ANSWERS TO A SERIES OF QUESTIONS ASKED BY KEY INDUSTRY FIGURES

QUEENSLAND Racing Limited addressed a series of questions raised by key industry figures at today’s annual general meeting.

They ranged from expenses incurred by the QRL Board to Product and Program Fee payments to country clubs and profits recorded in the annual report.

QUESTIONS RAISED BY BRISBANE RACING CLUB CHAIRMAN KEVIN DIXON

THE Annual Report announced that:

Page 33 – QRL has recorded a profit of $15,697 million.

Page 34 – QRL has recorded total equity as $82,632 million.

Therefore, in light of the above:

1. Please explain as to what strategy and what basis QRL is retaining such funds and substantial assets.

QRL has increased Prizemoney steadily from $60.5m in FY03 to $78.8m in FY09. Unfortunately, industry assets including tracks and stabling have continued to deteriorate. QRL has pursued a strategy to improve equine amenities in QLD. Examples are below.

Cash asset is $40m less, $6.5m for Rockhampton, Part of Toowoomba $3m, Deagon, Eagle Farm, and Mackay $3.2m. Retain approx $15m. There will be approximately $12.3m available for further investment subject to the Issues Paper outcome.

Works either completed or to be completed:

Capital Development with new synthetic track of $6 million at metro track or Gold Coast – net cost $2 million.

Rockhampton Track upgrade - $6.5 million.

Stables at Caloundra $12 million.

Lights at Caloundra $7.2 million

Cushion Track at Caloundra $6.3 million

$2M in miscellaneous capital expenditure of which $1.2M was expended at Eagle Farm

Cushion Track and lights at Toowoomba $12 million

Renovation course proper Eagle farm $1 million.

Stables and Upgrade Mackay Turf Club $1.2 million.

Retention of Deagon $1 million.

Statewide barrier upgrade $630,000

QRL policy is "that prizemoney will only be allocated from reoccurring income, not from one off events” and wagering is down YTD almost 2%.

2. Does QRL have a business plan in relation to such funds and assets?

Yes. Both the annual business plan and draft 5 year strategy deal with continued asset development.

3. How long does QRL intend to hold such funds and assets?

Subject to discussions with Government on the Issues paper, QRL will consider the best use of avail funds having regard for the amounts already committed. Refer to 1 above.

4. How does the QRL Board determine where funds are to be spent, and the amount of such funds?

Determined through forward planning and annual budgeting, Workplace Health and Safety assessment of facilities to support the industry asset management plan.

Venues are audited annually on a rotating basis, with the information used to identify priorities.

QUESTIONS RAISED BY BRC DIRECTOR DAVID DAWSON

THE Annual Report announced at page 33 that Committee/Board expenses for the period ended June 30, 2009 was $375,000.

1. Please provide a breakdown of such expenses and allowances.

The Committee and Board expenses include fees paid to Directors have not changed since July 1, 2006, the start of QRL.

QUESTIONS RAISED BY GARY PEOPLES OF THE COUNTRY CLUBS ASSOCIATION

THE Annual Report announced that at page 18:

(a) QRL is required to pay 7% of its net UNiTAB Product and Program fee for a year as prizemoney for non-TABQ races conducted by non-TABQ clubs in the year.  For the 2008/09 year this amounted to $6,426,333 of net UNiTAB Product and Program fee after race information charges from Principal Racing Authorities to UNiTAB had been taken out.

(b) QRL therefore paid $668,767 in excess of its 7% net UNiTAB Product and Program fee obligation under the Racing Act 2002.

(c) Further funding amounting to $4,336,532 was provided by QRL to assist the non-TABQ (country) racing sector in funding its operations.  QRL therefore, during 2008/09, provided some $5M in excess of the amount required to be paid under legislation to support non-TABQ racing.

The Queensland Country Racing Committee does not believe that the above listed paragraphs are true and correct, and as such, requests that QRL:

1. Confirm the interpretation of the Racing Act 2002 in relation to QRL’s requirement to pay 7% of its net UNiTAB Product and Program fee for a year as prizemoney for non-TABQ races conducted by non-TABQ clubs in the year

This has been confirmed with the Office of Racing and is in accordance with the Product and Program Agreement with UNiTAB. The definition in the act is in accordance with the advice from the Racing Dept and in part says, “means the amount paid to the thoroughbred control body as calculated under the intercode agreement”.

2. Disclose the race information charges as per paragraph (a) above

Race Information fees charged by Interstate Principal Racing Authorities deducted from Product and Program fee from UNiTAB.

To note that Western Australia and Tasmania had not introduced legislation as at 30 June 2009. UNiTAB have been advised that they that legislation would be retrospective from 1 September 2008.

Refer to Question 1 above.

QRL is not obligated under legislation to provide this funding and supports country racing through these unrecognised funding streams.

Section 67 (1) (b) of the racing act states that a function of the country racing committee is to “develop a distribution strategy for prize money and other funding that the member clubs of each of the country racing associations require for holding non-tabq races”.

Section 68 (E) (1) (a) states, “The thoroughbred control body must consider committee’s recommendations. This section applies if the thoroughbred control body receives a recommendation from the committee under – section 67 (1) (b) about a distribution strategy for prize money and other funding. (2) The thoroughbred control body must consider the recommendation and adopt the recommendation, with or without changes, as the control body considers appropriate.