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									         Meeting of Investors
Heritage Fine Wines Pty Ltd
(In Liquidation) (Receiver and Manager Appointed)


       Melbourne Convention Centre
            25 November 2005

                         CROUCH INSOLVENCY
                         CHARTERED ACCOUNTANTS
           Heritage Fine Wines


   Chairman introduction and confirmation
   All attendees to sign Attendance register
   Tabling of Proxy Register



                                 CROUCH INSOLVENCY
                                 CHARTERED ACCOUNTANTS
         Heritage Fine Wines
Agenda:
1. Consider report on progress of receivership

2. Consider formal resolutions (7)

3. General discussion




                             CROUCH INSOLVENCY
                             CHARTERED ACCOUNTANTS
           Heritage Fine Wines
Progress report:
1.   Reconciliation update – Steve Arblaster
2.   Recoverable wine – Walt Shellshear
3.   Wine storage and distribution /Sale of business –
     Nick Crouch
4.   Sales Advisory Committee – Nicholas Crouch
5.   Legal process update – Chris Perry



                                   CROUCH INSOLVENCY
                                   CHARTERED ACCOUNTANTS
            Heritage Fine Wines
RECONCILIATION OF INVESTOR WINE
OBJECTIVES           (Steve Arblaster)

   Label pallets (254 no number)
   Design & build Warehouse database
   Stock-take
   Establish wine label code integrity
   Populate Warehouse database
   Create Variance Analysis platform
   Prove veracity of barcodes
   Reconciliation of Investor & Warehouse databases
                                  CROUCH INSOLVENCY
                                  CHARTERED ACCOUNTANTS
             Heritage Fine Wines
CHALLENGES
   Lack of functionality of RSSQL warehouse system (no
    quantity/wine label code)
   Computer System (inability to access at Administrator level)
   Re-codify wine labels - 300,000 bottles out of 1,600,000
   Identify data not loaded into WIMS
    -    V590 & V591
    -    Stock releases
    -    Private Holdings
   Validate barcodes
    - 47,500 bottles out of 51,900 (ownership confirmed by WIMS)
    - 8% invalid (old cartons used)
           Heritage Fine Wines
WINE LABEL CODES
 Initially over 2,000

 Parent/child amendments
   - up to 5 codes for 1 wine label
   - 160,000 investor bottles re-coded
 Removed 1,000 label codes

 Added 300 new label codes

 Today = 1,261 wine labels
          Heritage Fine Wines
WIMS (INVESTOR SALES) DATABASE
   Investor database integrity - good

   Mail-out to investors - July & November

   Veracity of 99.7 %
          Heritage Fine Wines
WAREHOUSE DATABASE
 Archive first cut Excel spreadsheet extract – 10/6

 Supplement with wine label coding – 23/6

 Stock-take data available - 28/7

 Reconcile Warehouse database records with Stock-take
  data – 21/8
          Heritage Fine Wines
INVESTOR / WAREHOUSE RECONCILIATION
 1,616,000 investor bottles v 1,320,000 warehouse
  bottles
 Started - 5/8

 Variance Analysis – Overs/Unders by wine label code

 High Value warehouse data sheets – nine iterations

 Completed 17/10
          Heritage Fine Wines
VARIANCE ANALYSIS

 Ver No   Date   Overs     Unders    Unders as Overs &
                                     percentage Unders
                                      of total  combined
  Ver2    17/8   133,047   127,762     8.0%     260,809
  Ver4    29/8   101,890   76,561      4.8%     178,451
  Ver5    14/9   34,979    58,078      3.6%      93,057
  Ver6    7/10   19,837    50,053      3.1%      69,890
            Heritage Fine Wines
   ANALYSIS OF UNDERS
   282,000 Shortfall bottles (never delivered into
    warehouse)
   13,000 Unexplained Unders (poor transaction
    processing)
   34,000 Overs (17,000 Troy Kalleske Mouthpiece
    clean skins)
   19,000 “Retention of Title” bottles (held in
    warehouse)
           Heritage Fine Wines
RECOVERABLE WINE                      (Walt Shellshear)
 Recoveries to Date:
     68,217 bottles
     $2,871,071 (Approx Investor Cost)

   Potential Recoveries Outstanding:
     72,399 bottles
     $2,096,099 (Approx Investor Cost)
            Heritage Fine Wines
Vintage         Winery                  Label           V-Code
 2002     Binder Mitchell    Dovetail Baroota Shiraz     V479

 2003     Binder Mitchell    Dovetail Shiraz Grenache    V496
                             Mataro
 2003     Binder Mitchell    REX Shiraz Grenache         V516
                             Mataro
 1999     Charles Cimicky    Reserve shiraz              V416

 2001     Gilberts Siding    Erebus Shiraz               V528

 2001     Heathcote Winery   Slaughterhouse Paddock      V541
                             Shiraz
              Heritage Fine Wines
Vintage           Winery                      Label              V-Code
 2002     Heathcote Winery       Slaughterhouse Paddock Shiraz    V540

 2001     Heathcote Winery       Curagee Shiraz                   V489
                                 Barossa Old Valley Co Shiraz
 2001     Langmeil Winery                                         V533
                                 Magnum
 2001     Summerfield Wines      Reserve Cabernet Sauvignon       V503
 2002     Summerfield Wines      Reserve Shiraz Pyrenees          V566

 2001     Summerfield Wines      Reserve Shiraz Pyrenees          V502

 2002     Willow Bridge Estate   The Black Dog Shiraz             V563
                                 Kalleske Wines Gotham
 2004     Gotham Wine Company                                     V573
                                 Langhorne Creek Shiraz
           Heritage Fine Wines
RETENTION OF TITLE CLAIMS

   Claims to Date:
     10 labels
     19,470 bottles

     $622,891 (Approx Investor Cost)
               Heritage Fine Wines
Vintage                 Winery                 Label           V-Code
 2002     Balnaves Vineyards        Shiraz                      V569
 2002     Carlei Green Vineyards    Biodynamic Shiraz           V545

 2002     Grancari Estate Wines     Shiraz                      V549
 2001     Kulkunbulla               Hilltops Cabernet Merlot    V546
 2001     Punters Corner            Cabenet Sauvignon           V575
 2002     Watershed Premium Wines   Watershed Shiraz            V576
 2001     Wirra Wirra Vineyards     The Angelus Cabernet        V561
                                       Sauvignon
 2002     Wirra Wirra Vineyards     McLaren Vale Shiraz         V555
            Heritage Fine Wines
100% LOSSES
 Known 100% Losses to Date:
     72 labels
     130,801 bottles

     $3,855,891 (Approx Investor Cost)

   Majority of loss across 10 labels:
     121,951 bottles
     $3,416,683 (Approx Investor Cost)
                     Heritage Fine Wines
Vintage                 Winery                                Label              V-Code


 2002     Gilberts Siding                   Erebus Shiraz                        V580
 2003     Binder Mitchell Wines             Dovetail Baroota Shiraz              V578

 2001     Trevor Mast Wines / Mount Langi   Grampian Shiraz                      V535

 2003     Neck Oil                          Barossa Valley Shiraz Grenache       V582

 2003     Fox Gordon                        Eight Uncles Barossa Valley Shiraz   V583

 2002     Gilberts Siding                   Jardim do Bomfim Shiraz              V570

 1999     Mount Langi Ghiran Vineyards      Langi Cabernet Merlot                V560

 2003     Mouthpiece Wines                  John Gilbert Cabernet Sauvignon      V590

 2003     Fox Gordon                        King Louis Cabernet Sauvignon        V588

 2001     Balnaves of Coonawarra            Cabernet Sauvignon                   V579
             Heritage Fine Wines
    WINE STORAGE AND DISTRIBUTION /
    SALE OF BUSINESS                       (Nicholas Crouch)
   Tenders called / negotiations continuing
   Main asset is investor database
   Cost effective solution for distribution and medium
    term storage
   Election process
   Subject to Court approval
           Heritage Fine Wines
SALES ADVISORY COMMITTEE
 Assistance to investors in determining wine strategy

 Propose election from body of investors

 May engage external expert assistance

 Report to investors generally

 Costs to be paid as cost of receivership

 Subject to investor views and Court consideration




                                  CROUCH INSOLVENCY
                                  CHARTERED ACCOUNTANTS
           Heritage Fine Wines
LEGAL ISSUES (Chris Perry, Parry Carroll Solicitors)
Recap:
 Proof of debt, cut off deadline and advertising;

 Expansion of scope of receivership;

 Directions for service and substituted service –
  Application for distribution;
 Application for remuneration

 Apportionment of losses


                                   CROUCH INSOLVENCY
                                   CHARTERED ACCOUNTANTS
           Heritage Fine Wines
LEGAL ISSUES
Existing:
 Application for distribution of wine – outline of orders;
 Service options
 Hearing 12 December 2005 – Supreme Court of NSW
Other:
 Application for delivery up of wine by P Ngan
 Accounting of P Ngan fees – effect upon levy
 Redemption of P Ngan charge
Focus distribution of wine. Examinations to follow.
                                   CROUCH INSOLVENCY
                                   CHARTERED ACCOUNTANTS
          Heritage Fine Wines


   Resolutions




                      CROUCH INSOLVENCY
                      CHARTERED ACCOUNTANTS
         Heritage Fine Wines
Resolution A:
   “That the Receiver and Manager’s
   recommendations concerning the allocation of
   title to wine held by the company be
   accepted.”




                            CROUCH INSOLVENCY
                            CHARTERED ACCOUNTANTS
       Heritage Fine Wines
 Resolution B:
“That, if considered appropriate by the Receiver
and Manager, the distribution of wine be
undertaken by a third party.”




                           CROUCH INSOLVENCY
                           CHARTERED ACCOUNTANTS
      Heritage Fine Wines
Resolution C:

“That the payment of a further levy by
investors be approved in the range of $1.00
per bottle to $1.75 per bottle (plus GST).”



                         CROUCH INSOLVENCY
                         CHARTERED ACCOUNTANTS
      Heritage Fine Wines
Resolution D:

   “That a Sales Advisory Committee be
   formed for the purposes of advising
   investors on potential wine sale options and
   that the costs of this Committee be paid as a
   cost of the receivership.”

                          CROUCH INSOLVENCY
                          CHARTERED ACCOUNTANTS
         Heritage Fine Wines
Resolution E:

   “That the Receiver and Manager’s fees for the
   period 8 October 2005 to 31 October 2005 in
   the amount of $259,727 (inclusive of GST) be
   approved and paid.”


                           CROUCH INSOLVENCY
                           CHARTERED ACCOUNTANTS
      Heritage Fine Wines
Resolution F:
   “That the Receiver and Manager’s fees for
   the period 1 November 2005 to 22
   November 2005 in the amount of
   approximately $247,522 (inclusive of GST)
   be approved and paid.”



                         CROUCH INSOLVENCY
                         CHARTERED ACCOUNTANTS
       Heritage Fine Wines
Resolution G:
   “That , in the event that distribution and
   storage is undertaken by a third party,
   investors shall be liable to that third party
   for storage and distribution fees and charges
   for a period estimated at between two (2) to
   four (4) months. Such fees and charges shall
   be at competitive market rates.”
                          CROUCH INSOLVENCY
                          CHARTERED ACCOUNTANTS
           Heritage Fine Wines
   General Discussion

   Meeting closure




                         CROUCH INSOLVENCY
                         CHARTERED ACCOUNTANTS
CELLARIT – Scott Witt

   NSW-based Wine Storage & Sales specialists with 6 years
    experience


   Focus on best-practice infrastructure, technology, efficiency &
    value for money


   100% integrated with SWADS, Australia’s top-performing
    national warehouse and logistics company,
     recently purchased by Australia Post


   Licensed for retail wine sales, wine auction sales and wine export
Storage & Distribution


   Secure individual online account available 24/7
   Short “lock-in” period of 2 - 4 month’s fees (wine can
    be withdrawn during), then no further obligations
   Storage Rates (All per bottle, incl. GST):
       Consolidation, transport, handling-in   No Charge
       Storage (sliding scale by volume)       $0.125 – $0.15 per
        bottle/month
   Handling-out                                $0.50
Next-Day Delivery (1st/add’l per dozen)*
   Sydney          $9.95/6.00
   Melbourne       $14.95/9.25
   Brisbane        $15.65/10.05
    Other           $As per rate schedule
Insurance (All per bottle, incl. GST):
   Storage   $0.125/$1000/month (1.8% p.a. rate)
   Transit   1% of value
   Other
       Late  and Default fees: 3% or $10min
       Account Fee:

       No Charge for online credit card payment,
       $10/mo for cheques or direct deposit
       (Superannuation Accounts excepted)
       “Tasting Dozens”: Surcharge of $1.25/extra
       label(s)/dozen
Sales Platform
 Joint Venture with Uvine, Winebid & other substantial international
  players
 Significant brand-build, PR, marketing & advertising spend
 Choice of wholesale & retail channels (online and offline)
 Account-keeping and payment services (monthly direct deposit of
  surplus funds to your bank account)
 Discounted auction fees (Cellarit, Uvine, Winebid, etc.) of at least
  5%
 Participation exclusively for Cellarit storage customers
 Management, staffing, marketing, PR, platform, etc. fee of 5% p.a.
  + GST
 Minimum total subscription of $20mill to cover budgeted items
Timeline

Info available (www.hfw.cellarit.com)   7-10 days
Sales Platform build begins             Current

Online accounts available               Approx. 4 wks
First storage/insurance invoices        Est 1 Jan 06 2006
Consolidation and systems preparation   Approx. 6 wks
Delivery begins                         Est 1 Feb 06
Sales commence                          April 2006

								
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