FROM THE PRESIDENT’S DESK

That wonderful time of the year Autumn is now upon us when we celebrate fantastic racing supported by a wonderful sales series at Inglis.

The Rosehill leg of the Sydney Carnival was superb with black type racing at its brilliant best. Day One Coolmore Classic Day, with two Group One races on offer, saw Aloha and Zavite (NZ) salute. On Day Two, Rosehill Gardens Day, we were amazed by the awesome Kiwi raider Jimmy Choux (NZ) when he made the Group 1 Rosehill Guineas a procession. Day Three, Golden Slipper Day, with five Group 1 events conducted, saw impressive wins by Sepoy, Cedarberg, Rangirangdoo (NZ), More Joyous and Mirjulisa Lass.

The Randwick leg of the Sydney Carnival will commence on Saturday and won’t the racing be something to behold. Sydneysiders will get their first glimpse of the incredible Black Caviar (currently rated the Best Racehorse in the World by the International Federation of Horse Authorities with a 130 rating) when she steps out in the Group 1 T J Smith Stakes. The 150th running of the Group One Australian Derby is another highlight with Jimmy Choux (NZ) looking for his second Group One success of the Carnival whilst the final Group One event, the Sires Produce Stakes will see the unlucky Smart Missile try to compensate for his controversial Golden Slipper scratching.

Speaking of things that are incredible, it would be very remiss of me indeed if I did not make special mention of former NSWROA Committee Member Mr Max Whitby in this column.

It was with great regret that the NSWROA Committee accepted Max’s resignation recently. As members would be aware Max was appointed to the Board of the Australian Turf Club as one of three former STC directors to sit on the ATC’s Board. Due to legislative requirements, unfortunately Max cannot be on two industry bodies at one time and so had to resign from NSWROA.

May I take this opportunity on behalf of my fellow Directors and members of the Association to thank Max for all his hard work over many years. To say that we will miss Max is a classic understatement but one thing is for sure and certain – there is only one Max Whitby!

Our loss is very much the Australian Turf Club’s gain and we wish Max all the very best for the future.

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BOOKINGS CLOSING SOON FOR SYDNEY CUP DAY LUNCHEON

A reminder that bookings are closing soon for the NSWROA Sydney Cup Day Luncheon at Royal Randwick on Saturday 23 April 2011. As previous attendees will confirm, the NSWROA Sydney Cup Luncheon is an event not to be missed.

Network Ten & TVN Presenter Frank Coletta will join us again as Master of Ceremonies at this great day out.

The package for the day includes a sumptuous buffet luncheon and beverage package, afternoon tea, Guest Tipsters and Tipping Competition, Best Hat & Best Tie Competitions, Most Elegant Woman Award, a Raffle with great prizes, race book and pen and full tote and bookmaker facilities.

The luncheon, which is held in the Vista Room, Level 5, Queen Elizabeth Stand, is priced at $180.00 per person, GST inclusive. Click here for a booking form.

If you receive the Newsletter by mail, please contact the office for a booking form.

BOOK NOW as numbers are strictly limited.

A REFLECTION ON THE SYDNEY CUP

As a preamble to our Sydney Cup Day Luncheon on 23 April, our good friend and NSWROA member, Mr Graham Caves, has kindly prepared for the interest of members the following item.

*   *   *   *   *

As we wait with great anticipation for our Sydney Cup Day luncheon it is timely for us to reflect on what a memorable history the Sydney Cup has and what great horses have graced its Roll of Honour.

It is true that the race has not been treated well by the racing powers, as they cater for the never ending emphasis on speed. The Sydney Cup prizemoney this year would be $4,980,000 if it had kept pace with its relativity to the value of the Melbourne Cup in say, 1977. Instead, it is worth $500,000 and that is why it is no longer an automatic choice of trainers to set their Cup horses for the Sydney Cup in the autumn. They wait for the next Melbourne spring. Folly, when you think about it, because who knows if you will still have a horse in 12 months time.

That said, recent Sydney Cups have produced some splendid competitive contests. The fields have been quite good and in some years, outstanding.

The Australian Jockey Club introduced the Sydney Cup in 1866 and it was won by Yattendon. In later years the magnificent gold trophy for that race was presented to the AJC for safekeeping. It still remains a treasure in its collection and is displayed on suitable occasions.

The magnificient trophy for the first Sydney Cup won by Yattendon in 1866

Let’s amble now through the years and recall what fine horses have won the race.

After Yattendon, the Sydney Cup was won in the next three years by the champion of the colony. Fishhook won in 1867 as a three-year-old and then The Barb won the following two years when he dominated the Australian turf. In a handicap, as the Sydney Cup is, it takes a special horse to win such a major race carrying 67kgs. The Barb did that in his second win. Other notable winners prior to 1900 were Darebin in 1883 and a host of three-year olds including Australian Peer who carried a record for his age group of 53.5kgs in 1888. Immortal Carbine was the winner in 1889 and 1890 and his Sydney Cups were among the greatest ever run, especially his win in 1889 when he smashed Australian Peer’s record by winning with 57kgs as a three-year-old in a gut-crunching finish with Melos, Abercorn and Keith.

The stirring finish to the 1889 Sydney Cup won by Carbine, on the outside

Highborn and Wallace also won the race before the turn of the century and in 1902 the best mare the turf had seen, Wakeful, won her Sydney Cup, carrying 60.5kgs. By the end of the Great War in 1918, Trafalgar and Cadonia had graced the list of winners.

Between the wars there were memorable cups aplenty. Kennaquhair in 1920, Eurythmic in 1921, David in 1923, Lilypond in 1925 and Rogilla in 1933.

A postcard of the great stayer David, winner in 1923

When World War II limited racing somewhat, the AJC and its autumn carnival continued and the forties produced a couple of dual Sydney Cup winners in Mosaic and Veiled Threat. Three-year-olds had a successful period after the war. Of that age group Proctor, Carbon Copy, Bankstream and Sailor’s Guide in 1956, emerged victorious. The very popular old warrior Dark Marne won a cup, as did the near champion Carioca in 1948 and 1953 respectively.

The very popular racehorse Dark Marne was the Sydney Cup Winner in 1948

The late fifties saw the beginning of the decline in the breeding of stayers but there were still Sydney Cups that stayed long in the memory. The Melbourne Cup winner Straight Draw exerted his staying superiority in 1958 and tough campaigners like Grand Garry, Grand Print and River Seine, won sixties cups. Sharply’s shock defeat of Tulloch in 1961 prevented the champion from passing the $100,000 milestone as the first horse to do that in Australia. Not long after, he achieved that goal in Adelaide in the S J Pullman Select Stakes, a race virtually handed to him by its special conditions. It was a masterstroke by the enterprising race club to get him to South Australia. To prove he didn’t need to be given favours Tulloch then won twice more including a Brisbane Cup, taking revenge on Sharply.

Maidenhead, who ate mud for breakfast, ploughed home in 1963 and the great Galilee was unbeatable when he followed his Melbourne Cup win with a six lengths Sydney Cup win in 1967. Johnny Miller took the long way around in the race to avoid special attention from the other riders as he knew he was on a vastly superior animal, and so it proved.

The new decade was heralded by another bog track for Arctic Symbol in 1970. Sydney’s weather is notoriously fickle in autumn. New Zealanders, then still dominant in breeding stayers, produced a sequence of cup winners, Apollo Eleven and Battle Heights, then Oopik a couple of years later and My Good Man two years after that. The Australian racing authorities, ever so sensitive, refused to allow Good Lord to race here, that name was offensive, so his name was changed to My Good Man and the Good Lord couldn’t help the Australian stayers when he blitzed them in the Sydney Cup of 1978.

Three-year-olds were still winning Sydney Cups in those days. Double Century, after the pain of losing the 1979 AJC Derby on protest to Dulcify, came out five days later to demoralise the older horses including Melbourne Cup winner Arwon (third) by seven lengths. The awesome acceleration of Kingston Town was in full play in 1980 when he denied Double Century his second cup and Colin Hayes came to Sydney Town to give that age group its third successive cup when Our Paddy Boy strolled home. For good measure Mal Barnes produced Veloso to do it again for them in 1983.

Turf Monthly Magazine in October 1980 featured the champion Kingston Town,
the brilliant 3YO Sydney Cup winner on its cover

Imported Marooned, later leading sire in Western Australia, gave nothing a chance in 1986 and in 1987 Major Drive, owned in part by Kerry Packer and driven home by a man possessed in Greg Hall, edged out the hot favourite Myocard and thwarted a multi million dollar plunge made by none other than …. Kerry Packer.

Bottomless, was the best way to describe the Randwick track in 1989,1990 and 1991 and mudlarks strolled home. Banderol, Palace Revolt and King Aussie were their names and old timers told us that there had never been a track as bad as in Palace Revolt’s year.

Tough dour stayers won the Sydney Cup through the nineties such as Azzaam, Cross Swords, Dacha, Count Chivas and Linesman for Gai Waterhouse in 1997.

They had to stand aside for class in Tie the Knot’s dual wins in 1998 and 1999. The eventual winner of 13 Group 1 races and the most popular horse in Sydney was way too good for his opposition. In 1998 that included the previous Melbourne Cup winner Doriemus and Tie the Knot, a three-year-old, and the last of his age to win the Sydney Cup, was too strong.

A succession of durable handicap stayers carried the Sydney Cup through the turn of the new millennium, horses such as Streak, Mr. Prudent, Henderson Bay, Mahtoum, No Wine No Song and Ista Kareem and a level above them were the winners Honor Babe, County Tyrone and Gallic but there was one exception to that description – Makybe Diva – who in 2004 played with a high class field to leave such good horses as Mummify in her wake.

Last year Jessicabeel, a fast improving young mare stormed home to a fine win, offering great promise for the spring, but unfortunately was unable to deliver.

So, who will it be that wins the staying contest at Randwick on April 23 2011 and joins the history of the Sydney Cup?

Why not look ahead a couple of years and buy yourself a stayer. You will find it much easier to win prizemoney and will be able to run, just about at will, on city tracks in that quest, in races where ballots are seldom necessary. It requires a little patience and if your horse is good enough, who knows, it may be you that holds that Sydney Cup aloft in a coming year. And lastly don’t forgot to enter your purchase into the BOBS and BOBS Extra Scheme – the extras you will collect will assist on the long road you will travel.

BENEFITS FOR OWNER/BREEDER NSWROA MEMBERS

Our good friend and corporate partner Gow Gates Insurance Brokers, have kindly prepared, via Kingsley Edwards, B.Agr.Ec (Syd.), Dip.Fin.Serv. (Ins. Broking), ANZIIF (Snr. Assoc.), C.I.P., the following:

For NSWROA members who are thoroughbred breeders as well as racehorse owners, there exists a further benefit of membership through access to the exclusive horse insurance package with Gow-Gates Insurance Brokers.

NSWROA members can take advantage of the significantly reduced premiums for mortality cover offered through Lloyd’s of London on their racing and breeding stock. Additional benefits included in this offer are the death of a horse which becomes ill or injured within the period of insurance for up to 12 months after the policy expires; and death during surgery conducted by a qualified veterinarian under local or general anaesthetic (both subject to the policy terms and conditions).

This tailored mortality insurance policy is an effective way for owners who have purchased yearlings at this year’s sales and/or are planning to buy any broodmares at the Easter Sale to reduce their risks and protect their investments.

Another feature of the exclusive insurance package for owner and breeders, in addition to these cost savings and broader cover, is the professional and personalised service for which Gow-Gates has earned a highly respected reputation since this leading insurance broking firm was established over 40 years ago. Gow-Gates specialises in adding value to their client’s horse insurances.

For more information about the NSWROA horse insurance package, please contact Kingsley Edwards on (02) 8267 9940 or by email kedwards@gowgates.com.au.

Gow-Gates Insurance Brokers (Australasia) Pty Ltd, A.B.N 29 069 562 787, AFSL 245433.

Disclaimer: The information in the above article is intended as a guide only and should not be relied upon without the consulting the “Lloyd’s Equine Policy LE (Australia) LMA3069” wording with relevant endorsements and seeking independent professional advice.

NOTICE OF ANNUAL GENERAL MEETING

Members are reminded that the forty-sixth Annual General Meeting of the NSW Racehorse Owners Association Limited (ACN 000 498 859) is to take place:

   • at The Rugby Club, Rugby Place, Off 31A Pitt Street, Sydney, 3rd Floor – Barbarian Room
   • on the 16 May 2011
   • commencing at 6.00pm.

In order to assist with catering arrangements, it would be greatly appreciated if members attending the AGM could advise the office by either email nswroa1@ozemail.com.au or by telephone (02) 9299 4299.

WINNERS ARE GRINNERS

A WINNER – there are no better words for an owner to hear!

As members are aware, as part of our membership renewal process, NSWROA requested members to forward the names of their racehorses in order for us to acknowledge their racing triumphs in our publications.

The listing under comprises wins recorded in New South Wales as well as Australian black type successes which are recorded in bold type.

Accordingly, hereunder are the lucky NSWROA members who had winners in March 2011:

NSWROA RACE SPONSORSHIP AT WAGGA GOLD CUP CARNIVAL CONTINUES IN 2011

I am very pleased to advise that the Association, as part of our commitment to support our country colleagues, will again be sponsoring the NSW Racehorse Owners Association Maiden Handicap over 1000 metres on Town Plate Day – May 5.

Town Plate Day is of course part of the Murrumbidgee Turf Club’s prestigious Wagga Gold Cup Carnival which commences on 17th April with Prelude Day and concludes on 6th May for Cup Day.

The featured event of the Carnival, the Listed Wagga Wagga Gold Cup which is run over 2000 metres, has prizemoney of $140,000 on offer. The Carnival attracts all the big names in racing with horses from the stables of Bart Cummings, Gai Waterhouse, John O’Shea and Tim Martin and the calibre of jockeys such as Corey Brown, Hugh Bowman, Tim Clark and Jim Cassidy regulars at Wagga each year.

Apart from the wonderful racing there is plenty of fun to be had off the track.

We encourage all members in the Southern Region to join us on 5 May for a great day out.

For further details on the Carnival, visit the Murrumbidgee Turf Club website at www.mtcwagga.com.au.

THE CARRAZZO TAX FILE -
ATO ANNOUNCE – THEY’RE CHASING YOUR LOSSES!

Due to the vagaries of the racing and breeding industry, tax losses are very common, especially in the early years, thus the industry should always take special notice if the ATO launches special projects focusing on tax losses.

I hope I have your attention now, as a release in the past week from the ATO has made it quite clear that it will not only be individuals who will wear the brunt of their crackdown on the claiming of illegitimate tax losses.

As background, individuals have been in the ATO’s sights for many years, highlighted by the tightening of the “Non-Commercial Loss” rules in the 2009 Budget, this change make it far more difficult for high income earners with an “adjusted taxable income” of over $250,000 to claim tax losses immediately.

This latest announcement has now put the onus on “Small-Medium Enterprise” (“SME”) to ensure that the claiming of their tax losses are within accepted ATO guidelines, so now entities such as companies and trusts, and not just individuals, are firmly within the sights of the ATO. For the record, a SME is a business whose turnover is within the range of $2 million to $250 million p.a.

What does the ATO release say?
The release emphasizes that a large number of businesses in the small-to-medium enterprise (SME) market segment are reporting tax losses following the global economic downturn. Due to this, the ATO are “stepping up” their focus on businesses reporting losses.

The major focus of the ATO will be to ensure losses are incurred and used in accordance with the tax law, and they intend to:
• help SMEs understand their obligations; and
• deal with non-compliance by reviewing and auditing higher risk cases.

ATO “losses” project strategy
As part of the ATO tax loss initiatives for 2011, they will be undertaking the following campaign activities in the coming weeks.

Pre-lodgment awareness campaign
The ATO will write to selected SME companies (via their Accountant) with carried forward tax losses in their 2009 income tax return. Their letters will provide “educational” guidance about common issues associated with revenue losses.

Verification campaign
The ATO will write to selected SMEs (via their Accountants) in early April that generated, deducted or carried forward significant tax losses in the 2008 or 2009 income year. This letter will notify them that they may seek further verification of those loss amounts through a questionnaire, or where necessary, a more formal review or audit process. The ATO will notify those SMEs they select for verification purposes via their tax agents in late April early May 2011.

N.B. The ATO will only select SMEs as part of one of these campaigns, not both.

What do you need to do?
If your racing and/or breeding entity has reported losses in either the 2008 or 2009 income year, I strongly suggest you take the opportunity to check these losses to ensure that they are still eligible to use them. Some common mistakes the ATO have indentified, or are likely to identify, include:

• the company is not carrying on a tax “business” and thus the losses are not eligible (refer below);
• losses used where the company does not satisfy either the 'continuity of ownership' or 'same business' tests;
• records not accurately kept to support or reconcile the loss; and
• carried forward losses not checked to ensure they are correctly calculated, including amendments to prior-year tax returns or losses cancelled.

What is a horse business for ATO purposes?
It goes without saying that my office has seen many instances over the years where SMEs have had their business status questioned by the ATO and their tax losses put at risk. I don’t expect this ATO project to be any different and I’m sure many breeders and owners will come under scrutiny, thus it’s crucial that your tax losses are reviewed for eligibility before the ATO darkens your doorstep…

In summary, the primary business factors the ATO wants demonstrated for a horse breeding business and/or racing business to be accepted are listed below and are sourced from guidelines within the ATO tax rulings TR 2008/2 and TR 97/11 and related case law in this area:

• whether the activity has a significant commercial purpose or character;
• whether the taxpayer has more than just an intention to engage in business;
• whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity;
• whether there is repetition and regularity of the activity;
• if racing, are they “integrated” with the breeding activities?;
• whether the activity is of the same kind and carried on in a businesslike manner such that it is directed at making a profit;
• the size, scale and permanency of the activity;
• existence of a breeding property;
• if the activity started with limited numbers, is their consistent growth in the scale of the activities (e.g. increase in mare numbers and/or foals);
• whether the activity is better described as a hobby, a form of recreation or a sporting activity;
• prior horse industry experience;
• the keeping of proper records;
• the existence of a business plan evidencing viability (see comments below);
• time expended on the activity;
• are mares being regularly serviced;
• progeny must be sold on a commercial basis;
• stallions used for breeding need to have market appeal (commerciality);
• are progeny being regularly sold in order to generate a profit;
• are stallion rights (if applicable) being utilised;
• registration of a business name;
• establishing a separate bank account;
• the regular use of experts and consultants; and
• does the taxpayer exercise “control” of his/her stock?

N.B. The taxpayer need not demonstrate all of these factors, however the existence of a business is enhanced by the activity demonstrating as many of these factors as possible. Whether an activity is a taxation “business” will always be decided as a question of fact.

You are welcome to contact Paul Carrazzo if you wish him to clarify or expand upon any of the matters raised in this article. Contact details for Paul appear under.

DISCLAIMER: Any reader intending to apply the information in this article to practical circumstances should independently verify their interpretation and the information’s applicability to their particular circumstances with an accountant specialising in this area.

PAUL CARRAZZO CPA
CARRAZZO CONSULTING CPAs
22 BLACKWOOD ST, NORTH MELBOURNE VIC 3051
TEL: (03) 9329 7044
FAX: (03) 9329 8355
MOB: (0417) 549 347
E-mail: paul.carrazzo@carrazzo.com.au
Web Site: www.carrazzo.com.au

SUCCESSFUL FUNCTIONS IN MARCH

Golden Slipper Hats & Tea Function

Without a doubt one of the glamour events leading into the Golden Slipper carnival was the Golden Slipper Hats & Tea which was held by the Association in conjunction with Sharon Lenton Events on 20 March 2011.

The models at the function were dressed in corsetry by Jessica Turner Designs and following the theme of the event, in masks.

In a room filled with beautifully dressed women, the Most Elegant Woman was always going to be a difficult decision.

Katie Brand was the successor in a pale pink satin vintage dress & jacket coordinated with patent pale pink shoes, matching bag and leather gloves. Katie adorned this number with a head piece from Kim Fletcher that could "stop traffic". The runner up was Marlia Saunders in a silk black floral dress with a strong blue tone lifting the outfit.

Best millinery award went to Kim Norton with a Lindsay Clare black wired intricate creation with black felt flowers encased at the back of the head.

If you missed out attending the event – don’t make the same mistake next year.

Hereunder are a selection of photos from the event:

Sharon Lenton & Rachel Watt		Katie Brand & Marlia Saunders
Jo McKinnon & Caroline Searcy		Models in the latest fashion from Perri Cutten for the Carnival
Models “in theme”

BMW Barrier Draw Cocktail Luncheon

The BMW Barrier Draw was the highlight of a cocktail function conducted by the Association, again in conjunction with Sharon Lenton Events, on Tuesday, 29 March. The function, which was held following the AAMI Golden Slipper Barrier Draw, was a great success with guests having a wonderful time savouring drinks and a cocktail style lunch.

Racing NSW Chief Steward Mr Ray Murrihy and Steward Mr Mark van Gestel officiated at the barrier draw which brought cheers from the gathering connections as they “picked a ball” and “sealed their fate”. Master of Ceremonies, Jo McKinnon conducted some “on-the-spot” interviews with guests including Ray Murrihy, Anthony Cummings, Rob Waterhouse and Max Whitby.

The Association would like to thank Jo McKinnon, Ray Murrihy, Mark van Gestel, Colin Tuck, Sharon Lenton, Doug May and the Australian Turf Club for contributing to the success of the day. We look forward to welcoming everyone back again next year to this event.

Hereunder are some photographs from the function which were kindly taken by Shane Hood from Hood Imagery.

Max Whitby, Melinda Madigan & Doug May		John & Judith Foley with Rob Waterhouse
Bruce Cowell, Michael Yates & John Vouris		Jo McKinnon & Anthony Cummings

Louis Mihalyka & Jo McKinnon		Sharon Lenton & Michael Crismale		John Vouris, Darren Pearce & Peter Beer