Annual Report 2015

To be presented at the Annual General Meeting

of shareholders of Seashells Limited

to be held at Seashells Beachfront Resort,

363 Diamond Beach Road, Diamond Beach 2430

on Saturday 28th November, 2015

at 12.00pm

Seashells Limited

SEASHELLS LIMITED

(ABN 86 001 722 541) NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Seashells Limited will be

held at Seashells Beachfront Resort, 363 Diamond Beach Road, Diamond Beach NSW 2430 at

12.00pm on Saturday 28th November, 2015.

1. Apologies

2. Confirmation of Minutes of the previous Annual General Meeting.

3. To receive, consider and adopt the Board’s Report.

4. To receive, consider and adopt the Financial Report for the year ended 30th June, 2015, the

Auditor’s Report and Statement by Directors.

5. To receive and transact any other business which may be lawfully brought before the meeting.

6. To stand down existing directors and conduct elections for the position of four (4) Directors.

.

DIRECTORS AND OFFICE HOLDERS

Peter Allwood - Chairperson (resigned 6/10/2015)

Robert Gould - Company Secretary/Timeshare Marketing

Alan Gorman - Director of Finance/Administration

John Pym - Director Grounds & Maintenance

KEY SUPPORT PERSONNEL

Gilbert Hicks - Financial Controller (Contractor)

Rhonda Futterleib - Company Auditor (Contractor)

Rachel Hall - Admin. Supervisor & Accounts

Office Support - Nikki Elsley, Sheena Gray

Grounds/Maintenance James McMullen, Michael Madrusan

David Black - Timeshare sales

John & Sue Costello - Cleaning Contractors

BOARD REPORT - 2015 AGM

Your current board members consist of Robert Gould (Company Secretary/Timeshare Marketing);

Alan Gorman (Director of Finance/Administration); John Pym (Grounds and Maintenance), and it is with

regret that our Chairman Peter Allwood tendered his resignation on 6th October, 2015 due to age catching

up and failing health.

Peter has been a long serving board member of our Company since 1990 when he became a shareholder

some 25 years ago - his vast experience, stability and the management support he provided, has benefited all

shareholders and we wish him all the best in his retirement from the Seashells Board.

The existing board members will be standing for re-election at this year’s AGM along with any other

shareholders wishing to nominate for a position of director. Such nominations must be received by

14th November, 2015 along with a current CV - there will be four positions to be filled and

nomination/acceptance forms can be obtained from the resort.

We have issued this report without our audited financial accounts due to the ill health of Rhonda Futterleib

of Essential Assurance Services Pty. Ltd. who promises to have them completed by mid November and

available to shareholders prior to the AGM.

Many thanks to Alan Gorman who as director of Finance and Administration has taken on the role as Acting

Resort Manager including training our new reception staff of Nikki, Sheena and Rachel, who replaced

Rebecca Crump (Admin. Supervisor) and others. Alan will be reducing his time spent in administration

(except for supervision), and is confident that our existing staff, and our Financial Controller on more

flexible hours, will be more than capable of continuing the smooth running of the resort.

Alan also was responsible for supervision of ground staff and upgrading of units in “Aquarius” and

“Beachcomber” with a beachside theme including painting, replacing carpets, fittings and furniture, wall

paintings and linen has been completed along with landscaping and pool repair.

An area of concern with the financials is the Profit & Loss which normally runs at a loss, but the cash flow

is positive once adjusted against depreciation allowance. This has occurred for many years as the Board is

continually replacing and upgrading our resort facilities.

Our 2014/15 financial figures will include part of last year’s water bill of $65,000 due to a massive leak

between the water main and our property and this year’s water bill of $29,000 - or a total of $94,000 of

which $77,000 has been paid, and will affect our Profit & Loss as a “one-off’ payment. On a positive note,

we currently have $88,000 in our sinking fund account.

The board is mindful of keeping our maintenance fees low, and we are the best value timeshare resort in

Australia with 1 bedroom units currently at $450pw or $300pw if placed in the rental pool – this financial

year we deleted the $40 Special Levy which did in some small measure affect our cash flow.

The majority of our outstanding maintenance fees are secured by the timeshare assets which are returning an

income from the rental pools, and our bad debt situation is slowly improving with the sale of forfeited weeks

by David Black (our on-site Timeshare Consultant).

As approved by the shareholders at our 2013 AGM, the rezoning of our land to

SP3 Tourism is proceeding with the following Consultant Reports being completed:

(1) Ecology (2) Visual Assessment (3) Archaeology.

Once the rezoning has been approved by the Department of Planning, Stage 2 will commence which will

require the proponents of the rezoning to arrange for the proposed conversion of Company Title of “G” and

“H” Class shares and 10 private units to a Strata Title Scheme which will include:

a. Review and amendment of Constitution of Seashells Ltd. to delete the share classes being converted to

Torrens Title (the current timeshare owners and benefits will not change).

b. Creation of a Community Title Scheme and preparation of a Community Management Statement.

c. Creation of Strata Scheme and preparation of:

1. By Laws

2. Transfer of lots in the Community Scheme from the Company to various parties who are to be the lot

owners.

d. The surveyor (Lidbury Summers Whiteman) propose to create a Community Title concept plan over the whole

site and strata title the units.

e. It may be necessary under part 5c of the Corporations Act that a new PDS will need to be registered with

ASIC.

All our shareholders will benefit from the rezoning with a large cash injection into the Company from the conversion

of different share classes to Torrens Title, and which will benefit existing timeshare owners, and as each step in the

rezoning is completed, the shareholders will have full details of the Consultant Reports.

We anticipate the Special General Meeting and shareholder voting on the final proposal will occur prior to

June, 2016, and the board urges all shareholders to take an active interest in attending the Annual General

Meeting.

The board appreciates and would like to thank Gilbert (Financial Controller) and our hardworking staff for

the implementation of many daily tasks required of them to make Seashells Beachfront Resort a family

friendly and fun location.

For and on behalf of the Board

Robert Gould

Company Secretary

SEASHELLS LIMITED PROXIES

All members of Seashells Ltd (the company) are entitled to attend and vote at the Annual General Meeting of

the Company personally, or by proxy or (in the case of a corporation) by a representative appointed under

Section 249 of the Corporations Act 2001 subject to the notes below.

The attention of all members is drawn to Section 249L of the Corporations Act 2001.

Public Companies) In every notice convening a meeting of a public company or of any class of members,

there shall appear with reasonable prominence -

d) if a member is entitled to appoint a proxy – contain a statement setting out the following

information;

i. that the member has a right to appoint a proxy;

ii. whether or not the proxy needs to be a member of the company;

iii. that a member who is entitled to cast 2 or more votes may appoint 2 proxies and may

specify the proportion or number of votes each proxy is appointed to exercise.

The attention of all corporate members (shareholders is drawn to Section 250D of the Corporations Act 2001)

.

All corporate shareholders must appoint a representative or a proxy under the seal of the company or

under the hand of an officer/attorney of the Company, duly authorised by that company.

To be effective, forms appointing proxies must be lodged not less than 48 hours before the time of the

meeting (section 250B (i)) – however, you are urged to lodge proxies as soon as possible.

Proxy forms “A” and “B” are attached hereby, for use as follows:

FORM “A” INDIVIDUALS:

Where an individual member is unable to attend the meeting, he or she may appoint his or her proxy to attend

and vote at the meeting.

FORM “B” CORPORATIONS:

Where corporate members wish to appoint a delegate or proxy to attend and vote at the meeting.

Robert Gould, Company Secretary BY ORDER OF THE BOARD this 30th day of October, 2015

ADDITIONAL NOTES

A Member is not entitled to vote at a general meeting or appoint a delegate or proxy unless all calls and other

sums payable in respect of shares in the Company have been paid.

Calls and other sums payable are due 1 week prior to General Meetings. Members paying by direct credit

into the company’s bank account must make their payments in sufficient time to allow the payment to be

identified and receipted by the Company by this time.

Members are requested to provide their proxies 2 days prior to General Meetings, earlier receipt would be

appreciated. Proxy forms may be returned to the Company’s registered address, via Fax to 02 65592811 or

via Email to info@seashellsresort.com.au

SEASHELLS LIMITED ABN 86 001 722 541

Registered Office : 363 Diamond Beach Road, Diamond Beach NSW 2430

PROXY FORM – INDIVIDUALS “A”

Important: Refer to ‘Notes on Proxies’ for further information and timeframes.

In summary, a Member must be paid up by 1 week prior to Special General Meetings and Proxy Forms are required at

least 2 days prior to Special General Meetings, earlier receipt would be appreciated. Proxy forms may be returned to the

Company’s registered address, via Fax to 02 6559 2811 or via Email to info@seashellsresort.com.au

I / We ………………………………………………………………………………………………………………………

of……………………………………………………………………………………………………………………………

being a member / members of Seashells Limited hereby appoint

…………………………………………………………………………………………………………………………….

of…………………………………………………………………………………………………………………………..

or in his / her absence, ……………………………………………………………………………………………………

of…………………………………………………………………………………………………………………………..

or in his / her absence, the Chairman of the Meeting as my / our general / special proxy to vote on my / our behalf at the

2015 Annual General Meeting (being held 29/11/2015) or any adjournment of that meeting.

Signed this ………………….. day of …………………………………..2015

Signature of Shareholder ………………………………………………………………………………………………….

Unless otherwise instructed the proxy will vote as he or she thinks fit, or abstain from voting. If the Chairman is

appointed proxy, he will vote all undirected proxies in favour of all resolutions. If you wish the Chairman to vote as he

or she thinks fit do not complete the following section of the form.

Should you wish to direct the appointed proxy how to vote, please complete the following:-

Item Number (Agenda Number) and Description For Against Abstain

1. (2) Confirmation of Minutes of the previous Annual General

Meeting.

2. (3) To receive, consider and adopt the Board’s Report.

3. (4) To receive, consider and adopt the Financial Report for

the year ended 30th June, 2015, the Auditor’s Report

and Statement by Directors.

4. (6) To stand down existing directors and conduct elections for

the position of four (4) directors.

SEASHELLS LIMITED ABN 86 001 722 541

Registered Office : 363 Diamond Beach Road, Diamond Beach NSW 2430

PROXY FORM – CORPORATIONS “B”

Important: Refer to ‘Notes on Proxies’ for further information and timeframes.

In summary, a Member must be paid up by 1 week prior to Special General Meetings and Proxy Forms are required at

least 2 days prior to Special General Meetings, earlier receipt would be appreciated. Proxy forms may be returned to the

Company’s registered address, via Fax to 02 6559 2811 or via Email to info@seashellsresort.com.au

All corporate shareholders must appoint a representative or a proxy under the seal of the company or under the hand of

an officer/attorney of the company duly authorized by that company. Where a company has a Sole Director who is also

the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to Section 204A of the

Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this for

must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office

held by signing in the appropriate place.

Company Name:……………………………………………………………………………having its registered office

at: …………………………………………..……………………..……being a member of Seashells Limited hereby

appoint………………………………………………..…of........……………………………………………………….

or in his / her absence, …………………….……………of……………………….……………………………………

or in his / her absence, the Chairman of the Meeting as my / our general / special proxy to vote on my / our behalf at the

2015 Annual General Meeting (being held on 28/11/2015) or any adjournment of that meeting.

Signed this ………………….. day of …………………………………..2015 [Affix Seal]

…………………………..……………….. …………………………….. ……………………………………..

Sole Director & Sole Company Secretary Director Director/Company Secretary

Unless otherwise instructed the proxy will vote as he or she thinks fit, or abstain from voting. If the Chairman is

appointed proxy, he will vote all undirected proxies in favour of all resolutions. If you wish the Chairman to vote as

he or she thinks fit do not complete the following section of the form.

Should you wish to direct the appointed proxy how to vote, please complete the following:-

Item Number (Agenda Number) and Description For Against Abstain

1. (2) Confirmation of Minutes of the previous Annual General

Meeting.

2. (3) To receive, consider and adopt the Board’s Report.

3. (4) To receive, consider and adopt the Financial Report for

the year ended 30th June, 2015, the Auditor’s Report

and Statement by Directors.

4. (6) To stand down existing directors and conduct elections for

the position of four (4) directors.

BY –LAWS / RULES FOR THE TIMESHARE PROGRAM

CURRENT AS AT 28TH NOVEMBER, 2015

SEASHELLS LTD BY–LAWS / RULES for the TIMESHARE PROGRAMME

When you acquire a Seashells timeshare you become an owner, member and shareholder in Seashells

Ltd, a public company. The Company owns the land, bricks and mortar of the Resort.

You have exclusive right to use and occupy a unit or units for the week(s) or time you buy and shared use of the common facilities.

USE Your timeshare week(s) may be used by yourself, your family or friends. EXCHANGE You may exchange your time (week) at Seashells for time at another Resort in Australia or

overseas. RENT You may let-out your timeshare week(s) and collect rent directly yourself or ‘deposit’ into

the Rental Pools for a share of the net tariff income. WILL Your share is perpetual and therefore willable. SELL Seashells Ltd is a Public Company therefore you may sell your share privately or through

any other sales dealer provided there are no outstanding levies.

SEASHELLS TIMESHARE PROGRAMME

Annual Allocation: Each Seashells Timeshare Year begins on July 1st.

Timeshare Week: Commencing from July 1, 2010, a Timeshare ‘Week’ means the period of approximately seven days from 3pm on any Friday to 10am on the succeeding Friday. Applications to vary this may be put to Management who have the option to accommodate requests.

Fixed Weeks These weeks coincide with the gazetted NSW public school holidays as follows:-

C1 - C6 The six consecutive weeks coinciding with the Christmas school holidays in December through January with the C1 week commencing on the Friday coinciding with the end of the gazetted NSW public school term else immediately following.

E1 & E2 Two consecutive weeks coinciding with the gazetted NSW public school holidays on/or around Easter and may not include the statutory Easter holidays.

ASH1 & ASH2 Two weeks as gazetted for the NSW public school holidays in June/July. SSH1 & SSH2 Two weeks as gazetted for the NSW public school holidays in September/October.

Flexi Weeks These are all weeks other than fixed weeks. These may be taken either in one stay or in two separate stays of 3 and 4 days each. Should you split your week, there is no guarantee that there will be a vacancy for the remaining unused days. Note: Additional usage/cleaning fees are payable for each split stay.

Internal Exchange: Owners of Fixed Week may exchange their week for a Flexi week at Seashells subject to availability and owners of a Flexi Week may exchange their week for a Fixed week subject to availability and an upgrade fee applicable at the time. All subject to the discretion of Management.

External Exchange: Owners can deposit their time with external exchange companies. Up to 3 years can be deposited. Please refer directly to exchange companies for more information.

52-week shareholders are allocated 12 Fixed Weeks and 40 Flexi Weeks each timeshare year.

RESERVATIONS & STAYS

Owners of Fixed Weeks are required to advise the resort of their intention to use each of their Fixed Timeshare Weeks 13 months in advance otherwise the Resort may let out allocations. Please book early to avoid disappointment.

Owners of Flexi Weeks are advised that their bookings are subject to availability. It is recommended and requested that at least 6 months notice be provided. Please book early to avoid disappointment.

All stays begin at 3.00 pm on the day of arrival. Guests must vacate their unit by 10.00 am on the day of departure. Late departure may incur an additional charge.

A maximum of 4 people per 1 bedroom unit is allowed however an additional small child is permitted (double bed and divan/stretcher bed supplied).

A maximum of 6 people per 2 bedroom unit is allowed however an additional small child is permitted (double bed and divan/stretcher bed supplied).

Portable cots and highchairs are available for hire from reception. Please request when booking.

Linen and towels are provided for each guest.

PRIVATE RENTAL ARRANGEMENTS: Owners are encouraged to rent out their unused timeshare week/s privately. In which case, owners are responsible for collecting their own rent/tariffs and meeting the costs of any damages incurred by Seashells or any other liabilities. A Tariff Fee for usage/cleaning will be applicable, presently $60 for a 1 bed unit, $80 for a 2 bed unit.

VEHICLES: One internal car space is available for each unit, additional cars must be left in designated car parks. Any visiting owner or guest must check-in at reception. The maximum vehicle speed within the Resort grounds is 10 kilometres per hour (unless otherwise sign posted) due to high pedestrian activity for adults and children. Parking is not permitted on grassed areas.

SECURITY: All owners and guests are to ensure that units and vehicles are locked when unattended as the Resort or Management will not accept any responsibility for loss or damage.

ANIMALS: Domestic animals (including birds) are not permitted in the Resort.

DAY VISITS: Owners may use the Resort facilities on a day to day basis without occupying a unit providing suitable arrangements are made with Management.

GUESTS OF OWNERS: Owners are responsible for their guests whether they are staying at the Resort or visiting. Facilities are available for day guests only in the company of an owner.

DAMAGE AND LIABILITY: Any wilful breakages, loss or damage to units, facilities or equipment and any other liability attributable to the owner or guest is to be paid for by the owner or guest.

CANCELLATIONS: All cancellations must be confirmed to the Resort in writing at least 1 month prior to your reserved stay otherwise any deposits or usage fees will be forfeited. Should your timeshare allocation not be consequently let-out, then you risk being omitted from the Rental Pool. The onus is on the shareholder to confirm that the cancellation has been received by the Resort.

GENERAL: Management and Caretakers may require any owner or guest to leave the Resort if they consider that the owner or guest is being disruptive, vandalizing or acting in any manner that may be detrimental to the safety and well-being of other guests or not complying with Resort rules. DISCLAIMER: Please note Seashells Ltd accepts no responsibility for claims in respect to theft, personal injury or property damage due to any activity at the Resort.

TIMESHARE LEVIES, Contributions to Costs & Other Moneys Payable:

Timeshare Levies are split into two parts;

o The Main Timeshare Levy (Part A) is designed to cover the costs of Grounds and Building Maintenance, Rates and Taxes, Corporate Governance, insurances and basic running costs.

This will be invoiced annually in advance in June and payable within 14 days of the date of the invoice, unless otherwise specified.

Shareholders with 8 or more timeshare weeks may pay quarterly in advance.

For on-time payments, a discount may be allowed via notification with invoices. Presently the discount allowed is $40 per timeshare.

Seashells may at its discretion permit an on-time payment discount, charge late fees and/or interest on unpaid accounts at a rate of up to 8% p.a. o The Supplementary Timeshare Levy (Part B), referred to as a ‘Usage Fee’ is only payable if and when an Owner makes arrangements to personally utilise each of their timeshare weeks or share with family and friends. This may be a reservation to stay at Seashells or an exchange with other timeshare companies. This Usage Fee is designed to help cover costs associated with stays and reservations including computers, IT and software, check-ins, cleaning, additional wear and tear, etc.

Currently the Usage Fee is $150 for 1-bedroom units and $165 for 2 bedroom units.

If Timeshare Levies are unpaid, the timeshare owner foregoes their right to use, exchange or rent their timeshare week/s and may not share in rental pools.

Seashells may take a lien over shares for moneys unpaid, thus preventing the sale of shares.

Recovery of levies is enforceable under NSW law. In accordance with the Constitution and provisions of NSW law, the Company may forfeit shares of a member for non-payment of timeshare levies, contributions to costs or other moneys payable. Share transfers will not be approved unless all outstanding moneys are first paid.

EXCHANGE INFORMATION: Dial An Exchange (Offices in Australia, New Zealand, USA and United Kingdom) Australia: (07) 5572 6722 www.dialanexchange.com.au Email: info@dialanexchange.com.au New Zealand: 64 (07) 378 8825 www.dialanexchange.co.nz Interval International (Australian and New Zealand members are serviced from the Singapore office) Australia: Toll free on 0011 800 4683 7825 Email: anzmemberservices@intervalintl.com RCI Australia Inc. (Worldwide) Australia: 1300 132 377 New Zealand: 0800 172 377 www.rciap.com Email: member@rciap.com Normal exchange requests have limitations on unit size (number of people) or time allotments (school holidays etc) however, subject to availability, it is often possible to upgrade.

Exchange companies generally only permit an exchange of 4 people for a 1 bedroom unit and 6 people for a 2 bedroom unit. For any member wishing to exchange for a greater number than allowed under the system, (eg: 5 people in a 1 bedroom unit) you may contact the Exchange Resort direct and ask for permission to bring the extra person(s).

SEASHELLS LTD BY–LAWS & RULES OF TIMESHARE RENTAL POOLS

For shareholders that are unable to utilise their full allocation of timeshare weeks, management of Seashells Ltd (the Resort) is prepared to operate rental pools for tariff income received. The ‘Main Rental Pools’ consist of 20 distinctive rental pool periods during the year:

1-bed Flexi ASH1 & ASH 2 SSH1 & SSH2 C1 C2 C3 C4 C5 C6 E1 & E2 2-bed Flexi ASH1 & ASH 2 SSH1 & SSH2 C1 C2 C3 C4 C5 C6 E1 & E2

Shareholders wishing to enter the Rental Pools are required to fill in the appropriate Nomination Form and forward to the Resort before the commencement of each timeshare year (ie by 30th June).

The Resort will retain the first $60 / $80 of any tariff booking as a ‘usage fee’ and 20% of the remaining tariff as ‘Letting Commissions’. The balance of tariff income will go into the various Rental Pools for disbursement to shareholders eligible to be in the rental pool. The Board reserves the right to increase the Tariff Fee and Letting Commissions to meet associated operating costs.

The Resort will have the first option to utilise any timeshare week/s nominated for the Rental Pools by Shareholders. Subject to prior written consent of Management, Owners may use or privately let their timeshare weeks after nominating to go in the Rental Pools.

Shareholders will be excluded from any Rental Pool Entitlements if they are in arrears with the Resort at any time during the relevant financial year and especially leading up to the commencement of any rental pool categories (flexi or fixed weeks). The Board reserves the right to make concessions for applications received in advance and should extenuating circumstances arise.

Notes for 52 Week Owners Only:

Paying guests will be booked into units included in the ‘Main Rental Pools’ firstly where practical. For 52-Week Owners to be eligible to participate in the Main Rental Pools;

1) The standard of their unit for which they are entitled ‘exclusive use’ must meet the Resort’s ‘normal standard’ as determined by the Board appointed Standards Committee from time to time (presently equivalent to 3 ½ Star Rating), and

2) Pay the Full Timeshare Levies (Part A), that is, no discounts for electing to do own maintenance.

If 52-week units do not meet the Resorts normal standards, then an owner may be allowed to enter rental pools, however will only be entitled to 50% of any rental pool disbursements. The remaining 50% will be held by the Resort where the owners may apply for such moneys to be spent on their apartments on a $1 for $1 basis or otherwise as determined by the Board of Directors.

The Resort is prepared to setup a ‘Secondary Rental Pool’ for 52-week owners entitled to ‘exclusive use’ of a unit that have a unit of lesser than normal standard and/or elect to do own maintenance in return for a lesser Timeshare Levy (part A). Presently the allowance for doing own maintenance is $30 for a 1 bedroom unit and $50 for a 2 bedroom unit.

This Secondary Rental Pool will be a single rental pool for 1 bedroom units and another for 2 bedroom units only and include tariff income from Fixed and Flexi weeks in together and counted as the same for the purpose of disbursements.

This Secondary Rental Pool will receive the overflow of bookings from the Main Rental Pool and any special request of guests. A much lesser proportion of tariff income is to be expected.

If the standard of a 52-week owner’s unit for which they are entitled to ‘exclusive use’ does not meet the Resort’s ‘minimum standard’ as determined by the Board appointed Standards Committee from time to time (presently equivalent to 2 ½ Star Rating), Management reserves the right to not let-out these units, thus nullifying any entitlement to rental pools

SEASHELLS LIMITED ABN 86 001 722 541

2015 FINANCIAL REPORT

If you require a copy of the full report or abridged version

after 15/11/2015 and prior to 28/11/2015 please contact Gilbert Hicks at the resort