EDC 2014 SR (UPDATED)
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<strong>EDC</strong> <strong>2014</strong> Performance Report<br />
9.<br />
Available-for-sale Investments/Financial Asset at Fair Value Through Profit or Loss<br />
Financial asset at fair value through profit or loss<br />
In January <strong>2014</strong>, the Company entered into an investment management agreement (IMA) whereby<br />
the Company availed of the services of Security Bank relative to the management and investment<br />
of funds amounting to ₱500.0 million.<br />
Among others, following are the significant provisions of the IMA:<br />
The Investment Manager shall administer and manage the fund as allowed and subject to the<br />
requirements of the Central Bank of the Philippines and in accordance with the written investment<br />
policy and guidelines mutually agreed upon and signed by Security Bank and the Company.<br />
The agreement is considered as an agency and not a trust agreement. The Company, therefore,<br />
shall at all times retain legal title to the fund.<br />
The IMA does not guaranty a yield, return, or income on the investments or reinvestments made<br />
by the Investment Manager. Any loss or depreciation in the value of the assets of the fund shall be<br />
for the account of the Company.<br />
The Company accounts for the entire investment as a financial asset to be carried at fair value<br />
through profit or loss. Mark-to-market adjustment on the securities is taken up in the consolidated<br />
income statement amounted to ₱23.6 million in <strong>2014</strong>.<br />
Available-for-sale Investments<br />
<strong>2014</strong> 2013<br />
Current - Quoted government debt securities<br />
(Note 31) ₱– ₱341,841,500<br />
Noncurrent<br />
Quoted securities (Note 31)<br />
Equity 308,129,936 114,961,907<br />
Government bonds and note 226,879,065 226,221,345<br />
Corporate bond 32,967,889 66,058,877<br />
567,976,890 407,242,129<br />
Total ₱567,976,890 ₱749,083,629<br />
Quoted government debt securities consist of investments in Republic of the Philippines (ROP)<br />
bonds, RCBC GT Capital Fixed Rate Bonds, BDP Fixed Rate Treasury Note and RCBC Retail<br />
Treasury Bond with maturities of 2016, 2023, 2032 and 2037, respectively; and interest rates of<br />
8.0%, 5.1%, 5.8% and 5.1%, respectively.<br />
Investments in equity securities consist mainly of shares traded in the Philippine Stock Exchange.<br />
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