Scanpower Limited

Notes to the Financial Statements (Continued)

For the Year Ended 31 March 2005

Note 2. Taxation

| | 2005 |
| | $'000 |
|--------------------------|-------|
| Taxation Reconciliation | |
| Accounting net operating surplus before taxation | 228 |
| Taxation at 33% | 75 |
| Plus tax effect of: | |
| Permanent differences | 0 |
| Prior year adjustment | 0 |
| Deferred tax adjustment | 0 |
| Tax expense / (Benefit) | 75|

| | 2004 |
| | $'000 |
|--------------------------|-------|
| Accounting net operating surplus before taxation | 449 |
| Taxation at 33% | 148 |
| Plus tax effect of: | |
| Permanent differences | 0 |
| Prior year adjustment | 0 |
| Deferred tax adjustment | 0 |
| Tax expense / (Benefit) | 148|

Income tax charge for the year comprises:

| | 2005 |
| | $'000 |
|--------------------------|-------|
| Current taxation (liability) | 107 |
| Deferred taxation | (32) |
| Total | 75|

| | 2004 |
| | $'000 |
|--------------------------|-------|
| Current taxation (liability) | 148 |
| Deferred taxation | 0 |
| Total | 148|

Deferred Tax Asset / (Liability):

| | 2005 |
| | $'000 |
|--------------------------|--------|
| Opening balance | (1,702)|
| Prior period adjustment | 0 |
| Underground deferred tax adjustment | 0 |
| Current year movement | 32 |
| Closing balance | (1,670)|

| | 2004 |
| | $'000 |
|--------------------------|--------|
| Opening balance | (226) |
| Prior period adjustment | 0 |
| Underground deferred tax adjustment | 0 |
| Current year movement | (1,476)|
| Closing balance | (1,702)|

Imputation Credit Account:

| | 2005 |
| | $'000 |
|--------------------------|-------|
| Opening balance | 529 |
| Tax paid during the year | 104 |
| Tax refunds during the year | 0 |
| Resident withholding tax paid | 0 |
| Credits attached to dividends paid | (15) |
| Closing balance at end of the year | 618 |

| | 2004 |
| | $'000 |
|--------------------------|-------|
| Opening balance | 647 |
| Tax paid during the year | 46 |
| Tax refunds during the year | (164) |
| Resident withholding tax paid | 0 |
| Credits attached to dividends paid | 0 |
| Closing balance at end of the year | 529 |

Note 3. Retained Earnings and Reserves

Retained Earnings

| | 2005 |
| | $'000 |
|--------------------------|--------|
| Balance at beginning of the year | (2,121)|
| Net surplus for the year | 153 |
| Dividends paid and proposed | (30) |
| Movement in revaluation reserve | 69 |
| Balance at end of the year | (1,929)|

| | 2004 |
| | $'000 |
|--------------------------|--------|
| Balance at beginning of the year | (2,407)|
| Net surplus for the year | 301 |
| Dividends paid and proposed | (15) |
| Movement in revaluation reserve | 0 |
| Balance at end of the year | (2,121)|

Reserves

Asset revaluation reserves:

| | 2005 |
| | $'000 |
|--------------------------|-------|
| Freehold land | 14 |
| Freehold buildings & fixtures | 32 |
| Distribution assets | 13,805|
| Total | 13,851|

| | 2004 |
| | $'000 |
|--------------------------|-------|
| Freehold land | 14 |
| Freehold buildings & fixtures | 32 |
| Distribution assets | 13,874|
| Balance at end of the year | 13,920|