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as remuneration for their services was increased by $200,000 to $400,000 for any financial year. At the same meeting, shareholders approved the remuneration of Directors of the Company for their services as Non-Executive Directors of Karoon Petróleo & Gas SA, a subsidiary of the Company, at $500,000 for any financial year. The maximum aggregate amount payable to Non-Executive Directors of the Company from the Group is $900,000 p.a. 

Non-Executive Directors do not receive any performance-related remuneration. 

The remuneration structure is based on a number of factors including length of service, particular experience, responsibilities of the individual and the overall performance of the Company. Remuneration involves a balance between fixed and incentive pay, reflecting short and long term performance objectives appropriate to the Company’s circumstances and objectives. A proportion of executive remuneration is structured in a manner designed to align the success of the Company with the employees who contributed. 

This is achieved by considering the following remuneration components: 

• fixed base remuneration; and 

• equity-based remuneration within limits set by the Board of Directors. 

Options are issued under either the Company’s ESOP (to employees) or via other share options (to Directors). 

The Directors, other key management personnel and executives of the Company receive a superannuation contribution as required by the Australian Federal Government, which is currently 9.0% p.a., and do not receive any other retirement benefits. Individuals, however, may choose to sacrifice part of their salary to increase payments towards superannuation. It is at their discretion to seek individual financial advice concerning each of their own personal superannuation funds. 

Upon retirement, executives are paid employee benefit entitlements accrued to date of retirement. 

## Relationship Between the Remuneration Policy and Company Performance 

Notwithstanding that the Group is still in the exploration and evaluation phase of activities and is still incurring operating losses (excluding net foreign currency losses), the Company believes this policy is effective in increasing long term shareholder wealth through share price appreciation, strengthening the Group’s asset base and prospective resources. 

The tables below set out summary information about the Group’s earnings and movements in shareholder wealth to 30 June 2011: 

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