Afs (2020)

\ SECURITIES AND EXCHANGE COMMISSION
Secretariat Building, PICC Complex, Roxas Boulevard, Pasay City, 1307 Metro Manila Philippines
Tel; (632) 818-0921 Fax: (632) 818-5293 Email: mis@sec.gov.ph
shes
The following document has been received:
Receiving: MarkJ ason Orcine

Receipt Date and Time:J uly 15, 2021 10:22:14 AM
Company Information
SEC Registration No.: A199902074

Company Name: UNITELLER FILIPINO INC.
Industry Classification:
Company Type:
Document Information
Document ID: 0ST107152021869375

Document Type: AFS
Document Code: AFS
Period Covered: December 31, 2020
Submission Type: AFS
Remarks: None
COVER SHEET
for
AUDITED FINANCIAL STATEMENTS
SEC Registration Number
AJ1/9/9/9/0)2])0])7)4
COMPANY NAME
U|N/I/T/E/LIL/E/R F/T}JLIT|/P|I)NjO;, I|N|C].
(|A Wihjo}l/ljy|-;/o]wi/n/e/d S|u/b/s]/i}d]/ijajrjy o|f
Ujnji}tje;/l}ljejr F/ijnjajn/|ec]ija]l Sle|rjv/ijlele]s|,
PRINCIPAL OFFICE (No. / Street/ Barangay/ City/ Town / Province )
U|n|i|t 2)/4/0/3)/, 2)4|//)F!/, Ti rja|dje ajnid
Flijnja/njejija/l T\jo|wie};r/,|/B/G|/C], Tijhje Fjo|r|t
Form Type Department requiring the report Secondary License Type, If Applicable
COMPANY INFORMATION
Company's Email Address Company's Telephone Number Mobile Number
No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)
5 December 31
CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number
Noel Fernando C. Cristal noel.cristal@uniteller.com 636 - 4611
CONTACT PERSON’s ADDRESS
NOTE 1: Incase of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within
thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
2: All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation's records with the Commission
and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.
SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 8819 0872 October4, 2018, valid until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Building a better Philippines November 6, 2018, valid until November 5, 2021
working world
INDEPENDENT AUDITOR’S REPORT
The Board of Directors and Stockholders

UniTeller Filipino, Inc.
Unit 2403, 24/F, Trade and Financial Tower
7th Avenue, BGC, The Fort
Taguig City
Opinion
We have audited the financial statements of UniTeller Filipino, Inc. (the Company) (a wholly-owned
subsidiary of UniTeller Financial Services, Inc.), which comprisesthe statements of-financial position as at
December 31, 2020 and 2019, and the statements of comprehensive income, statements of changes in equity
and statements of cash flows for the years then ended, and notes to the financial. statements, including a
summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of the Company as at December 31, 2020, and 2019, and, its financial performance.and its cash
flows for the years then ended in accordance with Philippine Financial Reporting Standards (PFRSs).
Basis of Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the Code of
Ethics for Professional Accountants in the Philippines (Code of Ethics) together with the ethical
requirements that are relevant to our audit of the financial statements in the Philippines, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation ,and fair presentation of the financial statements in
accordance with PFRSs, 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.
In preparing the financial’ statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going-concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Amember firm of Ernst & Young Global Limited

SGV
Building a better
working world
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with PSA will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
e Identify and assess the risks of material misstatement of the financial statements, whether due to ‘fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis.for,our,opinion. The risk,of not.detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
e Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
e Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
e Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
e Evaluate the overall presentation, structure, and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
e We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

Building a better
working world
-3-
Report on the Supplementary Information Required under Bangko Sentral ng Pilipinas (BSP)
Circular No. 1075 and Revenue Regulation No. 15-2010 and 34-2020
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 BSP Circular No. 1075 in Note 18 and Revenue
Regulations 15-20 34-2020 in Note 19 to the financial statements is presented for purposes of filing
with the BSP Internal Revenue, respectively, and is not a required part of the basic financial
statements. is the responsibility of the management of Uniteller Filipino, Inc. The
to the auditing procedures applied in our audit of the basic financial
ation is fairly stated in all material respects in relation to the basic
Securities and
Exchange
Commission
PAP H ILIPPHIN
ES
198-069-2020,
til December 2, 2023
PTR No. 85343 4, 2021, Makati City
March 31, 2021
THIS IS A SYSTEM GENERATED COPY OF

DOCUMENT FROM THE OFFICIAL
RECORD OF THE SEC.
SIGNATURE NOT REQUIRED.

UNITELLER FILIPINO, INC.
(A Wholly-owned Subsidiary of UniTeller Financial Services, Inc.)
STATEMENTS OF FINANCIAL POSITION
December 31
Notes 2020 2019
ASSETS
Current assets
Cash 4, 16 P528,340,378 P165,332,457
Receivables 5, 16 31,540,835 14,523,352
Prepaid expenses and other current assets 6 2,490,889 2,958,257
Total Current Assets 562,372,102 182,814,066
Noncurrent assets
Property and equipment, net 7 2,146,312 5,097,047
Deferred tax assets, net 13 3,801,518 1,909,059
Other noncurrent assets 6, 11, 16 4,953,151 4,083,238
Total Noncurrent assets 10,900,981 11,089,344
Total Assets P573,273,083 P193,903,410
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued expenses 8, 16 P446,273,809 P59,630,558
Due to affiliate 9, 16 86,762,462 86,762,462
Lease liability - current portion 11 487,446 2,994,030
Total Current Liabilities 533,523,717 149,387,050
Noncurrent liabilities
Retirement liability 12 2,163,629 1,339,425
Lease liability - net of current portion ll - 244,432
Total Noncurrent Liabilities 2,163,629 1,583,857
Total Liabilities 535,687,346 150,970,907
Equity
Capital stock 10 18,068,000 18,068,000
Stock dividend distributable 10 11,932,000 -
Reserve for remeasurement of retirement
benefit obligation 12 (950,897) (870,265)
Retained earnings 8,536,634 25,734,768
Total equity 37,585,737 42,932,503
Total liabilities and equity P573,273,083 P193,903,410
See Notes to the Financial Statements.

STATEMENTS OF COMPREHENSIVE INCOME
Years Ended December 31

Notes 2020 2019
Revenues
Service fee 9 P35,997,229 P38,172,003
Commission income 9 4,357,430 3,469,117
40,354,659 41,641,120
Operating expenses
Salaries, wages and employee benefits 9 12,411,350 13,889,435
Professional fees and outside services 7,504,281 5,177,399
Commission expense 4,357,430 3,469,117)
Depreciation and amortization 7 3,484,171 35757,305
Insurance 2,160,274 1,959,144
Communication 1,331,328 719,107
Retirement expense 12 709,015 799,167
Utilities 549,346 650,259
Bank charges 487,439 651,678
Dues and subscription 478,995. 478,995
Taxes and licenses 389,346 479,282
Repairs and maintenance 190,342 326,773
Office supplies 155,255 254,593
Transportation and travel 154,436 624,749
Advertising - 4,444,721
Others 186,675 67,151
34,549,683 37,748,875
Income from operations 5,804,976 3,892,245
Other expense (income), net 14 12,200,804 (6,558,736)
Income (Loss) before income tax (6,395,828) 10,450,981
Income tax expense (benefit) 13 (1,129,694) 2,528,951
Net income (loss) (5,266,134) 7,922,030
Other comprehensive loss
Items that will not be reclassified subsequently,

to profit or loss
Remeasurement loss on defined benefit liability,
net of tax 12 (80,632) (391,575)
Total comprehensive income (loss) (25,346,766) P7,530,455

STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31,2020 AND 2019
Reserve for
remeasurement
of retirement
Stock dividend benefit
Capital stock distributable obligation Retained
(Note 10) (Note 10) (Note 12) earnings Total equity
Balances at January 1, 2020 P18,068,000 P- (2870,265) P25,734,768 P42,932,503

Comprehensive income:
Net loss - - - (5,266,134) (5,266,134)
Other comprehensive loss - (80,632) - (80,632)
Stock dividends declared r 11,932,000 - (11,932,000) -
Balances at December 31, 2020 P18,068,000 P11,932,000 (2950,897) P8,536,634 P37,585,737
Balances at January 172019 P7,800,000 - (P478,690) P17,812,738 P25,134,048

Issuance of capital stock 10;268,000 - - - 10,268,000
Comprehensive income:
Net income = - = 7,922,030 7,922,030
Other comprehensive loss - = (391,575) - (391,575)
Balances at December 31, 2019. 218,068,000 = (2870,265) P25,734,768 P42,932,503

STATEMENTS OF CASH FLOWS
Years Ended December 31

Notes 2020 2019
CASH FLOWS FROM OPERATING

ACTIVITIES
Income (loss) before income tax (26,395,828) P10,450,981
Adjustments for:
Depreciation and amortization 7 3,484,171 3,757,305
Interest income 14 (236,092) (173,973)
Interest expense 14 141,767 288,845
Unrealized foreign exchange loss (gain) 15 (56,217) 97,140
Recovery of losses 14 - (13,990,279)
Loss on sale of transportation equipment 14 - 105,625
Retirement benefits paid 12 - (4,593,400)
Operating loss before working capital changes (2,353,184) (3,258,589)
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables (17,017,483) 14,732,371
Due from affiliate - 62,169,829
Prepaid expenses and other current assets (275,840) (65,761)
Other non-current assets (869,913) (1,546,247)
Increase (decrease) in:
Accounts payable and accrued expenses 386,624,847 (4,802,210)
Net cash flows generated from operations 366,108,427 67,229,393
Interest received 236,092 173,973
Net cash provided by operating activities 366,344,519 67,403,366
CASH FLOWS FROM INVESTING

ACTIVITIES
Acquisitions of property and equipment 7 (474,466) (758,216)
Proceeds fromysale of property and equipment - 5 446,429
Net cash used in investing activities (474,466) (311,787)
CASH FLOWS FROM FINANCING

ACTIVITIES
Payment of principal portion of lease liabilities 11 (2,936,753) (2,791,850)
Net cash used in financing activities (2,936,753) (2,791,850)
NET INCREASE IN CASH 362,933,300 64,299,729
CASH AT BEGINNING OF THE YEAR 165,332,457 101,037,825

Effect of exchange rate changes on cash 74,621 (5,097)
CASH AT THE END OF THE YEAR 4 P528,340,378 P165,332,457

NOTES TO THE FINANCIAL STATEMENTS
1. Corporate Information
UniTeller Filipino, Inc. (the “Company”) was registered with the Philippine Securities and Exchange
Commission (SEC) on February 15, 1999, to engage in the business of remitting, transferring, or
otherwise delivering any kind of foreign currency from abroad into the Philippines either by
telegraphic, wire, electronic transfer or any other manner. The Company was also registered with the
Bangko Sentral ng Pilipinas (BSP) on January 20, 2005, as a remittance agent, subject to the applicable
provisions of law and BSP rules and regulations, as well as the provisions of the Anti-Money
Laundering Act of 2001 (R.A. No. 9160, as amended by R.A. No. 9194) and its implementing rules
and regulations.
The immediate parent of the Company is UniTeller Financial Services, Inc. (UFSI) which is,based.in
the United States of America. The ultimate parentof theCompany is Grupo Financiero Banorte which
is based in Mexico.
The registered office address of the Companyvis located,at Unit 2403, 24/F, Tradeand Financial Tower,
7" Avenue, BGC, The Fort, Taguig City.
The accompanying financial statements were,approyed and authorized for issuance by the Board of
Directors (BOD) on March 31, 2021.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1. Basis of preparation
The financial statements of the Company have been prepared in accordance with Philippine Financial
Reporting Standards (PFRS). The term PFRS in general includes all applicable PFRS, Philippine
Accounting, Standards (PAS), and»interpretations: of the Philippine-Interpretations Committee (PIC),
Standing Interpretations Committee. (SIC) -and. International Financial» Reporting Interpretations
Committee (IFRIC), which have,been approved,by the Financial Reporting Standards Council (FRSC)
and adopted by the SEC.
The financial statements have-been prepared on-the historical. cost basis of accounting.
The financial statements are presented in Philippine peso (P), which is the Company’s functional
currency. All finaneial,information presented in,Philippine-peso,has,been,rounded off to the nearest
peso, unless otherwise indicated.
The preparation of financial statements in conformity with PFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its judgment in the process of applying
the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or
areas where assumptions and estimates are significant to the financial statements are disclosed in
Note 3.
-2-
2.2. Changes in accounting policies and disclosure
New Standards, Interpretations and Amendments

The accounting policies adopted are consistent with those of the previous financial year, except for the
adoption of new standards effective as at January 1, 2020. The Company has not early adopted any
standard, interpretation or amendment that has been issued but is not yet effective.
Unless otherwise indicated, adoption of these new standards did not have an impact on the financial
statements of the Company.
e Amendments to PFRS 3, Business Combinations, Definition ofa Business
The amendments to PFRS 3 clarifies that to be considered a business, an integrated set of activities and
assets must include, at a minimum, an input and a substantive process that together significantly
contribute to the ability to create output. Furthermorey#it clarifies'that a business,can exist without
including all of the inputs and processes needed to create outputs. These amendments may impact
future periods should the Company enter into any business combinations.
e Amendments to PFRS 7, Financial Instruments: Disclosures and PFRS 9, Financial Instruments,

Interest Rate Benchmark Reform
The amendments to PFRS 9 provide a number of reliefs, which apply to all hedging relationships that
are directly affected by the interest rate benchmark reform. A hedging relationship is affected if the
reform gives rise to uncertainties about the,timing and or, amount of benchmark-based cash flows of
the hedged item or the hedging instrument.
e Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies,

Changes in Accounting Estimates and Errors, Definition of Material
The amendments provide a new definition of material that states “information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the primary users of
general purpose financial statements make on the basis of those financial statements, which provide
financial information about a specific reporting entity.”
The amendments clarify that materiality will depend on the nature or magnitude of information, either
individually or in combination with other information,.in the context of the financial/ statements. A
misstatement of information is material if it could reasonably be expected to influence decisions made
by the primary users.
¢ Conceptual Framework for Financial Reporting-issued on March 29, 2018
The Conceptual Framework is not a standard, and none of the concepts contained therein override the
concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the
standard-setters in developing standards,.to help preparers develop consistent accounting policies
where there is no applicable standard in place and to assist all parties to understand and interpret the
standards.
The revised Conceptual Framework includes new concepts, provides updated definitions and
recognition criteria for assets and liabilities and clarifies some important concepts.
e Amendments to PFRS 16, COVID-19-related Rent Concessions
The amendments provide relief to lessees from applying the PFRS 16 requirement on lease
modifications to rent concessions arising as a direct consequence of the COVID-19 pandemic. A lessee
may elect not to assess whether a rent concession from a lessor is a lease modification if it meets all of
the following criteria:
= The rent concession is a direct consequence of COVID-19;

= The change in lease payments results in a revised lease consideration that is substantially the
same as, or less than, the lease consideration immediately preceding the change;
= Any reduction in lease payments affects only payments originally due on or before June 30,
2021; and
= There is no substantive change to other terms and conditions of the lease.
A lessee that applies this practical expedient will account for any change in lease payments resulting
from the COVID-19 related rent concessioniin the same way it would account fora change that is not
a lease modification, i.e., as a variable lease, payment.
Desde Financial instruments
Initial Recognition and Classification of Financial Instruments

Financial assets are measured at fair value through profit orloss (FVTPL) unless these aremeasured at
fair value through other comprehensive income (FVOCI) or at amortized cost. Financial liabilities are
classified as either financial liabilities at FVTPL or financial liabilities at amortized cost.
The classification of financial assets depends on the contractual terms,and the business model for
managing the financial assets. Subsequent to initial recognition, the Company may reclassify its
financial assets only when there is a change in its business model for managing these financial assets.
Reclassification of financial liabilities is not allowed.
The Company determines its business model at the level that best reflects how it manages groups of
financial assets to achieve its business objective. The Company’s business model is not assessed on an
instrument-by-instrument basis, but at a higher level of aggregated portfolios. As a second step of its
classification process, the Company assesses the contractual terms of financial assets to identify
whether they pass the contractual cash flows test (SPPI test).
The Company had no investment securities at FVTPL and FVOCI as at December 31, 2020 and 2019.
Financial assets at amortized cost

Financial assets at.amortized cost are debt financial assets that meet both of the following conditions:
(i) these are held within a business\model whose objective is to hold the financial assets in order to
collect contractual cash flows; and (ii) the contractual terms give rise.on specified dates to cash flows
that are SPPI on the outstanding principal amount. This “accounting policy mainly relates to the
statement of financial position captions ‘Cash’, ‘Receivables’, and refundable deposits under ‘Prepaid
expenses and other current assets’, which arise primarily from service revenues and other types of
receivables.
After initial measurement, financial assets at amortized cost are subsequently measured at amortized
cost using the EIR method, less impairment in value. Amortized cost is calculated by taking into
account any discount or premium on acquisition and fees that are an integral part of the EIR. The
amortization is included in ‘Interest income’ in the statement of comprehensive income. Gains and
losses are recognized in statement of comprehensive income when these investments are derecognized
or impaired, as well as through the amortization process.
-4-
The expected credit loss (ECL) are recognized in the statement of comprehensive income under
‘Provision for credit losses’. The effects of revaluation on foreign currency-denominated debt financial
assets are recognized in the statement of comprehensive income.
Financial liabilities at amortized cost

Financial liabilities at amortized cost are contractual obligations which are either to deliver cash or
another financial asset to another entity or to exchange financial assets or financial liabilities with
another entity under conditions that are potentially unfavourable to the Company. They are included
in current liabilities, except for maturities greater than 12 months after the reporting period which are
classified as non-current liabilities.
The Company’s financial liabilities at amortized cost consist of accounts payable and accrued expenses
(Note 2.12) and due to affiliate.
The Company recognizes a financial liability insthe statement,of financial positionwhen, and only
when, the Company becomes a party to the contractual provision of the instrument.
Other liabilities at amortized cost are initially.measured. at fair value plus transaction costs.
Subsequently, these are measured at amortized cost using the effective interest rate method.
Interest expense on financial liabilities is recognized at gross amount in profit or loss.
Derecognition of Financial Instruments
Financial Assets
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial
assets) is derecognized when:
e The rights to receive cash flows from the asset have expired;
e 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
e 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.
When the Company has transferred-its, rights» to: receive: cash flows from an asset and has neither
transferred nor retained substantially all the risks and rewards of the asset nor transferred control of 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 the original carrying-amount of the asset and the maximum amount of consideration that the
Company could be required to repay.
Financial Liabilities
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 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 the Company’s statement of
comprehensive income.
2.4. Impairment of financial assets
The Company recognises an ECL for all debt instruments not held at fair value through profit or loss.
ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Company expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
For receivables and contract assets, the Company“applies_a simplified approach’ in calculating ECLs.
Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. .The Company, has,established.a,provision matrix that
is based on its historical credit loss experience, adjusted for forward-looking factors*specific to the
debtors and the economic environment.
The Company considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Company may also*consider a financial asset to’be in default when
internal or external information indicates that the Company is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements held by the Company.
A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows.
2.5. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the statement of financial
position when, and only when, the Company currently has a legally enforceable right to offset the
recognized amounts and it intends either to settle them on a net basis, or realize the asset and settle the
liability simultaneously. The Company assesses that it has a currently enforceable right of offset if the
right is not contingent on a future event, and is legally enforceable in the normal course of business,
event of default, and event/of insolvency or bankruptcy of the Company andvall of the counterparties.
2.6. Fair value measurement
Fair value is the price that would be received to’sell'anjasset or paid to transfer a liability in an orderly
transaction between market participants atthe measurement date:
The fair value of a non-financial asset is measured based on its highest and best use. The asset’s current
use is presumed to be its highest and bestuse;
The fair value of financial and non-financial liabilities takes into account non-performance risk, which
is the risk that the entity will not fulfil an obligation.
-6-
The Company classifies its fair value measurements using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The fair value hierarchy has the following
levels:
= Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
= Level 2: inputs other than quoted prices included within Level | that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and
= Level 3: inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs).
The appropriate level is determined on the basis of the lowest level input that is significant to the fair
value measurement.
The fair value of financial instruments traded in active markets is based on quoted market prices at the
reporting date. A market is regarded as active if quoted prices are readily and regularly available from
an exchange, dealer, broker, industry group, pricing service, or regulatory agency, ‘and those”prices
represent actual and regularly occurring market transactions on an arm’s length basis. The quoted
market price used for financial assets held by the Company is,the most representative.price within the
bid-ask spread. These instruments are included in Level 1.
The fair value of assets and liabilities that,are not traded in an active market (for example, oyer-the-
counter derivatives) is determined by using valuation techniques. These valuation techniques maximize
the use of observable market data where it is‘available and rely as little as possible on entity specific
estimates. If all significant inputs required to fair value an instrument.are observable, the asset or
liability is included in Level 2. Ifone or more of the significant inputs is not based on observable market
data, the asset or liability is included in Level 3.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
“
Day 1’ Profit
When the transaction price in a non-active market is different from the fair value of other observable
current market transactions of 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’ profit’) in profit or loss. In cases where no observable data
is used; the) difference between the transaction pricejand model value is‘only recognized iin 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” profit amount.
As at December 31, 2020;and°2019; the: Company has no assets and liabilities measured at fair value.
2.7. Cash
For the purpose of presentation inythe)statement of cash flows,,cash includes’eash on hand and deposits
held at call with financial institutions: Cash-in banks earns interest at the respective bank deposit rates.
2.8. Prepaid expenses and other current assets
Prepaid expenses are recognized in the event that payment has been made in advance of obtaining right
of access to goods or receipt of services and measured at nominal amounts. These are derecognized and
charged to profit or loss either with the passage of time or through use or consumption.
Prepaid expenses are included in current assets, except when the related goods or services are expected
to be received and rendered more than twelve months after the end of the reporting period, in which
case, these are classified as non-current assets.
Other noncurrent assets include input value-added tax (VAT) which is stated at historical cost less
provision for impairment, if any. Provision for unrecoverable input VAT, if any, is maintained by the
Company at a level considered adequate to provide for potential unutilized portions of the claims.
The Company, on a continuing basis, makes a review of the status of recoverability of its input VAT
designed to identify those that may require provision for impairment losses. These are derecognized
when refunded, used or offset against output tax or disallowed by the tax authority.
2.9. . Property and equipment
Property and equipment are stated at historical cost less accumulated depreciation and impairment in
value, if any. Historical cost includes expenditure;that,is,directly attributable to,the,acquisition of the
items.
Subsequent costs are included in the asset’s carrying,amount orsecognized.as.a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the:item will flow
to the Company and the cost of the item can be measured reliably. Major renovations are depreciated
over the remaining useful life of the related assetor to the date of the next major renovation, whichever
is sooner. Repairs and maintenance are charged to profit or loss during the financial period in which
they are incurred.
Leasehold improvements are amortized over the estimated useful lives of the improvements, which is
the shorter period compared to the term of the lease considering renewal options and management’s
intention.
Depreciation on assets is computed using the straight-line method over the asset’s estimated useful
lives, as follows:
In years
Transportation equipment 5
Computer equipment 5
Office,equipment 5
Furniture and fixtures 5
3 or the lease term,
Leasehold improvements whichever is shorter
The assets’ residual values and useful lives are. reviewed periodically,.and adjusted as appropriate, at
each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount
if the asset’s carrying amount is greater than its estimated recoverable amount.
Fully depreciated assets. are retained in the property and equipment account until these are retired.
Gains and losses on disposals are determined by comparing proceeds with carrying amount and these
are included in the statement of comprehensive income within “Other expense (income), net”.
An item of property and equipment is derecognized upon disposal or when no future economic benefits
are expected from its use or disposal at which time the cost and their accumulated depreciation are
removed from the accounts.
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The Company classify right-of-use assets as part of property and equipment. The Company recognizes
right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are initially measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The initial cost of right-of-
use assets includes the amount of lease liabilities recognized, initial direct costs incurred, lease
payments made at or before the commencement date less any lease incentives received and estimate of
costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site
on which it is located or restoring the underlying asset to the condition required by the terms and
conditions of the lease, unless those costs are incurred to produce inventories.
Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease
term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of their
estimated useful life and lease term. Right-of-use assets are subject to impairment.
2.10. Impairment of non-financial assets
The carrying values of non-financial assets, such as property and equipment, are reviewed for
impairment whenever events or changes in circumstances indicate that the.carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating units). Value in use
requires entities to make estimates of future’cash flows to be derived from the particular asset, and
discount them using a pre-tax market rate that reflects current assessments of the time value of money
and the risks specific to the asset. Impairment losses, if any, are recognized in the statement of
comprehensive income within other expenses.
Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at
each reporting date. When impairment loss subsequently reverses, the carrying amount of the assets or
cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased
carrying amount should not exceed the carrying amount that would have been determined had no
impairment loss has been recognized for the asset or cash-generating unit in prior years. Reversals of
previously recorded impairment provisions are credited against provision account in the statement of
comprehensive income.
2.11. ‘Refundable deposits
Refundable deposits (including surety bond) ,areyamounts ;which~are refundable upon expiry of a
specified termin“a contract, subject to certain*conditions such as’the lessee's payment of rent as it
becomes due. If part or all*ofa,refundable*deposit becomes non-refundable, e.g. where no refund will
be paid due to damage to the property by the lessee or a loss‘has been incurred, the right to receive the
deposit or part thereof is impaired, and the carrying amount is reduced and the corresponding loss is
recognized in the statement of comprehensive income within general and administrative expenses.
Also refer to Note 2:3 for the recognition, measurement and-derecognition of financial assets.
2.12. Accounts payable and other accrued expenses
These amounts represent liabilities for goods and services provided to the Company prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months after the reporting period. They are recognized initially at their fair value and
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subsequently measured at amortized cost using the effective interest method.
Accounts payable and other accrued expenses denominated in foreign currency are translated to
Philippine peso using the exchange rate at the reporting date. Foreign exchange gains or losses are
included in “Other expense (income), net” in the statement of comprehensive income.
Accounts payable and other accrued expenses are derecognized when extinguished, that is, when the
obligation specified in a contract is discharged or cancelled or when the obligation expires.
2.13. Lease liability
At the commencement date of the lease, the Company recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, andsamounts expected to be paidunder residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term
reflects the Company exercising the option to terminate. Variable lease payments that.do not depend
on an index or a rate are recognized as expenses in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the underlying asset.
2.14. Provisions
Provisions for legal claims and other losses are recognized when the Company has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be
required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized
for future operating losses.
Where there are anumber*of similar obligations, the likelihood*that an-outflow will be required in
settlement is determined by considering the/class,of obligations as‘aywhole. Avproyision is recognized
even if the likelihood”of an outflow with respect to any one item included in the same class of
obligations may be small,
Provisions are measured at the present value of management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine
the present value isya pre-tax \rate\that reflects current market assessments’ of\the time value of money
and the risks specific to the liability. The increase in the=provision due to the passage of time is
recognized as interest expense.
Provisions and reversal of provisions are recognized under “Other expense (income), net”.
2.15. Retirement liability
The Company has yet to adopt a formal retirement plan for the benefit of its qualified employees. Under
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Republic Act (RA) 7641, otherwise known as the Retirement Pay Law, in the absence of a retirement
plan or agreement providing for retirement benefits of employees in the private sector, an employee
upon reaching the age of 60 years or more, but not beyond 65 years, who has served at least 5 years in
a private company, may retire and shall be entitled to retirement pay equivalent to at least 2 month
salary for every year of service, a fraction of at least 6 months being considered as 1 whole year.
The Company recognizes retirement benefit provision based on the minimum requirements of
RA 7641. The liability recognized in the statement of financial position is the present value of the
accumulated retirement benefit obligation at the financial reporting date as calculated annually by an
independent actuary using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency
in which the benefits will be paid, and that have terms approximating to the terms of the related
obligation. Where there is no deep market in such,bonds, the market rates onsgovernment bonds are
used.
The net interest cost is calculated by applying the discount rate.to the net balance.of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefitsexpense in the
profit or loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognized in the period in which they occur, directly in othercomprehensive income.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognized immediately in profit or loss as past service costs.
2.16. Equity
Capital Stock
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of shares
are recognized as a deduction from equity, net of any tax effect.
Stock dividend distributable

Common stock dividend distributable represents common stock that has been declared by the Company
but notyet distributed pendingapproval from the SEC;
Retained earnings
Retained earnings represent the accumulated profit/loss arising from the operations of the Company,
less any dividends declared,
2.17. Revenue recognition
Revenue from contracts*withy customers is: recognized upon transferjof\services to the customer at an
amount that reflects: the-consideration to-which the Company expects tobe entitled in exchange for
those services.
The Company assesses its revenue arrangements against specific criteria in order to determine if it is
acting as a principal or agent.
Service fee income

Service fee income is recognized in the statement of comprehensive income as they are earned.
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The revenue equivalent to a fixed amount that shall be determined as a function of expenses that the
Company incurs plus a ten percent (10%) mark up.
Commission income
Commission income is recognized upon reimbursement from Servicio Uniteller, Inc. (SUT), an affiliate
of the Company, of the commission fees of the paying agents. The revenue is equivalent to the
commission expense paid to the paying agents.
Revenue outside the scope of PFRS 15
Interest income
Interest income is recognized as it accrues using the effective interest method and is presented net of
final tax.
2.18. Cost and expense recognition
Expenses are recognized in the statement of income when a 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 the statement of income: 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 statement of financial condition as an
asset.
Expenses in the statement of comprehensive income are presented using the function of expense
method. Operating expenses are costs attributable to operating and other business activities of the
Company.
2.19. Foreign currency transactions and translations
Functional and presentation currency

Items included in the financial statements are measured using the currency of the primary economic
environment in which the entity operates (the “functional currency’). The financial statements are
presented in Philippine’Peso, which is the;Company’s functional and’presentatiom currency;
Transactions and balances

Foreign currency transactions are'translated into'the functional currency using the exchange rates at the
dates of the transactions» Foreign exchange gains“and losses resulting from the settlement of such
transactions and from the translation of monetary assets» and liabilities denominated in foreign
currencies at year end exchange rates are recognized in profit or loss.
Foreign exchange gains/and.losses-are presented in*profit’orloss within “Other expense (income), net”.
2.20. Current and deferred income tax
Income tax expense represents the sum of the current tax and deferred tax expense.
Current tax
The current tax expense is based on taxable profit for the year. Taxable profit differs from net profit as
reported in the statements of income because it excludes items of income or expense that are taxable or
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deductible in other years and it further excludes items that are never taxable or deductible.
The Company’s current tax expense is calculated using the regular corporate income tax (RCIT) rate
of 30% of taxable income or the minimum corporate income tax (MCIT) rate of 2% of defined gross
income, whichever is higher.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Deferred tax
Deferred income tax is provided in full, using the liability method, on all temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the related deferred income
tax asset is realized or the deferred income tax liability is settled.
Deferred tax is recognized on temporary, differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognized.for all,taxable temporary,differences. Deferred
tax assets are generally recognized for all deductible temporary differences to thevextent that it is
probable that taxable profits will be available against which those deductible temporary differences can
be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises
from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit
nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences where the Company is.able to
control the reversal of the temporary difference and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences are only recognized to the extent that it is probable that there will be sufficient taxable
profits against which to utilize the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax liabilities and:assets aremeasured at the)tax rates that are expected to'apply inthe period
in which the liability is settled or the asset realized, based on tax rates and’tax laws that have been
enacted or substantively enacted by, the end of the reporting period:
Deferred tax assets and liabilities are offset, when there is alegally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income ondirectly inequity:In this‘case; the tax is also recognised
in other comprehensive income or directly-in equity, respectively.
2.21. Contingencies
Contingent liabilities are not recognized in the financial statements. They 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 in the financial statements but are disclosed in the notes
to the financial statements when an inflow of economic benefits is probable.
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2.22. Events after reporting date
Post period-end events that provide additional information about the Company’s financial position at
the end of the reporting date (adjusting events) are reflected in the financial statements. Post period-
end events that are not adjusting events are disclosed in the notes to the financial statements when
material.
2.23. Future Changes in Accounting Policies
Pronouncements issued but not yet effective are listed below. The Company intends to adopt the
following pronouncements when they become effective. Adoption of these pronouncements is not
expected to have a significant impact on the Company’s financial statements unless otherwise indicated.
Effective beginning on or afier January 1, 2021

e Amendments to PFRS 9, PFRS 7, PFRS.4 and'PFRS\16;/nterest Rate Benchmark Reform —
Phase 2
Effective beginning on or afier January 1, 2022

e Amendments to PFRS 3, Reference to the Conceptual Framework
e Amendments to PAS 16, Plant and Equipment: Proceeds before Intended Use
e Amendments to PAS 37, Onerous Contracts— Costs of Fulfilling aContract
e Annual Improvements to PFRSs 2018-2020 Cycle
o Amendments to PFRS 1, First-time Adoption of Philippines Financial Reporting Standards,
Subsidiary as a first-time adopter
o Amendments to PFRS 9, Financial Instruments, Fees in the ’10 per cent’ test for
derecognition of financial liabilities
o Amendments to PAS 41, Agriculture, Taxation in fair value measurements
Effective beginning on or after January 1, 2023

e Amendments to PAS 1, Classification of Liabilities as Current or Non-current
PFRS 17, Insurance Contracts
Deferred effectivity
e Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28, Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture
2.24. Coronavirus outbreak
In late 2019, a cluster of cases displaying the symptoms of a ‘pneumonia of unknown cause’ were
identified in Wuhan, the capital of China’s Hubei province. On December 31, 2019, China alerted the
World Health Organization (WHO) of the coronavirus disease 2019 (COVID-19) or coronavirus
outbreak. On January 30, 2020, the International Health Regulations Emergency Committee of the
WHO declared the outbreak a ‘Public Health Emergency of International Concern’. Since then, the
virus has spread worldwide. On March 11, 2020, the WHO announced that the coronavirus outbreak
can be characterized as a pandemic. The virus has greatly impacted the economic activities.
In a move to contain the COVID-19 outbreak, on March 13, 2020, the Office of the President of the
Philippines issued a Memorandum directive to impose stringent social distancing measures in the
National Capital Region effective March 15, 2020. On March 16, 2020, Presidential Proclamation
No. 929 was issued, declaring a State of Calamity throughout the Philippines for a period of six (6)
months and imposed an enhanced community quarantine (ECQ) throughout the island of Luzon until
April 12, 2020, unless earlier lifted or extended. As of March 25, 2021, different parts of the country
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remain to be under varying degree of community quarantine.
In order to comply with the government’s measures to monitor and mitigate the effects of COVID-19,
the following were taken by the Company:
e created a work from home readiness planning and monitoring to ensure all the workforce could
cope with the telecommuting setup. The Company ensured that all employees are well equipped to
work remotely. The Company’s work from home policy is being tied to an enhanced Key
Performance Indicators to monitor employee performance and ensure goals are being achieved and
at the same time compliant with Labor policies.
¢ transitioned physical events or face to face meetings into digital or online meetings. Online banking
transactions were also adapted. Achieved social distancing while still sustaining productivity.
¢ as part of business continuity plan, the Company’s key management personnel would perform daily
teleconferencing to address the following issues:
e critical job functions should be completed when)working remotely:
e identify processes that needs changes to betterrespond to business interruptions.
e monitor or report the situation of subordinates who might be at risk of carrying the virus.
The scale and duration of these developments remain uncertain as of the report date. The Company
observed declines in general business. It is not possible to estimate the overall impact of the outbreak’s
near-term and longer effects, however, the Company»hasyalready incurred and, will continue to"incur
costs as the Company continues to mitigate the adverse impact of the outbreak on its operations. The
outbreak could have material impact on the Company’s financial results for the rest of 2021 and even
periods thereafter. Considering the evolving nature of the pandemic, the Company will continue to
monitor the situation.
Critical Accounting Estimates, Assumptions and Judgments
Estimates, assumptions and judgments 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.
The Company makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates, assumptions and
judgments that have a significant risk of causing a materialadjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below:
3.1. Critical accounting estimates and assumptions
Retirement benefit obligation (Note 12)

The present value of the pension obligation depends on a number of factors that are determined on an
actuarial basis using a number of assumptions. The assumptions used in determining the net cost
(income) for pensions include the discount rate and future salary increases. Any changes in these
assumptions will impact the carrying amount of retirement obligations.
The Company determines the appropriate discount rate at the end of each year. This is the interest rate
that should be used to determine the present value of estimated future cash outflows expected to be
required to settle the pension obligations. In determining the appropriate discount rate, the Company
considers the interest rates of government bonds that are denominated in the currency in which the
benefits will be paid and that have terms to maturity approximating the terms of the related retirement
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obligation.
Other key assumptions for pension obligations are based in part on current market conditions.
The possible effects of sensitivities surrounding these actuarial assumptions at reporting date are
presented in Note 12.
Leases - Estimating the incremental borrowing rate (Note 11)

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its
incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the
Company would have to pay to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires
estimation when no observable rates are available or when they need to be adjusted to reflect the terms
and conditions of the lease. The Company estimates theIBR. using,observableinputs(such as market
interest rates) when available and is required to make certain entity-specific estimates,
The Company’s lease liabilities as of December.3 1,,.2020 and.2019,.amounted to.P487,446 and

P3,238,462, respectively.
3.2. Critical judgments in applying the entity’s accounting policies
Provision for income tax and deferred tax (Note 13)

Significant judgment is required in determining the recorded provision for income tax in the statement
of comprehensive income. There are many transactions and calculations for which the ultimate tax
determination is uncertain in the ordinary course of business. The Company recognizes liabilities for
anticipated tax audit issues when it is probable. The liabilities are based on assessment and judgment
of whether additional taxes will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will impact the Company’s current income
tax and deferred income tax provisions in the period in which such determination is made.
Further, the recognition of deferred tax assets depends on management’s assessment of the probability
of available future taxable income against which the temporary differences can be applied.
The Company reviews the carrying amounts of deferred tax assets at the end of each reporting period
and reduces the amounts to the extent that it is no longer probable that sufficient taxable profit will
allow all or\part ofits deferred/tax assets to beutilizedy The Company.’s management believes that the
deferred tax assets’at the end of each reporting period will be realized.
The Company has deferred tax assets of P3,818,384 and P1,909,059 as at December 31, 2020 and 2019,
respectively, which was assessed by management to be fully recoverable based on projected taxable
profits and expected timing of reversal of the temporary differences:
Provisions and Contingencies (Note 8)

In accordance with PAS.37, Provisions, Contingent Liabilities and Contingent Assets, the Company
determines whether to provide for loss contingencies based on an assessment of whether the risk of loss
is remote, reasonably possible or probable. Management’s assessment is developed in consultation
with the Company’s outside counsels and advisors and is based on an analysis of possible outcomes
under various circumstances. Contingency assumptions involve judgments that are inherently
subjective and can involve matters that are in litigation, appeal and ongoing negotiations with
authorities and third parties which by its nature is unpredictable. Management believes that its
assessment of the probability of contingencies is reasonable, but because of the subjectivity involved
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and the unpredictable nature of the subject matter at issue, management’s assessment may prove
ultimately to be incorrect, which could materially impact the financial statements in current or future
periods.
Cash
Cash as at December 31 consists of:
Note 2020 2019

Cash in banks 16 P528,330,378 P165,322,457
Petty cash fund 10,000 10,000
P528,340,378 _P165,332,457
Cash in banks earn interest at the prevailing banksdepositrates. Forthe:years ended.
December 31, 2020 and 2019, the Company-has not provided,any allowance forimpairment since the
expected loss is very minimal.
Interest income on cash in banks for the years ended December 31, 2020 and 2019 amounted to
236,092 and 2173,973 (Note 14), respectively, and is presented under “Other income (expenses), net’
in the statements of comprehensive income.
Receivables
Receivables mainly pertain to advances made by the Company to paying agents for cash remittances to
beneficiaries amounting to P31,540,835 and P14,523,352 as at December 31, 2020 and 2019,
respectively.
For the years ended December 31, 2020 and 2019, the Company has not provided any allowance
for impairment since the expected loss is very minimal. There has not been a significant change in
credit quality and the receivables are considered fully recoverable taking into account the paying
agents’ historical payment patterns and their financial condition. The Company holds no collateral
with respect to receivables.
Prepaid Expenses and Other Assets
Prepaid expenses and other current assets as at December 31 consist of:
Note 2020 2019

Prepaid insurance P1,223,702 P1,098,919
Prepaid tax 855,073 1,583,281
Prepaid rent 207,195 -
Refundable deposits 204,919 268,292
Prepaid others 7,765
P2,490,889 22,958,257
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Other noncurrent assets as at December 31 consists of:
Note 2020 2019

Input VAT P3,925,049 P2,880,316
Refundable deposits 11 1,028,102 1,006,915
Prepaid rent 196,007
P4,953,151 24,083,238
7. Property and Equipment
The movements for each category of property and equipment are as follows:
2020.
Transportation Computer Office Furniture Leasehold Right of
Equipment Equipment Equipment _.and/Fixtures Improvements Use Assets Total
Cost
Balance at beginning of
year P1,311,979 3,877,315 P977,658 291,005 P1,559,819 26,412,288 P14,230,064
Additions o 474,466 - L . 58,970 533,436
Disposals - — x : : (491535) (49,535)
Balance at end of year 1,311,979 4,351,781 977,658 91,005 1,559,819 6,421,723 14,713,965
Accumulated
Depreciation and
Amortization
Balance at beginning
of year 1,311,979 3,036,410 815,392 10,664 1,224,430 2,674,142 9,133,017
Depreciation and
amortization q 403,548 88,900 12,208 289,254 2,690,261 3,484,171
Disposals = = = = = (49,535) (49,535)
Net Book Value Pp P911,823 273,366 P8,133 P46,135 P1,106,855 P2,146,312
2019
Transportation ‘Computer Office Furniture Leasehold Right of
Equipment Equipment Equipment and Fixtures Improvements Use Assets Total
Cost
Balance at beginning of
year 2,538,765 3,510,717 P945,426 P91,005 P1,462,045 6,362,753 P14,910,711
Additions - 366,598 32,232 - 97,774 49,535 546,139
Disposals (1,226,786) = = = = = (1,226,786)
Accumulated
Depreciation and
Amortization
Balance at beginning =
of year 1,864,032 2,704;196 687,050 58,465 736,701 6,050,444
Depreciation and 2,674,142
amortization 122,679 332,214 128,342 12,199 487,729, 3,757,305
Disposals (674,732) = L = - = (674,732)
Balance at end of year 1,311,979 3,036,410. 815,392 70,664 1,224,430 2,674,142 9,133,017
Net Book Value Pe P840,905, P162,266 20,341 P335,389 3,738,146 5,097,047
Certain fully-depreciated property and equipment with cost of P6,098,043 and P3,820,471 as at
December 31, 2020 and 2019, respectively, are still in use.
-18-
8. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as at December 31 consist of:
Note 2020 2019

Financial liabilities:
Pre-funding from SUT 9 P439,736,152 P50,972,953
Due to paying agents 1,080,207 6,376,194
Accounts payable 90,117 178,870
Accrued expenses:
Accrued professional fees 1,474,261 667,392
Accrued salaries 774,924 1,062,290
Other accrued expenses 400,733 49,047
443,556,394 59,306,746
Non-financial liabilities:
Payable to regulatory agencies 2,717,415 323,812
P446,273,809 P59,630,558
Pre-funding from SUT pertains to amount payable to beneficiaries. The Company being engaged in
cross border transfer of funds, facilitates payment of funds to receiver in the Philippines. Sender from
overseas initiates the transaction using the Company’s money transfer platform.
Due to paying agents pertains to advances made by paying agents for the cash remitted to beneficiaries.
Payable to regulatory agencies includes to the amount payable to the Bureau of Internal Revenue (BIR)
in relation to the Voluntary Assessment and Payment Program (VAPP) which the Company availed
and is pending for approval as of December 31, 2020. In 2021, the Company paid the amount due and
the BIR issued the Certificate of Availment of the VAPP on January 15, 2021.
Other accrued expenses pertain to accruals of utilities and office supplies.
9. Related Party Transactions
In the normal course of business, the Company’s only related party transactions are with its affiliate,
SUT, where the Company serves. as an intermediary between senders and beneficiaries. SUT engages
the Company to provide administrative, financial and accounting Services in the nature of those
service required by SUT including without limitation, the efficient delivery of financial services to
senders and beneficiaries, the receipt and dispatch on SUT’s behalf of monetary resources to cover
payment of the orders paid by the paying agents, and the dispatch of remittances to bank accounts as
designated by the sender.
-19-
Significant related party transactions for the years ended December 31 are as follows:
Related party Terms and Conditions 2020 2019

(A) Service fee The Company has a service agreement with SUT to P35,997,229 P38,172,003
Affiliate: SUT provide administrative, financial, and accounting
services in the nature of those services required by the
latter, including the processing and transfer of
information, and representing or serving as a
commission agent in the Philippines or in a foreign
territory, for every kind of industrial or commercial
dealing, whether national or foreign.
The Company adds reasonable arm’s length margin to

the total costs and expenses on the said services.
Unless otherwise agreed to in writing by the parties, the

service fee is due on a monthly basis in arrears within
thirty (30) days following the billing date.
(B) Commission Commission income pertains'to the amount reimbursed 4,357,430 3,469,117
Affiliate: SUT by SUT representing the amount of commission
expenses incurred and paid by the Company to the
paying agents.
At December 31, outstanding balances are summarized as follows:
Related party Terms and Conditions 2020 2019

(A) Advances These are unsecured and non-interest bearing and have P86,762,462 P86,762,462
Affiliate: SUT no fixed repayment term, due ‘on demand
(B) Pre-funding SUT pre-funds remittances for disbursements to 439,736,152 50,972,953
Affiliate: SUT beneficiaries in periods where there are no banking
transactions due to weekends and holidays.
These are pass-through transactions that are settled

through subsequent deduction from the inward funding
remittances by SUT to the Company.
There are no guarantees issued and collaterals held with respect to transactions and balances with
related parties.
Key management compensation. for the years,ended December.3 L.consists.of:
Note 2020 2019

Short-term.employee.benefits P1,482,493 P1,232,846
P1,806,182 P1,489,998
The Company has not provided termination benefits or other long-term benefits, other than retirement
benefits, to its key management. employees for the-years ended’ December 315,2020 and 2019.
-20-
10. Capital Stock
Details of share capital as at December 31, 2020 and 2019 follow:
2020 2019
Shares Amount Shares Amount
Common stock- 2100 per share
Authorized 300,000 230,000,000 300,000 230,000,000
Issued and outstanding at

beginning of year 180,680 P18,068,000 78,000 #7,800,000
Issuance of new shares = = 102,680 10,268,000
Issued and outstanding at end of 180,680 18,068,000 180,680 P18,068,000
year
On August 22, 2018, the BOD approved the issuance:of 102,680 common shares with par value.of
P100 per share from its unissued portion of,authorized capital stock in consideration of the advances
from the Parent Company amounting to P10,268,000, On December 20, 2018, the Company submitted
the requirements to SEC for evaluation. SEG,approval.was issued,on May 21, 2019.
On December 9, 2020, the BOD approved the declaration of stock dividend of 119,320 common shares
amounting to P11,932,000, payable out of\theyCompany’s unissued authorized capital.stock. The
approval is still pending from SEC as of December 31, 2020.
. Operating Lease Commitment
On June 8, 2018, the Company has entered into a non-cancellable lease agreement with a third-party
lessor for the rental of its administrative office. The lease agreement runs for a period of three (3) years
from June 1, 2018 up to May 31, 2021. The lease agreement is renewable upon terms and conditions
mutually agreed by the contracting parties. As at December 31, 2020 and 2019, refundable security
deposit amounting to P1,028,102 and P1,006,915 is presented as “Other noncurrent assets” (Note 6).
Below are the carrying amount of lease liabilities and the movements during the period:
Note 2020 2019

At beginning of year P3,238,462 P5,704,532
Additions 43,970 36,935
Accretion of interest 14 141,767 288,845
Payments (2,936,753) (2,791,850)
At end of year P487,446 P3,238,462
Current P487,446 P2,751,016

Non-current 487,446
P487,446 __P3,238,462
-21-
The following are the amounts recognized in the statement of comprehensive income:
Note 2020 2019

Depreciation expense of right-of-use assets
included in property and equipment 7 P2,690,261 P2,674,142
Interest expense on lease liabilities 14 141,767 288,845
P2,832,028 _ P2,962,987
Shown below is the maturity analysis of the undiscounted lease payments:
2020 2019
Within one (1) year P482,895 2,891,753
After one (1) year but not more than
five (5) years - 491,715
P482,895 P3,383,468
12. Retirement Liability
The Company’s basis of provision for retirement benefits cost and obligation is discussed in Note 2.15.
The amounts recognized in the statements of financial. position as at December 31 as retirement liability
are determined as follows:
2020 2019
Present value of defined benefit obligation P2,163,629 P1,339,425
Fair value of plan assets = =
Liability in the statement of financial position P2,163,629 P1,339,425
The movements in the present value of retirement liability for the years ended December 31 follow:
2020 2019
Beginning of the year P1,339,425 P4,574,265
Benefits paid - (4,593,400)
Included in profit or loss:
Current service cost 638,829 367,814
Interest cost 70,186 431,353
709,015 799,167
Included in other comprehensive income:
Remeasurement gain on experience adjustment (251,052) (206,379)
Remeasurement loss on change in financial
assumptions 366,241 765,772
115,189 559,393
End of the year P2,163,629 P1,339,425
As of December 31, 2020, and 2019, remeasurement loss presented in the statement of financial
position as ‘Reserve for remeasurement of retirement benefit obligation’ amounted to 2950,897 and
P870,265, respectively.
-22-
The movement in remeasurement loss of (280,632) and (2391,575) in 2020 and 2019, respectively, is
presented net of deferred income tax of (234,557) and (P167,818) in 2020 and 2019 (Note 13),
respectively, in the statement of total comprehensive income.
The principal actuarial assumptions used at December 31 are as follows:
2020 2019
Discount rate 4.21% 5.24%
Future salary increase rate 5.00% 5.00%
Discount rate
The discount rate is based on the theoretical spot yield curve calculated from the Bankers Association
of the Philippines (BAP) PHP Bloomberg BVAL Reference Rates (BVAL) benchmark reference curve
for the government securities market (previously the PDEx (PDST-R2) market yields on benchmark
government bonds) by stripping the coupons from. government bonds; to create, virtual zero coupon
bonds as of November 18, 2020, and considering the estimated timing and amount of projected benefit
payments.
Future salary increases

This is the expected long-term average rate of salary increase taking into account inflation, seniority,
promotion and other market factors. Salary increases,comprise,of the general inflationary increases plus
a further increase for individual productivity, merit and promotion. The future'salary increase rates are
set by reference over the period over which benefits are expected to be paid.
Demographic assumptions
Assumptions regarding mortality experience are set based on advice from published statistics and
experience in the Philippines.
The sensitivity of the defined benefit obligations to changes in the significant actuarial assumptions at
December 31 follows:
2020
Impact on defined benefit obligation
Changes in Increase in Decrease in
assumptions assumption assumption
Discount rate 1.00% Decrease by P356,763 Increase by P 452,412
Salary increase rate 1.00% _ Increase by 443,823 Decrease by P357,402
2019
Impact-on-defined benefit obligation
Changes in Increase in Decrease in
assumptions assumption assumption
Discount rate 1.00% _ Decrease by P221,648 __ Increase by P 281,211
Salary increase rate 1.00%. Increase by 278,944 Decrease by P223,911
The above sensitivity analyses are based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions
may be correlated. When calculating the sensitivity of the defined benefit obligation to significant
actuarial assumptions the same method (present value of the defined benefit obligation calculated with
the projected unit credit method at the end of the reporting period) has been applied as when calculating
the retirement benefit obligation recognized in the statement of financial position.
-23-
The weighted average duration of the defined benefit obligation is 18.7 years and 18.8 years in 2020
and 2019, respectively. Shown below is the maturity analysis of undiscounted benefit payments as at
December 31:
2019 2018
Year | P23,780 P18,357
Year 2 34,545 25,160
Year 3 51,759 39,525
Year 4 79,321 59,141
Year 5 116,126 94,492
Year 6-10 1,158,170 978,837
13. Taxation
Republic Act (RA) No. 9337, An Act Amending dnternal Revenue Code, provides that the regular
corporate income tax rate shall be 30.0%.
The regulations also provide for MCIT of 2.0% on modified gross.income and.allow.NOLCO. The
carryforward of unused tax credits from excess_of MCIT over regular minimumcorporate income tax
(RCIT) and unused NOLCO may be applied against*the Company’s income tax: liability"and' taxable
income, respectively, over a three-year period from the year of inception.
The components of income tax expense (benefit).shown in profit or loss for the years ended
December 31 are as follows:
2020 2019
Current P728,208 P763,440
Deferred (1,857,902) 1,765,511
(P1,129,694) P2,528,951
Deferred income tax (DIT) assets and liability are determined using income tax rates in the period the
temporary differences are expected to be recovered or settled.
DIT assets, and liability,as at December, 31 consist.of the tax effects of the following:
2020 2019
DTA on:
MCIT P1,491,648 P763,440
NOLCO 1,511,786 634,854
Retirement benefit obligation 649,089 401,828
Accrued expenses 151,217 29,714
Leases 14,644 50,081
Unrealized foreign exchange loss - 29,142
3,818,384 1,909,059
DIT liability on:
Unrealized foreign exchange gain (16,866) -
DIT assets, net P3,801,518 P1,909,059
-24-
The expected timing of recovery/settlement of the Company’s DIT assets and liabilities are as
follows:
2020 2019
DIT assets
To be recovered within 12 months P1,642,865 P822,296
To be recovered more than 12 months 2,175,519 1,086,763
3,818,384 1,909,059
DIT liability
To be recovered within 12 months (16,866) -
DIT assets, net P3,801,518 P1,909,059
The movements in the Company’s net DIT assets (liabilities) are as follows:
2020 2019
Beginning of the year P1,909,059 P3,506,752
Charged to profit or loss 1,857,902 (1,765,511)
Charged to other comprehensive income 34,557 167,818
End of the year P3,801,518 P1,909,059
Realization of the future tax benefits related to the DIT assets is dependent on many factors including
the Company’s ability to generate taxable income during the periods in which the DIT assets are
expected to be recovered. Management has considered these factors in reaching its conclusion to
recognize in full the related future tax benefits ftom the above DIT assets.
The reconciliation between income taxes computed at the statutory tax rate and the income tax expense
as shown in profit or loss for the years ended December 31 follows:
2020 2019
Income tax expense (benefit) computed at statutory
rate of 30% (P1,918,748) P3,135,295
Adjustments for:
Movements in unrecognized deferred tax - (3,516,612)
Non-deductible expenses 859,881 3,063,326
Interest income subjected to final tax (70,827) (525192)
Others = (100,866)
(P'1)129,694) P2,528,951
On September 30, 2020, the. BIR issued Revenue. Regulations. No, 25-2020 implementing Section
4(bbbb) of “Bayanihan to Recover As One Act” which states that the NOLCO incurred for taxable
years 2020 and 2021 can be carried over and claimed as a deduction from gross income for the next
five (5) consecutive taxable years immediately following the year of such loss.
As at December 31, 2020, the Company has incurred NOLCO which can be claimed as deduction from
the regular taxable income for the next three (3) consecutive taxable years, as follows:
Year Incurred Amount Expired Balance Availment Period

2019 P2,116,180 - P2,116,180 2020-2022
-25-
As at December 31, 2020, the Company has incurred NOLCO for the taxable year 2020 which can be
claimed as deduction from the regular taxable income for the next five (5) consecutive taxable years
pursuant to the Bayanihan to Recover As One Act, as follows:
Year Incurred Amount Expired Balance Availment Period

2020 P2,923,107 P- P2,923,107 2021-2025
As at December 31, 2020, carryover MCIT can be used as a tax credit against future income tax
liability:
Year Incurred Amount Used Balance Expiry Year

2020 P728,208 Pp P728,208 2023
2019 763,440 - 763,440 2022
P1,491,648 P- P1,491,648
14. Other Expense (Income), net
Other expense (income), net for the years ended December 31 consist of:
Note 2020 2019

Foreign exchange gain (loss), net 15 P9,689,243 P3,564,038
Provision (reversal) of losses, net 8 3,019,041 (10,357,279)
Interest income 4 (236,092) (173,973)
Interest expense 11 141,767 288,845
Loss on sale 7 = 105,625
Miscellaneous (413,155) 14,008
P12,200,804 (26,558,736)
15. Foreign Currency Denominated Monetary Assets and Liabilities
The Company’s foreign currency denominated monetary assets and liabilities as at December 31 are as
follows:
2020 2019
In USD
Assets:
Cash in bank $458,627 $253,111
Receivables 335493 10,736
Liabilities
Pre-funding from SUT (9,153,542) (1,004,591)
Due to related party, (1,806,046) (1,709,942)
Net foreign currency denominated liabilities ($10,497,468) ($2,450,686)
Exchange rates at December 31 P48.04 P50.74
Peso equivalent (2504,298,363) (P124,347,808)
Foreign exchange loss, net, presented in ‘Other expense (income), net’ in the statements of
comprehensive income for the years ended December 31, 2020 and 2019 amounted to 29,689,243 and
P3,564,038, respectively, of which 256,217 and (297,140) pertains to unrealized foreign exchange gain
(loss) as at December 31, 2020 and 2019, respectively (Note 14).
-26-
16. Financial Instruments and Risk Management
16.1. Financial risk factors
The Company’s ultimate parent company provides written principles for over-all risk management, as
well as written policies covering specific areas, such as foreign exchange risk, interest-rate risk, credit
risk, use of non-derivative financial instruments, and investing excess liquidity.
The Company’s activities expose it to a variety of financial risks and these activities involve the
analysis, evaluation and management of some degree of risk or combination of risks. The Company’s
overall risk management program focuses on the unpredictability of financial markets, aims to achieve
an appropriate balance between risk and return and seeks to minimize potential adverse effects on the
Company’s financial performance.
The most important types of risk the Company manages are: credit risk, market risk and liquidity risk.
Market risk includes foreign exchange risk.
16.2 Components of financial assets and liabilities
Financial assets
Details of the Company’s financial assets as at December 31 are as follows:
Note 2020 2019

Cash in bank 4 P528,330,378 © P165,322;457
Receivables 5 31,540,835 14,523,352
Refundable deposits 6 1,233,021 1,275,207
P561,104,234 _ P181,121,016
Financial liabilities
Details of the Company’s financial liabilities classified as liabilities at amortized cost as at
December 31 are as follows:
Note 2020 2019

Accounts payable and accrued expenses 8 P443,556,394 P59,306,746
Due to affiliate 9 86,762,462 86,762,462
Lease liability 11 487,446 3,238,462
P530,806,302 - P149,307,670
16.3 Fair yaluemeasurement
As of December 31, 2020 and2019, the carrying values.of the Companys financial assets and liabilities
as reflected in the statements. of financial condition and related notes approximate their respective fair
values as of the statement of financial condition date.
16.4 = Credit risk
Credit risk is the risk of financial loss to the Company if counterparty to a financial instrument fails to
meet its contractual obligations and arises from the Company’s cash and due from affiliate. The
Company has established controls in its credit policy to determine and monitor the credit worthiness of
customers and counterparties. The Company’s exposure to credit risk is not considered significant
because the counterparty of its financial assets has good credit standing. The Company’s maximum
exposure to credit risk is represented by the carrying amount of each financial asset.
-27-
The Company’s exposure to credit risk arises mainly from Cash in banks (Note 4), Receivables
(Note 5) and Refundable deposits (Note 6).
The carrying amount of financial assets represents the Company’s maximum credit exposure.
Collateral and other credit enhancement
The Company’s exposure to credit risk arising from default of the counterparty has a maximum
exposure equal to the carrying amount of the particular instrument plus any irrevocable loan
commitment or credit facility.
There are no significant concentrations of credit risk within the Company.
16.5 Credit quality of the Company’s financial assets
The Company utilizes an internal credit rating system based on its assessment of the quality*ofits
financial assets. The Company classifies its financial assets into the following credit grades:
e High Grade — This pertains to accounts with a very low probability of default as demonstrated by
the debtor’s long history of stability, profitability and diversity. The debtor has the ability to raise
substantial amounts of funds through public markets or.external financing... The debtor has a strong
debt service record and a moderate use of leverage.
e Medium Grade — The debtor has no history, of default. The debtor has sufficient liquidity to fully
service its debt over the medium term. The debtor has adequate capital to readily. absorb any
potential losses from its operations and any foreseeable contingencies. The debtor reported
profitable operations for at least the past three years.
e Low Grade — The borrower is expected to adjust to the cyclical downturns in its operations. Any
prolonged adverse economic conditions would however ostensibly create profitability and liquidity
losses. Operating performance may have a history of default in interest but must have regularized
its service record to date. The use of leverage is above industry standards but has contributed to
shareholder value.
As at the end of reporting period, credit quality of the Company’s Cash in bank, Receivables, and
Refundable deposits that are neither past due nor impaired were determined to be-high grade and are in
stage 1 of the ECL model.
Cash in bank
Credit risk exposure arising ftom cash in bank arises from default ofthe counter party, with a maximum
exposure equal to the fair value of financial assets. The Company has policies that limit the amount of
credit exposure with financial institutions.
To reduce the credit risk, the Company has concentrated its banking activities with a limited company
of universal banks that have good financial ratings. Individual risk limits on per bank basis are set
based on its financial position, credit ratings, past experience and other factors in accordance with those
set by the BOD. The utilization of credit limits with each bank is regularly monitored.
Receivables
Receivables mainly pertain to advances made by the Company to a paying agent for cash remittances
to beneficiaries which are readily collectable by the Company, with the counterparty in good credit
- 28-
standing. Thus, the Company is not expecting any significant exposure on these balances.
Refundable Deposits
Credit risk on refundable deposits pertains to deposits for the Company’s existing non-cancellable lease
agreements for a period of more than twelve months from reporting date. The Company limits its
exposure to credit risk by transacting only with counterparty that has appropriate and acceptable credit
history.
Refundable deposits on leased properties by the Company are normally refundable at the end of the
lease term (Note 11).
16.6 . Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, will affect the
Company’s income or the value of its holdings of ‘financial instruments. The,objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while
optimizing the return.
Foreign Exchange Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency
exchange rates, to the extent of its monetary foreign currency,denominated. assets and. liabilities,
primarily with respect to the U.S. dollars.
The reasonable possible change in foreign-exchange rate used in the sensitivity analysis,is the-rate of
change in U.S. dollars between the Peso equivalent at year end and the Peso equivalent determined
sixty (30) days from reporting date, by which management is expected to receive or settle the
Company’s most significant financial assets or liabilities, respectively.
Closing rate thirty

Closing rate at (30) days after © Change in foreign
reporting date reporting date exchange rate in
(Peso equivalent) (Peso equivalent) absolute %
December 31, 2020 48.02 48.08 0.12%
December 31, 2019 50.74 50.90 0.32%
Reasonable possible change in foreign currency exchange rate determined above would lead to the
following pre-tax (loss) profit and equity movements for the years ended December 31 as follows:
2020
Foreign currency Foreign currency
exchange rate exchange rate
weakened strengthened
against against
Philippine Peso Philippine Peso
Cash in bank P54,436 (P54,436)
Receivables 415 (415)
Due to affiliate (214,365) 214,365
Pre-funding from SUT (1,086,463) 1,086,463
Net increase (decrease) in pre-tax loss and equity (P:1,245,977) P1,245,977
-29-
2019
Foreign currency Foreign currency
exchange rate exchange rate
weakened strengthened
against against
Philippine Peso Philippine Peso
Cash in bank P40,498 (P40,498)
Due from affiliate 1,718 (1,718)
Due to affiliate (569,506) 569,506
Pre-funding from SUT (316,781) 316,781
Net increase (decrease) in pre-tax loss and equity (P844,071) P844,071
Price risk
The Company does not hold financial assets, and liabilities that are price sensitive, nor does it have
equity investments that are subject to price.fluctuations), As such, the Company isnot exposed to
significant price risk.
16.7 Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the’availability of funding
through an adequate amount of committed credit facilitiessefficient:collection of customers’ accounts
and the ability to close out market positions.. The Company aims to maintain flexibility in funding by
monitoring and ensuring that there are available funds to operate the business. Management monitors
rolling forecasts of the Company’s liquidity reserve on the basis of expected cash flows.
The Company believes that the cash generated from its operating activities is sufficient to meet
currently maturing obligations required to operate the business.
As at December 31, 2020 and 2019, all of the Company’s financial liabilities, which consist of accounts
payable and accrued expenses and due to affiliate, are contractually payable on demand and up to sixty
(60) days’ term.
The table below analyzes the Company’s financial liabilities into relevant maturity based on the
remaining period at the reporting date to the contractual maturity date:
2020
Carrying Less than — 6 Months to More than
Amount 6 Months 1 Year 1 Year
Accounts payable and accrued
expenses P443,556,394 P443,556,394 Pp Pp
Due to affiliate 86,762,462 86,762,462 - -
Lease liability 487,446 487,446 = =
P530,806,302 _P530,806,302 Pp Pp
-30-
2019
Carrying Less than 6 Months to More than
Amount 6 Months 1 Year 1 Year
Accounts payable and accrued
expenses P59,306,746 P59,306,746 Pp Pp
Due to affiliate 86,762,462 86,762,462 - -
Lease liability 3,238,462 1,322,244 1,428,772 487,446
P:149,307,670 147,391,452 P1,428,772 P487,446
The Company expects to settle the above financial liabilities in accordance with their contractual
maturity date.
The carrying amounts above approximate the undiscounted cash flows as the impact of discounting is
not significant, considering their short-term maturity.
As shown in Note 16.2, the Company has sufficient financial assets such as cash and receivables which
are available to settle these financial liabilities.
Capital management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue
as a going concern, so that it can continue to provide returns for shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, obtain borrowings from banks or related parties,
and issue new shares. Total capital being managed by the Company is its total equity, excluding reserve
on remeasurements of retirement benefits, as shown in the statements of financial position.
The Company is not subject to externally imposed capital requirements.
. Events After the Reporting Period
On March 26, 2021, President Rodrigo Duterte signed into law the CREATE Act to attract more
investments and maintain fiscal prudence and stability in the Philippines. Republic Act (RA) 11534 or
the CREATE Act introduces reforms to the corporate income tax and incentives systems. It takes effect
15 days after its complete publication in the Official Gazette or in a newspaper of general circulation
or April 11, 2021;
The following are the key changes to\the Philippine tax law pursuant'to the CREATE Act which have
an impact on the Company:
e Effective July 1, 2020, regular corporate income tax (RCIT) rate is reduced from 30.00% to 25.00%
for domestic and resident foreign corporations. For domestic corporations with net taxable income
not exceeding 25.00 million and with total assets not)exceeding ? 100.00, million (excluding land
on which the business entity’s office, plant and equipment are situated) during the taxable year, the
RCIT rate is reduced to 20.00%.
e Minimum corporate income tax (MCIT) rate reduced from 2.00% to 1.00% of gross income
effective July 1, 2020 to June 30, 2023.
As clarified by the Philippine Financial Reporting Standards Council in its Philippine Interpretations
Committee Q&A No. 2020-07, the CREATE Act was not considered substantively enacted as of
-31-
December 31, 2020 even though some of the provisions have retroactive effect to July 1, 2020. The
passage of the CREATE Act into law on March 26, 2021 is considered as a non-adjusting subsequent
event. Accordingly, current and deferred taxes as of and for the year ended December 31, 2020
continued to be computed and measured using the applicable income tax rates as of
December 31, 2020 (i.e., 30% RCIT / 2% MCIT) for financial reporting purposes.
Applying the provisions of the CREATE Act, the Company would have been subjected to lower MCIT
rate effective July 1, 2020.
The estimate on the financial effect of the CREATE Act on the Company as of and for the year ended
December 31, 2020 are as follows:
e Lower provision for current income tax for the year ended December 31, 2020 and lower income
tax payable as of December 31, 2020, which will be reflected in the Company’s 2020 annual
income tax return but will only be recognizedsfor financial reporting purposes insts 2021 financial
statements. Pending clarification from,the tax authorities on how the taxable income for the period
beginning July 1, 2020 will be computed, the Company has not quantified the impact of the lower
corporate income tax rate on the 2020 current income tax.
e Lower deferred tax assets and liabilities as of December 31, 2020 and provision for deferred tax.
These reductions will be recognized inthe 2021 financial,statements.
Revised based
As reported in on CREATE
the FS Act Difference
DTA on:
MCIT P1,491,648 P1,309,596 P182,052
NOLCO 1,511,786 1,259,822 251,964
Retirement benefit obligation 649,089 540,907 108,182
Accrued expenses 151,217 126,015 25,202
Leases 14,643 12,203 2,440
3,818,383 3,248,543 569,840
DIT liability on:
Unrealized foreign exchange gain (16,865) (14,054) (2,811)
DIT assets, net P3,801,518 P3,234,489 P567,029
18. Supplementary Information Required by the BSP
This information is presented-for-purposes.of filing with the BSP and isnot a required part of the basic
financial statements prepared in accordance with PFRS.
BSP Circular No. 1075

The Monetary Board (MB), in its Resolution No..48 dated January. 8, 2020 approved the amendments
to the relevant provisions of the manual regulations for non-bank financial institutions prescribing the
manner of compliance with any documentary and/or procedural requirements in connection with the
preparation and submission of financial statements. Subsection 4511N.6 was further amended to
include in the Notes to Financial Statements supplementary information as prescribed under Annex N-
19-c of Appendix N-19.
-32-
Below is the additional information required by BSP Circular No. 1075:
a. Total volume and value of remittance and foreign exchange transactions for the year 2020:
No. of
Type of Transactions Transactions Amount in USD Amount in PHP
A. International Inward 467,085 $259,261,522 P12,615,515,842
(Payout) Remittance
Transactions
B. International Outward - - -
(Send Out) Remittance
Transactions
C. Domestic Inward (Payout) - - -
Remittance Transactions
D. Domestic Outward (Send - } ~
Out) Remittance
Transactions
Foreign Currencies Bought — - —
Foreign Currencies Sold 277 229,876,000. 8,052,460
International Inward . ' ~
(Payout) Remittance
Facilitated Through VC
H. International Outward a 7 .
(Send Out) Remittance
Facilitated Through VC
I. Exchange of VC to - 7 -
Philippine Peso/Other
Currency
J. Exchange of Philippine - - -
Peso/Other Currency to
VC
K. Other VC Transactions - - -
(please specify)
b. Basic quantitative indicators of financial performance:
Formula 2020 2019

Return on average Net income (loss) after income (13%) 61%
equity tax/Average total capital
accounts
Return onaverage Net income (loss) after income (1%) 4%
assets tax/Average total assets
19. Supplementary Information Required by the Bureau of Internal Revenue (BIR)
This information is presented for purposes*of filing with the BIR and is not ‘a required part of the basic
financial statements.
Revenue Regulations (RR) No. 15-2010
On December 28, 2010, RR No. 15-2010 became effective and amended certain provisions of
RR No. 21-2002 prescribing the manner of compliance with any documentary and/or procedural
requirements in connection with the preparation and submission of financial statements and income tax
-33-
returns. Section 2 of RR No. 21-2002 was further amended to include in the Notes to Financial
Statements information on taxes, duties and license fees paid or accrued during the year in addition to
what is mandated by PFRS.
Below is the additional information required by RR No. 15-2010:
a. Output value added tax (VAT)
Output VAT declared for the year ended December 31, 2020 and the gross receipts upon which
the same was based consist of:
Gross amount of
revenues Output VAT
Zero-rated transactions
Sale of services P40,354,659 P-
Zero-rated sales are sale of services other than processing, manufacturing or repacking rendered to
a person engaged in business conducted outside,the Philippines,-the consideration for which is paid
in acceptable foreign currency and accounted for in accordance with the rules and regulations of
the BSP.
Input VAT
Movements in input VAT for the year ended December 31, 2020 follow:
Input VAT
Beginning Balance P2,880,316
Add: Current year’s domestic purchases/payments for
Goods for resale 25,736
Services 1,018,997
Capital goods subject to amortization =
Total input VAT, net P3,925,049
Excise tax
The Company, has no transactions that “are subject, to” excisetax for the year ended
December 31, 2020.
Documentary stamp tax
The Company had no transactions for the year ended December 31, 2020 pertaining to acceptance,
assignment, sale or transfer of an obligation, rights, or property requiring payment of documentary
stamp tax.
All other local and national taxes
All other local and national taxes paid and accrued for the year ended December 31, 2020 consist
of:
Amount
License and Permit Fees P389,346
-34-
The above local and national taxes are presented as taxes and licenses within operating expenses.
The remaining taxes and licenses pertain to penalties and other licenses and registrations as at
December 31, 2020.
f. Withholding taxes
Paid Accrued Total

Withholding tax on compensation P1,054,149 P205,288 P1,259,437
Expanded withholding tax 603,753 74,349 678,102
P1,657,902 P279,637 P1,937,539
g. Tax assessments and cases
On December 16, 2020, the Company availed ofthe Voluntary Assessment Payment Program. The
VAPP are granted to taxpayers who has.an ongoing.2018 tax audit. The total amount to be paid by
the Company amounted to 22,318,458. The VAPP application is under evaluation as of
December 31, 2020. In 2021, the Company paid theamount due‘and the BIR issued the Certificate
of Availment of the VAPP on January 15, 2021.
RR No. 34-2020
On 18 December 2020, BIR issued RR No. 34-2020, Prescribing the Guidelines and Procedures for the
Submission of BIR Form No. 1709, Transfer Pricing Documentation (TPD) and other Supporting
Documents, Amending for this Purpose the Pertinent Provisions of RR Nos. 19-2020 and’21-2002, as
amended by RR No. 15-2010, to streamline the guidelines and procedures for the submission of BIR
Form No. 1709, TPD and other supporting documents by providing safe harbors and materiality
thresholds. Section 2 of the RR provides the list of taxpayers that are required to file and submit the
RPT Form, together with the Annual Income Tax Return.
The Company is not covered by the requirements and procedures for related party transactions provided
under this RR as it does not meet any criteria of taxpayers prescribed in Section 2 of the RR.
All other information required to be disclosed by the BIR has been included in this note.
G SyCip Gorres Velayo &Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001
6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021
—_ 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Building a better Philippines November 6, 2018, valid until November 5, 2021
working world
INDEPENDENT AUDITOR’S REPORT
The Board of Direct and Stockholders

UniTeller Filipino.
inancial Tower
7th Avenue,
Taguig Ci
reap ste ERRew

A ea
sGEe l Gt .
Commission
PHILIPPINES
CPA Certificate 2
SEC Accreditation No. 1328-AR-2 (Group A),
July 9, 2019, valid until July 8, 2022
Tax Identification No. 900-322-673
BIR Accreditation No. 08-001998-069-2020,
December 3, 2020, valid until December 2, 2023
PTR No FATS 4S": SYSTEM"GENERATED COPY OF
March 31,2021 DYOCUMENT FROM THE OFFICIAL
RECORD OF THE SEC.

® UniTeller
“STATEMENT OF MANAGEMENT’S RESPONSIBILITY
FOR FINANCIAL STATEMENTS”
The management of Uniteller Filipino, Inc. (the “Company”) is responsible for the preparation and
fair presentation of the financial statements including the schedules of attached therein, for the year
ended December 3 20, in accordance with the prescribed financial reporting framework indicated
therein, and for al control as management determines is necessary to enable the preparation
of financial s ‘e free from material misstatement, whether due to fraud or error.
s, management is responsible for assessing the Company’s ability

ing, as applicable matters related to going concern and using the
migeoes
LT eo and
“Excnange”™
Coramisston
nted by the stockholders, has audited the financial statements
Philippine Standards on Auditing, and in its report to the
ssed its opinion on the fairness of presentation upon completion of
such audit.
. 7
sifE CORD OF THE SEC.
+. Digitally signed by Maria
Maria Victoria victo
be ria
Polonia
De Polon ia Date: 2021.05.21 17:02:00
++08'00"
Signature:
~MariaVDéid
Polonior
a = ia
VOT REQUIRED.
Treasurer
Signed this 11th day of May 2021
i aDivision of
www.uniteller.com <P BANORTE
{EXTERNAL} Your BIR AFS eSubmission uploads were received
6 eafs@bir.gov.ph
To Maria Victoria De Polonia
Cc Maria Victoria De Polonia
(You forwarded this message on 04/29/2021 4:34 PM,
Hi UNITELLER FILIPINO INC,,
Securities ana
Exchange
Commission
PHILIPPINES
use of this portal and expressly agree, warrant and certify that:
ents are complete, truthful and correct based on the personal knowledge and the same are from authentic records;
it of the BIR to require additional document, if any, for completion and verification
‘ed through tisis facility shall
be submitted when required by the BIR in the event faust and/or forany other legal purpose.
This is a system-generated e-mail, Please do not reply.
DISCLAIMER
trae $l ards AyD went eee EL NNERATED COPY OF

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RECORD OF THE SEC.

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\ SECURITIES AND EXCHANGE COMMISSION

The following document has been received:

Receiving: MarkJ ason Orcine

SEC Registration No.: A199902074

Document ID: 0ST107152021869375

SEC Registration Number

(|A Wihjo}l/ljy|-;/o]wi/n/e/d S|u/b/s]/i}d]/ijajrjy o|f

Ujnji}tje;/l}ljejr F/ijnjajn/|ec]ija]l Sle|rjv/ijlele]s|,

PRINCIPAL OFFICE (No. / Street/ Barangay/ City/ Town / Province )

U|n|i|t 2)/4/0/3)/, 2)4|//)F!/, Ti rja|dje ajnid

Flijnja/njejija/l T\jo|wie};r/,|/B/G|/C], Tijhje Fjo|r|t

CONTACT PERSON INFORMATION

Name of Contact Person Email Address Telephone Number/s Mobile Number

Noel Fernando C. Cristal noel.cristal@uniteller.com 636 - 4611

CONTACT PERSON’s ADDRESS

INDEPENDENT AUDITOR’S REPORT

The Board of Directors and Stockholders

Amember firm of Ernst & Young Global Limited

Auditor’s Responsibilities for the Audit of the Financial Statements

Amember firm of Ernst & Young Global Limited

March 31, 2021

THIS IS A SYSTEM GENERATED COPY OF

SIGNATURE NOT REQUIRED.

Amember firm of Ernst & Young Global Limited

Total Assets P573,273,083 P193,903,410

LIABILITIES AND EQUITY

Total liabilities and equity P573,273,083 P193,903,410

See Notes to the Financial Statements.

Years Ended December 31

Income from operations 5,804,976 3,892,245

Other expense (income), net 14 12,200,804 (6,558,736)

Income (Loss) before income tax (6,395,828) 10,450,981

Income tax expense (benefit) 13 (1,129,694) 2,528,951

Net income (loss) (5,266,134) 7,922,030

Other comprehensive loss

Items that will not be reclassified subsequently,

Total comprehensive income (loss) (25,346,766) P7,530,455

See Notes to the Financial Statements.

Balances at January 1, 2020 P18,068,000 P- (2870,265) P25,734,768 P42,932,503

Balances at January 172019 P7,800,000 - (P478,690) P17,812,738 P25,134,048

See Notes to the Financial Statements.

Years Ended December 31

CASH FLOWS FROM OPERATING

CASH FLOWS FROM INVESTING

CASH FLOWS FROM FINANCING

NET INCREASE IN CASH 362,933,300 64,299,729

CASH AT BEGINNING OF THE YEAR 165,332,457 101,037,825

CASH AT THE END OF THE YEAR 4 P528,340,378 P165,332,457

See Notes to the Financial Statements.

2. Summary of Significant Accounting Policies

2.1. Basis of preparation

2.2. Changes in accounting policies and disclosure

New Standards, Interpretations and Amendments

e Amendments to PFRS 3, Business Combinations, Definition ofa Business

e Amendments to PFRS 7, Financial Instruments: Disclosures and PFRS 9, Financial Instruments,

e Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies,

¢ Conceptual Framework for Financial Reporting-issued on March 29, 2018

= The rent concession is a direct consequence of COVID-19;

Desde Financial instruments

Initial Recognition and Classification of Financial Instruments

Financial assets at amortized cost

Financial liabilities at amortized cost

Interest expense on financial liabilities is recognized at gross amount in profit or loss.