EDC PR 2016 (FS section)

Stock awards granted by the Committee to officers and employees of EDC are shown below:
Grant Date
Number of
Shares Granted
Fair Value
Per Share
at Grant Date Vested Unvested
Forfeited
Shares
December 1, 2009 7,000,000 ₱4.20 7,000,000 – –
June 1, 2010 2,625,000 4.70 2,625,000 – –
June 1, 2011 2,625,000 6.75 2,437,500 – 187,500
June 1, 2012 2,625,000 5.84 1,950,000 – 675,000
June 1, 2013 2,250,000 6.10 1,509,375 – 740,625
Total compensation expense (gain) recognized in 2016, 2015 and 2014 amounted to nil,
(₱5.3 million) and ₱7.8 million, respectively, recognized under “General and administrative
expenses”. A corresponding decrease (increase) in the “Common shares in employee trust
account” amounting to nil, (₱3.5 million) and ₱4.8 million and increase (decrease) in the
“Additional paid-in capital” account amounting to nil, (₱1.8 million) and ₱3.0 million were
recorded in 2016, 2015 and 2014, respectively (see Note 19).
31. Financial Risk Management Objectives and Policies
The Company’s financial instruments consist mainly of cash and cash equivalents, FVPL, AFS
investments and long-term debts. The main purpose of these financial instruments is to finance
the Company’s operations and accordingly manage its exposure to financial risks. The Company
has various other financial assets and liabilities such as trade receivables, trade payables and other
liabilities, which arise directly from operations.
Financial Risk Management Policy
The main financial risks arising from the Company’s financial instruments are credit risk, foreign
currency risk, interest rate risk, equity price risk and liquidity risk. The Company’s policies for
managing the aforementioned risks are summarized hereinafter below.
Credit Risk
The Company’s geothermal and power generation business trades with two major customers, NPC
and TransCo, both a government-owned-and-controlled corporations. Any failure on the part of
NPC and TransCo to pay their obligations to the Company would significantly affect the
Company’s business operations. As a practice, the Company monitors closely its collections from
NPC and TransCo and may charge interest on delayed payments following the provision of the
PPAs and REPA, respectively. Receivable balances are monitored on an ongoing basis to ensure
that the Company’s exposure to bad debts is not significant. The maximum exposure of trade
receivable is equal to its carrying amount.
With respect to the credit risk arising from other financial assets of the Company, which comprise
of cash and cash equivalents excluding cash on hand, financial asset at FVPL, short-term
investments, other receivables, AFS investments and due from a related party, the Company’s
exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to
the carrying amount of these instruments.
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I Energy Development Corporation Performance Report 2016