FS - Toyota - 2

Toyota Financial Services Philippines Corporation
Financial Statements
March 31, 2014 and 2013
and
Independent Auditors’ Report
A member firm of Ernst & Young Global Limited

SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 819 0872 December 28, 2012, valid until December 31, 2015
1226 Makati City ey.com/ph SEC Accredit ation No. 0012-FR-3 (Group A),
Philippines November 15, 2012, valid until November 16, 2015
INDEPENDENT AUDITORS’ REPORT
The Stockholders and the Board of Directors

Toyota Financial Services Philippines Corporation
Report on the Financial Statements
We have audited the accompanying financial statements of Toyota Financial Services Philippines
Corporation, which comprise the statements of financial position as at March 31, 2014 and 2013, and
the statements of comprehensive income, statements of changes in equity and statements of cash flows
for the years then ended, and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Philippine Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with Philippine Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
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Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of
Toyota Financial Services Philippines Corporation as at March 31, 2014 and 2013, and its financial
performance and its cash flows for the years then ended in accordance with Philippine Financial
Reporting Standards.
Report on the Supplementary Information Required Under Revenue Regulations 15-2010
Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplementary information required under Revenue Regulations 15-2010 in
Note 26 to the financial statements is presented for purposes of filing with the Bureau of Internal
Revenue and is not a required part of the basic financial statements. Such information is the
responsibility of the management of Toyota Financial Services Philippines Corporation. The
information has been subjected to the auditing procedures applied in our audit of the basic financial
statements. In our opinion, the information is fairly stated in all material respects in relation to the
basic financial statements taken as whole.
SYCIP GORRES VELAYO & CO.
Janeth T. Nuñez
Partner
CPA Certificate No. 111092
SEC Accreditation No. 1328-A (Group A),
July 1, 2013, valid until June 30, 2016
Tax Identification No. 900-322-673
BIR Accreditation No. 08-001998-69-2012,
April 11, 2012, valid until April 10, 2015
PTR No. 4225198, January 2, 2014, Makati City
June 25, 2014
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TOYOTA FINANCIAL SERVICES PHILIPPINES CORPORATION
STATEMENTS OF FINANCIAL POSITION
March 31, April 1,
2013 2012
March 31, (As restated - (As restated -
2014 Note 2) Note 2)
ASSETS
Cash and Cash Equivalents (Notes 4 and 21) P
=628,779,104 P
=681,299,124 P
=1,216,209,838
Due from Bangko Sentral ng Pilipinas (Note 4) 3,894,429,108 2,759,843,098 1,595,003,345
Securities Purchased Under Resale Agreement – – 540,000,000
Available-for-Sale Investments (Note 5) 950,000 910,000 930,000
Loans and Receivables (Note 6) 26,728,237,910 19,496,446,696 17,542,603,072
Assets Held for Sale (Note 7) 44,432,452 63,881,090 74,860,784
Property and Equipment (Note 8) 38,156,382 35,051,281 17,337,934
Software Costs (Note 9) 19,324,213 18,666,339 22,647,467
Deferred Tax Assets (Notes 2 and 19) 141,554,003 138,657,279 106,215,834
Other Assets (Note 9) 29,880,183 31,190,985 40,356,169
=31,525,743,355 P
P =23,225,945,892 P
=21,156,164,443
LIABILITIES AND EQUITY

LIABILITIES
Loans Payable (Notes 11 and 21) =21,769,150,726 P
P =15,391,501,071 14,408,406,141
Derivative Liability (Note 14) 210,630 – 34,246,258
Accounts Payable and Other Liabilities
(Notes 2, 13 and 21) 499,505,607 519,827,073 544,746,391
Income Tax Payable 66,819,225 18,045,603 39,940,720
Deposits on Lease Contracts (Note 15) 5,344,783,262 3,877,691,991 2,921,006,789
Subordinated Debt (Note 12) 997,951,695 997,066,198 996,239,534
28,678,421,145 20,804,131,936 18,944,585,833
EQUITY
Capital Stock - =
P100 par value
Authorized, issued and outstanding - 10,000,000
shares (Note 23) 1,000,000,000 1,000,000,000 1,000,000,000
Retained Earnings (Notes 2 and 23) 1,845,178,364 1,424,196,467 1,153,882,391
Net Unrealized Gain on Available-for-Sale Investments
(Note 5) 140,000 100,000 120,000
Actuarial Gain (Loss) on Retirement (Notes 2 and 18) 2,003,846 (2,482,511) –
Cash Flow Hedge Reserve – – 57,576,219
2,847,322,210 2,421,813,956 2,211,578,610
P
=31,525,743,355 23,225,945,892 P
=21,156,164,443
See accompanying Notes to Financial Statements.
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STATEMENTS OF COMPREHENSIVE INCOME
Years Ended March 31

2013
(As restated -
2014 Note 2)
INTEREST INCOME
Loans and receivables (Note 6) P
=1,931,941,877 =1,684,235,971
P
Cash and cash equivalents (Notes 4 and 21) 6,109,069 27,296,890
1,938,050,946 1,711,532,861
INTEREST EXPENSE (Notes 11, 12 and 21) 809,601,401 830,014,656
NET INTEREST INCOME 1,128,449,545 881,518,205
SERVICE FEES AND OTHER INCOME (Note 17) 163,709,230 117,977,330
OPERATING EXPENSES
Provision for credit and impairment losses (Note 10) 216,412,604 215,239,594
Taxes and licenses 130,274,545 113,465,043
Compensation and fringe benefits (Notes 2, 18 and 21) 107,447,923 81,561,021
Sales and marketing 70,172,840 47,722,537
Occupancy (Note 20) 57,401,470 54,558,351
Management and professional fees 25,256,800 21,118,949
Depreciation and amortization (Notes 8 and 9) 20,090,419 20,820,070
Litigation 15,044,094 20,143,022
Entertainment, amusement and recreation (Note 19) 9,718,000 9,402,085
Transportation and travel 8,271,352 6,719,349
Credit investigation 6,076,255 134,071
Others 19,609,074 13,609,807
685,775,376 604,493,899
INCOME BEFORE INCOME TAX 606,383,399 395,001,636
PROVISION FOR INCOME TAX (Notes 2 and 19) 185,401,502 124,687,560
NET INCOME 420,981,897 270,314,076
OTHER COMPREHENSIVE INCOME (LOSS)
Other comprehensive income (loss) to be reclassified to profit or
loss in subsequent periods:
Net unrealized gain (loss) on available-for-sale investments
(Note 5) 40,000 (20,000)
Net movement on cash flow hedges (Note 14) – (82,251,742)
Income tax effect (Note 19) – 24,675,523
– (57,576,219)
Other comprehensive income (loss) not to be reclassified to
profit or loss in subsequent periods:
Actuarial gain (loss) on retirement 6,409,081 (3,546,444)
Income tax effect (Note 19) (1,922,724) 1,063,933
4,486,357 (2,482,511)
4,526,357 (60,078,730)
TOTAL COMPREHENSIVE INCOME P
=425,508,254 =210,235,346
P
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STATEMENTS OF CHANGES IN EQUITY
For the Years Ended March 31, 2014 and 2013

Net Unrealized
Gains (Losses)
on Available- Cash Flow
Retained for Sale Hedge Actuarial
Capital Stock Earnings Investments Reserve Gain (Loss)
(Note 23) (Notes 2 and 23) (Note 5) (Note 14) (Notes 2 and 18) Total
Balances at April 1, 2013, as previously reported P
=1,000,000,000 P
=1,408,453,026 P
=100,000 P
=– P
=– P
=2,408,553,026
Effect of retroactive application of PAS 19 (Revised) (Note 2) – 15,743,441 – – (2,482,511) 13,260,930
Balances at April 1, 2013, as restated 1,000,000,000 1,424,196,467 100,000 – (2,482,511) 2,421,813,956
Net income – 420,981,897 – – – 420,981,897
Other comprehensive income – – 40,000 – 4,486,357 4,526,357
Total comprehensive income – 420,981,897 40,000 – 4,486,357 425,508,254
Balances at March 31, 2014 P
=1,000,000,000 P
=1,845,178,364 P
=140,000 P
=– P
=2,003,846 P
=2,847,322,210
Balances at April 1, 2012, as previously reported P

=1,000,000,000 P
=1,137,136,606 P
=120,000 P
=57,576,219 P
=– P
=2,194,832,825
Effect of retroactive application of PAS 19 (Revised) (Note 2) – 16,745,785 – – – 16,745,785
Balances at April 1, 2012, as restated 1,000,000,000 1,153,882,391 120,000 57,576,219 – 2,211,578,610
Net income – 270,314,076 – – – 270,314,076
Other comprehensive loss – – (20,000) (57,576,219) (2,482,511) (60,078,730)
Total comprehensive income – 270,314,076 (20,000) (57,576,219) (2,482,511) 210,235,346
Balances at March 31, 2013 P
=1,000,000,000 P
=1,424,196,467 P
=100,000 =
P– (P
=2,482,511) P
=2,421,813,956
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STATEMENTS OF CASH FLOWS

2013
(As restated -
2014 Note 2)
CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax P
=606,383,399 =395,001,636
P
Adjustments for:
Provision for credit and impairment losses (Note 10) 216,412,604 215,239,594
Depreciation and amortization (Notes 8 and 9) 20,090,419 20,820,070
Loss on sale of assets held for sale (Note 17) 2,928,041 10,837,142
Gain on sale of property and equipment (2,067,098) (2,485,581)
Valuation loss on derivative liability (Note 14) 210,630 698,186
Changes in operating assets and liabilities:
Decrease (increase) in:
Loans and receivables (7,677,133,232) (2,408,740,059)
Other assets 7,719,882 4,293,156
Increase (decrease) in:
Deposits on lease contracts 1,467,091,271 956,685,202
Accounts payable and other liabilities (20,363,523) (23,610,851)
Net cash used in operations (5,378,727,607) (831,261,505)
Income taxes paid (141,405,270) (153,267,550)
Net cash used in operating activities (5,520,132,877) (984,529,055)
CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of:
Property and equipment (Note 8) (10,505,196) (30,971,114)
Software (Note 9) (8,018,392) (4,398,664)
Proceeds from sale of:
Assets held for sale 239,985,841 239,799,393
Property and equipment 2,201,462 3,303,072
Net cash provided by investing activities 223,663,715 207,732,687
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from availment of loans payable 18,942,471,099 7,952,450,696
Payments of loans payable (12,563,935,947) (7,085,725,289)
Net cash provided by financing activities 6,378,535,152 866,725,407
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,082,065,990 89,929,039
CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR
Cash 681,299,124 1,216,209,838
Due from Bangko Sentral ng Pilipinas 2,759,843,098 1,595,003,345
Securities Purchased Under Resale Agreement – 540,000,000
3,441,142,222 3,351,213,183
(Forward)
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2013
(As restated -
2014 Note 2)
CASH AND CASH EQUIVALENTS AT END OF YEAR

Cash P
=628,779,104 P681,299,124
=
Due from Bangko Sentral ng Pilipinas 3,894,429,108 2,759,843,098
P
=4,523,208,212 =3,441,142,222
P

2014 2013
OPERATIONAL CASH FLOWS FROM INTEREST
Interest received P
=1,835,161,095 =1,736,217,022
P
Interest paid 827,006,880 823,902,945
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NOTES TO FINANCIAL STATEMENTS
1. Corporate Information
Toyota Financial Services Philippines Corporation (the Company) is a domestic corporation

registered with the Securities and Exchange Commission (SEC) on August 16, 2002. The
Company’s registered address is 32nd Floor, GT Tower International, Ayala Avenue corner H.V.
Dela Costa St., Salcedo Village, Makati City.
The Company serves customers of Toyota vehicles through financing and leasing services, as well
as Toyota dealers, through inventory stock financing. On May 8, 2008, the Monetary Board of the
Bangko Sentral ng Pilipinas (BSP) granted the Company its quasi-banking license, which enables
the Company to diversify its sources of funds, as well as offer a wider range of financing products
to its growing customers and perform other quasi-banking functions effective April 1, 2009.
The following table sets forth the ownership structure of the Company:
Percentage of ownership
Toyota Financial Services Corporation (TFSC) 60%
Philippine Savings Bank (PSBank) 25%
Metropolitan Bank and Trust Company (MBTC) 15%
The Company’s ultimate parent company is TFSC, a leading financial services company based in
Japan.
The accompanying financial statements were approved and authorized for issue by the Board of
Directors (BOD) on June 25, 2014.
2. Summary of Significant Accounting Policies
Basis of Preparation
The accompanying financial statements of the Company have been prepared using the historical
cost basis except for available-for-sale (AFS) investments and derivative financial instruments,
which have been measured at fair value.
The accompanying financial statements are presented in Philippine peso (P

=), which is also the
Company’s functional currency.
All values are rounded to the nearest peso unless otherwise stated.
The accompanying financial statements provide comparative information in respect of the

previous period. In addition, the Company presents an additional statement of financial position at
the beginning of the earliest period presented when there is a retrospective application of an
accounting policy, a retrospective restatement, or a reclassification of items in financial
statements. An additional statement of financial position as at April 1, 2012 is presented in the
accompanying financial statements due to retrospective application of certain accounting policies.
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Statement of Compliance
The financial statements of the Company have been prepared in compliance with Philippine
Financial Reporting Standards (PFRS).
Presentation of Financial Statements

The Company presents its statement of financial position broadly in order of liquidity. An
analysis regarding recovery or settlement within 12 months after the statement of financial
position date (current) and more than 12 months after the statement of financial position date
(non-current) is presented in Note 16.
Changes in Accounting Policies and Disclosures

The Company applied, for the first time, certain standards and amendments that require
restatement of previous financial statements. These include PAS 19, Employee Benefits (Revised
2011), PFRS 13, Fair Value Measurement and amendments to PAS 1, Presentation of Financial
Statements. Several other amendments apply for the first time in 2013. Unless otherwise stated,
these changes did not have any impact on the financial statements of the Company.
The nature and impact of each new standard and amendment are described below:
PFRS 7, Financial Instruments: Disclosures - Transfers of Financial Assets (Amendments)

These amendments require an entity to disclose information about rights of set-off and related
arrangements (such as collateral agreements). The new disclosures are required for all recognized
financial instruments that are set off in accordance with PAS 32. These disclosures also apply to
recognized financial instruments that are subject to an enforceable master netting arrangement or
‘similar agreement’, irrespective of whether they are set-off in accordance with PAS 32. The
amendments require entities to disclose, in a tabular format, unless another format is more
appropriate, the following minimum quantitative information. This is presented separately for
financial assets and financial liabilities recognized at the end of the reporting period:
a) The gross amounts of those recognized financial assets and recognized financial liabilities;
b) The amounts that are set off in accordance with the criteria in PAS 32 when determining the
net amounts presented in the statement of financial position;
c) The net amounts presented in the statement of financial position;
d) The amounts subject to an enforceable master netting arrangement or similar agreement that
are not otherwise included in (b) above, including:
i. Amounts related to recognized financial instruments that do not meet some or all of the
offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
PFRS 10, Consolidated Financial Statements

PFRS 10 replaced the portion of PAS 27, Consolidated and Separate Financial Statements, that
addressed the accounting for consolidated financial statements. It also included the issues raised
in SIC 12, Consolidation - Special Purpose Entities. PFRS 10 established a single control model
that is applied to all entities including special purpose entities. The changes introduced by PFRS
10 require management to exercise significant judgment to determine which entities are
controlled, and therefore, are required to be consolidated by a parent, compared with the
requirements that were in PAS 27.
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PFRS 11, Joint Arrangements

PFRS 11 replaced PAS 31, Interests in Joint Ventures, and SIC 13, Jointly Controlled Entities -
Non-Monetary Contributions by Venturers. PFRS 11 removed the option to account for jointly
controlled entities using proportionate consolidation. Instead, jointly controlled entities that meet
the definition of a joint venture must be accounted for using the equity method.
PFRS 12, Disclosure of Interests in Other Entities

PFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries,
joint arrangements, associates and structured entities. The requirements in PFRS 12 are more
comprehensive than the previously existing disclosure requirements for subsidiaries (for example,
where a subsidiary is controlled with less than a majority of voting rights).
PFRS 13, Fair Value Measurement

PFRS 13 establishes a single source of guidance under PFRSs for all fair value measurements.
PFRS 13 does not change when an entity is required to use fair value, but rather provides guidance
on how to measure fair value under PFRS. PFRS 13 defines fair value as an exit price. PFRS 13
also requires additional disclosures.
As a result of the guidance in PFRS 13, the Company re-assessed its policies for measuring fair
values, in particular, its valuation inputs such as non-performance risk for fair value measurement
of liabilities. The Company has assessed that the application of PFRS 13 does not materially
impact the fair value measurements of the Company. Additional disclosures, where required, are
provided in the individual notes relating to the assets and liabilities whose fair values were
determined.
PAS 1, Presentation of Financial Statements – Presentation of Items of Other Comprehensive

Income or OCI (Amendments)
The amendments to PAS 1 introduced a grouping of items presented in OCI. Items that will be
reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon
derecognition or settlement) will be presented separately from items that will never be recycled.
The amendments affect presentation only and have no impact on the Company’s financial position
or performance.
PAS 19, Employee Benefits (Revised)

On 1 January 2013, the Company adopted the Revised PAS 19 Employee Benefits. For defined
benefit plans, the Revised PAS 19 requires all actuarial gains and losses to be recognized in other
comprehensive income and unvested past service costs previously recognized over the average
vesting period to be recognized immediately in profit or loss when incurred.
Prior to adoption of the Revised PAS 19, the Company recognized actuarial gains and losses as
income or expense when the net cumulative unrecognized gains and losses for each individual
plan at the end of the previous period exceeded 10% of the higher of the defined benefit obligation
and the fair value of the plan assets and recognized unvested past service costs as an expense on a
straight-line basis over the average vesting period until the benefits become vested. Upon
adoption of the revised PAS 19, the Company changed its accounting policy to recognize all
actuarial gains and losses in other comprehensive income and all past service costs in profit or loss
in the period they occur.
The Revised PAS 19 replaced the interest cost and expected return on plan assets with the concept
of net interest on defined benefit liability or asset which is calculated by multiplying the net
balance sheet defined benefit liability or asset by the discount rate used to measure the employee
benefit obligation, each as at the beginning of the annual period.
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The Revised PAS 19 also amended the definition of short-term employee benefits and requires
employee benefits to be classified as short-term based on expected timing of settlement rather than
the employee’s entitlement to the benefits. In addition, the Revised PAS 19 modifies the timing of
recognition for termination benefits. The modification requires the termination benefits to be
recognized at the earlier of when the offer cannot be withdrawn or when the related restructuring
costs are recognized.
Changes to definition of short-term employee benefits and timing of recognition for termination
benefits do not have any impact to the Company’s financial position and financial performance.
The changes in accounting policies have been applied retrospectively. The effects of adoption on
the financial statements are as follows:
March 31, April 1,

2013 2012
Increase (decrease) in:
Statements of financial position
Other assets P
=12,351,786 P
=18,655,734
Deferred tax assets (5,683,256) (7,176,765)
Accounts payable and other liabilities (6,592,400) (5,266,816)
Other comprehensive income, net of tax (2,482,511) –
Retained earnings 15,743,441 16,745,785
2014 2013
Statements of comprehensive income
Compensation and fringe benefits P
=6,155,397 P
=1,431,920
Provision for income tax (1,846,619) (429,576)
Net income (4,308,778) (1,002,344)
Actuarial gain (loss) 6,409,081 (3,546,444)
Provision for income tax (1,922,724) 1,063,933
Other comprehensive income, net of tax 4,486,357 (2,482,511)
Total comprehensive income P
=177,579 (P
=3,484,855)
PAS 27, Separate Financial Statements (as revised in 2011)

As a consequence of the issuance of the new PFRS 10, Consolidated Financial Statements, and
PFRS 12, Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to
accounting for subsidiaries, jointly controlled entities, and associates in the separate financial
statements. The adoption of the amended PAS 27 did not have a significant impact on the
separate financial statements of the Company.
PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)
As a consequence of the issuance of the new PFRS 11, Joint Arrangements, and
PFRS 12, Disclosure of Interests in Other Entities, PAS 28 has been renamed
PAS 28, Investments in Associates and Joint Ventures, and describes the application of the equity
method to investments in joint ventures in addition to associates.
Philippine Interpretation IFRIC 20, Stripping Costs in the Production Phase of a Surface Mine
This interpretation applies to waste removal (stripping) costs incurred in surface mining activity,
during the production phase of the mine. The interpretation addresses the accounting for the
benefit from the stripping activity. This new interpretation is not relevant to the Company.
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Annual Improvements to PFRSs (2009-2011 cycle)

The Annual Improvements to PFRSs (2009-2011 cycle) contain non-urgent but necessary
amendments to PFRSs. The Company adopted these amendments for the current year.
· PFRS 1, First-time Adoption of PFRS – Borrowing Costs

The amendment clarifies that, upon adoption of PFRS, an entity that capitalized borrowing
costs in accordance with its previous generally accepted accounting principles, may carry
forward, without any adjustment, the amount previously capitalized in its opening statement of
financial position at the date of transition. Subsequent to the adoption of PFRS, borrowing
costs are recognized in accordance with PAS 23, Borrowing Costs. The amendment does not
apply to the Company as it is not a first-time adopter of PFRS.
· PAS 1, Presentation of Financial Statements – Clarification of the requirements for

comparative information
These amendments clarify the requirements for comparative information that are disclosed
voluntarily and those that are mandatory due to retrospective application of an accounting
policy, or retrospective restatement or reclassification of items in the financial statements. An
entity must include comparative information in the related notes to the financial statements
when it voluntarily provides comparative information beyond the minimum required
comparative period. The additional comparative period does not need to contain a complete
set of financial statements. On the other hand, supporting notes for the third balance sheet
(mandatory when there is a retrospective application of an accounting policy, or retrospective
restatement or reclassification of items in the financial statements) are not required. The
amendment does not have any significant impact on the Company’s financial position or
performance.
· PAS 16, Property, Plant and Equipment – Classification of servicing equipment

The amendment clarifies that spare parts, stand-by equipment and servicing equipment should
be recognized as property, plant and equipment when they meet the definition of property,
plant and equipment and should be recognized as inventory if otherwise. The amendment
does not have any significant impact on the Company’s financial position or performance.
· PAS 32, Financial Instruments: Presentation – Tax effect of distribution to holders of equity
instruments
The amendment clarifies that income taxes relating to distributions to equity holders and to
transaction costs of an equity transaction are accounted for in accordance with
PAS 12, Income Taxes. The amendment does not have any significant impact on the
Company’s financial position or performance.
· PAS 34, Interim Financial Reporting – Interim financial reporting and segment information
for total assets and liabilities
The amendment clarifies that the total assets and liabilities for a particular reportable segment
need to be disclosed only when the amounts are regularly provided to the chief operating
decision maker and there has been a material change from the amount disclosed in the entity’s
previous annual financial statements for that reportable segment. The amendment affects
disclosures only and has no impact on the Company’s financial position or performance.
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New standards and interpretations that have been issued but are not yet effective
Standards issued but not yet effective up to the date of issuance of the Company’s financial
statements are listed below. This listing of standards and interpretations issued are those that the
Company reasonably expects to be applicable at a future date. The Company intends to adopt
these standards when they become effective.
PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets
(Amendments)
These amendments remove the unintended consequences of PFRS 13 on the disclosures required
under PAS 36. In addition, these amendments require disclosure of the recoverable amounts for
the assets or cash-generating units (CGUs) for which impairment loss has been recognized or
reversed during the period. These amendments are effective retrospectively for annual periods
beginning on or after January 1, 2014 with earlier application permitted, provided PFRS 13 is also
applied. The amendments affect disclosures only and have no impact on the Company’s financial
position or performance.
Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27)

These amendments are effective for annual periods beginning on or after January 1, 2014. They
provide an exception to the consolidation requirement for entities that meet the definition of an
investment entity under PFRS 10. The exception to consolidation requires investment entities to
account for subsidiaries at fair value through profit or loss. It is not expected that this amendment
would be relevant to the Company.
Philippine Interpretation IFRIC 21, Levies (IFRIC 21)

IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggers
payment, as identified by the relevant legislation, occurs. For a levy that is triggered upon
reaching a minimum threshold, the interpretation clarifies that no liability should be anticipated
before the specified minimum threshold is reached. IFRIC 21 is effective for annual periods
beginning on or after January 1, 2014. The Company does not expect that IFRIC 21 will have
material financial impact in future financial statements.
PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives and
Continuation of Hedge Accounting (Amendments)
These amendments provide relief from discontinuing hedge accounting when novation of a
derivative designated as a hedging instrument meets certain criteria. These amendments are
effective for annual periods beginning on or after January 1, 2014. The Company has not novated
its derivatives during the current period. However, these amendments would be considered for
future novations.
PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial
Liabilities (Amendments)
The amendments clarify the meaning of “currently has a legally enforceable right to set-off” and
also clarify the application of the PAS 32 offsetting criteria to settlement systems (such as central
clearing house systems) which apply gross settlement mechanisms that are not simultaneous. The
amendments affect presentation only and have no impact on the Company’s financial position or
performance. The amendments to PAS 32 are to be retrospectively applied for annual periods
beginning on or after January 1, 2014.
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PAS 19, Employee Benefits – Defined Benefit Plans: Employee Contributions (Amendments)
The amendments apply to contributions from employees or third parties to defined benefit plans.
Contributions that are set out in the formal terms of the plan shall be accounted for as reductions
to current service costs if they are linked to service or as part of the remeasurements of the net
defined benefit asset or liability if they are not linked to service. Contributions that are
discretionary shall be accounted for as reductions of current service cost upon payment of these
contributions to the plans. The amendments to PAS 19 are to be retrospectively applied for annual
periods beginning on or after July 1, 2014. The amendments have no impact on the Company’s
financial position or performance.

amendments to the following standards:
· PFRS 2, Share-based Payment – Definition of Vesting Condition

The amendment revised the definitions of vesting condition and market condition and added
the definitions of performance condition and service condition to clarify various issues. This
amendment shall be prospectively applied to share-based payment transactions for which the
grant date is on or after July 1, 2014. This amendment does not apply to the Company as it
has no share-based payments.
· PFRS 3, Business Combinations – Accounting for Contingent Consideration in a Business

Combination
The amendment clarifies that a contingent consideration that meets the definition of a
financial instrument should be classified as a financial liability or as equity in accordance with
PAS 32. Contingent consideration that is not classified as equity is subsequently measured at
fair value through profit or loss whether or not it falls within the scope of PFRS 9 (or PAS 39,
if PFRS 9 is not yet adopted). The amendment shall be prospectively applied to business
combinations for which the acquisition date is on or after July 1, 2014. The Company shall
consider this amendment for future business combinations.
· PFRS 8, Operating Segments – Aggregation of Operating Segments and Reconciliation of the

Total of the Reportable Segments’ Assets to the Entity’s Assets
The amendments require entities to disclose the judgment made by management in
aggregating two or more operating segments. This disclosure should include a brief
description of the operating segments that have been aggregated in this way and the economic
indicators that have been assessed in determining that the aggregated operating segments share
similar economic characteristics. The amendments also clarify that an entity shall provide
reconciliations of the total of the reportable segments’ assets to the entity’s assets if such
amounts are regularly provided to the chief operating decision maker. These amendments are
effective for annual periods beginning on or after July 1, 2014 and are applied retrospectively.
The amendments affect disclosures only and have no impact on the Company’s financial
position or performance.
· PFRS 13, Fair Value Measurement – Short-term Receivables and Payables

The amendment clarifies that short-term receivables and payables with no stated interest rates
can be held at invoice amounts when the effect of discounting is immaterial.
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· PAS 16, Property, Plant and Equipment – Revaluation Method – Proportionate Restatement
of Accumulated Depreciation
The amendment clarifies that, upon revaluation of an item of property, plant and equipment,
the carrying amount of the asset shall be adjusted to the revalued amount, and the asset shall
be treated in one of the following ways:
a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation
of the carrying amount of the asset. The accumulated depreciation at the date of
revaluation is adjusted to equal the difference between the gross carrying amount and the
carrying amount of the asset after taking into account any accumulated impairment losses.
b. The accumulated depreciation is eliminated against the gross carrying amount of the asset.
The amendment is effective for annual periods beginning on or after July 1, 2014. The
amendment shall apply to all revaluations recognized in annual periods beginning on or after
the date of initial application of this amendment and in the immediately preceding annual
period. The amendment has no significant impact on the Company’s financial position or
performance.
· PAS 24, Related Party Disclosures – Key Management Personnel

The amendments clarify that an entity is a related party of the reporting entity if the said
entity, or any member of a group for which it is a part of, provides key management personnel
services to the reporting entity or to the parent company of the reporting entity. The
amendments also clarify that a reporting entity that obtains management personnel services
from another entity (also referred to as management entity) is not required to disclose the
compensation paid or payable by the management entity to its employees or directors. The
reporting entity is required to disclose the amounts incurred for the key management
personnel services provided by a separate management entity. The amendments are effective
for annual periods beginning on or after July 1, 2014 and are applied retrospectively. The
amendments affect disclosures only and have no impact on the Company’s financial position
or performance. The amendments have no impact on the Company’s financial position or
performance.
· PAS 38, Intangible Assets – Revaluation Method – Proportionate Restatement of Accumulated

Amortization
The amendments clarify that, upon revaluation of an intangible asset, the carrying amount of
the asset shall be adjusted to the revalued amount, and the asset shall be treated in one of the
following ways:
a. The gross carrying amount is adjusted in a manner that is consistent with the revaluation
of the carrying amount of the asset. The accumulated amortization at the date of
revaluation is adjusted to equal the difference between the gross carrying amount and the
carrying amount of the asset after taking into account any accumulated impairment losses.
b. The accumulated amortization is eliminated against the gross carrying amount of the asset.
The amendments also clarify that the amount of the adjustment of the accumulated
amortization should form part of the increase or decrease in the carrying amount accounted for
in accordance with the standard.
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The amendments are effective for annual periods beginning on or after July 1, 2014. The
amendments shall apply to all revaluations recognized in annual periods beginning on or after
the date of initial application of this amendment and in the immediately preceding annual
period. The amendments have no impact on the Company’s financial position or
performance.

amendments to the following standards:
· PFRS 1, First-time Adoption of Philippine Financial Reporting Standards – Meaning of

‘Effective PFRSs’
The amendment clarifies that an entity may choose to apply either a current standard or a new
standard that is not yet mandatory, but that permits early application, provided either standard
is applied consistently throughout the periods presented in the entity’s first PFRS financial
statements. This amendment is not applicable to the Company as it is not a first-time adopter
of PFRS.
· PFRS 3, Business Combinations – Scope Exceptions for Joint Arrangements

The amendment clarifies that PFRS 3 does not apply to the accounting for the formation of a
joint arrangement in the financial statements of the joint arrangement itself. The amendment
is effective for annual periods beginning on or after July 1 2014 and is applied prospectively.
The amendment has no impact on the Company’s financial position or performance.
· PFRS 13, Fair Value Measurement – Portfolio Exception

The amendment clarifies that the portfolio exception in PFRS 13 can be applied to financial
assets, financial liabilities and other contracts. The amendment is effective for annual periods
beginning on or after July 1 2014 and is applied prospectively. The amendment has no
significant impact on the Company’s financial position or performance.
· PAS 40, Investment Property

The amendment clarifies the interrelationship between PFRS 3 and PAS 40 when classifying
property as investment property or owner-occupied property. The amendment stated that
judgment is needed when determining whether the acquisition of investment property is the
acquisition of an asset or a group of assets or a business combination within the scope of
PFRS 3. This judgment is based on the guidance of PFRS 3. This amendment is effective for
annual periods beginning on or after July 1, 2014 and is applied prospectively. The
amendment has no impact on the Company’s financial position or performance.
· PFRS 9, Financial Instruments

PFRS 9, as issued, reflects the first and third phases of the project to replace PAS 39 and
applies to the classification and measurement of financial assets and liabilities and hedge
accounting, respectively. Work on the second phase, which relate to impairment of financial
instruments, and the limited amendments to the classification and measurement model is still
ongoing, with a view to replace PAS 39 in its entirety. PFRS 9 requires all financial assets to
be measured at fair value at initial recognition. A debt financial asset may, if the fair value
option (FVO) is not invoked, be subsequently measured at amortized cost if it is held within a
business model that has the objective to hold the assets to collect the contractual cash flows
and its contractual terms give rise, on specified dates, to cash flows that are solely payments of
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principal and interest on the principal outstanding. All other debt instruments are
subsequently measured at fair value through profit or loss. All equity financial assets are
measured at fair value either through other comprehensive income (OCI) or profit or loss.
Equity financial assets held for trading must be measured at fair value through profit or loss.
For liabilities designated as at FVPL using the fair value option, the amount of change in the
fair value of a liability that is attributable to changes in credit risk must be presented in OCI.
The remainder of the change in fair value is presented in profit or loss, unless presentation of
the fair value change relating to the entity’s own credit risk in OCI would create or enlarge an
accounting mismatch in profit or loss. All other PAS 39 classification and measurement
requirements for financial liabilities have been carried forward to PFRS 9, including the
embedded derivative bifurcation rules and the criteria for using the FVO. The adoption of the
first phase of PFRS 9 will have an effect on the classification and measurement of the
Company’s financial assets, but will potentially have no impact on the classification and
measurement of financial liabilities.
On hedge accounting, PFRS 9 replaces the rules-based hedge accounting model of PAS 39
with a more principles-based approach. Changes include replacing the rules-based hedge
effectiveness test with an objectives-based test that focuses on the economic relationship
between the hedged item and the hedging instrument, and the effect of credit risk on that
economic relationship; allowing risk components to be designated as the hedged item, not
only for financial items, but also for non-financial items, provided that the risk component is
separately identifiable and reliably measurable; and allowing the time value of an option, the
forward element of a forward contract and any foreign currency basis spread to be excluded
from the designation of a financial instrument as the hedging instrument and accounted for as
costs of hedging. PFRS 9 also requires more extensive disclosures for hedge accounting.
PFRS 9 currently has no mandatory effective date. PFRS 9 may be applied before the
completion of the limited amendments to the classification and measurement model and
impairment methodology. The Company will not adopt the standard before the completion of
the limited amendments and the second phase of the project.
· Philippine Interpretation IFRIC 15, Agreements for the Construction of Real Estate
This interpretation covers accounting for revenue and associated expenses by entities that
undertake the construction of real estate directly or through subcontractors. The interpretation
requires that revenue on construction of real estate be recognized only upon completion,
except when such contract qualifies as construction contract to be accounted for under PAS 11
or involves rendering of services in which case revenue is recognized based on stage of
completion. Contracts involving provision of services with the construction materials and
where the risks and reward of ownership are transferred to the buyer on a continuous basis
will also be accounted for based on stage of completion. The SEC and the Financial
Reporting Standards Council (FRSC) have deferred the effectivity of this interpretation until
the final Revenue standard is issued by the International Accounting Standards Board (IASB)
and an evaluation of the requirements of the final Revenue standard against the practices of
the Philippine real estate industry is completed. Adoption of the interpretation when it
becomes effective will not have any impact on the financial statements of the Company.
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Significant Accounting Policies
Foreign Currency Translations

Transactions denominated in foreign currencies are recorded using the applicable exchange rate at
the date of the transaction. Foreign currency-denominated assets and liabilities are translated to
Philippine peso using the Philippine Dealing System (PDS) closing rate prevailing at the reporting
date. Foreign exchange gains or losses arising from foreign currency transactions and revaluation
of foreign currency-denominated assets and liabilities are credited to or charged to profit or loss in
the year in which the rates change.
Fair Value Measurement

The Company measures Available-for-sale investments, Assets held for sale and Derivative
liability at fair value at each statement of financial position date. Also, fair values of other
financial assets and liabilities are disclosed in Note 22.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
• in the principal market for the asset or liability, or
• in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Company. The fair value
of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best
interest. A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its highest and best use or
by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re-
assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis of the nature, characteristics and fair value hierarchy as explained above.
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Financial Instruments - Initial Recognition and Measurement

Date of recognition
Purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace are recognized on the settlement date,
the date that an asset is delivered to or by the Company. Deposits on finance lease, amounts due
to banks and loans are recognized when cash is received by the Company or advanced to the
borrowers.
Initial recognition of financial instruments

All financial instruments are initially recognized at fair value. Except for financial assets and
financial liabilities at fair value through profit or loss (FVPL), the initial measurement of financial
assets includes transaction costs. The Company classifies its financial assets in the following
categories: financial assets at FVPL, AFS investments, held-to-maturity (HTM) investments and
loans and receivables. Financial liabilities are classified as financial liabilities at FVPL and other
financial liabilities carried at amortized cost. Financial assets or financial liabilities at FVPL
include financial assets or liabilities held for trading purposes and financial assets or liabilities
designated upon initial recognition as at FVPL. The classification depends on the purpose for
which the investments were acquired and whether they are quoted in an active market.
Management determines the classification of its investments at initial recognition and, where
allowed and appropriate, reevaluates such designation at every reporting date.
As of March 31, 2014 and 2013, the Company has no financial assets at FVPL and HTM
investments.
‘Day 1’ difference
Where the transaction price in a non-active market is different from the fair value of other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Company recognizes the
difference between the transaction price and fair value (a ‘Day 1’ difference) in profit or loss
unless it qualifies for recognition as some other type of asset. In cases where use is made of data
which is not observable, the difference between the transaction price and model value is only
recognized in profit or loss when the inputs become observable or when the instrument is
derecognized. For each transaction, the Company determines the appropriate method of
recognizing the ‘Day 1’ difference amount.
AFS investments
AFS investments are those which are designated as such or do not qualify to be classified as
financial assets held for trading, designated at FVPL, HTM investments or loans and receivables.
These are purchased and held indefinitely, and may be sold in response to liquidity requirements
or changes in market conditions.
After initial measurement, AFS investments are subsequently measured at fair value.
The unrealized gains and losses arising from the fair valuation of AFS investments are excluded,
net of tax, from reported earnings and are reported as other comprehensive income in the
statement of comprehensive income as ‘Net unrealized gain (loss) on available-for-sale
investments,’ until the investment is derecognized or determined to be impaired at which time the
cumulative gains or losses previously reported as other comprehensive income is included in profit
or loss.
The Company’s AFS investments consist of golf club shares.
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Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments and
fixed maturities that are not quoted in an active market. These are not entered into with the
intention of immediate or short-term resale and as such are not classified as financial assets at
FVPL and AFS investments. They also do not include those for which the company may not
recover substantially as its initial investments, other than because of credit deterioration.
After initial measurement, loans and receivables are subsequently measured at amortized cost
using the effective interest method less allowance for credit losses. Amortized cost is calculated
by taking into account any discount or premium on acquisition cost and fees that are an integral
part of the effective interest rate (EIR). The amortization is included in profit or loss under
“Interest income.” The losses arising from impairment are recognized in profit or loss under
“Provision for credit and impairment losses.”
The Company’s loans and receivables consist of cash in bank, due from BSP, securities purchased
under resale agreements (SPURA), receivables from customers and other receivables.
Other financial liabilities

Issued financial instruments or their components, which are not designated at FVPL, are classified
as loans payable, accounts payable and other liabilities, deposits on lease contracts and
subordinated debt where the substance of the contractual arrangement results in the Company
having an obligation either to deliver cash or another financial assets to the holder, or to satisfy the
obligation other than by the exchange of a fixed amount of cash or another financial asset for a
fixed number of own equity shares.
After initial measurement, these financial liabilities not qualified as and not designated at FVPL
are subsequently measured at amortized cost using the effective interest method.
Derivative Financial Instrument and Hedge Accounting

The Company uses derivative financial instruments such as cross currency interest rate swap to
hedge its foreign currency and interest rate risks. Such derivative financial instruments are
initially recognized at fair value on the date in which a derivative transaction is entered into and
are subsequently re-measured at fair value. Derivatives are carried as assets when the fair value is
positive and as liabilities when the fair value is negative.
Any gains or losses arising from the changes in fair value of derivatives are taken directly to profit
or loss, except for the effective portion of cash flow hedges, which is recognized as OCI.
For the purpose of hedge accounting, hedges are classified as:
· Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset
or liability or an unrecognized firm commitment (except for foreign currency risk);
· Cash flow hedges when hedging exposure to variability in cash flows that is either attributable
to a particular risk associated with a recognized asset or liability or a highly probable forecast
transaction or the foreign currency risk in an unrecognized firm commitment; or
· Hedges of a net investment in a foreign operation.
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At the inception of a hedge relationship, the Company formally designates and documents the
hedge relationship to which the Company wishes to apply hedge accounting and the risk
management objective and strategy for undertaking the hedge. The documentation includes
identification of the hedging instrument, the hedged item or transaction, the nature of the risk
being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting
the exposure to changes in the hedge item’s fair value or cash flows attributable to the hedged risk.
Such hedges are expected to be highly effective in achieving offsetting changes in fair value or
cash flows and are assessed on an on-going basis to determine that they actually have been highly
effective throughout the financial reporting periods for which they were designated.
Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized directly as other
comprehensive income in the cash flow hedge reserve, while the ineffective portion is recognized
directly in profit or loss.
Amounts recognized as other comprehensive income are transferred to profit or loss, such as when
the hedged financial income or financial expense is recognized or when a forecast sale occurs.
Where the hedged item is the cost of a non-financial asset or non-financial liability, the amounts
recognized as other comprehensive income are transferred to the initial carrying amount of the
non-financial asset or liability.
If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain
or loss previously recognized in other comprehensive income are transferred to profit or loss. If
the hedging instrument expires or is sold, terminated or exercised without replacement or rollover
or if its designation as a hedge is revoked, any cumulative gain or loss previously recognized in
other comprehensive income remains in OCI until the forecast transaction or firm commitment
affects profit or loss. If the related transaction is not expected to occur, the amount is taken to
profit or loss.
The Company designates its cross currency interest rate swaps as cash flow hedges of the foreign
currency and interest rate risks arising from floating interest rate foreign currency-denominated
liabilities.
Embedded derivatives
The Company has certain derivatives that are embedded in host financial contract such as call
options in the corporate note. Embedded derivatives are bifurcated from their host contracts and
carried at fair value with fair value changes being reported through profit or loss, when the entire
hybrid contracts (composed of both the host contract and the embedded derivative) are not
accounted for as financial assets at FVPL, when their economic risks and characteristics are not
closely related to those of their respective host contracts, and when a separate instrument with the
same terms as the embedded derivative would meet the definition of a derivative. The Company
assesses whether embedded derivatives are required to be separated from the host contracts when
the Company first becomes a party to the contract. Reassessment of embedded derivatives is only
done when there are changes in the contract that significantly modifies the contractual cash flows.
Derecognition of Financial Assets and Liabilities

Financial asset
A financial asset (or, where applicable a part of a financial asset or part of a group of similar
financial assets) is derecognized when:
· the rights to receive cash flows from the asset have expired;
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· the Company retains the right to receive cash flows from the asset, but has assumed an
obligation to pay them in full without material delay to a third party under a
‘pass-through’ arrangement, or;
· the Company has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the
asset.
Where the Company has transferred its rights to receive cash flows from an asset or has entered
into a ‘pass-through’ arrangement, and has neither transferred nor retained substantially all the
risks and rewards of the asset nor transferred control over the asset, the asset is recognized to the
extent of the Company’s continuing involvement in the asset. Continuing involvement that takes
the form of a guarantee over the transferred asset is measured at the lower of original carrying
amount of the asset and the maximum amount of consideration that the Company could be
required to repay.
Financial liability
A financial liability is derecognized when the obligation under the liability, is discharged,
cancelled or has expired. Where an existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is
recognized in profit or loss.
Securities Purchased Under Resale Agreement

Conversely, SPURA to resell at a specified future date (‘reverse repos’) are not recognized on the
statement of financial position. The corresponding cash paid, including accrued interest, is
recognized in the statement of financial position as SPURA, and is considered a loan to the
counterparty. The difference between the purchase price and resale price is treated as interest
income and is accrued over the life of the agreement using the effective interest method.
Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, cash in
banks, due from BSP and SPURA with original maturities of three months or less from dates of
placements and that are subject to insignificant risks of changes in value.
Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement
of financial position if, and only if, there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or to realize the asset and
settle the liability simultaneously. This is not generally the case with master netting agreements,
and the related assets and liabilities are presented gross in the statement of financial position.
Impairment of Financial Assets

The Company assesses at each reporting date whether there is objective evidence that a financial
asset or a group of financial assets is impaired. A financial asset or a group of financial assets is
deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one
or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’)
and that loss event (or events) has an impact on the estimated future cash flows of the financial
asset or the group of financial assets that can be reliably estimated. Evidence of impairment may
include indications that the borrower or a group of borrowers is experiencing significant financial
difficulty, default or delinquency in interest or principal payments, the probability that they will
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enter bankruptcy or other financial reorganization and where observable data indicate that there is
measurable decrease in the estimated future cash flows, such as changes in arrears or economic
conditions that correlate with defaults.

For loans and receivables, carried at amortized cost, the Company first assesses whether objective
evidence of impairment exists individually for financial assets that are individually significant, or
collectively, for financial assets that are not individually significant. If the Company determines
that no objective evidence of impairment exists for individually assessed financial asset, whether
significant or not, it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses for impairment. Those characteristics are relevant to the
estimation of future cash flows for groups of such assets by being indicative of the debtors’ ability
to pay all amounts due according to the contractual terms of the assets being evaluated. Assets
that are individually assessed for impairment and for which an impairment loss is, or continues to
be, recognized are not included in a collective assessment for impairment.
If there is objective evidence that an impairment loss has been incurred, the amount of the loss is
measured as the difference between the asset’s carrying amount and the present value of the
estimated future cash flows (excluding future credit losses that have not been incurred). The
carrying amount of the asset is reduced through use of an allowance account and the amount of
loss is charged to profit or loss. Interest income continues to be recognized based on the original
EIR of the asset. The financial assets, together with the associated allowance accounts, are written
off when there is no realistic prospect of future recovery and all collateral has been realized. If, in
a subsequent year, the amount of the estimated impairment loss decreases because of an event
occurring after the impairment was recognized, the previously recognized impairment loss is
reduced by adjusting the allowance account. If a future write-off is later recovered, any amounts
formerly charged are credited to “Other income” in profit or loss.
AFS investments
For equity investments classified as AFS investments, impairment indicators would include a
significant or prolonged decline in the fair value of the investments below its cost. Where there is
evidence of impairment, the cumulative loss measured as the difference between the acquisition
cost and the current fair value, less any impairment loss on that financial asset previously
recognized as OCI is removed and recognized in profit or loss. Impairment losses on equity
instruments are not reversed through profit or loss. Increases in fair value after impairment are
recognized directly in other comprehensive income.
Finance Lease Receivables

When assets are held subject to finance leases, the present value of the lease payments is
recognized as finance lease receivables. Finance lease receivables are stated at the outstanding
balance, reduced by unearned lease income and allowance for credit losses.
Residual Value of Leased Assets and Deposits on Lease Contracts

The residual value of leased assets is the estimated proceeds from the disposal of the leased asset
at the end of the lease term which approximates the amount of guaranty deposit paid by the lessee
at the inception of the lease. At the end of the lease term, the residual value is generally applied
against the guaranty deposit of the lessee.
Property and Equipment

Property and equipment are carried at cost less accumulated depreciation and amortization and
impairment loss, if any.
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The initial cost of property and equipment consists of its purchase price, any directly attributable
costs of bringing the asset to its working condition and location for its intended use and the initial
estimate of the costs of dismantling and removing the item and restoring the site on which it is
located to the extent it had recognized an obligation for that cost.
Expenditures incurred after an item of property and equipment has been put into operation, such as
repairs and maintenance, are normally charged to operations in the year in which the costs are
incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in
an increase in the future economic benefits expected to be obtained from the use of an item of
property and equipment beyond its originally assessed standard of performance, the expenditures
are capitalized as an additional cost of property and equipment. When the property and equipment
are retired or otherwise disposed of, the cost and the related accumulated depreciation and
amortization are removed from the accounts and any resulting gain or loss is reflected in profit or
loss.
Depreciation and amortization is computed using the straight-line method over the estimated
useful lives of the property and equipment as follows:
5 years or the lease term,

Leasehold improvements whichever is shorter
Furniture, fixtures and equipment 3-5 years
Transportation equipment 3-5 years
The useful life and the depreciation and amortization method are reviewed periodically to ensure
that the period and method of depreciation and amortization are consistent with the expected
pattern of economic benefits from items of property and equipment.
An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
assets, which is calculated as the difference between the net disposal proceeds and the carrying
amount of the asset, is included in profit or loss in the year the asset is derecognized.
Assets Held for Sale

An asset is classified as held for sale if its carrying amount will be recovered principally through a
sale transaction rather than through continuing use, available for immediate sale and its sale is
highly probable. An asset classified as held for sale is measured at the lower of fair value less
costs to sell and its carrying amount.
Any impairment loss on write-down of the asset to fair value less costs to sell is recognized in
profit or loss. Any gain on subsequent increase in fair value less costs to sell is also recognized in
profit or loss, but not in excess of the cumulative impairment loss already recognized on the asset.
Assets held for sale of the Company consists mainly of motor vehicles foreclosed from borrowers
or lessees who have defaulted on their installment or lease payments.
Intangible Assets
This consists of software costs, stated at acquisition cost and is amortized on a straight-line basis
over estimated useful life of five (5) years.
An intangible asset is recognised only when its cost can be measured reliably and it is probable
that the expected future economic benefits that are attributable to it will flow to the Company.
*SGVFS004641*
- 18 -
Impairment of Non-financial Assets

The carrying values of non-financial assets (i.e. property and equipment, assets held for sale,
software cost) are reviewed for impairment when events or changes in circumstances indicate that
the carrying values may not be recoverable. If any such indication exists and where the carrying
values exceed the estimated recoverable amounts, the assets or cash-generating units are written
down to their recoverable amounts. The recoverable amount of an asset is the greater of its net
selling price and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessment of the time value of money and the risks specific to the asset. For an asset that does
not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs. Impairment loss is recognized under ‘Provision for
credit and impairment losses’ in profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously
recognized impairment losses may no longer exist or may have decreased. If such indication
exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount
since the last impairment loss was recognized. If that is the case, the carrying amount of the asset
is increased to its recoverable amount. That increased amount cannot exceed the carrying amount
that would have been determined, net of depreciation and amortization, had no impairment loss
been recognized for the asset in prior years. Such reversal is recognized in profit or loss. After
such a reversal, depreciation and amortization expense is adjusted in future years to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining
life.
Retirement Cost
The Company has a funded, noncontributory defined benefit retirement plan covering all its
employees with regular employment status. The defined benefit liability (asset) is the aggregate of
the present value of the defined benefit obligation at the end of the reporting period reduced by the
fair value of plan assets, adjusted for any effect of limiting a net defined benefit asset to the asset
ceiling. The asset ceiling is the present value of any economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognized as expense in profit or loss. Past service costs are recognized
when plan amendment or curtailment occurs.
Net interest on the net defined benefit liability or asset is the change during the period in the net
defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on government bonds to the net defined benefit liability or asset.
Net interest on the net defined benefit liability or asset is recognized as expense or income in
profit or loss.
Remeasurements comprising of actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized
immediately in other comprehensive income in the period in which they arise. Remeasurements
are not reclassified to profit or loss in subsequent periods.
*SGVFS004641*
- 19 -
Plan assets are assets that are held by a long-term employee benefit fund. Plan assets are not
available to the creditors of the Company, nor can they be paid directly to the Company. Fair
value of plan assets is based on market price information. When no market price is available, the
fair value of plan assets is estimated by discounting expected future cash flows using a discount
rate that reflects both the risk associated with the plan assets and the maturity or expected disposal
date of those assets (or, if they have no maturity, the expected period until the settlement of the
related obligations). If the fair value of the plan assets is higher than the present value of the
defined benefit obligation, the measurement of the resulting defined benefit asset is limited to the
present value of economic benefits available in the form of refunds from the plan or reductions in
future contributions to the plan.
Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of
the arrangement at inception date whether the fulfillment of the arrangement is dependent on the
use of a specific asset or assets or the arrangement conveys a right to use the asset.
Company as lessor
The Company recognizes assets held under a finance lease in its statement of financial position as
a receivable at an amount equal to the net investment in the lease. The lease payments received
from the lessee are treated as repayments of principal and finance income. Initial direct costs that
are incremental and directly attributable to negotiating and arranging the lease are included in the
measurement of the net investment in the lease at inception and reflected in the calculation of the
implicit interest rate.
Company as lessee
Lease of assets under which the lessor effectively retains all the risks and rewards of ownership is
classified as operating lease. Lease payments under an operating lease are recognized as an
expense on a straight-line basis over the lease term.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the income can be reliably measured. The following specific recognition criteria
must also be met before revenue is recognized:
Interest income
Interest and financing fees on finance leases and loans and receivables (including dealers’ and
manufacturers’ subsidy) are initially credited to unearned interest income and amortized over the
term using effective interest method. Any direct costs to acquire finance leases and loans and
receivables are capitalized and amortized using the effective interest method.
Interest income on impaired receivables is recognized based on the rate used to discount future
cash flows to their net present value. Interest income from cash in bank is accrued as earned.
Service fees
Service fees earned for the provision of transaction services such as processing fees are recognized
upon completion of the underlying transaction.
Recoveries of accounts written off

Recoveries of accounts written off are recognized as income upon actual collection.
*SGVFS004641*
- 20 -
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use are capitalized.
All other borrowing costs are recognized as expense in the year which they are incurred.
Income Taxes
Current taxes
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted at the reporting date.
Deferred taxes
Deferred tax is provided on all temporary differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets
are recognized for all deductible temporary differences, carryforward benefit of the excess of
minimum corporate income tax (MCIT) over regular corporate income tax (RCIT) and unused net
operating loss carryover (NOLCO), to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and carryforward of MCIT and
unused NOLCO can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred tax assets to be utilized. Unrecognized deferred tax assets are reassessed at
each reporting date and are recognized to the extent that it has become probable that future taxable
profit will allow all or part of the deferred tax assets to be recovered. Deferred tax, however, is
not recognized on temporary differences that arise from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting income nor taxable income or loss.
Deferred tax assets and liabilities are measured at the tax rate that is expected to apply to the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
Current tax and deferred tax relating to items recognized directly in equity is also recognized in
equity and not in profit or loss.
Deferred tax assets and tax liabilities are offset, if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.
Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive)
where, as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation.
*SGVFS004641*
- 21 -
Contingencies
Contingent liabilities are not recognized but are disclosed in the notes to the financial statements
unless the possibility of an outflow of resources embodying economic benefits is remote.
Contingent assets are not recognized but are disclosed in the notes to the financial statements
when the inflow of economic benefits is probable.
Equity
Capital stock is measured at par value for all shares issued. When the Company issues more than
one class of stock, a separate account is maintained for each class of stock and the number of
shares issued.
When the shares are sold at premium, the difference between the proceeds and the par value is
credited to “Additional paid-in capital” account. When shares are issued for a consideration other
than cash, the proceeds are measured by the fair value of the consideration received. In case the
shares are issued to extinguish or settle the liability of the Company, the shares shall be measured
either at the fair value of the shares issued or fair value of the liability settled, whichever is more
reliably determinable.
Direct cost incurred related to the equity issuance, such as underwriting, accounting and legal fees,
printing costs and taxes are chargeable to “Additional paid-in capital” account. If additional paid-
in capital is not sufficient, the excess is charged against retained earnings.
Retained earnings represent accumulated net income of the Company, net of dividends paid.
Dividends
Dividends are recognized as a liability and deducted from equity when declared and approved by
the Board of Directors of the Company and of the BSP. Dividends for the year that are declared
and approved after the reporting date, if any, are dealt with as an event after the reporting date and
disclosed accordingly.
Expense Recognition
Expenses are recognized in profit or loss when decrease in future economic benefit related to a
decrease in an asset or an increase in a liability has arisen that can be measured reliably. Expenses
are recognized in profit or loss: on the basis of a direct association between the costs incurred and
the earning of specific items of income; on the basis of systematic and rational allocation
procedures when economic benefits are expected to arise over several accounting periods and the
association with income can only be broadly or indirectly determined; or immediately when an
expenditure produces no future economic benefits or when, and to the extent that, future economic
benefits do not qualify or cease to qualify, for recognition in the statements of financial position as
an asset.
Events after the Reporting Period

Post year-end events that provide additional information about the Company’s financial position at
the reporting date (adjusting events) are reflected in the financial statements. Post year-end events
that are not adjusting events are disclosed in the notes to the financial statements when material.
*SGVFS004641*
- 22 -
3. Significant Accounting Judgments and Estimates
The preparation of the accompanying financial statements in conformity with PFRS requires
management to make judgments, estimates and assumptions that affect the reported amounts in the
financial statements and accompanying notes. The judgments, estimates and assumptions used in
the accompanying financial statements are based upon management’s evaluation of relevant facts
and circumstances as of the date of the financial statements. Actual results could differ from such
estimates.
Judgments and estimates are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Judgments
In the process of applying the Company’s accounting policies, management has made the
following judgments, apart from those involving estimates and assumptions, which have the most
significant effect on the amounts recognized in the financial statements.
Finance leases
The Company, as a lessor, has entered into finance leases of vehicles with its customers. The
Company has determined that it transfers all the significant risks and rewards of ownership as the
lease terms are for the major part of the economic life of these properties which are leased out on
finance leases.
Operating leases
The Company has entered into a lease commitment for its occupied office premises. The
Company has determined based on its evaluation of the terms and conditions of the lease
arrangements (i.e., the lease does not transfer ownership of the asset to the lessee by the end of the
lease term, the lessee has no option to purchase the asset at a price that is expected to be
sufficiently lower than the fair value at the date the option is exercisable and the lease term is not
for the major part of the asset’s economic life) that all significant risks and rewards of ownership
are retained by the respective lessors. Operating lease payments are recognized as an expense in
profit or loss on a straight-line basis over the lease term.
Estimates
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed in the following
paragraphs.
a. Estimation of allowance for credit losses

The Company reviews impairment of receivables on a monthly basis. Impairment loss on
receivables is determined on a collective basis using the net flow rate methodology.
In determining whether an impairment loss should be recorded in profit or loss, the Company
makes judgments as to whether there is any observable data indicating that there is a
measurable decrease in the estimated future cash flows from a portfolio of receivables
financed and lease contract receivables before the decrease can be identified with an
individual account in that portfolio. This observable data may include adverse changes in the
payment status of borrowers in a group, or national or local economic conditions that correlate
with defaults on assets in the portfolio.
*SGVFS004641*
- 23 -
The amount and timing of recorded expenses for any period would differ if the Company
made different estimates. An increase in allowance for credit losses would increase the
recorded expenses and decrease the related asset account.
As of March 31, 2014 and 2013, the carrying value of loans and receivables amounted to
P
=26.7 billion and P
=19.5 billion, respectively (see Note 6).
As of March 31, 2014 and 2013, allowance for credit losses on loans and receivables
amounted to P
=482.2 million and =
P476.5 million, respectively (see Notes 6 and 10).
Fair value of derivatives

The fair values of derivatives that are not quoted in active markets are determined using
valuation techniques. Where valuation techniques are used to determine fair values, they are
validated and periodically reviewed by qualified personnel independent of the area that created
them. All models are reviewed before they are used, and models are calibrated to ensure that
outputs reflect actual data and comparative market prices. To the extent practical, models use
only observable data, however areas such as credit risk (both own and counterparty),
volatilities and correlations require management to make estimates. Changes in assumptions
about these factors could affect reported fair value of financial instruments.
b. Valuation of assets held for sale

The Company’s assets held for sale are carried at the lower of its carrying amount and fair
value less costs to sell. Fair value is based on the valuation performed by the internal
appraiser. Valuation of assets held for sale is ascertained using the market data approach,
wherein current sales prices of identical vehicles, together with the valuation opinions of
conversant appraisers are accumulated, compared and thoroughly analyzed. As of
March 31, 2014 and 2013, assets held for sale amounted to P =44.4 million and =P63.9 million,
respectively (see Note 7).
c. Present value of retirement obligation

The present value of the obligation depends on certain factors that are determined on an
actuarial basis using a number of assumptions. These include, among others, discount rates,
future salary increases, mortality rates, and future pension increases. Due to long term nature
of this plan, such estimates are subject to significant uncertainty.
The assumed discount rate was determined using average market yields on Philippine
government bonds with terms consistent with the expected employee benefit payout as of
reporting date. The mortality rate is based on publicly available mortality tables and is
modified accordingly with estimates of mortality improvements. Future salary increases and
pension increases are based on expected future inflation rates. Refer to Note 18 for the details
of assumptions used in the calculation.
As of March 31, 2014 and 2013, the present value of the defined benefit obligation of the
Company amounted to = P29.1 million and =P27.0 million, respectively. As of March 31, 2014
and 2013, the Company has net retirement asset amounting to = P12.6 million and
=
P12.4 million, respectively (see Note 18).
*SGVFS004641*
- 24 -
d. Recognition of deferred tax assets

Deferred tax assets are recognized for all deductible temporary differences to the extent that it
is probable that taxable income will be available against which the losses can be utilized.
Significant management judgment is required to determine the amount of deferred tax assets
that can be recognized, based upon the likely timing and level of future taxable income
together with future tax planning strategies.
The Company has been in a taxable income position over the past several years. The
Company believes, based on its expected future taxable income that it is highly probable for
temporary differences to be realized in the future.
As of March 31, 2014 and 2013, the carrying value of the recognized net deferred tax assets
amounted to P
=141.6 million and =
P138.7 million, respectively (see Note 19).
4. Cash and Cash Equivalents and Due from Bangko Sentral ng Pilipinas
Cash and Cash Equivalents

This account consists of:
2014 2013
Cash on hand P
=453,603 P
=124,623
Cash in banks (Note 21) 628,325,501 587,174,501
Cash equivalents − 94,000,000
P
=628,779,104 =681,299,124
P
Cash in bank earns annual interest ranging from 0.3% to 1.5% and 2.3% to 2.8% in 2014 and
2013, respectively.
Cash equivalents pertain to overnight placement that earns annual interest ranging from 1.3% to
1.8% in 2013 made by the Company with a bank.
Due from BSP

As of March 31, 2014 and 2013, due from BSP consists of demand deposit accounts with 0.0%
interest rate and interest ranging from 0.0% to 3.8%, respectively.
Interest income on cash and due from BSP consists of:
2014 2013
Cash in banks (Note 21) P
=5,544,573 P
=17,899,591
Cash equivalents 564,496 565,717
Due from BSP − 8,831,582
P
=6,109,069 P
=27,296,890
*SGVFS004641*
- 25 -
5. Available-for-Sale Investments
AFS investments include quoted equity shares. The carrying value of the AFS investments
amounted to =P0.95 million and P
=0.91 million as of March 31, 2014 and 2013, respectively. The
changes in fair value recognized in other comprehensive income amounted to =P0.04 million in
2014 and =
P0.02 million in 2013.
The movements in unrealized gain on AFS investments follow:
2014 2013
Balance at beginning of year P
=100,000 P
=120,000
Changes in fair value 40,000 (20,000)
Balance at end of year P
=140,000 P
=100,000
6. Loans and Receivables
2014 2013
Receivables from customers
Receivables financed =6,696,193,189 =
P P6,122,070,518
Unearned finance income (850,143,313) (742,091,624)
5,846,049,876 5,379,978,894
Finance lease receivables
Finance lease receivables 18,927,141,143 12,529,149,796
Residual value of leased assets 5,351,659,359 3,888,283,340
24,278,800,502 16,417,433,136
Unearned lease income (2,979,803,604) (1,913,111,446)
21,298,996,898 14,504,321,690
27,145,046,774 19,884,300,584
Other receivables
Receivables from clients 57,111,903 81,610,125
Receivables from employees 8,074,029 6,332,790
Accrued interest receivable 174,446 512,957
Others 79,607 142,558
65,439,985 88,598,430
Allowance for credit losses (Note 10) (482,248,849) (476,452,318)
=26,728,237,910 P
P =19,496,446,696
Receivables financed earn fixed interest ranging from 6.5% to 19.9% in 2014 and from 6.2% to
28.4% in 2013 while finance lease receivables earn fixed interest ranging from 6.8% to 17.0% in
2014 and from 6.8% to 18.0% in 2013. An account shall be considered delinquent when after the
arrival of a payment due date, the client failed to settle the amount. If the account remains unpaid
for 30 days from the last due date, the account shall be considered past due.
*SGVFS004641*
- 26 -
Receivables from customers are due in monthly installments with terms ranging from one (1) to
five (5) years. The receivables financed, net of unearned finance income, by contractual maturity
dates is analyzed as follows:
2014 2013
Due within 1 year P
=649,470,817 P733,913,666
=
Due beyond 1 year but not beyond 5 years 5,196,579,059 4,646,065,228
P
=5,846,049,876 =5,379,978,894
P
The breakdown of the Company’s gross investment in finance lease receivables by contractual
maturity dates is analyzed as follows:
2014 2013
Gross investment in finance lease receivables
Due within 1 year P
=547,203,935 =375,384,557
P
18,927,141,143 12,529,149,796
Residual value of leased assets
Due within 1 year 692,350,815 437,161,918
5,351,659,359 3,888,283,340
Unearned lease income
Due within 1 year (21,094,466) (14,467,927)
Due beyond 1 year but not beyond 5 years (2,958,709,138) (1,898,643,519)
(2,979,803,604) (1,913,111,446)
Net investment in finance lease receivables =21,298,996,898 =
P P14,504,321,690
The net investment in finance lease receivables is analyzed as follows:
2014 2013
Due within 1 year P
=1,623,371,783 =798,078,548
P
=21,298,996,898 =
P P14,504,321,690
Interest income on loans and receivables consists of:
2014 2013
Receivables financed P
=580,685,820 P640,644,829
=
Finance lease receivables 1,351,256,057 1,043,591,142
P
=1,931,941,877 =1,684,235,971
P
A reconciliation of the allowance for credit losses by class of receivables from customers
follows (see Note 10):
2014
Receivables Finance lease
financed receivables Total
Balances at beginning of year P
=232,223,319 P
=244,228,999 P
=476,452,318
Provisions (reversals) (46,443,094) 243,256,630 196,813,536
Accounts written off (62,359,788) (128,657,217) (191,017,005)
Balances at end of year P
=123,420,437 P
=358,828,412 P
=482,248,849
*SGVFS004641*
- 27 -
2013
Receivables Finance lease
financed receivables Total
Balances at beginning of year =224,098,504
P =245,078,612
P =469,177,116
P
Provisions 72,217,375 99,937,424 172,154,799
Accounts written off (64,092,560) (100,787,037) (164,879,597)
Balances at end of year =232,223,319
P =244,228,999
P =476,452,318
P
All accounts not identified as specifically impaired are subjected to collective testing. Collective
testing of impairment loss is assessed using net flow rate methodology. As of March 31, 2014 and
2013, there were no specifically impaired loans and receivables
BSP reporting
As of March 31, 2014 and 2013, information on concentration of receivables from customers
excluding residual value of leased assets as to economic activity of the Company follows:
2014 2013
Amount % Amount %
Real estate, renting and business activities P
=5,292,847,403 24.3 P
=3,897,892,700 24.4
Wholesale and retail trade 3,552,854,258 16.3 2,865,945,026 17.9
Other community, social and personal
activities 3,195,077,459 14.7 1,985,768,069 12.4
Financial intermediaries 2,560,205,417 11.7 1,642,244,863 10.3
Transportation, storage and communication 2,280,953,687 10.5 1,846,443,525 11.5
Manufacturing 1,766,270,318 8.1 1,633,268,822 10.2
Education 1,060,739,732 4.9 705,570,819 4.4
Hotels and restaurants 683,064,839 3.1 398,071,508 2.5
Construction 663,224,537 3.0 438,648,153 2.7
Agricultural, hunting and forestry 354,043,566 1.6 307,041,298 1.9
Electricity, gas and water 266,659,402 1.2 189,570,670 1.2
Mining and quarrying 98,632,798 0.5 73,157,799 0.5
Fishing 18,813,999 0.1 12,393,992 0.1
P
=21,793,387,415 100.0 P
=15,996,017,244 100.0
The BSP considers that concentration of credit exists when total loan exposure to a particular
industry or economic sector exceeds 30% of total loan portfolio.
As of March 31, 2014 and 2013, nonperforming loans (NPLs) not fully covered by allowance for
credit losses of the Company, as reported to BSP, follow:
2014 2013
Total NPLs P
=318,655,071 P327,347,513
=
NPLs fully covered by allowance for credit losses (205,702,023) (171,489,688)
P
=112,953,048 =155,857,825
P
Generally, NPLs refer to loans whose principal and/or interest is unpaid for ninety (90) days or
more after due date or after they have become past due in accordance with existing BSP rules and
regulations. This shall apply to loans payable in lump sum and loans payable in quarterly, semi-
annual, or annual installments, in which case, the total outstanding balance thereof shall be
considered nonperforming.
*SGVFS004641*
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In the case of receivables that are payable in monthly installments, the total outstanding balance
thereof shall be considered nonperforming when three (3) or more installments are in arrears. In
the case of receivables that are payable in weekly, or semi-monthly installments, the total
outstanding balance thereof shall be considered nonperforming at the same time that they become
past due in accordance with existing BSP regulations, i.e., the entire outstanding balance of the
receivable shall be considered as past due when the total amount of arrearages reaches more than
10.0% of the total receivable balance.
7. Assets Held for Sale
The rollforward analysis of this account follows:
2014 2013
Cost
Balance at beginning of year P
=92,562,869 P
=81,805,577
Additions 248,528,482 282,741,636
Disposals and transfers (277,629,353) (271,984,344)
Balance at end of year 63,461,998 92,562,869
Allowance for impairment losses (Note 10)
Balance at beginning of year 28,681,779 6,944,793
Additions 19,599,068 43,084,795
Disposals (29,251,301) (21,347,809)
Net book value P
=44,432,452 P
=63,881,090
The Company’s assets held for sale consist of repossessed collaterals from customers who have
defaulted in their respective loan accounts. These are actively marketed for sale and are expected
to be sold within one year from the date of its classification as assets held for sale.
Loss on assets held for sale included under ‘Service fees and other income’ in the statements of
comprehensive income amounted to = P2.9 million and P
=10.8 million in 2014 and 2013,
respectively (see Note 17).
8. Property and Equipment
The composition and movements in this account follow:
2014
Furniture,
Leasehold Fixtures and Transportation
Improvements Equipment Equipment Total
Cost
=31,617,783 P
=52,819,160 P
=26,884,996 P
=111,321,939
Acquisitions 3,391,227 5,222,301 1,891,668 10,505,196
Transfers (Note 25) − − 5,598,813 5,598,813
Disposals − – (4,121,511) (4,121,511)
Balances at end of year 35,009,010 58,041,461 30,253,966 123,304,437
Accumulated depreciation and amortization
Balances at beginning of year 19,180,646 44,855,959 12,234,053 76,270,658
Depreciation and amortization 3,249,008 4,692,951 4,787,942 12,729,901
Disposals − − (3,852,504) (3,852,504)
Net book value P
=12,579,356 P
=8,492,551 P
=17,084,475 P
=38,156,382
*SGVFS004641*
- 29 -
2013
Furniture,
Leasehold Fixtures and Transportation
Improvements Equipment Equipment Total
Cost
Balances at beginning of year =
P22,676,856 41,345,993 =
P23,402,964 =
P87,425,813
Acquisitions 8,940,927 11,536,468 5,339,740 25,817,135
Transfers (Note 25) − − 5,153,981 5,153,981
Disposals – (63,300) (7,011,690) (7,074,990)
Accumulated depreciation and amortization
Balances at beginning of year 17,599,610 38,564,116 13,924,153 70,087,879
Depreciation and amortization 1,581,036 6,327,392 4,531,850 12,440,278
Disposals – (35,549) (6,221,950) (6,257,499)
Net book value =
P12,437,137 7,963,202 =
P14,650,942 =
P35,051,281
As of March 31, 2014 and 2013, the cost of the Company’s fully depreciated property and
equipment still in use amounted to =
P64.6 million and =
P63.0 million, respectively.
9. Software Costs and Other Assets
Software Costs
Movements in software costs follow:
2014 2013
Cost
=58,722,088 P
=54,323,424
Additions 8,018,392 4,398,664
Balances at end of year 66,740,480 58,722,088
Accumulated amortization
Balances at beginning of year 40,055,749 31,675,957
Amortization 7,360,518 8,379,792
Net book value P
=19,324,213 P
=18,666,339
Amortization of software costs is included in the depreciation and amortization in the statements
of comprehensive income.
As of March 31, 2014 and 2013, the cost of the Company’s fully amortized software still in use
amounted to =
P33.9 million and P
=18.2 million, respectively.
Other Assets
2013
(As Restated -
2014 Note 2)
Retirement asset (Note 18) P
=12,605,470 12,351,786
Prepaid expenses 9,424,258 11,820,103
Security deposits 7,755,059 7,019,096
Others 95,396 –
P
=29,880,183 P
=31,190,985
*SGVFS004641*
- 30 -
Prepaid expenses mainly consists of prepayments on office rent, IT related costs, electronic
documentary stamps and accommodation of certain executive employees.
10. Allowance for Credit and Impairment Losses
2014 2013
Balances at beginning of year
=232,223,319 =224,098,504
P
Finance lease receivables 244,228,999 245,078,612
476,452,318 469,177,116
Assets held for sale 28,681,779 6,944,793
505,134,097 476,121,909
Provision for credit and impairment losses 216,412,604 215,239,594
Accounts written off (Note 6) (191,017,005) (164,879,597)
Reversal (Note 7) (29,251,301) (21,347,809)
(3,855,702) 29,012,188
Balances at end of year
Loans and receivables (Note 6)
Receivables financed 123,420,437 232,223,319
482,248,849 476,452,318
Assets held for sale (Note 7) 19,029,546 28,681,779
P
=501,278,395 =505,134,097
P
Below is the breakdown of provision for credit and impairment losses:
2014 2013
Loans and receivables (Note 6)
Receivables financed (P
=46,443,094) P
=72,217,375
196,813,536 172,154,799
Assets held for sale (Note 7) 19,599,068 43,084,795
P
=216,412,604 215,239,594
With the foregoing level of allowance for credit and impairment losses, management believes that
the Company has sufficient allowance to absorb any losses that may be incurred from the
noncollection or nonrealization of its receivables and assets held for sale.
*SGVFS004641*
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11. Loans Payable
2014 2013
Bank loans (Note 14) =20,196,771,924 P
P =13,864,652,748
Corporate note 1,486,242,489 –
Notes payable 86,136,313 26,910,823
Loans payable to First Metro Investment
Corporation (FMIC) – 1,499,937,500
=21,769,150,726 P
P =15,391,501,071
Bank loans
Bank loans bear interest rates ranging from 1.7% to 6.9% in 2014 and 2.7% to 6.9% in 2013. As
of March 31, 2014 and 2013, the Company’s bank loans have maturity period of 2 months to
3 years and 4 months to 5 years, respectively.
Notes payable
Notes payable pertains to retail notes issued by the Company that bear interest rates ranging from
3.3% to 4.0% and with maturity period of 1 month to 12 months.
Foreign loan from BTMU-Japan

On December 18, 2009, the BSP approved the Company’s application to enter into a USD term
loan agreement with BTMU-Japan. The Company was also allowed to execute a cross-currency
swap agreement on the approved USD term loan.
On February 4, 2010, the Company entered into a US$31.0 million loan with BTMU-Japan which
matured last February 4, 2013. Interest is payable quarterly based on British Banker’s Association
London Interbank Offered Rate (BBA LIBOR) plus 0.4%. On the same date, the Company
entered into a cross-currency interest rate swap agreement with BTMU-Manila Branch and which
was designated by the Company as cash flow hedge (see Note 14).
Corporate note
On January 24, 2014 (the Issue Date), the Company issued fixed rate notes amounting to
1.5 billion. The fix rate notes bear interest of 5.4% and will mature on January 25, 2019 but can
be early redeemed, at the option of the Company, on any interest payment date on or after the third
anniversary of the Issue Date, subject to the certain conditions, at the amount equivalent to the
principal and all accrued interest due on the notes and a prepayment penalty equivalent to 1% per
annum to be computed on the remaining term of the principal amount of the notes prepaid. The
Company is also required to maintain, at all times, a Capital Adequacy Ratio of not less than
10.0% or such other percentage as may be required by BSP.
Loan from FMIC

On April 23, 2010, the Company entered into a loan agreement with FMIC to obtain a loan
amounting to = P1.5 billion. The loan bears an interest of 6.6% and will mature on April 10, 2013.
Interest on the loan will be payable every six months from the date of borrowing. On
April 10, 2013 this loan with FMIC was settled in full.
*SGVFS004641*
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Interest expense on loans payable consists of:
2014 2013
Bank loans P
=721,371,770 =569,919,969
P
Corporate note 15,555,678 –
Notes payable 1,798,080 941,008
Loans payable to FMIC 2,740,375 100,023,687
Foreign loan from BTMU-Japan – 91,053,329
P
=741,465,903 =761,937,993
P
12. Subordinated Debt
On April 28, 2011 (the Issue Date), the Company issued unsecured subordinated notes (the Notes)
amounting to =P1.0 billion. The Notes bear an interest of 6.7% and will mature on April 28, 2016
(the Maturity Date).
Among the significant terms and conditions of the Notes are:
a. The Notes will be in minimum denominations of = P50.0 million and in integral multiples of
P
=10.0 million, thereafter, each sold at 100% of the face value of the Notes for a total issue size
of =
P1.0 billion.
b. The fixed rate of 6.7% per annum, payable to the noteholders for the period from and including
the Issue Date up to but excluding the Maturity Date. The interest rate or the formulation for
calculating interest payments shall be fixed at the time of the issuance of the Notes and may not
be linked to the credit standing of the Company.
c. The Notes shall not be redeemable or terminable at the instance of any noteholder before the
Maturity Date, except in cases of bankruptcy and liquidation. Negotiations or transfers of the
Notes to one other than the Company prior to the Maturity Date shall not constitute pre-
termination.
d. The Notes may only be sold, transferred or negotiated (whether in whole or in part) to another
qualified institutional investor which is not a prohibited noteholder; provided, that in case of
non-banks without underwriting licenses, such negotiation or assignment shall be through banks
or non-banks licensed to be an underwriter or a securities dealer; provided further, that in no
case shall the Notes be negotiated or assigned to non-qualified investors.
e. The Notes constitute direct, unconditional, unsecured, and subordinated peso-denominated

obligations of the Company. Claims of the noteholders in respect of the Notes shall at all times
rank pari passu without any preference among themselves.
The Company’s interest expense on subordinated notes amounted to =

P68.1 million in 2014 and
2013.
*SGVFS004641*
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13. Accounts Payable and Other Liabilities

2013
(As Restated -
2014 Note 2)
Accounts payable (Note 21) P
=292,266,758 =307,634,505
P
Accrued interest payable (Note 21) 130,259,427 147,664,906
Accrued expenses 73,351,147 61,708,429
Withholding tax payable 3,124,979 2,421,049
Others 503,296 398,185
P
=499,505,607 519,827,073
Accounts payable are composed of trade payables to dealers, insurance and outsourcing
companies which are non-interest bearing and are normally settled on a 30-day term.
Accrued expenses pertain to unpaid utilities and accrual for employees’ compensated leaves and
absences.
Others consist of payables to government agencies.
14. Derivative Liability
The movements in fair value changes of the derivative liability follow:
2014 2013
Beginning balance P
=– P
=34,246,258
Net changes in fair value of derivatives through
profit/loss 210,630 698,186
Net changes in fair value of derivatives through
other comprehensive income – (16,887,295)
Settlement – (18,057,149)
P
=210,630 P
=–
On August 12, 2013, the Company executed a peso-denominated interest rate swap amounting to
=150.0 million (notional amount) with Bank of Tokyo-Mitsubishi UFJ (BTMU). The Company
P
pays fixed quarterly interest at 2.7% and receives 3-month PHIREF plus 45 basis points. As of
March 31, 2014, the fair value of the derivative liability amounted to P
=0.2 million.
On February 4, 2010, the Company entered into a cross-currency interest rate swap agreement
with BTMU-Manila Branch to hedge foreign currency and interest rate risks in the foreign loan
availed from BTMU-Japan. Under the agreement, the Company, on a quarterly basis, pays fixed
interest rate of 5.8% per annum on the peso principal amounting to 1.4 billion and receives
floating interest rate at 3 month British Bankers’ Association London Interbank Offered Rate
(BBA LIBOR) plus 0.4% on the USD loan amounting to $31.0 million. Effectively, under the
swap agreement, the Company swaps its USD-denominated floating rate loans into peso fixed-rate
loans. On the loan hedged, the swaps cover a period of three (3) years from February 4, 2010 to
February 4, 2013. On the same date, the Company designated the swaps as effective hedging
instruments under a cash flow hedge relationship. As such, the effective portion of the changes in
fair value of the swaps was recognized under other comprehensive income.
*SGVFS004641*
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The Company assessed the hedge relationship of the swaps and the hedged loans as highly
effective. In the fiscal year 2012, the effective fair value changes on the swaps that were
recognized as OCI under ‘Cash flow hedge reserve’ amounted to 35.6 million, net of deferred
tax liability of 15.3 million. No ineffectiveness was recognized during the fiscal year 2013. On
February 4, 2013, the loan from BTMU-Japan has matured and has been fully settled. On the same
date, the cross currency interest rate swap has also been settled.
The movements in cash flow hedge reserve (gross of tax) in 2013 follow:
Beginning balance P
=82,251,741
Net changes in fair value 16,189,109
Foreign exchange revaluation 69,285,000
Settlement (167,725,850)
P
=−
15. Deposits on Lease Contracts
Deposits on lease contracts consist of deposits from lessees and customers of finance lease
receivables to serve as security for the prompt and faithful performance of the terms and
conditions of the contracts. Such deposits are applied as lease payments at the end of the lease
term subject to terms and conditions of the contract.
The maturity information of deposit on lease contracts follow:
2014 2013
Within 1 year P
=706,032,150 =432,179,075
P
Beyond 1 year but not beyond 5 years 4,638,751,112 3,445,512,916
P
=5,344,783,262 =3,877,691,991
P
16. Maturity Analysis of Assets and Liabilities
The following tables present the assets and liabilities as of March 31, 2014 and 2013 analyzed
according to when they are expected to be recovered or settled within one year and beyond one
year from the reporting date:
2014 2013 (As restated – Note 2)
Due within Due beyond Due within Due beyond
one year one year Total one year one year Total
Financial Assets
Cash and cash equivalents P
= 628,779,104 P
=– P
= 628,779,104 =681,299,124
P =
P– =681,299,124
P
Due from BSP 3,894,429,108 – 3,894,429,108 2,759,843,098 – 2,759,843,098
AFS investments – 950,000 950,000 – 910,000 910,000
Receivables financed 649,470,817 5,196,579,059 5,846,049,876 733,913,666 4,646,065,228 5,379,978,894
Finance lease receivables 1,218,460,284 20,080,536,614 21,298,996,898 798,078,548 13,706,243,142 14,504,321,690
Other receivables
Receivables from clients 57,111,903 − 57,111,903 81,610,125 – 81,610,125
Receivables from employees 3,351,543 4,722,486 8,074,029 1,635,634 4,697,156 6,332,790
Accrued interest receivable 174,446 − 174,446 512,957 – 512,957
Others 79,607 − 79,607 142,558 – 142,558
6,451,856,812 25,282,788,159 31,734,644,971 5,057,035,710 18,357,915,526 23,414,951,236
(Forward)
*SGVFS004641*
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2014 2013 (As restated – Note 2)

Due within Due beyond Due within Due beyond
one year one year Total one year one year Total
Nonfinancial Assets
Assets held for sale P
= 63,461,998 P
=– P
= 63,461,998 =92,562,869
P =
P– =92,562,869
P
Property and equipment - net – 38,156,382 38,156,382 – 35,051,281 35,051,281
Software costs – 19,324,213 19,324,213 – 18,666,339 18,666,339
Deferred tax assets - net – 141,554,003 141,554,003 – 138,657,279 138,657,279
Other assets
Retirement Asset – 12,605,470 12,605,470 – 12,351,786 12,351,786
Prepaid expenses 9,424,258 – 9,424,258 11,820,103 – 11,820,103
Security Deposits 7,755,059 – 7,755,059 7,019,096 – 7,019,096
Others 95,396 – 95,396 – – –
80,736,711 211,640,068 292,376,779 111,402,068 204,726,685 316,128,753
Less: Allowance for credit and
impairment losses 61,805,575 439,472,820 501,278,395 149,561,359 355,572,738 505,134,097
P
= 6,470,787,948 P
= 25,054,955,407 P
= 31,525,743,355 5,018,876,419 18,207,069,473 23,225,945,892
Financial Liabilities
Loans payable
Bank loans P
= 8,492,787,577 P
= 11,703,984,347 P
= 20,196,771,924 =5,693,749,446
P =8,170,903,302 P
P =13,864,652,748
Corporate Note − 1,486,242,489 1,486,242,489 − − −
Notes payable 86,136,313 – 86,136,313 26,910,823 – 26,910,823
Loans payable to First Metro
Investment Corporation (FMIC) – – – 1,499,937,500 – 1,499,937,500
8,578,923,890 13,190,226,836 21,769,150,726 7,220,597,769 8,170,903,302 15,391,501,071
Subordinated Debt – 997,951,695 997,951,695 – 997,066,198 997,066,198
Derivative liability – 210,630 210,630 – – –
Accounts payable and other liabilities
Accounts payable 292,266,758 – 292,266,758 307,634,504 – 307,634,504
Accrued interest payable 130,259,427 – 130,259,427 147,664,906 – 147,664,906
Accrued expenses 51,005,155 – 51,005,155 38,867,208 – 38,867,208
Deposits on lease contracts 686,564,694 4,658,218,568 5,344,783,262 432,179,075 3,445,512,916 3,877,691,991
9,739,019,924 18,846,607,729 28,585,627,653 8,146,943,462 12,613,482,416 20,760,425,878
Nonfinancial Liabilities
Income tax payable 66,819,225 – 66,819,225 18,045,603 – 18,045,603
Accounts Payable and other liabilities
Accrued expenses 22,345,992 – 22,345,992 22,841,221 – 22,841,221
Withholding tax payable 3,124,979 – 3,124,979 2,421,049 – 2,421,049
Other liabilities 503,296 – 503,296 398,185 – 398,185
92,793,492 – 92,793,492 43,706,058 − 43,706,058
P
= 9,831,813,416 P
= 18,846,607,729 P
= 28,678,421,145 =8,190,649,520 P
P =12,613,482,416 20,804,131,936
17. Service Fees and Other Income
2014 2013
Service fees 131,037,393 110,246,421
Recoveries from accounts written off 32,439,394 15,412,761
Loss on assets held for sale (Note 7) (2,928,041) (10,837,142)
Others 3,160,484 3,155,290
163,709,230 117,977,330
Service fees include income from late payments and penalty charges.
Others includes gain on sale of property and equipment, foreign exchange gains and other
miscellaneous income.
*SGVFS004641*
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18. Retirement Plan
The Company has a funded, noncontributory benefit retirement plan covering all its employees with regular employment status.
Changes in net retirement asset in 2014 are as follows:
Remeasurements in other comprehensive income

Return on
plan assets Actuarial
(excluding changes arising
Net benefit cost in statement of income amount from changes Changes in
Current Benefits included in in financial the effect of March 31,
April 1, 2013 service cost* Net interest* Subtotal paid net interest) assumptions asset ceiling Subtotal 2014
Present value of defined
benefit obligation P
=27,048,939 P
=6,669,595 P
=1,133,351 P
=7,802,946 (P
=159,519) =
P– (P
=5,617,052) P
=– (P
=5,617,052) P
=29,075,314
Fair value of plan assets (40,178,034) – (1,680,118) (1,680,118) 159,519 (1,312,433) – – (1,312,433) (43,011,066)
(13,129,095) 6,669,595 (546,767) 6,122,828 – (1,312,433) (5,617,052) – (6,929,485) (13,935,752)
Restrictions on
asset recognized 777,309 – − − – – – 552,973 552,973 1,330,282
Net defined benefit
asset (Note 9) (P
=12,351,786) P
=6,669,595 (P
=546,767) P
=6,122,828 P
=– (P
=1,312,433) (P
=5,617,052) P
=552,973 (P
=6,376,512) (P
=12,605,470)
*Current service cost and net interest are included in “Compensation and Fringe Benefits”
The maximum economic benefit available is a combination of expected refunds from the plan and reductions in future contributions.
*SGVFS004641*
- 37 -
Changes in net retirement asset in 2013 are as follows:
Remeasurements in other comprehensive income

Return on plan
assets Actuarial
(excluding changes arising March 31,
April 1, 2012 Net benefit cost in statement of income amount from changes Changes in the 2013
(As restated - Current Benefits included in net in financial effect of asset (As restated -
Note 2) service cost* Net interest* Subtotal paid interest) assumptions ceiling Subtotal Note 2)
Present value of defined
benefit obligation P
=15,890,224 P
=3,941,442 P
=1,043,988 P
=4,985,430 (P
=1,270,718) =
P– P
=7,444,003 =
P– P
=7,444,003 P
=27,048,939
Fair value of plan assets (38,576,400) – (2,492,726) (2,492,726) 1,270,718 (379,626) – – (379,626) (40,178,034)
(22,686,176) 3,941,442 (1,448,738) 2,492,704 – (379,626) 7,444,003 – 7,064,377 (13,129,095)
Restrictions on
asset recognized 4,030,442 – – – – – – (3,253,133) (3,253,133) 777,309
Net defined benefit
asset (Note 9) (P
=18,655,734) P
=3,941,442 (P
=1,448,738) P
=2,492,704 =
P– (P
=379,626) P
=7,444,003 (P
=3,253,133) P
=3,811,244 (P
=12,351,786)
*Current service cost and net interest are included in “Compensation and Fringe Benefits”
The maximum economic benefit available is a combination of expected refunds from the plan and reductions in future contributions.
*SGVFS004641*
- 38 -
The fair value of plan assets by each classes as at the end of the reporting period are as follows:
2014 2013
Cash and cash equivalents P
=5,022,526 P
=863,612
Available-for-sale securities
Government securities 27,365,874 28,717,938
Other securities and debt instruments 10,168,150 10,101,052
42,556,550 39,682,602
Total assets 43,065,037 40,228,707
Accrued expenses (53,971) (50,673)
Fair value of plan assets P
=43,011,066 P
=40,178,034
All debt instruments held have quoted prices in active market. The remaining plan assets do not
have quoted market prices in active market.
The cost of defined benefit pension plans as well as the present value of the pension obligation are
determined using actuarial valuations. The actuarial valuation involves making various
assumptions. The principal assumptions used in determining pension obligations for the defined
benefit plans are shown below:
2014 2013
Discount rates: 5.96% 4.19%
Future salary increases: 7.00% 7.00%
The sensitivity analysis below has been determined based on reasonably possible changes of each
significant assumption on the defined benefit obligation as of the end of the reporting period,
assuming if all other assumptions were held constant:
Percentage Amount
Discount rates -10.80% ( 3,143,948)
12.70% 3,689,191
Future salary increases 11.50% 3,338,943

-10.10% (2,925,046)
Attrition rate 52.60% 15,295,021
The Retirement Plan Trustee has no specific matching strategy between the plan assets and the
plan liabilities.
The Company is not required to pre-fund the future defined benefits payable under the retirement
plan before they become due. For this reason, the amount and timing of contributions to the
retirement fund are at the Company’s discretion. However, in the event a benefit claim arises and
the retirement fund is insufficient to pay the claim, the shortfall will then be due and payable from
the Company to the retirement fund.
The Company does not expect to contribute to the defined pension plans in 2015 because the fund
is overfunded.
*SGVFS004641*
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The average duration of the defined benefit obligation at the end of the reporting period is 17.1
years in 2014.
Shown below is the maturity analysis of the undiscounted benefit payments as of March 31, 2014:
Less than 1 year P

=1,003,068
More than 1 year to 5 years 4,837,264
More than 5 years 25,765,307
19. Income Taxes
Provision for income tax consists of:
2013
(As Restated -
2014 Note 2)
Current
Regular P
=188,999,282 =125,929,242
P
Final 1,221,668 5,460,307
190,220,950 131,389,549
Deferred (4,819,448) (6,701,989)
P
=185,401,502 =124,687,560
P
The components of net deferred tax assets follow:
2013
(As Restated -
2014 Note 2)
Deferred tax assets:
Allowance for credit and impairment losses P
=150,383,518 =151,540,229
P
Accrued expenses 13,758,676 650,194
Excess of rent expense over payment 335,332 205,858
Derivative liability 63,189 –
Others − 1,501,103
164,540,715 153,897,384
Deferred tax liabilities:
Documentary stamp tax 17,270,336 10,622,926
Pension cost 3,781,641 3,705,536
Subordinated debt issue cost 1,897,584 880,141
Unrealized foreign exchange gain 37,151 31,502
22,986,712 15,240,105
P
=141,554,003 =138,657,279
P
*SGVFS004641*
- 40 -
Under current tax regulations, the maximum amount of entertainment, amusement and recreation
(EAR) expenses allowable as deduction from gross income for purposes of income tax
computation shall not exceed 1% of the gross revenue of the Company. EAR expenses incurred in
2014 and 2013 amounted to P =9.7 million and =
The reconciliation of provision for income tax computed at the statutory corporate income tax rate
to provision for income tax shown in the statements of comprehensive income follows:
2013
(As Restated -
2014 Note 2)
At statutory income tax rate P
=181,915,020 =118,500,491
P
Adjustments for:
Nondeductible expenses 3,492,738 6,213,437
Interest income subjected to final tax (611,054) (2,728,760)
Nondeductible interest expense 604,798 2,702,392
P
=185,401,502 =124,687,560
P
20. Lease Commitments
The Company currently leases both of the office premises it occupies. The contract for the 28th
and 32nd floor in GT Tower expires on April 30, 2017 and June 30, 2017, respectively. The
contract is renewable upon mutual agreement between the Company and the lessor. In 2014 and
2013, rent expense, which is included under ‘Occupancy expenses’ amounted to P =18.4 million and
=
The leasehold rental commitments of the Company follow:
2014 2013
Within 1 year P
=21,262,897 P
=19,960,795
Beyond 1 year 58,879,917 59,183,344
80,142,814 P
=79,144,139
21. Related Party Transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the
other party, or exercise significant influence over the other party in making financial and operating
decisions. Parties are also considered to be related if they are subject to common control or
common significant influence (referred to as affiliates).
In the normal course of business, the Company enters into transactions with its related parties
principally consisting of advances and other borrowings. Under RA No. 8556, Financing
Company Act, the Company’s amount of credit accommodation to its directors, officers,
stockholders and other related parties should not exceed 15% of its net worth. In 2014 and 2013,
the Company has complied with this regulatory requirement.
*SGVFS004641*
- 41 -
The year-end account balances with respect to related parties included in the financial statements
follow:
2014
Nature/Terms and
Category Amount/Volume Outstanding Balance Conditions
Stockholder
MBTC
Cash in bank P
=318,264 P
=84,976,483 Demand deposit account with
annual interest of 0.5%.
Interest income 370,944 Interest earned from the
deposit account.
PSBank
Cash in bank 12,626 2,474,616 Demand deposit account with
deposit account.
TFSC (Parent Copany)
Accounts payable − 101,538 Amount payable to TFSC
relating to billing for the
support services being
provided to the Company.
Key Management Personnel
Salaries and wages
Salaries and other short term 13,528,982 − Salaries and other short-term
benefits benefits for its key
management personnel.
Post-employment benefits 127,730 – The post-employment benefits

for its key management
personnel.
2013
Category Amount/Volume Outstanding Balance Nature/Terms and Conditions
Stockholder
MBTC
Cash in bank =
P385,937 =
P82,924,928 Demand deposit account with
deposit account.
PSBank
Cash in bank 27,740 2,441,090 Demand deposit account with
deposit account.
TFSC (Parent Company)
Accounts payable – 76,701 Amount payable to TFSC
relating to billing for the
support services being
provided to the Company.
Subsidiary of the stockholder
FMIC
Loans payable – 1,500,000,000 Loan payable by the Company
to FMIC bearing annual
interest of 6.6% and maturing
on
April 10, 2013.
(Forward)
*SGVFS004641*
- 42 -
2013
Category Amount/Volume Outstanding Balance Nature/Terms and Conditions
Accrued interest payable =
P100,023,687 =
P42,163,410 Interest on loan payable by the
Company to FMIC
Key Management PersonnelSalaries

and wages
Salaries and other short term 12,849,697 – The salaries and other short-
benefits term benefits for its key
management personnel.
Post-employment benefits 314,651 – The post-employment benefits

for its key management
personnel.
In the ordinary course of business, the Company has loan transactions with certain directors,
officers, stockholders, and related interests (DOSRI). Existing banking regulations limit the
amount of individual loans to DOSRI, 70.0% of which must be secured, to the total of their
respective deposits. Such limit does not apply to loans secured by assets considered as non risk as
defined in the regulations. In the aggregate, loans to DOSRI generally should not exceed the
respective total regulatory capital or 15.0% of total loan portfolio, whichever is lower.
BSP Circular No. 423 dated March 15, 2004 amended the definition of DOSRI accounts.
BSP Circular No. 560 which became effective on February 22, 2007 provides the rules and
regulations that govern loans, other credit accommodations and guarantees granted to subsidiaries
and affiliates of the banks/quasi-banks. Under the said Circular, the total outstanding exposures
to each of the said subsidiaries and affiliates shall not exceed 10.0% of the lending bank's/quasi-
bank’s net worth, the unsecured portion of which shall not exceed 5.0% of such net worth.
Further, the total outstanding exposures to subsidiaries and affiliates shall not exceed 20.0% of the
net worth of the lending bank/quasi-bank; and the subsidiaries and affiliates of the lending
bank/quasi-bank are not related interest of any director, officer and/or stockholder of the lending
institution, except where such director, officer or stockholder sits in the BOD or is appointed
officer of such corporation as representative of the bank/quasi-bank.
As of March 31, 2014 and 2013, the Company has no DOSRI accounts.
Transactions with Retirement Plans

Under PFRS, certain post-employment benefit plans are considered as related parties. The
Company’s retirement plan is in the form of a trust administered by Metrobank. The carrying
value of the fund which approximates its fair value follows:
2014 2013
Investment in government securities P
=37,534,024 P
=38,818,990
Bank deposits 5,022,526 863,612
Liabilities (53,971) (50,673)
P
=43,011,066 P
=40,178,034
*SGVFS004641*
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22. Fair Value Measurement
The methods and assumptions used by the Company in estimating the fair value of the financial
instruments are:
Cash and Due from BSP - Due to the short-term nature of the instruments, the fair values
approximate the carrying amounts as of the reporting date.
AFS investments - Fair values are generally based on quoted market prices.
Loans and receivables - Fair value was computed using the discounted cash flow method. The
discount rate used was the PDST-F rate plus 350 basis points (bps).
Loans payable and subordinated debt - Fair value was computed using the discounted cash flow
method. The discount rate used was the zero curve for PDST-F rate plus 200 bps.
Derivative financial instruments - The fair values of cross currency interest rate swap transactions
are derived using acceptable valuation methods. The valuation assumptions are based on market
conditions existing at the reporting dates.
Accounts payable and other liabilities - Due to the short-term nature of the transactions, the fair
value approximates the carrying amount as of the reporting date.
2014
Carrying Fair Value
Value Level 1 Level 2 Level 3 Total
Assets and liabilities measured
at fair value:
Financial assets:
Available-for-Sale Investments P
=950,000 P
=950,00 P
=− P
=− P
=950,000
Financial liability:
Derivative Liability 210,630 − 210,630 − 210,630
Assets and liabilities for which fair
value is disclosed:
Financial assets:
Loans and Receivables
Receivables financed – net 5,722,629,439 − − 6,696,193,189 6,696,193,189
Finance lease receivables - − −
20,940,168,487
net 24,285,633,893 24,285,633,893
Financial liabilities:
Loans payable
Bank loans 20,196,771,924 − − 19,135,715,167 19,135,715,167
Corporate note 1,486,242,489 − − 1,141,200,466 1,141,200,466
Notes payable 86,136,313 − − 86,136,313 86,136,313
Subordinated Debt 997,951,695 − − 899,265,982 899,265,982
Deposit on lease contracts 5,344,783,262 − − 4,649,985,554 4,649,985,554
*SGVFS004641*
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2013
Carrying Fair Value
Value Level 1 Level 2 Level 3 Total
Assets and liabilities measured
at fair value:
Financial assets:
Available-for-Sale Investments P
=910,000 P
=910,000 P
=− P
=− P
=910,000
Assets and liabilities for which fair
value is disclosed:
Financial assets:
Loans and Receivables
Receivables financed – net 5,147,755,575 − 6,122,070,518 6,122,070,518
Finance lease receivables - net 14,260,092,691 − 16,428,320,286 16,428,320,286
Financial liabilities:
Loans payable
Bank loans 15,364,590,248 − − 14,630,166,533 14,630,166,533
Notes payable 26,910,823 − − 26,910,823 26,910,823
Subordinated Debt 997,066,198 − − 859,232,976 859,232,976
Deposit on lease contracts 3,877,691,991 − − 3,480,830,878 3,480,830,878
As of March 31, 2014 and 2013, the Company has no financial instruments that are reported under
Level 2 and no transfers were made among the three levels in fair value hierarchy.
23. Capital Management and Financial Performance Ratios
Capital Management
The primary objective of the Company’s capital management is to ensure that it maintains a strong
credit rating and healthy capital ratios in order to support its business and maximize shareholder
value.
The Company manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust the capital structure, the Company may adjust the
dividend payment to shareholders or issue new shares. No changes were made in the objectives,
policies or processes for the years ended March 31, 2014 and 2013.
The Company considers the following as capital:
2014 2013
Capital stock P
=1,000,000,000 =1,000,000,000
P
Retained earnings 1,845,178,364 1,424,196,467
P
=2,845,178,364 =2,424,196,467
P
The Company monitors capital using debt-to-equity ratio. The Company’s target debt-to-equity
ratio is 10:1. The Company's debt-to equity ratio is 10:1 and 9:1 as of March 31, 2014 and 2013,
respectively.
Regulatory Capital
The Company has started its operations as a Quasi-bank effective April 1, 2009. Thus, the
Company began to actively manage its capital in accordance with regulatory requirements of BSP.
The primary objective of which is to ensure that the Company maintains adequate capital to cover
risks inherent to its quasi-banking activities without prejudice to optimizing shareholder’s value.
*SGVFS004641*
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Under existing BSP regulation, the capital accounts of the Company should not be less than an
amount equal to 10.0% of its risk assets. Risk assets consist of total assets less cash on hand, due
from BSP, loans covered by hold-out on or assignment of deposits, loans or acceptances under
letters of credit to the extent covered by margin deposits, and other nonrisk items as determined by
the Monetary Board of the BSP.
The following table sets the Company’s regulatory capital as reported to BSP as at
March 31, 2014 and 2013 (amounts in thousands):
2014 2013
Actual Required Actual Required
Tier 1 capital P
=2,847,182 P
=2,415,054
Tier 2 capital 602,739 804,777
Gross qualifying capital 3,449,921 3,219,831
Less Required deductions 141,554 150,955
Total qualifying capital P
=3,308,367 300,000 P
=3,068,876 300,000
Risk weighted assets P
=22,526,637 P
=22,305,774
Tier 1 capital ratio 12.01% 10.15%
Total capital ratio 14.69% 13.76%
In 2014 and 2013, the Company complied with the required capital adequacy ratio of the BSP.
Under the Financing Company Act, the Company is required to maintain the following capital
requirements:
· Minimum paid-up capital of = P10.0 million; and

· Additional capital requirements for each branch of =
P1.0 million for branches established in
Metro Manila, =P0.5 million for branches established in other classes of cities and =
P0.2 million
for branches established in municipalities.
As of March 31, 2014 and 2013, the Company was in compliance with this minimum paid-up
capital.
Financial Performance Ratios

The following basic ratios measure the financial performance of the Company:
2013
(As Restated -
2014 Note 2)
Return on average equity 15.94% 11.67%
Return on average assets 1.54% 1.22%
Net interest margin on average earning assets 6.00% 4.54%
*SGVFS004641*
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24. Financial Risk Management Objectives and Policies
The Company’s principal financial instruments are composed of cash in banks, due from BSP,
SPURA, loans and receivables, loans payable, derivative liability, accounts payable and accrued
expenses and subordinated debt. These financial instruments are used in operations. Financial
instruments used in financing are bank loans, subordinated debt and notes payable. The main risks
arising from the use of financial instruments are credit risk, liquidity risk and market risk.
Risk Management Framework

The Company serves customers of Toyota vehicles through financing and leasing services.
Enterprise Risk Management (ERM) enables the Company to achieve corporate objectives while
operating within the boundary of its risk appetite through a well-defined risk management
framework.
The BOD oversees the Company's overall risk management strategy through the various
Committees created as follows:
a. Executive Committee
The Executive Committee approves the limits operated by business units; except for credit
exposures to DOSRI which are approved by the BOD regardless of amount.
b. Corporate Governance Committee

The Corporate Governance Committee provides independent views from the business units
and ensures effective implementation of risk management framework through regular reviews
of the Company's performance against approved tolerance for each risk indicator. The
Committee also monitors key and emerging risks as well as reviews and assesses the impact of
business strategies, opportunities and initiatives on overall risk position.
c. Audit Committee
The Audit Committee through Internal Audit provides independent assurance of robustness of
processes and methodologies against practice.
d. Toyota Financial Services Corporation Enterprise Risk Functional Committee (TFSC-ERFC).

The TFSC-ERFC helps ensure that all business risks are periodically assessed, monitored and
evaluated and assessed internal and external forces that affect the Company’s risk position.
Risk Management Structure

The Company's organizational structure includes the Risk Management Unit (RMU), responsible
for developing, recommending and implementing policies and strategies of ERM. It is also in
charge of periodically monitoring and reporting to management, regional ERFC and to the BOD
Corporate Governance Committee, the state of company-wide risk position and effectiveness of
the ERM framework. In addition, the Company adopts the basic risk tenet that risks are owned by
the process owners and have the primary responsibility for identifying, managing and reporting
risks.
Risk Management Strategy

The Executive Committee establishes and oversees execution of business strategies and has the
accountability to identify and manage the embedded risks. Business strategies and business plans
are thus aligned with the risk appetite of the TFSC-ERFC and BOD, defined in the form of risk
tolerances for a set of selected key risk indicators. These plans are executed by management and
are reviewed by the President. Quarterly performances and risks are reviewed together with the
appropriate Board Committees.
*SGVFS004641*
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Risk Monitoring and Reporting

All material events that may negatively impact the Company’s earnings, corporate value and
reputation are identified, assessed for frequency, severity and causation. Both top down and
bottom up risk assessment methodologies are done through the deployed processes and practical
standards.
RMU oversees a formal process to monitor and report enterprise-wide risk exposures. These are
discussed with business units and management. On a quarterly basis, RMU, TFSC-ERFC and
each BOD Corporate Governance Committee review risk reports for significant trends. Based on
discussions with business units and senior management, RMU submits requests for approval for
any policy exceptions or remedial action plans to the TFSC-Risk Management Group and BOD
risk committees.
Risk Control and Mitigation

As part of its market risk mitigation activities, the Company uses derivatives to manage exposures
resulting from changes in foreign currencies and appropriate hedging activities to manage its
interest rate exposures. Credit risks are reduced through the use of chattel mortgages and
insurance protection. Concentration risks are managed by setting exposure limits. Concentration
reports are provided to management on a monthly basis and to various related committees on a
quarterly basis. Limits set undergo at least an annual review or as needed.
Operational risks are controlled and mitigated through the set-up of an appropriate organizational
structure, supported by human resource allocation, staff training and education, combination of
policies, procedures and standards, information technology and performance measurement.
The Company’s risk management policies are summarized below:
Credit Risk
Credit risk is the possibility that the Company suffers losses when a counterparty to a credit
transaction fails to meet its financial obligation.
The Credit Committee establishes and oversees the execution of the Company’s credit risk
management program. The Committee sets out objectives related to overall quality and
diversification of investments. It establishes policies for the selection of counterparties,
outsources providers as well as accreditation of insurance companies.
Credit officers conduct credit risk review on the prospective borrower based on verified
information. Team heads evaluate the prospective borrower based on the recommendation of the
credit officers.
Loan amounts that exceed the approval limit of the loan division head are brought up to the Credit
Committee. Loan amounts that exceed the limit of Credit Committee are elevated to the
Executive Committee and recommended to the BOD for approval.
The Company will, from time to time and in the ordinary course of business, enter into loans with
DOSRI. All DOSRI loans are subject to approval of the BOD. All such loans are on commercial
arm’s-length basis. BSP Circular No. 560 states that “the total outstanding loans, other credit
accommodations and guarantees to each of the company’s subsidiaries and affiliates shall not
exceed 10.0% of the net worth.” As of March 31, 2014 and 2013, the Company has no loans with
DOSRI.
*SGVFS004641*
- 48 -
The credit policy manual defines the evaluation process in order to provide an objective
assessment of credit worthiness of counterparties. The credit policy manual undergoes a
minimum of annual review.
The credit rating system, as defined in the credit policy, uses a combination of quantitative and
qualitative factors to assess the general financial position of the borrower. Investment grade
pertains to cash in banks, deposited or invested in BSP and other banks based on a mark-to-market
value exposure to each counterparty. For receivables financed and finance lease receivables,
investment grade pertains to receivables with no history of default in payment; non-investment
grade pertains to receivables with history of defaults in payment.
The Company has neither credit rating system nor grading for other types of receivables.
Maximum exposure to credit risk

The gross maximum exposure, net of allowance for credit and impairment losses, to the credit risk
of the Company and the related fair value of collateral and other credit enhancements and its
financial effect are shown below:
2014
Financial
Effect of
Gross Maximum Collateral
Maximum Fair Value Exposure or Credit
Exposure of Collateral to Credit Risk Enhancement
=5,722,629,439 P
=10,428,960,589 P=62,475,048 P
=5,660,154,391
Finance lease receivables 20,940,168,487 20,418,539,788 2,537,152,070 18,403,016,417
P
=26,662,797,926 P
=30,847,500,377 P
=2,599,627,118 P
=24,063,170,808
2013
Financial
Effect of
Gross Maximum Collateral
Maximum Fair Value Exposure or Credit
Exposure of Collateral to Credit Risk Enhancement
Receivables financed =
P5,147,755,575 =
P10,630,158,500 =
P– =
P5,147,755,575
Finance lease receivables 14,260,092,691 14,414,122,454 1,036,923,915 13,223,168,776
=
P19,407,848,266 =
P25,044,280,954 =
P1,036,923,915 =
P18,370,924,351
The carrying values of ‘Cash in Banks’, ‘Due from BSP’, ‘SPURA’, ‘AFS investments’ and
‘Other receivables’ represent the maximum exposure to credit risk as of March 31, 2014 and
2013.
Concentration of risks of financial assets with credit risk exposure

Concentrations arise when a number of counterparties are engaged in similar business activities,
or activities in the same geographic region, or have similar economic features that would cause
their ability to meet contractual obligations to be similarly affected by changes in economic,
political or other conditions. Concentrations indicate the relative sensitivity of the Company’s
performance to developments affecting a particular industry or geographic location. In order to
avoid excessive concentrations of risk, the Company’s policies and procedures include specific
guidelines to focus on maintaining a diversified portfolio. Identified concentrations of credit risks
are controlled and managed accordingly.
*SGVFS004641*
- 49 -
Concentration by industry
An analysis of concentrations of credit risk at the reporting date based on carrying amount is
shown below:
2014
Loans and
Loans and Advances to AFS
Receivables Banks* Investments** Total
Concentration by Industry
Real estate, renting and business activities P
=6,655,197,033 P
=– P
=– P
=6,655,197,033
Wholesale and retail trade 4,509,352,940 – – 4,509,352,940
Financial intermediaries 3,165,016,241 4,522,754,609 – 7,687,770,850
Transportation, storage and communication 2,748,593,906 – – 2,748,593,906
Manufacturing (various industries) 2,282,537,181 – – 2,282,537,181
Other community, social and personal activities 2,140,039,253 – 950,000 2,140,989,253
Education 1,311,681,354 – – 1,311,681,354
Hotels and restaurants 834,076,755 – – 834,076,755
Construction 823,338,469 – – 823,338,469
Agricultural, hunting and forestry 436,045,529 – – 436,045,529
Electricity, gas and water 331,902,415 – – 331,902,415
Mining and quarrying 120,012,148 – – 120,012,148
Fishing 24,281,609 – – 24,281,609
Others 1,828,411,926 – – 1,828,411,926
27,210,486,759 4,522,754,609 950,000 31,734,191,368
Less allowance for credit and impairment losses 482,248,849 – – 482,248,849
P
=26,728,237,910 P
=4,522,754,609 P
=950,000 P
=31,251,942,519
* Comprised of Cash in banks, Cash equivalents, and Due from BSP
** Comprised of golf shares
2013
Loans and
Receivables Banks* Investments** Total
Concentration by Industry
Real estate, renting and business activities =
P4,837,587,111 P
=– =
P– P
=4,837,587,111
Wholesale and retail trade 3,555,065,723 – – 3,555,065,723
Transportation, storage and communication 2,276,427,968 – – 2,276,427,968
Manufacturing (various industries) 2,045,114,088 – – 2,045,114,088
Financial intermediaries 2,038,990,694 3,441,017,599 – 5,480,008,293
Other community, social and personal activities 1,012,626,235 – 910,000 1,013,536,235
Education 871,561,644 – – 871,561,644
Construction 560,581,905 – – 560,581,905
Hotels and restaurants 497,731,977 – – 497,731,977
Agricultural, hunting and forestry 376,103,647 – – 376,103,647
Electricity, gas and water 243,962,434 – – 243,962,434
Mining and quarrying 88,701,721 – – 88,701,721
Fishing 15,956,368 – – 15,956,368
Others 1,552,487,499 – – 1,552,487,499
19,972,899,014 3,441,017,599 910,000 23,414,826,613
Less allowance for credit and impairment losses 476,452,318 – – 476,452,318
=
P19,496,446,696 P
=3,441,017,599 P
=910,000 P
=22,938,374,295
* Comprised of Cash in banks, Cash equivalents, and Due from BSP
*SGVFS004641*
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Concentration by geographical location
2014
Loans and
receivables Banks* Investments** Total
Concentration by Location
Metro Manila P
=13,896,247,973 P
=4,522,754,609 P
=– P
=18,419,002,582
Luzon (except Metro Manila) 14,231,552,531 – 950,000 14,232,502,531
Visayas 1,563,899,933 – – 1,563,899,933
Mindanao 1,348,733,239 – – 1,348,733,239
31,040,433,676 4,522,754,609 950,000 35,564,138,285
Less: Allowance for credit and impairment
losses 482,248,849 – – 482,248,849
Unearned interest income 3,829,946,917 – – 3,829,946,917
P
=26,728,237,910 P
=4,522,754,609 P
=950,000 P
=31,251,942,519
* Comprised of Cash in banks, Due from BSP and SPURA
2013
Loans and
receivables Banks* Investments** Total
Concentration by Location
Metro Manila =
P11,046,866,241 P
=3,441,017,599 =
P– P
=14,487,883,840
Luzon (except Metro Manila) 9,395,583,795 – 910,000 9,396,493,795
Visayas 1,049,892,221 – – 1,049,892,221
Mindanao 1,135,759,827 – – 1,135,759,827
22,628,102,084 3,441,017,599 910,000 26,070,029,683
Less: Allowance for credit and impairment
losses 476,452,318 – – 476,452,318
Unearned interest income 2,655,203,070 – – 2,655,203,070
=
P19,496,446,696 P
=3,441,017,599 P
=910,000 P
=22,938,374,295
* Comprised of Cash in banks, Due from BSP and SPURA
Credit quality per class of financial assets

The following tables provide information regarding the credit risk exposure of the Company by
classifying financial assets according to the Company’s credit ratings of the counterparties.
2014
Neither past due nor impaired Past Due but
Investment Non-investment Not Specifically
Grade Grade Impaired Total
Cash in banks P
=628,325,501 P
=– P
=– P
=628,325,501
Due from BSP 3,894,429,108 – – 3,894,429,108
AFS investments 950,000 – – 950,000
Receivables financed – net 4,420,624,245 1,251,882,029 173,543,602 5,846,049,876
Finance lease receivables – net 15,732,521,896 4,776,019,664 790,455,338 21,298,996,898
Other receivables
Receivables from clients – 57,111,903 – 57,111,903
Receivables from employees – 8,074,029 – 8,074,029
Accrued interest receivable – 174,446 – 174,446
Others – 79,607 – 79,607
24,676,850,750 6,093,341,678 963,998,940 31,734,191,368
impairment losses 52,386,274 199,023,833 230,838,742 482,248,849
P
=24,624,464,476 P
=5,894,317,845 P
=733,160,198 P
=31,251,942,519
*SGVFS004641*
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2013
Neither past due nor impaired Past Due but
Investment Non-investment Not Specifically
Grade Grade Impaired Total
Cash in banks =
P587,174,501 P
=– P
=– =
P587,174,501
Cash equivalents 94,000,000 – – 94,000,000
Due from BSP 2,759,843,098 – – 2,759,843,098
AFS investments 910,000 – – 910,000
Receivables financed – net 3,560,549,574 1,545,171,082 274,258,238 5,379,978,894
Finance lease receivables – net 5,125,725,401 8,647,525,434 731,070,855 14,504,321,690
Other receivables
Receivables from clients – 81,610,125 – 81,610,125
Receivables from employees – 6,332,790 – 6,332,790
Accrued interest receivable – 512,957 – 512,957
Others – 142,558 – 142,558
12,128,202,574 10,281,294,946 1,005,329,093 23,414,826,613
impairment losses 159,411,794 117,014,843 200,025,681 476,452,318
P
=11,968,790,780 P
=10,164,280,103 =
P805,303,412 P
=22,938,374,295
The credit quality of the financial assets was determined as follows:
· Cash - Investment grade pertains to cash in banks and cash equivalents placed, deposited or
invested in local banks with a credit rating of AAA, AA and A.
· Receivables financed and finance lease receivables - Investment grade pertains to receivables
with no history of default in payment; Non-investment grade pertains to receivables with
history of defaults in payment.
· The Company has neither credit rating system nor grading for other types of receivables.
Aging of past due but not specifically impaired loans and receivables
The table below shows the aging analysis of loans and receivables per class that the Company
held. Under PFRS 7, a financial asset is past due when a counterparty has failed to make
payments when contractually due.
2014
Past due but not specifically impaired
31 - 60 days 61 - 90 days 91 - 120 days Over 120 days Total
Receivables financed – net P
=68,715,917 P
=25,140,457 P
=20,594,083 P
=59,093,145 P
=173,543,602
Finance lease receivables - net 340,592,793 123,320,148 78,111,705 248,430,692 790,455,338
P
=409,308,710 P
=148,460,605 P
=98,705,788 P
=307,523,837 P
=963,998,940
2013
Past due but not specifically impaired
31 - 60 days 61 - 90 days 91 - 120 days Over 120 days Total
Receivables financed – net =
P119,805,382 =
P48,133,409 =
P23,686,831 =
P82,632,616 =
P274,258,238
Finance lease receivables - net 335,725,975 103,809,625 71,023,975 220,511,280 731,070,855
=
P455,531,357 =
P151,943,034 =
P94,710,806 =
P303,143,896 =
P1,005,329,093
*SGVFS004641*
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Collateral and other credit enhancements

The Company holds collateral against loans and receivables in the form of chattel mortgages.
Estimates of fair value are based on the value of collateral assessed at the time of borrowing and
generally are not updated except when a loan is assessed to be impaired. The following table
shows the fair value of collateral held against loans and receivables:
2014 2013
Against neither past due nor impaired =29,735,804,244 =
P P23,797,586,754
Against past due but not specifically impaired 1,111,696,133 1,246,694,200
=30,847,500,377 P
P =25,044,280,954
It is the Company’s policy to dispose assets acquired in an orderly fashion. The proceeds of the
sale of the foreclosed assets classified as assets held for sale are used to reduce or repay the
outstanding claim.
Liquidity Risk
Liquidity risk is the risk of encountering difficulty in raising funds to meet commitments
associated with financial instruments.
Liquidity of the Company’s operations are managed with highest degree of accuracy, supported by
sufficient, locally available, committed and uncommitted sources of funds for shorter periods and
a sound and conservative funding plan with an appropriate internal authorization for longer
periods. The funding structure is diversified as to financial instruments adopted, geographical
markets approached and funding maturities in order to maintain stable access to low cost funds.
The Asset Liability Committee (ALCO) oversees the management of liquidity risks. The
Company’s Treasury Department has the primary responsibility for managing the Company’s
sources of funding, and is tasked with ensuring that the Company has adequate liquidity at all
times. As part of this function, the Treasury Department prepares an annual funding plan that
places the highest priority on liquidity and diversity of funding structure. The Department also
prepares an annual contingency funding plan based on stress scenarios which include inability to
access the debt market for an extended period. As such, monthly computation of Days until
Alternative Funding key risk indicator and setting of appropriate limits provides management the
means to adopt measures that will strengthen its liquidity position.
The Company’s principal source of funding are borrowings from international and domestic banks
amounting to 20.2 billion and = P15.4 billion as of March 31, 2014 and 2013, respectively, with
maturities ranging from one month to five years, including bond issuances secured by stand-by letter of
credit issued by an international bank. Borrowings are generally on a clean basis.
The Company maintains what it believes to be a sufficient cash level. In addition, the Company
manages its liquidity by managing the maturity profile of its outstanding loans.
*SGVFS004641*
- 53 -
Analysis of financial assets and liabilities by remaining contractual maturities

The following tables set forth the financial assets and liabilities based on undiscounted future cash
flows of the Company as of March 31, 2014 and 2013 into their relevant maturity groups based on
the remaining period at reporting dates to their contractual maturities.
2014
More than More than More than
1 month up 3 months up 6 months up
On demand Up to 1 month to 3 months To 6 months To 12 months Beyond 1 year Total
Financial Assets
Cash P
= 628,779,104 P
=− P
=− P
=− P
=− P
=− P
= 628,779,104
Due from BSP 3,894,429,108 − − − − − 3,894,429,108
AFS investments – – – – – 950,000 950,000
Receivables financed - net 4,310,870 330,256,848 565,653,850 792,238,493 1,358,126,770 3,651,173,899 6,701,760,730
Finance lease receivable - net 11,501,176 707,229,056 1,201,243,879 1,775,890,755 3,522,857,530 17,067,894,931 24,286,617,327
Other receivables
Receivables from
employees 1,004,509 324,441 417,244 525,820 997,532 4,804,483 8,074,030
Receivables from clients 57,111,903 − − − − − 57,111,903
Accrued interest
− 174,446 − − − − 174,446
receivable
P
= 4,597,136,670 P
= 1,037,809,741 P
= 1,766,964,873 P
= 2,568,169,469 P
= 4,881,146,882 P
= 20,726,669,013 P
= 35,577,896,648
Loans payable
Bank loans P
=− P
= 1,056,147,356 P
= 2,268,563,035 P
= 2,333,454,048 P
= 4,512,556,065 P
= 15,074,124,606 P
= 25,244,845,110
Corporate note − − − 41,351,137 40,963,836 1,823,225,202 1,905,540,175
Notes payable − 51,784,435 18,447,831 18,060,071 − − 88,292,337
Accounts payable and other
liabilities
Accounts payable 21,539,089 222,686,259 133,154 46,100,629 399,464 1,408,163 292,266,758
Accrued interest payable
and other expenses − 120,177,003 42,391,069 15,107,479 − − 177,675,551
Subordinated debt − 33,120,625 − − 33,625,000 1,100,875,000 1,167,620,625
Deposit on lease contracts 10,349,726 42,026,525 80,512,886 132,006,018 421,669,539 4,658,218,568 5,344,783,262
P= 31,888,815 P
= 1,525,942,203 P
= 2,410,047,975 P
= 2,586,079,382 P
= 5,009,213,904 P
= 2,657,851,539 P
= 34,221,023,818
2013
More than More than More than
1 month up 3 months up 6 months up
On demand Up to 1 month to 3 months to 6 months to 12 months Beyond 1 year Total
Financial Assets
Cash =681,299,124
P =
P– =
P– =
P– =
P– =
P– =681,299,124
P
Due from BSP 2,759,843,098 – – – – – 2,759,843,098
AFS investments – – – – – 910,000 910,000
Receivables financed - net 14,133,864 395,132,477 563,435,389 777,510,825 1,305,957,610 3,073,692,804 6,129,862,969
Finance lease receivable - net 11,396,543 571,392,833 834,912,851 1,220,803,923 2,430,568,512 11,360,263,392 16,429,338,054
Other receivables
Receivables from
employees 1,306,804 231,677 329,028 377,630 751,510 3,336,141 6,332,790
Receivables from clients 81,610,125 – – – – – 81,610,125
Accrued interest
receivable 497,624 15,333 – – – – 512,957
=3,550,087,182
P =966,772,320 =
P P1,398,677,268 P=1,998,692,378 =3,737,277,632
P =14,438,202,337
P =26,089,709,117
P
Loans payable
Bank loans =
P– =97,893,535 P
P =1,199,425,333 =978,784,482
P =3,931,206,154
P =8,581,993,879
P =14,789,303,383
P
Notes payable – 5,098,080 6,399,692 16,125,101 – – 27,622,873
Loans payable to First
Metro Investment
Corporation (FMIC) – 1,544,580,421 – – – – 1,544,580,421
Accounts payable and other
liabilities
Accounts payable 100,506,541 198,198,646 1,912,275 1,686,074 4,042,163 1,288,806 307,634,505
Accrued interest payable
and other expenses – 123,619,376 41,794,537 18,950,889 – – 184,364,802
Subordinated debt – 33,120,625 – – 33,625,000 1,168,125,000 1,234,870,625
Deposit on lease contracts 9,654,450 24,955,550 55,073,600 78,381,253 264,114,222 3,445,512,916 3,877,691,991
=110,160,991 =
P P1,961,792,546 P =1,269,465,207 =P1,099,197,899 =4,256,790,494
P =13,268,661,463
P =21,966,068,600
P
*SGVFS004641*
- 54 -
Market Risk
Market risk is exposure to changes in market rates that may adversely affect the Company value
and ability to meet obligations as they mature. Market risks cover interest rate and foreign
exchange risks.
Interest rate risk

Interest rate risk arises from interest margin compression due to an adverse movement in the
market interest rates. This risk applies only to accrual positions as the Company has no trading
portfolio.
The ALCO establishes and oversees the Company’s interest rate risk as part of the market risk
management program. In considering interest rate exposures, the Company measures its risk
profile in terms of asset and debt/derivative notional size, asset yields and market rates, maturity
profile, pre-payment and re-pricing characteristics. Interest rate risks exposures are evaluated
using a variety of techniques and measures, each of which are based on projecting asset and
liability cash flows under interest rate and market price scenarios.
Interest rate risk exposures are reported via portfolio hedge ratio. This tool highlights the level of
gap in amounts in fixed rates of interest between assets and liabilities, as a measure of exposure to
interest rate changes, the critical components of which are notional size, maturities and re-pricing
profiles.
The Company also measures the potential impact of bps yield curve parallel shift on the expected
earnings. This tool gives a measure of expected earnings at risk as a result of interest rate risk
exposure.
The table below demonstrates sensitivity analysis to a reasonably possible change in interest rate
based on one year historical rates, with all other variables held constant, of the Company’s income
before income tax (through the impact on floating rate interest).
2014 2013
Increase in Decrease in Increase in Decrease in
Basis Points Basis Points Basis Points Basis Points
Change in basis points 200 200 200 200
Effect in income before tax (P
=1,533,333) P
=1,533,333 (P
=29,261,920) P =29,261,920
Foreign currency risk

Foreign currency risk is the risk that the value of a financial instrument will fluctuate as a result of
changes in the value of foreign currencies which include volatility in exchange rates, correlations
across currencies and changes in currency regime.
As a general rule, the Company is not allowed to have a forex position. All foreign borrowings
must be fully hedged from inception until maturity. The Company’s foreign exchange risk results
primarily from movements of the Philippine peso against the USD and the Japanese Yen (JPY)
with respect to USD and JPY-denominated financial assets (such as cash and cash equivalents)
and USD-denominated financial liabilities (such as loans payable and accounts payable and other
liabilities).
*SGVFS004641*
- 55 -
In 2013, the Company completed its transaction involving a USD-denominated loans amounting
to US$31.0 million with BTMU-Japan. Also, in 2013, the Company has outstanding cross-
currency interest rate swap on the USD-denominated loans and designated it as cash flow hedge
(see Notes 11 and 14) to eliminate the variability in the cash flows due to interest rate and foreign
currency risk.
The following table shows the details of the Company’s foreign currency-denominated monetary
assets and liabilities:
2014
In USD In JPY
Cash in bank $4,366 ¥−
Accounts payable and other liabilities 2,269 −
2013
In USD In JPY
Cash in bank $8,198 ¥1,568,934
Accounts payable and other liabilities 1,888 −
The following table demonstrates the sensitivity to a reasonably possible change in the USD and
JPY exchange rate, with all other variables held constant, on the Company’s income before tax.
2014
Foreign currency appreciates (depreciates) USD JPY
5.0% P
=4,699 −
(5.0%) (4,699) −
2013
Foreign currency appreciates (depreciates) USD JPY
5.0% P
=12,872 P
=33,991
(5.0%) (12,872) (33,991)
25. Note to Statements of Cash Flows
Noncash investing activities pertain to transfer of repossessed vehicles classified as assets held for
sale to property and equipment amounting to = P5.6 million in 2014.
26. Supplementary Information Required Under Revenue Regulations 15-2010
The Company reported and/or paid the following types of taxes for the year ended
March 31, 2014:
Gross Receipts Tax (GRT)

The Company is subject to GRT on its gross income from Philippine sources. GRT is imposed on
interest, commissions and discounts from lending activities at 5.00% or 1.00%, depending on the
remaining maturities of instruments from which such receipts are derived, and at 7.00% on non-
lending fees and commissions, trading and foreign exchange gains and other items constituting
gross income.
*SGVFS004641*
- 56 -
Details of the Company’s income and GRT accounts in 2014 are as follows:
Gross
Gross Receipts Receipts Tax
Income derived from lending activities =2,062,979,268
P =103,148,963
P
Other income 41,919,576 2,812,190
=2,104,898,844
P =105,961,153
P
Other Taxes and Licenses
For the year ended March 31, 2014, other taxes and licenses included in ‘Taxes and licenses’
account of the Company consist of:
Documentary stamps taxes P

=18,367,116
Local taxes 3,518,016
Others 2,428,260
P
=24,313,392
The others taxes includes fringe benefits tax, LTO registration and SEC registration fee.
Withholding Taxes
Total Remittances Balance

Expanded withholding taxes P
=23,291,342 P
=2,258,847
Withholding taxes on compensation and benefits 11,352,604 824,075
Final withholding taxes 355,144 42,057
P
=34,999,090 P
=3,124,979
*SGVFS004641*

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Toyota Financial Services Philippines Corporation

Independent Auditors’ Report

A member firm of Ernst & Young Global Limited

INDEPENDENT AUDITORS’ REPORT

The Stockholders and the Board of Directors

Report on the Financial Statements

Management’s Responsibility for the Financial Statements

Report on the Supplementary Information Required Under Revenue Regulations 15-2010

SYCIP GORRES VELAYO & CO.

June 25, 2014

LIABILITIES AND EQUITY

See accompanying Notes to Financial Statements.

Years Ended March 31

See accompanying Notes to Financial Statements.

For the Years Ended March 31, 2014 and 2013

Balances at April 1, 2012, as previously reported P

See accompanying Notes to Financial Statements.

Years Ended March 31

CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

NET INCREASE IN CASH AND CASH EQUIVALENTS 1,082,065,990 89,929,039

CASH AND CASH EQUIVALENTS AT

Years Ended March 31

CASH AND CASH EQUIVALENTS AT END OF YEAR

Years Ended March 31

See accompanying Notes to Financial Statements.

Toyota Financial Services Philippines Corporation (the Company) is a domestic corporation

2. Summary of Significant Accounting Policies

The accompanying financial statements are presented in Philippine peso (P

The accompanying financial statements provide comparative information in respect of the

Presentation of Financial Statements

Changes in Accounting Policies and Disclosures

PFRS 7, Financial Instruments: Disclosures - Transfers of Financial Assets (Amendments)

PFRS 10, Consolidated Financial Statements

PFRS 11, Joint Arrangements

PFRS 12, Disclosure of Interests in Other Entities

PFRS 13, Fair Value Measurement

PAS 1, Presentation of Financial Statements – Presentation of Items of Other Comprehensive

PAS 19, Employee Benefits (Revised)

March 31, April 1,

PAS 27, Separate Financial Statements (as revised in 2011)

Annual Improvements to PFRSs (2009-2011 cycle)

· PFRS 1, First-time Adoption of PFRS – Borrowing Costs

· PAS 1, Presentation of Financial Statements – Clarification of the requirements for

· PAS 16, Property, Plant and Equipment – Classification of servicing equipment

Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27)

Philippine Interpretation IFRIC 21, Levies (IFRIC 21)

Annual Improvements to PFRSs (2010-2012 cycle)

· PFRS 2, Share-based Payment – Definition of Vesting Condition

· PFRS 3, Business Combinations – Accounting for Contingent Consideration in a Business

· PFRS 8, Operating Segments – Aggregation of Operating Segments and Reconciliation of the

· PFRS 13, Fair Value Measurement – Short-term Receivables and Payables

· PAS 24, Related Party Disclosures – Key Management Personnel

· PAS 38, Intangible Assets – Revaluation Method – Proportionate Restatement of Accumulated

Annual Improvements to PFRSs (2011-2013 cycle)

· PFRS 1, First-time Adoption of Philippine Financial Reporting Standards – Meaning of

· PFRS 3, Business Combinations – Scope Exceptions for Joint Arrangements

· PFRS 13, Fair Value Measurement – Portfolio Exception

· PAS 40, Investment Property

· PFRS 9, Financial Instruments

Significant Accounting Policies

Foreign Currency Translations