FOR AGES GAR ANT FR ERES INC NOTES TO THE FINANCIAL ST A TEMENTS Continued 9 INCOME T A XES Continued F uture income taxes are based on differences between the accounting and tax values of assets and liabilities and consist of the following as at the dates presented June 30 September 30 2006 2006 2005 F uture income tax liabilities Capital assets 245856 256902 175352 10 ADDITIONAL INFORMA TION RELA TING TO THE ST A TEMENTS OF C ASH FLOWS Changes in noncash operating working capital items 3month period ended Y ears ended June 30 September 30 2006 2006 2005 A ccounts receivable 477046 141514 4037769 Income taxes payable 125603 549223 40800 Inventories 29908 572456 5006 P repaid expenses 74524 4926 13820 A ccounts payable and accrued liabilities 678677 742981 4005000 Bonuses payable 1150000 250000 371850 566840 276857 Other information Interest paid 74159 189851 102123 Income taxes paid 565762 29356 95311 11 FINANCIAL INSTRUMENTS Credit risk The company provides credit to its customers in the normal course of its operations It carries out on a continuing basis cre dit checks on its customers and maintains provisions for contingent credit losses T wo major customers represent 57 of the companys trad e accounts receivable as at September 30 2006 four major customers for year ended June 30 2006 73 and three major customers for June 30 2005 83 and four major customers representing 89 respectively by customer 43 18 17 and 11 of the contract revenue for the threemonth period ended September 30 2006 year ended June 30 2006 83 respectively by customer 35 18 17 and 13 and year ended June 30 2005 78 respectively by customer 42 13 12 and 11 Interest rate risk The bank loan and the longterm debt of the company generally bear a floating rate of interest which exposes the company to in terest rate fluctuation F air value The fair value of accounts receivable advances to the parent company and to a company under common control bank overdraft ba nk loan accounts payable and accrued liabilities advances from a private trust fund and bonuses payable is approximately equal t o their carrying values due to their shortterm maturity The fair value of longterm debt bearing interest at variable interest rates is approximately equal to their carrying value due to their interest rate being based on the market rate F55