DIRECTORS’ REPORT CONT. REMUNERATION REPORT (AUDITED) (CONTINUED) 3. Board oversight of remuneration (continued)  Staff and Remuneration Committee (continued) Remuneration approval process Voting and comments made at the company’s 15 March 2013 Annual General Meeting (‘AGM’) 4. Non-executive Director (NED) remuneration arrangements Remuneration policy Structure Mr. D. Farley, Managing Director/Chief Executive Officer, attends certain Staff and Remuneration Committee meetings by invitation but is not  present during any discussions relating to his own remuneration arrangements. The Board is responsible for determining the remuneration of the Managing Director/Chief Executive Officer on the advice of the Staff and  Remuneration Committee, which obtains independent remuneration advice as necessary. The Board approves the remuneration arrangements  for the Managing Director/Chief Executive Officer and executives and all awards made under any long-term incentive (LTI) plan, which are  then subject to shareholder approval, following recommendations from the Staff and Remuneration Committee. During the 2014 financial year  commencing 1 April 2013, the Company will be undertaking a review of its LTI plan to ensure this incentive reflects business needs, shareholder  views and contemporary market practice. The Company expects that any changes resulting from this review will be implemented in the financial  year commencing 1 April 2013, and will be presented to shareholders for consideration and approval at the 2013 AGM to be held in or about 8  August 2013. The Board also sets the aggregate remuneration of NEDs, which is then subject to shareholder approval. The Chairman oversees the Managing Director/Chief Executive Officer’s recommendations for remuneration of senior executives with the  assistance of the Staff and Remuneration Committee and independent remuneration advice, where necessary. The Staff and Remuneration Committee approves, having regard to the recommendations made by the Managing Director/Chief Executive Officer,  the level of any Company short-term incentive (STI) payments to employees, including KMP’s and therefore the amount of any Deferred Equity  Award entitlement. The level of STI payments to the Managing Director/CEO are determined separately by the Board. Any DEA entitlement resulting  in an issue of securities for the Managing Director/CEO must be approved by shareholders. The company received 97% of ‘for’ votes in relation to its remuneration report for the year ended 31 December 2012. The company did not receive  any specific feedback at the AGM regarding its remuneration practices. The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain Directors of the highest  calibre, whilst incurring a cost that is acceptable to shareholders. The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against fees paid to NEDs  of comparable companies. The Board considers advice from external consultants when undertaking the annual review process. The Company’s constitution and the ASX Listing Rules specify that the aggregate remuneration of NEDs shall be determined, from time to time, by  general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The latest determination was  at the Annual General Meeting held on 24 May 2007, when shareholders approved an aggregate remuneration of $875,000 per year. The remuneration of NEDs consists of Directors’ fees and committee fees. NED’s do not receive retirement benefits other than superannuation, nor  do they participate in any incentive programs. Each NED receives a base fee for being a Director of the Company. An additional fee is also paid for each Board committee on which a Director sits,  with a higher fee paid if the Director is a Chairman of a Board committee. The payment of additional fees for serving on a committee recognises the  additional time commitment required by NEDs who serve on one or more committees.  NED’s are encouraged to hold shares in the Company. Any shares purchased by the Directors are purchased on market, which is in line with the  Group’s overall remuneration philosophy and aligns NEDs with shareholder interests. The remuneration of NEDs for the 3 months ended 31 March 2013 and for the 12 months ended 31 December 2012 is detailed in table 1 on page  33 of this report. 26 Australian Agricultural Company Limited