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RACING LIMITED ANNUAL04 REPORT 1> ADMINISTRATION 1> CHAIRMAN’S REPORT

It is with great pleasure that I present Racing Victoria Limited’s The expansion of ThoroughVisioN™ Pty Ltd (TVN) to include the (RVL) annual report and financial statements for 2004/05. Australian Jockey Club and Turf Club and the subsequent agreement for the formation of a joint venture between TVN This is RVL’s third reporting year since its establishment in and Tabcorp illustrates how the leading organisations within December 2001 and marks the end of the RVL Board’s first Australian racing can successfully work together to produce term of appointment. outstanding results for the industry. This structure ensures that The introduction of a new governance structure for the Victorian racing not only will control its own broadcasting destiny, but has racing industry was always destined to be a the commercial launching pad to achieve global pre-eminence. challenging task and I consider it is fair to say that, reflecting Similarly, the cementing of Racing Information Services ’s back over that three-year term, it is a mission that has been (RISA) control over data rights secures the other main stream of well accomplished. Of course, the transition would not have the industry’s intellectual property and allows us to now pursue been possible without the full support and cooperation of the any third parties that refuse to meet racing’s integrity standards member shareholders, the industry stakeholders and the and revenue entitlements. Victorian Government. Australian racing and wagering took a major step towards a While RVL is now firmly established in its industry leadership true national standing when Tabcorp and TAB Ltd merged into role, this annual report clearly documents that our work is the biggest wagering operator in the country. RVL was a strong by no means done. The challenge of growing and sustaining supporter of Tabcorp’s takeover bid and we expect that this the business of racing is a continual one and is expanding support will be well justified by the financial benefits generated into a broader landscape with every passing day. for Victorian racing through the resultant operational savings, 2003/04 was a year in which the Victorian racing industry co-mingling of pools and expansion into new markets. held to its strategic approach of building positive relationships with the key players of the racing business across Australia.

2 There were many other highlights throughout the year with Racing’s grassroots – our 16 picnic racing clubs – also received two particularly special moments being the inaugural National a significant boost when the RVL Board approved the Specialist Jockey Celebration Day in March and the opening of Champions Racing Strategy to maximise the financial and social benefits – Australian Racing Museum & Hall of Fame at Federation picnic racing generates to local communities and to promote Square in July. Both initiatives are fine examples of a national this ideal point of entry into racing for the general public and approach raising the recognition of our sport’s participants, its for owners, trainers, jockeys and stablehands alike. The 2003/04 rich history and its wide appeal across the community. Likewise, picnic season attracted over 65,000 on-course patrons and 1,750 the wearing of Australia Day and colours by jockeys starters across the 38 meetings between November and April. riding at race meetings on those respective national public RVL’s achievements throughout the year were ably assisted by holidays was a similarly well received gesture. outstanding government support. Total financial assistance During the year, there was considerable work undertaken in the granted to the collective Victorian racing industry amounted improvement program for jumping racing. New safety measures to $9.7 million across a number of State and Federal Government included a second stage roll-out of better designed, constructed programs in the areas of education, tourism, research and water and located hurdles and steeplechase fences with a particular management. Significant grants in 2003/04 included the special emphasis on cushioned take-offs and more forgiving brush. Victorian Government contribution of $3.8 million towards the Combined with rigorous race qualification and training regimes, relocation of Racing Museum to , we are steadily raising the standards of protection for riders the third annual payment of the EGM Levy Compensation Scheme and horses. A pending epidemiological study of jumping racing of $4.0 million (and the announcement that the payment would accidents will provide a sound basis for measuring the effects be extended for a further two years), a $100,000 grant to RVL from of these changes and identifying opportunities for further the Smart Water Fund and ongoing funding from Tourism Victoria. improvements. At the same time, a strategic plan has been In addition to direct financial support, the Victorian Government commissioned to recommend how this integral part of racing also facilitated legislative changes to enable RVL to implement can be sustained into the future. The plan is being formulated reforms to ’s appeal processes featuring in close consultation with the jumping racing fraternity. the formation of the Racing Appeals & Disciplinary (RAD) Board and consulted closely on a number of other relevant legislative and policy decisions.

3 Yarra Valley Racing 1> CHAIRMAN’S REPORT

RVL greatly appreciates the industry leadership extended by the The RVL Board also underwent change with both Mr George Hon Steve Bracks MP, Premier, and the Hon John Pandazopoulos Corones and Mr James Henderson resigning in the first half MP, Minister for Racing, and the valuable assistance provided of 2004. They were both outstanding contributors to RVL during by their staff and departments. its formative term and I wish them both well for the future. Country Racing Victoria exercised its right to fill George’s vacancy I also acknowledge the continuing support that RVL receives from and appointed Mr Chinka Steel to the position. Chinka, with his its member shareholders – Country Racing Victoria, strong record in country racing administration, is a most welcome Racing Club, Moonee Valley Racing Club and Victoria Racing addition to the Board. The four remaining RVL Board Directors Club – and its industry stakeholders – the Australian Jumping appointed by the Appointment Panel decided not to fill James’ Racing Association, Australian Services Union, Australian Trainers’ vacancy given the relatively short period of time until the next Association, Australian Workers’ Union, Media, Entertainment round of appointments to the Board. & Arts Alliance, Thoroughbred Breeders Victoria, Thoroughbred Racehorse Owners’ Association, Victorian Bookmakers’ Association, The appointment of Mr Robert Nason as CEO to replace the Victorian Jockeys’ Association and the new inclusion in our vacancy arising from Mr Neville Fielke’s resignation was the stable of stakeholders, the Australian Liquor, Hospitality & other major RVL personnel change during the year. Robert Miscellaneous Workers’ Union. brings with him a wealth of business experience, an enthusiastic understanding of racing and a tremendous capability to provide Further, I extend RVL’s appreciation for the productive RVL with strong leadership, vision and accountability. relationships we enjoy with the Australian Racing Board (ARB), RVL’s counterpart Principal Racing Authorities around Australia, Lastly, I express my sincere appreciation for the hard working Tabcorp, TVN, RISA, Harness Racing Victoria, Greyhound Racing dedication of my Deputy, the Hon Michael Duffy, the rest of the Victoria, Radio Sport 927, Channel 7 and Sky Channel. RVL Board, the RVL Executive Team and the entire staff of RVL.

At year’s end, there are inevitably changes in the industry’s Here’s to a great year of racing. guard and a most significant instance was the retirement of Mr Bob Charley as Chairman of the ARB and his replacement by Mr Andrew Ramsden. Bob has been pivotal in elevating racing’s national focus and the high standing of the ARB. We are fortunate that he has been able to hand over the reins to such an experienced successor. Graham Duff Chairman

5 >1 >2 >3 >4 >5 1> BOARD OF DIRECTORS

>1 Graham Duff – Chairman (Age 61) Former Chair, Tripartite Working Party on Labour Standards to Chairman, HOSTPLUS (appointed August 2004) examine ways of promoting labour standards in the Asia Pacific Director, Australian Racing Board Limited Region Board of Governors, International Masters Games Association Former Chair, Trade Sub-Committee of the Joint Standing Director, Mark Sensing Ltd Committee on Foreign Affairs, Defence & Trade Chairman of National Construction Management Services Pty Ltd Federal Attorney General (1990–1993) Former Chairman of Victorian Institute of Sport Minister Trade Negotiations, Member of Cabinet (1987–1990) Former Chairman and Managing Director of John Holland Group Minister Communications (1983–1987) Former Managing Director of Fletcher Challenge Construction Member of the Joint Committee of Public Accounts (1980–1983) (Worldwide) MHR (ALP) Holt Vic (1980–1996) Chairman, Dandenong Youth Employment Project >2 Robert Nason – Chief Executive Officer (Age 49) Board Member, Dandenong Community Advice Bureau Chairman, Australian Racing Museum Solicitor, private practice Director, VicRacing Pty Ltd >4 Sue Carter (Age 54) Director, Racing Information Services Australia Pty Ltd BA (Leeds), ACA (UK) Director, Australian Racing Board Limited Former Director ThoroughVisioN™ Pty Ltd Diploma in Applied Finance and Investment (SIA) Former Chairman, EDS Australia Graduate Diploma in Applied Science (Organisation Dynamics) RMIT Former Executive Vice President and Director, A.T. Kearney (USA) Director, AMP Superannuation Ltd Former Managing Director, A.T. Kearney Australia & associated Director, Peter MacCallum Cancer Institute companies Director, Private Health Insurance Administration Council Former Managing Partner, Coopers & Lybrand Consultants, Director, Professional Indemnity Insurance Company Australia Ltd Melbourne Consultant, Corporate Governance and Board Effectiveness Former Director, Variety Club of Victoria >3 The Hon Michael Duffy – Deputy Chairman (Age 66) Former Director, Open Family Australia Bachelor of Laws degree, Former Director of Future One Limited Consultant, Mallesons Stephens Jacques Lawyers Former Director of Queen Victoria Women’s Centre Trust Member of the Order of New Zealand for work on the Closer Regional Commissioner, ASIC Victoria (1999–2001) Economic Relations Agreement with New Zealand (1990) Chief Financial Officer, ANZ Funds Management (1994–1998) Chair, Judicial Remuneration Tribunal of Victoria >5 Professor David Karpin AM (Age 61) Director, ThoroughVisioN™ Pty Ltd B Com (Hons), MBA, LLD (Hon), FCPA, FAIM, ACIS, MACS Director, Hanover Welfare Services Chair, Kensington Management Committee – A Public/Private Chairman, Melbourne Health Partnership Housing Development Chairman, Magnesium International Ltd Director, Melbourne Business School Limited

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Director, Placer Dome Inc >8 Ray Orloff (Age 63) Director, ThoroughVisioN™ Pty Ltd Non-Executive Director of various private companies Chairman, Warrnambool Cheese & Butter Factory Ltd Former Executive, Smorgon Consolidated Industries Director, Institute of Public Affairs Ltd Former Executive, Humes Ltd Member of Council, Curtin University of Technology Former Non-Executive, Equity Trustees Ltd Adjunct Professor of Management at the Australian National Former Board of Management Member, Royal Children’s Hospital University, Canberra Smorgon Consolidated Industries (1960–1990) Group Executive, CRA Ltd (1992–1996) Director, Smorgon Consolidated Industries (1978) Managing Director, Argyle Diamond Mines Pty Ltd (1986–1992) Non-Executive Director Smorgon Consolidated Industries (1990) Commercial Director, Hamersley Iron Pty Ltd (1982–1986) >9 Chinka Steel (Age 59) >6 Lindsay Maxsted (Age 50) Bachelor of Law, Melbourne University; Bachelor of Commerce, FCA, Diploma of Business Melbourne University Chief Executive Officer, KPMG Australia Admitted to practice Supreme Court of Victoria and High Court Board Member, KPMG ASPAC of Australia Board Member, KPMG Australia Australia’s Representative on Strategic Planning Committee Director, Helmsman Funds Management Ltd of International Petanque Federation (FIPJP) Chairman, VicRacing Pty Ltd Director and Secretary of Petanque Australia Ltd Former Chairman and Director, Public Transport Corporation Former Director, Country Racing Victoria (1994–2004) of Victoria Former Director of Radio 3UZ Pty Ltd >7 Kevin McNamara (Age 69) Former President and Treasurer of Kyneton District Racing Club FCPA, ACIS Former Director, Metropolitan Football League Former President, Riddell District Football League Director, VicRacing Pty Ltd Former President and Secretary of Woodend Racing Club Director, Racing Products Victoria Pty Ltd Former Chairman, Arts Access Society (for disabled and Deputy Chairman, Jade Software Corporation Pty Ltd disadvantaged) Deputy Chairman, Huntingdale Partners Pty Ltd Former Shire President/Councillor for Shire of Newham and Director, Macstech Pty Ltd Woodend Former Director, Country Racing Victoria Former Chairman, Kilmore Turf Club Inc >10 Geoff W Torney (Age 69) General Manager, Systems & IT, Advance Bank Ltd (1990–1995) LLB General Manager, Systems & IT, Ford Motor Co Australia & Asia Director, Racing Products Victoria Pty Ltd Pacific (1980–1990) Consultant, BJT Legal Former Chairman, Moonee Valley Racing Club Former Chairman, Country Racing Victoria and Ballarat Turf Club Extensive community involvement

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>2 >3 >4 >5 >6 1> EXECUTIVE TEAM

>1 Chief Executive Officer – Robert Nason >5 Director – Integrity Services – Des Gleeson National Chairman of Stewards Advisory Group. Areas of >2 Director – Racing Operations – Stephen Allanson responsibility include: Chairman of Stewards’ Panel; upholding Areas of responsibility include: Planning & Infrastructure (capital the Rules of Racing, the conduct of inquiries and appeals; projects, tracks and training facilities, infrastructure and race administration of raceday and official trials; licensing of industry product planning); Operations (race dates, race programs, race participants; and raceday security. field management, product development, Group and Listed Races (Victoria only), handicapping, race classifications, jumping >6 General Manager – Organisation Development & Human racing, picnics, Super VOBIS and Registrar of Racehorses); and Resources – Susan Harrison Betting Services (bookmaker supervision and regulation, Areas of responsibility include: recruitment, employee relations, Australian Prices Network, portable wagering infrastructure, industrial relations, performance appraisal, training and career bookmaking policy, sports bookmaking and Bookmakers’ development, succession planning, remuneration, payroll/profile; Development Fund). and HR Services to related entities including ARM, TVN, CRV, RISA and other industry stakeholders such as trainers. >3 Legal Counsel – Simon Barrile

Areas of responsibility include: legal advice; intellectual property >7 General Manager – Planning & Infrastructure – David Hawke protection; contractual and regulatory matters; Freedom of Areas of responsibility include: capital management, infrastructure Information; Privacy; Rules of Racing; and racing appeals and race product planning, maintenance and development of administration. tracks and training facilities including Cranbourne Training Complex; and research and development. >4 Director – Public Affairs, Communications & Publishing – Peta Credlin >8 Director – Veterinary Services – Dr John McCaffrey Areas of responsibility include: media; government relations; Areas of responsibility include: raceday veterinary services; corporate affairs; public relations; events and awards including administration of farriers (VMFA); analytical services (RASL); Australian Champion Racehorse of the Year, Celebrating industry research and development (RIRDC/RVERF); Australian Racing’s Heroes (Scobie Breasley Medal and Fred Hoysted Horse Industry Council (AHIC); quarantine (AQIS); health and Award), Official Launch and Silver welfare; equine integrity and welfare (NEIWAG); and RVL’s Arrow Sprint Challenge; Spring Racing Carnival branding dealings with the Australian Equine Veterinary Association (AEVA). and marketing including Spring Racing Carnival Ambassador program; advertising and promotional campaigns and Form Guide Strategy; Internet; Intranet; publishing; graphic and web design; Inside Racing; Inside Breeding; CustomerFirst – industry call centre and booking service; and market research.

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>10 >11 >12 >13 >14

>9 Director – Racing Services – Julie Piper >13 General Manager – Information Services – Chris Skorsis Areas of responsibility include: Information Services, Finance, Areas of responsibility include: information technology project Strategic Planning, Procurement; and Risk Management. management, help desk services, software development, database management, system/infrastructure management, >10 Director – Equine Business Development – Mark Player Internet hosting services, applications service provider, network Areas of responsibility include: overseas equine recruiting; communications, innovations/technology upgrades, Internet/ breeders’ services; horse sales; international business e-mail access policy, information technology access policy, development; owners’ liaison; international media rights. information technology asset management, service provider – RISA/TVN/ARM/APN/Victorian Clubs; and information management. >11 Director – Racing Development – Bernard Saundry >14 General Manager – Racing Victoria Limited Education Areas of responsibility include: strategy, external relationships & Training Centre – Chris Watson (ThoroughVisioN™ (TVN), Champions – Australian Racing Museum & Hall of Fame and Racing Information Services Areas of responsibility include: apprentice jockey school, Australia (RISA)); and RVLETC, RVL’s Education & Training trackrider training and recruitment, jockey welfare, stablehand Centre. traineeships, liaison with State and Federal training authorities, workplace assessment, courses for cross country riders; and >12 General Manager – Finance – Kevin Shaw accommodation and facility hire. Areas of responsibility include: Joint Venture Tabcorp; VicRacing Pty Ltd; Racing Products Pty Ltd; Audit, Finance and Governance Sub-Committee; Internal Audit; Finance & Compliance Policy; GST; business rules and policy; club support; reporting; risk management and insurance; and role as Company Secretary to TVN and the Australian Racing Museum.

9 1> CHIEF EXECUTIVE OFFICER’S REPORT

I am pleased to present my first Chief Executive Officer’s Report Industry returns have been impacted by smoking bans in gaming following my appointment to Racing Victoria Limited in April 2004. venues introduced in 2002. This reduced 2002/03 distributions to racing clubs by $7.5 million of which $6.6 million has been The 2004 year posed many challenges but we have arrived at reversed in 2003/04. Because prizemoney levels for 2002/03 were the end of it in a position where the Victorian industry continues set (up $8.9 million on prior year) before the income reduction to lead the nation and, on many dimensions, lead the world in was known, 2003/04 prizemoney levels needed to be adjusted the integrity, financial performance, quality, participation and to pick up the lag effect of the lower rate of industry revenue presentation of thoroughbred racing. returns. This resulted in a year-on-year reduction in prizemoney Racing’s appeal as one of Victoria’s most popular spectator of $3.0 million to $107.5 million after 10 previous years of sports remained strong with a total attendance of 1,627,505 consecutive growth. during the 2003/04 season. While the total metropolitan While this adjustment has had flow-on negative effects attendances of 974,249 represented a 2.0% reduction on the throughout the industry, it has been a catalyst for aggressive previous season, country racing attendances increased by 1.3% action focused on improving financial returns from our core to a total of 653,256. The country racing result was particularly wagering functions. We have introduced a more conservative commendable given that adverse weather conditions caused approach to the setting of annual prizemoney levels to address the full or partial abandonment of 22 country race meetings, future potential volatility and have worked with the industry compared to 10 abandonments in the previous season. to provide a platform for continued further growth in returns The extraordinary drawcard that is the Spring Racing Carnival to owners. Our commercial strategy has focused on: reached new heights in 2003. The 50 days of the 2003 Carnival • placing the industry in a position to control its own destiny; attracted a record attendance of 658,675 and generated an • broadening the overall appeal of thoroughbred racing and estimated gross economic benefit of $388.5 million. Tourists ‘growing the pie’ in terms of total wagering returns; from across Australia and overseas again flocked to our Carnival with some 120,000 visitations. The quality of racing was second • driving for performance with our commercial partners; and to none with another strong international contingent. Nine • harnessing the earnings potential of our intellectual capital. international horses contested the major races over the Carnival and while they provided the favourites for both the Caulfield and Melbourne Cups, our world class local competitors prevailed with great distinction.

10 Achievements during 2003/04 in executing this strategy include: The Relocation of the Australian Racing Museum The Australian Racing Museum was successfully relocated from The Formation of Racing Information Services Australia to its new home at Federation Square and The intellectual property of racing data was strategically rebranded Champions – Australian Racing Museum & Hall of consolidated into a new national industry owned company, Fame. With the benefit of RVL funding and the financial support Racing Information Services Australia (RISA). RISA’s of the Victorian Government, Champions provides Australian racing establishment means that the crucial data of race fields, with a first class facility to showcase its rich history. It will be results and form can be properly controlled and distributed used to educate, entice interest and promote our sport to the to our legitimate partners in the wagering industry and media. broader community and the many domestic and international It heralds a new era where free riders on the industry can visitors attracted to this world class precinct. no longer exploit our data without satisfying the industry’s requirements in terms of revenue and integrity. Race Programming and Race Field Management Over the past two years, RVL’s Racing Operations Department The Expansion of ThoroughVisioN™ has developed complex modelling and analytical capability ThoroughVisioN™ Pty Ltd (TVN) was established by RVL to which has enabled, for the first time, detailed examination of the manage and commercialise Victorian racing’s media rights. impact of race dates and race programs on wagering turnover. During the year RVL transferred governance to the three This analysis was used extensively during the year in determining Victorian metropolitan racing clubs, Country Racing Victoria, the 2004/05 race program and in examining issues related to the Australian Jockey Club and Sydney Turf Club. This night and twilight racing. The ability to conduct in depth, objective unprecedented union enabled the media rights of all six analysis has enhanced our ability to drive wagering performance racing bodies to be consolidated in an entity owned by the and improved turnover from Tabcorp and is expected to yield industry, and for the first time place the destiny of racing’s significant growth in returns to owners for the industry. media coverage and presentation in its own hands.

11 2004 Australian Champion Racehorse of the Year – 1> CHIEF EXECUTIVE OFFICER’S REPORT

The Merger of Tabcorp and TAB Ltd • the implementation of the second stage of measures aimed 2003/04 will be remembered for the landmark takeover of at improving the safety standard of jumping racing; New South Wales’ TAB Ltd by Victoria’s Tabcorp. The merging • the development and implementation of a strategy for picnic of Australia’s two largest TABs has created major opportunities racing which will see major change during the 2004/05 for operational synergies and a platform to make long overdue summer season; inroads into the international wagering marketplace. RVL looks • continued success in improving operational efficiency and forward to the benefits of the merger flowing to the racing governance of country racing through a repositioned program industries of both States. of support with resources provided by RVL but managed by Country Racing Victoria; Investment in Other Related Ventures • the implementation of the free nomination system, launched During the course of the year, RVL invested heavily in the at the beginning of the season and refined during the year, establishment of TVN and co-funded with the Victorian Government achieving a reduction in nomination fees of $3.3 million with the establishment of Champions – Australian Racing Museum an average saving per trainer of $2,000; and & Hall of Fame. In 2003/04, a total of $8.9 million was expensed • the expansion of our event program with the inclusion of in relation to these ventures which was largely offset by the profit new events such as National Jockey Celebration Day, ANZAC on sale of assets to RISA of $8.7 million. Day and Australia Day celebrations as well as special one-off On the operational side of RVL, key achievements during 2003/04 occasions such as Mr Scobie Breasley AO’s 90th birthday included: celebration.

• the creation of the independent Racing Appeals & Disciplinary RVL has also played a key role in the national campaign to counter Board which was a recommendation of the 2003 Integrity the serious threats posed by betting exchanges and offshore Services Review. The Board commenced hearing appeals bookmakers who transact on Australian racing product with against penalty decisions of the stewards in May 2004, and in no regard to the impacts they are having on our industry. Betting August 2004 commenced its disciplinary function of hearing exchanges and their capacity for informed insiders to act as serious charges brought by the stewards; unregulated bookmakers and offer odds on horses to lose races • the development of a strategy for the ‘drought-proofing’ of are a blight on the sport. We must heed the salutary lessons being Victorian racing sponsored by the Victorian Government’s learned in the United Kingdom where betting exchange transactions Smart Water Fund; are being increasingly linked to a large number of improprieties • the successful installation at Seymour of a new all-weather involving corruption and race fixing. RVL is working closely with synthetic training surface known as ThoroughTrack and the Australian Racing Board to take every possible step to protect developed by RVL. We were subsequently engaged by the public confidence in the integrity of racing and to have betting Canberra Racing Club to install a ThoroughTrack at the exchanges totally outlawed. We look to the Federal, State and Thoroughbred Park Complex; Territory Governments to use their collective legislative powers to support the Australian racing industry in achieving this outcome. 12 During the year, RVL underwent an organisational restructure Operational priorities will include the development of a night/ to increase our focus on the business of racing and to ensure twilight/synthetic racing strategy, further development of our there is no duplication between the roles of RVL and the member jumping racing strategy, implementation of our drought-proofing shareholders. The new structure features a simplification into four of racing strategy and the introduction of the pre-race weighing organisational units being Racing Integrity, Racing Operations, of horses strategy to provide improved information to punters. Racing Services and Racing Development. The restructure In closing, I would like to thank my Chairman, Mr Graham Duff achieved cost savings of 17% across RVL’s non-integrity related for his strong support and in particular for his commitment functions allowing those funds to be reallocated to the industry’s to pursuing the many commercial reforms during his period emerging development needs. as acting CEO from November 2003 to April 2004. I would also Looking to the year ahead, a five-year strategic plan will be like to thank the RVL Board, the CEOs and committees of all submitted to the RVL Board in early 2005 which will outline Victorian racing clubs and industry bodies and the staff of RVL strategies and targets with respect to all elements of our who have welcomed me to racing and supported me as I have charter. We remain confident that the Victorian industry can made my way up the steep learning curve of this complex and look forward to a period of strong economic and operational fascinating business. performance and the strategic plan will provide the foundation for its achievement.

In conjunction with the strategic plan, we expect to develop and implement key measures addressing horse ownership, the breeding industry and the bookmaking industry. We will also complete the ‘distribution review’ examining options for change Robert Nason to the revenue sharing agreement between the Victorian clubs. Chief Executive Officer

The industry’s commercial attention will be focused on ensuring the Victorian racing industry achieves targeted outcomes from the Tabcorp and TAB Ltd merger and the co-mingling of wagering pools. Supporting the operational objectives of RISA, TVN and Champions – Australian Racing Museum & Hall of Fame will also be high priorities.

13 Betting Ring at Classic Caulfield – 2003 Carlton Draught 2> ORGANISATION

STRUCTURE OF INDUSTRY Stakeholder Consultation RVL continued the established process of regular and effective Background consultation and cooperation with each of the following racing In December 2001, Racing Victoria Limited (RVL) was registered industry stakeholders: as a public company limited by guarantee under the Corporations • Australian Jumping Racing Association (AJRA); Act. At this time, RVL assumed the functions and responsibilities as the Principal Racing Authority governing thoroughbred racing • Australian Services Union (Victorian Branch) (ASU); in Victoria from the Victoria Racing Club. This change in the • Australian Trainers’ Association (Victorian Branch) (ATA); governance of Victorian thoroughbred racing coincided with • Australian Workers’ Union (Victorian Branch) (AWU); the commencement of the Racing (Racing Victoria Ltd) Act 2001. • Media, Entertainment & Arts Alliance (MEAA); Member Shareholders • Thoroughbred Breeders Victoria (TBV); RVL’s member shareholders are Country Racing Victoria Inc • Thoroughbred Racehorse Owners’ Association (TROA); (CRV), Inc (Melb RC), Moonee Valley • Victorian Bookmakers’ Association Limited (VBA); and Racing Club Inc (MVRC) and Victoria Racing Club (VRC). • Victorian Jockeys’ Association (VJA).

Board of Directors Regular stakeholder forums ensure that the Board of RVL The RVL Board comprises 11 directors – five appointed understands issues affecting the Victorian thoroughbred racing by an independent Appointment Panel and five appointed industry and provide an important two-way communication by the member shareholders. The eleventh position is the opportunity. Chief Executive Officer who is appointed by the Board.

During 2003/04, Directors Dr George Corones (appointed by CRV) and Mr James Henderson (appointed by the Appointment Panel) resigned from their positions.

CRV appointed Mr Chinka Steel as a casual replacement for Dr Corones, while those Directors appointed by the Appointment Panel resolved not to fill Mr Henderson’s vacancy due to the impending round of Board appointments in late 2004.

In November 2003, RVL’s inaugural Chief Executive Officer Mr Neville Fielke resigned. Mr Robert Nason was appointed by the RVL Board in April 2004 as his successor.

15 2003 AAMI winner ridden by 2> ORGANISATION

CONSTITUTIONAL OBJECTIVES • economic benefits: the management of RVL’s and Victorian RVL’s constitutional objectives are to develop, encourage, thoroughbred racing clubs’ revenues, costs, assets and promote and manage the conduct of the racing of thoroughbred liabilities optimises the economic benefits delivered by horses in Victoria by ensuring: Victorian thoroughbred racing to all of its stakeholders and participants, including in particular: • excellence: Victorian thoroughbred racing is, and is recognised throughout Australia and worldwide as, a centre of racing (i) the owners of thoroughbred racehorses; excellence; (ii) the breeders of thoroughbred racehorses; • service of customers: Victorian thoroughbred racing competes (iii) other participants and stakeholders in Victorian thoroughbred effectively in the leisure and entertainment markets by providing: racing; (i) excellent customer service to patrons, punters and other (iv) the communities in which Victorian thoroughbred racing customers; and operates; and (ii) a source of exciting entertainment for a wide audience; (v) the Victorian economy generally;

• integrity: Victorian thoroughbred racing generally, and race • social obligations: Victorian thoroughbred racing is conducted meetings in particular, are managed and conducted to ensure to ensure that it meets its social obligations to Victoria and the the highest integrity, building continuously on the reputation communities in which it operates, including but not only by: and integrity of Victorian thoroughbred racing; (i) promoting Victorian country thoroughbred racing; • efficiency: Victorian thoroughbred racing is managed with (ii) encouraging responsible wagering and gaming; and optimal efficiency in order to best enable the meeting of (iii)optimising employment in the Victorian thoroughbred the objectives; racing industry; and • participation: Victorian thoroughbred racing is managed • independence: RVL conducts its operations and exercises its to encourage the fullest participation by the widest range powers and functions in a manner which ensures the public of people, particularly women and young people; confidence in RVL’s integrity and independence from any improper external influence.

17 His Excellency, Major General Michael Jeffery, AC, CVO, MC (Retd) and the Premier of Victoria, the Hon Steve Bracks MP meet Chairman of Stewards, Des Gleeson and Clare Lindop – the first Australian woman to ride in a 3> RACING INTEGRITY

Racing Integrity incorporates Integrity Services and Veterinary The only variations to the RAD Board structure as recommended Services. Integrity Services manages the policing of the Rules by the review panel are that its size is to be up to 15 members of Racing; the conduct of enquiries and appeals; administration (the panel recommended up to 10 members) and that when of raceday and official trials; licensing of industry participants; sitting, the RAD Board is to be usually constituted by five members and raceday security. Veterinary Services covers raceday including the Chair or the Deputy Chair or both but with a discretion veterinary services; the administration of farriers; administration to be constituted by three members if so directed by the Chair (the of the drug control program (via Racing Analytical Services review panel recommended a usual quorum of three members Limited (RASL)); industry research and development; quarantine with a discretion to sit as five members). issues (including managing the Sandown Quarantine Station); These variations ensure that the RAD Board is properly health and welfare; equine integrity and welfare; and RVL’s resourced to meet its workload and enabled the following dealings with the Australian Equine Veterinary Association. appointments to be made: INTEGRITY SERVICES REVIEW • three Racing Appeals Board members for one year (as a transitional measure); RVL commissioned an independent review of its Integrity Services in 2003. Many of the recommendations from the review have • six new members (including the Deputy Chair) for two years; been adopted and implemented, including the key initiatives • six new members (including the Chair) for three years; and of opening stewards’ inquiries to the media and doubling the • subsequent appointments to be for three-year terms. drug testing program budget to an annual total of approximately $2.1 million to enable Victoria to have the most comprehensive The RAD Board commenced its appeal hearing function in May drug control program in Australia. One recommendation still 2004 followed by the commencement of its disciplinary function in under review relates to the fast-tracking of drug testing procedures. August 2004. The disciplinary function involves hearing charges in relation to alleged breaches of certain serious offences under Six recommendations from the review relate to the establishment the Rules of Racing. These charges will be brought by the stewards. of the Racing Appeals & Disciplinary (RAD) Board. The stewards will continue to deal directly with less serious charges as part of their raceday duties. Establishment of Racing Appeals & Disciplinary Board A key recommendation of RVL’s 2003 Integrity Services Review The inaugural Chair of the RAD Board is Judge Russell Lewis, was the establishment of a Racing Appeals & Disciplinary (RAD) a retired County Court Judge of 14 years standing. Judge Lewis Board to replace the Racing Appeals Board (RAB). also practised as a barrister for 21 years and regularly appeared before racing tribunals on behalf of stewards and appellant participants. He is an enthusiastic racegoer and has bred, owned and raced horses.

19 Director of Veterinary Services, Dr John McCaffrey takes a blood sample 3> RACING INTEGRITY

The Deputy Chair is Mr Brian Forrest – Chairman of the 2003 Occupational Health & Safety (OH&S) safety course for the independent review of integrity services, former Chairman of the purpose of assisting in the conduct of stable inspections. Victorian Casino and Gaming Authority, former Deputy President The most common breach of the Rules of Racing is careless of the Commonwealth and Victorian Administrative Appeals riding and in 2003/04, 80 riders were suspended from riding Tribunals and former Chairman of the Victorian Crimes in races for periods ranging from 14 meetings (Spring Racing Compensation Tribunal. Mr Forrest practised as a barrister for Carnival) to 28 meetings. Of these, eight appeals were heard by 24 years, is a keen follower of racing and has owned racehorses. the RAB and two by the RAD Board. All of these appeals were The remaining members of the RAD Board are former dismissed but five penalties were varied with one being reduced RAB members – Mr Andrew Ramsden (RAB Chairman), by one day and a $30,000 fine imposed to allow Mr Mr Christopher Jenkins and Mr Bill Knights. Other members to ride Lonhro in the Carlton Draught Cox Plate. Another three include Mr Josh Bornstein, Mr Geoff Ellis, Mr Chris Enright, suspensions for careless riding were reduced by one day and Mr Bill Kneebone, Mr Ken McDonald, Mr Mick Murphy, one was reduced by three days. Ms Barbara Phelan, Mr Phil Power, Mr Ron Taylor and Other riders were penalised for improper practice when failing Mr Graeme Ward. to weigh-in after a race and for improper riding. Appeals by both riders in these matters to the RAD Board were dismissed. INTEGRITY SERVICES Twelve inquiries involving prohibited substances found in horses Operations 2003/04 were conducted during the reporting period, with penalties Integrity Services managed all officials (including stewards, the ranging from fines of $3,000 to $10,000 totalling $47,000, Chief Investigator and Racecourse Investigator, starters, judges, to suspensions of two months for a stablehand and three to clerks of scales and barrier attendants) at the 572 race meetings five months for trainers found to be guilty of these offences. and 127 race trial days (both official and non-official) conducted in Victoria in 2003/04. Of the 95 trackwork riders and jockeys tested for banned substances, 12 inquiries for trackwork riders and two inquiries RVL stewards adjudicated on approximately 4,000 matters for jockeys were conducted for positive findings. Penalties imposed relating to riding incidents, wrong colours, late riders, sample ranged from suspensions of two to four months with no appeals irregularities, ownership disputes, conduct of licensed persons, lodged in respect of the stewards’ findings in these matters. protests and a variety of other inquiries involved in the maintenance of integrity matters in 2003/04. The Racing Appeals Tribunal heard 46 appeals against the stewards’ findings in respect of penalties imposed. Of these, The stewards also increased the stable inspection program with 42 related to the Leone Chiara inquiry alone. The outcome of 257 inspections conducted compared with 220 in the previous this inquiry ranged from penalties of six months disqualification year. Many of these inspections were conducted in the presence to three years disqualification. All appeals in this matter of WorkSafe inspectors and all stewards completed a five-day were dismissed and the penalties imposed by the stewards were confirmed. 20 During the year, the Investigation Department was involved in At an industry level, RVL adopted a new Rule of Racing that 64 matters which became the subject of stewards’ inquiries with makes it an offence under the Rules of Racing for persons on 53 matters being resolved without the need for a formal inquiry. a racecourse or any licensed participant to communicate or Thirty-three other matters were referred to other areas or to bet with betting exchanges. In addition, RVL has supported the external agencies. The remaining investigations focused on ARB’s pursuit of legal remedies to enforce the racing industry’s incidents in stables and at race meetings involving licensed intellectual property rights in the case of wagering operators and registered persons. utilising racing’s data without authority.

The Integrity Services Department closely monitored betting Betting Exchanges exchange transactions and has instituted a number of related During 2003/04, RVL considered a proposal from the UK based investigations. Betfair to enter into a memorandum of understanding (MOU) governing Betfair's conduct of a betting exchange service in Licensing relation to Australian racing. RVL rejected the MOU on the The required qualifications of applicants for new trainers’ grounds that the terms of the agreement failed to address licences were expanded in August 2002, slowing applications the fundamental integrity risks posed by betting exchanges. for ‘picnic’, ‘owner-trainer’ and ‘permit to train’ licences. RVL actively supported the campaigns of the Australian Racing This is regarded as a positive, as applicants now begin training Board (ARB) calling for a ban on betting exchanges from racehorses with additional skills and knowledge that historically operating on the Australian racing industry. The ARB's position have not been taught in stable workplaces. Of the 42 new mirrors the strong stance that the International Federation of applicants who were granted a permit this season, 39 had Horseracing Authorities and the Asian Racing Federation have completed the relevant qualification and were granted licences adopted on the issue. after relevant integrity and credit checks. The remaining three were successful in their applications due to recognition RVL also lobbied governments at both Federal and State of prior learning. level seeking legislative intervention to protect the integrity of Australian racing from this new betting phenomenon. An Occupational Health & Safety effective ban requires the exercising of Commonwealth controls over interactive gaming and associated telecommunications Occupational Health & Safety (OH&S) compliance continues as a and financial transactions. In terms of Victorian legislation, high priority with WorkSafe inspectors liaising with Licensing and RVL is calling for the introduction of a prohibition on persons RVL stewards in joint stable inspections. Early indications reveal betting with betting exchanges as is currently the case in lack of compliance with respect to documentation of injuries, New South Wales and . electrical safety and storage of chemicals and preparations. To remedy this, a proposal to develop WorkSafe guides for distribution to trainers to help them meet their obligations is being considered.

21 RVL stewards – Heidi Keighran, Neville Laskey, Rob Montgomery, Brad Dunn, Des Gleeson and Robert Cram 3> RACING INTEGRITY

An OH&S policy for barrier attendants was implemented in Changes in the strategies used to select horses for sampling 2003/04 to equip each barrier attendant working at Victorian identified in the Review incorporate traditional selection race meetings with a standard uniform and personal protective criteria with more innovative and novel approaches designed equipment including helmets, steel-capped boots and sunglasses. to proactively address potential problem areas. The emphasis There are summer and winter uniforms and all equipment on sampling and testing strategies has changed significantly is weatherproof. over the last 12 months in response to an ever changing pharmaceutical landscape and the possibility of increasingly VETERINARY SERVICES inventive patterns of drug use and/or abuse, reinforcing the findings of the Selection Strategy Review. Drug Control Program A highly effective drug control program is a critical element in The total budget for drug control during 2003/04 was increased by ensuring a level playing field for all competitors, protecting the 4.5% from 2002/03 to $1.3 million. This funded the and health and welfare of horses and their riders and maintaining analysis of pre and post-race samples, research and equipment the confidence of the betting public and the wider community upgrades (within RASL), labour, travel and other sundry resource in the integrity of the Victorian thoroughbred racing industry. and equipment expenditure.

The Board of RVL unanimously endorsed the findings and RVL’s commitment to ongoing research into drug detection has recommendations of the Sample Selection Strategy Review been demonstrated by its significant financial support for RASL’s conducted by the Veterinary Department in 2003. This commitment drug research program and ongoing equipment upgrades during was underpinned by a $500,000 (or 42%) increase in the budget 2003/04. allocated for drug control in the Victorian thoroughbred racing Veterinary Services was responsible for drug administration trials industry for the 2003/04 (pro rata) season and beyond. The wide- and double-blind quality assurance programs on behalf of RASL ranging recommendations of the Review were progressively during the reporting period. This represents a significant in-kind rolled out from 1 January 2004 and implementation will be contribution by RVL to drug research in addition to its financial completed by the end of the 2004/05 racing season. These support of the program. Projects included the development and will include the establishment of a computer database which implementation of an efficient and cost-effective method for the will use prescribed selection criteria to identify areas for the detection of quaternary ammonium compounds, research into application of targeted sampling. a new generation of anti-inflammatory agents, development of in vitro drug metabolism techniques and the potential use of hair samples as a drug detection matrix.

22 Sample Collection Rates Type of sample No Change of 02/03 Positive Samples % Post-race (blood and urine) 3,209 +2.4% 4 0.12 Pre-race blood for pre-race analysis 5,427 0% 1 0.02 Pre-race blood for post-race analysis 1,606 +124% 2 0.12 Elective tests 9 - 43% - - Miscellaneous (feed etc) 14 + 43% - -

Stable TCO2 16--- Out of competition testing* 0 - - - * The implementation of out of competition testing was suspended due to Integrity Services staffing issues in 2003/04. With additional resources allocated for 2004/05 it will increase.

Emergency Disease Preparedness Parts 1, 2 and 5 are underway and are due to be completed by During 2002/03, RVL, in association with Harness Racing Victoria December 2004 and it is anticipated that parts 3 and 4 will be (HRV), Tabcorp and the Victorian Government, initiated a program completed by the end of June 2005 before testing. designed to ensure that the racing industry was fully prepared RVL has provided $15,000 towards the completion of this project in the event of an emergency disease situation occurring in the which was leveraged against $45,000 of other industry and Victorian horse industry. Stage 1 of the project has been completed government (Department of Primary Industry) funds. and its major elements have been widely disseminated to all industry stakeholders. Horse Alert Victoria, as it is known, is posted in its HorseSafe Code of Practice entirety on the RVL website. The HorseSafe Code of Practice outlines minimum safety Stage 2 of the project was initiated during 2003/04 with funding requirements and provides guidance for managing horse activities. from RVL, HRV, Tabcorp and the Victorian Department of Primary It also includes an accreditation system to recognise and reward Industries (Chief Veterinary Officer’s Unit). The key project areas businesses and organisations that comply with the Code. include the development of: The initiative was funded by the Federal Department of Small 1.emergency communications networks; Business, Tourism and Industry and managed by the Australian 2.model enterprise contingency plans; Horse Industry Council. RVL provided considerable financial and in-kind support through Veterinary Services. 3.business continuity and recovery plans for the racing industry; 4.continuing education and training programs; and 5.horse industry transport control strategies.

23 2003/04 saw the introduction of higher safety standards for barrier attendants 3> RACING INTEGRITY

HorseSafe was launched by the Hon Joe Hockey MP, Minister 5. Exercise Induced Pulmonary Haemorrhage & Performance: for Small Business, Tourism and Industry, Mr Graham Duff, prevalence of upper airway abnormalities and risk factors and Dr Paul O’Callaghan (Chairman Australian Horse Industry involved in exertional rhabdomyolysis. Designed to determine Council and RVL Veterinary Surgeon) in November 2003. the incidence of and relevance to performance of these conditions in racing horses; RVL is currently investigating the integration of the HorseSafe Code of Practice into its OH&S policy framework for implementation 6. Pathophysiological Mechanisms in Equine Chondrodysplasia by racecourses, training facilities and training establishments (OCD): leads to an understanding of the causative factors of for which it has relevant responsibilities. OCD, development of preventative strategies, techniques for early diagnosis and optimal diagnostic imaging modalities; Racing Victoria Limited Equine Research Fund 7. A Prospective Study of Pre-Sale Yearling Radiographs: The Strategic Alliance formed between RVL and the University to identify the incidence of radiographic lesions in yearlings of Melbourne in 2001 has seen the continued development presented for sale in Australia and provide an objective of a world class research program designed to benefit the assessment of the effects of these findings on performance; health and welfare of all thoroughbred racehorses. and 8. Communication: to provide effective strategies for the The research program has eight major research and industry extension of research findings to industry stakeholders. extension priorities: 1. Diagnostic Imaging: improved understanding of the sensitivity RVL currently provides $303,000 per annum to the Strategic and specificity of nuclear medicine as a diagnostic modality Alliance and research program. These funds are currently for horses when compared to other techniques; leveraged against approximately $400,000 of University of Melbourne, Rural Industries Research and Development 2. Epidemiology and Risk Factor Analysis of Racetrack Corporation (RIRDC) and Australian Research Council (ARC) Fatalities: based on an ongoing post mortem program and funding for the program and related activities. associated record analysis designed to decrease the incidence of racetrack fatalities; 3. Musculoskeletal System: study designed to develop specific training programs and assess racetrack surface and construction to reduce musculoskeletal injury; 4. Aetiology of Respiratory Disease in Victorian Racehorses: designed to identify pathogens of relevance in respiratory disease of racehorses;

24 During 2003/04, RVL and the University of Melbourne were An improved system of auditing of raceday plating standards the lead agencies in initiating funding and developing a proposal which will ensure compliance with the Rules of Racing will for an Australian Horse Industry Cooperative Research Centre be introduced statewide over the next 12 months when the which was submitted to the Federal Government’s Department recommendations of the review are approved. The implications of Education, Science and Training. The Department announced for horse and rider health and welfare, along with other integrity in April 2004 that the horse industry proposal was one of issues, are significant. 33 selected to progress to the second round (Stage 2) of the RVL is the only Australian Principal Racing Authority of either approval process. The Stage 2 application was submitted in code which employs only farriers who have been nationally July 2004 and has attracted broad industry support. Should accredited to Certificate III in Farriery on racedays. Furthermore, this application be successful, it will generate approximately it is the only racing authority in Australia to support the training $19.6 million of Federal Government support for equine research of apprentice farriers financially through its Apprentice Wage and development nationally against industry funding support Subsidy Scheme. of approximately $37.1 million (in-cash and in-kind). RVL is the only racing authority in Australia that has a policy Farrier and Veterinary Raceday Services which mandates the provision of at least two veterinarians Veterinary Services has completed a review into the provision at all Victorian country TAB race meetings and during 2003/04 of farrier services to the industry (both on raceday and more provided an industry veterinarian at 184 TAB meetings in country generally), and the operation and future of the Plating Fee Victoria. By 1 December 2004, an industry funded and supplied Subsidy. Currently, it is in consultation with the relevant industry veterinarian will be in attendance at every TAB meeting conducted stakeholders which is intended to produce a model for farrier throughout the State. This initiative has considerable implications services which will be to the future benefit of the industry. for best practice in the delivery of veterinary services on raceday and, as a consequence, for the integrity of the racing industry more RVL remains committed to supporting an appropriate level generally. This initiative will be an Australian first. of properly skilled tradesmen to the industry and will continue its considerable financial support in that area through the Similarly, all sampling assistants are currently supplied and development and implementation of a contemporarily relevant, funded centrally by RVL. Significant increases in the rate applicable and effective model to provide a benchmark to of sample collection in line with the implementation of the establish world’s best practice in this important field. recommendations of the Sample Selection Strategy Review will necessitate increases in the labour required to collect those samples over the next six to 12 months. The necessary changes have been approved and funded.

25 2003 Carlton Draught Cox Plate winner ridden by Steven King 4> RACING OPERATIONS

Racing Operations incorporates Operations (race dates, race The 2003/04 racing calendar encompassed: programs, race field management, product development, • 128 metropolitan race dates (Melbourne Racing Club 63, Group and Listed Races (Victoria only), handicapping, race Moonee Valley Racing Club 33 and Victoria Racing Club 32); classifications, jumping racing, picnics, Super VOBIS and • 417 country race dates (389 TAB, 28 non-TAB); and Registrar of Racehorses); Planning & Infrastructure (capital projects, tracks and training facilities, infrastructure and race • 38 picnic dates. product planning); and Betting Services (bookmaker supervision As a result of extensive analysis of data and market trends, the and regulation, Australian Prices Network, portable wagering 2004/05 race dates have been allocated and include the following infrastructure, bookmaking policy, sports bookmaking; and the initiatives: Bookmakers’ Development Fund). • an increase from 27 to 30 in the number of Saturday meetings Major changes to Racing Operations in 2003/04 included the allocated to Flemington and Caulfield; move of the Trainers’ Service Centre from RVL to Racing Information • Moonee Valley increasing the number of twilight/night Services Australia (RISA) in December 2003, and the transfer meetings from 14 to 17; of the Planning & Infrastructure Department to the Racing • an increase in Sandown midweek meetings from 24 to 30; and Operations function. • Sunday continuing to be the domain of feature country Operations meetings (predominantly major Cups). Sunday metropolitan race meetings have been decreased from 15 to nine. Race Dates The metropolitan race dates have evolved into a new structure The RVL Racing Operations Department is charged with the of being primarily held on a Wednesday, Friday and Saturday. responsibility of providing the entire racing program (dates and programs) for Victoria. During the 2003/04 season, there were As part of RVL’s Twilight/Night Racing Strategy, there will be 572 race meetings allocated to clubs with some 4,550 races a total of 19 metropolitan twilight/night meetings conducted programed at these meetings. (Thursday (8), Friday (11)) in the daylight saving period in 2004/05. This will be an increase of five from 2003/04.

27 2003 Emirates Legends Race: Jason Weaver (UK), Cash Asmussen (USA), Pam O’Neill (AUS), David Peake (NZ), Alf Matthews (AUS), Malcolm Johnston (AUS), Hiroshi Kawachi (JPN) and John Reid (IRE) 4> RACING OPERATIONS

Programming The summer period has been targeted as an area which requires Race programs are completed bi-annually prior to distribution immediate improvement in attracting more starters. This can be and designed to: achieved by redirecting a small portion of the horse population from racing in the traditional peak periods (Spring and Winter). • match horse eligibility statistics in Victoria (‘horse population’); Race Field Management • increase opportunities and returns for stakeholders; A combination of factors including one of Victoria’s more • ensure that shareholders receive maximum returns; extreme winters for a decade contributed to a slight fall in • increase competition in race fields and amounts wagered average field sizes at TAB race meetings during 2003/04. There on race meetings; were 20 abandoned race meetings in 2003/04 (compared with seven in 2002/2003) and the total amount of abandoned races • increase the amount of individual race winners and increased from 42 to 138 in 2003/04. The average field size starters produced; dipped slightly from 10.8 starters per race to 10.6 starters per • provide a leading and innovative thoroughbred wagering race during the season. This was reflected in other figures as product; and well, with the total amount of starters falling by 3.8% and total • improve the control of race field management. amount of individual starters falling by 3.1%.

Several new programming initiatives were identified with A major positive to come out of the season was the continuation Country Racing Victoria during the season designed to assist of RVL’s policy to reduce the total amount of ballots in races the industry. These included: (horses unable to obtain a start) which fell by 26%. Whilst the • Country Showcase Racing ($22,500 restricted races on introduction of the free nomination system on 1 August 2003 country-only Wednesday, Thursday and Sunday race meetings); significantly contributed to this result, it is pleasing to note that on average, only three out of every 100 starters will be balloted • 2005 Country Showcase Summer Series (to be run in January, from race fields in Victoria. In season 2001/2002, the average February and March worth in excess of $570,000); and was 4.5 out of every 100 starters. • a Summer Racing Campaign. Free Nominations System In 2003/04 the free nomination system was introduced for all standard races (excluding Group and Listed, picnic and point-to-point races). As a result of the introduction of the free nomination system, racing transaction fees were reduced by $3.3 million. The average cost per starter in standard races fell by 54% down from $115 in 2002/03 to $53 in 2003/04.

28 Victorian Percentage Share of National Thoroughbred Races Victorian Percentage Share of Individual Horses which % Started Nationally % 24 32 23%

22 29.7% 30

20 28

18 26

16 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 24 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 Includes all TAB, non-TAB, picnic and point-to-point races Source: Racing Victoria Limited Includes all starters in TAB, non-TAB, picnic and point-to-point races Source: Racing Victoria Limited

As well as the significant reduction in owners’ costs, administrative Handicapping savings were achieved through a 9% reduction in the number For the 2003/04 racing season, the four-member Victorian of transactions processed by the Trainers’ Service Centre and Handicapping Panel issued just less than 80,000 ratings 10,433 fewer horses required to be handicapped. Three in every for the 572 race meetings conducted throughout the State. four trainers saved in excess of 50% of the fees they were charged in 2002/03, reducing demands on their cash flow. The major handicapping project for the season was the successful roll-out of the Ratings Based Handicapping Victorian Group and Listed Races Advisory Group (RBH) system. Following months of testing, the RBH system A comprehensive overhaul of the systems and methodologies commenced operation on 1 March 2004 and has been used in determining the status of Australia’s Black Type races enthusiastically received by all sections of the industry. Under was implemented by the National Group and Listed Races RBH, horse performances are rated by the Handicapping Panel Advisory Group during the season. within two working days of each race and these ratings, when compared to a published template of weights by class of race, The Australian Racing Board has determined that Australia’s indicate the weight a horse will receive for any race. RBH Group and Listed schedule needs to become more reflective templates and horse ratings are published on RVL’s website of the current structure of metropolitan racing and international for public access. pattern structures. The group will also utilise the Australian Handicapping Group’s ANZ Classifications as a tool to determine Scheduled timeframes were maintained throughout the season the classification of Group and Listed Races. with all handicaps being issued within 24 hours of the closing of nominations. The panel also continued to act as a teaching The Victorian Group and Listed Races Advisory Group will continue faculty, delivering regular lectures at venues such as the the diligent task of improving the Black Type calendar for apprentices’ school and hosting international visits from several participants, as well as identifying greater opportunities to promote overseas racing authorities. our schedule nationally and internationally. There are already some exciting developments in store for the 2004/2005 program, with the Internationally, the Victorian Handicapping Office is responsible VRC Nestle Peters Classic on Derby Day upgraded to become for all export ratings, classifications, nominations and assessments Victoria’s first fillies and mares race. for overseas events. The department also hosts the chair and compiles the annual Australia-New Zealand Official Classifications. These Classifications are then integrated into the International Federation of Horseracing Authorities’ (IFHA) World Ranking Order, enabling Australian horses to be rated against their international peers.

29 Liquid Lunch ridden by Brad McLean (nearest camera) jumps ‘the last’ the first time around before going on to win the B.R. Smith hurdle Thoroughbred Prizemoney (including Trophies and Bonuses) Number of Victorian Race Meetings Conducted $M % Meetings

600 40 572

400 33.1% 500 $346 30 300 400

20 300 200 Prizemoney

200 $115 10 100

Victorian % Share of National Prizemoney Victorian % Share 100

0 0 0 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04

Victoria Australia Victorian % share of national prizemoney TAB Non-TAB* Total Source: Racing Victoria Limited *Includes all non-TAB, picnic and point-to-point races Source: Racing Victoria Limited

4> RACING OPERATIONS

Super VOBIS RVL’s adoption of the safety improvements arising from the 2002 Super VOBIS is Australia’s premier ownership and breeding review as well as an ongoing process of continual improvement incentive scheme and contributes to the success and growth has meant that significant progress was made in 2003/04, during of Victoria’s racing and breeding industry. Super VOBIS provides which time RVL: an opportunity to race a horse in Victoria for extra prizemoney, • introduced new modular jumps (mark 2) for all hurdle and which financially rewards thoroughbred racehorse owners, steeplechase races (excluding Mornington) in the greater breeders, trainers and jockeys. metropolitan area;

Since its inception in 1998, Super VOBIS has returned to • commenced development of modular jumps (mark 3) which participants in the Victorian racing industry an additional will be used in all hurdle races in Victoria in 2005; $55.0 million worth of bonuses by breeding or racing a • modified all steeplechase fences including adjusting angles, Super VOBIS qualified horse. removing log take-offs and replacing with pads, as well as improving brushes; In the 2003/04 season there were 9,824 Super VOBIS starters who received a total of $5.5 million in Super VOBIS bonuses. • condensed the duration and extent of the jumping racing Super VOBIS bonuses were available on all two and three-year- season to ensure the best possible use of venues and to old races in Victoria, as well as the Super VOBIS Stayers Series maximise participation and marketing efforts. The season for four-year-olds. now runs from approximately six weeks prior to Easter and concludes in October, with no more than 125 races; Jumping Racing • reviewed race distances and the number and placement The primary finding of the independent review of jumping of hurdles and fences; racing in 2002 was that jumping racing is an integral part of • improved standards of training and competency for riders the Victorian racing industry. However, while Victorian jumping and increased qualification levels for horses; racing’s safety standards are in line with world’s best practice, • enhanced reporting and analysis of jumping racing incidents; the review panel contended that further safety measures should and be implemented over a three-year period and that greater • commenced the development of a Jumps Strategic Plan which promotion and financial support is required to maintain and will be presented to the Board of RVL in late 2004. grow jumping racing as an important contributor to the Victorian racing industry.

31 Average Prizemoney Per Race Average Prizemoney Per Individual Horse Index Index

350 250 Victoria Victoria 300 200

250

150 200

150 100

100

50 50

0 0 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04

Australia Victoria South Australia Australia Victoria South Australia Western Australia Tasmania Queensland Western Australia Tasmania Queensland Northern Territory New South Wales Northern Territory New South Wales Index – 100 = National Average in 1992/1993 Index – 100 = National Average in 1992/1993 Source: Racing Victoria Limited Source: Racing Victoria Limited

4> RACING OPERATIONS

An epidemiological study is also being commissioned to examine • provide a sporting opportunity for riders employed as causal factors in jumping racing falls and fatalities to assist RVL trackwork riders, but unable to ride at a professional level; in assessing the effectiveness of these measures. and

In addition, RVL is implementing the Panel’s final recommendation • value the contribution of the volunteers and communities that annual reviews of jumping racing are conducted with a which enable clubs to survive and meetings to occur. major review to be undertaken in 2005, three years after the The 2003/04 picnic racing season commenced on Melbourne initial review. Cup Day at Mansfield and concluded on ANZAC Day with the The 2003/04 season saw the continued growth of the Warrnambool Colac St Pats meeting. There were 38 race meetings on 10 May Carnival, the emergence of Ms Andrea Leek as a leading racecourses with 1,750 starters and 65,200 on-course patrons. jumps rider and the continued success of Mr Craig Durden as Australia’s number one jumps rider and Tommy Corrigan Planning and Infrastructure Medal winner. Training Tracks

Picnic Racing Significant enhancements were made to training facilities throughout the year and investment priorities were established In March 2004 the Board of RVL approved the Specialist Racing following the release of the Statewide Strategy to Upgrade Training Strategy in recognition of the important contribution that picnic Facilities discussion paper. RVL committed to the upgrade of racing makes to the growth and development of thoroughbred facilities at the largest regional training centres of Mornington, racing in Victoria. RVL acknowledges picnic racing as ‘grassroots’ Ballarat and Geelong. These centres, along with Cranbourne, racing and its non-professional, community nature. Flemington and Caulfield, are designated Tier 1 training facilities Picnic racing, through the implementation of the Specialist and produce 60% of starters in Victoria. In time, these training Racing Strategy, will enable Victoria’s 16 picnic racing clubs to: centres will produce up to 70% of starters. • provide financial and social benefits to local communities; • encourage new participants in the industry; • provide an entry point for attendees, owners, trainers and jockeys to the industry; • provide an alternative path for less successful horses from the professional circuit;

32 Organised Race Trials 2003/04

Flat Trials Percentage No. of No. of Average no. of Percentage of No. of of total Venue trial dates trials trials/meeting total trials starters trial starters Cranbourne 14 339 24.2 55% 2,554 58% 7 103 14.7 17% 700 16% Wangaratta 2 14 7.0 2% 79 2% Ballarat 4 58 14.5 9% 389 9% Geelong 4 44 11.0 7% 337 8% Benalla 1 11 11.0 2% 70 2% Seymour 1 18 18.0 3% 125 3% Pakenham 3 26 8.7 4% 150 3% Hanging Rock 1 5 5.0 1% 29 1% Total 37 618 16.7 4,433

Steeple Trials Hurdle Trials Average no. Average no. No. of No. of of trials/ No. of No. of No. of of trials/ No. of Venue trial dates trials meeting starters Venue trial dates trials meeting starters Cranbourne 4 7 1.8 27 Cranbourne 26 105 4.0 598

A key component in the upgrade of the major training facilities is As a result of these developments, RVL has been able to provide the development of high quality synthetic training tracks. During consultancy services to other racing jurisdictions to help the year RVL committed $600,000 to the development and trial improve their maintenance practices. RVL currently has Track of a synthetic training track at Seymour. The ‘ThoroughTrack’ Management Consultancies with both Tote Tasmania and the synthetic training track was opened in March 2004 and has been Canberra Racing Club. positively received by trainers and track riders. The track is a To support the expanded capital works program, RVL developed wax-coated sand track, with elastic fibre to provide cushion. an improved capital management system with improved reporting ThoroughTrack is low maintenance and importantly requires and project management methodology. Known as Project Central, no watering. the system is an online toolkit for project managers that improves In June 2004, the Canberra Racing Club engaged RVL to construct performance, reduces risk and enhances accountability across a ThoroughTrack at their Thoroughbred Park complex. At 15 metres the capital management process. in width, the track will be completed in early November 2004 and will be used for both training and racing. The track is modelled on Cranbourne Training Complex the test track built at Seymour. The largest training facility in Victoria, Cranbourne Training In July 2004, RVL also committed funding to the construction of Complex (CTC) is directly funded by RVL. During 2003/04, CTC a ThoroughTrack training track at Ballarat which is due to open produced 13.6% of all Victorian starters and the average number in December 2004. of starters produced by each CTC trainer has nearly doubled from 27 to 50 per annum since 1998/99. Over this period, the A key part of the strategy to upgrade training facilities was the number of starters at CTC trials has more than doubled from development of RVL racecourse maintenance standards. All clubs 1,587 to 3,179, with 78% of trial starters coming from training are now required to produce annual racecourse maintenance plans centres other than CTC. in conjunction with their Regional Tracks and Facilities Manager. These plans specify the timing and nature of maintenance practices The average number of flat trials per trials meeting at CTC has and are a pre-requisite to receiving training track maintenance increased since 1998/99 from 14 to 24 and the total number of funding from RVL. flat trials held at the facility has increased from 168 to 339 per annum. CTC now conducts the equivalent of 36 race meetings per year in trial days. Organised hurdle trials have increased in number at CTC from 68 in 1998/99 to 105 in 2003/04.

33 Individual Starters – Australia and Victoria Average Earnings – Top 100 Trainers '000 '000 $'000

36 10.0 400

350 35 34,540 9.5 300

34 250 9,245 9,039 33 9.0 200 Victoria Australia

150 32

8.5 100

31 31,126 50

30 8.0 0 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 Top 10 11 to 20 21 to 30 31 to 40 41 to 60 61 to 100

Australia Victoria 2001/2002 2002/2003 2003/2004 Includes all individual horses which started in TAB, Includes 10% comission on prizemoney and Super VOBIS earnings within Victoria non-TAB, picnic and point-to-point races Source: Racing Victoria Limited Source: Racing Victoria Limited

4> RACING OPERATIONS

Cranbourne Training Complex 2003/2004 Racecourse. The project will incorporate an investigation and risk Victorian starters produced 6,443 assessment of the long-term effects of treated effluent water on Percentage of total Victorian starters 13.6% the nutrient and sodium levels of racecourse soil profiles and the Trainers registered at Cranbourne Training Complex 128 development of viable turf management techniques. Average starters produced per Cranbourne Training Complex trainer 50 Betting Services Total trials conducted (including flat and hurdle) 451 Total horses trialed 3,179 Following the 2003 Integrity Review, Betting Services was given Percentage of trial starters trained outside Cranbourne Training Complex 78% more responsibility in relation to on-course wagering issues. The most significant of these was that betting supervisors can now mediate between bookmakers and punters on betting Acceptances/Nominations/Ballots related disputes, previously a function of the RVL stewards. Actual % All Betting Services staff members have undertaken extensive 2001/02 2002/03 2003/04 Change Change training in mediation and dispute solving skills to help the Nominations 85,739 85,951 74,429 –11,522 –13.4% facilitation of this new activity. Acceptances 58,340 58,345 58,412 67 0.1% Total turnover from bookmakers operating on racing increased Ballots 2,126 1,945 1,321 –624 –32.1% to $524.0 million, which is an increase of 8.5% from the 2002/03 Note: During 2003/04 the free nomination system was introduced which changed trainer behaviour. total of $483.0 million. This growth in on-course bookmaker turnover has consistently risen over the last four seasons. On 1 July 2004, the minimum bet levels for metropolitan race meetings were abolished to give bookmakers access to a broader market. Smart Water Fund During 2003/04 RVL was awarded a $100,000 grant from Sports turnover from the four licensed sports bookmakers the Victorian Government’s Smart Water Fund to undertake was down for the 2003/04 season. This can be mainly attributed investigations to identify alternative water supplies and improve to increased competition in sports betting which is primarily water management for 11 racing venues in the Greater Melbourne conducted over the Internet. The current licensed sports area. The racing industry is one of the State’s largest users bookmakers are competing in a highly competitive global market. of water and has a high dependency on a secure water supply. The moratorium on these licences expires in April 2005. A critical factor in the long-term success of RVL’s vision for a drought-proof racing industry is the effective use of recycled water. As a result, RVL is intending to proceed with a demonstration project at the Cranbourne Training Complex and Cranbourne

34 Average Earnings – Top 100 Jockeys Bookmaker Turnover $'000 $M

300 600

$524M

250 500

200 400

150 300

100 200

50 100

0 0 Top 10 11 to 20 21 to 30 31 to 40 41 to 60 61 to 100 98/99 99/00 00/01 01/02 02/03 03/04

2001/2002 2002/2003 2003/2004 On-course Phone Total Includes riding fees and 5% commission on prizemoney and Source: Racing Victoria Limited Super VOBIS earnings within Victoria Source: Racing Victoria Limited

‘Telephone Only Bookmakers’ are currently being trialled to allow bookmakers who have not been allocated to work at a race meeting they have applied for to service their existing clients and attract new clientele by offering a continuity of service by way of telephone-only. This initiative has resulted in an extra $2.7 million in turnover since March 2004.

During 2003/04, the overall number of bookmakers licensed by RVL has remained constant. Of the four new bookmakers licensed, two are daughters of current rails bookmakers. There are now three female bookmakers licensed in Victoria who work at city and provincial race meetings throughout the State. More female bookmakers are expected to be licensed in the future as there are a number of registered female clerks with extensive experience who could join the ranks of bookmakers.

Registered Victorian Bookmakers Year 1999 2000 2001 2002 2003 2004 Number of Bookmakers 203 196 183 179 174 169

35

5> RACING DEVELOPMENT

Racing Development encompasses three RVL Departments: The Media Unit also managed all public relations activities Public Affairs, Communications & Publishing, Equine Services across the racing year which included the significant promotional & International Development, and Strategy. Strategy includes activities demanded by the 2003 Spring Racing Carnival, the RVL’s Education & Training Centre and all of RVL’s external 2004 Silver Arrow Sprint Challenge and the industry events relationships such as ThoroughVisioN™ (TVN), Champions– orchestrated by RVL including Australian Champion Racehorse Australian Racing Museum & Hall of Fame and Racing Information of the Year, Celebrating Racing’s Heroes (Scobie Breasley Medal Services Australia (RISA). and Fred Hoysted Award) and on behalf of Champions – Australian Racing Museum & Hall of Fame, the 2004 Australian PUBLIC AFFAIRS, COMMUNICATIONS & PUBLISHING Racing Hall of Fame Induction Dinner. Working in close Public Affairs, Communications & Publishing incorporates cooperation with the Events & Tourism team within Public media; government relations; corporate affairs; public relations; Affairs, the Media Unit achieved outstanding results in terms events and awards including Australian Champion Racehorse of national coverage of industry events and awards. In relation of the Year, Celebrating Racing’s Heroes (Scobie Breasley Medal to the Spring Racing Carnival, the in-house media and public and Fred Hoysted Award), Spring Racing Carnival Official Launch relations team eclipsed all previous records in terms of media and Silver Arrow Sprint Challenge; Spring Racing Carnival branding (print, radio and television) coverage and increased overall and marketing including Spring Racing Carnival Ambassador coverage by 42%. program; advertising and promotional campaigns and Form Guide In addition, the RVL Media Unit continued to develop and Strategy; Internet; Intranet; publishing; graphic and web design; strengthen media relations at a number of levels and improve Inside Racing; Inside Breeding; CustomerFirst – industry call centre overall communication flows with the introduction of a ‘whole- and booking service; and market research. All awards and of-industry’ Spring Racing Carnival media guide. Over Spring, promotion aspects of Public Affairs, Communications & Publishing the media team managed a significant number of domestic and will be detailed in the forthcoming chapter – ‘Celebration’. international media information requests, continued to provide racing updates for the RVL and Spring Racing Carnival websites, Media as well as provide numerous opportunities for racing’s participants During 2003/04, the RVL Media Unit continued to generate to showcase the sport through pictorial opportunities, interviews exposure for the Victorian racing industry; worked to identify and appearances. new opportunities to promote racing in non-traditional mediums (such as business media outlets and international arenas); and Aside from core activities surrounding the delivery of the media focused a concerted effort on building greater racing coverage strategy and management of media issues such as the TVN/Sky in country Victoria. Channel issue in early 2004, the RVL media team supplies copy and stories for RVL publications and websites and provides a daily media service to the CEO and Executive Team.

37 Filly by Grass Wonder (USA) from Pseudo at Eliza Park, Romsey 5> RACING DEVELOPMENT

Government Relations Victorian Government contribution towards the relocation of the RVL recognises the value of promoting positive relationships Australian Racing Museum to Federation Square, the third annual with the three tiers of government and places a high degree payment of the EGM Levy Compensation Scheme of $4.0 million of importance in the maintenance of regular and effective across the three codes of racing and a $100,000 grant from the communication with government. The racing industry is a Smart Water Fund. valuable state asset and generates over $2.2 billion of benefit Total government funding across the Victorian racing industry into the Victoria economy whilst providing over 64,000 jobs in 2003/04 amounted to $9.7 million. (22,000 full-time equivalents) – many in rural and regional areas. In turn, governments are well placed to implement policies Relocation of the Australian Racing Museum and provide funding to assist racing to generate sustainable Champions – Australian Racing Museum & Hall of Fame was economic and social benefits across the community. officially opened by the Governor General, Major General Michael Throughout the year, RVL ensured the government was well Jeffrey AC CVO MC on 1 July 2004. The Victorian Premier, the informed about the issues facing the industry and a range of Hon Steve Bracks MP, and Victorian Minister for Racing and submissions were made in relation to wagering regulation, Minister for Tourism, the Hon John Pandazopoulos MP, also racing appeals legislation, Crown land management, tax participated in the ceremony. administration, animal welfare controls, quarantine regulation, The relocation of the museum from Caulfield Racecourse to the emergency horse disease preparedness, racing and tourism cultural and sporting heart of Melbourne represents a new era collaboration, financial services issues, GST on export of horses, that will reinforce its national status and literally take racing to the Federal Government’s Tourism White Paper and most recently, the people of Victoria and its many visitors. submissions to the statutory review of the Commonwealth Interactivity Gambling Act 2001 relating to betting exchanges. Located in a high-profile position at Federation Square in central Melbourne, Champions offers an exclusive Australian first and A number of funding opportunities were pursued across various reflects all the innovative and stylish characteristics Federation government programs including education, tourism, research Square has to offer. Champions features a large retail area, and water management. In particular a proposal for a Horse together with an exhibition level and major function facility. Industry Cooperative Research Centre was submitted to the Federal Government’s Department of Education, Science and The prime objective of Champions is to become a world class Training in July 2004 which could generate approximately racing museum. The project cost was $7.7 million, of which $19.6 million of Federal Government support for equine research the Victorian Government contributed $3.8 million which was and development. Significant grants in 2003/04 included a special matched dollar-for-dollar by RVL.

38 2003/04 Returns To Owners Ratios Ranking 2002/03 Ranking 2003/04 Club Meetings held Region Prizemoney Ratio 1 1 VRC 32 Metro 133.4% 47 2 Mansfield 1 Goulburn Murray 121.0% 6 3 Dunkeld 1 Western Otway 119.4% 2 4 Gunbower 1 Goulburn Murray 116.3% 14 5 Warrnambool 14 Western Otway 114.6% 11 6 Burrumbeet 1 Midwest Bellarine 112.8% 10 7 Manangatang 1 Wimmera Mallee 111.5% 3 8 Kerang 2 Wimmera Mallee 109.9% 26 9 Camperdown 2 Western Otway 105.0% 9 10 Mornington 20 Bay & Ranges 104.6% 8 11 Towong 2 Goulburn Murray 104.6% 20 12 Coleraine 1 Western Otway 104.2% 13 13 Penshurst 2 Western Otway 104.0% 22 14 Ballan 2 Midwest Bellarine 103.7% 12 15 Mt Wycheproof 1 Wimmera Mallee 103.5% 15 16 Mortlake 1 Western Otway 103.3% 16 17 Woodford 1 Western Otway 102.3% 19 18 Avoca 3 Midwest Bellarine 102.2% 23 19 Elmore 1 Central 102.2% 44 20 Moe 14 Gippsland 102.1% 18 21 Apsley 1 Western Otway 101.6% Country Clubs (Average) 101.6% 24 22 Quambatook 1 Wimmera Mallee 101.2% 29 23 Geelong SP 1 Midwest Bellarine 101.0% 24 Great Western 1 Wimmera Mallee 101.0% 37 25 Edenhope 2 Western Otway 100.3% 30 26 Colac 5 Western Otway 100.2% 45 27 Sale 19 Gippsland 100.2% 41 28 Wimmera 35 Wimmera Mallee 100.1% 28 29 Marong 1 Central 100.0% 5 30 Stony Creek 8 Gippsland 99.6% 7 31 Melb RC 63 Metro 99.6% 27 32 Echuca 11 Goulburn Murray 99.2% 32 33 Gippsland 3 Gippsland 99.1% 17 34 Kilmore 13 Central 99.0% 49 35 Bendigo 22 Central 98.9% 31 36 Werribee 14 Midwest Bellarine 98.6% 25 37 Wodonga 8 Goulburn Murray 98.4% 35 38 Swan Hill* 10 Wimmera Mallee 97.9% 52 39 Kyneton 16 Central 97.8% 34 40 Ballarat 20 Midwest Bellarine 97.8% 53 41 Casterton 5 Western Otway 97.8% 36 42 Benalla 12 Goulburn Murray 97.5% 55 43 Mildura 11 Wimmera Mallee 97.1% 39 44 Cranbourne 19 Bay & Ranges 97.1% 46 45 Geelong 20 Midwest Bellarine 96.6% 4 46 MVRC 33 Metro 96.6% 21 47 Wangaratta 11 Goulburn Murray 96.2% 42 48 Hanging Rock 3 Central 96.1% 38 49 Pakenham 9 Bay & Ranges 95.8% 54 50 Tatura 8 Goulburn Murray 95.6% 43 51 Yarra Glen 9 Bay & Ranges 95.4% 51 52 Seymour 11 Goulburn Murray 94.7% 50 53 Bairnsdale 10 Gippsland 94.5% 48 54 Hamilton 9 Western Otway 94.5% 40 55 Terang 8 Western Otway 94.3% Total 535 106.4% *Swan Hill SP included in Swan Hill figure. Great Western Meeting Abandoned 02/03 – Meetings include TAB and non-TAB but exclude picnic meetings. – Returns to owners ratios includes prizemoney, trophies, riding fees, jockeys’ WorkCover, starters’ subsidiaries and farriers’ returns.

Yarra Valley Racing 39 2003 Spring Racing Carnival Ambassador, Kate Waterhouse 5> RACING DEVELOPMENT

Having been established as a non-profit organisation, Champions PubTAB Support Package will promote racing as a sport of tremendous cultural, historical In November 2002, the Victorian Racing Industry and the Australian and social significance. It will give insight into the behind-the- Hotels Association – Victoria representing PubTABs and ClubTABs, scenes world of some of our greatest elite athletes: jockeys reached agreement on a two-year assistance package. and racehorses. The name Champions captures the spirit of the great horses, jockeys, trainers and owners who form racing’s Included in the assistance package is a media support payment history and offers a connection to the wider sporting ethos of to assist in the cost of providing Sky Channel, a country all Australians. distribution allowance targeted to assist country non-gaming PubTABs, merchandising support and a growth incentive bonus Market Research to reward those operators who increase wagering turnover. During 2003/04, RVL commissioned a market research strategic Responsible Wagering Code of Practice plan for the Victorian thoroughbred racing industry aiming to improve the coordination and sharing of market research across The RVL Board endorsed a Responsible Wagering Code of Practice the industry and minimise cost. The plan is expected to be in 2003/04 as part of its general responsibility for protecting the completed by the end of 2004. integrity and reputation of the thoroughbred racing code.

The research function also managed the economic benefit study RVL adopted this Responsible Wagering Code of Practice on the of the 2003 Spring Racing Carnival and provided assistance to basis that: a number of external industry related research projects. • as the regulatory body of Victorian thoroughbred racing, RVL seeks to ensure racing clubs conduct their race meetings Corporate Affairs having full regard to responsible wagering practices; RVL maintained an extensive network of communications with • as a joint venture partner of Tabcorp, Victorian thoroughbred the member shareholders, industry stakeholders, commercial racing encourages and supports Tabcorp in its conduct of partners, interstate and international counterparts, government responsible wagering practices; agencies and the wider business sector and community. • as the co-regulatory body of Victorian registered bookmakers, The diverse nature and the major dimensions of the Victorian RVL seeks to ensure bookmaking is properly conducted having thoroughbred racing industry makes it essential that this full regard to responsible wagering practices; and network facilitates effective consultative processes and the • as a good corporate citizen, RVL recognises the importance sharing of information. of promoting responsible wagering practices to protect the Victorian community and minimise harm associated with problem wagering.

41 Celebrating 2004 Australian Champion Racehorse of the Year, Lonhro: Rear L-R: Robbie Ingham, Peter Snowden, Debbie Kepitis and John Ingham; Front L-R: Lynette Ingham, John Hawkes, Bob Ingham and Trevor Lobb 5> RACING DEVELOPMENT

Advertising Code of Practice for the Victorian Thoroughbred Publishing & e-Communications Racing Industry RVL Publishing & e-Communications provides print and web As the governing body of the Victorian thoroughbred racing industry design services for RVL and the wider thoroughbred racing and with the general responsibility for protecting the industry’s integrity breeding industry and produces RVL publications such as Inside and reputation, the RVL Board adopted the Victorian Thoroughbred Racing – the Victorian racing industry’s official publication which Racing Industry Advertising Code of Practice in 2003/04 to promote includes the racing calendar, Inside Breeding, Inside Racing ethical advertising within the industry. Online, the Spring Features Guide and RVL media guides.

In particular, the Code seeks to encourage the industry to During 2003/04, the production of racebooks was transferred maintain the highest standard of advertising that at all times from Publishing & e-Communications to Racing Information accords with the expectations of the wider community and Services Australia (RISA). generally contributes to the good reputation of racing. Internet The operation of the Code will be periodically reviewed through the regular monitoring and assessment of industry advertising The RVL website (www.racingvictoria.net.au) was named Best campaigns and practices. Reviews will also benchmark the Organisation site at the 2004 Radio Sport 927 Racing Internet Code against prevailing advertising standards and community Awards and continues to be one of Australia’s most popular attitudes, as well as be responsive to the views of bodies such sites with in excess of 2.4 million visitors in 2003/04, as the Advertising Standards Bureau, Advertising Federation of an increase of 45% on 2002/03. Australia and the Australian Association of National Advertisers. In addition springracingcarnival.com attracted 1.1 million hits over the Carnival in 2003. Industry Events Publishing & e-Communications also provides Internet design As the central point for industry functions and events, the and management services to a large number of industry industry events team worked on numerous internal and external partners, clubs and other participants. events to promote and celebrate the racing industry as detailed in ‘Celebration’, from Celebrating Racing’s Heroes and the launch Intranet of the Spring Racing Carnival on a State level, to national projects such as coordinating National Jockey Celebration Day, the 2004 The Victorian racing industry Intranet continues to be an invaluable Australian Racing Hall of Fame induction and the 2004 Australian resource for racing administrators with an increase in usage in Champion Racehorse of the Year Awards. 2003/04 of 20%.

A focus on community was also prominent with a Christmas Major advancements during the year included: party for children in the Flemington area, the commemoration • bringing development and maintenance in-house for of ANZAC Day at Victorian race meetings and the coordination significant cost savings; of Australia Day celebrations at race meetings across the country.

42 Attendance at Victorian Thoroughbred Race Meetings Gross Economic Benefit of the Spring Racing Carnival '000 $M

400 1750 $388.5 1,628

350 1500

300 1250

250 1000 200

750 150

500 100

250 50

0 0 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 94 95 96 97 98 99 00 01 02 03

Spring Racing Carnival attendance (nine major metropolitan racedays) Metropolitan area Regional Victoria Total Attendance at all other meetings Source: IER Consulting Total Gross economic benefit from spending by visitors to the Spring Racing Carnival Source: Racing Victoria Limited and Clubs In 2000 the study was also expanded to include the economic benefit of the Spring Racing Carnival on regional Victoria

• development of more human resources functions within EQUINE SERVICES & INTERNATIONAL DEVELOPMENT the Intranet; and Visiting International Horses • the development of an image management system on the industry’s Intranet for efficient storage and retrieval International participation in the 2003/04 season again proved of digital images. to be one of the highlights of the year for RVL. Key features included: CustomerFirst • 97 international nominations received for the Carlton Draught The RVL CustomerFirst contact centre handles all calls and Caulfield Cup, Carlton Draught Cox Plate and Tooheys New enquiries regarding products and services for RVL, Country Melbourne Cup as compared with 74 in 2003; Racing Victoria (CRV), country clubs, Champions – Australian • nine international starters across the 2003 Spring Racing Racing Museum & Hall of Fame and ThoroughVisioN™. Carnival, including three on Caulfield Cup day; During 2003/04, CustomerFirst continued to work with the • the reappearance of Henry the pony and Jardine’s Lookout (IRE) Victorian racing industry to improve processes, efficiencies fuelling strong media coverage; and customer service and: • the appearance of Holy Orders (IRE), the Irish horse who • took in excess of 35,000 phone enquiries for the Victorian refused to run in training, creating record levels of media racing industry; coverage; and • processed memberships for 25 country clubs; • international horses starting as favourite in both the Caulfield • took 10,000 orders for Champions – Australian Racing and Melbourne Cups. Museum & Hall of Fame and ThoroughVisioN™ products International coverage of Victorian racing and the Spring Racing (including owners videos and DVDs) and Inside Racing Carnival underwent significant growth through: subscriptions; and • processed bookings for all RVL and CRV events (including • building and leveraging relationships with key international Australian Champion Racehorse of the Year, Australian Racing journalists; Hall of Fame Induction Dinner, Celebrating Racing’s Heroes • providing regular updates to key international journalists and Victorian Country Racing Awards). on a regular basis; • developing and enhancing relationships with key executives from other racing jurisdictions, particularly in England, Ireland, United States, Japan, and New Zealand;

43 5> RACING DEVELOPMENT

• profiling the Spring Racing Carnival brand internationally; and STRATEGY AND EXTERNAL RELATIONSHIPS • leveraging the success of in the 2002 Tooheys RVL continues to develop and foster its relationships with New Melbourne Cup. Champions – Australian Racing Museum & Hall of Fame, Racing Information Services Australia (RISA) and ThoroughVisioN™ (TVN). Ownership The Country Owners Racing Challenge (CORC) continued in Racing Information Services Australia 2003/04 with 55 horses in the points-based Challenge, an RISA was formally established in December 2003 following the increase of 31% on 2002/03 (42 horses). To be eligible to register Victorian racing industry’s decision to sell the Racing Services a horse as part of CORC, horses must be named after the town Bureau (RSB) to RISA, a company established with the support in which they are trained. The winning owner of the Challenge of the Australian Racing Board. receives $10,000 cash (second $7,500 and third $5,000) and the town for which the winning horse is named wins $10,000. RISA’s establishment means that the crucial data of race fields, results and form can be controlled on a national basis and RVL entered into a service agreement with the Thoroughbred distributed to customers in the wagering industry and various Racehorse Owners’ Association to conduct a series of ownership media outlets. In the longer term, RISA will increase returns for campaigns during 2003/04. This included the conducting of racing at a national level and streamline the many duplicated successful ‘Own A Racehorse for A Day’ Competitions which business processes in each State. attracted hundreds of applicants.

In conjunction with William Inglis & Son Ltd and the Equine Centre ThoroughVisioN™ – University of Melbourne, an ownership forum was held prior to TVN was established to manage and commercialise Victorian the 2004 San Miguel Melbourne Premier Yearling Sale. Speakers racing’s visual and audio rights. During 2003/04, RVL, in conjunction included Prof Andrew Clarke from the University of Melbourne, with the Victorian clubs, successfully negotiated and funded the Fields of Omagh part-owner Mr Martin O’Connor, the Federation transition of TVN to a broader ownership which now includes of Bloodstock Agents, licensed syndicators and leading trainers. the Australian Jockey Club, Country Racing Victoria, Melbourne Racing Club, Moonee Valley Racing Club, Sydney Turf Club and A review of the application of the Owners Card launched in Victoria Racing Club. 2002 identified some technology shortfalls. This has lead to the development of a proposed upgrade plan for these cards The consolidation of Australia’s premier race broadcasting to be effective in 2005. product into a single entity has placed the industry on a solid foundation to increase returns for racing’s shareholders and stakeholders and broadens the appeal of racing to a wider audience.

44 Components of Returns to Owners $M

140

120

100

80

60

40

20

0 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04

Prizemoney and trophies Super VOBIS Float rebates Riding fees Jockey’s WorkCover Farriers’ rebates Starters’ subsidies Free nominations benefit* Source: Racing Victoria Limited and Clubs *The benefit to owners of the introduction of a free nomination system was a reduction of $3.3 million in transaction costs.

TVN is currently negotiating with Tabcorp (the new owners of Sky Victorian apprentices had an outstanding racing season Channel) to deliver a new thoroughbred and sports channel and highlighted by Mr Nicholas Ryan and Mr Blake Shinn finishing new exploitation services for new media and international rights. fourth and fifth respectively in the Scobie Breasley Medal count. The Thoroughbred Channel is expected to be launched in Owners and trainers demonstrated their confidence in the ability February 2005. of our young riders with 22% starters being ridden by apprentice jockeys during the year. Education and Training for the Racing Industry RVL is a registered training organisation delivering nationally Trackrider Training and Recruitment accredited training to the racing industry in Victoria. In 2003/04, In 2002, a survey of trainers into the shortage of trackriders the Racing Victoria Limited Education & Training Centre (RVLETC) in Victoria confirmed a shortfall of available riders within the provided accredited courses to over 150 industry participants. Key industry. As a consequence, an international trackrider achievements were the successful implementation of the Jockey recruitment program was developed. By 1 August 2004, overseas Welfare Program, jumping riders training and trackrider initiatives. trackriders had taken up 22 of the 50 available places under a labour agreement, negotiated by RVL and the Australian Jockey Apprenticeship Trainers’ Association, with the Department of Immigration & An intake of 13 new apprentices in 2003/04 increased the Indigenous Affairs & the Department of Workplace Relations. number of jockeys in training to 40. The Certificate IV in Racing In excess of 100 enquiries regarding the trackriding training (Jockey) focuses on the key skills of riding, diet and nutrition, program at Pakenham were received. Nine trackriding courses personal management, stable skills and horse health. were conducted with full enrolments for each program. This year, a number of initiatives were implemented to broaden Forty-eight riders completed the course during the season the exposure and skills of apprentices during the season, with students from as far away as Warrnambool, Bairnsdale, including the introduction of regionally-based riding instruction Terang and Colac attending the course. Many of these riders utilising the services of qualified instructors from the Equestrian enrolled in the course as a direct result of workshops Federation of Australia. Support to both apprentices and trainers conducted in their regions by the trackriding instructors. was extended throughout the year with a 20% increase in the Employment outcomes for these students were excellent with number of visits to workplaces, trials and race meetings. 33 course graduates going on to either full or part-time work in the racing industry.

45 Regimental Gal – winner of the 2004 Silver Arrow Sprint Challenge 5> RACING DEVELOPMENT

Jumping Riders Training 2. Effective financial investment scheme (Superannuation): All jumping races conducted during the season were reviewed the Jockey Retirement Package has now been operational since 1 July 2003. Currently 130 jockeys and apprentices by race-riding expert Mr Ron Hall and national showjumping out of a possible 230 have signed on to the scheme and are champion Mr Nick Roe in order to provide advice and support to now accessing the benefits of both the Career Benefit and jumps jockeys in relation to their personal riding skills and race Superannuation Funds. Enquires are still consistent through safety. In addition to the coaching scheme, three compulsory both the Superannuation Trust of Australia and RVL. riding workshops were conducted for ‘B’ class riders with the 3. Access to professional financial planning services: three focus on riding technique. financial seminars were conducted at Caulfield, Cranbourne and Flemington Racecourses with options for more flexible Stable Skills delivery of financial planning advice for jockeys to be developed. A total of 56 students enrolled in the pre-vocational program 4. Benevolent Fund – ‘National Jockeys’ Trust’ and the Oliver ‘Handle Horses Safely’, which is a nationally accredited unit Foundation: guidelines for the Racing Victoria Limited of Certificate II in Racing (Stablehand). The training for this Benevolent Fund were distributed in the October edition of program is funded by the State Government under the Priority the Jockey Welfare Program – Riding for the Future newsletter, Education & Training Program. This program is conducted in clarifying the policy and procedures for applying for racing stables and is designed for people seeking a career assistance. The National Jockeys’ Trust has been established for jockeys and their families. The leading patron of the in the industry but who have little or no experience. trust is ‘The Oliver Foundation’, which was established by Accredited traineeships for stablehands continued with eight Mr Damien Oliver and his business manager Mr Neil Pinner new enrolments during the year. in memory of Mr Jason (Damien’s brother) and Mr Ray (Damien and Jason’s father) Oliver. Annual fundraising Jockey Welfare Program – ‘Riding for the Future’ activities for this trust will take place at the National Jockey Celebration Day each year. More progress was made in the Jockey Welfare Program – 5. Education and training programs: in November 2003, ‘Riding for the Future’ in 2003/04. These included: a partnership agreement between the Victorian Institute 1. Victorian Jockeys’ Association’s relocation to Racing Victoria of Sport (VIS) and RVL to deliver education and training Centre: refurbishment of a room adjacent to the offices on programs was announced. the ground floor of the Education & Training Centre is now The VIS is offering all current and retired jockeys access complete. The Executive Officers of both the VJA and AJRA to their Athlete Career and Education (ACE) Program relocated to these premises in February 2004. which consists of career counselling and planning, personal development training, educational guidance and information, employment preparation, access to career referral networks and ongoing transitional support.

46 Currently, 15 jockeys have signed up for the ACE Program and 7. Formal recognition of retired jockeys: all current and retired are receiving assistance with planning their careers. Posters jockeys across Australia were invited to join in the inaugural advertising this program have also been designed and were National Jockey Celebration Day on Saturday 13 March this distributed to all Victorian racecourses to be displayed in all year. A specially designed pin to commemorate the day was jockeys’ rooms. sold at all 27 racecourses across the country racing on this In addition, the VIS delivered a series of three seminars designed day with all proceeds going to the National Jockey Trust. specifically to assist female jockeys. These seminars were The Retired Jockey Ticketing Scheme launched in November presented by leading female athletes and focused on life skills, 2003 has received an overwhelming response from former motivation, fitness, diet and nutrition. The first of these seminars jockeys. Currently, 125 former jockeys have applied and been was held in December 2003 with 12 female jockeys in attendance. successful with their applications to take part in the scheme. The second seminar was held in March 2004 at the Victorian Institute of Sport and featured Sydney 2000 Olympic Games Gold Medallist (Taekwondo) Ms Lauren Burns. Lauren provided the jockeys with an outstanding session detailing her stories of competing at the highest level, managing weight issues, motivation and dealing with the media and self promotion. 6. Professional counselling and health/medical services: the Jockey Assistance Program continues to receive a solid response from the jockeys and their immediate families. The program has assisted 18 jockeys during the last 12 months, via both one-on-one counselling sessions and phone referrals. Program posters have been distributed to each raceclub for display in their jockeys’ rooms. Plans for 2004/05 include sending out program brochures with licensing renewal forms, continued promotion of the program via media exposure and familiarisation seminars for stewards and other relevant officials.

47 Andrea Leek, the first woman to win the VRC Grand National Hurdle (on Team Heritage in July 2004) 6> RACING SERVICES

Racing Services comprises Human Resources (HR), Information The training budget was significantly increased in 2003/04 and Services, Finance, Procurement, Planning & Analysis, Region is now managed by HR to ensure that training expenditure is Services and Risk Management. In a number of areas, services fully aligned with RVL’s strategic objectives. are provided beyond RVL to other associated organisations, Training and support has also been provided to functional particularly country clubs. leaders to enable them to take greater responsibility for human The Racing Services group is also responsible for overseeing resource management in their areas. and reviewing financial and other aspects of the Victorian racing An HR policy review has also been undertaken and a number industry’s (VRI) joint venture with Tabcorp, as well as managing of key policies were developed or updated to ensure fairness and reporting RVL’s financial performance. and consistency for all staff and to improve entitlements where possible. The policies include carer’s leave, compassionate leave, HUMAN RESOURCES overtime and time off in lieu of overtime. The focus for HR in 2003/04 was on enhancing the framework for human resource management to enable employees to Consolidation of the payroll function for RVL, Country Racing further develop their potential in a challenging and satisfying Victoria and the country clubs which opt to be part of the process environment. HR has concentrated on performance appraisal, has now commenced. This project will reduce administration training and development and career progression and encourages effort and payroll efficiency will be significantly improved by transfer and learning within the industry. Significant progress reducing the number of payroll cycles. has been made over the year in achieving these key HR strategic The new streamlined recruitment process enabled positions objectives with the support of RVL management and staff. to be filled more efficiently. The HR function facilitated the During 2003/04 a comprehensive classification and remuneration recruitment of 71 full-time and contract positions and 59 casual review was undertaken and this has provided a solid, market- positions for RVL and related entities in 2003/04. related remuneration system for all employees. A competency- During 2004/05, the focus will be on career development for all based succession planning process has also been developed and staff, creating a family-friendly work environment and improved this has been linked with a new performance appraisal system work/life balance. to provide a valuable input into the training and development for each staff member. In addition, succession risks have also been identified and action plans developed.

49 Clerk of the Course John (Patto) Patterson and Banjo 6> RACING SERVICES

Regional Operations Region Financial Services In December 2002, RVL, in conjunction with Country Racing During 2003/04, the Bendigo Jockey Club, Elmore Racing Club Victoria (CRV), initiated a regional resource sharing initiative and Cranbourne Turf Club joined Region Financial Services. to assist the 24 clubs in the Gippsland, Goulburn Murray All country clubs now participate in this service and picnic and Wimmera Mallee regions to improve their operational clubs have become eligible to participate. performance. During the year, development work was undertaken with CRV Following an extensive consultation process with clubs, new as part of the industry’s data warehouse project. Over time this shared administration structures were put in place in August new system will enable country clubs to easily access racing, 2003. The operational improvements for the clubs involved turnover and financial results. over the first 12 months have been excellent and a base for New raceday and monthly committee reports were also developed further growth and improvement has now been established. with CRV and country clubs to provide key performance results A considerable amount has been achieved through the support in a summarised format with appropriate commentaries to help provided to country clubs regionally, with many pressing issues value add club decision-making. addressed that would otherwise not have been possible, Region Services are also continuously exploring other opportunities particularly in the area of risk management. to streamline services for country clubs. Initiatives currently Clubs in the Western Otway region have now also commenced underway include the option for clubs to join a centralised working with CRV and RVL in examining regional resource payroll function and standardisation of Region Financial Services sharing opportunities. operating processes to improve efficiency and service.

Responsibility for managing and improving the efficiency of budgeting, payment, scheduling, rostering and coordination of internal and external raceday services for all country race meetings has been taken on by the Region Services function. This has enabled the Region Service Managers to take on responsibility for additional regions, as RVL will be providing services to all country clubs.

At the end of July 2004, management responsibility for the Region Services function and all country resource sharing initiatives was transferred from RVL to CRV whilst RVL continues to fund the service.

50 2003/2004 Industry Income Sources 2003/2004 Industry Expenditure ($220.3M) ($219.9M)

Program Fee ($50.9M) Distributions to Member Shareholders ($123.1M)* *Distributions to member shareholders Product Fee ($75.5M) Administration and Operations ($31.0M) (Country Racing Victoria, Melbourne Racing Club, Moonee Valley Racing Club, Victoria Racing Club) Marketing Fee ($2.4M) Special Projects Allocations ($1.8M) Joint Venture Profit ($61.5M) Training Tracks Maintenance ($6.2M) Distributions were as follows: Electronic Gaming Machine Levy Rebate ($2.8M) Jockeys WorkCover Expenses ($4.7M) Country Racing Victoria $48.774 million RSB Income ($0.8M) Thoroughbred Country Assistance Fund ($8.1M) Melbourne Racing Club $32.435 million Telecasting ($2.1M) Super VOBIS ($5.7M) Moonee Valley Racing Club $15.907 million Super VOBIS Income ($2.2M) Telecasting ($6.7M) Victoria Racing Club $26.008 million WorkCover Levy Income ($1.5M) Marketing and Promotion ($2.4M) Source: Racing Victoria Limited Profit on sale RSB/TSC ($9.3M) Racecourse Planning and Development ($12.3M) Industry Recoveries ($5.3M) Region Services ($4.7M) Other Income ($6.0M) Establishment Expenses and Debt Forgiveness ($8.8M) Profit on sale of RSB/TSC is a non-recurring Other Expenditure ($4.4M) Source: Racing Victoria Limited

INFORMATION SERVICES Projects to enhance and improve the two main industry Information Services implemented a number of key industry information systems, i-RIS and E.piphany (the industry’s customer initiatives which included a combination of both systems and relations management system) were also undertaken during infrastructure projects in 2003/04. the year. In particular, the redevelopment of the industry’s stakes payment system to fully integrate it into i-RIS has not only During the year the Principal Racing Authorities of Australia delivered full tax compliance, it has also provided the added established Racing Information Services Australia (RISA) to, benefit of greatly enhancing the process for generating stakes amongst other things, provide information technology services payments to owners, trainers and jockeys. to facilitate racing administration on a national level. Upon establishment, RISA purchased i-RIS (the industry’s racing The ‘CustomerFirst’ (E.piphany) system is now processing information database) from RVL with a view to developing it into customer transactions not only for RVL and some metropolitan a national racing administration system. Information Services clubs, but for related entities including ThoroughVisioN™, played a major role in the formation of RISA and has a service Champions – Australian Racing Museum & Hall of Fame and level agreement with RISA to manage the ongoing maintenance Country Racing Victoria. In addition to this, new E.piphany and operation of i-RIS. developments were undertaken for both the Moonee Valley Racing Club and the Victoria Racing Club, including the The major infrastructure project completed during the year on incorporation of a Members’ Rewards system for both clubs. behalf of RVL’s stakeholders was an upgrade of RVL’s internal network and communications systems to a more contemporary Business intelligence for the industry has also been given platform enabling greater integration of voice, data and fax significant priority with the ongoing development of an industry services and providing mobile computing capabilities from data warehouse. The warehouse incorporates both racing and anywhere in the world using a mobile phone or the Internet. financial data and is continuing to improve the quality and The project also included upgrades of external data links to timeliness of data reported within the industry. metropolitan and country clubs and improved Internet services As part of its ongoing commitment to delivering high quality resulting in considerable savings in communications charges services to the thoroughbred industry in Victoria, Information being passed back to stakeholders. Services was significantly restructured during the year. Programming services were outsourced to help reduce the department’s fixed cost structure and to enable the full-time team to focus more on strategic and management issues. This change has better equipped the Information Services team to meet the ongoing challenges facing racing in a rapidly evolving technology environment.

51

Tabcorp – Racing Product Market Share Thoroughbred Wagering Turnover (Tabcorp) % (on and off-course) $M

2500 100.0 $2,304M

76.7% 2000 75.0 70.3%

1500

50.0 Turnover 1000

25.0 14.0% 15.0% 500 14.7% 9.3% 0.0 0 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04

Thoroughbred Harness Greyhounds On-course Off-course Total Note: Market share as at Tabcorp’s financial year end (30 June) Source: Tabcorp Source: Tabcorp

6> RACING SERVICES

RVL FINANCE RISK MANAGEMENT The finance function has continued to streamline and enhance Risk Management initiatives in 2003/04 focused on assisting processes during 2003/04 and it significantly expanded its particularly country clubs to improve Occupational Health workload through service provision to new business entities and Safety (OH&S) management practices, the introduction including RISA, ThoroughVisioN™, and Champions – Australian of an OH&S manual and the adoption of the On-Course Horse Racing Museum & Hall of Fame. Movement Safety Policy.

The scope of the internal audit service has also been expanded The On-Course Horse Movement Safety Policy framework was to provide services for metropolitan raceclubs. formulated with the support of the clubs and stakeholders to minimise the potential risks of serious injury to on-course Strengthened budgeting and financial forecasting processes patrons associated with the unpredictable nature of racehorses. have improved cost accountability throughout the business The policy strikes an appropriate balance between the enjoyment and performance reporting has been further enhanced through derived from the on-course experience and the requirement for the introduction of the industry’s monthly scorecard ‘ThoroughScore’. clubs to provide for the safety of all on-course patrons. Clubs Procedural adherence has also been strengthened both via have been planning and implementing their own horse movement training and improved policy and procedure access via the safety policies within the industry framework to meet their Intranet’s finance toolkit. particular circumstances.

The policy provides for the following categories of access: PROCUREMENT, PLANNING AND ANALYSIS • Red Zone 1 – Restricted Area (authorised officials, trainers, The procurement function has focused heavily on achieving jockeys and strappers); cost reductions across a range of items including vehicles, fuel, communications, power and printing and stationery. An • Yellow Zone 2 – Restricted Area (Zone 1 categories of persons e-Procurement process has also been successfully implemented and authorised owners, accredited media, sponsors, across the organisation. dignitaries, members and other authorised persons); and • Green Zone 3 – Public Areas. The Planning & Analysis team has undertaken a range of important analysis projects during the year including wagering Areas subject to safety zoning include the mounting yard, the trend analysis, a twilight/night racing review, a returns to owners birdcage and horse stalls, the track, exit and entry points to and review and analysis of jumps and picnic starters. The team also from the horse float car park, and any other relevant on-course facilitated commencement of the refresh of RVL’s strategic plan area such as walking rings, wash areas and urinal boxes. – a process which will be completed with the input of the new RVL Board in 2005.

53 Glenn Boss – 2003 Tooheys New Melbourne Cup 7> CELEBRATION

Public Affairs, Communications & Publishing and in particular Spring Racing Carnival the Events and Tourism and Public Relations teams worked RVL is the proprietor and promoter of the Spring Racing Carnival closely with the marketing staff of the various racing clubs which begins on 1 October and ends with the Carlton Draught across Victoria to showcase the magnificent achievements Ballarat Cup in mid-November each year. of the thoroughbred industry in 2003/04. The 2003 Spring Racing Carnival was launched at Federation From the all-time high of the (GB) camp on winning Square for the first time by Victorian Premier, the Hon Steve the 2003 Tooheys New Melbourne Cup to the thrill of owners Bracks MP. seeing St Arnaud Banana announced the winner of the 2003/04 Country Owners Racing Challenge, 2003/04 was a stellar year. Ms Kate Waterhouse, as the 2003 Spring Racing Carnival Ambassador, added a new dimension to the role with her strong In a year that racing farewelled the champion , Lonhro racing heritage as the daughter of champion trainer Mrs Gai made up for the loss and was deservingly crowned Australia’s Waterhouse and granddaughter of legendary Hall of Famer, Champion Racehorse before being retired to stud for the 2004 Mr Tommy Smith. season. The Spring Racing Carnival is the biggest annual event in This was also the year that jockeys were recognised for the very Australia and enjoyed a record-breaking year in 2003 including first time with a National Jockey Celebration Day. It was also an all-time high attendance of 658,675 and a gross economic fitting then, to celebrate Mr Scobie Breasley AO’s 90th birthday benefit of $388.5 million. Interstate and international tourist shortly afterwards. Another jockey, Ms Andrea Leek, the RVL visitations were once again very prominent – accounting for track riding promotions officer and mother of two, also created 18.3% of total Carnival visitations, with overseas tourist history, becoming the first woman to ride home the winner of visitations increasing from 22,405 to 27,168. the VRC Grand National Hurdle on Team Heritage. Carnival fashion spending peaked at $16.6 million in 2003 – The industry also experienced even more support for Victoria’s including 48,000 hats, 40,000 pairs of shoes and 23,000 handbags. hallmark event, the Spring Racing Carnival, with an all-time high attendance figure of 658,675 across Victoria and a gross economic A recent Australian sport survey reported that the Melbourne benefit of $388.5 million. Cup has overtaken the AFL Grand Final as the most important Australian sporting event, 22% of the Australian population ranked as number one (up from 18% in 2001) compared to 20% for the AFL Grand Final (down from 22%). The estimated viewing audience of the Melbourne Cup is now 700 million – with many now watching via the Internet.

55 Celebrating the win of Fields of Omagh in the 2003 Carlton Draught Cox Plate 7> CELEBRATION

Silver Arrow Sprint Challenge In an effort to elevate the ever-growing success of Australian Toowoomba-trained filly, Regimental Gal, was crowned the 2004 on the international stage, the Silver Arrow Sprint Silver Arrow Sprint Challenge champion following her gallant Challenge brings together the best Australian sprinters and acts win in the Group One Timbercorp Australia Stakes. as a platform for a potential overseas campaign.

The Silver Arrow Sprint Challenge comprises four prestigious National Jockey Celebration Day and National Jockey Trust Victorian Group One races: The Inaugural National Jockey Celebration Day was launched • TEAC Lightning Stakes 1000 metres (Flemington); on Tuesday 2 March 2004 at Parliament House, Canberra, by • 1100 metres (Caulfield); the Federal Minister for the Arts & Sport, Senator, the Hon Rod Kemp, before a large audience of sponsors, government, media • Seppelt Wines 1200 metres and racing industry representatives. (Flemington); and • Timbercorp Australia Stakes 1200 metres (Moonee Valley). The Prime Minister of Australia, the Hon John Howard MP, was also involved in the launch, hosting jockeys representing A two-pronged bonus served as the publicity centrepiece of Australia’s eight States and territories in his private office. the 2004 Silver Arrow Sprint Challenge, inspired in part by the international success of 2003 Silver Arrow Series winner, Choisir. An initiative of the Australian Racing Board (ARB) and the Australian Jockeys’ Association (AJA), the concept of National Generous sponsorship by the Victorian Bookmakers’ Association Jockey Celebration Day and its affiliation with the newly (VBA) saw a $500,000 bonus offered to the winner of any three established National Jockeys’ Trust was developed largely races in the four-race series, while Ascot Racecourse, England, through the efforts of an appointed working party which offered an invitation to the overall series winner to compete at coordinated fundraising arrangements and administration Royal Ascot in either/both the King’s Stand Stakes and/or the through RVL. Golden Jubilee Stakes. This support reinforced the recognition of the importance of our races and is an important step in the With generous co-national sponsorship provided by Superannuation development of an international sprint series. Trust of Australia (STA) and Tabcorp, National Jockey Celebration Day was celebrated at 27 scheduled race meetings across Considerable progress was made on the development of this Australia on 13 March 2004. international sprinting series with partners in Japan and the United Kingdom during the season. This series would feature sprint races from the Victorian Autumn and presents a significant marketing opportunity for the Australian racing and breeding industries. It is planned that the initial series will be undertaken in 2005.

56 Attendance at Major Metropolitan Meetings 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Carlton Draught 15,075 20,168 22,216 19,672 21,127 21,074 20,310 19,868 21,416 18,373 Vinery Stud Thousand Guineas 10,075 10,206 10,851 9,662 9,008 8,561 9,195 7,815 8,076 8,400 Carlton Draught Caulfield Cup 31,440 35,241 36,112 36,471 42,685 43,347 45,312 40,640 42,015 46,873 Carlton Draught Cox Plate 39,192 38,077 36,190 35,658 38,514 32,397 34,017 38,081 38,325 30,109 AAMI Victoria Derby 54,467 60,404 64,099 64,528 75,805 76,514 92,581 93,029 101,898 97,059 Tooheys New Melbourne Cup 81,650 74,843 90,149 94,143 100,607 104,028 121,015 92,477 102,533 122,736 Crown Oaks 50,176 62,388 67,086 75,482 77,301 83,870 96,406 101,201 103,269 101,179 Emirates Stakes 22,624 25,318 25,736 26,357 31,249 31,728 42,311 42,759 47,593 55,793 Sandown Classic 15,204 14,000 17,130 15,768 15,100 15,230 15,809 14,686 14,250 12,433 Total 319,903 340,645 369,569 377,741 411,396 416,749 476,956 450,556 479,375 492,955

Commemoration of ANZAC Day at Victorian Race Meetings Australian Champion Racehorse of the Year proudly sponsored In addition to the traditional links between race meetings and by Sky Channel ANZAC Day celebrations, RVL showed support for returned Sydney favourite Lonhro was named the 2004 Australian Champion soldiers and their families by arranging the wearing of ANZAC Racehorse of the Year, proudly sponsored by Sky Channel, in Day colours by one jockey in each of the races held at front of an audience of 950 at Crown’s Palladium Ballroom. Flemington, Moe, Avoca and Colac on ANZAC Day. Lonhro highlighted his season with five Group One victories In addition, the Australian Racing Board coordinated race which included the , Yalumba Stakes, CF programming schedules to ensure that there was a simultaneous Orr Stakes, and . Starting minute’s silence at every race meeting across Australia. 10 times during the season for eight wins, one second and one third, Lonhro earned more than $2.3 million in prizemoney. Australia Day Celebrations Lonhro was also named TGM Engineers & Surveyors Champion RVL, in conjunction with the Australia Day Committee (Vic), Middle Distance Racehorse, while Melbourne and facilitated the provision of Australia Day colours to all top-weight heroine Makybe Diva (GB) comfortably took home the award for jockeys at all Australia Day meetings held in Victoria at Caulfield, Radio Sport 927 Champion Stayer. Hanging Rock and Balnarring and at Moonee Valley’s Australia Day themed night meeting on Friday 23 January. Sydney racing greats Mr John Hawkes and Mr accepted awards for the New Zealand Bloodstock Champion All jockeys riding horses with the Number 1 saddlecloth in races Group One Trainer and Henry Buck’s Champion Group One at Moonee Valley wore the colours based on the Australian flag Jockey respectively, with Boss also named the Emirates Airlines in a celebration of our nationhood by owners, trainer, jockeys Racing Personality of the Year. and the wider racing industry. Queensland colt Starcraft (NZ) took New Zealand Thoroughbred Marketing Champion Three-Year-Old honours, while the record- breaking Mrs -trained Dance Hero collected the award for Yallambee Stud Champion Two-Year-Old.

Private Steer grabbed her share of the spotlight winning the most hotly contested category, Crown Champion Filly/Mare.

57 Danny Nikolic and won the 2003 Carlton Draught Caulfield Cup 7> CELEBRATION

Celebrating Racing’s Heroes Proudly Sponsored by Telstra Australian Racing Hall of Fame Induction Mr Damien Oliver continued his domination of the Scobie The 2003/04 induction to the Australian Racing Hall of Fame Breasley Medal with his fourth consecutive and sixth win admitted 13 of racing’s heroes. of the award for the most outstanding jockey on Victorian The ceremony was marked by the live induction of 1990 Japan tracks for the 2003/04 racing season. Cup winning gelding, Better Loosen Up before an 800-strong Voting was close with Oliver stealing victory by a mere six votes. audience. Better Loosen Up was accompanied by the man who The 2004 Scobie Breasley Medal runner-up was Mr Danny partnered him to international victory, Mr Michael Clarke. Nikolic, followed by Mr . Victorian apprentices Twelve further champions were inducted including thoroughbred Mr Blake Shinn and Mr Nicholas Ryan rounded out the top five. greats Ajax, Gloaming, and The Barb. Also presented on the night was the 2004 Fred Hoysted Award, The doyen of Australian jumping racing, Mr Jim Houlahan, the proudly sponsored by Telstra, which went to former jockey- winner of more than 70 Group Ones, John Hawkes and masterful turned-trainer, Mr Tony Vasil. Mr Vasil was a dominant force trainer of the 1920s-40s, Mr Lou Robertson, joined the trainers’ throughout the 2003/04 racing season with 58 winners from category. 258 runners – an strike rate of 22.5%. International dominance, combined with their Australian The evening also paid tribute to the most outstanding jumps victories, saw Mr Edgar Britt, Mr Rae ‘Togo’ Johnstone and rider on Victorian racetracks with the awarding of the 2004 Mr Jack Purtell inducted into the jockey elite. Radio Sport 927 Tommy Corrigan Medal to now five-time winner Mr Craig Durden, ahead of Mr Adam Trinder and The first Secretary of the Victoria Racing Club and the man Mr Brad McLean. responsible for the declared Melbourne Cup holiday, Mr Robert Cooper Bagot, joined the Hall of Fame associate ranks. Alongside From 2004/05 the prestigious Scobie Breasley Medal, awarded him saw the induction of the Ingham brothers, Mr Bob and the to Victoria’s most outstanding jockey for the racing season, late Mr Jack Ingham. will be judged entirely by the RVL stewards. Much like the current-day Brownlow Medal voting system in the Australian The Australian Racing Hall of Fame was established in 2001 and Football League, the ‘umpires’ of thoroughbred racing, the celebrates the most acclaimed icons in Australian thoroughbred stewards, will now become the sole determinants of votes, racing history. With a rich history, thoroughbred racing has been effective for the 2004/05 racing season. at the heartbeat of Australian culture for more than 150 years. A combination of 66 horses and personalities have now been inducted in the Australian Racing Hall of Fame’s short history.

58 Industry Awards 2003/04 Australian Champion Racehorse of the Year Awards proudly sponsored by Sky Channel Australian Champion Racehorse of the Year Award proudly sponsored by Sky Channel Lonhro Seppelt Wines Champion Jumper Topzoff Yallambee Stud Champion Two-Year-Old Dance Hero New Zealand Thoroughbred Marketing Champion Three-Year-Old Starcraft (NZ) Crown Champion Filly/ Mare Private Steer William Inglis & Son Champion Sprinter Exceed And Excel TGM Engineers & Surveyors Champion Middle Distance Racehorse Lonhro Radio Sport 927 Champion Stayer Makybe Diva (GB) Crazy John’s Most Popular Racehorse Breeding & Racing Magazine Champion Sire (USA) Emirates Airline Racing Personality of the Year Glen Boss Henry Bucks Group One Jockey Glen Boss New Zealand Bloodstock Champion Group One Trainer John Hawkes

Celebrating Racing’s Heroes proudly sponsored by Telstra Scobie Breasley Medal proudly sponsored by Telstra Damien Oliver Fred Hoysted Award proudly sponsored by Telstra Tony Vasil Radio Sport 927 Tommy Corrigan Medal Craig Durden Sky Channel Victorian Trainers’ Premiership Sky Channel Victorian Jockeys’ Premiership Brad Rawiller

Champions – Australian Racing Museum & Hall of Fame Scobie Breasley’s 90th Birthday Champions – Australian Racing Museum & Hall of Fame was The Victorian public paid a 90th birthday tribute to one of officially opened by the Governor General, Major General Michael Australia’s racing legends – Mr Arthur ‘Scobie’ Breasley AO – Jeffrey AC CVO MC, on 1 July 2004. The Victorian Premier, the in what was ‘Racing’s Biggest Morning Tea’ at Federation Hon Steve Bracks MP, and Victorian Minister for Racing and Square on 7 May 2004. Minister for Tourism, the Hon John Pandazopoulos MP, also As an inaugural inductee of the Australian Racing Hall of Fame participated in the ceremony. and namesake of the medal for outstanding jockey performance The relocation of the Museum from Caulfield Racecourse to the each year, Mr Breasley was treated to a public birthday cultural and sporting heart of Melbourne represents a new era celebration by his many friends in racing. that will reinforce its national status and literally take racing to Scobie Breasley won four Caulfield Cups in succession between the people of Victoria and its many touring visitors. 1942 and 1945 and later returned from a trip to England to record The new location, at the heart of Melbourne’s CBD, has over a fifth win in the race in 1952. Breasley established a huge 220 objects on display, a program of temporary exhibitions reputation during a stellar career in the United Kingdom. and interpretive exhibition tours. Every opportunity will be He won the English Jockeys’ Premiership four times and his made available to share in the magnificence of Australian career total of 3,251 winners included more than 2,000 in England. racing history. He won two English Derbies (1964-66) and also won the 1958 Prix de L’Arc de Triomphe. Breasley had his last ride in 1968 Country Owners Racing Challenge and took up training before returning to Melbourne to live in Owned by the ‘Saints No 1 Syndicate’, St Arnaud Banana was his retirement. the eventual winner of the 2003/04 Country Owners Racing Challenge on 128 points after a hard-fought battle against Breasley was immortalised with the naming by RVL of the second placegetter, Saint Manangatang which finished on Scobie Breasley Medal, awarded each year since 1996 to 117 points. Victoria’s outstanding jockey.

Prizes included $10,000 to the owners of St Arnaud Banana, a TEAC DVD player for trainer Mr Austy Coffey and a home entertainment package for the winning town, St Arnaud. There was also $7,500 cash for the connections of Saint Manangatang and $5,000 for third-placegetter Swan Hill.

59 7> CELEBRATION

Christmas Party for Special Kids Winner of the Group One AAMI Blue Diamond Stakes, Alinghi RVL and the Victoria Racing Club (VRC) hosted a Christmas was named Super VOBIS Horse of the Year at an awards night party at in December 2003 for local at Champions at Federation Square. schoolchildren; children from the Royal Children’s Hospital, 2003/04 Super VOBIS Premierships: Ronald McDonald House and Camp Quality; and the children Leading Trainer Mathew Ellerton $315,900 of RVL and VRC staff. Leading Owner Contract Racing $269,000 Leading Nominator Contract Racing $309,400 Complete with a visit from Mr Roy ‘Santa’ Higgins and Rudolph Leading Bonus Earner Jakodae $77,000 (Subzero), the event was a marvellous success and featured 4yo Super Stayers Series Palazzo Musicale Camp Australia activities and many giveaways. Crown Casino Super VOBIS Horse of the Year Alinghi

Barastoc Horse of the Year RVL again sponsored the Barastoc Horse of the Year Show in 2003. The winner was WL Envy, known in his former racing life as Profumo (Centaine – Lavender (NZ)). Not so successful on the racetrack (12 starts, 0-3-1, $3,995), WL Envy has more than redeemed himself in the showring after being discovered at the apprentices’ school in Queensland before being brought to Victoria by Ms Sally Watkins, his owner and rider.

Super VOBIS Horse of the Year Super VOBIS had another big year with 9,824 Super VOBIS starters receiving a total of $5.5 million in bonuses during the season.

60 Victorian Group One Races 2003/04 Prizemoney Race Distance (metres) (including trophies) Winner Trainer Jockey Cleanevent Stakes 1200 $357,000 Spinning Hill Guy Walter Patrick Payne Emirates Airline 1800 $352,000 Mummify Lee Freedman Danny Nikolic Dubai Racing Club Cup 1400 $352,000 Exceed And Excel Tim Martin Corey Brown Carlton Draught Caulfield Guineas 1600 $1,002,000 In Top Swing Noel Mayfield-Smith Noel Callow Yalumba Stakes 2000 $402,000 Lonhro John Hawkes Darren Beadman 1600 $352,000 Roman Arch Mick Whittle Luke Currie Vinery Stud Thousand Guineas 1600 $502,000 Special Harmony Lee Freedman Damien Oliver Carlton Draught Caulfield Cup 2400 $2,165,000 Mummify Lee Freedman Danny Nikolic Carlton Draught Cox Plate 2040 $3,020,000 Fields of Omagh Tony McEvoy Steven King AAMI Victoria Derby 2500 $1,257,000 Elvstroem Tony Vasil Damien Oliver Thrifty Mackinnon Stakes 2000 $502,000 Casual Pass Mathew Ellerton Glen Boss Seppelt Salinger Stakes 1200 $502,000 Ancient Song Peter Moody Scott Seamer Tooheys New Melbourne Cup 3200 $4,150,000 Makybe Diva (GB) David Hall Glen Boss Crown Oaks 2500 $628,000 Special Harmony Lee Freedman Damien Oliver Emirates Stakes 1600 $502,000 Titanic Jack Tom Hughes (Jnr) Brett Prebble C.F. Orr Stakes 1400 $302,000 Lonhro John Hawkes Darren Beadman TEAC Lightning Stakes 1000 $402,000 Regimental Gal Shaun Dwyer Steven King Cadbury Guineas 1600 $753,000 Reset Graeme Rogerson Danny Nikolic AAMI Blue Diamond Stakes 1200 $1,015,000 Alinghi Lee Freedman Damien Oliver Oakleigh Plate 1100 $352,000 Reactive Brian Mayfield-Smith Mathew Pumpa Futurity Stakes 1400 $402,000 Reset Graeme Rogerson Danny Nikolic Seppelt Wines Newmarket Handicap 1200 $1,002,500 Exceed And Excel Tim Martin Corey Brown Darley Australian Cup 2000 $1,005,000 Lonhro John Hawkes Darren Beadman VRC Sires’ Produce Stakes 1400 $402,000 Barely a Moment Tony McEvoy Greg Childs Timbercorp Australia Stakes 1200 $350,000 Regimental Gal Shaun Dwyer Steven King

Apprentices’ Graduation TEAC Rising Stars Apprentice Jockey Series Top Ten The 53rd Annual Apprentice Jockey Graduation Ceremony saw Jockey Points 15 apprentices graduate. They included: Blake Shinn 67 Thomas Campbell 66 Megan Ansley Brady Cross Ryan Martin Brady Cross 59 Troy Baker Ricky Debono Gary Mathrick Michelle Payne 47 Jason Benbow Naomi Fisher Holly McKechnie Nicholas Ryan 46 Edward Brennen David Keating Craig Newitt Ryan Martin 45 Michael Connick Craig Lloyd Rowan Waymouth Rowan Waymouth 33 Gary Mathrick 22 To have graduated and received a Certificate IV Racing Chris Symons 22 (Thoroughbred) Jockey, an apprentice jockey must have Bryce Dieckmann 20 satisfactorily achieved specified competency standards, which set out the skills apprentices need to become professional jockeys.

TEAC Rising Stars Apprentice jockey Mr Blake Shinn rode La Flor D’Luna into second place in the TEAC Rising Stars Final (2000m) at Flemington to win the TEAC Rising Stars Apprentice Jockey Series by one point.

For his efforts, Mr Shinn won a TEAC Widescreen Home Theatre Package. Runner-up Mr Thomas Campbell received a TEAC TV/DVD Combined Unit, while third-placegetter Mr Brady Cross picked up a TEAC Stereo Sound System.

61 Graeme McKnight – Official Racing Farrier with John ‘Patto’ Patterson and Thong and Pushbike – now a Clerk of the Course horse 8> CORPORATE GOVERNANCE

Racing Victoria Limited (RVL) recognises the importance of Structure the Board to Add Value good corporate governance and implements business practices • the RVL Board is structured to add value to the business of reflective of the 10 corporate governance principles formulated RVL. The RVL Board consists of Chairman, Deputy Chairman, by the Australian Stock Exchange (ASX) for the guidance of listed Chief Executive Officer, Directors and sub-committees. Each companies as outlined below. As RVL is not a listed company but of these roles has identified responsibilities and reports to the rather a ‘not for profit’ company limited by guarantee, RVL has Board on those responsibilities. had to adapt and modify these principles as appropriate for its circumstances. Promote Ethical and Responsible Decision-Making • RVL has developed a Code of Conduct for Directors which Lay Solid Foundation for Management and Oversight outlines best practice for Directors; • the RVL Board has committed to developing a formal • the Executive Management Team of RVL meets monthly Board Charter which details the responsibilities of the to discuss any management issues and to ensure that all Board including a formal statement of delegated authority decision-making is transparent and ethical; and to management; • RVL staff are provided with position descriptions and have • the RVL Board has established four sub-committees to a clear understanding of their individual decision-making overview operations and to develop best practice policy responsibilities. procedures for key areas. These committees are: Risk Management Committee; Audit Committee; Racing Integrity Safeguard Integrity in Financial Reporting Committee and Remuneration Committee; and • the RVL Audit Committee oversees the integrity of the • the Executive Management Team of RVL has detailed position financial statements of the company, the company’s system descriptions and their annual performance is assessed both of internal controls and the independence and performance against these position descriptions and other goals established of the company’s internal and external auditors; at the commencement of the year. • the RVL Executive Management Team is individually responsible for their department’s financial accountability and the names of RVL management appear on the financial accounts; and • RVL staff are provided with financial delegation authorities and have a clear understanding of the limits of their individual financial delegations.

63

8> CORPORATE GOVERNANCE

Make Timely and Balanced Disclosure Encourage Enhanced Performance • RVL recognises the importance of transparent business • the RVL Board has established a Remuneration Committee processes and has developed the following formal disclosure which oversees performance management; and mechanisms: • RVL undertakes annual performance appraisals of all staff, – Annual General Meetings; during which staff identify areas of future training or career – regular shareholder meetings; development. These individual career goals are then documented in staff career plans and are implemented over – quarterly stakeholder meetings; the following 12 month period. – regular meetings with the Minister for Racing and Department officials; and Remunerate Fairly and Responsibly – monthly staff meetings; and • the RVL Board has established a Remuneration Committee • RVL has also developed many informal networks which foster which oversees remuneration and benefits (including open and transparent communication between Board members, superannuation and welfare programs); and shareholders, management and staff. • RVL conducts annual internal salary reviews and has recently, with the assistance of external consultants, established Respect the Rights of Shareholders external benchmarks for salaries for all positions to ensure • RVL communicates effectively with members through Annual that remuneration at RVL is consistent with the external market. General Meetings and regular members meetings; and Recognise the Legitimate Interests of Stakeholders • the RVL Chief Executive Officer also meets at least monthly • RVL has established consultative committees and meets with the Chief Executive Officers of all RVL members. quarterly with key stakeholder groups to discuss issues Recognise and Manage Risk and plans. • RVL has established a Risk Management Committee; • the RVL Board has committed to reviewing the charter of the Risk Management Committee to focus more broadly on business risk issues; and • RVL also operates a separate Racing Integrity Committee which specifically oversees the management’s actions in relation to major racing integrity issues likely to potentially impact the industry’s reputation.

65 Clerk of the Course, Graham Salisbury and Subzero 9> FINANCIAL PERFORMANCE

Victorian Racing Industry and Tabcorp Joint Venture Structure In turn, VicRacing Pty Ltd and Racing Products Victoria Pty Ltd In 1994, the Victorian Racing Industry (VRI) and Tabcorp Holdings distribute this income to the three codes based on the following Limited formed an unincorporated joint venture for the operation formula: of a wagering and gaming business in Victoria. This coincided • the joint venture profit, marketing fee and 25% of the product with the privatisation of the former Totalisator Agency Board, supply fee are allocated to the codes based on off-course the public float of Tabcorp and the issuing of a wagering and a wagering market share; and gaming licence by the Victorian Government under the Gaming • the racing program fee and 75% of the product supply fee and Betting Act 1994. The joint venture agreement and licences are allocated on a fixed basis of 73% thoroughbred code, are in place until 2012. The Act specifies that the VRI will be 18% harness code and 9% greyhound code. no worse off under the business arrangements relating to the renewal of those licences. In addition, from time to time VicRacing Pty Ltd and Racing Products Victoria Pty Ltd enter into arrangements with Tabcorp The VRI’s participation in the joint venture is conducted under for the benefit of the joint venture that have a different cost the auspices of VicRacing Pty Ltd and Racing Products Victoria sharing basis as agreed between the parties. Examples include Pty Ltd. Both companies have six directors (four nominated Sky Channel agencies and Pay TV contributions, the PubTAB by RVL, one nominated by Harness Racing Victoria and one support scheme and special joint venture management fees. nominated by Greyhound Racing Victoria). Racing Victoria Limited Financial Performance 2003/04 VicRacing Pty Ltd and Tabcorp have one vote each on the Joint Venture Management Committee. All decisions by the Net Profit Committee must be unanimous, thereby giving both parties RVL reported a net profit for the 12 months to 31 July 2004 of equal control over the conduct of the joint venture. $0.4 million consisting of surpluses from RVL general operations VicRacing Pty Ltd holds the VRI’s equity interest in the joint of $0.4 million and the Bookmaking Development Fund of venture and is entitled to a 25% share of the joint venture’s $0.2 million, and a deficit of $0.2 million from the Accident total profit (incorporating the net profit arising from Tabcorp’s Insurance Fund. wagering and gaming businesses). Revenue Racing Products Victoria Pty Ltd supplies racing services to Tabcorp in return for racing program, product supply Revenue from ordinary activities totalled $211.0 million in and marketing fees. 2003/04. After including non-operating revenue, total revenue amounted to $220.3 million for the year, an increase of $18.8 million versus prior year.

67 9> FINANCIAL PERFORMANCE

The largest single driver of the year-on-year increase in revenue Marketing and promotion expenditure decreased during the year was the sale to Racing Information Services Australia (RISA) of following a restructure of RVL’s marketing operations to combine RVL’s fully owned interest in the Racing Services Bureau (RSB) it with Public Affairs, Communications & Publishing. and Trainers’ Service Centre (TSC) as well as the sale of its 22% In line with the revenue for Regional Services, expenditure in interest in the ‘Registrar of Racehorses’ business for a total of relation to the services and financial activities for this function $9.3 million. The sale amounts have been shown in the accounts of $4.7 million has been included in RVL industry expenditure as non-operating revenue items. for the first time in 2003/04. Racing program, product and marketing fees received from the Jockeys’ WorkCover expenses totalled $4.7 million in 2003/04, an joint venture operation with Tabcorp totalled $128.9 million, an increase of $1.2 million compared to the previous year primarily increase of $5.1 million year-on-year reflecting strong wagering as a result of a rise in the WorkCover premium for jockeys. turnover growth. The joint venture profit share was $61.5 million, an increase of $3.4 million versus prior year. RVL telecasting distribution expenses have decreased year-on- year to $6.7 million in accordance with contract arrangements Telecasting revenue from the arrangements with Sky Channel with Sky Channel. These costs include sponsorship to clubs totalled $2.1 million with the funds being used to support racing and a contribution to club production costs and some links and clubs and the distribution of thoroughbred racing broadcasts bearer costs. In addition, RVL makes payments for its share of to TAB agencies, PubTABs and Pay TV. the Victorian racing industry support package to PubTABs and Regional Services revenue relates to funds received from clubs contributes towards Sky Channel costs for TAB agencies and and Country Racing Victoria to centrally service and pay for Pay TV. regional racing activities through a streamlined arrangement RVL employees are members of the Victorian Racing Industry with clubs and suppliers Superannuation Fund. During the year an actuarial review was Revenue from RSB of $0.7million represents the income for undertaken to monitor the Fund’s financial position. As a result the period to 30 November 2003 when the business was sold of this review and on the recommendation of the Fund’s Trustees, to RISA. RVL maintained its contribution for the defined benefit fund members at the level recommended by the actuary. Racing and TSC income includes additional revenue received during 2003/04 from nomination services provided to other Distributions states. The TSC business was also sold to RISA. Distributions to member shareholders totalled $123.1 million Expenses in 2003/04, an increase of $6.6 million compared to the previous year’s expenditure. Total RVL expenditure excluding distributions to shareholders amounted to $96.7 million in 2003/04 and consisted of Distributions were as follows: $31.0 million in RVL operating expenditure and $65.7 million Country Racing Victoria $48.8 million in industry-related expenditure. Operating expenditure increased Melbourne Racing Club $32.4 million by $1.4 million or 4.7% reflecting cost inflation and expenditure Moonee Valley Racing Club $15.9 million to facilitate improving industry standards during 2003/04. Victoria Racing Club $26.0 million Industry expenditure increased by $12.8 million year-on-year.

The largest single driver of the year-on-year increase in industry expenditure was costs directly and indirectly related to the development of two new businesses: Champions – Australian Racing Museum & Hall of Fame and ThoroughVisioN™. Costs from 2003/04 relating to Champions – Australian Racing Museum & Hall of Fame (ARM) which opened on 1 July 2004 totalled $3.6 million and expenses incurred (largely at the request of RVL’s shareholders) in developing their media rights business ThoroughVisioN™ Pty Ltd (TVN) totalled $5.2 million. In addition, as agreed with RVL shareholders, all Income Support Reserve contributions made by RVL in 2002/03 and 2003/04 will also be applied to TVN costs.

68 Distribution and Prizemoney Trends Year-on-Year 03/04 Year-on-Year Two-Year $ Million 01/02 02/03 Change Change Change Distributions to Shareholders 124.0 116.5 –7.5 123.1 +6.6 –0.9 Prizemoney Paid 101.6 110.5 +8.9 107.5 –3.0 +5.9 Returns to Owners 121.9 131.7 +9.8 123.6 –8.1 +1.7

Distributions and prizemoney payments over the last two years In addition, RVL also paid a deposit of $1.0 million during the have been impacted by the joint venture revenue downturn year in relation to the purchase of the Epsom Road building caused by the introduction of smoking bans in gaming venues from the Victoria Racing Club. in 2002/03. The 2002/03 prizemoney levels were set before the Partly offsetting these investing outlays were receipts from income reduction effect of smoking bans was known and as a the State Government of Victoria of $3.8 million towards funding consequence 2003/04 prizemoney levels were adjusted to pick the establishment of the ARM at Federation Square. up the lag effect of these lower distribution levels.

Over the two years since 2001/02, annual distributions to Subsequent Events shareholders have reduced by $0.9 million to $123.1 million RVL has guaranteed a loan facility of up to $1.5 million to assist whilst prizemoney payments have increased by $5.9 million to Champions – Australian Racing Museum & Hall of Fame with $107.5 million. A more conservative approach to setting annual the establishment of the Museum at Federation Square, prizemoney levels and other returns to owners has since been Melbourne. adopted as a result of the recent volatility levels experienced in joint venture income. RVL has also entered into a funding agreement with the member shareholders to enable it to borrow up to $6.0 million to assist Cash Flow with the restructure of TVN. The member shareholders have agreed to collectively guarantee the credit facility and that the Cash at the end of the financial year totalled $8.4 million, company will be entitled to retain out of future distributions a decrease of $6.1 million compared to the previous year. $1.0 million per annum for the purpose of discharging the Net cash provided by operating activities increased by facility. $2.2 million, whilst net cash used in investing activities increased by $8.1 million largely as a result of outlays for RVL Audit Sub-Committee amounts advanced to TVN and Champions – Australian Racing The RVL Audit Sub-Committee consists of Ms Sue Carter, Museum & Hall of Fame. Mr Lindsay Maxsted and Mr Kevin McNamara.

Of the $10.9 million advanced to TVN and ARM, $8.9 million The Sub-Committee’s role is to provide additional assurance was written off at the end of the financial year by way of regarding the quality and reliability of the company’s financial establishment expenses and loan forgiveness for TVN information used by the Board and management. ($5.3 million) and the ARM ($3.6 million) and the remainder is largely represented by a $1.9 million five-year interest During 2003/04, the Sub-Committee met on six occasions to free loan advanced to the ARM. review the RVL financial projections and results as well as the internal audit program. The Sub-Committee also liaises with RVL’s external auditors and oversees compliance relating to financial disclosures in RVL’s annual accounts.

69

9> FINANCIAL REPORT

RACING VICTORIA LIMITED ACN 096 917 930 FINANCIAL REPORT FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

Directors' Report page 72 Independent Audit Report page 74 Directors' Declaration page 75 Statement of Financial Performance page 76 Statement of Financial Position page 77 Statement of Cash Flows page 78 Notes to the Financial Statements page 79

71 DIRECTORS’ REPORT

The Directors of Racing Victoria Limited submit herewith the annual financial report for the financial year ended 31 July 2004. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: The names of the Directors of the company during or since the end of the financial year are as follows. Directors' particulars and profiles can be viewed in the annual report on pages 6 and 7. Graham Duff The Hon Michael Duffy Sue Carter Prof David Karpin AM Lindsay Maxsted Kevin McNamara Robert Nason Director since 5 April 2004 Ray Orloff HEP (Chinka) Steel Director since 1 June 2004 Geoff W Torney Dr George Corones Director resigned 17 May 2004 Neville Fielke Director resigned 13 November 2003 James Henderson Director resigned 14 May 2004

Principal Activities The company's principal activities in the course of the financial year were the administration of thoroughbred racing in the State of Victoria.

Dividends Under the company's constitution no dividends may be declared or paid.

Review of Operations The underlying revenue of the Victorian thoroughbred racing industry received under the Racing Deed of Operations increased by 4.7% to $190.4 million in the 12 months to 31 July 2004. Distributions to the Clubs increased by 5.7% to $123.1 million for the same period. The operating surplus of the company for the 12 months to 31 July 2004 was $392,000 compared to a surplus of $2.3 million in the prior 12 months.

Changes in States of Affairs During the financial year there was no significant change in the state of affairs of the company other than that referred to in the financial statements or notes hereto.

Subsequent Events A number of subsequent events have arisen since the end of the financial year which may impact on the company's operations in future financial years. Details of these events are as follows: • Racing Victoria Limited has guaranteed a loan facility of up to $1.5 million to assist the Australian Racing Museum Limited with the establishment of the museum at Federation Square, Melbourne. • Racing Victoria Limited has entered into a funding agreement with the member shareholders to enable it to borrow up to $6 million to assist with the restructure of ThoroughVisioN™ Pty Ltd. The member shareholders have agreed to collectively guarantee the credit facility and that the company will be entitled to retain out of future distributions $1 million per annum for the purpose of discharging the facility.

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

72 Directors’ Meetings The following table sets out the number of Directors' meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member). During the financial year, 11 Board meetings, one special meeting and six Audit Committee meetings were held.

Board of Directors Audit Committee No. of No. of No. of No. of Regular Regular Special Special No. of No. of Meetings Meetings Meetings Meetings Meetings Meetings Directors Held (1) Attended Held (1) Attended Held (1) Attended

Mr Graham Duff 11 11 1 1 The Hon Michael Duffy 11 11 1 1 Ms Sue Carter 11 11 1 1 6 6 Dr George Corones (2) 9611 Mr Neville Fielke (2) 44 Mr James Henderson (2) 9911 Prof David Karpin AM 11 10 1 1 Mr Geoff W Torney 11 11 1 1 Mr Lindsay Maxsted 11 11 1 1 6 6 Mr Kevin McNamara 11 11 1 1 6 6 Mr Ray Orloff 11 11 1 1 Mr Robert Nason 3 3 Mr HEP (Chinka) Steel 2 2

(1) The number of meetings held during the time the Directors held office during the 12 months to 31 July 2004. (2) Messrs George Corones, James Henderson and Neville Fielke resigned on 17 May 2004, 14 May 2004 and 13 November 2003 respectively.

Indemnification of Officers and Auditors During the financial year, the company paid a premium in respect of a contract insuring the Directors of the company, the company secretary and all executive officers of the company and of any related body corporate against a liability incurred as such a Director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The company has executed deeds of indemnity in favour of each of the Directors. Each of these deeds provides for the company to indemnify each Director to the maximum extent permitted by law against: • all liabilities incurred by the Director as an officer of the company and each subsidiary; and • all legal costs and expenses arising from proceedings or an investigation incurred by the Director as an officer of the company or of a subsidiary. The deeds also give the Directors a right of access to Board papers for a period of seven years after their retirement and requires the company to maintain insurance cover for the Directors. A Director's right of access to Board papers is subject to protection of the company's legal professional privilege rights and to the Director keeping the Board papers in confidence. The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor.

Rounding Off of Amounts The company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors' report and the financial report have been rounded off to the nearest thousand dollars. Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Directors

Graham Duff Chairman Melbourne, 10 November 2004 73 INDEPENDENT AUDIT REPORT

TO THE MEMBERS OF RACING VICTORIA LIMITED

Scope The financial report and Directors' responsibility The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the Directors' declaration for Racing Victoria Limited, for the financial year ended 31 July 2004 as set out on pages 75 to 93. The Directors of the company are responsible for the preparation and true and fair presentation of the financial report in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal controls, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected. We performed procedures to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with the Corporations Act 2001 and Accounting Standards and other mandatory professional reporting requirements in Australia so as to present a view which is consistent with our understanding of the company's financial position, and performance as represented by the results of its operations and its cash flows. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates made by the Directors. While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls. The audit opinion expressed in this report has been formed on the above basis.

Independence In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001.

Audit Opinion In our opinion, the financial report of Racing Victoria Limited is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the company's financial position as at 31 July 2004 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and (b) other mandatory professional reporting requirements in Australia.

DELOITTE TOUCHE TOHMATSU

Tom Imbesi Partner Chartered Accountants Melbourne, 10 November 2004

74 DIRECTORS’ DECLARATION

The Directors' declare that: (a) The attached financial statements and notes thereto comply with Accounting Standards in Australia; (b) The attached financial statements and notes thereto give a true and fair view of the financial position and performance of the company; (c) In the Directors' opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001; and (d) In the Directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001. On behalf of the Directors

Graham Duff Chairman Melbourne, 10 November 2004

75 STATEMENT OF FINANCIAL PERFORMANCE

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

2004 2003 Note $'000 $'000

Revenues from ordinary activities 2(a) 220,301 201,491 Expenses from ordinary activities (excluding borrowing costs and distributions) 2(b) (96,785) (82,614) Borrowing costs 2(c) – (21) Profit From Ordinary Activities Before Distributions 123,516 118,856 Distributions 2(d) (123,124) (116,510) Net Profit 392 2,346 Total Changes in Retained Profits 392 2,346

Notes to the financial statements are included on pages 79 to 93.

76 STATEMENT OF FINANCIAL POSITION

AS AT 31 JULY 2004

2004 2003 Note $'000 $'000

Current Assets Cash at bank 8,394 14,534 Receivables 4 25,105 19,271 Other 5 78 365 Total Current Assets 33,577 34,170

Non-Current Assets Property, plant & equipment 7 7,991 9,364 Other financial assets 6 7,681 307 Investments accounted for using the equity method 8 4,589 – Total Non-Current Assets 20,261 9,671 Total Assets 53,838 43,841

Current Liabilities Payables 9 30,867 24,581 Interest bearing liabilities 10 3,955 888 Provisions 11 2,485 1,615 Total Current Liabilities 37,307 27,084

Non-Current Liabilities Interest bearing liabilities 12 1,811 2,766 Provisions 13 3,802 3,465 Total Non-Current Liabilities 5,613 6,231 Total Liabilities 42,920 33,315 Net Assets 10,918 10,526

Equity Issued capital 15–– Retained profits 16 10,918 10,526 Total Equity 10,918 10,526

Notes to the financial statements are included on pages 79 to 93.

77 STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

Inflows/ Inflows/ (Outflows) (Outflows) 2004 2003 Note $'000 $'000

Cash Flows from Operating Activities Receipts on behalf of the thoroughbred racing industry 192,961 197,230 Distributions to clubs (122,513) (128,376) Payments to suppliers and employees (84,713) (83,143) Interest received 931 1,107 Interest and other costs of finance paid – (21) Receipts from other activities 18,276 15,883 Net Cash Provided by Operating Activities 23(c) 4,942 2,680

Cash Flows from Investing Activities Receipts from Government for Australian Racing Museum 3,750 – Payments for plant & equipment (1,811) (2,417) Proceeds from sale of property, plant & equipment – 651 Payments for the acquisition of RISA (189) – Amounts advanced to related parties (10,944) (307) Payment for buildings – deposit paid (1,000) – Net Cash Provided by/(Used in) Investing Activities (10,194) (2,073)

Cash Flows from Financing Activities Repayment of borrowings (888) (997) Net Cash Provided by/(Used in) Financing Activities (888) (997) Net Increase/(Decrease) in Cash Held (6,140) (390) Cash at beginning of financial year 14,534 14,924 Cash at the End of Financial Year 23(a) 8,394 14,534

Notes to the financial statements are included on pages 79 to 93.

78 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

1. SUMMARY OF ACCOUNTING POLICIES Financial Reporting Framework The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, applicable Accounting Standards and Urgent Issues Group Consensus Views, and complies with other requirements of the Corporations Act 2001. The financial report has been prepared on the basis of historical cost and, except where stated, does not take into account changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. The financial report has also been prepared in accordance with the terms of various agreements with the Victoria Racing Club, the Members (as defined at (i) below) and the racing industry in Victoria as follows:

(i) Establishment of Operations The company was incorporated on 17 December 2001 for the purpose of administering the Victorian thoroughbred racing industry which was previously the responsibility of the Victoria Racing Club (VRC). On 19 December 2001 the four thoroughbred racing bodies – Victoria Racing Club, Melbourne Racing Club, Moonee Valley Racing Club and Country Racing Victoria (collectively the Members) entered into a Members Agreement with the company. Under this agreement the Members agreed to establish the company as the new Principal Club and governing body for thoroughbred racing in Victoria, to be owned and funded by the Members. The VRC agreed to relinquish its status as the Principal Club and its role as governing body to facilitate the granting to the company of that status and role.

(ii) Thoroughbred Racing Industry Revenue and Distributions The racing industry in Victoria has entered into joint venture and information supply agreements with the TABCORP Group of Companies. Under a Racing Industry Deed of Operations executed on 25 May 1994, the thoroughbred, harness and greyhound racing codes have determined arrangements between themselves including the allocation of joint venture profits and information supply fees. This income is received by the thoroughbred racing industry in the form of a racing program fee, a product supply fee, a marketing fee and the joint venture profit share (refer Note 2(a)). Under the Members Agreement the income received by the company under the Deed of Operations is received by the company for and on behalf of the Members as trustee for the Members. The Members Agreement requires the company to distribute this income to the Members in accordance with the Agreement. Such distributions are recorded as expenses of the company (refer Note 2(d)).

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

Significant Accounting Policies Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions and other events is reported. The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

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

(b) Acquisition of Assets Assets acquired are recorded at the cost of acquisition, being the purchase consideration determined as at the date of acquisition plus costs incidental to the acquisition. In the event that settlement of all or part of the cash consideration given in the acquisition of an asset is deferred, the fair value of the purchase consideration is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

79 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

1. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) (c) Depreciation Depreciation is provided on property, plant and equipment, including freehold buildings and excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter using the straight line method. The following estimated useful lives are used in the calculation of depreciation: Buildings 40 years Plant and equipment 3–10 years Super screens under hire purchase 5 years Computer systems and developments 3–4 years

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

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

(f) Goods and Services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: (i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or (ii) for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

(g) Revenue Recognition Thoroughbred Racing Industry Revenue Revenue is recognised when receivable under the joint venture and information supply agreements with the TABCORP Group of Companies. Sale of Goods and Disposal of Assets Revenue from the sale of goods and disposal of other assets is recognised when the company has passed control of the goods or other assets to the buyer. Rendering of Services Revenue from a contract to provide services is recognised by reference to the contract terms. Contributions of Assets Revenue arising from the contribution of assets is recognised when the company gains control of the contribution or the right to receive the contribution.

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

(i) Employee Benefits Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably. Provisions made in respect of wages and salaries, annual leave, sick leave, and other employee benefits expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of other employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to reporting date.

80 1. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) (j) Investments Investments in associates are accounted for under the equity method in the financial statements. (k) Accident Insurance Fund Prior to 1 September 1985 the Fund was an authorised insurer for the purposes of the Workers Compensation Act 1958. The provision for outstanding claims at Note 13 is based on an actuarial assessment of the outstanding claims of the Fund.

(l) Interest-Bearing Liabilities Commercial bills and other loans are recorded at an amount equal to the net proceeds received. Interest expense is recognised on an accrual basis. Ancillary costs incurred in connection with the arrangement of borrowings are deferred and amortised over the period of the borrowing.

(m) Provisions Provisions are recognised when the entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is probable that recovery will be received and the amount of the receivable can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

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

(o) Impacts of adopting Australian equivalents to IFRS In accordance with the Financial Reporting Council's strategic directive, Racing Victoria Limited will be required to prepare financial statements that comply with Australian equivalents to International Financial Reporting Standards (‘A-IFRS’) for annual reporting periods beginning on or after 1 January 2005. Accordingly, Racing Victoria Limited's first annual financial report prepared under A-IFRS will be for the year ended 31 July 2006. The full impact of A-IFRS on the company has yet to be fully determined, however, the Directors and management are monitoring the developments in A-IFRS and the potential impact it will have on the company. The company is undertaking a complete review and impact study in relation to current and future requirements of A-IFRS and has commenced planning to prepare the company to be A-IFRS compliant. While no decision has yet been made as to the policy alternatives to be applied or the extent to which it will affect the company, the Directors of Racing Victoria Limited have identified some key accounting policy differences expected to arise on transitioning to A-IFRS. This does not represent an exhaustive list of the differences that will arise, and further analysis may change the company's assessment of the importance or otherwise of the various differences. First-time Transitional Arrangements On first-time adoption of A-IFRS, the company will be required to restate its comparative financial statements such that the comparative amounts and balances presented comply with the requirements specified in the A-IFRS. As most adjustments on first-time adoption are to be made against opening retained earnings, the amount of retained earnings at 31 July 2004 presented in the 2005 financial report and the 2006 financial report may differ. Superannuation Plan Employees of the company are members of the Victorian Racing Industry Superannuation Fund. Contributions to the Fund are expensed when due and payable and no assets or liabilities are recognised in relation to the Fund in the financial report of the company. Under A-IFRS, the company will be required to recognise the surplus or deficit from the defined benefit section of the Fund in its balance sheet, with the resulting movement recognised in its income statement. Any surplus or deficit arising at the time of the transition will be determined in accordance with the requirements of A-IFRS.

81 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

1. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

(o) Impacts of adopting Australian equivalents to IFRS (continued) Off-balance Sheet Financial Assets and Liabilities A-IFRS requires the recognition of all financial assets and financial liabilities. Accordingly, recognition of these financial assets and financial liabilities may change the net asset position of the company, but the impact of the change will not be known until the information is identified, measured and recognised in accordance with the new requirements. Property, Plant and Equipment On transition to A-IFRS, the company has several options in the determination of the cost of each tangible asset, and can also elect to use the cost or fair value basis for the measurement of each class of property, plant and equipment after transition. At the date of this report, the entity has not decided which options and measurement basis will be adopted. Employee Benefits Under A-IFRS, the company will no longer be able to recognise provisions for annual leave on a nominal basis, regardless of when the leave is expected to be taken, but will instead be required to discount the portion of annual leave liabilities expected to be taken more than 12 months from the reporting date. This change in accounting policy is likely to reduce the aggregate provision for annual leave, but is unlikely to significantly affect the income statement. Proceeds from Sale of Assets The current definition of revenue requires proceeds on sale of non-current assets to be included as revenue. Under A-IFRS, only the net gain or loss from the sale will be recognised in profit or loss. Consequently, there will be no net impact on the income statement.

82 2004 2003 $'000 $'000

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

(a) Revenue from ordinary activities: Racing program fee 50,967 49,075 Product supply fee 75,486 72,328 Marketing fee 2,442 2,365 Joint venture profit share 61,513 58,118 Electronic gaming machine levy rebate 2,815 2,839 Racing Services Bureau 725 2,417 Telecasting 2,149 3,135 Racing & Trainers’ Service Centre 459 807 Publishing 869 920 Licence fees 778 780 WorkCover levy 1,542 1,509 Super VOBIS 2,229 2,315 Interest 931 996 Regional Services 3,709 – Industry Service Recoveries 1,602 – Other 2,787 3,261

Non-operating revenue: Proceeds on sale Racing Services Bureau and Registrar of Racehorses 9,050 – Proceeds on sale Trainers’ Service Centre 248 – Proceeds from sale of property, plant & equipment – 626 220,301 201,491

(b) Expenses from ordinary activities: Racing Victoria Limited Operating Expenditure Integrity services 6,013 5,769 Racing & Trainers’ Service Centre 2,160 1,722 Racing Services Bureau 529 1,658 Publishing 630 795 Human Resources and regional operations 1,148 1,670 Veterinary & swabbing 2,003 1,829 Public affairs & communications 1,464 1,174 Planning, capital & procurement 1,250 721 Technology planning & development 3,445 3,443 Legal & risk management 826 669 Administration & operations 9,008 8,696 Other 2,579 1,476 31,055 29,622

83 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

2004 2003 $'000 $'000

2. PROFIT FROM ORDINARY ACTIVITIES (CONTINUED) (b) Expenses from ordinary activities (continued): Industry Expenditure Marketing & promotion 1,215 3,079 Country racing administration – 627 Regional services 4,679 – Special projects allocations 1,828 1,599 Stewards video & race telecasting 1,757 1,808 Form guide 1,225 1,273 Racecourse planning & development 12,316 12,314 Training facilities maintenance funding 6,234 6,470 Jockeys WorkCover expenses 4,680 3,471 Thoroughbred country assistance fund 8,135 7,760 Telecasting 6,686 7,068 Income support contribution 2,375 500 Super VOBIS 5,748 5,922 Establishment expenses and debt forgiveness 8,852 1,101 65,730 52,992 96,785 82,614

Revenue and expenses from ordinary activities include: Provision for bad and doubtful debts –50 Contributions made to the defined benefits superannuation plan during the financial year 1,612 1,459 Depreciation of non-current assets: • Property, plant & equipment 2,623 3,971 Operating lease rental expenses 611 637 Establishment expenses and debt forgiveness – other related party: • ThoroughVisioN™ Pty Ltd 5,247 1,101 • Australian Racing Museum 3,605 –

(c) Borrowing costs: Other –21 –21

(d) Distributions: Country Racing Victoria 48,774 46,179 Melbourne Racing Club 32,435 30,707 Moonee Valley Racing Club 15,907 15,125 Victoria Racing Club 26,008 24,499 123,124 116,510

84 2004 2003 $'000 $'000

The net profit includes the following significant items:

3. SIGNIFICANT ITEMS Net Profit on sale of Racing Services Bureau and Registrar of Racehorses 8,467 – Net Profit on sale of Trainers’ Service Centre 248 – Net Profit on sale of property, plant & equipment – 626 Establishment expenses and debt forgiveness: • ThoroughVisioN™ Pty Ltd (5,247) (1,101) • Australian Racing Museum (3,605) – (137) 626

4. CURRENT RECEIVABLES Trade receivables 11,777 8,583 Provision for doubtful debts (38) (138) 11,739 8,445 Joint Venture Fees and indexation receivable 7,313 5,568 Joint Venture Profit share receivable 4,436 2,834 Australian Racing Museum – other related party 34 – ThoroughVisioN™ Pty Ltd – other related party 583 – Sundry receivables 1,000 2,424 25,105 19,271

5. OTHER CURRENT ASSETS Prepayments – other 78 365 78 365

6. OTHER NON-CURRENT FINANCIAL ASSETS Racing Information Services Australia – other related party 4,806 – Australian Racing Museum – other related party 1,875 – Prepayments – deposit on buildings 1,000 – Interest bearing loans advanced to: • ThoroughVisioN™ Pty Ltd – other related party – 307 7,681 307

85 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

Computer Super Screens Systems and Under Hire Plant & Buildings Development Purchase Equipment at cost at cost at cost at cost Total $’000 $’000 $’000 $’000 $’000

7. PROPERTY, PLANT & EQUIPMENT Gross carrying amount (at cost) Balance at 31 July 2003 1,700 12,157 4,966 4,294 23,117 Additions – 960 61 812 1,833 Disposals – (3,641) – – (3,641) Balance at 31 July 2004 1,700 9,476 5,027 5,106 21,309

Accumulated Depreciation/Amortisation Balance at 31 July 2003 (298) (9,668) (1,480) (2,307) (13,753) Disposals – 3,058 – – 3,058 Depreciation expense (43) (922) (1,004) (654) (2,623) Balance at 31 July 2004 (341) (7,532) (2,484) (2,961) (13,318)

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

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

86 8. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Name of Entity Ownership Interest Carrying Amount Principal Balance 2004 2003 2004 2003 Interest in associated entity: Activity Date $'000 $'000

Racing Information Services Australia Pty Ltd Racing Information 31/07/2004 42% – 4,589 –

Significant influence is derived over Racing Information Services Australia Pty Ltd through the Board's appointment of a nominee Director. Pursuant to a shareholder agreement the company has the right to cast 33% of the votes at a shareholder meeting. The company acquired its 42.68% interest in Racing Information Services Australia Pty Ltd on 1 December 2003.

2004 2003 Movements in investments in associates $'000 $'000

At the beginning of the financial year –– Acquisition of Investment during the year 4,681 – Share of operating profit/(loss) (92) – At the end of the financial year 4,589 –

Summarised financial position of associates: Current assets: Cash 1,053 – Receivables 694 –

Non-current assets: Property, plant & equipment 3,405 – Receivables 4,558 – Intangibles 6,881 –

Current liabilities: Payables (900) –

Non-current liabilities: – Non-interest bearing (4,806) – Provisions (26) – Net Assets 10,859 – Net profit/(loss) (216) –

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

87 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

2004 2003 $'000 $'000

9. CURRENT PAYABLES Unsecured: Trade payables 4,264 5,017 Stakes accruals 3,929 3,396 Sundry payables 9,950 4,176 GST payable 185 112 Club distributions 11,886 11,279 Thoroughbred country assistance fund 653 601 30,867 24,581

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

Secured: Hire purchase (i) (Note 17) 955 888 3,955 888

(i) Secured by the assets subject to hire purchase, the current market value of which exceeds the value of liability

11. CURRENT PROVISIONS Employee entitlements (Note 14) 1,110 1,115 Income support contribution (i) 1,375 500 2,485 1,615

(i) Income support contribution:

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

12. NON-CURRENT INTEREST-BEARING LIABILITIES Secured: Hire purchase (i) (Note 17) 1,811 2,766

(i) Secured by the assets subject to hire purchase, the current market value of which exceeds the value of the liability

13. NON-CURRENT PROVISIONS Accident claims (Note 1(k)) 1,804 1,616 Employee entitlements (Note 14) 1,998 1,849 3,802 3,465

88 2004 2003 $'000 $'000

14. EMPLOYEE ENTITLEMENTS The aggregate employee entitlement liability recognised and included in the financial statements is as follows: Provision for employee entitlements: Current (Note 11) 1,110 1,115 Non-current (Note 13) 1,998 1,849 3,108 2,964

Number of employees at end of financial year 176 169

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

16. RETAINED PROFITS Balance at beginning of financial period 10,526 8,180 Net Profit 392 2,346 Balance at end of financial period 10,918 10,526

17. COMMITMENTS FOR EXPENDITURE (a) Non-cancellable operating leases: Not later than 1 year 322 584 Later than 1 year but not later than 5 years 8 234 330 818

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

(b) Hire purchase liabilities: No later than 1 year 1,124 1,124 Later than 1 year and not later than 5 years 1,932 3,057 Minimum hire purchase payments 3,056 4,181 Deduct future hire purchase charges 290 527 Hire purchase liabilities 2,766 3,654

Included in the financial statements as borrowings: Current (Note 10) 955 888 Non-current (Note 12) 1,811 2,766 2,766 3,654

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

89 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

18. SUPERANNUATION COMMITMENTS The employees of the company are members of Victorian Racing Industry Superannuation Fund, which also includes employees of the Victoria Racing Club and Country Racing Victoria. The Fund has a composition of defined benefit and accumulation membership. The last actuarial valuation of the VRI Superannuation Fund was conducted as at 30 June 2003 by Andrew Colin Sach, a Fellow of the Institute of Actuaries of Australia. The following balances were reported in the most recent audited financial statements of the Fund at 30 June 2003 of which Racing Victoria Limited comprises 61.8% of the accrued benefits:

$'000

Accrued benefits at latest actuarial valuation 30,595 Net assets at market value 27,214 Vested benefits 30,582 Deficiency (3,381)

The assets and income of the Fund are held in trust by the Fund's Trustee, Victorian Racing Industry Superannuation Pty Ltd, and neither are included in the company's financial statements. As a result of the latest actuarial review, and on the recommendation of the Fund Trustees, the company has maintained its contribution for the defined benefit fund members at the actuarial recommended levels. On the completion of the 2004 Fund accounts, a further actuarial valuation will be undertaken to allow trustees to respond to any market movements which may require changes to company contributions.

19. DIRECTORS' REMUNERATION The Directors of Racing Victoria Limited during the year were: Mr Graham Duff The Hon Michael Duffy Mr Robert Nason Ms Sue Carter Mr Ray Orloff Prof David Karpin AM Mr Geoff W Torney Mr Lindsay Maxsted Mr HEP (Chinka) Steel Mr Kevin McNamara Dr George Corones (resigned) Mr Neville Fielke (resigned) Mr James Henderson (resigned)

2004 2003 $$

The aggregate income paid or payable or otherwise made available, in respect of the financial year, to all Directors of the company, directly or indirectly, by the company or by any related party.1,045,264 918,085

2004 2003

The number of Directors of the company whose total income falls within the following bands: $0 – $9,999 1– $10,000 – $19,999 –3 $20,000 – $29,999 13 $30,000 – $39,999 75 $40,000 – $49,999 11 $50,000 – $59,999 –– $60,000 – $69,999 –1 $210,000 – $219,999 1– $220,000 – $229,999 1– $270,000 – $279,999 1– $510,000 – $519,999 –1

90 2004 2003 $$

20. REMUNERATION OF AUDITORS Auditing the financial statements 71,000 67,800 Other services – 33,000 71,000 100,800

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

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

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

(c) Related party disclosures Transactions with Director related entities The net profit reported in the statement of financial performance in 2004 includes operating expenses in relation to establishment expenses and debt forgiveness paid by Racing Victoria Limited on behalf of ThoroughVisioN™ Pty Ltd and the Australian Racing Museum Ltd (Director related entities) totalling $8.9 million. These expenses were incurred only after review by the Racing Victoria Limited Board. Aggregate amounts receivable from Director related entities are disclosed in Notes 4 and 6 to the financial statements

91 NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 JULY 2004

2004 2003 $'000 $'000

23. NOTES TO THE STATEMENT OF CASH FLOWS (a) Reconciliation of cash For the purpose of the statement of cash flows, cash includes cash on hand and in banks and investments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the balance sheet as follows: Cash at bank 8,394 14,534

(b) Financing facilities Credit stand-by arrangements: Funds deemed clear facility, reviewed annually 7,000 7,000 7,000 7,000

Lease and hire purchase, commercial bill, credit card and interest rate swap facilities, reviewed annually: Amount used 2,766 3,654 Amount unused 1,809 921 4,575 4,575

(c) Reconciliation of net profit to net cash flows from operating activities Profit/(Loss) from ordinary activities 392 2,346 Share of associates loss 92 – Depreciation & amortisation of non-current assets 2,623 3,971 Profit on sale of non-current assets – (626) Proceeds from sale of Racing Services Bureau and R of R (9,050) – Proceeds from sale of Trainers’ Service Centre (248) – Written down value of non-current assets sold to RISA (i-RIS) 583 – Forgiveness of amounts advanced to related parties 8,852 –

Changes in net assets & liabilities: (Increase)/Decrease in: Receivables 1,171 13,353 Prepayments 287 9 Increase/(Decrease) in: Payables (967) (14,043) Provisions 1,207 (2,330) Net cash provided by operating activities 4,942 2,680

(d) Non-cash financing and investing activities During the financial year the company disposed of the Racing Services Bureau (Note 26), Trainers’ Service Centre and the Registrar of Racehorses for $9.298 million. This disposal is not reflected in the statement of cash flows given all proceeds arising on disposal are yet to be received.

92 24. FINANCIAL INSTRUMENTS The company has adopted the policy of only dealing with creditworthy counterparts and obtaining sufficient security where appropriate, as a means of mitigating the risk of financial loss. Short-term deposits are carried at cost. Interest revenue is recognised on an effective yield basis. Cash assets of and interest-bearing liabilities of are subject to interest rate risk. At 31 July 2004 the cash assets had an average applicable interest rate of 4.90% and interest-bearing liabilities an average applicable interest rate of 7.26%. There were no other financial assets or liabilities in the statement of financial position subject to such risk at 31 July 2004. The carrying value of the financial assets and liabilities in the statement of financial position represent their fair net values.

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

26. DISCONTINUING OPERATIONS On 1 December 2003 the Board divested of its 100% interest in the Racing Services Bureau (RSB) to Racing Information Services Australia Pty Ltd on which date control of the RSB passed to the acquirer. The company recognised a gain of $7.917 million on disposal being the proceeds of the disposal less the carrying amount of the net assets of the RSB (including any attributable goodwill). The net assets disposed related solely to the written down value of the i-RIS computer system of $583,000. The financial performance of the RSB for the period from 1 August 2003 to 30 November 2003 (date of disposal) is as follows:

2004 2003 $'000 $'000

Financial Performance Revenue from ordinary activities 725 2,417 Expenses from ordinary activities (529) (1,658) Net profit 196 759

Cash Flows Net cash from operating activities 196 759 Total net cash flows 196 759

27. SUBSEQUENT EVENTS A number of subsequent events have arisen since the end of the financial year which may impact on the company's operations in future financial years. Details of these events are as follows: • Racing Victoria Limited has guaranteed a loan facility of up to $1.5 million to assist the Australian Racing Museum Limited with the establishment of the museum at Federation Square, Melbourne. • Racing Victoria Limited has entered into a funding agreement with the member shareholders to enable it to borrow up to $6 million to assist with the restructure of ThoroughVisioN™ Pty Ltd. The member shareholders have agreed to collectively guarantee the credit facility and that the company will be entitled to retain out of future distributions $1 million per annum for the purpose of discharging the facility.

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

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

93 10> OUR RACING PARTNERS

PARTNERS MEMBER SHAREHOLDERS

Champions – Australian Racing Museum & Hall of Fame Country Racing Victoria Inc (CRV) Australian Racing Museum Chairman: Michael Caveny Chairman: Robert Nason Chief Executive Officer: Mark O’Sullivan Chief Executive Officer: Paul Brettell Committee: Chas Armytage, Brian Dougherty, Joanne Dwyer, Directors: Kerry Gillespie, Bryan Martin, Graeme Ward, John Higgs, David Kittel, Bill Knights, Ross Lanyon, Peter Hiscock and Paul Brettell Neil McRae and Michael Moore Postal address: 400 Epsom Road, Flemington VIC 3031 Postal address: 400 Epsom Road, Flemington VIC 3031 Street address: Federation Square, Melbourne General contact phone number: 03 9258 4759 General contact phone number: 1300 139 407 Fax number: 03 9376 5216 Fax number: 03 9376 5349 e-mail address: [email protected] www.racingmuseum.com.au www.countryracing.com.au

Racing Hall of Fame Committee Melbourne Racing Club (Melb RC) Chairman: Bryan Martin Chairman: John Dillon Chief Executive Officer: Paul Brettell Chief Executive Officer (resigned 18 October 2004): Members: Kerry Gillespie, Graeme Ward, Roger Cameron, Peter Sweeney Paul Brettell and Robert Nason Committee: John Dillon, The Hon Justice Peter Young, www.racinghalloffame.com.au Ian McDonald, John Moule, Peter Lawrence, Mal Seccull, Mary Burney, Peter McCarthy, Warran Brown and Mike Symons Racing Information Services Australia Pty Ltd (RISA) Postal address: PO Box 231, Caulfield East VIC 3145 Chairman: Merv Hill Street address: Station Street, Caulfield East VIC 3145 General Manager RISA: Brian Masters General contact phone number: 03 9257 7200 Directors: Robert Nason, Rod Thirkell-Johnson AM, Fax number: 03 9257 7210 Peter V’Landys, Steven McGregor and Robert Pearson e-mail address: [email protected] www.melbourneracingclub.com.au Postal address: 400 Epsom Road, Flemington VIC 3031 General contact phone number: 03 9258 4711 Moonee Valley Racing Club Inc (MVRC) Fax number: 03 9258 4273 e-mail address: [email protected] Chairman: Don Abell Chief Executive Officer: John Cameron Racing Products Victoria Pty Ltd Committee: Don Abell, Geoff Webb, Martin Ralston, Kerry Gillespie, Tony Beddison AO, Christopher Stear, Chairman: Kevin McNamara Rob Scarborough, Emma Boling and Craig Opie Directors: John Anderson, John Cameron, Mark Dooley, Duncan McPherson, Doug Reid OAM and Geoff Torney Postal address: PO Box 245, Moonee Ponds VIC 3039 Company Secretary: Kevin Shaw Street address: McPherson Street, Moonee Ponds VIC 3039 General contact phone number: 03 9373 2222 Postal address: 400 Epsom Road, Flemington VIC 3031 Fax number: 03 9370 4816 e-mail address: [email protected] ThoroughVisioN™ Pty Ltd (TVN) www.mvrc.com.au Chairman: Harold Mitchell Chief Executive Officer (from 18 October 2004): Peter Sweeney Victoria Racing Club (VRC) Directors (from 31 August 2004): Michael Duffy, David Karpin Chairman: Rod Fitzroy AM, Ray Orloff, Tom Hartigan, Ian Frykberg, Bill Lenahan Chief Executive Officer: Dale Monteith and Campbell Anderson Committee: Rod Fitzroy, Peter Barnett, Doug Reid OAM, Postal address: 400 Epsom Road, Flemington VIC 3031 Bill MacKinnon, Peter Fekete, Paul Leeds, Amanda Elliott, General contact phone number: 1300 139 408 Michael Burn, Katherine Bourke and Dale Monteith Fax number: 03 9258 4717 Postal address: 400 Epsom Road, Flemington VIC 3031 e-mail address: [email protected] General contact phone number: 03 9258 4666 www.tvn.com.au Fax number: 03 9258 4605 e-mail address: [email protected] VicRacing Pty Ltd www.vrc.net.au Chairman: Lindsay Maxsted Directors: John Anderson, Kevin McNamara, Robert Nason and John Stephens Company Secretary: Kevin Shaw Joint Venture Representatives: Robert Nason, Dale Monteith and John Stephens Observers: John Anderson and Julie Piper Postal address: 400 Epsom Road, Flemington VIC 3031

94 STAKEHOLDERS Media, Entertainment & Arts Alliance (MEAA) Branch Secretary: Pat O’Donnell Australian Jumping Racing Association (AJRA) Postal address: Level 4, 221 Queen Street, Melbourne VIC 3000 President: Rodney Rae General contact phone number: 03 9691 7100 Vice President: Eric Musgrove Secretary: John Adams Thoroughbred Breeders Victoria (TBV) Treasurer: Pearse Morgan President: Mike Becker Committee: Chris Nolan, Michael DeCampo, Simon Mills, Vice Presidents: Tas Rielley and John Barns Laurie Paltridge, Ian Rough, Brett Scott, Cathy Walker, Executive Officer: Richard Andrews John Fallschear and Brian Meldrum Committee: Ruth Frenzel, Bryan Muschialli, Tim Johnson, Postal address: 400 Epsom Road, Flemington VIC 3031 John Kenneally, Rosemary Inglis and Emma Boling General contact phone number: 03 9376 3924 Postal address: 400 Epsom Road, Flemington VIC 3031 Fax number: 03 9376 4819 General contact phone number: 03 9376 3893 e-mail address: [email protected] Fax number: 03 9376 4051 www.ajra.now.com.au e-mail address: [email protected] www.tbv.com.au Australian Liquor, Hospitality and Miscellaneous Workers Union (LHMU) Thoroughbred Racehorse Owners’ Association (TROA) Branch Secretary: Brian Daley Chairman: David Lauritz Postal address: PO Box 327, North Melbourne VIC 3051 Chief Executive Officer: Peter Jurkovsky Street address: Ground Floor, 117-131 Capel Street, Board: Gary Gray, Peter Mason, John Alducci, Barbara Duff North Melbourne VIC 3051 and Lillian Cooney General contact phone number: 03 9235 7777 Executive Officer: Smedile Toll free number: 1800 819 087 (Country Victoria only) Postal address: PO Box 585, Flemington VIC 3031 Fax number: 03 9235 7770 Street address: 400 Epsom Road, Flemington VIC 3031 e-mail address: [email protected] General contact phone number: 03 9376 6999 www.lhmu.org.au Fax number: 03 9372 1699 e-mail address: [email protected] Australian Services Union (Victorian Branch) (ASU) www.troa.com.au Branch Secretary: Darrell Cochrane Postal address: 116-124 Queensberry Street, Victorian Bookmakers’ Association Limited (VBA) Carlton South VIC 3053 Chairmen: Paddy O’Brien and Lyndon Hsu General contact phone number: 03 9342 3400 Vice Chairman: Alex Bell Toll free number: 1800 133 096 Executive Officer: John Clancy Fax number: 03 9342 3499 or 9342 3498 Council Members: John Bull, Alan Eskander, Darren Gilham, e-mail address: [email protected] Gavin Marantelli and Norm Short www.asuvic.asn.au Postal address: 400 Epsom Road, Flemington VIC 3031 Australian Trainers’ Association (Victorian Branch) (ATA) General contact phone number: 03 9376 1933 Fax number: 03 9376 7933 President: Colin Alderson e-mail address: [email protected] Committee: Colin Alderson, Robert Smerdon, Tony Noonan, www.vicbookmakers.com.au Colin Little, Frances Houlahan and Pat Carey Chief Executive: John Alducci Victorian Jockeys’ Association (VJA) Postal address: PO Box 585, Flemington VIC 3031 Chairman: Neville Wilson General contact phone number: 03 9372 1688 Vice Chairman: Brian Werner Fax number: 03 9372 1699 Directors: Darren Gauci, Jason Patton, Vlad Duric, e-mail address: [email protected] Stephen Baster and Noel Callow www.austrainers.com.au Non-Jockey Directors: Ros Inglis, Martin O’Connor and Bill Shorten Australian Workers’ Union (Victorian Branch) (AWU) Executive Officer: Ned Wallish Victorian Secretary: Bill Shorten Postal address: 400 Epsom Road, Flemington VIC 3031 Postal address: 685 Spencer Street, West Melbourne VIC 3003 General contact phone number: 03 9258 4709 General contact phone number: 03 8327 0888 Fax number: 03 9376 4819 or 03 9820 0848 Fax number: 03 8327 0899 e-mail address: [email protected] e-mail address: [email protected] www.awuvic.com

95 RACECOURSE LOCATION GUIDE

VICTORIAN COUNTRY RACECOURSE LOCATION GUIDE METROPOLITAN RACECOURSES

Moonee Valley Mildura Flemington Moonee Valley Melbourne FlemingtonCBD Melbourne CBD Caulfield Caulfield Manangatang Sandown Swan Hill Sandown

Kerang

Gunbower Wycheproof Echuca Wodonga Towong Warracknabeal Nhill Donald Wangaratta Tatura Dederang Benalla Murtoa St. Arnaud Horsham Bendigo

Merton Edenhope Stawell Seymour Mansfield Avoca Yea Omeo Great Western Alexandra Ararat Kyneton Kilmore Swifts Creek Hanging Rock Casterton Burrumbeet Buchan Coleraine Ballarat Dunkeld Yarra Glen Healesville Hamilton Melbourne Bairnsdale Penshurst Werribee Pakenham Mortlake Cranbourne Moe Sale Terang Camperdown Geelong Mornington Drouin Traralgon Warrnambool Colac Balnarring Woolamai Stony Creek

PHOTOGRAPHY

PHOTOGRAPHY – Flemington (page 36) – VRC/Getty Images Bruce Postle – Kate Waterhouse (page 40) – MVRC/Joe Sublyak – Celebrating 2004 Australian Champion Racehorse of the Year, BOARD AND EXECUTIVE PHOTOGRAPHY Lonhro (page 42) – Chloe Paul Andy Tavares – Regimental Gal (page 46) – Stuart McCormick – Patto and Banjo (page 50) – Stuart McCormick EXCEPTIONS – Media Tower (page 52) – Stuart McCormick – 2003 Tooheys New Melbourne Cup (cover) – Fields of Omagh’s owners, Tony McEvoy and Steven King – courtesy of Jay Town/Herald Sun (page 56) – MVRC/Joe Sublyak – Trackwork at Caulfield (page 1) – Stuart McCormick – Carlton Draught Caulfield Cup (page 58) – Lonhro (page 12) – Stuart McCormick – Melbourne Racing Club/John Lane – Elvstroem (page 16) – VRC/Getty Images – Fashions on the Field (page 60) – Edwina Pickles/The Age – Carlton Draught Cox Plate (page 26) – Colin Bull – Subzero (page 66) – Stuart McCormick – Liquid Lunch ridden by Brad McLean (page 30) – Terry Phelan/Herald Sun

96 CONTENTS

1 > Administration page 1 2 > Organisation page 15 3 > Racing Integrity page 19 4 > Racing Operations page 27 5 > Racing Development page 37 6 > Racing Services page 49 7 > Celebration page 55 8 > Corporate Governance page 63 9 > Financial Performance page 67 10 > Our Racing Partners page 94

Racing Victoria Limited (RVL) Postal address: 400 Epsom Road Flemington VIC 3031 General contact telephone number: 03 9258 4258 Fax number: 03 9258 4707 Web address: www.racingvictoria.net.au e-mail address: [email protected]