Chairman's End of the Financial Year Newsletter to Members
Posted on - 08 Aug 2014
ROYAL WESTERN INDIA TURF CLUB, LTD.
Race Course, Mahalakshmi, Mumbai 400 034.
31st July 2014
To:
All Members,
Royal Western India Turf Club, Ltd.
Dear Members,
On behalf of the Committee, I have pleasure in addressing this end of the financial year Newsletter to you to keep you informed of significant highlights of the Club’s working that deserve mention:
1. Working of the Club:
The estimated financial results for the year ended June 30th, 2014 show a cash loss of about Rs.670.15 lacs which I agree, is a significant negative turnaround from a cash profit of Rs.1,110 lacs for year ended June 2013. The major reasons for the deviation in the profitability are summarized as under:
Increase in Expenses:
Stakes (a long standing demand from
owners especially in view of rising cost of
maintenance & upkeep and new regulatory levies) Rs.605.53 lacs
Repairs to stables / buildings, etc. (repairs
to stables for reasons of safety and hygiene.
Some of these have not been repaired for
over 20 years). Rs.327.40 lacs
Legal & professional fees (partly owing to the BJR’s
litigation and architects fees for repairs and renovations
at Mumbai Race Course). Rs.148.70 lacs
Marketing & Sponsorship (mainly owing to the one-off
130 years Anniversary Celebrations, launch of the
Green Circle Foundation to focus on sustainability /
open spaces and the Season ending Awards function). Rs.123.00 lacs
Decrease in Revenue:
Hire of Lawns (partly due to the new panel rules and the
uncertainty on the lease) Rs.517.35 lacs
Profit on sale of investments Rs.274.06 lacs
These were partly offset by increase in revenue under other miscellaneous heads.
Inspite of these losses, the reserves of the Club stand at a reasonably healthy Rs.116.85 crores.
An extensive budgeting exercisehas been undertaken to keep a tight control on costs.
2. Lease of the Mahalakshmi Race Course:
Constant efforts are being made to renew the lease of the Mahalakshmi Race Coursewhich expired on 31st May, 2013. Meetings with the Chief Minister, Government of Maharashtra and senior officials of Mumbai Municipal Corporation have been held, though it appears unlikely that any decision will be reached prior to the State Assembly elections in October 2014.
3. TDS on Stake Money:
The Club has received a show cause notice for financial years 2007-08 to 2011-12 to show cause why the Club is not deducting Tax at Source before disbursing Stake money to owners. A demand notice aggregating to Rs. 11.76 crores has also been received by the Club for the financial year 2011-12. The Club has taken appropriate measures to file an appeal and also file for a stay on this demand. The Club has been legally advised that TDS need not be deducted on Stake money and we have received several opinions from eminent Tax Consultants in support.
We have been further advised that as per a Supreme Court decision, on the Club proving that the owners have filed their income tax returns regularly and included racing income in their Returns, the retrospective demand will reduce to the extent of liability covered by the returns.
The Club has sent letters to owners requesting for certificates from their Chartered Accountants in the prescribed format and for the year 2011-12 83% of the demand is covered. The Committee has decided that stake money will be withheld from such owners who fail to send the documents and undertakings as required, to safeguard the Club’s interest and liability.
I recently led a delegation of the Turf Authorities of India, to the Principal Secretary, Ministry of Finance, who was appreciative of the matter and assured a review of the TDS deduction on stakes, within a month.
4. Hooves – The Club House at Mumbai:
The Club took over the catering at Hooves, the “Mini Club” at Mumbai departmentally by appointing a consultant and rationalised the tariff. This was done with a view towards providing quality food and better service at a reduced cost. However, during the first eight months this self management has resulted in the Club making a huge loss on this operation.
Owing to these losses, efforts are being made to appoint a renowned caterer at Hooves, who would be paying a lumpsum royalty to the Club, with good quality of food and the prices of the popular items will be controlled by the Club. Thereby the Club will maintain service and quality at reasonable prices and earn a fair profit on this activity. Bids recently received are being evaluated.
Guest charges at Hooves, which were increased recently, have now been significantly moderated by the Club. Guest charges for the card room will be levied for two sessions separately, and the card room charges for members have remained un-changed, in response to requests from several members.
5. Panel of Caterers / Decorators:
In order to augment the Club’s income, the Club, had last year, constituted a panel of Caterers / Decorators for functions held at the Club’s three venues viz. Members Pavilion, First Enclosure Lawn and the Far Pavilion at the Mumbai Race Course. However, to encourage a wider panel the number of panelists has been increased to 10 caterers and 8 decorators, for the year 2014-15 and the terms made more user friendly which we hope will result in increased bookings, which fell significantly last year. The Club, while forming these panels, has ensured that all those caterers and decorators who regularly work at the Club are included, and further, these panelists have been asked to give a 15% discount to members of the Club who book the venue.
6. Status on BJR Arbitration Case:
The Arbitration proceedings between the Club and BJR’s (who run “Gallops”) had reached an advanced stage with Mr. Justice A.P. Shah (Retd.) who had been appointed sole Arbitrator in the matter. Examination and cross-examination of witnesses were completed and arguments on behalf of the Club had commenced. Subsequently, as Mr. Justice A.P. Shah (Retd.) was appointed Member of the Law Commission, BJR’s objected to him continuing as sole Arbitrator in the matter. Mr. Justice A.P. Shah (Retd.) subsequently resigned as sole Arbitrator. The Club had filed an Arbitration Petition in the High Court, Bombay for substituting a new Arbitrator in place of Mr. Justice A.P. Shah (Retd.) and the High Court has appointed Mr. Justice F.I. Rebello as the Sole Arbitrator. The next date of hearing is fixed for 15th September, 2014.
BJR’s has made application to the Arbitrator for conducting the examination and cross examination of witnesses afresh. The Club has opposed the said application.
7. Sponsorship for Pune Meeting 2014:
Sponsorship for the Pune Meeting 2014 has increased as compared to the previous Pune Meeting and the total sponsorship will be approximately Rs.1.15 crores. This has maintained our leadership position in attracting the highest sponsors in India for racing. Several new sponsors including Goel Ganga Group, Kildare Hotel, Spa & Country Club, Omkar Realtors & Developers Pvt. Ltd., Prithvi Edifice, and Crème Magazine have joined our rostrum of contributors.
8. New Monsoon Track at Pune:
The entire Track at Pune has been converted into a Monsoon Track this year to make it the only “all Monsoon” track in India. We expect this would help all horses to race as per form. Unfortunately,Pune has received well below the average rainfall as compared to previous year, which may cause a delay in the acceptability of the track.
9. Media Reports on Heliport / Theme Park at Mumbai:
Reports have appeared in the press proposing to have a Heliport with day and night landing facility at the Mahalakshmi Race Course. As this heliport will be on a fairly large scale, it will definitely disturb horses who are working during the mornings / afternoons, as also racing in general. Several environmentalists and members of the public have written letters to the authorities concerned voicing their strong objection to the proposed Heliport. The Club has also written to the Chief Minister, Government of Maharashtra and other officials of the State Aviation Authority to refrain from having this activity at the race course. The proposal seems to be on hold atleast for now.
There have also been press reports, proposing a Theme Park at the Mahalakshmi Race Course. We have received no proposal on this project and we will represent the Club’s position and opposition to a take over of the Centre of the race course at the appropriate time.
10. Likely changes in the Companies Act:
The Companies Act, 2013 has now come into effect in place of the Companies Act, 1956. The Club’s Articles of Association are being drafted for appropriate amendments, as legally advised, to bring them in conformity with the Companies Act, 2013. Members shall be updated of the same, and it may become necessary to hold an Extra-ordinary General Meeting to approve the amendments.
11. 36th Asian Racing Conference:
The Club will be hosting the 36th Asian Racing Conference in Mumbai during January 2016. About 700 delegates from countries around the world and distinguished invitee speakers are expected to attend this huge event. The Chairmen, Turf Authorities of India have appointed Dr. Cyrus S. Poonawalla to head the Organising Committee (OC) for this Conference. The OC has met recently in Bangalore and will be making a formal presentation to the Asian Racing Federation Executive Council on the progress of preparatory work in Paris in October.
12. Welfare Committee for Equines:
The Chairmen Turf Authorities of India have recently decided to set up a Committee for horse welfare (to look into matters like use of whip, home for retired race horses, etc.) called the Welfare Committee for Equines. Each Turf Authority will have one representative on this Committee who will give their recommendations to the Chairmen, Turf Authorities of India who will then take final decisions in the matter.
Your comments/suggestions on any aspect of this report or on the working of the Club are welcome and may be mailed to vivekjain@dcwltd.com or secretary@rwitc.com. Kindly also send your e-mail ID if not already given to the Club, to keep you regularly informed of Club affairs and events.
With warm regards,
Yours faithfully,
For and on behalf of the Committee of the Club,
Vivek Jain
Chairman
