SHAREHOLDERS REPORT

Presented by Poppy Holding, Inc.

January 24, 2008

INDUSTRY UPDATE

In the last decade: Number of golfers/facilities increasing by 5% Number of rounds/golfer decreasing by 10% Number of rounds/facility decreased by 5%

NATIONAL 1997 2007 %

Population 266.5M 303.2M 14%

Rounds 481.5M 500M 4%

Golfers 25M 28.7M 15%

Facilities 14,602 15,990 10%

INDUSTRY UPDATE

NORTHERN CALIFORNIA 2006 2007 %

Avg public rounds/course 35,150 37,200 +5.8%

Facilities 401 404 +.7%

Poppy rounds 109,500 111,500 +1.8%

NCGA golfers 173,900 (peak) 174,200 (peak) +.17%

NCGA golfers 143,000 (1/1/07) 145,000 (1/1/08) +1.4%

OBSERVATIONS

NATIONAL TREND Rounds stagnant in 2007 Rounds/golfer decreasing Rounds/facility decreasing Facility growth slowing

NORTHERN CALIFORNIA Rounds at public courses grew 5.8% in 2007 Low-end facilities getting more play than high-end facilities NCGA membership stabilize/growing Poppy Holding, Inc. rounds increasing

Poppy Holding, Inc.

2007 FINANCIAL OVERVIEW

Poppy Holding, Inc.

2007 FINANCIAL OVERVIEW

Gross revenue: $13.25M Net cash flow: ($25,361) Cash position: $3.6M Investment account: $1.7M Debt: $1.4M Taxes (2006)

- Federal $300K- State $ 72.5K

Poppy Holding, Inc.

CONSOLIDATED GROSS REVENUE

2007 Gross revenue: $13.25M Plan: $14M

$11,974,568

$12,300,231

$13,035,377

$13,246,622

$12,576,468

$11,000,000

$11,500,000

$12,000,000

$12,500,000

$13,000,000

$13,500,000

2003 2004 2005 2006 2007

Poppy Holding, Inc.

CONSOLIDATED CASH FLOW 2007 Cash flow: ($25K) Plan: $6161

$542,418

$(1,445,389)

$(25,361)$(134,032)

$3,714,027

$(1,500,000)

$(1,000,000)

$(500,000)

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

2003 2004 2005 2006 2007

Poppy Holding, Inc.

CONSOLIDATED CASH POSITIONas of January 1, 2008

Cash position: $3.6M

$4,676,995

$5,219,413

$3,639,992 $3,614,635

$3,774,024

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

$5,500,000

2003 2004 2005 2006 2007

Poppy Holding, Inc.

INVESTMENT ACCOUNTas of January 1, 2008

Investment position: $1.7M

$1,573,802

$1,670,026

$1,500,000

$1,525,000

$1,550,000

$1,575,000

$1,600,000

$1,625,000

$1,650,000

$1,675,000

$1,700,000

2006 2007

Annualized Return of 6.11%

Poppy Holding, Inc.

2007 OPERATIONAL OVERVIEW

Poppy Holding, Inc.

OPERATIONAL OVERVIEW

TOTAL

Rounds played 54,700 56,800 111,500

NCGA tournaments 50 20 70

NCGA Association Member events

370 230 600

Free clinics 28 32 60

Club fittings 30 50 80

Employees 75 105 180

Poppy Holding, Inc.

2007 ACTUAL PLAYER MIX

NCGA 77% 88%

Guest 14% 8%

Industry 1% --

Public 7% 2%

Junior 1% 3%

Golf car 82% 81%

Poppy Holding, Inc.

2007 OBJECTIVES

Poppy Holding, Inc.

2007 OBJECTIVES Play 113,135 rounds at Poppy facilities Achieve net cash flow of $6,161 Increase $/round Pursue these strategic plan objectives:

- Confirm appropriate staffing levels- Improve employee image and appearance- Enhance employee training- Make physical plant improvements- Upgrade point of sale systems- Improve golf course conditioning- Improve food & beverage product and service

Poppy Holding, Inc.

2008 OBJECTIVES

Poppy Holding, Inc.

2008 OBJECTIVES

Achieve consolidated cash flow: $23,724 Increase rounds to 114,000 (+2.3%) Increase spending/round at both courses Grow food/beverage business by 10% and improve profit margins Provide additional free instruction clinics Increase free club fittings Create business plan for golf academies at Poppy facilities Select course renovation architect, approve upgrade concept/plan

and commence permitting Pursue options to unlock and leverage Poppy Holding, Inc. equity Review for-profit tax status Create business plan and revised renovation plan for Mulligan’s Increase wedding business

Poppy Holding, Inc.

2008 OBJECTIVES Pursue strategic plan objectives

- Adopt and implement a customer intimate philosophy- Improve Poppy course condition, design and playability- Create and execute Poppy facility master plans- Provide an affordable and high-quality product- Provide player development, fitness education and instruction- Enhance the total clubhouse experience at Poppy facilities- Provide an educational and historic experience at the NCGA

headquarters and Poppy facilities- Protect member accessibility to NCGA-owned courses- Achieve a “Top 100” ranking- Retain the AT&T Pebble Beach National Pro-Am and attract

other major events- Increase rounds to 120,000 by 2010

Poppy Hills

2007 REVIEW

Poppy Hills

2007 OBJECTIVES

Confirm appropriate staffing levels Improve employee image and appearance Enhance employee training Make physical plant improvements Upgrade point of sale systems Improve golf course conditioning Improve Food and Beverage Product and service

PLAN

Net cash flow $889,180

Rounds 56,000

$/round $134.09

Poppy Hills

2007 SUMMARY

Plan Actual

Net cash flow $889,180 $783,930

Rounds 56,000 54,667

$/round $134.09 $130.47

Poppy Hills

2007 SUMMARY

Confirm appropriate staffing levels Added additional staff in several areas:

- Driving range- Bag drop- Starter position- Call center- Restaurant

Poppy Hills

2007 SUMMARY

Improve employee image and appearance Emphasized employee grooming Acquired and provided new nametags Increased uniform budget

Enhance employee training Held 8 customer intimate training sessions, including:

- Server training- Golf operations- AED/CPR certification- Safety education

Poppy Hills

2007 SUMMARY

Make physical plant improvements Completed kitchen renovation Updated fixturing in and around the clubhouse, including:

- Added new benches, ball washers and flags on course- Provided new bag stands on the range- Created new teaching tee for independent contractor- Provided new Pepsi vending machines on course- Added new lighting- Installed new shoe cleaning devices around clubhouse- Added new signage for restaurant

Poppy Hills

2007 SUMMARY

Upgrade point-of-sale system Installed new Fairway systems server Streamlined Maitre’D point-of-sale system Enhanced website

- Added virtual tour

- Collect and blast emails Upgraded phone system

Poppy Hills

2007 SUMMARYImprove golf course conditioning

Acquired new greens aerators Instituted an aggressive top dressing program Began course enhancement plan

- Architect interviews (3)- Chipping green trial of T1 bentgrass

Made course playability changes- Tree trimming- New tees- New bunker sand- New divot mix

Poppy Hills

2007 SUMMARY

Improve food and beverage product and service Re-named restaurant to “Porter’s Grill and Bar” Created new menu look and offerings

- Authentic Mexican dishes added

- Incorporated popular specials as permanent menu items

- Added six draft selections Pursued wedding business

Poppy Hills

2007 ADDITIONAL HIGHLIGHTS Achieved $1M in golf shop sales Received “Top 100” award from Golf Business Magazine Received “Best Promotional Idea” award among “Top 100”

facilities Ranked #12 on Zagat “Most Popular Courses in the Country” Conducted 56 hours of instruction to 300 NCGA members Offered approximately 30 free club fittings Hosted Pacific Grove, Carmel, and RLS high school golf teams Conducted AT&T Pebble Beach Junior Golf Assoc. events/clinics Hosted NCPGA apprentice training Acquired new fleet of golf carts

Poppy Ridge

2007 REVIEW

Poppy Ridge

2007 OBJECTIVES

Confirm appropriate staffing levels Improve employee image and appearance Enhance employee training Make physical plant improvements Upgrade point of sale systems Improve golf course conditioning Improve Food and Beverage Product and service

PLAN

Net cash flow ($175,211)

Rounds 57,000

$/round $114.21

Poppy Ridge

2007 SUMMARY

Plan Actual

Net cash flow ($175,211) ($211,857)

Rounds 57,000 56,761

$/round $114.21 $107.70

Poppy Ridge

2007 SUMMARY

Confirm appropriate staffing levels Restructured group coordinator position Hired new 1st assistant professional and three

additional apprentice professionals Added six additional outside service staff Added office coordinator position Created Concierge/Receptionist position

Poppy Ridge

2007 SUMMARYImprove employee image and appearance

Improved service and teamwork in all departments Provided all golf operations and food and beverage staff

same color uniform golf shirt and cap Enforced nametag and grooming standards policy Held daily, weekly, and monthly meetings by managers and

supervisors

Enhance employee training Held 20 customer intimate training meetings Conducted AED/CPR annual training for management Required monthly safety education for all departments Provided sexual harassment classes for management

Poppy Ridge

2007 SUMMARY

Make physical plant improvements Improved clubhouse and Mulligan’s landscape Developed a plan for administrative office upgrade Replaced HVAC unit in the golf shop Completed bunker, irrigation and drainage projects Replaced necessary kitchen equipment Started fescue removal project Ongoing repair and maintenance of building, signage

Poppy Ridge

2007 SUMMARYUpgrade point-of-sale system

Installed new Fairway systems server Streamlined Maitre’D software system Upgraded phone system Genesis payroll system training HR and accounting

Improve golf course conditioning Started fescue removal project Completed 3 of 8 Audubon certificates Continued Heathland approach with irrigation, drainage

and bunker improvements Maintained course to standards

Poppy Ridge

2007 SUMMARY

Improve food and beverage product and service Restructured Management team Created Banquet sales position Added host positions Seasonal menu changes Managers, chef on floor to converse with guests Fine dining training for servers Achieved $425k in banquet revenue (44 weddings, 62

banquets)

Poppy Ridge

2007 ADDITIONAL HIGHLIGHTS Improved service and teamwork in all departments Made a good transition with new Director of Human Resources Good annual safety record Improved Genesis timecard management and payroll procedures Conducted 32 free clinics Offered 50 free club fittings Conducted LARPD junior classes Hosted Nike junior golf camps, Granada High School and Charter

Middle School golf teams Successful email blasts produced 3,000 rounds of golf Controlled expenses and maintained course standards Seaver Golf Academy hosted junior series and parent/child weekend events Controlled expenses

Poppy Holding, Inc.

2007 FINANCIAL OVERVIEW

POPPY HOLDING, INC – CONSOLIDATED2007 FINANCIAL REVIEW

POPPY HILLS POPPY RIDGE POPPY HOLDING CONSOLIDATED

2007 Budgeted Rounds 56,000 57,000 113,000

2007 Actual Rounds 54,667 56,761 111,428

2007 Budgeted Net Cash Flow 889,180 (175,211) (707,808) 6,161

Variances from 2007 Plan:

Inc/(Dec) in Gross Margins (397,364) (367,584) - (764,948)(Inc)/Dec in Deptartment Expenses 238,327 373,140 44,858 656,325Other Income / (Expense) 8,192 0 164,127 172,319(Over)/Under Capital (218,776) (30,355) - (249,131) 2007 Net Cash Flow From Operations 519,559 (200,010) (498,823) (179,274)

Inc/(Dec) Assets / Liabilities 264,371 (11,845) (98,613) 153,913

2007 Net Cash Flow 783,930 (211,855) (597,436) (25,361)

2007 ACTUAL

Poppy Holding, Inc.

2008 FINANCIAL PLAN

Poppy Holding, Inc.

2008 ASSUMPTIONS

Rounds 56,500 57,500

$/round $137.24 $114.90

NCGA 79.6% 81.9%

Guest 10.9% 13.4%

Industry 2.0% --

Public 7.0% 1.4%

9-hole -- 0.8%

Junior 0.5% 2.5%

Golf car 84.0% 85.0%

Poppy Holding, Inc.

2008 FINANCIAL PLAN

M-Th F-Su

NCGA $55 $70

Guest $85 $100

Industry $170 $170

Public $200 $200

Junior $10 $10

Golf car $17 $17

M-Th F-Su

NCGA $40 $55

Guest $50 $70

Industry $60 $80

Public $70 $90

Junior $10 $10

Golf car $17 $17

POPPY HOLDING, INC – CONSOLIDATED2008 FINANCIAL PLAN

2007 ACTUAL 2008 PLANHILLS RIDGE HOLDING CONSOLIDATED HILLS RIDGE HOLDING CONSOLIDATED

54,667 56,761 111,428 TOTAL ROUNDS 56,500 57,500 114,000

7,133,704 6,112,918 - 12,945,932 TOTAL INCOME 7,754,140 6,606,730 - 14,360,870

1,026,768 890,189 - 1,916,957 TOTAL COST OF SALES 1,057,650 957,560 - 2,015,210

6,106,936 5,222,729 - 11,028,975 GROSS MARGIN 6,696,490 5,649,170 - 12,345,660

4,905,490 5,042,384 169,672 10,117,546 TOTAL DEPT EXPENSES 5,373,380 5,577,406 231,940 11,182,726

1,201,446 180,345 (169,672) 1,212,119 TOTAL OPERATING INCOME 1,323,110 71,764 (231,940) 1,162,934

149,892 - 199,420 349,312 OTHER NET INC/(EXP) 141,700 - 247,190 388,890

1,351,338 180,345 29,748 1,561,431 NET INCOME 1,464,810 71,764 15,250 1,551,824

- - (528,571) (528,571) Debt Retirement - - (528,600) (528,600) (831,779) (380,355) - (1,212,134) Capital (434,500) (565,000) - (999,500)

- - - - - - - -

519,559 (200,010) (498,823) (179,274) NET CASH FLOW FROM OPS 1,030,310 (493,236) (513,350) 23,724

264,371 (11,845) (98,613) 153,913 INC/DEC ASSETS/LIAB - - - -

783,930 (211,855) (597,436) (25,361) NET CASH FLOW 1,030,310 (493,236) (513,350) 23,724

POPPY HOLDING, INC – CASH FLOW

Plan Plan Plan Plan Plan2008 2009 2010 2011 2012

POPPY HOLDING, INC NET INCOME BEFORE DEPRECIATION 1,551,820 1,290,680 1,422,310 1,409,130 1,176,070

DEBT (528,600) (528,580) (352,380) - - CAPITAL (999,500) (700,000) (700,000) (700,000) (700,000)

CASH FLOW 23,720 62,100 369,930 709,130 476,070

CASH BALANCE 3,614,635$ 3,638,355 3,700,455 4,070,385 4,779,515 5,255,585

Poppy Holding, Inc - Consolidated Five Year Cash Flow

-$1,000

-$500

$0

$500

$1,000

$1,500

2008 2009 2010 2011 2012

YEAR

Poppy Hills Poppy RidgePoppy Holding Consolidated