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

- 116 -(c) Other Transactions with Related PartiesA summary of other transactions of the Parent Bank with subsidiaries andassociates is shown below.(i) Loans and Advances to SubsidiariesThe Parent Bank grants non interest-bearing advances to subsidiaries forworking capital requirements, which are unsecured and without fixed repaymentterms. Outstanding advances to subsidiaries recognized as part Advances tosubsidiaries under Other Resources in the Parent Bank statements of financialposition amounted to P3,183 as of December 31, 2010 (nil in 2011) (see Note13). On the other hand, outstanding advances to subsidiaries recognized as partof Accounts receivable under Loans and Other Receivables amounted to P198and P1,397 as of December 31, 2011 and 2010, respectively.The Parent Bank also grants interest-bearing loans to subsidiaries withoutstanding balance of P3,238 and P351 as of December 31, 2011 and 2010,respectively, and are presented as part of Loans and discounts under Loans andOther Receivables in the Parent Bank’s statements of financial position.Interest income recognized on the loans amounted to P115 in 2011, P1 in 2010and P16 in 2009 and is presented as part of Net Interest Income in the ParentBank’s statements of income.(ii) Loans and Advances to AssociatesAs of December 31, 2011 and 2010, outstanding loans and advances toassociates amounted to P814 and 421, respectively, in the BDO Unibank Groupfinancial statements and P44 and P414, respectively, in the Parent Bankfinancial statements, presented as part of Loans and discount and Accountsreceivable under Loans and Other Receivables in the statements of financialposition (see Note 10). The BDO Unibank Group recognized P41 interestincome on the loans in 2011 (nil in 2010 and 2009).(iii) Income to the Parent Banki. BDOSHI engaged the Parent Bank to provide various support such ashuman resources management, audit, preparation and issuance of checks forand in behalf of BDOSHI, documentation and safekeeping/custodianship ofsecurities and collateral documents, accounting functions and review offinancial statements for BDOSHI. The service agreement shall continue tobe in force unless terminated by either party through a written notice ofeither party at least 60 days prior to date intended for termination. In 2011and 2010, total service fees both amounted to P692 thousand and ispresented as part of Service charges, fees and commissions under OtherOperating Income in the Parent Bank’s statements of income(see Note 22).BDOSHI also leases its office space from Parent Bank at P1.6 per year,shown as part of Miscellaneous - net under Other Operating Income in theParent Bank’s statements of income (see Note 22).