2006 - Eastern Caribbean Securities Exchange

Notes to the Consolidated Financial Statementsfor the year ended 31st December, 2006Expressed in Thousands of Trinidad and Tobago dollars3. Operating profit (continued)During February 2006, a quantity of non-conforming cement was released to the market by our subsidiarycompany in Jamaica. The company has received claims for damages from customers who used this cementin construction projects and has estimated an amount of $30.3 million to settle these claims.4. Finance costs - net 2006 2005Interest expense 121,502 119,019Interest income (1,770) (1,100)Accretion in value of bond redemption options (20,867) (24,142)98,865 93,777Foreign currency exchange loss 5,490 3,3545. Taxation104,355 97,131a) Taxation chargeDeferred taxation (Note 5c)Impact of tax rate change – (25,476)Valuation adjustment – (42,025)Reversal of other temporary differences 3,626 (6,962)3,626 (74,463)Current taxation 5,095 7,495b) Reconciliation of applicable tax charge toeffective tax charge8,721 (66,968)Profit before taxation 160,488 86,799Tax calculated at 25% (2005-30%) 40,122 26,040Net effect of other charges and disallowances (1,731) 2,503Impact of income not subject to tax (30,629) (30,414)Tax not previously recognised – (42,025)Business and green fund levies 1,643 2,151Change in tax rate (see note below) – (25,476)Effect of different tax rates outsideTrinidad and Tobago (684) 253Effective taxation charge/(credit) 8,721 (66,968)16