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 815196 1082807 277769 A verage basic number of common shares outstanding 1 0 0 1 0 0 1 0 0 Earnings per share basic 815196 1082707 277769 Earnings per share diluted Net earnings available to common shareholders 815196 1082807 277769 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 17700 23600 A verage diluted number of common shares outstanding 1 0 0 17800 23700 Earnings per share diluted 815196 6083 1172 9 INCOME T A XES Income tax expense comprises the following 3month period ended Y ears ended June 30 September 30 2006 2006 2005 Current 440099 578575 54511 F uture 11046 81550 17175 429053 660125 71686 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 3236 and 2005 1998 to the earnings before income taxes as follows 3month period ended Y ears ended June 30 September 30 2006 2006 2005 Earnings before income taxes 1244249 1742932 349455 Income taxes based on statutory rates 423045 564013 69821 Increase decrease of income taxes due to the following Nondeductible expenses 1849 917 959 Nontaxable portion of capital gain 945 2135 Effect of corporate tax rate modification 96711 Other items 4159 571 3041 T otal income taxes 429053 660125 71686 F54