EFTA01367057.pdf

Amendment #4 Page 628 of 868 Ilifrilr,,ef;ei cm, Revenue Pens pun. agreements Substantially all of the Operating Ertities revenues are obtained ttvou7i the sale of energi to Este» pursuant to terms of the Was Concentrabon nsk does exist as the Operating Entities transact with only one customer, namely Eskom This concentration risk cannot be negated due to the limtabans of the energy market within South Nnca All PPAs are accounted for as operating leases, have no minimum lease payments and all of the rental income under these leases ate conIngent rental roc *d as income when the electricity a delivered Leases The land en when the solar energy systems are situated is leased Linder operaeng tease agreements with a lease term of 25 years Rentals applicable to operating bases. where substantially all of the tenets and risks of ownership remain with the lessor are charged to the statement of °perkier* and comprehensse income on a straight-line basis over the period of the lease Income tarn Income lax balances are =courted for under the asset and liability metrod Deferred tax assets and letaites are recognized for the Mure lax consequences attnbutatte to differences between the financial statement carrying amounts of existing assets and batilities and thee respeciwe tax bases and operedng loss carhrforwards Deferred tax assets and katerbes are measured using enacted tax rates expected to apply to taxable income in the years m which those bete ckfferencea are expected to be recovered or settled The effect en deferred tax assets and »betties of a change in tax rate is recognized in operate-is in me period that includes tre enactment date Dewed income taxes anse pnmanly becauSe of di(erences in the bean Of assets o benign between financial statement amen/Xing and tax accounting which ate Mown as tess drerences Management records be tax effect of these basis differences as deferred tax assets (genera/ items that can be used es a tax deducton or credit in Mure periods) and deferred tax liabilities (generally terns that we be taxable in future pence; but have not yet teen recorded in the combined statement of operations and comprenensnre income) Management regiani reviews the deferred tax assets, including unused tax benefits, for realizablity. taktg into ccnsderaton all available evidence, bom positive and negalne including historical pretax and taxable income, projected Mure pretax and taxable income, and the expected temg of the reversals ol existing bass differences In arrnnng at these srdgmenta tre weight gnen to the patentet acid of all poutse and negatne evidence is commensurate web the totem to which it can be otxectvely verified Valuation allowances are established when management Otlermaxes trot it is more Misty than not that some ponton, or all of the deferred tax asset, wit not be realized. Management nas made the best estimates of certain income tax emporia rcluded in the tombred finance' statements. Appleaton of the accourtng policies and estimates however, implies to exercise of judgment and use ce assurrybus as b future wicertaintes aes as a result, actual resits could Offer from these esbmates. In determining these estimates, management considers various factors, which include how accurate tre estimate or assumptions have been in the pest, how much the estimate or asarnptceis have changed and row ikety such change may have a enkeel impact Interest and penales are accounted for as income tax. F.3O5 http://cfdocs.btogo.com:27638/cf/drv7/pub/edgar/2015/07/20/0001193125-15-256461/d78... 7/20/2015 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0058585 CONFIDENTIAL SDNY GM_00204769 EFTA01367057