EDC PR 2016 (FS section)

Financial Statement
c.
A numerical reconciliation between provision for income tax and the product of accounting
income multiplied by the tax rates of 10% or 30%, as applicable, follows:
2016 2015 2014
Income before income tax ₱11,389,506,296 ₱8,740,045,384 ₱13,040,598,429
Income tax at statutory tax rates
(10%/30%) 2,790,478,198 2,268,550,840 2,415,436,620
Adjustments for:
Dividend income (1,144,680,501) (1,257,259,851) (842,386,620)
Unrecognized deferred tax asset
on NOLCO 278,440,393 106,389,828 153,830,468
Non-deductible provisions/
(non-taxable recovery) - net (150,706,455) (75,486,865) (26,984,160)
Income tax holiday incentives (107,593,669) (160,692,221) (381,507,362)
Translation adjustment on
nonmonetary assets and
liabilities 73,990,301 – –
Interest income - net of final tax (21,669,820) (21,752,126) (11,039,108)
Non-deductible interest expense 6,852,043 6,549,306 2,982,989
Movement of temporary
differences reversing during
income tax holiday (3,855,087) 38,164,441 (5,693,868)
Non-taxable/non-deductible
foreign exchange loss
(gains) on ROP bonds (183,382) – 38,317,625
Foregone itemized deduction – 156,902,618 –
Optional standard deduction – (156,243,744) –
Effect of Renewable Energy
Law – 10,079,189 –
Unrecognized deferred tax asset
on provision for impairment
loss – (4,812,664) (172,446,259)
Others (47,148,285) (29,715,354) 52,079,076
Provision for income tax ₱1,673,923,736 ₱880,673,397 ₱1,222,589,401
The 10% statutory rate applies to the relevant renewable energy operations covered by the RE
Law, while the 30% applies, in general, to the other activities.
d.
e.
On February 14, 2013, BGI was granted with an income tax holiday (ITH) incentive by the
Board of Investments (BOI) covering its 130-MW BMGPP complex. Subject to certain
conditions, BGI is entitled to income tax holiday for seven years from July 2013 or date of
commissioning of the power plants, whichever is earlier. BGI does not recognize deferred tax
assets and deferred tax liabilities on temporary differences for its registered activities that are
expected to reverse during ITH period.
On February 12, 2014, the BOI approved the ITH registration of the Nasulo Power Plant under
the Renewable Energy Act of 2008 (RA 9513) effective for 7-year period beginning in
January 2016 or date of commissioning, whichever is earlier. While the Nasulo power plant
has a capacity of 49.4 MW, the ITH shall be limited only to the revenues derived from the sale
of 30 MW.
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