2012 Annual Report - Racing NSW

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2012 RACING NSW ABN 86 281 604 417
NOTE 2: CONSOLIDATED OPERATIONS
fees is detailed below:
Racing NSW - Administration includes the administrative functions of Racing
NSW in accordance with the Thoroughbred Racing Act 1996. Racing NSW
provides the independent integrity functions of the NSW Thoroughbred
Racing Industry including Licensing, Stewards, Veterinary and Laboratory. In
addition it provides the co-ordination of the NSW Thoroughbred Racing
Industry including race programming, stakes payments and industry training.
Also included are Racing Colours Registration, NSW Racing Magazine,
Syndicates, Leases and Transfers and the Racing NSW Insurance Fund separately.
The consolidated results encompass all divisions noted above.
NOTE 3: INCOME TAX
Racing NSW being a non-profit organisation established for the promotion of
thoroughbred racing is exempt from Income Tax pursuant to the provisions of
Section 50-45 of the Income Tax Assessment Act (1997), as amended.
NOTE 4: EVENTS SUBSEQUENT TO THE END OF THE
REPORTING PERIOD
There are no circumstances that have arisen since the end of the financial
year which will significantly affect the operations of the company, the results
of those operations or the state of affairs of the company in future financial
years.
NOTE 5: STATEMENT OF COMPREHENSIVE INCOME
(i) Sale of Goods - Publications represents income derived from the sale of
advertising space in the NSW Racing Magazine as well as subscriptions to
NSW Racing Magazine by industry participants and customers.
(ii) Sale of Services represents income derived from the sale of services to
the racing industry - including stewards, handicapping, laboratory, veterinary,
race results, syndicates and stakes payments.
(iii) Workers Compensation Fund Premiums and Revenues represents premiums,
charges, reinsurance recoveries and other revenues of the Racing
NSW Workers Compensation Fund other than those disclosed elsewhere in
the profit or loss. (Refer to Note 31).
(iv) First Charge represents a charge to the industry based on the budgeted
expenditure for the year.
(v) Race Fields fees pursuant to the Race Fields legislation, from 1
September, 2008, Racing NSW required all wagering operators to pay a uniform
fee of 1.5% of wagering turnover on New South Wales thoroughbred
races above $5 million ("exempt fee turnover"). The exempt fee threshold
was applied uniformly and wagering operators only become liable to pay a
fee when their wagering turnover exceeds $5 million annually.
The Race Fields fees throughout the period from 1 September, 2008 to 30
June, 2012 are detailed as follows:
1 September to
30 June 30 June 30 June 30 June
2009 2010 2011 2012 Total
$ $ $ $ $
Race Fields
fees 40,553,762 53,931,662 57,949,265 57,045,185 209,479,874
As a result of the ongoing litigation and the uncertainty this created in respect
of the validity of the Race Fields fees charged, the Race Fields fees for the
period from 1 September 2008 to 30 June, 2011 ($152,434,689) were treated
as a liability. As a result of the unanimous judgement in Racing NSW's favour
in the High Court on 30 March, 2012 there has been a change in accounting
estimate and as a result all Race Fields fees to the period ending 30 June,
2012 including prior periods were recognised in the current financial year.
In addition to the Race Fields fees charged during period from 1 September,
2008 to 30 June, 2012 Racing NSW also interest income earned on the
Race Fields fees detailed above. The interest income on the Race Fields
NOTES
1 September to
30 June 30 June 30 June 30 June
2009 2010 2011 2012 Total
$ $ $ $ $
Race Fields
Interest
Received 485,487 1,788,379 4,666,358 6,324,456 13,264,680
For the reasons detailed directly above regarding the recognition of Race
Fields fees, as a result of the High Court judgement on 30 March, 2012 the
Interest on the Race Fields fees including prior year periods will be recognised
in the current financial year period. Total Race Fields fees & interest
received is as follows:
1 September to
30 June 30 June 30 June 30 June
2009 2010 2011 2012 Total
$ $ $ $ $
Race Fields
fees and
Interest
Received 41,039,249 55,720,041 62,615,623 63,369,641 222,744,554
(vi) Appearance Fee Receipts represents a charge to the industry based on
expected starters, to fund a $200 per starter payment to the owners of all
horses not receiving prize money.
(vii) Interest represents investment earnings and interest income, excluding
movements in the value of managed funds and property.
2012 2011
$ $
Interest from Cash at Bank 785,118 951,760
Interest from Loans to Clubs 761,296 -
Interest from Cash on Deposit 6,558,068 1,530,704
8,104,482 2,482,464
(viii) Profit/(Loss) on Disposal of Assets represents net amounts received on
sale or trade in of assets, less the carrying value of these assets.
(ix) Conferences and industry functions includes all direct income and expenditure
associated with the hosting of these conferences and functions.
(x) Horse Rehabilitation includes staff, office costs, horse feed, veterinary
and horse welfare costs associated with the retraining and sale of thoroughbred
horses.
(xi) Board includes directors fees and office costs associated with the board
of Racing NSW. These costs were previously reported under Administration
and Executive.
(xii) Analytical includes staff, software and office costs associated with providing
specialised analytical information.
(xiii) Finance includes staff, software and office costs associated with providing
finance and accounting support.
(xiv) Administration and Executive represent the administrative costs of
Racing NSW including executive, property, human resources, appeals, consultants
as well as support to the Provincial Association and Racing NSW
Country.
(xv) Legal represents the cost of managing legal matters and litigation,
including staff costs and external representation. In 2012, an amount of
$3,500,000 was taken up in the accounts, representing the estimated fees to
be reimbursed in respect of the Race Fields case.
(xvi) Licensing expenditure represents staff and office costs associated with
the derivation of this income stream.
(xvii) Payments made to sustain minimum prizemoney and in respect of obligations
arising under various agreements - during the course of the Race Fields
litigation, Racing NSW distributed some of the Race Fields fees in order to sustain
the racing industry in New South Wales. Furthermore Racing NSW made
payments in respect of obligations arising under various agreements.
46