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2015

Annual

Financial

Report

2015 Annual Financial Report Water Districts Volume II

Water Districts

Volume II

Table of Contents

Part I - Introduction

Page

 

Audit mandate over water districts………….…………………………… Structure, contents and limitations………………………………………. Methodology of summarization…………………………………… General Information……………………………………………………… Guide to users……………………………………………………………

1

2

2

3

4

Part II - Financial Highlights

 

Financial condition………………………

5

……………………………… Financial performance……………………………

……………………… Changes in equity………………………………………………

……… Cash flows……………………………………………………………

10

12

13

Part III - Summary Financial Statements

 

Over-all summary financial statements

 

Balance Sheet………………………………………………

16

Income Statement………………………………………….

17

Statement of Changes in Equity……………………………

18

Cash Flow Statement………………………………………

19

Notes to Financial Statements……………………………..

20

 

Summary financial statements by Regions

 

Over-all……………………………………………………

25

Cordillera Administrative Region…………………………

42

Region 1……….…………………………………………….

63

Region 2……………………………………………………

108

Region 3……………………………………………………

145

Region 4A…………………………………………………

230

Region 4B…………………………………………………

291

Region 5……………………………………………………

316

Region 6……………………………………………………

365

Region 7……………………………………………………

422

Region 8……………………………………………………

443

Region 9……………………………………………………

492

Region 10……………………………………………………

519

Region 11……………………………………………………

556

Region 12……………………………………………………

585

Region 13……………………………………………………

618

Region 16……………………………………………………

655

ARMM……………………………………………………… 684

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Part IV Annexes

A List of Water Districts with Audited or Unaudited Financial Statements

B Roster of Members of Governing Boards (with office addresses) of Water Districts

C List of Water Districts with information on submission of Financial Statements

D Water Districts with Unreconciled Cash and Cash Equivalent Accounts per Balance Sheet vs. Statement of Cash Flows and Unreconciled 2015 Opening vs. 2014 Year-end Cash and Cash Equivalent Balances per Cash Flow Statement

E Water Districts with Unreconciled Equity Accounts per Balance Sheet vs. Statement of Changes in Equity and Unreconciled 2015 Opening vs. 2014 Ending Balance of items in the Equity Accounts

F Tabulation of Audit Opinions Rendered

G Ranking of Water Districts by Total Assets

H Water Districts by Total Liabilities

Ranking of

I Water Districts by Total Equity

Ranking of

J Water Districts by Gross Income

Ranking of

K Water Districts by Total Expenditures

Ranking of

L Water Districts by Net Income

Ranking of

M Breakdown of Domestic Loans

N Status of Implementation of Prior Years Audit Recommendations

ii

705

717

758

770

772

775

783

785

787

789

791

793

795

813

Part I

Introduction

Audit mandate over water districts

Water Districts (WDs) are public utilities classified as quasi-public corporations created by virtue of legislative enactments of Local Government Units (LGUs) that have territorial jurisdiction over the water concessionaries, pursuant to the provisions of Presidential Decree (PD) No. 198, otherwise known as the “Local Water District Law” as amended. The said law provides for the formation/creation of local WDs in line with the state policy favoring local operation and control of water systems and providing for the governance and administration of such districts, chartering a national administration to facilitate improvement of local water utilities and granting said WDs such powers as are necessary to optimize public service pertinent to water utility operations, and for other purposes.

It is well settled in the case of Davao City Water District, et al, vs. Civil Service Commission (CSC) and Commission on Audit (COA), G.R. Nos. 95237-38 dated September 13, 1991 that WDs are government owned or controlled corporations with original charter, having been created under a special law, thus within the jurisdiction of CSC and COA. This was also reiterated in the case of Leyte Water District, et al vs. COA (GR No. 147402 dated January 14, 2004) where the second sentence of Section 20 of PD No. 198 which states that Auditing shall be performed by a certified public accountant not in the government serviceis declared void for being inconsistent with Section 2(1) and 3, Article IX-D of the 1987 Constitution, as follows:

“SECTION 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit…including government-owned or controlled corporations with original charters, and on a post-audit basis…xxx

“SECTION 3. No law shall be passed exempting any entity of the Government or its subsidiary in any guise whatever, or any investment of public funds, from the jurisdiction of the Commission on Audit.

1

Structure, content and limitations

This volume of the Annual Financial Report (AFR) for the calendar year (CY) 2015 covers the summarization/combination of the 488 financial statements or 96.25 percent of the 507 operating WDs nationwide. Of those included herein, 282 or 57.79 percent are audited while 206 WDs or 42.21 percent are unaudited.

This report includes significant data related to the operations of WDs, the composition of the governing boards and their respective office addresses, listing of WDs which failed to submit the required financial statements as of September 1, 2015 and audit opinion rendered on the particular WD, among others. These data are presented as Annexes A to N.

Consistent with the previous submission of financial statements by WDs, this year’s AFR presents the comparative financial data for CYs 2015 and 2014. The newly created WDs in CY 2015 are included in this report with their financial statements only for the year ended December 31, 2015.

Methodology of summarization

As a government corporation, WDs’ financial statements are presented in this Volume of the AFR. In view of the implementation of the Integrated/Unified Audit Approach, the audit supervision over WDs were transferred to the respective COA Regional Offices and included in the audit work plan prepared by the COA Regional Director. COA employs the Audit Team Approach in the conduct of examination of the financial transactions and operations of WDs, whereby the designated Audit Team visits the auditee-WD on a given period to undertake the audit. Upon completion of the field work, the Audit Team returns to its designated official station for the preparation of the Audit Observation Memorandum, if any, and of the Annual Audit Report.

The summarized financial data includes all of the components of the financial statements, with the exception of the notes to financial statements, such as: the balance sheet, income statement, statement of changes in equity, and cash flow statement.

Most of the WDs presented their financial statements in accordance with the accounting principles under the New Government Accounting System (NGAS) prescribed by the COA. The Local Water Utilities Administration (LWUA) which has the operational and technical supervision over WDs requires for the adoption of the operating standards and the corresponding reportorial requirements based on established business policies and practices in the water utilities sector as enunciated under the Commercial Practice System (CPS). The

2

accounting policies prescribed in both systems (NGAS and CPS) are in line with the generally accepted accounting principles in the Philippines.

The individual financial statements of WDs are first summarized by provincial/city level and further combined to come up with the regional level summary. The two level summaries (provincial and regional) are prepared at the respective COA Regional Offices while the national level summary, comprised of the consolidation of the seventeen regional level summaries, is processed at the Government Accountancy Sector (GAS), this Commission. The over-all summarized financial information of WDs is also presented in Volume I of the AFR as one entity under Cluster 3 Public Utilities, Corporate Government Sector (CGS). The national, regional and provincial level summaries including the individual financial statements of the WDs are presented separately in this Volume II of the AFR.

General Information

Presidential Decree No. 198, otherwise known as the Provincial Water Utilities Act of 1973, as amended by the Presidential Decree Nos. 768 and 1479 and Republic Act 9286 provides that it is the declared national policy of government to favor the local operation and control of water systems through the WDs. As such, WDs are established to facilitate the maintenance and improvement of the water utilities sector. Title III of said Presidential Decree prescribes the governance and administration of the water utilities with the creation of the Local Water Utilities Administration (LWUA). The agency is tasked to provide financial, technical and institutional development and regulatory services to established WDs nationwide.

The policy-making body of WD is the Board of Directors, composed of five members. Section 8 of the PD No. 198, as amended, provides that the LWUA may appoint any of its personnel to sit in the Board as its sixth member, with all the rights and privileges appertaining to a regular member of the Board, when such water utility avails of financial assistance from the LWUA and until the indebtedness is fully paid.

The operation of a WD is headed by a general manager appointed by the Board. The general manager, subject to the approval of the Board, has full supervision and control over the maintenance, operation and construction of water supply and wastewater disposal and administrative facilities of the district with full power and authority to exercise management prerogatives.

3

WDs are created for the following purposes:

Acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses within the boundaries of such districts,

Providing, maintaining and operating water collection, treatment and disposal facilities; and

Assuming such other functions and operations incidental to water resource development, utilization and disposal within such districts as are necessary or incidental to said purpose.

In CY 2015, there were 507 operating WDs nationwide. The regional distribution of the operating WDs is shown in Annex A. The names of the chairperson and members of the governing board for each WD including the respective office addresses of the districts are shown in Annex B. The 23 non-operational WDs, those which have ceased operations and those which have been dissolved are disclosed in Annex C.

Guide to users

Included in this Volume of the AFR are the following parts: (I) Introduction; (II) Financial highlights; (III) Financial statements; and (IV) Annexes. The first set of summarized financial data as exhibited in Part III hereof presents the overall combined financial position, results of operation and the changes in equity as well as the cash flows for all WDs which submitted the financial statements components. This is supported by another set of summary financial statements showing financial information by region, then by province and finally by the financial data of the individual WD. The individual financial information of WDs were lifted from the submitted financial statements.

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Part II

Financial Highlights

1.0 Financial condition

As of December 31, 2015, the WDs have a combined total assets of P66.09 billion and total liabilities of P26.45 billion resulting in favorable equity of P39.65 billion. Chart II- 1 shows a stable and strong financial condition of the WDs as their combined assets is more than sufficient to pay their current liabilities when they come due. The debt ratio or the ratio of the total liabilities to the combined total assets of WDs of 40.01 percent in CY 2015 indicates stability.

Chart II-1 Financial Position for 2015

Equity = P39.65 B Assets = P66.09 B Liabilities = P26.45 B
Equity
= P39.65 B
Assets
= P66.09 B
Liabilities
= P26.45 B

1.1 Assets P66.09 billion

Compared to last year’s level of P60.82 billion, the total assets this year amounted to P66.09 billion, increased by P5.27 billion or 8.67 percent.

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The bulk or 57.76 percent of current assets pertain to cash and cash equivalents which amounted to P9.07 billion, showing an increase of P1.56 billion or 20.74 percent from previous year’s balance of P7.51 billion. On the other hand, property, plant and equipment amounting to P45.60 billion comprised the 90.49 percent of the non-current assets of the WDs. The comparative composition of current and non-current assets are presented in Charts II-2 and II-3, respectively.

Chart II-2 Composition of Current Assets

P9.07 B P0.12 B P3.78 B P1.98 B P0.43 B P0.32 B P7.51 B P0.11
P9.07 B
P0.12 B
P3.78 B
P1.98 B
P0.43 B
P0.32 B
P7.51 B
P0.11 B
P3.85 B
P1.84 B
P0.30 B
P0.26 B

2015B P7.51 B P0.11 B P3.85 B P1.84 B P0.30 B P0.26 B 2014 Cash and

2014B P7.51 B P0.11 B P3.85 B P1.84 B P0.30 B P0.26 B 2015 Cash and

Cash and

Short-term

Receivables

Inventories

Prepayments

Others

cash

investments

and deferred

equivalents

charges

Chart II-3 Composition of Non-current Assets

100%

80%

60%

40%

20%

0%

P0.04 B P1.05 B P45.60 B P0.04 B P3.67 B P0.04 B P0.82 B P43.17
P0.04 B
P1.05 B
P45.60 B
P0.04 B
P3.67 B
P0.04 B
P0.82 B
P43.17 B
P0.04 B
P2.89 B

2015B P3.67 B P0.04 B P0.82 B P43.17 B P0.04 B P2.89 B 2014 Long-term Long-term

2014P3.67 B P0.04 B P0.82 B P43.17 B P0.04 B P2.89 B 2015 Long-term Long-term Property,

Long-term

Long-term

Property,

Intangible

Others

receivables

investments

plant and

assets

 

equipment

The top 50 WDs with the biggest amount of total assets are shown in Annex G. The first five (5) WDs are: Davao P5.00 billion; Metro Cebu P3.68 billion; Cagayan de Oro City P2.03 billion; Metro Leyte P1.96 billion; and San Jose del Monte - P1.66 billion. Eight (8) other WDs have total assets of P1 billion to P1.57 billion. The remaining 37 WDs have total assets ranging from P250 million to P970 million.

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1.2 Liabilities P26.45 billion

The recorded liabilities increased slightly this year by P156.20 million or 0.59 percent from the previous year’s level of P26.29 billion. The bulk of increase was noted in contracts payable amounting to P11.50 million or 57.72 percent. Table II-1 shows the comparative composition of liabilities.

Table II-1 Comparative composition of liabilities (in million pesos)

Particulars

Amount

Increase/(Decrease)

2015

2014

Amount

Percent

Current liabilities Trade and non-trade payables Others

5,436.99

4,745.09

691.90

14.58

4,769.90

4,107.60

662.30

16.12

667.08

637.49

29.60

4.64

Non-current liabilities Notes payable Mortgage payable Bonds payable Loans and advances payable Contracts payable Deferred credits Others

21,008.88

21,544.57

(535.69)

(2.49)

5.22

4.58

0.63

13.79

3.45

4.48

(1.02)

(22.84)

0.12

41.05

(40.92)

(99.70)

18,405.70

19,139.45

(733.75)

(3.83)

31.43

19.93

11.50

57.72

811.47

796.09

15.38

1.93

1,751.48

1,538.99

212.49

13.81

Total liabilities

26,445.87

26,289.66

156.20

0.59

Of the total liabilities, 20.56 percent or P5.44 billion are current liabilities while 79.44 percent or P21.01 billion pertains to non-current liabilities. The bulk of current liabilities amounting to P4.77 billion or 87.73 percent came from trade and non-trade payables. The significant portion of non-current liabilities pertains to loans and advances payable amounting to P18.41 billion or 87.61 percent which are mostly loans and advances from the Local Water Utilities Administration (LWUA). The borrowings from LWUA were incurred pursuant to the guidelines issued by the Department of Finance to implement Executive Order No. 279 relative to the financing of WDs operations. The graphical comparative composition of current and non- current liabilities incurred by WDs is shown in Chart II-4.

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Chart II-4 Comparison of Current and Non-Current Liabilities

Current liabilities = P5.44 B or 20.56% Non-current liabilities = P21.01 B or 79.44%
Current liabilities
= P5.44 B
or 20.56%
Non-current
liabilities
= P21.01 B
or 79.44%

The top 50 WDs ranked by total liabilities are presented in Annex H. The first five (5) WDs that incurred the biggest amount of liabilities are: Metro Cebu P1.15 billion; Metro Roxas - P1.02 billion; Butuan City - P930.13 million; Metro Leyte P908.13 million; and Cagayan de Oro City - P841.93 million. The remaining 45 WDs incurred total liabilities of P107 million to P740 million.

The combined financial position of the water districts reflects a favorable quick ratio or the acid test ratio (dividing the sum of cash and cash equivalents, short term investments, and receivables by the total current liabilities), which indicates that the water districts have enough short term current assets to cover its current liabilities without selling its inventories. A quick ratio of greater than one indicates a reasonable level of liquidity. Chart II-5 shows the graphical comparative presentation of quick ratios in CYs 2015 and 2014, showing a 0.03 decrease in liquidity ratio from 2.42 in CY 2014 to 2.39 in CY 2015.

Chart II-5 Comparative Quick Ratios

2014 to 2.39 in CY 2015. Chart II-5 Comparative Quick Ratios Quick ratio Current liabilities Cash

Quick ratio

Current liabilities

Cash and cash equivalents, Short-term investments, Receivables, net

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2015

equivalents, Short-term investments, Receivables, net 8 2015 2014 2.39 % 2.42 % P5.44 B P4.75 B

2014

2.39 % 2.42 % P5.44 B P4.75 B P12.97 B P11.47 B
2.39
%
2.42
%
P5.44 B
P4.75 B
P12.97 B
P11.47 B

The collective debt ratio of WDs for CY 2015 at 40.01 percent shows the portion of the WDs assets that were acquired through credit. Comparison of the ratios between CYs 2015 and CY 2014 shows improvement of 3.21 percentage points, as the debt ratio of 40.01 percent in 2015 is lower compared to the 43.22 percent in 2014. The debt ratio measures the extent to which borrowed funds have been used to finance the WDs operations. Chart II-6 provides the graphical presentation of the comparative debt ratio for CYs 2015 and 2014 showing improved financial stability of water districts.

Chart II-6 Comparative Debt Ratios

70.00

60.00

50.00

40.00

30.00

20.00

10.00

-

P66.09 B P60.82 B P26.45 B P26.29 B
P66.09 B
P60.82 B
P26.45 B
P26.29 B

Total assets

Total liabilities

2015P60.82 B P26.45 B P26.29 B Total assets Total liabilities 2014   2015 2014 Decrease Debt

2014B P26.45 B P26.29 B Total assets Total liabilities 2015   2015 2014 Decrease Debt ratio

 

2015

2014

Decrease

Debt ratio

40.01%

43.22%

(3.21%)

1.3 Equity P39.65 billion

The over-all combined equity of WDs amounting to P39.65 billion increased by P5.12 billion or 14.82 percent from the 2014 level of P34.53 billion. The top five (5) WDs that contributed the highest amount in the over-all combined equity of the WDs are: Davao P4.36 billion; Metro Cebu P 2.53 billion; Dasmariñas P1.30 billion; Cagayan De Oro City P1.18 billion; and Metro Leyte P1.05 billion. The top 50 water districts ranked by total equity are shown under Annex I.

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2.0 Financial performance

For the year ended December 31, 2015, the WDs realized a net income after tax of P5.67 billion exceeding last year’s figure of P4.31 billion by P1.36 billion or 31.58 percent. Combined gross revenue for CY 2015 reached P27.04 billion while combined expenses reached P21.36 billion. The WDs incurred income tax expense of P5.43 million for the year.

2.1 Income/Revenue P27.04 billion

This year’s total income amounted to P27.04 billion which is 7.56 percent higher than the CY 2014 total income of P25.14 billion. Business and service income accounted for the highest contribution to WDs revenue at P26.58 billion equivalent to 98.29 percent of the combined gross income. The comparative composition of income for CYs 2015 and 2014 is shown in Table II-2.

Table II-2 Comparative composition of income/revenue (in million pesos)

Particulars

Amount

Increase/(Decrease)

2015

2014

Amount

Percent

Business and service income Gains and premiums Others

26,577.16

24,774.22

1,802.94

7.28

6.79

4.94

1.84

37.25

454.37

358.43

95.94

26.77

Total income/revenue

27,038.31

25,137.59

1,900.72

7.56

For CY 2015, WDs did not receive any subsidy from other government agencies. In CY 2014, the subsidy received by WDs from other government agencies amounted to P1.31 million.

The Davao Water District ranked first with the biggest gross income generated for the year amounting to P2.02 billion. Also included in the top five (5) WDs that earned the biggest income are: Metro Cebu - P1.66 billion; Cagayan de Oro City P960.63 million; Dasmariñas P745.49 million and San Jose del Monte P680.72 million. The top 50 grossers that generated 63.45 percent or P17.16 billion of the total income of the WDs are presented in Annex J.

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2.2 Expenses P21.36 billion

Total expenses of WDs for CY 2015 totalled P21.36 billion exceeding last year’s level of P20.83 billion by P534.57 million or 2.57 percent. Total expenses before taxes consist of personnel services (PS); maintenance and other operating expenses (MOOE); financial expenses (FE); and other expenses (OE) as shown in Chart II-7.

Income taxes for the year posted at P5.43 million or 174.96 percent higher than the CY 2014 total of P1.98 million.

Chart II-7 Composition of Expenses

FE = P1.30 B or 6.10% OE = P0.04 B or 0.20% PS = P7.44
FE
= P1.30 B
or 6.10%
OE
= P0.04 B
or 0.20%
PS
= P7.44 B
or 34.85%
MOOE
= P12.57 B
or 58.84%

The top five (5) WDs that incurred the biggest amount of expenses before income tax are the following: Metro Cebu P1.37 billion; Davao P1.17 billion; Cagayan De Oro City P672.00 million; Dasmariñas P576.43 million; and San Jose Del Monte P493.22 million.

The top 50 water districts that incurred substantial expenditures before tax with aggregate amount of P13.19 billion or 61.76 percent of the total expenses before income tax are shown in Annex K.

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2.3

Net Income After Tax P5.67 billion

The top five (5) WDs with the biggest amount of income after tax are: Davao P854.47 million; Metro Cebu P294.23 million; Cagayan De Oro City P288.64 million; San Jose Del Monte P187.50 million; and Zamboanga P181.21 million. Annex L presents the top 50 water districts in terms of net income generated during the year.

2.4 Return on Assets Ratio

The financial condition and performance of WDs for CY 2015 and 2014 showed a lower return on asset (ROA) ratio from 8.59 percent in 2014 to 7.09 percent in 2015. The decrease indicates a decline in the efficient utilization of the assets to generate profits. Chart II-8 shows the graphical comparative return on assets ratio.

Chart II-8 Comparative Return on Assets

Income before subsidy and taxes

Total assets

Return on assets

Changes in equity

P5.68 B P4.31 B P66.09 B P60.82 B 8.59 % 7.09 % - 40.00 80.00
P5.68 B
P4.31 B
P66.09
B
P60.82 B
8.59
%
7.09
%
-
40.00
80.00

2015B P66.09 B P60.82 B 8.59 % 7.09 % - 40.00 80.00 2014 Total equity of

2014P66.09 B P60.82 B 8.59 % 7.09 % - 40.00 80.00 2015 Total equity of WDs

Total equity of WDs for the year is posted at P39.66 billion, higher by P5.12 billion or 14.82 percent compared to CY 2014 level of P34.54 billion.

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The composition of equity is shown under Chart II-9.

Chart II-9 Composition of Equity

Equity

under Chart II-9. Chart II-9 Composition of Equity Equity - 5.00 10.00 15.00 20.00 25.00 30.00

-

5.00

10.00

15.00

20.00

25.00

30.00

Cash flows

The ending balance of cash and cash equivalents as of December 31, 2015 amounted to P8.86 billion increased by P1.43 billion or 19.32 percent compared to the previous year’s total of P7.43 billion.

Chart II-10 shows the comparative cash flows for operating, financing, and investing activities of the water districts for CYs 2015 and 2014.

Chart II-10 Comparative Cash Flow Activities

10.00

8.00

6.00

4.00

2.00

-

(2.00)

(4.00)

(6.00)

(8.00)

P7.58 B P5.85 B P(2.71) B P(4.02) B P(1.55) B P(2.13) B
P7.58 B
P5.85 B
P(2.71) B
P(4.02) B
P(1.55) B
P(2.13) B

2014

13

2015

Net cash provided from operating activities for CY 2015 reached P7.58 billion which is P1.72 billion or 29.44 percent higher compared with the previous year level of P5.85 billion. The net cash provided resulted from the cash generation of P28.14 billion over the P20.56 billion disbursements relative to WDs operating activities.

In CY 2015, total disbursements for investing activities at P4.88 billion exceeded the cash generated of P864.17 million, thus, resulted to a negative net cash outflow of P4.02 billion. Compared to CY 2014, the net cash provided by investing activities decreased by (P1.30 billion) or 48.07 percent.

The combined cash disbursements for financing activities at P2.98 billion that surpassed the cash generation of P846.72 million resulted in the decrease of the net cash provided by financing activities of (P2.13 billion). Said amount is higher by 37.20 percent or P577.34 million as compared to the net cash provided by financing activities of (P1.55 billion) in CY 2014.

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Part III

Summary Financial Statements

The financial statements in the succeeding pages pertain to the summarized financial data from the combined balance sheet, income statements, statements of changes in equity, cash flow statements, and notes to financial statements of 488 WDs. The combined financial statements of WDs were further summarized by region, by province, and by specific water districts. The details of which are included in this Volume of the AFR.

The overall balance sheet presents the total financial position of the WDs as at December 31, 2015 while the income statement shows their entire financial performance for the year ended December 31, 2015. The statement of changes in equity provides information on all the changes in equity. The cash flow statement imparts information on the cash flows from operating, investing and financing activities.

The ending balances as at CY 2015 of cash and cash equivalents and equity accounts in the balance sheet vis-à-vis the corresponding year-end balances shown in the cash flow statement and statement of changes in equity have discrepancies of P210.94 million and P10.00 million, respectively. The details of said discrepancies are presented in Annex D for cash and cash equivalents account and Annex E for equity account.

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Republic of the Philippines Water Districts Summary Balance Sheet December 31, 2015 (With corresponding figures for 2014) In thousand pesos

 

2015

2014

Assets

 

Current assets

15,701,999

13,868,264

Cash and cash equivalents Short-term investments Receivables, net Inventories, net Prepayments and deferred charges Others Non-current assets

9,070,252

7,512,078

121,369

111,061

3,781,347

3,845,831

1,977,312

1,838,113

429,902

303,589

321,817

257,592

50,392,828

46,952,802

Long-term receivables, net Long-term investments, net Property, plant and equipment, net Intangible assets Others

36,798

38,262

1,053,148

818,302

45,600,480

43,172,775

35,623

35,483

3,666,779

2,887,979

Total assets

66,094,827

60,821,066

Liabilities and equity Current liabilities

 

5,436,987

4,745,090

Trade and non-trade payables Others Non-current liabilities

4,769,903

4,107,603

667,084

637,486

21,008,879

21,544,572

Notes payable Mortgage payable Bonds payable Loans and advances payable Contracts payable Deferred credits Others Liabilities

5,215

4,583

3,454

4,476

124

41,048

18,405,698

19,139,452

31,431

19,928

811,473

796,091

1,751,484

1,538,994

26,445,865

26,289,662

Equity

39,648,964

34,531,404

Total liabilities and equity

66,094,830

60,821,066

Difference between totals and sum of components is due to rounding off.

   

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Republic of the Philippines Water Districts Summary Income Statement For the year ended December 31, 2015 (With corresponding figures for 2014) In thousand pesos

 

2015

2014

Income

27,038,315

25,137,595

Business and service income Gains and premiums Others

 

26,577,162

24,774,223

6,786

4,945

454,367

358,427

Expenses

21,360,651

20,826,080

Personnel services Maintenance and other operating expenses Financial expenses Others

7,444,508

7,209,462

12,569,472

11,914,231

1,303,253

1,661,565

43,417

40,822

Net income (loss) before subsidy

5,677,664

4,311,514

Subsidy income

-

1,312

Net income (loss) before tax

 

5,677,664

4,312,826

Income tax expense (benefit)

5,434

1,976

Net income (loss) after tax

5,672,230

4,310,850

Difference between totals and sum of components is due to rounding off.

   

17

Republic of the Philippines Water Districts Summary Statement of Changes in Equity For the year ended December 31, 2015 (With corresponding figures for 2014) In thousand pesos

 

2015

2014

Government equity Balance, beginning of period Additions (deductions)

   

10,508,445

9,650,203

1,207,549

858,769

Balance, end of period

 

11,715,993

10,508,971

Donated capital Balance, beginning of period Additions (deductions)

 

1,818,205

1,624,089

71,804

145,066

Balance, end of period

 

1,890,009

1,769,156

Share premium Balance, beginning of period Additions (deductions)

 

15,933

15,933

3,507

-

Balance, end of period

 

19,440

15,933

Appraisal capital Balance, beginning of period Additions (deductions)

 

201,560

201,552

27

9

Balance, end of period

 

201,588

201,560

Reserved/Restricted capital Balance, beginning of period Additions (deductions)

 

558,772

434,105

(6,699)

124,667

Balance, end of period

 

552,073

558,772

Retained earnings Balance, beginning of period Additions (deductions)

 

21,467,956

18,329,839

3,811,901

3,156,342

Balance, end of period

 

25,279,857

21,486,181

Total equity

39,658,960

34,540,573

Difference between totals and sum of components is due to rounding off.

   

18

Republic of the Philippines Water Districts Summary Statement of Cash Flows For the year ended December 31, 2015 (With corresponding figures for 2014) In thousand pesos

 

2015

2014

Cash flows from operating activities Cash inflows Cash outflows

 

28,137,336

26,043,676

20,561,477

20,190,863

Net cash provided by (used in) operating activities

7,575,859

5,852,813

Cash flows from investing activities Cash inflows Cash outflows

 

864,172

363,670

4,883,233

3,078,023

Net cash provided by (used in) investing activities

(4,019,060)

(2,714,353)

Cash flows from financing activities Cash inflows Cash outflows

 

846,720

1,053,498

2,976,166

2,605,603

Net cash provided by (used in) financing activities

(2,129,446)

(1,552,105)

Net increase (decrease) in cash and cash equivalents

1,427,352

1,586,355

Cash and cash equivalents, beginning of period

7,431,959

5,838,665

Cash and cash equivalents, end of period

8,859,311

7,425,020

Difference between totals and sum of components is due to rounding off.

   

19

Notes to Financial Statements

1. Report Coverage/Limitation

Coverage/Limitation

Statements 1. Report Coverage/Limitation Coverage/Limitation For CY 2015, the financial statements of 488 water districts

For CY 2015, the financial statements of 488 water districts (WDs) or 96.25 percent of the total 507 operating WDs are herein summarized. Of the financial reports submitted and included in the summarization, 57.79 percent or 282 financial statements (FS) were audited while 206 WDs or 42.21 percent are unaudited. The list of WDs not included in the summarization of FS is disclosed in Annex C.

Currency of presentation

All amounts presented in this report are expressed in Philippine pesos, rounded off to the nearest thousand.

2. Summary of significant accounting policies

Bases in the preparation of financial statements

In line with the commitment of the Commission on Audit to adhere to International Financial Reporting Standards, WDs, like other GOCCs, are encouraged to adopt the Philippine Financial Reporting Standards (PFRS). Corollary thereto, they observe the reportorial requirements of regulatory agencies such as the CPS, an accounting system prescribed by the LWUA. With the implementation of the New Government Accounting System (NGAS) under COA Circular No. 2004-002, dated April 29, 2004, WDs were required to convert their accounts under the NGAS. Subsequently, LWUA issued Memorandum Circular No. 003-008 dated June 16, 2008 prescribing the use of the CPS- NGAS Modified Chart of Accounts for use of WDs to facilitate the implementation of a unified accounting system that conforms to both NGAS and LWUA’s regulatory and reportorial requirements. Thus, the WDs adopt the CPS, NGAS and PFRS in the preparation of their financial statements.

Significant accounting judgments and estimates

The preparation of the financial statements in accordance with the prescribed accounting principles/standards require the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. It also requires management to exercise its judgment in applying the WDs’ accounting policies. Future events may occur which will cause the assumptions used in arriving at the estimates to change. The effects of any change in estimates are reflected in the financial statements as they become reasonably determinable.

20

Cash and cash equivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments with original maturities of three (3) months or less from dates of purchase.

Receivables and allowance for probable losses

Receivables are stated at face value less allowance for uncollectible accounts. Allowance for probable losses is set up at a level to provide for potential receivables, the collection of which is considered remote. The level of this allowance is based on management’s evaluation on past collection experience and other factors that may affect collectability. Periodic evaluation of accounts is conducted to identify those requiring sufficient level of allowance and determine proper level thereof.

Inventories

Inventories are maintained using the perpetual inventory system and stated at cost using the moving average method required under existing COA regulations.

Property, plant and equipment

Property, plant and equipment, except land are stated at cost less accumulated depreciation. Costs include expenditures directly attributable to its acquisition. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, when it is probable that the future economic benefits therefrom can be measured reliably. All other costs of repairs and maintenance are disclosed in the income statement during the financial period in which these costs are incurred.

Recognition of income and expenses

Income is recognized on accrual basis to the extent that it is probable that the economic benefits will flow into the WD and its reliability of measurement. Expenses are likewise recorded once incurred in line with the accrual basis of accounting.

Subsequent events

Any post-year event that provides additional information about the WDs’ financial position at the balance sheet date (adjusting event) is reflected in the financial statements. Post-year events that are non-adjusting are disclosed in the individual notes to financial statements, when material.

 

2015

2014

3.

Cash and cash equivalents

9,070,252

7,512,078

Cash includes cash on hand and in bank (under current and savings deposits). Cash equivalents are short-term and highly liquid investments with maturities of three (3) months or less and are determined to be readily available to a known amount of cash and

21

subject to an insignificant risk of change/s in value. The financial reports of 488 WDs included in the summarization disclosed ending balances of cash and cash equivalents per statement of cash flows that are different from the same account balances as presented in the respective balance sheets of eleven (11) WDs by P210.94 million. Annex D details the WDs with such variances in the said account.

2015

2014

4. Receivables, net of allowance for doubtful accounts

Current

3,781,347

3,845,831

Non-current

36,798

38,262

Receivables are stated at face value less an allowance for doubtful/uncollectible amounts and are classified into current and non-current assets. Not all WDs provide an allowance for doubtful accounts but for those that do so, allowance for doubtful accounts is computed at a predetermined rate based on total accounts receivable outstanding at the end of each month or year.

 

2015

2014

5. Inventories, net

1,977,312

1,838,113

Inventories pertain to various materials for use in the operation of WDs and are presented at cost per existing regulation. Inventories are stated at face value less allowance for obsolescence. The allowance for obsolescence is determined based on the WDs’ policy.

 

2015

2014

6. Property, plant and equipment, net

45,600,480

43,172,775

Property, plant and equipment (PPE) are carried at cost less accumulated depreciation. Depreciation on assets is calculated using the straight-line method allocated over the estimated useful lives of the assets after deducting the residual value.

 

2015

2014

7. Non-current liabilities

21,008,879

21,544,572

Non-current liabilities pertain mostly to long-term debt granted by LWUA to various WDs.

22

 

2015

2014

8.

Total equity

39,648,964

34,531,404

The equity of WDs is composed of government equity, donated capital, share premiums, appraisal capital, restricted/reserved capital and retained earnings. The WDs with variances in their equity accounts totaling P10.00 million per Balance Sheet and Statement of Changes in Equity are disclosed in Annex E.

9. Income and Expenses

WDs adopt the accrual method of accounting for income and expenses, thus, all income and expenses are recognized when earned and incurred, respectively.

 

2015

2014

Income

27,038,315

25,137,595

The account includes revenues derived from business and service income, gains and premiums and other income.

 

2015

2014

Expenses

21,360,651

20,826,080

Expenses encompass personnel services, maintenance and other operating expenses, financial expenses and other expenses.

23

LUZON VISAYAS MINDANAO
LUZON
VISAYAS
MINDANAO

WATER DISTRICTS BY REGION Summary Balance Sheet December 31, 2015 (With corresponding figures for 2014) In thousand pesos

TOTAL

CAR

I

II

III

 

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Assets

Current assets

15,701,999

13,868,264

371,698

297,226

772,882

601,043

347,882

283,818

2,392,079

2,126,962

Cash and cash equivalents Short-term investments Receivables, net Inventories, net Prepayments and deferred charges Others

9,070,252

7,512,078

136,070

115,287

503,501

355,893

184,304

137,153

1,369,363

1,152,466

121,369

111,061

98,930

53,124

-

-

-

-

3,828

4,157

3,781,347

3,845,831

54,559

58,452

146,870

138,647

106,102

85,347

631,346

619,159

1,977,312

1,838,113

75,462

62,478

103,106

87,799

54,040

57,260

238,538

225,476

429,902

303,589

3,700

4,384

16,687

17,073

3,435

4,057

57,415

60,262

321,817

257,592

2,978

3,502

2,718

1,631

-

-

91,589

65,442

Non-current assets

50,392,828

46,952,802

1,490,946

1,505,260

2,900,639

2,861,531

1,602,133

1,516,700

9,629,585

8,826,546

Long-term receivables, net Long-term investments, net Property, plant and equipment, net Intangible assets Others

36,798

38,262

-

-

-

-

-

-

13,654

13,634

1,053,148

818,302

7,279

21,800

18,274

17,340

-

-

206,731

186,464

45,600,480

43,172,775

1,463,128

1,461,847

2,663,846

2,651,956

1,484,701

1,414,880

9,300,857

8,529,745

35,623

35,483

-

-

2,018

2,385

6,740

3,607

2,394

4,582

3,666,779

2,887,979

20,539

21,613

216,501

189,850

110,691

98,213

105,949

92,121

Total assets

66,094,827

60,821,066

1,862,644

1,802,486

3,673,521

3,462,574

1,950,014

1,800,518

12,021,664

10,953,508

Liabilities and equity

Current liabilities

5,436,987

4,745,090

77,253

75,407

187,624

168,956

280,626

251,519

1,096,477

1,009,587

Trade and non-trade payables Others

4,769,903

4,107,603

58,921

55,936

112,604

102,610

252,250

225,219

971,278

867,521

667,084

637,486

18,332

19,470

75,020

66,346

28,376

26,300

125,199

142,066

Non-current liabilities

21,008,879

21,544,572

544,281

630,302

1,219,195

1,215,887

906,112

929,701

3,432,683

3,518,292

Notes payable Mortgage payable Bonds payable Loans and advances payable Contracts payable Deferred credits Others

5,215

4,583

-

-

-

-

-

-

5,215

4,583

3,454

4,476

-

-

-

-

-

-

923

1,490

124

41,048

-

-

-

-

-

-

-

40,924

18,405,698

19,139,452

538,394

626,157

1,096,077

1,099,565

878,859

906,071

3,198,156

3,342,919

31,431

19,928

-

-

-

-

-

-

5,621

1,367

811,473

796,091

5,887

3,895

123,117

116,322

27,252

23,630

101,512

88,714

1,751,484

1,538,994

-

250

1

-

-

-

121,256

38,295

Liabilities

26,445,865

26,289,662

621,534

705,709

1,406,819

1,384,843

1,186,738

1,181,220

4,529,160

4,527,879

Equity

39,648,964

34,531,404

1,241,110

1,096,778

2,266,702

2,077,731

763,276

619,298

7,492,504

6,425,629

Total liabilities and equity

66,094,830

60,821,066

1,862,644

1,802,486

3,673,521

3,462,574

1,950,014

1,800,518

12,021,664

10,953,508

Difference between totals and sum of components is due to rounding off.

25

WATER DISTRICTS BY REGION Summary Balance Sheet December 31, 2015 (With corresponding figures for 2014) In thousand pesos

IV-A

IV-B

V

VI

VII

 

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Assets

Current assets

2,279,239

1,737,193

256,863

196,377

985,921

876,334

718,577

623,782

1,828,692

1,660,273

Cash and cash equivalents Short-term investments Receivables, net Inventories, net Prepayments and deferred charges Others

1,206,763

769,125

150,413

108,617

593,330

507,876

368,791

291,821

1,183,370

1,055,936

4,295

39,490

-

-

-

-

-

-

-

-

617,378

552,419

42,473

36,192

234,932

233,253

230,902

223,605

338,915

346,324

262,295

226,807

63,287

50,942

129,990

107,276

64,258

55,341

242,430

234,978

35,518

28,330

273

205

19,558

21,036

40,030

38,846

63,978

23,035

152,990

121,022

417

421

8,110

6,892

14,596

14,169

-

-

Non-current assets

7,495,381

7,040,264

1,137,990

1,130,939

2,762,789

2,624,235

2,839,312

2,835,587

2,683,891

2,702,854

Long-term receivables, net Long-term investments, net Property, plant and equipment, net Intangible assets Others

11,648

21,353

4,037

3,275

-

-

-

-

-

-

389,757

236,926

16,216

17,033

180,409

145,106

25,006

24,254

27,815

29,007

6,930,681

6,671,010

1,102,283

1,092,870

2,541,774

2,438,872

2,807,567

2,804,429

2,331,023

2,295,373

13,460

12,950

-

-

28

380

-

-

-

-

149,836

98,026

15,454

17,761

40,577

39,876

6,739

6,904

325,053

378,474

Total assets

9,774,620

8,777,457

1,394,853

1,327,316

3,748,709

3,500,569

3,557,889

3,459,369

4,512,583

4,363,127

Liabilities and equity

Current liabilities

693,570

542,061

67,260

49,398

364,037

282,158

433,665

373,948

568,998

509,261

Trade and non-trade payables Others

603,441

438,440

30,163

24,122

341,713

269,006

410,734

355,975

552,166

494,686

90,129

103,621

37,097

25,276

22,324

13,152

22,931

17,973

16,832

14,574

Non-current liabilities

2,283,066

2,230,560

558,122

603,488

1,405,514

1,440,284

2,151,787

2,242,776

948,198

988,824

Notes payable Mortgage payable Bonds payable Loans and advances payable Contracts payable Deferred credits Others

-

-

-

-

-

-

-

-

-

-

2,531

2,986

-

-

-

-

-

-

-

-

111

111

-

-

-

-

-

-

-

-

1,848,548

1,971,076

556,122

602,232

1,352,277

1,385,132

1,823,275

1,872,398

844,989

891,614

1,364

40

-

-

-

-

-

-

-

-

80,615

95,008

579

238

50,755

48,875

88,606

81,445

102,342

95,884

349,897

161,338

1,421

1,018

2,482

6,277

239,906

288,932

868

1,326

Liabilities

2,976,636

2,772,621

625,382

652,886

1,769,551

1,722,443

2,585,453

2,616,724

1,517,196

1,498,085

Equity

6,797,984

6,004,836

769,471

674,430

1,979,159

1,778,126

972,437

842,646

2,995,387

2,865,042

Total liabilities and equity

9,774,620

8,777,457

1,394,853

1,327,316

3,748,709

3,500,569

3,557,889

3,459,369

4,512,583

4,363,127

Difference between totals and sum of components is due to rounding off.

26

WATER DISTRICTS BY REGION Summary Balance Sheet December 31, 2015 (With corresponding figures for 2014) In thousand pesos

VIII

IX

X

XI

XII

 

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

Assets

Current assets

594,552

581,055

1,046,109

860,225

1,022,259

819,915

915,588

1,054,577

780,565

691,657

Cash and cash equivalents Short-term investments Receivables, net Inventories, net Prepayments and deferred charges Others

294,722

298,147

636,893

565,013

678,809

399,390

491,638

476,225

516,758

433,739

10,000

10,000

205

205

3,160

3,160

26

-

-

-

202,251

187,098

155,342

138,425

221,356

278,535

163,507

341,481

166,135

164,739

70,747

62,373

151,318

151,282

94,516

96,038

208,821

196,187

90,684

87,640

16,831

23,437

102,297

4,946

4,729

22,878

34,661

25,565

1,399

2,352

-

-

53

355

19,688

19,913

16,935

15,119

5,589

3,187

Non-current assets

2,635,097

2,561,428

1,496,154

1,470,607

2,351,871

2,166,949

5,244,079

3,875,199

1,942,157

1,767,396

Long-term receivables, net Long-term investments, net Property, plant and equipment, net Intangible assets Others

-

-

-

-

-

-

7,460

-

-

-

-

-

10,535

1,060

5,037

4,662

51,911

51,806

34,800

13,134

2,605,723

2,515,447

1,466,401

1,430,243

2,095,874

2,078,981

2,929,722

2,160,064

1,907,357

1,754,262

550

979

90

-

9,030

9,042

-

152

-

-

28,825

45,002

19,128

39,304

241,929

74,263

2,254,986

1,663,177

-

-

Total assets

3,229,650

3,142,483

2,542,263

2,330,832

3,374,130

2,986,864

6,159,667

4,929,776

2,722,721

2,459,053

Liabilities and equity

Current liabilities

150,410

178,215

203,408

196,939

289,436

226,610

218,119

218,956

253,815

179,874

Trade and non-trade payables Others

99,801

97,382

198,437

193,976

231,441

199,709

181,472

188,255

236,815

163,509

50,609

80,833

4,971

2,963

57,995

26,901

36,647

30,701

17,001

16,364

Non-current liabilities

1,546,509

1,469,298

819,434

851,527

1,148,271

1,280,854

707,532

386,310

821,702

908,835

Notes payable Mortgage payable Bonds payable Loans and advances payable Contracts payable Deferred credits Others

- -

-

-

-

-

-

-

-

-

- -

-

-

-

-

-

-

-

-

- -

-

-

-

-

13

13

-

-

1,506,030

1,433,046

699,157

732,237

1,110,339

1,216,167

666,847

365,571

768,503

880,985

-

-

23,383

17,458

1,063

1,063

-

-

-

-

40,480

36,253

72,993

70,642

36,859

52,354

835

684

33,958

26,658

-

-

23,901

31,189

9

11,269

39,837

20,042

19,241

1,192

Liabilities

1,696,919

1,647,513

1,022,842

1,048,466

1,437,707

1,507,464

925,651

605,266

1,075,517

1,088,708

Equity

1,532,730

1,494,970

1,519,421

1,282,366

1,936,423

1,479,399

5,234,016

4,324,510

1,647,204

1,370,345

Total liabilities and equity

3,229,650

3,142,483

2,542,263

2,330,832

3,374,130

2,986,864

6,159,667

4,929,776

2,722,721

2,459,053

Difference between totals and sum of components is due to rounding off.

27

WATER DISTRICTS BY REGION Summary Balance Sheet December 31, 2015 (With corresponding figures for 2014) In thousand pesos

   

XIII

XVI

ARMM

 

2015

2014

2015

2014

2015

2014

Assets

Current assets

528,591

676,790

679,671

612,034

180,831

169,003

Cash and cash equivalents Short-term investments Receivables, net Inventories, net Prepayments and deferred charges Others

331,550

484,917

415,625

353,321

8,352

7,152

926

926

-

-

-

-

97,658

88,768

204,431

197,851

167,189

155,536

69,050

75,799

55,492

55,156

3,277

5,281

26,434

23,487

1,182

2,900

1,775

796

2,973

2,893

2,941

2,806

239

239

Non-current assets

2,239,735

2,192,878

1,684,893

1,634,184

256,177

240,246

Long-term receivables, net Long-term investments, net Property, plant and equipment, net Intangible assets Others

-

-

-

-

-

-

13,090

12,309

66,287

57,400

-

-

2,103,378

2,059,938

1,610,041

1,572,667

256,124

240,193

-

-

1,314

1,406

-

-

123,267

120,631

7,252

2,711

53

53

Total assets

2,768,326

2,869,668

2,364,564

2,246,219

437,008

409,248

Liabilities and equity

Current liabilities

186,937

167,602

135,230

152,176

230,121

162,423

Trade and non-trade payables Others

186,937

167,602

124,853

122,319

176,877

141,336

-

-

10,377

29,858

53,243

21,087

Non-current liabilities

1,407,644

1,667,984

1,031,173

1,042,970

77,655

136,681

Notes payable Mortgage payable Bonds payable Loans and advances payable Contracts payable Deferred credits Others

- -

-