Good Evening, Ladies and Gentlemen.
At the outset, as a mark of respect to members who have passed away in the last year, let us rise to observe a minute's silence.
It is a great honour for me to address you, for the first time as Chairman of the Club, on behalf of the Committee as this our 95th Annual General Meeting.
The AGM is unusually being held, this year, on a Saturday, and not the traditional third Thursday, as the day fell on Moharrum- a day of mourning. This would have meant that several members would not have been able to attend and to respect their sentiments, and on their request, the Committee unanimously decided to shift the date by two days.
To make it easier, especially, for our Pune members, we hope to ensure full day voting from next year and the committee will soon deliberate on the logistics and legality for doing so.
Let me start with the financial performance. The Club made a cash profit of Rs 3.96 crore, and a profit before tax of Rs 1.03 crore.
Admittedly the figures are down on last year, but if the following exceptional items are considered, it can be seen we have done quite well- even on a comparative basis.
There is a reduction in income of Rs 3 crore due to outstanding conducting fees payable by BJRs. The major heads for increase in expenses has been stake money (Rs. 5.4 crore) Invitation Cup costs (about Rs 1 crore) and Depreciation (Rs 1 crore). Litigation costs (mainly on contesting the BJRs case), added nearly Rs 70 lakhs to our expenses.
We were able to largely offset these expenses by a rise in tote income (Rs.2.4 crore) bookmakers revenue (Rs.1.2 crore) and sponsorships (Rs.2.84 crore).
As you can observe, if the Club was paid its rightful dues and we were not forced into expensive litigation, we would have closed the year with a record profit.
We did, however, set a record on a financial yardstick- that is often lost sight of- ie in growth in our reserves, which touched a record Rs 70 crore on 30th June 2010, and based on our waitlisted membership applicants, and further contributions to our corpus by members, the reserves will cross an unprecedented 100 crore in the months ahead which will be a landmark achievement.
Totalisator betting grew to a near Rs 200 crore which was up 20% on the previous year. Even the usually flat bookmakers field money increased.
Over the last 5 years, tote investment has grown from Rs 86 crore to nearly 140 crore, and fixed odds income has doubled from 26 crore to 54 crore.
However, this is set to undergo a serious setback this year as betting tax has been increased by 100% on the tote and 50% on the bookmakers. I have met the Ex-Chief Minister and the relevant bureaucrats to represent our case. The change in the political set up in our State, means we have to start afresh.
However, your Committee took two pro active steps to mitigate the effect of this most draconian tax hike. A token increase in the Club's commission on the tote has paid rich dividends as the Club's commission has fallen by only 13% as against a decline in investment by nearly 27% on a per race basis.
Further, the Bookmakers Working Group, did an excellent job by negotiating an increase in stall fees by nearly Rs.1.4 crore on an annual basis- the highest annual increase in several years.
Though the trend of decline in investment and commission has slowed the projected combined reduction in tote and fixed odds income for year 2010/11 is budgeted to decrease by Rs. 3 crore which will seriously impact our profitability.
MUMBAI RACING SEASON
The Stewards of the Club, have done well to start the Mumbai Racing Season on time inspite of unseasonal rain in November. That we had to cancel only one day even though it rained every few days till the end of November was a commendable achievement.
The Mumbai stables are not geared to withstand even moderate rain, and our Estate did the best in the difficult circumstances to ensure the racing track and infrastructure was kept in shape.
We plan to revamp the stable area by modifying the design of certain stables, as well as paving areas prone to get damp after putting in place a drainage system, which will commence at the conclusion of the season.
The Club continues to do outstandingly well in the field of sponsorships.
Sponsorships grew nearly 75% in one year to an all time high of 7.43 crore. The exponential increase can be judged if one compares the figure to just four years ago- a paltry 1.66 crore!
In the year 2010/11, sponsorships will surpass an unheard of 8.25 crore, and if contributions to infrastructure and to the corpus are added, will touch the 10 crore mark, which sets the RWITC in a league of its own.
The club attracted international sponsorships from across the world- Ireland, The U.K, Australia, Japan, Mauritius, Bahrain and possibly Qatar in the not too distant future.
The return of the Indian Turf Invitation Cup for the second year running to Mahalaxmi- thanks to the munificence of HDIL, and a record breaking McDowell Indian Derby- with the prize money set to cross 2.5 crore this year- are landmarks of what is the most ambitious racing season staged by any racing centre in India.
FACILITIES FOR MEMBERS
In our enthusiasm to reward our owners and bring the best racing to Mumbai, facilities for members have not been forgotten.
The third deck has been restored to more than its former glory, and the RWITC Club House is set to grow in stature. The new Gym already has over 300 members. The Club has signed the famous eatery, Joss to take over the catering at the Club House and plans for brunches, food festivals and more is on the anvil.
A new air conditioned lounge has been opened for members on the third deck which is fitted with plasma screens and modern furniture. Catering will soon be started here too.
RWITC- A LEADER IN PROMOTION OF RACING
The RWITC has leapfrogged in its efforts to showcase racing as a true lifestyle sport. Our first ever season opening members gala last month, and the Invitation Cup dinner for example, were very popular and fully sponsored. We hope to bring many more such events reserved exclusively for our members.
For the first time we will be holding a New Year's Eve function, literally a celebration under the stars at special prices at the centre of the course, and we have got the NCPA to agree to provide us the SOI in a live open air symphony on our lawns to give our members a cultural treat.
We may be often on Page 3, featured with Bollywood stars, but we are now making a conscious effort to scale up our corporate social responsibility endeavours. An association wiith The Indian Cancer Society for an event in February is a step in that direction.
Infact, tomorrow- the Casino Royale Indian 2000 Guineas Day is promoted as “Racing for a cause” with the Happy Home for the Blind as the beneficiary with a raffle weaved into the race day program.
To help us become more visible and to capitalise on the reach of social media, you will now find us on Facebook and Twitter to draw more numbers to our Turf and to create a community for the RWITC.
Our new web site is already ranked as the No.1 racing website in the country and we are the first to start live streaming- amongst several other innovations planned for the site.
Our efforts are showing results and cumulative attendance for the year 2009/10 crossed 1 million for the first time ever- an impressive statistic and a fitting rebuttal to those who maintain that racing is a dying sport.
DRESS UP IN STYLE
The reaction to bring back the dress code in the members enclosure was bound to be mixed. Hence to take a middle path, we have decided to re introduce it only on our classic days. As Racing World says, " Finally class comes back to grass. Bring out your Armani's, Brioni's and Saville Row suits and let's add a bit of dash to our classic days. Mahalaxmi gets tres chic once again."
LIVE RACING ON ET NOW
In a path breaking agreement, the RWITC has recently signed up with The Times of India for exclusive rights to bring live twelve races a year on ET NOW. Each telecast will be of 3 hrs. In addition to the rights fee the Club will earn (about 2,5 crore in four years) the exponential benefit in the exposure of racing across thousands of new viewers is obvious.
Owners remain the backbone of the sport. Stake money remains the Club's biggest expense item. The beneficiaries of enhanced sponsorship have been the owners which has seen gross prize money spurt to the near 30 crore mark in 2009/10. Stake money has doubled from 15 crore in 2005/6 to this level in just four years.
DISPUTE WITH BJRs
The legal stand off with BJRs, who run Gallops, continues. An effort to arrive at an out of court settlement made significant headway and a draft MOU was even arrived at. However, due to lack of consensus and a deadlock on certain critical amendments, the Committee decided to drop the proposed understanding. Senior counsel have met recently to make another attempt on revised terms.
TERMINATION NOTICE FROM THE BMC
As you are aware, the Club has been served a termination notice from the BMC on the lease of Mahalaxmi racecourse arising out of alleged structural irregularities at the eateries on the Club's premises and on the ground that the agreement with BJRs amounted to a sub lease.
The BMC has initiated an enquiry under Sec 105(b) of the MMC Act which is underway, and based on our discussions with the Municipal Commissioner and other functionaries we are hopeful of an amicable solution to this crisis.
OTHER STATUTORY LEVIES
The Club has also received unreasonable demands from the Income Tax, Property tax and Service Tax authorities. We have contested these proposed levies which are at various stages of appeal and no definite liability has yet arisen and the auditors have commented on their contingent nature in the notes to the balance sheet.
The confidence in our Club is reflected by a surge in memberships. 257 members were admitted in 2009/10, which helped us add 5 crore to our reserves. Since the start of the current year, a further 958 life members were elected/interviewed and 565 remain on the wait list. This surge in applications was made possible by maintaining a realistic fee.
The accretion to our reserves by membership fees has strengthened the financial base of the Club and an extensive capital program- encompassing infrastructure spend on stables and syces quarters, brand new world class starting gates, the first phase of upgrading the equine hospital and improvements at the Pune Race Course are being drawn up.
Subject to BMC approvals, the next phase of extended recreation facilities for our members will be taken up.
In Conclusion the Committee worked through the year in harmony and democratically. The decision making process was transparent and apolitical. We hope to carry this co-operative atmosphere into the next year.
The Club continues to face a challenging, hostile external environment. We are constantly adjusting, innovating and investing to take us forward to enhance our image and financial strength. We hope to turn our times of trial into times of triumph in the years ahead.