RAIDEN RESOURCES LIMITED — Annual Report 2008

Sep 29, 2009

SHELL VILLAGES AND RESORTS LIMITED AND CONTROLLED ENTITIES

ABN: 68 009 161 522

Annual Financial Report for the Year Ended 30 June 2008

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

CORPORATE GOVERNANCE STATEMENT

Unless disclosed below, all the best practice recommendations of the ASX Corporate Governance Council have been applied for the entire financial year ended 30 June 2008.

The Board of Directors is responsible for the corporate governance of the consolidated entity. It monitors the business affairs of the Company on behalf of shareholders by whom they are elected and to whom they are accountable.

Board Composition

The composition of the Board shall be determined in accordance with the following principles and guidelines:

• The Board shall comprise at least 3 Directors, increasing where additional expertise is considered desirable in certain areas;

• The Board shall not comprise a majority of executive Directors; and

• Directors shall bring characteristics, which allow a mix of qualifications, skills and experience.

Where there is no formal review process in place, in order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all Directors is informally reviewed by the Chairman. Directors whose performance is unsatisfactory may be asked to retire.

The skills, experience and expertise relevant to the position of each director who is in office at the date of the annual report and their term of office are detailed in the director’s report.

The names of independent directors of the company are:

Mr Peter Dunne (resigned 17/10/2008)

Mr Boris Patkin (appointed 16/12/2008)

Mr Rohan Kerr (appointed 21/10/2008)

Mr John Bennett (resigned 21/10/2008)

Mr Stephen Grimson (resigned 7/07/2008)

Performance Evaluation and Communication to Shareholders

The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all information necessary to assess the performance of all Directors. Information is communicated to the shareholders through:

• Annual Report which is distributed to all shareholders and posted on the ASX website www.asx.com.au;

• The Half-yearly report which is posted on the ASX website www.asx.com.au;

• The Annual General Meeting and other meetings called to obtain approval for Board action as appropriate;

• The Company’s compliance with ASX continuous disclosure requirements;

• All public announcements and associated documents which are made available on the Company website at www.shellvillages.com.au

The Role of Shareholders

The Board of Directors aims to ensure that the shareholders are informed of all major developments affecting the consolidated entity’s state of affairs:

• Proposed major changes in the consolidated entity which may impact on share ownership rights are submitted to a vote of shareholders.

• Notices of all meetings of shareholders are made available to shareholders.

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the consolidated entity’s strategy and goals. Important issues are presented to the shareholders as single resolutions.

The shareholders are requested to vote on the appointment and aggregate remuneration of directors, the granting of options and shares and changes to the Constitution. Copies of the Constitution are available to any shareholder who requests it.

The External Auditor is to attend the Annual General Meeting and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the Auditor’s report.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

Audit Committee

The Board of Directors holds responsibilities of the audit committee.

Internal Control Framework

The Board acknowledges that it is responsible for the overall internal control framework but recognises that no cost effective internal control system will preclude all errors and irregularities. The Board believes that the current cost control framework to be suitable to the Company’s current operations. There is no Internal Audit function as the cost would significantly outweigh the benefits.

Trading Policy

The company’s policy regarding directors and employees trading in its securities is set by the board. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security’s prices.

Conflict of Interest

In accordance with Corporations Act 2001 and the company’s constitution, the directors must keep the Board advised on an ongoing basis of any interest that could potentially conflict with those of the Company. Details of Director related entity transactions with the Company and the consolidated entity are set out in the note 25.

Independent Professional Advice

Each director will have the right to seek independent professional advice at the Company’s expense. However, prior approval of the Chairman will be required, which will not be unreasonably withheld.

Business Risk Management

The Board will monitor and receive advice on areas of operational and financial risk, and consider strategies for appropriate risk management arrangements.

Specific areas which were initially identified and which will be regularly considered by the Board Meetings include foreign currency fluctuations, performance of activities, human resources, the environment and continuous disclosure obligations.

Ethical Standards

The Board’s policy for all Directors and management to conduct themselves with the highest ethical standards. All directors and employees will be expected to act with integrity and objectivity, striving at all times to enhance the reputation and performance of the consolidated entity.

Other Information

Further information relating to the company’s corporate governance practices and policies can be obtained from the company upon the request of shareholders.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ REPORT

Your directors present their report on the company and its controlled entities for the financial year ended 30 June 2008.

Directors

The names of directors in office at any time during or since the end of the year are:

Mr Corey Budd (appointed 26/02/2008)

Mr John Bennett (resigned 21/10/2008)

Mr Peter Dunne (resigned 17/10/2008)

Mr Boris Patkin (resigned 24/10/2007) (reappointed 16/12/2008)

Mr Peter Burger (resigned 17/06/2008)

Mr Stephen Grimson (resigned 7/07/2008)

Mr Rohan Kerr (appointed 21/10/2008)

Mr Steve Taylor (appointed 4/10/2008) (resigned 16/12/2008)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Company Secretary

The following person held the position of company secretary at the end of the financial year:

Mrs Lynn Thompson resigned as company secretary on 24 April 2009. In accordance with ASX listing rule 12.6, Mr Boris Patkin is caretaker company secretary until such a time a new company secretary is announced.

Principal Activities

The principal activities of the consolidated group during the financial year were:

• Owning, managing and developing ―Over 50’s Residential Gated Communities‖.

In August 2007 the shareholders approved the following:

• change of nature of The Company’s business activities from medical operations to property operations;

• change company name from Medical Monitors Limited to Shell Villages and Resorts Limited.

There were no other significant changes in the nature of the consolidated group’s principal activities during the financial year.

Operating Results

The consolidated loss of the consolidated group after providing for income tax amounted to $5,197,992 (2007: $5,653,081).

Dividends Paid or Recommended

No dividends have been paid or declared during the financial year ended 30 June 2008 (2007: nil), nor have the directors recommend that any dividend be paid.

Review of Operations

• In August 2007 the shareholders approved change of principal activities from medical services to property operations;

• The Group has sold its medical business for $1.16 million, which was approved by shareholders at the extraordinary general meeting on 31 December 2008;

• The Group continues to convert debt to equity, with $1.4 million of debt converted to equity during the 2008 financial year.

• The Group has negotiated the sale of its Hunter Valley, Brisbane River Terrace and Cooroy properties.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ REPORT

The following significant changes in the state of affairs of the parent entity occurred during the financial year:

• i. On 23 August 2007 the company sold its subsidiary Heart Monitors Pty Ltd for $1.16 million.

• ii. In February 2008 the company appointed a new Managing Director to head its property operations. iii. Before the end of financial year the company started negotiating sale of its properties in Hunter Valley, Brisbane River Terrace and Cooroy.

Future Developments, Prospects and Business Strategies

To further improve the consolidated group’s profit and maximise shareholder wealth, the following developments are intended to be implemented in the near future:

• i. The company seeks to sell its properties in Hunter Valley, Cooroy and Brisbane River Terraces to concentrate on development opportunities.

• ii. The company continues to looks for positive cash flow companies to purchase to improve cash flows and strengthen the balance sheet of the business.

These developments, together with the current strategy of continuous improvement and an adherence to quality control in existing markets, are expected to assist in the achievement of the consolidated group’s long-term goals and development of new business opportunities.

Information on Directors

Mr Boris Patkin Qualifications Experience Special Responsibilities

• Non-executive Director

• [Bachelor of Science (Industrial Chemistry) ] Masters in Commerce (Marketing and Financial Management)

• — Board member since December 2008

• [Actively promoting new investment opportunities and investor ] relations

Mr Rohan Kerr Experience

• Non-executive Director

• Board member since October 2008.

Mr Corey Budd Qualifications Experience

• Managing Director

• Masters of Business Administration (Executive)

• Board member since February 2008.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ REPORT

REMUNERATION REPORT - AUDITED

This report details the nature and amount of remuneration for each director of Shell Villages & Resorts Limited, and for the executives receiving the highest remuneration.

Remuneration policy

The remuneration policy of Shell Villages and Resorts Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the consolidated group’s financial results.

The board’s policy for determining the nature and amount of remuneration for board members and senior executives of the economic entity is based on the following factors:

• Length of service,

• Experience of individual involved,

• The overall performance of the market in which the Company is in,

• The overall performance of the Company.

Key Management Personnel Remuneration

2008
Key Management Person	Short-term Benefits				Post- employment Benefits
	Cash salary and fees $	Cash bonus $	Non – monetary benefits $	Other $	Super- annuation $
Mr Corey Budd Mr Peter Berger Mr Boris Patkin Mr Stephen Grimson Mr Peter Dunne Mr John Bennett	45,000 - 44,000 - - -	- - - - - -	- - - - - -	- - - - -	4,050 - - - - -
Total	89,000	-	-	-	4,050
2008 (cont’d)
Key Management Person	Share-based Payment		Total $	Performance Related %	Shares as a percentage of remune- ration %
	Equity Options $ $
Mr Corey Budd Mr Peter Berger Mr Boris Patkin Mr Stephen Grimson Mr Peter Dunne Mr John Bennett	30,000 - 30,000 - 9,500 - - - 25,000 - 25,000 -		79,050 30,000 53,500 - 25,000 25,000	- - - - - -	38 100 18 - 100 100
Total	119,500 -		212,550	-	56

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ REPORT

REMUNERATION REPORT - AUDITED (CONITNUED)

2007
Key Management Person	Short-term Benefits				Post- employment Benefits
	Cash salary and fees $	Cash bonus $	Non – monetary benefits $	Other $	Super- annuation $
Mr Peter Berger Mr Boris Patkin Mr Stephen Grimson Mr Peter Dunne Mr John Bennett Dr Allan Shell Mr Neville Buch Mr John Genner Mr Harry Platt	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -	- - - - - - - - -
Total	-	-	-	-	-
2007 (cont’d)
Key Management Person	Share-based Payment		Total $	Performance Related %	Shares as a percentage of remune- ration %
	Equity $	Options $
Mr Peter Berger Mr Boris Patkin Mr Stephen Grimson Mr Peter Dunne Mr John Bennett Dr Allan Shell Mr Neville Buch Mr John Genner Mr Harry Platt	- - - - - 30,000 18,000 18,000 -	- - - - - - - - -	- - - - - 30,000 18,000 18,000 -	- - - - - - - - -	- - - - - 100 100 100 -
	66,000	-	66,000	-	100

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ REPORT

REMUNERATION REPORT - AUDITED (CONITNUED)

The table below sets out key management personnel’s compensation together with the earnings for the same period.

Financial year ended 30 June 2004 30 June 2005 30 June 2006 30 June 2007 30 June 2008	Total remuneration $	EPS cents	Share price cents
	366,465	(2.0)	7
	472,147	(2.0)	4
	488,615	(3.0)	24
	66,000	(7.5)	10
	212,550	(14.3)	18

Note: EPS and share price are shown as at the reporting date without adjustments for consolidations and bonus share issues.

Director’s Share and Option Holdings as of the date of this report

Mr Corey Budd Mr Peter Berger Mr Boris Patkin Mr Stephen Grimson Mr Peter Dunne Mr John Bennett	2008 2007 Shares Options Shares Options 210,000 - N/A - 66,667 - 25,000 - N/A - 1,291,786 - 105,767 - 91,000 - 55,556 - - - 55,556 - - -
	493,546 - 1,407,786 -

Meetings of Directors

During the financial year, 6 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

	Directors’ Meetings	Directors’ Meetings
	Number eligible to attend	Number attended
Mr Peter Berger	3	3
Mr Boris Patkin	6	4
Mr Stephen Grimson	6	4
Mr Peter Dunne	6	6
Mr John Bennett	6	6
Mr Corey Budd	2	2

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ REPORT

Non-audit Services

The board of directors is satisfied that nil non-audit services were performed by the external auditors during the year.

Environmental Issues

The consolidated group’s operations are not subject to significant environmental regulation under the law of the Commonwealth and State. The directors are not aware of any significant breach, or pending legal action, in the period covered by this report.

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2008 has been received and can be found on page 10 of the directors’ report.

Signed in accordance with a resolution of the Board of Directors.

==> picture [177 x 96] intentionally omitted <==

Boris Patkin Director

Dated this -30 th day of September 2009

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2002 TO THE DIRECTORS OF SHELL VILLAGES AND RESORTS LIMITED AND CONTROLLED ENTITIES

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

INCOME STATEMENTS FOR YEAR ENDED 30 JUNE 2008

	Note	Consolidated Group	Consolidated Group	Parent Entity	Parent Entity
		2008	2007	2008	2007
		$	$	$	$
Revenue	2	8,596	128,177	-	4,165
Cost of Sales		-	-	-	-
Gross Profit		8,596	128,177	-	4,165
Other income	2	1,211,009	593,324	198,827	17,409
Consulting expenses		(652,700)	(635,835)	(550,343)	(364,111)
Commissions		(80,260)	(464,035)	(17,455)	(438,000)
Corporate expenses		(193,701)	(95,297)	(193,701)	(87,542)
Depreciation and amortisation		(250,666)	(192,828)	(7,506)	(49,710)
Finance costs		(856,256)	(693,452)	(325,093)	(183,699)
Foreign currency loss		(58)	(236)	(58)	(236)
International marketing expenses		-	(50,288)	-	(50,288)
Provision for write-downs		(2,845,000)	(3,405,757)	(7,800,534)	(1,352,247)
Other expenses		(880,322)	(442,708)	(404,919)	(354,114)
Provision for write-down of inventory		-	(19,246)	-	(19,246)
Rental property expenses		(214,417)	(88,954)	(553)	-
Rent		(49,323)	(55,735)	(11,730)	(51,423)
Staff Expenses		(332,633)	(495,449)	(322,076)	(495,219)
Loss before income tax	3	(5,135,731)	(5,918,319)	(9,435,141)	(3,424,261)
Income tax benefit	4	-	265,238	-	265,238
Loss from continuing operations		(5,189,059)	(5,653,081)	(9,435,141)	(3,159,023)
Loss from discontinued operations	5	(8,933)	-	-	-
Loss attributable to members of the parent entity		(5,197,992)	(5,653,081)	(9,435,141)	(3,159,023)
Basic earnings per share (cents per share)	8	(15.3)	(22.5)

Diluted earnings is not disclosed as it is not materially different to basic earnings per share

The above income statement should be read in conjunction with the accompanying notes.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

BALANCE SHEETS AS AT 30 JUNE 2008

AS AT	30 JUNE 2008
Note ASSETS CURRENT ASSETS Cash and cash equivalents 9 Trade and other receivables 10 Financial assets held for sale 11 Fixed assets held for sale 12 Other current assets 15 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables 10 Financial assets 11 Property, plant and equipment 13 Intangible assets 14 Other non-current assets 15 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 16 Financial liabilities 17 Short-term provisions 18 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Financial liabilities 17 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 19 Reserves Retained earnings TOTAL EQUITY	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 46,361 306,588 2,975 197,628 137,746 26,768 60,003 84,329 - - - 2,460,405 13,162,063 - - - 124,015 9,103 - -
	13,470,185 342,459 62,978 2,742,362
	- - - 4,544,511 - - 56 61 3,942 12,491,622 3,942 22,193 600,000 4,827,406 - - 5,261 20,640 3,782 3,782
	609,203 17,339,668 7,780 4,570,547
	14,079,389 17,682,127 70,758 7,312,909
	944,793 1,529,676 698,393 771,291 13,724,000 2,628,532 3,870,000 2,179,281 - 259 - 259
	14,615,465 4,158,467 4,568,393 2,950,831
	1,195,000 11,820,500 1,195,000 2,330,000
	1,195,000 11,820,500 1,195,000 2,330,000
	15,810,465 15,978,967 5,763,393 5,280,831
	(1,784,404) 1,703,160 (5,692,635) 2,032,078
	41,793,849 40,083,421 41,793,849 40,083,421 493,152 493,152 393,153 393,153 (44,074,405) (38,873,413) (47,879,637)(38,444,496)
	(1,784,404) 1,703,160 (5,692,635) 2,032,078

The above balance sheets should be read in conjunction with the accompanying notes.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

STATEMENTS OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2008

Consolidated Group

Balance at 1 July 2006 Profit attributable to members of parent entity Shares issued during the year Balance at 30 June 2007 Shares issued during the year Profit attributable to members of parent entity Balance at 30 June 2008	Share Capital – Ordinary Shares Retained Earnings Reserves Total
	$ $ $ $ 35,746,633 (33,220,332) 493,152 3,019,453 - (5,653,081) - (5,653,081) 4,336,788 - - 4,336,788
	40,083,421 (38,873,413) 493,152 1,703,160
	1,710,428 - - 1,710,428 - (5,197,992) - (5,197,992)
	41,793,849 (44,074,405) 493,152 (1,784,404)

Parent Entity
	Share Capital –	Retained	Reserves	Total
	Ordinary	Earnings
	Shares
	$	$	$	$
Balance at 1 July 2006	35,746,633	(35,285,473)	393,153	854,313
Profit attributable to members of parent entity	-	(3,159,023)	-	(3,159,023)
Shares issued during the year	4,336,788	-	-	4,336,788
Balance at 30 June 2007	40,083,421	(38,444,496)	393,153	2,032,078
Shares issued during the year	1,710,428	-	-	1,710,428
Profit attributable to members of parent entity	-	(9,435,141)	-	(9,435,141)
Balance at 30 June 2008	41,793,849	(47,879,637)	393,153	(5,692,635)

The above statements of changes in equity should be read in conjunction with the accompanying notes.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

CASH FLOW STATEMENTS FOR YEAR ENDED 30 JUNE 2008

	Note	Consolidated Group	Consolidated Group	Parent	Entity
		2008	2007	2008	2007
		$	$	$	$
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash receipts in the course of operations		1,281,622	858,877	220,376	126,741
Interest received		5,772	30,612	2,179	9,596
Cash payments in the course of operations		(2,935,612)	(2,014,499)	(1,270,329)	(1,698,552)
Finance costs		(814,245)	(544,959)	(188,749)	(85,733)
Income tax paid		-	265,238	-	265,238
Net cash used in operating activities	24a	(2,462,463)	(1,404,731)	(1,236,523)	(1,382,710)
CASH FLOWS FROM INVESTING
ACTIVITIES
Refund deposits		-	(14,529)	-	(38,780)
Purchase of property, plant and equipment		(287,142)	(8,836,835)	(6,348)	-
Purchase of intangibles		(600,000)	-	-	-
Purchase of investments		-	-	-	(40)
Payment for businesses		-	(975,000)	-	-
Net cash used in investing activities		(887,142)	(9,826,364)	(6,348)	(38,820)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of shares		291,649	1,060,000	291,649	1,060,000
Proceeds from secured borrowings		-	6,183,000	-	-
Proceeds from unsecured borrowings		2,798,500	4,368,531	2,615,000	1,218,531
Loans to controlled entities		-	-	(1,857,660)	(588,561)
Repayment of borrowings		(663)	(152,011)	(663)	(145,927)
Net cash provided by financing activities		3,089,486	11,459,520	1,048,326	1,544,043
Net increase (decrease) in cash held		(260,119)	s228,425	(194,545)	122,513
Cash at beginning of financial year		306,588	78,399	197,628	75,351
Effect of exchange rates on cash holdings in
foreign currencies		(108)	(236)	(108)	(236)
Cash at end of financial year	9	46,361	306,588	2,975	197,628

The above cashflow statements should be read in conjunction with the accompanying notes.

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 .

The financial report covers the consolidated group of Shell Villages and Resorts Limited and controlled entities, and Shell Villages and Resorts Limited as an individual parent entity. Shell Villages and Resorts Limited is a listed public company, incorporated and domiciled in Australia.

The financial report of Shell Villages and Resorts Limited and controlled entities, and Shell Villages and Resorts Limited as an individual parent entity complies with all International Financial Reporting Standards (IFRS) in their entirety.

The following is a summary of the material accounting policies adopted by the consolidated group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Basis of Preparation

The accounting policies set out below have been consistently applied to all years presented.

Reporting Basis and Conventions

The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Accounting Policies

a. Principles of Consolidation

A controlled entity is any entity Shell Villages and Resorts Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 21 to the financial statements. All controlled entities have a June financial year-end.

All inter-company balances and transactions between entities in the consolidated group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated group during the year, their operating results have been included/excluded from the date control was obtained or until the date control ceased.

Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item in the consolidated financial report.

b. Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated group will derive sufficient future assessable income to enable the benefit to be realised and

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Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

comply with the conditions of deductibility imposed by the law.

c. Property, Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses.

Property

Freehold land and buildings are shown at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the income statement. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the income statement and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset	Depreciation Rate
Buildings	2.50%
Plant and equipment	13–14%
Leased plant and equipment	20%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

– 16 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

d. Investment Property

Investment property, comprising freehold office complexes, is held to generate long-term rental yields. All tenant leases are on an arm’s length basis. Investment property is carried at fair value, determined annually by independent valuers. Changes to fair value are recorded in the income statement as other income.

e. Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the consolidated group, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

• f. Financial Instruments

Recognition

Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit and loss

A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Derivatives are also categorised as held for trading unless they are designated as hedges. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the income statement in the period in which they arise.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.

Held-to-maturity investments

These investments have fixed maturities, and it is the group’s intention to hold these investments to maturity. Any held-to-maturity investments held by the group are stated at amortised cost using the effective interest rate method.

Available-for-sale financial assets

Available-for-sale financial assets include any financial assets not included in the above categories. Available-for-sale financial assets are reflected at fair value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.

Financial liabilities

Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.

– 17 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

g. Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

• h. Intangibles

Goodwill

Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

• i. Foreign Currency Transactions and Balances

Functional and presentation currency

The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income statement.

Group companies

The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as follows:

• assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;

• income and expenses are translated at average exchange rates for the period; and

• retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign currency translation reserve in the balance sheet. These differences are recognised in the income statement in the period in which the operation is disposed.

j. Employee Benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

– 18 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Equity-settled compensation

The group operates a share-based compensation plans - an employee share scheme. The bonus element over the exercise price of the employee services rendered in exchange for the grant of shares is recognised as an expense in the income statement. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares granted.

k. Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

l. Debt Defeasance

Where assets are given up to extinguish the principal repayments and all future interest payments of a debt any differences in the carrying values of assets foregone and the liability extinguished are brought to account in the profit. Costs incurred in establishing the defeasance are expensed in the period that the defeasance occurs.

Where only part of a debt is extinguished the interest payments and principal repayments are defeased proportionately and a liability recognised for the net present value of the remaining future interest and principal repayments. The discount factor applied is the implicit rate in the original debt.

In all cases where defeasance occurs, it is highly unlikely that the company will again be required to pay any part of the debt or meet any guarantees or indemnities associated with the debt.

m. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.

n. Revenue

Revenue from the sale of goods is recognised upon the delivery of goods to customers.

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

Revenue from investment properties is recognised on an accruals basis or straight-line basis in accordance with leases agreements.

Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture entities are accounted for in accordance with the equity method of accounting.

Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

o. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in income in the period in which they are incurred.

– 19 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

p. Financial Guarantees

• Financial guarantee contracts are measured at their fair values initially and subsequently measured at the higher of:

• the amount of obligation under the contract, as determined in accordance with AASB 137: Provisions, Contingent Liabilities and Contingent Assets; or

• the amount recognised initially less cumulative amortisation recognised in accordance with revenue recognition policies.

The fair value of financial guarantee contracts has been assessed using a probability weighted discounted cash flow approach. The probability has been based on:

• the likelihood of the guaranteed party defaulting in a year period;

• the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and

• the maximum loss exposed if the guaranteed party were to default.

Changes in the accounting policy during the year for the group are described in detail in Note 38.

q. Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

r. Government Grants

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

s. Comparative Figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

t. New accounting standards and interpretations not yet adopted

Relevant accounting standards and interpretations that have recently been issued or amended but are not yet effective and have not been adopted for the annual reporting period ended 30 June 2008, are as follows:

Standard/Interpretation	Application	Application date
	date*	for the Group*
AASB 8_Operating Segments_and consequential amendments to other accounting standards resulting from its issue	1 January 2009	1 July 2009
AASB 101_Presentation of Financial Statements – revised_and
consequential amendments to other accounting standards resulting	1 January 2009	1 July 2009
from its issue
AASB 3_Business Combinations – revised_and consequential amendments to other accounting standards resulting from its issue	1 July 2009	1 July 2009
AASB 127_Consolidated and Separate Financial Statements – revised_
and consequential amendments to other accounting standards	1 July 2009	1 July 2009
resulting from its issue
AASB 123_Borrowing Costs – revised_and consequential amendments to other accounting standards resulting from its issue	1 January 2009	1 July 2009

– 20 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

TE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Standard/Interpretation	Application date*	Application date for the Group*
AASB 2008-1_Amendments to Australian Accounting Standard – _Share-based Payments: Vesting Conditions and Cancellations	1 January 2009	1 July 2009
AASB 2008-2_Amendments to Australian Accounting Standards –_
Puttable Financial Instruments and Obligations arising on	1 January 2009	1 July 2009
Liquidation
AASB 2008-5_Amendments to Australian Accounting Standards_ arising from the Annual Improvements Project	1 January 2009	1 July 2009
AASB 2008-6_Further Amendments to Australian Accounting_ Standards arising from the Annual Improvements Project	1 July 2009	1 July 2009
AASB 2008-7_Amendments to Australian Accounting Standards –_
Cost of an Investment in a Subsidiary, Jointly Controlled Entity or	1 January 2009	1 July 2009
Associate
Interpretation 13_Customer Loyalty Programmes_	1 July 2008	1 July 2008
IFRIC 15_Agreements for the Construction of Real Estate_	1 January 2009	1 July 2009
IFRIC 16_Hedges of a Net Investment in a Foreign Operation_	1 October 2008	1 July 2009

*** Application date is for annual reporting periods beginning on or after the date shown in the above table.**

The directors anticipate that the adoption of these standards and interpretations in future periods may have the following impacts:

 AASB 8 - AASB 8 may impact segment disclosures. It is not expected to impact the amounts included in the financial statements except that it may impact the level at which goodwill, if any, is tested for impairment.

 AASB 101 - The revised AASB 101 is only expected to effect the presentation and disclosure of the financial report. It is not expected to effect recognition and measurement accounting policies.

 AASB 3 - The revised AASB 3 applies prospectively for all business combinations after it becomes effective. It introduces a number of changes which may have a significant impact on accounting for future business combinations. For example, it allows a choice for measuring a non-controlling interest (minority interest) in an acquiree – either at fair value or at the proportionate share of the acquiree’s net identifiable assets. It also requires acquisition related costs to be accounted for separately from the business combination – which will usually mean they will be expensed. The directors have not yet assessed the impact the revised standard will have in future periods.

 AASB 127 - The revised AASB 127 introduces a number of changes, including requiring that changes in an ownership interest in a subsidiary that do not result in a loss of control be accounted for as equity transactions. Another change will result in net income being attributed to the parent and the noncontrolling interests even if this results in the non-controlling interests having a deficit balance. The directors have not yet assessed the impact the revised standard will have in future periods.

 AASB 123 - The revised AASB 123 requires that borrowing costs associated with qualifying assets be capitalised. The directors do not expect the revised standard will have a material impact as the Group has no borrowing costs associated with qualifying assets.

 AASB 2008-1 - AASB 2008-1 introduces a number of amendments in accounting for share-based payments, including clarifying that vesting conditions comprise service conditions and performance conditions only. The Group may have, or enter into, share-based payment arrangements that could be impacted by these amendments. However, the directors have not yet assessed the impact, if any.

 AASB 2008-2 - AASB 2008-2 introduces amendments that allow an entity that issues certain puttable financial instruments to classify them as equity rather than financial liabilities. As the Group does not have any such financial instruments, these amendments are not expected to have an impact on the financial report.

– 21 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

 AASB 2008-5 and AASB 2008-6 - These amendments introduce various changes to IFRSs. The directors have not yet assessed the impact of the amendments, if any.

 AASB 2008-7 – AASB 2008-7 introduces amendments that result in all dividends from a subsidiary, jointly controlled entity or associate being recognised in the separate financial statements of an investor as income.

 Interpretation 13 - This interpretation deals with accounting for customer loyalty programmes. As the Group does not have any such programmes, the interpretation is not expected to have an impact on the financial report.

 IFRIC 15 - This interpretation deals with accounting by real estate developers providing construction services. As the Group does not provide such services, the interpretation is not expected to have an impact on the financial report.

 IFRIC 16 - This interpretation deals with accounting for hedges of a net investment in a foreign operation. As the Group does not have any such investment, the interpretation is not expected to have an impact on the financial report.

• u. Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key Estimates — Impairment

The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

No impairment has been recognised in respect of goodwill for the year ended 30 June 2008.

v. Going Concern

During the year ended 30 June 2008, the consolidated entity experienced a consolidated operating loss of $4.86 million and reported net liabilities of $1,45 million. In addition, the entity was reliant upon shareholder capital and unsecured borrowings to meet its business and loan obligations. The continuing viability of the entity and its ability to continue as a going concern and meet its debts and commitments as and when they fall due is dependent upon the following key events:

• i. conversion of the company’s convertible notes to shares to decrease liabilities and interest expense, and increase assets;

• ii. acquisition of new villages, properties or businesses, with development opportunities within the asset, to create higher returns to the company, which will provide growth for the company and increase shareholder wealth;

• iii. ongoing support from the company’s creditors; and

• iv. continued share capital raising, including the possible issuance of a prospectus to raise $18 million in additional share capital.

The directors believe that the company will be successful in the above matters, and realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. Accordingly, the directors have prepared the financial report on a going concern basis.

In the event that the company does not meet its planned revenue and cash flow targets, or successfully adopts alternative strategies, the company may not be able to realise its assets, including intangible assets, and extinguish its liabilities in the normal course of business at the amounts stated in the financial report. Accordingly, the going concern basis used in the preparation of the financial report would not be appropriate.

– 22 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 2: REVENUE

NOTE 2: REVENUE
Note Sales revenue — sale of goods Total Revenue Other income — Interest received — Rental revenue for property investment — Management fees — Loss on disposal of property, plant and equipment — Other revenue Total other income Total revenue from continuing activities NOTE 3: PROFIT FOR THE YEAR a.Expenses Finance costs: — Director related entities — Other entities Total finance costs Foreign currency translation losses Payments to defined contributions plan Provision for impairment: — trade receivables — wholly-owned subsidiaries — goodwill — land 13 — buildings 13 — development approval 14 Total Impairment	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 8,596 128,177 - 4,165
	8,596 128,177 - 4,165
	5,827 32,161 2,179 11,210 1,210,416 556,706 - 1,742 - - 202,400 - (17,093) - (17,093) - 11,859 4,457 11,341 4,457
	1,211,009 593,324 198,827 17,409
	1,219,605 721,501 198,827 21,574
	- 93,969 - 93,969 856,657 599,483 325,093 89,730
	856,657 693,452 325,093 183,699
	58 236 58 236 683 17,861 683 17,861 - 1,173,576 - 1,173,576 1,645,000 1,178,314 7,800,534 178,671 - 1,053,867 - - 265,000 - - - 645,000 - - - 290,000 - - -
	2,845,000 3,405,757 7,800,534 1,352,247

– 23 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 4: INCOME TAX EXPENSE

Note a. The components of tax expense comprise: Current tax Deferred tax b. The prima facie tax on profit from ordinary activities before income tax is reconciled to the income tax as follows: Operating Loss from ordinary activities Prima facie tax payable on profit from ordinary activities before income tax at 30% (2007: 30%) — consolidated group — parent entity Add: Tax effect of: timing differences and tax losses not recognised as a deferred tax asset or liability Less: Tax effect of: — Research and development offset Income tax attributable to entity	Consolidated Group Parent Entity 2008 $000 2007 $000 2008 $000 2007 $000 - 265,238 - 265,238 - - - -
	- 265,238 - 265,238
	(5,197,992) (5,653,081) (9,435,141) (3,159,023) (1,549,398) (1,695,924) - - - - (2,830,542) (947,707) 1,549,398 1,695,924 2,830,542 947,707 - (265,238) - (265,238)
	- (265,238) - (265,238)

– 24 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

NOTE 5: DISCONTINUED OPERATIONS

On 23 August 2007 the Group sold its entire heart monitoring segment; the segment was not a discontinued operation or classified as held for sale as at 30 June 2007 and the comparative income statement and statement of cash flows have been restated to show the discontinued operation separately from continuing operations.

The disposal involved the sale of 100% of the Group’s interest in Heart Monitors Pty Ltd.

During the year ended 30 June 2008, the heart monitoring segment had net cash outflows from operating activities of $6,634 (2007: inflows $ 39,157).

Profits attributable to the discontinued operation for year ended 30 June 2008 were as follows:

	2008 2007
Results of discontinued operation	$ $
	26,796 124,012 (5,000) (2,201) (24,151) (66,838) (10,471) (35,221) - (1,178,314)
Revenue
Administration expenses
Consulting and professional services fees
Other expenses
Impairment of intangible assets
Results from operating activities	(12,826) (1,282,573) - -
Income tax expense
Loss after tax but before loss on sale of discontinued operation	(12,826) (1,158,561) 3,893 -
Gain on sale of discontinued operation
Loss for the period	(8,933) (1,158,561)
	(28,337) 39,157 - - (14,255) (5,679)
The net cash flows of the discontinuing division which have been incorporated
into the statement of cash flows are as follows:
Net cash inflow/(outflow) from operating activities
Net cash inflow/(outflow) from investing activities
Net cash inflow/(outflow) from financing activities
Net increase in cash generated by the discontinuing division	(42,592) 33,478

– 25 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 6: KEY MANAGEMENT PERSONNEL DISCLOSURES

Key management personnel remuneration has been included in the Remuneration Report section of the Directors Report.

a. Key Management Personnel Compensation

Key Management Personnel Compensation
Short term employee benefits Post-employment benefits Share-based payments	Consolidated Parent entity 2008 2007 2008 2007 $ $ $ $ 89,000 - 89,000 - 4,050 - 4,050 - 119,500 66,000 119,500 66,000
	212,550 66,000 212,550 66,000

b. Shareholdings - Number of Shares held by Key Management Personnel

b. Shareholdings - Number of Shares held by Key Management Personnel	b. Shareholdings - Number of Shares held by Key Management Personnel	b. Shareholdings - Number of Shares held by Key Management Personnel
Balance 1 July Share consolidation Received as Compen- sation Options Exercised Net Change Other Final Notice Balance 30 June 2008 Mr Corey Budd - - 150,000 - 60,000 - 210,000 Mr Peter Berger 25,000 (16,667) 66,667 - (8,333) - 66,667 Mr Boris Patkin 1,291,786 (861,191) 35,000 - (165,595) 300,000 Mr Stephen Grimson 91,000 (60,666) - - 75,433 - 105,767 Mr Peter Dunne - - 55,556 - - - 55,556 Mr John Bennett - - 55,556 - - - 55,556 Total 1,407,786 (938,524) 362,779 - (38,495) 300,000 493,546 2007* Mr Peter Burger - - - - 25,000 - 25,000 Mr Boris Patkin 1,291,786 - - - - - 1,291,786 Mr Stephen Grimson - - - - 91,000 - 91,000 Mr Peter Dunne - - - - - - - Mr John Bennett - - - - - - - Dr Alan Shell 3,904,957 - 7,250,000 - (6,725,000) (4,429,957) - Mr John Genner 1,425,186 - 90,000 - - (1,515,186) - Mr Harry Platt 3,581,196 - - - (1,004,957) (2,576,239) - Mr Neville Buch 131,800 - 90,000 - - (221,800) - 10,334,925 - 7,430,000 - (7,613,957) (8,743,182) 1,407,786
	1,407,786 (938,524)	362,779 - (38,495) 300,000 493,546
		- - 25,000 - 25,000 - - - - 1,291,786 - - 91,000 - 91,000 - - - - - - - - - - 7,250,000 - (6,725,000) (4,429,957) - 90,000 - - (1,515,186) - - - (1,004,957) (2,576,239) - 90,000 - - (221,800) -
	10,334,925 -	7,430,000 - (7,613,957) (8,743,182) 1,407,786

• Net Change Other refers to shares purchased or sold during the financial year.

– 26 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 7: AUDITORS’ REMUNERATION

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008 NOTE 7: AUDITORS’ REMUNERATION	THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2008	THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2008
Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Remuneration of the auditor of the parent entity for: — auditing or reviewing the financial report 75,500 80,100 75,500 80,100 NOTE 8: EARNINGS PER SHARE Consolidated Group 2008 cents 2007 cents Basic and diluted earnings per share (15.3) (22.5) 2008 $ 2007 $ Loss attributable to ordinary shareholders Loss attributable to members of the parent entity (5,197,992) (5,653,081) Loss attributable to ordinary shareholderes (5,197,992) (5,653,081) 2008 No 2007 No Weighted average number of ordinary shares Issued shares at 1 July 91,292,254 65,858,956 Effect of consolidation of ordinary shares on 3 to 1 basis in August 2007 (60,861,501) - Effect of shares issued during the year 3,486,601 9,593,708 Restating prior period shares consolidated on 3 to 1 basis for comparison - (50,301,776) Weighted average number of ordinary shares at 30 June 33,917,354 25,150,888	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 75,500 80,100 75,500 80,100
		Consolidated Group 2008 cents 2007 cents (15.3) (22.5) 2008 $ 2007 $ (5,197,992) (5,653,081) (5,197,992) (5,653,081) 2008 No 2007 No 91,292,254 65,858,956 (60,861,501) - 3,486,601 9,593,708 - (50,301,776) 33,917,354 25,150,888
Weighted average number of ordinary shares
Issued shares at 1 July Effect of consolidation of ordinary shares on 3 to 1 basis in August 2007 Effect of shares issued during the year Restating prior period shares consolidated on 3 to 1 basis for comparison Weighted average number of ordinary shares at 30 June

Convertible notes were considered as potential ordinary shares but were not reflected in calculation of diluted earnings per share as their nature is anti-dilutive.

– 27 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 9: CASH AND CASH EQUIVALENTS

Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Cash at bank and in hand 46,361 306,588 2,975 197,628 Cash and cash equivalents 46,361 306,588 2,975 197,628 NOTE 10: TRADE AND OTHER RECEIVABLES CURRENT Trade receivables 137,746 1,200,345 60,003 1,206,579 Provision for impairment of receivables - (1,173,577) - (1,173,577) 137,746 26,768 60,003 33,002 Amounts receivable from: —wholly-owned subsidiaries - - 6,155,534 51,327 Provision for impairment of receivables - - (6,155,534) - 137,746 26,768 60,003 84,329 NON-CURRENT Amounts receivable from: — wholly-owned entities - - - 4,544,511 The ageing of the trade receivables at the reporting date was: Not past due 137,746 26,768 59,376 33,002 Past due more than 90 days - 1,173,577 - 1,173,577 137,746 1,200,345 59,376 1,206,579 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Balance at 1 July 1,173,577 - 1,173,577 - Impairment loss recognised 12,147 1,173,577 12,147 1,173,577 Debts written-off (1,185,724) - (1,185,724) - Balance at 30 June - 1,173,577 - 1,173,577 NOTE 11: FINANCIAL ASSETS Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ CURRENT Available-for-sale financial assets - - - 2,460,405 - - - 2,460,405 NON CURRENT Investments in controlled entities at cost - - 56 61 - - 56 61	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Cash at bank and in hand 46,361 306,588 2,975 197,628 Cash and cash equivalents 46,361 306,588 2,975 197,628 NOTE 10: TRADE AND OTHER RECEIVABLES CURRENT Trade receivables 137,746 1,200,345 60,003 1,206,579 Provision for impairment of receivables - (1,173,577) - (1,173,577) 137,746 26,768 60,003 33,002 Amounts receivable from: —wholly-owned subsidiaries - - 6,155,534 51,327 Provision for impairment of receivables - - (6,155,534) - 137,746 26,768 60,003 84,329 NON-CURRENT Amounts receivable from: — wholly-owned entities - - - 4,544,511 The ageing of the trade receivables at the reporting date was: Not past due 137,746 26,768 59,376 33,002 Past due more than 90 days - 1,173,577 - 1,173,577 137,746 1,200,345 59,376 1,206,579 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Balance at 1 July 1,173,577 - 1,173,577 - Impairment loss recognised 12,147 1,173,577 12,147 1,173,577 Debts written-off (1,185,724) - (1,185,724) - Balance at 30 June - 1,173,577 - 1,173,577 NOTE 11: FINANCIAL ASSETS Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ CURRENT Available-for-sale financial assets - - - 2,460,405 - - - 2,460,405 NON CURRENT Investments in controlled entities at cost - - 56 61 - - 56 61	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Cash at bank and in hand 46,361 306,588 2,975 197,628 Cash and cash equivalents 46,361 306,588 2,975 197,628 NOTE 10: TRADE AND OTHER RECEIVABLES CURRENT Trade receivables 137,746 1,200,345 60,003 1,206,579 Provision for impairment of receivables - (1,173,577) - (1,173,577) 137,746 26,768 60,003 33,002 Amounts receivable from: —wholly-owned subsidiaries - - 6,155,534 51,327 Provision for impairment of receivables - - (6,155,534) - 137,746 26,768 60,003 84,329 NON-CURRENT Amounts receivable from: — wholly-owned entities - - - 4,544,511 The ageing of the trade receivables at the reporting date was: Not past due 137,746 26,768 59,376 33,002 Past due more than 90 days - 1,173,577 - 1,173,577 137,746 1,200,345 59,376 1,206,579 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Balance at 1 July 1,173,577 - 1,173,577 - Impairment loss recognised 12,147 1,173,577 12,147 1,173,577 Debts written-off (1,185,724) - (1,185,724) - Balance at 30 June - 1,173,577 - 1,173,577 NOTE 11: FINANCIAL ASSETS Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ CURRENT Available-for-sale financial assets - - - 2,460,405 - - - 2,460,405 NON CURRENT Investments in controlled entities at cost - - 56 61 - - 56 61	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Cash at bank and in hand 46,361 306,588 2,975 197,628 Cash and cash equivalents 46,361 306,588 2,975 197,628 NOTE 10: TRADE AND OTHER RECEIVABLES CURRENT Trade receivables 137,746 1,200,345 60,003 1,206,579 Provision for impairment of receivables - (1,173,577) - (1,173,577) 137,746 26,768 60,003 33,002 Amounts receivable from: —wholly-owned subsidiaries - - 6,155,534 51,327 Provision for impairment of receivables - - (6,155,534) - 137,746 26,768 60,003 84,329 NON-CURRENT Amounts receivable from: — wholly-owned entities - - - 4,544,511 The ageing of the trade receivables at the reporting date was: Not past due 137,746 26,768 59,376 33,002 Past due more than 90 days - 1,173,577 - 1,173,577 137,746 1,200,345 59,376 1,206,579 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Balance at 1 July 1,173,577 - 1,173,577 - Impairment loss recognised 12,147 1,173,577 12,147 1,173,577 Debts written-off (1,185,724) - (1,185,724) - Balance at 30 June - 1,173,577 - 1,173,577 NOTE 11: FINANCIAL ASSETS Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ CURRENT Available-for-sale financial assets - - - 2,460,405 - - - 2,460,405 NON CURRENT Investments in controlled entities at cost - - 56 61 - - 56 61	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ Cash at bank and in hand 46,361 306,588 2,975 197,628 Cash and cash equivalents 46,361 306,588 2,975 197,628 NOTE 10: TRADE AND OTHER RECEIVABLES CURRENT Trade receivables 137,746 1,200,345 60,003 1,206,579 Provision for impairment of receivables - (1,173,577) - (1,173,577) 137,746 26,768 60,003 33,002 Amounts receivable from: —wholly-owned subsidiaries - - 6,155,534 51,327 Provision for impairment of receivables - - (6,155,534) - 137,746 26,768 60,003 84,329 NON-CURRENT Amounts receivable from: — wholly-owned entities - - - 4,544,511 The ageing of the trade receivables at the reporting date was: Not past due 137,746 26,768 59,376 33,002 Past due more than 90 days - 1,173,577 - 1,173,577 137,746 1,200,345 59,376 1,206,579 The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Balance at 1 July 1,173,577 - 1,173,577 - Impairment loss recognised 12,147 1,173,577 12,147 1,173,577 Debts written-off (1,185,724) - (1,185,724) - Balance at 30 June - 1,173,577 - 1,173,577 NOTE 11: FINANCIAL ASSETS Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ CURRENT Available-for-sale financial assets - - - 2,460,405 - - - 2,460,405 NON CURRENT Investments in controlled entities at cost - - 56 61 - - 56 61
		306,588 2,975 197,628
		1,200,345 (1,173,577)	60,003 -	1,206,579 (1,173,577)
		26,768	60,003	33,002
		- -	6,155,534 (6,155,534)	51,327 -
		26,768	60,003	84,329
		-	-	4,544,511 33,002 1,173,577 1,206,579 follows: - 1,173,577 - 1,173,577 Entity 2007 $ 2,460,405 2,460,405 61 61
		26,768 1,173,577	59,376 -
	137,746	1,200,345	59,376
	- 1,173,577 -
	Consolidated Group Parent 2008 $ 2007 $ 2008 $ - - -
	- - -
	- - 56
	- - 56

– 28 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 11: FINANCIAL ASSETS (CONTINUED)

FOR THE YEAR NOTE 11: FINANCIAL ASSETS (CONTINUED)	ENDED 30 JUNE 2008	ENDED 30 JUNE 2008
Available-for-sale Financial Assets Comprise	Consolidated Group			Parent	Entity
CURRENT	2008	2007		2008	2007
Unlisted investments, at cost	$	$		$	$
— shares in controlled entities		-	-	-	7,809,830
— (impairment provision)		-	-	-	(5,349,425)
		-	-	-	2,460,405

Available-for-sale financial assets comprise investments in the ordinary issued capital of Heart Monitors Pty Ltd. There are no fixed returns or fixed maturity date attached to this investment. There was further impairment recognised in 2008 year for $1,645,000, refer note 27 for additional details as to reasons for impairment.

NOTE 12: FIXED ASSETS HELD FOR SALE

	Consolidated	Group		Parent Entity	Parent Entity
CURRENT	2008	2007		2008	2007
Hunter Valley	$	$		$	$
Land & Buildings	2,246,924		-		-	-
Property, plant and equipment	356,891		-		-	-
Goodwill	855,000		-		-	-
	3,458,815		-		-	-
Brisbane River Terraces
Land	3,285,702		-		-	-
Buildings	3,265,406		-		-	-
Property, plant and equipment	151,022		-		-	-
	6,702,130		-		-	-
Cooroy
Land	661,503		-		-	-
Buildings	1,596,406		-		-	-
Property, plant and equipment	33,210		-		-	-
Development costs	710,000		-		-	-
	3,001,199		-		-	-
	13,162,063		-		-	-

– 29 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 13: PROPERTY, PLANT AND EQUIPMENT

	Consolidated Group	Consolidated Group	Parent	Entity
	2008	2007	2008	2007
	$	$	$	$
LAND AND BUILDINGS
Freehold land at:
Cost	-	6,493,023	-	-
Less accumulated impairment	-	-	-	-
Total Land	-	6,493,023	-	-
Buildings at:
Cost	-	5,744,677	-	-
Less accumulated depreciation & impairment	-	(94,248)	-	-
Total Buildings	-	5,650,429	-	-
Total Land and Buildings	-	12,143,452	-	-
PLANT AND EQUIPMENT
Plant and equipment:
At cost	-	423,753	-	52,517
Accumulated depreciation	-	(100,532)	-	(52,517)
	-	323,221	-	-
Leased plant and equipment
Capitalised leased assets	-	470,394	-	333,742
Accumulated depreciation	-	(469,801)	-	(333,149)
	-	593	-	593
Furniture and fittings
At cost	626	49,651	626	44,703
Accumulated depreciation	(4)	(27,550)	(4)	(23,103)
	622	22,101	622	21,600
Office Equipment
At cost	5,722	5,808	5,722	-
Accumulated Depreciation	(2,402)	(3,553)	(2,402)	-
	3,320	2,255	3,320	-
Total Plant and Equipment	3,942	348,170	3,942	22,193
Total Property, Plant and Equipment	3,942	12,491,622	3,942	22,193

– 30 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 13: PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Movements in Carrying	Amounts
	Freehold	Buildings	Plant and	Furniture &	Leased Plant		Total
	Land		Equipment	Office	and
				Equipment	Equipment
	$	$	$	$	$		$
Consolidated Group:
Balance at 1 July 2006	299,134	-	8,281	30,540	37,552		375,507
Additions	6,193,889	5,744,677	371,236	3,611	-		12,313,413
Disposals	-	-	-	(4,470)	-		(4,470)
Depreciation expense	-	(94,248)	(56,296)	(5,325)	(36,959)		(192,828)
Balance at 30 June 2007	6,493,023	5,650,429	323,221	24,356	593		12,491,622
Reclassification –
investment property held
for sale	(6,228,023)	(4,827,917)	(534,706)	(6,417)	-	(11,597,063)
Additions	-	-	274,899	12,243	-		287,142
Disposals	-	-	-	(17,093)	-		(17,093)
Depreciation expense	-	(177,512)	(63,414)	(9,147)	(593)		(250,666)
Impairment	(265,000)	(645,000)	-	-	-		(910,000)
Balance at 30 June 2008	-	-	-	3,942	-		3,942
Parent Entity:	Freehold	Buildings	Plant and	Furniture &	Leased Plant		Total
	Land		Equipment	Office	and
				Equipment	Equipment
	$	$	$	$	$		$
Balance at 1 July 2006	-	-	8,281	30,540	37,552		76,373
Disposals	-	-	-	(4,47)		-	(4,740)
Depreciation expense	-	-	(8,281)	(4,470)	(36,959)		(49,710)
Balance at 30 June 2007	-	-	-	21,600	593		22,193
Additions	-	-	-	6,348		-	6,348
Disposals	-	-	-	(17,093)		-	(17,093)
Depreciation expense	-	-	-	(6,913)	(593)		(7,506)
Balance at 30 June 2008	-	-	-	3,942		-	3,942

– 31 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 14: INTANGIBLE ASSETS

Goodwill Cost Accumulated impaired losses Net carrying value Development approvals Cost Accumulated impaired losses Net carrying value Intellectual Property Cost Accumulated amortisation and impairment Net carrying value Total intangibles Movements in Carrying Amounts Consolidated Group: Balance at 1 July 2006 Additions Impairment losses Closing value at 30 June 2007 Reclassification – investment property held for sale Addition Disposal Impairment Closing value at 30 June 2008	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ - 3,489,662 - - - (2,634,662) - -
	- 855,000 - -
	600,000 1,000,000 - - -
	600,000 1,000,000 - -
	- 5,929,600 - - - (2,957,194) - -
	- 2,957,194 - -
	600,000 4,827,406 - -
	Goodwill Development Approvals Intellectual Property Total $ $ $ $ 1,053,867 - 4,150,720 5,204,587 855,000 1,000,000 - 1,855,000 (1,053,867) - (1,178,314) (2,232,181) 855,000 1,000,000 2,972,406 4,827,406 (855,000) (710,000) - (1,565,000) - 600,000 - 600,000 - - (1,327,406) (1,327,406) - (290,000) (1,645,000) (1,935,000) - 600,000 - 600,000

Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the income statement. Goodwill has an infinite life.

– 32 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 15: OTHER ASSETS

CURRENT Prepayments Security deposits NON-CURRENT Security Deposits NOTE 16: TRADE AND OTHER PAYABLES CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses NOTE 17: FINANCIAL LIABILITIES CURRENT Unsecured liabilities Lease liabilities Converting note interests Government R&D start loan Loans at call Unsecured borrowing Secured liabilities Bank loans	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 98,165 9,103 - - 25,850 - - -
	124,015 9,103 - -
	5,262 20,640 3,782 3,782
	5,262 20,640 3,782 3,782
	616,816 1,445,743 450,657 687,358 327,977 83,933 247,736 83,933
	944,793 1,529,676 698,393 771,291
	- 14,918 - 663 2,670,000 300,000 2,670,000 300,000 - 434,996 - - - 1,878,618 - 1,878,618 4,871,000 - 1,200,000 -
	7,541,000 2,628,532 3,870,000 2,179,281
	6,183,000 - - -
	13,724,000 2,628,532 3,870,000 2,179,281

– 33 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 17: FINANCIAL LIABILITIES (CONTINUED)

	Consolidated Group	Consolidated Group	Parent	Entity
	2008	2007	2008	2007
NON-CURRENT	$	$	$	$
Unsecured liabilities
Lease liability	-	-	-	-
Convertible note interests	1,195,000	2,330,000	1,195,000	2,330,000
Unsecured borrowing	-	3,307,500	-	-
	1,195,000	5,637,500	1,195,000	2,330,000
Secured liabilities
Commercial bills	-	6,183,000	-	-
	-	6,183,000	-	-
	1,195,000	11,820,500	1,195,000	2,330,000
a. Total current and non-current secured
liabilities:
Commercial bills	6,183,000	6,183,000	-	-
	6,183,000	6,183,000	-	-
b. The carrying amounts of non-current
assets pledged as security are:
First mortgage
Freehold land and buildings	11,055,940	12,143,452	-	-
c. The bank and mortgage loans are secured by registered first mortgages over certain freehold properties of
the subsidiaries.
d.Bills Payable	Consolidated Group		Parent Entity
Bills payable have been drawn as a	2008	2007	2008	2007
source of long-term finance. They	$	$	$	$
mature on August 2011 and bear
variable interest at 7.05 – 7.41%
payable quarterly in advance.	6,183,000	6,183,000	-	-

e. The convertible notes bear 8% interest payable quarterly and unsecured borrowings attract 1.25% interest.

f. Convertible notes issued to purchase retirements villages owned by the consolidated group. In addition, the proceeds have been used to fund the ongoing operational costs of the group.

NOTE 18: PROVISIONS

CURRENT

Employee Entitlements – Annual Leave - 259 - 259

– 34 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 19: ISSUED CAPITAL Ordinary Shares At the beginning of reporting period Shares issued during year — 6 October 2006 — 6 December 2006 — 3 January 2007 — 18 January 2007 — 21 May 2007 Share consolidation (3 for 1 basis) Shares issued during year — 5 September 2007 — 19 September 2007 — 1 November 2007 — 15 November 2007 — 23 November 2007 — 27 February 2008 — 7 March 2008 — 25 March 2008 — 8 April 2008 — 29 April 2008 — 14 May 2008 — 22 May 2008 — 23 June 2008 — 25 June 2008 At reporting date	2008 2007 2008 2007 No. No. $ $ 91,292,254 64,358,956 40,083,421 35,746,633
	- 5,325,000 - 1,065,000 - 8,069,736 - 1,561,750 - 1,630,000 - 326,000 - 1,614,474 - 236,038 - 10,294,088 - 1,148,000 (60,861,502) - 1,511,667 - 453,500 - 1,011,926 - 455,360 - 166,666 - 50,000 - 694,666 - 167,000 - 425,495 - 127,649 - 642,090 - 128,419 - 125,000 - 25,000 - 280,554 - 50,500 - 440,000 - 44,000 - 850,000 - 85,000 - 490,000 - 49,000 - 100,000 - 10,000 - 400,000 - 40,000 - 250,000 - 25,000 -
	37,818,816 91,292,254 41,793,849 40,083,421

• Due to an error in the share registry the actual amount issued was different to the one that was announced due to consolidation of shares processing at the time. The Company have issued some shares after the date of this report and would issue additional shares to rectify this error.

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

– 35 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 20: CAPITAL AND LEASING COMMITMENTS

a.Finance Lease Commitments Payable — minimum lease payments — not later than 12 months — between 12 months and 5 years Minimum lease payments Less future finance charges Present value of minimum leave payments NOTE 21: CONTROLLED ENTITIES Parent Entity: Shell Villages and Resorts Limited Subsidiaries of Shell Villages and Resorts Limited: Heart Monitors Pty Ltd Kalgoorlie Tailings Project Pty Ltd Shell Villages and Resorts BRT Pty Ltd Shell Villages and Resorts Cooroy Pty Ltd Shell Villages and Resorts HV Pty Ltd Shell Villages and Resorts Helidon Spa Pty Ltd Shell Villages and Resorts Mollymook Pty Ltd Shell Villages and Resorts Bribie Island Pty Ltd Shell Villages and Resorts Commercial Pty Ltd Medical Monitors (UK) Limited Wellness Monitors Inc. E-Medicine Services Limited	Consolidated Group Parent Entity 2008 2007 2008 2007 $ $ $ $ - 15,344 - 671 - - - -
	- 15,344 - 671 - (426) - (8)
	- 14,918 - 663
	Country of Incorporation Percentage Owned (%) 2008 2007 Australia Australia - 100% Australia 100% 100% Australia 100% 100% Australia 100% 100% Australia 100% 100% Australia 100% 100% Australia 100% 100% Australia 100% - Australia 100% - United Kingdom - 100% USA - 100% United Kingdom -* 100%

• Percentage of voting power is in proportion to ownership

– 36 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

NOTE 22: CONTINGENT LIABILITIES AND CONTINGENT ASSETS

There were no contingent liabilities and contingent assets as at balance date.

NOTE 23: SEGMENT REPORTING

Business Segments

The consolidated entity is involved in sales of heart monitoring devices and managing ―Over 50’s Residential Gated Communities‖. The parent entity is engaged in provision or corporate services to the consolidated entity and from the beginning of the reporting period is not primarily involved in medical operations.

Geographical Segments

The consolidated entity primarily sells medical and property services in Australia. Geographical segment revenue from sales overseas is less than 10% of the consolidated entity’s external revenues and secondary assets are less than 10% of all business segments assets and as a consequence, no secondary reporting of geographical segments is provided.

Primary Reporting – Business Segments

2008 Segment revenue Interest income Discontinued operations Total revenue Segment result Loss on sale of discontinued operation Net segment result ASSETS Segment assets LIABILITIES Segment liabilities	Medical Operations Property Operations Intercompany Sales Unallocated Corporate Management $ $ $ $ 26,796 1,219,530 (202,400) 196,649	Total $ 1,240,605 5,827 (26,796)
	(1,942,305) (1,711,643) - (1,544,044)
		1,219,605
		(5,197,992)
	- 13,961,554 - 117,835	8,893
		(5,189,099)
		14,079,389
	- 10,129,200 - 5,658,666	15,787,866

– 37 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2008

NOTE 23: SEGMENT REPORTING (CONTINUED)

2007 Segment revenue Interest income Total revenue Segment result ASSETS Segment assets LIABILITIES Segment liabilities	Medical Operations Property Operations Intercompany Sales Unallocated Corporate Management $ $ $ $ 124,012 554,964 - 10,364	Total $ 690,960 30,541
	(1,158,277) (481,253) - (4,013,551)
		721,501
		(5,653,081)
	3,030,646 14,569,460 - 82,021	17,682,127
	18,593 10,679,546 - 5,280,828	15,978,967

– 38 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 24: CASH FLOW INFORMATION

NOTE 24: CASH FLOW INFORMATION
	Consolidated Group		Parent	Entity
	2008	2007	2008	2007
	$	$	$	$
a.Reconciliation of Cash Flow from Operations with
Profit after Income Tax
Profit after income tax	(5,197,992)	(5,653,081)	(9,435,141)	(3,159,023)
Cash flows excluded from profit attributable to operating	activities
Non-cash flows in profit
Amortisation and depreciation	250,666	192,828	7,506	49,710
Write-off of obsolete stock	-	19,246	-	19,246
Loss on disposal of property, plant and equipment	17,093	-	17,093	-
Gain on sale of discontinued operations	(3,893)	-	-	-
Impairment loss	2,845,000	3,405,757	7,800,534	1,352,247
Debt converted directly to equity	422,316	-	422,316	-
Changes in assets and liabilities, net of the effects of
purchase and disposal of subsidiaries
(Increase)/decrease in trade and term receivables	(110,978)	682,880	24,326	624,672
(Increase)/decrease in other assets	(99,533)	25,530	-	17,524
Increase/(decrease) in trade payables and accruals	(584,883)	(140,230)	(72,898)	(349,425)
Increase/(decrease) in provisions	(259)	62,339	(259)	62,339
Cashflow from operations	(2,462,463)	(1,404,731)	(1,236,523)	(1,382,710)
b.Loan Facilities
Loan facilities	(6,183,000)	(6,183,000)	-	-
Amount utilised	6,183,000	6,183,000	-	-
Amount unutilised	-	-	-	-

The major facilities are summarised as follows:

Commercial bill facility of $4,410,000 5-year variable interest rate facility provided by Westpac Banking Corporation Limited to Shell Villages and Resorts BRT Pty Ltd expiring in August 2011.

Commercial bill facility of $1,773,000 5-year variable interest rate facility provided by Westpac Banking Corporation Limited to Shell Villages and Resorts Cooroy Pty Ltd expiring in December 2011.

Finance will be provided under all facilities provided the company and the consolidated group have not breached any borrowing requirements, there are no covenants on the bill facilities.

– 39 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 25: RELATED PARTY TRANSACTIONS

NOTE 25: RELATED PARTY TRANSACTIONS
	Consolidated	Group	Parent	Entity
	2008	2007	2008	2007
	$	$	$	$
Transactions with related parties:
Other income
Management fees - subsidiaries	-	-	202,400	-
Consulting expenses
Consultancy fee paid for acquisition of land and
business in Hunter Valley to Gritin Industries Pty Ltd,
a company associated with Mr S Grimson and Mr
Neville Dunne (close family member to Director,
Peter Dunne)	100,000	200,000	100,000	-
Consultancy fees paid to KaiTek International Pty
Ltd, a company associated with Dr A Shell	-	302,468	-	302,468
Consultancy fees paid to Patkin investments Pty Ltd,
a company associated with Mr B Patkin	17,455	59,011	17,455	59,011
Consultancy fees paid to CNB Services Pty Ltd, a
company associated with Mr C Budd	53,328	-	-	-
Consultancy fees paid to Pipeline Construction and
Services Pty Ltd, a company associated with Mr N
Dunne (close family member to Director, Peter
Dunne)	74,800	-	74,800	-
Other expenses
Management services fees paid for managing
villages and resorts to Gritin Industries Pty Ltd, a
company associated with Mr S Grimson and Mr
Neville Dunne (close family member to Director,
Peter Dunne)	-	295,918	-	295,918
Intangible assets
Development fee paid to Gritin Industries Pty Ltd, a
company associated with Mr S Grimson and Mr
Neville Dunne (close family member to Director,
Peter Dunne), for development application work
completed at the Shell Villages and Resorts Cooroy
Pty Limited property.	600,000	1,000,000	-	-
Property, plant and equipment
Land in Cooroy purchased Gritin Industries Pty Ltd	-	2,900,000	-	-
Purchase of cabins and payment of development
application fees by Shell Villages and Resorts Hunter
Valley Pty Limited to Gritin Industries Pty Ltd, a
company associated with Mr S Grimson and Mr
Neville Dunne (close family member to Director,
Peter Dunne)	145,922	-	-	-

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

– 40 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 26: FINANCIAL INSTRUMENTS

a. Financial Risk Management

The Group and the parent entity hold the following financial instruments:

Financial assets Cash and cash equivalents Trade and other receivables Financial assets Security deposits Financial liabilities Trade and other payables Financial liabilities	Consolidated Group Parent Entity 2008 $ 2007 $ 2008 $ 2007 $ 46,361 306,588 2,975 197,628 137,746 26,768 60,003 4,628,840 - - - 2,460,405 31,112 20,640 3,782 3,782
	215,219 353,996 66,760 7,290,655
	944,793 1,529,676 698,393 771,291 14,919,000 14,449,032 5,065,000 4,509,281
	15,863,793 15,978,708 5,763,393 5,280,572

The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, loans to and from subsidiaries, commercial bills, leases and convertible notes.

The main purpose of non-derivative financial instruments is to raise finance for group operations.

The economic entity currently has no derivative financial instruments.

• The Group has exposure to the following risks from its use of financial instruments:

• credit risk

• liquidity risk

• market risk.

b. Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or a counter party to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers. For the parent entity it also arises from receivables due from its subsidiaries.

Group currently holds following receivables based on type of debtor:

Tenants (Individuals) Australian Taxation Office (GST refund) Other receivables Subsidiaries	Consolidated Group Parent Entity 2008 $000 2007 $000 2008 $000 2007 $000 35,190 - - - 101,929 13,571 31,109 20,255 627 13,197 627 12,747 - - - 4,595,838
	137,746 26,768 31,736 4,628,840

– 41 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 26: FINANCIAL INSTRUMENTS (CONTINUED)

c. Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due without incurring unacceptable losses or risking damage to the Group’s reputation. The consolidated group regularly reviews cashflow forecasts and maintains sufficient cash on demand.

The table below analyses the Group’s and the parent entity’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:

Consolidated 2008 Secured bank loans Lease liabilities Unsecured loans Trade and other payables 2007 Secured bank loans Lease liabilities Unsecured loans Trade and other payables Parent 2008 Unsecured loans Trade and other payables 2007 Lease liabilities Unsecured loans Trade and other payables	Carrying Amount Contractual Cash flows 6 mths or less 6-12 mths 1-2 years 2-5 years More than 5 years $'000 $'000 $'000 $'000 $'000 $'000 $'000 6,183,000 6,899,340 4,636,771 62,498 249,993 1,950,078 - 13,500 13,500 9,000 4,500 - - - 8,722,500 9,110,947 7,250,847 524,025 1,336,075 - - 944,793 944,793 944,793 - - - -
	15,863,793 16,968,580 12,841,411 591,023 1,586,068 1,950,078 -
	6,183,000 8,380,976 214,848 214,848 859,392 859,392 6,232,496 14,918 15,344 15,344 - - - - 8,251,114 9,431,177 2,727,486 113,872 455,488 455,488 5,678,844 1,529,676 1,529,676 1,529,676 - - - -
	15,978,708 19,357,173 4,487,354 328,720 1,314,880 1,314,880 11,911,340
	Carrying Amount Contractual Cash flows 6 mths or less 6-12 mths 1-2 years 2-5 years More than 5 years $'000 $'000 $'000 $'000 $'000 $'000 $'000 5,065,000 5,430,588 3,570,488 524,025 1,336,075 - - 698,393 698,393 698,393 - - - -
	5,763,393 6,128,981 4,268,881 524,025 1,336,075 - -
	663 671 671 - - - - 4,508,618 5,440,618 2,271,818 93,200 372,800 372,800 2,330,000 771,291 771,291 771,291 - - - -
	5,280,572 6,212,580 3,043,780 93,200 372,800 372,800 2,330,000

– 42 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 26: FINANCIAL INSTRUMENTS (CONTINUED)

d. Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group’s income or the value of its holdings of financial instruments.

The Group operates from Australia and transacts only in Australian dollars, hence, eliminating currency risk. The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. As at the reporting date, the Group had the following variable rate borrowings outstanding:

	2008 Weighted		2007 Weighted
	average interest	2008 Balance	average interest	2007 Balance
	rate		rate
		$		$
Convertible notes	8.00%	2,220,000	8.00%	2,630,000
Unsecured borrowings	1.00%	4,871,000	1.25%	3,307,500
Bank loans	7.31%	6,183,000	6.95%	6,183,000

An analysis by maturity is provided in note (c) above.

Sensitivity analysis for variable rate instruments for the consolidated entity, showing an effect of increase/(decrease) of profit or loss and equity to an increase of interest rates by 100 basis points is shown below:

	Increase in interest rate		Decrease in interest rate
	by 1%		by 1%
	Profit Equity		Profit Equity
	$ $		$ $
2008
Convertible notes	22,200	-	(22,200)	-
Unsecured borrowings	48,710	-	(48,710)	-
Bank loans	61,830	-	(61,830)	-
2007
Convertible notes	26,300	-	(26,300)	-
Unsecured borrowings	33,075	-	(33,075)	-
Bank loans	61,830	-	(61,830)	-

This analysis assumes that all other variables remain constant.

– 43 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008

NOTE 27. EVENTS AFTER REPORTING DATE

1. On 7 July 2008, Mr Stephen Grimson resigned as Non-Executive Director of the company

2. On 28 July 2008 the company has entered into an agreement to vary the sale of Heart Monitors Pty Ltd and other medical assets to Icardia Healthcare Pty Ltd. The variation was to reduce the sales price by $1.645 million. This reduction in sales price resulted in convertible notes with face value of sales price reduction being recognised in the 2008 financial statements.

3. On 27 August 2008 the company announced the sale of Shell Villages and Resorts Hunter Valley Pty Limited. The sale price for the company was $3.75 million. The sale was completed on 3 October 2008.

4. On 3 September 2008 the Company issued 333,333 shares to rectify the share issue error dated 5 and 19 September 2007. The shares issued did not fully rectify the issue, with the company looking to issuing more shares in due course to fully rectify the errors identified in note 19.

5. Mr John Bennett resigned as Non-Executive Director of the company on 21 October 2008. Mr Rohan Kerr was announced as his replacement.

6. Mr Steve Taylor was appointed as Non-Executive Director for the company on 4 October 2008. Mr Taylor replaced Mr Peter Dunne, who resigned as Non-Executive Director on the same day.

7. Mr Boris Patkin was appointed as Non-Executive Director of the company on 16 December 2008. Mr Patkin replaced Mr Steve Taylor, who resigned as Non-Executive Director on the same day.

8. On 17 April 2009, the company announced the sale of Shell Villages and Resorts Cooroy Pty Limited for $2.6 million. The sale is subject to shareholder approval, which is to be obtained at an upcoming general meeting. The date of this meeting is unknown as at the date of this report.

9. On 20 April 2009, the company announced the sale of Shell Villages and Resorts BRT Pty Limited for $7.8 million. The sale is subject to shareholder approval, which is to be obtained at an upcoming general meeting. The date of this meeting is unknown as at the date of this report.

No other matter or circumstance has arisen since 30 June 2008 that has significantly affected, or may significantly affect:

• The consolidated entity’s operations in future financial years, or

• The results of those operations in future financial years, or

• The consolidated entity’s state of affairs in future financial years.

NOTE 28. COMPANY DETAILS

Shell Villages and Resorts Limited

213 Brisbane Terrace

GOODNA, QLD, AUSTRALIA, 4300

The principal places of business are:

Shell Villages and Resorts Limited 213 Brisbane Terrace

GOODNA, QLD, AUSTRALIA, 4300

– 44 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. the financial statements and notes, as set out on pages 11 to 43, are in accordance with the Corporations Act 2002 and:

2. a. comply with Accounting Standards and the Corporations Regulations 2002; and

3. b. give a true and fair view of the financial position as at 30 June 2008 and of the performance for the year ended on that date of the company and consolidated group;

4. the Chief Executive Officer and Chief Finance Officer have each declared that:

5. a. the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2002 ;

6. b. the financial statements and notes for the financial year comply with the Accounting Standards; and

7. c. the financial statements and notes for the financial year give a true and fair view;

8. in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The company and its wholly-owned subsidiaries have entered into a deed of cross guarantee under which the company and its subsidiaries guarantee the debts of each other.

At the date of this declaration, there are reasonable grounds to believe that the companies which are party to this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become subject to, by virtue of the deed.

This declaration is made in accordance with a resolution of the Board of Directors.

Director

…………………………………………………………………………………

…………………………….

Dated this …THIRTIETH………………………………… day of ……SEPTEMBER……………………………… 2009

– 45 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SHELL VILLAGES AND RESORTS LIMITED

– 46 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SHELL VILLAGES AND RESORTS LIMITED

– 47 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SHELL VILLAGES AND RESORTS LIMITED

– 48 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

The following additional information is required by the Australian Stock Exchange Ltd in respect of listed public companies only. The information is current as at 21 September 2009.

1. Shareholding

Shareholding
a.Distribution of Shareholders Category (size of holding) 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over	Number Number of Holders Shares Held 196 92,331 435 1,024,645 133 969,932 182 6,006,585 65 35,014,875
	1011 43,108,368

b.The number of shareholdings held in less than marketable parcels is 580.

c. Voting Rights

The voting rights attached to each class of equity security are as follows:

Ordinary shares

• At meetings of members each member entitled to vote can vote in person by proxy or attorney or, in the case of member which is a body corporate, by representative duly authorised.

• Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

d. 20 Largest Shareholders — Ordinary Shares

Name 1. DR ALLAN MICHAEL SHELL 2. MR ALLAN MICHAEL SHELL AND MRS ROMA SHELL 3. CHRISWALL HOLDINGS PTY LTD 4. GRITIN INDUSTRIES PTY LTD 5. DIRDOT PTY LIMITED 6. MR COREY BUDD 7. AND TECHNOLOGIES PTY LTD 8. SNOWY PLAINS PTY LTD 9. H NOMINEES PTY LTD 10. SNOWY PLAINS PTY LTD 11. MR KEITH DIGBY WILLOUGHBY AND MRS MARILYN WILLOUGHBY 12. MR STEPHEN J HUGHES AND M/S ROBYN J HUGHES 13. BLACKCOURT (NSW) PTY LIMITED 14. CHRISWALL HOLDINGS PTY LTD 15. GRITIN INDUSTRIES PTY LTD 16. MR EUGENE MIGLAS 17. H NOMINEES PTY LTD 18. RON-TON FASHIONS PTY LTD 19. MR DAVID CHERNY 20. MR NEIL FINLAY AND MS LYNN BROADBENT

Number of Ordinary Fully Paid Shares Held % Held of Issued Ordinary Capital 3,955,671 9.18% 3,500,000 8.12% 1,825,695 4.24% 1,808,771 4.20% 1,561,809 3.62% 1,285,641 2.98% 1,209,016 2.80% 1,068,545 2.48% 1,060,554 2.46% 924,902 2.15% 906,814 2.10% 845,281 1.96% 807,290 1.87% 766,901 1.78% 715,683 1.66% 600,000 1.39% 550,000 1.28% 529,891 1.23% 528,096 1.23% 522,222 1.21%

24,972,782 57.93%

– 49 –

Shell Villages and Resorts Limited ABN 68 009 161 552 and Controlled Entities

ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES

1. The name of the company secretary is Mr Boris Patkin

2. The address of the principal registered office in Australia is 213 Brisbane Terrace, GOODNA, QLD, AUSTRALIA, 4300. Telephone (07) 3818 3008.

3. Registers of securities are held at the following addresses

COMPUTERSHARE INVESTOR SERVICES PTY LTD

LEVEL 2, RESERVE BANK BUILDING

45 ST GEORGE’S TERRACE,

PERTH, WA, AUSTRALIA, 6000

5. Stock Exchange Listing

Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Limited.

6. Unquoted Securities

The company does not have any unquoted securities at the year end.

– 50 –