Racing Victoria Limited Annual Report

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2005ANNUAL REPORT 2005 RACING 2005 RACING VICTORIA LIMITED ANNUAL REPORT

Racing Victoria Limited Racing Victoria Limited 400 Epsom Road Flemington Victoria 3031 Telephone: (03) 9258 4258 Fax: (03) 9258 4707 Web: www.racingvictoria.net.au Email: [email protected] 2005 ANNUAL REPORT

ACN: 096 917 930 400 Epsom Road Flemington Victoria 3031 Telephone: (03) 9258 4258 Fax: (03) 9258 4707 Web: www.racingvictoria.net.au Email: [email protected]

Annual Report published by Harding Media Services Pty Ltd, designed by Scarab Blue Design and printed by Fineline Printing. Photography: Sam D’Agostino, Kristian Dowling, Andy Tavares.

Photo by HWT, Melbourne RACING VICTORIA LIMITED

2005ANNUAL REPORT

Contents

Chairman’s Report 2

Board of Directors 6

Executive Team 9

Chief Executive Officer’s Report 10

Organisation 14

Integrity 18

Operations 28

Development 38

Services 50

Celebration 58

Corporate Governance 68

Financial Performance 74

Financial Report 77

racing victoria limited 1 2005 ANNUAL REPORT

Chairman’s Report

It is with great pleasure that I present Racing Another major milestone in 2004/05 was the Victoria Limited’s annual report and financial successful launch of ThoroughVisioN’s (TVN) statements for 2004/05. racing broadcast service. The expansion to a full live coverage of all thoroughbred racing events Victorian thoroughbred racing enjoyed a year of from Sydney, Melbourne and country Victoria great achievements, made possible by a highly from 4 May, 2005 heralded a new era in the constructive and cooperative relationship development of racing coverage. between RVL and its member shareholders – Country Racing Victoria, Melbourne Racing It is unfortunate that an earlier proposal for a Club, Moonee Valley Racing Club and Victoria joint venture with Tabcorp for the cooperative Racing Club. This positive collaboration across operation of both Sky Channel and TVN was not the industry was best illustrated by the historic realised and even more unfortunate that TVN decision by all parties to introduce a new system encountered so many problems in gaining for the distribution of thoroughbred racing’s access to distribution channels and outlets revenue from the joint venture with Tabcorp. required to make its service available to the widest possible audience. RVL is confident that The new system came into operation at the the TVN broadcast model will deliver the best start of the 2005/06 racing season and was long term outcomes for thoroughbred racing and the result of a mature and whole-of-industry its millions of patrons. The establishment of approach to identifying how best to allocate TVN has certainly been an experience for the racing’s primary income stream. It replaces a industry and could prove to be influential in how long standing distribution system that was racing elects to structure other spheres of its administratively complex and did not provide business in the future. flexibility to address innovation, development or capital needs. The new arrangements provide a Following the substantial consolidation of the fair and equitable scheme of distribution that national wagering marketplace last year as a supports the industry’s overall objectives and result of the Tabcorp-TAB Ltd merger, the promotes industry growth. In particular it is racing industry and wagering customers were expected to contribute to ongoing steady growth looking forward to quickly reaping the benefits in total returns to owners, as well as provide a of the co-mingling of the Victorian and NSW capacity for the industry to continue to support totalisator pools. Regrettably, unforeseen delays key industry activities such as international and complications arose to prevent the two racing development, enhanced integrity States’ wagering operations being combined measures and the operation of the Australian during 2004/05. Racing Museum.

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The regulation of wagering was the subject of a Bookmaking reforms were progressed during Savabeel wins the 2004 Carlton Draught Cox Plate landmark piece of legislation introduced during the year as RVL agreed to increase the number at Moonee Valley the Autumn 2005 Sitting of Parliament. The of available sports bookmaking licences, as part Racing and Gambling Acts (Amendment) Bill of the evolution of the Victorian sports was brought before Parliament by the Hon John bookmaking business within the national and Pandazopoulos MP, Minister for Racing, with the international market. RVL also worked in purpose of making a new offence that prohibits partnership with the Victorian government and wagering service providers not licensed in the Victorian Bookmakers Association to design Victoria from publishing Victorian thoroughbred and plan the introduction of an internet service race fields unless they have the approval of RVL. for race betting bookmakers. That service is on This legislation is a crucial tool in guarding target for commencement in 2005/06, subject against wagering service providers whose to satisfying a number of regulatory and operations pose an unacceptable risk to the commercial requirements. integrity of Victorian thoroughbred racing, or Victorian racing enjoyed an outstanding year on which fail to make an appropriate economic the world racing stage with Karasi winning the contribution to the industry. The legislation has Nakayama Grand Jump in Japan, Elvstroem attracted broad commendation from the winning the Group One Dubai Duty Free in international racing community, including the Dubai, Mummify winning the Singapore International Federation of Horseracing International Cup and Alinghi winning the Authorities and the Asian Racing Federation. Group Three Ballston Spa Breeder's Cup In the same Sitting, the Minister also introduced Handicap in the USA. This Victorian quadrella is the Racing and Gaming Acts (Police Powers) Bill a credit to our local participants and reinforces for the purpose of empowering Victoria Police to the value of the two-way street that the exclude certain persons – where it is in the internationalisation of racing presents. public interest – from attending race meetings at specified racecourses. This is another welcome measure to protect the integrity and probity of thoroughbred racing. racing victoria limited 3 2005 ANNUAL REPORT

The inaugural Global Sprint Challenge – On the investment attraction side, the regular featuring premier racing in Japan, the United flow of trainers, owners and breeders migrating Kingdom, Victoria, and next year Hong Kong – into Victoria has continued and we are working is a perfect example of the promotion of our sport hard at maximising this important economic at the highest possible level. Congratulations contribution from international and interstate must go to the connections of the winner of the investors and participants. 2005 Challenge, the Hong Kong-trained Cape of The export performance and general economic Good Hope. Entered in five of the six Challenge value of the breeding sector has come under the races, the seven year old won the Timbercorp spotlight of the Victorian Parliament’s Economic Australia Stakes at Moonee Valley in February Development Committee. RVL commends this and the Golden Jubilee Stakes at York’s Royal review and has been an active contributor to the Ascot meeting in June. consultative process, in collaboration with RVL remains committed to supporting this Thoroughbred Breeders Victoria. We anticipate important series and helping to develop other that the Committee will formulate productive major international events, such as the Asian recommendations for the Victorian Government Mile Challenge. and industry to jointly implement – especially in relation to lifting the profile of the Victorian sales.

Victorian thoroughbred racing enjoyed a year Sadly, March 2005 will always be remembered of great achievements, made possible by a highly for the tragic deaths of Victorian jockeys Adrian constructive and cooperative relationship Ledger and Gavin Lisk following race falls at []between RVL and its member shareholders. Corowa and Moe on consecutive days. Their loss was felt right across the industry with the racing community rallying around to provide In acknowledging the season’s international immediate and long term support to the Ledger highlights, it was tremendous to see the and Lisk families. Our deepest sympathies and Godolphin stable rewarded for its regular thoughts remain with these racing families. participation in the Spring Racing Carnival by Industry safety remains the highest priority of winning the Group Two Queen Elizabeth Stakes Victorian racing and there was solid progress at Flemington during the 2004 Melbourne Cup made by the industry, working closely with the Carnival with Fantastic Love. Victorian Jockeys’ Association, Australian Our international interests extend well beyond Trainers Association, WorkSafe and the race competition and include a concerted plan to Victorian Workers Union. Victoria is also a promote business connections that benefit participant in a National Jockey Safety Review Victorian racing’s export trade and investment- Steering Committee, which is examining a range attraction performance. RVL was selected by of measures for minimising riding risks. the Kingdom of Bahrain to prepare a feasibility Safety improvements in jumping racing continued study for a revamp of Bahrain racing. The into the 2004/05 season with the unveiling of a outcome could create any number of export third generation of the modular hurdles and opportunities for Victorian racing expertise. steeplechase fences and their progressive roll-out At the same time, we are encouraging overseas across the State. Their safety record is under close racing industries to take advantage of RVL’s scrutiny as a key part of the independent jumping high quality consulting capability, and its review panel’s terms of reference. The panel is education and training services. due to report back to the RVL Board by December, 2005 and furnish its assessment of the three year improvement program.

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Additional to the support RVL receives from its community of Ballarat and to the thoroughbred member shareholders, our task is also made much racing industry. As one of RVL’s inaugural easier by the positive relationships we enjoy with Directors and a former Chairman of the Moonee our industry stakeholder groups, Australian Valley Racing Club, Ballarat Turf Club and the Jumping Racing Association, Australian Services Victorian Country Racing Council, Geoff is Union, Australian Trainers’ Association, the widely regarded as one of the industry’s most Australian Liquor, Hospitality & Miscellaneous distinguished administrators. Workers Union, Australian Workers Union, Media His replacement as the nominee of MVRC on the & Entertainment Arts Alliance, Thoroughbred RVL Board is Robert Hance, while another Breeders Victoria, Thoroughbred Racehorse vacancy on the RVL Board was filled by the Owners Association, Victorian Bookmakers’ appointment of Merran Kelsall. Association and Victorian Jockeys’ Association. Their collective input is fundamental in keeping Inaugural RVL Board Director, Sue Carter, has the industry on the right track. announced her retirement effective from the 2005 RVL Annual General Meeting. Sue has Australian racing relies on a strong been a highly active member of the team, administrative network and we were well served especially in the area of finance and audit as throughout the year by the leadership of the well as chairing the Australian Racing Museum Australian Racing Board and the Principal Racing during the challenging period when it was Authorities, and the support of the racing clubs relocating to Federation Square. I wish Sue all around Australia. Within Victoria RVL enjoyed a the very best in her future endeavours. productive relationship with its counterparts in the other racing codes - Harness Racing Victoria I must also pay tribute to three great men of the and Greyhound Racing Victoria. Thanks also goes turf, Sir Rupert Clarke, David Bourke CBE and to Victorian thoroughbred racing’s many Angus Armanasco, who sadly passed away business, media and sponsoring partners. during the year. They were all true racing icons and their legacies certainly live on. In closing, I would like to take the opportunity of acknowledging the Victorian Government’s Lastly, I express my sincerest appreciation for assistance throughout the year and in particular, the hard working dedication of my Deputy, the the strong support from the Hon. Steve Bracks Hon Michael Duffy, the rest of the RVL Board, MP, Premier, the Hon. John Brumby MP, the RVL Executive Team most ably led by RVL’s Treasurer, the Hon. John Pandazopoulos MP, CEO, Robert Nason, and the entire staff of RVL. Minister for Racing, and their respective Private Here’s to another year of great racing. Offices and Departments. I also acknowledge the Government Friends of Racing group, co-convened by Steve Herbert MP and Tony Robinson MP, which has taken such an enthusiastic interest in racing.

I pay tribute to the tireless contributions of GRAHAM DUFF Geoff Torney AM, who retired from the RVL Chairman Board last November and most deservedly received Australia Day honours this year for his services to the legal profession, to the

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BOARD OF DIRECTORS

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1 GRAHAM DUFF – CHAIRMAN (AGE 63) 2 ROBERT NASON – CHIEF EXECUTIVE • Chairman, North Melbourne Football Club Ltd OFFICER (AGE 50) (appointed October 2005) • Chairman, Australian Racing Museum • Chairman, HOSTPLUS (appointed August 2004) • Director, VicRacing Pty Ltd • Director, Australian Racing Board • Director, Racing Information Services Australia • Board of Governors, International Masters Games Pty Ltd Association • Director, Australian Racing Board Ltd • Director, Mark Sensing Ltd • Former Director ThoroughVisioN Pty Ltd • Chairman of National Construction Management • Former Chairman, EDS Australia Services Pty Ltd • Former Executive Vice President and Director, A.T. • Former Chairman of Victorian Institute of Sport Kearney (USA) • Former Chairman and Managing Director of John • Former Managing Director, A.T. Kearney Australia & Holland Group associated companies • Former Managing Director of Fletcher Challenge • Former Managing Partner, Coopers & Lybrand Construction (Worldwide) Consultants, Melbourne

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3 THE HON. MICHAEL DUFFY – • Former Director, Open Family Australia DEPUTY CHAIRMAN (AGE 67) • Former Director of Future One Limited Bachelor of Laws degree, University of Melbourne • Former Director of Queen Victoria Women’s Centre Trust • Consultant, Mallesons Stephens Jacques Lawyers • Regional Commissioner, ASC Victoria (1999 – 2001) • Member of the Order of New Zealand, for work on the Closer Economic Relations Agreement with New • Chief Financial Officer, ANZ Funds Management Zealand (1990) (1994 – 1998) • Chair, Judicial Remuneration Tribunal of Victoria 5 • Director, ThoroughVisioN Pty Ltd ROBERT HANCE (AGE 62) • Director, Hanover Welfare Services • Admitted as Associate of Australian Society of Accountants (1969) • Director, Keane Australia Pty Ltd • Managing Director, Timbercorp Limited • Director, Keane Australia Micro Payment Consortium Pty Ltd • Non Executive Director, Piquant Blue Limited • Chair, Kensington Management Committee – • Non Executive Director, Boundary Bend Limited A Public/Private Partnership Housing Development • Director, Plantation Land Limited • Former Chair, Tripartite Working Party on Labour • Non Executive Director, Boundary Bend Limited Standards to examine ways of promoting labour standards in the Asia Pacific Region • Director, Almonds Australia Pty Ltd • Former Chair, Trade Sub Committee of the Joint • Director, Plantation Pulp Exports Pty Ltd Standing • Non Executive Chairman, Australian Garlic • Committee on Foreign Affairs, Defence & Trade Producers Pty Ltd • Federal Attorney General (1990 – 1993) • Director, Punters Corner Wines Pty Ltd • Minister Trade Negotiations, Member of Cabinet 6 (1987 – 1990) PROFESSOR DAVID KARPIN AM (AGE 62) • Minister Communications (1983 – 1987) B Com (Hons), MBA, LLD (Hon), FCPA, FAIM, ACIS, MACS • Member of the Joint Committee of Public Accounts (1980 – 1983) • Chairman, Melbourne Health • MHR (ALP) Holt Vic (1980 – 1996) • Chairman, Magnesium International Ltd • Chairman, Dandenong Youth Employment Project • Director, Melbourne Business School Ltd • Board member, Dandenong Community Advice • Director, Placer Dome Inc Bureau • Director, ThoroughVisioN Pty Ltd • Solicitor, private practice • Chairman, Warrnambool Cheese & Butter Factory Ltd 4 SUE CARTER (AGE 55) • Director, Institute of Public Affairs Ltd BA (Leeds), M App Sc (Organisation Dynamics), • Member of Council, Curtin University of Technology Chartered Accountant (UK) • Adjunct Professor of Management at the Australian • Director, AMP Superannuation Ltd National University, Canberra • Director, Peter McCallum Cancer Institute • Group Executive, CRA Ltd (1992 – 1996) • Director, Private Health Insurance Administration • Managing Director, Argyle Diamond Mines Pty Ltd Council (1986 – 1992) • Director, Professional Indemnity Insurance • Commercial Director, Hamersley Iron Pty Ltd Company Australia Ltd (1982 – 1986) • Director, Treasury Corporation of Victoria • Consultant, Corporate Governance and Board Effectiveness • Former Director, Variety Club of Victoria

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BOARD OF DIRECTORS CONTINUED

7 MERRAN KELSALL (AGE 51) 10 RAY ORLOFF (AGE 64) B Com (Hons), FCA, MBA • Non-Executive Director of various private • Chairman, Auditing and Assurance Standards companies Board • Former Executive, Smorgon Consolidated • Chairman, Professional Indemnity Insurance Industries Company Australia Pty Ltd • Former Executive, Humes Ltd • Chairman, Public Transport Industry Ombudsman • Former Non-Executive, Equity Trustees Ltd (Victoria) Limited • Former Board of Management Member, Royal • Deputy Chairman, Melbourne Water Corporation Children’s Hospital • Director, Credit Union Services Corporation • Director, Smorgon Consolidated Industries (1978) (Australia) Limited • Non-Executive Director, Smorgon Consolidated • Member, Council of Trustees, National Gallery Industries (1990) of Victoria • Director, ThoroughVisioN Pty Ltd • Former Director, Colonial Limited • Former Director, Transport Accident Commission 11 HEP (CHINKA) STEEL (AGE 60) • Former Council Member, RMIT University Bachelor of Law, Melbourne University; Bachelor of • Former Partner, BDO Chartered Accountants Commerce, Melbourne University • Admitted to practice Supreme Court of Victoria 8 LINDSAY MAXSTED (AGE 51) and High Court of Australia FCA, Diploma of Business • Australia’s Representative on Strategic Planning Committee of International Petanque Federation • Chief Executive Officer, KPMG Australia (FIPJP) • Board Member, KPMG, ASPAC • Director and Secretary of Petanque Australia Ltd • Board Member, KPMG Australia • Former Director, Country Racing Victoria • Director, Helmsman Funds Management Ltd (1994 – 2004) • Chairman, VicRacing Pty Ltd • Former Director, Radio 3UZ Pty Ltd • Former Chairman and Director, Public Transport • Former President and Treasurer, Kyneton District Corporation of Victoria Racing Club • Former Director, Metropolitan Football League 9 KEVIN McNAMARA (AGE 70) • Former President, Riddell District Football League FCPA, ACIS • Former President & Secretary, Woodend Race Club • Director, VicRacing Pt Ltd • Former Chairman, Arts Access Society (for disabled • Director, Racing Products Victoria Pty Ltd and disadvantaged) • Deputy Chairman, Jade Software Corporation • Former Shire President/Councillor, Shire of Pty Ltd Newham and Woodend • Deputy Chairman, Huntingdale Partners Pty Ltd • Director, Macstech Pty Ltd • Former Director, Country Racing Victoria • Former Chairman, Kilmore Turf Club Inc • General Manager, Systems IT, Advance Bank Ltd (1990 – 1995) • General Manager, Systems & IT, Ford Motor Co Australia & Asia Pacific (1980 – 1990)

8 racing victoria limited EXECUTIVE TEAM

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EXECUTIVE TEAM

1 CHRIS SKORSIS, General Manager – Information Services 2 JULIE PIPER, Director – Finance and Services 3 SUSAN HARRISON, General Manager – Organisational Development and Human Resources 4 BERNARD SAUNDRY, Director – Racing Development 5 MARK CLOSE, Manager – Government Relations 6 SIMON BARRILE, Legal Counsel 7 JAMIE ROSS, General Manager – Strategic Planning 8 DES GLEESON, Director – Integrity Services 9 KEVIN SHAW, General Manager – Finance 10 DR PAUL O’CALLAGHAN, General Manager – Veterinary Services 11 ROBERT NASON, Chief Executive Officer 12 LEIGH JORDON, General Manager – Racing Operations 13 CHRIS WATSON, General Manager – Education and Training 14 STEPHEN ALLANSON, Director – Racing Operations 15 STUART LAING, General Manager – Marketing and Development 16 DAVID HAWKE, General Manager – Planning and Infrastructure 17 DR JOHN McCAFFREY, Director – Veterinary Services

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Chief Executive Officer’s Report

The 2004/05 racing year was filled with many 25,000 international visitations. RVL has no highlights, both on and off the track. doubt there is still room for substantial growth in these tourism numbers and we are developing Victorian thoroughbred racing continued to evolving strategies with Victoria’s tourism and make great strides as one of the world’s leading events agencies. industries. Total returns-to-owners during 2004/05 amounted to $135.4 million, up 4.4% or RVL recorded a solid financial result for the year. $5.7 million on the previous year. Victoria’s Net profit was $106,000 after a total operating prize money offer remains in the national lead, expenditure of $ 91.1 million and distributions to accounting for 33.3% of the Australian total. the member shareholders of $129.5m, up 5.2% ($6.4 million) on the previous year. Victoria’s race meeting attendances for the season remained steady at 1.647 million people, Improving the efficiency of RVL’s structure and up 1.2% on the previous year. operations was a key theme throughout the year, with a series of organisational changes delivering Wagering totalisator turnover on thoroughbred major productivity benefits. These changes racing grew by 3.5% to a total of $2.4 billion, included consolidating ownership and breeding driven largely by innovative race date and promotion, education and training, industry program planning by the industry. marketing and sponsorship, communications and Unfortunately, Tabcorp’s efforts in product industry event management and publishing into a development (Mystery 6 and Duet) and new Racing Development Department. The achieving a single NSW/Victorian wagering pool Department also assumed a service provision role were unsuccessful. This, combined with the in relation to the Australian Racing Museum’s failure to address the unsatisfactory vision (ARM) marketing, promotion and education arrangements since the advent of the new activities. The net productivity value of this channel, ThoroughVisionN (TVN), adversely consolidation of resources was a saving of $0.9 impacted wagering performance. Tabcorp’s million as well as providing a much more focused gaming performance, however, was outstanding, and coordinated level of service to the industry. showing an 8%-plus growth in both turnover and profit. Overall, the thoroughbred code’s share of The ARM’s funding and business operations returns from the Victorian joint venture were also reviewed during the year and actions increased to $198.5 million, up 4.3% on the were taken to provide long term financial previous year. security for the operation of the museum at Federation Square. Revised forecasts were set In 2004 the Spring Racing Carnival proved itself and a targeted ongoing grant of $1 million p.a. yet again to be a hallmark international event, was set for its future operations. RVL was able attracting outstanding fields of world class to accommodate additional costs of this competitors. The economic value of the Carnival restructure without the need to seek additional amassed an estimated gross benefit of $467.4 funds from the member shareholders or the million, while amongst the 650,000-plus Victorian Government. attendances there were 75,000 interstate and

10 racing victoria limited CHIEF EXECUTIVE OFFICER’S REPORT

The other main organisational change occurred growth and in turn, increase returns to owners in the Integrity Services Department, through (RTO), attract new owners, bolster the horse the creation of four units to enhance and focus population and reinforce the investment cycle. the Department’s delivery of integrity assurance. As far as RVL is concerned, the new distribution The new units - Raceday Integrity & Operations, scheme will result in the following major changes: Training & Development/Licensing & Registrations, Investigations and Non-Raceday • RVL will assume funding responsibility for all Integrity & Compliance - each report directly to raceday services (including the provision of the Director of Integrity Services and Chairman veterinarians, farriers, doctors, barrier of Stewards, Des Gleeson. This specialisation attendants, clerks of course, ambulances and and expansion of the Department is a sound photo finish services) at all tracks in Victoria; investment in protecting the Victorian • RVL budget items associated with RTO thoroughbred racing’s high reputation for racing payments (SuperVOBIS, riding fees, integrity and probity. WorkCover payments) will be ring-fenced with The way in which the thoroughbred racing unspent amounts being retained, to be applied industry distributes its joint venture revenue to RTO distributions in future years; will be revolutionised in 2005/06 after RVL and • Indexation will occur on training track capital the member shareholders successfully allocations, and; completed a review of the distribution agreement. The new system provides a fair and • At the discretion of the member shareholders, equitable distribution scheme, maximises RVL will be provided with funding to flexibility in race date allocation and consolidate club services and achieve programming and provides incentive for efficiencies. improved club performance and the achievement Throughout the year important assistance was of industry objectives. Importantly, it provides provided to the industry’s broadcast rights for a significant redistribution of income in holder, TVN, in terms of operational funding and favour of country racing. support services. This assistance was essential By distributing revenue on the basis of prize in enabling TVN to establish and launch its money for designated race types and including broadcast service and will continue until the incentives tied to prize money paid above the new enterprise reaches its full and sustainable prime distribution, the industry will have a much potential. RVL also played a key role in greater ability to achieve sustainable revenue endeavouring to facilitate necessary agreements

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between TVN and Sky Channel/Tabcorp, in order Regional racecourse development was the to ensure racing vision is supplied to all subject of a special planning project during the Victorian homes and commercial outlets. We year, aiming to maximise multi-usage have been very disappointed in the time taken development of the country racecourse network by both TVN and Tabcorp to negotiate a for the mutual benefit of local communities, settlement of all issues. rural and regional economies and the Victorian racing industry. Known as Regional Racecourse Similarly, supporting the operation of Racing Revitalisation the planning process is aiming to Information Services Australia (RISA) was help secure the future of country racing clubs by another priority. The effective protection and attracting public and private capital investment commercialisation of racing’s data is a key plank and stronger community and business linkages, in the industry’s long term business strategy. through promoting non-racing related Actions were commenced during the year to development on their racecourses. Following a examine alternative models for a restructure of proof-of-concept phase the project has now RISA, to better address the commercial and progressed to detailed planning studies at six operational data needs of the Australian racing pilot racecourse precincts. industry. This review is expected to be completed in 2005/06. Racehorse ownership promotion was a major focus. The need to sustain and grow this Following on from previous resource sharing important participant group and the vital horse initiatives across Victoria’s network of country population it generates, led to the conduct of an thoroughbred racing clubs RVL, in conjunction unprecedented survey of the entire Victorian with Country Racing Victoria (CRV), facilitated racehorse ownership base. The findings of this the formation of the Western Otway Region. The survey were instrumental in the development of participating 11 clubs have customised other an ownership strategy that is aiming to regional resource sharing models and adopted maximise the recognition of owners, deliver eastern and western cooperative clusters within them a range of benefits, entitlements and an the region. improved race day experience. Combined with Since the inception of new resource sharing the offering of greater rates of prize money and practices in 2003, country clubs have collectively other returns, the strategy should stimulate a increased their top line raceday revenue by more significant rise in Victorian ownership levels. than $2 million. The ongoing challenge for the The strong interrelationship between racehorse clubs is to continue the growth whilst improving ownership and the breeding industry is being margins and other cost efficiencies relating to closely examined by the Victoria Parliamentary raceday and racecourse operations. These Economic Development Committee, which has resource sharing models are considered to be been commissioned to undertake an Inquiry into integral to the long term viability of the country the Viability of the Thoroughbred and racing club network. Standardbred Breeding Industries. RVL welcomes this inquiry and is actively Improving the efficiency of RVL’s structure and contributing to its deliberations. There is much operations was a key theme throughout the year, confidence that the outcomes will produce a with a series of organisational changes delivering landmark roadmap for the Victorian Government []major productivity benefits. and the industry to jointly take Victorian breeding and sales to a new level of performance and position within the national and international bloodstock market.

12 racing victoria limited CHIEF EXECUTIVE OFFICER’S REPORT

Another initiative of the Victorian Government Our leading jockeys and trainers were recognised during the year was the launching of the Racing at Celebrating Racing’s Heroes proudly Community Development Fund (RCDF) by sponsored by Telstra. Blake Shinn created Minister Pandazopoulos. Sourced from the history by winning the 2005 Scobie Breasley compensation payments that the Victorian racing Medal and becoming, at 17, the first apprentice to industry receives to offset the impact of the win the award. Lee Freedman won his first Health Benefit Levy on racing’s gaming revenue, Fred Hoysted Award for the most outstanding RVL’s share of the RCDF in 2004/05 was $2.78 performance by a trainer on Victorian racetracks. million, which was allocated to an extensive Craig Durden won the VBA Tommy Corrigan range of projects and programs targeting Medal for the sixth time and the third in industry development and participant welfare. succession. Jamie Evans took out the Emirates The Levy was increased again in the 2005 State Airline VRMA Racing Personality of the Year Budget, costing the industry over $5 million per Award and Nicholas Ryan won the VJA annum. This revenue loss was partly addressed Outstanding Apprentice In Training Award. by a one-off $3.5 million assistance package and Looking ahead, 2005/06 promises to be another we are currently holding positive discussions challenging year, with many issues to be dealt with the Victorian Government to secure a long with. We expect the Victorian Government to term funding arrangement beyond 2005/06. announce the terms of reference for a review of The Victorian Government has also been highly the Victorian wagering and gaming licences and supportive of addressing betting regulatory this will be a prime focus for RVL and the issues and is actively leading legislative reforms member shareholders. Additionally we expect to and improved enforcement strategies to protect restructure the way the industry funds training the integrity and commercial viability of track maintenance, implement a range of Victorian racing. The most prominent threat to bookmaking reforms, bed down the TVN vision racing’s integrity is the continuing practice of issues, implement a range of jockey safety off-shore betting exchanges targetting initiatives, expand the internationalisation of Australian racing product and Australian Spring and Autumn racing and examine customers. Throughout the year RVL advocated administrative synergies with other states. for the Australian Racing Board’s national In closing, I would like to record my appreciation campaign to oppose moves to legitimise the for the strong support I have received from the betting exchange model, on the grounds that the committees and management of the Victorian capacity for unidentified persons to act as racing clubs and industry bodies. Throughout a bookmakers and profit from horses losing races year of many challenging moments, it was a constitutes an unacceptable integrity risk. pleasure to see such a high degree of On the track there were some fantastic cooperation and a shared commitment to serve highlights. Mighty mare Makybe Diva (GB) was racing’s best interests. comprehensively awarded the 2005 Australian Finally I wish to thank RVL’s Executive Team and Champion Racehorse of the Year proudly Staff, who have consistently displayed an presented by TVN in recognition of her feats, enormous level of professionalism and dedication. which included her second consecutive Emirates Melbourne Cup victory. Tszyu won the 2005 No Fuss Events Country Victorian Racehorse of the Year Award and Karasi (IRE) won the 2005 Wolf Blass Champion Jumper Award. ROBERT NASON Chief Executive Officer

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Organisation

STRUCTURE OF INDUSTRY BOARD OF DIRECTORS The RVL Board comprises 11 directors – five BACKGROUND appointed by an independent Appointment Panel In December 2001, Racing Victoria Limited and five appointed by the members. The (RVL) was registered as a public company eleventh position is that of the Chief Executive limited by guarantee under the Corporations Officer, who is appointed by the Board. Act. At this time RVL assumed, from the Victoria Racing Club, the functions and responsibilities In accordance with the Constitution all directors as the Principal Racing Authority governing except the Chief Executive Officer completed thoroughbred racing in Victoria. This change in their terms in office at the end of the 2004 AGM the governance of Victorian thoroughbred racing and were eligible for reappointment. coincided with the commencement of the Racing The casual vacancy caused by the resignation (Racing Victoria Ltd) Act 2001. from the Board in May, 2004, by Mr James MEMBERS OF RVL Henderson was not filled by the appointed directors at that time due to the impending RVL’s members are Country Racing Victoria round of Board appointments. Limited (CRV), Melbourne Racing Club Inc (Melb. RC), Moonee Valley Racing Club Inc The directors appointed by the Appointment (MVRC) and the Victoria Racing Club (VRC). Panel to take office from the conclusion of the 2004 AGM were serving directors Mr Graham Duff, the Hon. Michael Duffy, Professor David Regular stakeholder forums ensure that the Board Karpin and Ms Sue Carter, together with Ms of RVL understands issues affecting the Victorian Merran Kelsall. thoroughbred racing industry, and provides an The members reappointed Mr Lindsay Maxsted important two-way communication opportunity. [](VRC), Mr Ray Orloff (MRC), Mr Kevin McNamara and Mr H.E.P. (Chinka) Steel (CRV). Mr Robert Hance was appointed by MVRC to replace Mr Geoff Torney, who had served on the Board since the company’s inception in 2001.

The RVL directors subsequently determined the terms of appointment as follows: • Graham Duff, Michael Duffy, Kevin McNamara, Lindsay Maxsted – three years; • Sue Carter, David Karpin and Ray Orloff – two years; and • Robert Hance, Merran Kelsall and H.E.P. (Chinka) Steel – one year.

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Photo courtesty of Slickpix

STAKEHOLDER CONSULTATION Media, Entertainment & Arts Alliance Brett Prebble rides • Hong Kong sprinter Cape RVL continued the established process of regular (MEAA); Of Good Hope to win the 2005 Timbercorp Australia and effective consultation and cooperation with • Thoroughbred Breeders Victoria (TBV); Stakes at Moonee Valley each of the following racing industry stakeholders: • Thoroughbred Racehorse Owners’ Association (TROA); • Australian Jumping Racing Association (AJRA); • Victorian Bookmakers’ Association Limited (VBA); and • Australian Liquor Hospitality and Miscellaneous Workers’ Union • Victorian Jockeys’ Association (VJA). (Victorian Branch) (LHMU); Regular stakeholder forums ensure that the • Australian Services Union Board of RVL understands issues affecting the (Victorian Branch) (ASU); Victorian thoroughbred racing industry, and provides an important two-way communication Australian Trainers’ Association • opportunity. (Victorian Branch) (ATA); • Australian Workers’ Union (Victorian Branch) (AWU);

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CONSTITUTIONAL OBJECTIVES RVL’s constitutional objectives are to develop, encourage, promote and manage the conduct of the racing of thoroughbred horses in Victoria by ensuring: • Excellence. Victorian thoroughbred racing is recognised worldwide as a centre of racing excellence; • Service of customers. Victorian thoroughbred racing competes effectively in the leisure and entertainment markets by providing – excellent customer service to patrons, punters and other customers – a source of exciting entertainment • Economic benefits. The management of RVL for a wide audience; and its shareholders’ revenues, costs, assets and liabilities optimises the economic benefits • Integrity. Victorian thoroughbred racing delivered by Victorian thoroughbred racing to generally, and race meetings in particular, are all of its stakeholders and participants, in managed and conducted to ensure the highest particular the integrity, building continuously on the reputation and integrity of Victorian – owners thoroughbred racing; – breeders • Efficiency. Victorian thoroughbred racing is other participants and stakeholders managed with optimal efficiency, in order to – best enable the meeting of objectives; – communities in which racing operates • Participation. Victorian thoroughbred racing – Victorian economy generally; is managed to encourage the utmost participation by the widest range of people, particularly women and young people;

16 racing victoria limited ORGANISATION

• Social obligations. Victorian thoroughbred racing is conducted to ensure it meets its social obligations to Victoria and the communities in which it operates, including, but not only by – promoting Victorian country racing – encouraging responsible wagering and gaming – optimising employment in the Victorian thoroughbred racing industry; and • Independence. RVL conducts its operations and exercises its powers and functions in a manner which ensures public confidence in RVL’s integrity, and its independence from any improper external influence.

racing victoria limited 17 2005 ANNUAL REPORT

Integrity

INTEGRITY SERVICES SAFETY AND SKILLS OF APPRENTICE RIDERS Integrity Services was directly involved in the The Integrity Services Department underwent a implementation of a program designed to structural and functional change designed to improve the standard of safety with Apprentice encapsulate all core areas of integrity in the Riders, particularly in the early stages of their modern racing industry. apprenticeship. Terry Bailey was appointed Deputy Chairman of RVL also recently appointed an apprentice’s Stewards, responsible for Training and riding skills panel consisting of not less than Development of all Stewards and Officials and five persons with relevant skills and expertise. Information Technology Strategies. The objectives of the panel are to: Robert Cram was appointed Deputy Chairman of Stewards, Non-Raceday activities, responsible • assist in the mentoring of apprentice riders, for a drug control strategy including out of with respect to the development of individual competition testing, testing at trials and testing apprentice riders’ riding skills and practices; in the stable environment. The Betting Services • encourage individual apprentice riders to Department was divided, with the regulation and develop safe riding skills and practices; and compliance component coming under this function. • contribute to the development of knowledge, programs and strategies for the promotion and Terry Sharp is Deputy Chairman of Stewards adoption of safe riding skills and practices. responsible for Operations, and along with Terry Bailey and Robert Cram, and Chief Investigator CARELESS RIDING POLICY Peter McMillan, reports to the Director of RVL introduced a policy in respect of careless Integrity Services, Des Gleeson. riding designed to make race riding safer and to ensure all horses have a fair chance of success. Brett Clothier was appointed to the position of Solicitor, Integrity Services and has been Changes include: responsible for the preparation of prosecutions • Where a jockey is careless, but the before the Racing Appeals and Disciplinary resultant interference has been Board, as well as providing general legal advice contributed by another jockey. to the Stewards and Investigators. Previously this type of case resulted in a jockey being severely reprimanded; now stewards suspend the jockey predominantly to blame in such cases but will factor in the degree of contribution by said jockey in determining penalty (80% at fault, 80% of normal penalty);

18 racing victoria limited INTEGRITY 2005 ANNUAL REPORT

RVL’s Chief Steward • Where a jockey is careless but the MANAGEMENT Des Gleeson resultant degree of interference was During the 2004/05 racing season, deemed too low to warrant suspension. Integrity Services managed all Officials This type of case previously resulted in a including Stewards, Starters, Judges, Clerks of jockey being severely reprimanded; now the Scales and Barrier Attendants at each of the “bar” has been lowered when deeming 580 race meetings, 130 Metropolitan, 412 whether the degree of interference warrants Country, 39 Picnic and 130 race trials (official suspension. The degree of interference caused and barrier trials). by a jockey’s carelessness remains relevant to penalty; and INQUIRIES RVL Stewards inquired into in excess of 4600 • Where a jockey is careless and the related matters during the 2004/05 season, the resultant interference involves a fall or most common breach of the rules being careless loss of rider. riding, with 149 riders being suspended from This type of case now involves a minimum one riding in races for periods ranging from seven to calendar month suspension applied across the 28 race meetings. Seven of these riders board, except where there are unusual appealed the decision to the Racing Appeals and circumstances. Disciplinary Board, of which three were Under the new policy as detailed, the standard dismissed and four were varied. penalty for careless riding suspensions will One appeal against the Stewards’ decision to remain at approximately 18 race meetings. suspend a rider for a period of six weeks for In relation to the first and second cases, the improper riding was dismissed, and an appeal penalty may be further reduced resulting in a against the Stewards’ decision to suspend minimum level of suspension that is lower than another rider for six weeks for failing to take all what is currently the case.

20 racing victoria limited INTEGRITY

reasonable and permissible measures This is unsatisfactory from an integrity point of throughout a race to obtain the best possible view. A number of Stewards’ inquiries were not placing, was upheld. concluded to the satisfaction of the Stewards because the Stewards were unable to identify The Stewards charged 11 persons with a total of persons laying horses to lose on Betfair. 15 offences for breaches of the rule and acted as Prosecutor before the Racing Appeals and TRAINER EDUCATION INITIATIVES Disciplinary Board. Penalties ranged from a fine In conjunction with the Australian Taxation of $200 for a charge of unseemly behaviour, to Office, Taxation Compliance Seminars were an 18 month suspension imposed on a trainer conducted for licensed personnel throughout the for having brought a horse to the racecourse State as well as OH&S Seminars. The when it was found to have a prohibited Department also conducted two workshops for substance administered to it. jumps trainers, and oversaw a statewide stable The Investigation Department conducted 130 inspection program, designed to ensure inquiries, 37 of which were referred to the compliance with RVL standards and Government Stewards. Nine cases resulted in the matter Legislation. A number of these inspections were being referred to the Racing Appeals and undertaken in connection with the Worksafe Disciplinary Board, 24 were referred elsewhere Authority. A total of 350 licensed premises were and 60 were resolved. involved in this program.

101 track work riders and jockeys were drug ADMINISTRATION COURSES tested, of which 12 tested positive. Penalties Integrity Services, through Terry Bailey and ranging from one to three month suspensions Peter McMillan, conducted three Field were imposed on these riders, and there were no Investigators Courses throughout the year appeals against the Stewards findings. involving RVL Stewards and those from interstate jurisdictions (NSW, SA, TAS), as well LICENSING as Stewards from Harness Racing Victoria and The Licensing Department processed 1250 the Greyhound Control Board. This course forms Trainers Licence applications, 277 jockeys’ part of the Diploma of Racing Administration applications and 2900 stable employee (Stewards), a course that is being undertaken by applications. all RVL Stewards. BETTING EXCHANGES Betfair’s operations on Victorian races continued Integrity Services managed all Officials including during the 2004/05 season. These operations Stewards, Starters, Judges, Clerks of Scales and Barrier caused serious concern for Stewards as they Attendants at each of the 580 race meetings, 130 allowed unlicensed persons to play the role of []Metropolitan, 412 Country, 39 Picnic and 130 race trials. bookmaker and lay horses to lose. Bookmakers, of course, are highly regulated in Victorian racing. They undergo detailed probity checks prior to being licensed and their betting activities are closely scrutinised by the Stewards. Unfortunately, persons laying horses to lose on Betfair do not face the same scrutiny. No probity checks are required to open an account and Betfair does not provide the Stewards with access to information that would identify individual account holders.

racing victoria limited 21 2005 ANNUAL REPORT

VETERINARY SERVICES • implementation of changes to the analytical DRUG CONTROL PROGRAM methodologies employed in pre-race blood screening to significantly enhance Drug control is one of the foundation stones of a effectiveness; and credible racing industry. It ensures, interalia, the health and welfare of all horses and riders, a level • support for the tri-code submission to playing field for participants and the maintenance the State Government for funding of a of confidence in the integrity of the industry by significantly expanded drug research the betting public and the wider community. program.

The recommendations of the Sample Selection The changes in sample selection strategies will Strategy Review, approved by the Board of RVL be enhanced by the development of risk-based in 2003/04, have been progressively rolled out computer analyses of horses to be tested. over the last 12 months. This has resulted in a Related changes to selection criteria have 28% increase in the total number of samples already resulted in significant integrity collected (refer table). improvements in relation to specific areas of drug control. The program has been the subject of ongoing review over the last 12 months which resulted in The total budget for the program during the announcement of a range of specific 2004/05 was $1.65 million, up 27%. This funded integrity measures to be introduced the collection and analysis of pre- and post-race progressively. They will include: samples, equipment upgrades (within RASL), labour, travel and other sundry resource and • a 75% increase in the number of horses equipment expenditure. sampled pre-race and 50% post-race (2004-2006); RVL’s commitment to ongoing research in drug detection has been demonstrated by its • the development and implementation of a significant financial support for RASL’s drug sophisticated computer database using risk research program ($105,000) and ongoing analysis techniques for targeted sampling of equipment upgrades ($173,000) during 2004/05. horses; Veterinary Services was responsible for drug • provision of more than $600,000 over the next administration trials and the double-blind QA three years, to allow Racing Analytical program on behalf of RASL. This represents a Services Limited (RASL) to upgrade analytical significant in-kind contribution by RVL to drug equipment to significantly enhance screening research, in addition to its direct financial capabilities; support for the program. • a review of processes relating to raceday horse arrival requirements on course at metropolitan EMERGENCY DISEASE PREPAREDNESS and country meetings; Planning for the possibility of an exotic disease outbreak in the horse industry which the creation of a dedicated unit of three • began in 2002/03, continued during 2004/05. stewards and investigators to focus on stable The Horse Alert Reference Group signed off on inspections and non-raceday drug testing; Stage One of the project in 2003/04 with the • a new policy whereby security will be production of the “Horse Alert” manual, for the provided to all Group One runners from guidance of industry stakeholders on issues 6.00pm on the night before their race. This such as disease awareness, biosecurity and a will apply to every Group One race on the communication strategy. Victorian calendar and will also apply to other selected races identified by the stewards;

22 racing victoria limited INTEGRITY

SAMPLE COLLECTION RATES NUMBER CHANGE % POSITIVE SAMPLE CATEGORY COLLECTED ON 03/04 POSITIVES SAMPLES

Pre-race urine/post-race blood and urine 4,564 38% 1 0.02%

Pre-race blood for pre-race analysis (GC/LC/TCO2) 5,753 7.6% 4 0.05% Pre-race blood for post-race analysis (TCO2) 2,818 74%

EPO 3,393 5.8% - -

Out of competition testing 24 100% - -

Trials 12 - - -

Other 22 - - -

The overall rate of positives relative to samples collected was 0.04%, down from 0.07% in 2003/04.

racing victoria limited 23 2005 ANNUAL REPORT

This year has seen the commencement and Finally, the Victorian Government’s Department completion of the Final Report on Stage 2A of Agriculture, in collaboration with its HAV Projects of the Horse Alert Victoria Program. co-sponsors - Tabcorp, Harness Racing Victoria This report covers three main areas: and RVL - conducted a Government and industry equine disease simulation named Exercise Emergency Communication Networks • Pegasus. This was a desktop exercise, engaging This involved wide industry consultation representatives of horse industry stakeholders identifying current industry communication and relevant Government agencies in a networks, documenting existing databases, simulated response to an outbreak of equine performing a gap analysis on same, and influenza in Victoria. Its aims were to raise making recommendations on responsibilities awareness at all levels of an emergency animal for the ongoing maintenance of the currency disease outbreak in Victoria, and to assess of network information; industry and Government preparedness to mount an effective response. As of 1 December, 2004, at least two official racecourse veterinarians are in attendance at every metropolitan Various roles and responsibilities were and country TAB race meeting. identified and confirmed, capabilities assessed, []cost estimates and funding implications were examined, and key recovery issues were Model Enterprise Contingency Plan • identified. In particular, the adequacies of the This is a plan covering both thoroughbred current AusVet Plan, Horse Alert Victoria and and harness racing. It describes in detail the the Model Action Plan for a racecourse standstill roles and responsibilities of teams and were tested. individuals within an enterprise in the event of an emergency animal disease outbreak, The success of the exercise in achieving these whether this be at a racetrack or training aims was recognised by all participants. A final venue. It details actions which may be report on the simulation will be produced in the necessary and relates them to responsibilities, near future. timings and resources. It also provides recommendations relating to specific venue VETERINARY RACEDAY SERVICES contingency plans, and for the testing and From 1 December, 2004, at least two official maintenance of such plans; and racecourse veterinarians will be in attendance at every metropolitan and country TAB race Horse Transport Sector • meeting conducted throughout Victoria. One of This review provides a detailed overview of these is employed by RVL as an industry the Horse Transport Sector, validates and veterinarian, the other is usually a local updates existing communication databases practitioner engaged by RVL on behalf of the within Victoria and with operators moving Club. Rostering and payment is now done regularly in and out of Victoria. It also centrally by RVL. provides a code of practice for the transport industry, which incorporates HAV strategies Similarly, two sampling assistants now attend all and biosecurity principles. TAB meetings throughout Victoria. This has been necessary to facilitate the significant increases in sample collection rates, especially on country racecourses. It has also been necessary in order to implement the changes in sample selection strategies which have been progressively introduced at all race meetings over the last two to three years. These sampling assistants are employed and rostered by RVL.

24 racing victoria limited INTEGRITY

These two initiatives have resulted in an RACING VICTORIA EQUINE improvement in the standards of raceday RESEARCH FUND veterinary services and a significant increase in The strategic alliance formed between RVL and the number of samples collected. This has had the University of Melbourne in 2001 has seen obvious consequential benefits for industry the continued development of a world class integrity. research program designed to benefit the health and welfare of all thoroughbred racehorses. Through the Racing Community Development Fund, five dedicated horse ambulances have Increasingly, its direction will aim more been commissioned. These will be rolled out over specifically at developing strategies designed to the next 12 months, housed in the first instance reduce wastage in breeding, training and racing. at the five major Victorian training centres. They This will have signficant flow-on benefits for the will be made available progressively at as many industry. Further, it will incorporate issues such race meetings as possible, once the transport as improved track design and composition logistics have been finalised to the satisfaction of (whether it be for racing or training), design of the relevant parties. rails, jockeys protective gear.

The research program currently has eight major research and industry extension priorities: • Diagnostic Imaging Improved understanding of the sensitivity and specificity of nuclear medicine as a diagnostic modality for horses when compared to other techniques;

racing victoria limited 25 2005 ANNUAL REPORT

• Epidemiology and Risk Factor Analysis of • Exercise Induced Pulmonary Haemorrhage Racetrack Fatalities and Performance Based on an ongoing post mortem program Prevalence of upper airway abnormalities and and associated record analysis designed to risk factors involved in exertional decrease the incidence of racetrack fatalities rhabdomyolysis. Designed to determine the (ongoing, preliminary results peer reviewed incidence of and relevance to performance of and published); these conditions in racing horses (completed, peer reviewed and published internationally); • Musculoskeletal System Study designed to develop specific training • Pathophysiological Mechanisms in Equine programs and assess racetrack surface and Chondrodysplasia (OCD) construction to reduce musculoskeletal injury Leads to an understanding of the causative (completed 2005, awaiting publication); factors of OCD, development of preventive strategies, techniques for early diagnosis and Aetiology of Respiratory Disease in • optimal diagnostic imaging modalities; Victorian Racehorses Designed to identify pathogens of relevance in • A Prospective Study of Pre-sale Yearling respiratory disease of racehorses; Radiographs To identify the incidence of radiographic lesions in yearlings presented for sale in Australia, and provide an objective assessment of the effects of these findings on performance; and

26 racing victoria limited INTEGRITY

During 2003/04, RVL and the University of • Communication Melbourne were the lead agencies in initiating, To provide effective strategies for the funding and developing a proposal for an extension of research findings to industry Australian Horse Industry Co-operative Research stakeholders. Centre (CRC), which was submitted to the ADDITIONAL PROJECTS Federal Government’s Department of Education, During 2004/05 two other projects have come Science and Training. The Department on line which will receive funding support (in announced in April, 2004 that the horse part) from the RVERF. These are: industry proposal was one of 33 selected to progress to the second round (Stage Two) of the • The role of macrophages in recovery from approval process. The Stage Two application was Exercise Induced Pulmonary Haemorrhage submitted in July 2004 and attracted broad (EIPH/Bleeders) industry support. This project aims to identify the major mechanisms of chronic lung lesions induced Subsequently, the application received approval by EIPH, develop methods for reducing to advance to the final round of interviews, along chronic lung damage after episodes of EIPH, with 19 other candidates. Unfortunately the bid and to investigate a range of diagnostic was ultimately unsuccessful. However, imaging modalities to document changes to considerable knowledge was garnered about the lungs following EIPH in order to improve CRC and Government research funding diagnosis; and processes for future reference during this process. Valuable partnerships with a variety of • Equine infectious respiratory disease after industry groups were also developed. In order to long distance confined transportations build on these experiences, RVL has established The overall objective is to characterise and a working group to investigate the possibility of develop a novel, non-invasive and rapid establishing an Equine and Racing Research approach to detecting and monitoring Centre as a stand alone R&D arm of RVL in the respiratory tract infections in horses and other first instance. If considered viable, this could be large animals after confined long distance developed into a more inclusive horse industry transportation. This will enable an assessment R&D program which might ultimately seek CRC of the risk these bacteria and viruses pose, status leveraging Federal Government funding at both to the transported horse and horses in some point in the future. the destination stable.

RVL currently provides $303,000 per annum to the strategic alliance and research program. These funds are currently leveraged against approximately $470,000 of University of Melbourne, Rural Industries Research and Development Corporation (RIRDC) and Australian Research Council (ARC) funding for the program and related activities.

racing victoria limited 27 2005 ANNUAL REPORT

Operations

During the 2004/05 Racing Season, the Racing RACE PROGRAMMING Operations team worked towards providing During the current season, Racing Operations industry participants with the best available established the Race Programming Review Group. racing program. The group consists of representatives from RVL and shareholder and stakeholder bodies. RACE DATES The major aims of the group are to: The 2004/05 racing calendar consisted of • develop and approve the Victorian racing 581 race meetings. There were 130 metropolitan program through RVL’s programming race dates, an increase of two on the 2003/04 template; season. The Melbourne Racing Club conducted • monitor the performance of the racing 65 meetings, the Moonee Valley Racing Club program and identify areas that require 33 and the Victoria Racing Club 32. improvement through statistical analysis; Race dates in country Victoria totaled 451, • develop new concepts to be incorporated into comprising 384 TAB meetings, 28 non-TAB the racing program; and meetings and 39 picnic race dates • review all RVL Race Programming Policies. The only major structural change to the calendar in season 2004/05, was the expansion of The representatives from the stakeholder metropolitan twilight fixtures in the daylight groups include three licensed racehorse saving period and a further reduction in Sunday trainers, an executive member from the metropolitan fixtures. Australian Trainers Association and an owners representative from TROA. Senior staff members from Racing Operations met with country race club representatives in VICTORIAN GROUP & LISTED RACES regional locations around the state, to best ADVISORY GROUP identify the needs of clubs when formulating the The Victorian Group and Listed Races Advisory country racing calendar. Group continued the task of identifying appropriate races for upgrade by the Australian The 2004/05 racing calendar consisted Pattern Committee. of 581 race meetings. There were 130 Among the major upgrades approved in July, metropolitan race dates, an increase of 2005 for the upcoming season were: two on the 2003/04 season. []MVRC W H Stocks Stakes, VRC Jayco Stakes, • Melb RC Tristarc Stakes, VRC Matriarch Stakes – upgraded to Group 2; • MVRC Ian McEwen Trophy, Melb RC Cockram Stakes, VRC Let’s Elope Stakes, Melb RC Dubai International Stakes – upgraded to Group 3; and 28 racing victoria limited OPERATIONS

VRC Aurie’s Star Handicap, Melb RC The Following extensive consultation with various Elvstroem drives to the finish • ahead of Makybe Diva in the Heath Handicap, Melb RC Northwood Plume stakeholder and shareholder bodies during the 2004 Carlton Draught Stakes, VRC Liberty Financial Plate, Melb RC off season, RVL launched the Modular Mark III Caulfield Cup. Anniversary Vase – upgraded to Listed status Jumps during the months of April and May. The for first time. clubs based in the Western Otway Region were provided with a set of the Modular Mark III JUMPING RACING Hurdles which are shared between them Jumping Racing continues to capture the ensuring uniformity in all types of hurdles imagination of racing fans. Superb performances across the state. were recorded by the unheralded Frankoo Very Much in both the Brierly and Grand Annual Another innovation to the jumps calendar was Steeplechases at Warrnambool. Liquid Lunch the introduction of the “Rookie Chasers Series”. shone in the VRC Grand National Steeplechase The aim of the series is to encourage owners to on a bleak winter’s day, whilst the VRC Grand campaign first season chasers in a lucrative race National Hurdle saw the Moe-trained Enzed series worth in excess of $120,000. The series score a decisive win. Moonee Valley’s A.V. also gives Hunt Clubs the opportunity to Hiskens Steeple saw Sissano defy recent history showcase the rich history and tradition of by recording a victory in the time honoured hunting in Victoria. event as a “first season” jumper.

racing victoria limited 29 2005 ANNUAL REPORT

The Independent Review launched in 2002 has RACE FIELD MANAGEMENT now entered the final year of its three year HANDICAPPING review. At the beginning of 2005, RVL once again established an Independent Jumping The 2004/05 racing season has been one Review Panel to monitor the changes made marked by generational change for the Victorian from the first review, from which 38 Handicapping Panel. In December 2004, James recommendations were implemented. The panel Bowler retired after 25 years as head of the will provide a report on the current state of panel and in April of this year Gordon Rees jumps racing during the 2005/06 season. retired from his position as Senior Handicapper after more than 30 years of service. Both of WEIGHING OF HORSES TRIAL these men have made outstanding contributions A key initiative introduced during 2004/05 was to the Victorian Racing Industry over more than to trial the weighing of horses on raceday. three decades.

A weighing station was sited at Sandown The Ratings Based Handicapping (RBH) system racecourse and three raceday trials were introduced last year continued to establish itself conducted on 1 and 17 December, 2004 and on to the benefit of the industry. While there has 25 May, 2005. The success of these preliminary been a high level of acceptance of the system trials prompted RVL to introduce weighing from industry participants, the process of stations at the other three metropolitan improving the understanding of it is an ongoing racecourses, where raceday trials will be challenge. The RBH template, which allows conducted during season 2005/06. A decision ratings to be translated to indicative weights in on proceeding with this project at all Victorian races, was further refined during the season in TAB Meetings will be made in 2006. recognition of changing circumstances, such as the increase in minimum weights.

30 racing victoria limited OPERATIONS

The RBH system has now been adopted in all $M COMPONENTS OF RETURNS TO OWNERS Australian states with the exception of 150 Queensland and has also been introduced in $135.4M New Zealand. While each state is at a different stage of development, the prospect of a common 120 handicapping and rating system throughout Australasia is now closer to realisation than ever before. RVL has played a leading role in 90 providing support to other Principal Racing Authorities in the development of this important national initiative. 60 The main focus of the Panel remains the daily delivery of weights for all Victorian race meetings in a timely and efficient manner. To 30 this end the four-member team issued more than 74,000 ratings for horses nominated for 581 meetings during the season, in turn re-rating 0 more than 47,000 individual runners. 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05

The Victorian Racing Industry continued to set Prize money and trophies Super VOBIS Riding fees the standard for high quality, competitive racing Jockeys’ WorkCover Farriers rebates Starters’ subsidies in 2004/05, with 41% of races run in the Free nominations metropolitan area and 39% of non-metropolitan races decided by a margin of a half length or less. • a $30 float rebate for all starters plus a further PICNIC RACING allowance of $30 for meetings more than The Specialist Racing Strategy approved by the 250km from Melbourne; Board in March 2004 was aimed at supporting and improving the overall viability of picnic • introduction of the Picnic Bookmakers racing, by reducing costs to clubs as well as sponsored sprint and stayers race series; and assisting with improving the training of riders • minimum standards for track preparation, and safety levels at picnic tracks. including running rails and access to industry Key Initiatives introduced by RVL included: equipment for track preparation. • a Community Racing Scheme to assist clubs These changes have laid the foundation for a with infrastructure costs for major meetings; strong and vibrant picnic racing sector. • expanding the Picnic Rider classification to permit former professional riders who had not ridden 20 winners to be admitted as Picnic Riders; • formal training for all Picnic Riders as well as race day payment of riders to assist with participation costs;

racing victoria limited 31 2005 ANNUAL REPORT

VICTORIAN PERCENTAGE SHARE OF NATIONAL THOROUGHBRED RACES PLANNING AND INFRASTRUCTURE 24% 23.3% Planning has been focussed on the completion of the Distribution Review, to which all stakeholders agreed. This sets the correct 22% structural framework from which to provide funding to Clubs. The next stage of change is underway, with the review of the Training Tracks Maintenance Fund expected to be 20% completed towards the end of the financial year.

The Regional Tracks and Facilities Managers continue to work closely with the Clubs in the 18% development of maintenance plans and to provide advice and expertise as required to ensure country venues provide the best training facilities possible and racing surfaces are prepared appropriately for 16% race meetings. 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 RVL continues to place importance on research Victorian % share of national thoroughbred races and development and the focus this year has Includes all TAB, non-TAB, picnic and point to point races. been on developing new techniques for measuring tracks and understanding their impact on the horse. This work is well advanced VICTORIAN PERCENTAGE SHARE OF INDIVIDUAL HORSES and continues to improve our understanding of WHICH STARTED NATIONALLY turf, sand and synthetic tracks.

32% The Drought Proofing of Racing Strategy which was adopted in the previous year has been progressed with the completion of conceptual 30.0% design work for a drought proofing 30% demonstration project at Cranbourne Training Complex. The project involves the use of effluent water from the Eastern Irrigation Scheme pipeline and will provide valuable experience in 28% the application of this technology to other venues across the state.

From an Infrastructure perspective, the year has 26% been characterised by an expanding capital works program, both for RVL funded projects and project management of substantial portions of the CRV capital works budget. 24% 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 Headline projects include the commencement of Victorian % share of individual horses which started nationally the training facilities redevelopment at Mornington (made possible with a substantial Includes all TAB, non-TAB, picnic and point to point races. contribution towards the project by the Club), the completion of synthetic track installation at

32 racing victoria limited OPERATIONS

NUMBER OF THOROUGHBRED RACES – AUSTRALIA AND VICTORIA Ballarat and the upgrading of various sand ‘000 ‘000 training tracks at Hamilton and Mornington. 24 5 The predominant themes for the capital works 23,280 projects this year are training facility upgrades and OH&S improvements – in particular lighting 23 and running rail upgrades. 4,646 RVL continues to grow the consulting side of the 22 infrastructure business, engaging in advisory and project management roles with Tote 21 4.5 Tasmania and the Canberra Racing Club. VICTORIA AUSTRALIA A feasibility study into the privatisation of racing 4,387 20 in the Middle Eastern kingdom of Bahrain was 19,968 also completed and the potential for forward work from this looks promising. 19

BETTING SERVICES 18 4 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 The 2004/05 year heralded the emergence of contemporary bookmaker operations within Australia Victoria Victoria. Includes all TAB, non-TAB, picnic and point to point races.

With the support of RVL, two bookmaking corporations were licensed, together with an additional four bookmaking partnerships. NUMBER OF INDIVIDUAL STARTERS – AUSTRALIA AND VICTORIA ‘000 ‘000 There are a further six bookmaking partnerships awaiting approval and it is expected that 34 10 33,551 corporations and partnership numbers will continue to grow throughout the 2005/06 season. 33 9,315 The advantages of bookmaking corporations and partnerships include:

the ability to provide a far better continuity • 32 9 of service; VICTORIA AUSTRALIA 8,865 • a broader financial base to expand the bookmaking operation; and 31 31,037 • the opportunity to enter into commercial negotiations with other bookmakers if considering retirement. 30 8 Approved Victorian racing bookmakers can also 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 provide a wagering service on approved sporting events for on and off course punters, an RVL Australia Victoria initiative that has allowed bookmakers to offer a Includes all individual horses which started in TAB, non TAB, picnic and point to point races. more diverse wagering product range to punters who attend on course.

racing victoria limited 33 2005 ANNUAL REPORT

Walking the Godolphin THOROUGHBRED PRIZE MONEY Total Victorian bookmaking turnover this year horses at Sandown’s (INCLUDING TROPHIES AND BONUSES) international quarantine $M was $547 million, an increase of 4.4% on last station year’s total of $524 million. This result 400 continues the positive growth of Victorian bookmaker turnover over the past five years.

During 2005, the RVL Board announced that the 300 Victorian Sports Bookmaking Licences would be advertised and that the number of these licences would be increased from four to six.

200 The result of the applications will be known in November 2005 and it is expected the new PRIZE MONEY bench marks that RVL has set for Victorian Sports Licence holders will stimulate turnover in 100 this highly competitive market.

Turnover on sports betting this year increased by nearly 20%, to $51.3 million from $43 million,

0 although this was achieved mainly as a result of 00/01 01/02 02/03 03/04 04/05 the turnover of one operator. However it brings turnover back in line with the result achieved in Victoria Australia the 2002/03 season.

Following an internal review in the latter part of the 2004/05 season, it was decided to restructure the Betting Services department. The monitoring and compliance duties will be transferred to Integrity Services under the

34 racing victoria limited OPERATIONS

NUMBER OF VICTORIAN RACE MEETINGS CONDUCTED management of the Non Raceday Integrity arm of Integrity Services, whilst the wagering 700 analysis and development will continue to be 572 managed by the Racing Operations Department. 600

INTERNATIONAL RECRUITMENT 500

GLOBAL SPRINT CHALLENGE 400 The 2004/05 season continued the international development of racing in Victoria with the launch of the Global Sprint Challenge. 300

During the media conference for the 2004 Japan MEETINGS CONDUCTED 200 Cup, a partnership between Ascot Racecourse, the Japan Racing Association and Racing 100 Victoria Limited announced the launch of the Global Sprint Challenge, a unique international 0 series for turf sprinters. 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 The inaugural Global Sprint Challenge Series in TAB Non TAB Total 2005 consisted of two races in each of the three countries.

The series commenced in Australia with the running of the Group One TEAC Lightning Stakes at Flemington, won by Fastnet Rock. BOOKMAKER TURNOVER $M That stunning contest was followed by the Group 600 One Timbercorp Australia Stakes at Moonee $547M Valley which fell to the David Oughton-trained Hong Kong visitor Cape of Good Hope (GB), 500 who created history by becoming the first horse trained outside of Australia or New Zealand to 400 win at the Valley.

June in England saw the series continue at the Royal Ascot meeting, this year held at York. 300 The Group Two King’s Stand Stakes was won by the French sprinter Chineur (FR), then the much 200 travelled Cape Of Good Hope (GB) clinched the series with a superb win in the Group One Golden Jubilee Stakes. 100

The first race in the final leg of the series, held in Japan, was the Group Three Centaur Stakes at 0 98/99 99/00 00/01 01/02 02/03 03/04 04/05 Hanshin, and it was won by the local sprinter Golden Cast (JPN). The second and final race, the On-course Phone Total Group One Sprinters Stakes at Nakayama, saw victory go to one of the most exciting turf gallopers in the world, the Australian-bred, Hong Kong-trained Silent Witness.

racing victoria limited 35 2005 ANNUAL REPORT

AVERAGE EARNINGS – TOP 100 TRAINERS ‘000 Total prize money for the six races totalled more than US$3.7 million. The 2006 series will be $450 even bigger, with the inclusion of a race from $400 Hong Kong and a US$1 million bonus.

$350 Through on-going recruitment campaigns, the Global Sprint Challenge and interaction with key $300 international racing executives, relationships globally were enhanced in a number of racing $250 jurisdictions, in particular those in Japan, Hong

$200 Kong, England, Ireland, France, United States, Dubai and Bahrain. $150 VISITING INTERNATIONAL HORSES $100 International participation in the 2004/05 season continued to grow, with international $50 horses now targeting more than just the major

$0 spring features. Top 10 11 to 20 21 to 30 31 to 40 41 to 60 61 to 100 109 international nominations (69 Individual 2002/03 2003/04 2004/05 horses) were received for the 2004 Carlton

Includes 10% commission on prize money and Super VOBIS earnings within Victoria Draught Caulfield Cup, Carlton Draught Cox Plate and the Emirates Melbourne Cup, compared to 97 (58 Individual horses) in 2003.

AVERAGE EARNINGS – TOP 100 JOCKEYS Eleven international horses faced the starter ‘000 during the 2004 Spring Racing Carnival, $350 including five in the Emirates Melbourne Cup, along with others tackling the Carlton Draught $300 Cox Plate, VRC Mackinnon Stakes, VRC Queen Elizabeth Stakes and the Shannons $250 Sandown Classic.

ASIAN MILE CHALLENGE $200 Victoria’s expansion into the world of international racing will be further enhanced $150 with the proposed Asian Mile Challenge. This series will be launched in November 2005 $100 with 2006 the inaugural year of participation for Victoria. $500

0 Top 10 11 to 20 21 to 30 31 to 40 41 to 60 61 to 100

2002/03 2003/04 2004/05

Includes riding fees, 5% commission on prize money and Super VOBIS earnings within Victoria

36 racing victoria limited OPERATIONS

AVERAGE PRIZE MONEY / RACE INDEX

350 Victoria

300

250

200

150

100

INDEX – 100=NATIONAL AVERAGE IN 1992/93 AVERAGE INDEX – 100=NATIONAL 50

0 92/9393/94 94/9595/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05

NSW NT QLD SA TAS VIC WA Australia

AVERAGE PRIZE MONEY / INDIVIDUAL HORSE INDEX

250 Victoria

200

150

100

50 INDEX – 100=NATIONAL AVERAGE IN 1992/93 AVERAGE INDEX – 100=NATIONAL

0 92/9393/94 94/9595/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05

NSW NT QLD SA TAS VIC WA Australia

racing victoria limited 37 2005 ANNUAL REPORT

Development

An extensive review of the Racing Development MARKETING AND DEVELOPMENT structure was undertaken during 2004/05, to The Marketing and Development group more closely align activities and responsibilities incorporates media, public relations, events and with the needs and strategies of our awards, Spring Racing Carnival branding, shareholders and stakeholders. marketing and Ambassador programs, The Racing Development group is principally advertising and promotional campaigns, tourism aimed at growing and developing the level of development, internet, publishing and graphic participation, interest in and awareness of design, Inside Racing and Inside Breeding, thoroughbred racing in Victoria. CustomerFirst, the industry’s customer call centre and booking service, and market research The group now encompasses three core functional including the Economic Impact study for the areas; Marketing and Development, Education Spring Racing Carnival. and Training, and Owners & Breeders. Racing Development also has responsibility for MEDIA AND PUBLIC RELATIONS supporting the relationships with our partner During 2004/05, the media area has worked organisations; Champions – Australian Racing across the organisation and the industry in Museum and Hall of Fame, ThoroughVisionN providing services to generate media coverage (TVN) and Racing Information Services Australia for the Victorian Racing Industry. Its work (RISA), amongst others. encompasses proactively identifying opportunities to promote the industry, The Racing Development group is principally aimed particularly with non-racing media, and to at growing and developing the level of participation, manage the communication message to the interest in and awareness of thoroughbred racing. media and the general public. []The major media and public relations activities have been predominantly focussed on assisting the media and generating coverage of the major racing carnivals and events, such as the Spring Racing Carnival and the Global Sprint Challenge.

Industry events and celebrations have continued to provide major opportunities to showcase the success of the industry’s champions. These events, which continue to grow in popularity and coverage by the media, include Australian Champion Racehorse of the Year, Celebrating Racing’s Heroes [Scobie Breasley Medal, Fred Hoysted Award and Tommy Corrigan Medal] and,

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Minister for Racing John Pandazopoulos with 2004 Spring Racing Carnival Ambassador Clare Hawkes. 2005 ANNUAL REPORT

on behalf of Champions - Australian Racing INDUSTRY EVENTS Museum & Hall of Fame, the 2005 Australian The Events and Tourism team perform a highly Racing Hall of Fame Induction dinner, this year valued role in promoting success within the held in partnership with the Gold Coast Turf Club. Victorian and Australian racing industry. RVL is widely regarded for the innovative, high quality Media relations is a critical undertaking of the events it manages. 2004/05 was yet another big media team. This important activity ensures that year in the promotion and celebration of the all sections of the media have access to the marvellous achievements and contributions of so information and to the industry personnel many people to the thoroughbred racing required to simplify communications to and from industry in Victoria and nationally. These events the media. The Spring Racing Carnival media are covered in more detail in the Celebration guide is an important and valued reference tool section of this report. for media, as is the Spring Features Guide prepared in conjunction with the Racing PUBLISHING Operations team. The media team has also been RVL publishes Victoria’s monthly official proactive in arranging pictorial, feature article, racing industry magazine, Inside Racing and interview and appearance opportunities with also the annual publication, Inside Breeding. The numerous media outlets, to showcase various publishing and design group also produces a racing personnel and industry initiatives. range of publications, brochures and information documents for the Spring Racing Carnival, Global Sprint Challenge and media.

40 racing victoria limited DEVELOPMENT

INTERNET GROSS ECONOMIC IMPACT OF THE SPRING RACING CARNIVAL The RVL website [www.racingvictoria.net.au] $M maintained its position as the most visited horse 500 $467.4M racing site in Australia with a market share of over 13% of all horse racing traffic. The site was named Best Organisation site for the fourth time 400 in the 2005 Radio Sport 927 Internet Awards. Attracting more than 97 million hits and three million visits, the website continues to grow in 300 popularity and use.

The springracingcarnival.com.au site alone produced nearly 1.7 million hits during the 200 2004 Carnival period. The site has again been refreshed to provide an up-to-date and relevant service to an information thirsty racing 100 audience.

CUSTOMERFIRST 0 RVL provides a customer contact and bookings 2000 2001 2002 2003 2004 service for its customers and on behalf of a number of related parties, including Country Metropolitan area Regional area Racing Victoria (CRV) and 19 country clubs, Total ThoroughVisioN, and Champions – Australian Source: IER Consulting Racing Museum and Hall of Fame. The CustomerFirst Contact Centre handles all calls ATTENDANCE AT VICTORIAN THOROUGHBRED RACE MEETINGS and enquiries regarding products and services ‘000 for each business and aims to provide a first-call 2000 resolution for all customers. 1.647M Following two years of operation CustomerFirst 1750 underwent a detailed review of operations and 1500 business processes, in an endeavour to improve the services to clubs and customers. This review 1250 has resulted in improved efficiencies and systems and will further expand the services 1000 provided to customers, interacting with various sectors of the industry, during 2005/06. 750 During 2004/05 CustomerFirst: 500 • received more than 22,000 customer telephone enquiries; 250 • processed 6,432 bookings for 19 country clubs and CRV; 0 95/9696/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 • processed 5,130 membership renewals for country clubs; and Spring Racing Carnival attendance (Nine major metropolitan race days) Attendance at all other meetings • took sales orders for Champions, TVN and Total Inside Racing subscriptions.

racing victoria limited 41 2005 ANNUAL REPORT

EDUCATION, TRAINING This year the apprentice graduation ceremony AND WELFARE was featured at the Celebrating Racing Heroes Awards night in August. The 2004/05 Graduates The Racing Victoria Limited Education and were Ryan Maloney, Nick Mehmet, Damien Training Centre (RVLETC) provided nationally Robinson, Matthew Alesci, Thomas Campbell, accredited training to more than 300 industry Michael Guthrie, Glenn Hodges, Gavin Lisk participants during the 2004/05 season. Courses (deceased), Daniel Moor, Nicholas Ryan and included training for apprentice jockeys, Blake Shinn. trackriders, jumps and picnic riders, stable hands, stewards, racing administrators and The Fifth TEAC Rising Stars Series for barrier attendants. The Centre also provides apprentices again proved popular with owners, welfare and support programs for jockeys and trainers and punters, with capacity fields on other racing industry personnel. almost every occasion. As in previous years the series winner was decided in the final event at JOCKEY APPRENTICESHIP Flemington in July. The eventual winner was Twenty new applicants were enrolled in the Jamie Mott, who beat Rowan Waymouth and Certificate IV in Racing (Jockey) in 2004/05, Michael Guthrie. Ben Melham finished fourth, taking the total number of apprentices in only one winning ride from the top of the table. training to 43 – a 10 per cent increase on the previous season. PICNIC AND JUMPS RIDER TRAINING Two jumps rider workshops were conducted at Increased emphasis on rider skills and safety the Werribee Park National Equestrian Centre. was implemented, with the RVLETC’s qualified All B Class riders from Victoria, Tasmania and and experienced instructors playing roles in South Australia attended the sessions, designed developing riding style, technique, tactics, and to improve riding skills and enhance safety in track assessment. RVL’s workplace assessor the sport. A panel of experts studied films of all attended 30 official trial meetings to support, Australian jumping races conducted during the advise and assess the apprentices in further season, so as to provide specialised training, developing their riding skills. coaching and advice to individual jockeys. A RVL also strengthened its relationship with the particular focus was placed upon safety issues. Victorian Institute of Sport with apprentice The first training workshop for picnic riders was jockeys travelling to the VIS and joining some of held at the RVLETC in 2004/05. All riders were Australia’s leading athletes for media training required to attend the session which emphasised and motivational seminars. knowledge of the rules and regulations, riding On the racetrack Victorian apprentices have had safely, position, balance and whip usage. their best year ever, winning 1146 races for the Apprentice Jockey Training Director, Frank season. Nicholas Ryan became the first Muratore, facilitated the training and reported a apprentice jockey since Damien Oliver in positive response and enthusiasm from all 1992/93 to win the Victorian Jockey Premiership jockeys who attended the sessions. with another three apprentices finishing in the top ten. Jason Benbow completed a successful Spring Racing Carnival for the apprentices when he won the Group One Emirates Stakes on Sky Cuddle and at the season’s end, Blake Shinn won the prestigious Scobie Breasley Medal – the first apprentice to achieve the honor in the history of the award.

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TRACKRIDER TRAINING AND RECRUITMENT STABLE SKILLS Racing Victoria Limited and the Australian Twenty young trainees were enrolled in either Trainers Association completed the second year Certificate II or III in Racing and received of a three year Labour Agreement with the training and assessment in occupational health Federal Government to import overseas and safety, stable skills, communication, trackriders to Victoria, to help alleviate the handling horses safely and care for horses. All shortfall in skilled trackwork riders. By August traineeships were conducted in racing stables 1, 2005 the target of 50 riders had been throughout Victoria. achieved with participants from Japan, India, RVL also received state government funding to Sweden and the UK securing visas under the conduct a pre-vocational course for people conditions of the Agreement. seeking to develop basic stable hand skills for RVL continued to conduct courses in track riding employability in the racing industry. The at Pakenham Racecourse. The seven courses program was conducted on the job at the stables involved 40 participants under the tutelage of the of Tony Vasil and Mick Cerchi. Sixty-two 2004/05 Lady of Racing and successful jumps students were placed in the course, which is rider, Andrea Leek. The program only accepts delivered through the Priority Education and enrolments from skilled equestrian riders looking Training program. to work in the racing industry, or from existing trackriders wanting to improve their skills.

Graduates of the three week intensive course often find immediate employment in a racing stable. Employment outcomes were achieved in the 2004/05 season for 75% of course participants.

racing victoria limited 43 2005 ANNUAL REPORT

STEWARDS TRAINING JOCKEY SAFETY PROGRAMS All RVL stewards concluded their training as The Jockey Welfare Program was expanded in accredited workplace assessors, having 2005 to include the development and completed the assessment phase of three units implementation of rider safety initiatives. of competency from the Certificate IV in Former top jockey David Charles was appointed Workplace Training and Assessment. to the position of Welfare and Safety Coordinator. A range of initiatives have commenced In 2004/05 RVL customised the Victoria Police including: Force Course in Investigation to create a Course in Investigation for Racing Stewards. The • a national review of jockey equipment, program offers three specific units of including analysis of vests, helmets, safety competency and has been accredited by the irons and toe stoppers; State Training Board of Victoria. • a review of jockey riding conditions and Following the successful piloting of the course, techniques including field sizes, penalties, two programs were conducted during the season iron and stirrup length, apprentice training, with stewards from all three codes and other working conditions and riding clearances; states attending five days, facilitated by RVL’s a review of health issues affecting riders, Chief Racing Investigator, Peter McMillan. • including weight limits, studies into bone RACING INDUCTION density and hydration, facility standards, development of guidelines and policy The Racing Induction course is designed for new relating to raceday nutrition and return to employees in club or industry administration riding after injury; roles, to enhance their knowledge of the racing industry. Included in the one day course is a • a review of tracks and facilities including racing stable inspection, an RASL tour and the running rail and barrier placements, starting opportunity to hear guest speakers from procedures and minimum track standards; Integrity Services, Racing Operations, TVN, a review of medical transport facilities and Education and Training, RISA and the ARM. • personal requirements for race meetings and Eighty staff members from RVL and clubs training tracks; attended the five sessions conducted throughout ongoing research into jockey injuries and falls; the year. • and All RVL stewards concluded their training as accredited • the development of critical incident response workplace assessors, having completed the assessment procedures and policy. phase of three units of competency from the Certificate JOCKEY WELFARE IV in Workplace Training and Assessment. []Further enhancement to the Jockey Welfare Program was made through: • The Jockey Retirement Package – 150 jockeys and apprentices are now members of superannuation schemes, representing a 15 percent increase on the previous year; • RVL Benevolent Fund - In 2004/05 RVL financially assisted 28 industry participants with grants ranging from $600 to $10,000. Total payments exceeded $45,000;

44 racing victoria limited DEVELOPMENT

The Jockey Assistance Program - jockeys The Owners and Breeders Unit is responsible for RVL’s Apprentice Jockey • Training Director and their families were provided with the promotion and administration of Frank Muratore working professional counselling through this service. SuperVOBIS, Owners and Breeders initiatives, with a pupil The program was also made available to other support services and Registrar administrative participants in the industry and this function. component will be more widely available SUPER VOBIS over the next 12 months; and 2004/05 saw the Super VOBIS Advisory • The Jockey Career Education Program – Committee develop key initiatives aimed at 23 jockeys participated in this initiative, ensuring the continued success of Super VOBIS which forms part of the Victorian Institute of as Australia’s premier owners and breeders’ Sport’s Athlete Career Education program. incentive scheme. It provides support and assistance in career transition, strength and fitness, media training The Country Super VOBIS Super Days and nutrition. promotion involved six race meetings where every race on the program carried a $10,000 Super VOBIS Bonus. Races were open to any OWNERS AND BREEDERS Super VOBIS qualified horse, regardless of age. The Owners and Breeders unit was established The Super VOBIS Super Summer promotion saw a during 2004/05 with the purpose of partnering record 295 individual horses share $1,001,700 in with shareholders and stakeholder groups in the bonuses, paid for first, second and third in all TAB development and delivery of initiatives to 3YO and up Maidens, 2YO and 3YO TAB races, promote racehorse ownership and strengthen and all races at the Super VOBIS Super Days. the breeding industry in Victoria. 2,700 yearlings from 2003 were nominated to the scheme, the highest level of nominations in three seasons.

racing victoria limited 45 2005 ANNUAL REPORT DEVELOPMENT

A total of $11,642,000 in Super VOBIS Bonuses 2005 TBV AND SUPER VOBIS AWARDS was offered for 1,017 races, with $5,203,550 AWARD WINNER being paid out. TBV Victorian Leading Small Breeder Brian Durran (tied) During 2004/05 the Super VOBIS Advisory Terry O’Sullivan (tied) Committee worked to further increase the spread TBV Victorian Champion Broodmare Arantxa Rose and availability of bonuses, announcing that from TBV Leading Victorian Breeder Bob & Ivy Hawkes (Tolka Stud) 1 August, 2005 the 4YO Super VOBIS Stayers’ Series would be revised and expanded to allow TBV Victorian Industry Contribution Award The Late Graham Campbell Super VOBIS qualified stayers of any age to TBV Victorian Champion Freshman Sire Testa Rossa (Yallambee Stud) compete for over $600,000 in stayers’ bonuses. TBV Champion Victorian Broodmare Sire 05 Last Tycoon (Blue Gum Farm)

OWNERS John Ingleton Memorial Encosta De Lago TBV Champion Victorian Stallion (Blue Gum Farm) RVL acknowledges the important role that owners play in the sustainability and growth of SV Owners Bonus Forest Spy racing in Victoria and is committed to ensuring SV Stayer of the Year Isle of Majorca greater and more equitable returns for all SV Trainer of the Year Mathew Ellerton Victorian owners. SV Country Trainer of the Year Robbie Griffiths In February, 2005 a survey of 28,000 Victorian SV Owner of the Year David & Jenny Moodie thoroughbred owners was undertaken by RVL. (Contract Racing Pty Ltd) This survey, the most comprehensive ever undertaken with owners, was aimed at assisting SV Country Owner of the Year Kevin & Tanith O’Brien in the development of the Victorian SV Country Horse of the Year Beleura Thoroughbred Industry’s Strategy for Owners. SV Horse of the Year Alinghi The survey highlighted the challenge that the industry faces in servicing and growing ownership in Victoria, especially considering the The $3.6m Victorian Owners’ Strategy, to be ever changing profile of this most important implemented from 1 January, 2006, has five key group. The participation of young women in objectives: racehorse ownership is growing at a faster rate • to strengthen the diversity of interest in than that of young men. Also there has been a racehorse ownership across the community; three-fold growth over the past 20 years in to improve the owners’ experience on and off owners purchasing horses via syndicates. • course; Importantly the survey revealed a passionate to improve the viability of ownership; desire on the part of owners to receive • recognition and respect from the racing industry, • to demystify the ownership process; and in particular when their horse is racing. • to strengthen the representative voice of In May, 2005 the RVL Board endorsed the owners in addressing industry issues. development of the industry owners’ strategy, a The implementation of Stage One of the strategy partnership initiative between RVL and its entails the introduction of an Owners’ Gold Card, shareholders. aimed at providing all owners who race horses The Thoroughbred Racehorse Owners in Victoria with access to improved benefits and Association (TROA), as the owners’ stakeholder services, as well as recognising owners for the representative, provided independent input and fundamental role they play in the continued feedback in the development of the strategy. success of the Victorian racing industry.

racing victoria limited 47 2005 ANNUAL REPORT

BREEDERS Victorian racing is seeking to further expand the In March RVL welcomed the Victoria horse population, to provide more consistent Government Economic Development year-round race field sizes. It also seeks to Committee’s Inquiry into the Viability of the steadily improve the quality of our racing stock, Victorian Thoroughbred and Standardbred and to contribute to the campaign for elevating Breeding Industries. The Government has a Victorian competitiveness on the world racing strong record of support for Victorian racing and stage. Expansion in size, and raising the quality breeding and we look forward to the Inquiry of locally-produced breeding stock, are also producing positive outcomes for the long term fundamental for the development of a larger benefit of these highly interdependent sectors. It thoroughbred export trade. is anticipated the outcomes of the inquiry will be Whilst the overall strength of Victoria’s racing released in early 2006. product is internationally recognised as world RVL recognises the essential and important role class, the challenge is to ensure our breeding that the Victorian breeding industry plays in sector reaches the same position. RVL has begun ensuring the continued viability of racing in to address the challenge through a collaborative Victoria. An active local breeding industry is approach between the Victorian Government pivotal to sustainable growth. and racing and breeding industries.

Throughout the year RVL has worked with its breeding stakeholder, Thoroughbred Breeders EXTERNAL RELATIONSHIPS Victoria (TBV), to further assist and develop the CHAMPIONS - AUSTRALIAN RACING Victorian Breeding Industry. A key achievement MUSEUM AND HALL OF FAME in 2004/05 has been the establishment of the Champions - Australian Racing Museum and North Eastern Thoroughbred Industry Alliance Hall of Fame has completed its first full year of (NETIA) to assist in developing and marketing operation since its official opening on 1 July, Victoria’s premier breeding region. 2004. Its location, in the vibrant heart of Melbourne at Federation Square, has contributed Whilst the overall strength of Victoria’s racing to its high profile and growing popularity. product is internationally recognised as world class, The Museum celebrates the success and history the challenge is to ensure our breeding sector of thoroughbred racing, its many heroes, []reaches the same position. characters and personalities and contextualises the industry’s broader role within Australian cultural and sporting heritage. It simultaneously presents a picture of contemporary practices, and continues to research, discover, communicate and care for aspects of our heritage. The Hall of Fame again recognised the country’s great achievers and these are to be presented in the Museum.

Through the exhibitions, the various collections and the public and schools programs, the Museum provides unique mechanisms for the exploration of a diversity of ideas and issues. Each aspect provides visitors with insights into the past and the present and stimulates their thoughts about the future.

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Since opening in July, more than 110,000 The primary objectives of TVN are to increase visitors from all parts of Australia and the globe returns to the shareholders and racing’s have explored the Museum and Hall of Fame. stakeholders and broaden the appeal of racing to The visitors book also records the comments of a wider audience. many industry figures who have enjoyed and In May 2005, all Victorian racing was included been moved by the stories presented. on the TVN Racing Service, following the During the year, some aspects of the management expiration of an agreement with Sky Channel. and operation of the Museum were restructured The TVN Racing Service has live racing seven to ensure a more effective association with RVL. days a week and is being rolled out nationally to Services in the areas of marketing, business all hotels and clubs, and to Foxtel Digital Pay-TV development, education, training and financial subscribers. management are provided. Special projects, such During 2004/05 RVL provided office as Subzero’s visits to schools, are undertaken accommodation, financial management, media jointly with continuing success. and operational services while TVN develops its THOROUGHVISION (TVN) own independent management structure. TVN is a premium sports and interactive rights RVL is working with TVN to ensure all Victorian management company that specialises in Race Clubs achieve the maximum benefit from thoroughbred racing. In August 2004, the this new media platform. ownership of TVN formally transferred from RVL to the Victorian Race Clubs, Australian Jockey Club and Sydney Turf Club.

racing victoria limited 49 2005 ANNUAL REPORT

Services

Racing Services comprises Human Resources the necessary skills to do their jobs properly, (HR), Information Services, Finance, Procurement, work areas being free of discrimination and Planning & Analysis, Region Services and Risk harassment, and employees having effective Management. In a number of areas, services are relationships within their teams and their provided beyond RVL to other associated immediate managers. Action plans were organisations, particularly country clubs. prepared where improvement was required, with a focus on recruitment, communication, work The Racing Services group is also responsible for environment and conditions, performance overseeing and reviewing financial and other management, working across departments and aspects of the Victorian racing industry’s (VRI) more inclusive behaviour. These plans are joint venture with Tabcorp, as well as managing regularly followed up and we are pleased with and reporting RVL’s financial performance. the positive progress being made. A further survey will be undertaken next year. HUMAN RESOURCES A comprehensive survey was also undertaken The focus for HR in 2004/05 was on seeking with our shareholders and stakeholders and RVL views and feedback from staff, shareholders and rated well in regards to services received from stakeholders; career development; payroll employees in RVL with whom they deal, being consolidation; addressing industrial relations able to trust RVL with commercially sensitive obligations across the industry and information information, collaborating effectively with sharing with HR Managers in the industry. stakeholders, listening to the issues being faced We commenced ‘On-Track Leadership’ initiatives by stakeholders, communicating effectively and to build organisation and individual leadership. delivering high quality services. Once again This is an ongoing, integrated approach designed there were areas for improvement, including to simultaneously develop the organisation, communicating openly and transparently, and of work teams and individual leaders. Key features RVL employees having a clear understanding of include continued refinement of staff appraisal, the expectations of the stakeholders. career development and skills training, a The annual staff appraisal has a focus on tailored Employee Survey, a customised development and individual Development Plans Stakeholder and Shareholder Survey, and the are completed for all staff. The training budget introduction of 360 Degree Feedback for the has again been increased, with staff attending Executive Team. courses aligned with their Development Plans. The Employee Survey was completed by staff in Staff are encouraged to be proactive and a February and they were provided with results workbook, ‘Developing Yourself and Your Career’ both at an RVL level and at a departmental level. has been prepared by HR to assist staff making A number of the items in the survey were rated use of their strengths, deciding what is important well by most employees, including employees and setting their own objectives. This year we knowing what is expected of them and having have gained funding for industry traineeships

50 racing victoria limited SERVICES

and scholarships and these will be implemented During 2005/06 the focus will be on an internal in 2005/06. The 360 Degree Feedback initiated efficiency and systems review, succession for the Executive Team also provides a useful planning, improved work/life balance, creating a development focus. family friendly environment and continuing our focus on career development. Provision of payroll functions for some country clubs has continued and in addition there is more focus on providing an increased human INFORMATION SERVICES resource service to country clubs. Industry 2004/05 was another busy period for Information brochures on employment obligations and Services, delivering several key technology rights, and where to seek assistance with projects for the Industry. They included: personal and workplace problems, have been • a consolidation of the industry’s data updated and widely distributed to apprentices communications and web sites, resulting in and trainees, trainers and stablehands. The Code significant efficiency gains for the industry; of Conduct has also been reviewed and will be used as the template for distribution by clubs • provision of resources and expertise to the throughout Victoria. ARM in the establishment of Champions, including implementation of a retail HR also focussed on addressing some of the key management system, Voice over Internet industrial relations obligations for RVL and the Protocol (VoIP) phone solution, networking of industry. This included reviewing the computer terminals, audio visual equipment employment terms and conditions for RVL’s and security systems; employees and implementing the changes under new industrial relations legislative • investigation, planning and implementation of requirements. This review will provide a the external call centre solution for TVN, and springboard to ensuring RVL is able to connection to the Foxtel Customer Activation proactively meet its industrial relations System enabling TVN subscribers to be obligations into the future. authorised to view the TVN service on the Foxtel platform;

racing victoria limited 51 2005 ANNUAL REPORT

Photo by HWT, Melbourne

• completion of important regulatory changes to wireless network. Implementation is the national stakes payment system on behalf scheduled to commence in 2006. of Australian clubs for GST compliance; In addition, Information Services completed • upgrading the Bookmakers Telephone Betting major enhancements to the Industry’s Customer system on behalf of the VBA and its members, Relationship Management (CRM) system, providing a more contemporary web-enabled resulting in significant improvements to Back- platform that will meet the demands of office functions (processing payments, Bookmakers over the Spring Carnival; reconciliation and integration with financial systems); Customer focus activities (call centre development of new software to enable • functions, campaign management) and successful introduction of the “Weighing of Customer analytics on behalf of shareholders. Horses” initiative at Victorian metropolitan race tracks; and Information Services’ continued commitment to shared services has seen the number of successful trial of on-course wireless • stakeholders utilising RVL’s technology infrastructure technology for improving the expertise rise in 2005 to include all the data communications on race day and shareholder clubs as well as a number of eliminating the dependency on expensive affiliated racing bodies such as the VBA, TROA, cabling. The pilot included scanning of VJA, TVN, ARM, APN JP and RISA. Amongst stakeholder cards (Owners, Members, the major shared service initiatives undertaken Officials) for controlling access in and in 2005 included the roll out of the Regional IT throughout the race course, real time data and Communications strategy at country clubs exchange between officials (Judge, Clerk of to enhance the efficiency of regional clubs and Scales, Stewards and Bookmakers Supervisor), improve the information exchange with and streaming of voice and video over the country racing.

52 racing victoria limited SERVICES

2004/05 INDUSTRY INCOME 2004/05 INDUSTRY SOURCES ($220.6M) EXPENDITURE ($220.5M)

Program fee ($53.7M) Distributions to member shareholders ($129.5M) Product fee ($77.8M) Administration and operations ($33.3M) Marketing fee ($2.5M) Special projects allocations ($1.2M) JV profit ($64.4M) Grants – Australian Racing Museum ($2M) Electronic Gaming Machine Levy rebate ($3M) Provision for doubtful debt – Australian Racing Museum ($1.9M) Telecasting ($1.1M) Training tracks maintenance ($6.5M) Super VOBIS Income ($2M) Jockeys WorkCover expenses ($3.8M) WorkCover Levy Income ($1.7M) Thoroughbred country assistance fund ($8.4M) Industry recoveries ($6.3M) Super VOBIS ($5.2M) Shareholder grant ($1M) Telecasting ($7.5M) Other income ($7.1M) Marketing and promotion ($2.6M) Racecourse planning and development ($12.5M) Region services ($6.1M)

RVL Information Services has also played a RISK MANAGEMENT major role in delivering several key national The past 12 months has seen a significant focus initiatives on behalf of RISA that include: on risk management and health and safety • completing a major platform upgrade of the throughout Racing Victoria Limited. I-RIS racing information system; Over recent months considerable work has been • development of Australian Rule of Racing undertaken to improve the Risk Management amendment for payment of prize money to and OHS strategy for RVL. The RVL Board and 10th placing nationally; Executive is committed to eliminating unmitigated risks that may effect the introduction of the new Australian Horse • organisation, whilst providing safe work Identification Card (HIC) as part of the systems, practices and workplaces for replacement of the traditional Document of employees, participants, contractors, customers Description; and visitors. development of a system for data exchange • Education programs have been delivered with between I-RIS and Weatherbys for updating the aim of changing the focus from reactive details of international horses racing in safety into proactive risk management within Australia; and the organisation. A cultural shift is underway • significant changes to Stable Assist for enabling all personnel to incorporate risk enhancing the on-line capabilities of the mitigation strategies into their day-to-day Trainers Service Centre (TSC) for lodgement activities and business decisions. of nominations, acceptances and scratching Many staff participated in safety induction nationally. sessions, which provided an overview of RVL’s ongoing commitment to safety and explained changes implemented under the new Occupational Health and Safety Act, 2004.

racing victoria limited 53 2005 ANNUAL REPORT

Health and Safety Week, incorporating the new A revised “Race Safe” occupational health and RVL Healthy Work-Life Balance Program, was safety management system is in the process of launched in August. This week offered employees being developed for all departments. Risk profile the opportunity to view safety and risk workshops are also being conducted. These management in a new light. Educational “profiles” will build on the risk register seminars by health professionals and a variety of developed over recent months, to ensure that a health and fitness activities were offered comprehensive picture of identifiable risks is throughout the week, with many staff expressing constructed and as a result, risk control plans considerable benefits as a result. developed. Planned activity includes: Considerable emphasis was placed on enhancing • development of risk management plans for all communication strategies throughout the departments; organisation and the industry in general. development of business continuity and crisis Regional safety committees and OHS • management plans; and committees are now established and meet frequently. These forums give employees the • modification of job descriptions to reflect risk opportunity to be directly involved in the management and OHS responsibilities. development of safety initiatives which affect Emergency Management policies and procedures them and their work colleagues. Occupational are in the process of being finalised. These Health and Safety Representatives have been procedures will ensure that risk mitigation elected to designated work groups throughout strategies are effectively implemented in the the facility, and training has been provided to event of an emergency which may affect people, enable them to conduct their job efficiently and property or business interruption to the 400 with confidence. Epsom Road site. Training has been provided to

54 racing victoria limited SERVICES

THOROUGHBRED WAGERING TURNOVER (TABCORP) wardens and persons required to participate in $M $2,399M the emergency management committee. 2500

A network of communication channels has been developed which will enable RVL management and employees access to the most 2000 up-to-date information on legal requirements, legislation and codes of practice, and any other information pertinent to risk management and 1500 health and safety.

With the assistance of funding approved by 1000 WorkSafe Victoria an OHS management system and database is being developed and implemented within the Victorian thoroughbred 500 racing industry, with RVL being the key administrator of the project. This project will enable a consistent approach to risk 0 management to be achieved throughout the 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 industry thereby reducing incidents, creating safer work environments and enhancing public On-course Off-course Total safety at race facilities.

REGION FINANCIAL SERVICES THOROUGHBRED THREE CODE MARKET SHARE OF TOTAL OFF-COURSE WAGERING During the year a number of activities were undertaken aimed at improving the operating 100% processes and efficiency of the service. All 15.73% country clubs now participate in the region 90% financial services provided by RVL. 80% 15.47% A survey of Clubs was undertaken to gauge the 70% level of satisfaction with the provision of financial services and list outstanding issues. 60%

As a result a number of areas for improvement 50% were identified. 40% 68.80% These were considered at a two day business planning workshop where a Business Plan was 30% developed that included the development of a 20% Vision for Region Financial Services and strategies in response to issues emanating from 10% the survey. 0% 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 Five Key Objectives were identified as follows:

• implement an effective processes and Thoroughbred Harness Greyhounds procedures toolkit; • develop and deliver structured staff induction and training;

racing victoria limited 55 2005 ANNUAL REPORT

FINANCE • develop clearly defined SLA’s with all country clubs; The finance function has continued to streamline and enhance processes during 2004/05 and bed • provide a shared payroll service to Clubs; and down the provision of accounting services to • deliver on-line reporting to Clubs. associated business entities including RISA, ThoroughVisioN™, and Champions – Australian In addition, the Gippsland and Bay & Ranges Racing Museum & Hall of Fame. Regions were restructured to create a RFS “Super Centre” at Mornington to service both The finance function participated in and regions. This initiative had an immediate impact contributed to a number of important industry on the quality of servicing provided to the Clubs projects during the year, including joint venture in these regions. operations, the industry distribution review, restructure of ARM, a new purchasing and The unique requirements of the Mornington and procurement system, prize money development Ballarat Clubs were also addressed by providing and TVN financial analysis. dedicated resources to service their needs on a fee-for-service basis. The scope of the internal audit service has again been expanded to provide services to Communication improvements have also been a metropolitan race clubs and a more extensive key focus with enhanced reporting to Country review of the joint venture operations. Racing Victoria management and presentations to the CRV board. Strengthened budgeting and financial forecast reporting have improved cost accountability throughout the business, and the industry’s monthly scorecard ‘Thoroughscore’ has also been enhanced.

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Finance staff participated in a number of Sourced from the compensation payments that professional training and development programs the Victorian racing industry receives to offset to ensure they remain up to date in all technical, the impact of the Health Benefit Levy on racing’s financial and compliance aspects of the business gaming revenue, the Minister announced that and profession. the RCDF would commit $8 million of funding over two years to support the growth and PLANNING, ANALYSIS AND development of the three codes of racing. PROCUREMENT In 2004/05 Racing Victoria Limited’s share of A key outcome of 2004/05 is the development of the RCDF - $2.78 million - was allocated to the the Victorian Thoroughbred Industry Strategic following 23 projects – Direction 2005 – 2010, containing strategies and RACING COMMUNITY DEVELOPMENT FUND $000 challenging objectives for the industry. The objectives and strategies provide a framework Breeding/sales development 27 for action to be undertaken by RVL, member Drug testing equipment and research 282 clubs and stakeholder organizations, to ensure Equine veterinary research 353 the industry continues to provide world-leading racing. Progress against the objectives will be Female jockey program development and facilities audit 21 regularly reviewed to the end of 2009/10 season. Horse ambulances at major training centres 200

Considerable analysis and coordination efforts Horse disease emergency planning – Horse Alert Stage 2 8 were also undertaken to achieve agreement by Jockey welfare and research 292 member clubs to the new distribution scheme Jumping racing epidemiology study 30 that commenced this season. This new scheme provides the platform for the industry to achieve Jumping rider training 10 further sustainable growth in revenue, returns to OHS & risk management 100 owners, ownership, horse population and On-line training program 10 participation. Picnic Racing Community Racing Scheme 43 Additional analysis projects completed Picnic racing promotion 50 throughout the year include the enhancement of key performance indicators and the continued Picnic rider training 9 refinement to race programming to drive Racehorse ownership promotion strategies 255 improved wagering performance. Regional Racecourse Revitalisation project 200

The procurement and facilities function Schools and community education programs 250 continued to focus on achieving cost reductions Spring Racing Carnival regional tourism promotion 50 by leveraging the industry’s buying power and preparations have commenced for a major Stewards training courses 22 refurbishment of the Racing Victoria Centre to SuperVOBIS initiatives 450 be undertaken during 2005/06. Track rider training and recruitment 101

RACING COMMUNITY Water management - Cranbourne demonstration project 18 DEVELOPMENT FUND TOTAL 2,780 The Racing Community Development Fund (RCDF) was formally launched by the Hon. John Pandazopoulos MP, Minister for Racing, in January 2005 at the University of Melbourne’s Equine Veterinary Centre.

racing victoria limited 57 2005 ANNUAL REPORT

Celebration

In what proved to be another stellar year for 2005 saw the establishment of TVN, Australia’s Victorian racing the Events and Communications first thoroughbred only racing channel and it Team worked closely with the marketing staff of broadcast for the first time on the second day of racing clubs across the state to help publicise the Warrnambool Grand Annual Steeplechase and showcase the achievements of the meeting on 4 May. thoroughbred industry in 2004/05. The 2005 Australian Racing Hall of Fame Dinner And there were many of them! Until 2004 only traveled north for the first time, to Queensland. three horses had won the Melbourne Cup in Conducted by the Gold Coast Turf Club with the successive years – Archer, Rain Lover and Think assistance of RVL, a gala occasion at the Gold Big. But on a damp, overcast day at Flemington Coast Convention Centre saw more than 800 the mighty Makybe Diva (GB) propelled herself guests welcome 13 new inductees into the Hall of into the history books by becoming the first mare Fame, including the mighty Gunsynd, trainers to achieve that extraordinary feat. Her win Jack Denham and the late Geoff Murphy and crowned another record-breaking Spring Racing jockeys Ron Hutchinson and the late Pat Glennon. Carnival, with record crowds attending the VRC’s A five year-old mare put a tiny town in the AAMI Victoria Derby Day and Crown Oaks Day Grampians on the racing map when she carried meetings, and the biggest crowd in 30 years its name, Mirranatwa, to win six races from 16 turning out to see Elvstroem win the Carlton starts and amass enough points to win the Draught Caulfield Cup. 2004/05 Country Owners’ Racehorse Challenge.

Fashion purchases hit an all-time record of SPRING RACING CARNIVAL more than 245,384 items, while it is estimated RVL is the proprietor and promoter of the Spring visitors to the carnival spent more than $15.7 Racing Carnival which begins on the Wednesday million on fashion in Victorian shops. following the AFL Grand Final and ends with the []Ballarat Cup. If it was Makybe Diva (GB)’s year – she also won Officially the 2004 Carnival ran from 29 the AAMI Australian Cup, the BMW in Sydney, September until 17 November, after being and unsurprisingly was crowned the Australian launched at Federation Square by The Hon. Champion Racehorse of the Year proudly John Thwaites, Deputy Premier of Victoria. presented by TVN – it was also the year of the apprentice. Nicholas Ryan won the Victorian Clare Hawkes, daughter of pioneer female jockey, Jockeys’ Premiership and Blake Shinn made Linda Jones, and New Zealand trainer, Alan Jones, history by becoming the first apprentice to win and also the daughter-in-law of Australian Hall of the Scobie Breasley Medal, voted for the first Fame inductee John Hawkes, was a racing regular time by the Victorian stewards’ panel. throughout the 50 days after being crowned the 2004 Spring Racing Carnival Ambassador.

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Graeme Rogerson, trainer of 2004 Carlton Draught Cox Plate winner Savabeel

SPRING RACING CARNIVAL ATTENDANCE TREND FOR FEATURE RACE DAYS 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Carlton Draught Caulfield Guineas 20,168 22,216 19,672 21,127 21,074 20,310 19,868 21,416 18,373 20,344

Vinery Stud Thousand Guineas 10,206 10,851 9,662 9,008 8,561 9,195 7,815 8,076 8,400 7,423

Carlton Draught Caulfield Cup 35,241 36,112 36,471 42,685 43,347 45,312 40,640 42,015 46,873 51,015

Carlton Draught Cox Plate 38,077 36,190 35,658 38,514 32,397 34,017 38,081 38,325 30,109 32,187

AAMI Victoria Derby 60,404 64,099 64,528 75,805 76,514 92,581 93,029 101,898 97,059 115,542

Emirates Melbourne Cup 74,843 90,149 94,143 100,607 104,028 121,015 92,477 102,533 122,736 98,161

Crown Oaks 62,388 67,086 75,482 77,301 83,870 96,406 101,201 103,269 101,179 110,677

Emirates Stakes Day 25,318 25,736 26,357 31,249 31,728 42,311 42,759 47,593 55,793 45,734

Shannons Sandown Classic 14,000 17,130 15,768 15,100 15,230 15,809 14,686 14,250 12,433 11,377

TOTAL 340,645 369,569 377,741 411,396 416,749 476,956 450,556 479,375 492,955 492,460

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Finalists in the Myer Fashions Once again the Spring Racing Carnival GLOBAL SPRINT CHALLENGE on the Field, 2004 confirmed its status as Australia’s largest annual The Global Sprint Challenge, staged jointly by event. Despite the inclement weather that RVL, Ascot Racecourse and the Japan Racing persisted for much of the Carnival attendance Association (JRA), was introduced in 2005 and figures and spending statistics reached new featured two races in each of Australia, Great heights, headlined by a record Gross Economic Britain and Japan. Benefit of $467.4 million. This inaugural challenge was officially launched For the second year running, the Carnival in Melbourne prior to the two Australian legs, attracted a total attendance of more than 650,000. the Group One TEAC Lightning Stakes at Flemington and Group One Timbercorp Australia Record numbers flocked to both AAMI Victoria Stakes at Moonee Valley. Derby Day (115,542), up by 19% and Crown Oaks Day (110,677) up by nine per cent. The Carlton Timbercorp Australia Stakes winner Cape of Draught Caulfield Cup crowd (51,015) was the Good Hope (GB), trained in Hong Kong, was highest in 30 years while the Carlton Draught Cox crowned the 2005 Global Sprint Challenge Plate attendance (32,187) improved by 7% (30,109). champion after compiling an impressive tally of points in five races of the six-race series. Country Carnival events attracted record attendances totaling almost 157,000. More than 25,000 overseas visitors attended the Carnival, and more than 75,000 came from interstate.

Fashion purchases hit an all-time record of more than 245,384 items, while it is estimated visitors to the carnival spent more than $15.7 million on fashion in Victorian shops.

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RESULTS OF VICTORIAN GROUP 1 RACES FOR 2004/05 DISTANCE RACE (METRES) PRIZE MONEY WINNER JOCKEY TRAINER

Cleanevent Manikato Stakes 1200 $350,000 Spark of Life Danny Nikolic Allan Denham

Dubai Racing Club Cup 1400 $350,000 Regal Roller Mark Flaherty Clinton McDonald

Emirates Airline Underwood Stakes 1800 $350,000 Elvstroem Nash Rawiller Tony Vasil

Carlton Draught Caulfield Guineas 1600 $1,000,000 Econsul (NZ) Chris Munce Graeme Rogerson

Yalumba Stakes 2000 $400,000 Mummify Danny Nikolic Lee Freedman

Seven News Toorak Handicap 1600 $350,000 Regal Roller Mark Flaherty Clinton McDonald

Vinery Stud Thousand Guineas 1600 $500,000 Alinghi Damien Oliver Lee Freedman

Carlton Draught Caulfield Cup 2400 $2,150,000 Elvstroem Nash Rawiller Tony Vasil

Carlton Draught Cox Plate 2040 $3,000,000 Savabeel Chris Munce Graeme Rogerson

Nestle Peters Classic 1600 $500,000 Miss Potential Glen Boss Bill Borrie

AAMI Victoria Derby 2500 $1,500,000 Plastered Paul Harvey Lindsey Smith

Thrifty Mackinnon Stakes 2000 $500,000 Grand Armee Damien Oliver Gai Waterhouse

Seppelt Salinger Stakes 1200 $500,000 Takeover Target Jay Ford Joe Janiak

Emirates Melbourne Cup 3200 $4,050,000 Makybe Diva (GB) Glen Boss Lee Freedman

Crown Oaks 2500 $750,000 Hollow Bullet David Taggart John McArdle

Emirates Stakes 1600 $500,000 Sky Cuddle Jason Benbow Peter G Moody

TEAC Lightning Stakes 1000 $500,000 Fastnet Rock Glen Boss Paul Perry

C.F. Orr Stakes 1400 $300,000 Elvstroem Nash Rawiller Tony Vasil

Timbercorp Australia Stakes 1200 $350,000 Cape of Good Hope (GB) Brett Prebble David Oughton

Oakleigh Plate 1100 $350,000 Fastnet Rock Glen Boss Paul Perry

AAMI Blue Diamond Stakes 1200 $1,000,000 Undoubtedly Dwayne Dunn Mark Kavanagh

Futurity Stakes 1400 $400,000 Regal Roller Mark Flaherty Clinton McDonald

Seppelt Wines Newmarket Handicap 1200 $1,000,000 Alinghi Damien Oliver Lee Freedman

Australian Cup 2000 $1,000,000 Makybe Diva (GB) Glen Boss Lee Freedman

Cadbury Guineas 1600 $750,000 Al Maher Noel Callow Gai Waterhouse

ANZAC DAY COMMEMORATION AUSTRALIA DAY CELEBRATIONS RVL commemorated ANZAC Day and the 90th RVL, in conjunction with the Australia Day anniversary of Gallipoli somewhat uniquely. In Committee (Vic), facilitated the provision of every race run in Victoria that day, at Flemington, Australia Day colours to all top-weight jockeys at Avoca, Colac, Moe and Swan Hill, the ANZAC Australia Day meetings held in Victoria at spirit was honoured by having one jockey wear an Caulfield, Hanging Rock, Wangaratta, exclusive set of ANZAC Day colours. Camperdown and Balnarring.

As a tribute to fallen soldiers, the Australian These jockeys wore the colours based on the Racing Board (ARB) co-coordinated race Australian flag in a celebration of our nationhood programming schedules to observe a minute’s by owners, trainers, jockeys and the wider silence across all racecourses nationwide. racing industry.

racing victoria limited 61 2005 ANNUAL REPORT

INDUSTRY AWARDS 2004/05 AUSTRALIAN CHAMPION RACEHORSE OF THE YEAR AWARDS PROUDLY PRESENTED BY TVN

Australian Champion Racehorse of the Year Awards proudly presented by TVN Makybe Diva (GB)

The Wolf Blass Champion Jumper Karasi (IRE)

Yallambee Stud Champion Two Year Old Fashions Afield

New Zealand Bloodstock Champion Three-Year-Old Filly Alinghi

New Zealand Thoroughbred Champion Three-Year-Old Colt/Gelding Fastnet Rock

TAB Most Popular Racehorse Makybe Diva (GB)

William Inglis & Son Champion Sprinter Fastnet Rock

TGM Engineers & Surveyors Champion Middle Distance Racehorse Grand Armee

Radio Sport 927 Champion Stayer Makybe Diva (GB)

IRT Champion International Performer Elvstroem

Crown Limited Champion Group One Jockey Glen Boss

Emirates Airline Champion Group One Trainer Gai Waterhouse

Turf Monthly & Racing and Sports Champion Sire Award Danehill (USA)

CELEBRATING RACING'S HEROES PROUDLY SPONSORED BY TELSTRA

Scobie Breasley Medal proudly sponsored by Telstra Blake Shinn

Fred Hoysted Award proudly sponsored by Telstra Lee Freedman

VBA Tommy Corrigan Medal Craig Durden

VJA Most Outstanding Apprentice in Training Award Nicholas Ryan

Victorian Jockey Premiership Award proudly sponsored by Tooheys Nicholas Ryan

Victorian Trainer Premiership Award proudly sponsored by Tooheys Lee Freedman

VRC Bert Wolfe Media Award Adrian Dunn

Emirates Airline VRMA Racing Personality of the Year Jamie Evans

AUSTRALIAN CHAMPION RACEHORSE OF horses to receive votes were Carlton Draught THE YEAR PROUDLY PRESENTED BY TVN Caulfield Cup winner Elvstroem (18), five-time Dual Melbourne Cup winner Makybe Diva (GB) Group 1 winner Grand Armee (8), popular filly capped off a memorable season when she was Alinghi (4) and dual Derby winner Plastered (1). named the 2005 Australian Champion The prestigious title was one of three awards the Racehorse of the Year, proudly presented for the connections of Makybe Diva (GB) collected at the first time by TVN. spectacular Ice Ball function. In the Radio Sport In what proved to be a comprehensive victory 927 Champion Stayer Award Makybe Diva (GB) Makybe Diva (GB) polled 114 votes out of a polled a winning 144 votes, and she was also possible 145 and was announced the winner in voted the TAB Most Popular Racehorse. front of a record audience of over 1,000 people gathered at Melbourne’s Crown Palladium. Other

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CELEBRATING RACING’S HEROES PROUDLY meeting, with each individual ride being Blake Shinn, Scobie Breasley, SPONSORED BY TELSTRA Lee Freedman and recognised. Craig Durden at Celebrating Apprentice jockey Blake Shinn created history Racing’s Heroes proudly It was, in fact, a night of firsts, for Australian sponsored by Telstra. by winning the 2005 Scobie Breasley Medal, Racing Hall of Fame trainer Lee Freedman won proudly sponsored by Telstra at a black-tie his first Fred Hoysted Award, proudly sponsored dinner in the Crown Palladium. by Telstra, for the most outstanding performance Shinn, 17, became the first apprentice to win the by a trainer on Victorian racetracks. Scobie Breasley Medal since its inception in Freedman gained the award for his feat of 1996 in one of the most thrilling finishes in the training Makybe Diva (GB) to win her record- medal’s history. He overhauled fellow breaking second consecutive Emirates apprentice, 18 year-old Nicholas Ryan, in the last Melbourne Cup at Flemington. Runner-up in the three sets of votes counted. The final tally saw Fred Hoysted Award was last year’s winner, Shinn with 59 votes, four ahead of Ryan on 55, Tony Vasil, for having prepared Elvstroem to and 11 clear of third placed Danny Nikolic, who win the Carlton Draught Caulfield Cup. polled 48 votes. Craig Durden won the VBA Tommy Corrigan For the first time the Scobie Breasley Medal was Medal for the third successive year. voted on by the Racing Victoria Limited stewards and also for the first time jockeys were able to receive multiple sets of votes per

racing victoria limited 63 2005 ANNUAL REPORT

Owners celebrate the win AUSTRALIAN RACING HALL OF FAME Jack Denham, who prepared Might and Power to of Hollow Bullet in the 2004 Crown Oaks Thirteen of racing’s heroes were inducted into win the Melbourne Cup, Caulfield Cup and Cox the Australian Racing Hall of Fame in the Plate, was there in person to receive racing’s presence of fellow legends and present-day greatest training honour, and was joined in the champions at a gala function hosted by the Gold Hall of Fame by the legendary Caulfield Coast Turf Club, assisted by RVL. horseman Geoff Murphy, trainer of the only three-year-old filly (Surround) to win the WS Applauded by an 800-strong audience at the Cox Plate, and Richard Bradfield, a renowned Gold Coast Convention and Exhibition Centre, mentor to apprentices. five horses, three jockeys, three trainers and two associates were immortalised in racing history. Ron Hutchinson, champion jockey at home and overseas, travelled from Melbourne to receive Queenslander Gunsynd, Western Australian star his induction. Also honoured were Jack Eurythmic, one of the nation’s greatest stayers, Thompson, a man who made his mark in the Galilee (NZ), two-time WS Cox Plate winner, saddle during a five-decade career, and Pat Chatham and inaugural Golden Slipper winner, Glennon, who won Melbourne Cups on Comic Todman, joined the ranks in the horse category. Court and Macdougal and partnered the mighty Sea Bird II in his domination of European racing in the mid 1960’s.

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Sir Patrick Hogan, who established Cambridge wanting to hang out and didn’t panic when Stud in New Zealand and has had an influence challenged strongly late in the straight. on breeding that few can match, was inducted The win took Mott’s points tally to 66 after into the Hall of Fame’s associate ranks, along winning the final three Rising Stars series races with the widely respected and highly influential at Kilmore, Mornington and Flemington. racing journalist, Bert Wolfe. Runner-up in the series was Rowan Waymouth 2005 Inductees to the Australian Racing with 52 points and third was Michael Guthrie, Hall of Fame who scored 47 points. Both these riders were HORSES - Chatham, Eurythmic, Galilee (NZ), unfortunate in that their respective mounts were Gunsynd, Todman. scratched from the final race. JOCKEYS - Pat Glennon, Ron Hutchinson, Jack Thompson. COUNTRY OWNERS’ RACING CHALLENGE TRAINERS - Richard Bradfield, Jack Denham, Five year-old mare Mirranatwa, named after Geoff Murphy. an agricultural hamlet in the Grampians, won six races and placed four times from 16 starts to ASSOCIATES - Sir Patrick Hogan, Bert Wolfe. comfortably win the Country Owners’ Racing Challenge. TEAC RISING STARS The TEAC Rising Stars Series is comprised of Owned by trainer Stephen Wilde in partnership races for apprentice riders only, with riders with his wife, Karen, and breeders Charles and collecting points on a 12-6-4-2-1 basis for Joanna Armytage, Mirranatwa amassed 118 finishing first to fifth in each race. points to finish 26 clear of second-placed Toxic Free Mallee. The Swan Hill-trained Tee Jamie Mott displayed a high degree of ability in Gee Pea finished third with 73 points after a winning the TEAC Rising Stars Final (2000m) at great late charge. Flemington. Riding Reine Du Soir, Mott defied a slow pace, held his mount together despite her

TEAC RISING STARS APPRENTICE JOCKEY COUNTRY OWNERS’ RACING SERIES TOP TEN CHALLENGE TOP FIVE JOCKEY POINTS HORSE TOWN POINTS

Jamie Mott 66 Mirranatwa Mirranatwa 118

Rowan Waymouth 52 Toxic Free Mallee Mildura 92

Michael Guthrie 47 Tee Gee Pea Swan Hill 73

Ben Melham 43 St Arnaud Banana St Arnaud 69

Thomas Campbell 42 Birallee Babe Birallee 63 (tied)

Daniel Moor 40 Ford’s Creek Mansfield 63 (tied)

Ricky Debono 38

Ryan Maloney 37

Ryan Hinton 33

Brady Cross 32

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THOROUGHBRED BREEDERS VICTORIA LEADING VICTORIAN JOCKEYS, 2004/05 (TBV) AND SUPER VOBIS AWARDS JOCKEY WINS The annual TBV and Super Vobis Awards, which Nicholas Ryan 165 honour excellence in the areas of breeding and Blake Shinn 160 racehorse ownership, crowned the four-time Peter Mertens 135 Group One winning filly Alinghi the Horse of Brad Rawiller 100 the Year for the second consecutive year. Ben Melham 981/2 The TBV Leading Victorian Breeder, based on stakes wins during the season, was won by Bob LEADING VICTORIAN TRAINERS, 2004/05 and Ivy Hawkes’ Tolka Stud at Casterton. Tolka TRAINER WINS tasted success in the Group Two VRC Sires Lee Freedman 147 Produce Stakes with Danger Looms and in the Peter Moody 104 Group Three SAJC Sires Produce with Izanami. Darren Weir 100

Mick Price 951/2

Danny O’Brien 721/2

COUNTRY CUP WINNERS 2004/05 COUNTRY CUP WINNER TRAINER JOCKEY Apsley Cup Dianne’s Miss Darren Weir Brad Melham Ararat Cup Mr. Tambourine Man John Leek Mark Flaherty Avoca Cup Palace Aide (NZ) Kevin Myers Craig Robertson Bairnsdale Cup Enzed Alison Bennett Michael Walker Ballan Cup Louie’s Backyard (NZ) Brent Hollinshead Brad Melham Marwina Lass Tony Noonan Chris Symons Ballarat Cup Just The Part Darren Weir Garry Murphy Benalla Cup General Booth (NZ) Tony Vasil Vin Hall Bendigo Cup Gallic (NZ) Graeme Rogerson Danny Nikolic Burrumbeet Cup Surfie Pete Darren Weir Garry Murphy Camperdown Cup Many Are Called Geoff Daffy Neville Wilson Casterton Cup Solitas Michael O’Leary Neville Wilson Colac Cup Benevole Brian Walsh Ricky Debono Coleraine Cup Al Zimer Sue Jaensch Damien Holland Cranbourne Cup On A Jeune Peter Montgomerie Joe Bowditch Donald Cup Pinerate Gwenda Johnstone Mick Johnstone Dunkeld Cup Prince Della Terry O’Sullivan Damien Holland Echuca Cup Pinerate Gwenda Johnstone Mick Johnstone Edenhope Cup Hello Hello Paul Preusker Wayne Hokai Elmore Cup Dorin Donna Arthur Pace Andrew Prentis Geelong Cup Pacific Dancer Richard Otto Brad Rawiller Gunbower Cup Tack Hammer Brendon Hearps Michael Heagney Hamilton Cup Palio Archway Brendan McCarthy Dean Yendall Hanging Rock Cup Iona Avenue Tony Vasil Stan Tsaikos Horsham Cup Aquiline Terry Kelly Michael Evans Kerang Cup Bigtime Charlie Brendon Hearps Andrew Prentis Kilmore Cup Tszyu Kevin Corstens Stephen Baster Kyneton Cup Smart Arch Ray Cleaver Rhys McLeod Manangatang Cup Stark Touch David Noonan Dale Missen Mansfield Cup Uncle Speed Adrian Osborne Shaun Nolen

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COUNTRY CUP WINNERS 2004/05 CONTINUED COUNTRY CUP WINNER TRAINER JOCKEY Marma Cup Battle Tower Ron Dart Dale Missen Marong Cup Willie Command Matthew Enright Mark Pegus Mildura Cup Polyester Boy Jenette McCormick Brady Cross Moe Cup Aka Bilk Jason Williams Brian Park Mornington Cup Kounthekash Lee Freedman Nicholas Ryan Mt Wycheproof Cup Pinerate Gwenda Johnstone Mick Johnstone Murtoa Cup Aquiline Terry Kelly Michael Evans Nhill Cup Jamatre Wayne Walters Kate Walters Pakenham Cup Masai Graham Richardson Greg Childs Penshurst Cup Louie’s Backyard Brent Hollinshead Michael Evans Quambatook Cup Bernie Done Nothin Greg Baker Thomas Campbell Sale Cup Inspire Clarry Connors Mark Pegus Seymour Cup Stamen Bill Moorhouse Steven King Sheep Hills Cup Methodical Boy Michael O’Leary Brenton Primmer St. Arnaud Cup Bernie Done Nothin Greg Baker Dale Missen Stawell Cup Methodical Boy Michael O’Leary Wayne Hokai Stony Creek Cup Davidoff Peter Moody Wayne Hokai Swan Hill Cup Pindari Prince James Fraser Ernie Marchent Tatura Cup Dorin Donna Arthur Pace Fabian Alesci Terang Cup Many Are Called Geoff Daffy Neville Wilson Towong Cup Grimhuntamug Malcom Jarvis Jamie Anstice Traralgon Cup Royal Rule Jim Marconi Anthony Darmanin Wangaratta Cup Don’t Stop Jamie Scott Wayne Hokai Warracknabeal Cup Lanson David Bates Holly McKechnie Warrnambool Cup True Courser Darren Weir Peter Mertens Werribee Cup Lightning Command Brian Mayfield-Smith Steven King Wodonga Cup Green Pick Peter Maher Brad Rawiller Woodford Cup Kelone Belinda O’Loughlin Terry Barry

racing victoria limited 67 2005 ANNUAL REPORT

Corporate Governance

The Racing Victoria Limited (RVL) Board • monitor the performance of the Company; and strongly supports good corporate governance ensure that the appropriate risk management and the company implements business practices • systems, internal controls, reporting systems reflective of the 10 corporate governance and compliance frameworks are in place and principles formulated by the Australian Stock operating effectively. Exchange (ASX) for the guidance of listed companies as outlined below. As RVL is not a The Board, together with management, has also listed company but rather a ‘not for profit’ documented a series of operating protocols to company limited by guarantee, it has had to ensure there is a shared understanding of each adapt and modify these principles as appropriate others authority and responsibility. for its circumstances. RVL’s activities supporting The Board has established six sub-committees to these principles are as follows: overview operations and to develop best practice 1. LAY SOLID FOUNDATION FOR policy and procedures for key areas. These sub- MANAGEMENT AND OVERSIGHT committees are outlined on the opposite page. The RVL Board of Directors has primary All Sub-Committee Board members must be responsibility for guiding and monitoring the independent of management and free from any affairs of the company including compliance relationship with the company that would with the company’s corporate governance interfere with their exercise of independent objectives. The Board holds 11 formal meetings judgment as a Sub-Committee member. Powers a year and additional meetings are held as and responsibilities of each Sub-Committee are required. set out in their respective charters, which are reviewed at least annually. Minutes of all Sub- The Board has delegated responsibility for day to Committee meetings are reviewed by the Board. day management of the company to its Chief Executive Officer, who is accountable to the The Executive Management Team of RVL has Board for performance of those duties. detailed position descriptions, and their annual performance is assessed both against these The duties of the Board are set out in the Board position descriptions and other goals established Charter and include: at the commencement of the year. The • establish, monitor and modify the Company’s Remuneration Sub-Committee oversights this strategies and policies; process together with executive succession • approve major corporate initiatives and planning and remuneration, as well as its other expenditures in excess of those limits responsibilities. delegated to management; • ensure conformity with corporate governance procedures;

68 racing victoria limited CORPORATE GOVERNANCE

Premier of Victoria, Steve Bracks, with Cups King Bart Cummings

SUB-COMMITTEE ROLE MEETING FREQUENCY BOARD MEMBERSHIP

Audit Sub-Committee Oversight integrity of RVL’s financial and 4 times per year S. Carter (Chair), internal controls and performance of (minimum) L. Maxsted, internal and external auditors K. McNamara

Racing Integrity Oversight management of all major racing As required to adequately G. Duff (Chair), Sub-Committee integrity issues where there is potential address integrity issues M. Duffy impact on the industry’s reputation

Remuneration Oversight human resource policy development 4 times per year D. Karpin (Chair), Sub-Committee and implementation, including remuneration (minimum) S. Carter, and benefits, performance management, M. Kelsall succession planning, superannuation and industry welfare programs

Risk Management Oversight business and OHS risk 4 times per year M. Duffy (Chair), Sub-Committee management systems (including OH&S and (minimum) R. Orloff, excluding matters dealt with by the Audit C. Steel Sub-Committee)

Wagering (Relicencing) Oversight RVL’s role in the Victorian As required to complement D. Karpin (Chair), Sub-Committee Government’s wagering and gaming the government’s R. Hance re-licensing process, to ensure the industry’s re-licensing timetable. ability to deliver its strategic objectives is maximized.

Race Fields Sub-Committee Oversight race fields authorization, Initially, as required to L. Maxsted (Chair), (Established Sept 05) policy development and implementation. establish appropriate G. Duff, Grant interim approvals. policy and protocols C. Steel

racing victoria limited 69 2005 ANNUAL REPORT

2. STRUCTURE THE BOARD TO ADD VALUE • key principles The RVL Board is structured to add value to the business of RVL. The RVL Board consists of the – honesty Chairman, Deputy Chairman, Chief Executive – integrity Officer and Directors. Each of these roles has identified responsibilities and reports to the – accountability Board on those responsibilities. – impartiality

Details of the respective Directors qualifications, – responsive service; other directorships (including those held within the past 3 years), experience and other • personal and professional behaviour; responsibilities are included on page six. • use and release of information; 3. PROMOTE ETHICAL AND RESPONSIBLE • conflict of interest; DECISION MAKING • gifts and favours; RVL has a Code of Conduct for Directors which outlines best practice for Directors. At the • financial probity and accountability; commencement of each Board meeting, the • outside employment; Directors’ Code of Conduct’s policy on conflict of anti-discrimination, anti-sexual harassment interest is restated by the Chair and any Director • and anti-bullying; conflicts in relation to the meeting’s agenda items are noted. The affected Director(s) are • breaches of the code; excluded from review and voting on that matter. • seeking advice; and RVL also has a Code of Conduct that sets policy statements & procedures. guidelines for ethical behavior by all company • personnel. These guidelines relate to: The Code of Conduct provides for varying penalties for non compliance, based on severity of the breach. Also, under the Company’s fraud

70 racing victoria limited CORPORATE GOVERNANCE

policy, staff are encouraged to raise concerns 5. MAKE TIMELY AND BALANCED with any one of a number of senior personnel, DISCLOSURE plus they have direct access to the Chair of the RVL recognises the importance of transparent Audit Sub-Committee if they deem this to be business processes and has developed the appropriate. following formal disclosure mechanisms: The Executive Management Team of RVL meets • annual general meetings; monthly to discuss any management issues and • regular shareholder meetings; to ensure that all decision-making is transparent and ethical. • quarterly stakeholder meetings; RVL staff are also provided with position • regular meetings with the Minister for Racing descriptions, and have a clear understanding of and department officials; and their individual decision-making responsibilities. • monthly staff meetings. 4. SAFEGUARD INTEGRITY IN FINANCIAL RVL has also developed many informal networks REPORTING which foster open and transparent The RVL Audit Sub-Committee oversees the communication between Board members, integrity of the financial statements of the shareholders, management and staff. company, the company’s system of internal controls and the independence and performance 6. RESPECT THE RIGHTS OF SHAREHOLDERS of the company’s internal and external auditors. RVL communicates effectively with members Specific powers and responsibilities of the Audit through Annual General Meetings and regular Sub-Committee include: members’ meetings. • review and recommend external auditors and The external auditor attends the Annual General their compensation; Meeting and is available to answer shareholder questions about: • review independence of external auditors; • the conduct of the audit; • review audit plan; • the preparation and content of the auditor’s review financial statements and audit results; • report; review annual budget; • • the accounting policies adopted by the • review internal audit plans and reports; and Company in relation to the preparation of the financial statements; and • review systems of internal accounting controls. • the independence of the auditor in relation to the conduct of the audit. The RVL Executive Management Team is individually responsible for their department’s The RVL Chief Executive Officer also meets at financial performance and the names of RVL least monthly with the Chief Executive Officers management appear in the Annual Report. of all RVL members.

RVL staff are provided with financial delegation authorities and have a clear understanding of the limits of their individual financial delegations.

racing victoria limited 71 2005 ANNUAL REPORT

7. RECOGNISE AND MANAGE RISK • make recommendations to the RVL board on RVL has established a Risk Management any matter relating to risk management, Sub-Committee, whose Charter includes the occupational health and safety, public security following powers and responsibilities: or such other matters as are within the Sub • adopt, and ensure the implementation of a Committee’s remit. Risk Management Framework and Plan (and RVL also operates a separate Racing Integrity report this plan annually to the full RVL Sub-Committee to oversee responses to any Board); major integrity issues that have the potential • monitor and periodically review the Risk to impact on the industry’s reputation. Its Management Plan; Charter specifies the following powers and responsibilities: • monitor the adequacy of risk management policies, plans and procedures; • review (where applicable to the major integrity issue at hand) • monitor the implementation, performance and auditing of risk management plans and – drug control strategies processes; – video coverage, surveillance and • monitor compliance with relevant legislation; investigations practices • consider regular management reports on – betting integrity matters health & safety, legal, reputational or other – code of conduct issues relevant risk issues, including the impact of changes in legislation, case law, regulations, – training and development practices community expectations, research findings – Integrity I.T. systems strategies and technology; – industry compliance matters; • consider reports on, and review responses to, significant risk related incidents; • oversight stewards appeals to RAD Board decisions; and • provide information to Victorian racing clubs to facilitate their understanding of risk • recommend to the Board changes in integrity management issues; related policies resulting from the Sub- Committee’s oversight responsibilities. • approve materials, including a framework and templates, for provision to Victorian racing 8. ENCOURAGE ENHANCED PERFORMANCE clubs to assist them to prepare, adopt, publish Since the last Annual Report, the Board has and implement their OHS policy consistent reviewed its Sub-Committee structure and with industry policy and their legal Charters and expanded the number of Sub- obligations; Committees from five to six, to ensure Board • facilitate the efficient communication of oversight on all key policy areas. information about risk management and safety The RVL Board’s Remuneration Sub-Committee matters within the industry; oversees performance management and its • facilitate education of licensed persons, Charter includes the following powers and employees and contractors in relation to responsibilities: occupational health and safety matters; and

72 racing victoria limited CORPORATE GOVERNANCE

superannuation, other benefits and • oversee human resource management remuneration structure, likely to have a including significant impact on RVL; and – recruitment and selection practices • approve the outcomes of remuneration – remuneration and benefits policies reviews for the individual members of the – HR policies generally Executive Team.

– career and succession planning including RVL also undertakes annual performance secondment policies appraisals of all staff, during which staff identify areas of future training or career development. – superannuation and industry welfare; These individual career goals are then • monitor and review major human resource documented in staff career plans and are issues including implemented over the following 12 month period. – leadership performance 9. REMUNERATE FAIRLY AND RESPONSIBLY – industrial agreements likely to have a The RVL Board’s Remuneration Sub-Committee material impact on RVL oversees remuneration and benefits (including – legislative compliance in employment issues superannuation and welfare programs). and legislative developments likely to have a RVL conducts internal salary reviews and material impact on RVL externally benchmarks salaries for all positions – HR Risk Management to ensure that remuneration at RVL is consistent – career development and succession with the external market. planning for direct reports to CEO and high 10. RECOGNISE THE LEGITIMATE INTERESTS potential employees (and report annually to OF STAKEHOLDERS the RVL Board on this issue); RVL has established consultative committees • recommend to the Board changes in and meets quarterly with key stakeholder remuneration policy, including groups to discuss issues and plans.

racing victoria limited 73 2005 ANNUAL REPORT

Financial Performance

VICTORIAN RACING INDUSTRY In turn, VicRacing Pty Ltd and Racing Products AND TABCORP JOINT VENTURE Victoria Pty Ltd distribute this income to the STRUCTURE three codes based on the following formula: In 1994 the Victorian Racing Industry (VRI) • the joint venture profit, marketing fee and and Tabcorp Holdings Limited formed an 25% of the product supply fee are allocated to unincorporated joint venture for the operation of the codes based on off-course wagering a wagering and gaming business in Victoria. market share; and This coincided with the privatisation of the • the racing program fee and 75% of the product former Totalizator Agency Board, the public float supply fee are allocated on a fixed basis of of Tabcorp and the issuing of a wagering and a 73% thoroughbred code, 18% harness code and gaming licence by the Victorian Government 9% greyhound code. under the Gaming and Betting Act 1994. The joint venture agreement and licences are in place In addition, from time to time, VicRacing Pty Ltd until 2012. The Act specifies that the VRI will be and Racing Products Victoria Pty Ltd enter into no worse off under the business arrangements arrangements with Tabcorp for the benefit of the relating to the renewal of those licences. joint venture that have a different cost sharing basis as agreed between the parties. Examples The VRI’s participation in the joint venture is include Sky Channel agencies and Pay TV conducted under the auspices of VicRacing Pty contributions, the PubTAB support scheme and Ltd and Racing Products Victoria Pty Ltd. special joint venture management fees. Both companies have six directors (four nominated by RVL, one nominated by Harness Racing Victoria and one nominated by RACING VICTORIA LIMITED Greyhound Racing Victoria). FINANCIAL PERFORMANCE 2004/05

VicRacing Pty Ltd and Tabcorp have one vote NET PROFIT each on the Joint Venture Management RVL reported a net profit for the 12 months to Committee. All decisions by the Committee must 31 July, 2005 of $0.1 million consisting of a be unanimous, thereby giving both parties equal break even performance from RVL general control over the conduct of the joint venture. operations and the Accident Insurance Fund and a surplus from the Bookmaking VicRacing Pty Ltd holds the VRI’s equity Development Fund of $0.1 million. interest in the joint venture and is entitled to a 25% share of the joint venture's total profit REVENUE (incorporating the net profit arising from Revenue from ordinary activities, including Tabcorp’s wagering and gaming businesses). non-operating revenue, totalled $220.7 million Racing Products Victoria Pty Ltd supplies racing in 2004/05, an increase of $0.4 million versus services to Tabcorp in return for racing program, prior year. product supply and marketing fees.

74 racing victoria limited FINANCIAL PERFORMANCE

Racing program, product and marketing fees EXPENSES received from the joint venture with Tabcorp Total RVL expenditure excluding distributions to totalled $134.1 million, an increase of $5.2 shareholders amounted to $91.0 million in million year-on-year reflecting strong wagering 2004/05 and consisted of $33.3 million in RVL turnover growth. The joint venture profit share operating expenditure and $57.8 million in was $64.5 million, an increase of $3.0 million industry-related expenditure. Operating versus prior year. expenditure increased by $2.2 million (7.1%), largely reflecting investments in integrity, Telecasting revenue from the arrangements with veterinary and racing development to improve Sky Channel totalled $1.1 million, with the funds industry standards. Industry expenditure being used to support racing clubs and the decreased by $7.9 million but after normalising distribution of thoroughbred racing broadcasts to for non-recurring expenditure in 2003/04 TAB agencies, PubTABs and Pay TV. relating to establishment expenses and debt Regional Services revenue of $4.5 million relates forgiveness, industry expenditure year-on-year to funds received from clubs and Country Racing increased by $0.9 million. Victoria to centrally service and pay for regional Consistent with RVL’s strategy of reducing racing activities through a streamlined administration costs to fund enhancements in arrangement with clubs and suppliers. regulatory and racing development functions, During the year RVL completed the purchase services, administration and information from the Victoria Racing Club of the buildings at technology costs reduced by $1.0 million to 400 Epsom Road and as a result rent received $8.2 million in 2004/05. This in turn provided for the year of $0.6 million has been included for additional funding for integrity and veterinary the first time. services of $0.9 million (total $9.9 million) which was used to expand steward’s activities Shareholder grants totalling $1 million were and increase the level of control and surveillance received during the year and have been disclosed of racing. in the accounts as non-operating revenue. Racing operations and racing development expenditure also increased to $7.7 million partly due to the restructuring of these functions and further investments in jumps racing, picnic racing and the new owners’ strategy. racing victoria limited 75 2005 ANNUAL REPORT

In line with the increase in revenue for Regional DISTRIBUTIONS AND Services and the additional RVL responsibilities PRIZE MONEY PAYMENTS for raceday services, expenditure in relation to Distributions to member shareholders totalled these services has risen accordingly. $129.5 million in 2004/05, an increase of $6.4 million (5.2%) compared to the previous Grants to the Australian Racing Museum at year’s expenditure. Federation Square totalled $2.0 million during 2004/05. RVL has also fully provided for its $1.9 Distributions were as follows: million loan to the museum via a provision for Country Racing Victoria $51.5 million doubtful debts. Melbourne Racing Club $34.2 million Moonee Valley Racing Club $16.6 million RVL has guaranteed a loan facility to the Victoria Racing Club $27.2 million Australian Racing Museum Limited totalling $1.5 million. Prize money payments increased 7.2% to $115.2 million and total returns to owners amounted to Jockeys' WorkCover expenses totalled $3.8 $135.4 million, up $5.6 million versus prior year. million in 2004/05, a decrease of $0.9 million compared to the previous year, primarily as a CASHFLOW result of a decrease in the WorkCover premium Cash at the end of the financial year totalled for jockeys which resulted from reduced claims $10.0 million, an increase of $1.6 million and improved claims management. compared to the previous year. RVL telecasting distribution expenses have Net cash provided by operating activities decreased in accordance with contract decreased by $2.8 million, whilst net cash used arrangements with Sky Channel. Payments by in investing activities decreased by $8.6 million RVL include sponsorship to clubs and a to $1.6 million, largely as a result of non- contribution to club production costs and some recurring amounts advanced to TVN and links and bearer costs. In addition RVL made Champions – Australian Racing Museum & Hall payments for its share of the Victorian Racing of Fame in the previous year. Industry (three codes) support package to PubTABs (which concluded in January 2005) and In addition, RVL received $2.0 million in net contributes towards Sky Channel costs for TAB proceeds from borrowings during the year. agencies and Pay TV. SUBSEQUENT EVENTS To assist member shareholders in the Subsequent to year end, the board of RVL, as a restructure of ThoroughVisioN, RVL has entered 42% beneficial owner of Racing Information into a funding agreement with the member Services Australia (RISA) has conditionally shareholders to borrow up to $6 million. The endorsed the restructure of RISA. The financial member shareholders have agreed to collectively effect of the restructure on RVL’s investment in guarantee a credit facility and fund the interest RISA has not been brought to account at this payments and RVL will be entitled to retain time, as all parties subject to the restructure are $1 million per annum out of future distributions still to agree on final terms and conditions. The for the purpose of discharging the facility. proposed restructure remains incomplete as at During the year RVL paid $1.3 million from the the date of the signing of this report. RVL income support reserve to meet the final RVL obligations in relation to the ThoroughVisioN restructure.

76 racing victoria limited FINANCIAL PERFORMANCE

Financial Report

RACING VICTORIA LIMITED ACN 096 917 930 FINANCIAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2005

Directors’ Report 78

Auditor’s Independence Declaration 81

Independent Audit Report 82

Directors’ Declaration 83

Statement of Financial Performance 84

Statement of Financial Position 85

Statement of Cash Flows 86

Notes to the Financial Statements 87

racing victoria limited 77 2005 ANNUAL REPORT

DIRECTORS REPORT

The Directors of Racing Victoria Limited submit herewith the annual financial report for the financial year ended 31 July 2005. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

The names of the Directors of the company during or since the end of the financial year are as follows. Directors’ particulars and profiles can be viewed on page six in the Annual Report.

Graham Duff

The Hon Michael Duffy

Sue Carter

Prof David Karpin AM

Lindsay Maxsted

Kevin McNamara

Robert Nason

Ray Orloff

HEP (Chinka) Steel

Geoffrey Torney Director resigned 2/12/2004

Robert Hance Director appointed 2/12/2004

Merran Kelsall Director appointed 2/12/2004

Company Secretary Peter J. Williams

PRINCIPAL ACTIVITIES The company’s principal activities in the course of the financial year were the administration of thoroughbred racing in the State of Victoria.

DIVIDENDS Under the company’s constitution no dividends may be declared or paid.

REVIEW OF OPERATIONS The underlying revenue of the Victorian thoroughbred racing industry received under the Racing Deed of Operations increased by 4.3% to $198.5 million in the twelve months to 31 July 2005. Distributions to the Clubs increased by 5.2% to $129.5 million for the same period. The operating surplus of the Company for the twelve months to 31 July 2005 was $106,000 compared to a surplus of $392,000 in the prior twelve months.

CHANGES IN STATE OF AFFAIRS During the financial year there was no significant change in the state of affairs of the company other than that referred to in the financial statements or notes hereto.

SUBSEQUENT EVENTS Subsequent to year end, the board of RVL, as a 42% beneficial owner of Racing Information Services Australia Pty Ltd (RISA) has conditionally endorsed the restructure of RISA. The financial effect of the restructure on RVL’s investment in RISA has not been brought to account at this time as all parties subject to the restructure are still to agree on final terms and conditions. The proposed restructure remains incomplete as at the date of signing of this report.

78 racing victoria limited FINANCIAL REPORT

DIRECTORS REPORT

FUTURE DEVELOPMENTS Disclosure of information regarding likely developments in the operations of the company in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the company. Accordingly, this information has not been included in this report.

DIRECTORS’ MEETINGS The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial year, 11 board meetings, 1 special meeting and 4 audit committee meetings were held.

BOARD OF DIRECTORS AUDIT COMMITTEE No. of No. of No. of No. of Regular Regular Special Special No. of No. of Meetings Meetings Meetings Meetings Meetings Meetings Directors Held (1) Attended Held (1) Attended Held (1) Attended

Mr Graham Duff 11 11 1 1

The Hon. Michael Duffy 11 11 1 1

Ms Sue Carter 11 10 1 1 4 3

Prof. David Karpin AM 11 10 1 1

Mr Geoffrey Torney(2) 5 5

Mr Lindsay Maxsted 11 10 1 - 4 4

Mr Kevin McNamara 11 11 1 - 4 4

Mr Ray Orloff 11 10 1 1

Mr Robert Nason 11 11 1 1

Mr HEP (Chinka) Steel 11 10 1 1

Mr Robert Hance 6 6 1 -

Ms Merran Kelsall 6 6 1 1

(1) The number of meetings held during the time the Directors held office during the 12 months to 31 July 2005.

(2) Mr Geoffrey Torney resigned on 2 December 2004.

INDEMNIFICATION OF OFFICERS AND AUDITORS During the financial year, the company paid a premium in respect of a contract insuring the Directors of the company, the company secretary and all executive officers of the company and of any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

The company has executed deeds of indemnity in favour of each of the Directors. Each of these deeds provides for the company to indemnify each Director to the maximum extent permitted by law against:

• all liabilities incurred by the director as an officer of the company and each subsidiary; and

• all legal costs and expenses arising from proceedings or an investigation incurred by the Director as an officer of the company or of a subsidiary.

racing victoria limited 79 2005 ANNUAL REPORT

DIRECTORS REPORT

The deeds also give the Directors a right of access to board papers for a period of seven years after their retirement and requires the company to maintain insurance cover for the Directors. A Director’s right of access to board papers is subject to protection of the company’s legal professional privilege rights and to the Director keeping the board papers in confidence.

The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor.

AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration is included on page 81 of this report.

ROUNDING OFF OF AMOUNTS The company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors’ report and the financial report have been rounded off to the nearest thousand dollars.

Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

Graham Duff CHAIRMAN

Melbourne, 10 November 2005

80 racing victoria limited FINANCIAL REPORT

AUDITOR’S INDEPENDENCE DECLARATION

Deloitte Touche Tohmatsu ABN 74 490 121 060

180 Lonsdale Street Melbourne VIC 3000 GPO Box 78B Melbourne VIC 3001 Australia

DX 111 Tel: +61 (0) 3 9208 7000 Fax: +61 (0) 3 9208 7001 www.deloitte.com.au

AUDITOR’S INDEPENDENCE DECLARATION

The Board of Directors Racing Victoria Limited 400 Epsom Road Flemington Vic 3031

10 November 2005

Dear Board Members

Racing Victoria Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Racing Victoria Limited.

As lead audit partner for the audit of the financial statements of Racing Victoria Limited for the financial year ended 31 July 2005, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Tom Imbesi Partner Chartered Accountants

Melbourne, 10 November 2005

Liability limited by a scheme approved under Professional Standards Legislation.

racing victoria limited 81 2005 ANNUAL REPORT

INDEPENDENT AUDIT REPORT

Deloitte Touche Tohmatsu ABN 74 490 121 060

180 Lonsdale Street Melbourne VIC 3000 GPO Box 78B Melbourne VIC 3001 Australia

DX 111 Tel: +61 (0) 3 9208 7000 Fax: +61 (0) 3 9208 7001 www.deloitte.com.au

INDEPENDENT AUDIT REPORT TO THE MEMBERS OF RACING VICTORIA LIMITED

Scope The financial report and directors’ responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors’ declaration for Racing Victoria Limited, for the financial year ended 31 July 2005. The directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report. Audit approach We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal controls, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with the Corporations Act 2001 and Accounting Standards and other mandatory professional reporting requirements in Australia so as to present a view which is consistent with our understanding of the company’s financial position, and performance as represented by the results of its operations and its cash flows. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates made by the directors. While we considered the effectiveness of management’s internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of Racing Victoria Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the company’s financial position as at 31 July 2005 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory professional reporting requirements in Australia.

DELOITTE TOUCHE TOHMATSU

Tom Imbesi Partner Chartered Accountants

Melbourne, 10 November 2005

Liability limited by a scheme approved under Professional Standards Legislation.

82 racing victoria limited FINANCIAL REPORT

DIRECTORS’ DECLARATION

The Directors declare that:

(a) 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;

(b) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the company;

Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors

Graham Duff CHAIRMAN

Melbourne, 10 November 2005

racing victoria limited 83 2005 ANNUAL REPORT

STATEMENT OF FINANCIAL PERFORMANCE

FOR THE FINANCIAL YEAR ENDED 31 JULY 2005

NOTE 2005 2004 $’000 $’000

Revenues from ordinary activities 2(a) 220,659 220,301

Expenses from ordinary activities (excluding borrowing costs and distributions) 2(b) (91,067) (96,785)

Profit From Ordinary Activities Before Distributions 129,592 123,516

Distributions 2(c) (129,486) (123,124)

Net Profit 106 392

Total Changes in Retained Profits 106 392

Notes to the financial statements are included on pages 87 to 100.

84 racing victoria limited FINANCIAL REPORT

STATEMENT OF FINANCIAL POSITION

AS AT 31 JULY 2005

NOTE 2005 2004 $’000 $’000

CURRENT ASSETS Cash at bank 10,029 8,394 Receivables 4 23,633 25,105 Other 5 752 78

Total Current Assets 34,414 33,577

NON-CURRENT ASSETS Other financial assets 6 4,707 7,681 Property, plant & equipment 7 9,577 7,991 Investments accounted for using the equity method 8 4,530 4,589

Total Non-Current Assets 18,814 20,261

Total Assets 53,228 53,838

CURRENT LIABILITIES Payables 9 30,139 30,867 Interest bearing liabilities 10 2,026 3,955 Provisions 11 1,350 2,485

Total Current Liabilities 33,515 37,307

NON-CURRENT LIABILITIES Interest bearing liabilities 12 4,785 1,811 Provisions 13 3,904 3,802

Total Non-Current Liabilities 8,689 5,613

Total Liabilities 42,204 42,920

Net Assets 11,024 10,918

EQUITY Issued capital 15 - - Retained profits 16 11,024 10,918

Total Equity 11,024 10,918

Notes to the financial statements are included on pages 87 to 100.

racing victoria limited 85 2005 ANNUAL REPORT

STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2005

INFLOWS/(Outflows) INFLOWS/(Outflows) NOTE 2005 2004 $’000 $’000

Cash flows from operating activities Receipts on behalf of the thoroughbred racing industry 198,784 192,961 Distributions to clubs (129,368) (122,513) Payments to suppliers and employees (90,628) (84,713) Interest received 702 931 Interest paid (108) - Receipts from other activities 22,782 18,276

Net cash provided by operating activities 23(c) 2,164 4,942

Cash flows from investing activities Receipts from Government for Australian Racing Museum - 3,750 Payments for plant & equipment (1,574) (1,811) Payments for the acquisition of RISA - (189) Amounts advanced to related parties - (10,944) Payment for buildings – deposit paid - (1,000)

Net cash used in investing activities (1,574) (10,194)

Cash flows from financing activities Repayment of borrowings (955) (888) Net proceeds from borrowings 2,000 -

Net cash provided by/(used in) financing activities 1,045 (888)

Net increase/(decrease) in cash held 1,635 (6,140)

Cash at beginning of financial year 8,394 14,534

Cash at the end of financial year 23(a) 10,029 8,394

Notes to the financial statements are included on pages 87 to 100.

86 racing victoria limited FINANCIAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2005

1. SUMMARY OF ACCOUNTING POLICIES

Financial Reporting Framework The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, applicable Accounting Standards and Urgent Issues Group Consensus Views, and complies with other requirements of the Corporations Act 2001.

The financial report has been prepared on the basis of historical cost and, except where stated, does not take into account changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report has also been prepared in accordance with the terms of various agreements with the Victoria Racing Club, the Members (as defined at (i) below) and the racing industry in Victoria as follows:

(i) Establishment of Operations The company was incorporated on 17 December 2001 for the purpose of administering the Victorian thoroughbred racing industry which was previously the responsibility of the Victoria Racing Club (VRC).

On 19 December 2001 the four thoroughbred racing bodies – Victoria Racing Club, Melbourne Racing Club, Moonee Valley Racing Club and Country Racing Victoria (collectively the Members) entered into a Members Agreement with the company. Under this agreement the Members agreed to establish the company as the new Principal Club and governing body for thoroughbred racing in Victoria, to be owned and funded by the Members. The VRC agreed to relinquish its status as the Principal Club and its role as governing body to facilitate the granting to the company of that status and role.

(ii) Thoroughbred Racing Industry Revenue and Distributions The racing industry in Victoria has entered into joint venture and information supply agreements with the TABCORP Group of Companies. Under a Racing Industry Deed of Operations executed on 25 May 1994, the thoroughbred, harness and greyhound racing codes have determined arrangements between themselves including the allocation of joint venture profits and information supply fees. This income is received by the thoroughbred racing industry in the form of a racing program fee, a product supply fee, a marketing fee and the joint venture profit share (refer Note 2(a)).

Under the Members Agreement the income received by the company under the Deed of Operations is received by the company for and on behalf of the Members as trustee for the Members. The Members Agreement requires the company to distribute this income to the Members in accordance with the Agreement. Such distributions are recorded as expenses of the company (refer Note 2(c)).

(iii) Retained Profits Under the terms of the Members agreement net profit and the ongoing retained profits of the company cannot be distributed as dividends to the Members.

Significant Accounting Policies Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions and other events is reported.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Receivables Trade receivables and other receivables are recorded at amounts due less any provision for doubtful debts.

racing victoria limited 87 2005 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

(b) Acquisition of Assets Assets acquired are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to the acquisition.

In the event that settlement of all or part of the cash consideration given in the acquisition of an asset is deferred, the fair value of the purchase consideration is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

(c) Depreciation Depreciation is provided on property, plant and equipment, including freehold buildings and excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter using the straight line method.

The following estimated useful lives are used in the calculation of depreciation: Buildings 40 years Plant and equipment 3 – 10 years Super screens under hire purchase 5 years Computer systems and developments 3 – 4 years

(d) Recoverable Amount of Non-Current Assets Non-current assets are written down to recoverable amount where the carrying value of any non- current asset exceeds recoverable amount. In determining the recoverable amount of non-current assets, the expected net cash flows have not been discounted to their present value.

(e) Accounts Payable Trade payables and other accounts payable are recognised when the company becomes obliged to make future payments resulting from the purchase of goods and services.

(f) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii. for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

(g) Revenue Recognition

Thoroughbred Racing Industry Revenue Revenue is recognised when receivable under the joint venture and information supply agreements with the TABCORP Group of Companies.

Sale of Goods and Disposal of Assets Revenue from the sale of goods and disposal of other assets is recognised when the company has passed control of the goods or other assets to the buyer.

Rendering of Services Revenue from a contract to provide services is recognised by reference to the contract terms.

Contributions of Assets Revenue arising from the contribution of assets is recognised when the company gains control of the contribution or the right to receive the contribution.

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NOTES TO THE FINANCIAL STATEMENTS

(h) Income Tax The company is exempt from Income Tax under section 50-45 of the Income Tax Assessment Act.

(i) Employee Benefits Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of wages and salaries, annual leave, sick leave, and other employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of other employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the company in respect of services provided by employees up to reporting date.

(j) Investments Investments in associates are accounted for under the equity method in the financial statements.

(k) Accident Insurance Fund Prior to 1 September 1985 the Fund was an authorised insurer for the purposes of the Workers Compensation Act 1958. The provision for outstanding claims is at Note 13. The provision is based on the last actuarial assessment of the outstanding claims of the Fund conducted as at 31 July 2003 by Frank Funder, a fellow of the Institute of Actuaries of Australia.

(l) Interest-Bearing Liabilities Commercial bills and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised on an accrual basis.

Ancillary costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the borrowing.

(m) Provisions Provisions are recognised when the entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is probable that recovery will be received and the amount of the receivable can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

(n) Superannuation Contributions made to defined benefit superannuation plans are expensed when incurred. The difference between the accrued benefits and net market value of plan assets has not been recognised in the financial statements.

(o) Comparative amounts Certain comparative amounts have been reclassified to accord with the current year’s presentation. The reclassification of comparative amounts has not resulted in a change to the aggregate amounts of Current Assets, Non-Current Assets, Current Liabilities, Non-Current Liabilities or Equity, or the Net Surplus of RVL as reported in the prior year Financial Report.

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2005

2005 2004 $’000 $’000

2. PROFIT FROM ORDINARY ACTIVITIES The result from ordinary activities includes the following items of revenue and expense

(a) Revenue from ordinary activities: Operating revenue: Racing program fee 53,710 50,967 Product supply fee 77,799 75,486 Marketing fee 2,551 2,442 Joint venture profit share 64,453 61,513 Electronic gaming machine levy rebate 2,979 2,815 Racing services bureau - 725 Telecasting 1,139 2,149 Racing 282 459 Publishing 883 869 Licence and registration fees 866 778 WorkCover levy 1,688 1,542 SuperVobis 1,975 2,229 Interest 702 931 Regional services 4,483 3,709 Industry service recoveries 1,835 1,602 Rent received 585 - Other 3,729 2,787

Non-operating revenue: Shareholder grant 1,000 - Proceeds on sale racing services bureau and registrar of racehorses - 9,050 Proceeds on sale trainers service centre - 248

220,659 220,301

(b) Expenses from ordinary activities: RACING VICTORIA LIMITED OPERATING EXPENDITURE Integrity services 7,457 6,967 Veterinary & swabbing 2,421 2,003 Racing 2,929 2,160 Racing development 4,837 3,902 Services & administration 5,788 5,789 Information services 2,457 3,445 Legal 1,186 826 Occupancy 1,140 559 Racing services bureau - 529 Depreciation 2,598 2,623 Directors’ fees & expenses 1,163 1,045 Other 1,298 1,207

33,274 31,055

90 racing victoria limited FINANCIAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $’000 $’000

2. PROFIT FROM ORDINARY ACTIVITIES (CONTINUED) INDUSTRY EXPENDITURE Marketing & promotion 1,634 1,215 Regional services 6,148 4,679 Special projects allocations 1,248 1,828 Grants – Australian Racing Museum Limited 2,000 - Stewards video & race telecasting 2,361 1,757 Formguide 952 1,225 Racecourse planning & development 12,514 12,316 Training facilities maintenance funding 6,505 6,234 Jockeys WorkCover expenses 3,790 4,680 Thoroughbred country assistance fund 8,398 8,135 Telecasting 5,132 6,686 Income support contribution - 2,375 SuperVobis 5,236 5,748 Provision for doubtful debts – Australian Racing Museum Limited 1,875 - Establishment expenses and debt forgiveness - 8,852

57,793 65,730

91,067 96,785

Revenue and expenses from ordinary activities include: Contributions made to the defined benefits superannuation plan during the financial year 1,406 1,612 Operating lease rental expenses 617 611 Establishment expenses and debt forgiveness - other related party: – ThoroughVisioN Pty Ltd - 5,247 – Australian Racing Museum Limited - 3,605 Operating expenses – other related party: – ThoroughVisioN Pty Ltd 417 - – Australian Racing Museum Limited 2,000 -

(c) Distributions: Country Racing Victoria 51,471 48,774 Melbourne Racing Club 34,154 32,435 Moonee Valley Racing Club 16,649 15,907 Victoria Racing Club 27,212 26,008

129,486 123,124

The net profit includes the following significant items:

3. SIGNIFICANT ITEMS Net Profit on sale of Racing Services Bureau and Registrar of Racehorses - 8,467 Net Profit on sale of Trainers Service Centre - 248 Establishment expenses and debt forgiveness: – ThoroughVisioN Pty Ltd - (5,247) – Australian Racing Museum Limited - (3,605) Contributions to Australian Racing Museum Limited (2,000) - Provision for doubtful debts - Australian Racing Museum Limited (1,875) -

(3,875) (137)

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NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $’000 $’000

4. CURRENT RECEIVABLES Trade receivables 8,297 11,777 Allowance for doubtful debts - (38)

8,297 11,739 Joint Venture Fees and indexation receivable 5,077 7,313 Joint Venture Profit share receivable 6,500 4,436 Australian Racing Museum Limited – other related party - 34 ThoroughVisioN Pty Ltd – other related party 579 583 Sundry receivables 3,180 1,000

23,633 25,105

5. OTHER CURRENT ASSETS Prepayments – other 752 78

752 78

6. OTHER NON-CURRENT FINANCIAL ASSETS Receivable from Racing Information Services Australia - other related party 4,707 4,806 Receivable from Australian Racing Museum Limited - other related party 1,875 1,875 – Less allowance for doubtful debts (1,875) - Prepayments – deposit on buildings - 1,000

4,707 7,681

7. PROPERTY, PLANT AND EQUIPMENT Computer Super Screens Systems and Under Hire Plant & Buildings Development Purchase Equipment at cost at cost at cost at cost Total $’000 $’000 $’000 $’000 $’000 Gross carrying amount (at cost) Balance at 31 July 2004 1,700 9,476 5,027 5,106 21,309 Additions 3,039 278 3 1,254 4,574 Assets written off - - - (1,316) (1,316)

Balance at 31 July 2005 4,739 9754 5,030 5,044 24,567

Accumulated Depreciation/ Amortisation Balance at 31 July 2004 (341) (7,532) (2,484) (2,961) (13,318) Assets written-off - - - 926 926 Depreciation expense (92) (810) (1,006) (690) (2,598)

Balance at 31 July 2005 (433) (8,342) (3,490) (2,725) (14,990)

Net Book Value As at 31 July 2005 4,306 1,412 1,540 2,319 9,577

As at 31 July 2004 1,359 1,944 2,543 2,145 7,991

Aggregate depreciation allocated during the year is recognised as an expense and disclosed in Note 2(b) to the financial statements.

92 racing victoria limited FINANCIAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

8. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Name of Entity Principal Activity Balance Date Ownership Interest Carrying Amount

2005 2004 2005 2004 $’000 $’000 Racing Information Services Australia Pty Ltd Racing Information 31/07/2005 42% 42% 4,530 4,589

Significant influence is derived over Racing Information Services Australia Pty Ltd through the Board’s appointment of a nominee director. Pursuant to a shareholder agreement the company has the right to cast 33% of the votes at a shareholder meeting. The company acquired its 42% interest in Racing Information Services Australia Pty Ltd on 1 December 2003.

2005 2004 $’000 $’000

Movements in investments in associates At the beginning of the financial year 4,589 - Acquisition of Investment during the year - 4,681 Share of operating profit / (loss) (59) (92)

At the end of the financial year 4,530 4,589

Summarised financial position of associates: Current assets: Cash 2,034 1,053 Receivables 793 694

Non-current assets: Property, plant and equipment 2,915 3,405 Receivables 4,558 4,558 Intangibles 6,524 6,881

Current liabilities: Payables (1,293) (900)

Non-current liabilities: Non-interest bearing (4,706) (4,806) Provisions (94) (26)

Net Assets 10,731 10,859

Net profit / (loss) (138) (216)

Share of reserves attributable to associates: Retained profits / (losses) At the beginning of the year (92) - At the end of the year (167) (92)

racing victoria limited 93 2005 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $’000 $’000

9. CURRENT PAYABLES Unsecured: Trade payables 4,579 4,264 Stakes accruals 3,611 3,929 Sundry payables 9,007 9,950 GST payable 282 185 Club distributions 12,004 11,886 Thoroughbred country assistance fund 656 653

30,139 30,867

10. CURRENT INTEREST BEARING LIABILITIES Unsecured: Shareholder Loans - 3,000

Secured: Commercial Bills(i) 1,000 - Hire purchase(ii) (Note 17(b)) 1,026 955

2,026 3,955

(i) Secured by a fixed and floating charge over the assets of RVL (ii) Secured by the assets subject to hire purchase, the current market value of which exceeds the value of liability

11. CURRENT PROVISIONS Employee entitlements (Note 14) 1,225 1,110 Income support contribution (i) 125 1,375

1,350 2,485

(i) Income support contribution:

Balance at beginning of the year 1,375 500 Income support provided on behalf of members - 2,375 Amounts applied to ThoroughVisioN Pty Ltd on behalf of members (1,250) (1,500)

Balance at end of the year 125 1,375

12. NON-CURRENT INTEREST BEARING LIABILITIES Secured: Commercial Bills(i) 4,000 - Hire purchase(ii) (Note 17(b)) 785 1,811

4,785 1,811

(i) Secured by a fixed and floating charge over the assets of RVL (ii) Secured by the assets subject to hire purchase, the current market value of which exceeds the value of the liability.

13. NON-CURRENT PROVISIONS Accident claims (Note 1(k)) 1,804 1,804 Employee entitlements (Note 14) 2,100 1,998

3,904 3,802

94 racing victoria limited FINANCIAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $’000 $’000

14. EMPLOYEE ENTITLEMENTS The aggregate employee entitlement liability recognised and included in the financial statements is as follows:

Provision for employee entitlements: Current (Note 11) 1,225 1,110 Non-current (Note 13) 2,100 1,998

3,325 3,108

Number of employees at end of financial year 192 176

15. ISSUED CAPITAL The company is a company limited by guarantee. Every member undertakes to and must contribute an amount not exceeding $10 in the event of the winding up of the company.

16. RETAINED PROFITS Balance at beginning of financial period 10,918 10,526 Net Profit 106 392

Balance at end of financial period 11,024 10,918

17. COMMITMENTS FOR EXPENDITURE (a) Non-cancellable operating leases: Not later than 1 year 617 322 Later than 1 year but not later than 5 years - 8

617 330

Operating leases relate to the leasing of motor vehicles. The term of each individual lease is between one and three years. These lease agreements are not subject to rental adjustments.

(b) Hire purchase liabilities: No later than 1 year 1,124 1,124 Later than 1 year and not later than 5 years 807 1,932

Minimum hire purchase payments 1,931 3,056

Deduct future hire purchase charges 120 290

Hire purchase liabilities 1,811 2,766

Included in the financial statements as borrowings: Current (Note 10) 1,026 955 Non-current (Note 12) 785 1,811

1,811 2,766

The hire purchase liabilities relate to the hire purchase of super screens. The term of each individual hire purchase agreement is 5 years.

(c) The company has undertaken to fund any working capital deficiency of the Australian Racing Museum Limited which may arise over the next 12 months. It is expected the funding will not exceed $1.450 million during 2005/06.

racing victoria limited 95 2005 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $$

18. SUPERANNUATION COMMITMENTS The employees of the company are members of Victorian Racing Industry Superannuation Fund, which also includes employees of the Victoria Racing Club and Country Racing Victoria. The fund has a composition of defined benefit and accumulation membership.

The last actuarial valuation of the VRI Superannuation Fund was conducted as at 30 June 2003 by Andrew Colin Sach, a Fellow of the Institute of Actuaries of Australia. The following balances were reported in the most recent audited financial statements of the Fund at 30 June 2004 of which Racing Victoria Limited comprises approximately 62% of the accrued benefits: $’000 Accrued benefits at latest actuarial valuation 30,595 Net assets at market value 31,049 Vested benefits 32,073 Surplus 454

The assets and income of the Fund are held in trust by the Fund’s Trustee, Victorian Racing Industry Superannuation Pty Ltd, and neither are included in the company’s financial statements. As a result of the latest actuarial review, and on the recommendation of the Fund Trustees the company has maintained its contribution for the defined benefit fund members at the actuarial recommended levels. During the financial year the Victorian Racing Industry Superannuation Fund was transferred to the AMP Master Trust. An actuarial review was not undertaken pending access to information to complete the review.

19. DIRECTORS’ REMUNERATION The directors of Racing Victoria Limited during the year were: Mr Graham Duff Mr Robert Nason The Hon Michael Duffy Mr Ray Orloff Ms Sue Carter Mr HEP (Chinka) Steel Prof David Karpin AM Ms Merran Kelsall Mr Lindsay Maxsted Mr Robert Hance Mr Kevin McNamara Mr Geoff W. Torney (resigned)

The aggregate income paid or payable or otherwise made available, in respect of the financial year, to all directors of the Company, directly or indirectly, by the Company or by any related party. 1,162,692 1,045,264

The number of directors of the company whose total income falls within the following bands: $0 - $9,999 1 1 $10,000 - $19,999 1 - $20,000- $29,999 - 1 $30,000 - $39,999 1 7 $40,000 - $49,999 5 1 $50,000 - $59,999 2 - $100,000 - $110,000 1 - $210,000 - $219,999 - 1 $220,000 - $229,999 - 1 $270,000 - $279,999 - 1 $660,000 - $669,999 1 -

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NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $$

20. REMUNERATION OF AUDITORS Auditing the financial statements 78,000 71,000 Other services - -

78,000 71,000

21. SEGMENT REPORTING The company operates in the thoroughbred racing industry in the State of Victoria.

22. RELATED PARTY DISCLOSURES (a) Directors’ remuneration Details of directors’ remuneration are disclosed in Note 19 to the financial statements

(b) Transactions with Directors Certain directors participate in the thoroughbred racing industry via means of ownership of racehorses either individually or through related entities. This involvement is on terms and conditions no more favourable than other participants in the thoroughbred racing industry.

(c) Related party disclosures Transactions with director related entities The net profit reported in the statement of financial performance in 2005 includes expenses in relation to activities paid by Racing Victoria Limited on behalf of ThoroughVisioN Pty Ltd and the Australian Racing Museum Limited (director related entities) totalling $2.4 million. These expenses were incurred only after approval by the Racing Victoria Limited board. During the financial year the company also provided administrative services to the entities on normal commercial terms and conditions as agreed by the parties. Aggregate amounts receivable from director related entities are disclosed in Notes 4 and 6 to the financial statements.

racing victoria limited 97 2005 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

2005 2004 $’000 $’000

23. NOTES TO THE STATEMENT OF CASH FLOWS (a) Reconciliation of cash For the purpose of the statement of cash flows, cash includes cash on hand and in banks and investments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows:

Cash at bank 10,029 8,394

(b) Financing facilities Commercial bill facility: – amount used 5,000 - – amount unused 1,000 -

6,000 -

Lease and hire purchase, reviewed annually: – amount used 1,181 2,766 – amount unused 1,819 1,809

3,000 4,575

(c) Reconciliation of net profit to net cash flows from operating activities Profit/(Loss) from ordinary activities 106 392 Share of associates loss 59 92 Depreciation & amortisation of non-current assets 2,598 2,623 Proceeds from sale of racing services bureau and R of R - (9,050) Proceeds from sale of trainers service centre - (248) Written down value of non-current assets sold to RISA - 583 Forgiveness of amounts advanced to related parties - 8,852 Allowance for doubtful debts – Australian Racing Museum Limited 1,875 - Allowance for doubtful debts – general (38) -

Changes in net assets & liabilities:

(Increase)/Decrease in: Receivables 1,999 1,171 Prepayments (674) 287

Increase/(Decrease) in: Payables (2,728) (967) Stabilisation Reserve (1,250) - Provisions 217 1,207

Net cash provided by operating activities 2,164 4,942

98 racing victoria limited FINANCIAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

24. FINANCIAL INSTRUMENTS The company has adopted the policy of only dealing with creditworthy counterparts and obtaining sufficient security where appropriate, as a means of mitigating the risk of financial loss.

Short term deposits are carried at cost. Interest revenue is recognised on an effective yield basis.

Cash assets and interest bearing liabilities are subject to interest rate risk. At 31 July 2005 the cash assets had an average applicable interest rate of 5.5% and interest bearing liabilities an average applicable interest rate of 6.29%. There were no other financial assets or liabilities in the Statement of Financial Position subject to such risk at 31 July 2005.

The carrying value of the financial assets and liabilities in the Statement of Financial Position represent their fair net values.

25. CONTINGENT LIABILITY Under the Deed of Contribution and Indemnity with the VRC, the company has indemnified the VRC against any claims against the VRC arising from its previous operation of the thoroughbred racing industry in Victoria.

Racing Victoria Limited has guaranteed a loan facility of Australian Racing Museum Limited totalling $1.5 million.

26. SUBSEQUENT EVENTS Subsequent to year end, the board of RVL, as a 42% beneficial owner of RISA has conditionally endorsed the restructure of RISA. The financial effect of the restructure on RVL’s investment in RISA has not been brought to account at this time as all parties subject to the restructure are still to agree on final terms and conditions. The proposed restructure remains incomplete as at the date of signing of this report.

27. IMPACTS OF ADOPTING AUSTRALIAN EQUIVALENTS TO IFRS Racing Victoria Limited will be required to prepare financial statements that comply with Australian equivalents to International Financial Reporting Standards (“A-IFRS”) for annual reporting periods beginning on or after 1 January 2005. Accordingly, Racing Victoria Limited’s first annual financial report prepared under A-IFRS will be for the year ended 31 July 2006.

The company is in the process of transitioning its accounting policies and financial reporting from the current Australian Accounting Standards (AGAAP) to Australian equivalents of International Financial Reporting Standards (A-IFRS).

The company has established a project team which has completed a preliminary review to determine the effect of the adoption of A-IFRS and is in the process of quantifying the impact of A-IFRS on areas identified in the review.

While no decision has yet been made as to the policy alternatives to be applied or the extent to which it will affect the company, the directors of Racing Victoria Limited have identified some key accounting policy differences expected to arise on transitioning to A-IFRS. This does not represent an exhaustive list of the differences that will arise, and further analysis may change the company’s assessment of the importance or otherwise of the various differences.

First time Transitional Arrangements On first-time adoption of A-IFRS, the company will be required to restate its comparative financial statements such that the comparative amounts and balances presented comply with the requirements specified in the A-IFRS. As most adjustments on first-time adoption are to be made against opening retained earnings, the amount of retained earnings at 31 July 2004 presented in the 2005 financial report and the 2006 financial report may differ.

racing victoria limited 99 2005 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

Superannuation Plan Employees of the company are members of the Victorian Racing Industry Superannuation Fund. Contributions to the fund are expensed when due and payable and no assets or liabilities are recognised in relation to the fund in the financial report of the company. Under A-IFRS, the company will be required to recognise the present value of defined benefit obligations and to recognise the net carrying amount of the obligation less the fair value of the plan assets adjusted for any net actuarial gain or loss under AASB 119. Due to the transition of the Victorian Racing Industry Superannuation Fund to the AMP Master Trust, RVL does not currently have access to actuarial information about the plan that satisfies the requirements of the Standard. The plan, being a multi-employer plan, does not provide a reliable basis for allocating the obligations between employers until the actuarial analysis is completed and available.

Off-balance Sheet Financial Assets and Liabilities A-IFRS requires the recognition of all financial assets and financial liabilities. Accordingly, recognition of these financial assets and financial liabilities may change the net asset position of the company, but the impact of the change will not be known until the information is identified, measured and recognised in accordance with the new requirements.

Property, Plant and Equipment On transition to A-IFRS, the company has several options in the determination of the cost of each tangible asset, and can also elect to use the cost or fair value basis for the measurement of each class of property, plant and equipment after transition. At the date of this report, the entity has not decided which options and measurement basis will be adopted.

Employee Benefits Under A-IFRS, the company will no longer be able to recognise provisions for annual leave on a nominal basis, regardless of when the leave is expected to be taken, but will instead be required to discount the portion of annual leave liabilities expected to be taken more than twelve months from the reporting date. This change in accounting policy is likely to reduce the aggregate provision for annual leave, but is unlikely to significantly affect the income statement.

Proceeds from Sale of Assets The current definition of revenue requires proceeds on sale of non-current assets to be included as revenue. Under A-IFRS, only the net gain or loss from the sale will be recognised in profit or loss. Consequently, there will be no net impact on the income statement.

The company will continue analysis to quantify the effects of the adoption of A-IFRS and will finalise accounting policies for the preparation of Financial Statements for the reporting period ending 31 July 2006.

28. ADDITIONAL COMPANY INFORMATION Racing Victoria Limited is a company incorporated and operating in Australia.

Principal Registered Office and Principal Place of Business Racing Victoria Limited 400 Epsom Road Flemington Victoria 3031 Telephone: (03) 9258 4258 www.racingvictoria.net.au

100 racing victoria limited