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MEMBERS’ INFORMATION EVENING

27 April 2017

Member Presentation Agenda

Welcome – Mick McDonald…………………………………………………………...... Slide 1 Presentation Overview – Mick McDonald…………………………………………...... Slide 2 Board Member Introduction – Mick McDonald…………………………………......... Slide 3 Finance Director – Wayne Bastion…………………………………………………….. Slide 4-14 2016 Financial Performance……………………………………………………………. Slide 5 Key Sources of Revenue……………………………………………………...………… Slide 6-7 Key Areas of Expenditure……………..……………………………………..………..... Slide 8-9 2016 Capital Expenditure……………….………………………………………………. Slide 10 Cash Position…………………………………………………………………………….. Slide 11 Financial Performance – Quarter One 2017 ………………………………………….. Slide 12 2017 Club Credit Spend…………………………………………………………………. Slide 13 Arnie’s and The Palms Golf Shop…………………………………………………….. Slide 14 Data Analytics – Key Financial Ratios – Adam Twemlow………….………………... Slide 15-17 The Pines Golf Course Utilisation– Mick McDonald………………………………….. Slide 18 Holdings Limited Share Trading 2016/2017…………………………………………... Slide 19 Golf Course Report – Paul McLean and Paul Smerdon…………………………….. Slide 20 AGM – Mick McDonald…………………………………………………….……………. Slide 21 Evening Close – Mick McDonald………………………………….………………….… Slide 22

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2017 Board Member Introduction

Sanctuary Cove Golf and Country Club Pty Ltd and Sanctuary Cove Golf and Country Club Holdings Limited

• Mick McDonald – President (Holdings Chairman) • John McGreal – Vice President • Wayne Bastion – Finance Director • Colin Sinclair – Director • James Cooper – MSCD Appointed Director

Sanctuary Cove Golf and Country Club Pty Ltd

• Madonna Siokos – Captain of Ladies Golf • Paul Smerdon – Captain Men’s Golf

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Finance Director

Wayne Bastion

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2016 Financial Performance

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2016 Budget Variance to Budget 2015

Variance to 2015

'000 '000 '000 '000 '000

Operating Revenue 11,637 11,009 628 11,175 462

Operating Expenses (5,338) (5,076) (262) (4,969) (369)

Other Expenses (4,783) (4,787) 4 (4,511) (272)

Operating Profit 1,516 1,146 370 1,695 (179)

Holdings (442) (422) (20) (462) 20

Operating Earnings 1,074 724 350 1,233 (159)

Depreciation and Amortisation (968) (968) 0 (944) (24)

Profit/(Loss) before Income Tax 106 (244) 350 289 (183)

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2016 2015 2014'000 '000 '000

● Membership Subscriptions 4,521 4,408 4,211

● Golf Operations Green Fees 2,098 1,945 1,970 - Pines 713 734 752 - Palms 1,385 1,211 1,218 Merchandise 670 649 676 - Pines 513 513 515 - Palms 157 136 161

● Fitness Fees External Members 793 794 763 Room Rentals 279 268 242

● Food & Beverage Members/Guests 1,398 1,286 1,401 Golf and Fitness 409 382 363 External Functions 682 656 699

Key Sources of Revenue

SOURCE OF REVENUE

Other - External15% (LY 16%)

Food and Beverage - External9% (LY 9%)

Membership - Members39% (LY 39%)

Golf Services - Members5% (LY 5%)

Food and Beverage - Members12% (LY 12%)

Golf Services - External20% (LY 19%)

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External Revenue 44%Member Revenue 56%

Key Areas of Expenditure

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Number of Employees

2016 2015 2014

Full Time 47 39 36

Part Time 7 6 5

Casual 77 67 70

131 112 111

2016 2015 2014'000 '000 '000

● Employee expenses 5,224 4,868 4,912

● Cost of Sales Food and Beverage 958 855 960 Merchandise 410 418 447

● Equipment Rental Golf Operations 236 250 220 Golf Course Maintenance 339 296 305

● Golf Course Maintenance Operating Costs 875 855 798

● Property Holding Costs (incl. R&M) 1,205 1,228 1,104

● Administration Costs 319 270 264

● Other 983 910 770

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KEY AREAS OF EXPENDITURE

Golf Course MaintenanceOperating Costs

8% (LY 9%)

Property Holding Costs(incl. R&M)

11% (LY 12%)

Other 9%(LY 8%)

AdministrationCosts 3% (LY 3%)

EquipmentRental 5%

(LY 6%)

Cost of Sales13%

(LY 13%)

EmployeeExpenses

50%(LY 49%)

Employee ExpensesCost of SalesEquipment RentalGolf Course Maintenance Operating CostsProperty Holding Costs (incl. R&M)OtherAdministration Costs

Full Time Employees per Department

2016 2015 2014

Administration 3 4 3

Finance 5 4 4

Country Club 1 1 1

Clubhouse 5 5 5

Arnie's Café and Bar 2 0 0

Kitchen 3 3 1

Fitness 2 2 2

Golf Maintenance 22 21 18

Golf Services 11 5 7

54 45 41

Casuals 77 67 70

Total 131 112 111

2016 Capital Expenditure

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'000

● The Country Club upgrade 420● Bunker Refurbishment - The Pines 303● Course Renewal Projects 112● Course Maintenance Equipment 69● Bunker Refurbishment - The Palms 63● The Palms Garden Rejuvenation 56● Satellite Irrigation Upgrade 52● Club House Improvements 47● Gym and Country Club Equipment 35● IT Replacements 28● Miscellaneous 28

Total 1,213

• The Pines Chipping Area • The Pines 2nd Hole works (remove trees and mulch) • Fig tree removal • 11th Hole bridge

Business Term Loan • Amount: $800,000 • Term: 10 years – reviewed annually • Principal paid to date $111,230

Cash Position

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2016 2015 2014 2013'000 '000 '000 '000

Cash at Banks as at 31 December 2,374 2,013 1,320 795

Cash Trading Summary

Trading Results 1,092 1,255 1,087 107

Non-Cash Income (78) (78) (73) (63)

Nett Borrowings/(Repayments) 753 (412) (382) (322)

Capital Expenditure (1,213) (507) (387) (125)

Cash from Disposal of Fixed Assets 0 7 111 0

Net Movement in Other Assets and Liabilities (270) 350 97 551

Cash Surplus/Deficit from Operations 284 615 453 148

Opening Cash Position/(Shortfall) 249 (366) (819) (967)

Closing Cash Position/(Shortfall) 533 249 (366) (819)

Financial Performance - Quarter One 2017

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2017 Budget Variance

'000 '000 '000

Operating Revenue 2,879 2,935 (56)

Operating Expenses (1,511) (1,502) (9)

Other Expenses (1,272) (1,284) 12

Holdings (111) (122) 11

Operating Earnings (15) 27 (42)

2017 Club Credit Spend

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Jan-16 Feb-16 Mar-16 Total

2016

Bar/Restaurant Purchase 63,182 55,389 57,716 176,287

Jan-17 Feb-17 Mar-17 Total

2017

Bar/Restaurant Purchase 51,552 50,001 55,639 157,192

Competition Fee 20,286 20,698 18,957 59,941

Comp Prize (16,715) (14,727) (12,346) (43,788)

Drinks Cart Purchase 1,143 1,586 2,144 4,873

Arnie's Café and Bar Purchase 16,607 14,761 14,585 45,953

Pro Shop Purchase - Merchandise 44,284 51,924 29,784 125,992

Pro Shop Purchase - Beverage 3,823 4,054 2,762 10,639

Pro Shop Purchase - Food 8,068 1,844 4,799 14,710

Other (5,577) 12,914 (1,449) 5,888

TOTAL 123,471 143,055 114,875 381,400

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Arnie’s and The Palms Golf Shop

Arnie's Food and Beverage - Daily Trade

Pre-Refurbishment Post-Refurbishment

5 December 2015 to 16 April 2016 5 December 2016 to 16 April 2017

$57,683 $346,170

500%

The Palms Golf Shop Merchandise

Pre-Refurbishment Post-Refurbishment

2 December 2015 to 16 April 2016 2 December 2016 to 16 April 2017

$54,810 $86,185

57%

KPMG Engagement Partner

Adam Twemlow

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Key statistics 84% (LY 79%) of Members’ Competition rounds played on The Pines Member play available on The Pines golf course 346 (LY 345) days out of 365 49 (LY 61) Competition rounds played on The Palms – 24 of these are Monthly Medal rounds

The Pines Golf Course Utilisation

The Palms Members Comps The Pines Member Comps The Pines Social Play Only The Pines Corporate TOTAL

Monday 16 36 14 2 52

Tuesday 0 0 44 8 52

Wednesday 16 36 15 1 52

Thursday 2 50 1 1 52

Friday 12 40 6 6 52

Saturday2 (Ladies only during Men's

Club Championships) 52 0 0 52

Sunday 1 35 17 1 53

TOTAL 249 97 19 365

% 17% 68% 27% 5%

Competition Split 16% 84%

Membership Share Trading

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• 2016 number of shares traded – 54 • April 2016 shares listed for sale – 75 • 2017 number of shares traded YTD – 25 • April 2017 shares listed for sale – 71

• Equity Model

Golf Course Report

Paul McLean and Paul Smerdon

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Sanctuary Cove Golf and Country

Club Holdings Limited

Annual General Meeting Date: Thursday 4 May 2017 Time: 6pm Location: Lakeview Bar

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Evening Close - President

Questions

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