EDC PR 2016 (FS section)

Transactions for the years
ended December 31
Outstanding balance as of
December 31
Related Party Nature of Transaction Terms 2016 2015 2014 2016 2015
Due to related parties
First Gen Dividend Unsecured and will ₱4,303,670 ₱3,866,170 ₱3,866,206 ₱– ₱–
be settled in cash
The purchases from and sales to related parties are made at normal commercial terms and
conditions. The amounts outstanding are unsecured and will be settled in cash. The Company
has not recognized any impairment losses on receivables from related parties in 2016, 2015
and 2014.
i.
First Gen
First Gen provides financial consultancy, business development and other related services
to the Parent Company under a consultancy agreement.
In March 2015, EDC and First Gen agreed to extend the consultancy agreement for a
period of 24 months, from January 1, 2015 to December 31, 2016, for a monthly fee of
₱32.4 million per month plus applicable taxes. The total consultancy services amounted
to ₱388.9 million each in 2016 and 2015, and ₱175.3 million in 2014, respectively, and
were included in the “Purchased services and utilities” under “General and administrative
expense” account (see Note 22). The consultancy agreement was extended until
December 31, 2018.
In 2013, the Parent Company acquired 1.7 million First Gen shares at ₱12.99 per share or
for a total purchase cost of ₱21.8 million. In 2014, another 3.9 million shares were
acquired with share price ranging from ₱15.32 to ₱22.10 per share or for total purchase
costs of ₱76.3 million. In 2015, additional 1.2 million First Gen shares were acquired
with share price ranging from ₱21.82 to ₱24.4 per share or for total purchase costs of
₱29.0 million. The acquired First Gen shares were recognized as available-for-sale
investments in the consolidated statements of financial position (see Note 9).
ii.
First Balfour, Inc. (First Balfour)
Following the regular bidding process, the Company awarded to First Balfour
procurement contracts for various works such as civil, structural and mechanical/piping
works in the Company’s geothermal, solar and wind power plants.
As of December 31, 2016 and 2015, the outstanding balance amounted to
₱938.4 million and ₱1,356.2 million, respectively, recorded under “Trade and other
payables” account in the consolidated statements of financial position (see Note 16).
First Balfour is a wholly owned subsidiary of First Holdings, which is an entity under
common control.
iii.
Thermaprime
Thermaprime Well Services, Inc. (Thermaprime) is a subsidiary of First Balfour, a
wholly owned subsidiary of First Holdings. Thermaprime provides drilling services
such as, but not limited to, rig operations, rig maintenance, well design and
engineering. Thermaprime provides drilling services and drilling rig preservation
services to EDC. The contracts for drilling services are for a period of five (5) years
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I Energy Development Corporation Performance Report 2016