The Deed Administrators previously received a tax ruling from the Australian Taxation Office advising that despite the Deed Administrators making a declaration deeming Pasminco shares worthless, a Capital Gains Tax event has not occurred under current legislation. This meant that to date, Pasminco shareholders have been unable to claim a tax loss on their shares.

Recently, however, the Australian Taxation Office issued an Interpretative Decision (ATOID 2003/1024) and a Taxation Determination (TD 2004/13) that may possibly allow Pasminco shareholders to claim a tax loss on their shares.

A copy of ATOID 2003/1024 and TD 2004/13 are available at:

http://law.ato.gov.au/atolaw/search.htm

To access the Interpretative Decision, place a tick in the box marked `ATO Interpretative Decision` and type `2003/1024` in the box located next to the search button.

Further information on TD 2004/13 can be found utilising the following link.

http://www.ato.gov.au/individuals/content.asp?doc=/content/45789.htm

Further, in the 2004 Federal Budget, it was proposed that any insolvency practitioner (for example an administrator) will be able to declare shares in a company worthless thus enabling shareholders to crystallise a loss on their shares. The enabling legislation in this regard requires Royal Assent.

Note: Shareholders must seek their own taxation advice in relation to the application of ATOID 2003/1024 and TD 2004/13 to their individual circumstances. The Deed Administrators, (or any member or employee of Ferrier Hodgson), are not in any way providing tax advice in respect of this matter.

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