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Heritage Fine Wines. Chairman introduction and confirmationAll attendees to sign Attendance registerTabling of Proxy Register. CROUCH INSOLVENCYCHARTERED ACCOUNTANTS . Heritage Fine Wines. Agenda:Consider report on progress of receivershipConsider formal resolutions (7)General discussion .
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1. Meeting of InvestorsHeritage Fine Wines Pty Ltd(In Liquidation) (Receiver and Manager Appointed) Melbourne Convention Centre
25 November 2005
2. Heritage Fine Wines
Chairman introduction and confirmation
All attendees to sign Attendance register
Tabling of Proxy Register
3. Heritage Fine Wines Agenda:
Consider report on progress of receivership
Consider formal resolutions (7)
General discussion
4. Heritage Fine Wines Progress report:
Reconciliation update – Steve Arblaster
Recoverable wine – Walt Shellshear
Wine storage and distribution /Sale of business – Nick Crouch
Sales Advisory Committee – Nicholas Crouch
Legal process update – Chris Perry
5. 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
6. 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)
7. 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
8. Heritage Fine Wines WIMS (INVESTOR SALES) DATABASE
Investor database integrity - good
Mail-out to investors - July & November
Veracity of 99.7 %
9. 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
10. 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
11. Heritage Fine Wines VARIANCE ANALYSIS
12. 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 “R etention of Title” bottles (held in warehouse)
13. 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)
14. Heritage Fine Wines
15. Heritage Fine Wines
16. Heritage Fine Wines RETENTION OF TITLE CLAIMS
Claims to Date:
10 labels
19,470 bottles
$622,891 (Approx Investor Cost)
17. Heritage Fine Wines
18. 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)
19. Heritage Fine Wines
20. 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
21. 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
22. 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
23. 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.
24. Heritage Fine Wines
Resolutions
25. 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.”
26. Heritage Fine Wines Resolution B:
“That, if considered appropriate by the Receiver and Manager, the distribution of wine be undertaken by a third party.”
27. 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).”
28. 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.”
29. 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.”
30. 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.”
31. 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.”
32. Heritage Fine Wines General Discussion
Meeting closure
33. 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
34. 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
35. Next-Day Delivery (1st/add’l per dozen)*
Sydney $9.95/6.00
Melbourne $14.95/9.25
Brisbane $15.65/10.05Other $As per rate schedule
Insurance (All per bottle, incl. GST):
Storage $0.125/$1000/month (1.8% p.a. rate)
Transit 1% of value
36. 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
37. 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
38. Timeline
Info available (www.hfw.cellarit.com) 7-10 daysSales Platform build begins Current
Online accounts available Approx. 4 wksFirst storage/insurance invoices Est 1 Jan 06 2006Consolidation and systems preparation Approx. 6 wks Delivery begins Est 1 Feb 06Sales commence April 2006