Via ODiSy March 22, 2012 PHILIPPINE STOCK EXCHANGE ... - BDO

- 23 -2.18 Related Party TransactionsRelated party transactions are transfers of resources, services or obligations betweenBDO Unibank Group and its related parties, regardless whether a price is charged.Parties are considered to be related if one party has the ability to control the other partyor exercise significant influence over the other party in making financial and operatingdecisions. These include: (a) individuals owning, directly or indirectly through one ormore intermediaries, control or are controlled by, or under common control with theBDO Unibank Group; (b) associates; and, (c) individuals owning, directly or indirectly,an interest in the voting power of the BDO Unibank Group that gives them significantinfluence over BDO Unibank Group and close members of the family of any suchindividual.In considering each possible related party relationship, attention is directed to thesubstance of the relationship and not merely on the legal form.2.19 EquityCapital stock represents the nominal value of shares that have been issued.Common stock options pertain to the cumulative amount of stock option arising fromthe stock option plan granted by BDO Unibank Group to its qualified officers. Theoptions under the stock option plan were fully exercised and paid for in 2010.Additional paid-in capital includes any premiums received on the issuance of capitalstock. Any transaction costs associated with the issuance of shares are deducted fromadditional paid-in capital.Surplus reserves pertain to a portion of BDO Unibank Group’s income from trustoperations set-up on a yearly basis in compliance with BSP regulations. Surplusreserves also consist of reserve for contingencies and self-insurance.Surplus free includes all current and prior period results as disclosed in profit or lossand which are available and not restricted for use by BDO Unibank Group.Net unrealized fair value gains (losses) on AFS securities pertains to cumulativemark-to-market valuation of AFS financial assets.Revaluation increment consists of gains arising from the revaluation of land under bankpremises, furniture, fixtures and equipment.Accumulated translation adjustment pertains to exchange differences arising ontranslation of the assets and liabilities of foreign subsidiaries and overseas branch thatare taken to other comprehensive income.Non-controlling interests represents the portion of the net assets and profit or loss notattributable to BDO Unibank Group and are presented separately in the BDO UnibankGroup statement of income and within equity in the BDO Unibank Group statementof financial position and changes in equity.