Ar2019 7 Card Empc Afs

CARD Employees
Multi-Purpose
Cooperative
Financial Statements
As at and for the year ended December 31, 2019
(With comparative figures as at and for the year ended
December 31, 2018)
Independent Auditor’s Report
To the Board of Directors and Members of

CARD Employees Multi-Purpose Cooperative
20 M.L. Quezon Street, City Subdivision
San Pablo City, Laguna
Report on the Audit of the Financial Statements
Our Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of CARD Employees Multi-Purpose Cooperative (the “Cooperative”) as at
December 31, 2019, and its financial performance and its cash flows for the year then ended in
accordance with the Philippine Financial Reporting Framework for Cooperatives.
What we have audited
The financial statements of the Cooperative comprise:
• the statement of financial position as at December 31, 2019;

• the statement of operations for the year ended December 31, 2019;
• the statement of changes in equity for the year ended December 31, 2019;
• the statement of cash flows for the year ended December 31, 2019;
• the notes to the financial statements, which include a summary of significant accounting policies.
Basis for Opinion
We conducted our audit in accordance with Philippine Standards on Auditing (PSA). 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Cooperative 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.
Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines
T: +63 (2) 8845 2728, F: +63 (2) 8845 2806, www.pwc.com/ph
Isla Lipana & Co. is the Philippine member firm of the PwC network. PwC refers to the Philippine member firm, and may sometimes refer to the PwC network. Each
member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
Page 2
Other Matter
The financial statements of the Cooperative as at and for the year ended December 31, 2018,
presented for comparative purposes, were audited by another auditor who expressed an unmodified
opinion on those statements in an audit report dated March 15, 2019.
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 Philippine Financial Reporting Framework for Cooperatives, 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 to assessing the Cooperative’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
Cooperative or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Cooperative’s financial reporting
process.
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.
Page 3
As part of an audit in accordance with PSA, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• 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.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Cooperative’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• 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 Cooperative’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
Cooperative to cease to continue as a going concern.
• 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.
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.
Page 4
Report on the Bureau of Internal Revenue Requirement
Our audit was conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplementary information under Revenue Regulations 15-2010 in Note 21 to
the financial statements is presented for purposes of filing with the Bureau of Internal Revenue and is
not a required part of the basic financial statements. Such supplementary information is the
responsibility of management and has been subjected to the auditing procedures applied in our audit
of the basic financial statements. In our opinion, the supplementary information is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
Isla Lipana & Co.
Zaldy D. Aguirre
Partner
CPA Cert No. 105660
P.T.R. No. 0024447, issued on January 7, 2020, Makati City
SEC A.N. (individual) as general auditors 1176-AR-2, Category A; effective until June 20, 2021
SEC A.N. (firm) as general auditors 0009-FR-5, Category A; effective until June 20, 2021
CDA A.N. 104-AF, issued on April 15, 2018; effective until April 14, 2021
TIN 221-755-698
BIR A.N. 08-000745-77-2018, issued on January 29, 2018; effective until January 28, 2021
BOA/PRC Reg. No. 0142, effective until September 30, 2020
Makati City
June 25, 2020
Statement Required by Section 8-A, Revenue Regulations No. V-1

20 M.L. Quezon Street, City Subdivision
San Pablo City, Laguna
None of the partners of the firm has any financial interest in CARD Employees Multi-Purpose
Cooperative or any family relationships with its president, manager, or principal members.
The supplementary information on taxes and licenses is presented in Note 21 to the financial
statements.
Isla Lipana & Co.
Zaldy D. Aguirre
Partner
CPA Cert No. 105660
TIN 221-755-698
Makati City
June 25, 2020
T: +63 (2) 8845 2728, F: +63 (2) 8845 2806, www.pwc.com/ph
Statement of Representation
The Chairman
Cooperative Development Authority
Regional Office
In connection with our examination of the financial statements of CARD Employees Multi-Purpose
Cooperative (the “Cooperative”) as at and for the year ended December 31, 2019 that are herewith
submitted to the Cooperative Development Authority, we hereby represent the following:
1. That said financial statements herewith were prepared and presented in in accordance with the
Philippine Financial Reporting Framework as prescribed by the Cooperative Development
Authority (CDA);
2. That, in the conduct of our audit, we adhered to the Philippine Standards on Auditing;
3. That we are qualified as provided for in Section 14 of the Code of Professional Ethics for Certified
Public Accountants and Article 81 of Republic Act No. 9520 (Cooperative Code of the Philippines);
4. That we are fully aware of our responsibility as independent auditors for the audit certificate
issued and attached to the financial statements and the sanctions to be bestowed on us for any
misrepresentations that we may have willingly or unwillingly committed;
5. That we, nor any member of our immediate family, do not have any direct or indirect financial
interest with the Cooperative;
6. That none of us is an employee of the Cooperative Development Authority nor have we engaged
an employee of the Cooperative Development Authority in the course of our audit; and
7. That we made this representation in our capacity as auditors of the Cooperative.
T: +63 (2) 8845 2728, F: +63 (2) 8845 2806, www.pwc.com/ph
Statement of Representation
The Chairman
Page 2
It is however understood that our accountability is based on matter within the normal coverage of an
audit conducted in accordance with the Philippine Standards on Auditing.
Isla Lipana & Co.
Zaldy D. Aguirre
Partner
CPA Cert No. 105660
TIN 221-755-698
Makati City
June 25, 2020
Statement of Financial Position

As at December 31, 2019
(With comparative figures for the year ended December 31, 2018)
(All amounts in Philippine Peso)
Notes 2019 2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2 44,893,742 44,118,070
Loans and receivables, net 3 706,191,098 542,554,680
Other current assets 8 3,913,070 96,237
Total current assets 754,997,910 586,768,987
NON-CURRENT ASSETS
Equity investments at cost 4 117,508,150 98,395,650
Investment in associate 5 200,090,100 187,554,500
Investment properties, net 6 21,827,910 11,188,446
Property and equipment, net 7 1,326,600 1,485,775
Retirement asset 14 4,287,857 3,415,904
Other non-current assets 8 63,256,215 79,958,336
Total non-current assets 408,296,832 381,998,611
Total assets 1,163,294,742 968,767,598
LIABILITIES AND MEMBER’S EQUITY
CURRENT LIABILITIES
Loans payable 11 12,500,000 27,500,000
Accounts and other payables 9 14,648,879 5,469,969
Accrued expenses 10 1,546,722 1,920,151
Other current liabilities 12 137,579,920 120,229,109
Total current liabilities 166,275,521 155,119,229
NON-CURRENT LIABILITIES
Loans payable 11 25,400,000 12,500,000
Other non-current liabilities 12 5,337,500 5,963,200
Total non-current liabilities 30,737,500 18,463,200
Total liabilities 197,013,021 173,582,429
MEMBER’S EQUITY
Common shares 13 833,465,400 600,000,000
Preferred shares 13 11,111,100 7,979,929
Deposit for share capital subscription - 84,613,228
Statutory funds 13 121,705,221 102,592,012
Total member’s equity 966,281,721 795,185,169
Total liabilities and member’s equity 1,163,294,742 968,767,598
(The notes on pages 1 to 28 are an integral part of these financial statements.)

Statement of Operations
For the year ended December 31, 2019
Notes 2019 2018

INTEREST INCOME 2,3,8 79,059,048 58,577,242
FINANCE COST 11 (4,327,466) (1,572,282)
NET INTEREST INCOME 74,731,582 57,004,960
OTHER INCOME 15 99,731,257 97,615,944
ADMINISTRATIVE EXPENSES 16 (18,086,909) (17,004,844)
NET SURPLUS FOR THE YEAR 156,375,930 137,616,060
NET SURPLUS ALLOCATION: 12

Interest on share capital and patronage refund 121,973,226 107,340,526
General reserve fund 15,637,593 13,761,606
Optional fund 10,946,315 9,633,124
Community development fund 4,691,278 4,128,482
Cooperative education and training fund 3,127,518 2,752,322
156,375,930 137,616,060

Statement of Changes in Equity

Deposit for
Common Preferred share capital Statutory
shares shares subscription funds Undivided net
Notes (Note 13) (Note 13) (Note 13) (Note 13) surplus Total
Balances at January 1, 2018 552,205,099 6,624,838 - 74,424,470 - 633,254,407
Contribution of members 36,996,133 895,929 - - - 37,892,062
Refund of share capital (25,320,150) - - - - (25,320,150)
Deposit for share capital subscription - - 84,613,228 - - 84,613,228
Net surplus for the year - - - - 137,616,060 137,616,060
563,881,082 7,520,767 84,613,228 74,424,470 137,616,060 868,055,607
Distribution from interest on share and patronage refund 12 36,118,918 459,162 - - - 36,578,080
Appropriation on distribution from undivided net surplus 12,13 - - - 30,275,534 (137,616,060) (107,340,526)
Due to union/federation 12 - - - (1,376,161) - (1,376,161)
Utilization of funds 13 - - - (731,831) - (731,831)
Balances at December 31, 2018 600,000,000 7,979,929 84,613,228 102,592,012 - 795,185,169
Contribution of members 161,662,461 3,131,171 - - - 164,793,632
Refund of share capital (51,402,455) - - - - (51,402,455)
Transfers to share capital subscription from deposit 84,613,228 - (84,613,228) - - -
Net surplus for the year - - - - 156,375,930 156,375,930
794,873,234 11,111,100 - 102,592,012 156,375,930 1,064,952,276
Distribution from interest on share and patronage refund 12 38,592,166 - - 38,592,166
Appropriation on distribution from undivided net surplus 12,13 - - - 34,402,704 (156,375,930) (121,973,226)
Due to union/federation 12 - - - (1,563,759) - (1,563,759)
Utilization of funds 13 - - - (13,725,736) - (13,725,736)
Balances at December 31, 2019 833,465,400 11,111,100 - 121,705,221 - 966,281,721
……………………
.….….
Statement of Cash Flows

Notes 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES
Net surplus for the year 156,375,930 137,616,060
Adjustments for:
Dividend income 4,5,15 (84,756,920) (85,408,872)
Interest income from credit operations 3 (74,601,065) (56,905,988)
Provision for credit and impairment losses 3,616 4,523,224 2,878,020
Interest income 15 (4,457,983) (1,671,254)
Interest expense 11 4,327,466 1,572,282
Depreciation and amortization 6,7,8,16 571,679 667,174
Loss on sale of investment property 246,396 -
Retirement expense, net of contributions 14 (861,952) 114,988
Net deficit before changes in working capital (1,366,775) (1,137,590)
Increase in:
Loans and receivables (168,159,642) (154,980,643)
Other current assets (3,816,833) (21,270)
Increase (decrease) in:
Accounts payable and other payables 9,178,910 790,682
Accrued expenses (119,548) 417,782
Other current liabilities (67,594,006) (65,730,956)
Net cash used in operations (229,144,344) (220,661,995)
Interest income received 79,059,048 58,577,242
Interest expense paid (4,581,284) (1,138,155)
Contributions to the retirement fund (10,001) -
Net cash flows used in operating activities (154,676,581) (163,222,908)
CASH FLOWS FROM INVESTING ACTIVITIES
Dividends received 4,5 84,756,920 85,408,872
Placement of fund deposits 8 (138,218,115) (77,692,437)
Withdrawal of fund deposits 8 154,920,236 35,728,576
Sale of investment property 1,270,000 -
Acquisition of:
Financial assets at cost 4 (19,112,500) (5,374,250)
Investment in associate (12,535,600) -
Investment properties 6 (12,297,301) -
Property and equipment 7 (265,257) (110,495)
Computer software and licenses 8 (5,806) -
Net cash flows provided by investing activities 58,512,577 37,960,266
(forward)
Statement of Cash Flows

Notes 2019 2018

CASH FLOWS FROM FINANCING ACTIVITIES
Deposit for share capital subscription 13 - 84,613,228
Contributions of members 164,793,568 37,892,062
Refund of share capital (51,402,455) (25,320,150)
Proceeds from borrowings 11 85,000,000 55,000,000
Settlements of:
Loans payable 11 (87,100,000) (16,333,333)
Subscription payable 12 (625,700) (11,706,300)
Utilization of statutory funds 13 (13,725,737) (731,831)
Net cash provided by financing activities 96,939,676 123,413,676
NET INCREASE IN CASH 775,672 (1,848,966)
CASH
January 1 44,118,070 45,967,036
December 31 44,893,742 44,118,070

Notes to the Financial Statements

As at and for the year ended December 31, 2019
(With comparative figures and notes as at and for the year ended December 31, 2018)
(In the notes, all amounts are in Philippine Peso unless otherwise stated)
1 General information
CARD Employees Multi-Purpose Cooperative (the “Cooperative”), with registration number

9520-4008972, was registered with the Cooperative Development Authority (CDA) on
May 11, 2004 with the following purposes:
a. to encourage thrift and savings mobilization among the members;

b. to generate funds and extend credit to the members for productive and provident purposes;
c. to administer the retirement funds of Center for Agriculture and Rural Development Mutually
Reinforcing Institutions (CARD-MRI) employees;
d. to administer or manage the health insurance of the members;
e. to provide goods and services and other requirements to the members;
f. to promote and advance the economic, social and educational status of the members;
g. to coordinate and facilitate the activities of the Cooperative;
h. to advocate for the cause of the Cooperative movement;
i. to ensure the viability of the Cooperative through the utilization of new technologies;
j. to advocate for the cause of the Cooperative movement;
k. to invest in shares of stock, bonds, time deposits, land or such other projects as the Board of
Directors may determine to be advisable or proper in order to improve the earning base of the
Cooperative thereby making more benefits available to its members; and
l. to undertake any and all other activities for the effective and efficient implementation of the
m. provisions of the Cooperative Code.
The Cooperative was issued with new Certificate of Registration under Article 144 of Republic Act
(RA) 9520, otherwise known as the Philippine Cooperative Code of 2008, on March 4, 2010. The
operation of the Cooperative is funded through the share capital which is subsequently redeployed as
loans to members. The Cooperative shall operate within the areas where the institutions under Center for
Agriculture and Rural Development Mutually Reinforcing Institutions operate.
Net surplus during the year is allocated and distributed to the members of the Cooperative after setting
aside the amounts for statutory reserves. Reserve requirements are further discussed in Note 13.
As set forth in Article 61 of RA 6938, An Act to Ordain a Cooperative Code of the Philippines, duly
registered cooperatives under this code which do not transact any business with non-members or the
general public shall not be subject to any government taxes or fees imposed under the Internal Revenue
Laws and other tax laws. The Cooperative was granted a certificate of tax exemption on December 19,
2017 which shall be valid for five years, until December 19, 2022, unless sooner revoked by the Bureau of
Internal Revenue (BIR) for violation of any provision of the Joint Revenue Regulations, the terms and
conditions indicated in the certificate or upon withdrawal of the Certificate of Registration by the CDA.
As a Cooperative transacting with its members only, the Cooperative is entitled to the following tax
exemptions and incentives provided for under Article 60 of Republic Act No. 9520, as implemented by
Section 7 of the Joint Rules and Regulations implementing Article 60, 61 and 144 of Republic
Act No. 9520:
1. Exemption from income tax on income from CDA-registered operations;

2. Exemption from value-added tax on CDA-registered sales or transactions;
3. Exemption from other percentage tax;
4. Exemption from donor’s tax on donations to duly accredited charitable, research and educational
institutions and reinvestment to socio-economic projects within the area of operation of the
Cooperative;
5. Exemption from excise tax for which it is directly liable;
6. Exemption from documentary stamp tax: Provided, however, that the other party to the taxable
document/transaction who is not exempt shall be the one directly liable for the tax;
7. Exemption from payment of annual registration fee of five hundred pesos (500); and
8. Exemption from all taxes on transactions with insurance companies and banks, including but not
limited to 20% final tax on interest on deposits and 7.50% final income tax on interest income
derived from a depository bank under the expanded foreign currency deposit system.
The Cooperative’s registered office address is at 20 M.L. Quezon Street, City Subdivision, San Pablo City,
Laguna, Philippines.
These financial statements were approved and authorized for issuance by the BOD, on March 30, 2020.
There are no material events that occurred subsequent to March 30, 2020 until June 25, 2020.
2 Cash and cash equivalents
This account as at December 31 consists of:
Note 2019 2018

Petty cash fund 107,058 10,000
Checks and other cash items 47,048 98,408
Cash in banks 17
Demand deposit 8,678,696 22,586,828
Savings deposit 34,153,242 18,664,690
Time deposit 1,907,698 2,758,144
44,893,742 44,118,070
Demand and savings deposits bear annual interest rates ranging from 0.25% to 2.0%
(2018 - 0.25% to 1.50%). Time deposit placements with a related party, with a term of less than three
months, bear interest rate of 2.5% and 4.0% in 2019 (2018 - 3.50% and 3.00%) (Note 17).
Interest income earned from cash and cash equivalents amounted to P442,401 in 2019 (2018 - P332,160)
(Note 15).
(2)
3 Loans and receivables, net
Note 2019 2018

Loans receivable 723,954,079 555,889,264
Other receivables 17 257,102 162,275
724,211,181 556,051,539
Allowance for credit losses (18,020,083) (13,496,859)
706,191,098 542,554,680
Loans receivable pertains to loans offered to members of the Cooperative that earn effective interest
ranging from 1.67% % to 18.75% in 2019 and 2018, respectively.
In 2018, the Cooperative launched a non-interest bearing loan product, Pocket Loan with P3,000
loanable amount. The term of the loan is three (3) months.
Other receivables pertain to non-interest bearing receivables from members extended by the Cooperative
to provide medical assistance to members.
As at December 31, the breakdown of loans as to secured and unsecured follows:
2019 2018
Amount % Amount %
Secured - - - -
Unsecured 723,954,079 100.00 555,889,264 100.00
723,954,079 100.00 555,889,264 100.00
Loans receivable includes past due accounts for more than one year and loans to resigned members
amounting to P3.6 million in 2019 (2018 - P2.43 million). These loans are fully provided with allowance.
As at December 31, 2019 and 2018, changes in the allowance for credit losses follow:
Note 2019 2018

Balance at beginning of the year 13,496,859 10,618,839
Provision during the year 16 4,523,224 2,878,020
Balance at the end of year 18,020,083 13,496,859
Individually impaired 3,613,441 2,427,626
Collectively impaired 14,406,642 11,069,233
18,020,083 13,496,859
Gross amounts of loans individually determined
to be impaired, before deducting any
individually assessed impairment losses 3,613,441 2,427,626
Interest income earned from loans receivable recognized as 'Interest income from credit operations’ in
statement of operations amounting to P74.60 million in 2019 (2018 - P56.91 million).
(3)
4 Equity investments at cost
This account as at December 31 consists of investments in the following companies:
% of % of
ownership 2019 ownership 2018
CARD MRI Property Holdings, Inc. (CMPHI) 10.00% 32,500,100 10.00% 22,500,100
CARD Bank, Inc. (CARD Bank) 6.02% 26,469,800 6.02% 26,469,800
CARD MRIT, Inc. (CMIT) 10.00% 19,800,000 10.00% 19,800,000
Rizal Bank, Inc. (RBI) 3.00% 13,387,500 3.00% 7,875,000
CARD Leasing & Finance Corp (CLFC) 13.00% 11,111,750 13.00% 11,111,750
CARD MRI Holdings, Inc. (CMHI) 5.00% 6,250,000 5.00% 6,250,000
CARD MRI Astro Laboratories Inc. 12.00% 3,600,000 - -
CARD - MRI Insurance Agency (CAMIA) 5.16% 2,614,000 5.16% 2,614,000
BotiCARD, Inc. (BotiCARD) 3.46% 1,775,000 3.46% 1,775,000
117,508,150 98,395,650
The above equity investments are carried at cost less any impairment in value, due to absence of a
reliable basis for fair value. The Cooperative intends to hold these investments for the long term.
Dividend income from financial assets at cost in 2019 amounted to P39.10 million
(2018 - P40.95 million) (Note 15).
5 Investment in associate
As at December 31, 2019 the Cooperative owns equivalent to 29.62% (2018 - 29.62 %) in CARD SME, a
thrift bank that offers working capital financing to businesses engaged in agricultural services, industry
and housing; and provides diversified financial and allied services for its chosen market and constituents
especially for small and medium enterprises, microfinance and individuals.
CARD SME’s principal place of business is located at 120 M. Paulino Street cor. Burgos Street, San
Pablo City, Laguna.
The investment is accounted for using the cost method. The Cooperative earned dividend income from its
investment in associate amounting to P45.66 million in 2019 (2018 - P44.45 million).
6 Investment properties, net
2019 Note Land Buildings Total

Cost
January 1, 2019 9,641,615 2,051,686 11,693,301
Additions/Acquisitions 12,297,301 - 12,297,301
Disposals (603,500) (1,274,556) (1,878,056)
Accumulated depreciation
January 1, 2019 - 290,656 290,656
Depreciation 16 - 141,441 141,441
Disposals - (244,290) (244,290)
At December 31, 2019 - 187,807 187,807
Allowance for impairment losses - 96,829 96,829
Net book value 21,335,416 492,494 21,827,910
(4)
2018 Note Land Buildings Total
Cost
At January 1, 2018 9,641,615 2,051,686 11,693,301
Accumulated depreciation -
January 1, 2018 - 85,487 85,487
Depreciation 16 - 205,169 205,169
At December 31, 2018 - 290,656 290,656
Allowance for impairment losses - 214,199 214,199
Net book value 9,641,615 1,546,831 11,188,446
In 2019, the Cooperative disposed certain house and lots in Bella Vita, Laguna with proceeds amounting
to P1.27 million resulting to a loss of P0.25 million.
7 Property and equipment, net
Furniture,
Land Buildings and fixtures and
2019 Land improvements improvements equipment Total
Cost
January 1, 2019 770,869 673,047 1,137,836 783,395 3,365,147
Additions - - 215,807 49,450 265,257
Disposals - - - (256,885) (256,885)
At December 31, 2019 770,869 673,047 1,353,643 575,960 3,373,519
January 1, 2019 - 468,887 699,973 710,512 1,879,372
Depreciation - 204,158 168,745 51,529 424,432
Disposals - - - (256,885) (256,885)
At December 31, 2019 - 673,045 868,718 505,156 2,046,919
Net book value 770,869 2 484,925 70,804 1,326,600
Furniture,
Land Buildings and fixtures and
2018 Land improvements improvements equipment Total
Cost
January 1, 2018 770,869 673,047 1,037,836 772,900 3,254,652
Additions - - 100,000 10,495 110,495
At December 31, 2018 770,869 673,047 1,137,836 783,395 3,365,147
January 1, 2018 - 252,871 577,312 590,851 1,421,034
Depreciation - 216,016 122,661 119,661 458,338
At December 31, 2018 - 468,887 699,973 710,512 1,879,372
Net book value 770,869 204,160 437,863 72,883 1,485,775
(5)
8 Other assets
2019 2018
Current
Deposit for share capital subscription 3,772,500 -
Prepaid expenses 140,570 96,237
3,913,070 96,237
Non-current
Restricted funds 63,256,215 79,958,336
67,169,285 80,054,573
On March 31, 2019, the Cooperative made advance payments for the subscription of 37,725 share of
common stocks of CARD Bank Inc. with par value of P100.
Restricted funds arise from annual allocation of net income as prescribed by the CDA. The funds are in
the form of time deposits with banks that bear interest ranging from 1.50% to 4.00% (2018 - 1.50% to
4.00%). Interest income earned from these deposits amounted to P4.02 million in 2019
(2018 - P1.34 million) (Note 15).
9 Accounts and other payable
2019 2018
Emergency fund payable 819,447 2,356,681
Health premium fund payable 12,179,476 2,114,665
Withholding tax payable 35,836 174,618
Others 1,614,120 824,005
14,648,879 5,469,969
Health premium and emergency fund payable pertains to amount set by the Cooperative as payment to
the hospitalization, medical and calamity expenses of the members.
Others consist of unpaid insurance claims and the Cooperative’s share in expenses paid for by a related
party such as meetings and seminars.
10 Accrued expenses
Note 2019 2018

Professional fees 490,966 503,286
Employee benefits 832,091 599,319
Interest on borrowings 11 180,308 434,127
Taxes and licenses - 339,860
Others 43,357 43,559
1,546,722 1,920,151
Others pertain to accruals for transportation expenses, salaries and wages, and communications,
supplies, insurance and utilities.
(6)
11 Loans payable
Interest rate Maturity date 2019 2018

Land Bank of the Philippines (LBP) 4.30% 1/20/2020 12,500,000 40,000,000
Related party 6.00% 3/28/2024 25,400,000 -
37,900,000 40,000,000
2019 2018
Current 12,500,000 27,500,000
Non-current 25,400,000 12,500,000
37,900,000 40,000,000
Movement in the account as follows:
2019 2018
January 1 40,000,000 1,333,333
Availments 85,000,000 55,000,000
Repayments (87,100,000) (16,333,333)
December 31 37,900,000 40,000,000
All of the above borrowings are unsecured. Interest expense recognized from these loans amounted to
P4.33 million in 2019 (2018 – P1.57 million).
12 Other liabilities
2019 2018
Current
Interest on share and patronage refund 124,600,759 108,918,131
Due to Union/Federation 1,563,759 1,376,161
Others 11,415,402 9,934,817
137,579,920 120,229,109
Non-current
Subscriptions payable 5,337,500 5,963,200
142,917,420 126,192,309
Interest on share and patronage refund pertains to amounts payable to the members of Cooperative
as a return for their capital contribution and may be claimed depending on the net surplus for the
year. The amount declared as interest is based on the net surplus that the Cooperative earned during
the previous year. Each member will receive an interest equal to the proportion of their individual
patronage. The distribution made for the year (from the previous year’s appropriation on distribution
from undivided net surplus) is done in two dividend forms: cash dividend and share dividend on a
50:50 basis.
(7)
The movements in the account follow:
2019 2018
January 1 108,918,131 103,124,218
Share in undivided net surplus 121,973,226 107,340,526
Cash distribution (67,698,432) (64,968,533)
Distribution to share capital
Common shares (38,592,166) (36,118,918)
Preferred shares - (459,162)
December 31 124,600,759 108,918,131
Due to Union/Federation pertains to accumulated amounts set aside to be remitted to the union or
federation where the Cooperative is a member. This corresponds to 50.00% of the total annual
allocation for Cooperative Education & Training Fund (CETF).
The movements in the account follow:
Note 2019 2018

January 1 1,376,161 1,301,219
Share on CETF 13 1,563,759 1,376,161
Payment to union/federation (1,376,161) (1,301,219)
December 31 1,563,759 1,376,161
Details of the subscription payable as at December 31 follows:
2019 2018
CMHI 4,687,500 4,687,500
BotiCARD 650,000 650,000
CMIT - 617,700
CAMIA - 8,000
5,337,500 5,963,200
13 Member’s equity
Share capital
As at December 31, 2019 and 2018, the Cooperative’s capital shares consist of:
2019 2018
Number of Number
shares Amount of shares Amount
Authorized
Common shares (at 100 par) 12,500,000 1,250,000,000 6,500,000 650,000,000
Preferred shares (at 100 par) 300,000 30,000,000 300,000 30,000,000
Issued, paid and outstanding
Common shares (at 100 par) 8,334,654 833,465,400 6,000,000 600,000,000
Preferred shares (at 100 par) 111,111 11,111,100 79,799 7,979,900
(8)
The movements in common and preferred shares follow:
2019 2018
Common Preferred Common Preferred
Issued and outstanding at beginning of 6,000,000 79,799 5,522,051 66,248
year
Issued 2,848,679 31,312 731,151 13,551
Redeemed (514,025) - (253,202) -
Issued and outstanding at end of year 8,334,654 111,111 6,000,000 79,799
The Cooperative’s preferred shares have no voting rights and may be owned or subscribed by members of
the Cooperative.
Deposit for share capital subscription
In 2018, the BOD of the Cooperative approved the increase of authorized common shares from
P6,500,000,000 to P12,500,000. The same was approved by the CDA on 2019. The deposit for future
share capital recorded in 2018 amounting to P 84,613,228 were issued in 2019.
Deposit for share capital subscription is Classified under equity in accordance with the Standard
Chart of Accounts prescribed by the CDA per Memorandum Circular No. 2016-06.
Capital management
The Cooperative’s risk management function has developed and implemented certain minimum
stress and scenario tests for identifying the risks to which the Cooperative are exposed, quantifying
their impact on the volatility of economic capital. The results of these tests, particularly, the
anticipated impact on the realistic balance sheet and revenue account, are reported to the
Cooperative’s risk management function. The risk management function then considers the aggregate
impact of the overall capital requirement revealed by the stress testing to assess how much capital is
needed to mitigate the risk of insolvency to a selected remote level.
Regulatory matters
The operation of the Cooperative is also subject to the regulatory requirements of CDA. Such
regulations not only prescribe approval and monitoring of activities but also impose certain
restrictive provisions.
Statutory funds
The Cooperative provides the minimum mandatory reserve requirements set forth in Chapter 10,
Section 87 of Republic Act 6938 entitled “An Act to Ordain a Cooperative Code of the Philippines”,
which include the 10.00% general reserves fund, 3.00% community development fund, 2.00% CETF
and 7.00% optional fund.
(9)
The movements in the account as at December 31 follow:
Cooperative
Community education
General development and training Optional
2019 reserve fund fund fund fund Total
Balance at beginning of 54,614,470 14,843,248 2,899,007 30,235,287 102,592,012
year
Appropriation from
undivided net surplus 15,637,593 4,691,278 3,127,519 10,946,315 34,402,704
Due to union/federation
(Note 12) - - (1,563,759) - (1,563,759)
Utilization of funds - (13,351,024) (374,713) - (13,725,736)
Balance at end of year 70,252,063 6,183,502 4,088,054 41,181,602 121,705,221
Cooperative
Community education
General development and training Optional
2018 reserve fund fund fund fund Total
Balance at beginning of
year 40,852,864 10,818,766 2,150,677 20,602,163 74,424,470
Appropriation from
undivided net surplus 13,761,606 4,128,482 2,752,322 9,633,124 30,275,534
(Note 12) - - (1,376,161) - (1,376,161)
Utilization of funds - (104,000) (627,831) - (731,831)
Balance at end of year 54,614,470 14,843,248 2,899,007 30,235,287 102,592,012
14 Retirement benefits
The Cooperative, CARD MRI Development Institute, Inc. (CMDI), CARD Mutual Benefit Association
(MBA), Inc., CARD SME Bank, Inc., CARD MRI Insurance Agency (CAMIA), Inc., CARD Business
Development Service Foundation, Inc. (BDSFI), Inc., CARD MRI Information Technology, Inc. (CMIT),
CARD Rural Bank, Inc. (CBI), Responsible Investments for Solidarity and Empowerment Financing Co.
(RISE), BotiCARD Inc., CARD Leasing and Finance Corporation(CLFC), Rizal Bank, Inc. (RBI), CARD,
Inc. and Mga Lilkha ni lnay Inc. (MLNI), maintain a funded and formal non-contributory defined benefit
retirement plan - the CARD MRI Multi-Employer Retirement Plan (MERP) - covering all of their regular
employees and CARD Group Employees’ Retirement Plan (Hybrid Plan) applicable to employees hired
on or after July 1, 2016. MERP is valued using the projected unit cost method and is financed solely by
the Cooperative and its related patties.
MERP and Hybrid Plan comply with the requirements of Republic Act No. 7641 (Retirement Law).
MERP provides lump sum benefits equivalent to up to 120% of final salary for every year of credited
service, a fraction of at least six (6) months being considered as one whole year, upon retirement, death,
total and permanent disability, or voluntary separation after completion of at least one year of service
with the participating companies.
Hybrid Plan provides a retirement benefit equal to 100% of the member’s employer accumulated value
(the Cooperative’s contributions of 8% plan salary to Fund A plus credited earnings) and 100% of the
Member’s Employee accumulated value (member’s own contributions up to 10% of plan salary to Fund B
plus credited earnings), if any. Provided that in no case shall 100% of the Employee Accumulated Value
in Fund A be less than 100% of plan salary for every year of credited service.
(10)
The amounts of retirement asset recognized in the statement of financial position as at December 31
follow:
2019 2018
Fair value of plan assets 11,243,992 10,750,245
Present value of retirement obligation (4,313,695) (3,767,851)
Effects of asset ceiling (2,642,440) (3,566,490)
Net retirement asset 4,287,857 3,415,904
The movements in the fair value of plan assets for the year ended December 31 follow:
2019 2018
Balance at beginning of year 10,750,245 9,316,477
PVO transfer - 949,130
Interest income 828,154 568,988
Contributions 10,001 362,795
Return on plan assets (344,408) (224,540)
Benefits paid - (222,605)
Balance at end of year 11,243,992 10,750,245
The movements in the present value of obligation (PVO) assets for the year ended December 31 follow:
2019 2018
Balance at beginning of year (3,767,851) (3,299,802)
PVO transfer - (949,130)
Actuarial gains (427) 681,500
Current service cost (255,292) (232,625)
Benefits paid - 222,605
Interest cost (290,125) (190,399)
Balance at end of year (4,313,695) (3,767,851)
The composition of retirement as reported under ‘Salaries, wages and other benefits’ in
“Administrative expense” (Note 16) in statement of operations for the year ended December 31
follow:
2019 2018
Interest income on plan assets (828,154) (568,988)
Current service cost 255,292 232,625
Interest expense on retirement obligation 290,125 190,399
Interest on the effect of the asset ceiling 274,620 143,430
(8,117) (2,534)
Components of remeasurement gains (losses) for the year ended December 31 follow:
2019 2018
Changes in the asset ceiling 1,198,670 (937,277)
Actuarial gains (losses) due to changes:
Financial assumptions (818,910) 856,604
Experience 874,361 (187,549)
Demographic assumptions (55,878) 12,445
Return on plan assets (344,408) (224,540)
853,835 (480,317)
Total retirement expense for the year ended December 31, 2019 related to Hybrid Plan amounted to
P8,117 (2018 - 2,795).
(11)
The maximum economic benefit of plan assets available is a combination of expected refunds from
the plan and reductions in future contributions.
The fair values of plan assets as at December 31 follows:
2019 2018
Government securities 148,421 5,145,067
Cash and cash equivalents 9,161,605 4,775,259
Other assets 314,832 593,414
Other bonds 255,238 236,505
Loans receivable 1,299,805 -
Mutual funds 64,091 -
Fair value of plan assets 11,243,992 10,750,245
All plan assets do not have quoted prices in an active market except for government securities. Cash
and cash equivalents are deposited in reputable financial institutions and related parties and are
deemed to be standard grade. Mutual fund, loans and other assets are unrated.
The plan assets have diverse investments and do not have any concentration risk other than those in
government securities which are of low risk.
The overall investment policy and strategy of the Cooperative’s defined benefit plans is guided by the
objective of achieving an investment return which, together with contributions, ensures that there
will be sufficient assets to pay pension benefits as they fall due while also mitigating the various risk
of the plans.
The cost of defined retirement plan as well as the present value of the defined benefit obligation is
determined using actuarial valuations. The actuarial valuation involves making various assumptions.
The principal assumptions used in determining pension for the defined benefit plans are shown
below:
The reconciliation of the provision for income tax computed at the statutory income tax rate to
provision for income tax as reported in the statement of comprehensive income as at
December 31 follows:
2019 2018
Discount rates 5.54% 7.70%
Future salary increases 5.00% 5.00%
The sensitivity analysis below has been determined based on reasonably possible changes of significant
assumptions shows the impact on the defined benefit obligation as at the end of the reporting period,
assuming all other assumptions were held constant:
2019 2018
% change in assumption +1.00% -1.00% +1.00% -1.00%
Discount rates (412,757) 484,062 (352,975) 411,122
Salary rates 481,785 (418,399) 418,253 (364,593)
The Cooperative plans to contribute P18,000 to the defined benefit retirement plan in 2020.
The average duration of the defined benefit obligation at the end of the reporting period is 10.4 years.
(12)
Shown below is the maturity analysis of the undiscounted benefit payments:
2019 2018
Less than 1 year 227,434 198,677
More than 1 year to 5 years 1,225,935 1,046,015
More than 5 years to 10 years 2,490,422 3,606,821
15 Other income
Notes 2019 2018

Dividend income from investments from:
Equity investments at cost 4,17 39,100,849 40,958,319
Investment in associate 5,17 45,656,071 44,450,553
Membership and administrative fee 14,352,446 11,745,413
Miscellaneous income 8,18 621,891 461,659
99,731,257 97,615,944
16 Administrative expenses
Notes 2019 2018

Salaries, wages and other benefits 14 6,064,708 6,751,848
Provisions for credit and impairment losses 3,6 4,523,224 2,878,020
General support services 5,17 3,097,383 2,705,333
Travel and transportation 1,124,478 1,364,150
Meetings and conferences 632,001 333,419
Depreciation and amortization 6,7,8 571,679 667,174
Professional and consultancy fees 554,720 558,591
Office supplies 431,886 480,311
Rentals 233,873 231,357
Insurance 186,282 232,834
Communication 118,265 106,070
Power, light and water 8 96,726 92,738
Taxes, fees and charges 20,823 358,615
Miscellaneous 8 430,861 244,384
18,086,909 17,004,844
Miscellaneous includes bank charges, repair and maintenance and others.
17 Related party transaction
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other
party or exercise significant influence over the other party in making financial and operating decisions.
The Cooperative’s related parties include:
a. key management personnel, close family members of key management personnel and entities which
are controlled, significantly influenced by or for which significant voting power is held by key
management personnel or their close family members,
b. post-employment benefit plans for the benefit of the Cooperative’s employees, and
c. entities under common significant influence (CARD-MRI entities).
(13)
The Cooperative has several business relationships with related parties. Transactions with such parties
are made in the ordinary course of business and on substantially same terms, including interest and
collateral, as those prevailing at the time for comparable transactions with other parties. These
transactions also did not involve more than the normal risk of collectability or present other unfavorable
conditions.
Remunerations of directors and other key management personnel
Key management personnel are those persons having authority and responsibility for planning, directing
and controlling the activities of the Cooperative, directly or indirectly. The Cooperative considers the
members of the board of directors and senior management to constitute key management personnel for
purposes of PAS 24, Related Party Disclosure.
The compensation of key management personnel included under “Salaries, wages and other benefits”
(Note 16) for the year ended December 31 follows:
2019 2018
Short-term employee benefits 1,095,163 1,085,108
Post-employment benefits 2,166,874 1,292,774
3,262,037 2,377,882
Other related party transactions
Transactions between the Cooperative and its key management personnel meet the definition of related
party transactions. Transactions between the Cooperative and its affiliates within the CARD-MRI, also
qualify as related party transactions.
(14)
Cash and cash equivalents, loans and other receivable and trade and other payables
The table below shows the cash and cash equivalents, accounts receivable and accounts payable held by
the Cooperative for key management personnel, associates and affiliates as at and for the year ended
December 31:
Category 2019
Notes Amount/ Volume Outstanding Nature, Terms and Conditions
Balance
Associate:
Cash and cash equivalents 2 2,826,505 This pertains to savings and time deposit
accounts with CARD SME with annual interest
rates from 1.5% to 4.0%.
Deposits 122,763,646
Withdrawals 128,791,854
Interest income 138,928 This pertains to interest earned from savings and
time deposits with CARD SME.
Billings 24,165
Payments 24, 165
Receivable from associate 3 This pertains to CARD SME’s share of expenses
still payable to the Cooperative included in
- “Other current receivables”.
Billings 18,500
Payments 18,500
Other related parties:
Cash and cash equivalents 2 10,116,257 This pertains to the savings, checking and time
deposit accounts maintained with CARD Bank
with annual interest rates from 1.5% to 4.0%.
Interest income 268,489 This pertains to interest earned from savings and
time deposits with CARD Bank.
Payable to related party 9 939,241 This pertains to the Cooperative’s share of
expenses still payable to CARD, Inc. and CARD
MBA included in “Other accounts payable”.
Billings 12,387,043
Payments 12,302,464
Receivable from a related party 3 23,085 This pertains to the CARD Bank and CLFC’s
share of expenses still payable to the Cooperative
which are unimpaired, due and demandable, and
receivables for common shares issued for the
employees of an associate included in “Other
current receivables”.
Billings 1,301,710
Payments 1,388,746
(15)
Category 2018
Notes Amount/ Volume Outstanding Nature, Terms and Conditions
Balance
Associate:
Cash and cash equivalents 2 This pertains to savings and time deposit
accounts with CARD SME with annual interest
8,854,713 rates from 0.25% to 1.5%.
Deposits 83,448,647
Interest income This pertains to interest earned from savings and
70,920 - time deposits with CARD SME.
Payable to associate 9 This pertains to the Cooperative’s share of
expenses still payable to CARD SME included in
- “Other accounts payable”.
Billings 16,029
Payments 92,029
Receivable from associate 3 This pertains to CARD SME’s share of expenses
still payable to the Cooperative included in “Other
- current receivables”.
Billings 1,775
Payments 4,595
Other related parties:
Cash and cash equivalents 2 This pertains to the savings, checking and time
deposit accounts maintained with CARD Bank
21,819,986 with annual interest rates from 3.00% to 3.75%.
Interest income This pertains to interest earned from savings and
215,593 855,682 time deposits with CARD Bank.
Payable to a related party 9 This pertains to the Cooperative’s share of
expenses still payable to CARD, Inc. and CARD
110,122 MBA included in “Other accounts payable”.
Billings 855,422
Payments 969,296
Receivable from a related party 3 This pertains to the CARD, Inc. and CARD MBA’s
share of expenses still payable to the Cooperative
which are unimpaired, due and demandable, and
receivables for common shares issued for the
employees of an associate included in “Other
current receivables.
Billings 120,090
Payments 16,594
Investment related transactions with related parties are disclosed in Notes 4 and 5.
18 Lease contracts
As a lessor
In 2018, the Cooperative entered into renewable Operating lease agreements with CLFC for one year
without escalation rate.
Operating lease income recognized in 2019 and 2018 under ‘Other income’ amounted to P0.12 million for
each year (Note 15).
The future aggregate minimum lease receivables under operating lease in 2019 within one year and
beyond one year but not more than five years amounted to P0.12 million (P0.02 million).
As a lessee
The Cooperative leases its computer units and server from CLFC. The lease commenced in 2018, with the
lease terms of eighteen (18) months for computers and twenty-four (24) months for the server. Leased
items shall be surrendered to the lessor after the termination of the lease agreement.
Operating lease expense recognized in 2019 under ‘Rentals’ in Administrative Cost amounted to
P233,873 (2018 - P231,357) (Note 16).
(16)
19 Significant accounting judgments and estimates
The preparation of the financial statements in compliance with PFRF for Cooperatives requires the
Cooperative to make judgments and estimates that affect the reported amounts of assets, liabilities,
income and expenses and disclosure of contingent assets and contingent liabilities.
Future events may occur which will cause the assumptions used in arriving at the estimates to change.
The effects of any change in estimates are reflected in the financial statements as they become reasonably
determinable.
Judgments and estimates are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Critical accounting judgement - Impairment of investment in associate
Investment in associate is reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount may not be recoverable. In assessing whether there is any indication
that the Organization's investment in associate is impaired, management considers both external and
internal sources of information such as significant changes with adverse effect on the associate that have
taken place during the period, or will take place in the near future such as plans to discontinue or
restructure the operation of the associate, the carrying amount of the net assets of the associate is more
than its market capitalization, or there is continuing operating losses and decline in cash flows from the
operating activities of the associate.
Critical accounting judgement - Impairment of equity investments at cost
In case of unquoted equity investments classified as ‘Equity investments at cost’, the amount of the
impairment is measured as the difference between the carrying amount of the financial asset and the
present value of estimated future cash flows discounted at the current market rate of return for a similar
financial asset. Such impairment losses shall not be reversed.
20 Summary of significant accounting policies
20.1 Basis of preparation
The accompanying financial statements have been prepared on a historical cost basis. The financial
statements are presented in Philippine Peso, the Cooperative’s functional currency.
20.2 Statement of compliance
On September 16, 2015, the CDA issued Memorandum Circular No. 2015-06 also known as the
Philippine Financial Reporting Framework (PFRF) for Cooperatives which specifically provides for
treatment of certain accounts which are unique only to Cooperatives and such peculiarities are in accord
with universally-accepted cooperative principles. The revised Framework was adopted by the
Cooperative on January 1, 2016, the effective date of PFRF for Cooperatives.
Where PFRF for Cooperatives do not specifically address accounting for a certain transaction, events or
conditions, the Cooperative considers the requirements and guidance in Philippine Financial Reporting
Standard (PFRS) or PFRS for Small and Medium Enterprises (PFRS for SMEs).
The financial statements of the Cooperative have been prepared in accordance with PFRF for
Cooperatives prescribed by the CDA.
(17)
20.3 Accounts peculiar to Cooperatives
The following accounts are peculiar to the Cooperative due to its nature as well as adherence to
Cooperative laws, issued policies, rules and regulations, as well as cooperative principles and practices:
• Interest on share capital and patronage

• Due to union/federation
• Statutory funds
• Income taxes - the Cooperative Code states that a cooperative transacting business only with its
members is exempt from all government taxes, and therefore cannot apply the PAS for income taxes
because of its tax - exempt nature.
For cooperatives transacting business with both members and non-members with accumulated reserves
and undivided net savings of not more than ten million pesos (P10.00 million), they shall be exempt
from all national, city, provincial, municipal or barangay taxes of whatever name and nature. Should a
cooperative exceed the limit set forth, it shall be imposed taxes and fees based on the provisions as
indicated in Article 61 of the Cooperative Code; consequently, it will adopt the accounting standards for
income taxes as stated in PAS 12, Income taxes.
In 2019 and 2018, the Cooperative only transacted business with its members.
• Presentation of withdrawable common and preferred shares as equity.
20.4 Presentation of financial statements
The Cooperative presents its statement of financial position broadly in order of liquidity. Financial assets
and financial liabilities are offset and the net amount is reported in the statement of financial position
only when there is a legally enforceable right to offset the recognized amounts and there is an intention
to settle on a net basis or to realize the assets and settle the liability simultaneously. Income and
expenses are not offset in the statement of operations unless required or permitted by any accounting
standard or interpretation and as specifically disclosed in the accounting policies of the Cooperative.
20.5 Current versus non-current classifications
The Cooperative presents assets and liabilities in the statement of financial position based on current and
non-current classification. An asset is current when it is:
• Expected to be realized or intended to be sold or consumed in normal operating cycle;

• held primarily for the purpose of trading;
• expected to be realized within twelve months after the reporting period; or
• cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the reporting period; or
• There is unconditional right to defer the settlement of the liability for at least twelve months alter
the reporting period.
The Cooperative classifies all other liabilities as non-current.
(18)
20.6 Cash and cash equivalents
Cash includes cash on hand and in banks. Cash in banks earn interest at the prevailing bank deposit
rates. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash with original maturities of three (3) months or less from date of placements and that are
subject to insignificant risk of change in value. Checks and other cash items are composed of undeposited
checks.
20.7 Financial instruments - initial recognition and subsequent measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
20.7.1 Date of recognition
Purchases or sales of financial assets that require delivery of the assets within the time frame established
by regulation or convention in the marketplace are recognized on settlement date. Generally, settlement
date is the date on which the transaction is settled by delivery of the assets that are subject of the
agreement. Settlement date accounting refers to (a) the recognition of an asset on the day it is received by
the Cooperative, and (b) the recognition of an asset and recognition of any gain or loss on disposal on the
day that such asset is delivered by the Cooperative. Loans and receivables are recognized when cash is
received by the Cooperative or advanced to the borrowers.
20.7.2 Initial recognition of financial instruments
The Cooperative shall recognize a financial asset or a financial liability only when the cooperative
becomes a party to the contractual provisions of the instrument. When a financial asset or financial
liability is recognized initially; a cooperative shall measure it at the transaction price unless the
arrangement constitutes, in effect, a financing transaction. A financing transaction may take place in
connection with the sale of goods or services, for example, if payment is deferred beyond normal
business terms or is financed at a rate of interest that is not a market rate. If the arrangement constitutes
a financing transaction, the Cooperative shall measure the financial asset or financial liability at the
present value of the future payments discounted at a market rate of interest for a similar debt
instrument.
20.7.3 Subsequent measurement
At the end of each reporting period, the Cooperative shall measure financial instruments as follows,
without any deduction for transaction costs the Cooperative may incur on sale or other disposal:
• Debt instruments shall be measured at amortized cost using the effective or straight line
interest amortization method.
• Debt instruments that are classified as current assets or current liabilities shall be measured at the
undiscounted amount of the cash or other consideration expected to be paid or received (i.e., net
of impairment unless the arrangement constitutes, in effect, a financial transaction). If the
arrangement constitutes a financing transaction, the cooperative shall measure the debt instrument
at the present value of the future payments discounted at a market rate of interest for a similar
debt instrument.
• Investments in publicly-traded securities shall be measured at fair value with changes in fair
value recognized in profit or loss.
• Investments in non-publicly-traded securities (Note 4) shall be measured at cost less impairment.
(19)
20.7.4 Derecognition of financial instruments
Financial asset
The Cooperative shall derecognize a financial asset only when:
(a) the contractual rights to the cash flows from the financial asset expire or are settled, or
(b) the Cooperative transfers to another party substantially all of the risks and rewards of ownership
of the financial asset, or
(c) the Cooperative, despite having retained some significant risks and rewards of ownership, has
transferred control of the asset to another party and the other party has the practical ability to sell
the asset in its entirety to an unrelated third party and is able to exercise that ability unilaterally and
without needing to impose additional restrictions on the transfer. In this case, the cooperative shall:
i. derecognize the asset; and

ii. recognize separately any rights and obligations retained or created in the transfer.
The carrying amount of the transferred asset shall be allocated between the rights or obligations retained
and those transferred on the basis of their relative fair values at the transfer date. Newly created rights
and obligations shall be measured at their fair values at that date. Any difference between the
consideration received and the amounts recognized and derecognized in accordance with this paragraph
shall be recognized in profit or loss in the period of the transfer.
If a transfer does not result in derecognition because the cooperative has retained significant risks and
rewards of ownership of the transferred asset, the Cooperative shall continue to recognize the transferred
asset in its entirety and shall recognize a financial liability for the consideration received. The asset and
liability shall not be offset. In subsequent periods, the Cooperative shall recognize any income on the
transferred asset and any expense incurred on the financial liability.
If a transferor provides non-cash collateral (such as debt or equity instruments) to the transferee, the
accounting for the collateral by the transferor and the transferee depends on whether the transferee has
the right to sell or re-pledge the collateral and on whether the transferor has defaulted.
The transferor and transferee shall account for the collateral as follows:
(a) If the transferee has the right by contract or custom to sell or re-pledge the collateral, the transferor
shall reclassify that asset in its statement of financial condition (e.g., as a loaned asset, pledged equity
instruments or repurchase receivable) separately from other assets.
(b) If the transferee sells collateral pledged to it, it shall recognize the proceeds from the sale and a
liability measured at fair value for its obligation to return the collateral.
(c) If the transferor defaults under the terms of the contract and is no longer entitled to redeem the
collateral, it shall derecognize the collateral, and the transferee shall recognize the collateral as its
asset initially measured at fair value or, if it has already sold the collateral, derecognize its
obligation to return the collateral.
(d) Except as provided in (c), the transferor shall continue to carry the collateral as its asset, and the
transferee shall not recognize the collateral as an asset.
Financial liability
A cooperative shall derecognize a financial liability (or a part of a financial liability) only when it is
extinguished (i.e. when the obligation specified in the contract is discharged, is cancelled or expires).
(20)
Offsetting of financial instruments
Financial assets and financial liabilities are only offset and the net amount reported in the statement of
financial position when there is a legally enforceable right to set off the recognized amounts and the
Cooperative intends to either settle on a net basis or to realize the asset and the liability simultaneously.
This is not generally the case with master-netting agreements and the related assets and liabilities are
presented gross in the statement of financial condition.
Income and expense are not offset in the statement of operations unless required or permitted by any
accounting standard or interpretation, and as specifically disclosed in the accounting policies of the
Cooperative.
As at December 31, 2019 and 2018, no financial assets and liabilities were offset.
Impairment of financial assets
The Cooperative assesses at each reporting date whether there is objective evidence that a financial asset
or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be
impaired if, and only if, there is objective evidence of impairment as a result of one or more events that
has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or the group of financial
assets that can be reliably estimated. Evidence of impairment may include indications that the borrower
or a group of borrowers is experiencing significant financial difficulty, default or delinquency in interest
or principal payments, the probability that they will enter bankruptcy or other financial reorganization
and where observable data indicate that there is measurable decrease in the estimated future cash flows,
such as changes in arrears or economic conditions that correlate with defaults.
Loans and receivables
Loans to members not paid in installment due date are considered as portfolio-at-risk (PAR). The
CDA prescribes loss rates to be applied to PAR on the basis of the following:
%
Past due for 360 days and above 100.00%
Past due 30 days but less than 360 days 35.00%
Equity investments at cost
In case of unquoted equity investments classified as ‘Equity investments at cost’, the amount of the
impairment is measured as the difference between the carrying amount of the financial asset and the
present value of estimated future cash flows discounted at the current market rate of return for a similar
financial asset. Such impairment losses shall not be reversed.
20.8 Investment in associates
Associates pertain to all entities over which the Cooperative has significant influence. Significant
influence is the power to participate in the financial and operating policy decisions of the investee, but is
not control or joint control over those policies.
The Cooperative’s investments in associate is accounted for using the cost method of accounting per
guidelines set by the CDA. In the absence of published price quotation, the Cooperative measures
investment in associate at cost less any accumulated impairment losses recognized. An impairment loss
occurs when the carrying amount of the investment in associate exceeds its recoverable amount and is
recognized in the statement of operations. Dividends received and other distributions from the associate
is recognized as ‘Dividend income’ in the statement of operations.
(21)
20.9 Property and equipment
Property and equipment, except land, are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. Land is stated at cost less any impairment in value. The initial cost of property
and equipment consists of its purchase price, including taxes and any directly attributable costs to bring
the asset to its working condition and location for its intended use. Expenditures incurred after items of
property and equipment have been put into operation, such as repairs and maintenance are normally
charged against operations in the period in which the costs are incurred. In situations where it can be
clearly demonstrated that the expenditures have resulted in an increase in the future economic benefits
expected to be obtained from the use of an item property and equipment beyond its originally assessed
standard of performance, the expenditures are capitalized as an additional cost of property and
equipment. All other repair and maintenance expenses are charged to current operation as incurred.
Depreciation commences once the assets are available for use, it is computed using the straight-line
method over the estimated useful lives (EUL) of the respective assets.
The EULs of the depreciable assets are as follows:
No. of years
Land improvements 3
Building 10
Building improvements 3
Furniture, fixtures and equipment 3
The EUL and the depreciation method are reviewed periodically to ensure that the period and the
method of depreciation and amortization are consistent with the expected pattern of economic benefits
from items of property and equipment. If there is an indication that there has been a significant change
in depreciation rate, useful life or residual value of an asset, the depreciation of that asset is revised
prospectively to reflect the new expectation.
An item of property and equipment is derecognized upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
statement of operations in the year the asset is derecognized.
The carrying values of the property and equipment are reviewed for impairment when events or changes
in circumstances indicate the carrying value may not be recoverable. If any such indication exists and
where the carrying values exceed the estimated recoverable amount, an impairment loss is recognized
under ‘Provision for credit and impairment losses” in the statement of operations.
Fully depreciated assets are retained in the accounts until they are no longer in use and no further
depreciation is credited against statement of operations.
20.10 Investment properties
Investment properties refers to cost of properties or a portion there of that generate income or capital
appreciation or both, not used in production of goods, supply or services, nor for administrative purposes
or sale in the ordinary course of business are measured initially at cost. Subsequent to initial recognition,
investment properties are stated at cost less accumulated depreciation and accumulated impairment
losses, if any.
(22)
Investment property is derecognized either when they have been disposed of or when the investment
property is permanently withdrawn from use and no future benefit is expected from its disposal. Any
gains or losses on the retirement or disposal of an investment property are recognized in the statement of
operations in the period of retirement or disposal, Expenditures incurred after the investment property
has been put into operations, such as repairs and maintenance costs, are charged against income in the
year in which the costs are incurred.
Transfers are made to investment property when, and only when, there is a change in use or purpose,
evidenced by cessation of owner-occupation or of construction or development, or commencement of an
operating lease to another party. Transfers are made from investment property when, and only when,
there is a change in use, evidenced by commencement of owner-occupation or commencement of
development with a view to sale.
20.11 Computerization cost
Computerization cost pertains to the software purchased by the Cooperative recognized at cost.
Computerization cost is amortized over three (3) years and assessed for impairment whenever there is an
indication that the software may be impaired. The amortization period and method for software with a
finite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied in the asset are
considered to modify the amortization period or method, as appropriate, and are treated as changes in
accounting estimates. The amortization expense on computerization cost is recognized as ‘Depreciation
and amortization’ in the statement of operations.
20.12 Impairment of non-financial asset
The Cooperative assesses the impairment of its property and equipment, investment properties,
investment in associate, and computerization cost, whenever events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable. The factors that the Cooperative considers
important which could trigger an impairment review include the following:
• significant underperformance relative to expected historical or projected future operating results;

• significant changes in the manner of use of the assets; and
• significant negative industry or economic trends.
Recoverable amount
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to
sell and its value in use. If it is not possible to estimate the recoverable amount of an individual asset to
an asset should be read as references also to an asset’s cash-generating unit.
It is not always necessary to determine both an asset’s fair value less costs to sell and its value in use. If
either of these amounts exceeds the asset’s carrying amount, the asset is not impaired and it is not
necessary to estimate the other amount.
If there is no reason to believe that an asset’s value in use materially exceeds its fair value less costs to
sell, the asset’s fair value less costs to sell may be used as its recoverable amount. This will often be the
case for an asset that is held for disposal.
(23)
Reversal of impairment
Cooperative shall assess at each reporting date whether there is any indication that an impairment loss
recognized in prior periods may no longer exist or may have decreased. If any such indication exists, the
Cooperative shall determine whether all or part of the prior impairment loss should be reversed. The
procedure for making that determination will depend on whether the prior impairment loss on the asset
was based on the recoverable amount of that individual asset, or the recoverable amount of the
cash-generating unit to which the asset belongs.
20.13 Equity
Share capital
Share capital refers to the unit of capital stated in common or preferred share issued by the Cooperative,
subscribed and paid by its members. This is measured at par for all shares issued.
Minimum share capital subscription
A member shall subscribe at least three thousand pesos (P3,000.00) and pay for the value under the
terms and conditions prescribed in the Membership and Subscription Agreement.
Deposit for share capital subscription
Deposit for share capital subscription represents payments made on subscription of shares which cannot
be directly credited to ‘Common shares’ or ‘Preferred shares’ pending application for increase in
authorized capital shares with CDA. Deposit for share capital subscription is classified under equity per
guidelines set by the CDA.
Statutory funds
Statutory funds are mandatory funds set up in accordance with Article 86 of RA 9520 which include
general reserve fund, cooperative education and training fund, community development fund and
optional fund.
General reserve fund
10.00% shall be set aside for the reserve fund. The reserve fund shall be used for the stability of the
Cooperative and to meet net losses in its operations. The general assembly may decrease the amount
allocated to the reserve fund when it has already exceeded the authorized share capital. Any sum
recovered on items previously charged to the reserve fund shall be credited to such fund.
Cooperative education and training fund
1.00% shall be set aside for Cooperative Education and Training Fund (CETF). The fund shall provide for
the training and development and similar other activities geared towards the growth of the
Cooperative. Half of the amounts allocated to the education and training fund annually under this
subsection maybe remitted to a union or federation chosen by the Cooperative of which it is a member.
Community development fund
3.00% shall be set aside for Community Development Fund. The fund shall provide for the projects and
activities that will benefit the community where the Cooperative operates.
(24)
Optional fund
7.00% shall be set aside for Optional Fund for land and building fund, and such other developmental
purposes as may be identified by the Cooperative as approved by the general assembly.
20.14 Share capital transactions
The Cooperative accumulates share capital from contribution of members and share of the shareholders
from the undivided net surplus. The shares are redeemable upon termination of membership of the
member.
Refund of paid-up share capital
A member whose membership is terminated shall be entitled to a refund of his/her share capital
contribution and all other interests in the Cooperative less outstanding loan obligations and other
financial accountabilities. However, such refund shall not be made if upon payment, the value of the
assets of the Cooperative would be less than the aggregate amount of its debts and liabilities exclusive of
his/her share capital contribution. In which case, the terminated member shall continue to be entitled to
the interest of his/her share capital contributions, patronage refund and the use of the services of the
Cooperative until such time that all his/her interests in the Cooperative shall have been duly paid. Upon
the acceptance of his/her withdrawal or approval of his/her termination, however, he/she losses his/her
right to attend, participate and vote in any meeting of the BOD or the general assembly.
Members’ shares are classified as equity if the Cooperative has an unconditional right to refuse
redemption of the members’ shares.
Interest in share capital and patronage
Interest on share capital and patronage are recognized as liability and pertains to interest on share
capital and for patronage refund due to members of the Cooperatives, which are determined based on
distributable earnings at each end of the reporting date.
All amount set aside for the education and training fund recognized as liability, which is 50.00% of the
amount allocated for the CETF.
20.15 Income and expenses
Income and expenses in the statement of operations are recognized in the books using the modified
accrual basis of accounting.
20.16 Revenue recognition
As a rule, cooperatives adopt the accrual basis of accounting. However, for credit and other cooperatives,
recognition of revenues is on a modified accrual basis; i.e., interest income, fines, penalties and
surcharges shall be recognized when earned and actually collected. This is because only interest income,
fines, penalties and surcharges on loans receivable that has been realized (i.e., earned and collected) shall
be the basis of the income available for distribution to its members through interest on share capital and
patronage refund.
Interest income
Interest income is recognized when earned and collected.
(25)
Dividend income
Dividend is recognized when received.
Membership and administrative fee
Membership and administrative fees pertain to membership fees and income from handling the health
fund of CARD-MRI employees which are collected and recognized upon receipt of cash.
Miscellaneous income
Miscellaneous income consists of income that does not come from the main operations of the
Cooperative and does not fall to any of the income accounts and is recognized when earned.
20.17 Costs and expenses
Costs and expenses encompass losses as well as those expenses that arise in the course of the ordinary
activities of the Cooperative. Costs and expenses are recognized when incurred.
20.18 Leases
As a lessee
Leases in which the lessor retains substantially all the risks and rewards of ownership of an asset are
classified as operating leases. Operating lease payments are recognized by the Cooperative as an expense
under ‘Miscellaneous expense’ in the statement of operations on a straight-line basis over the lease term.
As a lessor
Leases in which the Cooperative does not transfer substantially all the risks and rewards of ownership of
an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased asset and recognized over the lease term
on the same basis as rental income. Contingent rents are recognized as revenue under ‘Miscellaneous
income’ in the statement of operations in the period in which they are earned.
20.19 Retirement benefits
The Cooperative is covered by a funded, non-contributory defined benefit retirement plan.
The Cooperative’s retirement cost is determined using the projected unit credit method. Under this
method, the current service cost is the present value of retirement benefits payable in the future with
respect to services rendered in the current period.
Net interest on the net defined benefit liability or asset is the change during the period in the net defined
benefit liability or asset that arises from the passage of time which is determined by applying the
discount rate based on government bonds to the net defined benefit liability or asset. Net interest on the
net defined benefit liability or asset is recognized as expense or income in the statement of operations.
The net defined benefit liability or asset is the aggregate of the present value of the defined benefit
obligation at the end of the reporting period reduced by the fair value of plan assets, adjusted for any
effect of limiting a net define benefit asset to the asset ceiling. Tire asset ceiling is the present value of any
economic benefits available in the form of refunds from the plan or reductions in the future contributions
to the plan. The defined benefit obligation is 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 rate on government bonds that have terms
to maturity approximating the terms of the related retirement liability.
(26)
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the
effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized immediately
in the statement of operations in the period in which they arise.
20.20 Provisions
Provisions are recognized when the Cooperative has a present obligation (legal or constructive) as a
result of a past event and it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Cooperative expects some or all of a provision to be reimbursed, the reimbursement is
recognized as a separate asset but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the statement of operations, net of any
reimbursement. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase
in the provision due to the passage of time is recognized as an ‘Interest expense’ in the statement of
operations.
20.21 Contingent liabilities and contingent assets
Contingent liabilities are not recognized in the financial statements but are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not
recognized but are disclosed in the financial statements when an inflow of economic benefits is probable.
20.22 Events after the reporting date
Post-year-end events that provide additional information about the Cooperative’s position at the
reporting date (adjusting events), are reflected in the financial statements. Post-year-end events that are
not adjusting events, if any, are disclosed when material in the notes to the financial statements.
21 Supplementary information required by the Bureau of Internal Revenue (BIR)
On November 25, 2010, BIR issued RR 15-2010 to amend certain provisions of RR 21-2002. The
Regulations provide that starting 2010 the notes to financial statements shall include information on
taxes, duties and license fees paid or accrued during the taxable year.
The Cooperative also reported and/or paid the following types of taxes for the year:
(27)
(i) Taxes and licenses
Taxes and licenses of the Cooperative consist of:
Amount
Local taxes 3,628
Government licenses 4,407
Others 12,788
20,823
(ii) Withholding taxes
Details of total remittances of withholding taxes are as follows:
Paid Accrued Total

Expanded withholding taxes 204,270 15,983 220,253
Withholding taxes on compensation and benefits 131,439 19,853 151,292
335,709 35,836 371,545
(iii) Tax assessment and cases
The Cooperative received a tax assessment in 2019. The Cooperative is waiting for the preliminary
assessment notice from the BIR.
(28)

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CARD Employees

To the Board of Directors and Members of

Report on the Audit of the Financial Statements

What we have audited

The financial statements of the Cooperative comprise:

• the statement of financial position as at December 31, 2019;

Basis for Opinion

Responsibilities of Management and Those Charged with Governance for the

In preparing the ﬁnancial statements, management is responsible to assessing the Cooperative’s

Auditor’s Responsibilities for the Audit of the Financial Statements

Report on the Bureau of Internal Revenue Requirement

Isla Lipana & Co.

To the Board of Directors and Members of

Isla Lipana & Co.

7. That we made this representation in our capacity as auditors of the Cooperative.

Isla Lipana & Co.

Statement of Financial Position

Notes 2019 2018

LIABILITIES AND MEMBER’S EQUITY

(The notes on pages 1 to 28 are an integral part of these financial statements.)

Notes 2019 2018

NET SURPLUS ALLOCATION: 12

(The notes on pages 1 to 28 are an integral part of these financial statements.)

Statement of Changes in Equity

Statement of Cash Flows

Notes 2019 2018

Statement of Cash Flows

Notes 2019 2018

(The notes on pages 1 to 28 are an integral part of these financial statements.)

Notes to the Financial Statements

CARD Employees Multi-Purpose Cooperative (the “Cooperative”), with registration number

a. to encourage thrift and savings mobilization among the members;

1. Exemption from income tax on income from CDA-registered operations;

2 Cash and cash equivalents

This account as at December 31 consists of:

Note 2019 2018

This account as at December 31 consists of:

Note 2019 2018

As at December 31, the breakdown of loans as to secured and unsecured follows:

Note 2019 2018

This account as at December 31 consists of investments in the following companies:

6 Investment properties, net

This account as at December 31 consists of:

2019 Note Land Buildings Total

7 Property and equipment, net

This account as at December 31 consists of:

This account as at December 31 consists of:

9 Accounts and other payable

This account as at December 31 consists of:

This account as at December 31 consists of:

Note 2019 2018

This account as at December 31 consists of:

Interest rate Maturity date 2019 2018

Movement in the account as follows:

This account as at December 31 consists of:

The movements in the account follow:

Note 2019 2018

Details of the subscription payable as at December 31 follows: