EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
HTM Investments
HTM investments are quoted non-derivative financial assets with fixed or determinable payments
and fixed maturities for which the Company has the positive intention and ability to hold to
maturity. Where the Company sells other than an insignificant amount of HTM investments, the
entire category would be tainted and would have to be reclassified as AFS investments.
Furthermore, the Company would be prohibited to classify any financial assets as HTM
investments for the following two years. After initial measurement, HTM investments are
measured at amortized cost using the effective interest method. Amortized cost is calculated by
taking into account any discount or premium on acquisition and fees that are integral parts of the
effective interest rate. Gains and losses are recognized in the consolidated statement of income
when the HTM investments are derecognized or impaired, as well as through the amortization
process. The effect of restatement of foreign-currency denominated HTM investments are also
recognized in the consolidated statement of income.
The Company has no HTM investments as of December 31, 2014 and 2013.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. After initial measurement, loans and receivables are carried at
amortized cost using the effective interest method less any allowance for impairment. Gains and
losses are recognized in the consolidated statement of income when the loans and receivables are
derecognized or impaired, as well as through the amortization process.
Loans and receivables are classified as current assets if maturity is within 12 months from the
financial reporting date. Otherwise, these are classified as noncurrent assets.
Classified under loans and receivables are cash and cash equivalents, trade and other receivables,
and long-term receivables (see Notes 7, 8, 15 and 31).
AFS Investments
AFS investments are those non-derivative financial assets that are designated as such or are not
classified as financial assets designated at FVPL, HTM investments or loans and receivables.
They are purchased and held indefinitely, and may be sold in response to liquidity requirements or
changes in market conditions.
After initial measurement, AFS investments are subsequently measured at fair value with
unrealized gains and losses being recognized as other comprehensive income in the “Net
accumulated unrealized gain (loss) on AFS investment” account until the investment is disposed
of or is determined to be impaired, at which time the cumulative gain or loss previously
recognized in equity are recognized in the consolidated statement of income. The Company uses
the specific identification method in determining the cost of securities sold. Interest earned on the
investments is reported as interest income using the effective interest rate method. Dividends
earned on investment are recognized in the consolidated statement of income when the right to
receive payment has been established.
AFS investments are classified as current if these are expected to be realized within 12 months
from the financial reporting date. Otherwise, these are classified as noncurrent assets.
AFS investments include quoted investments in government securities, corporate bonds,
proprietary and equity shares (see Notes 9 and 31).
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