DIRECTORS’ REPORT at the Company’s annual general meeting in November 2000, it was proposed to invite each holder of the above options to subscribe for one new 30 November 2001, 0.75 cent option for each of the above options held on its expiry at a proposed issue price of 1 cent per new option. There is no inherent right arising from these options to participate in any new issue of shares in the Company which may be offered to shareholders from time to time prior to the exercise of the options. The Company will ensure however, that during the exercise period, for the purpose of determining entitlement to any new issue, the relevant record date will be at least 12 business days after the new issue is exercised, so as to give the holder of options an opportunity to exercise their options prior to the relevant record date of any new issue. In accordance with the provisions of the Mermaid Marine Australia Limited Employee Share Option Incentive Plan (the “Employee Option Plan”), as at the date of this report a total of 42 employees have under option an aggregate of 615,000 ordinary shares in the Company. Of the 615,000 ordinary shares under option pursuant to the Employee Option Plan, half (307,500) may be purchased within 12 months of 18 June 2000 at an issue price of 60 cents per share and half (307,500) may be purchased within 12 months of 18 June 2000 at an issue price of 70 cents per share. EMPLOYEE SHARE OPTION INCENTIVE PLAN Holders of options over unissued shares in the Company do not have the right, by virtue of the option, to participate in any share issue or interest issue of the Company or of any other body corporate or registered scheme. As at the date of this report no shares have been issued during or since the end of the Financial Year as a result of the exercise of an option over unissued shares in the Company. During the Financial Year, Mermaid paid a premium for a contract insuring all of the directors of the Company, the company secretaries and all executive officers of Mermaid against any liability incurred by such director, secretary or executive officer during the course of their duties as such director, secretary or executive officer to the extent permitted by the Corporations Law. The policy does not allocate an identifiable part of the premium to specific directors or officers. Accordingly, the premium paid has not been apportioned to directors’ remuneration. The company has not otherwise during or since the end of the Financial Year, indemnified or agreed to indemnify an officer or auditor of the company against a liability incurred as such officer or auditor. 31 Ar INDEMNITIES AND INSURANCE PREMIUMS FOR OFFICERS AND AUDIT ORS