EDC PR 2016 (FS section)

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Financial Statement Purchase Commitments Total purchase commitments for capital expenditures as of December 31, 2016 and 2015 amounted to ₱1,598.5 million and ₱1,153.2 million, respectively, of which, contractual commitments for the acquisitions of property, plant and equipment amounted to ₱1,245.1 million and ₱425.7 million as December 31, 2016 and 2015, respectively. These are expected to be settled in the next financial year. Impact of Typhoons In November 2013, certain assets of the Company located in Leyte sustained damage due to Typhoon Yolanda. As a result, in 2013, the Company recognized loss amounting to ₱625.0 million, which comprised of the carrying amount of the damaged property, plant and equipment at ₱519.5 million and the value of damaged inventories at ₱105.5 million. In 2015, total rehabilitation costs capitalized as part of property, plant and equipment amounted to nil and ₱299.8 million, respectively while the costs of repairs and minor construction activities charged to expense amounted to ₱715.3 million in 2015. The Company received insurance proceeds relating to property damaged caused by Typhoon Yolanda amounting to ₱1.8 million and ₱774.8 million in 2016 and 2015, respectively. Proceeds from insurance claims received were presented under “Other income (charges)” in the profit or loss. In July 2014, Typhoon Glenda caused damaged to certain assets of the Company located in Albay, Sorsogon and Leyte. In 2015, the Company received insurance proceeds amounting to ₱46.3 million which were presented as part of “Other income (charges)” in the profit or loss whereas in 2014, proceeds from insurance proceeds amounting to ₱52.1 million were offset against the “Costs of sale of electricity” account also in the profit or loss (see Note 21). In December 2014, certain assets of the Company located in Leyte were damaged due to Typhoon Seniang. The Company received insurance proceeds amounting to ₱12.0 million and ₱81.2 million in 2016 and 2015, respectively, which were presented as part of “Other income (charges)” in the profit or loss. In December 2011, certain assets of the Company located in Southern Negros were damaged due to Typhoon Sendong. In 2015, the Company received insurance proceeds amounting to ₱17.6 million which were presented as part of “Other income (charges)” in the profit or loss. Other insurance proceeds received in 2016 and 2015 amounting to ₱259.4 million and ₱17.1 million, respectively, pertain to property damages and machinery breakdowns in prior years. BGI Insurance Claims On August 12, 2016, the Company and BGI entered into a settlement agreement with their Insurers in relation to BGI’s claims involving Unit 2 at the Bacman 1 Plant in Palayan, Bayan, Manito, Albay which occurred on February 26, 2013. The Insurers are required to pay a total of ₱1,525.0 million in full and final settlement of the claims. BGI received insurance proceeds relating to machinery breakdown of Palayan Unit 2 amounting to ₱1,238.9 million and ₱235.8 million in 2016 and 2015, respectively. Proceeds from insurance claims received are presented under “Other income (charges)” in the consolidated statements of income. 283
Legal Claims The Company is contingently liable for lawsuits or claims filed by third parties, including labor related cases, which are pending decision by the courts, the outcomes of which are not presently determinable. In the opinion of management and its legal counsel, the eventual total liability from these lawsuits or claims, if any, will not have a material effect on the consolidated financial statements (see Notes 3 and 18). 33. Geothermal Service Concession Contracts Geothermal Service Contracts Under P.D. 1442, all geothermal resources in public and/or private lands in the Philippines, whether found in, on or under the surface of dry lands, creeks, rivers, lakes, or other submerged lands within the waters of the Philippines, belong to the State, inalienable and imprescriptible, and their exploration, development and exploitation. Furthermore, the Government may enter into service contracts for the exploration, development and exploitation of geothermal resources in the Philippines. Pursuant to P.D. 1442, the Parent Company had entered into the following Geothermal Service Contracts (GSCs) with the Government of the Republic of the Philippines (represented by the DOE) for the exploration, development and production of geothermal fluid for commercial utilization: a. Tongonan, Leyte, dated May 14, 1981 b. Southern Negros, dated October 16, 1981 c. Bac-Man, Sorsogon, dated October 16, 1981 d. Mt. Apo, Kidapawan, Cotabato, dated March 24, 1992 e. Mt. Labo, Camarines Norte and Sur, dated March 19, 1994 f. Northern Negros, dated March 24, 1994 g. Mt. Cabalian, Southern Leyte, dated January 13, 1997 The exploration period under the service contracts shall be five (5) years from the effective date, renewable for another two years if the Parent Company has not been in default in its exploration, financial and other work commitments and obligations and has provided a work program for the extension period acceptable to the Government. Where geothermal resource in commercial quantity is discovered during the exploration period, the service contracts shall remain in force for the remainder of the exploration period or any extension thereof and for an additional period of 25 years thereafter, provided that, if the Parent Company has not been in default in its obligations under the contracts, the Government may grant an additional extension of 15 to 20 years. Under P.D. 1442, the right granted by the Government to the Parent Company to explore, develop, and utilize the country’s geothermal resource is subject to sharing of net proceeds with the Government. The net proceeds is what remains after deducting from the gross proceeds the allowable recoverable costs, which include development, production and operating costs. The allowable recoverable costs shall not exceed 90% of the gross proceeds. The Parent Company pays 60% of the net proceeds as government share and retains the remaining 40%. The 60% government share is comprised of government share and income taxes. The government share is split between the DOE (60%) and the LGUs (40%) where the project is located. 284 I Energy Development Corporation Performance Report 2016
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2016 Audited Consolidated Financial
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Compliance • We have monitored th
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156 I Energy Development Corporatio
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We have fulfilled the responsibilit
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Those charged with governance are r
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ENERGY DEVELOPMENT CORPORATION (A S
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Preferred Stock (Note 19) Common St
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Years Ended December 31 2016 2015 2
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Southern Negros, Valencia, Negros O
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EDC Drillco EDC Drillco is a compan
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Geotermica Chile SPA also incorpora
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Authorization for Issuance of the C
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These amendments are applied prospe
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Applicability of IFRIC 12, Service
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In August 2013, EDC Geotermica SpA
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Fair Value Measurement of Financial
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In 2011, EDC recognized full impair
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The factors that the Company consid
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Recognition of Deferred Income Tax
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Current versus Non-current Classifi
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In 2015, the functional currency of
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Construction in progress represents
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would have been determined, net of
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Classified under loans and receivab
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Derivative financial instruments ar
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the allowance account. Any subseque
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maturity or expected disposal date
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has expired, as well as the Parent
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Proceeds from Insurance Claims Proc
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Future Changes in Accounting Polici
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The Company is currently assessing
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oader review of the research projec
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LGBU NIGBU BGBU MAGBU Pantabangan/
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7. Trade and Other Receivables 2016
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The movements of the net accumulate
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12. Property, Plant and Equipment L
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Total borrowing costs capitalized t
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Bac-Man 3 Engineering Procurement a
Page 81 and 82: 13. Goodwill and Intangible Assets
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Page 85 and 86: 2015 Long term receivables Input VA
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Page 89 and 90: The Parent Company capitalized in i
Page 91 and 92: ₱8.5 billion GCGI Term Loan On Ma
Page 93 and 94: 19. Equity Capital Stock As require
Page 95 and 96: On March 6, 2015, the BOD approved
Page 97 and 98: US$14.0 million thereafter up to 20
Page 99 and 100: Transactions for the years ended De
Page 101 and 102: Remuneration of Key Management Pers
Page 103 and 104: Net retirement and other post-emplo
Page 105 and 106: The following tables summarize the
Page 107 and 108: The Company expects to contribute
Page 109 and 110: Beginning of Year Charged to Income
Page 111 and 112: f. g. h. i. j. k. On June 29, 2011,
Page 113 and 114: Stock awards granted by the Committ
Page 115 and 116: Foreign Currency Risk Foreign curre
Page 117 and 118: US$ Japanese yen (JP¥) Sweden kron
Page 119 and 120: 2015 Foreign Currency Appreciates (
Page 121 and 122: The following tables demonstrate th
Page 123 and 124: Financial Assets and Financial Liab
Page 125 and 126: The Company classifies its financia
Page 127 and 128: The table below shows the derivativ
Page 129 and 130: Pertinent details of the IRS are as
Page 131: The Company monitors capital using
Page 135 and 136: EDC also holds geothermal resource
Page 137 and 138: As of December 31, 2016, the Compan
Page 139 and 140: As of December 31, 2016, the Compan
Page 141 and 142: Ancillary Services Procurement Agre
Page 143 and 144: 41. ULGEI Power Supply Agreements A
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EDC PR 2016 (FS section)

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