CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2011 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. Consolidated 2011 2010 Note  $ $ Cash flows from operating activities Receipts from customers (inclusive of GST refunds)  1,669,745 571,428 Payments to suppliers and employees (inclusive of GST)  (16,636,777) (6,951,002) Payments for exploration and evaluation expenditure expensed  (683,108) (136,812) Interest received  10,324,046 4,954,195 Interest and other costs of finance paid  (456,290) (244,275) Income taxes paid  (220,227) - Net cash flows used in operating activities 26(a)  (6,002,611) (1,806,466) Cash flows from investing activities Purchase of plant and equipment  (2,058,087) (235,204) Purchase of computer software  (320,991) (283,677) Payments for exploration and evaluation expenditure capitalised  (34,129,282) (157,420,044) Payment of security deposits  (51,875,314) (1,767,942) Proceeds from disposal of non-current assets  31,374 - Net cash flows used in investing activities (88,352,300) (159,706,867) Cash flows from financing activities Proceeds from issue of ordinary shares  292,461,747 29,592,031 Payments for transaction costs arising on ordinary shares issued  (8,714,624) (800,819) Net cash flows provided by financing activities 283,747,123 28,791,212 Net increase (decrease) in cash and cash equivalents  189,392,212 (132,722,121) Cash and cash equivalents at beginning of financial year  87,122,836 228,238,280 Effect of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies  (9,675,904) (8,393,323) Cash and cash equivalents at end of financial year 10  266,839,144 87,122,836 36 Karoon Gas Australia Ltd  Annual Report 2011