EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
Accrued sick leave and accrued vacation leave
Sick and annual vacation leave with pay are given to active employees subject to certain
requirements set by the Company. These leaves are convertible into cash upon separation of the
employees. At the end of the year, any remaining unused sick and vacation leave are accrued up
to maximum allowed number of leave credits which is based on the employees’ length of service
with the Company. Vacation and sick leave credits exceeding the maximum allowed for accrual
are forfeited.
19.
Equity
Capital Stock
As required under the Philippine Constitution, the Parent Company is subject to the nationality
requirement that at least 60% of its capital stock must be owned by Filipino citizens since it is
engaged in the exploration and exploitation of the country’s energy resources. The Parent
Company is compliant with the said nationality requirement.
Beginning December 13, 2006, the 6.0 billion common shares of EDC were listed and traded on
the PSE at an initial public offering price of ₱3.2 per share.
On May 19, 2009, the BOD approved an increase in EDC’s authorized capital stock from
₱15.1 billion comprising of 15.0 billion common shares with a par value of ₱1,00 per share or
aggregate par value of ₱15.0 billion, and 7.5 billion preferred shares with a par value of ₱0.01 per
share or aggregate par value of ₱75.0 million to ₱30.1 billion divided into 30.0 billion common
shares with a par value of ₱1.00 per share or aggregate par value of ₱30.0 billion, and 15.0 billion
preferred shares with a par value of ₱0.01 per share or aggregate par value of ₱150.0 million. The
increase in authorized capital stock of the common shares was effected by way of a 25% stock
dividend, to be taken from EDC’s unrestricted retained earnings as of December 31, 2008.
As of December 31, 2014 and 2013, the common shares are majority held by Filipino citizens,
with Red Vulcan holding 7.5 billion shares or an equivalent of 40% interest.
The ownership of the Parent Company’s preferred shares is limited to Filipino citizens. The
preferred shares have voting rights and subject to 8% cumulative interest (Note 29). Red Vulcan
holds the entire 9.4 billion outstanding preferred shares equivalent to 20% voting interest in EDC.
The combined interest of Red Vulcan entitles it to 60% voting interest and 40% economic interest
in EDC.
On February 28, 2014, the BOD approved the reclassification of EDC’s 3.0 billion common shares
with a par value of ₱1.00 per share or aggregate par value of ₱3.0 billion out of the unissued
authorized common stock to 300.0 million non-voting preferred shares with a par value of ₱10.00
per share or aggregate par value of ₱3.0 billion thereby creating a new class of preferred shares.
Among others, the new class of non-voting preferred shares has the following features:
i.
ii.
iii.
Non-voting except in the cases provided by law;
Entitled to receive out of the unrestricted retained earnings of EDC, when and as declared by
the BOD, cumulative dividends at the rate to be determined by the BOD at the time of
issuance, before any dividends shall be set apart and paid to holders of the common shares,
and shall not be entitled to participate with holders of the common shares in any further
dividends payable;
Assignable;
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