EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
2014 2013 2012
Non-deductible provisions/
(non-taxable recovery) - net (₱26,984,160) (₱42,670,666) ₱15,333,535
Unrecognized deferred tax asset on
provision for impairment loss (172,446,259) 172,446,259 –
Non-deductible interest expense 2,982,989 12,293,165 16,263,341
Movement of temporary
differences reversing during
income tax holiday (5,693,868) (42,946,777) 27,955,021
Non-taxable/non-deductible
foreign exchange loss (gains)
on ROP bonds 38,317,625 (3,408,285) (533,579)
Others 52,079,076 41,547,147 28,032,073
Provision for (benefit from) income tax ₱1,222,589,401 ₱485,983,349 ₱816,906,356
From continuing operations ₱1,222,589,401 ₱485,983,349 ₱775,122,594
From discontinued operations – – 41,783,762
₱1,222,589,401 ₱485,983,349 ₱816,906,356
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.
f.
g.
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 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.
On June 29, 2011, the BOI approved the ITH registration of the 86 MW Burgos Wind Farm
under the Renewable Energy Act of 2008 (RA 9513). On June 03, 2014, the Company
received a legal service letter from BOI granting the upward amendment of registered capacity
of the Burgos Wind Farm from 86 MW to 150 MW effective for 7-year period beginning in
December 2015 or date of commissioning,whichever is earlier.
On December 18, 2008, the BIR issued Revenue Regulations (RR) No. 16-2008 which
implemented the provisions of Section 34(L) of the Tax Code, as amended by Section 3 of
R.A. No. 9504, which allows individuals and corporations who are subject to the 30% RCIT
rate to adopt the OSD in computing their taxable income. Under RR No. 16-2008,
corporations may claim OSD equivalent to 40% of gross income, excluding passive income
subjected to final tax, in lieu of the itemized deductions. A corporate taxpayer who elected to
avail of the OSD shall signify such in the income tax return (ITR). Otherwise, it shall be
considered as having availed of the itemized deductions allowed under Section 34 of the
National Internal Revenue Code. Pursuant to Section 3 of RR No. 02-2010 dated February 18,
2010, the election to claim the OSD or the itemized deduction for the taxable year must be
signified by checking the appropriate box in the ITR filed for the first quarter of the taxable
year adopted by the taxpayer. Once the election is made, the same type of deduction must be
consistently applied for all succeeding quarter returns and in the final ITR for the taxable year.
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