COVER SHEET 0 6 9 - 0 3 9 2 7 4 SEC Registration Number P H I N M A E N E R G Y C O R P O R A T I O N (Company’s Full Name) L e v e l 1 1 P H I N M A P l a z a 3 9 P l a z a D r i v e R o c k w e l l C e n t e r M a k a t i C i t y (Business Address: No. Street City/Town/Province) ATTY. ALAN T. ASCALON 870-0100 (Contact Person) (Company Telephone Number) 1 2 3 1 1 7 - A 0 3 2 4 Month Day (Form Type) Month Day (Calendar Year) (Annual Meeting) Not Applicable (Secondary License Type, If Applicable) — — Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings 3,204 — — Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier S T A M P S Remarks: Please use BLACK ink for scanning purposes. D1 SEC Number 39274 File Number PHINMA ENERGY CORPORATION ( formerly Trans-Asia Oil and Energy Development Corporation) (Company’s Full Name) Level 11 Phinma Plaza, 39 Plaza Drive, Rockwell Center, Makati City (Company’s Address) 870-0100 (Telephone Number) December 31 (Fiscal Year ending) (month & day) 17-A (Form Type) __________________________________________________________ _ Amendment Designation (If Applicable) December 2016 (Period Ended Date) (Secondary License Type and File Number) D2 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17- A ANNUAL REPORT PURSUANT TO SECTION 17 OF THE REVISED SECURITIES ACT AND SECTION 141 OF THE CORPORATION CODE OF THE PHILIPPINES 1. For the fiscal year ended December 31, 2016 2. SEC Identification Number 39274 3. BIR Tax Identification No. 121-000-506-020 4. Exact name of issuer as specified in its charter PHINMA Energy Corporation Corporation 5. Province, Country or other jurisdiction of Philippines incorporation or organization 6. Industry Classification Code (SEC Use Only) 7. Address of principal office Level 11, Phinma Plaza 39 Plaza Drive, Rockwell Center Makati City 1200 8. Issuer’s telephone number, including (632) 870-0100 area code 9. Former name, former address, and former Trans-Asia Oil and Energy fiscal year, if changed since last report Development Corporation 10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA Number of shares of common stock outstanding 4,885,897,908 shares Amount of debt outstanding P=7.0 billion 11. Are any or all of these securities listed on a Stock Exchange? Yes X No 12. Check whether the issuer: (a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports); Yes X No (b) has been subject to such filing requirements for the past ninety (90) days. D3 Yes X No 13. State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within sixty (60) days prior to the date of filing. If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided the assumptions are set forth in this Form. (See definition of “affiliate” in “Annex B”). NA 14. Check whether the issuer has filed all documents and reports required to be filed by Section 17 of the Code subsequent to the distribution of securities under a plan confirmed by a court or the Commission. NA 15. Documents incorporated by reference a) Annual Report to security holders b) Information Statement filed pursuant to SRC Rule 20 D4 TABLE OF CONTENTS Page No. PART I BUSINESS AND GENERAL INFORMATION Item 1: Business 6 Item 2: Properties 40 Item 3: Legal Proceedings 41 Item 4: Submission of Matters to a Vote of Security Holders 43 PART II OPERATIONAL AND FINANCIAL INFORMATION Item 5: Market for Issuer’s Common Equity and Related Stockholders Matters 43 Item 6: Management’s Discussion and Analysis or Plan of Operation 46 Item 7: Financial Statements 69 Item 8: Changes in and Disagreements with Accountants 69 on Accounting and Financial Disclosure PART III CONTROL AND COMPENSATION INFORMATION Item 9: Directors and Executive Officers of the Issuer 70 Item 10: Executive Compensation 78 Item 11: Security Ownership of Certain Beneficial Owners and Management 82 Item 12: Certain Relationships and Related Transactions 83 PART IV CORPORATE GOVERNANCE Item 13: Corporate Governance 90 PART V EXHIBIT AND SCHEDULES Item 14: Exhibits and Schedules on SEC Form 17-C 91 SIGNATURES 108 D5 PART I – BUSINESS Item 1. Description of Business Business Development PHINMA Energy Corporation (formerly Trans-Asia Oil and Energy Development Corporation) (“PHINMA Energy”, or “the Company”) was established by the Philippine Investment Management (PHINMA), Inc. on September 8, 1969 in line with PHINMA’s vision to create a vehicle for building the nation’s economy through self-reliance in energy. PHINMA Energy is engaged primarily in power generation and electricity supply, with secondary investments in petroleum and geothermal exploration. The Company was originally known as Trans-Asia Oil and Mineral Development Corporation, reflecting its original purpose of engaging in petroleum and mineral exploration and production. In order to diversify its product and revenue portfolio, the Company invested in power generation and supply, which eventually became its main business and revenue source. On April 11, 1996, the Company’s name was changed to Trans-Asia Oil and Energy Development Corporation. Moving forward, on August 22, 2016, the company embraced the name of its parent, to become known as PHINMA Energy Corporation, combining the company’s commercial success with PHINMA’s longstanding reputation, in commemoration of PHINMA’s 60th anniversary. Description of Principal Businesses Power Generation The principal product of power generation and supply is the electricity produced and delivered to the end-consumers. It involves the conversion of fuel or other forms of energy to electricity; or the purchase of electricity from the Philippine Wholesale Electricity Spot Market (WESM). The Company conducts its power generation and supply activities directly or through its Joint Venture Company and subsidiary. The Electricity Supply business continues its active participation in the WESM through buying the electricity requirements of customers and selling the excess output of the Company’s generation supply portfolio. In 2016, the total energy sales reached 2,947 GWh a 33% increase from 2,216 GWh in 2015. Our primary customers are: Holcim Philippines’ cement plants in Bulacan and La Union, Philippine Economic Zone Authority’s (PEZA’s) Cavite Economic Zone, Quezon II Electric Cooperative Inc. (QUEZELCO II), Lafarge Republic, Inc., Direct Power Services, Inc. and new customers accounted for the bulk of the total energy sold while the remaining supply was sold to WESM. Aside from the WESM, the Company also sourced electricity from contracted capacities with SEM-Calaca Power Corporation, Unified Leyte Geothermal Power Plant and KEPCO SPC Power Corporation. In 2016, the Company’s total generation capacity was 639.4 megawatts (MW), a 40% increase from 455.4 MW in 2015. 2016 additional capacity include SLTEC Unit 2 with 135 MW, and Power Barges 101 and 102, which have a nominal capacity of 64 MW. Trans-Asia Power Generation Corporation (TAPGC) On April 10, 2014, Trans-Asia Power Generation Corporation (“TAPGC”) purchased the shares of One Subic Power Generation Corp. (“OSPGC”), the lessee and operator of the 116 MW Subic Diesel Generator Power Plant (the “Subic Power Plant”). OSPGC has an D6 existing Power Administration and Management Agreement (PAMA) with PHINMA Energy under which PHINMA Energy is given the right to administer and manage the net output of the Subic Power Plant in consideration of energy fees to be paid by PHINMA Energy to OSPGC. The Agreement commenced on December 26, 2012 and shall be effective throughout the term of the lease of the Subic Power Plant from the owner, Subic Bay Metropolitan Authority (SBMA). The acquisition of OSPGC expanded TAPGC’s existing generation portfolio, adding to the 52MW Bunker C-Fired power plant in Bulacan serving Holcim’s Cement Plant. In 2016, TAPGC generated 36 gigawatt hours (GWh) of electricity and posted revenues of P414 million under its PAMA with PHINMA Energy. CIP II Power Corporation (CIPP) In December 2010, CIP II Power Corporation’s (“CIPP”) Board of Directors approved the transfer of its power plant from Laguna to Bacnotan, La Union, adjacent to the Holcim Cement Plant. Actual groundbreaking began on April 2011. The Plant was commissioned on December 21, 2012 and commenced commercial operations in January 2013. The new location of the Plant not only allowed it to serve the requirements of the adjacent Holcim cement plant, but also to sell power to the WESM and PHINMA Energy, with the total energy sales of CIPP reaching 10.50 GWh for the period January to June 2013. Thereafter, CIPP and PHINMA Energy entered into a PAMA, where PHINMA Energy pays CIPP energy fees for its entire capacity.