2014 Financial Statement

EDC 2014 Performance Report
Tax credit certificates (TCCs)
In April and June 2010, ₱1,638.9 million TCCs were issued by the BIR to the Parent Company
with respect to its input VAT claims on Build-Operate-Transfer (BOT) fees from 1998 and 1999
amounting to ₱1,894.7 million. Such TCCs shall be utilized over a period of five years starting in
2011 to 2015 with a cap of ₱300.0 million per year, except in 2015 where the remaining balance
may be fully applied. The remaining balance of input VAT claims of ₱255.8 million, which was
disallowed by the BIR, was written off in 2010.
On August 17, 2012, BIR issued TCC to the Parent Company amounting to ₱26.5 million for the
input VAT claims covering the period from January 1 to March 31, 2010. In 2013, BIR issued
TCC to the Parent Company amounting to ₱212.0 million, ₱152.3 million and ₱96.4 million
representing input VAT claims for 2009, 2010 and first quarter of 2011, respectively. GCGI
likewise received TCC in 2013 amounting to ₱27.6 million pertaining to its 2010 input VAT claim.
In 2014, BIR also issued TCC to the Parent Company amounting to ₱381.7 million and
₱183.0 million, representing input VAT claims covering the period April 1 to December 31, 2011
and January 1 to June 30, 2012, respectively. GCGI similarly received in 2014 TCC amounting to
₱31.0 million for the input VAT claims covering year 2011 and January 1 to June 30, 2012.
In 2014 and 2013, the Parent Company utilized its TCCs amounting to ₱32.2 million and
₱64.6 million, respectively, for payment of DST and various taxes. GCGI, on the other hand,
utilized its TCCs amounting ₱14.5 million and ₱27.6 million for income tax payments for the
years ended 2014 and 2013, respectively.
The Parent Company classified a portion of its TCCs as current assets amounting to ₱44.7 million;
and for GCGI amounting to ₱16.5 million. These are expected to be utilized for payment of
various taxes within twelve months.
TCCs that remain unutilized after five years from the date of original issuance are still valid
provided that these are duly revalidated by the BIR within the period allowed by law.
Prepaid Expenses
In connection with the installation of Burgos Wind Project’s wind turbines and related
transmission towers, the Company entered into uniform land lease agreements and contracts of
easement of right of way, respectively, with various private landowners. The term of the land lease
agreement starts from the execution date of the contract and ends after 25 years from the
commercial operations of the Burgos Wind Project. The total prepaid lease amounts to
₱143.9 million.
80