Hawke’s Bay Racing Annual Report · Presentation of the Annual Report and Accounts for the year ended 31 July 2013. 4. Appointment of Auditor. ... Dick Hunt Gary Philips Veterinary

www.hawkesbayracing.co.nz

Hawke’s Bay Racing Annual Report 2012 / 2013

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BUSINESS

1. Apologies.

2. Condolences.

3. Presentation of the Annual Report and Accounts for

the year ended 31 July 2013.

4. Appointment of Auditor.

5. Announcement of Board Appointments.

6. General Business.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Hawke’s Bay Racing Incorporated will be held in the Cheval Room, Hastings Racecourse on

Tuesday 3rd December 2013 at 7pm.

JP Fleming

CHIEF EXECUTIVE OFFICER

HAWKE’S BAY RACING INCORPORATED

HASTINGS RACECOURSE

HASTINGS

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JP Fleming

CHIEF EXECUTIVE OFFICER

HAWKE’S BAY RACING INCORPORATED

HASTINGS RACECOURSE

HASTINGS

HAWKE‘S BAY RACING INCORPORATED 2012-2013

DIRECTORS STEWARDS

AUDITORS Staples Rodway Hawke‘s Bay

SOLICITORS

BANKERS ANZ

CHIEF EXECUTIVE OFFICER Jason Fleming

Bate Hallett

RACING OFFICIALS

NZ Thoroughbred Racing

Handicapper Judge Starter

Dick Hunt Gary Philips

Veterinary Surgeons

Vet Associates Hastings

Assistant Judge

John Jenkins

Clerk of Sales

Paul Terry

Clerks of Course

Murray Thompson

Philip Thompson

Course Commentator

Mike O‘Sullivan

George Simon

Racing Operations Manager Kim Treweek (to June 2013)

Marketing & Events Manager Greg Howie

Accounts Department Mark Webby

Sue Treneman (to March 2013)

Executive Assistant Victoria Beale (to Dec 2012)

Alana Waters (from Dec 2012)

Racecourse Manager Richard Fenwick

Track Assistants

Peter Dickie

Craig BergeCaretaker

Chris King

M R Ormond (Chairman)

K J Browne

A J Lockyer (Co-opt)

E B Smyth

C A J Whyte

A B Cuming (resigned - 2012)

K L Wood

TGB Macphee

Dr P J Foley

TGR Lowry

M P White

P Shirnack

Mrs A Horrocks

Ms R Waller

H Chard

L F Drake

SCH Matthews

A J Wall

STAFF

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06. Chairman’s Review

09. Corporate Governance

11. Chief Executive Officer‘s Report

14. Sponsorship

16. Hawke’s Bay Racing and Breeding Awards

18. 2012 / 2013 Season Racing Review

25. Finance Review Statements

36. Members of HBRI

TABLEOF CONTENTS

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CHAIRMAN’S REVIEW After two relatively successful ye-ars, we‘ve run into a problem this year, and I‘m disappointed to re-port on behalf of the board a sub-stantial cash loss. Certainly the warning signals were there last year, as I reported at the time. Un-fortunately we have been unable to turn around the declines in our underlying performance in time to have a positive effect on the 2012/13 year.

The major savings on insurance that we had hoped to achieve have come into play late in the year, and we will get the full benefit of tho-se savings in this current year. Our raceday manager Kim Treweek re-signed his position at the end of last season, and has not, and will not be replaced. Obviously that puts pressure on other staff mem-bers, but I‘m pleased to report that they have coped admirably du-ring our busiest time of the year, the Spring Carnival. So those are two major savings in expenditure that will greatly assist us in getting back into the black this season. We also recognise that our financial management has not been sharp enough, and are taking steps right now to improve the reporting in this area.

During the year we farewelled a very long serving director Peter Roebuck. Peter was Chairman of Hawke‘s Bay Racing Inc for the 19 years since its incorporation, and the joining together of the various member clubs. It is an enormous contribution, often in trying cir-cumstances, and on your behalf I thank him sincerely for his time

and effort. He was presented with Life membership at a dinner held in his honour on the 1st of May.

The board has changed materi-ally since our last AGM when our numbers increased after the rule changes. We welcomed three new elected members – Tim Macphee, Tom Lowry Jnr, and Mike White. Unfortunately we accepted the resignation of Alistair Cuming in November. Alistair had made a si-gnificant contribution to the club in the short time he had been on the board, as both a decision ma-ker and a major sponsor. Alistair has that “can do” attitude so typi-cal of people headed to the top. He set an example to us all – just getting things done. Hopefully for the club‘s sake, he will be back. The board took the opportunity to co-opt Andrew Lockyer to fill the vacancy.

In April our long serving director Dr Peter Foley lost his battle with cancer, and we helped farewell him at a moving funeral service in Napier. Peter‘s influence was wide-ly felt in many spheres. He was an outstanding chief of the NZ Medi-cal Association, a ridiculously busy GP, a valuable appointment to any number of Govt. taskforces, a de-voted husband and father, and so-mehow found time for racing and definitely a punt which he loved. We‘ll miss both his wisdom and his foresight. He was a very special man.

In March the Hawke‘s Bay Hunt ap-pointed Davey Holden to replace Peter Roebuck as their represen-

tative on our board. The process wasn‘t done with a great deal of style, but we welcomed the ap-pointment nevertheless. So there have been a number of changes throughout the year. I believe we have an able board, but will be loo-king to co-opt someone from an accounting/finance background in the near future.

I‘m pleased to report we‘ve had a surge in new members in the last few months, and we particularly welcome them to the club. What I ask you as members to do is the same thing I ask board members to do. Please use your influence to ensure your like minded friends become members. It‘s not that dif-ficult, but it is really important for the wellbeing of the club.

Our aspiration to install a lift has unfortunately taken a backward step. Before applying for a con-sent we required a building as-sessment. Our enquiries made in that regard came up with very negative answers, and without doing the building assessment at considerable cost, we came to the conclusion after expert advice that our main stands would fail the 33% strength test due mainly to their age. In that light, to proceed with the lift project would open a can of worms which we decided not to do. A $50,000 grant from The Trusts Charitable Foundation was repaid, at this stage we are holding the small number of do-nations from generous members that wished to see the project pro-ceed, and will of course repay tho-se if requested to do so.

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I‘m disappointed to report that we have been unable to muster enough enthusiasm to begin a ra-cing club syndication of a couple of horses. Lester Drake particularly has done a fair bit of work, but in the end there has been virtually no positive responses from members wishing to participate. The project will not be forgotten however, and if we found the right horse I think we could restart the idea, as most of the groundwork has been done.

On the eve of the Spring Carnival opener - Makfi Stakes day, in con-junction with the HB branch of the NZTBA and the Owners Assn we held the Racing and Breeding Awards at an excellent dinner in the Cheval Room attended by 180 people. This was the first time the function had been held at the racecourse for many years, and although there were misgivings about the decision in certain quar-ters, the evening attracted una-nimously positive feedback. We introduced the NZ Racing Ambas-sador Kylie Bax – Poros during the evening, which was highlighted by the achievements of HB bred and part owned (It‘s a) Dundeel. Unfor-tunately Murray Andersen was in Melbourne to see the horse run in the Memsie Stakes, but the rest of the family together with Morisons and Craigs made it a memorab-le evening. Of course there were other highlights, one of which was the presentation to Don Gordon of the Horlicks Salver for outstan-ding contribution to HB racing and breeding over many years. We celebrated with Don the achie-vements of his promising young horse Survived being the first 3 yr old winner of the HB Cup for many years, who then came out and won

the Makfi Stakes very impressively the following day.

We caught a bit of criticism from some northern trainers after Mak-fi Stakes day due to the extremely heavy condition of the track. It was the wettest track many can remem-ber at Hawke‘s Bay. The criticism was about us racing on the track so close to the Spring Carnival. While the board agrees that it‘s not ideal, and have been urging NZTR to shift the early August Thursday to another track, that wasn‘t the cause of the track being so heavy this year. We were just caught with a lot of rain at the wrong time, and no wind to dry it. The meeting was actually held on fresh ground that hadn‘t been raced on for some time. We do however have a pro-blem with no real window in which to do any major maintenance of the track. There‘s no doubt in my mind that our drainage is not what it used to be, and some work will need to be done in the near future.

Our big day of the new season, Turks Spring Classic day was an excellent day for Hawke‘s Bay Ra-cing. We‘ve had bigger crowds, but not a better behaved one. The difficult element has been discou-raged, it would seem successfully. The Police were extremely happy with crowd behaviour, and patrons I think had a very enjoyable day at the races. Raceday security is a major cost for this day, but with better controls and behaviour this is a cost that may well lessen in fu-ture. The Fashion in the Field was very well set up and successful, the Punter of the Year was well atten-ded and at last profitable for the club – perhaps we are finally onto a winning recipe. There was cer-tainly a very good feel about the

day, which was a huge relief to us, as we‘ve had some average results here over the last few years.

In July Mayor Lawrence Yule (along with HB A&P Society, HB Racing, HB Polo and Hastings Rugby and Sports, and Drillers Poultry Farm) announced his intention for a Council funded feasibility study into the possibility of shifting the racecourse to the Showgrounds. I can‘t speak for the Mayor, but I know he is as concerned as the A&P and HB Racing are, that we cannot continue in the way we have for the last 20 years. It‘s not sustainable in the long term. Both organisations have survived the last decade or so with asset sales, and there is nothing obvious to say circumstances will change in a hurry unless we do things very differently. To utilise one facility more fully, with greatly reduced overheads sounds an obvious idea to explore.........a win/win situation if it can be achieved, and of course that‘s the $20 million question! What‘s our land worth, what will it cost to put in a 20 metre wide StrathAyr turf track at the Show-grounds and build some sort of ad-ministration/grandstand building? And a training facility? A consul-tant will be appointed early No-vember to complete the first part of the study. This will not include the valuation/possible sale of our land, so we‘ll will have to investiga-te that ourselves to give us a better than ballpark value.

Personally I don‘t think there is enough area at the Showgrounds to install both a racetrack and the required training facilities, without ruining the existing grounds. How-ever, if we were able to purchase land nearby on which to develop

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a training facility, perhaps with sta-bles/barns situated in the middle of that track, it most certainly is physically possible. The Mayor has already talked of closing Elwood Road which would allow a race-course to straddle both properties (essential) and there is so much goodwill between the parties that this idea may not just be pie in the sky stuff. A project like this I reali-se needs a lot more than goodwill and vision...it needs funding. That could well be the tricky bit, but the Govt does have a Regional Deve-lopment Fund that helped redeve-lop the Hawke‘s Bay Opera House and there are other avenues of funding that are outside of racing that could help with a project of this scale.

The Mayor is a critical part of the project. His leadership and his vi-sion for Hawke‘s Bay are exciting. He won’t be there forever, so we‘d better get cracking, and find out if this thing can fly. The boards of both main organisations have had overwhelmingly positive feedback from the memberships. Personally I‘ve only received a couple of anti-letters and angry objectors, and I‘m sure that goes with the terri-tory. Everyone is entitled to their view. Let‘s just get more informa-

tion out so that we can all make a better informed decision on the future. That‘s what we‘re aiming to do. The board is cognisant of the fact we mustn‘t be distracted from the running of HB Racing Inc. Another result like we have just re-ported will not be acceptable. At the end of the day we expect to be accountable to members, and I can assure you we will work hard to en-sure HB Racing performs better in the future.

My thanks to all who have helped in the running of the club during the year especially Jason Fleming and his team in the office of Ala-na, Greg, Mark and Kim. Also Chris King who is everywhere as careta-ker/Mr Fixit, and to Richard Fenwick and his team of Peter and Craig on the track. There are a number of other casual staff members and helpers that contribute to the running of the club especially on busy days, and I thank you all. That includes our ever reliable flower brigade. We have had during the year a number of honorary track staff.....those trainers, board mem-bers, raceday stewards and other members who have lent a hand (or more particularly, a foot !) to help with the time consuming chore of putting the track back after a race-

meeting. Great to see the trainers helping out here, it‘s a really good example of all working together to help the club. Special thanks also to two particularly hard working raceday stewards – Peter Shirnack for being our chief in the Winners Circle (and donning gumboots to work on the track as well) and also Lester Drake who runs a very effici-ent ship as Birdcage steward on racedays. I would encourage any member to give us a hand at put-ting the track back after racing. It‘s not a difficult job, but it does take time, and many hands really do make light work. It‘s good exercise in the fresh air, if you can put up with the incessant banter from one or two of the regulars. We‘ve even had a gang of PD workers help – we‘re not in a position to turn away free labour! So please, encourage your friends, it‘s work that can be done to varying degrees by anyo-ne between about 12 and 80, with at least one leg, so that‘s most of us.Particular thanks to my fellow board members for their time and the effort they put in to the affairs of the club. I know how substanti-al the input is as it‘s not just about governance. I‘ve tried to get some-what of a hybrid between a board and a committee in play – which means mucking in to help where-ver needed. Hopefully that engen-ders a bit of team spirit, and the power of team is huge.

Best of luck for the racing season ahead, and as always I welcome any feedback, critical or otherwise.

Mick Ormond - Chairman

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Hawke’s Bay Racing is an incorporated society. The club is governed by the Rules and Regulations adopted by the members (last updated Special General Meeting July 2012 – see www.hawkesbayracing.co.nz for the electronic version).

The Board of the society is responsible for the gover-nance of the Club. Governance is a matter of high importance and is a fundamental foundation of the culture and business practices of Hawke’s Bay Racing Incorporated (“HBRI”).

A description of the main corporate governance practi-ces are set out below, all practices described, unless otherwise stated, were in place for the entire season.

BOARD COMPOSITION & TERM OF OFFICE

The Board consists of the Chairman and nine directors (increased to twelve at the SGM dated July 19 2012). Each Board Director (elected) must retire tri-annually and may then seek re-election. The Chairman is elected annually.

It is the Board’s and indeed rules intention that Direc-tors reflect a broad range of skills to aid it in carrying out its responsibilities and in meeting the Club’s strategic objectives. Three positions are able to be co-opted with emphasis on recruiting Directors with skills that compli-ment the structure of the group.

The Board meets on a monthly basis and on separate occasions if required to discuss issues and provide di-rection to management for the operations of HBRI. The Board is responsible for;

Ensuring management focus on and plan to meet the goals and objectives of HBRI.

Contributing to the development and approving the strategic direction of HBRI.

Setting budgets and reviewing financial results.

Approving strategic capital expenditure and stake levels.

Monitoring and reviewing the risk management process of HBRI.

Performance assessment of the Chief Executive Officer.

SUBCOMMITTEES

The Board, where applicable, establish subcommit-tees to assist in carrying out its central functions. These subcommittees will meet as required and will act in an advisory capacity making recommendations to the full Board. Subcommittees may by invite include Racing Stewards as appropriate. The subcommittees for the 2012/13 season were as follows;

Audit and Finance – Tim Macphee (Chairman), Andrew Lockyer and Kevin Wood.

Racing and Track – Barry Smyth (Chairman), Ken Browne, David Holden, Tom Lowry and Lester Drake.

Marketing and Sponsorship – Charles Whyte (Chairman), Mick Ormond, Alistair Cuming, Mike White, Tom Lowry and Dr Peter Foley.

Chairman Ex-officio across all subcommittees.

CORPORATE GOVERNANCE

BOARD RESPONSIBILITY

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CHAIRMAN AND CHIEF EXECUTIVE OFFICER

The Chairman is responsible for leading the Board, ensuring at all times that the Board activities are recorded and efficiently conducted.

The Chief Executive is responsible for identifying and implementing strategies for HBRI as well as recom-mending policies for adoption by the Board to meet the goals and objectives of HBRI. The Chief Executive is further responsible for the Club’s operations, to deliver an effective and efficiently maintained business at all times.

FINANCIAL REPORTING

The Chairman, Chief Executive and Finance Sub-com-mittee Chairman have made the following representa-tions to the Board;

That the Club’s Financial Statements are complete and present fairly in all material respects of the financial position and operational results; and

That the above statement is founded on a sound system of internal controls, risk management assessment and that these are operating efficiently and effectively.

CONFLICTS OF INTEREST

Board Members are expected to avoid any action, posi-tion or interest that conflicts with any interest of HBRI or gives any appearance of such a conflict. A Board Mem-ber that has a conflict or perceived conflict of interest with that of the Club must bring it to the notice of other Board Members.

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CHIEF EXECUTIVE’S REPORT It is disappointing to present an annual result which differs so greatly from the previous year.

This result is not borne from lack of effort or any single catastrophe. Simply stating it - we have had a year where some positive impacts have not per-petuated and our reliance on significant funding streams continues to cause sustainability issues.

We have assessed with diligence the year that was. There have been and will continue to be frank assessment of every component of the business. Change is necessary and it forms an integral part of our strategic planning.

Expansive cost controls have been adopted for the upcoming season and it is fair to say, even with these significant changes that relate to human resources, stakes, promotion and operational expenses, there will need to be some corresponding uplift in income if we are to “right the ship”.

In this regard we have established a solid base for the delivery of a relevant consumer product and with continued growth and reach we should expect the yields on our entertainment offering to increase.

We are still ultra dependant on deriving additional income from the remainder of our assets and periods when racing is taking a break. There is still much to do in this regard.

The initiation of a robust study into the future and how a consolidated venue might serve racing and other com-plimentary pursuits is a timely one. The feasibility study (which commences in November 2013) will undoubtedly unlock exciting propositions for a revitalised racing sector in the province.

In the meantime racing at the current site must be championed and the 2013-14 season has delivered this from an equine, social and fiscal perspective.

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Number of racedays

Number of races

Number of horses started

Average starters per race

Hawke‘s Bay total season stake

Average stakes per race

On course turnover

Off course turnover

Fixed odds turnover

Members

15

138

1472

10.67

3,019,750

21,882

3,007,200

21,486,161

520

15

146

1454

9.96

3,110,125

21,302

2,962,006

21,167,852

516

16

150

1572

10.48

3,595,350

23,969

3,268,736

22,082,560

574

18

162

1697

10.48

5,025,760

31,023

3,502,060

23,747,172

494

15

147

1656

11.27

4,862,500

33,078

3,297,306

22,052,395

507

2004 / 2005 2005 / 2006 2006 / 2007 2007 / 2008 2008 / 2009

Number of racedays

Number of races

Number of horses started

Average starters per race

Hawke‘s Bay total season stake

Average stakes per race

On course turnover

Off course turnover

Fixed odds turnover

Members

13

126

1355

10.75

3,535,000

28,056

2,883,338

18,839,536

3,019,206

506

12

110

1198

10.90

2,413,375

21,940

2,253,619

15,670,770

2,770,280

537

14

114

1219

10.69

2,623,500

23,013

1,816,784

13,659,626

2,415,060

505

15

127

1334

10.50

2,758,800

21,723

1,979,038

15,089,608

4,318,987

528

7%

11%

10%

-2%

6%

-6%

7%

9%

60%

4.5%

2009 / 2010 2010 / 2011 2011 / 2012 2012 v 20132012 / 2013% Change

THE YEAR THAT WAS...

With an extra raceday held in 2012/13, net returns to owners increased by 6%, with total stakes of $2.7m paid across 127 races. Total betting revenue generated by races held at Hastings, across all three avenues, was $21,387,633, a 20% year on year increase.

2012/13 averages for each runner were up 9.2% to $16,032 per runner.

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FINALLY THANKYOU...

I would like to thank and pay tribute to a vast number of individuals who make racing such a success here in Hastings. There are countless staff and volunteers who all contribute to making a raceday a successful one. I would like to offer thanks to you all to ensuring the core values of Hawke’s Bay racing are maintained. All of your efforts underwrite significant achievements and outcomes – thank you.

To Chairman Mick Ormond and the board of Hawke’s Bay Racing thank you for your continued commitment to defi-ning the strategy and direction of our club. The hours spent on matters relating to the club are significant and your efforts are greatly appreciated.

To our Raceday Stewards thank also for your efforts across a variety of tasks. Unquestionably many of the tasks are thankless, however necessary to ensure our racedays are a success. To Rita Best, Jean Mulcaster, Sue Speedy, Shirley Wall and helpers our sincere thanks for the immaculate presentation of floral arrangements for our larger racedays.

To our members, I thank you for your continued support. Also to our trainers and owners that use the Hastings base thank you for a sensational year. There has been a raft of great performances from horses trained, owned and bred in Hawke’s Bay. A summary of these are included later in this report within the victors of the Racing and Breeding Awards.

Hawke’s Bay Racing is fortunate to be supported by the Hastings District Council. Our thanks go to the Mayor Law-rence Yule and CEO Ross McLeod for their assistance in ensuring Hastings has a facility that the district can be proud of. I look forward to working with you on strategic goals now and for the future.

To those great athletes, from the champion group performers to the humble backmarkers in the maiden races, thank you. The legacy of over 150 years of racing in the Hawke’s Bay owes a great deal more than words to you.

Deserved thanks and recognition must go to staff - Greg Howie, Alana Waters, Chris King, Richard Fenwick, Peter Di-ckie, Craig Berge and Cristy Stafford for their commitment and hard work. The hours required to put on the show are significant and sometimes crazy. There is no way we could do it without the team work ethic that exists.

Finally to my family, Anna, Frederick and Georgina thank you for supporting me to follow my passion and dreams. Racing is a truly great industry to be a part of.

With regards and best wishes to all for the 2013-2014 Racing Season

JP Fleming

Chief Executive OfficerHawke’s Bay Racing Incorporated

To perpetuate the success of Hawke’s Bay Racing as a valued and respected leader in thoroughbred racing,

entertainment and hospitality in Australasia.

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Hawke’s Bay Racing is grateful for the continued support of a vast set of sponsors. The success of these partner-ships that exist are borne from the enthusiasm, initiative and generosity exhibited by all our sponsors.

It is through these partnerships – financial and relation-ship based – that we will ensure the club’s survival. There are numerous industry related partners, whilst the conti-nued local support typifies the sense of community and placement of racing within the social and economic fab-ric of the local economy.

I would like to thank the following key sponsors whose support has been instrumental to the delivery of racing in Hastings this past season.

Firstly to Jim Bruford of New Zealand Bloodstock Insu-rance, your support of the Group I Spring Classic in Oc-tober 2012 has ensured that this iconic race maintains its iconic stature in the racing calendar.

To Westbury Stud and Sheikh Fahad Al Thani thank you for your support of the Group I Makfi Challenge Stakes, a race which opens the season in New Zealand and sets the scene for further Spring riches.

We are also grateful for the support of Nelson, Sue and Rodney Schick, Steve Till and Mike Moran of Windsor Park Stud for their support of the Group I Windsor Park Plate. Thanks also to local Breeders for their commitment to our fillies classic, the Group III Gold Trail Stakes held in association with Windsor Park.

DHL have backed racing in Hawke’s Bay for a number of years and the support of Managing Director Brian Broom in sponsoring the Group II Hawke’s Bay Guineas is a part-nership which will ensure this great three year old race grows in stature.

To Alistair and Kim Cuming, thanks are extended for your support of the Group III TradeRacks Stakes, a race that has grown in prestige and makes a large part of our gre-atest racing spectacle.

The 2013 running of the Group III Hawke’s Bay Gold Cup saw naming rights for the race drawn from a wide group of local sponsors. We are thankful to all the sponsors and

especially Marcus and Lynette Pohio of McDonalds with whom naming rights for the race were associated.

I would also like to acknowledge the support of the sponsors of our winter features, the Hawke’s Bay Steeples and Hawke’s Bay Hurdles. To Livamol I extend our most gracious thanks for your involvement with the Hawke’s Bay Steeples. Further thanks to Hamish and Wynne de Lautour for the commitment you made in sponsoring the Hawke’s Bay Hurdles in 2013.

The support of the Infinity Foundation has enabled many projects improving our facilities to be funded, our thanks to the Trustees for their generous support of racing at the grassroots level. Further thanks are given to Endeavour Foundation who have contributed to our business to un-derwrite necessary works and projects.

I would like to personally thank all our sponsors who have backed Hawke’s Bay Racing and been on board for the past season. I look forward to strengthening these relationships as we continue to build the business over the coming seasons.

JP Fleming

REVIEW OF ACTIVITES – SPONSORSHIP

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Agroforum Comcat

AON

Animal Health Direct Ltd

Amcor Kiwi Packaging

Awesum Organics

Bate Hallet Lawyers

Bay Ford Hastings

BBI

Bedpost Hastings

Best Travel Hastings

Bluewater Hotel

Bruce Perry Bloodstock

Chouxmaani Investments Ltd

D M Palmer Ltd

David and Jenny Morison

de Gruchy, G & D

DHL Global Forwarding

Dow Agro-Science

Dunstan Feeds

Edwards and Hardy Wellington

Elbow Room Sports Bar

Endeavour Foundation

Fairview Livestock

Farmers Transport

Farmlands

Fruitfed Supplies

Game Lodge

Gary Sherratt

Grieve Ivan

Hales, Peter & Margaret

Hastings District Council

Hastings RSA

Hawkes Bay European Ltd

HB Hunt

HB Breeders Assn

SPONSORS HB Racehorse Owners Assn

HB Master Plumbers

Hunt & Seek Limited

I See Red Syndicate

Infinity Foundation

J M Bostock Ltd

Jackson‘s Bakery & Cafe

Jenny Nilsson House of Travel

John & Barbara Holt

John Bary Racing Stables

John Duncan

John & Lou Scoular

Ken Browne

Kolla

L I Redshaw Ltd

Lawrence, KJ

Leader Products

Lime Country Thoroughbreds

Lion Breweries

Lion Foundation

Liquor King Napier

Little Avondale Stud

Lowry, TG

Lowry, P

Lynn Electrical

Mainstream Heating & Ventilation

Majestic Horse Transport HB

Manawatu Sound Service

McDonalds Hastings

Mediaworks Radio HB

Mossman, David

Nelson, Paul and Carol

NZCT

New Zealand Bloodstock

New Zealand Bloodstock Insurance

New Zealand Racing Board

NZ Thoroughbred Racing

Ormond, Mick

PGG Wrightson

Phillips, DJ

Profruit NZ

Prout Products

Racing Safety Fund

Redwood

Roger Russell

Rush Munro

Russell Roads

Sam Nelson

Staples Rodway HB

Storty Bar

Taradale Club

TAB

Te Whangai Romney

Ted the Painter Ltd

Thomas-Lang, G&J

Thomson‘s Suits Ltd

Total World Fresh

Trinity Hill Winery

TradeRacks

TruTest

Tumu ITM

Turks Bar

Veterinary Assoc Hastings

Waikato Stud

Waimea Nurseries

Wairoa Livestock Brokers

WASP NZ Ltd

Wendy Twist

Westbury Stud

Whyte C & A

Wood K & S

Windsor Park Stud Ltd

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2012-2013 HAWKE’S BAY & POVERTY BAY RACING AND BREEDING AWARDS

Each year the leading performer in their particular field is recognised at the Hawke’s Bay /Poverty Bay racing and breeding awards. Long term sponsors Bate Hallett and Vet Associates were once again the lead sponsors of the award night. We also welcomed back as sponsors of awards Westbury Stud and Richard and Elizabeth Wood.

This year’s awards evening made a welcome return to the Cheval Room. A full house was in attendance, showing the popularity of the event and making special guests Kylie Bax-Poros and Spiros Poros feel at home in the glitz and glamour. Andre Neil as MC provided humour and laughs, many at his own expense. Undoubtedly the year’s calibre of achievements to acknowledge was a vintage one.

Hawke’s Bay/Poverty Bay Trainer of the Year (Wins) - Awarded to the trainer utilising the Gisborne, Hastings, Waipukurau or Wairoa training facilities who attained the most wins in the 2012/2013 Racing Season. Winner – John Bary

Hawke’s Bay/Poverty Bay Trainer of the Year (Strike Rate) - Awarded to the trainer utilising the Gisborne, Hastings, Wairoa or Waipukurau training facilities who attained the best strike rate in the 2012/2013 Racing Season, with twenty starters being the minimum qualifying amount.Winner - John Bary

CRITERIA & WINNERS WERE AS FOLLOWS -

Hawke’s Bay/Poverty Bay Owned Horse of the Year - Awarded to the owners of the horse owned in the Hawke’s Bay or Poverty Bay districts based on their per-formances in black type races. This award is judged by representatives of Hawke’s Bay Racing, the Hawke’s Bay Racehorse Owners Association and the Hawke’s Bay/Poverty Bay Branch of the NZ Thoroughbred Breeders Association.Winner – Dundeel

Hawke’s Bay/Poverty Bay Trained Horse of the Year - Awarded to the owners of the horse trained at the Gisborne, Hastings, Waipukurau or Wairoa training facilities who has won the most takemoney in the 2012/2013 Racing Season.Winner – Recite

Hawke’s Bay/Poverty Bay Owner of the Year - Awarded to the leading owner or partnership residing in the Hawke’s Bay or Poverty Bay districts based on their horses trained at the Gisborne, Hastings, Waipu-kurau or Wairoa training facilities in the 2012/2013 Racing Season. Winner – Don Gordon

Hawke’s Bay/Poverty Bay Broodmare of the Year - The mare owned in the Hawke’s Bay or Poverty Bay districts whose progeny has recorded the most success at black type level. Judged by the Keeper of the Stud Book.Winner – Stareel, Dam of Dundeel, bred by Murray & Joanne Andersen

Hawke’s Bay/Poverty Bay Breeder of the Year Award - Awarded to the Hawke’s Bay or Poverty Bay based breeder who recorded the most points based on the performances of horses they have bred in the 2012/2013 Racing Season. Winner – Sue Harty

Horlicks Salver- Awarded in recognition of an outstanding contributi-on to thoroughbred racing in Hawke’s Bay.Winner – Don Gordon

17

- Awarded to the Hawke’s Bay and Poverty Bay based breeders of horses that have won black type races in the 2012/13 season;Winners –Dundeel – bred by Murray and Joanne AndersenSurvived – bred by Don GordonFleur de Lune – bred by John and Colleen Duncan Sea King – bred by Sue Harty Ambitious Dragon – bred by Pat and Jane LowryFiumicino – bred by Graham de Gruchy Tremec - bred by Graham de Gruchy

Group and listed awardsJimmy Choux 3YO of the Year - Highest earning 3YO bred by a HB Breeder in the 2012-2013 SeasonWinner – Dundeel

18

2012-2013 SEASON RACING REVIEW

A lot can happen in a year of racing. Take Ocean Park, a dead heat for first at Makaraka and within 365 days the winner of the WS Cox Plate – the fourth consecutive Group One of his four year old season. The first of his “quadrella” was a definitive lead to his brilliance as he muscled for position on the home turn, patiently waited for a rails run then explo-ded in the last 200m to win going away. The Underwood Stakes, Caulfield Stakes and then Cox Plate completed his meteoric rise and by season end via Dubai his next career at Waikato Stud was negotiated.

Group 1 Makfi Challenge Stakes WFA 1400m

1st Ocean Park 2nd Xanadu3rd Justanexcuse

Owners - G Hennessey, A Wong and S YanTrainer - G HennesseyJockey - L AllpressBreeding - (h) Thorn Park x Sayyida (2008)Breeder - Trelawney Thoroughbred LtdTime - 1.23.79 Dead 6

In a competitive opening leg of the NZ Bloodstock Filly of the Year series the colours of the Vela brothers reigned su-preme. Pure Elegance, a blue blood who can count among her close relations champions such as Ethereal, Burgundy and Darci Brahma, brought a strong reputation to the Hastings track and she duly delivered against this measure. Downing the top filly on the 2011-12 NZ 2YO Free handicap proved to this fillies greatest achievement before an untimely death.

Group III Hawke’s Bay Breeders Gold Trail Stakes 3YOF SW 1200m

1st Pure Elegance2nd Rollout the Carpet3rd Waterford

Owners - PJ Vela ONZM & PM VelaTrainer - S Ramsay and J RitchieJockey - J WaddellBreeding - (f) Redoute’s Choice x Our Echezeaux (2009)Breeder - PJ & PM Vela LtdTime - 1.10.30 Good 3

19

Mufhasa guaranteed his place amongst the greats of NZ Racing when he took his Group One tally to 10 with a scintil-lating victory in the Windsor Park Plate. The eight year old’s performance was as brave as any of his 18 career wins, with hoop Sam Spratt dominating from the “get-go” and he was never headed. In a modern day context only Sunline (13) and Rough Habit (11) rate ahead with wins at the elite level. Co-owner David Wright, as ebullient as ever, described his pride and joy simply as “a wonder horse” and that is as definitive as one need be.

Group I Windsor Park Plate GI WFA 1600m

1st Mufhasa2nd Fleur de Lune3rd Xanadu

Owners - DL, SC, NN Archer and Mrs DJ WrightTrainer - S SprattJockey - S McKeeBreeding - (g) Pentire x Sheila Cheval (2004)Breeder - CCE & JW ThompsonTime - 1.34.88 Good 3

Sacred Falls was sent out a hot favourite on the back of three undefeated career starts. Leith Innes and the horse sent most punters into cardiac arrest when he blundered the start and tailed the field by 5 lengths. However the race is not always won at the start. As the race developed the colt recovered the field and at the 300m marker Leith Innes gave him one on the neck and the response was scintillating as he put paid to the field in a few giant strides. Subsequent wins in the Group III Sarten Memorial and Group I 2000 Guineas were accentuated by an autumn victory against all ages in the Group I Doncaster Handicap at Royal Randwick where he defeated Pierro.

Group II DHL Global HB Guineas 3YO SW 1400m

1st Sacred Falls 2nd Southern Lord3rd Silverdale

Owner - Raffles Dancer (NZ) Pty Ltd Trainer - T Pike & M DonoghueJockey - L InnesBreeding - (c) O’Reilly x Iguazu’s Girl (2009)Breeder - Waikato Stud (2001) LtdTime - 1.22.13 Good 3

20

Considered by the market to be a moderate chance this marvellous Taranaki mare had performed with some merit leading into the race. Whilst not podium placing, her final 600m of the Windsor Park Plate was the fastest of the day and led to stable confidence (not normally lacking mind you). The previous winner of three group one events, all over distance, she added a fourth to her remarkable breeding page. In scenes reminiscent of Princess Coup’s course victories she thundered down the extreme and pipped all before her in the last strides. The group of owners all of whom have had long time racing interests were given an amazing jour-ney with the mare who retired with 24 cheques from 30 starts and $1.4million in the pocket.

Group I NZ Bloodstock Insurance Spring Classic WFA 2040m

1st Shez Sinsational 2nd Guiseppina3rd He’s Remarkable

Owners - AA Baeyertz, JP Goodin, GA MacDonald, GH Phillips & RW SharrockTrainer - SA Sharrock Jockey - OP BossonBreeding - (m) Ekraar x Original Sin (2007)Breeder - Karaka Group Ltd Time - 2.04.89 Good 3

Fritzy Boy obviously enjoys the road trip from the Wairarapa to the Hawke’s Bay as this race remarkably was his 19th at Hawke’s Bay and 6th consecutive spring racing carnival. Across those carnivals he has competed at the highest level – firstly he was runner up to Alamosa in the Hawke’s Bay Guineas in 2007 and over the years he won the Mudgway Partsworld Stakes at Group I level as well as numerous other group placings. In 2012 however it was his day, with a fast pace set it complimented his race running style and he sat in behind the early pace. As they belted down the home straight he and another Wairarapa export Aspinal battled head to head with the top weight using his street fighting skills to prevail by a short head.

Group III Trade Racks Stakes OPN HCP 1400m

1st Fritzy Boy2nd Aspinal3rd Antonio Lombardo

Owners - JM Jury & AR MacGregorTrainer - AR MacGregorJockey - H TinsleyBreeding - (g) Brilliance x Fritzy Girl (2004)Breeder - JM JuryTime - 1.20.65 Good 3

21

The fourth running of the Lowland Stakes at Hastings attracted a field of attractive fillies all of whom were chasing important black type status for their page. Of the field there were three daughters of champion stallion O’Reilly who eventually trifected the race.

Gary Chittick’s chuckle of happiness could be heard at the course some 400km from his base as his stallion marked the penultimate leg of the NZ Bloodstock Filly of the Year series in the most convincing fashion. Speaking of which the winner, who master trainer Kevin Gray nurtured through her classic season, was a classy individual whose domination of the fillies this day identified her as the favourite for the NZ Oaks a fortnight later.

Group III Bruce Perry Bloodstock Lowland Stakes 3YOF 2100m 1st High Fashion 2nd Chandelier3rd Emerald Queen

Owner - HM & PM ForbesTrainer - K GrayJockey - H TinsleyBreeding - (f) O’Reilly x Pin High (2009)Breeder - GJ ChittickTime - 2.10.31 Dead 4

Lucky to even be alive this son of Zed was named after his good fortune to see out a first birthday. Local breeding identity Don Gordon has had a couple between his last star Munlee and the next – though the wait was well worth it. Optimism was high in the camp as three year olds seldom line up in the Hawke’s Bay Cup. Survived joined Fury’s Order, Bunvaro, Speed and John Bary’s great grandfathers gelding Eligible as winners of the race in their three year old year. Survived literally toyed with and demolished the field of older horses coming from last at the turn to record a memorable 4.5 length win.

Group III McDonald’s Hawke’s Bay Cup OPN HCP 2200M

1st Survived 2nd Boninsky3rd Double O Seven

Owner - DJ GordonTrainer - JGG BaryJockey - M TanakaBreeding - (g) Zed x Liberal (2009)Breeder - D Gordon Time - 2.18.75 Slow 7

22

First run in 1881 the Hawke’s Bay Hurdles has been a strong pointer to the seasons form line and ultimate top liners. Sea King was bred by Hawke’s Bay breeding’s doyenne Mrs Sue Harty and enjoyed his best performances over the winter. It was ignited by wins in the Waikato Hurdle, a second place in the Waikato Hurdle, a dominate victory here in Hastings and a win on Canterbury soil in the Sydenham Hurdle.

Te Whangai Romney’s Hawkes Bay Hurdles OPN 3100m

1st Sea King 2nd Conquistador3rd Zenocoin

Owner - RA Frost, SM Harty & C O’ReillyTrainer - K MyersJockey - J RathboneBreeding - Shinko King x Ocean Princess (2006)Breeder - SM HartyTimer - 3.33.66 Heavy 10

NZ’s second oldest Steeple Chase, behind the Grand National, the Hawke’s Bay Steeplechase is steeped in history and excitement. After last year’s dead heat this year’s finish was far more conclusive however the silverware still went to the same stable – the legendary John Wheeler.

The longest race held at Hastings racecourse the marathon of sorts saw the two favourites (Borrack and No Quota) fail to finish. Like a Kenyan runner Riviera Star outstayed the competition and powered away at the top of the straight coming to the line like he had enjoyed a light gallop in the balmy winter conditions.

Livamol Hawke’s Bay Steeplechase OPN 4800m

1st Riviera Star1st Solid Steal 3rd Cape Kinnaveral

Owner - SB Parkes & JR Wheeler MNZMTrainer - JR WheelerJockey - S Phelan Breeding - Riviera x Tropic Star (2006)Breeder - GS Hale & JR WheelerTime - 6.28.34 Heavy 10

23

24

To the Members of Hawke’s Bay Racing (Incorporated)

We have audited the financial statements of Hawke’s Bay Racing (Incorporated) on pages 25 to 35, which comprise the statement of financial position as at 31 July 2013, the statement of financial performance, statement of movement in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Board ResponsibilitiesThe board is responsible for the preparation and fair presentation of these financial statements in accordance with generally accepted accounting practice in New Zealand and for such internal control as the board determine is ne-cessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of financial statements 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, as well as evaluating the overall presen-tation of the financial statements.

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

We have assisted with the presentation of the financial report from draft financial statements presented by the Board. The Board has taken responsibility for the financial report. Our firm has no other relationship with, or interests in, Hawke’s Bay Racing (Incorporated).

OpinionIn our opinion, the financial statements on pages 25 to 35 present fairly, in all material respects, the financial position of Hawke’s Bay Racing (Incorporated) as at 31 July 2013, and its financial performance for the year then ended in ac-cordance with generally accepted accounting practice in New Zealand.

Staples Rodway Hawkes Bay Partnership

12 November 2013

Hastings, New Zealand

INDEPENDENT AUDITOR’S REPORT

25

HAWKE‘S BAY RACING (INCORPORATED)CONSOLIDATED STATEMENT OF

RACING PERFORMANCEFOR THE YEAR ENDED 31 JULY 2013

Racing Revenue Admission, Privilege Fees & Box Sales

Commission

Nomination & Acceptance Fees

Race Subsidy

Bulk funding

NZTR Spring Carnival Support

Race Book Sales

Gaming Funds

Sponsorship

Promotion Income

Private Function Income

Net Bar Contribution

Distributions

Sundry Raceday Income

Notes 2013 $ 81,536

336,436

221,088

472,500

2,712,474

100,000

8,504

86,728

236,651

3,530

235,597

9,230

10,149

6,061

103,231

373,936

187,774

203,500

2,624,500

160,000

12,391

300,829

298,852

10,185

166,012

8,796

49,185

6,667

2012 $

TOTAL RACING REVENUE 4,520,484 4,505,858

(2)

Racing Expenditure Advertising

Promotion

Raceday Charges

Net Punter of the Year

Race Meeting Levies

Race Book Costs

Raceday Printing

Raceday Services

Raceday Wages

Stakes & Trophies

Sponsorship Expenses

Tote Costs

Cleaning

Private Function Expenditure

Sundry Raceday Expenses

Notes 2013 $ 80,091

48,786

216,436

75,982

89

36,097

1,051

229,532

47,308

2,767,869

27,908

110,490

39,197

225,696

27,039

70,142

33,770

900

58,646

7,000

30,339

3,856

156,536

70,852

2,695,768

74,776

111,953

44,382

172,798

58,493

2012 $

TOTAL RACING EXPENDITURE 3,933,571 3,590,211

NET RACING SURPLUS 586,913 915,647

26


FINANCIAL PERFORMANCEFOR THE YEAR ENDED 31 JULY 2013

Revenue Net racing surplus from Race Meetings

Interest

Membership

Rental

Secretarial Fees

Track & Training Income

Net Farm Revenue

Grants and Donations

Sponsorship

Sundry Income

Notes 2013 $ 586,913

4,225

31,805

63,973

102,175

94,088

4,328

136,125

10,700

26,103

915,647

10,108

36,995

68,974

103,575

112,427

10,794

68,250

-

23,791

2012 $

TOTAL REVENUE 1,060,435 1,350,561

Expenditure Administration Costs

Audit Fees - Audit

- Other Services

Depreciation

Insurance

Legal Fees

Interest & Bank Charges

Rates

Equipment Rental

Repairs & Maintenance

Travel

Subscriptions

Donations

Light and Power

Motor Vehicle

Promotion and non racing hospitality

Track related expenses

Salaries & Wages

Other Staff costs

Sundry Expenses

Notes 2013 $ 80,929

16,135

3,201

139,527

97,042

3,699

78,777

60,258

5,238

77,575

6,719

4,083

892

41,668

9,941

18,598

26,523

630,594

42,811

1,739

75,998

13,650

2,585

128,826

121,001

879

75,270

58,208

11,237

42,156

5,093

-

377

32,396

21,521

12,732

54,136

568,936

47,777

11,133

2012 $

TOTAL EXPENDITURE 1,345,949 1,283,911

(6)

(3)

NET SURPLUS (DEFICIT) (285,514) 66,650

The attached accounting policies and notes form part of and are to be read in conjunction with these financial statements.

27

Non Current Assets


FINANCIAL POSITION AS AT 31 JULY 2013Current Assets Cash on hand

Bank current account

Bank deposits

Accounts receivable & prepayments

Stock on hand

GST receivable

Advance

Notes 2013 $ 38

391

466

83,841

17,469

231,531

-

-

153,939

122,306

95,915

22,124

65,663

-

2012 $

TOTAL 333,736 459,947

(5)

(4)

(15)

Current Liabilities Bank overdraft

Trade creditors & accruals

Employee entitlements

Income in advance

Trophy funds - Walker/Stead

Loan from Hawke‘s Bay Hunt

Current portion of term loans

Notes 2013 $ 24,558

174,243

53,679

80,056

11,200

-

91,967

-

180,191

37,287

160,803

11,200

160,000

47,677

2012 $

TOTAL 435,703 597,159

Shares in companies

Property, Plant and Equipment (6)

8,590

3,965,274

3,973,864

8,590

4,014,119

4,022,710

TOTAL ASSETS 4,307,600 4,482,656

Notes 2013 $ 2012 $

(7)

(9)

(8)

(7)

Non current portion of borrowings (7) 1,118,572 846,658

TOTAL LIABILITIES 1,554,275 1,443,817

Notes 2013 $ 2012 $ Non Current Liabilities

NET ASSETS 2,753,325 3,038,839

Represented By: EQUITY 2,753,325 3,038,839

These financial statements were authorised for issue by the Board on 6 November 2013


28

OPENING EQUITY 3,038,839 2,972,189


MOVEMENTS IN EQUITYFOR THE YEAR ENDED 31 JULY 2013

Net Surplus/(Deficit)

Total Recognised Revenue & Expenditure

(285,514)

(285,514)

66 ,650

66 ,650

CLOSING EQUITY 2,753,325 3,038,839

Notes 2013 $ 2012 $

Retained Earnings

Revaluation Reserve

1,504,469

1,248,856

1,789,983

1,248,856

2,753,325 3,038,839


29


CASHFLOWS FOR THE YEAR ENDED 31 JULY 2013

Cashflows From Operating Activities Cash was provided from:

Receipts from customers & racing industry

Interest received

Cash was applied to:

Payments to suppliers & employees

Interest paid

GST (net)

Net operating cashflows

Notes 2013 $

5,129,630

4,225

5,133,855

(5,271,378)

(62,038)

(165,868)

(5,499,284)

(365,429)

5,126,838

10,108

5,136,946

(4,855,493)

(68,525)

(55,184)

(4,979,202)

157,744

2012 $

(10)

Cashflows From Investing Activities

Cashflows From Financing Activities

Cash was provided from:

Fixed asset purchases

Net investing cashflows

Loan drawdowns received

Cash was applied from:

Loan repayments

Net financing cashflows

Net increase (decrease) in cash

Add cash at beginning of year

Ending cash carried forward

Represented by:

Cash on hand

Bank accounts

Bank deposits

Notes

Notes

2013 $

2013 $ 316,203

(160,000)

156,203

(299,908)

276,245

(23,663)

38

(24,167)

466

(23,663)

-

(35,727)

(35,727)

85,797

190,448

276,245

-

153,939

122,306

276,245

(36,220)

(36,220)

(36,220)

(90,682)

(90,682)

(90,682)

2012 $

2012 $


30

REPORTING ENTITYHawke‘s Bay Racing Incorporated (HBRI) is an Incorporated Society established under the Incorporated Societies Act 1908. The consolidated financial statements comprise HBRI and its non trading subsidiary, Hawke‘s Bay Racing Centre Limited. The financial statements have been prepared in accordance with generally accepted accounting practices in New Zealand.

MEASUREMENT BASEUnless otherwise stated the measurement base adopted is that of historical cost.

PARTICULAR ACCOUNTING POLICIESThe following are the particular accounting policies which have a material effect on the measurement of results and financial position.

DIFFERENTIAL REPORTINGHBRI is a qualifying entity under the Framework for Differential Reporting as it is not publicly accountable and is not large. HBRI has taken advantage of all available exemptions except for FRS 10 Statement of Cashflows and FRS 19 Accounting for GST.

INCOME RECOGNITIONSponsorship income includes donated products and services at fair value.

DEPRECIATIONDepreciation is charged to write off the cost of depreciable fixed assets over their expected economic lives. The prin-cipal rates of depreciation used are as follows: Buildings 2% SL Plant and Equipment 7 - 40% SL Vehicles 20% SL Furniture and Fittings 10 - 35% SL Office Equipment 27.5 - 50% SL

TAXATIONTaxation is not payable as Racing Clubs are exempt from Income Tax in terms of Section CW 40 (2) of the Income Tax Act 2007.

DEBTORSDebtors are valued at expected realisable value.

HAWKE‘S BAY RACING (INCORPORATED)NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2013

1. STATEMENT OF ACCOUNTING POLICIES


31

STOCKTrading stocks are valued at the lower of cost or net realisable value. Livestock is valued at market value (National Average Market Value).

INVESTMENTSInvestments are valued at cost.

FIXED ASSETSLand, Course Developments and Buildings are recorded at 1978 Government Valuation plus subsequent additions at cost, less building accumulated depreciation. All other assets are at cost less accumulated depreciation. Land and course developments are not depreciated.

GSTAll amounts are shown exclusive of Goods and Services Tax (GST), except for receivables and payables that are stated inclusive of GST.

CASH FLOWSThe following definitions are used in the statement of cash flows:

CHANGES IN ACCOUNTING POLICIESDuring the year, HBRI has changed some coding of the income and expenses to better reflect their functions within the consolidated statement of financial performance. This practice had led to some changes within the consolidated statement of financial performance against the reported 2012 figures. There has been no impact on the net profit in either year.

There have been no other changes in accounting policies. All policies have been consistently applied.

Operating activities include all transactions and other events that are not investing or financing activities.

Investing activities are those activities relating to the acquisition, holding and disposal of property, plant and equipment and of investments.

Financing activities are those activities that result in changes in the borrowings not falling within the definition of cash. Cash comprises cash on hand, bank in funds and short term deposits offset by bank overdrafts.

32

Revenue

Cost of Sales

Gross Profit

Wages

Other Expenditure

Net Bar Contribution

147,478

66,162

81,316

53,025

19,061

9,230

119,661

73,654

46,007

7,851

29,360

8,796

2. NET BAR CONTRIBUTION 2013 $ 2012 $

Interest

- Bank Loans and Overdraft

- Other

Bank Fees

71,383

2,696

74,079

4,698

78,777

66,758

1,004

67,762

7,508

75,270

3. INTEREST AND BANK CHARGES 2013 $ 2012 $

Sheep on hand

Bar stock

Other

-

15,132

2,086

17,469

6,840

10,106

5,178

22,124

4. STOCK ON HAND 2013 $ 2012 $

Due within one year

Less provision

125,000

(125,000)

-

125,000

(125,000)

-

5. ADVANCE The loan advanced to Standard 183 Ltd is secured by way of personal guarantee by M J O‘Brien. The final payment of the loan was due in January 2011. The borrower has not made this payment and the loan is in default. HBRI is working with the borrower to agree revised terms for repayment. The board has made full provision for impairment of the loan as the value of the security held is doubtful. Interest is not being accrued on this loan.

2012 $ 2011 $

33

6. PROPERTY, PLANT AND EQUIPMENT Freehold land at valuation

Freehold land at cost

Total freehold land

Course developments at valuation

Course developments at cost

Total course developments

Buildings at cost

Less accumulated depreciation

Total buildings

Plant & equipment at cost


Total plant & equipment

Motor vehicles at cost


Total motor vehicles

Furniture & fittings at cost


Total furniture & fittings

Office equipment at cost


Total office equipment

2013 $ 2012 $

Depreciation

Buildings

Plant, Equipment & Vehicles

Furniture & Fittings

Office Equipment

68,855

58,222

2,759

9,691

139,527

68,669

41,437

5,626

13,094

128,826

Pre 1979 Land, Course Developments and Buildings are revalued to 1978 government valuation, with subsequent additions recorded at cost. This is allowed under the transitional provisions of Financial Reporting Standard No 3 Property, Plant and Equipment.

The latest Rating Valuation (01/08/2013) of land and buildings is $10,265,000.

739,058

474,420

1,213,478

372,950

561,032

933,982

3,010,933

(1,344,048)

1,666,885

813,985

(713,028)

100,957

162,072

(144,130)

17,942

335,361

(307,503)

27,858

192,188

(188,016)

4,172

739,058

474,421

1,213,479

383,146

561,032

944,178

3,010,933

(1,285,389)

1,725,544

739,629

(675,146)

64,483

162,072

(130,790)

31,282

331,131

(304,744)

26,387

187,092

(178,325)

8,767

TOTAL FIXED ASSETS 3,965,274 4,014,119

34

HBRI has an overdraft facility of $120,000 (2012: $120,000) and loans totalling $711,564 (2012: $403,577) at 31 July 2013 with ANZ bank. The bank facility is secured by way of a first charge registered mortgage over HBRI‘s property and guarantee from Hawke‘s Bay Racing Centre Limited. The interest rate on the bank facilities ranges from 6.15% to 11.40%.

HBRI also has other borrowings totalling $498,973 (2012: $490,758). The NZTR loan is interest only and is secured by way of first charge registered mortgage over one of HBRI‘s properties. Interest charged on other borrowings ranges from 3.5% to 13.25% . (2012: 3.5% ).

7. BORROWINGS

Due within one year

Due beyond one year

91,967

1,118,572

47,677

846,658

TOTAL BORROWINGS 1,210,539 894,335

The interest on these funds is put towards a sash for the Gold Trail Stakes (Stead) and trophies for the Hawke‘s Bay Hurdles & Steeples (Walker) each year.

8. TROPHY FUNDS

HBRI had a loan agreement with Hawke‘s Bay Hunt (Inc) which was repaid during the year (2012: $160,000). The term expiry date was sixty days post notice of demand by the lender to repay. Interest rate was calculated as the being the midpoint between the deposit rate that would be achieved by Hawke‘s Bay Hunt (Inc) on retail terms and the rate Hawke‘s Bay Racing (Inc) would pay for the same funds on a commercial overdraft arrangement. At 2012 year end this was 7.90%.

9. LOAN FROM HAWKES BAY HUNT (Inc)

Net Surplus/(Deficit) for year

Add non-cash items

Depreciation

Bad and Doubtful Debts

Movement in Working Capital Items

(Increase) / Decrease in Accounts Receivable, Prepayments & GST

(Increase) in Stock on Hand

Increase / (Decrease) in Accounts Payable

Increase / (Decrease) in Employee Entitlement

Increase / (Decrease) in Income in Advance

Net Operating Cash Flows

(285,514)

139,527

-

(145,987)

(153,793)

4,655

(5,948)

16,391

(80,747)

(219,442)

(365,429)

66,651

128,826

-

195,476

(25,215)

18,111

1,362

(6,676)

(25,315)

(37,733)

157,744

10. RECONCILIATION OF OPERATING CASHFLOWS 2013 $ 2012 $

35

Lease CommitmentsHBRI has an ongoing commitment in the form of an operating lease for a photocopier for the following amounts.

Directors M Ormond, C Whyte, K Wood, A Cuming, K Browne and T Macphee have provided sponsorship during the year. This is at normal commercial rates and terms.

There are no contingent liabilities at balance date (2012: Nil).

The Board of HBRI are working with the Hastings District Council, Hawke’s Bay A&P, Hastings Rugby and Sports, Drillers Poultry Farm and Hawke’s Bay Polo to determine the feasibility of a shared multi purpose venue. No decisions have been made. As the outcome and timing of this process are not yet known, the directors have not yet reassessed the useful lives of the property, plant and equipment. When there is more clarity regarding the useful lives the deprecia-tion rates for the assets will be updated (2012: Nil)

In 2013 there is a large GST Receivable at year end. This has arisen because GST paid on stakes expenses has not been claimed in the GST returns throughout the year. The refund has been claimed and received after year end.

11. COMMITMENTS

12. RELATED PARTY TRANSACTIONS

13. CONTINGENT LIABILITIES

14. SUBSEQUENT EVENTS

15. GST RECEIVABLE

Lease Commitments

Within 1 year

Within 1 - 2 years

2 to 5 years

Total lease expenses for the period was $5,238.

Capital Commitments

There are no capital commitments at year end (2012: Nil)

4,712

4,712

8,638

18,062

4,712

4,712

13,742

23,166

2013 $ 2012 $

36

Best R

Buddo D

de Gruchy G W

Ellingham R L

Harvey W J

Holden S

Hutchinson B J D

Hylton-Smith J D

Langdale P M Y

MeMbership - Life HAWKE’S BAY RACING INC 2012/2013 RACING SEASON MEMBERS

Lowry T R

McCallum S M

Mudgway W A

Nation R W

Nelson S O

Ormond A E

Ormond U C

Pattison J G

Redshaw L I

Renton D M

Sabiston D W

Scoular J D

Shanley C G

Small M S

Symes T W M

Throp W F

White H P

MeMbership - honorary Agnew J A

Anderson S

Arlidge J L

Baillie J M

Barker P

Barrett P E F

Bary A

Beachen A J

Beale J A

Begley L J

Berkahn R O

Blackmore C H

Breakwell G L

Bridgeman C

Bridgeman J A

Broughton L W

Chittick A G

Chittick B W

Christensen E M

Coleman P M

Couper W A X

Cranswick D

Crawford J M

Crosse L G

Dawson R C

Dent W J

Donnelly G P

Frizzell J A

Gordon D J

Grieve I D

Grieve P H

Guerin P J

Halpin W L

Harris K N

Harris M J

Holland J E

Hope M B

Horton J H

James B H

Jans B W

Jarvis J A

Johansen J E

Jones D

Kerins P M

Leathley C D

Lepper W E

Liddle A R

Little S D

Lobban H G

Loughnan T O

Lowry E P

Mackintosh J

MacMillan M R

Mahony J M

Mahony P S

McCormick G H

McKenzie R

McLeod D R

McLiesh A R

McMillin J R

Miller R M

Mulcaster R J

Murtagh M L

Murtagh P M

Nelson P S

Nichol D W

Nicholson B G

O‘Malley O

Orange K W

Ormond M R

Ormond W W

O‘Sullivan M

Parsons R J

Pettigrew R H

Plowman M V

Plowman G J

Powell F T

Rae D G

Reeves N

Robson A R

Scott G J

37

HAWKE’S BAY RACING INC 2012/2013 RACING SEASON MEMBERS

MeMbership

Sheild J I

Sherratt C W

Smith E W

Smith R A

Stevenson D L

Strother P M

Thelwall G A

Todd R G

Tremain P

Twigg D R

Twist N B

Verschaffelt E

Walker L J

Wall B C

Walls E M

Watson M J

Wattie R K

Wedd D J

Wedd M

White E D

Willis J C

Wilson J I

Wong H

Yardley D W

AHD/Livamol

Aldridge A M

Anderton C H

AON Insurance Brokers

Apatu A

Arrowsmith R

Baker D

Bary J

Bason J W

Bate Hallett K

Bath D C

Bay Ford Hastings

Bayliss K P

BBI B

Beachen W H

Beck M

BedPost Hastings

Bell R F

Bell M P

Benton J M

Biggs M

Bill R

Bishop D S

Bisman G B

Bisset C R

Black R A

Blundell J H

Brady P M

Breban D F

Brenton-Rule M

Bridge J

Brittin D R

Brittin P G

Brodie J C

Brooke S

Browne K J

Bruce Perry Bloodstock

Buchnan B

Buckeridge J

Buckingham F P

Byers J

Cadigan P J

Cameron A

Campbell A J

Carney M R

Carran A K

Castles D B

Castles K A

Chadwick R P M

Chapman W A

Chard H C

Chateris H

Howard J

MeMbership - Junior

Thomson D

Chilton E J

Chilton R W

Chittick W L

Clark T

Clayton C D

Clifford A

Coffey T P

Collings R J

Collins A K

Colson G C

Cook A B

Cooper E

Costello J P

Crawley B

Cutler R N

Dawkins B

de Lautour W B

Death R A

Dee R

DHL Global Forwarding

Dick H R

Dixon M J

Donovan B J

Dorward N

Downey W P

Drake L F

38

HAWKE’S BAY RACING INC 2012/2013 RACING SEASON MEMBERS Drinkwater J R

Driscoll G

Duff G I T

Duncan G M

Duncan G A

Duncan J

Duncan J C

Dunn H D

Edgecombe K D

Edmunds D M

Evans C J

Fairgray C A

Fargher G O

Farmlands A

Ferguson A D

Fitness L T

Fitzpatrick H M

Reisima B M

Fletcher V

Fly R J

Foote S J

France F

Francis G

Fraser P B

Galbraith V R

Galloway A M

Game Lodge

Gibbs A J

Gibson B R

Gillies A

Goodall M T

Gore J

Grace A R

Gray D E

Greaney C

Greaney M J

Greene K F

Greer P J

Grey N

Grey R

Grieve D P W

Gudsell M H

Guerin B J

Hales P J

Hannah M J

Harold M J

Harper M J

Harrison J

Hart G J

Hart G H

Harty S M

Hawke‘s Bay Today

Hawkins S B

Hay B F

Hayes O J

HDC R

Healy M J

Hebberley B J

Hesketh G J

Hickey B

Hill G

Hill D B

Holden D J

Holden P R

Hollebone N R M

Holt P G & H D

Hook G B

Horrocks A M

Houlahan M G

House of Travel

Howard S

Humphreys K J

Hunt & Seek Ltd

Hurlimann W E

Ireland B P

Jackson A

Jensen P

Johansson L W

Johnson K R

Johnston K

Jones L

Jury P H

Keighley D M

Keighley B W

Kelly J F

Kelsey B J

Kennedy H D

Keown G

Kerins Paul

Kieran B

Kirton N

Knobloch H J

Lambeth R L

Lawrence N

Laxon E B

Lee D

Leitch L D

Lime Country Thoroughbreds

Lion Breweries

Liquor King Napier

Lister N J

Little Avondale Stud

Livingston W

Lockyer A J

Longley T E

Lowrie M

Lowry T G

Lowry A

Lyndon T

Lynn Electrical

MacDonalds Hastings

MacGregor H D

Macklow P K

Macphee B R

Maguire M J

Mahony T P

Majestic Horse Floats

39

HAWKE’S BAY RACING INC 2012/2013 RACING SEASON MEMBERS Martin D J

Matthews P

Matthews S C H

McCarthy K J P

McClurg D J

McDonald P R

McDowall C C

McEntee P

McGinty P J

McGregor J

McIntosh L P

McIntyre P J

McLaughlin J

McLeod K B

McMillan G D

McPeake B

Meates J B A

Meech H

Mettrick A J

Molloy T A

Moorhead S C

Morgan S I

Morison D C

Mossman D

Moughan G F

Munro G C

Murdoch W T

Murphy P M

Nelson M

Nelson L

Nichol R W

Nicholson K

Nilsen B

Nobilo R

Nokes B

Northover S M

NZ Bloodstock Insurance

O‘Connor K J

O‘Grady H J

Olsen N

Ormond C A

Ormond R

Ormond M

O‘Shaughnessy P

O‘Sullivan T

Owen D J

Parker L

Parker C R

Patterson H

Pattullo D

Peacock A

Peterson B

Pettigrew W J

PGG Wrightson

Phillips D J

Potaka P

Potter R

Pratt S

Pratt A L

Prenter S

Price V

Priest C

Prout Products

Quin Building

Quinn M J

Razos M P

Razos J S

Redshaw M

Redwood Stallion

Reilly W J

Reynolds P R

Richardson I L

Richardson E I

Rigby F B

Roddick G J

Roebuck J

Roebuck P J

RSA Hastings

Rush Munros

Russell M

Russell K & C

Russell Roads

Ryan D

Ryan D H

Sanders V J

Sanson C

Sayers J

Schirnack P

Schirnack M J

Schmidt A J

Scobie R D

Selby C J

Shaw N D

Sherratt G

Shirley M J

Sim A B

Simonsen E N

Simpson P

Skerman C J

Skerman G

Slack T

Smith A H B

Smith F H

Smyth E B

Speedy S

Spotswood R C

Stace J L

Stace R M

Standring D J

Stevenson P M

Sugden P F

Sutherland M D

Sutherland B W

Swiss Ace Stallion

Tasker B L

Taylor H A

Te Whangai Romney

40

HAWKE’S BAY RACING INC 2012/2013 RACING SEASON MEMBERS Thompson M J

Thomson‘s Suits

Todd C D

Tomlins C

Tonge A

Townrow P

Train A

Treweek P J

Trickett S

Trinity Hill

Trower D G

Tru Test

Tumu Timbers ITM

Turfrey N O

Turner R J

Turner S K

Valcarcell J R

Van Zonnevend T

Vet Associates Hastings

Vos P

Waikato Stud

Wall A J

Wall A S

Waller R

Walter C R

Ward P B

Warren M

Wedd G J

Westbury Stud

Weston W G

Whyte C A J

Wilkins P

Williams K

Williams R A

Williamson G

Wilson D M

Windsor Park Stud

Wood R D

Wood S

Woodmass R B

Wood‘nLodge

Woolhouse B R

Yanko B A

Yartlett I W

Yortt P L

41

Hawke‘s Bay Racing, Prospect Road, Hastings, New Zealand www.hawkesbayracing.co.nz

Hawke’s Bay Racing Annual Report · Presentation of the Annual Report and Accounts for the year ended 31 July 2013. 4. Appointment of Auditor. ... Dick Hunt Gary Philips Veterinary

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