RACING VICTORIA LIMITED
2013 ANNUAL REPORT
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Chairman’s foreword
The 2012-13 thoroughbred racing season presented another fine showcase for our sport. During the season we farewelled a champion in Black Caviar and at the same time welcomed a new era with outstanding performances from a remarkable crop of three-year-olds and we look forward to these horses making their mark on racing in the seasons ahead. It was indeed a racing season to remember and I am pleased to present Racing Victoria’s Annual Report.
The Annual Report includes Racing Victoria’s Financial Report along with the Financial Statements for the financial period ended 30 June 2013. The report also provides a snapshot of the racing season via key statistical data including premiership tables, the season’s Group 1 results and general racing statistics.
Victorian racing is in a strong position and maintains its leadership in the racing industry in Australia in terms of the sport’s performance and popularity.
ROBERT ROULSTON Chairman �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Racing snapshot
Victoria was treated to some marvellous performances on the racetrack during the racing season. The traditional feature events of Victoria’s Spring Racing Carnival once again captured racing fans across the country headed by the BMW Caulfield Cup, Sportingbet Cox Plate and Emirates Melbourne Cup which saw French star Dunaden, New Zealand- trained champion Ocean Park and the Team Williams import Green Moon respectively added to the state’s most prestigious honour rolls. However, it was again the undefeated superstar sprinter Black Caviar that captured the heart of the nation. The Victorian bred, owned and trained mare added two more Victorian Group 1 races in her final season, highlighted by a record-breaking performance in the race now named in her honour, the Black Caviar Lightning (1000m) at Flemington. The following information presents a snapshot of the racing season, the feature race winners and all the facts and figures that combine to build the sport of racing in Victoria..
2012/13 GROUP 1 RESULTS
PRIZE DIST MONEY DATE VENUE RACE (M) ($) WINNER JOCKEY TRAINER 22/09/12 Caulfield Hyland Race Colours 1800 400,000 Ocean Park Glen Boss Gary Hennessy Underwood Stakes 30/09/12 Caulfield Clamms Seafood Sir Rupert 1400 400,000 Moment of Change Luke Nolen Peter G Moody Clarke Stakes 6/10/12 Flemington Turnbull Stakes 2000 500,000 Green Moon Craig Williams Robert Hickmott
13/10/12 Caulfield Cathay Pacific Caulfield Stakes 2000 400,000 Ocean Park Glen Boss Gary Hennessy 13/10/12 Caulfield David Jones Rose Clinic Toorak 1600 400,000 Solzhenitsyn Corey Brown Robert Heathcote Handicap 13/10/12 Caulfield BECK Caulfield Guineas 1600 1,000,000 All Too Hard Dwayne Dunn Michael, Wayne & John Hawkes 17/10/12 Caulfield Schweppes Thousand Guineas 1600 500,000 Commanding Jewel Damien Oliver Leon Corstens 20/10/12 Caulfield BMW Caulfield Cup 2400 2,500,000 Dunaden Craig Williams Mikel Delzangles 26/10/12 Moonee Valley Sportingbet Manikato Stakes 1200 750,000 Sea Siren James Cassidy John O'Shea 27/10/12 Moonee Valley Sportingbet Cox Plate 2040 3,000,000 Ocean Park Glen Boss Gary Hennessy 3/11/12 Flemington Coolmore Stud Stakes 1200 500,000 Nechita Christian Reith John Thompson 3/11/12 Flemington Longines Mackinnon Stakes 2000 1,000,000 Alcopop Craig Williams Jake Stephens 3/11/12 Flemington AAMI Victoria Derby 2500 1,500,000 Fiveandahalfstar Damien Oliver Anthony Cummings 3/11/12 Flemington Myer Classic 1600 500,000 Appearance Michael Rodd Guy Walter 6/11/12 Flemington Emirates Melbourne Cup 3200 6,000,000 Green Moon Brett Prebble Robert Hickmott 8/11/12 Flemington Crown Oaks 2500 1,000,000 Dear Demi James Cassidy Clarry Conners 10/11/12 Flemington Patinack Farm Classic 1200 1,000,000 Mental Kerrin McEvoy Peter Snowden 10/11/12 Flemington Emirates Stakes 1600 1,000,000 Happy Trails Damien Oliver Paul Beshara 9/02/13 Caulfield Sportingbet C.F. Orr Stakes 1400 400,000 All Too Hard Dwayne Dunn Michael, Wayne & John Hawkes 16/02/13 Flemington Black Caviar Lightning 1000 500,000 Black Caviar Luke Nolen Peter G Moody 23/02/13 Caulfield Cathay Pacific Futurity Stakes 1400 500,000 All Too Hard Dwayne Dunn Michael, Wayne & John Hawkes 23/02/13 Caulfield Patinack Farm Blue Diamond 1200 1,000,000 Miracles of Life Lauren Daniel Clarken Stakes Stojakovic 23/02/13 Caulfield Sportingbet Oakleigh Plate 1100 400,000 Mrs Onassis Kerrin McEvoy Gerald Ryan 2/03/13 Flemington Australian Guineas 1600 500,000 Ferlax Stephen Baster Jim Conlan 9/03/13 Flemington Lexus Newmarket Handicap 1200 1,000,000 Shamexpress Craig Newitt Danny O'Brien 9/03/13 Flemington Darley Australian Cup 2000 1,000,000 Super Cool Michael Rodd Mark Kavanagh 22/03/13 Moonee Valley Hacer Group William Reid 1200 400,000 Black Caviar Luke Nolen Peter G Moody Stakes �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Racing snapshot
2012/13 PREMIERSHIPS (1 August 2012 to 31 July 2013)
METRO TRAINER WINS COUNTRY JOCKEY WINS
Peter G Moody 69 Dean Yendall 138 David Hayes 51 Brad Rawiller 131
Peter Snowden 39 Craig Robertson 78
Mick Price 39 COUNTRY APPRENTICE WINS METRO JOCKEY WINS Josh Cartwright 47 Glen Boss 65 Patrick Moloney 42
Dwayne Dunn 47 Jye McNeil 40
Luke Nolen 46 PICNIC TRAINER WINS METRO APPRENTICE WINS Paul Kramer 10 Chad Schofield 41 Kim Mayberry 9
Damien Thornton 24 Ray West 8
Jake Duffy 17 John Kilgower 7
STATE TRAINER WINS PICNIC JOCKEY WINS Darren Weir 176 Adam Bodey 35
Peter G Moody 167 Clay Beasy 18
David Hayes 128 Clayton Douglas 16
Mick Price 128 Dani Walker 16
STATE JOCKEY WINS JUMPS TRAINER WINS Brad Rawiller 166 Ciaron Maher 10
Dean Yendall 150 Robert Smerdon 8
Glen Boss 106 Jarrod McLean 7
Bill & Symon Wilde 7 STATE APPRENTICE WINS Chad Schofield 70 JUMPS JOCKEY WINS Thomas Sadler 48 Steven Pateman 22
Damien Thornton 48 Brad McLean 10
John Allen 9 COUNTRY TRAINER WINS Darren Weir 139
Peter G Moody 98
Mick Price 89 �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Racing snapshot
2012/13 RACING STATISTICS (1 August 2012 to 31 July 2013)
NUMBER OF MEETINGS CONDUCTED FIELD SIZES Country 417 Average Starters
Metro 115 Country 9.78
Picnic 34 Metro 10.44
Total 566 Picnic 5.86
NUMBER OF RACES NUMBER OF TRAINERS WITH A STARTER† Races Scheduled Races Conducted 1,120
Country 3,382 3,301
Metro 936 922 NUMBER OF JOCKEYS WHO RODE† Picnic 205 205 335 Total 4,523 4,428 † Includes country, metro, picnic and trials
NUMBER OF INDIVIDUAL RACE STARTERS 8,958
TOTAL NUMBER OF RACE STARTS Starters
Country 32,284
Metro 9,625
Picnic 1,201
Total 43,110
2012/2013 VICTORIAN THOROUGHBRED RACING AWARD WINNERS
Sky Racing World Australian Racehorse of the Year Black Caviar Scobie Breasley Medal presented by TABCORP Michael Rodd Fred Hoysted Medal Daniel Clarken Tommy Corrigan Medal Steve Pateman Victorian Metropolitan Jockey Premiership Glen Boss Victorian Metropolitan Trainer Premiership Peter Moody Victorian Jockey Premiership Brad Rawiller Victorian Trainer Premiership Darren Weir Victorian Metropolitan Apprentice Jockey Premiership Chad Schofield Bert Wolfe Media Award presented by Victoria Racing Club Patrick Bartley �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Contents
Racing Victoria Limited ACN 096 917 930 Financial report for the financial period ended 30 June 2013
Directors’ report 2 – 6
Auditor’s independence declaration 7
Independent auditor’s report 8 – 9
Directors’ declaration 10
Consolidated statement of profit or loss and other comprehensive income 11
Consolidated statement of financial position 12
Consolidated statement of cash flows 13
Consolidated statement of changes in equity 14
Notes to the financial statements 15 – 41
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Directors’ report
The directors of Racing Victoria Limited submit herewith the annual financial report of the company for the financial period ended 30 June 2013. In order to comply with the provisions of the Corporations Act 2001, the directors’ report as follows:
The names of the directors of the company during or since the end of the financial period are as follows.
Robert Roulston Appointed director 4 December 2008, Deputy Chairman 8 December 2011 Chairman and Chairman 7 March 2013
Michael Caveny Deputy Chairman Appointed director 9 December 2010 and Deputy Chairman 7 March 2013
Ross Dobinson (retired 29 November 2012) Appointed 3 December 2009
The Hon Michael Duffy (retired as Chairman 7 March 2013) Appointed director 17 December 2001 and Chairman 6 December 2007
Bryan Gurry Appointed 4 December 2008
Graeme John AO Appointed 1 April 2010
David Moodie Appointed 3 December 2009
Pearse Morgan Appointed 8 December 2011
Greg Nichols Appointed 29 November 2012
Barbara Saunders Appointed 1 December 2005
Peter Sinn Appointed 4 December 2008
Bernard Saundry (Chief Executive Officer) Appointed 1 December 2012
Robert Hines (resigned as Chief Executive Officer on 30 November 2012) Appointed 11 August 2008
Mark Close (Company Secretary) Appointed 22 May 2008
SHORT AND LONG TERM OBJECTIVES AND STRATEGY The consolidated entity’s short and long term objectives, specific to Victorian thoroughbred racing, are to: a) Provide a centre of excellence b) Provide effective customer service c) Maintain high standards of integrity for racing generally d) Manage the racing calendar with optimal efficiency e) Encourage high participation levels f) Optimise economic benefits g) Meet social obligations h) Maintain independence
The consolidated entity’s strategy for achieving these objectives include to encourage, develop, promote and manage the conduct of the racing of thoroughbred horses in Victoria and to do all things the Board considers to be conducive of doing so.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Directors’ report
PRINCIPAL ACTIVITIES The consolidated entity’s principal activities in the course of the financial period were the administration of thoroughbred racing in the State of Victoria. These activities have assisted the consolidated entity in achieving its short and long term objectives by enabling it to provide, maintain and maximise:
(a) excellence: Victorian thoroughbred racing is, and is recognised throughout Australia and worldwide as, a centre of racing excellence;
(b) service to customers: Victorian thoroughbred racing competes effectively in the leisure and entertainment markets by providing:
(i) excellent service to patrons, punters and other customers; and
(ii) provides a source of exciting entertainment for a wide audience.
(c) integrity: Victorian thoroughbred racing generally, and race meetings in particular, are managed and conducted to ensure the highest integrity, building continuously on the reputation and integrity of Victorian thoroughbred racing;
(d) efficiency: Victorian thoroughbred racing is managed with optimal efficiency in order to best enable the meeting of the objectives;
(e) participation: Victorian thoroughbred racing is managed to encourage the fullest possible participation in all aspects and at all levels of the Victorian thoroughbred racing industry by the widest range of people, particularly women and young people;
(f) economic benefits: the management of the Company’s and Victorian thoroughbred racing clubs’ revenues, costs, assets and liabilities optimises the economic benefits delivered by Victorian thoroughbred racing to all of the Members and the stakeholders and participants of the Victorian thoroughbred racing industry, including in particular:
(i) the owners of thoroughbred racehorses;
(ii) the breeders of thoroughbred racehorses;
(iii) other participants and stakeholders in Victorian thoroughbred racing;
(iv) the communities in which Victorian thoroughbred racing operates; and
(v) the Victorian economy generally.
(g) social obligations: Victorian thoroughbred racing is conducted to ensure that it meets its social obligations to Victoria and the communities in which it operates, including but not only by:
(i) promoting Victorian country thoroughbred racing;
(ii) encouraging responsible wagering and gaming; and
(iii) optimising employment in the Victorian thoroughbred racing industry.
(h) independence: the Company conducts its operations and exercises its powers and functions in a manner which ensures the public confidence in the Company’s integrity and independence from any improper external commercial influence.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Directors’ report
PERFORMANCE MEASURES Up until 15 August 2012, the consolidated entity’s key performance measure is its share of wagering turnover during the year. From 16 August 2012, being the commencement of the new Joint Venture arrangements, the key performance measure is the consolidated entity’s share of net wagering revenue.
DIVIDENDS Under the company’s constitution no dividends may be declared or paid.
REVIEW OF OPERATIONS The total revenue from operations (i) increased to $311.423 million in the twelve months to 30 June 2013. The net profit of the consolidated entity for the twelve months to 30 June 2013 was $19.151 million compared to a loss of $9.442 million in the prior eleven months.
(i) Refer to note 1(i) on page 15 of the financial report that details the impact of financial results due to the change in financial year end dates which occurred in the prior period, and pending litigation matters. In addition, refer to page 26 of the financial report for a full breakdown of joint venture and other operating revenue.
CHANGES IN STATE OF AFFAIRS On 16th August 2012 a new joint venture, racing information and product supply agreements with the Tabcorp group of companies became effective (refer to Note 1(iv) of the attached financial statements for further explanation). As such, from this date the consolidated entity began receiving revenue under the new joint venture arrangements.
Other than that noted above and referred to in the financial statements or notes hereto, there was no significant change in the state of affairs of the consolidated entity.
SUBSEQUENT EVENTS The Victorian Government applied a Health Benefit Levy on the Tabcorp Group’s former Tabaret Gaming business for the financial year ended 30 June 2013. The levy has not been applied pro rata and it does not reflect that the Group ceased to operate gaming machines on 15 August 2012. Tabcorp was successful in challenging the Victorian Government’s determination in respect of the levy, with the Supreme Court of Victoria ruling that the Victorian Government has a discretion to calculate the levy on a pro rata basis. The Victorian Government has subsequently appealed the decision. If Tabcorp is ultimately unsuccessful in its claim to apply the levy on a pro rata basis, the estimated reduction in Racing Victoria Limited revenues would be $5.693 million. Racing Victoria Limited has disclosed a contingent liability for this amount in the Financial Report for the period ended 30 June 2013.
The consolidated entity received approval for a reduction in its debt facility totalling $6.000 million.
There has not been any other matter or circumstance occurring subsequent to the end of the period that has significantly affected or may affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial periods.
FUTURE DEVELOPMENTS Disclosure of information regarding likely developments in the operations of the consolidated entity in future financial periods and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been included in this report.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Directors’ report
DIRECTORS’ MEETINGS The following table sets out the number of directors’ meetings (including monthly and special meetings of the board and meetings of the audit committee) held during the financial period and the number of meetings attended by each director (while they were a director or committee member). During the financial period, 11 monthly board meetings, 2 special board meetings and 5 audit committee meetings were held.
�OARD OF �IRECTORS �UDIT �OMMITTEE No. of No. of No. of No. of Monthly Monthly Special Special No. of No. of Meetings Meetings Meetings Meetings Meetings Meetings Directors Held (*) Attended Held (*) Attended Held (*) Attended
Robert Roulston (Chairman) 11 11 2 2 The Hon Michael Duffy (Chairman) 11 11 2 2 Michael Caveny (Deputy Chairman) 11 11 2 2 Ross Dobinson 6 6 1 1 3 3 Bryan Gurry 11 11 2 2 2 2 Graeme John 11 10 2 2 David Moodie 11 10 2 2 Pearse Morgan 11 11 2 1 5 5 Greg Nichols 5 5 1 1 Barbara Saunders 11 10 1 1 Peter Sinn 11 11 2 2 5 5 Robert Hines (CEO) 6 6 2 2 3 2 Bernard Saundry (CEO) 5 5 0 0 2 2
(*) The number of meetings held during the time the directors held office during the 12 months to 30 June 2013.
INDEMNIFICATION OF OFFICERS AND AUDITORS During the financial period, the consolidated entity paid a premium in respect of a contract insuring the directors of the consolidated entity, the company secretary and all executive officers of the consolidated entity and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The consolidated entity has executed deeds of indemnity in favour of each of the directors. Each of these deeds provides for the consolidated entity to indemnify each director to the maximum extent permitted by law against:
• all liabilities incurred by the director as an officer of the consolidated entity and each subsidiary; and
• all legal costs and expenses arising from proceedings or an investigation incurred by the director as an officer of the consolidated entity or of a subsidiary.
The deeds also give the directors a right of access to board papers for a period of seven years after their retirement and require the consolidated entity to maintain insurance cover for the directors. A director’s right of access to board papers is subject to protection of the consolidated entity’s legal professional privilege rights and to the director keeping the board papers in confidence.
The consolidated entity has not otherwise, during or since the financial period, indemnified or agreed to indemnify an officer or auditor of the consolidated entity or of any related body corporate against a liability incurred as such an officer or auditor.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Directors’ report
AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration is included on page 7 of the financial report.
ROUNDING OFF OF AMOUNTS The consolidated entity is a consolidated entity of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the directors’ report and the financial report have been rounded off to the nearest thousand dollars.
Signed in accordance with a resolution of the directors made pursuant to s.298(2) of the Corporations Act 2001.
On behalf of the directors
ROBERT ROULSTON Chairman
Melbourne, 30 September 2013
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Auditor’s independence declaration
Deloitte Touche Tohmatsu ABN 74 490 121 060
550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia
DX 111 Tel: +61 (0) 3 9671 7000 The Board of Directors Fax: +61 (0) 3 9671 7001 www.deloitte.com.au Racing Victoria Limited 400 Epsom Road Flemington Vic 3031
30 September 2013
Dear Board of Directors Racing Victoria Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Racing Victoria Limited.
As lead audit partner for the audit of the financial statements of Racing Victoria Limited for the financial year ended 30 June 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Don Pasquariello Partner Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited 7 �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Independent auditor’s report
Deloitte Touche Tohmatsu ABN 74 490 121 060
550 Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia
DX 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au
Independent Auditor’s Report to the members of Racing Victoria Limited
We have audited the accompanying financial report of Racing Victoria Limited, which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at year’s end or from time to time during the financial year as set out on pages 10 to 41.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited 8 �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Independent auditor’s report
Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Racing Victoria Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion, the financial report of Racing Victoria Limited is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the year ended on that date; and
(b) complying with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Regulations 2001 .
DELOITTE TOUCHE TOHMATSU
Don Pasquariello Partner Chartered Accountants
9 �ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Directors’ declaration
The directors declare that:
(a) in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and
(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the directors
ROBERT ROULSTON Chairman
Melbourne, 30 September 2013
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Consolidated statement of profit or loss and other comprehensive income for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 NOTE ��000 ��000 Revenue 2(a) 311,423 247,519 Share of profit of associates accounted for using the equity method 8 77 250 Expenses from ordinary activities 2(b) (86,763) (81,700)
Profit from operations before funding 224,737 166,069 Member funding 2(c) (205,586) (175,511)
Profit/(loss) before income tax 19,151 (9,442) Income tax expense 1(n) - -
Profit/(loss) for the period 19,151 (9,442) Other comprehensive income/(loss) for the period Items that will not be reclassed to profit or loss 18 772 (740)
Total comprehensive income/(loss) for the period 19,923 (10,182)
Notes to the financial statements are included on pages 15 to 41.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Consolidated statement of financial position as at 30 June 2013
30 JUNE 2013 30 JUNE 2012 NOTE ��000 ��000 Current Assets Cash and cash equivalents 24(a) 11,092 1,848 Trade and other receivables 3 23,495 28,700 Other 4 1,959 2,982
Total Current Assets 36,546 33,530
Non-Current Assets Other financial assets 5 2,811 51 Property, plant & equipment 6 34,404 36,329 Other intangible assets 7 721 883 Investments accounted for using the equity method 8 4,121 4,044
Total Non-Current Assets 42,057 41,307
Total Assets 78,603 74,837
Current Liabilities Trade and other payables 9 27,085 33,964 Unearned revenue - 583 Borrowings 10 26,856 38,421 Provisions 11 4,939 3,277 Financial liabilities 14 75 103
Total Current Liabilities 58,955 76,348
Non-Current Liabilities Borrowings 12 1,985 - Provisions 13 2,461 3,142 Financial liabilities 14 - 68
Total Non-Current Liabilities 4,446 3,210
Total Liabilities 63,401 79,558
Net Assets / (Liabilities) 15,202 (4,721)
Equity Issued capital 15 - - Retained earnings / (accumulated losses) 16 15,202 (4,721)
Total Equity / (Deficiency) 15,202 (4,721)
Notes to the financial statements are included on pages 15 to 41.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Consolidated statement of cash flows for the period ended 30 June 2013
Inflows/(Outflows) Inflows/(Outflows) 12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 NOTE ��000 ��000 Cash flows from operating activities Receipts on behalf of the thoroughbred racing industry 308,978 230,198 Payments to and on behalf of members (169,023) (141,816) Payments to suppliers and employees (140,703) (131,226) Interest received 203 150 Interest paid (2,106) (1,869) Receipts from other activities 26,424 31,414
Net cash generated/(used in) by operating activities 24(c) 23,773 (13,149)
Cash flows from investing activities Payments for plant & equipment (4,949) (7,208)
Net cash used in investing activities (4,949) (7,208)
Cash flows from financing activities Repayment of borrowings (12,094) (1,495) Advance – other related entities - 512 Proceeds from borrowings 2,514 22,688
Net cash (used in)/provided by financing activities (9,580) 21,705
Net increase in cash held 9,244 1,348
Cash at beginning of financial period 1,848 500
Cash at the end of financial period 24(a) 11,092 1,848
Notes to the financial statements are included on pages 15 to 41.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Consolidated statement of changes in equity for the period ended 30 June 2013
Retained earnings/ Issued (accumulated Capital losses) TOTAL NOTE ��000 ��000 ��000
Balance at 1 August 2011 - 5,461 5,461 Loss for the period - (9,442) (9,442) Actuarial loss on defined benefit plans 18 - (740) (740) Balance at 30 June 2012 - (4,721) (4,721)
Balance at 1 July 2012 - (4,721) (4,721) Profit for the period - 19,151 19,151 Actuarial gain on defined benefit plans 18 - 772 772 Balance at 30 June 2013 - 15,202 15,202
Notes to the financial statements are included on pages 15 to 41.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of Racing Victoria Limited and its subsidiaries.
Basis of preparation Compliance with Australian Accounting Standards – Reduced Disclosure Requirements These general purpose financial statements have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements, other authoritative pronouncements of the Australian Accounting Standards Board and Interpretations and the Corporations Act 2001.
For the purposes of preparing the consolidated financial statements, the Company is a not-for-profit entity.
The financial statements were authorised for issue by the directors on 30 September 2013.
Change in the prior year reporting period end The consolidated entity changed the reporting date of its prior year period end, which materially impacted the financial result for the period ended 30 June 2012. The primary reason for the prior period loss was the fact that the consolidated entity receives significant joint venture revenues in the month of July. These were excluded from the prior reporting period (1 August 2011 to 30 June 2012) given the change in reporting period end from 31 July to 30 June.
These joint venture revenues received in July 2012 have effectively shifted from what would have been recorded in the prior period (2012 period end), had the change in the reporting period end not been made, to the current period. This has contributed to the recovery of the prior period reported loss with the current period reported profit.
Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property.
The consolidated entity is a consolidated entity of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Financial Report are rounded off to the nearest thousand dollars, unless otherwise indicated.
Comparatives have been reclassified where appropriate to ensure consistency and comparability with the current period.
The financial report has also been prepared in accordance with the terms of various agreements with the Victoria Racing Club, the members (as defined at (ii), (iii) and (iv) below) and the racing industry in Victoria as follows:
(i) Impact on financial results due to change in year end in the prior period and pending litigation matters During the period ended 30 June 2013, the consolidated entity recorded a net profit of $19.151 million and had net cash inflows from operating activities of $23.773 million.
The change in financial year end to 30 June from 31 July in the prior period caused a material shift in the financial result for the consolidated entity for the period ended 30 June 2013. Significant revenues and operating cash inflows were generated during the month of July 2012 that would have been recorded in the prior period had a change in the year end not been effected, contributing to the prior period loss of $9.442 million. On 1 July 2012 the consolidated entity received $10.827 million in respect of a quarterly program fee payment which has been included in the revenues and cash flows for the period ended 30 June 2013.
The result for the period also includes $5.693 million in Joint Venture profit distributions received, which represents the consolidated entity’s share of the amount in dispute in relation to the application of the Health Benefit Levy, this amount is subject to litigation between the State and Tabcorp. A contingent liability for this amount has been raised within note 25 for the financial period ended 30 June 2013.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
(ii) Establishment of Operations The consolidated entity was incorporated on 17 December 2001 for the purpose of administering the Victorian thoroughbred racing industry which was previously the responsibility of the Victoria Racing Club (VRC). On 19 December 2001 the four thoroughbred racing bodies – Victoria Racing Club (“VRC”), Melbourne Racing Club, Moonee Valley Racing Club and Country Racing Victoria (collectively the members) entered into a Members Agreement with the consolidated entity. Under this agreement the members agreed to establish the consolidated entity as the new principal club and governing body for thoroughbred racing in Victoria, to be owned and funded by the members. The VRC agreed to relinquish its status as the principal club and its role as governing body to facilitate the granting to the consolidated entity of that status and role.
(iii) New Constitution On 21 June 2007 the consolidated entity announced that agreement had been reached with its four members (Country Racing Victoria, Melbourne Racing Club, Moonee Valley Racing Club and Victoria Racing Club) in relation to the outcomes of the Victorian Thoroughbred Racing Industry Review. A number of the outcomes agreed with members related to changes to the consolidated entity’s governance and required amendment to the consolidated entity’s Constitution. As a consequence a Special General Meeting was held on 24 September 2007 at which a special resolution was passed to adopt a new Constitution. The principal changes to the Constitution provided that: • the membership of the consolidated entity be expanded to include Racing Victoria Limited’s ten stakeholder bodies subject to those new members satisfying minimum qualification criteria before being eligible to vote; • a vote of 66.66% be required to pass all resolutions other than a special resolution (which will continue to require a vote of 75%); • a new independent board be appointed with effect from the close of the 2007 Annual General Meeting; and • with effect from the 2008 Annual General Meeting directors will be required to retire by rotation and be subject to appointment by direct election of the members in the event of any member nominating candidates in addition to candidates proposed by the consolidated entity’s Board. The new Constitution came into operation on 29 November 2007 being the day upon which the Victorian Government Gazette published a certification by the Minister for Racing that the special resolution had not been disallowed by either House of the Victorian Parliament.
The new Constitution provides that consolidated entity’s membership and the associated voting rights are as follows: • Country Racing Victoria - ten votes; • Melbourne Racing Club - five votes; • Moonee Valley Racing Club - five votes; • Victoria Racing Club - five votes; • Thoroughbred Racehorse Owners Association - three votes; • Thoroughbred Breeders Victoria - two votes; • Australian Trainers Association - two votes; • Victorian Jockeys’ Association - one vote; • Australian Jumping Racing Association and Victorian Bookmakers’ Association - one vote exercisable jointly; and • Australian Services Union, Australian Workers Union, Liquor, Hospitality & Miscellaneous Workers Union and Media and Entertainment Arts Alliance - one vote exercisable jointly.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
(iv) Thoroughbred Racing Industry Revenue and Distributions The racing industry in Victoria on the 16 August 2012 entered into new joint venture and information supply agreements with the Tabcorp group of companies. Under a racing industry Deed of Operations executed on 21 December 2011, the thoroughbred, harness and greyhound racing codes have determined arrangements between themselves, including the allocation of joint venture profits and information supply fees.
Wagering income is received by the thoroughbred racing industry in the form of the above joint venture distributions, international distributions and race fields fees (refer Note 2(a)).
Following the adoption of the new constitution on 21 June 2007 (refer Note 1(iii)), the consolidated entity and the clubs agreed to terminate the Members’ Agreement as it operated between them and a new club Members’ Deed was entered into for the purpose of providing for certain arrangements in relation to the governance of the Tabcorp Joint Venture, the making of grants to the clubs and the re-licensing process.
In relation to the consolidated entity making grants to the clubs the following principles apply:
• The consolidated entity will from time to time make grants to participants in the Victorian thoroughbred racing industry for the purpose of encouraging thoroughbred horseracing.
• In making grants, the consolidated entity will seek to:
(i) adequately support the objectives of the Victorian thoroughbred racing industry;
(ii) provide incentives for club performance and achievements of industry objectives; and
(iii) encourage and optimise participation in the ownership of thoroughbred race horses throughout Victoria by maximising returns to owners through statewide prize money strategies and other incentives.
• The clubs further acknowledge that, consistent with the constitution of the consolidated entity, no portion or amount of the income or assets of the consolidated entity may be distributed, paid or transferred directly or indirectly by way of dividend, bonus, or otherwise by way of profit to or amongst the clubs in their capacity as members.
(v) Retained Profits Under the terms of the Members Agreement net profit and the ongoing retained profits of the consolidated entity cannot be distributed as dividends to the members.
Significant Accounting Policies The following significant accounting policies have been adopted in the preparation and presentation of the financial report:
(a) Borrowings and Borrowing Costs Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial recognised amount and the redemption value being recognised in profit and loss over the period of the borrowing using the effective interest rate method.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.
(b) Cash and Cash Equivalents Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.
Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
(c) Employee Benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values, using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months, are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to the reporting date.
Defined Contribution Plans Contributions to defined contribution superannuation plans are expensed when incurred.
Defined Benefit Plans For defined benefit superannuation plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each reporting date. Actuarial gains and losses are recognised in full, directly in retained earnings, in the period in which they occur.
Past service is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight line basis over the average period until the benefits become vested.
The defined benefit obligation recognised in the statement of financial position represents the present value of the defined benefit, net of the fair value of the plan assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the plan.
(d) Financial Assets Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.
Subsequent to initial recognition, investments in associates are accounted for under the equity method.
Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post acquisition changes in the consolidated entity’s share of the net assets of the associate, less any impairment in the value of individual investments.
Loans and Receivables Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method less impairment interest is recognised by applying effective interest rates.
(e) Financial Instruments issued by the consolidated entity Debt and Equity Instruments Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.
Interest Interest is classified as an expense consistent with the balance sheet classification of the related debt.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
(f) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense or
ii. for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from or payable to, the taxation authority is classified as operating cash flows.
(g) Impairment of Other Tangible and Intangible Assets At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash generating unit to which the asset belongs. Where a reasonable and consistent basis can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated the smallest group of cash generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. Notwithstanding this, value in use is depreciated replacement cost of an asset when the future economic benefits of the asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the consolidated entity would, if deprived of the asset, replace its remaining future economic benefits. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior periods. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.
(h) Intangible Assets Capitalised Software Capitalised software is recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight line basis over the estimated useful life of the software being five years.
(i) Leased Assets Leased assets are classified as finance leases when terms of the lease transfer subsequentially at the risks and rewards incidental to ownership of the leased asset to the leasee. All other leases are classified as operating leases.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
Finance leased assets are amortised on a straight-line basis over the estimated useful life of the asset. Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
(j) Payables Trade payables and other accounts payable are recognised when the consolidated entity becomes obliged to make future payments resulting from the purchase of goods and services. Trade and other payables are stated at amortised cost.
(k) Property, Plant and Equipment Plant and equipment, buildings and infrastructure capital are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land. Depreciation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life; whichever is the shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with effect of any changes recognised on a prospective basis.
The following estimated useful lives are used in the calculation of depreciation: Buildings and Improvements 40 years Plant and Equipment 3 to 10 years Infrastructure Capital 5 to 15 years
During the period the consolidated entity acquired assets through the completion of projects which are part of the capital infrastructure program. These projects are individually assessed for appropriateness of recognition as assets within the consolidated statement of financial position of the consolidated entity. The key elements for recognition of the capital expenditure as an asset are control and ensuring that future economic benefits will flow to the consolidated entity.
(l) Provisions Provisions are recognised when the consolidated entity has a present obligation (legal or constructive) as a result of a past event, it is probable that the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation, the future sacrifice for economic benefits is probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Accident Insurance Fund Prior to 1 September 1985 the Fund was an authorised insurer for the purposes of the Workers Compensation Act 1958. The provision for outstanding claims is disclosed at note 13. The provision is based on the last actuarial assessment of the outstanding claims of the Fund conducted as at 31 July 2011 by Frank Funder, a fellow of the Institute of Actuaries of Australia and reviewed annually by management having regard for material events impacting the calculation of the provision.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
(m) Revenue Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.
Thoroughbred Racing Industry Revenue Revenue is recognised when receivable under the joint venture and information supply agreements with the Tabcorp group of companies.
Sale of Goods and Disposal of Assets Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
• the consolidated entity has transferred to the buyer the significant risks and rewards of ownership of the goods;
• the consolidated entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
• the amount of revenue can be measured reliably;
• it is probable that the economic benefits associated with the transaction will flow to the consolidated entity; and
• the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Rendering of Services Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of the contract is determined as follows:
• installation fees are recognised by reference to the stage of completion of the installation, determined as the proportion of the total time expected to install that has elapsed at reporting date;
• servicing fees included in the price of products sold are recognised by reference to the proportion of the total cost of providing the servicing for the product sold, taking into account historical trends in the number of services actually provided on past goods sold;
• revenue from time and material contracts is recognised at the contractual rates as labour hours are delivered and direct expenses incurred.
Contributions of Assets Revenue arising from the contribution of assets is recognised when the consolidated entity gains control of the contribution or the right to receive the contribution.
Interest Revenue Interest revenue is accrued on a time basis, by reference to the principal outstanding and effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the assets carrying amount.
Government Grants Revenue from government grants relating to the roll out of capital infrastructure programs are recognised in accordance with AASB 1004 “Contributions”.
(n) Income Tax The consolidated entity is exempt from Income Tax under section 50-45 of the Income Tax Assessment Act.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
(o) Critical Accounting Judgements and Key Sources of Estimation Uncertainty In the application of the consolidated entity’s accounting policies, which are described above, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in 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 revision affects both current and future periods.
Critical judgements in applying the consolidated entity’s accounting policies Judgements made by management in the application of IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next period are disclosed, where applicable, in the relevant notes to the financial statements.
Accounting policies are selected and applied in a manner that ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at balance date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period.
Useful lives of Property, Plant & Equipment and Computer Software & Databases As described in note 1(k), the consolidated entity reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. During the current period, management determined that the useful lives of certain training track infrastructure should be shortened, due to increased wear and tear on these assets.
The financial effect of this reassessment, assuming the assets are held until the end of their estimated useful lives, is to increase the consolidated depreciation expense in the current financial period and for the next 3 periods, by the following amounts:
2013 $1.759 million 2014 $0.999 million 2015 $0.982 million 2016 $0.644 million
(p) Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Racing Victoria Limited (‘’consolidated entity’’ or ‘’parent entity’’) as at 30 June 2013 and the results of all subsidiaries for the period then ended. Racing Victoria Limited and its subsidiaries together are referred to in this financial report as the group or the consolidated entity.
Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the consolidated entity controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Racing Victoria Limited established Racing Victoria Media Pty Ltd (a wholly owned subsidiary with a shareholding of one share) on 20 May 2009.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
Intercompany entity transactions, balances and unrealised gains on transactions between consolidated entity companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of financial position respectively.
(q) Parent Entity Financial Information The financial information for the parent entity, Racing Victoria Limited, disclosed in note 21 has been prepared on the same basis as the consolidated financial statements.
(r) Derivative Financial Instruments The consolidated entity is exposed to changes in interest rates from its activities. The consolidated entity uses interest rate swaps to hedge these risks. Derivative financial instruments are not held for speculative purposes.
The consolidated entity uses derivative financial instruments, being interest rate swaps to hedge the risk associated with interest rate fluctuations. Such derivatives are stated at fair value. The fair value of interest swaps are calculated by reference to current rates for contracts with similar maturity profiles.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken directly to profit or loss for the period. For the period ended 30 June 2013, all interest rates swaps do not qualify for hedge accounting and have been taken directly to the profit and loss for the period.
(s) New Accounting Standards and Interpretations The consolidated entity has adopted all new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for the current annual reporting period.
Standards and Interpretations affecting the reported results or financial position The following new and revised Standards and Interpretations have been adopted in the current period and have affected the amounts reported in these financial statements.
Standards affecting presentation and disclosure Amendments to AASB 101 ‘Presentation of Financial Statements’
The amendment (part of AASB 2011-9 ‘Amendments to Australian Accounting Standards – Presentation of Other Comprehensive Income’) introduces new terminology for the statement of other comprehensive income and income statement. Under the amendments to AASB 101, the statement of comprehensive income is renamed as a statement of profit or loss and other comprehensive income and the income statement is renamed as a statement of profit or loss. The amendments to AASB 101 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to AASB 101 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis – the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. Other than the above mentioned presentation changes, the application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
Standards and Interpretations issued not yet adopted At the date of authorisation of the financial report, the Standards and Interpretations listed below were in issue but not yet effective:
Effective for annual Expected to be reporting periods initially applied in the Standard / Interpretation beginning on or after financial year ending
AASB 9 “Financial Instruments”, AASB 2009-11 1 January 2015 30 June 2016 “Amendments to Australian Accounting Standards arising from AASB 9” and AASB 2010-7 “Amendments to Australian Accounting Standards arising from AASB 9” (December 2010)
AASB 10 “Amendments to Australian Accounting Standards 1 January 2013 (1) 30 June 2015 (1) – Consolidated Financial Statements”
AASB 11 “Joint Arrangements” 1 January 2013 (1) 30 June 2015 (1)
AASB 12 “Disclosure of Interests in Other Entities” 1 January 2013 (1) 30 June 2015 (1)
AASB 127 “Separate Financial Statements” (2011) 1 January 2013 30 June 2014
AASB 128 “Investments in Associated and Joint Ventures” 1 January 2013 30 June 2014 (2011)
AASB 13 “Fair Value Measurement” and related AASB 2011- 1 January 2013 30 June 2014 8 “Amendments to Australian Accounting Standards arising from AASB 13”
AASB 119 “Employee Benefits” (2011), AASB 2011-10 1 January 2013 30 June 2014 “Amendments to Australian Accounting Standards arising from AASB 19” (2011)
AASB 2011-4 “Amendments to Australian Accounting 1 July 2013 30 June 2014 standards to Remove Individual Key Management Personnel Disclosure Requirements”
AASB 2011-7 “Amendments to Australian Accounting 1 January 2013 30 June 2014 standards arising from the Consolidation and Joint Arrangements Standards”
AASB 2011-6 Amendments to Australian Accounting 1 July 2013 30 June 2014 Standards – Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements
AASB 2012-2 Amendments to Australian Accounting 1 January 2013 30 June 2014 Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities
AASB 2012-3 Amendments to Australian Accounting 1 January 2014 30 June 2015 Standards – Offsetting Financial Assets and Financial Liabilities
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
1. Summary of Accounting Policies (continued)
Effective for annual Expected to be reporting periods initially applied in the Standard / Interpretation beginning on or after financial year ending
AASB 2012-5 Amendments to Australian Accounting 1 January 2013 30 June 2014 Standards arising from Annual Improvements 2009–2011 Cycle
AASB 2012-6 Amendments to Australian Accounting 1 January 2015 30 June 2016 Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures
AASB 2012-7 Amendments to Australian Accounting 1 July 2013 30 June 2014 Standards arising from Reduced Disclosure Requirements
AASB 2012-10 Amendments to Australian Accounting 1 January 2013 30 June 2014 Standards – Transition Guidance and Other Amendments
[AASB 1, 5, 7, 8, 10, 11, 12, 13, 101, 102, 108, 112, 118, 119, 127, 128, 132, 133, 134, 137, 1023, 1038, 1039, 1049 & 2011-7 and Interpretation 12]
AASB 2012-11 Amendments to Australian Accounting 1 July 2013 30 June 2014 Standards – Reduced Disclosure Requirements and Other Amendments
[AASB 1, AASB 2, AASB 8, AASB 10, AASB 107, AASB 128, AASB 133, AASB 134 & AASB 2011-4]
AASB 2013-3 Amendments to AASB 136 - Recoverable 1 January 2014 30 June 2015 Amount Disclosures for Non-Financial Assets
AASB 2013-4 Amendments to Australian Accounting 1 January 2014 30 June 2015 Standards - Novation of Derivatives and Continuation of Hedge Accounting
Interpretation 21 Levies 1 January 2014 30 June 2015
(1) These compiled Standards do not apply mandatorily for Not-For-Profit entities. However, early application is permitted for annual reporting periods beginning on or after 1 January 2013 but before 1 July 2013. The consolidated entity does not expect to early adopt this standard and thus it is expected to be initially adopted in the financial period ending 30 June 2015.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 2. Profit / (Loss) from Operations
(a) Revenue
Revenue from operations consisted of the following items: Joint venture distributions 209,964 179,822 International distributions 4,554 - Race fields 78,108 42,574
Total wagering revenue 292,626 222,396
Racecourse infrastructure program 2,470 6,891 Racing 2,491 2,551 VOBIS 5,098 3,914 Interest 203 150 Regional services 728 675 Media rights 2,307 3,304 Industry service recoveries 1,493 1,995 Scratching fees 1,072 1,130 Marketing and sponsorship 695 2,417 Rent received 920 835 Other 1,308 1,197
Non-operating revenue 12 64
311,423 247,519
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 2. Profit / (Loss) from Operations (continued)
(b) Expenses: Profit/(loss) has been arrived at after charging the following expenses: Operational expenditure Integrity services 5,397 4,613 Racing 3,502 3,367 Veterinary and swabbing 2,784 1,944 Racing development 1,407 1,340 Information services 1,929 2,439 Legal 1,076 1,557 Occupancy 1,898 1,455 Services and administration 8,051 6,624 Bookmakers development fund 200 245 Fleet costs 1,256 1,299 Other 5,977 2,870
33,477 27,753
Industry expenditure Marketing and promotion 3,792 2,049 Race day services 10,444 9,843 Regional financial services 991 1,062 Special projects allocations 454 1,072 Grants – Australian Racing Museum 900 875 Stewards video and race telecasting 7,202 6,214 Formguide 1,816 1,309 Racecourse infrastructure program 12,658 5,681 Infrastructure operations 1,237 496 Media rights 2,724 3,304 Radio Sport National (RSN) contributions 2,104 1,443 Depreciation and amortisation 5,523 2,332 Doubtful debts expense 98 144 Race fields 1,191 15,708 Interest expense 2,106 1,872 (Gain)/loss on derivative instruments (interest rate swap) (96) 171 Other 142 372
53,286 53,947
Total operating and industry expenditure 86,763 81,700
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 2. Profit / (Loss) from Operations (continued) Expenses from ordinary activities include: Employee benefits expense 14,421 11,514 Defined benefit superannuation plan expense/(income) 136 133 Depreciation of non-current assets: Property, plant and equipment 5,055 1,672 Amortisation of non-current assets: Computer software and databases 468 660 Operating lease rental expenses 440 712 Operating expenses – other related party: Australian Racing Museum 900 875
(c) Member funding: Returns to owners Prize money 147,283 112,200 VOBIS 6,205 5,008 Riding fees 9,543 8,651 Jockey workcover expenses 4,126 4,317 Jockey welfare 1,652 1,361
168,809 131,537
Club funding Club funding 16,073 24,449 Training tracks maintenance funding 12,916 11,506 On course commissions 3,956 5,167 Bookmaker commissions 2,109 2,852 National wagering payment 1,723 -
36,777 43,974
Total member funding 205,586 175,511
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 3. Current Trade and Other Receivables Trade receivables (i) 5,152 5,920 Allowance for doubtful debts (ii) (64) (166)
5,088 5,754
Joint venture fees and indexation receivable 4,646 3,577 Joint venture profit share receivable 8,524 5,806 Training tracks capital receivable - 3,820 Loan – ThoroughVisioN - 1,000 Receivable from Racing Information Services Australia – other related party 52 319 Media rights receivables 980 4,929 Sundry receivables 4,205 3,495
23,495 28,700
(i) The majority of trade receivables arise as a result of transactions with trainers and racing clubs with credit periods provided at 60 days and 30 days respectively. A provision has been made for estimated irrecoverable amounts from these receivables, determined by reference to past default experience. (ii) Reconciliation of doubtful debts Allowance for doubtful debts at the beginning of the period 166 22 – Bad debts written off (109) - – Movement in allowance account taken to profit and loss 7 144
Allowance for doubtful debts at the end of the period 64 166
4. Other Current Assets Prepayments – other 128 390 Financial assets – other 1,831 2,592
1,959 2,982
5. Other Non-Current Financial Assets At amortised cost: Media rights receivables 2,811 - Receivable from Racing Information Services Australia – other related party - 51 Receivable from Australian Racing Museum – other related party - 1,875 – Less allowance for doubtful debts (i) - (1,875) Receivable from Werribee Racing Club – other related party 200 - – Less allowance for doubtful debts (i) (200) -
2,811 51
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 5. Other Non-Current Financial Assets (continued) (i) Allowance for doubtful debts at the beginning of the period 1,875 1,875 – Bad debts written off (1,875) - – Movement in allowance account taken to profit and loss 200 -
Allowance for doubtful debts at the end of the period 200 1,875
On 5 October 2012, Racing Victoria Limited agreed to forgive the Australian Racing Museum loan.
6. Property, Plant and Equipment Work in Progress Infra- Infra- Free-hold structure structure Plant & Buildings Land Capital Capital Equipment Total ��000 ��000 ��000 ��000 ��000 ��000
Gross carrying amount (at cost) Balance at the beginning of the period 11,706 3,199 21,421 152 13,710 50,188 Additions - - 828 (152) 3,967 4,643 Assets written off (i) (2,369) - - - (6,400) (8,769) Balance at the end of the period 9,337 3,199 22,249 - 11,277 46,062
Accumulated Depreciation Balance at the beginning of the period (2,194) - (1,381) - (10,284) (13,859) Assets written off (i) 666 - - - 6,590 7,256 Depreciation expense (345) - (3,575) - (1,135) (5,055) Balance at the end of the period (1,873) - (4,956) - (4,829) (11,658)
Net Book Value As at the beginning of the period 9,512 3,199 20,040 152 3,426 36,329 As at the end of the period 7,464 3,199 17,293 - 6,448 34,404
(i) The asset register was reviewed in the current period, resulting in $8.769 million of obsolete property, plant and equipment being written off the asset register at 30 June 2013.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000
6. Property, Plant and Equipment (continued) Aggregate depreciation allocated whether recognised as an expense or capitalised as part of the carrying amount of other assets during the period. Buildings 345 322 Infrastructure capital 3,575 714 Plant and equipment 1,135 636
5,055 1,672
7. Other Intangible Assets Computer Software and databases Gross carrying amount (at cost) Balance at the beginning of the period 2,336 17,942 Additions 306 285 Assets written off (i) (848) (15,891)
Balance at the end of the period 1,794 2,336
Accumulated Amortisation Balance at the beginning of the period (1,453) (16,672) Assets written off (i) 848 15,879 Amortisation expense (468) (660)
Balance at the end of the period (1,073) (1,453)
Net Book Value 721 883
(i) The asset register was reviewed in the current period, resulting in $0.848 million of obsolete intangible assets being written off the asset register at 30 June 2013.
8. Investments accounted for using the Equity Method Name of entity Principal activity Balance date Ownership interest Carrying amount 2013 2012 2013 2012 $’000 $’000 Racing Information Services Australia Pty Ltd Racing Information 30/06/2013 35% 35% 4,121 4,044
Significant influence is derived over Racing Information Services Australia Pty Ltd through the Board’s appointment of a nominee director. Pursuant to a shareholder agreement the consolidated entity has the right to cast 33% of the votes at a shareholder meeting.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 8. Investments accounted for using the Equity Method (continued) Movements in investments in associates At the beginning of the financial period 4,044 3,794 Share of profit 77 250
At the end of the financial period 4,121 4,044
Summarised financial position of associates: Current assets: Cash and cash equivalents 4,263 4,405 Trade and other receivables 1,361 959 Non-current assets: Property, plant and equipment 462 283 Other financial assets 18 348 Intangibles 6,805 6,842 Current liabilities: Trade and other payables (592) (509) Provisions (504) (305) Non-current liabilities: Borrowings - (269) Provisions (99) (198)
Net assets 11,714 11,556
Net profit 77 250
Dividends received from associates During the period, the consolidated entity received no dividends (2012: nil) from its associates.
Capital commitments The consolidated entity’s share of capital commitments and other expenditure commitments of associates is nil.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 9. Current Trade and Other Payables Unsecured: Trade payables 4,369 12,219 Stakes accruals 8,139 6,265 Sundry payables 10,413 9,821 Media rights payable 886 2,597 Financial liabilities – other 1,831 2,592 GST payable 1,447 470
27,085 33,964
Accruals and payables represent liabilities for goods and services provided to the consolidated entity, prior to the end of the financial period, which are unpaid. Amounts are normally settled within 30 days and are carried at nominal value. Racing Victoria Limited has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. 10. Current Borrowings Secured at amortised cost: Commercial bills (i) & (ii) 23,627 28,688 Shareholder loan - 512 Training tracks facility (i) & (ii) - 3,820 Land and quarantine centre facility (i) & (ii) 2,700 3,300 Motor vehicle hire purchase facility (i) & (ii) 529 - Unsecured at amortised cost: Loan – other - 2,101
26,856 38,421
(i) Secured by a fixed and floating charge over the assets of Racing Victoria Limited. (ii) During the period there were no defaults or breaches on any of the loans.
11. Current Provisions Employee benefits 4,939 3,277
4,939 3,277
12. Non-Current Borrowings Secured at amortised cost: Motor vehicle hire purchase facility (i) & (ii) 1,985 -
1,985 -
(i) Secured by a fixed and floating charge over the assets of Racing Victoria Limited. (ii) During the period there were no defaults or breaches on any of the loans.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 13. Non-Current Provisions Accident claims (i) (Note 1(l)) 1,964 1,964 Employee benefits 350 224 Superannuation – defined benefit fund (Note 18) 147 954
2,461 3,142
(i) Accident claims Balance at beginning of the period 1,964 1,964 Additional provisions written back - -
Balance at end of the period 1,964 1,964
14. Financial Liabilities Current Interest rate swap not designated in hedge accounting relationship 75 103
75 103
Non-Current Interest rate swap not designated in hedge accounting relationship - 68
- 68
Interest rate swap contracts Under interest rate swap contracts, the consolidated entity agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the consolidated entity to mitigate the cash flow exposures on the variable rate borrowings. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at reporting date and the credit risk inherent in the contract and are disclosed below. The average interest rate is based on the outstanding balances at the end of the financial period. The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding as a reporting date for the consolidated entity. Average Fixed Notional Principal Fair Value Interest Rate Amount Gain/(Loss) % $’000 $’000 2013 2012 2013 2012 2013 2012 Less than 1 year 3.95 - 12,700 - 96 - 1 to 4 years - 3.95 - 10,752 - (171) 96 (171)
The interest rate swaps are settled on a monthly basis. The floating rate on the interest rate swaps is the 30 day Bank bill swap rate (BBSY). The consolidated entity settles the difference between the fixed and floating interest rate on a net basis.
15. Issued Capital The consolidated entity is a consolidated entity limited by guarantee. Every member undertakes to and must contribute an amount not exceeding $10 in the event of the winding up of the consolidated entity.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000
16. Retained Earnings / (Accumulated Losses) Balance at beginning of financial period (4,721) 5,461 Actuarial gains/(losses) 772 (740) Net profit/(loss) 19,151 (9,442)
Balance at end of financial period 15,202 (4,721)
17. Commitments for Expenditure (a) Non-cancellable operating leases: Not later than 1 year 31 396 Later than 1 year but not later than 5 years 15 46
46 442
Operating leases relate to the leasing of motor vehicles. The term of each individual lease is between one and three years. These lease agreements are not subject to rental adjustments.
(b) Hire Purchase: Not later than 1 year 529 - Later than 1 year but not later than 5 years 1,985 -
2,514 -
The consolidated entity entered into a hire purchase arrangement to facilitate the replacement of its motor vehicle fleet. The term of each hire purchase is 3 years (2012: nil). At the end of each term, the consolidated entity has an obligation to purchase themotor vehicle, which until this time is secured by the title of the asset. Interest rates underlying all obligations are fixed at 5.65% (2012: nil) per annum.
(c) Other (broadcast contract): Not later than 1 year 7,007 6,832 Later than 1 year but not later than 5 years 28,086 27,401 Later than 5 years 585 7,421
35,678 41,654
Other relates to the supply of outside broadcasting services to the Victorian Thoroughbred Racing Industry by Thoroughbred Racing Productions (TRP). (d) The consolidated entity has undertaken to provide financial support to the Australian Racing Museum to a maximum of $1.700 million during 2013/14.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
18. Superannuation Commitments The employees of the consolidated entity are members of Victorian Racing Industry Superannuation Fund, which also includes employees of the Victoria Racing Club and Country Racing Victoria. The fund has a composition of defined benefit and accumulation membership. The financial information of the fund disclosed in this report relates to the employees of the consolidated entity. Under the defined benefit plan, employees are entitled to retirement benefits based on a multiple of their deemed final salary upon attainment of their retirement age of 60. No other post-retirement benefits are provided to these employees. The defined benefit plans are funded plans. The net deficit determined in the plans most recent financial report, being the annual reports for the financial period ended 30 June 2013, was $0.147 million (2012: $0.954 million). The plan actuaries have not recommended that additional contributions beyond the current contribution level be made. Funding recommendations are made by the actuaries based on their forecast of various matters, including future plan assets performance, interest rates and salary increases. The consolidated entity has a legal liability to make up a deficit in the plans but no legal right to use any surplus in the plans to further its own interests.
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 % % 18. Superannuation Commitments (continued) Key Assumptions used (expressed as weighted averages) Discount rate gross of tax 3.8 3.1 Expected return on plan assets 7.0 7.0 Expected rate of salary increase 4.5 4.5
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 Amounts recognised in income in respect of the defined benefit plan is as follows: Current service cost 303 259 Interest cost 193 195 Expected return on plan assets (360) (321)
Total including employee benefit expense/(gain) 136 133
Actuarial gains / (losses) incurred during the period and recognised in the statement of changes in equity 772 (740)
Cumulative actuarial gains recognised in the statement of changes in equity 1,585 812
The amount included in the statement of financial position arising from the consolidated entity’s obligations in respect of its defined benefit plan is as follows: Present value of funded defined benefit obligations (6,743) (6,459) Fair value of plan assets 6,596 5,505
Net liability arising from defined benefit obligations (147) (954)
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 18. Superannuation Commitments (continued) Included in the statement of financial position: Non-current provision for employee benefits (Note 13): Superannuation – defined benefit fund 147 954
Net liability arising from defined benefit obligations 147 954
Movement in the present value of defined benefit obligations in the current period were as follows: Opening defined benefit obligation (6,459) (5,424) Current service cost (303) (259) Interest cost (192) (195) Contribution from plan participants (75) (70) Notional asset transfer - (125) Actuarial gains/(losses) 237 (645) Benefits and tax paid 49 259
Closing defined benefit obligation (6,743) (6,459)
Movement in the present value of plan assets in the current period were as follows: Opening fair value of plan assets 5,505 4,740 Expected return on assets 359 321 Actuarial gains / (losses) 535 (94) Contributions from the employer 171 602 Contributions from plan participants 75 70 Notional asset transfer - 125 Benefits and tax paid (49) (259)
Closing fair value of plan assets 6,596 5,505
Fair value of plan assets: Equity instruments 3,957 3,303 Debt instruments 1,682 1,404 Property 363 303 Other 594 495
6,596 5,505
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 $ $ 19. Key Management Personnel Remuneration The aggregate compensation of the key management personnel, including directors of the consolidated entity, is set out below:
Other key management Short-term employee benefits 2,139,404 1,945,818 Other long-term benefits 439,744 158,218
2,579,148 2,104,036
Non Executive Directors Short-term employee benefits 729,978 553,900
729,978 553,900
20. Remuneration of Auditors
Audit of the financial report 92,250 90,000
92,250 90,000
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 21. Parent Entity financial information Assets Current assets 38,860 28,599 Non-current assets 39,247 43,614
Total assets 78,107 72,213
Current liabilities 58,044 73,725 Non-current liabilities 4,446 3,210
Total liabilities 62,490 76,935
Shareholders’ equity Retained earnings / (accumulated losses) 15,617 (4,722)
Net Assets / (Liabilities) 15,617 (4,722)
Profit / (loss) for the period 19,567 (9,442)
Total comprehensive income for the period 20,339 (10,182)
22. Segment Reporting The consolidated entity operates in the thoroughbred racing industry in the State of Victoria.
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
23. Related Party Disclosures (a) Equity interests in associates and joint ventures
Details of interests in associates are disclosed in note 8 to the financial statements.
(b) Key management personnel compensation
Details of key management personnel compensation including directors are disclosed in note 19 to the financial statements.
(c) Transactions with key management personnel
Certain directors participate in the thoroughbred racing industry via means of ownership of race horses either individually or through related entities. This involvement is on terms and conditions no more favourable than other participants in the thoroughbred racing industry.
(d) Other related party disclosures
Transactions with key management personnel and their related entities
The net profit/(loss) reported in the statement of comprehensive income in 2013 includes expenses in relation to activities paid by Racing Victoria Limited on behalf of the Australian Racing Museum Ltd (director related entity) totalling $0.900 million (2012: $0.875 million). These expenses were incurred only after approval by the Racing Victoria Limited board. During the financial period the consolidated entity also provided administrative services to the entity on normal commercial terms and conditions as agreed by the parties. Aggregate amounts receivable from director related entities are disclosed in notes 3 and 5 to the financial statements.
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 24. Notes to the Statement of Cash Flows (a) Reconciliation of cash For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand and in banks and investments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial period as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: Cash at bank 11,092 1,848
(b) Financing facilities Secured bank overdraft facility, reviewed annually: – amount used - 7,000 – amount unused 6,000 3,000
6,000 10,000
Secured commercial bill facility, reviewed annually: – amount used 26,328 28,808 – amount unused - -
26,328 28,808
Secured hire purchase facilities, reviewed annually: – amount used 2,514 - – amount unused 686 -
3,200 -
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
12 MONTHS 11 MONTHS 30 JUNE 2013 30 JUNE 2012 ��000 ��000 24. Notes to the Statement of Cash Flows (continued) (c) Reconciliation of net profit/(loss) to net cash flows from operating activities Profit/(loss) from ordinary activities 19,151 (9,442) Share of associates (profit) (77) (250) Depreciation & amortisation of non-current assets 5,523 2,332 Asset Impairment 1,513 - Defined benefit plan gain (35) (470) Interest income (45) 368 Changes in net assets & liabilities: (Increase)/decrease in: Receivables 2,394 1,003 Prepayments 262 631 Increase/(decrease) in: Payables (6,118) (2,691) Provisions 1,788 825 Unearned revenue (583) (5,455)
Net cash provided by/(used in) operating activities 23,773 (13,149)
(d) Non-cash transactions
During the current period, the consolidated entity entered into the following non-cash financing activities which are not reflected in the consolidated statement of cash flows: • the consolidated entity acquired $2.734 million of motor vehicles under a hire purchase arrangement (2012: nil).
�ACING VICTORIA �IMITED – 2013 ANNUAL REPORT
Notes to the financial statements for the period ended 30 June 2013
25. Contingent Liability
Under the Deed of Contribution and Indemnity with the Victoria Racing Club, the consolidated entity has indemnified the Victoria Racing Club against any claims against the Victoria Racing Club arising from its previous operation of the thoroughbred racing industry in Victoria.
The Victorian Racing Codes (VRI) represented through Vic Racing Pty Ltd, received 25% of profits from the Joint Venture with TABCORP from the pre-16 August 2012 Joint Venture Agreement (“Old JV”) . The majority of profits earned within the joint venture were from gaming activities. In May 2013 the Victorian Government applied a Health Benefit Levy on TABCORP’s gaming business for an amount of $42.1m (full year charge) for Financial Year 2012-13. TABCORP believed that the levy should have been applied on a pro rata basis as the TABCORP gaming business ceased to operate gaming machines on 15 August 2012. TABCORP appealed the levy on 24 June 2013 and was successful in challenging the Government’s determination in respect of the levy in the Supreme Court of Victoria. The Government has subsequently appealed the decision. If the State Government is ultimately successful in its appeal the VRI would incur a liability of $8.7m and the consolidated entity under its sharing arrangements with the VRI Codes, would be responsible for its 65.075% share, being $5.693million plus interest accruing from 6 May 2013 (2012: Nil).
Racing Victoria Limited has guaranteed a loan facility of Australian Racing Museum of $1.100 million. (2012: $1.300 million).
Racing Victoria Limited has guaranteed a loan facility of Thoroughbred Racing Productions (VIC) Pty Ltd of $3.900 million (2012: $4.600 million). This facility has been guaranteed following the acquisition management rights by Racing Victoria Limited in relation to Thoroughbred Racing Productions (VIC) Pty Ltd.
26. Subsequent Events
The Victorian Government applied a Health Benefit Levy on the Tabcorp Group’s former Tabaret Gaming business for the financial year ended 30 June 2013. The levy has not been applied pro rata and it does not reflect that the Group ceased to operate gaming machines on 15 August 2012. Tabcorp was successful in challenging the Victorian Government’s determination in respect of the levy, with the Supreme Court of Victoria ruling that the Victorian Government has a discretion to calculate the levy on a pro rata basis. The Victorian Government has subsequently appealed the decision. If Tabcorp is ultimately unsuccessful in its claim to apply the levy on a pro rata basis, the estimated reduction in Racing Victoria Limited revenues would be $5.693 million. Racing Victoria Limited has disclosed a contingent liability for this amount in the Financial Report for the period ended 30 June 2013.
The consolidated entity received approval for a reduction in its debt facility totalling $6.000 million.
There has not been any other matter or circumstance occurring subsequent to the end of the period that has significantly affected or may affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in future financial years.
27. Additional Consolidated Entity Information
Racing Victoria Limited is a consolidated entity incorporated and operating in Australia. Principal Registered Office and Principal Place of Business Racing Victoria Limited 400 Epsom Road Flemington Victoria 3031 Telephone: (03) 9258 4258 www.racingvictoria.net.au
Racing Victoria Limited 400 Epsom Road Flemington Victoria 3031 Telephone: (03) 9258 4258 www.racingvictoria.net.au