annual report 2015 - Amazon S3€¦ · ANNUAL REPORT 2015 — 1 victoria racing ... Richmond...

annual report 2015

1 victoria racing club2 board of directors4 our results5 chairman and

chief executive’s report5 the year in review8 racing highlights12 2014 melbourne cup carnival

economic impact12 2015 flemington festival of racing12 membership breakdown13 racing rewards13 masterplan13 digital and technology13 media rights16 carnival advertising campaign16 awards16 vale Bart Cummings AM16 acknowledgements17 partnerships18 VRC in the community20 executive management21 risk and corporate governance23 financial statements

ANNUAL REPORT 2015 — 1

victoria racing clubvisionFlemington is a world leader in thoroughbred racing, event management and entertainment

valuesThe day-to-day activities of VRC employees are underpinned by the following values:Integrity Acting with integrity in all that we do. Innovation Encouraging and embracing innovation to achieve continuous improvement. Excellence Setting the highest standards in service and value for our Members, customers and business partners. Collaboration Valuing and respecting the commitment and contribution of all of our people and expecting collaboration across our teams. Safety and Sustainability Providing a safe and environmentally friendly workplace and venue for people, customers and industry participants.

2 — VICTORIA RACING CLUB

Michael BurnChairman, Remuneration Committee (Chair), member of the Audit and Risk Management Committee and Masterplan CommitteeBachelor of Commerce, University of Melbourne

Date joined Committee/Board November 2003Occupation and business interestsExecutive Director Macquarie Capital, Director of various Macquarie Group Subsidiaries, Member of Council Loreto Mandeville Hall

Racing interests and membershipsRacehorse ownerInterests outside of racing Family, golf and snow skiing

Amanda ElliottVice Chairman, Chairman Design Committee for Club Stand, Disciplinary Committee (Chair), member of the Masterplan Committee and Remuneration Committee Bachelor of Arts (Hons), University of Melbourne

Date joined Committee/Board July 2002Occupation and business interestsDirector Chatswood Park Pty Ltd (pastoral and family investment company)

Racing interests and membershipsPart-owner of seven racehorses, in Australia and UKInterests outside of racing Family and friends, tennis, most sports, interior design and architecture, fashion, film and gardens

John O’RourkeHonorary Treasurer, Audit and Risk Management Committee (Chair), Masterplan Committee (Chair) and member of the Remuneration Committee Bachelor of Commerce, University of Melbourne; Graduate Diploma in Finance, RMIT

Date joined Committee/Board December 2011Occupation and business interestsDirector Plenary Group Pty Ltd, Plenary Research Holdings Pty Ltd, Plenary Health Holdings (Comprehensive Cancer Centre) Pty Ltd, Plenary Conventions Pty Ltd, Flagship Property Holdings Pty Ltd

Racing interests and membershipsRacehorse owner, member Melbourne Racing Club and Moonee Valley Racing ClubInterests outside of racingGolf, Richmond Football Club

Peter FeketeMember of the Audit and Risk Management Committee, Masterplan Committee and Chairman Thoroughbred Racing Productions (VIC) Pty Ltd, Director ThoroughVisioN Pty LtdBachelor of Business (Accounting), Swinburne University; Fellow of the Institute of Chartered Accountants Australia (FCA)

Date joined Committee/Board July 2000Occupation and business interestsDirector of a number of non-listed investment companies. Member of the Finance Investment and Risk Committee for the National Stroke Foundation

Racing interests and membershipsRacehorse owner, member Melbourne Racing Club and Moonee Valley Racing ClubInterests outside of racing Skiing and football

Paul LeedsDirector Radio 3UZ Pty Ltd and 3UZ Pty LtdAssociate Fellow of Australian Institute of Management

Date joined Committee/Board April 2002Occupation and business interests Vice President National Stroke Foundation, Director Collingwood Football Club, Chairman Twenty3 Sport+Entertainment, Chairman Australian Made Media, Advisory Board Menzies Art Brands

Racing interests and membershipsRacehorse owner and breeder, member Melbourne Racing ClubInterests outside of racing Family, art, food, wine, travel, collectables and football

board of directors


Simon LoveChief ExecutiveBachelor of Business (Banking and Finance), Victoria University; Master of Business Administration, Swinburne University

Date joined Committee/BoardMay 2015Occupation and business interestsChief Executive Victoria Racing Club

Racing interests and membershipsRacehorse owner and breederInterests outside of racingTravel, wine, hockey, golf

Katherine BourkeMember of the Disciplinary CommitteeBachelor of Laws, Master of Laws and Bachelor of Arts, University of Melbourne

Date joined Committee/Board July 2004Occupation and business interestsJudge of County Court of Victoria

Racing interests and membershipsRacehorse owner and breeder, member Melbourne Racing Club and Moonee Valley Racing ClubInterests outside of racing Hawthorn Football Club, food, wine and travel

Elisa Sturzaker RobinsonMember of the Masterplan CommitteeBachelor of Laws and Bachelor of Commerce, Monash University; admitted to the Supreme Court of Victoria; completing Masters of Business Administration, Melbourne Business School

Date joined Committee/Board May 2011Occupation and business interests General Manager – Industry Management at nbn (National Broadband Network), speaking engagements on diversity and women in leadership, business and sport

Racing interests and membershipsRacehorse owner and breederInterests outside of racing Geelong Football Club, Kooyong Lawn Tennis Club, property development, travel, food and wine, art, design, fashion, sports, including skiing, running and spending time with my husband and sons

Michael RamsdenMember of the Audit and Risk Management CommitteeBachelor of Economics, Monash University, Bachelor of Laws, Monash University;Fellow of the Financial Services Institute of Australasia

Date joined Committee/Board December 2012Occupation and business interestsManaging Director Terrain Capital Ltd, Chairman Australian Mines Ltd, Chairman Cremorne Capital Ltd, Chairman African Mahogany (Aust) Pty Ltd

Racing interests and membershipsPart owner of approximately 45 horses, including The Offer, Chautauqua and Alaskan Rose, member Melbourne Racing Club, Moonee Valley Racing Club and France GalopInterests outside of racingGolf, surfing, football, wine and food

Neil WilsonBachelor of Business (Accounting) (MIS); Certified Practicing Accountant (CPA)

Date joined Committee/Board December 2012Occupation and business interestsChief Executive Officer and Managing Director Oakton Limited

Racing interests and memberships Racehorse owner and breederInterests outside of racing Family, running and travel


our results

2014/15 snapshot

racing

net profit2014/15 result

$10.7m

support for the community2014/15 result

$1mcontributed to or raised by charitable causes through VRC fundraising partnerships and donations

2014 melbourne cup carnival economic impact2014/15 result

$374.2min gross economic benefit to Victoria (Source: IER economic impact report)

prizemoney2014/15 result

$37.9mincluding $7 million in VRC top-ups

total melbourne cup carnival crowd2014 result

325,519total attendances at VRC racedays 2014/15 result

509,197

$

$

14 group one races

37 races were run

11 group two races

536 horses participated, with an average of 14.48 average runners per race

19 group three races

13 internationally trained runners during the Melbourne Cup Carnival

31 listed races

3.24m home viewers tuned into the Channel 7 coverage of the Emirates Melbourne Cup in Australia

2014 melbourne cup carnival


the year in review2014/15 proved to be another significant year for the Club and for the Victorian thoroughbred racing industry. Pleasingly, both the Club and the industry continued to make sound progress in relation to important strategic goals.

On the racing front, the year was once again highlighted by a successful Melbourne Cup Carnival. Protectionist’s dominant win in the Emirates Melbourne Cup was one of many highlights throughout a Carnival that drew strong overall crowds, extensive interstate and international visitor numbers and exceptional local, interstate and international racing talent.

International participation also continued to grow through the Flemington Festival of Racing in March as Flemington welcomed back UK trained globetrotter Red Cadeaux and four notable Hong Kong-based jockeys: Brett Prebble, Douglas Whyte, Nash Rawiller and crowd favourite João Moreira.

On the commercial front, the Club worked closely with Racing Victoria and other Victorian clubs to develop a new set of broadcasting arrangements for Victorian racing. The Club is pleased that as a result of this work, Victorian racing is now available to be viewed on the broadest ever range of platforms, delivering on the goal that fans should have the ability to watch Victorian thoroughbred racing ‘anytime, anywhere’.

chairman and chief executive’s reportMichael Burn, Chairman and Simon Love, Chief Executive

The Club also made further significant progress in relation to the ongoing upgrade of our IT platforms. We are confident that the substantial investment made across several years to upgrade our IT capability will deliver significant benefits to the Club and our Members.

2014/15 saw the sale of the Club’s interests in the Australian Stud Book (‘ASB’) and Australian Genetics Testing (‘AGT’). These investments had been held by the Club over many decades and the Club is proud of the achievements of the ASB and AGT under joint VRC/Australian Turf Club stewardship. However, the sale of the ASB and AGT interests should allow for the next phase of growth of those businesses, as they are to be operated alongside other data rich businesses owned on behalf of the Australian racing industry by Racing Australia.

The Club achieved a net profit of $10.7 million in 2014/15. This was an increase of $7.3 million on the $3.4 million profit recorded in 2013/14. The increase is largely attributable to the sale of the Club’s 50% interest in the Australian Stud Book and Australian Genetics Testing in September 2014, which generated a profit of approximately $9.0 million. The underlying result achieved by the Club was a net profit of $1.7 million, compared to $3.4 million in the previous year. The key factors influencing the movement between years were a reduction in media rights payments received through the year, whilst new arrangements were being negotiated and the cancellation of two significant outdoor music festivals. Overall, the positive financial result ensured the Club’s balance sheet remained healthy at year-end, positioning the Club well for significant planned investment in racecourse facilities.

leadership changeAfter an extended period of illness, our former Chief Executive, David Courtney, resigned from the Club in August 2014. Tragically, David has since passed away. In his relatively short time with the Club, David demonstrated his outstanding executive capabilities. Our sincere condolences are extended to David’s wife, Meagan, and his family.

Following a comprehensive recruitment and selection process, the VRC announced in June 2015 the appointment of Simon Love as Chief Executive. Simon had previously been our Executive General Manager Corporate Finance and Strategic Initiatives.

Prior to Simon’s appointment, Julian Sullivan had been in the role of Acting Chief Executive. Julian has since advised of his intention to resign from the Club. Across a period of 37 years, Julian has been an outstanding executive for the VRC. On behalf of the Board, I would sincerely like to thank Julian for his contribution to the VRC. His enthusiasm, humour, commitment and capability will be missed.

Michael Burn, Chairman


the beating heart of australian horse racing


racing highlightsThere were 25 racedays held at Flemington during 2014/15. In total, 223 races were run, taking in 2,715 starters. The season average was 12.2 per race, up from 11.9 during 2013/14. There were 14 Group One, 11 Group Two, 19 Group Three and 31 Listed races for a total of 75 ‘Black Type’ races.

During 2014/15, the Club returned $37.9 million in prizemoney, an increase of $1.2 million on 2013/14, which included $7 million in voluntary top-ups.

2014/15 Group One winners

Makybe Diva Stakes Dissident

Turnbull Stakes Lucia Valentina (NZ)

Coolmore Stud Stakes Brazen Beau

Longines Mackinnon Stakes Happy Trails

AAMI Victoria Derby Preferment (NZ)

Myer Classic Bonaria

Emirates Melbourne Cup Protectionist (GER)

Crown Oaks Set Square

Darley Classic Terravista

Emirates Stakes Hucklebuck

Black Caviar Lightning Stakes Lankan Rupee

Australian Guineas Wandjina

Lexus Newmarket Handicap Brazen Beau

Australian Cup Spillway (GB)

2014 Melbourne Cup CarnivalThe 2014 Melbourne Cup Carnival was one of the most competitive in recent years, with 29 individual trainers from Melbourne, interstate and overseas enjoying success in the 37 races.

Chris Waller won the opening race of the Carnival with Kermadec, ridden by Blake Shinn, and went on to dominate AAMI Victoria Derby Day, winning the Group One Coolmore Stud Stakes with Brazen Beau, ridden by Hong Kong-based jockey João Moreira, and the Group One AAMI Victoria Derby with Preferment, ridden by Damien Oliver. Oliver went on to win the Group One Longines Mackinnon Stakes aboard Happy Trails, for trainer Paul Beshara, while the Group One Myer Classic was won by Bonaria, for trainer Pat Hyland and jockey Michael Rodd. Waller’s and Oliver’s performances during the Melbourne Cup Carnival were recognised at the end of the week, with Waller taking out the Melbourne Cup Carnival Trainer Award for the second year in a row and Oliver winning the Ron Hutchinson Award for riding excellence.

The internationalisation of Australia’s greatest horse race was, as it has been in recent years, clearly evident, with a German-trained horse triumphant for the first time in the Cup’s 154-year history. Purchased only months earlier by an Australian syndicate, Protectionist secured victory for German trainer Andreas Wöhler and English champion jockey Ryan Moore over nine-year-old Red Cadeaux, which was runner-up for an incredible third time from four Emirates Melbourne Cup starts.

chairman and chief executive’s report continued


The Group One Crown Oaks was taken out by young trainer Ciaron Maher with the inexperienced Set Square, who justified the late entry paid by connections with a convincing victory under Sydney jockey Hugh Bowman.

The Melbourne Cup Carnival was rounded out with a spectacular Emirates Stakes Day, with the much anticipated Group One Darley Classic bringing together some of the world’s best sprinters in Chautauqua, Lankan Rupee and the UK’s Slade Power. However, it was emerging star Terravista, ridden by Hugh Bowman for Joe Pride who emerged the victor in a strongly fought finish. The Group One Emirates Stakes capped off a highly successful week for South Australia, with victory for trainer Phillip Stokes’s Hucklebuck under Adelaide-based jockey Dom Tourneur.

The quality of the course proper is crucial to the success of the Melbourne Cup Carnival, which during the week sustained 37 races featuring 536 horses, representing an average field size of 14.48. The track staff must be commended for their outstanding efforts in presenting a world-class surface across the four days of racing.

The Carnival continues to attract local, interstate and international visitors, and 2014 was no different, with 325,519 patrons attending Flemington Racecourse during the week.

Melbourne Cup Carnival attendance 2014

Total Members %

Derby 90,244 52,807 58.5

Cup 100,794 43,648 43.3

Oaks 64,430 40,191 62.4

Stakes 70,051 43,633 62.3

Total 325,519 180,279 55.4

2013

Total Members %

Derby 95,223 55,796 58.6

Cup 104,169 44,586 42.8

Oaks 66,757 43,043 64.5

Stakes 65,047 43,513 66.9

Total 331,196 186,938 56.4

2012

Total Members %

Derby 98,823 50,948 51.6

Cup 106,162 41,516 39.1

Oaks 71,825 37,605 52.4

Stakes 74,546 41,119 55.2

Total 351,356 171,188 48.7


glamour, refinement and prestige


2014 melbourne cup carnival economic impactFollowing the 2014 Melbourne Cup Carnival, the VRC commissioned IER to conduct an independent analysis of the economic impact of the Carnival on Victoria’s economy.

The results of this research, highlighted by record figures, demonstrate the significant contribution and positive impact that the Carnival has on the state’s economy. The 2014 Melbourne Cup Carnival contributed $374.2 million of gross economic benefit to Victoria, up from $364.5 million in 2013.

The Carnival was also responsible for a 9.8 per cent increase to a record value-added contribution to Victoria’s gross state product of $194.9 million. This is a measure that quantifies the direct and flow-on impact of the Melbourne Cup Carnival on the state’s economy from funds flowing through Victoria by interstate and international visitors who were in Victoria specifically to attend the Melbourne Cup Carnival.

2015 flemington festival of racingThe Flemington Festival of Racing was a showcase of the globalised nature of racing, with internationally based jockeys taking out three of the feature Group One races, along with a cameo from perennial globetrotter Red Cadeaux in the Australian Cup.

Hong Kong-based jockeys Brett Prebble, Douglas Whyte and Nash Rawiller made the trip from Hong Kong to fight out the finish of the feature Group One Australian Guineas, on Australian Guineas Day, with Prebble emerging the victor on Wandjina, ahead of Douglas Whyte, second on Alpine Eagle, and Nash Rawiller, an unlucky fourth on Kermadec.

On Super Saturday, the VRC welcomed back super star jockey and crowd favourite João Moreira, who won two races, including the Group One Lexus Newmarket Handicap on Brazen Beau. Michael Walker scored a victory for the locally based jockeys, winning the feature Group One Australian Cup on Spillway for Flemington uncle and nephew training partnership David Hayes and Tom Dabernig.

The return of three-time Emirates Melbourne Cup runner-up Red Cadeaux was the highlight of the Flemington Festival of Racing, with the great champion showing his amazing courage and love of Flemington to finish fifth in the Australian Cup.

For the second year running, the VRC joined with Melbourne Food & Wine Festival, on Super Saturday, to present the Flemington Grazing Trail & Cellar Door.

Through the association with Melbourne Food & Wine Festival, the Club was able to provide a unique experience for patrons by combining two of Melbourne’s great passions – high-quality food and wine complemented by first-class racing.

Victoria’s finest wineries, breweries and food producers were on show, while leading chefs Nicki Riemer, Jake Kellie, Andrew Logan, Stephen Burke and Mauro Callegari participated in cooking demonstrations for the sizeable crowd.

membership breakdown

Membership categories Number of Members

Full 24,195

Restricted 1,976

Life 125

Pre 1979 269

Provisional 95

Absentee 2,441

Junior 945

Phar Lap Club 1,124

Total 31,170



racing rewards In recent years, the VRC has been reviewing its Racing Rewards program with the aim of designing a new program with increased benefits to more Members by enabling Members to earn rewards through their spend, attendance and tenure with the Club.

This review included numerous initiatives implemented during the season. Members have been immensely supportive of these new initiatives, as well as changes to Racing Rewards as the Club transitions from the old to the new program. The new-look Racing Rewards is set to launch in early 2016.

Members who achieved Racing Rewards group status in 2014/15

Platinum 1,587

Group One 1,178

Group Two 2,140

Group Three 4,958

Total 9,863

masterplan The suite of improvements to the Flemington Racecourse Precinct, known as the Masterplan, is an ongoing project, which began several years ago.

Construction of the new Club Stand, which Members were advised of during 2013/14, is one of the major development projects of the Masterplan.

While the Club had hoped to commence construction of the Club Stand following the 2015 Melbourne Cup Carnival, the commencement of construction is dependent on a number of factors. One factor is the receipt of planning approvals from the state government necessary to allow the proposed sale of two surplus parcels of land at Flemington. The time frame in which the planning approvals were required to support the timeline for construction originally communicated to Members has now passed. VRC management continues to work diligently towards the building of this exciting new facility and will advise Members of a revised construction timeline as soon as possible.

digital and technologyThe Club is dedicated to improving its digital and technological capabilities so as to provide an enhanced experience for all customers.

In February, the VRC launched its new customer facing website – flemington.com.au – which combined the existing three customer facing websites into one fully responsive site. The VRC website now sits under the banner of racing.com, an industry initiative of which VRC, Racing Victoria Ltd (RVL), Melbourne Racing Club, Country Racing Victoria and Moonee Valley Racing Club are all 20% shareholders.

One of the major components of new technology being implemented at the VRC will soon be realised, with a Customer Relationship Management system, along with updated financial, procurement and reporting systems to be implemented at the end of 2015. Importantly for our Members, this upgrade will include a new e-commerce store, which will be integrated into the VRC website and is set to launch in December 2015. The new e-commerce store will further enhance the user experience for customers, enabling for easier transactions and management of accounts. The e-commerce store will also provide a platform for Members to view their Racing Rewards information when the new loyalty program is launched in January 2016.

media rightsIn June, the VRC reached an agreement with RVL supporting a united Victorian thoroughbred industry decision to award its primary television rights to Seven West Media. The decision is a step forward for the industry to broaden the television audience and allow people to watch Victorian racing whenever, wherever and however they choose. Additionally, coverage has also been restored on Sky through Sky Racing 1.

Seven West Media launched the new channel called racing.com on Saturday, 29 August. It is the first dedicated channel on free-to-air television for any sport and complements the industry-owned digital destination, racing.com

Importantly, the VRC continues to retain control over its Melbourne Cup Carnival free-to-air television rights, which remain subject to a separate agreement with Seven West Media until 2018/19.

https://www.racing.com


https://www.flemington.com.au



australia’spremierracecourse


carnival advertising campaignOn 14 March 2015, VRC launched its ‘Racing Royalty’ advertising campaign for the 2015 Melbourne Cup Carnival. This campaign, devised by VRC and newly appointed advertising agency Grey Melbourne, was the first significant change in advertising direction for more than a decade. The campaign brought together some of racing’s most recognisable faces, along with people who work behind the scenes, who all contribute to making Flemington and the Melbourne Cup Carnival so special.

awardsOn the eve of the 2014 Melbourne Cup Carnival, the 2013 Melbourne Cup Carnival was announced as the winner of the Major Festival and Events category at the RACV Victorian Tourism Awards. The VRC won the same award in 2013 for the 2012 Melbourne Cup Carnival. This prestigious award acknowledges the importance of the Melbourne Cup Carnival to the state, with regards to the economic and visitation impacts in addition to the positive promotion of Melbourne around the world. The VRC received bronze in the Major Festivals and Events category at the Australian Tourism Awards in February.

VRC was also announced the winner of Contribution to Profile by a corporation at the Melbourne Awards, conducted by the City of Melbourne in November. The Club beat 10 other contenders for the award, which celebrates projects or activities that have built Melbourne’s reputation as a centre for business, knowledge, sport, entertainment and culture.

The Club’s catering provider, Peter Rowland Catering (PRC), was acknowledged during the year with awards on two occasions. Peter Rowland Catering at Flemington – The Events Centre was awarded best Speciality Meeting Venue at the Meetings & Events Industry Awards in March. In addition, PRC was awarded ‘one glass’ from Gourmet Traveller Wine for The Chairman’s Club wine list.

vale Bart Cummings AMThe VRC was saddened by the loss of James Bartholomew Cummings AM, or ‘Bart’ as he was known, who passed away on 30 August 2015, aged 87. He will be remembered as Australia’s greatest horse trainer, with 268 Group One wins to his name, including an unrivalled 12 Melbourne Cups. He enjoyed great success at Flemington, winning an astonishing 83 of his Group One races at Australia’s most famous racecourse. He was respected by his peers, adored by the public and his contribution to the racing industry is undeniable. He will be greatly missed not only by those who knew him, but also by those who didn’t.

acknowledgements The VRC is fortunate to be supported by many of the world’s leading organisations, enabling the Club to offer lucrative prizemoney thus attracting world-class participants.

We would like to thank all who have supported the VRC during 2014/15, in particular our Principal Partner, Emirates Airline, who has been a Club sponsor for 18 years, and Major Partners, Myer (over 30 years), AAMI (23 years), Crown (22 years) and James Boag (14 years). We would also like to acknowledge our other long-standing sponsors, Treasury Wine Estates (38 years) and Schweppes (37 years), whose support is crucial to the success of the Club.

We would like to acknowledge and thank the VRC Directors, management and staff for their commitment to the success of the Club.

It would not be possible for the Club to operate successfully without the cooperation and assistance of a number of individuals and organisations. Accordingly, we record our appreciation and thanks to:

• The State Government and the Offi ce of the Premier, The Hon Daniel Andrews MP

• The Attorney General and Racing Minister, The Hon Martin Pakula MP

• The Minister for Tourism and Major Events, The Hon John Eren MP

• Racing Victoria Limited

• The Melbourne Racing Club and Moonee Valley Racing Club

• Country Racing Victoria Ltd and all country racing clubs

• The industry’s wagering joint venture partner, Tabcorp Holdings Limited

• ThoroughVisioN Pty Ltd

• Australian Racing Board

• Victorian Major Events Corporation

• City of Melbourne

Finally, to all of our Members, thank you for your continued support.



LOGOTYPE COULEURFOND BLANCNº dossier : 20120475E

Date : 28/03/2013

Validation DA/DC :

Validation Client M30 J70 N25

M100 J80 N10

C40 M40 J40 N100

Principal Partner Major Partners

Official Partners

Race Sponsors

Event & Program Partners

Media Partners Sustainability Partners

OFFICIAL TELECAST PARTNER

OFFICIAL WAGERING PARTNER

OFFICIAL WINE PARTNER

OFFICIAL NON-ALCOHOLIC BEVERAGE PARTNER

OFFICIAL TIMEKEEPER AND WATCH PARTNER

OFFICIAL FRENCH CHAMPAGNE

PARTNER

OFFICIAL PRINT MEDIA PARTNER

OFFICIAL SPIRITS PARTNER

OFFICIAL COFFEE PARTNER

OFFICIAL MOTOR VEHICLE PARTNER

OFFICIAL WELLNESS PARTNER

partnerships


Community engagement is important to the VRC, and this continued to be a key focus during 2014/15, with programs and initiatives delivering a range of benefits for charity partners and the broader community.

Approximately $1 million was contributed to, or raised by, charitable causes through VRC fundraising partnerships and donations during the year.

Through an ongoing donations program, the VRC assisted more than 160 charities and community groups with ticketing and hospitality donations. In addition, the VRC worked with a range of charities to utilise our world-class facility to deliver substantial fundraising results to local causes.

key highlights included:SecondBiteIn 2014, the VRC celebrated 20 years of Pin & Win, its major annual fundraiser and the program passed the $4 million mark in total money raised for VRC partners.

In its second and final year, food rescue charity SecondBite raised more than $494,000, which will help provide more than 1.3 million meals for vulnerable Australians.

A combined two-year total of just over $1 million exceeded all previous records and will enable SecondBite to provide more than 2.5 million healthy meals for families and people in need across Australia.

Since 2007, the Club has supported SecondBite through surplus food donations. After each major raceday, SecondBite, assisted by the VRC caterers, collects fresh surplus food to distribute to local agencies for community food programs.

SecondBite collected 5,447 kilograms from Flemington during the 2014/15 financial year, which equates to almost 11,000 meals for those in need.

Emirates Melbourne Cup ParadeThe Emirates Melbourne Cup Parade, proudly supported by the City of Melbourne, saw more than 40,000 people line the streets of Melbourne to experience the traditional Emirates Melbourne Cup eve event.

Emirates Melbourne Cup TourThe VRC remains committed to taking the coveted Emirates Melbourne Cup trophy to the people through its annual tour: a pathway to engage with local communities by profiling the heroes and champions intrinsically linked to the Cup.

The 2014/15 season marked the 12th year of the tour, which saw the ‘Peoples’ Cup’ travel a staggering 41,558 kilometres to visit 34 metropolitan and regional destinations across Australia and New Zealand.

The 2014 Emirates Melbourne Cup Tour successfully increased out of state visitation by driving awareness of the Melbourne Cup Carnival, both interstate and internationally. Most importantly, the tour enabled more than 24,847 people the unique opportunity to see the Cup first-hand and share in the heart-warming stories of the race’s 154-year history.

VRC in the community

AustraliaNew South WalesSydneyBallinaCootamundraDeniliquinGrenfellLismoreMurwillumbah/TweedWagga WaggaACTCanberra

VictoriaMelbourne BendigoGeelongLorneStawellWodongaQueenslandBrisbaneBirdsvilleCharlevilleCharters TowersGold CoastHome HillNoosaSouth AustraliaAdelaide

Western AustraliaPerthYorkNorthern TerritoryDarwinTasmaniaHobartSorell

New ZealandAucklandFeatherstonNew PlymouthWanganuiWellingtonWhakatane

Emirates Melbourne Cup Tour

34destinations across Australia and New Zealand


National Jockeys TrustThe VRC is an ongoing supporter of the National Jockeys Trust (NJT), to help jockeys and their families overcome financial hardship when jockeys are injured or killed in action.

Signed saddlecloths from the Melbourne Cup Carnival, feature races and other selected Group One races at Flemington are auctioned each year, with 30% of profits donated to the Trust.

To recognise involvement in the Emirates Melbourne Cup Parade, the VRC also makes a donation to the Trust for every jockey who participates.

Last year’s donation to the NJT from these activities totalled almost $19,000.

The VRC also supports the NJT Pin & Win promotion each autumn, with almost $6,000 in pins sold on Super Saturday, as well as the annual 4Tracks4Kids walk, which benefits a number of charities, including the NJT.

4Tracks4KidsThe VRC is a proud supporter of 4Tracks4Kids, a racing industry originated charity dedicated to helping the children of Australia by raising funds through selected partners.

In March, the fourth annual 4Tracks4Kids Melbourne walk raised $300,000 for its charity partners: Doxa Youth Foundation, the National Jockeys Trust, Very Special Kids and Pancare.

The event continues to grow each year and congratulations go to Richard and Kaye Callander for their ongoing efforts with 4Tracks4Kids.

The Pancare Foundation also raised $273,000 through a private event at Flemington in May.

ANZAC DayRacing on ANZAC Day at Flemington has a long history, but 2015 was particularly significant as it commemorated 100 years since the landing of troops in Gallipoli.

Historical stories of the connection between horse, racing and war were drawn upon in a moving Mounting Yard ceremony.

In recognition of the occasion, active and returned service personnel were welcomed to Flemington with free admission.

Watsonia RSL representatives raised over $7,500 through the sale of ANZAC Day Appeal pins.

Western Health Community RacedayThe annual Western Health Community Raceday was held at Flemington in December 2014, with the Western Health Foundation raising an impressive $106,000 for health services in Melbourne’s west.

Since 2006, more than $800,000 has been raised through this annual raceday, which Western Health reports has impacted more than one million people.

Peter MacCallum Cancer CentreFloral arrangements displayed at Flemington were, for the second year running, donated to the Peter MacCallum Cancer Centre. These arrangements were given to patients, families and carers throughout the hospital.


executive management

Nick Addison Executive General Manager Commercial Partnerships and Customer Engagement

Mark DaviesExecutive General Manager Flemington

Lisa PatroniActing Executive General Manager Brand, Marketing and International Development

Lucas RobertsonExecutive General Manager Legal, Risk and Procurement

Susan TonksExecutive General Manager People and Culture

Penny TrippActing Executive General Manager Club Services

Sam WhatmoreExecutive General Manager Finance and Information Technology

Julian SullivanChief Operating Officer, May 2015 – presentActing Chief Executive, April 2014 – May 2015


The VRC Board is ultimately responsible for the governance of the Club and remains committed to continuous improvement in this area. The Directors operate according to a code of conduct and the rules set down by the Club’s constitution and by-laws.

board composition and term of officeThe Board consists of nine non-executive independent Directors and the Chief Executive. It is the Board’s intention to seek Directors with a broad range of skills and experience to assist it in carrying out its responsibilities and in meeting the Club’s strategic objectives. Each non-executive Director must seek re-election every three years, and Directors must retire at the next Annual General Meeting after they reach the age of 72. The Chairman, Vice-Chairman and Honorary Treasurer are appointed each year. They may serve in these roles for a maximum of eight consecutive years.

sub-committeesThe Board establishes sub-committees, as required, to assist in carrying out its primary functions. These sub-committees meet on a regular basis, populated by representatives of the Board and management, and act in an advisory capacity, making recommendations to the Board.

audit and risk management committeeThe Audit and Risk Management Committee comprises the Honorary Treasurer (as Chair) and not less than two other Directors. This committee meets on at least three occasions throughout the year and on further occasions as the need arises. The committee meets with, and receives regular reports from, the Club’s auditors and management, working with them to review the Club’s risk profile, accounts and financial position. The committee makes recommendations to the Board in relation to key budget, financial and policy items.

corporate reportingThe Board receives reports from management on a monthly basis and otherwise as required.

risk managementThe Club utilises a web-based risk management system to record, monitor and report on risks affecting the business. The Senior Risk Manager meets with executives individually and as a group, on a regular basis, to update the risk register and to review the effectiveness of controls. This process gives input and ownership to people at all levels and in all departments of the Club, while providing greater visibility and confidence to senior management and the Board.

safetyGiven the nature of the VRC’s business, the Club remains keenly focused on its safety obligations. This is a high-priority issue for all of our people, highlighted by the intensive work that goes into keeping Flemington Racecourse a safe place to work throughout the year, but especially during and in the lead-up to Melbourne Cup Carnival. The safety team works with management and our contractors to continually look at how we can improve on what we do in this area.

conflicts of interestDirectors and employees are expected to avoid any action, position or interest that conflicts with an interest of the Club or may give any appearance of such a conflict. A Director who has a conflict or a perceived conflict with an interest of the Club must bring the matter to the notice of the other Directors. Directors will not vote on matters in which they have an interest and may, at the Chairman’s discretion, be asked to leave the meeting while the matter is being considered.

risk and corporate governance


remunerationA Remuneration Committee, comprising the Chairman, Vice-Chairman and Honorary Treasurer, reviews the Club’s remuneration of management and staff on an annual basis. The Chief Executive and EGM People and Culture also attend these meetings. With the exception of the Chief Executive, VRC’s Directors act in a voluntary capacity. However, they do receive certain reimbursements and compensation for costs incurred while fulfilling their role as a Director. Certain members of the Board participate in the Thoroughbred Racing Industry via means of ownership of racehorses. This involvement is on terms and conditions no more favourable than other participants in the Thoroughbred Racing Industry. Certain Directors are nominated by the Club to act as representatives in the Thoroughbred Racing Industry and those Directors are remunerated in accordance with the relevant entities’ remuneration practices.

legal The VRC’s in-house legal counsel are involved in the negotiation of contracts and provide advice and support on a wide range of matters affecting the Club. Processes and training are implemented, as required, to ensure a consistent approach to contracts and compliance. External legal advice is also sought where appropriate.

governance cultureThe Club remains committed to ensuring that all employees are appropriately inducted, trained and supported, as required, to ensure that corporate governance becomes second nature in all activities undertaken by the Club.

risk and corporate governance continued


financial statements

contents24 Directors’ Report27 Independence Declaration28 Independent Auditor’s Report29 Statement of Profit or Loss and

Other Comprehensive Income30 Statement of Financial Position31 Statement of Changes in Equity32 Statement of Cash Flows33 Notes to and forming part

of the Financial Statements48 Directors’ Declaration


The Directors of the Victoria Racing Club Limited (‘the Club’) submit herewith the annual financial report of the Club for the financial year ended 31 July 2015. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

The Club became a registered company under the Corporations Act 2001 on 10 April 2006. The Club is a public company limited by guarantee, incorporated and operating in Australia.

If the Club is wound up, the Constitution states that each current Member, and each person who ceased Membership within the preceding 12 months, is required to contribute a maximum of $10 towards meeting any outstanding obligations of the Club. At 31 July 2015, the number of Members was 30,046 (2014: 30,154), therefore the total contribution required by Members is equal to $300,460.

The Directors of the Club during or since the end of the financial year are as follows:

Directors Appointed Qualifications Business Interests

Katherine Bourke July 2004 • Bachelor of Laws, University of Melbourne• Master of Laws, University of Melbourne• Bachelor of Arts, University of Melbourne

Judge of the County Court of Victoria since 2007.

Michael Burn November 2003 • Bachelor of Commerce, University of Melbourne Executive Director Macquarie Capital, Director of Macquarie Investments, Macquarie Radar Holdings, Macquarie Technology Investments, Open Broadband Australia.Member of Council – Loreto Mandeville Hall.

David Courtney December 2012Resigned (August 2014)

• Bachelor of Business, RMIT• MBA, Monash University• Fellow of the Institute of Chartered

Accountants Australia (FCA)

Former Chief Executive of the Victoria Racing Club.

Amanda Elliott July 2002 • Bachelor of Arts (Hons), University of Melbourne

Director of Chatswood Park Pty Ltd.

Peter Fekete July 2000 • Bachelor of Business (Accounting), Swinburne University

• Fellow of the Institute of Chartered Accountants Australia (FCA)

Chairman of Thoroughbred Racing Productions (Vic) Pty Ltd, Director of ThoroughVisioN Pty Ltd and a number of non-listed investment companies.Member of the Finance Investment and Risk Committee of the National Stroke Foundation.

Paul Leeds April 2002 • Associate Fellow of Australian Institute of Management

Director of National Stroke Foundation, Director of Collingwood Football Club, Director of Radio 3UZ Pty Ltd and 3UZ Pty Ltd, Director of Twenty3 Sport + Entertainment, Chairman of Australian Made Media, Advisory Board of Menzies Art Brands.

Simon Love May 2015 • Bachelor of Business (Banking and Finance), Victoria University

• MBA, Swinburne University

Chief Executive of the Victoria Racing Club.

John O’Rourke December 2011 • Bachelor of Commerce, University of Melbourne

• Graduate Diploma in Finance, RMIT

Director of the Plenary Group Pty Ltd, Plenary Research Holdings Pty Ltd, Plenary Health Holdings (CCC) Pty Ltd, Plenary Conventions Holdings Pty Limited and Flagship Property Holdings Pty Ltd.

Michael Ramsden December 2012 • Bachelor of Economics, Monash University• Bachelor of Laws, Monash University• Fellow of the Financial Services Institute

of Australasia

Managing Director Terrain Capital Ltd, Chairman Cremone Capital Ltd, Chairman of Australian Mines Ltd, Chairman of African Mahogany (Aust) Pty Ltd.

Elisa Sturzaker Robinson May 2011 • Bachelor of Laws and Bachelor of Commerce, Monash University

• Admitted to the Supreme Court of Victoria • Postgraduate management studies,

Melbourne Business School

General Manager – Industry Management at NBN Co.

Neil Wilson December 2012 • Bachelor of Business (Accounting), (MIS)• Certified Practicing Accountant (CPA)

Chief Executive Officer and Managing Director of Oakton Limited.

Directors’ Report


Company SecretaryLucas Robertson, Executive General Manager Legal, Risk and Procurement.

Principal activitiesThe principal activities of the Club during the year were the conduct of thoroughbred racemeetings and the provision of training facilities for horses that are stabled and trained at Flemington Racecourse.

Objectives, strategies and key areas of focusThe Club’s primary objective is for Flemington to be the world leader in thoroughbred racing, event management and entertainment.

Key strategies to achieve this include:

• Optimise the racing program and raceday experience

• Continuous improvement of racing, Member and patron facilities

• Active engagement with Members and patrons

• Growth of the Melbourne Cup Carnival brand throughout Australia and select international markets

• Continued implementation of the ‘Masterplan’, including a review of non-core assets

• Improved staff engagement and the further development of a performance based culture

• Successful implementation of new systems to enhance the customer offering and drive internal process efficiencies.

A key area of focus for the Club is to construct a new grandstand, and ensure it is funded without undue pressure and risk on the Club’s financial position.

The Club has a number of indicators to assess and monitor performance. These include:

Customer engagement:• Number of Members and Member retention rates

• Raceday attendance by customer segments

• Customer satisfaction research

• Number of events (racing and non-racing).

Racing:• Race fields, including average number of starters and quality

of fields

• Pari-mutuel and bookmaker wagering turnover on Flemington racemeetings

• Total prizemoney paid by the Club, including the amount contributed to prizemoney by the Club’s own activities (often referred to as ‘top up’)

• Stables’ tenancy and training gallops

• Racetrack Condition.

In addition to the above, the Club has a number of financial metrics to assess its performance, including banking covenants linked to the Club’s financing facilities.

Review of operationsThe profit for the year ended 31 July 2015 was $10.7 million, compared with a profit of $3.4 million for the prior year. The 2015 profit included a $9.0 million gain on the sale of the investments in Australian Stud Book and Australian Genetics Testing Pty Ltd. The following other factors were key contributors to the financial performance:

• Revenue increased $4.8 million (3.2%) to $155.7 million for the year. The main sources of revenue for the Club continue to be raceday catering, dining, hospitality and events $56.6 million, racing distributions $30.9 million and marketing, sponsorship and broadcast rights $24.6 million. Revenues from Members’ subscriptions and their guests continue to play an integral part in the financial success of the Club, contributing $18.1 million in the 2015 financial year, excluding the revenue contribution to raceday catering and dining.

• Expenses increased $6.5 million (4.4%) for the year. This included the Club’s continued commitment to owners, returning $38.3 million in prizemoney for the year, up $1.2 million (3.4%), including $7.0 million in voluntary prizemoney ‘top ups’, with $5.6 million allocated to the Melbourne Cup Carnival to attract the best domestic and international horses to Flemington. Expenses also included costs of $0.4 million relating to the potential sale of surplus land to Greenland (Australia).

• Depreciation and amortisation costs of $9.5 million were expensed for the year, the same amount as for the prior year.

• The Club invested $12.3 million in capital projects during the year, including $2.9 million towards the design of the Club Stand, $2.0 million for the construction of a new commercial kitchen to service on course catering, $2.1 million in new technology and related systems to enhance the customer experience and $1.5 million in improvements to public facilities, including the completion of the James Boag’s Premium Celebration Deck Bar.

• An actuarial gain of $2.4 million on the Club’s defined benefit superannuation plan was recognised directly in equity during the year following an actuarial review of the plan’s financial position.

The Club continues to maintain a term overdraft facility to fund the working capital requirements of the Club during the year, with an expiry of October 2017.

Changes in state of affairsDuring the financial year, there was no significant change in the state of affairs of the Club other than that referred to in the financial statements or notes thereto.

Subsequent eventsThere have been no matters or circumstances occurring subsequent to the end of the financial year that have significantly affected, or may significantly affect, the operations of the Club, the results of those operations or the state of affairs of the Club in future financial years.

Future developmentsDisclosure of information regarding likely developments in the operations of the Club in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Club. Accordingly, this information has not been disclosed in this Report.

Indemnification of officers and auditorsDuring the financial year, the Club paid a premium in respect of a policy insuring the Directors, officers and employees of the Club against a liability incurred as such a Director, officer or employee to the extent of all losses which the Club becomes legally obligated to pay on account of any claim. The Club has not during or since the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an auditor of the Club against a liability incurred as such an auditor.


DividendsUnder the Club’s constitution, no dividends may be declared or paid.

Directors’ meetingsThe following table sets out the number of Directors’ Board meetings and meetings of the Audit and Risk Management Committee held during the financial year and the number of meetings attended by each Director (during their tenure). During the financial year, 16 Board meetings (11 scheduled monthly meetings and five extraordinary meetings), and three Audit and Risk Management Committee meetings were held.

Audit and risk Board of directors management committee

Directors Held Att’d Held Att’d

Katherine Bourke 16 13 – –

Michael Burn 16 16 3 2

David Courtney (a) – – – –

Amanda Elliott (b) 16 15 – –

Peter Fekete 16 15 3 1

Paul Leeds 16 14 – –

Simon Love (b) (c) 2 2 – –

John O’Rourke 16 16 3 3

Michael Ramsden 16 16 3 3

Elisa Sturzaker Robinson 16 13 – –

Neil Wilson 16 15 – –

(a) MrCourtneyresignedfromtheBoardon20August2014.(b) TheChiefExecutiveandMrsElliotattendedtheAuditandRiskManagementCommitteeasinvitees.(c) MrLovewasappointedtotheBoardon28May2015.(d) MasterplanCommittee–TheClubmadeanapplicationtotheVictorianPlanningMinisterrequestingaplanningprocessandtermsofreferencetoallowtheClub

toseekaPlanningSchemeAmendmentinrelationtothesaleofsurplusland.Thisapplicationwasmadepriortothebeginningofthefinancialyearandaformalresponseinrespectofthiswasnotreceiveduntilaftertheendofthefinancialyear.

Nootherstrategiclevelissuesarosewhichrequiredameetingofthiscommitteetobeconvened.(e) DisciplinaryCommittee–Nomeetingswererequiredduringthefinancialyear.DisciplinaryCommitteemembersreceivedandconsideredpaperswith

recommendationsfrommanagementinrelationtoMembermisconductasappropriate.(f) RemunerationCommittee–TheCommitteemeton20August2014.

AuditorDeloitte Touche Tohmatsu continues in office as the Club’s auditor. The auditor’s Independence Declaration is included in the financial statements on page 27.

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

On behalf of the Directors,

Michael S Burn John B O’Rourke Director Director

Melbourne, 23 October 2015

Directors’ Reportcontinued


Independence Declaration

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060550 Bourke Street Melbourne VIC 3000 GPO Box 78B Melbourne VIC 3001 AustraliaDX 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

The Board of Directors Victoria Racing Club Limited 448 Epsom Road FLEMINGTON VIC 3031

23 October 2015

Dear Board Members

Victoria Racing Club Limited

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

As lead audit partner for the audit of the financial statements of Victoria Racing Club Limited for the financial year ended 31 July 2015, I declare that to the best of my knowledge and belief, there have been no contraventions of:

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

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

Yours sincerely

DELOITTE TOUCHE TOHMATSU Peter Caldwell Partner Chartered Accountants


Independent Auditor’s Report to the Members of Victoria Racing Club Limited

We have audited the accompanying financial report of Victoria Racing Club Limited, which comprises the statement of financial position as at 31 July 2015, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company as set out on pages 29 to 48.

Directors’ Responsibility for the Financial ReportThe directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Victoria Racing Club Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

OpinionIn our opinion, the financial report of Victoria Racing Club Limited is in accordance with the Corporations Act 2001, including:

(a) giving a true and fair view of the company’s financial position as at 31 July 2015 and of its performance for the year ended on that date; and

(b) complying with Australian Accounting Standards – Reduced Disclosure Requirements and the Corporations Regulations 2001.

DELOITTE TOUCHE TOHMATSU Peter Caldwell Partner Chartered Accountants


Deloitte Touche Tohmatsu A.B.N. 74 490 121 060550 Bourke Street Melbourne VIC 3000 GPO Box 78B Melbourne VIC 3001 AustraliaDX 111 Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited


2015 2014 Notes $000 $000

Revenue

Thoroughbred Racing Industry Distributions 30,887 29,545

Catering, Dining, Hospitality and Events 56,631 53,951

Marketing, Sponsorship and Broadcast Rights 24,586 23,128

Members’ Tickets and Subscriptions 18,055 17,769

Public Ticketing 7,201 7,505

Wagering and Other Racing Revenue 7,311 7,433

Racecourse, Training Facilities and Grants 5,223 5,559

Gaming 4,815 4,558

Share of Net Profits of Associates and Jointly Controlled Entities Accounted for Using the Equity Method 11 657 1,186

Interest 180 97

Net Gain on Disposal of Fixed Assets – 10

Other Revenue 193 185

Total Revenue 155,739 150,926

Expenditure

Prizemoney and Other Returns to Owners 38,275 37,030

Catering, Dining, Hospitality and Events 39,921 39,361

Marketing, Sponsorship and Broadcast Rights 14,360 12,250

Members’ Services and Administration 26,523 25,449

Racecourse and Training Facilities 19,932 18,481

Gaming 4,443 4,390

Financing Costs 8 101 286

Depreciation and Amortisation 9,544 9,545

Net Loss on Disposal of Fixed Assets 47 –

Other Expenditure 883 697

Total Expenditure 154,029 147,489

Profit for the Year before net gains on Sale of Investments 1,710 3,437

Gain on Sale of Investments 8,973 –

Profit for the Year 5 10,683 3,437

Other Comprehensive Income

Actuarial Gain on Defined Benefit Plan 19 2,428 281

Other Comprehensive Income for the Year 2,428 281

Total Comprehensive Income for the Year 13,111 3,718

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 July 2015


2015 2014 Notes $000 $000

Assets

Current Assets

Cash and Cash Equivalents 20 8,533 1,173

Trade and Other Receivables 9 9,755 9,065

Inventories 1,081 865

Prepayments 3,315 3,031

Assets Classified as Held For Sale 10 37,581 37,581

Total Current Assets 60,265 51,715

Non-current Assets

Trade and Other Receivables 9 9 12

Investments Accounted for using the Equity Method 11 162 922

Intangibles 12 1,009 1,197

Other Financial Assets 13 2,641 1,129

Property, Plant and Equipment 14 159,774 157,665

Total Non-current Assets 163,595 160,925

Total Assets 223,860 212,640

Liabilities

Current Liabilities

Trade and Other Payables 15 6,701 9,069

Fees in Advance 25,779 23,678

Borrowings 16 1,909 1,640

Provisions 17 1,609 1,135

Total Current Liabilities 35,998 35,522

Non-current Liabilities

Trade and Other Payables 15 200 466

Borrowings 16 – 886

Provisions 17 2,561 3,776

Total Non-current Liabilities 2,761 5,128

Total Liabilities 38,759 40,650

Net Assets 185,101 171,990

Equity

Retained Earnings 5 131,134 118,023

Reserves 6 53,967 53,967

Total Equity 185,101 171,990

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

Statement of Financial Position at 31 July 2015


Properties Investments revaluation revaluation Retained reserve reserve earnings Total $000 $000 $000 $000

Balance as at 1 August 2013 53,795 172 114,305 168,272

Profit for the year – – 3,437 3,437

Other comprehensive income for the year – – 281 281

Balance as at 31 July 2014 53,795 172 118,023 171,990

Profit for the year – – 10,683 10,683

Other comprehensive income for the year – – 2,428 2,428

Balance as at 31 July 2015 53,795 172 131,134 185,101

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Statement of Changes in Equity for the year ended 31 July 2015


2015 2014 Notes $000 $000

Cash Flows from Operating Activities:

Receipts from Thoroughbred Racing Industry Distributions 34,156 31,954

Receipts from Catering, Dining, Hospitality and Events 64,857 59,168

Receipts from Marketing, Sponsorship and Broadcast Rights 27,045 25,876

Receipts from Members’ Tickets and Subscriptions 19,610 20,051

Receipts from Public Ticketing 7,921 8,255

Receipts from Gaming 5,296 4,993

Receipts from Wagering and Other Racing Revenue 7,690 7,049

Receipts from Racecourse, Training Facilities and Other 5,946 8,002

Payments for Prizemoney and Other Returns to Owners (42,377) (41,080)

Payments for Catering, Dining, Hospitality and Events (44,468) (45,000)

Payments for Marketing, Sponsorship and Broadcast Rights (15,900) (13,277)

Payments for Members’ Services and Administration (30,958) (27,769)

Payments for Gaming (4,887) (4,845)

Payments for Racecourse, Training Facilities and Other (23,403) (20,507)

Interest Received 180 97

Interest and Other Costs of Finance Paid (141) (264)

Net Cash Provided by Operating Activities 20(c) 10,567 12,703

Cash Flows from Investing Activities:

Payments for Buildings and Infrastructure (132) (1,886)

Payments for Plant and Equipment (4,080) (4,283)

Payments for Construction Work in Progress (7,850) (5,959)

Payments for Intangibles (266) (266)

Proceeds from the Sale of Investments 8,973 –

Proceeds from the Sale of Property, Plant and Equipment 41 10

Distribution from Equity Accounted Investments 723 1,167

Net Cash Used in Investing Activities (2,591) (11,217)

Cash Flows from Financing Activities:

Proceeds from Borrowings 1,225 –

Repayment of Borrowings (1,841) (1,170)

Net Cash Used in Financing Activities (616) (1,170)

Net Increase in Cash and Cash Equivalents 7,360 316

Cash and Cash Equivalents at Beginning of the Financial Year 1,173 857

Cash and Cash Equivalents at End of the Financial Year 20(a) 8,533 1,173

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

Statement of Cash Flows for the year ended 31 July 2015


1. General informationThe Victoria Racing Club Limited’s principal place of business and registered office is 448 Epsom Road, Flemington 3031, tel (03) 8378 0888.

Victoria Racing Club Limited (‘the Club’) is a public company limited by guarantee, incorporated and operating in Australia.

2. Adoption of new and revised accounting standardsStandards affecting reported results and financial positionThere are no new and revised standards and interpretations adopted in these financial statements affecting the reporting results or financial position.

Standards affecting presentation and disclosureThere are no new and revised standards and interpretations adopted in these financial statements affecting presentation and disclosure.

Standards and interpretations adopted with no effect on financial statementsThe Club has adopted all new and revised standards and interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for the current annual reporting period.

There was no material impact on the financial statements on the application of new and revised accounting standards.

3. Significant accounting policiesStatement of complianceThese financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards – Reduced Disclosure Requirements as issued by the Australian Accounting Standards Board (AASB).

For the purposes of preparing the financial statements, the Club is a not-for-profit entity.

The financial statements were authorised for issue by the Directors on 23 October 2015.

Basis of preparationThe financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The Club 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 financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.

The Club has retained the presentation and classification of items in the financial statements from one period to the next unless:

(i) it is apparent, following a significant change in the nature of the entity’s operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria or the selection and application of accounting policies in AASB 108; or

(ii) an Australian Accounting Standard requires a change in presentation.

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

(a) Cash and cash equivalentsCash comprises cash on hand and term deposits. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition, where applicable. Bank overdrafts will be shown within borrowings in current liabilities in the Statement of Financial Position.

(b) InventoriesInventories are stated at the lower of cost and net realisable value. Costs are assigned to inventory on hand by the method most appropriate to each particular class of inventory, with the majority being valued on a first in first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

(c) Financial assetsOther financial assetsThe investments in ThoroughVisioN Pty Ltd and 3UZ Sport 927 held by the Club are classified as being available for sale financial assets and are stated at fair value per the Directors’ valuation. Gains and losses arising from changes in fair value are recognised directly in the investment revaluation reserve with the exception of impairment losses, which are recognised directly in the Statement of Profit or Loss and Other Comprehensive Income to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investment revaluation reserve would be included in the Statement of Profit or Loss and Other Comprehensive Income for the period.

Available for sale financial assets are carried at Directors’ valuation with independent valuations for available for sale assets prepared as and when the Directors see fit. The independent valuations are used to assist Directors in assessing the fair value of available for sale assets.

Loans and receivablesTrade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Loans and receivables are initially measured at fair value, net of transaction costs. Loans and receivables are subsequently measured at amortised cost using the effective interest method less impairment.

Investments in associatesSubsequent to initial recognition, investments in associates are accounted for under the equity method in the financial statements.

Jointly controlled entitiesInterests in jointly controlled entities in which the Club is a venturer (and so has joint control) are accounted for under the equity method.

Notes to and forming part of the Financial Statements of the Victoria Racing Club Limited for the year ended 31 July 2015


Notes to and forming part of the Financial Statements of the Victoria Racing Club Limited for the year ended 31 July 2015 continued

(d) Other financial liabilitiesOther financial liabilities, including trade and other payables and borrowings, are initially measured at fair value, net of transaction costs. Trade and other payables are recognised when the Club becomes obliged to make payments resulting from the purchase of goods and services.

(e) Property, plant and equipmentFreehold land is measured at fair value. Fair value is determined on the basis of an annual independent valuation prepared by external valuation experts based on an analysis of the size and position of the land, and of sales of land within close proximity over the last number of years. Fair values are recognised in the financial statements and are reviewed regularly by the Directors to ensure that the carrying values of freehold land are not materially different from their fair values.

Any revaluation increase arising from the revaluation of land is credited to the properties revaluation reserve. A decrease in carrying amount arising on the revaluation of land is charged as an expense in the Statement of Profit or Loss and Other Comprehensive Income to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset.

Plant and equipment and buildings are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on plant and equipment, including buildings and infrastructure, but excluding construction work in progress, and is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with the effect of any changes recognised on a prospective basis.

The following estimated useful lives are used in the calculation of depreciation:

• Buildings and infrastructure – 25 to 40 years

• Plant and equipment – 3 to 10 years.

(f) Leased assetsLeases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.

Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset.

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(g) Impairment of tangible and intangible assets excluding goodwillAt the end of each reporting period, the Club reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of an individual asset the Club estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using the pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit or Loss and Other Comprehensive Income, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised in Statement of Profit or Loss and Other Comprehensive Income immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation increase.

(h) Borrowing costsAll borrowing costs are recognised in the Statement of Profit or Loss and Other Comprehensive Income in the period in which they are incurred.

(i) ProvisionsProvisions are recognised when the Club has a present obligation (legal or constructive) as a result of a past event, it is probable that the Club will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, 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.

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

(j) Employee benefitsA liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.


Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long-term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Club in respect of services provided by employees up to reporting date.

Defined benefit plansFor defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest) is reflected immediately in the Statement of Financial Position with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

• net interest expense or income; and

• remeasurement.

The Club presents the first two components of defined benefit costs in profit or loss in the line item Members’ services and administration expenses. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognised in the Statement of Financial Position represents the actual deficit or surplus in the Club’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

(k) RevenueRevenue is measured at the fair value of the consideration received or receivable for sale of goods and services.

Sale of goods and servicesRevenue from the sale of goods and services is recognised when all of the following conditions are satisfied:

• The Club has transferred to the buyer the significant risks and rewards of ownership of the goods or service

• The Club retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold or service provided

• The amount of revenue can be measured reliably

• It is probable that the economic benefits associated with the transaction will flow to the Club

• The costs incurred or to be incurred in respect of the transaction can be measured reliably.

Interest revenueInterest revenue is recognised when it is earned.

(l) Goods and Services TaxRevenues, 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 that are recognised inclusive of GST.

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

Cash flows are included in the Statement of Cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, is classified within cash flows from operating activities.

(m) Intangible assetsIntangible assets acquired separately are carried at cost less accumulated amortisation and impairment. Amortisation is charged on a straight line basis over their estimated useful lives. The estimated useful life and amortisation method is reviewed at the end of each annual reporting period, with any changes in these accounting estimates being accounted for on a prospective basis.

(n) Government grantsGovernment grants are not recognised until there is a reasonable assurance that the Club will comply with the conditions attaching to them and that the grants will be received.

(o) Assets held for sale Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales for such an asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

4. Critical accounting judgements and key sources of estimation uncertaintyIn the application of the Club’s accounting policies, which are described in Note 3, management is required to make judgements, estimates and assumptions about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Management uses their judgement in selecting the most appropriate valuation technique in deriving fair value. For available for sale financial assets, as noted in Note 13, a combination of commonly used valuation techniques are applied.



5. Retained earnings 2015 2014 $000 $000

Balance at 1 August 118,023 114,305

Actuarial gain on defined benefit plan 2,428 281

Net profit 10,683 3,437

Balance at 31 July 131,134 118,023

6. Reserves 2015 2014 $000 $000

Investment revaluation 172 172

Properties revaluation 53,795 53,795

Balance at 31 July 53,967 53,967

Investment revaluation reserve

Balance at 1 August 172 172

Movement – –

Balance at 31 July 172 172

The investment revaluation reserve arises on the revaluation of available for sale financial assets. Where a revalued financial asset is sold, that portion of the reserve which relates to that financial asset is effectively realised and is recognised in the Statement of Profit or Loss and Other Comprehensive Income. Where a revalued financial asset is impaired, that portion of the reserve which relates to that financial asset is recognised in the Statement of Profit or Loss and Other Comprehensive Income.

Properties revaluation reserve

Balance at 1 August 53,795 53,795

Revaluation increments – –

Balance at 31 July 53,795 53,795

The properties revaluation reserve arises from the revaluation of land. Where revalued land is sold, that portion of the properties revaluation reserve which relates to that asset, and is effectively realised, is transferred directly to retained earnings.

7. Income taxThe Club is exempt from income tax under section 50–45SS9.1(a) of the Income Tax Assessment Act 1997 (as amended).


8. Finance cost 2015 2014 $000 $000

Interest on term overdraft 46 191

Interest on obligations under finance lease 55 95

Total 101 286

9. Trade and other receivables 2015 2014 $000 $000

Current

Trade receivables (i) 7,032 6,712

Other receivables 574 698

Industry Funding 581 624

Thoroughbred Racing Production (Vic) Pty Ltd 1,568 1,031

9,755 9,065

Non-current

3UZ Sport 927 9 12

Total 9,764 9,077

(i) The average credit period on sales of goods and services is 30 days. Penalty interest is charged on outstanding receivables where applicable.

10. Assets held for sale 2015 2014 $000 $000

Freehold land held for sale (i) 37,581 37,581

Total 37,581 37,581

(i) During the 2014 financial year, the Club entered a conditional agreement with Greenland (Australia) to sell parcels of freehold land surplus to the Club’s needs. The settlement of this contract is contingent upon the outcome of a planning process that is currently ongoing.



11. Investments accounted for using the equity method 2015 2014 $000 $000

Investments in associates 162 185

Investments in jointly controlled entities (i) – 737

162 922

Country of 2015 2014Name of entity Principal activity incorporation % %

Investments in associates

Australian Prices Network Distribution of betting price fluctuations Australia 16.7 16.7

Thoroughbred Racing Production (Vic) Pty Ltd Production of on course racing vision Australia 25.0 25.0

Jointly controlled entity

Australian Stud Book Maintenance of breeding register Australia – 50.0

Australian Genetics Testing Pty Ltd DNA screening of research animals Australia – 50.0

2015 2014 $000 $000

Summarised financial information of associates

Share of associates’ profit 657 501

Summarised financial information of jointly controlled entities

Share of jointly controlled entities profit (i) – 685

657 1,186

(i) In September 2014, the Club sold its asset holding in Australian Stud Book and its shares in Australian Genetics Testing Pty Ltd and had no further entitlement to sharing in the profits of those entities.


12. Other intangible assets 2015 2014 $000 $000

Cost 1,412 1,614

Accumulated amortisation (403) (417)

1,009 1,197

Gaming Water entitlements (i) Website rights (ii) Total $000 $000 $000 $000

Balance at 1 August 2013 1,333 281 180 1,794

Additions – – – –

Impairment – – – –

Disposals – – (180) (180)

Balance at 31 July 2014 1,333 281 – 1,614

Additions – 79 – 79


Disposals – (281) – (281)

Balance at 31 July 2015 1,333 79 – 1,412

Accumulated amortisation

Balance at 1 August 2013 128 86 163 377

Amortisation expense 133 70 17 220


Disposals – – (180) (180)

Balance at 31 July 2014 261 156 – 417

Amortisation expense 133 50 – 183


Disposals – (197) – (197)

Balance at 31 July 2015 394 9 – 403

(i) In August 2012, the Club’s Gaming venue commenced operation under a new gaming machine entitlement arrangement. The Club is entitled to operate 80 gaming machines over a 10-year period.

(ii) In 2009, the Club acquired the right for a period of five years to utilise additional annual quantities of potable water, this expired during 2014 financial year.



13. Other financial assets 2015 2014 $000 $000

Available for sale investments at fair value:

Non-current

ThoroughVisioN Pty Ltd (i) – –

3UZ Sport 927 (ii) 1,074 1,074

1,074 1,074

Investments carried at amortised cost:

Non-current

Bank term deposits 55 55

Superannuation assets:

Non-current

Defined benefit plan 1,512 –

Total 2,641 1,129

(i) At 31 July 2014, the Club assessed the fair value of its shareholding in ThoroughVisioN Pty Ltd (TVN) as $nil. TVN ceased broadcasting during the 2015 financial year, but the Club continues to hold a 12.5% (2014: 12.5%) shareholding in the company until such time that TVN becomes deregistered.

(ii) At 31 July 2015, the Club held a 14.23% (2014: 14.23%) shareholding in 3UZ Sport 927. Based on a combination of factors, which included market values of assets, licences held and analysis of direct and indirect benefits accruing to the racing industry as a result of ownership of the radio station, the Club has valued its 14.23% shareholding at $1.074 million (2014: $1.074 million).


14. Property, plant and equipment Freehold Work in Plant and Assets under land at progress Buildings and equipment finance fair value at cost infrastructure at cost lease Total $000 $000 $000 $000 $000 $000

Gross carrying amount

Balance at 1 August 2013 60,489 7,577 126,545 135,281 2,982 332,874

Additions – 5,959 795 4,689 – 11,443

Transfers – (3,985) 665 1,783 1,537 –

Transfer to held for sale (36,491) – – – – (36,491)

Net revaluation increments – – – – – –

Impairment – – – – – –

Disposals – – – (132) – (132)

Balance at 31 July 2014 23,998 9,551 128,005 141,621 4,519 307,694

Additions – 7,849 132 4,294 37 12,312

Transfers – (2,772) 635 2,137 – –

Transfer to held for sale – – – – – –

Net revaluation increments – – – – – –

Impairment – – – – – –

Disposals – (838) – (258) – (1,096)

Balance at 31 July 2015 23,998 13,790 128,772 147,794 4,556 318,910

Accumulated depreciation and impairment

Balance at 1 August 2013 – – 67,578 73,228 30 140,836

Depreciation expense – – 3,043 5,815 467 9,325

Disposals – – – (132) – (132)

Balance at 31 July 2014 – – 70,621 78,911 497 150,029

Depreciation expense – – 3,033 5,817 511 9,361

Disposals – – – (254) – (254)

Balance at 31 July 2015 – – 73,654 84,474 1,008 159,136

Net book value

As at 31 July 2014 23,998 9,551 57,384 62,710 4,022 157,665

As at 31 July 2015 23,998 13,790 55,118 63,320 3,548 159,774



15. Trade and other payables 2015 2014 $000 $000

Current

Trade payables (i) 1,779 2,666

Other payables 4,210 4,935

Payables for assets 445 1,201

Gaming Licence Payable 267 267

6,701 9,069

(i) The average credit period on purchases is 30 days. No interest is charged on trade payables.

Non-current

Gaming Licence Payable 200 466

Total 6,901 9,535

16. Borrowings 2015 2014 $000 $000

Unsecured – at amortised cost

Current

Finance lease liabilities (i) 958 1,640

Insurance premium funding 951 –

1,909 1,640

Non-current

Finance lease liabilities (i) – 886

Total 1,909 2,526

(i) Secured by assets leased.


17. Provisions 2015 2014 $000 $000

Current

Employee benefits 1,609 1,135

Non-current

Employee benefits 2,561 2,903

Defined benefit plan – 873

2,561 3,776

Total 4,170 4,911

The employee benefits expense for the year was $0.5 million (2014: $0.5 million). The expense has been included in the Statement of Profit or Loss and Other Comprehensive Income in expenditure for members’ services and administration.

18. LeasesFinance leasesLeasing arrangements relate to the purchase of technology equipment with lease terms of up to four years remaining. At the conclusion of the term and final payment, full ownership is transferred to the Club.

Minimum future Present value of minimum lease payments future lease payments

2015 2014 2015 2014Finance lease liabilities $000 $000 $000 $000

– not later than 1 year 958 1,640 958 1,640

– later than 1 year and not later than 5 years – 952 – 886

Included in the financial statements as: (Note 16)

– Current borrowings 958 1,640

– Non-current borrowings – 886

958 2,526

Operating leasesLeasing arrangements relate to the rental of computer equipment and motor vehicles with lease terms of between 3 to 5 years. On conclusion of the term, there are options to extend the lease or return the goods.

2015 2014 $000 $000

Non-cancellable operating lease commitments

No longer than 1 year 189 219

Longer than 1 year and not longer than 5 years 194 359

383 578



19. Defined benefit superannuation planA significant number of employees of the Club are members of the Victorian Racing Industry Superannuation Fund (the sub-plan) of AMP Signature Super. The sub-plan has a combination of defined benefit and accumulation membership. The following information relates to the defined benefit membership. The defined benefit segment of the sub-plan is closed to new members.

The defined benefit members are entitled to retirement benefits based on a multiple of their deemed final salary upon attainment of a retirement age of 60. No other post-retirement benefits are provided to these employees.

The defined benefit superannuation segment is a funded segment of the sub-plan. The net surplus determined in the sub-plan’s most recent financial report, for the year ended 31 July 2015, was $1.5 million (2014: deficit of $0.9 million).

The Club has a legal liability to make up a deficit in the defined benefit segment of the sub-plan, but no direct legal right to withdraw any surplus from the sub-plan.

2015 2014 % %

Key assumptions used for the purpose of the actuarial valuation were as follows (expressed as weighted averages):

Discount rate gross of tax 4.0 3.5

Expected return on plan assets 7.0 7.0

Expected rate of salary increase 3.5 4.5

Amounts recognised in profit or loss in respect of the defined benefit plan are as follows: 2015 2014 Notes $000 $000

Expense recognised in the Statement of Profit or Loss and Other Comprehensive Income 403 405

Actuarial gains incurred during the year (2,428) (281)

Cumulative actuarial (gains)/losses (1,792) 636

The amount included in the Statement of Financial Position arising from the Club’s obligations in respect of its defined benefit sub-plan is as follows:

Present value of defined benefit obligation at end of year 9,159 11,191

Fair value of plan assets at end of year (10,671) (10,318)

Net liability/(asset) arising from defined benefit 13, 17 (1,512) 873

Movements in the present value of the plan assets in the current period were as follows:

Opening fair value of plan assets 10,318 9,594

Employer contributions 361 529

Member contributions 91 31

Benefits paid (1,198) (604)

Other 1,099 768

Closing fair value of plan assets 10,671 10,318

The analysis of the plan assets and the expected rate of return at the Statement of Financial Position date are as follows:

Fair value of plan assets

2015 2014 $000 $000

Equity instruments 4,407 3,830

Debt instruments 4,386 4,514

Property 598 849

Other 1,280 1,125

Total 10,671 10,318


20. Notes to the statement of cash flows 2015 2014 $000 $000

(a) Reconciliation of cash and cash equivalents

Cash at Bank 8,533 1,173

8,533 1,173

(b) Financing facilities

Unsecured facility (i)

Amount used – –

Amount unused 8,000 22,000

8,000 22,000

(i) The unsecured facility limit reduces to $2.0 million on 1 August to 31 December.

Unsecured leasing facility

Amount used – –

Amount unused 1,300 1,300

1,300 1,300

(c) Reconciliation of profit for the year to net cash flows from operating activities

Profit for the year 10,683 3,437

Depreciation and amortisation expense 9,544 9,545

Share of profits in associated entities not received as dividends or distributions (657) (19)

Gain on disposal of investments (8,973) –

(Gain)/loss on disposal of fixed assets 47 (10)

Non-cash movements in defined benefit superannuation expense 2,384 405

Changes in operating assets and liabilities

Increase in trade and other receivables (971) (409)

Increase in inventories (216) (160)

Decrease in trade and other payables (2,634) (5)

Increase in fees in advance 2,101 269

Decrease in employee benefit provisions (741) (350)

Net operating cash flow 10,567 12,703



21. Auditor’s remuneration 2015 2014 $ $

Auditors of Victoria Racing Club Limited

– Audit of the financial report 119,000 117,200

– Other services 42,218 40,275

161,218 157,475

22. Key management personnel compensationThe key management personnel of the Club include the Chief Executive Officer, Chief Operating Officer, seven Executive General Managers (2014: seven) and members of the Board. During the year, the compensation of the key management personnel is set out below and includes remuneration and allowances, payments for accrued annual and long service leave and post employment benefits in the form of superannuation. Directors of the Board are not remunerated by the Club; however, they do receive certain reimbursements and travel allowances for costs incurred while fulfilling their role as a Director.

2015 2014 $ $

Compensation to Directors and other members of key management personnel of the Club 2,316,106 2,431,360


23. Capital commitmentsThe Club has capital commitments for capital expenditure on qualifying assets at 31 July 2015 of $0.8 million (2014: $1.8 million).

24. Related partiesThe following parties are considered to be related parties to the Club:

Members of the Board who held office in the year ended 31 July 2015 (as detailed on page 24 of this Report).

All members of the Board act in an honorary capacity and receive no remuneration for their services; however, they do receive certain reimbursements and compensation for costs incurred while fulfilling their role as a Director. Certain members of the Board participate in the Thoroughbred Racing Industry via means of ownership of racehorses. This involvement is on terms and conditions no more favourable than other participants in the Thoroughbred Racing Industry. Certain Directors are nominated by the Club to act as representatives in the thoroughbred industry, those Directors are remunerated in accordance with the relevant entities remuneration practices.

The Club paid Directors’ and Officers’ Liability Insurance on behalf of the Board and officers of the Club.

The Club indemnifies each officer of the Club against any liability that may be instituted against them or any of them in the exercise of their office or performance of their duties.

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

All other material transactions and balances with related parties have been disclosed in this Report.

25. Subsequent eventsThere have been no further matters or circumstances occurring subsequent to the end of the financial year that have significantly affected, or may significantly affect, the operations of the Club, the results of those operations or the state of affairs of the Club in future financial years.

Photographs are courtesy of Getty Images, Michael Dodge (Getty Images), Robert Cianflone (Getty Images), Mark Metcalfe (Getty Images), Cameron Spencer (Getty Images), Karon Photography, Andrew Craig Photography, and Bryce Dunkley.

Paper: this annual report is printed entirely on paper certified by the Forest Stewardship Council® (FSC) to be sourced from responsibly managed plantation forests. The cover, printed on Knight Smooth, is made without the use of harmful elemental chlorine, while the text, printed on HannoArt, is produced as a totally chlorine free paper and is manufactured under the world’s best practice ISO14001 Environmental Management System. 48 — VICTORIA RACING CLUB

The Directors declare that:

(a) In the Directors’ opinion, there are reasonable grounds to believe that the Club will be able to pay its debts as and when they become due and payable.

(b) In the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with Accounting Standards and giving a true and fair view of the financial position and performance of the Club.

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

On behalf of the Directors

Michael S Burn John B O’Rourke Director Director


Directors’ Declaration

Photographs are courtesy of Getty Images, Michael Dodge (Getty Images), Robert Cianflone (Getty Images), Mark Metcalfe (Getty Images), Cameron Spencer (Getty Images), Karon Photography, Andrew Craig Photography, and Bryce Dunkley.

Victoria Racing Club Limited (ACN 119 214 078) 448 Epsom Road, Flemington Victoria 3031

Telephone: 613 8378 0888, Facsimile: 613 8378 0661vrc.net.au

The VRC and Flemington logos are ™, Victoria Racing Club Limited

(ACN 119 214 078)

http://www.vrc.net.au

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