St Barbara Mines Limited Annual Report 2004 Notes to the Financial Statements  for the year ended 30 June 2004 Consolidated Company 30 June 2004 $’000 30 June 2003 $’000 30 June 2004 $’000 30 June 2003 $’000 5. INCOME TAX (a) Tax  Expense The amount of income tax expense for the  fi  nancial  year differs from the amount calculated on the loss. The differences are reconciled as follows: Loss from ordinary activities before  income tax expense (25,228) (30,020) (31,929) (24,970) Income tax calculated at 30% (2003 - 30%) 7,568 9,006 9,579 7,491 Tax effect of permanent differences:  -  Provision for diminution in investments (90) - (3,720) (1,224) - Legal and other capital expenditure  (91) (132) (91) (127) - Sundry items (3) (20) (3) (20) (184) (152) (3,814) (1,371) Income tax adjusted for permanent differences 7,384 8,854 5,765 6,120 Net future income tax bene fi  t not brought  to account (7,384) (8,854) (5,765) (6,120) Future income tax bene fi  ts previously recognised,  now written off - (2,965) - (2,965) Income tax (expense) - (2,965) - (2,965) (b) Unbooked future income tax bene fi  t Future income tax bene fi  t attributable to  operating losses 33,263 26,401 25,809 21,617 Less: offset to provision for deferred income tax (1,357) (4,248) (834) (3,870) 31,906 22,153 24,975 17,747 Future income tax bene fi  t attributable to timing  differences not brought to account 1,674 1,615 1,602 1,615 Future income tax bene fi  t not brought to account 33,580 23,768 26,577 19,362 These bene fi  ts will only be obtained if: (i) the consolidated entity derives future assessable income of a nature and of an amount suf fi  cient to enable the  bene fi  t from the deductions for the loss to be realised; or (ii) the consolidated entity continues to comply with the conditions for deductibility imposed by the law; and (iii) no changes in tax legislation adversely affect the consolidated entity in realising the bene fi  t from the deductions  for the losses. The Company and its wholly-owned Australian subsidiaries have decided to implement tax consolidation in respect  of the year ended 30 June 2004. The Australian Taxation Of fi  ce has not yet been noti fi  ed of this decision. The accounting policy on implementation of the legislation is set out in note 1(h). As the company and consolidated  entity are in a carried forward tax loss position and do not currently recognise deferred tax balances in the  fi  nancial  statements, there has not been a material impact on company or consolidated assets, liabilities and results from  implementation of the legislation. (c)  Tax consolidation legislation