FOR AGES GAR ANT & FR ` ERES INC. NOTES TO THE FINANCIAL ST A TEMENTS (Continued) 8. SHARE C APIT AL (Continued) Earnings per share Diluted net earnings per common share were calculated based on net earnings divided by the average number of common shares outstanding taking into account the dilution effect of stock options using the treasury stock method. June 30, September 30, 2006 2006 2005 $$$ Earnings per share — basic Net earnings available to common shareholders ................... 815,196 1,082,807 277,769 A verage basic number of common shares outstanding ............... 1 0 0 1 0 0 1 0 0 Earnings per share — basic ................................ 8,151.96 10,827.07 2,777.69 Earnings per share — diluted Net earnings available to common shareholders ................... 815,196 1,082,807 277,769 A verage basic number of common shares outstanding ............... 1 0 0 1 0 0 1 0 0 A djustment to average number of common shares Stock options ....................................... — 17,700 23,600 A verage diluted number of common shares outstanding .............. 1 0 0 17,800 23,700 Earnings per share — diluted .............................. 8,151.96 60.83 11.72 9. INCOME T A XES Income tax expense comprises the following: 3-month period ended Y ears ended June 30, September 30, 2006 2006 2005 $$$ Current ............................................ 440,099 578,575 54,511 F uture ............................................. (11,046) 81,550 17,175 429,053 660,125 71,686 The income tax expense differs from the amount calculated by applying canadian statutory rates (federal and provincial) of 34% for September 30, 2006 (June 30, 2006, 32.36% and 2005, 19.98%) to the earnings before income taxes as follows: 3-month period ended Y ears ended June 30, September 30, 2006 2006 2005 $$$ Earnings before income taxes .............................. 1,244,249 1,742,932 349,455 Income taxes based on statutory rates ......................... 423,045 564,013 69,821 Increase (decrease) of income taxes due to the following: Non-deductible expenses ................................. 1,849 917 959 Non-taxable portion of capital gain ........................... — (945) (2,135) Effect of corporate tax rate modification ....................... — 96,711 — Other items ......................................... 4,159 (571) 3,041 T otal income taxes ..................................... 429,053 660,125 71,686 F-54