ABCD

Manabat Sanagustin & Co., CPAs

3rd Floor, ATM Business Center
Cor. Jalandoni-Ledesma Streets
Iloilo City 5000, Philippines

Telephone
Fax
Internet

+63 (33) 338 0849

+63 (33) 338 0523
+63 (33) 338 0849
www.kpmg.com.ph

November 11, 2011

Ms. Emma P. Alianza

Finance Director
Taytay sa Kauswagan, Inc.
Lopez-Jaena St., Jaro
Iloilo City

Dear Ms. Emma,

In connection with the audit of the financial statements of Taytay sa Kauswagan, Inc. as of and
for the year ended December 31, 2011, please furnish us the following schedules and
documents:
General
1. Trial balance (Per Branch, Per Area and Consolidated) as of December 31, 2011;
2. Copies of minutes of the meetings of the Board of Trustees and members for 2011;
3. Correspondences received during the year up to date from the Securities and Exchange
Commission (SEC), and Bureau of Internal Revenue if any;
4. Copies of major contracts, agreements and other documents entered into by the
Organization which may have an impact on our examination (lease, rental, loans, joint
venture, etc.);
5. Name, address and contact number of legal counsel*;
6. Copy of latest General Information Sheet (GIS);
7. Copy of the latest Organizational Chart;
8. Copy of updated list of Board of Trustees and Organization Officers; and
9. Copy of the Organizations annual budget analysis (actual vs. budget).
Cash and Cash Equivalents
1. Details of Cash on Hand and Petty Cash Fund;
2. List of depository banks and addresses, and name and designation of the Organizations
authorized signatories*;
3. Monthly bank reconciliations for all depository banks;
4. Print out of individual trial balance attached to the bank reconciliation statements;
5. Schedule of reconciling items and their supporting documents;
6. Photocopy of Bank statements and/or passbooks for the month of December 2011 and
January 2012;
7. Photocopy of bank statements and/or passbooks to support the reconciling items in the bank
reconciliation statements;
8. Duly signed client adjustments to book reconciling items, if any; and
9. Schedule of time deposits and photocopy of its certificate.

Manabat Sanagustin
& Co.,
CPAs,
a Philippine
partnership and a member firm of the KPMG network of
independent member firms affiliated with KPMG International
Cooperative (KPMG International), a Swiss entity.

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Loans and Advances
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Per branch, per area and consolidated aging schedule of loans receivable;
Loan status report from January 2011 to December 2011;
Actual monthly releases of loans per program from January 2011 to December 2011;
Interest rates for each loan program during the year;
Per branch and consolidated aging schedule of employee loan with subsequent collection
after December 31, 2011, segregated for each funds;
Per branch and consolidated aging schedule of advances to officers and employees with
subsequent collections after the period end segregated for each funds;
Consolidated aging schedule of accounts receivable others with subsequent collections
after the period end segregated for each fund;
Schedule of Accounts Receivable - AUSAID OI with supporting documents;
Schedule of Accounts Receivable - COCOLIFE with supporting documents
Schedule of Accounts Receivable - DSPI with supporting documents;
Schedule of Accounts Receivable - Others II with supporting documents
Schedule of Accounts Receivable - Katuwang Foundation with supporting documents; and
Schedule of accounts receivable written-off with corresponding board resolution on the
said write-off.

Other Current Assets

1.
2.
3.
4.

Consolidated schedule of prepaid expense segregated per fund, including clear and concise
descriptions;
Consolidated schedule of prepaid supplies segregated per fund, including clear and concise
descriptions;
Consolidated schedule of other prepayments segregated per fund, including clear and
concise descriptions; and
Consolidated schedule of prepaid rent, segregated per fund and indicate period of
applicability.

Property and Equipment

1.
2.
3.

4.

Per area and consolidated lapsing schedule of property and equipment;

Consolidated schedule of fixed asset acquisitions, to include description, date of purchase,
cost, estimated useful live and depreciation expense for the period;
Schedule of disposals, to include description, dates of disposal, original cost, accumulated
depreciation through date of disposal, proceeds from disposal and any gain or loss realized;
and
Copy of appraisal reports, if any.

Investments
1.
2.
3.

Detailed schedule of Short-term and Long-term Investments;

Latest General Information Sheet of KMDC, OKBANK and BPHI; and
Audited Financial Statements of KMDC and BPHI as of and for the year ended December
31, 2011.

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Due to / Due from
1.

Detailed reconciliation of Due to / Due from Account

Other Assets
1.
2.
3.
4.

Consolidated aging schedule of cash advances with subsequent collections after period end
segregated for each funds;
Cash surrender value of insurance premium with Ayala life;
Schedule of contributions to Ayala Life for the year; and
Schedule of receivable from KMBI with supporting documents.

Accounts Payable and Accrued Expenses

1.
2.

Schedule of accounts payable with subsequent payments after December 31, 2011; and
Schedule of accrued expenses.

Debt (Short and Long Term)

1.
2.
3.
4.
5.
6.

Detailed schedule of short-term and long-term loans as of December 31, 2011;

List of names, addresses and fax numbers of creditors*;
Promissory notes and amortization schedule of each loan;
Schedule of accrual of interest for each loan;
Schedule of interest expense incurred per creditor; and
Schedule of interest expense paid during the year per creditor.

Other Liabilities
1. Supporting schedule of Miscellaneous Liabilities included under Other Liabilities; and
2. Schedule of Due to Loan Beneficiaries (Misc. Liabilities - CBU including accrued
interests).
Income and Expenses
1.
2.
3.

Detailed schedule of grants and donations;

Schedule of Taxes and Licenses;
Schedule of salaries and compensation of the Organizations Board of Trustees and
Officers.

Moreover, kindly fill-out the hereto attached Annex A (disclosure requirements for the separate
financial statements of the Company).
Please be advised that the above requests are not all-inclusive. Other items may be requested
during the course of the audit.
We would like to emphasize that all schedules to support the trial balance should be duly
reconciled with the trial balance before submitting to us and please provide a soft copy of the
above requirements preferably in MS Excel format.

ABCD
*For lists of banks, creditors and legal counsel, please provide us these schedules within a week
after you have received this letter in order for us to facilitate the preparation and distribution of
confirmation letters.
We would appreciate the receipt of above-mentioned audit requirements on or before January 4,
2012.
Very truly yours,

Jectofer D. Arlos
Supervisor

cc: Mr. Angel L. De Leon, Jr. - Executive Director

cc: Mr. Franklin L. Lopez - Quality Management Representative

CONFORME:
Taytay sa Kauswagan, Inc.
By:

_____________________

Date: _____________________

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ANNEX A
Please fill-out the hereunder disclosure requirements for the separate financial statements of
Taytay sa Kauswagan, Inc.
Financial Risk Management
Credit Risk
An analysis of the gross and net (of allowances for impairment) amounts of individually
impaired assets by risk grade as of December 31, 2011 are set out below:

(In thousand pesos)

High grade
Standard grade
Substandard grade

Cash and Cash

Equivalents
Gross
Net

December 31, 2011

Loans and
Advances
Gross
Net

Available-for-sale
Securities
Gross
Net

Liquidity Risk
The following tables summarize the maturity of the Organizations financial assets and
liabilities based on contractual repayment arrangements:

Up to 1 Year

December 31, 2011

Over 1 Year
Up to 5 Years
Over 5 Years

Total

Assets
Cash and cash equivalents
Loans and advances - net
Prepayments and other assets
Liabilities
Accounts payable and
accrued expenses
Borrowings
Due to loan beneficiaries
Net liquidity gap

Cash and Cash Equivalents

Amount
Cash on hand and in banks
Short-term placements

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Property and Equipment
The movements in this account follow:
Year Ended December 31, 2011
Furniture,
Buildings and Transportation Fixtures and
Leasehold
Land Improvements
Equipment Equipment Improvements

Total

Costs:
Beginning balance
Additions
Ending balance
Accumulated depreciation and
amortization:
Beginning balance
Depreciation and amortization
Ending balance
Carrying amount:
Beginning balance
Ending balance

Related Party Transactions

Advances to Related Parties
Nature of Relationship
KMDC
OK Bank

Amount

Subsidiary
Subsidiary

The key management personnel compensation and other benefits included as part of Personnel
cost account under project expenses in the separate statements of revenues and expenses are as
follows:
Amount
Short-term employee benefits
Post-employment benefits

Lease Contracts
Rent Income
Future minimum rental commitments are as follows:
Amount
Not later than one (1) year
Later than one (1) year and not later than five (5) years

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Rent Expense
The future aggregate minimum lease payments follow:
Amount
Not later than one (1) year
Later than one (1) year and not later than five (5) years

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ANNEX B
Please ensure that the hereunder minimum disclosure requirements are presented in the audited
financial statements of the subsidiaries. This will help expedite the consolidation of the financial
statements of the Taytay sa Kauswagan, Inc. and Subsidiaries.
Financial Risk Management
Credit Risk
An analysis of the gross and net (of allowances for impairment) amounts of individually
impaired assets by risk grade as of December 31, 2011 are set out below:

(In thousand pesos)

High grade
Standard grade
Substandard grade

Cash and Cash

Equivalents
Gross
Net

December 31, 2011

Loans and
Advances
Gross
Net

Available-for-sale
Securities
Gross
Net

Liquidity Risk
The following tables summarize the maturity of the Organizations financial assets and
liabilities based on contractual repayment arrangements:

Up to 1 Year

December 31, 2011

Over 1 Year
Up to 5 Years
Over 5 Years

Total

Assets
Cash and cash equivalents
Loans and advances - net
Prepayments and other assets
Liabilities
Accounts payable and
accrued expenses
Borrowings
Due to loan beneficiaries
Net liquidity gap

Cash and Cash Equivalents

Amount
Cash on hand and in banks
Short-term placements

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Property and Equipment

The movements in this account follow:
Year Ended December 31, 2011
Furniture,
Buildings and Transportation Fixtures and
Leasehold
Land Improvements
Equipment Equipment Improvements

Total

Costs:
Beginning balance
Additions
Ending balance
Accumulated depreciation and
amortization:
Beginning balance
Depreciation and amortization
Ending balance
Carrying amount:
Beginning balance
Ending balance

Related Party Transactions

Advances to Related Parties

KMDC
OK Bank

Nature of Relationship
Subsidiary
Subsidiary

Amount

The key management personnel compensation and other benefits included as part of Personnel
cost account under project expenses in the separate statements of revenues and expenses are as
follows:
Amount
Short-term employee benefits
Post-employment benefits

Lease Contracts
Rent Income
Future minimum rental commitments are as follows:
Amount
Not later than one (1) year
Later than one (1) year and not later than five (5) years

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Rent Expense
The future aggregate minimum lease payments follow:
Amount
Not later than one (1) year
Later than one (1) year and not later than five (5) years

10