annual report 2006 MISSION VALUES – To develop Flemington as a world- – Integrity in our decisions and actions class racing venue – The highest standards in service and – To build upon the pre-eminence of value for our customers and business the Cup Carnival partners – To maximise fi nancial returns from – Competitiveness in our markets our racing and non-racing activities – Effi ciency in the management of for the benefi t of the Club, its our assets Members, the Racing Industry – The commitment and the contribution and racegoers of our people – To provide fi rst-class entertainment – A safe working environment for and wagering opportunities for our employees and industry participants customers – To maintain the highest integrity in all of our dealings and activities

Our vision is to be a leader in world racing

CONTENTS 2 Chairman’s Report 5 The Committee 8 Victorian Racing Industry Review 10 Chief Executive’s Report 15 Senior Management 17 Membership Department 21 Racing 25 29 Strategic Marketing 33 Sponsorship and Corporate Development 35 Sponsors 37 Catering 39 Business Development 42 Human Resources 43 Finance 44 Corporate Governance 46 Report of the Committee 47 Financial Statements

THE STORY OF PHAR LAP IS TRULY The wonder horse then travelled to Mexico ONE OF LEGEND for what was to be his last race. Taking on Born during the era of the Great Depression, America’s best horses in the Agua Caliente Phar Lap was the ‘people’s horse’ and the Handicap, Phar Lap scorched over the dirt public, desperate for a hero in those trying track in record time to blitz his opposition. times, followed his every move. He was the toast of the US but tragically, He raced 50 times in for 36 wins just days later, the horse died in mysterious and during the 1930 circumstances in California. Carnival was to achieve what no other horse Seventy-four years later, the legend of had done either before or since when he won Phar Lap remains as strong as ever and his races on each of the four days. The highlight statue greets visitors at the main entrance was his win in the Melbourne Cup when he to Flemington Racecourse. started the shortest priced favourite in Cup history – 11 to 8 on – and treated his rivals with contempt.

Phar Lap and – Australian racing legends

Makybe Diva

MAKYBE DIVA – The pair had proven a devastating A CHAMPION BECOMES A LEGEND combination, winning race after race at Flemington’s race caller Greg Miles said it Group 1 level from 1,400 metres to 3,200 all – ‘A champion becomes a legend.’ Miles’ metres. As well as her three Cup wins, her call captured a moment in history as the Flemington record included victories in magnifi cent mare Makybe Diva went the , and where no other had, winning a third Queen Elizabeth Stakes. Melbourne Cup. A handful of horses had Following her win in the 2005 Emirates done it twice, but no other had even come Melbourne Cup, Makybe Diva was retired close to winning it a third time, yet Makybe as the highest ever prizemoney winner in Diva was to do it with ease, jockey Australian racing. A statue in her honour simply shaking his head in disbelief. has been commissioned by the Racing Club (VRC) and will stand in the horse stall area at Flemington. Above: Jockey Glen Boss and champion mare Makybe Diva after winning the 2005 Emirates Melbourne Cup. Above: Jockey Jim Pike and the mighty Phar Lap 1929 winning the . 1 Chairman’s Report

“ Flemington played host to some world-class racing this season and the Club distributed a record amount in prizemoney” On behalf of the Committee, I am pleased It is regrettable that a satisfactory outcome to report to Members of the Victoria Racing could not have been achieved earlier, Rod Fitzroy Club for the year ended 31 July 2006. During however, the shareholders of TVN were the year, the ongoing dispute between committed to ensure that the settlement Tabcorp and ThoroughVisioN (TVN) adversely terms did not compromise TVN’s capacity impacted on betting turnovers and, as a to play a vital role in the future development consequence, distributions to all Victorian of racing. racing clubs. It is therefore pleasing that I We now look forward to TVN establishing am able to report to Members that the Club itself as the dedicated thoroughbred channel, generated a net surplus from its operations providing not only a comprehensive coverage 0.909 for the year of $ million. of Australia’s premier race meetings, but The Club distributed in prizemoney 136% also international racing. The VRC believes of the revenue received by way of the there is great scope to generate additional Racing Victoria Limited (RVL) shareholder revenues through reciprocal co-mingling or distribution agreement, a record since the common betting pools, which would operate benchmarking of returns to owners was on premium racing around the world. 10 instigated some years ago. I would like to place on record my Prior to the commencement of the Season, appreciation for the outstanding a distribution review was undertaken by contribution made to the resolution of RVL and its shareholders. The new model this dispute by our Vice Chairman – Peter will determine distributions for the next Barnett, Committee Member – Michael Burn, three years. Whilst reducing the VRC’s and other representatives of the shareholder entitlements, the revised distribution Clubs from Victoria and . system was agreed on unanimously by RVL, During the year, the VRC formed strategic the three metropolitan clubs and Country alliances with a number of the world’s Racing Victoria (CRV). leading racing clubs, providing opportunities The resolution of the TVN/Tabcorp dispute for our Members when travelling to have emerged as the number one priority for access to premium facilities at racecourses the Club during the year. The impact on operated by our alliance partners. Other wagering turnover through the ‘split screen’ benefi ts of the alliances are facilitating picture delivery at pubs, clubs and agencies staff exchanges and the sharing of was of concern, but of equal concern was the intellectual property. We expect to build our inability of so many people to view Victorian international affi liation program during the and Sydney racing on their pay television 2006/2007 Season. network, particularly those in regional and As detailed in our General Manager’s rural Australia. Racing Report, Flemington played host to some world-class and exciting racing during this Season.

2 It was, however, the achievement of • A highly competitive and quality Winter We were most gratifi ed that the Australia’s Champion Racehorse – the jumps series featuring eight premium Government fully recognised the need to mighty mare Makybe Diva – that has races collectively offering total prizemoney ensure a smooth transition of the Club’s left those who were privileged to be at of $1.2 million. operations. The enabling legislation, the 2006 Flemington on Emirates Melbourne Cup I would like to congratulate the Australian Victoria Racing Club Act , passed Day with memories that will surely be with Jumping Racing Association and RVL through both Houses with bipartisan them for life. Her dominant win and the support enabling the Club to commence for their leadership in restructuring the manner in which she accepted the plaudits operations from the start of the 2006/2007 programming of jumps racing in Victoria of the crowd in front of The Members’ Stand Season as an incorporated body. and, in doing so, providing substantial are images that set this day apart from all incentive for more owners and trainers to We are indebted to the Offi ces of both the others in recent racing history. become involved in this traditional and Premier and the Minister for Racing for In recognition of Makybe Diva’s record- exciting component of Autumn and Winter guiding the legislation through both Houses. breaking achievement in winning three racing in Victoria. It was most satisfying to read in Hansard the consecutive Melbourne Cups, the Committee, individual contributions of those who spoke The VRC is fortunate to have a collection in partnership with the State Government, to the Bill recording the important role that of documents, paintings and trophies that has commissioned a statue of the mare that the VRC has played in public life in Victoria record not only the history of the Club, but will be located adjacent to the new horse for well over a century, together with their also those who have become part of racing stall precinct, which will be completed prior confi dence in the current administration history through their deeds on the track. to the return of racing to Flemington in and our continuing conduct of the affairs This year, we were delighted to have the September 2007. It is intended that the of the Club. 1955 statue of Makybe Diva will strike a pose opportunity to acquire the Melbourne 30 2006 OAM, Cup Trophy from the Kerr family, who owned On June , Mr Douglas Hugh Reid that has her overlooking the track where in accordance with the Rules of the Club, 2003, 2004 2005 the winning horse, Toparoa. Toparoa’s victory she created history in and . retired from the Committee after 28 years will be remembered as much for the trainer Other racing highlights this year were: of outstanding service. and jockey, as they were to go on from • The 2005 Melbourne Cup Carnival, which this victory to become two of the greats in During his term, Mr Reid served the Club attracted the highest ever four-day Australian racing history – (TJ) Tommy Smith as a member of the Australian Stud Book attendance of 383,784, with record crowds the trainer, and Neville Sellwood, the jockey. Joint Proprietors Committee and as a on both AAMI Victoria Derby and Emirates Member of the Racecourse Licences Board. As foreshadowed in last year’s Annual Stakes Day Numerous other industry initiatives not Report, during the year legislation was • ’s victories in the Club’s merely restricted to the VRC can also be introduced into State Parliament to premier Autumn sprint double, Lightning attributed to Mr Reid. He was a passionate change the legal status of the VRC from Stakes () and Seppelt Wines advocate for Victoria’s breeders and the an unincorporated body to an incorporated (Group One). Later need for the development of an incentive body. In doing so, the Committee was in the year, Takeover Target represented scheme that would reward those supporting mindful to ensure that all of the rights Australia with distinction at the Royal the Victorian industry. His advocacy in this and privileges bestowed upon the VRC Ascot Meeting where he won the King’s regard led to the establishment of the and its Members pursuant to the Victoria Stand Stakes and, in doing so, assumed Victorian Owners and Breeders Incentive Racing Club Act 1871 were enshrined in an almost unassailable lead in the GLOBAL Scheme (VOBIS), of which he became any such change. SPRINT CHALLENGE™, of which the VRC Chairman, and its successor SUPER VOBIS, is a foundation partner which is still a national leader today.

3 Chairman’s Report continued

In accordance with the Club’s Rules, the • Brian Blackmore, one of Australia’s most While the course is closed for the track Committee determined to fi ll the casual experienced race broadcasters. Brian reconstruction, we will be continuing to vacancy created by the retirement of Mr acted as stand-in race caller at Flemington advance other projects that form part of the Reid with the appointment of Mr Timothy on many occasions during a career that Club’s Masterplan, and I am confi dent that Michael Poole, who joined the Committee spanned fi ve decades. Members will be more than satisfi ed with 1 2006 on July . I refer Members to Mr Poole’s I would like to place on record our the ‘New Flemington’ that will be unveiled 7 8 2007 biographical notes on page of the Report. appreciation for the support received from at our fi rst meeting on September . I am certain that he will, in concert with the Government, industry bodies and sister The VRC is fortunate to have forged other Members of the Committee, play an clubs, in particular: strategic partnerships with many leading important role in securing the future of • The State Government and the Offi ce of corporations. I would like to acknowledge the Club. the Premier, the Hon Steve Bracks MP and thank all who have assisted the Club As highlighted in last year’s Report, the • The Minister for Racing, the Hon John this year, particularly our Principal Partner, Committee is constantly pursuing strategies Pandazopolous MP Emirates, with whose assistance the that will improve the quality of racing at international reach of our signature event, • The Board and Chief Executive of RVL Flemington, and we were therefore delighted the Emirates Melbourne Cup, is growing • The Committees of our sister metropolitan that the Australian Pattern Committee saw each year, as well as our four other major clubs, the Melbourne Racing Club and fi t to elevate both the Turnbull Stakes and Melbourne Cup Carnival partners Lion Moonee Valley Racing Club Ascot Vale Stakes to the elite Group One Nathan Australia Pty Limited, AAMI, Crown • The Board of Country Racing Victoria Inc level, effective from the 2006/2007 Season. Limited and MYER. (CRV) – and all Country Racing Clubs It is appreciated that the grading of races is a The reputation and standing of the VRC is • The Committees of the Bendigo Jockey challenging task for the Pattern Committee. a refl ection of the dedication of our Club Club, Ballarat Turf Club, Geelong Racing Ultimately, the international reputation of administration, led by Chief Executive Dale Club and Werribee Racing Club for their Australian racing demands that there is a Monteith. Throughout every department continued generosity in assisting the VRC continuing assessment of all existing and there is an enthusiasm and passion for to hold meetings at their racecourses, potential Black Type races having regard ensuring that the Club continues to be thus preserving the racing surface at to the ratings criteria that has now been recognised as a world leader. To each and Flemington as it nears the ends of its adopted worldwide. every member of the VRC team, I extend effective life Prior to the 2005 Melbourne Cup Carnival, my thanks and congratulations for another • The Committee of the Australian Jockey the VRC administration for the fi rst time in excellent year. Club (AJC) and Board of the Sydney Turf its history was relocated to a new offi ce I wish to record my personal thanks to Vice Club (STC) building, occupying a wonderful position at Chairman Peter Barnett, Treasurer Peter • The Board and Chief Executive of our Joint the top of Flemington’s historic Straight Six Fekete, and all Members of the Committee Venture partner, Tabcorp Holdings Limited track. The move was necessitated by Racing who have once again this year given freely • The Board and Chief Executive of Victoria Limited requiring additional space their time and considerable expertise ThoroughVisioN (TVN) in the building that was shared between the to ensure that the VRC is managed in two bodies at 400 Epsom Road. The current • The Chairman and Chief Executive of the accordance with the highest governance esprit de corps of the VRC staff in the new Australian Racing Board. standards and is positioned to capitalise premises is refl ective of their collective Over the past six years, the Club has faced on future opportunities. enthusiasm as on a daily basis they overlook many challenges with the progressive The VRC prides itself on the integrity of that for which they are responsible – delivery of improvements that form part its operations and I can assure Members historic Flemington. of the Club’s Masterplan. However, there is that the Committee and administration On behalf of the Victoria Racing Club, I pay no more important or critical project than will continue to strive for excellence in tribute to the contribution made to the Club that which lies ahead of us immediately everything we do, while recognising the 2006 by two former Members of the Committee after the Melbourne Cup Carnival. heritage and legacy that has been left by who both passed away during the course of I refer to the reconstruction of the Course those who have gone before us and the the Season. They were: Proper at Flemington. Never in the history expectations of those who will succeed us. of Flemington, which has been continuously • Samuel Richard Creswick Wood DFC May I, on behalf of the Committee, thank used as a racecourse since 1840, has the track (Committee Member from 1949 until 1977) you, the Members of the Club, for your been totally reconstructed as a single project. • Frank Hunter Smith (Committee Member support during the year. from 1973 until 1987). The importance of returning to Flemington in September 2007 and a successful Both men served not only the VRC with subsequent Melbourne Cup Carnival has distinction, but also their country in World been paramount in our planning over the War II as members of the RAAF, where they past fi ve years. I am confi dent that every piloted missions over hostile territory in eventuality has been considered and that Rod Fitzroy Europe on numerous occasions. under the guidance of our General Manager Chairman I also acknowledge the passing of: Flemington, Terry Watson, Members can • Judge Bruce McNab who was the initial look forward to the track performing to Deputy Chairman of the Racing Appeals the standard expected of an international Tribunal when it was formed in 1984 and racecourse such as Flemington. who served as Chairman from 1990 to 2001, retiring in 2004

4 The Committee

ROD FITZROY PETER BARNETT PETER FEKETE DOUG REID OAM Fellow Real Estate Institute (FREI) Fellow Certifi ed Practising Fellow of the Institute of Chartered DATE JOINED COMMITTEE Associate Australian Property Accountant (FCPA) Accountants Australia (ICA) September 1977 Institute (AAPI) DATE JOINED COMMITTEE DATE JOINED COMMITTEE Retired 30 June 2006 DATE JOINED COMMITTEE June 1999 July 2000 BUSINESS INTERESTS November 1993 BUSINESS INTERESTS BUSINESS INTERESTS Retired Managing Director of BUSINESS INTERESTS Director of AMCIL Ltd and Partner at PricewaterhouseCoopers Blue Metal Quarries Founder of Fitzroys Biosian Pty Ltd Chartered Accountants, specialising Former Managing Partner of Chairman, Almond Orchards Director and shareholder of in audit and corporate advisory Tennis Camp Australia Australia Opis Capital Ltd services Former Chairman of VOBIS Chairman, Capital Star Motors Member of the ABN AMRO Former Chairman of Racing Products CURRENT RACING INTERESTS Director, Timbercorp Limited Australasian Advisory Council and VRC Promotions Sub-Committee Racehorse owner Deputy Chairman of Epworth Former Chief Executive Offi cer of Committee Member of Australian Hobby breeder Medical Foundation Board of EZ Industries Ltd Stud Book Trustees Managing Director of Pasminco Ltd INTERESTS OUTSIDE OF RACING Past President of Thoroughbred (1988-1995) Family Breeders Victoria CURRENT RACING INTERESTS Skiing Breeding: CURRENT RACING INTERESTS CURRENT RACING INTERESTS Football 5 mares Raced about 20 horses with the best Breeder Racing: being Paris Lane (winner Caulfi eld Life Member of Thoroughbred currently has interest in 5 horses Cup and 2nd Melbourne Cup) Breeders Victoria Owner breeder of mare Maybe INTERESTS OUTSIDE OF RACING INTERESTS OUTSIDE OF RACING Mahal 1978 Australian Champion Family Golf Racehorse of the Year Golf Food and wine Travel INTERESTS OUTSIDE OF RACING The Sydney Swans Tennis (former Wimbledon and Grand Slam player)

5 The Committee continued

BILL MACKINNON PAUL LEEDS AMANDA ELLIOTT MICHAEL BURN BA Hons (OXON) – Law degree Associate Fellow of Australian BA (Hons) Melbourne University Bachelor of Commerce with Honours Oxford University Institute of Management (Melbourne) DATE JOINED COMMITTEE Admitted as Barrister UK Bar DATE JOINED COMMITTEE July 2002 DATE JOINED COMMITTEE Solicitor Victoria – (Retired) April 2002 November 2003 BUSINESS INTERESTS DATE JOINED COMMITTEE BUSINESS INTERESTS Director of Pastoral and BUSINESS INTERESTS November 1998 Chief Executive Offi cer of Starcom Investment Companies Executive Director – Investment BUSINESS INTERESTS Worldwide (Australia Pty Ltd) Banking Group, Macquarie Bank CURRENT RACING INTERESTS Director of several public and private Chairman of AMX Breeder CURRENT RACING INTERESTS companies including Geelong Chairman of Radio 3UZ Pty Limited Racehorse owner Grammar Foundation, Marcus Board Member of Australian INTERESTS OUTSIDE OF RACING Oldham College, and Victorian Racing Association of National Advertisers Werribee Equine Hospital, Marcus INTERESTS OUTSIDE OF RACING Industry Superannuation Fund Oldham College Foundation Golf CURRENT RACING INTERESTS Partner in Beemac Bloodstock Family Snow skiing Racehorse owner and breeder Partnership Tennis Trustee of family owned wool and INTERESTS OUTSIDE OF RACING Riding agriculture growing property Family Travel Art Music CURRENT RACING INTERESTS Food, wine and travel Theatre and fi lm Racehorse breeder and interests Collectables Agriculture in a number of Tennis INTERESTS OUTSIDE OF RACING Football – Collingwood Farming – breeding fi ne wool sheep – agriculture Golf Polo

6 KATHERINE BOURKE TIM POOLE DALE MONTEITH BA, LLB, LLM Associate Institute of Chartered Bachelor of Commerce – Melbourne Member of Victorian Bar Accountants (ACA) Australian Sports Medal 2000 since 1989 DATE JOINED COMMITTEE DATE JOINED COMMITTEE DATE JOINED COMMITTEE July 2006 July 2000 July 2004 BUSINESS INTERESTS BUSINESS INTERESTS CURRENT RACING INTERESTS Managing Director of Hastings Chief Executive of Victoria Racing Racehorse owner and breeder Funds Management Club (2000 – present) Chairman of the Bookmakers and Director of Melbourne Airport Tabcorp Joint Venture Management Bookmakers Clerks Registration Director of Australian Infrastructure Committee (1994 – present) Committee Fund Previously Chief Executive of VATC (1991 – 2000) INTERESTS OUTSIDE OF RACING CURRENT RACING INTERESTS Hawthorn Football Club An interest in four horses CURRENT RACING INTERESTS Food, wine and travel INTERESTS OUTSIDE OF RACING Thoroughbred breeding Family INTERESTS OUTSIDE OF RACING Golf AFL football Running Snow skiing Fishing Cricket Golf Cycling

7 Victorian Racing Industry Review

Since the end of the fi nancial year, As a result, distributions to the • The commercial success of the Racing Victoria Limited (RVL), together Victorian Industry from the Joint Melbourne Cup Carnival does not with its Shareholders – Victoria Racing Venture were reduced by in excess just happen, it has been developed by Club, Melbourne Racing Club, Moonee of $8.6 million from budget forecasts. the VRC from its inception, but with Valley Racing Club and Country Racing As a consequence, some Clubs were a far greater commercial focus over 10 15 Victoria and the ten ( ) Industry forced to reduce prizemoney or not the past years where attendances 190,000 1993 Stakeholder groups – met and resolved increase it as they would have wished. have grown from in to 383,700 2005 to conduct a review into the Victorian The resolution of the dispute has in . Industry. resulted in turnover levels growing • The VRC bears all of the risk in The VRC through its role as Principal thus enabling Clubs to once again conducting the Carnival with an Club for well over a century, and focus on increasing prizemoney. annual investment in excess of 33 subsequent to relinquishing that role, It is nevertheless an opportune time $ million to stage the event to has demonstrated an unswerving for the industry to conduct a broad the standard that is now acclaimed commitment to the success of review so Victoria can maintain its throughout the world. thoroughbred racing in Victoria and pre-eminent national position. • The VRC has invested $27 million the welfare of its participants. The VRC expects that an important during the past ten years in new The Club remains committed to focus of the review will be strategies for stables and training facilities for ensuring the continued leadership growing net revenues so as to increase the benefi t of stakeholders. position of Victoria and we welcome this the pool of funds available for industry • The VRC incurs an annual net cost opportunity for the broader industry to investment, and to increase returns by of $1.5 million in providing training review its operations and benchmark way of prizemoney to stakeholders. facilities for the Flemington-based its successes and failings against both Without pre-empting the detail of trainers and their owners, funds national and international models. the VRC’s submission to RVL, the which otherwise might be available The catalyst for this review was development of our position will no for prizemoney. the disquiet amongst industry doubt have regard to the following: • The Club has invested in modernising stakeholders regarding the stagnation • The signifi cant contribution that the ‘the face of racing’ through the of prizemoney over the past twelve Melbourne Cup Carnival makes to construction of the new Members’ months. The 2005/06 racing season the Victorian and Australian Racing Grandstand (against much public was an annus horribilis not only for Industry as well as to the broader criticism at the time). The Grandstand Victoria but most other states, primarily Victorian economy. is now a cornerstone of the VRC’s due to the impact of the protracted commercial success. dispute between Tabcorp and TVN.

8 • The resources that the Club has to strategies, particularly in view of the Change is inevitable and we welcome invest in essential infrastructure substantial fi nancial benefi ts already that. However, it should not be change such as the track reconstruction enjoyed by many sections of the racing for change sake, it must be based upon which is programmed to commence industry and the Victorian economy as quantifi able and sustainable benefi ts immediately after the Melbourne Cup a result of the Melbourne Cup Carnival. to industry participants. Carnival this year. The VRC will not support any strategies We will keep Members informed of • The potential to increase industry the effect of which is to create large progress as the review process unfolds. funding by addressing the scale subsidies within the racing programming of race meetings. industry, as subsidies are the breeding • Ensuring the Victorian Racing Industry ground of complacency, ineffi ciency

receives an appropriate reward for and sub-optimal business decisions. supplying its high quality racing The Club intends to play a constructive Rod Fitzroy product nationally and internationally. and positive role in the process of Chairman • The fact that last season every dollar determining a framework for the the VRC received from RVL by way future of Victorian racing. of the Industry Distribution Scheme We are also committed to ensuring was paid out in prizemoney with an that those within the industry who additional 36% or $9 million premium. successfully drive growth enjoy a fair The VRC is able to ‘top up’ prizemoney return for accepting the risks that the in this way principally due to revenue pursuit of growth entails. generated from VRC Members and our The interests of our Members, Corporate Corporate Partners. Partners, Sponsors and employees as Recently views have been publicly well as industry stakeholders, will be expressed that the net fi nancial paramount in our considerations of and benefi ts of the Melbourne Cup Carnival active participation in this important should in part be re-directed away industry review. from the VRC. We are confi dent that any carefully considered strategy for change within the industry is unlikely to incorporate such expropriation

9 Chief Executive’s Report

“The 2005 Melbourne Cup Carnival was the most successful ever with attendances having more than doubled since 1993.” OVERVIEW A VRC sponsored initiative in 2005/2006 saw The 2005/2006 year proved to be a the introduction of payment of prizemoney Dale Monteith challenging one for the industry and the down to eighth placing in all Group and VRC, with the impact of the dispute between Listed Races in Victoria. This was achieved TVN and Tabcorp being a signifi cant by redistributing 5% of prizemoney away contributing factor to wagering turnovers from winning owners, who are still amply stagnating and in turn causing a shortfall rewarded (60%) for winning such races. For in funding from the Tabcorp Joint Venture, VRC Group and Listed Races, this meant that which placed pressure on the ability of all in excess of $1.2 million was redistributed to clubs to maintain prizemoney levels. owners, trainers and jockeys who otherwise This was the fi rst year since Tabcorp was would not have received prizemoney. privatised in 1994 that wagering turnovers The Club will continue to focus on allocating did not increase. prizemoney to reward as many owners From the VRC’s perspective, this impact as possible and to acknowledge the saw a $1.8 million shortfall in distributions contribution of industry participants. In 2005/2006 from the Joint Venture compared with this was amply recognised by budgeted distributions. Notwithstanding, the fact that the VRC’s ratio of prizemoney 136 the Club, based upon a very successful 2005 paid to distributions received was %. Melbourne Cup Carnival combined with DISTRIBUTION SCHEME healthy growth in Club revenues across the Unfortunately, the full intent of the board, was able to maintain prizemoney new Distribution Scheme between the increases as planned. metropolitan clubs and Country Racing 8.6 PRIZEMONEY Victoria was impacted by an $ million The Club takes very seriously its responsibility shortfall in industry funding compared to maximise prizemoney levels at all of its with forecasts, as a consequence of wagering 2005/2006 race meetings for the benefi t of the industry turnovers being fl at in . at large. The planned redistribution of funds via the Prizemoney for the Season under review new Distribution Scheme to further support increased from $33.5 million to $34.6 million, country racing was therefore not possible in 2005/2006 with particular emphasis upon minimum . prizemoney levels, as evidenced by Saturday It is important to understand that the prizemoney levels for standard races being new Distribution Scheme allocates 88% of set at $70,000 per race. These levels lead the available funds fl owing from the Tabcorp Australian Racing Industry. Joint Venture to underpin prizemoney levels for all races conducted in Victoria.

10 In this regard, every race is treated equally Record individual day attendances were I am pleased to report that the new system, regardless of which club conducts it or recorded on AAMI Victoria Derby Day which mirrors that previously implemented where it is held. By way of example, the – 115,660, and Emirates Stakes Day – 61,382. for Members’ Car Parks three years ago, following funding levels are provided for Apart from the signifi cant attendances and has been very successful with nearly all metropolitan races by the RVL sponsored consequent fi nancial outcomes achieved Members being able to reserve dining places 2006 Distribution Scheme: from the 2005 Melbourne Cup Carnival, the for the Carnival. Saturdays $56,929 Club was lauded for the professionalism Last year I reported that for the fi rst time Mid-week, Sundays and nights $24,842 with which it organised and conducted the Club’s in-house Event Offi ce would fully Victoria’s signature events, the Emirates the event. All of the regulatory authorities manage the preparations for the Carnival. Melbourne Cup, BMW Caulfi eld Cup and with which the Club works each year in I have no doubt the Event Management 2005 Tattersall’s Cox Plate, receive funding based conducting the Carnival confi rmed that it team contributed to the success of the upon a percentage of 2004 prizemoney was the most successful ever from their Carnival and will ensure that we continually levels whilst all other Victorian Group One, perspective. In particular, the Melbourne Cup strive to improve the quality of the Two and Three and Listed Races receive equal Carnival ‘Events Model’ is being used for all experience, not only during the Melbourne funding within each category. Consequently, other major events conducted in Victoria. Cup Carnival, but for other major events at clubs are treated equitably There will, however, always be room Flemington including Super Saturday. under the Distribution Scheme in so far as for improvement, and Management is TVN the provision of funding for minimum committed more than ever to pursuing In May 2006 TVN and Tabcorp reached prizemoney at all levels. this objective. agreement on terms to settle the The VRC is committed to paying prizemoney For the 2006 Melbourne Cup Carnival, broadcasting deadlock that had existed for all of its races, in excess of funding from measures have already been taken to for more than 12 months. However, this the Distribution Scheme, across all categories address issues associated with travelling settlement, at the time of writing, is still and will continue to focus on this policy in to Flemington by train. Since last year, the the subject of ACCC approval. the years ahead. This policy continues to Club has been dealing with Connex and The settlement, if and when ratifi ed by the drive interest in racing at Flemington, the Government to improve rail services ACCC, will ensure that thoroughbred racing wagering revenues, on-course attendances for the Carnival. has achieved its objective of guaranteeing and, ultimately, returns to owners. In addition, the system of allocating requests that our pictures are used to maximise MELBOURNE CUP CARNIVAL for Members dining over the four days of the wagering revenues back to the industry and 2006 The 2005 Melbourne Cup Carnival by any Carnival has been changed to provide at the same time ensure that thoroughbred measure was the most successful in the for a ballot on individual days to ensure that racing is presented in a way that promotes Club’s history. all Members are treated equitably with their involvement with the industry. TVN’s requests for dining on all days. Previously, the objective of presenting a thoroughbred-only It is sobering indeed to refl ect upon the ballot encompassed four-day requests and channel designed to fully service the needs growth in attendance for the Carnival since many Members missed out on being able to and interests of countless supporters of won the Melbourne Cup reserve dining on any of the four days. thoroughbred racing will be achieved. in 1993, when 190,000 people attended, compared with the 383,800 who attended in 2005. This was the highest four-day aggregate on record.

11 Chief Executive’s Report continued

Since the settlement was reached, there In September 2005 a milestone occurred Importantly, the Wall will also effectively has already been strong evidence that in the Club’s history with the transfer of remove the racecourse from the wagering turnovers have returned to levels the VRC’s operations on course to its new Maribyrnong River fl ood plain by enabling prior to the dispute thereby underpinning administration offi ces at 448 Epsom Road. the Planning Scheme ‘inundation overlay’, the operations of the VRC and all TVN This move fi nally completed the separation which prevents important infrastructure shareholders. of the VRC from its former industry developments being undertaken at functions, which were assumed by RVL in Flemington to be removed. FREE-TO-AIR COVERAGE December 2001. During the year, in order to lay the Integrated with the construction of the Bund foundations for the continued success of The Club will benefi t signifi cantly from Wall has been the wetlands development 1,200 the Melbourne Cup Carnival, the Committee this move with staff now enjoying a at the top of the Flemington metre decided to extend the term of the Seven working environment that maximises chute. The wetlands will provide the lowest Network’s coverage for an additional six their productivity. drainage point on the racecourse and will years until 2013. Towards the end of 2005 mitigation works importantly ensure that, in future, other important areas of the racecourse such By extending the term of the Seven on the Maribyrnong River, downstream from as The Birdcage and horse stalls areas will Network’s contract, the fi nancial outcomes Kensington, were completed, which then remain free from internal fl ooding with achieved by the Club for the Melbourne Cup enabled commencement of the construction heavy rainfall. Carnival have been signifi cantly protected, of the much needed Bund Wall around in particular many of the Club’s sponsorship Flemington Racecourse. The Wall is expected In addition, the wetlands will also act as a 2006 agreements, being on a long term basis, are to be completed soon after the safety valve should the Maribyrnong River dependent upon free-to-air coverage. Melbourne Cup Carnival and will serve two fl ood and breach the Bund Wall, which has very important purposes. been designed to divert such waters, in a The quality of the Seven Network’s free-to- worst case scenario, into the wetlands air coverage combined with the excellent In the fi rst instance the Wall will protect before any other areas of the racecourse partnership the Club enjoys with Seven were Flemington from events such as the near 1974, are affected. signifi cant factors in the Committee arriving disastrous fl ood in which completely at this decision. inundated the racecourse. At the same time Even now, after landscape works have just the Wall will signifi cantly protect the VRC’s been completed around the wetlands, it is FLEMINGTON MASTERPLAN future operations at Flemington. possible to visualise how the wetlands will During 2005/2006 a number of crucial Apart from enabling the Track Reconstruction become a signifi cant feature of Flemington Masterplan projects were undertaken, Project to proceed, the Wall will importantly and provide a much needed improvement to which will enable the Club to commence protect the Club’s signifi cant assets at this area of the racecourse, which is highly the total reconstruction of the Flemington Flemington and our business operations, in visible from Epsom Road. Course Proper immediately after the 2006 particular future Melbourne Cup Carnivals. Melbourne Cup Carnival. This project will without doubt be the single most important project undertaken in the Club’s history, as it will be fundamental to the VRC’s conduct of racing at Flemington for at least the next 30 years.

12 Another integrated project undertaken Looking ahead to 2006/2007, apart from the NON-RACEDAY ACTIVITIES during 2005/2006 was the construction of Track Reconstruction Project that will mean During 2005/2006, the Club sought the fi ve pumping stations around the the closure of Flemington for racing for a assistance of the Government to amend racecourse, which will ensure that future 10 month period, the other major project to the Planning Scheme to make greater use drainage from the racecourse no longer be undertaken will be the construction of of Flemington and all of its facilities on relies upon gravity or the vagaries of the a new Birdcage horse stall and parade ring non-racedays. The amended scheme now Maribyrnong River’s tidal fl ow to ensure complex on the site of the existing facilities. enables the Club to fully utilise its signifi cant that storm water drains from Flemington. The existing, dated horse stalls will be asset base to develop new revenue streams Importantly, these works needed to be replaced by facilities that more adequately on non-racedays. In particular, we are completed with the construction of the ensure the comfort and health of horses now able to conduct up to six major non- Bund Wall and before the Track racing at Flemington and trainers and raceday events at Flemington each year at 15,000 Reconstruction Project so that the new strappers working in this area. In addition, which or more people can attend. drainage system within the track could be the pre-race parade ring will be relocated The previous planning scheme specifi cally linked to the pumping stations. The new to inside the horse stall area, and a tunnel precluded the VRC from utilising Flemington track will be independently drained from will be constructed to take the horses from Racecourse in this manner. all other training and grounds facilities at the new parade ring to the walkway in front With the redevelopment of the Melbourne Flemington; something that has never been of The Members’ Stand, which leads to the Showgrounds, the VRC and RASV have been possible until now. This will ensure the Mounting Yard. working co-operatively on a plan to develop Course Proper is no longer compromised The horse tunnel will ensure that the Club Flemington as an entertainment precinct. by drainage from the remainder of addresses the signifi cant public safety issues In particular, the two organisations are the racecourse. associated with the movement of horses to currently exploring ways of working The construction of new stables to replace the Mounting Yard and patrons wishing to co-operatively to share costs and develop the old Southern Community stables access the viewing lawns and Betting Ring new joint revenue streams associated with 2005 commenced towards the end of areas at Flemington. the management of the racecourse and and should be completed soon after the The Birdcage redevelopment can only showgrounds sites outside of racedays and 2006 Carnival. be undertaken with the closure for the The Royal Melbourne Show. This is also likely Associated with training activities and as track reconstruction. to include exploring ways to jointly develop part of the Flemington Masterplan, other ‘non-core’ land at the rear of the racecourse, In preparation for the 2006 Melbourne capital projects completed during 2005/2006 in the Leonard Crescent and Fisher Parade Cup Carnival a new taxi road, to speed up included new stripping stalls adjacent to the areas owned by the VRC and RASV. access to the course, and drop-off point near Flemington horse tunnel and a new training the main entrance have been constructed. trotting ring adjacent to on-course stables Previously, such vehicles had to be stopped at Flemington. for the running of all straight races during the Carnival. This problem will be overcome in future.

13 Chief Executive’s Report continued

WAGERING AND GAMING Early this year WRC commenced the Racing in Victoria is more fortunate than RELICENSING reconstruction of the fi rst fl oor of its most other states as the Clubs and the The State Government has commenced a grandstand to provide facilities that will controlling body, RVL, work very closely process to review the granting of licences to better service the needs of its Members and together. In this regard I wish to thank the be issued to wagering and gaming operators those of the VRC in the years ahead. The VRC Chief Executives of RVL, CRV, MRC and MVRC from 2012. Tabcorp currently holds such has assisted WRC to secure borrowings to for their co-operation in working to grow licences in a Joint Venture with the Victorian enable it to facilitate this important project and develop the Victorian Racing Industry. Racing Industry. by guaranteeing loans for the construction The Club continues to work in partnership The Racing Industry, when agreeing to the works, which should be completed by with Peter Rowland Catering to ensure 2006 privatisation of the then TAB in 1994, sought Werribee Cup Day . the highest standard of catering services and was given assurances in legislation ACKNOWLEDGEMENTS for all patrons. I would like to thank the that the industry would be ‘no worse off’ I am fortunate to work with a dedicated and Peter Rowland team for its continued with relicensing. passionate team of people at the VRC who commitment to providing this service. The challenge for all in racing will be to are committed to continuing to improve the The continued support of Members is ensure over the next 18 months that the Club’s service to its Members, public and fundamental to the success of the VRC industry achieves a better result from industry participants. and much appreciated by all at the Club. relicensing and one that ensures the I also pay due credit to the Committee (now prosperity of the industry for all those Directors) of the Club which provides me who make their livelihood from racing. and the Club’s Management team with Dale G Monteith much valued knowledge and assistance, WERRIBEE Chief Executive The VRC has for a number of years worked which continues to ensure the best co-operatively with the Werribee Racing outcomes are achieved for the Club. Club (WRC) on a number of fronts. With the In June 2006 Mr Doug Reid OAM retired need to protect the Flemington track from from the Committee after 28 years’ service. over racing and recognise its limitations I have known Doug and Bev Reid for most leading up to the reconstruction, WRC has of my 30 years in racing and wish to thank permitted the VRC to conduct a number of them both for their untiring dedication to its mid-week meetings at Werribee. This the VRC, and in particular their support of arrangement is likely to continue after the me during my time in racing and at the VRC. Flemington track reconstruction to ensure that Flemington produces the best possible racing surface for all of its feature, Saturday and holiday meetings.

14 Senior Management

SUE LLOYD-WILLIAMS JOHN ANSTEY JAMES EARLS ROZALEE ERCEG BRENDAN FORD Deputy Chief Executive General Manager General Manager General Manager General Manager Human Resources Racing Flemington Business Sponsorship & Corporate Development Development

REBECCA HARVEY CRAIG MALTMAN DR STEPHEN SILK JULIAN SULLIVAN TERRY WATSON General Manager General Manager General Manager General Manager General Manager Catering & Event Business & Finance Strategic Marketing Membership Services Flemington Co-ordination

15 16 Membership Department

OVERVIEW In order to maintain our current retention MEMBER ATTENDANCE During 2005/2006, the Club continued to rate of 97%, ‘exclusivity’ must continue to Below is a summary of Members and refi ne all aspects of its Membership offering remain synonymous with VRC Membership. Members guests’ attendance, with AAMI to ensure continued Member satisfaction. The Club capped Full Member capacity at Victoria Derby Day remaining the most Key areas of focus included: 22,000 and aims to acquire an additional popular day of the Melbourne Cup • maintaining exclusivity of VRC Membership 1,500 Restricted Members each Racing Season. Carnival with over 47% of total attendance • ensuring both raceday and non-raceday A breakdown of Membership categories comprising of Members. events were appealing to all Members at the conclusion of the 2005/2006 Racing It is encouraging to see an increase in the • provision of fi rst-class communications Season is shown below. number of Members attending on Emirates and customer service Member category No of Members Melbourne Cup, Crown Oaks and Emirates • broadening the appeal of Racing Rewards Full 21,247 Stakes Days. benefi ts and redemptions Restricted 864 Member attendance outside of the 91 • offering a Membership package that Life Melbourne Cup Carnival continues to 1979 633 refl ects true value. Pre improve. Furthermore, this growth is Provisional 112 primarily attributed to the Membership Initiatives introduced to ensure the Juniors 788 Loyalty Program, Racing Rewards and new maintenance of Membership exclusivity Absentee 1,711 initiatives in Member benefi ts. The average included limiting the number of Members 25,446 frequency of Members’ attendance at the who progressed from Restricted to Full Total races at Flemington has increased from Membership and a continued focus on the For the new Racing Season, all Restricted 4.94 days in 2004 to 5.29 days in 2005. growth of the Restricted Membership base. Members who applied prior to September 2005 will be upgraded to Full Members in time for the 2006 Melbourne Cup Carnival.

MCC MEMBER ATTENDANCE 2004 2005 % of % of Members in Members in Total Members attendance Total Members attendance Derby 115,542 58,082 50.3 115,660 54,598 47.2 Cup 98,161 42,758 43.6 106,479 42,759 40.2 Oaks 110,677 53,658 48.5 100,263 50,557 50.4 Stakes 45,734 28,144 61.5 61,382 33,846 55.1 Overall 370,114 182,642 49.40 383,784 181,760 47.40

Member attendance continues to improve due to increasing initiatives in Member benefi ts.

17 Membership Department continued

RACING REWARDS Another noteworthy program initiative • Wine Appreciation Luncheon – Now in its fi fth year of operation, Racing for the 2005/2006 Racing Season was the Members’ Dining Room Rewards recorded its most successful year introduction of an exclusive Racing Rewards • Collingrove Stud and Mitchelton to date, as evidenced by the record number Henry Buck’s gold tie. The item proved so Winery Tour of group qualifying Members and the popular that all ties were redeemed within • Spring Fashion Cocktail Party – featuring increase in redemptions. Firmly established three months. a MYER fashion parade as a core component of the Club’s INITIATIVES IN MEMBER BENEFITS • Melbourne Cup Carnival Preview Evening Membership offerings, the program The 2005/2006 Racing Season saw a – guest speaker John Messara continues to develop and foster Member signifi cant expansion of the overall • Cocktail Party – guest speaker David Hayes loyalty. 2005/2006 market research fi ndings Membership offering with the following • Junior Members’ Marquee – Emirates indicate that 92% of Members were aware of key initiatives introduced: Stakes Day Racing Rewards and 76% agreed the program • Expansion of The Nursery Car Park is a great initiative. Racing Rewards will • VRC Racing Tour – endeavour to ensure that Members’ overall • Introduction of the Junior Membership • Flemington Festival of Racing Preview 12–17 attendance remains frequent for the Program for year olds Evening – guest speaker Fred Kersley 2006/2007 track closure phase. • VRC International Racing Tours – Hong • Flemington Festival of Racing Pre-Race Kong (Sha Tin) and Ireland (The Curragh) As shown in the table below, the 2005/2006 Cocktail Party Racing Season continued the trend of • Launch of the Strategic Alliance • Golf Day – Moonah Links Golf Course Members qualifying for group status with • Introduction of the Members’ E-Diary • VRC Racing Tour – Ireland a 4% increase on the previous Season. • Establishment of The Hedges in The • Private Gallery Viewing – Reward No of Members No of Members Birdcage National Gallery of Victoria Group 2005/2006 2004/2005 • Introduction of an innovative Access Pissarro: The First Impressionist. Group 3 4,237 4,309 Control solution. YOUNG MEMBERS Group 2 1,977 1,788 MEMBERS’ EVENTS Overall attendance at Young Members’ Group 1 1,305 1,182 VRC Members expressed a high level of events continued to grow. NIVEA VISAGE Total 7,519 7,279 satisfaction in the range of exclusive Girls’ Day Out was once again the most For the fi rst time, Group Members were Members’ events offered during the popular event with in excess of a third of 2005/2006 provided with the opportunity to purchase Racing Season. This was all Young Members in attendance. a discounted Super Site in The Domain on demonstrated by capacity attendance On Lightning Stakes Day all Group Racing 2005 Emirates Stakes Day. The offer was at each of the following events: Rewards Young Members were invited extremely well received as evidenced by the • Private Gallery Viewing – to attend a pre-race cocktail party which abundant number of Racing Rewards Super National Gallery of Victoria was held on Level 5, The Grandstand. This Sites purchased prior to raceday. Andy Warhol’s Time Capsules initiative was well received with over 450 Members attending.

18 MELBOURNE CUP CARNIVAL MEMBERS’ COMMUNICATION In August 2005, the Club introduced the RESERVED CAR PARKS During 2005/2006, the Membership E-BIRD E-DIARY®, which enabled Members to The Members’ Reserved Car Parks again Department primarily focussed on a range personalise their desktop calendars to include proved extremely popular during the 2005 of measures to ensure Members were kept a complete Raceday Fixture, as well as an Melbourne Cup Carnival. Impressive Car Site up-to-date with the latest raceday and offi cial Members’ Events Schedule. sales were achieved over all four days of the non-raceday information, including the long Quantum Market Research conducted after Carnival with AAMI Victoria Derby Day once awaited Flemington Track reconstruction. the 2005 Melbourne Cup Carnival indicated again proving the most popular. Communication tools that the Department that the current mix of communication A number of initiatives were welcomed utilised in order to effectively communicate methods used to reach Members is highly during the Carnival including the expansion with Members included: effective. The mix of mail and email as the of The Nursery, the introduction of The • Inside Headquarters magazine main forms of communication effectively 50 Hedges and the refurbishment of The • Melbourne Cup Carnival Offi cial Souvenir reaches all Member segments. Over % Birdcage Chalets. Magazine, Members’ Guide and Update of Members preferred to receive email communications from the Club on a The Nursery extension enabled the size of all • Exclusive Members’ section of the VRC monthly basis. Reserved Car Sites to be increased by 20% in website addition to facilitating the creation of shared • Junior Members’ website The overall objective of this research undercover areas for Members and their is to gain a comprehensive insight into • Online Membership renewal service guests to enjoy throughout the Carnival. Members’ interests, attitudes and • Email campaigns The launch of The Hedges and the perceptions, gauge satisfaction levels and • Track Closure Informational Flyer refurbishment of the popular Birdcage identify opportunities to further enhance • VRC Members’ and Racing Rewards Chalets were equally well received. Both the VRC’s Membership offerings. handbook initiatives enhanced Members’ capacity to • Information bulletins published in entertain guests within this precinct by Melbourne metropolitan newspapers providing a greater variety of purchasing options as well as improved facilities. • Brochures and invitations produced throughout the Season • SMS campaigns • Flemington Festival of Racing brochure • Customer Service Centre • Raceday and Ticketing Offi ce on racedays.

19 20 Racing

OVERVIEW 2005 SEPTEMBER AND OCTOBER The 151st AAMI Victoria Derby was a very Without doubt, the high quality, great variety MEETINGS even contest and trainer and competitiveness of racing at Flemington The fi rst Saturday of Spring provided began his dominance of the Carnival’s throughout 2005/2006 provided the basis for excellent racing, with the Craiglee Stakes fl agship races through Benicio, which came a very successful Season for the VRC, ensuring and Ascot Vale Stakes headlining the nine with a well-timed run to capture Australia’s high levels of enjoyment for VRC Members race program. This day marked a new era in oldest classic race. Additionally, Lad of the and all lovers of thoroughbred racing. the way prizemoney is distributed to ‘placed’ Manor, Lotteria and Glamour Puss were (1) Of the 32 race meetings conducted by the horses in Group and Listed Races in Victoria. all worthy winners of the other Group One Club in 2005/2006, 18 were held on a For the fi rst time, prizemoney was paid down races on the program. Saturday or public holiday at Flemington. to the eighth placed runner instead of being AAMI Victoria Derby Day again deserved its Other Flemington meetings comprised limited to fi ve horses, with slightly reduced mantle as Australia’s highest quality day of Crown Oaks Day, two Sundays, two Friday purses for the winner and runner-up racing, with its schedule of four Group One, twilights and one mid-week program. funding the new formula. This VRC initiative one Group Two and four Group Three races. Eight VRC weekday meetings were held was designed to reward more contributors As such, Derby Day has few rivals anywhere at provincial venues – fi ve at Werribee and in Flemington feature races. The idea was in the world as a raceday of such quality. one each at Geelong, Ballarat and Bendigo. quickly adopted by other clubs and, with the VRC Members and other racing followers endorsement of RVL, the new prizemoney During the Season, the VRC distributed certainly voted for the program ‘with their sharing arrangement for Black Type races 115,660) $34.3 million in prizemoney, and trophies feet’, as a new attendance record (of was made compulsory in Victoria under the valued at almost $300,000 – this was 3.4% was set for the second year in a row. Rules of Racing. more than in the preceding year. As an Warm and sunny conditions greeted individual Race Club providing fi nancial One month later, Melbourne Cup Carnival Flemington for the 145th running of the 10 returns of this magnitude, the VRC continues Preview Day provided a very exciting race Emirates Melbourne Cup, and it was on to be a leading contributor to the Victorian program and the fi eld for the Turnbull Stakes this day that the unthinkable was achieved. Racing Industry, providing a strong stimulus was the strongest in memory. Nevertheless, Despite very few horses ever having won for industry participants generally in both the amazing Makybe Diva overcame her more than one Emirates Melbourne Cup, the short and long term. rivals with ease and showed she was ready because of its handicap conditions, the for further greatness in the weeks ahead. The Club conducted 266 races in 2005/2006, great mare Makybe Diva was able to come Another darling of the turf was revealed 800 which attracted 2,981 starters at an average from seemingly nowhere at the metres on this day, when Serenade Rose signalled 300 of 11.2 horses per event. One quarter of those mark to reach the lead metres out, and her impending domination of upcoming races carried ‘Black Type’, comprised of defy all challengers to win an historic third fi llies’ classic races with her Edward Manifold 11 Group One, 11 Group Two, 16 Group Three Melbourne Cup. It is diffi cult to imagine Stakes victory. and 29 Listed Races. These (67) events alone another horse ever achieving this feat again. carried a total value of $23,050,000 in 2005 MELBOURNE CUP CARNIVAL Emotional scenes that usually accompany prizemoney, plus trophies. The VRC’s fi ne Once again, the Melbourne Cup Carnival a Cup win were even more special with the reputation worldwide as a promoter and provided four days of outstanding knowledge that this was ‘the impossible host of thoroughbred racing excellence at thoroughbred racing at Flemington. made possible’ by an incredibly talented Flemington is underlined by the substantial race mare. number of internationally recognised Group and Listed Races run by the Club each Season. (1) Except Emirates Melbourne Cup – 10 prizes.

Makybe Diva’s historic win in the 2005 Emirates Melbourne Cup was the highlight of another outstanding year of thoroughbred racing at Flemington.

21 Racing continued

For the fi rst time, a Japanese runner Robustly competitive and exciting racing, 2006 FLEMINGTON FESTIVAL OF RACING (Eye Popper) was seen in and he which the Melbourne Cup Carnival program Following the success of the Club’s decision was joined by a debutant South African of races inevitably provides, sets the in 2005 to consolidate the traditional March contestant (Greys Inn). Three European foundations of the success of the Carnival as feature races into two consecutive Saturdays raiders also took their place in the fi eld and a sporting event. High rates of participation under the banner ‘Flemington Festival of the best performed of all fi ve foreign runners fl owed from the signifi cant prizemoney, Racing’, a ‘Super Saturday’ of racing was was the Dermot Weld trained 2004 Emirates superior racing facility (surface and contour) again programmed, which featured the Darley Melbourne Cup runner-up , and from the opportunity for connections Australian Cup, Seppelt Wines Newmarket which fi nished eighth. to be involved in one of the great racing Handicap and the Cadbury Guineas. Crown Oaks Day delivered highly competitive carnivals of the world. No one will ever While the Darley Australian Cup delivered a 2005 racing. Serenade Rose was a comprehensive forget the Emirates Melbourne Cup surprise winner in Roman Arch, the Seppelt winner of the fi llies’ classic and later became in particular, because of Makybe Diva’s Wines Newmarket Handicap outcome one of the few fi llies to complete the Crown record feat. confi rmed the status of the champion Oaks/AJC Australasian Oaks double. 2006 SUMMER MEETINGS straight course sprinter, Takeover Target. Melbourne’s weather could not have been The Club conducted seven race meetings The Cadbury Guineas was won impressively better for Emirates Stakes Day, in complete between December and February inclusive, by , which later performed contrast to the 2004 version. The program the highlight of which was Lightning Stakes creditably at the Sydney Autumn Carnival. was strengthened by the inclusion of The Day featuring the fi rst leg of the 2006 The program for the second day of the Age Classic (transferred from Crown Oaks ™. Evergreen Flemington Festival of Racing was headed Day) in which the Seppelt Salinger Stakes Hong Kong visitor Cape of Good Hope again by three well-established Group Two races winner Glamour Puss again prevailed, competed boldly for another third placing – the Blamey, Kewney and VRC Sires’ Produce defeating a strong weight-for-age fi eld. in the Lightning, behind two local stars Stakes. As was the case in 2005, a very even Her Danny O’Brien-trained stablemate returning from the Spring, Takeover Target program of racing with highly competitive Valedictum fi nished powerfully to take out and God’s Own. The winner set the scene for fi elds was again seen on this day. the $750,000 Emirates Stakes, being run for a successful performance on the world stage the fi rst time as a Quality Handicap. at Ascot, in June, and at Nakayama, Japan in October.

22 2006 LATE AUTUMN AND WINTER BRIEF PREVIEW OF 2006/2007 SEASON Group and Listed Races RACING Race Dates In an exciting development, the Turnbull ANZAC Day saw the 150th renewal of the Due to the imminent closure of Flemington Stakes and Ascot Vale Stakes (the latter VRC St Leger at Flemington – Australia’s Racecourse after the 2006 Melbourne Cup now on AAMI Victoria Derby Day) have each last remaining St Leger over 2,800 metres Carnival, the Club will conduct 30 meetings deservedly acquired Group One status from for three-years-old horses only. The winner, in 2006/2007, as opposed to 32 in the the 2006/2007 Season onwards. The quality Dolphin Jo, showed himself to be a stayer previous Season. VRC Saturday fi xtures of these races over a prolonged period of the future. during the period of closure will be run at has recently been acknowledged by the The 2006 Screens Australasia Winter metropolitan courses, while all mid-week Australian Pattern Committee and, as Group Championship Series Heats were held at meetings will be at provincial courses One races, they join the list of Australia’s Bendigo, Geelong, Ballarat, Wangaratta and (eight at Werribee and one each at Ballarat internationally recognised elite races. In Flemington. As it always does, the Series and Bendigo). doing so, they rightfully add further prestige provided a focus for Winter fl at racing, and Major meetings such as New Year’s Day to the Flemington racing program. a strong fi eld contested the Championship and Super Saturday will be held at Caulfi eld, SUMMARY 8 race on Saturday July, won by Flemington while the Lightning Stakes, ANZAC Day Aligned to its vision and mission, the VRC’s trained Chitabe. and David Bourke Provincial Plate fi xtures commitment to excellence in thoroughbred Now each valued at $250,000 plus trophies, will be staged at Moonee Valley. Sandown racing at Flemington is evident in its the Grand Nationals were very exciting Racecourse will host the Christmas Meeting, strategic initiatives in racing management. contests and Busby Glenn was successful Chester Manifold Stakes Day and Andrew Securing optimal race dates, setting timely in the Hurdle, while Tasmanian import Ramsden Stakes Day, and all of the VRC’s feature and standard race programs and Personal Drum secured Jumper of the Year major jumping race days, including both offering the highest levels of prizemoney honours through his win in the Cleanevent Grand Nationals. possible in the various racehorse segments Grand National Steeplechase. The Nationals The co-operation received from the are key strategies for the achievement of the were strongly supported by a new and more respective Club Committees and Club’s objectives. The accurate placement of compact Flemington jumps racing program management at the host metropolitan the right races at the right time at world- of six hurdle and steeplechase races. These and country venues is greatly appreciated renowned Flemington Racecourse is vital to were quality races and they contributed to by VRC Directors, Management and staff. maintaining the VRC’s ability to be a global the total of $1,200,000 in prizemoney on leader in the pursuit of racing excellence. offer for jumps racing at Flemington in the 2006 Winter.

23 24 Flemington Racecourse

Flemington Tracks The new racing surface will comprise a NEW STRIPPING STALLS 36 The Flemington Course Proper has performed Kikuyu-based turf, incorporating a modern The construction of new stripping stalls, very well over the past 12 months, with the blend of other turf grasses that we are a sand roll and four horse washes was 2006 surface having provided uniform going and confi dent will produce a track of the completed in June . These stalls will some very exciting racing. Importantly, the highest standard. primarily service the needs of off-course Club consciously maintained the track to The Club takes considerable comfort from trainers. provide safe racing for all horses competing the performance of the recently relaid This facility is located adjacent to the horse at Flemington. Caulfi eld track, which used the same Kikuyu- and vehicular tunnel, providing easy access During 2005/2006 major maintenance based turf that has been planned for the to all the training facilities. works were undertaken after the Spring and new Flemington track. The construction of this new facility is tied Autumn Carnivals. These works are necessary NEW STABLES to the completion of the Bund Wall and each year and ensure that Flemington During the year, construction of the new the closure of the woodchip crossing at 2,000 provides a fair racing surface and at the Central Community stables commenced. This the metre start on the Course Proper. same time extended the life of the track project is well underway and is expected to The closure of the crossing has been on the longer than otherwise would be possible. be completed by the end of this year. Club’s agenda to provide the safest possible racing and training tracks. COURSE PROPER RECONSTRUCTION This modern 156 box complex, which will It is with great anticipation that all at comprise of stable blocks ranging from TROTTING AND CANTERING TRACK the Club, in particular the Flemington 11 to 26 boxes, will replace the old Southern In order to provide Flemington trainers with Racecourse Management team and Community stables that will eventually be the facilities necessary to enable them to staff, look forward to the Course Proper demolished to make way for racecourse conduct their activities, a new trotting and reconstruction project fi nally getting under workshops and staff amenities. cantering track was completed in October way after the 2006 Melbourne Cup Carnival. 2005 next to the main stabling complexes DIRT TRACK RENOVATION for slow and lead work from a pony. The existing track surface will be completely The dirt training track continues to perform removed and replaced with a new drainage well. It was renovated in March 2006 by With the construction of the wetlands, system and a well draining uniform profi le. blending a mixture of sand and pine mulch the previous track in that area was closed. Importantly, in future the Course Proper into the profi le to produce an even galloping This new track has a circumference of will have an independent drainage system surface for fast work. 375 metres and importantly is available from all other drainage at Flemington and The dirt track is the most favoured training seven days per week. will be aided by a new mechanical pumping track used by trainers at Flemington. system. This will remove the threat posed by the tidal fl ows of the Maribyrnong River, which until now have impeded the effective drainage of the whole racecourse.

The reconstructed Flemington track will use the same Kikuyu-based turf that has performed successfully at Caulfi eld.

25 Flemington Racecourse continued

SAND TRACK RENOVATION THE BIRDCAGE STALLS FLEMINGTON’S ELMS The surface on the big sand training track The Birdcage stalls will also be completely With Flemington’s population of some was replaced in April 2006 with a redesigned and rebuilt during the track 500 elm trees, the Club has implemented combination of different sands. closure. The new design will feature a an ongoing treatment program where a The new surface has been well received by parade ring within the stalls enclosure and number of trees are soil injected each year the trainers and track riders and is available an underground tunnel linking the horse with confi dor as a preventative for elm leaf 2005/2006, seven days per week. stalls area to the horse race in front of the beetle. During an additional Members’ lawn. This will alleviate the crush 160 trees were treated. As with all training tracks, this track requires situation that currently occurs during the constant maintenance and replenishing to Additionally, an ongoing program of Carnival where pedestrians cross the horse ensure that it performs to the expectations replacing elms in the main Betting Ring race. A dedicated avenue will also be built of the Club and trainers. is planned in the years ahead. as an entry to The Birdcage Marquee area. An Flemington Grounds additional 550 roses will be planted around LANDSCAPE MASTERPLAN Flemington has embarked on an ambitious and Gardens the fences in the new Birdcage horse stalls area. This will further demonstrate the Masterplan in order to maintain a consistent THE LAWNS AND ROSES VRC’s commitment to extend Flemington’s approach to the development of the 10 During Flemington’s month break reputation as one of the world’s most landscape elements within the site. from racing with the Course Proper prominent rose gardens. With the assistance of Murray Collins of reconstruction, a large percentage of the ‘The City Gardener’, we are working to THE WETLANDS public viewing lawns will be raised to produce a cohesive and aesthetically The Car Park area closest to Epsom Road, improve sight lines to the track. pleasing aspect to the Flemington facility adjacent to the top of the ‘Straight Six’, has This will present a perfect opportunity to as a whole. been transformed into a green oasis with the rejuvenate the rose gardens on the outside creation of the wetlands and surrounding of the track and on the lawns, as many of grass areas. With a large proportion of the plants are past their productive life. Flemington’s storm water fi ltering through 3,000 More than new roses will be planted this area, the wetlands should provide a to replace existing plants. potential haven for wildlife. A new taxi road and pedestrian walkway border the wetlands and a rose hedge will separate the road from the walkway. More roses will also fi nd their way across to the ‘Straight Six’ where they will be planted down both sides of the straight from the 1,200 metre mark to the 700 metre mark to beautify and cover the existing pipe and rail fencing.

26 27 28 Strategic Marketing

INTRODUCTION 2005 MELBOURNE CUP CARNIVAL As usual on this day, the fi nal of the MYER The Strategic Marketing Department aims The 2005 Melbourne Cup Carnival attracted Fashions on the Field at Flemington to be innovative and dynamic with a focus an all-time high attendance for the four was the most popular off-track event on Flemington and the Melbourne Cup days – 383,784 visitors. A record 115,660 and with contestants from all over Australia Carnival by: 61,382 attended AAMI Victoria Derby and competing for the rich prize pool. Emirates Stakes Days respectively. It was • Maximising and developing all VRC brands, EMIRATES STAKES DAY also encouraging to see a 10.6% rise in events and products to ensure they meet Fine weather on Emirates Stakes Day saw attendance on Melbourne Cup Carnival their brand values a record 61,382 fl ock to the Carnival’s ‘Family Preview Day, with 20,784 on hand to see • Providing exceptional communication, Day’. Emirates Kids’ Fashions on the Field Makybe Diva win the Turnbull Stakes. entertainment and facilities for all our attracted hundreds of eager young racegoers customers and stakeholders at all our AAMI VICTORIA DERBY DAY keen to impress the judges for a share of events to enhance their Flemington and AAMI Victoria Derby Day provided a the prize pool. Also grabbing attention were Melbourne Cup Carnival experiences spectacular start to the 2005 Melbourne those members of the Phar Lap Club who • Developing the right infrastructure to Cup Carnival with a record crowd of assembled in the Mounting Yard to sing support all customers and stakeholders 115,660 patrons witnessing Benicio’s win the National Anthem prior to the main race. • Managing our resources to maximise in the feature race. It was the fi rst Derby The Danny O’Brien-trained Valedictum revenue within the expense budget win for jockey Noel Callow and the third for (Steven King) took out the Emirates Stakes • Operating with integrity at all times. trainer Lee Freedman. Opera singer David while Lee Freedman’s Carnival concluded Hobson performed the National Anthem The Department also aims to maximise on a high note when Our Smoking Joe prior to the Derby and it was Men’s Day the fi nancial returns from the Melbourne (Noel Callow) triumphed in the Queen in the MYER Fashions on the Field at Cup Carnival for the benefi t of the Club, Elizabeth Stakes. Flemington competition. its Members, stakeholders and the general MYER FASHIONS ON THE FIELD public by protecting and strengthening EMIRATES MELBOURNE CUP DAY AT FLEMINGTON the Carnival as Australia’s major event The prospect of sharing a moment in history MYER Fashions on the Field at Flemington 106,479 of international importance, and by drew fans to Flemington on Emirates continued with its national promotion ensuring all Carnival events, products Melbourne Cup Day and they weren’t in 2005. Competitions were held in New and communications complement and disappointed when Makybe Diva recorded South Wales and and enhance the overall experience and sales her historic win. at racecourses in Queensland and South opportunities for the Club, its Members, Pre-Cup entertainment saw the conclusion Australia. Winners were fl own to Melbourne stakeholders and the general public. of the Emirates Melbourne Cup Tour with to compete on Crown Oaks Day for the title MELBOURNE CUP CARNIVAL champion jockey riding of ‘MYER Fashions on the Field at Flemington EVENT POSITIONING former Cup winner fl anked by National Winner’. other Cup winners for the handover of The VRC also introduced an industry based the Cup Trophy to the Chairman, Mr Rod Internation design category on Emirates Melbourne Cup al a nd Fitzroy. A specially choreographed ‘Dancing Raci A Day, which was a great success. ious ng u t ig st 24 n st G r with the Stars’ spectacular featuring e re la a 300,000 P m li With more than $ in prizes on offer, m a o n couples preceded the singing of the National n i r 9-3 a o C including a SAAB convertible, there t n u e r Anthem by Todd McKenney. o s l e e c t F b were some fantastic outfi ts on show. MYER I a n l r

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n g g B cin usiness with Ra for the fi fth consecutive year and continues Victorian entrant Laura Gleich took out the to be one of the Carnival’s great success Women’s Classic Racewear title and drove stories. The Crown Oaks was won by Lee away in her new SAAB 9-3 convertible as well Freedman’s Serenade Rose ridden by Steven as collecting some amazing prizes including King after Marina Prior had performed the a business class trip to Dubai with Emirates, National Anthem. MYER vouchers and a Longines watch.

29 Strategic Marketing continued

FLEMINGTON FASHIONS EMIRATES MELBOURNE CUP PARADE Challenge has brought great new initiatives We were delighted to be an offi cial partner SUPPORTED BY THE CITY OF MELBOURNE to the competition, developing new ways to of the L’ORÉAL Melbourne Fashion Festival A record number of jockeys and trainers drive pin sales. during the Autumn with our Fashion Lunch involved in the 2005 Emirates Melbourne Challenge entered into a corporate an offi cial event of the Festival. Cup participated in the Emirates Melbourne partnership with the Herald Sun allowing Cup Parade. Past champion horses 35,000 MELBOURNE CUP CARNIVAL LIVE SITE them to pre-sell pins in the lead-up including Brew, Subzero, Better Loosen to the Melbourne Cup Carnival. It also – FEDERATION SQUARE Up, Just a Dash and also made introduced the diamanté pin for the fi rst For the unlucky few who could not make it appearances on the day. time in 2005 – a special pin featuring small to Flemington, the Melbourne Cup Carnival diamantés was available to corporate Live Site was the perfect place to fi nd out all At the conclusion of the Parade at Federation customers for $10 and sold out. the Carnival information and view the live Square, jockeys and trainers signed telecasts that were beamed onto the big autographs for the public, prizes were given In addition to the diamanté pins, Challenge screen at Federation Square by the Seven away and the Emirates Melbourne Cup also produced three pins containing real Network on all four days. media conference, held on the main stage, diamonds. These pins were auctioned at provided the big crowd with up-to-date various VRC events including the Chairman’s The Live Site was also utilised to hold the reports on the horses competing in the Cup. Dinner. The diamond pins not only raised Melbourne Cup Carnival launch, media additional money for Challenge, but also conferences, the AAMI Victoria Derby barrier PIN & WIN contributed to raising the profi le of the draw, Herald Sun Public Breakfast with the For the past 10 years the VRC has aligned competition. Stars and a number of other activities that a charity with its popular Pin & Win had a link to Flemington and the Carnival. promotion with all proceeds going to the MAKYBE DIVA™ MERCHANDISE A merchandise store was set up in the nominated charity. AGREEMENT 2006 square over the two weeks along with In 2005, the Club received and reviewed In May , the Club announced it had betting and ticketing facilities. applications from 23 worthy charities signed an exclusive licensing agreement with Emily Krstina (Australia), owned by An additional 100,000 people visited the Live wishing to be considered for nomination Mr Tony Santic, to manage memorabilia as the offi cial charity of the Melbourne Cup Site in Federation Square over the Carnival. and merchandising for Makybe Diva™. Carnival. After a stringent review process, EMIRATES KIDS’ FASHIONS ON THE Challenge, which supports children and Following her retirement after her historic FIELD SUPPORTED BY TCL families living with cancer, was appointed third Melbourne Cup win, Mr Santic and Emirates Stakes Day saw the children step for a two-year period. the Club were inundated with requests to out in their raceday fi nest for Emirates Kids’ produce Makybe Diva™ memorabilia and Challenge, through its team of 300 Fashions on the Field. This event has grown the fi rst range of items including caps, volunteers, sold 75,000 Melbourne Cup in recent years and a record number of coffee mugs and lapel pins went on sale at Carnival lapel pins and raised $450,000. children entered the 2005 event. the Grand National Hurdle meeting in July That record amount included the sum 2006. The major item of merchandise, a DVD All the children had a fantastic day and a of $100,000 raised through the VRC’s entitled The Diva – A Champion Becomes number of the Seven Network’s Home and Chairman’s Dinner, which featured master a Legend was released during the 2006 Away stars turned up to sign autographs. tenor Luciano Pavarotti. Emirates and TCL provided some fantastic Melbourne Cup Carnival. The promotion was heavily supported by prizes for the kids. A percentage of sales from the memorabilia existing Club sponsors, with Ritzenhoff items will be distributed to the Makybe Diva providing a Smart Car as fi rst prize. Trust Fund, a charitable trust established by Tony Santic.

30 MEDIA AND PUBLICITY • Port Hedland (WA) where Damien Oliver Mrs Janice Matthews (family of Bob Sinclair, Publicity from the Melbourne Cup Carnival attended with 1999 Cup winner Rogan Josh winning trainer – 1953) in 2005 reached unprecedented levels • Skipton (Vic), the home town of former VRC Mr Wayne Dickinson (family of Jim Pike, with Rehame evaluating television and Chairman LKS Mackinnon and the town winning jockey – 1930) print coverage of the Carnival to ascertain after which the 1941 Melbourne Cup winner Mrs Nancy Telford (family of Harry Telford, its media value. Rehame estimated the was named. winning trainer – 1930) Melbourne Cup Carnival generated a total Many other racing and community Mrs Kathleen Hartney (family of Vic Hartney, 95.6 1943 media value of $ million, which equates personalities were involved in the Tour, winning jockey – ) 67 2004 to a % increase on . Print coverage in including jockeys , John Letts, Mr Bill Williamson Jnr (family of Bill 1952 particular was outstanding with more than Ray Selkrig, Pat Hyland, John Miller and Jim Williamson, winning jockey – ) 15,000 items identifi ed providing coverage, Johnson; trainer Lee Freedman; bloodstock Mr Bob Heasley (winning trainer – 1970) 47 estimated at a value of almost $ million. auctioneer Reg Inglis and AFL players Mark Mr (winning trainer – 1965, The Club is extremely grateful to all sections Ricciuto and Simon Black. 1966 and 1967, family of Jim Cummings, winning trainer – 1950) of the media for their continued support of As part of the Tour, retrospective Melbourne our great Carnival and all VRC race meetings Cups were presented to the following people The VRC acknowledges the key sponsorship throughout the year. or their family representatives for wins of Emirates and the supporting role of Telstra WEBSITE between 1919 and 1972, when trophies were BigPond in making this unique and exciting The past 12 months have been a time of rapid not presented to trainers or jockeys: event possible. growth for the Club’s website. The acquisition Yvonne Barbeta (family of Titch Wilson, MELBOURNE CUP CLUB of numerous wagering related domain winning jockey – 1922, 1923) The Melbourne Cup Club was introduced names, along with a 35% increase in visitation Midge Didham (winning jockey – 1970) in 2005/2006 with the aim of developing by Carnival goers, has signifi cantly increased Mrs Betty Kennedy (family of Ted O’Sullivan, a website totally dedicated to the Emirates website visitors. In addition to these factors, winning jockey – 1921) Melbourne Cup. The Club was launched on the website receives regular, relevant content George Duncan (family of Bill Duncan, 1 October 2005 and in just 10 months activity changes, which means it ranks highly in winning jockey – 1932) has attracted more than 3,000 online search engines, which in turn drives more Mrs Val McGregor (family of Arch McGregor, members. traffi c with unique sessions increasing by winning trainer – 1962) The Melbourne Cup Club targets an online 200 823,900 2,450,000 almost %, from to . Mrs Lynne Tucker (family of Ivan Tucker, audience and promotes news, views and 1954 EMIRATES MELBOURNE CUP TOUR winning trainer – ) interviews of people connected with the The Emirates Melbourne Cup Tour was run Mrs Denice Bergamin (family of Pat Glennon, Emirates Melbourne Cup. Its archival 1950, 1959 145 for the third time in 2005 with the Cup winning jockey – ) material on the -year history of the Cup is Trophy being shown in 25 destinations across Mr John Miller (winning jockey – 1966) amazing in its depth and provides the most unique search facility that allows the user to Australia, New Zealand and Ireland in the Mr Ray Selkrig (winning jockey – 1961) research virtually any Melbourne Cup fact. lead-up to Emirates Melbourne Cup Day. Mr Jim Shean (family of Fred Shean, winning We anticipate the Melbourne Cup Club There was particularly strong interest in jockey – 1938) (www.melbournecupclub.com.au) will the 18 carat trophy (made by Hardy Brothers Mr Peter Heagney (family of Graeme continue to develop strongly in the future Jewellers) in: Heagney, winning trainer – 1963) and will become the most defi nitive • Streaky Bay (SA) the home town of Mr Ray Neville (winning jockey – 1948) reference for Australia’s greatest race. Melbourne Cup winning jockey Kerrin Mrs (family of Tommy Smith, McEvoy who won the Cup in 2000 winning trainer – 1955)

31 32 Sponsorship and Corporate Development

During 2005/2006 the ever increasing • A new three-year sponsorship contract was New sponsor agreements for the Melbourne strength and attraction of the Melbourne signed with Darley for the Australian Cup Cup Carnival were negotiated with Cup Carnival and the power of the • Continued development of non-race based Ritzenhoff, The Age, Andrew McManus Flemington brand were the driving forces Associate sponsorships Presents, Motorola and City of Melbourne. behind continued revenue growth from the • Increased sponsorship fees for all new THE BIRDCAGE corporate sector in both sponsorship and Melbourne Cup Carnival sponsor contracts. The uniqueness of The Birdcage continued corporate hospitality. Crown Casino also signed a new fi ve-year to be highlighted by the considerable The Sponsorship and Corporate Development contract to continue its sponsorship of the investment by sponsors in their hospitality Department’s primary focus was to work Crown Oaks from 2007 to 2011. Crown has during the Carnival. closely with corporate partners and clients been a major sponsor of the Club for the The emphasis on celebrities and media to ensure their investment with the Club 10 past years and in addition to its on-course was more prominent and contributed was maximised. support, Crown has worked closely with the enormously to the overall publicity and Four key strategic components underpinned Club to develop the Oaks Club Luncheon profi le of The Birdcage. In particular, corporate revenue growth for the year. into one of the standout functions during the efforts of Emirates, MYER, Moët and • High level of client service and delivery Cup week. Chandon, Telstra BigPond, NAB, AAMI, of benefi ts Signifi cant emphasis was also placed on Andrew McManus Presents, ACP, Longines, • High client retention rate broadening the involvement of existing Motorola, Macquarie Bank, Lexus, Seppelt • Innovation and development of corporate sponsors and encouraging them to leverage Wines, Lavazza, L’ORÉAL Paris and Tabcorp products their sponsorship involvement with other were outstanding. • Communication with partners and clients. Club programs, functions, events and In the Autumn, Darley headed the list promotions. This resulted in greater sponsor of sponsors for the Flemington Festival SPONSORSHIP support for the Emirates Melbourne Cup of Racing with its continuation of the A total of 67 companies sponsored at Tour, Live Site, MYER Fashions on the Field, Australian Cup sponsorship. The two-day Flemington during the Season with gross Herald Sun Breakfast with the Stars, Festival was well supported with sponsors revenue from sponsorship growing by 12%. International Dinner Series, Melbourne Cup that included Schweppes, Seppelt Wines, A total of 41 existing sponsors renewed Business Network, Young Members, Cadbury, PFD Food Services, Vili’s Pies, Jayco, contracts and 15 companies became Members’ Golf Tournament and Members’ Mitty’s and Northland. sponsors for the fi rst time. National Gallery of Victoria evening. Irish Day was supported by TCL Electronics, The main factors contributing to revenue 32 During the Melbourne Cup Carnival, races Limerick Lane, Waterford Crystal and growth in sponsorship were: were sponsored and an additional nine Shamrock Travel. • Achieving a sponsor retention rate of 88% companies took up Associate sponsorship The popular Winter Championship was • A new fi ve-year sponsorship contract was packages. In addition to the new AAMI again sponsored by Screens Australasia and signed with major sponsor AAMI taking and MYER agreements, Telstra BigPond, the Grand National Hurdle and Steeplechase its sponsorship of the AAMI Victoria Derby Hilton International, Lavazza, Lexus, Liberty meetings continued to attract sponsorship through to 2009. AAMI has been a Club Financial, Nestlé Peters, Antler Luggage, support by regulars Cleanevent, Hanan sponsor since 1992 Helvetica Wealth Management Partners, Displays, Curran Chemicals and VES Collex. • A new three-year sponsorship contract Macquarie Bank, National Australia Bank was signed with Fashions on the Field/ and Sofi tel all renewed sponsorships. Derby Day Race Sponsor MYER, which was elevated to Major Partner status

Continued corporate revenue growth was underpinned by high client service, delivery of benefi ts and the development of corporate products.

33 Sponsorship and Corporate Development continued

In the early part of the Spring, the Girls’ Day CORPORATE MARQUEES • A high demand for additional tickets Out and Melbourne Cup Carnival Preview Gross revenue from corporate marquees over predominantly driven by the increased meetings were well supported by sponsors the four days of the Melbourne Cup Carnival number of clients opting for the cocktail, NIVEA VISAGE, Henry Buck’s, Antler Luggage, recorded a healthy 14% increase. This result stand-up format Northland, TCL Electronics, Concept Sports, was underpinned by a client retention rate • Capping the allocation of marquee Gilgai Farm, Blazer, Peter Rowland Catering, of 79%, a tremendous endorsement of the products offered to on-sellers to 30%. Jayco and Scalzo Food Industries. Club’s corporate marquee product. A range of new initiatives were The Club took sponsor reporting to a new The strong link between corporate implemented in 2005 to improve the level in 2005/2006 with all Melbourne hospitality and sponsorship was a major corporate marquee experience Cup Carnival sponsors provided with a catalyst for growth in both corporate • EFTPOS facilities were placed in all comprehensive, tailored, web-based report marquee and corporate suite sales during corporate enclosures protected by a secure log in code and 2005/2006. • A two-way track crossing system for the Winning Post Enclosure to the Course password. Each report features a key point The result was particularly pleasing given Proper was introduced summary of the sponsor contract, video the highly competitive market for major footage of the sponsored race and trophy sports event corporate hospitality and • The introduction of new timber slated fence panelling in the Winning Post presentation, photographic images of the inclusion of the 2006 Commonwealth Enclosure Marquees sponsor activity, the Club’s marketing and Games in Melbourne in March onto the • The upgrading of the outdoor furniture brand strategy, the major Carnival events state’s sporting calendar. and promotions, a summary of the Carnival component to the standard marquee A total of 123 marquees were erected in the achievements and results from the sponsor package Ascot, Trackside, Winning Post and Home brand measurement analysis. • Innovative catering packages were created Straight Enclosures with 147 individual to complement the growing demand for New and potential sponsors can now view a companies participating. Marquees 2005 the cocktail style entertaining format. generic Melbourne Cup Carnival report purchased for the four days of the Carnival on the Club’s website. accounted for 69% of sales with the CORPORATE SUITES The growth in the success of the Melbourne remainder of clients opting for an individual Gross revenue from corporate suites sold Cup Carnival has also attracted an increasing day purchase. annually and for the Melbourne Cup Carnival increased by 9.1%. amount of ambush marketing activity. The improved sales result was achieved All Mounting Yard suites and fi ve of the Flemington railway station (controlled by through: Connex), Footscray Park and air space above 10 Hill Stand suites were sold annually • The successful introduction and sale of the Flemington Racecourse are all avenues (100% retention rate). The remaining fi ve additional double storey and elevated for ambush marketing that now need to be Hill Stand suites were sold either on a structures overlooking the track in both monitored. The Club intends to aggressively four-day basis (two as part of sponsorship the Winning Post and Trackside Enclosures target those organisations undertaking packages) or on individual days over the • The early launch of marquee packages to such activities. Melbourne Cup Carnival. existing clients in January 2005 and full During the Season, suites continued to be sales launch in March 2005 successfully built into individual raceday sponsor packages and marketed to regular corporate clients.

34 Sponsors

2005/2006 PRINCIPAL PARTNER

2005/2006 MAJOR PARTNERS

2005/2006 OFFICIAL EVENT PARTNERS

2005/2006 MCC RACE SPONSORS

2005/2006 NON MCC RACE SPONSORS

2005/2006 ASSOCIATE SPONSORS

MEDIA PARTNERS OFFICIAL SUPPLIERS OFFICIAL CHARITY

35 36 Catering

OBJECTIVES Budgeted net profi t was exceeded by 30% SUNDAY MARKET The following objectives were set by the Club due to record crowds. This was achieved by Flemington Up Market is 10 years old this for Peter Rowland at Flemington Catering in a strong focus and commitment by the year and continues to be a popular event 2005/2006: Peter Rowland at Flemington Catering operating in The Nursery Car Park each • To ensure VRC Members get value for team to ensure the correct organisational month. The high standards set by the money on food and beverages structure and tools were made available. organisers, Craft Market Victoria, are a • To ensure a consistent level of service Following close liaison with the Victoria contributing factor in its ongoing popularity. and product on food, beverages and Police, the problems experienced in the The twilight market meetings leading into service quality Champagne Bar in 2004 were alleviated Christmas are extremely popular for those • Maximise fi nancial return to both with a new system incorporating the looking for something different to pop in a Victoria Racing Club and Peter Rowland Chicquita Room and the fi rst fl oor of the Christmas stocking. Champagne Bar. at Flemington Catering BUBBLY SPARKLES IN A SAFER FORM • Maintain the catering operation to the The Phar Lap Marquee in the Members’ Car IN 2006 highest standard ensuring compliance Park was well received by Members as a A glass of bubbly goes hand in hand with with all state and Federal legislation consequence of its new look and menu style. the Melbourne Cup Carnival and in 2006 • Continue ongoing training programs and The Hill Precinct and Party Bar serviced the Flemington will see a world fi rst – bubbly career opportunities for all staff employed record crowds with changes made to expand fl owing from plastic bottles when the on both a permanent and casual basis. it on Emirates Melbourne Cup Day to help ever popular Seppelt Fleur de Lys will be Through a close working party both the Club accommodate the public who came out served in innovative glass-free packaging. and Peter Rowland at Flemington Catering are to witness the Makybe Diva phenomenon. Developed in consultation with Seppelt committed to delivering these objectives by: Big screens, catering and betting facilities Wines, the Victoria Racing Club and Victoria • Setting clear goals at the start of each serviced the patrons in this area. Police, the new packaging will ensure a safer Racing Season During the Carnival the corporate enclosures on-course experience. • Continuing to develop strategies and long were serviced by Melbourne’s leading Whilst reducing the amount of glass on term plans to ensure the objectives are caterers. In the Ascot Enclosure, Trackside the course, the new plastic bottle will still clearly defi ned and achievable. Enclosure, Champions Marquee and Phar deliver the same Seppelt Fleur de Lys taste Lap Marquee we had Peter Rowland Major that Carnival punters have enjoyed over the FACILITY IMPROVEMENTS Events. The Hill Enclosure, Marquee years. It will be lightweight, easy to carry, During the year the Club committed and The Banks were catered for by Epicure unbreakable and recyclable. The ongoing extensive funds to ensure facilities could Catering and the Winning Post and Home commitment of sponsors such as Seppelt be not only maintained, but improved. Straight Enclosures by Life’s a Party Catering. Wines helps the Club to continue to improve Completed in time for the Festival of Racing A panel of Melbourne caterers serviced the standard and delivery of the Melbourne was an upgrade to The Peak fl oor. Works Members, sponsors and their guests in Cup Carnival. in the Chicquita Room were undertaken The Birdcage. These included Epicure To ensure delivery of service, Peter Rowland to overcome liquor licensing issues that Catering, Libby Reid Catering, Peter Rowland at Flemington Catering employs over developed out of the 2004 Melbourne Cup Catering and The Big Group. Members 2,300 employees to service the Melbourne Carnival. In addition, kitchen facilities across and their guests in The Rails, The Nursery Cup Carnival. the course received upgraded equipment to and The Domain were looked after by maintain service and quality. the abovementioned Birdcage panel and 2005 MELBOURNE CUP CARNIVAL by Damm Fine Foods and Table Matters. The Club’s objectives to maintain excellence Chefscene provided hampers and a pre- in both operational and fi nancial aspects as ordered liquor distribution service. well as food quality and service standards The Club recently went to tender on all were achieved. 2007 Carnival catering areas to ensure the standard and variety provided to Members, corporate, sponsors and public patrons are maintained for our return to Flemington after the 10 month break from racing due to the Track Reconstruction Project.

37 38 Business Development

The Business Development Department’s A library was built in The Chairman’s Club THE PANORAMA RESTAURANT mission is to maximise the fi nancial returns in 2005 and is stocked with a range of The Panorama Restaurant located on the from racing and non-racing activities for the lifestyle magazines, books and third level on the Hill Stand has an annual benefi t of the Club, and to provide customer encyclopaedias. The library has proved to membership of 92 seats. Many patrons service support for VRC Members, public be a very popular addition with members, have been long term members enjoying customers and internal customers. creating a relaxed retreat area on raceday. the great position with spectacular views of the winning post and Melbourne skyline. The Department is responsible for THE TERRACE RESTAURANT development and sales of The Chairman’s 282 annual seats were sold in The Terrace The average occupancy of The Panorama Club, The Terrace Restaurant, The Panorama Restaurant during the Season. On a number Restaurant throughout the Racing Season 74.2 Restaurant, Public Restaurant and Marquee of racedays, annual table extensions and was %. The facility also continued to Dining facilities during the Melbourne Cup casual bookings took The Terrace Restaurant enjoy full capacity on all four days of the Carnival, Flemington’s Customer Service up to capacity at 550 guests. Melbourne Cup Carnival and on several Centre, Tourism marketing and sales, raceday racedays throughout the year overfl ow The Terrace Restaurant enjoyed full capacity group packages and corporate functions, dining from The Panorama Restaurant on Melbourne Cup Carnival Preview Flemington – The Event Centre, The was relocated to the Hill Dining Room. Day, AAMI Victoria Derby Day, Emirates Melbourne Cup Business Network and the Melbourne Cup Day, Crown Oaks Day, Super THE CUSTOMER SERVICE CENTRE (CSC) development of new business initiatives Saturday and Cleanevent Grand National The CSC is an integral part of the Club’s including dining and entertainment products. Steeplechase Day. commitment to excellence in the service Across a portfolio of business segments, the Guest chef days are now very much part of its Members and customers. Through Department has been able to identify and 1300 of The Terrace Restaurant and patrons a number, the CSC assists with a develop new business opportunities and thoroughly enjoyed the menus designed by wide variety of enquiries across a range revenue streams for the Club through Shane Delia from Chateau Yering in the Yarra of mediums including telephone, written, strategic customer relationship management Valley, Adrian Richardson from La Luna and email, web and face-to-face. Reservations and cohesive and proactive selling strategies. John Hand from Peter Rowland Catering for for all Club dining entertainment products, In the 2005/2006 Season, the Business TCL Plasma Irish Day. events and Membership renewals are taken Development Department contributed over through the CSC. $9.3 million in net revenue to the Club. The Terrace Restaurant patrons also enjoyed 2005/2006 various promotions throughout the year The Season showed a strong THE CHAIRMAN’S CLUB including premium cheese tasting from level of growth within all areas of the CSC 2004/2005 The Chairman’s Club continues to maintain King Island Dairy, wine tasting from compared to . its status as one of the most prestigious and Scotchmans Hill Winery, fashion wardrobe • 103,000 calls were recorded compared exclusive corporate entertainment facilities prizes from Perri Cutten and the major to 92,586 the previous year – an increase within Australian and world sporting promotion over the 2005 Melbourne Cup of 11.25% 80 venues. Fully subscribed at memberships, Carnival was a package (fl ying • The value of orders increased by 9.3% and the Club continues to attract interest from Emirates and staying three nights at the was over $19 million interstate and overseas. A waiting list was Four Seasons Hotel in Singapore) and two • The number of orders increased by 8.9% established in 2005/2006 for companies Longines watches. • The number of email enquiries increased wishing to join and they were accommodated by 37% from 5,481 to 7,553. with hospitality in another location until membership became available.

By identifying new business opportunities, the Business Development Department contributed over $9.3 million in net revenue to the Club.

39 Business Development continued

CUSTOMER RELATIONSHIP Tourism Victoria held its inaugural New 366 events were held in the 2005/2006 MANAGEMENT (CRM) Zealand Events Trade Mission in Auckland, year representing a 38% increase from the The Club continued with its commitment which was attended by various major events previous year. to the development of CRM at Flemington and festivals from Victoria to present to The Peak has become one of the most and within the Victorian Racing Industry. key corporates, media and travel operators sought after wedding venues in Melbourne. An upgrade of the existing system is and wholesalers. Valuable relationships This market segment contributes $1.8 million currently underway and scheduled for have been formed and increased with per year to the total Event Centre revenue. completion in March 2007. The new system the international tourism industry and One wedding saw The Peak transformed will increase the ability to better develop awareness created on an international level. into an enchanting and exquisite setting. one-on-one relationships with our customers. An increase in Melbourne Cup Carnival White organza was draped from the High quality data collection continues to ceiling and wrought iron arrangements, bookings across a range of products has be a priority for the Club and 2005/2006 which incorporated candles and beautiful followed this initiative with over 47% or saw the completion of a major data load white orchids, were placed at either end of 32,018 of the Carnival’s international visitors including cleansing of the data. The Club the venue. originating from New Zealand. now possesses a signifi cant database Growth also continues in the conference of customers that will assist the Club in The Carbine Marquee and Banks Enclosure segment of the business where we 32 42 increasing sales across various products experienced % and % growth experienced a 68% increase in enquiries. 2005 and to understand opportunities to develop respectively during the Melbourne Cup A key function this year was the KPMG new product offerings. Carnival. The source of this growth is from National Graduate Induction Conference. 2005 11 TOURISM AND GROUPS the interstate market, and for the Over a period of four days, venues were Carnival, 49,179 interstate visitors attended 500 Relationships with tour operators transformed into workshops for the event. delegates. On the fi rst day, delegates were and wholesalers, both interstate and greeted by event staff and ushered to internationally, have continued to be a key Reserved Grandstand seats increased by 21% The Members’ Stand to be welcomed by initiative. During the Season under review, from the previous Season, and pre-sales of KPMG’s CEO. The diversity of the venue travel trade shows were a major focus. The general admission tickets increased by 17.5%. allowed for hamper lunches to be served Club participated in the Arabian Travel Mart FLEMINGTON – THE EVENT CENTRE on the Members’ Lawn amongst (ATM) held in Dubai, Australian Tourism The Event Centre continued with its growth Flemington’s famous rose gardens. Exchange (ATE) in , and RSVP ’06 in both revenue and the number of event Our dedicated website, in Sydney. ATE is based on an appointment 2005/2006 enquiries. Some key points of the www.fl emingtonevents.com.au, has been schedule where we had the opportunity to year included: our most valuable marketing tool over the present the Melbourne Cup Carnival in a • Growth in revenue of 18.6% past 12 months. 516 enquiries were one-on-one environment, whereas ATM • 1,423 enquiries for the year – a 36% generated via the ‘contact us’ form on the and RSVP ’06 were a mixture of consumer increase website and over the past 12 months we have and trade registrants. • 68% increase in conference enquiries had over 12,000 visitors to our home page 218,000 • 81% increase in exhibition enquiries with over page views. • 28% increase in wedding enquiries.

40 Flemington – The Event Centre won the A special events program and dedicated award for best single stand at AIME 2006. website is in place and has been well AIME is the premier exhibition in the supported by members of the network with southern hemisphere for the meetings over 3,000 visits a month. Membership and incentives industry. The two-day event is free and the Melbourne Cup Business showcases the best Australian, Asia Pacifi c Network will be an ongoing and sustainable and international destinations, products and initiative to assist in building relationships. services and provides excellent professional Members of the MCBN who reside in cities education and networking opportunities. where the Melbourne Cup International AIME 2006 included 850 exhibitors from events have been held in 2005/2006 were 45 countries, 480 hosted buyers and 2,200 invited to these exclusive events. trade visitors. The stand incorporated The VRC continues to work with Austrade to some of our stunning images from past facilitate business matching opportunities. events and showcased the fl exibility of Flemington’s venues. EVENT AND PRODUCT DEVELOPMENT A program of special events was established The award was presented in front of in 2005/2006 as a way of profi ling 850 local and international guests at the Flemington – The Event Centre and creating Gala Dinner held at Crown Palladium. a portfolio of annual events that the Club The Minister for Tourism and Major Events, ‘owns’ and has equity in. and Minister for Racing – The Hon John Pandazopoulos MP, and Event Director – Events included Footy Finals Fever @ Rosemarie Sama presented the award to the Flemington with special guests Sam Flemington Event Centre team. Newman, Garry Lyon and James Brayshaw, an Anthea Crawford Spring/Summer Fashion THE MELBOURNE CUP BUSINESS Lunch and the fi rst Women in Football Lunch NETWORK (MCBN) with Dermott Brereton, Jo Silvagni, Sam Lane MCBN is an initiative designed to assist and Christi Malthouse. networking and business building Other initiatives included the development opportunities between Australian and of a mini marquee precinct and the Deck Bar international businesses in the lead-up to Lawn Enclosure area for NIVEA VISAGE Girls and during the Melbourne Cup Carnival. Day Out and Super Saturday, which catered There are over 600 businesses that have for the interest and demand for dining and registered both within Australia and overseas. entertainment product on these racedays.

41 Human Resources

STAFFING TRAINING AND DEVELOPMENT WORK ORGANISATION As at 31 July 2006, the Club staffi ng totalled Details of participants and courses Part time work arrangements continued 149 full time staff and 13 part time staff undertaken in 2005/2006 are as follows: for staff returning from maternity leave, as 354 with casual employees employed at race Female Male Total well as fl exible working hours for staff with meetings and at the Club’s gaming venue. family responsibilities. General Induction 72 410 Over the Melbourne Cup Carnival period Course 465 385 850 VRC was ranked out of participating 9 the number of casual event operations staff CPA 1 1 organisations in the th National Work/Life engagements increased to approximately 4 14 18 Benchmarking Study. 1,500 80 2005 First Aid . Over % of the staff engaged in All human resources policies are reviewed 2006 Introduction to Racing 4 3 7 have indicated a desire to work at the annually and particular attention was Steps to Excellence 2 18 20 Melbourne Cup Carnival. This high retention given during 2005/2006 to ensure the 11 3 14 rate enables us to continually improve our Investment in Excellence Club continues to meet its industrial services through these experienced and WorkCover 1 1 2 relations obligations following the recent committed staff. Confi ned Spaces 6 6 legislative changes. RISK MANAGEMENT Forklift Licence 5 5 Following the introduction of the new During 2005/2006 the Club undertook Database Marketing 2 1 3 superannuation arrangements (successor a Risk Profi ling Project to formalise the Statistics Modelling 1 1 fund transfer) during the year, information seminars and individual counselling (where identifi cation, assessment and management Supervision 1 1 of risks facing the Club. requested) were provided to all staff. Time Management 2 2 The project will underpin the Club’s Workplace Consultative Committees Rewards Program objective to ensure that the risk continued to meet on a monthly basis Management 1 1 management process is at the forefront providing a forum to deal with workplace Media Management 1 1 2 of business practices, and that everyone and occupational health and safety issues. Drugs and Alcohol 1 1 who has responsibility for an objective has Close working relationships with both 1 1 the responsibility for the risks and controls Chainsaw Safety the Australian Workers’ Union and Media associated with achieving that objective. Crisis and Risk Entertainment and Arts Alliance ensured 1 1 The Club, in partnership with RVL, is seeking to Management issues were resolved in a timely manner. acquire and implement a risk management Building Client ART/HERITAGE/RECORDS MANAGEMENT software program that will enable the Club to Relationships 1 1 The function of the Art and Heritage Curator capture, monitor, analyse and review incidents, Study Assistance* 3 3 was transferred to the Human Resources compliance and provide audit capabilities. 2 Cert in Horticulture Department during the year. 2 2 The Club also continued to provide its (Arboriculture)** The role of the Curator has been expanded workforce, contractors and industry * 75% of costs are payable up to $5,000 per annum to encompass records management for all participants with effective guidelines, policies, for approved courses of study. departments. consultation and training in relation to a safe ** To ensure the Club meets its future needs for a trained Arbourist, two staff have been enrolled working environment. The training will assist During the year, a number of diversifi ed in a Certifi cate 2 in Horticulture (Arboriculture). staff in carrying out their day-to-day functions displays were showcased at the racecourse and VRC offi ces. in a safe manner in the following areas: The Club training strategy was expanded to • Hazard identifi cation and reporting encompass succession planning, mentoring, The conservation program focussed on • Manual handling guidelines coaching and general education. Staff archival materials and textiles, whilst the most signifi cant purchase during the year • The safe use and storage of chemicals appraisals were conducted twice yearly was the 1955 Melbourne Cup (Toparoa). • Incident reporting with a focus on training needs and succession planning. • Hazardous substance register 1955 • Chainsaw training A ‘racing education program’ has been Melbourne Cup acquired developed for new staff and a ‘managers’ 50 years after Toparoa’s win • Working in confi ned spaces program’ for staff with supervisory • Plant and equipment. responsibilities is currently being developed. In addition, over 1,000 event staff (both The Club also participated in the Victorian regular and new) attended induction and Employers’ Chamber of Commerce and information seminars, covering employment Industry (VECCI) program of ‘MPs in Business’ conditions and responsibilities, code of in May 2006. conduct, emergency management, risk State Member for Higinbotham, Mr Noel identifi cation and assessment, accreditation Pullen MLC, was hosted for a day at the Club, and racecourse familiarisation. meeting with Senior Management on issues The commitment of the Club to reducing pertaining to the running of the business of workplace incidents and accidents is refl ected racing at Flemington. in the reduction of WorkCover premiums to 2.1%. The claims rate of the Club is lower than industry by 86.39% and performance is better than industry by 68.07%.

42 Finance

ANNUAL PRIZEMONEY TOTAL OFF COURSE BOOKMAKERS ON COURSE ATTENDANCE TURNOVER TOTALISATOR TOTALISATOR Thousand Million $ Million $ Million $ Million $ Million $ 600 35 700 450 180 60

30 600 500 375 150 50

25 500 400 300 120 40

20 400 300 225 90 30 15 300

200 150 60 20 10 200

100 75 30 10 5 100

0 0 0 0 0 0 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06 02 03 04 05 06

FINANCIAL RESULT With fi rst-class facilities and quality racing, NET CASH POSITION The net surplus for the 2005/2006 fi nancial the Club has been able to keep revenues The Club’s cash position at year-end was year was $0.909 million. Considering the from this source increasing. $4.379 million and is an area that received long running dispute between Tabcorp and additional focus as the Club continues NON-RACEDAY RESULTS TVN for the right to broadcast thoroughbred to fund the Flemington Masterplan The Club’s non-raceday function business, racing to wagering outlets and to homes, improvements. To aid in this process the Flemington – the Event Centre, continued this was a more than satisfactory result. Club has arranged a $20.0 million borrowing with revenue growth in its second full facility. At the end of the fi nancial year a The dispute had a signifi cant affect on year of operations. Revenues from this debt level of $7.0 million was outstanding. wagering turnover across the industry source totalled $3.8 million, an increase The Club will continue to monitor its net and resulted in the Club receiving of $0.611 million compared to the previous 25.538 cash position due to the seasonal nature of wagering distributions of $ million. year. The Club will continue to maximise its cash fl ows and will therefore draw down In comparison to the previous Season, this the revenue from its facilities from a 1.421 and repay borrowed funds accordingly. was a reduction of $ million. At the non-raceday perspective. beginning of the 2005/2006 year the Club As an equal shareholder with the Australian AUSTRALIAN ACCOUNTING STANDARDS was forecasting an additional $1.8 million Jockey Club in the Australian Stud Book, the The Club has prepared the Financial to that which was actually received. Club has brought to account $0.670 million Statements using Australian standards As a result of reduced wagering in revenue as its share of profi ts derived for that comply with International Financial distributions, the Club was more reliant the 2005/2006 year. The joint proprietors of Reporting Standards (IFRS). The full impact than ever on its other revenue streams the Australian Stud Book have introduced of complying with those standards has been from racing and non-racing activities. technological improvements that have disclosed within the Financial Statements Overall, total revenue for 2005/2006 allowed costs to breeders to be held and and accompanying notes. 4.153 increased by $ million compared to at the same time the costs of operating BETTING the previous year. the Stud Book have reduced and thereby Off Course Wagering turnover on Flemington profi ts increased. 421 MELBOURNE CUP CARNIVAL race meetings totalled $ million, an 2.67 The 2005 Melbourne Cup Carnival, with a PRIZEMONEY increase of % on the previous Season. record four-day attendance total of 383,784 During the year the Club provided prizemoney On-Course Wagering turnover totalled 58.4 patrons, helped to achieve some signifi cant of $34.633 million. This was an increase of $ million for the Season. increases in revenue. Admission revenue $1.138 million compared to the previous Turnover from bookmakers increased increased by $1.139 million on the previous Season. The Club was extremely satisfi ed by $2.653 million or 1.6% for the Season. Season as a result of the record attendance. that it was able to increase prizemoney to Total turnover was $647.7 million. Other revenues from racing activities this extent given the previously mentioned increased by $3.090 million compared to downturn in wagering distributions. Other the previous Season. returns to owners, including riding fees and starter rebates, have been included in MEMBERS the budget of RVL as a result of the change Revenue from Members’ subscription fees in Distribution Scheme introduced from and entrance fees increased by $0.337 million August 2005. compared to the previous Season. With the 9.095 Full Membership category at its optimum The Club provided $ million in level the Club is now encouraging the prizemoney in excess of what was received uptake of Restricted Membership. in wagering distributions.

43 Corporate Governance

The Committee of the Victoria Racing Club COMMITTEE COMPOSITION AND SUB-COMMITTEES is responsible for the governance of the Club. TERM OF OFFICE The Committee, where required, will Governance is a matter of high importance • The Committee consists of nine establish sub-committees to assist in and is a fundamental part of the culture and independent Members and the carrying out its primary functions. These business practices of the Club. Chief Executive sub-committees will meet as required and A description of the Club’s main corporate • Each Committee Member must resign will act in an advisory capacity making governance practices follows. All these offi ce every three years and seek recommendations to the Full Committee. practices, unless otherwise stated, were in re-election Examples of sub-committees active over place for the entire year. • The Chairman, Vice Chairman and the last year include: Honorary Treasurer are appointed • Audit each year • Remuneration • The Chairman must vacate the Offi ce of • Grounds and Facilities Chairman at the Annual General Meeting • Course Proper track reconstruction following the date on which the Chairman • Masterplan working party attains the age of 68 • Administration building • Committee Members must resign offi ce • Race Programming. immediately upon attaining the age of 72 • It is the Committee’s intention to seek CHAIRMAN AND CHIEF EXECUTIVE Members with a broad range of skills and • The Chairman is responsible for leading experience to aid it in carrying out its the Committee, ensuring that Committee responsibilities and in meeting the Club’s activities are organised and effi ciently strategic objectives conducted • Should a casual vacancy arise on the • The Chief Executive is responsible for Committee, existing Committee Members implementing strategies and policies have the power to fi ll that vacancy with a formulated to refl ect the Club’s current Member of their choice, after considering goals and objectives. It is also the the skills and experience of existing responsibility of the Chief Executive to Committee Members. ensure the Club’s operations are effectively and effi ciently managed. COMMITTEE RESPONSIBILITY The Committee meets on a monthly basis CORPORATE REPORTING and on separate occasions, as the need The Chief Executive and the General arises, to discuss developments and issues Manager Finance annually make the and to review the operations of the Club following representations to the Committee: The Committee is responsible for: • That the Financial Statements are • Ensuring management of the Club complete and present a true and fair view, continuously and effectively strives to in all material respects, of the fi nancial meet the goals and objectives of the Club position and operating results of the Club • Contributing to the development of and • That the above statement is founded on approving the strategic direction of a sound system of internal control and the Club risk management which implements the policies adopted by the Committee and • Assisting Management in establishing that the Club’s risk management and and monitoring goals internal controls are operating effi ciently • Reviewing and approving business plans, and effectively. the annual budget and capital expenditure initiatives • Monitoring and reviewing the risk management processes of the Club • Appointing and assessing the performance of the Chief Executive • Approving senior executive appointments and reviewing executive succession planning.

44 AUDIT COMMITTEE CODE OF CONDUCT The Audit Committee consists of the The Club has developed separate Codes following Committee Members: of Conduct for Committee Members and P J Fekete (Chairman) for employees. P C Barnett The Code of Conduct for both Committee M S Burn Members and employees aims for the highest standards of professionalism This Committee meets on at least three and ethical behaviour to be maintained occasions throughout the year according to at all times. its terms of reference and then on further occasions as the need arises. The Committee CONFLICTS OF INTEREST meets with and receives regular reports from Committee Members are expected to avoid the internal and external auditors and from any action, position or interest that confl icts Management. The Committee presents its with an interest of the Club or may give any fi ndings and makes recommendations to appearance of such a confl ict. A Committee the Full Committee. Member who has a confl ict or a perceived The Audit Committee operates in accordance confl ict of interest with that of the Club with its terms of reference and its main must bring it to the notice of other responsibilities include: Committee Members. • Reviewing the Financial Statements to The general principle adopted by the determine whether they are complete and Committee is that should any Committee consistent with the information known Member have a material interest in any to Committee Members and to assess matter that is being considered by the whether the Financial Statements refl ect Committee, then that Committee Member appropriate accounting policies will not be present while the matter is • Gaining an understanding of the areas being considered. of greatest risk and the risk management REMUNERATION OF SENIOR framework adopted by Management to EXECUTIVES manage those risks A Remuneration Committee comprising • Discussing with external auditors any the Chairman, Vice Chairman and issues and making recommendations Honorary Treasurer review senior executive arising from the audit remuneration annually. The Chief Executive • Selection, evaluation and compensation also attends these meetings. of the external auditor. Recommendations submitted to the INTERNAL AUDIT Committee are based on annual performance The Club has an internal audit program appraisals conducted by the Chief Executive. in place which is designed to assist Management in improving procedures and operations and to ensure the Club has an established framework of internal controls. The Audit Committee is responsible for ensuring that an adequate internal audit program is in place and for reviewing the fi ndings from the work conducted by the internal auditor.

45 Report of the Committee

The Committee of the Victoria Racing Club PRINCIPAL ACTIVITIES assist drainage of the Racecourse grounds (the Club) presents its Report, together with The principal activities of the Club during and to complement fl ood mitigation, was the Financial Statements, for the year ended the year were the conduct of race meetings completed in May. 31 2006 July . at Flemington Racecourse and the provision Works on the reconstruction of the Course of training facilities for horses stabled and MEMBERS OF THE COMMITTEE Proper and the redevelopment of the horse trained at Flemington. The following persons were Members of the stalls and parade ring are both set to 2006 Committee of the Club during the whole RESULTS AND REVIEW OF OPERATIONS commence immediately after the of the fi nancial year and up to the date of The net surplus of the Club was $0.909 Melbourne Cup Carnival. 2.186 this Report: million compared to $ million for the SIGNIFICANT EVENTS AFTER R M Fitzroy previous year. The Committee was satisfi ed BALANCE DATE P C Barnett with this result given the contractual dispute On the 14 September 2006, the Club issued P J Fekete between TVN and Tabcorp and the effect a letter of acceptance to Akron Roads Pty Ltd W R Mackinnon that it had on wagering turnover. The for civil and engineering works for the 1.8 P T Leeds Club received $ million less in wagering Course Proper upgrade. The accepted price Mrs A M Elliott distribution than it had originally forecast for those works was $8.1 million. and therefore relied on other segments of M S Burn Throughout the year the Club worked its operations to ensure the Club recorded Miss K L Bourke on having the legal status of the Club a surplus. Some signifi cant fi nancial items D G Monteith changed from an unincorporated body to of note include the following: T M Poole was appointed to the Committee an incorporated body. Victoria Racing Club 1.142 on 1 July 2006 and continues as a Member • Additional prizemoney of $ million Limited became a registered company of the Committee at the date of this Report. for the Season under the Corporations Act 2001 on the • A record four-day attendance aggregate 10 2006 D H Reid OAM was a Member of the April . Existing rights, obligations, for the 2005 Melbourne Cup Carnival, Committee from the beginning of the assets and liabilities of the Victoria Racing increasing admission revenues by fi nancial year until his resignation on Club were transferred to Victoria Racing Club $1.138 million 30 June 2006. Limited under the provisions of the Victoria • Other additional race meeting revenues, Racing Club Limited Act 2006, as of the COMMITTEE MEETINGS primarily from the Melbourne Cup 1 August 2006. The number of Committee meetings and Carnival, of $0.496 million AUDITOR the number of meetings attended by each • Increased revenue from non-race day The fi rm of Deloitte Touche Tohmatsu Member of the Committee are set out in the function business generated from continues in offi ce as the Club’s Auditor. following table. Flemington – The Event Centre of A copy of the Auditor’s independence Committee Total possible Total $0.611 million. declaration is included in the Financial Member meetings attended The Financial Statements on the following Statements on page 62. 11 11 Rod Fitzroy pages have been prepared using Australian Peter Barnett 11 9 standards that comply with International ROUNDING OF AMOUNTS The amounts contained in this Report and Peter Fekete 11 10 Financial Reporting Standards (IFRS). The full impact of complying with those in the Financial Report have been rounded Doug Reid OAM 10 9 Standards has been disclosed according off to the nearest thousand. 11 10 Bill Mackinnon to requirements contained within those Signed in accordance with a resolution of Paul Leeds 11 9 Standards. the Committee. Amanda Elliott 11 9 LIKELY DEVELOPMENTS AND Michael Burn 11 11 EXPECTED RESULTS Katherine Bourke 11 10 During the year the Club continued with Tim Poole 1 1 work associated with the Flemington Masterplan. Major projects commenced Rodney M Fitzroy Dale Monteith 11 11 during the year included the Bund Wall, Chairman INFORMATION ON COMMITTEE which is due to be completed in November Melbourne, 25 October 2006 MEMBERS 2006, and the replacement of the South Information on individual Committee Community stable complex, which is due 2006 Members is outlined on pages 5–7 of the for completion in December . The Annual Report. Flemington wetlands project, designed to

46 Financial Statements

47 Income Statement for the fi nancial year ended 31 July 2006

2006 2005 $000 $000 Income Thoroughbred Racing Industry Distributions (Note 1(o)) 25,538 26,959 Admissions 9,869 8,730 Betting Levies and Commissions 4,168 3,648 Catering, Dining and Restaurants 16,602 15,292 Corporate, Membership and Public Facilities 14,632 14,515 Acceptance Fees 3,201 2,506 Sponsorships and Broadcast Rights 11,084 9,861 Other Raceday Revenue 918 1,693 Racecourse 1,977 2,198 Members’ Subscriptions and Entrance Fees 11,855 11,518 Interest 623 1,030 Gaming and Functions 6,295 5,409 Other Revenue (Note 4) 1,911 1,204 Share of net profi ts of associates and jointly controlled entities accounted for using the equity method (Note 1(d),(e), 9) 746 475 Net gain on Disposal of fi xed assets 34 262 Total Income 109,453 105,300 Expenditure Returns to Owners: – Prizemoney 34,633 33,495 – Other Payments and Subsidies 7 907 Catering, Dining and Restaurants 13,841 12,481 Corporate, Membership and Public Facilities 6,771 6,624 Sponsorships and Broadcast Rights 622 863 Other Raceday Expenditure 10,276 10,403 Racecourse Maintenance 12,149 10,870 Administration 6,012 5,713 Gaming and Functions 3,334 3,007 Information Technology 926 954 Marketing and Business Development 7, 158 5,685 Membership 3,096 2,718 Occupancy 826 697 Loss on Disposal of fi xed assets 132 – Impairment of fi xed assets 60 – Depreciation (Note 1(f)) 8,701 8,697 Total Expenditure 108,544 103,114 Net Surplus (Note 2) 909 2,186 The accompanying notes form part of these Financial Statements.

48 Balance Sheet as at 31 July 2006

2006 2005 $000 $000 Assets Current Assets Cash Assets 4,379 14,906 Receivables and Prepayments 14,453 11,929 Inventories (Note 1(b)) 624 490 Total Current Assets 19,456 27,325 Non-Current Assets Investments (Note 1(c), 9) Investments accounted for using the equity method – Australian Stud Book 677 1,007 – Australian Prices Network 101 150 Investment in 3UZ Sport 927 at fair value 2,135 2,135 Investment in ThoroughVisioN Pty Ltd at fair value 3,960 3,960 Other Financial Assets 55 55 Total Investments 6,928 7,307 Property, Plant and Equipment (Note 1(f), (g), 10) Freehold Land at Racecourse at cost 1,322 1,322 Buildings and Infrastructure at cost 91,895 84,704 Accumulated Depreciation (39,097) (34,567) Plant and Equipment and Furniture and Fittings at cost 79,493 63,036 Accumulated Depreciation (41,271) (37,573) Construction Work in Progress 16,817 13,230 Leased Assets (Note 1(g), 10) 66 66 Accumulated Depreciation (39) (29) Total Property, Plant and Equipment 109,186 90,189 Total Non-Current Assets 116,114 97,496 Total Assets 135,570 124,821 Liabilities Current Liabilities Payables 8,280 6,963 Borrowings (Note 12) 7,024 22 Fees and Charges in Advance 17,620 16,755 Employee Benefi ts Provision (Note 1(m), 13, 15) 920 957 Total Current Liabilities 33,844 24,697 Non-Current Liabilities Payables 750 1,250 Employee Benefi ts Provision (Note 1(m), 13, 15) 4,708 4,961 Borrowings (Note 12) – 23 Total Non-Current Liabilities 5,458 6,234 Total Liabilities 39,302 30,931 Net Assets 96,268 93,890 Equity Accumulated Funds (Note 2) 92,576 90,198 Available-For-Sale Revaluation Reserve (Note 3) 3,692 3,692 Total Equity 96,268 93,890 The accompanying notes form part of these Financial Statements.

49 Statement of Recognised Income and Expense for the fi nancial year ended 31 July 2006

2006 2005 $000 $000 Available-For-Sale Investments Valuation Gain taken to Equity – 2,460 Actuarial Gain/(Loss) on Defi ned Benefi t Plan 1,469 (818) Net Income Recognised Directly in Equity 1,469 1,642 Surplus for the Period 909 2,186 Total Recognised Income and Expense for the Period 2,378 3,828 The accompanying notes form part of these Financial Statements.

50 Cash Flow Statement for the fi nancial year ended 31 July 2006

2006 2005 $000 $000 Cash Flows from Club Operating Activities: Receipts from Racing Industry Distribution 24,396 27,035 Receipts from Members 12,437 10,901 Receipts from Racing Activities 58,412 57,806 Receipts from Gaming and Functions 6,295 4,898 Receipts from Racecourse 1,977 2,198 Receipts from Other Activities 1,919 1,199 Payments for Prizemoney (34,679) (33,247) Payments for Racing Activities (31,399) (31,341) Payments for Racecourse Maintenance (11,533) (10,578) Payments for Administrative Costs (6,321) (5,328) Payments for Marketing and Business Development (6,814) (5,322) Payments for Information Technology (926) (954) Payments for Membership (3,169) (2,546) Payments for Occupancy (826) (349) Payments for Gaming and Functions (3,323) (3,007) Interest Received 652 1,058 Interest and Other Costs of Finance Paid (69) (99) Net Cash provided by Club Operating Activities (Note 16) 7,029 12,324 Cash Flows from Investing Activities: Payments for Buildings and Infrastructure (1,012) (5,654) Payments for Plant and Equipment (17,119) (5,844) Payments for Construction Work in Progress (8,588) (9,171) Proceeds from the Sale of Assets 2,038 1,195 Distribution from Equity Accounted Investments 1,125 150 (Payment of)/Proceeds from Repayment of Short Term Loans (500) 1,500 Payments for Investments (500) – Net Cash used in Investing Activities (24,556) (17,824) Cash Flows from Financing Activities: Proceeds from Borrowings 7,000 – Repayments of Borrowings – (233) Net Cash provided by/(used) in Financing Activities 7,000 (233) Net Decrease in Cash Held (10,527) (5,733) Cash Balance at Beginning of the Period 14,906 20,639 Cash Balance at End of the Period 4,379 14,906 The accompanying notes form part of these Financial Statements.

51 Notes to and forming part of the Financial Statements of the Victoria Racing Club for the fi nancial year ended 31 July 2006

1. SUMMARY OF ACCOUNTING POLICIES The accounting policies set out below have been applied in preparing Statement of compliance the Financial Statements for the year ended 31 July 2006, the The Financial Report is a general purpose fi nancial report that comparative information presented in these Financial Statements has been prepared in accordance with applicable Accounting for the year ended 31 July 2005, and in the preparation of the opening Standards and Urgent Issues Group Interpretations. Accounting A-IFRS balance sheet at 1 August 2004 (as disclosed in Note 23), the Standards include Australian equivalents to International Financial Club’s date of transition. Reporting Standards (A-IFRS). Compliance with the A-IFRS ensures The following signifi cant accounting policies have been adopted that the Financial Statements and notes of the Club comply with in the preparation and presentation of the Financial Report. International Financial Reporting Standards (IFRS). (a) Cash and Cash Equivalents The Financial Statements were authorised for issue by the Cash and cash equivalents comprise cash on hand, cash in banks and Committee on 25 October 2006. investments in money market instruments, net of outstanding bank Basis of preparation overdrafts. Bank overdrafts are shown within borrowings in current The Financial Report has been prepared on the basis of historical liabilities in the balance sheet. cost, except for the revaluation of certain non-current assets (b) Inventories and fi nancial instruments. Cost is based on the fair values of the Inventories are valued at the lower of cost and net realisable value and consideration given in exchange for assets. relate to catering stock on hand at year-end at Flemington Racecourse. In the application of A-IFRS, management is required to make (c) Financial Assets judgements, estimates and assumptions about carrying values Available-for-sale fi nancial assets of assets and liabilities that are not readily apparent from other The investments in ThoroughVisioN Pty Ltd and 3UZ Sport 927 held sources. The estimates and associated assumptions are based on by the Club are classifi ed as being available-for-sale and are stated at historical experience and various other factors that are believed to fair value less impairment. Fair value is determined in the manner be reasonable under the circumstance, the results of which form described in Note 20(d). Gains and losses arising from changes in fair the basis of making the judgements. Actual results may differ from value are recognised directly in the available-for-sale revaluation these estimates. reserve until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously The estimates and underlying assumptions are reviewed on an recognised in the available-for-sale revaluation reserve is included ongoing basis. Revisions to accounting estimates are recognised in in the surplus or defi cit for the period. the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the Loans and receivables revision affects both current and future periods. Trade receivables, loans and other receivables are recorded at amortised cost less impairment. Judgements made by management in the application of A-IFRS that have signifi cant effects on the Financial Statements and (d) Investments in Associates estimates with a signifi cant risk of material adjustments in the The investment in the Australian Prices Network is accounted for next year are disclosed, where applicable, in the relevant notes to under the equity method in the Financial Statements. the Financial Statements. (e) Investments in Joint Ventures Accounting policies are selected and applied in a manner that The investment in the Australian Stud Book is accounted for under ensures that the resulting fi nancial information satisfi es the the equity method in the Financial Statements. concepts of relevance and reliability, thereby ensuring that the (f) Property, Plant and Equipment substance of the underlying transactions or other events is reported. Property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is The Club changed its accounting policies on 1 August 2005 to comply directly attributable to the acquisition of the item. In the event that with A-IFRS. The transition to A-IFRS is accounted for in accordance settlement of all or part of the purchase consideration is deferred, with Accounting Standard AASB 1 ‘First-time Adoption of Australian cost is determined by discounting the amounts payable in the future Equivalents to International Financial Reporting Standards’, with to their present value as at the date of acquisition. 1 August 2004 as the date of transition. An explanation of how the transition from superseded policies to A-IFRS has affected the Club’s Depreciation is provided on the cost of fi xed assets, including fi nancial position, fi nancial performance and cash fl ows is discussed Buildings and Infrastructure, but excluding Land and Construction in Note 23. Work in Progress, and is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life to its The Club has also elected to apply Accounting Standard AASB 119 estimated residual value. The estimated useful lives, residual values ‘Employee Benefi ts’ (December 2004), even though the Standard is and depreciation method are reviewed at the end of each annual not required to be applied until annual reporting periods beginning reporting period. on or after 1 January 2006.

52 The following estimated useful lives are used in the calculation (k) Borrowing Costs of depreciation. Borrowing costs directly attributable to buildings, plant and • Buildings and Infrastructure 25 to 40 years equipment under construction are capitalised as part of the cost of those assets. • Plant and Equipment and Furniture and Fittings 3 to 10 years (l) Provisions (g) Leased Assets Leased assets classifi ed as fi nance leases are recognised as assets. Provisions are recognised when the Club has a present obligation, The amount initially brought to account is the fair value or if lower the future sacrifi ce of economic benefi ts is probable, and the amount the present value of minimum lease payments. of the provision can be measured reliably. A fi nance lease is one that effectively transfers from the lessor The amount recognised as a provision is the best estimate of the to the lessee substantially all the risks and rewards of ownership consideration required to settle the present obligation at reporting to the lessee. All other leases are classifi ed as operating leases. date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash fl ows Finance leased assets are amortised on a straight line basis over estimated to settle the present obligation, its carrying amount is the the estimated useful life of the asset. present value of those cash fl ows. Finance lease payments are allocated between fi nance charges and When some or all of the economic benefi ts required to settle a reduction of lease obligation over the term of the lease. The interest provision are expected to be recovered from a third party, the expense is determined by applying the interest rate implicit in the lease to the outstanding lease liability at the beginning of each lease receivable is recognised as an asset if it is virtually certain that payment period. recovery will be received and the amount of the receivable can be measured reliably. Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another basis is (m) Employee Benefi ts more representative of the time pattern in which economic benefi ts Provision is made for benefi ts accruing to employees in respect of from the leased asset are consumed. wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of (h) Impairment of Assets being measured reliably. At each reporting date, the Club reviews the carrying amounts of its tangible assets to determine whether there is any indication that Provisions made in respect of employee benefi ts expected to be those assets have suffered an impairment loss. If any such indication settled within 12 months are measured at their nominal values using exists, the recoverable amount of the asset is estimated in order the remuneration rate expected to apply at the time of settlement. to determine the extent of the impairment loss (if any). Where the Provisions made in respect of employee benefi ts that are not asset does not generate cash fl ows that are independent from other expected to be settled within 12 months are measured as the present assets, the Club estimates the recoverable amount of the cash- value of the estimated future cash outfl ows to be made by the Club generating unit to which the asset belongs. in respect of services provided by employees up to reporting date. If the recoverable amount of an asset (or cash-generating unit) Defi ned benefi t plans is estimated to be less than its carrying amount, the carrying For defi ned benefi t superannuation plans, the cost of providing amount of the asset (cash-generating unit) is reduced to its benefi ts is determined using the Projected Unit Credit Method, recoverable amount. An impairment loss is recognised in the with actuarial valuations being carried out at each reporting date. income statement immediately. Actuarial gains and losses are recognised in full directly in retained Where an impairment loss subsequently reverses, the carrying earnings in the period in which they occur, and are presented in the amount of the asset (cash-generating unit) is increased to the revised statement of recognised income and expense. estimate of its recoverable amount, but only to the extent that the Past service cost is recognised immediately to the extent that the increased carrying amount does not exceed the carrying amount that benefi ts are already vested, and otherwise is amortised on a straight would have been determined had no impairment loss been recognised line basis over the average period until the benefi ts become vested. for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in the income statement immediately. The defi ned benefi t obligation recognised in the balance sheet represents the present value of the defi ned benefi t obligation, (i) Payables adjusted for unrecognised past service cost, net of the fair value of Payables are recognised when the Club becomes obliged to make the plan assets. Any asset resulting from this calculation is limited payments resulting from the purchase of goods and services. to past service cost, plus the present value of available refunds and (j) Borrowings reductions in future contributions to the plan. Borrowings are recorded initially at fair value, net of transaction costs. (n) Revenue Recognition Subsequent to initial recognition, borrowings are measured at Goods and services amortised cost with any difference between the initial recognised Revenue is recognised on an accruals basis when the signifi cant amount and the redemption value being recognised in the income risk and rewards of the services or goods has been transferred to statement over the period of the borrowing using the effective the purchaser. interest rate method.

53 Notes to and forming part of the Financial Statements of the Victoria Racing Club for the fi nancial year ended 31 July 2006 continued

Interest revenue 4. OTHER REVENUE Interest revenue is recognised on a time proportionate basis that Other Revenue in the income statement includes, amongst other takes into account the effective yield on the fi nancial asset. items, revenue relating to the marketing of non-raceday events and (o) Thoroughbred Racing Industry Distribution International Wagering rights. The Club received distributions of $25.538 million (2005: $26.959 5 million) and these represent the amount received and receivable in . COST OF SALES OF GOODS respect to the year ended 31 July 2006, net of industry adjustments. Inclusive in the balance of catering and other raceday expenditure Included in this total is the amount of $2.066 million (2005: $2.066 is cost of sales related to catering income. million) representing contributions made to the Club by Racing 2006 2005 Victoria Limited to fund, in part or wholly, capital developments $000 $000 at Flemington Racecourse. Catering Operations 7,300 7,045 (p) Goods and Services Tax Flemington Event Centre 1,792 1,560 Revenues, Expenses and Assets are recognised net of the amount Gaming Operations 600 507 of Goods and Services Tax (GST), except: (i) where the amount of GST incurred is not recoverable from 6. INCOME TAX the taxation authority, it is recognised as part of the cost of The Club is exempt from income tax under section 23(g) of the acquisition of an asset or as part of an item of expense; or Income Tax Assessment Act 1936 (as amended). Due to changes (ii) for receivables and payables that are recognised inclusive of GST. in the Income Tax Assessment Act 1997 the section reference has The net amount of GST recoverable from or payable to the taxation changed to S50–45 SS9.1(a), although the substance of the section authority is included as part of receivables or payables. has not changed. (q) Segment Reporting The entity operates in one geographical area and one segment, that 7. AUDITORS’ REMUNERATION being the Australian Racing Industry. 2006 2005 (r) Rounding of Amounts $ $ All amounts have been rounded off to the nearest thousand dollars Amounts received or due and unless otherwise stated. receivable by the Auditors of Victoria Racing Club for 2. ACCUMULATED FUNDS – Audit of the 2006 2005 Financial Report 98,000 83,000 Club activities $000 $000 – Other services 44,629 55,000 1 90,198 88,830 Balance at August Other services primarily consist of an FBT and Indirect Tax audit, Actuarial gain/(loss) on A-IFRS accounting assistance and risk assessment assistance. defi ned benefi t plan 1,469 (818) 8 Net surplus 909 2,186 . KEY MANAGEMENT PERSONNEL REMUNERATION The key management personnel of the Club include the Chief Balance at 31 July 92,576 90,198 Executive Offi cer and his nine direct reports, and members of the Committee. The compensation of the key management personnel 3. AVAILABLE-FOR-SALE REVALUATION RESERVE is set out below and includes the Chief Executive Offi cer and his 2006 2005 direct reports. Members of the Committee are not remunerated by $000 $000 the Club. 1 3,692 1,232 Balance at August 2006 2005 Valuation gain recognised – 2,460 $ $ 31 3,692 3,692 Balance at July Short term employee benefi ts 1,986,617 1,880,533 Post-employment benefi ts 331,921 299,638 Other long term employee benefi ts 516,228 451,297 2,834,766 2,631,468

54 9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 2006 2005 $000 $000 Investments in associate 101 150 Investments in jointly controlled entities 677 1,007

Country of Name of entity Principal activity incorporation Ownership interest 2006 2005 % % Associate Australian Prices Network Distribution of betting price fl uctuations Australia 16.7 16.7 Jointly controlled entity Australian Stud Book Maintenance of breeding register Australia 50.0 50.0

2006 2005 Summarised fi nancial information of associate $000 $000 Current assets 425 1,125 Non-current assets 314 503 Current liabilities 118 690 Non-current liabilities 16 36 Net assets 605 902 Revenue 1,610 1,596 Net profi t 454 432 Share of associates’ profi t or loss Share of profi t before income tax 76 71 Income tax expense – – Share of associates’ profi t 76 71

2006 2005 Summarised fi nancial information of jointly controlled entity $000 $000 Current assets 1,656 1,974 Non-current assets 1,160 1,252 Current liabilities 1,441 1,110 Non-current liabilities 20 101 Net assets 1,355 2,015 Revenue 5,061 4,619 Net profi t 1,340 808 Share of jointly controlled entities’ profi t or loss Share of profi t before income tax 670 404 Income tax expense – – Share of jointly controlled entities’ profi t 670 404

55 Notes to and forming part of the Financial Statements of the Victoria Racing Club for the fi nancial year ended 31 July 2006 continued

10. PROPERTY, PLANT AND EQUIPMENT Construction Buildings and Plant and Assets under W.I.P. Freehold land infrastructure equipment fi nance lease at cost at cost at cost at cost at cost Total $000 $000 $000 $000 $000 $000 Gross Carrying Amount Balance at 31 July 2005 13,230 1,322 84,704 63,036 66 162,358 Additions 14,136 – 7,191 17,121 – 38,448 Transfers (10,549) – – – – (10,549) Impairment (i) – – – (357) – (357) Disposals – – – (307) – (307) Balance at 31 July 2006 16,817 1,322 91,895 79,493 66 189,593 Accumulated Depreciation/Amortisation and Impairment Balance at 31 July 2005 34,567 37,573 29 72,169 Depreciation 4,530 4,161 10 8,701 Impairment (i) – (297) – (297) Disposals – (166) – (166) Balance at 31 July 2006 39,097 41,271 39 80,407

(i) Irrigation equipment with a Net Book value of $60 thousand is considered to be impaired as a result of the upcoming Course Proper reconstruction. An impairment loss of $60 thousand has been recognised during the period.

11. CAPITALISED BORROWING COSTS 2006 2005 $000 $000 Borrowing costs capitalised during the fi nancial year 253 – Weighted average capitalisation rate on funds borrowed generally 6.06% –

12. BORROWINGS 2006 2005 $000 $000 Current – Secured Bank bills (i) 7,000 – Hire purchase (ii) – 9 Lease liability (iii) 24 13 7,024 22 Non-Current – Secured Lease liability (iii) – 23 – 23 Total 7,024 45

(i) Secured by a Deed of Negative Pledge of General Undertakings. (ii) Secured by assets under Hire Purchase. (iii) Secured by assets leased.

56 13. EMPLOYEE BENEFIT PROVISIONS 2006 2005 $000 $000 Current 920 957 Non-current 4,708 4,961

Accrued wages and salaries are included in the current trade payables balance.

14. LEASES Finance Leases Leasing arrangements relate to the purchase of motor vehicles with lease terms of one year remaining. At the conclusion of the term there is an agreed residual amount where upon payment ownership is transferred. Present value of minimum Finance lease liabilities Minimum future lease payments future lease payments 2006 2005 2006 2005 $000 $000 $000 $000 – not later than 1 year 25 14 25 13 – later than 1 and not later than 2 years – 25 – 23 Minimum lease payments 25 39 25 36 Deduct: future fi nance charges – (3) – – Present value of minimum lease payments 25 36 25 36 Included in the Financial Statements as: Current borrowings 24 13 Non-current borrowings – 23

Minimum future lease payments includes the aggregate of all lease payments and any guaranteed residual.

Operating leases Leasing arrangements relate to the rental of the Club computer network and motor vehicles. On conclusion of the term there are no options to extend or purchase. 2006 2005 Non-cancellable operating lease payments $000 $000 Not longer than 1 year 403 409 Longer than 1 year and not longer than 5 years 143 524 Longer than 5 years – – 546 933

57 Notes to and forming part of the Financial Statements of the Victoria Racing Club for the fi nancial year ended 31 July 2006 continued

15. DEFINED BENEFIT SUPERANNUATION FUND with Accounting Standard AAS 25 ‘Financial Reporting by A signifi cant number of employees of the Club are members of the Superannuation Plans’, which prescribes a different measurement Victorian Racing Industry Superannuation Fund (the sub-plan) of basis to that applied in this Financial Report. The net defi cit the AMP Signature Super. The sub-plan has a combination of defi ned determined in the sub-plans’ most recent fi nancial report, being benefi t and accumulation membership. The following information the annual report for the year ended 31 July 2006, was $2.471 million relates to the defi ned benefi t membership. The defi ned benefi t (2005: $3.663 million). The sub-plans’ actuary has recommended that segment of the Fund is closed to new members. no additional contributions beyond the current contribution level be The defi ned benefi t members are entitled to retirement benefi ts made. Funding recommendations are made by the actuary based on based on a multiple of their deemed fi nal salary upon attainment their forecast of various matters, including future plan assets of a retirement age of 60. No other post-retirement benefi ts are performance, interest rates and salary increases. provided to these employees. The Club has a legal liability to make up a defi cit in the defi ned The defi ned benefi t superannuation segment is a funded segment benefi t segment of the sub-plan, but no legal right to use any surplus of the sub-plan. The sub-plan computes its obligations in accordance in the sub-plan to further its own interests.

2006 2005 % % Key assumptions used for A-IFRS purposes (expressed as weighted averages): Discount rate gross of tax 5.8 5.1 Discount rate net of tax 4.9 4.3 Expected return on plan assets 7.0 7.0 Expected rate(s) of salary increase 4.5 4.5 Amounts recognised in income in respect of these defi ned benefi t plans are as follows: Current service cost 1,309 1,123 Interest cost 503 466 Expected return on plan assets (656) (544) Total, included in Income Statement 1,156 1,045 Actuarial losses/(gains) incurred during the year and recognised in the statement of recognised income and expense (1,469) 818 Cumulative actuarial (gains)/losses recognised in the statement of recognised income and expense (651) 818

58 15. DEFINED BENEFIT SUPERANNUATION FUND CONTINUED 2006 2005 $000 $000 The amount included in the balance sheet arising from the Club’s obligations in respect of its defi ned benefi t sub-plan is as follows: Present value of defi ned benefi t obligations 13,315 12,639 Fair value of plan assets (10,844) (8,976) Net liability arising from defi ned benefi t obligations 2,471 3,663 Included in the balance sheet: Current provision for employee benefi ts: Defi ned benefi t obligations – – Non-current provision for employee benefi ts: Defi ned benefi t obligations (Note 13) 2,471 3,663 Net liability arising from defi ned benefi t obligations 2,471 3,663 Movements in the present value of the defi ned benefi t obligations in the current period were as follows: Opening defi ned benefi t obligation 12,639 10,226 Current service cost 1,309 1,123 Interest cost 503 466 Member contributions 115 143 Actuarial (gains)/losses (1,037) 1,266 Benefi ts paid (214) (585) Closing defi ned benefi t obligation 13,315 12,639 Movements in the present value of the plan assets in the current period were as follows: Opening fair value of plan assets 8,976 7,573 Expected return on plan assets 656 544 Actuarial gains 432 448 Employer contributions 879 853 Member contributions 115 143 Benefi ts paid (214) (585) Closing fair value of plan assets 10,844 8,976

The Club expects to make a contribution of $0.884 million to the defi ned benefi t division of the sub-plan during the next fi nancial year.

The analysis of the plan assets and the expected rate of return at the balance sheet date is as follows: Expected return Fair value of plan assets 2006 2005 2006 2005 % % $000 $000 Plan assets 7.0 7.0 10,844 8,976

Expected Rate of Return on Plan Assets The expected return on plan assets assumptions is determined by weighting the expected long term return for each asset class by the target allocation to each class. The returns used for each class are net of investment tax and fees. The history of experience adjustments is as follows: 2006 2005 $000 $000 Experience adjustments – plan liabilities 270 – Experience adjustments – plan assets 432 –

59 Notes to and forming part of the Financial Statements of the Victoria Racing Club for the fi nancial year ended 31 July 2006 continued

16. RECONCILIATION OF NET CASH PROVIDED BY CLUB OPERATING ACTIVITIES TO NET SURPLUS 2006 2005 $000 $000 Net surplus 909 2,186 Depreciation of non-current assets 8,701 8,697 Impairment of fi xed assets 60 – Share of profi ts in associated entities not received as dividends or distributions (746) (475) Net loss/(gain) on disposal of fi xed assets 98 (262) Increase in defi ned benefi t superannuation expense 278 192 Changes in operating assets and liabilities Increase in receivables and payments (4,072) (1,558) Increase in inventories (134) (72) Increase in payables 206 1,606 Increase in fees in advance 865 1,605 Increase in employee benefi t provisions 864 405 7,029 12,324

17. CAPITAL COMMITMENTS (c) Interest Rate Risk Management The Club has capital commitments at 31 July 2006 of $6.322 million Cash assets of $4.379 million, other fi nancial assets of $55 thousand (2005: $16.332 million). The capital commitments are expected to be and borrowings of $7.024 million are subject to interest rate risk. paid within 12 months. At 31 July 2006, the cash asset had average applicable interest rates of 5.5% (2005: 5.15%) and the fi nance leases of 8.0% (2005: 8.0%). 18 . FINANCING FACILITIES In respect of outstanding borrowings at 31 July 2006 of $7.0 million, 31 2006 1.5 The Club had in place at July a leasing facility of $ million there was an applicable average interest rate of 6.06%. The Club is 20.0 2005 and commercial bill facility limit of $ million ( : Nil) of which also subject to interest rate risk in relation to the guaranteed Racing 13.0 31 2006 $ million remained undrawn as at July . Victoria obligation of $1.0 million. The average applicable interest rate was 5.83%. There are no other fi nancial assets or liabilities in the 19. CONTINGENT LIABILITIES balance sheet subject to such risk at 31 July 2006. The Club has guaranteed the obligations of ThoroughVisioN Pty Ltd, Racing Victoria Limited and Werribee Racing Club in respect of loans (d) Fair Value of Investments 3UZ 927 provided by Australia and New Zealand Banking Group for the Fair values of Sport and ThoroughVisioN Pty Ltd have been amounts not exceeding $2.269 million, $1.0 million and $3.0 million determined by a combination of considerations. These included respectively. cash fl ow earnings multiples, sales of similar businesses and asset valuations. 20. FINANCIAL INSTRUMENTS 21 (a) Financial Risk Management Objectives . RELATED PARTIES The Club’s fi nance function provides services to the business and The following parties are considered to be related parties to the Club: manages the fi nancial risks relating to the operations of the Club. Members of the Committee who held offi ce in the year ended 31 2006 5–7 The Club does not enter into or trade fi nancial instruments, July (as detailed on pages of this Report). including derivative fi nancial instruments, for speculative purposes. All Members of the Committee act in an honorary capacity and Compliance with policies and exposure limits is reviewed on a receive no remuneration for their services. Certain Members of the continuous basis by the Audit and Risk Management Committee. Committee participate in the Thoroughbred Racing Industry via (b) Signifi cant Accounting Policies means of ownership of racehorses either individually or through Details of the signifi cant accounting policies and methods adopted, related entities. This involvement is on terms and conditions no including the criteria for recognition, the basis of measurement more favourable than other participants in the Thoroughbred and the basis on which income and expenses are recognised, in Racing Industry. respect of each class of fi nancial asset, fi nancial liability and equity A Member of the Committee, Mr P J Fekete, is a partner of the fi rm instrument are disclosed in Note 1 to the Financial Statements. PricewaterhouseCoopers. That fi rm has provided consultancy services on normal commercial terms and conditions to the value of $28 thousand (2005: $23 thousand).

60 The Club paid Committee and Offi cers’ Liability Insurance on behalf Effect of A-IFRS on the Balance Sheet as at 31 July 2005 of the Committee and Offi cers of the Club. Reconciliation of net assets Note $000 18 The Club indemnifi es the Committee and Stewards (Club Rule No ) Net assets (AGAAP) 93,861 against damages, verdicts in, and costs of any legal proceedings that Adjustments may be instituted against them or any of them in the exercise of Defi ned benefi t obligation (a) (3,663) their offi ce or performance of their duties. Investment in 3UZ Sport 927 (b) 1,232 The Club has not otherwise, during or since the fi nancial year 2,460 indemnifi ed or agreed to indemnify an Offi cer or Auditor of the Investment in TVN Pty Ltd (c) Club or any related organisation against liability incurred as such Net assets (A-IFRS) 93,890 an Offi cer or Auditor. Effect of A-IFRS on the Cash Flow Statement for the Financial Year All other material transactions and balances with related parties Ended 31 July 2005 have been disclosed in this Report. There are no material differences between the cash fl ow statement 22. SUBSEQUENT EVENTS presented under A-IFRS and the cash fl ow statement presented Victoria Racing Club Limited became a registered company under under the superseded policies. the Corporations Act 2001 on the 10 April 2006. On the 1 August 2006 Notes to the reconciliations of income and equity all existing rights, obligations, assets and liabilities of the Victoria (a) Defi ned Benefi t Superannuation Plans Racing Club were transferred to Victoria Racing Club Limited under A defi ned benefi t obligation, included in the provision for employee the provisions of the Victoria Racing Club Limited Act 2006. benefi ts, of $2.653 million was recognised on 1 August 2004 on On the 14 September 2006, the Club issued a letter of acceptance to transition to A-IFRS. Under superseded policies, contributions to Akron Roads Pty Ltd for civil and engineering works for the Course defi ned benefi t superannuation plans were expensed when due Proper upgrade. The accepted cost for those works is $8.1 million. and payable and no assets or liabilities were recognised in relation to the plans. 23. IMPACT OF THE ADOPTION OF AUSTRALIAN EQUIVALENTS For the fi nancial year ended 31 July 2005, the defi ned benefi t TO INTERNATIONAL FINANCIAL REPORTING STANDARDS obligation increased by a further $1.010 million to $3.663 million. The Club changed its accounting policies on 1 August 2005 to comply Adjustments were made to recognise actuarial losses of $0.818 million with Australian equivalents to International Financial Reporting directly in retained earnings, and to increase employee benefi t Standards (A-IFRS). The transition to A-IFRS is accounted for in expenses by $0.192 million for the fi nancial year ended 31 July 2005. accordance with Accounting Standard AASB 1 ‘First-time Adoption 3 927 of Australian Equivalents to International Financial Reporting (b) Investment in UZ Sport 3 927 Standards’, with 1 August 2004 as the date of transition. The investment in UZ Sport held at cost under superseded AGAAP is now recognised in the Financial Statements at fair value An explanation of how the transition from superseded policies under A-IFRS. to A-IFRS has affected the Club’s fi nancial position, fi nancial 1 2004, 15.0 performance and cash fl ows is set out in the following tables and On transition at August the total fair value was $ million. 14.23 2.135 the notes that accompany the tables. The fair value of the Club’s % share is $ million and therefore an adjustment of $1.232 million was recognised at this date. Effect of A-IFRS on the Balance Sheet as at 1 August 2004 The fair value of 3UZ Sport 927 at 31 July 2005 was deemed not to have $000 Reconciliation of net assets Note changed from $15.0 million. 91,483 Net assets (AGAAP) (c) Investment in TVN Pty Ltd Adjustments The investment in TVN Pty Ltd held at cost under superseded Defi ned benefi t obligation (a) (2,653) AGAAP is now recognised in the Financial Statements at fair value Investment in 3UZ Sport 927 (b) 1,232 under A-IFRS. 12.5 31 Net assets (A-IFRS) 90,062 The fair value of the Club’s % share of TVN Pty Ltd at July 2005 is $3.96 million, an increase of $2.46 million. The investment Effect of A-IFRS on the Income Statement for the Financial Year Ended was purchased after the date of transition hence no adjustment is 31 July 2005 required at 1 August 2004. Reconciliation of net surplus Note $000 24. ADDITIONAL INFORMATION 2,378 Net surplus (AGAAP) The Victoria Racing Club’s principal place of business and registered Adjustments offi ce is 448 Epsom Road, Flemington 3031, tel (03) 8378 0888. Defi ned benefi t obligation (a) (192) Net surplus (A-IFRS) 2,186

61 Certifi cates and Auditor’s Report

CERTIFICATES INDEPENDENCE DECLARATION We hereby certify that the accompanying Financial Statements of I am pleased to provide the following declaration of independence the Victoria Racing Club comprising the Income Statement, Balance to the Committee Members of Victoria Racing Club. Sheet, Statement of Recognised Income and Expense and Cash Flow As audit partner for the audit of the fi nancial statements of Victoria Statement together with the Notes to the Financial Statements have Racing Club for the year ended 31 July 2006, I declare that to the best been prepared in accordance with Australian Accounting Standards of my knowledge and belief, there have been no contraventions of: and other mandatory professional reporting requirements. (i) the auditor independence requirements of the Corporations Act It is our opinion that, 2001 in relation to the audit; and (a) there are reasonable grounds to believe that the Club will be able (ii) any applicable code of professional conduct in relation to the to pay its debts as and when they become due and payable; audit. (b) the Financial Statements and Notes present a true and fair view Yours faithfully of the fi nancial position as at 31 July 2006 and performance of the Club during the year ended 31 July 2006. Signed in accordance with a resolution of the Committee. Deloitte Touche Tohmatsu

P J Fekete Tony Brain Honorary Treasurer Partner Melbourne 25 October 2006 Chartered Accountants Melbourne 25 October 2006

D G Monteith Chief Executive Victoria Racing Club Melbourne 25 October 2006

62 INDEPENDENT AUDIT REPORT TO THE MEMBERS Audit Opinion OF VICTORIA RACING CLUB In our opinion, the fi nancial report of Victoria Racing Club presents Scope fairly in accordance with applicable Accounting Standards in The fi nancial report and the VRC Committee’s responsibility Australia, the fi nancial position of Victoria Racing Club as at The fi nancial report comprises the Balance Sheet, Income Statement, 31 July 2006 and the results of its operations, its changes in equity Cash Flow Statement, Statement of Recognised Income and Expense, and its cash fl ows for the year ended on that date. a Summary of Signifi cant Accounting Policies and other Explanatory Notes and the Certifi cates for the Victoria Racing Club (‘VRC’), for the fi nancial year ended 31 July 2006 as set out on pages 48 to 62.

The VRC Committee is responsible for the preparation and fair Deloitte Touche Tohmatsu presentation of the fi nancial report in accordance with Accounting Standards in Australia. This includes responsibility for the maintenance of adequate fi nancial 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 fi nancial report. Tony Brain Audit approach Partner We have conducted an independent audit of the fi nancial report Chartered Accountants in order to express an opinion on it to the members. Our audit has Melbourne 25 October 2006 been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the fi nancial report is Liability limited by a scheme approved under the Professional Standards free of material misstatement. The nature of an audit is infl uenced Legislation. ©Deloitte Touche Tohmatsu, October, 2006. 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 fi nancial report is presented fairly in accordance with Accounting Standards in Australia so as to present a view which is consistent with our understanding of VRC’s fi nancial position, the results of its operations, its changes in equity and its cash fl ows. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the fi nancial report, and the evaluation of accounting policies and signifi cant accounting estimates made by the VRC Committee. While we considered the effectiveness of management’s internal controls over fi nancial 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.

63 Statistical Summary

2005/06 2004/05 2003/04 2002/03 2001/02 Racing Race Meetings 32 32 32 31* 34 Saturdays and Public Holidays 19 19 18 18 19 Sundays 2 2 6 6 6 Mid-Weeks 11 11 8 7 9 Races 266 274 272 261 282 Starters 2,981 3,078 3,180 3,102 3,270 Average Starters per Race 11.2 11.2 11.7 11.9 11.6 Attendances Annual 563,862 551,266 555,868 531,223 506,019 Melbourne Cup Day 106,479 98,161 122,736 102,533 92,477 Melbourne Cup Carnival 383,784 370,114 376,767 355,293 329,466 Membership Members – All Categories 26,170 24,136 23,332 23,233 20,591

$000 $000 $000 $000 $000 Prizemoney 34,633 33,495 30,917 29,286 27,504 Betting Turnover On Course Totalizator 58,320 59,520 58,352 56,498 54,073 Bookmakers 168,474 169,391 156,718 139,253 120,678 Off Course Totalizator 420,954 410,974 384,244 375,762 364,355 Total Turnover 647,748 639,885 599,314 571,513 539,106 Financial Information Net Surplus 909 2,186 3,397 1,879 3,171 Wagering Distribution 25,538 26,959 25,713 23,279 23,131 New Buildings and Equipment 26,721 20,183 5,926 10,774 5,866 Performance Total Revenue (excl. Wagering Distribution) 83,915 78,341 73,676 53,518 40,954 Average Entrance Revenue $17.50 $15.84 $13.82 $11.26 $10.27 Sponsorship as to Prizemoney 21.6% 19.7% 23.1% 17.3% 16.7% Returns to Owners as to Distribution 135.6% 124.2% 120.2% 125.8% 110.8% Note: The above fi ve-year statistical summary relates to the Racing Seasons 1 August to 31 July. * One meeting abandoned in 2002/2003.

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Victoria Racing Club Limited (ACN 119 214 078) 448 Epsom Road Flemington Victoria 3031 telephone: 613 8378 0888 facsimile: 613 8378 0661 www.vrc.net.au