AUDITED GROUP FINANCIAL STATEMENTS
HORSE RACING IRELAND
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 201$
HORSE RACING IRELAND REPORTS AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
CowVlay Page
Board Members and Other Information 2
Governance Statement and Board Members Report 3
Report of the Comptroller and Auditor General 6 .
Statement on Internal Control 8 -9
Group Statement of Income and Expenditure 10- 11
Group Statement of Comprehensive Income 12
Group Statement of Changes in Reserves and Capital Account 1.3
Horse Racing Ireland Statement of Changes in Reserves and Capital Account 14
Group Statement of Financial Position. is
Home Racing Ireland Statement offinancial Position
Group Statement of Cash Flows I
Notes to the Financial Statements 18 -52
HORSE RACING IRELAND BOARD MEMBERS AND OTHER INFORMATION
Board Members Mr. Nicholas Hartery (Chairperson) (Appointed 24 May 2018) Mr. Joe Keeling (Chairperson) (Retired 24 May 2018) Mr. Bernard Caldwell Mr. Darugh Fitzpatrick (Appointed 26 January 2018) Mr. James Cough Mr. Christy Crasick (Appointed 26 January 2018) Mr. Michael Hallord Ms. Elizabeth Hendon Mr. Harry McCalrnoiil Mr. Robert Nixon Ms. Carol Nolan (Appointed 28 March 2018) Mr. Peter Nolan Mr. Coner O'Neill (Appointed I 0 December 2018) Ms. Meta Osborne Mr. John Powell Mr. Noel Clonke (Retired 28 March 2018) Mr. Francis Hyland (Retired 26 January 2018) Mr. John Moloney (Retired 10 December 2019) Ms. £irneir Mulhern (Retired 26 January 2018)
Secretary Mr. Raymond Horan
Registered Office Bullymany The Currogh Co Kildare
Auditors Comptroller and Auditor General 3A Mayor Street Upper Dublin I
Solicitors William Fry 2 Grand Canal Square Dublin 2
Kilroys Solicitors 69 Lower Lesson Street Dublin 2
Bankers Bank of Ireland Allied Irish Banks p.l.c. KEJC Bank Ireland p.l.c. Permanent tsb Group Holdings p Lc HORSE RACING IRELAND GOVERNANCE STATEMENT AND BOARD MEMBERS' REPORT
Governance The Board of Horse Racing Ireland was established under the Irish Uorseraciirg Industry Act. 1994 (as amended) ('the Act").
The functions of the Board are set out in section 10 of the Act. Ilia Board is accountable to the Minister for Agriculture, Food and the Marine and is responsible for ensuring good governance and performs this task by setting strategic objectives and targets and raking strategic decisions on all key business issues. The regular day-to-day management, control and direction of Horse Racing Ireland are the responsibility of the Chief Executive Officer (CEO) and the senior management team The CEO and the senior management team must follow the broad strategic direction set by tire Board, and must ensure that all Board members have a clear understanding of the key activities and deviainrl5 related to the entity, and crony significant risks likely to arise. Tire CEO acts us a direct liaison between the Board and senior management of Horse Racing Ireland,
Horse Racing Ireland is also responsible for the administration of its nine subsidiaries and tire authorisation of transactions in cach of the subsidiaries. The governance arrangements and control procedures within Horse Racing Ireland also apply to each of the subsidiaries, flnnrt-d Member ResponsibilitIes The work and responsibilities of the members are set our in Schedule of Reserved Board Functions, which also contains the matters specifically reserved for Board decision Standing items considered by the Board include
- Strategic arid busiest planning
- Financial management
- Resource allocation
- Corporate governance
- Reports from committees
- Financial reports management accounts
- Risk management
Tire Board also considers declaration of interests and performance reporting as well as the above matters reserved for Board decision.
Section 29 of the 1994 Act requires the Board of Horse Racing Ireland to keep, in such fcrrrn as may be approved by tire Minister for Agriculture, Food and the Marine with consent of tire Minister for Public Expenditure and Reform, all proper and usual accounts of money received and expended by it.
In preparing these financial statements, the Board of Horse Racing Ireland is required to:
- select suitable accounting policies and then apply them consistently;
- makejudgernenis and estimates that are reasonable and prudent;
- prepare tire financial statements on the going concern basis unless it is inappropriate to presume that Horse Racing Ireland and lire Group will continue in business; and
- state whether applicable accounting standards have been followed, subject to any material departures being disclosed and explained in tire financial statements.
The Board is responsible for keeping adequate accounting records which disclose, with reasonable accuracy at arry time, the financial position of the Group and to enable theirs to ensure that the financial statements are prepared in accordance with Section 29 of tire Act and accounting standards generally accepted in Ireland. The maintenance and integrity of the corporate and financial information on the Horse Racing IreInmnds website is the responsibility, of tIne Board.
The members are responsible for approving the strategic plan and the annual budget which are evaluated on an ongoing basis.
The Board is also responsible for safeguarding its assets and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Board considers that tIre financial Statements of Horse Racing Ireland gives true and fair view of the financial perfonnsnce and the financial position of Horse Racing Ireland at 31 December 20111.
HORSE RACING IRELAND GOVERNANCE STATEMENT AND BOARD MEMBERS' REPORT (CONTINUED)
Board Structure The Board consists are Chairperson and thirteen ordinary members, all of whom are appointed by the Minister for Agriculture, Fond and the Manna. Members of the Board are generally appointed for a period of four years. In some instances, a second term may be served or the period olappoinirnent may be longer. Members mcci between B - 10 times per calendar year. The date of appointment of current members has been included at Note 14 to the Financial Statements. Following a change in Chair and strategic planning work, the Board commenced an internal Board Effectiveness and Evaluation Review which is ongoing and will be completed in 2019.
The Board has established five committees. Four of these committees are required by statute and one is required by the Code of Practice for the Governance of State Bodies. Their membership is defined by reference to the underlying statutory provisions, Code provisions or internal terms of reference and complies with same. No Committee members receive any fees in relation to these appointments
S/ttlt:lory Coin muliteas Rx:inres Committee The fixtures committee is responsible for determining and recommending proposals for the annual list of race fixtures, new or additional Fixtures in the event of abandonment or cancellation of fixtures, monitoring the programme of race fixtures and proposing policies and strategies which form the basis for determining race fixtures.
Media Rights connmn:ee The media rights committee holds responsibility for determining and recommending media rights policies and strategies which form the basis for media rights contracts and arrangements, monitoring the international media landscape market, overseeing the negotiation and financial arrangements associated with the sale or licensing relating to media rights.
Betrjng Commit tee The betting committee dctcnnines and recommends strategies and policies for Horse Racing Ireland in relation to the betting sector in accordance with the terms of the Act.
Industry Scriber Committee The industry services committee Is responsible for determining and recommending initiatives and proposals that could be implemented and/or supported by Horse Racing Ireland as industry initiatives in order to strengthen the skills, learning and development and represent the interests oItliosc eriiployed in the industry.
Pictures Conwniuee (2 meetings) Media Rights C'onuniuce (I niaeaing) Harry McCahrnot &erdn,,ni5v Can trr O'Neill (Appi, 10/12/18) Bawd aien,ber (Chnirperson) (Chairperson) James Cough B,dvimjbcr James Gough Baard,,,rHb,, Michael Halford 8aardrnrmber Nicholas Hartery (.4ppr. lt)fiJa/!,) Conor O'Neill (Appr 10112/18) Board met,t, Derek McGrath £,1nl member Meta Osborne fiondatember Mew Osborne Bawd member John Moloney (Rrri'rd /0/12 IB) Board member ice Keeling tRedrrd l0/tJ5/1Bi Baardrnea,ber John Maloney (Retired 10/12/18) Banr'e!r'
Bending Cranrnriitee (3 meetings) Industry Services Committee (5 meetings) Darngh Fitzpatrick £lo,utj Plunbc, Carol Nolan (App 21/152/18) 8ann1 ,ar,,jbe, (Chairperson) (Chairperson) Allan Byrne !,srr,,nt "' Bernard Caldwell Board mc,:Ibcr Sharon fiyrrie Entrust censOr' Andrew Coonan Lilerini mrrnbzs Elizabeth Ikadori Peardmembe, John Flannery £urrnm( rsen,ber Tim Higgins Rrrnrd 311(1! 10) Essrsirit oseniber Michael Oflonoghue Enema! uscnibrr HORSE RACING IRELAND GOVERNANCE STATEMENT AND BOARD MEMBERS' REPOR'r (CONTINUED) code of Pnzcelcefor:/:e Governance ofSitno Bodies Cornrni::Eej Audit c Risk Con:rn (tine The audit and risk committee is responsible for oversight and assistance to the HRJ Board in relation to compliance, internal control framework, internal and r.,ierntrl audit reviews, risk management and other regulatory or compliance matters.
Audi: & Risk Committee '6 nieeiings,l Sasha Kerins (lppoinledt)4i01/I9) &r).,,,at nen,bgr (Chairperson) Bernard Caldwell Baird ,neriber James Cough Board n,e,,,br Peter Nolan Board member Patricia O'Connor (Appointed F WVS/19) Eel trill,! ,vii4er Nick Wacliman Ecirrimi ,sevmber Con Haugh (Retired 04101/19) &lrnlai eien,ber Francis Hyland (Retired 2511?l/l 6) floard iieaib.r
Schedule of Attendance, Fees and Expenses A schedule of attendance of Board members at the Board and Committee meetings for 2018 is set our in Note 15 to the financial statcmtielmt.t. This includes the fees and expenses received by each member.
Key Personnel Changes There were a number of changes to Board members during 2018 which are reflected on page 2. In accordance with the Act, mill appointments are made by the Minister for Agriculture, Food and the Marine.
Code of Practice fur timr Governance of Stare Bodies The Board is responsible For ensuring that Horse Racing Ireland has complied with lltc requirements of time Code of Practice for the Governance of State Bodies ('the Code"), as published by the Department of Public Expenditure and Reform in August 2016. The Board has adopted the Code of Practice for the Governance ofSimmte Bodies and has put procedures in place to ensure compliance with the Code.
Statement of Compliance Horse Racing Ireland has complied with the requirements of the Code of Practice for the Governance of State Bodies, as published by the Department of Public Expenditure and Reform in August 2016, with the following exceptions:
Horse Racing Ireland does not disclose details of the number of employees whose total employee benefits (excluding employer pension costs) for the reporting period fell within each band ofE25,000 fmrn €50,000 upwards in their annual report and/or financial sta tements due to the commercial sensitivity of this information. This departure from the Code has been agreed with the Department of Agriculture, Food and the Marine.
In addition to the afore mentioned derogation, Horse Racing Ireland has sought formal desogstions front the application of the Code of Practice for the Governance of Stntc Bodiet in relation to the imposition of re3tt1cti0n5 on further employment on Board members and staFf arid the requirement to oblige grant recipients to include staff benefits tables within their published financial statements where such publication arises solely as a consequence of such grant mild being provided by Horse Racing Ireland. We arc currently awaiting a response at time of signing the accounts,
Tire Code required disclosures for Consultancy Costs, Legal Costs and Settlements, Travel and Subsistence and Hospitality Costs are set out in Note IS to life financial statements.
4f\' Nicholas Hariery eta Osborne 281h June 2019 Chairperson Board Member Date
Ard Reachtaire Cuntas agus Ciste Comptroller and Auditor General
Report for presentation to the Houses of the Oireachtas Horse Racing Ireland
Opinion on the financial statements
I have audited the financial statements of Horse Racing Ireland for the year ended 31 December 2018 as required under the provisions of section 28 or the Irish Horseracing Industry Act 1094. The financial statements comprise • the group statement of Income and expenditure • the group statement of comprehensive Income • the group statement of changes In reserves and capital account • the Horse Racing Ireland statement of changes In reserves and capital account • the group statement of financial position • the Horse Racing Ireland statement of financial position • the group statement of cash flows and • the related notes, including a summary of significant accounting policies. In my opinion, the financial statements give a true and fair view of the assets, liabilities and financial position of the group and of Horsing Racing Ireland at 31 December 2018 and of the group's income and expenditure for 2018 in accordance with Financial Reporting Standard (FRS) 102— The Financial Reporting Standard applicable In the UK and the Republic of Ireland.
Basis of opinion
I conducted my audit of the financial statements In accordance with the international Standards on Auditing (ISAs) as promulgated by the International Organisation of Supreme Audit Institutions. My responsibilities under those standards are described in the appendix to this report. I am Independent of Horse Racing Ireland and have fulfilled ray oilier ethical responsibilities In accordance with the standards. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Report on Information other than the financial statements, and on other matters
Horse Racing Ireland has presented certain other Information together with the financial statements. This comprises the annual report, the governance statement and Board members' report, and the statement on Internal control. My responsibilities to report in relation to such information, and on certain other matters upon which I report by exception, are described lathe appendix to this report, I have nothing to report In that regard.
Q MLC
Seamus McCarthy Comptroller and Auditor General 30 June 2019
Appendix to the report
Responsibilities of Board members • I conclude on the appropriateness of the use of the going concern basis of accounting and, based on the audit The governance statement and Board member'? report sets out evidence obtaIned, on wtiethara material uncertainty x the Board niber'? responsibfl'rtiaa. The Board members am e ists responsible for related to events Or conditions that may cost significant doubt on Horse Racing Ireland's ability to continue as a • the preparation of financial statements In the form going concern. If I conclude that a material uncertainly proscribed under section 28 of the Irish Hors acing exists. I am required In draw attention in my report to the Industry Act 1994 related disclosures In the finandal statements or, If such • ensuring that the tinanciet statements give a true and fair disclosures are inadequate, to modify my oplrrkrn. My view In accordance with FMS 102 conduslone are based on the audit evidence obtained up to • eflaUrlri9 the regularity of transactions the dale of my report However, future events or conditions may cause Horse Racing Ireland to cease to continue as a • assessing whether the use of the going concern basis of going concern- accounting is appropriate and • I evaluate the overall presentation, structura and content of • such Internal control as they determine Is necessary to the financial statements, including the dIeciourua, and enable preparation financial the of statements that are free whether the financial statements represent the underlying from material misstatement, whether due to fraud or error. transactions and events In a manner that achieves fair presentation. Responsibilities of the Comptroller and Auditor General I communicate with these charged with governance regarding, among other matters, the planned scope and Umlng of the audit lam required under section 26 of the Irish Horsaracing Industry and significant audit findings, Including any significant Act 1994 to audIt the financial statements of Horse Racing deficiencies in Internal control that I Identify during my audit. Ireland and to report thereon to the Houses of the Oireachtas. Information other linen the ftnencial stat My objective In carrying out the audit Is to obtain reasonable ementa assurance about whether the financial statements ass whole are My opinion on the financial statements does not cover the other free from material misstatement due to fraud or error. Information presented with those efalumanta, and I do riot Reasonable assurance Is a hIgh level of assurance, but Is note express any form of assurance conclusion thereon. guarantee that an audit conducted In accordance with the ISAs will always defect a material misstatement when it exists. In connection with my audit of the financial statements. I am Misstatements can arise from fraud or error and are conoiderüd required under the ISAa to read the other Information presented material If. Individually or in the aggregate, they could reasonably and. In doing so. consider whether the other information Is be expected to Influence the economic decisions of users taken materially Inconsistent with the financial statements or with on the beats of these Iteenrial statements. knowledge obtained during the audit, or If it otherwise appears to be materially misstated, if, based on the work I have performed. As part of an audit In accordance with the ISAs, I enercisu I conclude that (here Is a materiel misstatement at this other professional Judgment and maintain professional scepticism Information, lam required to report that fact. throughout the audit. In doing so, • I identify and assess the risks of malarial misstatement of Reporting on other matters the financial statements whether due to fraud or error; My audit Is conducted by reference to the special considerations design arid perform audit procedures responsive to those which attach to State bodies In relation to their management and risks; and obtain audit evidence that Is sufficient and operation, I report III Identify material matters relating to the appropriate to provides beats for my opinion. The risk of not manner In which public business has been conducted. detecting a material misstatement resulting from fraud l higher than for one resulting from error, as fraud may I seek to obtain evidence about the regularity of financial Involve collulon, forgery, iriteritfonal emissions, transactions In the course of audit. I report If I Identify any materiel instance where public money has not been applied for misrepresentations, or the override of Internal control. the purposes Intended or where transactions did not conform to • I obtain an understanding of Internal control relevant to the the authorities governing them. audit In order to design audit procedures that are I also report by exception If, In my opinion, appropriate In the circumstances. but not for the purpose of expressing an opinion on the effectiveness of the Internal • I have not received all the Information and explanations I controls. required for my audit, or • I evaluate the appropriateness of accounting policies used • the accounting records were not sufficient to pemrnti the and the reasonableness of accounting estimates and financial etniarnonla to be readily and property audited, or related dIsclosures. • the financial statements are not In agreement with the accounting records. STATEMENT ON INTERNAL CONTROL FOR UORSE RACING IRELAND FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
Scope of Responsibility On behalf of the Board of Horse Racing Ireland, I acknowledge the Boards responsibility for ensuring that an effective system of internal control ismsintaincd and operated in respect of liore Racing Ireland and each tifits subsidiaric. This responsibility takes account of the requirements of the Code of Practice for the Governance of Stale Bodies (2016).
Purpose of the System of internal Control The system of internal control is designed Co manage risk within a clearly articulated nih framework The system is designed to provide reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded and that material errors or irregularities are either prevented or detected in a timely way
The trading subsidiaries operate a similar reporting structure in relation to the controls in accordance with the requirement of the Code of Practice for the Governance of State Bodies.
The system of internal control, which accords with guidance issued by the Department of Public Expenditure and Reform, has been in place in Horse Racing Ireland for the year ended 31 December 2018 and up to the date of approval of the financial statements. lite System of Internal Control is built on a framework of;
- Regular financial information. • Administrative procedures including segregation of duties and responsibilities and a system of delegation and accountability. • A comprehensive annual budgeting system, including approval by the Board ofHRls budget. • Regular reviews by the Board of financial reports and key performance activity with performance measured against budgets. • Clearly defined capital investment control procedures. • Compliance with purchasing policies and procedures.
- An annual external audit performed by the Comptroller and Auditor General.
- A comprehensive internal audit programme overseen by the Audit and Risk Committee.
Capacity to Handle Risk Horse Racing Ireland's Audit and Risk Committee comprise three Board members and three eMemal members, with financial strd audit expertise, one of whom is the Chair. The Audit and Risk Committee net six times in 2018.
Etotse Racing Ireland has an outsourced internal audit function which is adequately resourced and conducts a programme of work agreed with the Audit & Risk Committee. The internal audit function reports directly to the Audit and Risk Committee which in turn reports to tire Board of Horse Racing Ireland. The internal audit plans are carried out based on a risk analysis profile of activity arid expenditure and lire plans are preapproved by tIre Audit and Risk Committee on belralIof the Board. In 2018, nine separate internal audit reports were presented to the Audit and Risk Committee
The Audit and Risk Committee has overseen the preparation of risk management policy which sets our the organisation's risk appetite, tlrc risk management processes and details the roles and responsibilities ofstriff in relation to risk management. This policy was approved by the Board in 2018. The policy has been issued to all relevant personnel who are required to work within Horse Racing Ireland's risk management policy, to alert management on emerging risks and control weaknesses and assume responsibility for risks and controls within their own area of work. A formal process to identify and evaluate organisation business risks is in place. An executive risk management committee meets regularly during the year and submits their reports to the Audit and Risk Committee.
Risk and Control Framework Horse Racing Ireland has implemented a risk management system which identifies and reports key risks and the management actions being taken to address and, to the extent possible, to mitigate those risks Corporate and departmental risk registers are in place which identifies the key risks facing Horse Racing Ireland and its subsidiaries and these have been evaluated and graded according to their significance. The corporate register is reviewed and updated by the executive risk management committee on it quarterly basis, The outcome of these assessments is used to plait and allocate resources to ensure risks are managed loan acceptable level. The Board reviews the key corporate risks as a standing item on the agenda and the full corporate register at least once a year. STATET'I4ENT ON INTERNAL CONTROL FOR HORSE RACING IRELAND (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
The Board has taken steps to ensure an appropriate control environment is in place through:
- A clearly defined Management Structure within Horse Racing Ireland and its subsidiaries with clarity on management responsibilities and functions.
- Developing a strong culture of accountability across all lcrvels of the organisation.
- Establishment of formal procedures to monitor activities and safeguard tile assets of all companies within the organisation,
- Establishing procedures for reporting significant control failures and ensuring appropriate corrective action is taken. • Ettablislinterit of systems aimed it ensuring the security of( he information and communication technology systems, • Implementing control procedures over grant funding to cuts idc agencies to ensure adequate control over approval of grants and monitoring and review of grantees to ensure grant funding has been applied for the purpose intended. • An appropriate budgeting system with an annual budget which is kept under review by senior management,
Brercit has potentially serious impact across the organisation and industry including but not limited to the impact uftire sterling euro exchange rate and movement of horses. Home Racing Ireland is actively involved in ensuring the implications for the industry are communicated to the relevant officials. Horse Racing Ireland is a 33'. shareholder in Currugh Racecourse Ltd. and the redevelopment of the racecourse is now completed. Risks associated with the redevelopment are mitigated by the appointment of nominees by Horse Racing Ireland to the Board of Curragh Racecourse Lid and by regular reports to the Board of Horse Racing Ireland,
Ongoing Monitaring & Review Formal procedures have been established for monitoring control processes and control deficiencies are communicated to those responsible for taking corrective action and to management and the Board, where relevant, in a timely way. The following ongoing monitoring systems arc in place:
• Key risks and related controls have been identified and processes have been put in place to monitor the operation of those key controls and report any identified deficiencies. • Reporting arrangements have been established atoll levels where responsibility for financial management has been assigned. • There are regular reviews by senior management of periudic and annual performance and financial reports which indicate performance against budgets/Forecasts.
Public Spending Code
The Public Spending Code, Expenditure Planning, Appraisal and Evaluation in the Irish Public Service - Standard Rules & Procedures, suitably modified for the circumstances of Horse Racing Ireland, is currently being complied with.
Procurement Horse Racing Ireland has procedures in place to ensure compliance with current procurement rules and guidelines and during 2018 Horse Racing Ireland complied Milt those procedures.
Annual Review of Effectiveness Horse Racing Ireland has procedures to monitor the effectiveness of its risk management and control procedures. The Board conducted an annual review of the effectiveness of internal controls in March 2019. The review was co-ordinated by the Audit and Risk Committee and included a review by the Board of;
- The Review or Systems of Inirmal Control completed by internal audit
- The results of the internal audit programme which audited financial and other controls • The annual report by the Audit and Risk Committee to the Board of Horse Racing Ireland. • ihe assurance report by the Internal Audit function to the Board.
No significant breaches or material instances offi-aud were identified through these reviews during the year ended 31st December2018. There were no weaknesses identified in internal control that resulted in material lasses, contingencies or unccrlaintie.s which require disclosure in the financial statements or the uudiiors report on the financial statements,
This statement on iniemol control has been reviewed by the Audit and Risk Committee to ensure that it accurately reflects the control system in operation during the reporting period.
NichuIs Hartery 28th June 2019 Chairperson Date
GROUP STATEMENT OF INCOME AND EXPENDITURE FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
2018 2017 Turnover Notes €000 €000 Tote Ireland turnover 65,235 99,140 Betting related fees 1,481 1,483 Racecourse income 7 14,315 13,866 Total turnover 81,031 114,489 Winnings paid by Tote Ireland 4 (59,018) (91.966) Operating coats '1 (20,373) (19,417) Direct costa (79,391) (111,383)
Income from Racing 1,640 3,106
Other income Allocation from the Horse and Greyhound Racing Fund 5 64,000 64,000 Prie,nonoy contributions from Owners and Sponsors 9 22,107 21,182 Foal levy 6 2,037 2.142 Media income 6,718 6,521 Registrations income 2,554 2,453 Industry services income 372 365 Other income 8 522 618 Industry contributions to Irish Thoroughbred Marketing 443 476 Int.'rcnt income IS 211 347 Net Income 100,604 101,210
Expenditure Contributions to pnizernuney 9 42,805 41,236 Prizemoncy contributions from Owners and Sponsors 9 22,107 21,182 Industry support schemes 1,504 1,241 Integrity and racecourse services 10 11,961 11,440 Racecourse schemes 12 1,067 1,047 Capital development fund grunts 12 6,322 12,062 Capital development fund interest and enpenses 840 725 Grants / Fcts to industry bodies II 2,960 2,916 Foal levy distribution 6 1,521 1,370 Other expenditure 913 441
Fair value movements of investment properties 18 - (400) Horse Racing Ireland administration costs 15 7,374 6,926 Irish Thoroughbred Marketing expenditure 1,856 1,825 General marketing and promotions 2,397 2,054 103,627 104,065
Share of operating loss nfasociutc 17 (1,080) (1,1 II) Other finance expense (155) (214)
Exceptional items 14 1,239 - Taxation 13 (431) (372) Deficit 15 (3,450) (4,559) GROUP STATEMENT OF INCOME AND EXPENDITURE (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
2018 2017 E'OOU €000
Deficit for the financial year (3,450) (c5S9)
Deficit atTributable to. Horse Racing Ireland Group (3452) (4,566) Noncontrolling interest 2 7 (3450) (4,559)
The result on ordinary activities arises solely from continuing activities. Notes I to 39 form part of these financial statements,
~'—) l ,~a 6 7 9~~ Nicholas linricry Meta Osborne 28th June 2019 Chairperson Board Member Dac GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE FINANCL&L YEAR ENDED 31 DECEMBER 2018
2018 2017 No tes €'OUO E000
Deficit for the financial year (3,450) (4,559) Actuarial (toss) gain recognised in the pension scheme 29 (499) 2,443
Gain on DR pension scheme combination 29 197 - Share of comprehensive (toss) / profit of associate 17 (ID) 60 Total comprehensive expenditure for the financial year (3,762) (21056)
Thinl comprehensive expenditure aisribijiable In: Horse Racing Ireland Group (3,764) (2,063) Non-controlling interest 2 (3.762) (2,056)
Notes I to 39 farni part of these Financial statements.
GROUP STATEMENT OF CHANCES IN RESERVES AND CAPITAL ACCOUNT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
Revenue Reserves
Other I & E Establishment Nun Capital Total Comprehensive Reserves Reserve Distributable Reserves Establishment Income Reserves and Other Reserves Curreiuflmz,scia! year €'OOO €1000 €'OOO €'OOO f 100 E'DOO At I January 2018 (14,106) 65,228 17,183 6,875 18,996 94,176
Retained loss - (3,450) - - (3,450)
Transfer to (from) reserves - 1,084 - (1.084) -
Non-cuntruThng interest - (2) - (2)
Other comprehensive gain 187 - - 187
Actuarial loss (499) - - - (499) At 31 December2018 (14,418) 62,860 17,183 6,815 17,912 90,412
J'riorfiu,a,srial year €000 €'QOO €'UOO €000 E1000 €000 At I January 2017 (16,609) 71,064 17,183 6,875 17,726 96,239
Retained loss - (4,559) - - (4,559)
Transfer toI(from) reserves - (1270) 1,270
Non-controlling interest - (7) - (7)
Other comprehensive gain 60 - ' 60
Actuarial gam 2,443 - 2,443 At 31 December 2017 (14,106) 65,228 17,183 6,875 18,996 94,176
Total Non- Total Establishment controlling Equity and Other Interest Reserves €'OOO €'OUO €'OOO C'srrrerufivaitcial year At I January2018 94,176 12 94,188
Retained loss (3,450) - (3,450)
Transfer to/(from) reserves - - -
Non-controlling interest (2) 2 -
Other comprehensive gain 187 - 187
Actuarial ICES (499) - (499) At 31 December 2018 90,412 14 913,426
Prior fl:snnc(al year At I January 2017 96,239 S 96,244 Retained toss (4,559) (4,559)
Transfer to/(from) reserves - -
Nun-controlling interest (7) -
Other comprehensive gain 60 ' 60 Actuarial gains 2,443 - 2,443 At 31 December 2017 94,176 1 2 94,188
Notes I to 39 form part of these financial statements
11
HORSE RACING [RELA.Nt) STATEMENT OF CHANGES IN RESERVES AND CAPITAL ACCOUNT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
Revenue Reserves
Other I& E Establishment Non Capital Total Comprehensive Reserves Reserve Dlttributahle Reserves Establishmen t Income Reserves and Oilier Reserves Curreis:finaacial year €'OOD E'OOO f 100 €000 €000 €'OUO At 1 Janintry 2018 (14,085) 27,429 9,592 6,875 18,996 48,807
Retained toss - (4,1(0) - - - (4,110)
Transfer II) (from) reserves - 1,084 - - (1084) -
Other comprehensive pain 197 - - 197
Actuarial lOSS (499) - - - (499) Ai3l December2018 (14,387) 24,403 9,592 6,875 17,912 44,395
Prior financial year €'OOO €'OUU €'OUQ E1000 €000 €1009 At I January2017 (16,528) 31,901 9,592 6,875 17,726 49,566
Retained loss (3202) - (3,202)
Transfer to (from) reserves - (1,270) - - 1,270 - Actuarial gain 2,443 2,443 Al 31 December2017 (14,085) 27,429 9,592 6,875 18,996 48,801
Notes I to 39 form part of these Financial statements GROUP STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018
2018 2017 Note, €'OOD
Fixed assets Tangible assets 16 75,123 74,001 Financial assets 17 29,673 48,603 Investment properties is 11.700 11,700 Ncgatiegoodwi1L 19 (2,078) (2,331) 184,418 1312973
Current assets Debtors 20 10,093 9,187 Cash atbanlc 21 37,436 21,556 47,529 30,743
Creditors: Amounts rallIng due wIthin one year 22 48,928 45,915
Net current liabilities (11399) (15,172)
Total assets less current llattltlt)es 113,019 116,801
Creditors: Amounts falling due alter one year 23 12,522 13,025
Provision for liabilities 25 1,397 1,371
Pension liability 29 8,674 8,217
Net assets 90,426 94,188
Capital and reserves Establishment teserve 27 17,183 17,183 Revenue reserves 28 48,442 51,122 Non-distributable reserves 28 6,875 6,875 Capital reaen'es 28 17,912 18,996 Capital and reserves attributable to Group 90,412 94,176
Non-controlling imereat 30 14 12 Total capital and reserves 90,426 94,188
Notes Ito 39 (ann pail of fhasL financial statements.
CA Nicholas tartary Meta Osborne 28111 June 2019 Chairperson Board Member Data
is
HORSE RACING IRELAND STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018
2018 2017 Notes €'OOO €'OO(} FI*etl assets Tangible assets 16 21,613 20,745 Financial UsSCt5 17 33,660 51,500 Investment properties lB 4,600 4,600 59,873 76,845
Current assets Debtors 20 20,609 20,667 Cash at bank 21 28,708 12,858 49,317 33,525
Creditors: Amounts falling due within one year 22 43,621 40,346
Net current assets / (liabilities) 5,696 (6,821)
Total assets less current liabilities 65,569 70,024
Creditors: Amounts falling due after one year 23 12,500 13,000
Pension liability 29 8,674 8,217
Net assets 44,395 48,807
Capital and reserves Establishment reserve 27 9,592 9,592 Revenue reserves 28 10,016 13,344 Non-distributable reserves 28 6,875 6,875 Capitol reserves 28 17,912 18,996 Total capital and reserves 44,395 48,807
Notes I to 39 form port of these financial statements
N icholas Hsrtcry Meta Osborne 28th June 2019 1 1 Chairperson IJoarsi Membes Date
GROUP STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
2018 2017 Notes €000 €'OOU
Net cash inflow / (outflow) from operating activities 33 3,558 (140)
Cash flows (ron investing activitie s Receipts from sale of tangible fixed assets 310 38 Payments to acquire tangible fixed assets (4,790) (3,968) Investment in associate undertakings (3,250) (11,750) Receipts from financial asset loans 265 265 Loans to racecourses and industry bodies (ii) (87) Sale I (Purchase) ufunlisieti investments - net 22,476 (9,986)
Purchase of listed investments - net (1.980) Interest received 163 293
Net cash flow, from investing activities 13,123 (25,195)
Cash flows from financing activities Loans in the period 2,500 10,000 Bank loan repayment (3.000) (3,000) Interest paid (301) (208)
Net cash flows from financing activities (801) 6,792
Net increase/ (decrease) in cash and cash equivalents 15,880 (18,843) Cash and cash equivalents at beginning of financial year 34 21,556 40,399 Cash and cash equivalents at end of financial year 31 37,436 21,556
Notes I to 39 fomi part of these financial statements HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
I. Accounting Policies
The following accounting policies are applied consistently in dealing with items which are considered material in relation to the Groups and Parents financial statements.
General Information and Basis or Accounting Horse Racing Ireland is the national authority for thoroughbred horse racing in Ireland, with responsibility for the governance, development and promotion of the industry under the Horse and Greyhound Racing Act 2001, as updated for the Horse and Greyhound Racing Act 2016
Statenmeiii of C'onzplinuice The financial statements have been prepared under the historical cost convention, modified to include certain items at lair value in accordance with generally accepted accounting practice, Including Financial Reporting Standard 102 (FRS 102) issued by this Financial Reporting Council as promulgated by Chartered Accountants Ireland,
The unit of currency in which time financial statemcnr.s are presented in is Euro.
The subsidiary companies all meet the definition ole qualifying entity under FRS 102 and have therefore availed of the disclosure exemptions available to them in respect nitlie Company financial stistemenla. Permitted FRS 102 disclosure exemptions have been taken in the Company financial statements in relation to financial instruments, presentation ofa cash flow statement and remuneration of key management personnel.
Basis of consolidation
The consolidated financial statements comprise the financial statements of Horse Racing Ireland and all outs subsidiaries during the financial year.
Business combinations are accounted for under the purtlmnse method. Where necessary, adjustments are itnde to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All inira-group transactions, balances, income and expenses are eliminated on consolidation.
Turnover
Tumovcr excludes latin group transactions with Group subsidiaries. Tote Ireland turnover represents the sum of wagers placed into Tote Ireland pools on Irish horse racing during the period for both cash and credit bets and the commissions accruing to Tote Ireland on bets placed through Tote Ireland into Tote pools operated by Totalinlors in foreign jurisdictions. Betting laconic represents a levy charged to on-course bookmakers and en-course betting shops, based oil their on-course turnover, pitch fees charged to on-course bookmakers and registration fees charged to on-course bookmakers on transfer of seniority on pitches. Racecourse income represents income received from the provision of racing and golfing activities and related activities and from income earned on the rental of the racecourse's facilities. Turnover is accounted for on an accruals basis.
Interest income is recognised when it is probable that the economic benefits associated with time transaction will flow to the Group and the amount of time interest income can be measured reliably. For leans not repayable an demand the effective interest rate method is used.
Rental income arising arm inve511notrt property is accounted for on a straight line basis over the lease term. Where there is a doubt over collectability mirmiounts due are provided for in full.
14 HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
1. Accounting Policies (continued)
Foal levy Income
Foal levy income is recognised on a cash receipts basis,
Contribution to prizemuney
Contributions to prizcmoncy are made by Owners, Sponsors and Home Racing Ireland
Contributions to prizemorsey by Horse Racing Ireland are expensed in the period in which they are incurred.
The entrance fees, forfeits and sponsorship money for guaranteed value races ore npplied in funding prizemonsey for such races Where there is surplus in any guaranteed value race this is used to fund any deficits in other such races at a subsequent time as directed by the Chief Executive of Horse Racing Ireland
Grants and racecourse Incentive schemes
Grants ,,ujd Capital development grants paid to racecourses under the capital development scheme are accounted for on an accruals basis.
These grants are treated use deferred credit in the Statements of Financial Position cithe subsidiary companies and are credited to revenue on the some basis as the related liiccd assets are depreciated. However for consolidation, these balances are adjusted to reflect the Group position.
Grains received State grants are credited to income when cash has been received front the State.
Operating leases
Rental expenditure under operating leases is recognised in the Statement of Income and Expenditure over the life of the lease. Expenditure is recognised on a straight-line basis over the lease period.
Rental income arising on operating leases is accounted for on a stmiglir.Iimre basis over the tease term of the ongoing leases,
Operating lease incen tives Operating lease incentives granted as a reduction against rental incn:n are recognised over the lease term on a straight-line basis.
Finance leases / hire purchase agreements
The capital cost of assets acquired under finance leases / hire purchase agreements is included under tangible assets and written off over the shorter of the lease / agreement term or the estimated useful life of the asset. The capital elements of future lease obligations are recorded nan liabilities Interest on the remaining obligation is charged to the Statement of Income and Expenditure over the period of the lease / agreement. This charge is calculated so as to produce a constant periodic rate of charge nm the remaining balance of the obligation for each accounting period.
Exceptional items
Iii order to highlight significant items within the Group result for the year, the Group include significant items as exceptional items within the Statement of Income and F-_npertditure. Such items may include: impairment of assets, litigation settlements and profit or loss on disposal of investments. Judgement is used by management in assessing the particular itenntS which by virtue of their scale and nature, should tn disclosed in the Statement of Income and Expenditure and notes as exceptional items. HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
I. Accounting Policies (continued)
Taxation anti deferred sax
The yearly charge for taxation is based on the profit bribe financial year and is calculated with reference to the tax rates applying at the Statement of Financial Position date.
Deferred lax is calculated on the differences between the subsidiary company's taxable profits and the results as stated in the financial statements that ari5c from the inclusion ulgains and losses in tax assessments in periods different from those in which they are recugniscd in the financial Statements. Full provision for deferred tax assets and liabilities is made at tax rates that are expected to apply on reversal of the timing difference. Deferred tax relating to property, plant and equipment measured using the revmmluetion model and investment property is measured using the tea rates and allowances that apply to the sale of the asset
A net deferred asset is regarded as recoverable and recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted,
Fixed assets and depreciation
Fixed assets are stated at cost less accurstulated depreciation and provisions for impairment in value, except for lend which is stated at cost less impairment. Depreciation is provided on all tangible assets other than freehold land, at rates calculated to Write off [he cost, less estimated residual value, of each asset systematically over its estimated useful life, on the straight-line basis, at the following annual rates:
Land Nit Buildings 2%- 10% Track Enhancements 2% - 12.5% Plant, Equipment, Fissures & Vehicles 3% - 33%
Residual value represents the estimated amount which would currently be obtained front disposal of an asset, after deducting estimated costs of disposal, if time asset were already of the age and in the condition expected at the end of its useful life.
The carrying values of tangible fixed assets are reviewed for impairment in accounting periods if events or changes in circumstances indicate the carrying value may not be recoverable.
Assets under construction are not depreciated until the asset is available for use i.e, when it is in the location and condition necessary for it to be capable of operating in the manner intended by ntanagemnent.
All capitalised software is recognised us a fixed asset.
Investment properties Investment properties for which fair value can be measured reliably without undue cost or elfun us an ongoing basis use measured at fair value annually with any change recognised in the Statement of Income and Expenditure.
Rental income arising on investment properly is accounted for on a straight-line basis over the lease term of the ongoing leases.
Reserves The establishment and non-distributable reserves may only be used for a limited number of purposes.
20 HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 20111
1. Accounting Policies (continued)
Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions cithe r55tr0155c1tt.
Financial liubilitles and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group afler deducting all of its liabilities.
Cash and tOni equirrila,i:s Cash consists of cash an hand demand deposits and short term fixed deposits. Cash equivalents consist of short term highly liquid investments that arc readily convertible to known amounts ufcasli that are subject to an insignificant risk of change in value.
Financial ascets and liabilities All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets e1555if1ed as at lair value through profit or toss, which are initially measured at lair value (which is normally he transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. lion arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Debt instruments which meet the following conditions are subsequently measured at amortised cost using tire effective interest metitod, with the exception of listed debt instruments which are designated is at fair value with any change recognised in the Statement of Income and Expenditure' (a) The contractual return to the holder is: (i) a fixed amount; (ii) a positive fixed rate or a positive variable rate; or (iii) a combination ala positive or a negative fixed rate and a positive variable rate. (b) The contract may provide for repayments of the principle or the return to the holder (hut not both) to be linked to a single relevant observable index olgencral price inflation of the currency in which the debt instrument is denominated, provided such links are not leveraged. (c) The contract may provide for a determinable variation of the return to the holder during the life of the instrument, provided that (i) the new rate satisfies condition (a) and the variation is not contingent on future events tither than: (I) a change of a contractual variable rain; (2) to protect the holder against credit deterioration of the Issuer; (3) changes in levies applied by a central bank or arising from changes in relevant taxation or law; or (ii) the new ratc is a market rate of interest and satisfies condition (a) (d) There is no contractual provision that could, by its temia, result in the holder losing the principal amount or any interest attributable to the current period or prior periods. (e) Contractual provisions that permit the issuer to prepay a debt instrument or permit the holder to put it back to the issuer before maturity arc not contingent on future events, other than to protect the holder against the credit deterioration of the issuer or a change in control of the issuer, or to protect the holder or issuer against changes in levies applied by a central bank or arising from changes in relevant taxation or law. (fl Contractual provisions may permit the extension of the term of the debt instrument, provided that the return to the holder and any other contractual provisions applicable during the extended term satisfy the conditions of paragraphs (a) to (c).
21 HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 20I
1 ACCULtIttIrIg Policies (continued)
Financial Instruments (continued)
Debt instruments that are dassified as payable or receivable within one year on initial recognition and which meet the above conditions are measured at the undiscounted amount 01`01C cash or other consideration expected to be paid or received, net of impairment.
Commitments to make and receive: loans which meet the conditions mentioned above are measured at Cost (which may be nil) less impairment.
Financial assets are deiccognised when and only when (is) the contractual rights to the cash flows from the Financial asset expire or are settled; (b) the Group tranfer.s to another party substantially all of the risks and rewards of ownership of the Financial asset; or (c) the Group, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.
Financial liabilities are derecognised only when the obligation specified in the corttract Is discharged, cancelled or expires.
!)tl'tSl,?ILiFltS Investments in non-puttable orifinoryshares (where shares are publicly traded or their fair value is reliably measurable) are rtteasured at lair value with changes in fair value recognised lttrciuglt profit or loss. Where fair value cannot be measured reliably, investments are measured as cost less impairuterit.
Fair va/lie nleils,lrentei:r The best evidence of fair value is a quoted price loran identical asset in an active market. When quoted prices are unavailable the price ofa recent transaction loran identical asset provides evidence affair value as long as there has not been e significant change in economic circumstances ore significant lapse of time since the transaction took place lithe market is not active and recent transactions outtn identical asset on their own are not a good estimate affair value, the lair value is estimated using a valuation technique.
Investments in subsidIaries and racecourses investments In subsidiaries and racecourses are measured at cost less impairment. For investments in subsidiaries acquired for consideration Including the issue of shares qualifying for relief from the recognition of share premium, cost is measured by reference to the nominal value of the shares issued plus lair value of other consideration. Any premium is ignored.
Acquisitions
In accordance with Section 35 ufFRS 102, Section 19 of FItS 102 has not been applied its these financial statements in respect of business combinations affected prior to the date of transition On the acquisition of a company or business, fair values reflecting conditions at the dute olacquisitiun tire attributed to the identifiable separable assets and liabilities acquired.
Where the fair value of the consideration paid exceeds the fair value ufilta identifiable separable asset and liabilities acquired, the difference is treistcd as purchased goodwill. Where the fair value of the separable net assets acquired exceeds the fair value of the consideration given, the difference in treated as negative goodwill, Negative goodwill is accounted for as Indicated below.
22 HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
1. Accounting Policies(continued) invesirneiit In nnaclate
An associate is an entity over which Horse Racing Ireland has significant influence. Significant Influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. In the Group financial statements and pursuant no the equity method the investment in an associate will be initially recorded at cost antI its carrying amount will be increased ordecreased to recognise their share of profit or loss and other comprehensive income generated by the entity,
When the GrOUPS share of losses ofan associate exceeds the Groups interest in that associate (which includes any lung-term interests that, in substance, form pars oIthe group net investment in tltc associate), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on beltalf of the associate.
In the Parents financial statements investments in associates are accounted for at cost less impairment.
Negative Goodwill
Negative goodwill arising on acquisitions is amortised to the Statement of Income and Expenditure account over the financial year in which the non-monetary assets are realised either through depreciation or tale. Negative goodwill comprises the excess of the fair value of the assets acquired over the consideration.
Pensions
Horse Racing Ireland has both defined contribution and defined bcniel'in pension schemes.
Defined contribntio,i .rc/reFrIes Payments to the defined contribution schemes are charged to the Statement of Income and Expenditure in the period to which they relate.
Defined benefit schemes For the defined benefit scheme operated by Horse Racing Ireland, pension scheme assets are measured at fair value. Pension scheme liabilities are measured on art actuarial basis using the projected unit credit method. All excess of scheme liabilities over scheme assess is presented on the Statement of Financial Position as a liability.
Actuarial gains and losses arising front changes in actuarial assumptions and from experience surpluses and deficits arc recognised in the Statement of Comprehensive Income for the financial year in which they occur.
The pension charge in the Statement or Income and Expenditure comprises the current service cast and past service cost plus the difference between the interest income on scheme assets bated on the discount rate and the interest cost oil the scheme liabilities.
Judgements and hey sources or estimation uncertainty
Tire members consider the accounting estimates and assumptions below to belts critical accounting estimates and judgcrtrenta:
Going concern The members have reviewed and approved budgets and cash flows for the next financial year which demonstrate that there is no material uncertainty regarding the Groups ability to meet its liabilities as they fall due and to continue ass going concern. Given the significant decline in turnover in 2018, Horse Racing Ireland undertook a strategic review of Tote Ireland and as a result there was a reorganisation oltotc operations during the year. On this basis the members consider it appropriate to prepare the financial statements on a going concern basis Accordingly, these financial statenients do not include any adjustments no the carrying amounts and classification of assets and liabilities that may arise if the Group was unable to continue as a going concern HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
I. Accounting Pollies (cnntlnurd)
Judgements and Ley sources at estimation uncertainty (continued)
Useful lives of tangible fired assets The annual depreciation charge depends primarily on the estimated lives of each type of asset. The useful lives are reviewed by management on a regular basis and changed, if necessary, to reflect current conditions. In determining these useful lives management consider technological change, patterns of consumption, physical condition and expected economic utilisation of the assets. Changes in the useful lives can have a significant impact on the deprcciaiion charge for the financial year. The depreciation policy reported in these financial statements is approved by the Members and is reviewed annually, in conjunction with the approval of the Financial Statements The net book value of tangible fired assets subject to depreciation was €55.197in (2017: €54.095m).
Rgij,enienl benefit obligations The assumptions underlying the actuarial valuations for which the amounts recognised in the financial statements are determined with input from the actuary and tire updated annually based on current economic conditions.
Valuation of in iestnwnt properly Investment properlies were valued at El 1.700m at 31 December 2018. There was no change in value during 2018. Significant assumptions were applied in the valuation of investment properties. These assumptions applied to size, location terms, covenant and other material factors.
Financial Instruments For the financial instruments held at fair value through profit or Ions, fair values are marked at prices quoted in an active market. Other financial instruments are valued using a discounted cash flow analysis which is based on assumptions supported, where possible, by observable market prices although some assumptions are not supported by observable market prices or rates.
Impairment aJiangible (155505 Determining whether tangible assets arc impaired requires an estimation oftlicir value in use to the Group The value In use calculation requires the management to estimate the future cash flows expected to arise from the tangible asset amid a suitable discount rote in order to calculate present value.
2. Employee numbers
The average number of persons employed by the Group was as set out below: 2018 21117 Number Number
HRI - Full time staff 103 98
I-IPJ - P.aceday casual staff (Full time equivalen(s) 7 6 110 104
HRJ Subsidiaries - Full time staff 90 96 I-flu Subsidiaries P.aeeduy casual staff (Full IirnC equivalents) 40 39 130 135
240 239
The average number of individual casual employees that worked in 2018 was 271 (2017: 268)
24
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
3. Employee remuneration
The aggregate payroll cost of the employees, excluding pension costs, detailed above was as follows: ioia lull €'OOO €000 Wages and salaries 12,325 11,596
Employers social welfare costs . 1,244 1,167 13,569 12,763
4nalysed asfalluirs: Capitalised into assets 361 316 Expensed in financial year 13,208 12,417 13,569 12,763
Included in the above figure is an amount in respect of payments paid and accrued in 2018 under a restructuring, redundancy and other programs of€0.194nt (2017: Ell. 169m). Alto included within the figure for wages & salaries are amounts relating to overtime €0.120m (2017: €0.127m) and allowances €0.077m (7017: E0.07lm).
Rent uneratioa and benefits paid w key management Wax asfollaii's: 2018 2017 €000 €000 Remuneration and other benefits 1,392 1,143
The above figure includes remuneration of € l.165m and benefits of€0.227m paid and accrued in 2018. Key management includes the Chief Executive Officer, Board members and senior management. There was a full complement olkey management in 1018,
Horse Racing Ireland does not disclose details of the number of employees whose total employee benefits (excluding pension casts) for the reporting period fell within each bend of €25,000 from €50,000 upwards due to the commercial sensitivity of this information. This departure from the Code has been agreed with the Department of Agriculture, Food and the Marine.
4. Direct coals Winnings paid on bets Operating costs Total 2018 2017 2018 2017 2018 2017 €'OOD €0110 €000 €'OOO £000 €000
Betting collection costs . 315 341 315 341 Tote Ireland 59,018 91,956 6,677 6,301 65,695 98,267 I-fRI Rocecuiirses Group 13,381 12,775 13,381 12,775 59,018 91,966 20,373 19,417 79,391 111,383
25
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
S. Allocation from the Horse and Greyhound Racing Fund
Horse Racing Ireland with a registcrcd office at Bullymuriy, The Curragh, Co. Kildare was established on 18 December 2001, under the Horse and Greyhound Racing Act 2001 A fund was established for the purpose of giving support to the horse end greyhound racing industry under Section 12 of this Act. This has subsequently been extended under the Horse and Greyhound Fund Regulations, most recently In 2018. The general functions of Horse Racing Ireland are set out in the Irish Horsersicing Industry Act 1994 and the horse and Greyhound Act 2001. In 2018, E64.0m was allocated to Horse Racing Ireland (2017: €64.0m),
6. Foal levy
Under the Irish hlorserncng Authority Act 1994, as amended by the Horse and Greyhound Racing (Betting Charges and Levies) Act 1999, Horse Racing Ireland may, with the consent of the Minister for Agriculture, Food and the Marine, charge a levy on all thoroughbred foals registered in a stud book.
This levy is collected by Weatherbys on behalf of Horse Racing Ireland at variable rates and the distribution is based on recommendations from the Foal Levy Committee (as defined in the Act) mild approved by the Board of Horse Racing Ireland.
2018 2017 €000 €000 flelunce on hand at I January 883 536
Collected during the financial year 2,037 2,142
vyei:4i1pr 1n theAcar: Irish Equine Centre (900) (870) Irish Thoroughbred Breeders Association (475) (425) Irish Thoroughbred Marketing (450) (425) Others (146) (75) (1,971) (1,795)
Balance on hand at 31 December (included in revenue reserves) 949 863
Irish Thoroughbred Marketing expenditure of E450,00 (2017: €425,000) is eliminated on consolidation and shown under Irish Thoroughbred Marketing expenditure in the Group Statement oflncome and Expenditure Account-
7. Rececourac Income
Racecourse income exclude the fair value movement of Investment properties of nil (2017; increase of €0 050ns) which were valued at the financial year end by Knight Frank. See Note 19 for more information.
8. Other income 2018 2017 €000 E1000 Negative goodwill amortisation (Note 19) 253 349 HRJ lease income 269 269 522 618
In
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
9. Contributions to prlzetctorsey 2019 2017 €000 €'OOO From Sponsors 7,754 7,265 From Owners 14,353 13,917 22,107 21,182 From Horse Racing Ireland 42,805 41,236 64,912 62,418
This relates to contributions to pricemoney under the Rules of Racing and Paint to Points
19. Integrity and racecourse services
Under the Irish Ilorsericirig Industry Am 1094, Part III, as amended by the Horse and Greyhound Racing Act 2001, Schedule 6, the Racing Regulatory Body (which comprises the Turf Club and the Irish National Hunt Steeplechase Committee) has responsibility for making and enforcing the Rules of Racing and for providing oti•course integrity 5erv1c5. Horse Racing Ireland provides the funding to the Racing Regulatory Body in order to meet the costs of providing such services as laid out in Part III, paragraph 42 of the 1994 Act. Included in the Grunts to Irish Horserucing Regulatory Board (iF-1R13) are the costs associated with National Hunt Integrity Services.
Horse Racing Ireland directly funds Racecourse Service costs for patrol camera, starting stalls and photo finish, which were functions transferred to Horse Racing Ireland from the Turf Club under the Horse and Greyhound Racing Act 2001.
2018 2017 €000 €'OOO Grant to tURD in relation to Racing integrity Services 7,822 7,482 Grunt to IlIRD in relation to Point its Point Integrity Services • 689 686 Total Grant paid to the IHRU 8,511 8,168 Racecourse services funded by Horse Racing Ireland 3,450 3,272 Total cost of Integrity and Racecourse services funded by Horse Racing Ireland 11961 11,440
In addition to the above, Horse Racing Ireland maltes deductions from client accounts for amounts due to the Il-IRD in respect of license renewals, appeal costs, commissions on stable bonus, sampling fees and certain charitable funds The amounts deducted and paid over are not reflected in Horse Racing Ireland's Statement of income and Expenditure and amounted to €1.34 Ira in 2018 (El .187m in 2017).
The Irish Horseracing Regulatory Board has been established to assume the activities of the Racing Regulatory Body and as from I January 2018 is the regulatory hotly for all haiscracing in Ireland
11. Grants / Fees to Induitry bodies
Grants/ Fees paid to industry bodies are analysed as follows: 2018 2017 €'ool) €1000 Irish Equine Centre 1,320 1,320 Racing Academy and Centre of Educmion 710 710 Order olMaltis 475 448 Glue Crass 274 253 Ocher Industry Bodies 181 185 2,960 2,916
In 2018, HRI advanced loans totalling E0.088m (2017: €0.087ns) to the Irish Equine Centre. As at 31 December 2018, total loans outstanding from the Irish Equine Centre amounted to € 1.250m (2017: €1. 162m).Thls balance is included in Note 20 Dcblors Amounts fulling due within one year.
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
12. Racecourse schemes and capital grants
RacccouresrIse,nes 20114 2017 €000 €'OOI) Levy, pitch fee and other payments to racecourses 971 962 Tote percentage betting payments 96 85 1,067 1,047
The payments made under the above racecourse scltcmcs relate to third puny owned racecourses only.
CpittzI grants 2018 2017 €000 €'OOO Capital development Fund grants 6,322 12,062
The Board of Horse Racing Ireland estIiIished a new capital dcvcloprxienr acIicre for racecourses which provides up In a maximum of,10a a Funding of capital expenditure approved under the scheme.
13. Taxation
(A) Analysis of charge in the financial year 2018 2017 €'000 €000 Current In x: Corporation tax 405 326
Deferred tax: Origination and reversal of timing differences (Note 25) 26 46
Tax on profit on ordinary activities 431 372
(H) Reconciliation between tax charge included in profit and loss and profit on ordinary activities before tax of taxable entities multiplied by the applicable tax rare:
The tax assessed for the financial year is different to the standard rate of corporation tax in Ireland (12.5 per cent). The diflèrcrtces art explained below: 2018 2017 €'GlIO €'OOO Profit on ordinary activities before taxation (HRI owned racecourses) 3,100 2,304
Profit urt ordinary activities before taxation multiplied by standard rate ulcorporation tax in Ireland of 12.5'a (2017: 12.5a) 328 288
Non deductible expenses 22 19 Non allowable income (136) (129) Depreciation in excess of capital allowances 154 153 Income taxable at higher rate 34 51 Losses unused on current period basis. Case 1 (57) (51) Current tax charge for financial year 405 326
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
13. Tasallon (continued)
The activities of Horse Racing Ireland, histi Tliuruu8lIbred M4rhethsg Limited and Tott Ireland Limited are csetnpt From curpuration tax under the provisions ofSeetion 220 of he Taxes Consolidation Act 1997. The profit on ordinary activities befare tmcotion relates to taxable profits its FIR! owned rncecourscs,
A deferred tax asset of€35.000 (2017: 698.000) has not been recognised in the unsocial statements as there is insufficient evidence that the asset will be recovered in the foreseeable future.
14. Exceptional Items 2018 2017 E'OOO €000
Income arising (rum a settlement (I) 278 Amounts received under a legal cane settlement (ii) 961 1,239
(i) FIR! Group rccci;cd incorncolE.0278ut rinsing from it settlement due to Tote Ireland Limited and Hoist Racing Ireland (if) Income arising from payments to The Leopardstowrt Club Limited under n 1e851 case settlement, The prior year amount itfEl) 200m sins recognised within Racecourse income'. Due to the nature and amount of the settlement in the current year this has been disclosed as an exceptional item.
15. Deficit for the financial year 2018 2017 Et00 6000 Deficit for time financial year has been arrived of after charging: Depreciation Owned tangible fixed assets 3,366 3,163 Auditors remuneration- Audit of group linsatcia! statements 104 96 Capital development fund interest 301 208 Loss on disposef of assets Operating Ise rentals 110 108 Consultancy costs 01 1,080 1,001 Legal fees and settlements (ii) (1230) 184 Travel and subsistence (iii) 816 833 Flonpitisliry (iv) 430 315 and after credit imrg: Interest receivable on deposits 130 260 Effective interest on loans 81 87 Negative goodwill amortisation 253 349 Gain on disposal of assets 8 20
Fair value movements of investment properties - 400
HORSE RACING IRELAND NOTES TO THE FINANCIAL StATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 I1ECEM11ETI 2018
15. Deficit for the finanlal year (continued)
Horse Racing Ireland ndininistrauun costs cotnpric the foIlowiti 2018 2017 €000 Running costs oldeparimenis. pay and ncn.pay 5,731 5,517 Pension costs 447 403 Building running costs 1,196 1,006 7,374 6,926
The remuneration package of the Chief Executive of Horse Racing hroland was as follows, 2018 2017 €000 €000 l3asrcrinlary 191 191 Pension contributions and other taxablv. berrehics 56 56 247 247
2018 1017 7l Cousuhancy costs * €'011O Legal advice 136 69 Financial / actuarial advice 161 114 Internal audit 44 59 Capital Development Scheme 154 310 Pension Advice Consultancy 251 199 Public relations marketing 120 122 IT Consultancy 15 38 Other 199 90 Total cnnultnrtcy costs 1,080 1,001
/O Legir/ fees and actilrn,a,,rs
Legal fees - Legal proceedings 9 384 Conciliation and atbitration payments (Note 14) (961) (200) Settlements (Note 14) (278) Total legal fees and settlements (1,230) 184
(II) Tie eel and subsistence
Domestic - Board mtd committee members 31 27 Domestic- Employees 580 615
International nnrd and committee members - 4 International -Employees 205 187 TWO travel and subsistence 816 833
(ii) !loapitaWj' Stuff hospitality 33 36 Client hospitality (External hospitality provided to clierits/tliirtl parties) 397 279 Total hospitality 430 315
The above costs reflect the total spend for Horse Racing Ireland and all subsidiary undertakings. Consultancy costs include the cast of external advice to management Client hospitality Includes Insiard l3uycr& Market flevcicpinent Support
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
15. Deficit for the financial year (continued)
Horse Racing Ireland Group Board Members' fees 2018 2018 2017 2017 and expenses were as follows: Fees Mileage Fees Mileage €'OOO €000 €000 €000
Nicholas 1-lartery A1ipninizd 24 May 2018 - -
Joe Keeling Rctixtd 24 May 2018 - - Bernard Caldwell Appointed 18 December 2008 13 2 13 1
Daragh Fitzpatrick Appointed26JanuLny2018 12 - - - James Gough Appointed 4 March ?0 15 13 2 13 3
Christy Grassick Appointed 26 January 2018 12 - -
Michael Haiford Appointed 26 May 2016 13 - 13 - Elizabeth 1-leadon Appointed 111 Noveusber 20)6 13 I 13 I Hurry MeCalmont Appointed 19Decetnber2016 13 2 13 2
Canoe O'Neill Appointed tO December 20 18 - - Robert Nixon Appointed 31 August 1016 13 2 13 2
Carol Nolan Appointed 28 Much 2018 - Peter Nolan Appointed l0 November 20l6 13 I 13 I Meta Osborne Appomled It tJcccnibcr2013 13 I] 1 John Powell Appointed 26 May 2016 13 I 13
Retired 28 March 20111 - Noel Cloake - 13
2018 - Francis Ilyland Retired26 January - 13 John Maloney Retired 10 December2018 13 3 I) 4
Retired 26January20I8 - EirncarMullrenr - 13 154 14 169 19
Horse Racing Ireland Group Board Members Hoard Board Total no. of Total no. or t(cndaace at meetings during 2018 was as follows: Meetings Meetings Board & GIber Board & Other Attended Committee Committee Meetings Meetings Attended Nicholas liatiery 5 5 7 7 Joe Keeling Retires) 24 May 2018 4 4 10 8 Bernard Caldwell 9 8 34 29 Duragli Fitzpatrick 9 8 12 II James Gough 9 9 24 20 Christy Grussick 9 9 9 9 Michael 1-lalford 9 g 19 15 Elizabeth 1-le2don 9 9 12 II I lorry McCaImont 9 9 16 16 Conor O'Neill I I I Robert Nixon 9 9 9 9 Carol Nolan 7 7 12 12 Peter Nolan 9 9 IS IS Meta Osborne 9 9 19 18 John Powell 9 9 9 9 Noel Cloake Retired 21 March 2018 I I I John Moloney Retired 10 December 2018 9 8 17 IS The total number of meetings attended includes Board Members' attendance at meetings of tire Eloise Racing Ireland Board and other statutory advisory committees. 31
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED]! DECEMBER 2018
16 Tangible assets Plant, Equipment, Group Land & IT Development Buildings & Vehicles Total Cost and valuation €'OOO E'OOO €'UOO Al I January 2018 95,166 35,310 130,476 Additions 2,000 2,790 4,790 Disposals (300) (204) (504) At 31 December 2018 96,866 37,896 134,762
Accumulated Depreciation At I January 2018 33,528 22,947 56,475 Charge for the financial year 1,482 1,884 3,365
Disposals - (202) (202) At 31 December 2018 35,010 24,629 59,639 lYe: book value At3! December2018 61,856 13,267 75,123
At 31 December 2017 61,638 12,363 74,001
Group - In respect of prior financial year Plant, Equipment, Land & IT Development Buildings & Vehicles Total Cost and valuation E1000 €000 €'OOO At I January2017 93,881 32.699 126,580 Additions 1,304 2,664 3,968 Disposals (19) (53) (72) At 31 December 2017 95,166 35,310 130,476
Accumulated Depreciation Asl January 20I7 32,082 21,283 53.365 Charge for the financial year 1,450 1,713 3,163 Disposals (4) (49) (53) At 31 December 2017 33,528 22,947 56,475
Net book value Ac3l Decernber2017 61,638 12,363 74,001
At]! Deccmbcr 2016 61,799 11,416 73,215
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
16. Tangible assets (continued) Plant, Equipment, Horse Racing Ireland Land & IT Development Buildings & Vehicles Total Cost and valuation E1000 €000 €'OOO At I January 2018 23,287 8,059 31,346 Additions 4 1,668 1,672
Disposals - (167) (167) At 31 December2018 23,291 9,560 32,851
A rcuni tilated Lepreda1loi At I January 2018 6,410 4,191 10,601 Charge for the financial year 120 684 804
Disposals - (167) (167) Al 31 December2018 6,530 4,708 11,238
Net book value At 31 December2018 16,761 4,852 21,613
At)! December 2017 16,877 3,868 20,745
I orse Racing Ireland - in respect or prior financial yeas- Plant, Equipment, Land & IT Development Buildings & Vehicles Total Cast and i'aluaiiau €'OOO £000 €'OOO At I January 2017 23,026 6,416 29,442 Additions 280 1,691 1,971 Disposals (19) (48) (67) At 31 December2017 23,287 8,059 31,346
Accumulated Depreciation At I January 2017 6,297 3,661 9,958 Charge for the financial year 117 579 696 Disposals (4) (49) (53) At 31 December 2017 6410 4,191 10,601
Net book value At 31 December 2017 16,977 3,1368 20,745
At 31 December 2016 16,729 2,735 19,484
11
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
17. Financial assets 1018 2017 Nate £'DOO C'OOO Group Loans to racecourses (A) 1,041 1.174 Loans to associate undertaking (0) 776 860 lnvctment in racecourse (H) I I Investment in associate (B) 15,064 12,904
Unlisted investments (8) - 22,476 Listed investments (B) 12,791 I 1,188 29,673 48,603 Horse Radng Ireland Loans to racecourses (A) 1041 1,174 Loans to associate undertaking (0) 776 860 Investment in racecourse (B) I Investment in associate (0) 17,500 14,250
Unlisted inveslrnersts (13) - 22,476 Listed investments (0) 12,791 11,188 Investment in subsidiary undertakings (C) 1,551 1,551 33,660 51,500
(A) Loans to racecourses- Group Fair value through profit or loss Total €'OOO E'OOO Current financial year All January 2018 1,174 1,174 Repayments (165) (165) Gain on fair value movement 32 32 At 31 December 2018 1,041 1,041
Prior financial year At I January 2017 1,30.1 1,304 Repayments (165) (165) Gain on fair value movement 35 35 A131 December 2017 1,174 1,174
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
17. Financial assets (continued)
(A) Loans to racecourses - Horse Racing Ireland Fair value titrouglt profit or loss Total Current financial year €'OOO €000 At I January 2018 1,174 1,174 Repayments (1115) (165) Gain on fair value movement 32 32 At3l December 2018 1,041 1.041
Prior finaucial year At 1 January 2017 1,304 1,304 Repayments (165) (165) Gain on fair value movement 35 35 At 31 December 2017 1,174 1,174
Loans to racecourses, which is at fair value through profit or loss, constitute financing transactions and are measured at the present value of the future cash flows, discounted at a market rare of interest, Included in loans to racecourses are:
- a loan to Blackball Racing Company, Punchestuwn Development Company Limited and Punclietown Enterprises Company Limited measured to €0.947:ii (2017: €1 .069m). The maturity date of the loan is 30 November 2025 and interest is charged at a rule on month Euribor plus 1%.
- a loan IoGowran Park Race Ctitnptsny Limited measured to €0.093m (2017: ED, I05m). Fite maturity date of the loan is 31 March 2025 and interest is charged at a rate of ECI3 plus 1%.
(B) Investments - Group Investment in Investment In Unlisted Listed Associate Racecourse Investments Investments Total ecoo €1100 €'OOO €000 €'OOO Current financial year At I January2018 12,904 I 22,476 11,188 46,569
Additions 3,250 - 22,991 12,970 39,211
Share or loss in associate (1,090) - - (1,090) Disposals • (45,467) (10,990) (56,457)
LOSS on fair value movement . (377) (377) At 31 December 2018 15,064 1 12,791 27,856
Prior financIal year At I January2017 2,212 12,490 10,990 25,693 Additions 11,750 55,460 4,998 72,208
Share or loss in associate (1,058) • - (1,058)
Disposals - (45,474) (4,998) (50,472)
Gain on fair value movement - - 198 198 A% 31 December 2017 12,904 I 22,476 11,188 46,569
35
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED] I DECEMBER 2018
17. Financial assets (continued)
(H) Investments - Horse Racing Ireland Investment in Investment In Unlisted Listed Associate Racecourse Investments Investments Total €'OOO €000 £1000 €'DOO VOOD Current financial year At I January 2018 14.250 I 22,476 11,188 47,915
Additions 3,250 - 22,991 12,970 39,211
Disposals - - (45,467) (10,990) (56,457)
Loss an fair value rrivcmetit - - (377) (377)
At 31 December 2018 17,5110 I - 12,791 30,292
Prior financial year At I January 2017 2,500 I 12,490 1 0,990 25,981 Additions 11,750 55,460 4,998 72,208
Disposals . - (45,474) (4,998) (50,472)
Gain on fair value movettient - . - 198 198 At 31 December 2017 14,250 I 22,476 11,188 47,915
The listed investments relate In fitted interest investment bonds (all of which tire listed on several European Stock Exchanges) The unlisted investments relate to investments in short term financial money market iristrumenis.
Group funding and liquidity is managed by ensuring that sufficient funds are available to meet the Group's needs with an appropriate spread of investment maturity dates. The Group cantiols and monitors credit risk on the amounts due from counter parties by ensuring that all financial assets are held with regulated institutions of at least investment grade in accordance with the treasury policy and that exposure to credit risk is distributed across it number of institutions. Price risk is the risk that the fair value ulfuture cash flows of a financial instrument will fluctuate because of changes in market prices caused by factors specific to an individual investment or factors affecting all instruments traded in the market. The Group monitors this risk on a daily basis.
Investment in racecourse represents investments in ordinary shares This investment is held at cost less impairment because the fair value cannot be measured reliably.
See Note 37 for further information on inveslincot in associate undertaking.
(C) Investments In subsidiary undertakings - Horse Racing Ireland 2018 2017 €000 €11410 At I January 1,551 1.551
Additions -
Disposals -
Gain (Loss) on fair value movement - At 31 December 1,551 1,551
Details of the principal subsidiaries of Horse Racing Ireland and their activities are set Out in Note 38.
it,
HORSE RACING IRELAND NOTES TO TIlE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
17, FInancial a55et5 (continued)
(D) Loans to associate undertaking - Group 2018 2017 €'OOO €000 Current financial year At I January 860 942
Additions - - Repayments (100) (100) Gain on fair value movement 16 18 At 31 December 776 860
Loans to associate undertaking- Hurte Racing Ireland 2018 2017 €000 €000 Current financial year At I January 860 942
Additions - - Repayments (IOU) (IOU) Gain on fair value movement 16 lB A131 December 776 860
Loans to associate undertakings, which is in fair value through profit or loss, constitute financing transactions and are measured at the present value of the future cash flows discounted at a market rate of interest. Loans to associate undertaking includes a loan to Cunagh Racecourse Limited measured at €0.776m (2011: €0.860m) in respect of an element of a previous development plan of the Cunagli Racecourse. The maturity date oftlte loan is 31 March 2020 and interest is charged at a rate of 3 month Euribor plus l
ii
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
18. investment properties 2018 2017 €'OOO €000 Group Fair value at I January 11,700 11,300
Gain on fair value movement - 400 Fair value at 31 December 11,700 11,700
2018 2017 £'OOO €000 Horse Racing Ireland Fair value at I January 4,600 4,250
Gain on fair value movement - 350 Fair value at 31 December 4,600 4,600
Investment properties, which are a health and fitness club, a retail Unit and an office building, were valued to fair value by Knight Frank, an independent valuer with recent experience in the location and class of investment property being valued, The method to determine fair value were the comparative and investment methods and significant assumptions were applied to size, location, terms, covenant and oilier material factors, There arena restrictions on the re&isubltity of investment property.
19. Negative goadivlll 2018 2017 E'OOO f'DOO Cost At 31 December 7,135 7,135
1 ecwnulated 4rnor1satiou At I January 4,804 4,455 Antortised in the financial year 253 340 Al II December 5,057 4904
Net book value At 31 December 2,078 2,331
Goodwill attributable to non.manctary depreciable a55Ct5 (5,057) (5,057)
Negative goodwill of €12.3m arose on the acquisition of net assets in Fairyliouse Club Limited in 2006 and was reduced by the 5ubsequerit impairment of those assets in 2013
Is
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
20. Debtors: Amounts lolling due within one year 2018 2011 E'OOO Group Trade debtors 5,257 4,567 Prepayments end accrued income 2,499 2,127 Amounts due from industry bodies 1,369 1.298 Amounts due from associate undertaking 81 II Other debtors 756 1,129 Taxation recoverable 131 55 10,093 9,187
Horse Racing Ireland Trade debtors 1,860 1, 125 Prcpaymenls and accrued income 1,100 1.300 Amounts due from subsidiary undertakings 15,907 16,566 Amounts due from associate undertaking SI ii Amounts due from industry bodies 1,369 1,298 Other debtors 292 367 20,609 20,661
21. Cashatbank 2018 2017 €000 €'OOO Group Horse Racing Ireland 28,708 12,858 HIU Racecourses 5,800 5,198 Tote Ireland 2,288 2,748 Irish Thoroughbred Marketing 640 752 37,436 21,556 horse Racing Ireland 28,708 12,858
144
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL VEAR ENDED 31 DECEMBER 2018
22. Creditors: Amounts falling due within one year 2018 2017 €000 €'OQO Group Accruals 5,043 5,17 9 Bank loans (Note 24) 3,000 3,000 Trade creditors 1 ,396 2,190 Balances due to racing clients 30,861 29,023 Deferred irseonte 2,521 1,641
Amounts due to associate undertakings 27 - Other creditors 5,219 4196 Taxation creditors 854 687 48,928 45,915
Horse Racing Ireland Accruals 2,577 3,122 Amounts owed to subsidiary undertakings 797 441 Bank loans (Note 24) 3,000 3,000 Trade creditors 642 635 Balances due to racing clients 30,868 29,023
Dcfened Income 851 - Other creditors 4,371 3,658 Amounts due to associate undertakings 27 Taxation creditors 488 467 43,621 40346
Group trade creditors include amounts due to betting clients not drawn down.
Other creditors includes balances amounting to €2.555m at 31 December 2018 2017: €3,073m) deducted from Trainers' prizcmoney accounts in respect of a Stable Employees Pension Plan.
Taxation creditors is spill asfollows: 2018 2017 €'OOO E'OOO Group PAVE 266 265 PRSI 160 ISO VAT 169 79 Outer taxes 259 193 854 687
Horse Racing Ireland PAVE 243 249 PRSI 138 131 VAT 50 39
Other taxeS 57 48 488 467
40
hORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR TIM FINANCIAL YEAR ENDED 31 DECEMBER 2018
23. Creditors: Anloubta falling due after more than one year 2018 2017 €'OOO E'OOO Group Bunk Ions (Note 24) 12,500 13,000 Deferred ioconic 22 25 12,522 13,025 horse Racing Ireland Bank loans (Note 24) 12,500 13,000 12,500 13,000
24. Bank loans 2018 2017 €'000 €'OOO Group Repayable within I year 3,000 3,000 Repayable within 2 to 5 years 12,500 13,000 Repayable after years 15,500 16,000
Horse Racing Ireland Repayable within I year 3,000 3,000 Repayable within 2 to years 12,500 13.000
Repayable after 5 years - - 15,500 16,000
Horse Racing Ireland's Group loan from KEIC is repayable In instaltncnt.s during 2012 and 20 19 The loan is subject to it variable interest rate bused on Euribor The weighted average interest rate during the financial year, for drawn amounts, was 0.350% (2017; 0 350%) The loan is unsecured,
Following receipt olapproval from the Minister for Finance in December 2015, FIR! entered into a E25m loan facility in 2016 with Ulster Bunk to enable the funding ofa capital development programme. The loan is unsecured and a variable Interest rate, based on Euribor, applies to any drawings As at 31 December 2018, El 2.5m (2017 €1 Urn) has been drawn down The weighted average interest rate during the financial year was 1.75% (2017: 1.75%). Undrnwn arttounts are subject to a commitment fee oI0.6125%. Drawings may be made under the facility up 102020 and the loan amount then outsianding will be repayable over the subsequent 7 years.
41
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
25. I'rovlsian for IInbiI1tks 2018 2017 €000 €'DflO Deferred taxation
At I iBtiuSty 1,371 1,325 Charge to Statement of Irtcornc and Expenditure 26 46 At 31 December 1,397 1,371
Components 01 deferred bastion Valuation of investment properties 1,166 1,166 Accelerated capital allowances 231 205 1,397 1 ,371
26. FinancIal Instruments
The carrying values of the Group's financial assets and liabilities are summarised by category below:
ifarsa Racing Ireland Group 2018 2017 2018 2017 €000 €000 €'OOO €'OOO Financial assets Measured otfufr ta/ste through profit or loss Listed investments (Note Il) 12,791 11,188 12,791 11,188
Unlisted investments (Note 7) - 22,476 - 22,476 Loans to racecourses (Note 17) 1,041 1,174 1,041 1,174 Loans to associatrunderlakings (Note 17) 776 860 776 860
Measured at cost less impairment Investment in associate (Note 17) 17,500 14,250 Investment in racecourse (Note 17) 1 I
Measured using the equity mci/sod
Investment in associate (Note 17) - - 15,064 12,904
Measured at tsudiscounted ansosjnt receivable Trade and other debtors (Note 20) 20,609 20,607 10,093 9,187 Cash at bank and in hand (Note 34) 13,908 10,358 22,636 19,056 Short lerni Fixed deposits (Note 34) 14,800 2,500 14.800 2,500
81,426 83,474 77,202 79,346
Financial liabilities Measured at azzsortjsezi cost Bank loans (Note 24) 15,500 16,000 15,500 16,000
Measured oa' uudiscot outed cuiuimout pat'ob/e Trade and other paysbles (Note 22) 40,621 37,346 45,928 42,915
56,121 53,346 61,428 58,915
12 HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
26. Financial Instruments (continued)
The Group's income, expense, gains and losses in respect of financial instruments arc summarised as follows:
Horse Racing Ireland Group 2018 2017 2018 2017 €'000 €000 €000 €000 Fair value (losses) / gains On financial assets (including listed investments) measured at fair value through profit or loss (270) 226 (270) 226
Interest inconse and Interest expense calculated using effective Interest rate method Interest income on financial assets measured at amortised cost 63 70 63 70
27, Establishment reserve
The establishment reserve arose on the transfer of net assets from the Racing Board to the Irish Horseracing Authority on I December 1994 and on the transfer of net assets of the Irish Horserncing Authority to Horse Racing Ireland on lB December 2001.
28. Reserves
Retained surplus include all cumulative gains and losses recognised in the Statement of Income and Expenditure. Revenue reserves at 31 December 201B include €14.3$7m being the pension reserve cumulative amount charged through the Statement of Comprehensive Income (2017: €14.085mn). Capital reserves represent surpluses set aside to fund future capital development, This reserve will be released to revenue reserves on completion of such developments Non-distributable reserves represent reserves which are non-distribulaljlc.
LN HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED] 1 DECEMBER 2019
29. Pension commitments
Horse Racing Ireland has established two pension schemes to provide pension benefits to its employees and farmer employees. Horse Racing Ireland established with effect from I May 2007 the Horse Racing Ireland and Racing Regulatory Body Superannuation Scheme 2007 ("the OH Scheme") which is a trust bused defined benefit pension scheme and which holds contributions made towards benefits to be paid under the 013 Scheme. In addition, Horse Racing Ireland established with effect from 25 February 1999 the Eloise Racing Ireland & Racing Regulatory Body & Associated Companies Defined Contribution Employee Benefits Plan ("the DC Scheme") which is a trust bused defined contribution pension scheme for new employees joining after I January 1999.
Defined Benefit Scheme (Hone Racing Ireland and Racing Regulatory Body Superannuation Scheme 2007) a) On I December 1994, the Irish Horsexacing Authority took over the operation of the Racing Board's Defined Benefit Pension Scheme for permanent stuff. Since 18 December 2001, this scheme continued to operate under Hurst Racing Ireland until 30 April 2007. On I May 2002, at tite paint of transfer of employees from the Turf Club to Horse Racing Ireland, a Deed of Adherence between Horse Racing Ireland, Stewards of the Turf Club and Coyle Hamilton Trustees Limited (now Willis Towers Watson) was put in place allowing Horse Racing Ireland to bean adhering body to participate in the Turf Club of Ireland Pension Scheme (the Principal Employer) from that point until 30 April 2007. b) Until I May 2007, two schemes, the Racing Board's Defined Benefit Pension Scheme and the Turf Club of Ireland Pension Scheme, were in operation. At 1 May 2007, the two schemes merged into one scheme. All pension obligations from baths tire former Racing Board Scheme and the former Turf Club Scheme are now covered in the new merged DB Scheme,
The OH Scheme covers the employees involved in Integrity Services who are directly funded by Horse Racing Ireland under Horseritcing Arthority Act 1994, Section 42 while employed by the Turf Club. Total members at ii December 2018 amounted to 148(2017. 149). As the DII Scheme did not satisfy the statutory Funding Standard, governing pensions legislation required that a Funding Proposal to rectify this deficit be agreed and submitted to the Pensions Authority (formerly known as the Pensions Board). Following consultation with relevant stakeholders, a Funding Proposal over the period from 2013 to 2023 was agreed and subsequently approved by the Pensions Authority. Under the terms of the agreed Funding Proposal, the 013 Sclrente ceased to accrue retirement benefits with effect from I April 2013, and future retirement provisions for service after 1 April 2013 is on a defined contribution basis. As a measure to resolve the deficit in the DS Scheme, the employers (Horse Racing Ireland and ttre Turf Club), have committed, subject to the terms of the Funding Proposal, to make additional contributions over the funding proposal period to 2023.
With effect from 20 December 2018, 'he Turf Club ceased to participate in the DB Scheme and paid its final contribution of €835,000, This final payment was based on future contributions due under the Funding proposal discounted at 4°c. The rights and obligations of the Turf Club has been transferred to Horse Racing Ireland. As a result the assets and liabilities of tire Scheme associated with the Turf Club have been transferred to Horse Racing Ireland. At the same date Curnrgh Racecourse Limited became an adhering employer to the Scheme. c) Total employer contributions in the OH Scheme made for the financial period ended 31 December 2018 were E1,004,000 (2017: £2,607,000). Future expected employer contributions in the OH Scheme are €1270000 for the financial year ended 31 December 2019. d) A comprehensive actuarial valuation was completed as at 31 December 2018 in order to determine the defined benefit obligation for the OH Scheme. c) The pension cost of the 013 Scheme is assessed on an annual basis in accordance with the advice of qualified actuaries using the projected unit credit method. Liabilities relating to other employees of the Currugh Racecourse are excluded in calculating the net pension liability disclosed underneath
41
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
29. Pension commitments (continued)
The principal financial assumptions for the DO Scheme used to calculate tire retirement liabilities under FRS 102 as at 31 December 2011 were as follows;
Valuation method Projected unit credit Projected unit credit 2018 2017 Discount rate 1.90% pa, 1.75% pa. Future pension increases 2.50% pa. I.00a P.B. 2.50% P.n. 1,001. pa Future inflation 1.601% p.a. 1,50% pa. Statutory revaltistion 1.60% p.a. 1.50% p a
2018 2017 Year Year
Mortality pre-rctiremenl Male 62%oFPNMLOO 62% of PNMLOU Female 70% of PNFLUO 709/6 of PNFLOO
Mortality post-retirement Male 58% of ILT15 58% uIILTIS Female 62%oflLT15 62%ufiLT15
The mortality basis explicitly allows for improvements in life expectancy over time so that life expectancy at retirement will depend an tire year in which a member attains retirement age (age 65). The life expectancy for members attaining age 65 in 2018 and 2038 is detailed below:
Life azpeczaricy of 65 Current pensioners (currently aged 65) -male 21.5 years 21.2 years Current pensioners (currently aged 65)- female 24 years 23.7 years
Future pensioners (currently aged 45) - male 23.9 ycors 23.7 years
Future pensioners (currently aged 45) - female 26 years 25.8 years
The asset distribution of the DO Scheme was as follows:
Asset Asset Distribution Distribution as percentage as percentage of total DO of total DB Scheme assets Scheme assets Class 31/12/2018 31/12/2017 Equities 27% 420. Property 8% 7% Fixed lniresi 32% 29a Absolute Return Funds 28% 1816 Cash 2% 1'e Insurance 3% 3o Total 100% 100n
The DO Scheme's assets do not include property occupied by, or oilier assets used by Horse Racing Ireland
45
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
29. Pension commitments (continued)
For accounting periods commencing on or after I January 2015. FRSI7 is replaced by FRSI02. FRSI02 stipulates that the expected return on a scheme's assets is the discount rate. As such, the eitpected return an assets assumption for the DR Scheme for 2019 is 1.900/6.
Analysis of the amounts charged to other finance expense 2018 2017 before amounts deducted for Curragh! Others are as follows: €'OOO €'QOO Interest income on DR Scheme assets 800 757 Interest on DR Scheme liabilities (966) (999) (165) (242)
During 2013 it was agreed that future accrual of retirement benefits would cease in the DO Scheme with effect from 31 March 2013. The accrued retirement benefits for active members, calculated at I April 2013, will be indexed each year up to retirement by means of Statutory Revaluation (asset out in governing pensions legislation), and the Actuary fins advised that I.6% per annum is the appropriate assumption as at this reporting date in this regard
The amounts recognised In the Statement of Financial Position are a; follows: 2018 2017 €'OOO €000 Present value of wholly or partly funded DR Scheme liabilities (54035) (56.205) Fair value of DO Scheme assets 44,870 46,803 Total Deficit in DR Scheme at end of the financial year (9,165) (9,402)
Curragh Racecourse Others deficit included in total deficit for tire financial year (491) (1,185) Net }1Rl liability recognised in the Statement of Financial Position (8,674) (8,217)
Changes In the present value of Dli Scheme liabilities are as follows: 2018 2017 €000 Opening present value of DO Scheme liabilities (56,205) (57,975)
Current service cost - - Interest cost (966) (999)
Contributions by DO Scheme participants
Actuarial gain - 923 Past 5CtViCC cost gain Benefits paid 1 ,990 1,846
Changes in assumptions 1,146 - Closing present value of RB Scheme liabilities (54,035) (56,205)
Changes in the fair value of DO Scheme assets are as follows: 2018 2017 €000 €000 Opening fair value of DO Scheme assets 46,803 43,440 Interest income 800 757 Actuarial (loss) gain (1,747) 1,845 Contributions by employer 1,004 2,607
Contributions by DO Scheme participants - - Benefits paid (1,990) (1,846) Closing fair value of DO Scheme assets 44,870 45,803
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
29. Pension commitments (continued)
Analysis of the amount which Is recognised in the Statement of lOIS 2017 Comprehensive Income Is as fellows: €'OOO €000 Currugh /Others actuarial (loss) / gain for the financial year (102) 325 IIR.l actuarial (loss) gain for the financial year (499) 2,443 Gain on DR pension scheme combination 197 -
The actual reluni on DEl Scheme assets in 2018 was a loss of €O,947ni (2017: gain of€2.602in). The total gains and losses recognised in the Statement of Comprehensive Income at 31 December 2018 for the period was a loss of €0.60 I in (2017: total gain of€2.768m).
Amounts for the current and previous period are as follows: Year ended 3l December 2018 2017 €000 €'OOO Present value of DR Scheme liabilities (54,035) (56.205) Fair value of DR Scheme assets 44,870 46,803 Deficit In the scheme (9,165) (9,402)
Year ended 31 December 2018 2017 €'OOO €000 Net deficit in DR Scheme in relation to HRI and HRI funded Turf Club employees or the DR Scheme (8,674) (8,217)
Experience adjustment arising on
- a the DR Scheme li bilities - 923
- the DD Scheme assets (1,747) 1.845
- Changes in assumptions 1,146
Defined Contribution Scheme (Horse Racing Ireland & Racing Regulatory Body & AssocIated Companies Defined Contribution Employee Benefits Pian)l PRSA a) Horse Racing Ireland operates a defined contribution plan, the Horse Racing Ireland Associated Companies Defined Employee Benefits Plan ("the DC Scheme") which is a trust based defined contribution pension plan. In addition, the DEl Scheme ceased accruing benefits with effect from 31 March 2013 and all active members of the DR Scheme became active members in the DC Scheme with effect from I April 2013. b) At 31 December 2018, there were 194 active DC participants. Horse Racing Ireland also offers a PRSA to employees who are not eligible to join time DC Scheme, c) The pension contributions for the DC Scheme for the year ended 31 December 2018 were El) 780ni (20I7:€0.716m)
4.,
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
30. Non-controlling interest 2018 2017 €'OOO €0011 At beginning of financial year 12 5 Movement in the financial year 2 7 At end of financial year 14 12
The balance of non-controlling interest relates to the percentage ofahareholdings which are not owned by the Group, as outlined in note 38.
31. Capital and other commitments
Future capital and other expenditure commitied by the Group bus not provided for in these financial statements was as follows
2018 2017 E000 €1100 Group Authorised, but not contracted for 10,104 13,017 Contracted 18,876 1,324 Total 28,980 14,341
Horse Racing Ireland Authorised, but not contracted for 10,101 13,017 Authamiscd, but not contracted for, to ubsidiury undertakings 5,554 5,801 Contracted 2,257 933 Total 17,912 19,751
32. Lemma commitments
Operating Lenses - Lessee Total future minimum lease payments under non-cancellable operating leases are as follows:
201$ 2017 €000 €'tIOU Group Within one year 100 107 Between one and five year, 84 13$
After irveyears - - 84 245
Horse Racing Ireland Within one year 48 41 Between one and five years 47 64
After five years - - 95 105
.IN
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
32. Lease commitments (continued)
Operating Leases - Lessor Total future minimum lease receipts under non-cancellable operating leases are as follows:
2018 2017 E'OOO f'OOO Group Within one year 933 845 Between one and five years 4,007 3,623 After five years 9,421 9,861 14.361 14,329
Horse Racing Ireland Within one year 275 275 Between one and five years 1,373 1 ,373 After five ycors 4,118 4,393 5,766 6,041
Significant leasing £7rliulgernencr - Lessor
- The office building has a 2.5 year lease expiring in 2039. The next rent review is due in July 7019. • The health and fitness club has 35 year lease expiring in 2033. The next rent review is due in January 2023
- There are two retail unit operating leases detailed as follows: • The first retail unit has a tO year lease expiring in January 2028. The second retail unit has a 16 year lease expiring in February 2032.
33. Reconciliation of Deficit for the financial year to act cash inflows f(outflows) From operating aetts'ltles: 2018 2017 E'OOO €000 Deficit for the financial year before tart, exceptional item other finance expenses & associate undertakings (3,023) (2,855) Interest receivable (211) (347) Interest payable 301 208 Depreciation 3,366 3,163
Non cash exceptional items 1,239 -
Fair value movement of investment properties . (400) Fair value rnovrntult on listed investments 377 (198) Gain on disposal of assets (8) (20)
Loss on disposal of assets . Negative goodwill amorlisotion (253) (349) Tart paid (407) (299) Increase in operating debtors (835) (902) Increase in operating creditors 3,012 3,859
Difference between pension charge and contribution • (2,301) Net cash Inflow l(outfluw) from operating actIvItWi 3,558 (440)
19
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR TH E FINANCIAL YEAR ENDED 31 DECEMBER 2018
34. Components of cash and runEs equivalents 2018 1017 €'OOD €000 Group Cash at bank and in hand 22,636 19,056 Short turin fixed deposits 14,800 2,500 37,436 21,556
Horse Racing Ireland Cush at bank and in hand 13,908 10,358 Shari term fled deposits 14,80(l 2,500 28,708 12,858
35. Related party transactions
In the normal course of business Horse Racing Ireland may enter into contractual arrangements with undertakings in which Board members have interests. The Hoard adpt:d procedures in accordance with guidelines issued by the Department of Public Expenditure and Reform in relation to the disclosure of interests by Hoard members and these procedures were adhered in during the financial year, The Board complied with the Department of Public Expenditure and Reform guidelines covering situations of personal interest. In cases of potential conflict of interest. Board members did not participate in or attend any Board discussion relating to the matter.
Home Racing Ireland has availed of the exemption afforded by paragraph 33. IA from the provisions of FRS 102 'related party trunsacuont' from disclosing transactions with wholly owned subsidiaries (i.a.i0U% owned). Navan Races Limited, The Tipperary Race Company Plc, The Leopardatown Club Limited and Fairyhouse Club Limited arc all considered related parties because they are not wholly owned subsidiary undertakings. Please refer to note) for total remuneration and benefits paid to key management.
Subsidiary undertakings Transactions in the financial year between Horse Racing Ireland and its non-wholly owned subsidiary undertakings included payroll and cost recharges olE] .886m (2017 E3.723m, bookmaker's fees of€0.353mn (2017: €0359m), sponsorship collected of€I .134m (20(7: €0.967rn), grants payable of€0.250m 12017: E0.988m) and interest income of€0.033rn (2017: €0.035m).
During the financial year, Horse Racing Ireland received repayments on financial assets of€0.625m (2017: €0.650its)
Associate underzakhsgs Transactions in the financial period between Horse Racing Ireland and its associate undertakings included payroll and cost recharges of €0021 in (2017: €0.033m), booknsakers tees of €0,054m (2017: €0063mn). sponsorship collected ofE0.938m (2017: €0.91 Om), grants payable of€0.025tn (2017: €0.050m), schools and gallops recharges ofE0,235ni (2017: €0.1 86rn), training gmund recharges ofE1,204 in (2017: €1 .201rit) and interest income om.006rri (20177 f0.007m).
Asset Out in Note 37 HRI has an equity investment of€I7.5tn at year end (2017 : €14.23ns) in CR1. As Set out in Note Il the carrying value of HRI Group's investment is €15,064m after taking account oIHRI's share oflosses in CR1 to date.
In addition, HRI provided grant aid ol€2.5m in 2018 bringing total grant aid paid to dutc of E12.5m. The €2,5m is included as a charge in time l&E.
Included in Note 31 is a capital conlmilmnent ol'EGmn by HRI towards development costs at the Cur-sigh, in exchange fur further equity investment its CR1. This was paid to CR1 in March 2019.
HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
35. Related party transactions (continued)
4rn aunts due (to) /frvni related parties At financial year end, the amounts due (to) from related parties were as follows:
Related party name 2018 2017 €000 E'OOO The Tipperary Race Company Plc (40) 26 The Lcopardstown Club Limited 744 1,094 Nuvan Races Limited 6.164 6,385 Fairyhause Club Limited 3,401 3,680 Curragli Racecourse Limited 830 871
36. Property
Horse Racing Ireland's main administrative office is located at the address defined on page 2 and is it freehold property.
37. Investment in Associate
I1R1, the Turf Club and private investors estblishtd a company, Currogh Racecourse Limited (CR1.) to facilitate the redevelopment and future operations of the Currugh racecourse. This company is incorporated in the Republic of Ireland In 2018, HRJ paid €3.25m in equity investment in CRL bringing its taint investment n131 December 2018 to €17.5:n (2017: €I4.25m), heingihe currying value of this Investment by HRI. See Note 35 for further information on CRL
As at 31 December 2018, there were two classes of shares held by Horse Racing Ireland in CRL. URI held 100,000 01 (2017: 100,000) Ordinary Shares and 108,44902 (2017: 08,449) Ordinary Shares with it nominal value of €0001 cacti. The 131 shares are fully paid up as at 31 December 2018 and represent 3333a voting tights in CRL, The 82 shares represent 33.660a economic shares with no voting rights,
At 31 December 2018 the Group and company had interests in the following associates:
% Held Principal Activities Currtiglt Racecourse Limited 33% The provision of racecourse and racehorse training facilities and the facilitation of the redevelopment of the Curragh Racecourse HORSE RACING IRELAND NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018
38. Principal subsidiaries
Direct subsidiaries '1. Held Principal Activities Tote Ireland Limited 100'/ Operation of a totalitalor at race meetings, operation ala tale-betting service and an internet betting service
Irish Thoroughbred Marketing Limited 100% Promotion of the Irish Thoroughbred Horse
HRJ Racecourses Limited 1001/10 Racecourse holding company, holding shares in indirect subsidiaries listed below
Tore Arena Limited 100% Non-trading
Indirect Subsldiarie The Leopardstown Club Limited 99.971/0 Holding afrace meetings and ancillary activities and the operation of Leopardstown golf course
Nnvajt Races Limited 99 580". Holding of race niectinga and ancillary activities
Cork Rticecu,ure Limited 100% Letting of land
The Tipperary Race Company Plc 97.5 116 Holding of race meetings and ancillary activities
Fairylnouse Club Limited 99.94% Holding of race meetings and ancillary activities
All tine subsidiary companies are incorporated in the Republic of Ireland with their registered offices an 13n11ymany, The Curragh. Co. Kildare.
39. Approval of financial statements
The Board of Horse Racing Ireland approved these financial statements for issue on 28th June 2019.