FOR AGES GAR ANT FR ERES INC NOTES TO THE FINANCIAL ST A TEMENTS Continued 8 SHARE C APIT AL A uthorized in an unlimited number of 8 categories and without par value Common shares participating and voting Class A shares participating nonvoting noncumulative dividend to be determined by the board of directors Class A preferred shares voting nonparticipating noncumulative dividend to a maximum of 9 of their redemption value redeemable at the option of the company at the market value Class B C D E F and G preferred shares nonvoting nonparticipating noncumulative dividend to be determined by the boar d of directors redeemable at the option of the company for the price paid for these shares June 30 September 30 2006 2006 2005 Issued and paid 100 Common shares 1 0 0 1 0 0 1 0 0 2222000 Class A preferred shares 15000 15000 15000 1238000 Class B preferred shares 238000 shares as at June 30 2006 and 2005 1238000 238000 238000 1253100 253100 253100 Issuance In September 2006 the company issued 1000000 class B preferred shares for a cash consideration of 1000000 Stock options On October 4 2003 the board of directors approved a stock option plan The purpose of this plan is to give an incentive to co mpany executive officers and employees In accordance with this plan 29500 stock options have been granted giving the option to pur chase class A shares at an exercise price of 2 per share which represents an amount that is not lower than the fair value of the sha res at the date of the grant These options can be exercised up to a maximum of 20 per year and expire 5 years after the date of the gran t Every year the company has the right to determine how many options can be exercised The holder of the option has the right to call for a settlement in cash The compensation cost is measured using the excess of the fair value of the shares of the company on the ex ercise price of the exercisable options This stock option plan was cancelled in September 2006 The number of options that can be granted annually is controlled by the compensation committee The stock option plan details are as follows 3month period ended Y ears ended June 30 September 30 2006 2006 2005 20052006 Number of Number of Number of A verage options options options exercise price Outstanding at the begining of period 11800 17700 23600 2 Exercised 3213 3078 2 Cancelled 11800 2 Expired 2687 2822 2 Outstanding and non exercisable at the end of period 11800 17700 2 The total expense related to stockbased compensation to employees amounted to 2454196 for the year ended June 30 2006 Jun e 30 2005 3344557 has been recorded and presented in the cost of contract revenue F air value of the options amounted to 2460622 for the year ended June 30 2006 June 30 2005 3350713 F53