2017ANNUAL REPORT AND ACCOUNTS

BHA vision and mission 4-5

Chairman’s statement 6-7

Chief Executive’s foreword 8-9

Financial report 10-19

Strategic report 20-51

Equine welfare leadership 22-23

Keeping racing fair and clean 24-31

Growing British racing together 32-33

Competitive and compelling racing 34-35

World class racing 36-37

Looking after our people 38-41

Director's Report & Governance Statement 42-51

Financial statements 53-81

CONTENTS

4 5

VISION AND MISSION

OURVALUES

Integrity:Weaimtodotherightthingto

upholdtheBHA'sreputationforfairness,and

tomaintainthetrustofourstakeholders.

Accountable:Weaimtotakepersonalresponsibilityforour

actionsandstrivetoimprovethehealthofBritishracing.

Credible:Weaimtobeopenandhonestaboutwhat

wedo,andtreateveryonefairlyandwithrespect.

Responsive:Weaimtostayin-tunewiththesport’s

diversestakeholderssothatwecaneffectivelymeet

agreedobjectivesandgoals.

Progressive:Weaimtopromoteaforward-thinking

andcollaborativeculturewhilerespectingthestrong

heritageofBritishracingasasportandanindustry.

EQUINE WELFARE LEADERSHIP SUSTAINABLE IN

DU

STRY FU

ND

ING

WO

RLD

CLA

SS R

ACIN

G

FIN

ANCIAL RESPONSIBILITY

OUR OBJECTIVES

Integrity Accountable Credible Responsive

P

rogr

essiv

e

PR

OFESSIO

NAL W

ORKPLACE LOOKING AFTER OUR PEOPLE COMPETITIVE AND COMPELLING RACING G

ROWING BRITISH RACING TOGETHER

KEE

PIN

G RA

CIN

G FA

IR A

ND

CLE

AN

BHAVISIONANDMISSION

TOGETHER,WEWILLBUILDABRIGHTERFUTUREFOROURSPORT,OURHORSESANDOURPEOPLE

OURVISION STRATEGICOBJECTIVES2018

OURMISSION

TheBritishHorseracingAuthorityisresponsibleforthegovernance,administrationandregulationofhorseracingandthe

widerhorseracingindustryinBritain.TheBHAleadsonthedevelopmentandgrowthofracing,andprioritisesthehealth

andwelfareofthesport’sparticipants

EquineWelfare

Leadership:To

provideequine

welfareleadership

Keepingracingfair

andclean:Togrow

confidenceinBritish

Racingthrough

appropriateregulation

andintegrityprocedures

GrowingBritishracing

together:Toleadin

growingBritishracing's

relevance,revenues

andreputation

Competitiveand

compellingracing:

Todelivercompetitive

andcompellingracing

Worldclassracing:

Tocontinuetodevelop

aframeworkthat

advancesBritain'sability

tostagethebestquality

racingintheworld

Lookingafterour

people:Toimplement

properly-funded

andintegrated

recruitment,training

andretentionactivities

Enablers:culture,valuesandcapability;

innovationandtechnology;representingBritishracing.

6 7

CHAIRMAN’S STATEMENT

CHAIRMAN’SSTATEMENT

AkeyquestiontoanswerinanyChairman’sstatementiswhether

racingisinbettershapeattheendoftheyearinquestion-2017?

Theanswerhastobe‘yes’.

Fourofoureventsareinthetoptenofsporting

attendancesintheUnitedKingdom.RoyalAscot,

theCheltenhamFestival,theInvestecEpsom

DerbyandtheAintreeRandoxHealthGrand

Nationalpulledinnearly850,000spectators

betweenthem.AddinarecordChampionsDay,

andit’sclearwhyracingisinastrongsecondplace

behindfootball,attractingabiggeraudiencethan

rugbyunion,cricket,tennisandmotorsport.

Thosefiguresreflecthugecreditonourracecourse

colleagueswhoorganisetheseprestigiousmeetings

andmarketthemsosuccessfullytothepublic.They

alsoreflectcreditontheracingstaff,jockeys,owners,

breedersandtrainerswhoseinvestmentofmoney,time,

courageandmostimportantly,passion,ensuresthose

spectatorsaretreatedtoenthrallingsportingcontests.

Thecommercialfoundationsofracingwereconsiderably

strengthenedbytheintroductionofthenewLevysystem

on25thApril2017.InmyroleasChairmanoftheBHA,

Ihaveensuredthatsecuringthisnewagreement

wasgivenourabsolutefocus.Weshouldbeproudof

thewayoursportworkedtogethertoachievethis,in

awaythatwasunthinkableonlyafewyearsago.

InanticipationofanincreasedLevyincome,wewere

abletoincreaseprizemoneyfor2018toarecord£160

million.Remember,itwasonly£95min2012.We

concentratedonincreasingreturnsinthelowerand

middletiersofoursport,inrecognitionofthevitalrole

thatownersplayasinvestorsinracing.AsIwrite,the

yieldfromtheLevyfor2017-18isover£40millionhigher

thaninthepreviousyear(andalmost£50million

morethanitwouldhavebeenwithoutLevyreform).

Inordertodistributetheseincreasedrevenues

effectively,theRacingAuthorityisalreadyactive

inshadowformandbyApril2019willhavetaken

overformalresponsibilitiesfromtheHorserace

BettingLevyBoard.I’mdelightedthatSirHugh

Robertson,theformerSportsMinister,isnow

thechairofthisAuthority.Iknowhewillbring

significantandmuchneededvaluetoourindustry.

TheLevyreformisonehugestepforracing.The

nextstageofdevelopingracingfundingwillbeas

importantinthecontextoftherecentFOBTdecision.

Westminsterandmanyotherswillexpectracing

tocontinuetoplayakeyroleinresponsible

gambling,animalwelfare,industrystaffing

andsupportinggrassrootsbusinesses.

Socialattitudestogamblingandindeedtoanimal

welfaredoposelong-termchallengestooursport.

Thatiswhylookingafterthewelfareofourhorses

continuestobethefirstpriorityinourindustry

strategyandwhywemustdemonstratethat

racingisasociallyresponsibleformofbetting.

Staffingremainsamajorissueinmanyareas.TheBHA

isworkinghardwithmanyothersinthesportbutthere

isaneedtodirectmoreresourceandexpertiseintothis

criticalarea(includingrecruitmentandretention).

Many,includingWestminsterpoliticians,will

expectracingtodevelopavibrantandcohesive

Toteprovidingsubstantialvaluetoracingthrough

innovationandgloballeverage.Racingwillalsoneed

todevelopaclear,moreunifiedandmorevaluable

mediastrategy,asmanyothersportshave.

Racingmustshowinapost-Brexitworldhowwe

areincentivisingBritishbreedingandreducing

ourrelianceonhorsessuppliedfromoverseas.So

alotmoretodoandplentywithWestminster!

Nosportcanaffordtobecomplacentsowiththe

inkbarelydryonLevyreform,welookedafresh

atourstrategyforgrowingracing.Thereare

greatopportunitiesaheadascustomersengage

withsportsthroughdigitalchannels.Viewingand

bettingarebothmovingonline.It’sachallengefor

racingtoadaptatthesamespeedascustomer

habitschange,butthesignsarepositive.Betting

onhorseracingwasup3%in2017andoursportis

workingwiththebookmakerstosustainthatgrowth.

Asaregulator,theBHAhasalsoidentifiedsomerisks

tooursportandismovingtoaddressthese.Iappreciate

wehavenotalwayscommunicatedthereasonsfor

changeaswellaswecould,forexamplearound

stewardingandbloodstocksalespractices.Butwedo

listentoawiderangeofviewsacrossoursportand

ensurethatanychangeswemakewillbeunderstood.

Weseeitasourdutytoensurethesportkeepspace

withtheexpectationsofbroadcastersandviewers

whowanttoseedecisionsmadequickly,transparently

andaccurately.Racinghassomecatchingupto

doinitsuseoftechnologyandinnovation,butwe

cannotaffordtofallbehindifwearetomaintain

theconfidenceofthebettingandviewingpublics.

Wehavealsosufferedsomemistakesoncourse

andthesecannotbeacceptableinanysport.

Thisreportisbeingpublishedinmid-2018andIam

gladtoseethatmanyofthetrendsremainpositive,

althoughtheweatherhasimpactedfieldsizes.

Iwanttothanksometeamsplayingtheirpart

indeliveringgreatracing.ITVaredoingafine

jobandweshouldrecognisethis;thetripartite

jointventurestructureweintroducedinracing

in2015continuestoworkwellandtheBHA

teamworktirelesslyforourgreatsport.

AsIreachmy6thyearasChairIwouldalsoliketo

thankthenumberofpeoplewhohavesupportedme

personallyovertheyearsandindeedinrecentmonths.

Ilookforwardtohelpingthissportformanyyears

tocome.

SteveHarman

Chairman

8 9

CHIEF EXECUTIVE’S FOREWORD

CHIEFEXECUTIVE’SFOREWORD

Reflectingonthisreportandtheprogresswehavemadeina

numberofareas,Iamstruckbytworecurringthemes.Thefirstis

theimportanceofworkingtogetherwithothersandtheprogress

wemakewhenwedoso.Thesecondisaboutimprovingthewaywe

runandregulateoursport,sowemaintainandbuildpublictrust.

WhilethisistheBHA’sAnnualReport,muchof

whatitcontainsistheresultofarealteameffortby

theleadersofBritishracing.Wemadeaconscious

decisionin2013tospeaktoGovernmentwithasingle

voiceandthiscombinedlobbyingapproachborefruit

whenwefinallysecuredreformoftheLevyin2017.

Whenweuniteinpursuitofcommongoals,wecan

achievegreatthingsandmakerealprogress.

WhileLevyreformisalandmarkachievement,thereis

evidenceofthesamespiritoftogethernesselsewherein

thisreport.Topickoutoneexample,wemadechanges

totheprocessforcompilingthe2018fixturelist,with

theclearobjectiveofincreasingtheinvolvementand

inputofthesport’svariouscustomers,participantsand

stakeholders.AsIwrite,wehavejustpublishedthe

fixturesfor2019,followingaprocessthatwasfurther

modified,basedonfeedbackfromthepreviousyear.

Buildingstrongrelationshipsrequiresgood

communication.Recognitionofthisresultedinachange

totheBHA’sorganisationalstructurein2017,inwhich

weappointedanewDirectorofCommunicationsand

CorporateAffairstotheExecutive,bringingtogether

ourcommunications,stakeholderengagementand

corporateaffairsfunctionsintoacombinedteam.

Thiswasanexplicitacknowledgementthatwewant

tocommunicatemoreopenlyandeffectively,notjust

withthesportitselfbutwithaudiencesoutsideracing.

Manyothersportshavebeenunderpublicandmedia

scrutinybecauseoffailuresaroundgovernance,

integrityandanassociatedlackoftransparency.We

wantthemedia’sfocusalwaystobeonthegoodthings

aboutourexcitingsportandthatmeanshavingthe

highestpossiblestandardsofwelfareandsafetyfor

bothequineandhumanparticipants,aswellasworld

classlevelsofintegrity.Itisnotjustabouthaving

thosestandards,it’saboutbeingseentohavethem.

That’sallpartofourregulatoryrolebut,asthe

governingbody,wearealsotaskedwithleadership.

Whilewealwaysstrivetobuildsupportandseek

consensus,wesometimeshavetobewillingtotake

tough,unpopulardecisionswhentheyarenecessary

tothelong-terminterestsofthesport.Itisourroleto

scanthehorizonforpotentialthreatsandweaknesses

and,asI’mfondofsaying,tohavesleeplessnights

onbehalfofBritishracing.Youwon’talwayslikeour

conclusions,anditgoeswithoutsayingthatdevoting

timeandefforttoeffectivecommunicationofthe

outcomesthatresultisalwaysaworthwhileinvestment.

Racing’sbiggestchallengesarearguablynotthose

presentedbygovernmentpoliciesongamblingorthe

potentialcomplicationspresentedbyaBritishexit

fromtheEU.Ourbiggestexistentialchallengeisour

relevancetothepublic,andourneedtodrivegreater

interestandengagementinracing,whichwillinturn

increaseattendances,horseownership,mediavalue,

bettingrevenues,sponsorshipand,mostimportantly,

theattractivenessofracingasacareerchoice.

Youwillnoticethat,overthepastyear,wehave

rationalisedandreducedthenumberofourstrategic

prioritiesfromninetosix.Whileyouwillreadabout

arangeoftechnicalprojectsthatunderpineach

oftheseheadings,beinnodoubtthatwehave

chosenasprioritiestheareasthataremostvital

ingrowingpublicinterestandtrustinoursport.

Equine welfare leadership:Publicperceptionsand

misconceptionsaboutequinewelfareremaina

majorbarriertopublicsupportforracing.Wemust

simultaneouslystriveforthehigheststandards

andbemoreopentotalkingaboutwelfare,tobuild

understandingandtodemonstrateimprovement.

Keeping racing fair and clean:Tomaintaintrust,the

publicandracing’sparticipantsmustbeconfident

thatBritishracingisfair,andthatrule-breaking,

dopingandcorruptionarenevertolerated.

Competitive and compelling racing:Competitionfor

people’sattentionandinterestfromarangeofsports,

leisurepursuitsandotheractivitiesishigherthanit

haseverbeen.Togrowpublicinterestinracing,we

needtoputcustomersattheheartofourproductand

raceplanning,sowegrabtheirattentionandfacilitate

theirengagement,inwaysthatworkforthem.

World class racing:Wewantpeopletoknowthey

arewitnessingsomethingtrulyworldclasswhen

theywatchBritishracing.Thatmeansproviding

opportunitiesthataidthemaximumprogressionof

individualhorses,sotheyareabletofulfiltheirpotential,

aswellasinvestinginthecontinueddevelopment

ofthethoroughbredbreedmoregenerally.

Looking after our people:Thisremainstheindustry’s

greatestchallengeandwemustworktogetherto

tackleitatmultiplelevels,fromrecruitmentto

retention,fromtrainingtoretraining.Partofthis

challengeisaboutmakingracinganattractive,

enjoyableandrewardingcareeroption.

Growing British racing together:AsI’vesaid,theglue

thatholdseverythingelsetogetherisourabilitytowork

togetherasasport,withthecommonaimofgrowing

anddevelopingracingforabrightandsecurefuture.

Somewouldfindthisallratherdaunting.Idon’t.I

lookaroundandseehugestrengthinBritishracing,

astrengththat’sbasedonoursharedpassion

forthesportandtheloveofourhorses.Itismy

privilegetospeaksometimesattheindustry’sstud

andstablestaffawardsandIdefyanyonewho

attendstocomeawaywithoutbeingupliftedbythe

sheerhumilityandexcellenceofracing’sstaff.

I’mluckytoseethosevaluesdisplayeddailybyour

hard-workingteamattheBHA,especiallythosewho

travelthelengthandbreadthofBritaintoenable

meetingstorunsmoothlywithinourrules.I'm

gladtohavethisopportunitytothankthempublicly

fortheirvitalcontributiontoBritishracing.

SoI’mconfidentthatoursportwillmakethemost

ofthemomentofopportunitywehavethrough

increasingrevenuestorefreshourappealand

adapttochangingsocialattitudes.Ilookforwardto

workingtogethertoachievethatbydemonstrating

thatracingisrelevant,responsiveandresponsible.

NickRust

ChiefExecutive

10 11

FINANCIAL REPORT

FINANCIALREPORT

PROVIDINGVALUEFORMONEYFORTHESPORTREMAINSAPRIORITY

2017wasthefirstyearofourcurrentthreeyear

budgetcycle,overwhichweareaimingtobreakeven.

Performancewasbetterthanexpectedwithincome

endinghigherthanbothbudgetandforecast,delivering

anincreasedsurplus.

Theadvantageofbeingslightlyaheadofourthreeyear

planwasthatfeeinflationfor2018wasabletobesetat

lowerlevelsthanpreviouslyanticipatedandlowerthan

inflation.Thispositivestepshouldhelpparticipantsand

racecoursesfinanciallyover2018andbeyondandwill

hopefullysupportfurthergrowthacrossthesport.

Wecontinuallyaimtodelivervalueformoneyforthe

sport.Thisremainschallenginggivenourfixedlongterm

contractswhicharetiedtoinflationandthefactthatover

halfofourcostsarerelatedtopeople,whicharesubject

tosalaryinflation.Thishashadasignificantimpactin

2018butagainwehavemanagedtheseincreaseswithin

ourthreeyearplan.

Activity in 2017 increased in many areas as we continued to

respond to changes across the industry:

Thenewstatutorylevydeliveringover

£40madditionalincomeforthesport

Creationofthenewindependentjudicialpanel

topresideovercompliancecaseswhichwill

deliverahigherstandardofregulation

Continueddeliveryoflargescalecapitalprojectswhich

allowsimproveduseoftechnologyonaraceday

Weundertookreviewsintobothcorporate

governanceandhandicapping,theresultsof

whichwillstarttobeimplementedin2018

Welaunchedthediversityinracingsteeringgroup

andhavestartedtotakeactionstoaddressissues

relatingtodiversityincludinggenderpay

Wehaverespondedtoidentificationissuesbyadding

additionalprocessesintoracedayregulation

Wearerollingoutenhancedintegrity

educationandtraining

Wecontinuetomakeimprovementstotherace

programmetoimprovefieldsizes.Akeychangewas

madein2017totheprogrammefor2yonovices.That

wasextendedin2018tocover3yosandolderhorses.

Newownershipstructuresandaracingadministration

sitewerelaunchedwhichwillreduceoverallownership

administrationandstreamlinepreviousprocesses.

HEADLINE NUMBERS FOR 2016 AND 2017

Surplus/(deficit)beforestatutoryadjustmentsandtax

Administrativecosts

Operatingsurplus/(deficit)

Interest

Income

£’000 £’000

33,23631,852

(32,907)

329

12

(32,046)

(194)

19

341(175)

2016 2017

12 13

FINANCIAL REPORT

INCOME INCOME EXPLAINED

Totalincome*

Totalstatutoryincome

Owners

Otherparticipants

Publications

Managementandpropertycharges

Other

Racecourses

£’000£’000 %£’000

21,811 5.8

8,570

699

515

552

409

3.4

5.6

(4.6)

3.2

(21.0)

1,186

283

37

(25)

17

(109)

32,911

33,236

4.4

4.3

1,385

1,384

65.6%Racecourses

25.8%Owners

2.1%Otherparticipants

1.6%Publications

4.9%Other

Thestructureofourincomedoesnotreallychangeeach

yearwithcirca65%comingfromracecourses,26%from

ownersand9%fromotherareas.Allfeesroseby2%

inJanuary2017generatingcirca£600,000additional

income.Thebalanceoftheincreasearosefromchanges

inactivityandthereleaseofdeferredincomefrom

previousyears.

Incomefromracecoursesisderivedfromcharges

forregulation,integrityandgovernanceservices.

Racecoursesreceivecentralfundingfromthe

HorseraceBettingLevyBoardtoassistthemin

fundingalargeproportionofthesecosts.

Themostsignificantchangesinourincomestructure

wereinourownershipfeeswhichweretiedtochanges

inownershipstructures.Themostnotablewasthe

removalofthere-registrationfeeforjointownerships

whichwasremovedinMay2017andmeantthatover

1,800re-registrationswerenotcharged,savingowners

£40,000.However,despitethiswesawincreased

activityinmanyareaswhichmorethancompensated

forthis.Inaddition,wealignedowners'annualre-

registrationstoonedatespecifictothemtoremove

unnecessaryadministrationandmaketheannualre-

registrationprocesssimpler.

Incomefromracecoursesandownersmakesupmore

than90%ofourincome,thebalancecomesfromother

participantfees,racingpublicationsandothersundry

income.Wecontinuetoseeadownturninactivity

fromracingpublicationswithmoreusersswitching

onlinetoaccessthisinformation.Thenewonlineracing

administrationsitewaslaunchedinlate2017toboth

trainersandownersandwehaveseenastronguptake

inthoseusingthisplatform.Thenewsitecontains

increasedfreeraceprogramminginformationas

wellasdrivingincreasedusageofonlineentry

anddeclarations.

Thenewsitehasmorefreerace-programming

informationandisdrivingincreasedusageofonline

entryanddeclarations.

2016 Variance Variance2017

*TotalincomeisthefigureusedbymanagementtoassesstheperformanceofthebusinessandisthenumberpublishedinourBudgetGuide.

**GreatBritishRacingInternationalistreatedasacostcentrewithintheBHA.Forstatutorypurposesthecostsandrevenuearerequiredtobeshowngross.

Fines

Industrytrainingincome

132

39

(24.6)

(29.1)

(43)

(16)

Internationalrunnerandpermanentimporttesting 184 42.655

GreatBritishRacingInternationalfunding** 325 (0.3)(1)

20,625

8,287

662

540

535

518

31,526

31,852

175

55

129

326

14 15

FINANCIAL REPORT

*Theimpairmentchargeof£148,000relatestoawritedownoftheCompany’sinvestmentinBritishHorseracingDatabaseLimited(BHD),whichisdriven

bythecompany'sinvestmentinGreatBritishRacingLimited(GBR)whichrelatestoawrite-downin2017.Foroperationalpurposesthisisanontrading

transactionandshouldbeexcludedforcostcomparisonpurposes.

**GBRItotalcostsamountedto£398,000,offsetby£325,000ofincomethatGBRIderivesfromothersources,makinganetcostof£73,000totheBHA.

***Totalcostsaredifferenttothoseshowninthestatutoryaccountsduetostatutorypensionadjustmentswhichareexcludedformanagementpurposesand

areshowninaseparatereconciliationonPage20.

COSTS

Weatherbys

Equinesamplingandresearch

Propertyandoverheads

Legalandprofessional

Communicationsandcorporateaffairs

Publicationandproductioncosts

Committeesandenquiries

Totalstaffcosts

£’000£’000 %£’000

16,83316,373 2.8

5,3415,293

3,4653,368

2,7132,488

8471,307

520514

409424

414348

0.9

2.9

9.0

(35.2)

1.2

(3.5)

19.0

460

48

97

225

(460)

Projectspend 697614 13.583

6

(15)

66

ITinfrastructureandnetworkcosts 194175 10.919

BHDlicencefee

Impairmentcharge*

160152

148-

5.3

N/A

8

148

Industrycareersmarketing

Internalstafftrainingandrecruitment

174172

197204

1.2

(3.4)

2

(7)

Horsemen’sGrouploanrepayment (50)(75) (33.3)25

Other 447267 67.4180

GBRI** 398422 (5.7)(24)

Total*** 32,907 2.7861

Total staff costsincludethecostofallstaff

andtheBHABoard.Overall,costsroseby

2.8%duetoanincreasedheadcount(seepage

17)todeliverourstrategicobjectives,anda

generalinflationincreaseof2percent.

Weatherbysprovideadministrationservices

onalong-termcontractwhichexpiresin2020.

Thesecostsincreasedby0.9%despiteinflation

of1.38%beingappliedin2017,meaninga

smallrealtermssavingwasdelivered.

Equine sampling and researchisprovided

underanagreementwithLGCandthroughour

facilityattheCentreforRacehorseStudiesin

Newmarket.The2.9%increaseincostsisdriven

bybothinflationandincreasedactivity.

Theentireincreaseinourproperty and overhead

costsisduetodepreciationdrivenbysignificant

capitalexpenditureinthelast2-3years.

Legal and professional costsreducedbyover35%

in2017.Thiswaswasalmostentirelyafunction

ofreducedcostsincomplianceanddisciplinary

aswellasreducedspendonlevyreplacement.

Project spendvarieseachyearandcoversintegrity,

equinescience,medical,andothercentralprojects

suchastheQuinlanreview,anditsimplementation.

Communications and corporate affairsincludes

costsassociatedwithourgovernmentrelations

activity,theStudandStableStaffAwardssponsored

byGodolphin,TheHorseComesFirstcampaign,

whichisco-fundedwithotherstakeholders,and

racing’scommunityengagementprogramme

RacingTogetherthroughRacingtoSchool.

Publication productioncostsrelatetotheRacing

CalendarandProgrammeBook.Forthethirdyear

runningwereducedthecostsofthesepublications.

Committee and enquirycostshaveincreasedduetothe

formationofthejudicialpanelanditsassociatedcosts.

Duringtheyear,wereceivedarepayment

fromThe Horsemen’s Groupof£50,000.A

balanceof£200,000remainsoutstanding.

50.7%Totalstaffcosts

16.2%Weatherbys

10.5%Equinesamplingandresearch

8.2%Propertyandoverheads

2.6%Legalandprofessional

2.1%ProjectSpend

1.6%Communicationsand

externalaffairs

1.3%Publicationandproductioncosts

1.1%Committeesandenquiries

5.7%Other

COSTS BROKEN DOWN

2016 Variance Variance2017

32,046

16 17

FINANCIAL REPORT

STAFF ANALYSIS GENDER PAY GAP

Racedayoperationsandregulation

Racingandoperations

Executive(includingexecutivesupport)

Communicationsandcorporateaffairs

GBRI

Legalandgovernance

Integrityandregulatoryoperations

2017 Variance2016Businessarea

5

3

(2)

1

1

-

1

102

54

40

15

8

IndustrypeopleanddevelopmentandHR -5

4

2

Numberofstaff

Numberofstaff

Ourheadcountwas230at31December2017,ninehigherthanatthesametimein2016.Thesenumbersexclude

sessionalstaffwhoperformavitalroleprimarilyinracedayregulationandoperations,whoarenotincludedin

thetablebelow.Followinginternalreportingchanges,theHRdepartmentheadcountisnowshowninRacingand

operations.The2016numbershavebeenrestatedaccordingly.Ourstatutorynumbers,whichincludesessionalstaff,

areshowninnotefouroftheaccounts.

WearerequiredtocomplywithGenderPayGapreportingrequirementsgivenourrelevantemployeesareover250

atthesnapshotdateof5April2017.Relevantemployeesatthisdateincludeanumberofsessionalworkerswho

areordinarilyexcludedfromourheadcountnumbersabove.

Theresultsareshowninthetablesbelow.

Total 9230

TheIntegrity and Regulatory operationsteamprovide

racedayandnonracedayintegrityfunctions.The

increasedstaffingrelatestoextrainvestigativeand

licensingresourceaswellasmoreracedayroles.

Raceday operations and regulationisresponsiblefor

providingracedayveterinaryandstewardingfunctions

aswellasheadofficedisciplinaryandcompliance

functions.Theincreasesin2017areduetothe

recruitmentoftwonewveterinaryofficersandone

internaltransferfromRacingandoperationstomanage

specificregulatoryprojects.

TheRacing and operationsteamhadvarioustemporary

vacanciesat31December2017offsetbymaternity

cover.Oncethesevacanciesarefilledthisnumber

willincrease.

TheExecutive officeincludesourexecutivedirectors

andtheirsupportstaff.Theincreaseisduetoan

additionalexecutiveassistanthiredtosupportthe

newexecutiveteam.

TheCommunications and Corporate affairsteamswere

mergedduringtheyearaspartofthenewstructuresput

inplace.Thisincreasedteamaroseduetoatemporary

vacancyattheendof2016whichwasfilledin2017.

TheLegal and Governancefunctionstookonpermanent

in-houselegalsupport.Thisstructure,whichwas

implementedaspartoftheQuinlanreviewin2016,

continuestoevolve.

The BHA’s gender pay gap, which is slightly below

the national average, is primarily owing to

Fewerwomeninseniormanagement

positionsandracedayroles

Underrepresentationofwomenin

theupperthreepayquartiles

Arelativeconcentrationoffemale

employeesinthelowestpayquartile

Wehaveagenderbonusgapof66%(mean)and

31%(median).Thegenderbonusgapisaresultofa

performance-relatedincentiveplanatExecutivelevel

linkedtoorganisationalandindividualperformance.At

thetimeofthesurvey,30%oftheExecutivewerewomen.

TheBHAiscommittedtoattractingmorewomeninto

theorganisationatmanageriallevelsandtopositive

actiontosupportwomeninourpromotionprocesses.

Wehaveincreasedourtraininganddevelopment

budgettosupportpositiveactionandwillincrease

recruitmentfromoutsidetraditionalracingcircles

toappealtomorewomenandminorities.

97

51

42

14

7

5

4

1

221

Meangenderpaygapinhourlypay

Mediangenderpaygapinhourlypay

Meanbonusgenderpaygap

Medianbonusgenderpaygap

ProportionofMalesandFemalesreceivingabonus

16%

15%

66%

31%

Males–20%:Females–34%

Quartile1

Quartile2

Quartile3

Quartile4

FemaleMaleProportionofmalesandfemalesineachquartile–Paybyquartile

22%

27%

20%

53%

78%

73%

80%

47%

18 19

FINANCIAL REPORT

RECONCILIATION TO STATUTORY NUMBERS

TAXATION

AdjustmentsinrespectofFRS102forpensions

Taxation

Surplus/(deficit)beforestatutoryadjustmentsandbeforetax

Surplusbeforetaxation

£’000

£’000

£’000

£’000

341

1,056

(175)

561

715

173

736

161

2016

2016

2017

2017

Whenpreparingstatutoryaccounts,wearerequired

tomakeanadjustmenttothewaywetreatpension

contributions.Intheinformationprovidedonpage16,

weshowpensioncontributionsbaseduponthecash

contributionspaid.Forstatutorypurposes,wereplace

thesecontributionswithinterestandservicecostsas

prescribedunderFinancialReportingStandard102.

Thisimprovesourresultsfor2017by£715,000.

Wearealsorequiredtoproduceconsolidatedstatutory

numberswhichincludetheoperationsofGBRandBHD.

Theanalysisandcommentaryaboveisbasedonthe

BHA’sactivityonly.

WecontinuetotakeadvantageofResearchandDevelopment(R&D)tax

creditsforexpenditureincurredinveterinaryresearch,medicalresearch

andITdevelopment.Thisresultedinataxcreditof£173,000.

Statutorysurplusbeforetax 1,056561

Surplusaftertaxation 1,229722

20 21

STRATEGIC REPORT

Equinewelfareleadership 22-23

Keepingracingfairandclean 24-31

GrowingBritishracingtogether 32-33

Competitiveandcompellingracing 34-35

Worldclassracing 36-37

Lookingafterourpeople 38-41

STRATEGICREPORT

22 23

STRATEGIC REPORT

ThecreationoftheroleofDirectorofEquineHealth

andWelfarereflectsthecriticalimportanceofequine

welfarefortheBHAandBritishracing.British

racingisalreadyamongsttheworld’sbest-regulated

animalactivities,butwemustcontinuouslyseekto

improvestandardsforourhorsesthroughouttheir

entirelivesandensurethatdecisionstakenare

underpinnedbyrobustresearch,scienceanddata.

The Equine Health and Welfare Strategy has

been developed with the following objectives:

Provideequinewelfareleadershipforracingonbehalf

ofthesport

MeasureandbenchmarkcurrentwelfarelevelsinUK

racingthoroughbreds

Makeevidence-basedpolicychangesonwelfare

concernstomaintainandimprovewelfareinall

sectorsoftheracingindustry

Establishtraceabilityfrombirthto

well-beyondretirement

Maintainpublictrustthroughopencommunication,

objectiveengagementandresponsetoperceivedand

realwelfareconcernswithintheracingindustry

Britishracing,throughtheBHA,HorseraceBettingLevy

BoardandTheRacingFoundation,investedalmost£2

millioninveterinaryresearchandeducationin2017.A

numberofprojectswerecommencedinlinewiththe

objectivesoftheStrategy.

EquineHealthandWelfareDatabase

Apriorityofthestrategyistodevelopafullyintegrated,

BHA-controlledUKthoroughbreddatabasethatwill

allowustocomprehensivelyassessandmonitorall

datarelatedtoathoroughbredreceivedbytheBHA

andallowdefined,appropriate,evidence-basedwelfare

decisionstobemade.ItwillalsoallowtheBHAto

identifyareasoflossfromtheindustryandimprove

racedaycatastrophicinjuryandfatalityanalysis.

30dayfoalnotification

Anotherpriorityofthestrategyistoestablishfulland

consistentthoroughbredtraceability.InNovember,

weannouncedanewrequirementforbreedersto

notifytheWeatherbysGeneralStudBook(GB)within

30daysofthebirthofafoalbredforracing.Thiswill

allowtheBHAtotracethewelfareandwhereabouts

offoalsbeforetheyarriveinaregisteredtrainingyard

andbringsBritainintolinewithinternationalpractice

acrossmanyothermajorracingjurisdictions.

WindSurgeryDeclarations

ItwasannouncedinNovemberthatracecardswillbe

abletocarryinformationthatconfirmswhenahorse

ishavingitsfirstrunafterhavingundergonewind

surgery.Thiswasintroducedwiththesport’sbetting

customerasthefocus,intheinterestsofopennessand

transparency,particularlyfollowingconsultationwiththe

HorseraceBettorsForum(HBF).Thedevelopmentalso

allowstheBHAtocollectresearchdataonthenature,

frequencyandimpactofwindsurgeriesonracehorses.

EQUINEWELFARELEADERSHIP

TheBHAleadsonequinewelfaremattersonbehalfofthesport

andin2017createdanewExecutive-levelroleofDirectorof

EquineHealthandWelfaretoleadonthedevelopmentand

implementationofanewequinewelfarestrategyforthesport.

EquineVisionProject

In2017,theBHAandTheRacingFoundationfunded

aninnovativeresearchprojectatExeterUniversityto

investigatethedesign,colouranddepthofobstaclesand

thedifferencebetweenhowhumansandequinessee

themincomparisontotheirsurroundings.Theinitial

findingssuggestthatalternativecoloursmaybemore

visibletohorsesagainstthesurroundingvegetation

underdifferentlightsandweatherconditionsasitis

unlikelythatthecurrentorangemarkerscanbeseen

wellbyhorsesagainstthefence/hurdleorsurrounding

vegetation.Theresearchprojectisongoingwith

furtherfindingsexpectedtobeannouncedin2018.

HorseComesFirstNationalRaceday

Communicatingandpromotingthesport’shigh

standardsofequinewelfareisvital.Theanimal

welfarestandardsdemandedbytheBritishpublic

haveneverbeenhigheranditisimportantthat

theperceptionofBritishracingisconsistentwith

theactualhighstandardsofcareprovidedto

thoroughbredsbefore,duringandaftertheirracing

career.TheannualHorseComesFirstraceday

washeldinDecemberatBangor,ChelmsfordCity,

CheltenhamandDoncasterracecourses.ITVbroadcast

anumberoftheactivitiestakingplacethroughout

thedayatCheltenham,includingthepaintedhorse

displayandalsoairedaninterviewwiththeBHA

ChiefRegulatoryOfficeronthetopicofthewhip.

INNOVATIVERESEARCHPROJECTATEXETERUNIVERSITYTO

INVESTIGATETHEDESIGN,COLOURANDDEPTHOFOBSTACLES

LEFT:HUMAN RIGHT:HORSE

24 25

STRATEGIC REPORT

KEEPINGRACINGFAIRANDCLEAN

Throughout2017,theBHAcontinuedtoimplement

recommendationsfromthe2016Integrityand

QuinlanReviews,mostnotably,appointingthenew

IndependentJudicialPanelChairmanandPanel

Members.Resourceintheintegritydepartmentwas

bolsteredwiththeappointmentofChrisWattsas

HeadofIntegrityAssuranceandEmmaMarleywas

appointedasHeadofRacecourseOperations.

Stewarding

TheBHAannouncedthatitwouldbeundertakinga

consultationonthefuturestewardingmodelforBritish

racing.Ensuringthehigheststandardsofgovernance

andregulationisfundamentaltoallsports,andBritish

racingisnoexception.Asthegoverningandregulatory

bodyofthesport,theBHAmustcontinuetoensurethat

weareoperatingtobestpracticetoprotecttheintegrity

ofoursportforthebenefitofparticipantsandfans.

The consultation was therefore commenced

with the following objectives:

Continuetodevelopasagoverningandregulatorybody

thatoperatesinthebestinterestsofthesportand

hastheconfidenceofparticipantsandtheracingand

bettingpublic

Ensurethereisclearaccountabilityandconsistencyin

managingracedayintegrityrisksanddecision-making.

Createasustainable,efficientandprogressivemodel

thatmeetsthedemandsofamodern-dayfixturelist

128 responses were received in the initial stage of

consultation which allowed for the development of

a series of core, underlying principles which might

form the foundations of a new stewarding model:

Streamlinedandaccountableracedaymanagement

Anefficientandlegallysoundstewardingmodel

Enhancedtrainingandmanagementthestewardingteam

SupportingtheintegrityfunctionsofBritishracing

Meetingsportsgovernancestandards

Consultationontheseprinciplesbeganattheend

of2017.

StrictLiability

TheBHAannouncedinNovember,thatitwillseekto

amendtheRulesofRacingtoavoidweakeningthe

abilityforpenaltiestobeimposedforbreachingthe

equineanti-dopingrules.Thisfollowedadecision

bytheindependentAppealBoardtodismissa

BHAappealagainstaDisciplinaryPaneldecision

nottoimposeapenaltyonatrainerforbreaching

racing’sstrictliabilityrules.Theclarificationofthe

interpretationofRule(G)11.4doesnotchallenge

theprincipleofstrictliabilitybutdidhighlight

issueswiththewaytheruleiscurrentlywritten.

Asregulationandintegrityevolvearoundtheworld,itisvital

thatBritishracingisseenasprogressiveandasaleader.That

meansembracingnewandimprovedprocedures,drivingchanges

toprocessesandmaximisingtheuseoftechnology,whilealso

ensuringtherulesofthesportandrequirementsofparticipants

areunderstoodthroughongoingeducation.

FastTrackProtocol

AFastTrackProtocolwaspublishedinNovemberfor

lowerlevelrulebreaches.Theobjectiveofthefast

trackprotocolistoincreasetheefficiencywithinthe

BHA’sregulatoryfunctionandresolveapplicablecases

inaswiftmannerwithlessofanimpactonresources

andcostfortheBHAandparticipantsinvolved.Itwas

recommendedinboththeIntegrityandQuinlanReviews.

Examplesofcaseswhichmaybeaccelerated

throughthischannelare:failuretonotifygelding

operationsorbreachesconcerningvaccination,

passportandidentitychecks,althougheachcase’s

suitabilitywillbejudgedonanindividualbasis.

InvestigationCharter/GuidanceNote

An‘InvestigationCharter’andguidancenotewere

introducedinDecemberforthosesubjecttoan

investigationinordertoprovideclearerguidanceas

towhattoexpectduringthecourseofdisciplinary

proceedings.Instructionsandinformationare

providedtoparticipantsastowhatisexpectedof

themandtheBHAstaffwhotheywillcomeinto

contactwith,aswellassettingoutguidelines

regardingthepossiblelengthofinvestigations

andtheregularityofupdatestheywillreceive.

Anti-Doping

Therollingimplementationofapaperlesssampling

applicationculminatedinallpost-racetestingbeing

conductedontheappfromRoyalAscotonwards.By

theendof2017othertypesofracedaytestinge.g.

TCO2werealsobeingundertakenviatheapp.In2017

wealsocarriedoutretrospectiveregulatorytesting.

RulesRe-Write

Progresscontinuedontheprojecttore-writethe

RulesofRacinginamoreaccessibleformatforour

participants.Consultationwithstakeholderstookplace

throughout2017andthelegaldraftingcommenced.

2017 INTEGRITY BENCHMARKING SURVEY

In2017theBHAcommissionedComRestoundertakea

surveytomeasureperceptionsandconfidencearound

integrityinBritishracingandthereforeidentifyareas

forimprovement.Theresultswillprovideanannual

benchmarkofstakeholderperceptionsofintegrity.

Thesurveywasconductedonlineand1,723

responseswerereceivedacrossarangeof

stakeholdertypes:owners,jockeysandjockeys'

agents,trainers,breeders,stakeholders,betting/

HBF,media,racecoursesandracingfans.

Perceptions of BHA

StakeholdersgenerallyconsidertheBHAtoperform

wellasthegoverningbodyandregulatorofBritish

racing-overeightintenreportthis(82%)with

only14%consideringtheBHAtohaveperformed

notwellasgoverningbodyandregulator

FavourabilitytowardstheBHAisgenerally

highacrossstakeholdergroups

ThosemorefamiliarwiththeBHAaremore

likelytobefavourabletowardsitswork.Nearly

eightinten(78%)ofthosefamiliarwiththe

BHAreportbeingfavourabletowardsit.

Points of action

ThereisalackoffamiliaritywiththeBHA'squasi-

judicialpanels;amajorityofBHAstakeholders

werepreviouslyunawareofthesepanels(67%)

ThefavourabilityratingstheBHAenjoysisnot

currentlybeingconvertedtoadvocacyforthe

organisation,withathird(33%)sayingthey

wouldspeakabouttheBHAinneutralterms

Thereisarelationshipbetweenfavourability

towardtheBHAandconfidencethatBritish

racingisrunwithintegrity,withtwoinfive(41%)

stakeholderssayingtheyarenotveryconfident

26 27

STRATEGIC REPORT

KEY FINDINGS

ThereisabroadconsensusthattheBHAiseffectiveacrossawiderangeofperformancemeasures

ThemajorityofrespondentsacrossallstakeholdergroupsareconfidentthatBritishracingisrunwithintegrity

Racingfansarethemostlikelytoreportbeingconfidentthatthequasi-judicialpanelscanandwillactindependentlyoftheBHA

Keepingracingfairandclean

Betting

Racingfans

Makingiteasyforpeopletocomplywiththerulesofracing

RacingFans

Betting

Providingsuitableeducationontherulesofracing

Trainers

Trainers

SafeguardingthegoodreputationofBritishracing

Racecourses

Media

Ensuringhorsesarerunontheirmerits

Owners

Breeder/Bloodstock

Monitoringracingbettingmarkets

Investigatingrulesbreaches

Breeder/Bloodstock

Stakeholders

Prosecutingthosewhobreaktherules

Jockeys/JockeysAgents

Owners

Keepingracingfreeofcrimeandcorruption

Stakeholders

Racecourses

Makingsureonlyproperandsuitablepersonstakepartinracing

Media

Jockeys/JockeysAgents

NET:Effective

NET:Confident

NET:Effective

Performancemeasure

Stakeholder

Stakeholder

81%

100%

85%

69%

91%

56%

63%

70%

46%

79%

96%

83%

68%

92%

55%

60%

72%

94%

76%

65%

77%

54%

71%

91%

71%

64%

75%

52%

AmajorityofstakeholdersthinkthattheintegrityofBritishracinghasstayedthesameoverthelasttwelvemonths

Gotbetter Stayedthesame Gotworse

10% 20% 30% 40% 50% 60%

Betting

RacingFans

Racecourses

Stakeholders

Breeder/Bloodstock

Owners

Jockeys/JockeysAgents

Media

Trainers

0%

%ofeachstakeholdergroupsayingeachofthefollowing

56%

55%

57%

55%

52%

60%

58%

58%

58%

5%

4%

9%

6%

13%

17%

10%

44%

37%

34%

33%

27%

19%

18%

17%

16%

INTEGRITY OF BRITISH HORSERACING OVER LAST 12 MONTHS

28 29

STRATEGIC REPORT

JUDICIAL PANEL

InFebruary,HisHonourBrianBarkerCBEQCwasappointedasthefirstJudicialPanelChairman.Hebeganthe

recruitmentprocessfortheexpandedDisciplinaryandLicensingPanelencouragingformerjockeysandtrainersto

applyasrecommendedbytheQuinlanreview.

InaccordancewithChristopherQuinlan’srecommendations,thenewquasi-judicialpanelwereappointedbythe

JudicialPanelChairmanfollowinganopen,competitiveprocess,judgedagainstpublishedcriteria.

TimCharltonQC

HHJamesO’Mahony

GardieGrissell

DisciplinaryPanelchairmansince2005

ACircuitJudgeinKentwithawideknowledgeofhorseracing

Aformertrainerwhotrainedmorethan300winners

AretiredCircuitJudge,stewardatracecourseswhichincludeNewmarketandYarmouthsince2002andamemberoftheDisciplinaryPanelsince2011

Aretiredsolicitorandaformerimmigrationjudge.Anownersince1990,enjoyingGroup2success.Atonetimeinpartnershipinabookmakingbusinessandanon-executivedirectorofAyrracecourse

AbarristerpractisinginLondonandcurrentlyachairmanoftheDisciplinaryPanel.HasownedracehorsesandatrusteeoftheInjuredJockeysFund

Aspecialistinform,raceanalysisandbetting.EmployedformanyyearsbyTimeform,amongstothers,andpreviouslyChairmanoftheHorseraceBettorsForum

Anowner,breederanddevoteeofhorseracing,withwideknowledge,andextensiveregulatoryanddisciplinaryexperience.FormerlytheChairmanoftheGreyhoundRegulatoryBoard

AbarristerpractisinginLondon,currentlythelegallyqualifiedmemberoftheLicensingCommittee.WillsitonlyonLicensingCommitteecases

Aformerjockeywhorodeover170winnersunderNationalHuntRules.CurrentlyassistanttrainertoGraemeMcPhersonQCandwillthereforenotsitonanycaseswhichinvolvealicensedtrainerorwhereGraemeMcPhersonisactingforeitherparty

Aformerjockeywhorodemorethan1000winnersontheFlatincludingmorethan30Group1winnersworldwide.PhilipisCoachingDevelopmentManagerforJETSwithresponsibilityforleadinganddevelopingtheindustry’sJockeyCoaches.Hewillnotsitonanycaseswhichinvolvehisstudentspast,orpresent

Queen’sCounselpractisinginManchesterandformanyyearsanownerwithacomprehensiveknowledgeofhorseracing

AformertrainerwhotrainedthewinnersofboththeGrandNationalandtheCheltenhamGoldCup

AcurrentmemberoftheDisciplinaryPanelandnowaretiringstewardwhohasactedsince1998atseveralracecourses

AretiredInvestigatingOfficerandStableInspector,joiningthepanelinJuly2018

AformerBHAhandicapperfor19yearsandpreviouslyaracingjournalistwiththeDailyExpress,joiningthepanelinNovember2018

Queen’sCounselpractisinginLondon,acurrentchairmanoftheDisciplinaryPanelandalong-standingownerandbreeder

HisHonourPhilipCurl

JStuartMorrison

WilliamNorrisQC

SimonRowlands

SteveWinfield

SebastianPrentis

JodieMogford

PhilipRobinson

DavidFishQC

JennyPitmanOBE

DianaPowles

YvonneMee

JohndeMoraville

PatrickMilmoQC

Chairmen

AretiredseniorlawyerattheCrownProsecutionServiceandamemberofseveralracecourseswithacomprehensiveknowledgeofhorseracing

AbarristerpractisinginLeedswhoridesoutregularlyforaYorkshire-basedtrainerandrodethewinneroftheMacMillancharityraceforamateursatYorkin2014

Aformerstewardfrom1988to2014andanowner.ChairmanofRacingtoSchool

AbarristerinLondonandanowner,withastrongknowledgeofhorseracing

FormerlyaRacecourseMedicalOfficerovermanyyears.Aseniormedico-legaladviserfortheMedicalProtectionSociety

AcurrentmemberoftheDisciplinaryPanelandtheLicensingCommitteeandasteward.Willonlyactonlicensingmatters

TonyConnell

ChloeFairley

DavidAdam

JohnDyer

DrLynGriffiths

EdwardDorrell

Members

30 31

STRATEGIC REPORT

Total

2,3031,846

11,42610,536

Numberofraces

20172016

10,28810,035

90,99389,616

0.18%0.24%

Numberofrunners

%Adverseanalyticalfindings(post-race)

Out-of-competitiontesting(includingyardvisits,internationalrunners,importsandauctions)**

Equine

Human

*predominantlysamplescollectedpost-race,butincludesthosesamplescollectedpre-race,orfromhorseswithdrawnbytheStewards**doesnotincludeone2017AAFinPoint-to-Point,andone2016AdverseAnalayticalFindingfollowingretrospectivetesting

DISCIPLINARY PANEL CASES

Exclusionorderbythedisciplinaryofficer

Appealsfromracecourse

Totalexclusions/disqualifications

Total

Total

Exclusionfollowingdisciplinaryhearing

Referralsfromracecourse

Disqualificationfollowingdisciplinaryhearings

Suspendedfollowingdisciplinaryhearing

Otherdisciplinarycases

Appealboard

Disqualificationsfordebts/arrears

Testsundertakeninconnectionwithreinstatementoflicences(positives)

Compliancecasesfromintegrity

STEWARDS' ENQUIRIES

Intereference(inbreach)

20172016

810(592)632(455)

524(524)452(452)

150(34)143(26)

INVESTIGATIONS

ANTI-DOPING

Intelligence

Breathaliser(positives)

2017

2017

2016

2016

3,392

1,935(3)

3,496

2,080(1)

104

421(2)

99

436(2)

115

14(0)

87

37(0)

Investigationsopened

Urine(positives)

Investigationsclosed

RacingSchoolurinetests(positives)

Whip(inbreach)

Runningandriding(inbreach)

20172016

511

1515

5

2,378(6)

32

2,561(3)

84102

13

5647

44

01

1016

22

28

8(1)

13

8(0)

324

Raceday–Total* 9,123(16)8,690(21)

32 33

STRATEGIC REPORT

HorseraceBettingLevy

InApril,theMinisterforSportandCivilSociety,

TraceyCrouchMP,signedtheHorseraceBetting

LevyRegulations(2017),theresultofsustainedand

co-ordinatedindustry-widelobbying.TheLevynow

appliestoallbettingoperatorsacceptingbetsonBritish

racing.Itreceivedcross-partysupportinbothHousesof

Parliamentandtheindustrywasalsosuccessfulinits

representationsfortheratetobeatleast10%ofgross

profits.EuropeanCommissionStateAidclearancewas

receivedinAprilandnolegalchallengeswerebrought

againstthelegislationintheUKorEurope.Thesecond

phaseofthereplacementprocesswaslaunchedin

DecemberwithaGovernmentconsultationprocessof

replacementoftheHorseraceBettingLevyBoardwitha

tripartiteRacingAuthority.

IndustryStrategy

Withasustainablefundingmechanismthesportwas

presentedwiththeopportunitytorefreshourthinking

aboutalongtermstrategyforBritishracing,buildingon

thefoundationsofthe2014StrategyforGrowth.

A programme of work was undertaken, through the

Members’ and Executive Committees and consultation

across stakeholders, which highlighted six strategic

priorities for a refreshed industry strategy:

1. IntegrityandRegulation

2. EquineWelfare

3. People

4. OwnershipandHorsePopulation

5. BettingIndustryPartnership

6. CustomerGrowth

TheBHAwillleadtheworkundertakenintheareasof

IntegrityandRegulation,EquineWelfareandPeople.

NewRacingAdministration

ThenewRacingAdministrationsystemtoowners

waslaunchedinAugust2017andwasaccompanied

byanumberofotherreformstohelpstreamlinethe

administrationofownership.

Improvements included:

Simplificationofownershipregistrationstructures,

reducingtheoptionsfrom8to5:Soleowner,Company,

Partnership,SyndicateandRacingClub

Removalofanumberoffees,withotherssimplifiedto

saveowners£140kperannum

Alignmentofre-registrationfeestoonedateintheyear

toavoidthedrip-feedingofchargesandlettersreceived

ImprovedregistrationprocesswithallnewPartnership,

SyndicateandRacingClubregistrationsnowcompleted

online.Thenewregistrationsarequickerandeasierto

complete,withturnaroundtimebetweensubmittingthe

formsandapprovalofapplicationsalsoreduced

Availabilityofinformationhasbeenimprovedsothat

ownerscannowmanagetheirownershipsonlineas

wellashavingfreeaccesstootherfeatures,suchas

theProgrammeBookandhandicapratings

ThroughouttheconstructionofthenewRacing

Administrationsystem,theBHAworkedcloselywith

owners,trainersandracingsecretariesholding

workshopsacrossthecountryandonlinewebinarsto

betterunderstandtheirrequirements.Wecontinueto

seekfeedbackfromalluserstorefinethesystemand

ensureitmeetstheirneeds.

Syndicates

TheBHAintroducedaSyndicateCodeofConduct

inFebruarydesignedtopromotetransparencyand

ensurethatSyndicatemembersarebetterprotected

andinformedwhenenteringintoSyndicateownership.

Itdoesnotdefinethewaythatsyndicatesoperate,but

highlightsanumberofbasicrequirementsthatall

syndicatorswillneedtoensurearemet.Itisthefirst

timetheRulesofRacingwillincludespecificprotection

forSyndicatemembersanditisanticipatedthatthis

shouldimprovetheconfidenceofprospectiveand

existingownersintheSyndicatemarket.

Thesport’sunifiedgovernancestructurethroughtheMembers’

Agreement,andenhancedincomestreamsthroughthenewLevy

andmediarightsdeals,providetheoptimumconditionstorefresh

theindustry’sstrategyforgrowthandpositionBritishracingfora

brighterfuture.

MEMBERSOFTHEHOTTOTROT

SYNDICATECHEERINTHEIRWINNER

OFTHEQUEENMARYSTAKES,

HEARTACHE,ATROYALASCOT

Brexit

TheBHAhasbeenworkingwithkeystakeholders

inBritain,IrelandandFrancetoco-ordinate

highlevelEuropeanCommissionengagement

regardingtheimpactontheEuropeanthoroughbred

industryofBritain’swithdrawalfromtheEU.

Engagementactivitythroughout2017included:

May:CommissionerPhilHogan(European

CommissionerforAgriculture)roundtablewith

thethoroughbredracingsectorinLondon

July:BHAparticipationinaEuropeanand

MediterraneanHorseracingFederation(EMHF)

delegationvisittoBrussels,meetingseveralMEPs,

EuropeanCommissionandUKGovernmentofficials

August:LordGardinerofKimble(Minister

forRuralAffairsandBiosecurity)visitto

NewmarketincorporatingtheAnimalHealth

Trust,CheveleyParkStudandtheJulyCourse

September:MeetinginBrusselswithrepresentatives

ofMichelBarnier(EUBrexitChiefNegotiator)Task

Force50teamtodiscussthefutureofthoroughbred

movementandtheTripartiteAgreement

December:Workinggroupestablishedwith

Defraofficialsregardingthefutureprinciplesfor

thoroughbredmovementbeyondEUwithdrawal

Ongoing:SubmissionstorelevantUKGovernment

consultations,includingtheMigrationAdvisory

CommitteeinquiryintoEEAworkersintheUK

LabourMarketwithBritishracing’sevidencealso

includedinthesubmissionfromtheDepartment

forDigital,Culture,MediaandSport

GROWINGBRITISHRACINGTOGETHER

34 35

STRATEGIC REPORT

SupportingGrassrootsRacing

TheBHA,RCAandHorsemen’sGroupannounced

apackageofproposalsinJulytoinvestadditional

Levyincomein2018tofurthersupportthethreekey

objectivesoftheFixturelist.Centraltotheproposals

wasa£9.7mboosttomidandlower-tierracingthrough

prizemoneyfundingsupportedbyanewappearance

moneyschemeandraceincentivefund.Mostraces

inBritainwillnowberunwithatotalvalueofatleast

£6,000(from2018),improvingreturnstohorsemen

andhopefullyincreasingfieldsizesatClass3and

belowoverjumpsandClass4andbelowontheflat.

Inaddition,anexisting£6mraceincentivefundwill

continuetoincentivisetheprogrammingofracesat

Class1to3,witha£500kDevelopmentFundcontinuing

tobeusedtosupportlongertermstrategicinitiatives

toenhancethebreed,alongside£1mofnewfunding

collectedthroughanauctionofBHAFixtures.

Publicationofthe2018FixtureList

The Fixture List for 2018 was compiled with the

agreed objectives of:

Supportingownership

Deliveringmorecompetitiveandcompellingracing

Increasingcustomerengagement

COMPETITIVEANDCOMPELLINGRACING

ForBritishracingtogrow,thesportmustberesponsivetothe

requirementsofitsvariouscustomers,includingfans,racegoers

andbettors.Thedemandfromeachofthesegroupsisfora

competitiveandvariedracingproduct,stagedatcustomer-

friendlytimes.Aswellasmatchingtherequirementsofthehorse

population,theprogrammeofracesmustbeprogressivesothat

horseshavetheopportunitytofulfiltheirpotential.

Non-runners

Following extensive data analysis and consultation

with the NTF, PJA, RCA, ROA and HBF the

Board approved a package of recommendations

aiming to reduce the number of non-runners:

BHAtopublishtablesshowingindividual

trainernon-runnerratesfromtheprevious

12monthsattheendofeachquarter

Anytrainerwithmorethan100declarationsinthe

periodwithanon-runnerrateaboveapublished

thresholdpercentage(namely50%abovethe

averagenon-runnerrate)willbesuspended

fromusingself-certificatesfor12months

Anyhorsethathasbeendeclaredanon-runner

withavet’scertificatewouldnotbeableto

raceonthetwodaysfollowingtherace

Stewardstoholdanenquirywhenahorseis

scheduledtorunonidenticalgoingtothat

onwhichithadbeenwithdrawnbecauseof

thegroundduringthepreviousmonth

FocuswasplacedonoptimisationoftheFixturelist

tosatisfythedemandsofthesport’scustomers–

whilecontinuingtosupporthorsemeninservicing

fixtures–keepingtheFixturelistatabroadly

similarsizeto2017onaccountofcurrentfieldsize

trendsandthenumberofhorsesintraining.

Itwasalsoannouncedthataweek-longJump

breakwouldbeintroducedaftertheBet365Jump

FinaleatSandown,withthenewJumpseason

startingonthefollowingSaturdayafternoonat

Uttoxeterforprofessionalriders.

NorthernLightsJumpSeries

FollowingthesuccessfullaunchoftheJumpChallenger

SeriestheBHAintroducedfivenewseriesofraces

designedtoprovidegreateropportunitiesformid-tier

jumphorsesattracksfromDoncasternorthwards.

Culminating in five £25k Finals run on Northern Lights

Finals Day at Carlisle racecourse on 3 December:

3mHandicapChaseSeries

2½mHandicapChaseSeries

2mHandicapHurdleSeries

3mHandicapHurdleSeries

2½mMares’HandicapChaseSeries

HandicappingReview

In2017,theBHAconcludedaninternalreview

ofitshandicappingfunction;thefirstreview

ofthisareasince2011.Thereview,whichwas

completedbyracingjournalistandbroadcaster

LydiaHislop,focusedonfourkeyareas:theaims

ofhandicapping,handicappingmethodology,

operationalmatters,andteamstructuresandroles.

Thereviewproduced30recommendationsincluding

ensuringthatBHAhandicappingpolicyispredicatedon

objectiveandrigorouslyscientificdata-interrogation,

improvingthehandicappinginformationmade

availableonline,introducingnewracetypestothe

raceprogrammeand,ultimately,helpingtheBHA

handicappingfunctionbestalignitselftomeetthe

needsofthesport'sparticipantsandcustomers.

Animplementationplan,includingconsultation

withindustrystakeholders,isunderwayin2018.

36 37

STRATEGIC REPORT

ItisessentialforBritaintoleadthewaybyencouraging

wideracceptanceamongstracingauthoritiestouphold

thevalueofBlackTypewithaconsistentqualitative

assessmentofGroup/GradedandListedracesandan

overallinternationalprogrammethatisfitforpurpose.

Britainshouldcontinuetostrivetoattractthetophorses

andprovideincentivesforoverseasinvestment.

Stayers

In2017,anindustry-wideStayers'Forumwasestablished

tohelpgenerateideastomorewidelypublicisethe

stayinghorseandtofindeffectivemeanstoencourage

morebreederstopatronisemiddle-distancestallions.

TheEuropeanPatternCommitteeannouncedafurther

trancheofenhancementstothePatternandListedrace

programmeforstayersin2017aspartoftheircommitment

tohelpsafeguardthefutureofthestayinghorseinEurope.

TheBHADevelopmentFundalsoannouncedanumberof

grassrootsinitiativestosupportstayersincludinganew13f

conditionsraceforthree-year-oldsatNewburyinOctober;

threevaluablestayingClass2Handicapsforthree-year-

oldsatMusselburgh,HaydockandChester,eachwith

aprizefundofatleast£50kandaprizefundboostto

£105kfortheMelroseHandicapatYork’sEborFestival.

WORLDCLASSRACING

ContinueddevelopmentoftheframeworkthatseesBritainfurther

itspositionasthehomeofthebestracingintheworldrequires

quality,varietyandopportunityforallaspectsofthethoroughbred

asitprogresses,andforthebreedonawiderbasis.

EUROPEAN PATTERN COMMITTEE

Distance Previous New

Name Venue Date &Age status status

EdinburghGinFillies'Stakes Musselburgh 3June 7f3yo+fillies Listed

Alteredfrom

Queen’sVase RoyalAscot 23June 2mto1m6f3yos Listed Group2

QatarGoodwood

QatarGoodwoodCupStakes Festival 1August 2m3yo+ Group2 Group1

ArranScottishFillies'Sprint Ayr 22September 51/2f3yo+fillies Listed

PrincessRoyalStakes Newmarket 29September 1m4f3yo+fillies Listed Group3

Distance Previous New

Name Venue Date &Age status Distance

TotequadpotNovices’Chase Chepstow 14October 2m31/2f4yo+ Class2 Listed

TheManyCloudsChase Aintree 9December 3m1f4yo+ Listed Group2

PertempsNetworkFinal

HandicapHurdle CheltenhamFestival 15March 3m5yo+ Listed Grade3

RandoxHealth

BetwayHandicapChase GrandNationalFestival 14April 3m5yo+ Listed Grade3

The following British races received changes announced by the European Pattern Committee:

JumpPatternUpgrades

InAugust,theJumpPatternCommitteeannouncedanumberofupgradestotheBritishJumpPattern

andListedracesforthe2017/18season.Thisincludedthere-namingofAintree’sListedChaseover

3m1finDecembertoTheManyCloudsChaseaswellasbeingupgradedfromListedtoGrade2.

Upgraded Races:

Jump Pattern Committee:AdrianGrazebrook(Chairman),EdArkell,RichardAston,AnthonyBromley,DavidCleary,

SamHoskins,PhilipHobbs,EmmaLavelle,SteveMellish,PaulNicholls,RichardNorris,RuthQuinn,LucindaRussell

Flat Pattern Committee:AdrianGrazebrook(Chairman),AndrewBalding,AndyClifton,SimonCrisford,

PhilipFreedman,WilliamHaggas,LydiaHislop,RuthQuinn,JulianRichmond-Watson,AmandaSkiffington,

NickSmith,NicholasWrigley

STRADIVARIUSANDANDREAATZENIWINTHE

GROUP1QATARGOODWOODCUPSTAKES

38 39

STRATEGIC REPORT

TheBHAiskeentodemonstrateleadershipinthis

area,butcannotoperatewithoutcollaborationwith

thesport’smajorstakeholderstodevelopacommon

strategy,makethecaseforincreasedfundingand

ensurethemoneythatisavailableisusedinthe

mostefficientwayandgoesasfaraspossible.

Brexitpresentschallengesandopportunitiesinthis

area,butwhereitmayprovideopportunities,itcan

stillonlybepartofasolutionaroundhighlyskilled,

specialistroles.WearemakingthiscasetoGovernment

butitmustsitwithinacompellingdomesticstrategy.

Weareconstantlylookingtootherrelevantindustries

toensureweareoperatingtobestpracticebutwe

mustcontinueto,asasport,promotethevariedand

rewardingrolesavailableinapositivemanner.

TheStudandStableStaffAwardssponsoredby

GodolphinandtheNationalTrainersFederation’s

LycettsTeamChampionAwardspresentopportunities

totellpositivestoriesandtocelebratebest

practice,ofwhichtherearecountlessexamples.

Overall,thenumberofnewrecruitsareholding

upandparticularlygrowingamongstunder19s.In

2017therewere1,366newjoinerstotheindustry

(414u19),however,thenumberofpeopleleaving

theindustrywashigher.Itwouldthereforeappear

thatthekeychallengeisaddressingtheretentionof

staff,particularlyaswehaveanindustryturnover

ratethatis10%higherthanthenationalaverage.

Agreatdealofactivitytookplacethroughout

2017topromotecareersinracing,trainand

developracingstaffandimprovethephysical

andmentalwellbeingofparticipants.

IndustryProgrammeBoard

TheBHAconvenedacross-industryworking

grouptoensureastrategicapproachis

takenregardingourPeopleStrategy.

LOOKINGAFTEROURPEOPLE

Recruiting,trainingandretainingstaffremainsoneofthedominant

challengesfacingtheindustry.Allthreeareasareinter-relatedand

wecannotfocusononewithouttheothersifwearetoachieve

sustainableimprovementtostaffing.

THECAREERSINRACINGSTANDAT

THESKILLSLONDONCAREERSEVENT.

Careersinracing

There-builtCareersinracingwebsitehasproved

popularwithahugerangeofcareerscontentcreated

inbothwrittenandvideoformat.Thejobboardremains

themostusedareaofthesitewithanaverageof162

racingjobsliveatanytime.Rolesadvertisedrange

fromracinggroomstocateringrolesatracecourses.

Wearecontinuingtoworkwithkeyequestrianpress

andpartnersincludingTheApprenticeshipGuide,

BritishGroomsAssociation,HorseandRider,Local

Rider,YourHorseandtheregionalfreeequestrian

magazinestocovercareersinracingandhaveachieved

considerablepresscoverageinthesejournals.

CareersinracingsponsoredtheCharlesOwenPony

RacingracecourseseriesforthePRAgivingbest

turnedoutprizesthroughouttheyearandculminating

inafinalatCheltenhamRacecourse.ACross

CountryfencewasalsosponsoredatthePonyClub

NationalChampionships.Sponsorshipactivatedwith

BritishEventing–JASIndoorJumpingSeries–two

monthfencesponsorship,BritishEventingXCfence

sponsorshipMitsubishiMotorsCupatBadminton.

AspartofRacingStaffWeekwedeliveredaGolden

Ticketpromotionopentoallracingstafftofind

aGoldenTicketwitha£100voucherinthem.

MentalHealth

InFebruaryweannouncedtheappointmentofmental

healthcharityMindasanadvisoryboardtoassistthe

sportinachievingitscommitmentsandobligationsto

theMentalHealthCharterforSportandRecreation

Licensingandtrainingprocedures

Inpartnershipwithkeystakeholdersweannouncedin

March2017asignificantoverhaultothejockeylicensing

andtrainingprocess,includingtheintroductionof

apre-licenceassessmentbeforebeingconsidered

forthemainapprentice/conditionalcourse.The

objectiveofthechangesistobetterequipjockeys

withthenecessarytechnicalskillsastheyprogress

throughtheearlystagesoftheircareerandtomeet

theirpersonaldevelopmentneeds.Morerigorous

entrycriteriaatthisstagewillensurethemost

suitableapplicantsenterthetrainingprocessand

minimisedrop-outratesfurtheralongtheprocess.

2016GODOLPHINSTUDANDSTABLESTAFF

EMPLOYEEOFTHEYEAR,GEMMAHOGG

GodolphinStudandStableStaffAwards

TheBHAhostedthe13thrunningoftheawards,

generouslysponsoredbyGodolphinandin

associationwiththeRacingPost.Theawardswere

hostedforthefirsttimebyITV’sEdChamberlin

withguestpresenterandspecialguestFreddie

TylickiwhopresentedtheEmployeeoftheYear

AwardtoTerryDohertyofWatershipDownStud.

Thewinners:

EMPLOYEEOFTHEYEAR

TerryDoherty

LEADERSHIPAWARD

RoryO’Dowd(BrianMeehan)

RIDER/GROOMAWARD

JamieBunsell(PaulHenderson)

STUDSTAFFAWARD

TerryDoherty(WatershipDownStud)

DEDICATIONTORACINGAWARD

ColinNutter(SirMarkPrescott)

RORYMACDONALDCOMMUNITYAWARD

ElishaWhittington(TomDascombe)

RORSPECIALRECOGNITIONAWARD

SarahMonkman(RacingWelfare)

TERRYDOHERTYEMPLOYEEOFTHEYEAR

40 41

STRATEGIC REPORT

DiversityinRacingSteeringGroup

Aresearchstudyintowomen’srepresentationand

diversityinhorseracingbyOxfordBrookesUniversity,

onbehalfofWomeninRacingandco-fundedbyThe

RacingFoundation,waspublishedinMay.Oneofits

keyrecommendationswastheestablishmentofan

independentbodytoactaschampionsintheindustry

foreffortstoincreaseitsdiversity.TheBHAannounced

theformationofaDiversityinRacingSteeringGroupin

Augustandwelcomedapplicationsformembership.

The final membership of the group, which met twice in

the second half of 2017, is as follows:

NickRust(BHA)–Chair,CatherineBeloff(BHA),

LauraWhyte(BHA),DebbieGrey(NARS),LindaBowles

(TheJockeyClub),SusannahGill(ARC),Patricia

Pugh(Horsemen’sGroup),SulekhaVarma(RCA),Lee

Mottershead(RacingPost),VictoriaMorgan,GuyDisney,

FrancescaLeyland,JoshApiafi,TanyaStevenson,Rishi

Persad,HarrietRochester

CAREERSINRACING

DigitalMarketing

Campaignhighlights

WebsiteandJobBoard

EventsandSponsorship

Atotalof335,416visitors

Sponsoredandexploited

sponsorshiprightsatthe

PonyClubChampionships2017,

BadmintonMitsubishiHorse

Trials&JASEventing

1.1muniqueindividualsreached

throughsocialmediaadvertising

Rebuiltmaincareerswebsiteandjob

boardintomobilefriendlyformat

13,213registered

candidatesonthejobboard

Recruitmentstandpresenceat3

largeevents:TheSkillsShow,

TheDiversityShowandBritish

ChampionsDay

78,928visitorstothe

Apprenticeshippageonthewebsite

‘Goldenticket’promotionfor

RacingStaffWeek

Over1,000racingjobsprocessed

andpromotedviasocialmedia

247,000promotionalvideoviews

acrossFacebookandInstagram

EntrytoEmploymentProgramme

createdandpromotedforEquine

Collegestudents

42 43

DIRECTORS’ REPORT AND GOVERNANCE STATEMENT

Although the BHA does not receive public funding and

therefore is not bound by the Code, nor is it a listed

company, the directors are mindful of the BHA’s position

as the governing and regulatory body of horseracing in

Great Britain and believe in striving for the highest level

of corporate governance as evidenced by the following:

aseparateChairmanandChiefExecutive;

laiddownprocedures;

aNominationsandRemunerationCommittee;

anAuditCommittee;

theuseofclearlydefinedauthoritiesforallexpenditure;

adherencetotheprinciplesofbetterregulation

andregularindependentscrutinyofcompliance;

formalconsultationprocesseswithstakeholders

onallmattersofregulationandgovernance;

adirectors’codeofpracticeadoptedbytheBoard;

regularmonitoringbytheBoardofdirectors;

TheBoardiscomprisedoftheChairman,ChiefExecutive,

aSeniorIndependentDirector,twoIndependent

RegulatoryDirectors,twoMember-NominatedDirectors

andfourIndependentNon-ExecutiveDirectors.

During2017,theonlychangetotheBoardwasthe

departureofEamonnWilmottwholefttheBoard

havingcompletedhistermasaDirector.MrWilmott’s

termconcludedattheendofNovember2017.

The Board is specifically responsible for the following:

Approvaloftheannualfixturelist

Approvalofourthree-yearbusinessplanandbudget

Approvingmajoritemsofcapitalandoperatingexpenditure

Agreeingmaterialcontracts

ApprovalofRacecourselicences

Administrationandapprovaloftherulesofracing

Oversightoftheriskregister

TheBoardmeteighttimesin2017andtheattendance

ofeachBoardmemberisrecordedbelow.TheBHA

Boardcontinuedtoupholditscommitmenttohold

meetingsinregionallocationstofacilitateengagement

withregionalstakeholders,holdingthreeoftheir

meetingsawayfromLondonandonemeetingvia

conferencecallinordertominimisecosts.

DIRECTORS’REPORTANDGOVERNANCESTATEMENT

Governanceinsportwasincreasinglyunderscrutiny

during2017,particularlyfollowingthepublication

ofUKSport'sCodeforSportsGovernance.

ITISOURRESPONSIBILITYTOGOVERNTHESPORTANDWEAIMTODOSOINANINCLUSIVEMANNER

44 45

DIRECTORS’ REPORT AND GOVERNANCE STATEMENT

SteveHarman,Chairman

AppointedJuly2013;

TermExpiresNovember2018

2017Meetingsattended:8/8

Experience:From1980onwards,Steveworked

forRoyalDutchShellinpositionsacrossEurope,

AsiaandtheAmericas.HisrolesincludedCEOof

ShellMarine,CEOofPennzoilandVicePresidentof

RoyalDutchShell.Hehasextensiveexperienceof

dealingwithmultiplestakeholdersandgovernment

organisations,andhassatonvariouscorporate

boardswhileholdingavarietyofExecutiveandNon-

ExecutivepositionsintheUK,AmericaandAsia.

Other roles:ADirectorandTrusteeofHelpforHeroes.

BoardmemberDurhamUniversityandChairmanof

UstinovCollegeCouncil.ShareholdingsinStGeorge’s

RecruitmentandVIPEscapes.Asupporterand

mentortoarangeofentrepreneurialstart-ups.

Committee membership:NominationsCommittee

(Chairman),Members’Committee(Chairman)

Horse ownership interests:Horsesintrainingwith

PhilipHobbs,DavidPipe,CharlieLongsdon,Richard

Fahey,AndrewBaldingandMartinKeighley

NickRust,Chief Executive

AppointedJanuary2015

2017Meetingsattended:8/8

Experience:Over27yearsofexperienceinthebetting

andgamingindustry.MostrecentlyasManagingDirector,

Retail,forLadbrokesPlcbutalsoinpreviousseniorroles

atBskyBincludingasManagingDirectorofSkyBet,and

atGalaCoral.Hehasextensiveexperienceinindustry

andcorporateaffairs,havingmanagedkeyrelationships

withGovernmentandregulators.Oversawestablishment

ofBritishracing’stripartitestructurethroughthe

Members’Agreement,anindustry-widestrategyfor

growthandreplacementoftheHorseraceBettingLevy

andhasexcellentrelationshipsacrossBritishracing.

Other roles:Non-ExecutiveDirectorofYorkTheatreRoyal

Committee membership:ExecutiveCommittee

(Chairman),RulesCommittee

Horse ownership interests:Horsesintrainingwith

MickyHammond,HugoPalmerandCharlieHills

AthollDuncan,

Senior Independent Director

AppointedDecember2014;

TermExpiresDecember2020

2017Meetingsattended:7/8

Experience:AnexperiencedNon-ExecutiveDirector

insportsorganisations,spent25yearswiththeBBC,

asajournalistandTVnewsandsportsproducer,

beforebecomingHeadofNewsandCurrentAffairs

fortheBBCinScotland.FouryearsasDirectorof

CorporateAffairswithScottishWater.Athollsits

onnumerousadvisoryboards,hasworkedwiththe

Governmentonvariousbusinessissuesandhasgood

knowledgeofsportsadministrationandgovernance,

andisaMemberoftheCaledonianRacingSociety.

Other roles:ExecutiveDirectorofInstitute

ofCharteredAccountantsofScotland

Committee membership:AuditCommittee,

NominationsCommittee

Horse ownership interests:Horsesintraining

withLucindaRussellandRichardHughes

AndrewMerriam,

Independent Regulatory Director

AppointedSeptember2012;

TermExpiresDecember2019

2017Meetingsattended:7/8

Experience:QualifiedCharteredAccountantwith

morethan30years’experienceinfinancialservices

andbankingand10yearsrunningtheBradfords

Group,theleadingprivately-ownedsupplierof

buildingmaterialsintheUK.Andrew’sotherracing

interestsincludebeingaMemberofTheJockey

ClubandChairmanofthePoint-to-PointAuthority.

HeisalsoaTrusteeofRacingtoSchool,Retraining

ofRacehorsesandtheBritishRacingSchool.

Other roles:ChairmanofBerners-Allsopp

EstateManagementCoLtdandDeputy

LieutenantoftheCountyofSuffolk

Committee membership:AuditCommittee

(Chairman),RemunerationCommittee,Rules

Committee(Chairman),StewardingCommittee.

Horse ownership interests:Horsesin

trainingwithWarrenGreatrex

SirPaulStephenson,

IndependentRegulatoryDirector

AppointedJuly2015;

TermexpiresJune2021

2017Meetingsattended:7/8

Experience:Ahighlydistinguishedcareerasa

policeofficer,holdingseniorcommandpositions

inMerseyside,LancashireandLondon.Inhisroles

withtheMetropolitanPoliceService–whereas

Commissionerhewasthemostseniorpoliceofficer

intheUK–headvisedgovernmentsonissuesranging

fromcounterterrorismtoseriousorganisedcrime

andnationalpoliceimprovements,withafocuson

modern,transparentandcollaborativepolicing.

Other roles:TrusteeofCrimestoppersUK

andDirectorofSirPaulStephensonLtd

Committee membership:RemunerationCommittee

Horse ownership interests:None

JulieHarrington,

Independent Non-Executive Director

AppointedDecember2014;

TermexpiresAugust2018

2017Meetingsattended:7/8

Experience:Considerableknowledgeandexperience

inhorseracingasaresultofhereight-yearcareer

withNorthernRacing,includingrolesasGroup

OperationsDirectorandManagingDirectorofUttoxeter

racecourse.JuliewasalsoRegionalMarketingDirector

atWhitbreadInns,RetailSectorDirectoratBritish

Airways,ManagingDirectorofStGeorge’sPark,andwas

appointedChiefExecutiveofBritishCyclingin2016.

Other roles:ChiefExecutiveofBritishCycling

Committee membership:None

Horse ownership interests:None

NöelHarwerth,

I ndependent Non-Executive Director

AppointedDecember2014;

T ermexpiresJuly2019

2017Meetingsattended:7/8

Experience:Aqualifiedsolicitor,previousrolesinclude

ChiefOperatingOfficerofCitibankInternational

andChieftaxOfficerofCitigroup,Dun&Bradstreet

CorporationandKennecottCooperCorporation.

Other roles:ChairoftheUKExportFinanceBoard

andaNon-ExecutivememberoftheDepartment

forInternationalTradeBoard.ANon-Executive

DirectorofStandardLife,theLondonMetal

Exchange,CHAPSCoandSiriusMinerals

Committee membership:None

Horse ownership interests:Horsesintraining

withRichardHannonandRalphBeckett

JoeSaumarezSmith,

I Independent Non-Executive Director

AppointedDecember2014;

TermexpiresDecember2020

2017Meetingsattended:8/8

Experience:Joehasadvisedandworkedcloselywith

lotteries,governments,investmentbanksandoperating

companiesonstrategy,operationalrestructuring,

financeandmergerandacquisition.Co-foundedBede

GamingLtd,aprovideroftechnologytotheonlinecasino

andbingoindustries,andoneofthefastestgrowing

companiesinthenorth-east.Joeisashareholderin

StarBloodstockLtd,TotalPerformanceDataLtd,Anglo

AustralianRacingandWagonWheel14BettingFund.

Other roles:ChairmanofBedeGamingand

ChiefExecutiveofSportsGamingLtd.ADirector

IrishOnlineBingoLotteryandScratchcardsLtd.

ShareholdingsinBedeGaming(Holdings)Ltd,

HelixTechnologiesLtdandeWaterPayLtd,Crowd

ConnectedLtd,FlexyfootLtd,TalentPoolLtd,Online

DomainServicesLtdandTheGamesCompanyLtd

Committee membership:RemunerationCommittee

Horse ownership interests:Horsesintraining

withEdDunlop,EdWalker,MartinKeighley

BOARD MEMBERS

46 47

DIRECTORS’ REPORT AND GOVERNANCE STATEMENT

LauraWhyte,

Independent Non-Executive Director

AppointedDecember2014;

TermexpiresDecember2020

2017Meetingsattended:7/8

Experience:PartoftheJohnLewisManagement

Boardfor10years,mostrecentlyintheroleofHuman

ResourcesDirector.OtherrolesatJohnLewisincluded

DivisionalRegistrar;aboardroleaimedatensuring

employeeviewswereappropriatelysupportedand

reflected.LauraalsoworkedwiththeBritishEquestrian

FederationasaNon-ExecutiveDirectorandChairof

theirRemunerationCommitteefrom2013to2016.

Other roles:Non-ExecutiveDirectoroftheDefence

PeopleandTrainingBoardwithintheMinistryof

Defence,Non-ExecutiveDirectorofCapitalandRegional

Plc.ExecutiveTrusteeofWomeninRetailandaDirector

ofCarringtonWhyteConsultingLtd.Investment

portfolioincludessharesin32redandWilliamHill.

Committee membership:Remuneration

Committee(Chairman)

Horse ownership interests:None

RupertArnold,

Member Nominated Director

AppointedJanuary2015;

TermexpiresDecember2018

2017Meetingsattended:8/8

Experience:RupertisChiefExecutiveoftheNational

TrainersFederation,therepresentativebodyforlicensed

racehorsetrainersinGreatBritain.Heisadirectorof

theHorsemen’sGroupandRacingtoSchool.Earlier

inhiscareer,afteremploymentasassistanttrainer,

Rupertheldatrainer’slicenceforsixyears,.Alsoa

TrusteeoftheNationalTrainersFederationCharitable

TrustandtheRacehorseTrainersBenevolentFund

Other roles:DirectorandTrusteeofTheHunsletClub(Leeds)

Committee membership:Members’Committee

Horse ownership interests:None

VivienCurrie,

Member Nominated Director

AppointedJanuary2016;

TermexpiresDecember2018

2017Meetingsattended:8/8

Experience:VivienisChiefExecutiveofHamilton

ParkracecourseandViceChairmanoftheRacecourse

Association.AQualifiedCharteredAccountantwith

Ernst&Young,workinginLondon,Australiaand

Glasgow,beforejoiningtelecomsbusinessDamovo

whereasDirectorofStrategyshewasresponsible

fortheintegrationofthegroup’s18countries’sales

forcesbeforebecomingheadofGlobalSalesand

Solutions.Previouslyalsopart-ownerandChief

ExecutiveofLivingstonFootballClub,havingbought

theclubandtakenitoutofadministration.

Other roles:MemberoftheDevelopmentBoard

oftheMarieCurieHospice(Glasgow)

Committee membership:AuditCommittee

Horse ownership interests:None

EamonnWilmott,

Independent Non-Executive Director

AppointedDecember2014

TermexpiredNovember2017

2017Meetingsattended:7/8

Experience:Ahighlysuccessfulentrepreneur,witha

recordofconsiderablesuccessinBritainandtheUS.

PreviousrolesincludeChairmanoftheThoroughbred

Owner&BreederMagazineandco-founderofTotal

PerformanceDataLtd.Hisearlycareerwasasaleaderin

thedevelopmentoftheinternet.HewastheFounderand

ManagingDirectorofanaward-winningdigitalagencyand

hewasChairmanofaleadingworldwidedigitalagency.

Other roles:FounderandManagingDirectorof

HorsesFirstRacing,astate-of-the-arttraining

yard,inpartnershipwithtrainerJeremyGask.

Committee membership:None

Horse ownership interests:None

*AllDirectorsarerequiredtoprovidetothe

IntegrityDepartmentoftheBHAalistofbetting

operatorswithwhichaccountsarecurrentlyheld.A

randomisedauditisconductedonanannualbasis.

48 49

DIRECTORS’ REPORT AND GOVERNANCE STATEMENT

NominationsCommittee

TheNominationsCommitteehasfourmembers,twoindependentBoarddirectors(ofwhichoneisChairman)

andtwonominatedmembersfromtheRacecoursesandHorsemen.

Main responsibilities of the committee include:

IdentifyingandnominatingcandidatestofillanyvacancyofChairman,ChiefExecutiveorIndependent

Non-ExecutiveBoardDirector

Evaluatingthebalanceofskills,knowledge,diversityandexperienceontheBoardandpreparinga

descriptionoftheroleandcapabilitiesrequiredforaparticularappointment

PerformanceevaluationoftheIndependentNon-ExecutiveDirectors

Successionplanningfortheaboveroles.

MeetingAttendance

SteveHarman(Chairman) 1/1

MaggieCarver 1/1

AthollDuncan 1/1

NicholasCooper 1/1

Otherrelevantcommittees:

Members’ Committee

TheMembers’Committeeisatripartiteindustrycommitteeresponsibleforhigh-levelstrategicdecisions

forthesport.ItmeetsthreetimesayearandreportstotheBHABoard.

Voting Members:SteveHarman,Chair(BHA),JulianRichmond-Watson(TBA),MaggieCarver(RCA),

NicholasCooperC.B.E.(ROA),RupertArnold(NTF/LicensedPersonnel)

Non-Voting Members:DavidThorpe(RCA),NickRust(BHA),RogerWeatherby(RCA)

Invited Observers:CharlesBarnett(RCA),JonjoSanderson(RCA),NigelPayne(PJA),PhilipFreedman(Horsemen’s

Group),TonyLangham(GreatBritishRacing)

Executive Committee

TheExecutiveCommitteeisatripartiteindustrycommitteeresponsiblefortakingexecutivedecisionsand

implementingthestrategysetbytheMembers’Committee.Itmeetseighttimesayearandreportstothe

Members’Committee.TwomeetingshavefullrepresentationfromindustryChiefExecutives.

Executive Representatives:NickRust,Chair(BHA),CharlieLiverton(Horsemen’sGroup)andStephenAtkin(RCA)

Non-Voting Attendees:RodStreet(GreatBritishRacing)

MeetingAttendance

AndrewMerriam(Chairman) 2/2

AthollDuncan 2/2

VivienCurrie 2/2

PhilipFreedman 2/2

GOVERNANCE COMMITTEES

TheBoardhasthreeprincipalcommitteesrelatingtogovernance.

AuditCommittee

TheAuditCommitteehasfourmembers,twoindependentBoarddirectors(ofwhichoneisChairman)andtwo

nominatedmembersfromtheRacecoursesandHorsemen.

TheAuditCommitteemeetstwiceayear,oncepre-auditinNovemberandoncepost-auditinApril.Theexternal

auditorsandrelevantBHAstaffalsoattendbothmeetings.

Main responsibilities include:

MonitoringtheintegrityofthefinancialstatementsoftheCompany

ReviewingtheCompany’sand/orexternalauditor’sassessmentofinternalfinancialcontrolsandrisk

managementsystems

ReviewingtheadequacyandsecurityoftheCompany’sarrangementsforitsemployeestoraiseconcerns,

inconfidence,aboutpossiblewrongdoinginfinancialreporting

Overseeingtherelationshipwiththeexternalauditor

Reviewingandapprovingtheexternalauditplanandthelevelofnon-auditfeesincurred

Overseeingtheriskregisterofthecompany

MeetingAttendance

LauraWhyte(Chairman) 3/3

AndrewMerriam 2/3

JoeSaumarezSmith 3/3

SirPaulStephenson 3/3

RemunerationCommittee

TheRemunerationCommitteehasfourmembers,allindependentBoarddirectors.

Main responsibilities of the committee include:

DeterminingandagreeingwiththeBoardpolicyfortheremunerationofkeypersonnel

WithinthetermsoftheagreedpolicyandinconsultationwiththeChairmanand/orChiefExecutive

asappropriatedeterminingthetotalindividualremunerationpackageofkeypersonnel

50 51

DIRECTORS’ REPORT AND GOVERNANCE STATEMENT

Therewere11employeescategorisedasExecutiveDirectorswithtwoappointmentsandtworesignationsthroughout2017.

Theirtotalremuneration,excludingpensioncontributions,amountedto£1.670mdown£127,000comparedto2016.

*FulldetailsoftotalBoardremunerationisshowninnotethreeofthefinancialstatements

NON-EXECUTIVE DIRECTORS

ThetablesummarisesthemainelementsofremunerationforNon-ExecutiveDirectors

Elementandlinktoperformance Summaryofcurrentpolicy

DirectorsFeesaresetaccordingtotheroleundertaken

Benefits

Reviewedannually,feesfor2017wereasbelow:

Chairman–£100,000

IndependentRegulatoryDirectors–£27,000–£35,000

OtherNon-ExecutiveDirectors–£27,000

Non-ExecutiveDirectorsdonotreceiveanybenefits

fromthecompanyoutsideofDirectors’liability

insurance

REMUNERATION REPORT

RemunerationforExecutiveandNon-ExecutiveDirectorsisdeterminedbytheRemunerationCommittee.

EXECUTIVE DIRECTORS

ExecutiveDirectorpayisacombinationoffixedbasicsalary,allowancesandperformance-drivenremuneration

baseduponoperationaldeliveryandadherencewithfinancialtargets.

Elementandlinktoperformance Summaryofcurrentpolicy Changesaheadin2018

Base salaryissetatalevelthat

aimstoattractandretainhigh

performingexecutivedirectors

Allowancesareallocatedforspecific

purposeslinkedtoeachrole

Pensionandbenefitsarepartof

acompetitivetotalremuneration

package

Annualbonusdrivesandrewards

outstandingperformanceand

delivery

Salariesarereviewedannually,

takingintoaccountperformanceor

changesinjobroles.Thisisinline

withthepolicyforallemployees.

Carallowancesarepayabletoall

executivedirectors.Accommodation

andtravelallowancesarepayable

underspecificcircumstances.

TheCompanyoperatesadefined

contributionpensionschemefor

allemployeesona1:2matching

basisuptoamaximumcompany

contributionof10%.

Dependentuponroleandispayable

baseduponfinancialandoperating

performance.

None

None

None

Underreview

ORGANISATIONAL RISKS

TheCompanymaintainsariskregisterwhichisreviewedregularlybyboththeAuditCommitteeandBoard.This

registerincludesBHAoperationalrisksandindustryrisksinareaswhereBHAhasleadershipresponsibilities.

TheregisterwaslastreviewedinApril2018andthekeyBHAoperationalrisksinclude:

Cybersecurity

AbreachofcybersecuritywouldhavemajoroperationalandreputationalissuesforBHA.Assuchwehavetrained

stafftoimproveawarenessandsoughtthirdpartysupporttoassessandimproveourcybersecurity.

Dataprotectionbreach

Inourroleasregulatoryofthesportweretainpersonalandsensitivedata.Wehaveundertakenasignificantreview

ofalldocumentsandnoticestoensurecompliancewithGDPRandhaveappointedaDataProtectionOfficer.

Pensiondeficitcontributions

Followingthe2017triennialvaluation,anaffordabledeficitrepairplanneedstobeagreedwiththetrustees.This

becomesincreasinglymoredifficultwhenthecurrentHBLBguaranteeexpiresin2024.Managementarediscussing

appropriateplanswiththetrusteesandareconfidentoffindingaworkableandaffordablesolution.

52 53

FINANCIAL STATEMENTS

Profitandloss 54-55

Balancesheet 56-57

Cashflow 58

Equitychanges 59

Notes 60-82

FINANCIALSTATEMENTS

54 55

FINANCIAL STATEMENTS

CONSOLIDATED PROFIT AND LOSS ACCOUNT (for the year ended 31 December 2017) COMPANY PROFIT AND LOSS ACCOUNT (for the year ended 31 December 2017)

CONSOLIDATED OTHER COMPREHENSIVE INCOME / (LOSS) (for the year ended 31 December 2017) OTHER COMPREHENSIVE INCOME / (LOSS) (for the year ended 31 December 2017)

Note 2017 2016

£'000 £'000

Turnover 2 33,236 31,852

Administrativeexpenses (31,749) (30,846)

Operatingprofit 1,487 1,006

Otherinterestreceivableandsimilarincome 6 12 19

Interestpayableandsimilarcharges 7 (443) (464)

Profitbeforetaxation 5 1,056 561

Taxationonprofit 8 173 161

Profitforthefinancialyear 16 1,229 722

Theprofitintheaboveprofitandlossaccountrelateentirelytocontinuingoperations.

Thenotesonpages60to81formpartofthesefinancialstatements.

Note 2017 2016

£'000 £'000

Groupturnover 2 34,717 33,500

Administrativeexpenses (33,348) (32,355)

Operatingprofit 1,369 1,145

Otherinterestreceivableandsimilarincome 6 17 24

Interestpayableandsimilarcharges 7 (443) (464)

Profitbeforetaxation 5 943 705

Taxationonprofit 8 219 129

Profitforthefinancialyear 16 1,162 834

Theprofitintheaboveprofitandlossaccountrelateentirelytocontinuingoperations.

Thenotesonpages60to81formpartofthesefinancialstatements.

Note 2017 2016

£'000 £'000

Profitforthefinancialyear 1,162 834

Othercomprehensiveloss

Remeasurementofthenetdefinedbenefitliability 17 (2,217) (4,348)

Totalcomprehensivelossfortheyear (1,055) (3,514)

Note 2017 2016

£'000 £'000

Profitforthefinancialyear 1,229 722

Othercomprehensiveloss

Remeasurementofthenetdefinedbenefitliability 17 (2,217) (4,348)

Totalcomprehensivelossfortheyear (988) (3,626)

PROFITANDLOSS

56 57

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET (at 31 December 2017) COMPANY BALANCE SHEET (at 31 December 2017)

Note 2017 2016

£'000 £'000

Fixedassets

Intangibleassets 9 1,386 1,289

Tangibleassets 10 606 597

1,992 1,886

Currentassets

Debtors(including£2,076,000(2015:£2,211,000)dueaftermorethanoneyear) 12 10,046 8,724

Cashatbankandinhand 13 12,415 13,428

22,461 22,152

Creditors:amountsfallingduewithinoneyear 14 (15,008) (15,040)

Netcurrentassets 7,453 7,112

Totalassetslesscurrentliabilities 9,445 8,998

Provisionsforliabilities

Pensionandsimilarobligations 17 (17,915) (16,413)

Netliabilities (8,470) (7,415)

Capitalandreserves

Capitalreserve 16 19 19

Profitandlossaccount 16 (8,489) (7,434)

Shareholders’deficit (8,470) (7,415)

Thenotesonpages60to81formpartofthesefinancialstatements

Thesefinancialstatementswereapprovedbytheboardofdirectorson23April2018andweresignedonits

behalfby:NRust,Director.

Note 2016 2015

£'000 £'000

Fixedassets

Intangibleassets 9 1,386 1,289

Tangibleassets 10 591 575

Investments 11 3,456 3,604

5,433 5,468

Currentassets

Debtors 12 7,872 6,726

Cashatbankandinhand 13 10,811 11,559

18,683 18,285

Creditors:amountsfallingduewithinoneyear 14 (14,763) (14,914)

Netcurrentassets 3,920 3,371

Totalassetslesscurrentliabilities 9,353 8,839

Provisionsforliabilities

Pensionandsimilarobligations 17 (17,915) (16,413)

Netliabilities (8,562) (7,574)

Capitalandreserves

Capitalreserve 16 19 19

Profitandlossaccount 16 (8,581) (7,593)

Shareholders’deficit (8,562) (7,574)

Thenotesonpages60to81formpartofthesefinancialstatements

Thesefinancialstatementswereapprovedbytheboardofdirectorson23April2018andweresignedonits

behalfby:NRust,Director.

BALANCESHEET

58 59

FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENT (for the year ended 31 December 2017) STATEMENT OF CHANGES IN EQUITY

Note 2017 2016

£'000 £'000

Cashflowsforoperatingactivities

Profitforthefinancialyear 1,162 834

Adjustmentsfor

Depreciation,amortisationandimpairment 772 539

Interestreceived (17) (24)

Otherfinanceincome 443 464

Lossonsaleoffixedasset - 2

Corporationtaxreclaimedinrespectofpriorperiods 154 246

2,514 2,061

Decrease/(increase)indebtors (1,452) 1,817

(Decrease)/increaseincreditors (23) (1,382)

Taxation (219) (129)

Differencebetweencashcontributionsandcurrentservicecharge (1,158) (1,200)

Netcashfromoperatingactivities (338) 1,167

Cashflowsfrominvestingactivities

Capitaliseddevelopmentexpenditure (553) (487)

Acquisitionoftangiblefixedassets (325) (173)

Interestreceived 17 24

Netcashfrominvestingactivities (861) (636)

Cashflowsfromfinancingactivities

Loansreceivedfromassociatedundertakings 186 166

Netcashfromfinancingactivities 186 166

Increaseincashandcashequivalents 20 (1,013) 697

Capitalreserve Profitandlossaccount Totalequity

£'000 £'000 £'000

Balanceat1January2016 19 (3,920) (3,901)

Totalcomprehensiveincomefortheyear

Profit - 834 834

Othercomprehensiveloss - (4,348) (4,348)

Balanceat31December2016 19 (7,434) (7,415)

Capitalreserve Profitandlossaccount Totalequity

£'000 £'000 £'000

Balanceat1January2017 19 (7,434) (7,415)

Totalcomprehensiveincomefortheperiod

Profit - 1,162 1,162

Othercomprehensiveloss - (2,217) (2,217)

Balanceat31December2017 19 (8,489) (8,470)

CASHFLOW EQUITYCHANGES

60 61

FINANCIAL STATEMENTS

NOTES(FORMINGPARTOFTHEFINANCIALSTATEMENTS)

FINANCIALSTATEMENTS

1 ACCOUNTING POLICIES

BritishHorseracingAuthorityLimited(the

“Company”)isacompanylimitedbyguaranteeand

incorporated,registeredanddomiciledintheUK.The

registerednumberis02813358andtheregistered

officeis75HighHolborn,London,WC1V6LS.

TheGroupandparentcompanyfinancialstatements

werepreparedinaccordancewithFinancialReporting

Standard102TheFinancialReportingStandard

applicableintheUKandRepublicofIreland(“FRS

102”).Thepresentationcurrencyofthesefinancial

statementsissterling.Allamountsinthefinancial

statementshavebeenroundedtothenearest£1,000.

Theparentcompanyisincludedintheconsolidated

financialstatements,andisconsideredtobeaqualifying

entityunderFRS102paragraphs1.8to1.12.

The following exemptions available under FRS

102 in respect of certain disclosures for the parent

company financial statements have been applied:

Thereconciliationofthenumberofshares

outstandingfromthebeginningtotheendofthe

periodhasnotbeenincludedasecondtime;

NoseparateparentcompanyCashFlow

Statementwithrelatednotesisincluded;and

KeyManagementPersonnelcompensation

hasnotbeenincludedasecondtime.

CertaindisclosuresrequiredbyFRS102.11Basic

FinancialInstrumentsandFRS102.12Other

FinancialInstrumentIssuesinrespectoffinancial

instrumentsnotfallingwithinthefairvalue

accountingrulesofParagraph36(4)ofSchedule1.

Theaccountingpoliciessetoutbelowhave,unless

otherwisestated,beenappliedconsistentlytoall

periodspresentedinthesefinancialstatements.

Judgementsmadebythedirectors,intheapplication

oftheseaccountingpoliciesthathavesignificant

effectonthefinancialstatementsandestimates

withasignificantriskofmaterialadjustmentinthe

nextyeararediscussedinnote15inrelationtothe

fairvalueassessmentoffinancialinstruments.

Measurementconvention

Thefinancialstatementsarepreparedonthehistorical

costbasiswiththeexceptionofcertainfinancial

instrumentswhichhavebeenmeasuredatfairvalue.

Goingconcern

ThedirectorsbelievethattheCompanyandGroup

arewellplacedtomanagetheirbusinessrisks

successfullydespitethecurrentuncertaineconomic

outlook.Thedirectorshaveareasonableexpectation

thattheCompanyhasadequateresourcestocontinue

inoperationalexistencefortheforeseeablefuture.

TheGrouphasnetliabilitieswhichareprimarilydue

totheDeficitoftheGroupPensionSchemewhich

hasalongtermplantobesettledandtherefore

haslimitedimpactonannualcashflows.

Onthisbasisthedirectorscontinuetoadopt

thegoingconcernbasisofaccountingin

preparingtheannualfinancialstatements.

Basisofconsolidation

Theconsolidatedfinancialstatementsincludethe

financialstatementsoftheCompanyanditssubsidiary

undertakingsmadeupto31December2017.

Asubsidiaryisanentitythatiscontrolledbytheparent.

Theresultsofsubsidiaryundertakingsareincludedin

theconsolidatedprofitandlossaccountfromthedate

thatcontrolcommencesuntilthedatethatcontrol

ceases.ControlisestablishedwhentheCompanyhas

thepowertogoverntheoperatingandfinancialpolicies

ofanentitysoastoobtainbenefitsfromitsactivities.In

assessingcontrol,theGrouptakesintoconsideration

potentialvotingrightsthatarecurrentlyexercisable.

TheCompanydoesnotownallthesharesinits

subsidiary,BritishHorseracingDatabaseLimited(‘BHD’),

withtheminorityshareholdersholding3‘B’and3‘C’

shareseach,comparedtotheCompany’sholdingof

4,003,932‘A’shares.Nominorityinterestsareshownin

theconsolidatedaccountsoftheCompanyas(i)under

theprovisionscontainedwithintheArticlesofBHDthe

‘A’shareholderistheonlyshareholderentitledtoa

distribution,ifandwhenadistributionisdeclaredbythe

Boardand(ii)onawindinguptheassetsaredistributedin

accordancewiththenumberofsharesheldinallclasses.

AnassociateisanentityinwhichtheGrouphassignificant

influence,butnotcontrol,overtheoperatingand

financialpoliciesoftheentity.Significanceinfluence

ispresumedtoexistswhentheinvestorsholds

between20%and50%oftheequityvotingrights.

Ajointventureisacontractualarrangementundertaking

inwhichtheGroupexercisesjointcontroloverthe

operatingandfinancialpoliciesoftheentity.Where

thejointventureiscarriedoutthroughanentity,itis

treatedasajointlycontrolledentity.TheGroup’sshare

oftheprofitslesslossesofassociatesandofjointly

controlledentitiesisincludedintheconsolidatedprofit

andlossaccountanditsinterestintheirnetassetsis

recordedonthebalancesheetusingtheequitymethod.

Intheparentfinancialstatements,investments

arecarriedatcostlessimpairment.

Intangibleandtangiblefixedassets

Thecostofintangibleandtangiblefixedassetsis

theirpurchasecost,togetherwithanyincidental

costsofacquisition.Assetsunderconstruction

relatestoworkinprogressoncomputerrelated

development.Thiswillbeamortised/depreciated

onceitcomesintouseonthebasissetoutbelow.

Depreciation/amortisationisprovidedsoasto

writeoffthecostoftangibleandintangiblefixed

assetsonastraightlinebasisovertheestimated

usefuleconomiclivesoftheassetsconcerned.

The rates of depreciation / amortisation are as follows:

Leaseholdimprovements: 3-5yearsorlease

term,ifshorter

Contractcomputerdevelopment: 7years

Othercomputerdevelopment: 4years

Fixturesfittingsandofficeequipment: 3-5years

TheCompanyholdsalicenceforuseoftheDatabase

ofpre-racedataforgovernanceandregulatory

purposes.InaccordancewithFRS102,noamounts

havebeencapitalisedinthebalancesheetinrespect

oftheserights.Thecostofacquiringthisassetis

writtenofftotheprofitandlossaccountasincurred.

Fixedassetinvestments

Fixedassetinvestmentsinjointventuresandsubsidiaries

areheldatcostlessanyprovisionforimpairment

inthefinancialstatementsoftheCompany.

Basicfinancialinstruments

Trade and other debtors / creditors

Tradeandotherdebtorsarerecognisedinitiallyat

transactionpricelessattributabletransactioncosts.

Tradeandothercreditorsarerecognisedinitiallyat

transactionpriceplusattributabletransactioncosts.

Subsequenttoinitialrecognitiontheyaremeasuredat

amortisedcostusingtheeffectiveinterestmethod,less

anyimpairmentlossesinthecaseoftradedebtors.If

thearrangementconstitutesafinancingtransaction,

forexampleifpaymentisdeferredbeyondnormal

businessterms,thenitismeasuredatthepresent

valueoffuturepaymentsdiscountedatamarket

rateofinstrumentforasimilardebtinstrument.

Interest-bearing borrowings classified

as basic financial instruments

Interest-bearingborrowingsarerecognisedinitiallyatthe

presentvalueoffuturepaymentsdiscountedatamarket

rateofinterest.Subsequenttoinitialrecognition,interest-

bearingborrowingsarestatedatamortisedcostusingthe

effectiveinterestmethod,lessanyimpairmentlosses.

Investments in preference and ordinary shares

Investmentsinequityinstrumentsaremeasuredinitially

62 63

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

atfairvalue,whichisnormallythetransactionprice.

Transactioncostsareexcludediftheinvestmentsare

subsequentlymeasuredatfairvaluethroughprofitand

loss.Subsequenttoinitialrecognitioninvestmentsthat

canbemeasuredreliablyaremeasuredatfairvaluewith

changesrecognitioninprofitorloss.Otherinvestments

aremeasuredatcostlessimpairmentinprofitorloss

Investments in subsidiaries, jointly

controlled entities and associates

Theseareseparatefinancialstatementsofthecompany.

Investmentsinsubsidiaries,jointlycontrolledentities

andassociatesarecarriedatcostlessimpairment.

Cash and cash equivalents

Cashandcashequivalentscomprisecashbalances

andcalldeposits.Bankoverdraftsthatare

repayableondemandandformanintegralpart

oftheCompany’scashmanagementareincluded

asacomponentofcashandcashequivalentsfor

thepurposeonlyofthecashflowstatement.

Foreigncurrencies

Transactionsinforeigncurrenciesarerecorded

usingtherateofexchangerulingatthedateof

thetransaction.Monetaryassetsandliabilities

denominatedinforeigncurrenciesaretranslatedusing

thecontractedrateortherateofexchangerulingat

thebalancesheetdateandthegainsorlosseson

translationareincludedintheprofitandlossaccount.

Turnover

Turnover,whichexcludesvalueaddedtax(‘VAT’),

representstheinvoicedvalueofgoodsandservices

suppliedinconnectionwiththeadministrationof

horseracinginGreatBritain.TheCompany’sincome

isinvoicedandrecognisedwhentheseservicesare

deliveredtoracecoursesandotherparticipants.

Inaddition,includedwithinGroupturnoverare

amounts(excludingVAT)derivedfromincomefrom

signedlicenceagreementswiththirdparties.The

licenceincomestreamsderivedbytheGroup

arerecognisedintheperiodtheyrelateto.

Interestreceivableandinterestpayable

Otherinterestreceivableandsimilarincomeinclude

interestreceivableonfundsinvested.Interestincome

isrecognisedintheprofitorlossasitaccrues.

Interestpayableandsimilarexpensesinclude

interestpayable,andinterestexpensesinrelation

topensionschemeassetsandliabilities.interest

payableisrecognisedinprofitorlossasitaccrues.

Relatedpartydisclosure

RelatedPartyDisclosuresrequiresthedisclosure

ofthedetailsofmaterialtransactionsbetween

theGroupandanyrelatedparties,asdefined.

Detailsofmaterialrelatedpartytransactionsare

includedinnote21tothefinancialstatements.

Provisions

Aprovisionisrecognisedinthebalancesheetwhenthe

entityhasapresentlegalorconstructiveobligationas

aresultofapastevent,thatcanbereliablymeasured

anditisprobablethatanoutflowofeconomicbenefits

willberequiredtosettletheobligation.Provisions

arerecognisedatthebestestimateoftheamount

requiredtosettletheobligationatthereportingdate.

Taxation

Taxontheprofitorlossfortheyearcomprises

currentanddeferredtax.Taxisrecognisedinthe

profitandlossaccountexcepttotheextentthatit

relatestoitemsrecogniseddirectlyinequityorother

comprehensiveincome,inwhichcaseitisrecognised

directlyinequityorothercomprehensiveincome.

Currenttaxistheexpectedtaxpayableorreceivable

onthetaxableincomeorlossfortheyear,using

taxratesenactedorsubstantivelyenactedat

thebalancesheetdate,andanyadjustmentto

taxpayableinrespectofpreviousyears.

Deferredtaxisprovidedontimingdifferenceswhich

arisefromtheinclusionofincomeandexpensesin

taxassessmentsinperiodsdifferentfromthosein

whichtheyarerecognisedinthefinancialstatements.

Deferredtaxisnotrecognisedonpermanentdifferences

arisingbecausecertaintypesofincomeorexpense

arenon-taxableoraredisallowablefortaxorbecause

certaintaxchargesorallowancesaregreateror

smallerthanthecorrespondingincomeorexpense.

Deferredtaxismeasuredatthetaxratethatisexpected

toapplytothereversaloftherelateddifference,using

taxratesenactedorsubstantivelyenactedatthebalance

sheetdate.Deferredtaxbalancesarenotdiscounted.

Unrelievedtaxlossesandotherdeferredtaxassets

arerecognisedonlytotheextentthatisitprobable

thattheywillberecoveredagainstthereversalof

deferredtaxliabilitiesorotherfuturetaxableprofits.

Operatingleases

Payments(excludingcostsforservicesandinsurance)

madeunderoperatingleasesarerecognisedintheprofit

andlossaccountonastraight-linebasisoverthetermof

theleaseunlessthepaymentstothelessorarestructured

toincreaseinlinewithexpectedgeneralinflation;in

whichcasethepaymentsrelatedtothestructured

increasesarerecognisedasincurred.Leaseincentives

receivedarerecognisedinprofitandlossoverthetermof

theleaseasanintegralpartofthetotalleaseexpense.

Employeebenefits

Defined contribution plans and other

long term employee benefits

Adefinedcontributionplanisapost-employment

benefitplanunderwhichthecompanypaysfixed

contributionsintoaseparateentityandwillhave

nolegalorconstructiveobligationtopayfurther

amounts.Obligationsforcontributionstodefined

contributionpensionplansarerecognisedasan

expenseintheprofitandlossaccountintheperiods

duringwhichservicesarerenderedbyemployees.

Defined benefit plans

Adefinedbenefitplanisapost-employmentbenefit

planotherthanadefinedcontributionplan.Theentity’s

netobligationinrespectofadefinedbenefitplanis

calculatedbyestimatingtheamountoffuturebenefit

thatemployeeshaveearnedinreturnfortheirservicein

thecurrentandpriorperiods;thatbenefitisdiscounted

todetermineitspresentvalue.Thefairvalueofanyplan

assetsisdeducted.Theentitydeterminesthenetinterest

expense/incomeonthenetdefinedbenefitliability/asset

fortheperiodbyapplyingthediscountrateasdetermined

atthebeginningoftheannualperiodtothenetdefined

benefitliability/assettakingaccountofchangesarising

asaresultofcontributionsandbenefitpayments.

Thediscountrateistheyieldatthebalancesheetdate

onAAcreditratedbondsdenominatedinthecurrency

of,andhavingmaturitydatesapproximatingtotheterms

oftheentity’sobligations.Avaluationisperformed

trienniallybyaqualifiedactuaryandthepositionupdated

annuallybyaqualifiedactuaryusingtheprojected

unitcreditmethod.Theentityrecognisesnetdefined

benefitplanassetstotheextentthatitisabletorecover

thesurpluseitherthroughreducedcontributions

inthefutureorthroughrefundsfromtheplan.

Changesinthenetdefinedbenefitliability

arisingfromemployeeservicerenderedduring

theperiod,netinterestonnetdefinedbenefit

liability,andthecostofplanintroductions,benefit

changes,curtailmentsandsettlementsduring

theperiodarerecognisedinprofitorloss.

Remeasurementofthenetdefinedbenefitliability/

assetisrecognisedinothercomprehensive

incomeintheperiodinwhichitoccurs.

Termination benefits

Terminationbenefitsarerecognisedasanexpense

whentheentityisdemonstrablycommitted,without

realisticpossibilityofwithdrawal,toaformal

detailedplantoeitherterminateemployment

beforethenormalretirementdate,ortoprovide

terminationbenefitsasaresultofanoffer

madetoencouragevoluntaryredundancy.

64 65

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

2 SEGMENTAL INFORMATION – GROUP AND COMPANY

Racingadministration Datalicensing Total

2017 2017 2017

£'000 £'000 £'000

Turnover

UnitedKingdomandRepublicofIreland 32,708 2,009 34,717

Totalsales-Group 32,708 2,009 34,717

Intragrouprevenue(Companyonly) 528

Totalsales-Company 33,236

Totaloperatingprofitbeforeinterestandtaxation 1,262 107 1,369

Netliabilities (7,922) (548) (8,470)

Racingadministration Datalicensing Total

2016 2016 2016

£'000 £'000 £'000

Turnover

UnitedKingdomandRepublicofIreland 31,591 1,909 33,500

Totalsales 31,591 1,909 33,500

Intragrouprevenue(Companyonly) 261

Totalsales-Company 31,852

Totaloperatinglossbeforeinterestandtaxation 1,016 129 1,145

Netliabilities (7,090) (325) (7,415)

TheGrouphastwoclassesofbusiness,datalicensingandracingadministration,bothofwhichoriginateintheUK.

Itisnotpossibletosplitthe(loss)/profitbeforeinterestandtaxationorthenetliabilitiesbygeographicaldestination.

3 REMUNERATION OF DIRECTORS AND KEY MANAGEMENT

TheremunerationpayabletoeachofthedirectorsofBritishHorseracingAuthorityLimitedfortheyearwas:

2017 2016

£'000 £'000

NJRust 380 328

SRHarman 100 100

AWKMerriam 27 27

DLWhyte 27 27

JWSaumarezSmith 27 27

ADuncan 27 27

EWilmott 25 27

JAHarrington 27 27

ENHarwerth 27 27

JRArnold 27 24

SirPRStevenson 35 35

VACurrie 27 24

Total 756 700

ThecostsofNJRust,whowasChiefExecutive,arealsorepresentedwithinthecostsincludedinnote4.

Numberofdirectors

2016 2015

Retirementbenefitsareaccruingtothefollowingnumberofdirectorsunder:

Moneypurchaseschemes 1 1

Theaggregateofemolumentsandamountsreceivableunderlongtermincentiveschemesofthehighestpaiddirector

was£380,000(2016:£328,000),andCompanypensioncontributionsof£24,300(2016:£24,000)weremadetoamoney

purchaseschemeonhisbehalf.

66 67

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

4 STAFF NUMBERS AND COSTS

TheaveragenumberofpersonsemployedbytheCompanyisshownbelow:

2017 2016

£'000 £'000

Permanentstaff 232 226

Sessionalstaff 25 21

257 247

Theaggregatepayrollcostsofthesepersonswereasfollows:

2017 2016

£'000 £'000

Wagesandsalaries 10,509 10,149

Pensioncosts 1,261 1,241

Socialsecuritycosts 1,153 1,123

12,923 12,513

5 EXPENSES AND AUDITOR’S REMUNERATION

2017 2016

Includedinprofit/lossarethefollowing: £'000 £'000

Depreciation/amortisationchargefortheyear:

Tangibleownedfixedassets 316 146

Intangibleownedfixedassets 456 393

Lossondisposaloffixedassets - 2

Impairmentcharges 148 -

Operatingleases:

Buildingrentals 852 852

Carleases 376 376

Photocopierleases 47 43

Auditor’sremuneration:

Auditofthesefinancialstatements 44 45

Amountsreceivablebyauditorsandtheirassociatesinrespectof:

Auditoffinancialstatementsofsubsidiariesofthecompany 14 13

Taxationcomplianceservices 25 30

Othertaxadvisoryservices 9 10

Allotherservices 1 1

6 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME

GROUP 2017 2016

£'000 £'000

Bankinterest 17 24

17 24

COMPANY 2016 2015

£'000 £'000

Bankinterest 12 19

12 19

7 INTEREST PAYABLE AND SIMILAR CHARGES - GROUP AND COMPANY

2017 2016

£'000 £'000

Interestonassets 1,966 2,234

Interestonliabilities (2,409) (2,698)

Netinterestexpenseonnetdefinedbenefitliabilities (443) (464)

68 69

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

8 TAXATION

GROUP 2017 2016

£'000 £'000

Analysisofcurrenttaxrecognisedinprofitandloss

UKcorporationtaxat19.25%(2016:20%)

Taxonprofitfortheyear (25) 32

Adjustmentinrespectofpriorperiods (141) (161)

Totalcurrenttax (166) (129)

Deferredtaxcreditfortheyear (53) -

Totaltax (219) (129)

Reconciliationofeffectivetaxrate 2017 2016

£'000 £'000

Profitexcludingtaxation 943 705

TaxusingtheUKcorporationtaxrateof19.25%(2016:20%) 182 141

Effectsof:

Expensesnotdeductiblefortaxpurposes 28 57

Pensioncostsnotimmediatelydeductible (138) (147)

R&Dtaxcreditstooffsettradingprofits (180) (3)

R&Dtaxcreditsexchangedforcash (137) (161)

(over)/underprovidedinprioryear (4) -

Capitalallowancesinexcessofdepreciation 30 (16)

Totalcurrenttaxcredit(seeabove) (219) (129)

TheCompanyhasclaimedR&Dtaxcreditsfor2016whichwereexchangedforcash.Thisamountof£137,000(2016:

£161,000)isshownseparatelyandwasreceivedfromHMRCinJanuary2018.TheCompanywillcontinuetoseekto

claimthesegoingforward,whereappropriate,andwillincludeanappropriateamountindeterminingthecurrentyear

taxcharge,bothinoffsettingtradingprofitsbutalsoasacash-invalue.

Factors that may affect future tax charges:

Adeferredtaxassetof£53,000(2016:£nil)hasbeenrecognisedinthebalancesheetinrespectofanticipatedR&D

credits.Inaddition,£3,449,000(2016:£3,283,000)hasnotbeenrecognisedontheGroup’spensionschemeliability.

Thisisduetotheuncertaintyoftherebeingsufficienttaxableprofitsinfutureyearstoenablesuchtaxdeductionsto

beclaimed.Therearealsounrecognisedtradinglossesof£383,000(2016:£384,000)whichagainareunabletobe

recognisedduetoinsufficienttaxableprofitsinfuturetousethemagainst.

FurtherreductionsintheUKcorporationtaxrateto18%(effective1April2020)weresubstantivelyenactedon26

October2016,andanadditionalreductionto17%(effective1April2020)wassubstantivelyenactedon6September

2016.GiventheCompany’sexpectationthatitwillcontinuetomakesmallprofits,theimpactofareductioninfuture

corporationtaxratesisminimal.

COMPANY 2017 2016

£'000 £'000

Analysisofcurrenttaxrecognisedinprofitandloss

UKcorporationtaxat19.25%(2016:20%)

Adjustmentinrespectofprioryears (137) (161)

Totalcurrenttax (137) (161)

Taxonprofitfortheyear–deferredtax (36) -

Totalcurrenttaxcredit (173) (161)

Reconciliationofeffectivetaxrate 2017 2016

£'000 £'000

Profitexcludingtaxation 1,056 561

Currenttaxat20%(2015:20.25%) 203 112

Effectsof:

Expensesnotdeductiblefortaxpurposes 49 49

Pensioncostsnotimmediatelydeductible (138) (147)

R&Dtaxcreditstooffsettradingprofits (180) (1)

R&Dtaxcreditsexchangedforcash (137) (161)

(over)/underprovidedinprioryear - -

Capitalallowancesinexcessofdepreciation 30 (13)

Totalcurrenttaxcredit(seeabove) (173) (161)

TheCompanyhasclaimedR&Dtaxcreditsfor2016whichwereexchangedforcash.Thisamountof£137,000(2016:

£161,000)isshownseparatelyandwasreceivedfromHMRCinJanuary2018.TheCompanywillcontinuetoseekto

claimthesegoingforward,whereappropriate,andwillincludeanappropriateamountindeterminingthecurrentyear

taxcharge,bothinoffsettingtradingprofitsbutalsoasacash-invalue.

Factors that may affect future tax charges:

Adeferredtaxassetof£36,000(2016:£nil)hasbeenrecognisedinthebalancesheetinrespectofanticipatedR&D

credits.Inaddition,£3,449,000(2016:£3,283,000)hasnotbeenrecognisedontheGroup’spensionschemeliability.

Thisisduetotheuncertaintyoftherebeingsufficienttaxableprofitsinfutureyearstoenablesuchtaxdeductionsto

beclaimed.Therearealsounrecognisedtradinglossesof£383,000(2016:£383,000)whichagainareunabletobe

recognisedduetoinsufficienttaxableprofitsinfuturetousethemagainst.

FurtherreductionsintheUKcorporationtaxrateto18%(effective1April2020)weresubstantivelyenactedon26

October2016,andanadditionalreductionto17%(effective1April2020)wassubstantivelyenactedon6September

2016.GiventheCompany’sexpectationthatitwillcontinuetomakesmallprofitsandreceivegrouprelief,theimpactof

areductioninfuturecorporationtaxratesisminimal.

70 71

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

9 INTANGIBLE FIXED ASSETS – GROUP AND COMPANY

Assetsunder

DevelopmentCosts Construction Total

£'000 £'000 £'000

Cost

At1January2017 2,002 - 2,002

Additions 140 413 553

At31December2017 2,142 413 2,555

Amortisation

At1January2017 713 - 713

Chargefortheyear 456 - 456

At31December2017 1,169 - 1,169

Netbookvalue

At31December2017 973 413 1,386

At1January2017 1,289 - 1,289

Thesecostsrelatetoracingspecificsoftwareandsystemdevelopmentcommissionedfromthirdpartiesandareeither

amortisedover4yearsforexternaldevelopmentorovertheremaininglifeofthecontracttowhichthedevelopment

relates.Thismethodofamortisationisbelievedtobefairandappropriateandrepresenttheusefuleconomiclifeof

theassetinthemostappropriatemanner.Theamortisationchargeisincludedwithadministrativeexpenses.

10 TANGIBLE FIXED ASSETS

COMPANY Leasehold Fixtures,fittings

improvements andofficeequipment Total

£'000 £'000 £'000

Cost

At1January2017 1,170 3,086 4,256

Additions 54 271 325

Disposals - (236) (236)

At31December2017 1,224 3,121 4,345

Depreciation

At1January2017 1,082 2,599 3,681

Chargefortheyear 45 264 309

Disposals - (236) (236)

At31December2017 1,127 2,627 3,754

Netbookvalue

At31December2017 97 494 591

At1January2017 88 494 575

GROUP Leasehold Fixtures,fittings

improvements andofficeequipment Total

£'000 £'000 £'000

Cost

At1January2017 1,170 3,111 4,281

Additions 54 271 325

Transfers - - -

Disposals - (236) (236)

At31December2017 1,224 3,146 4,370

Depreciation

At1January2017 1,082 2,602 3,684

Chargefortheyear 45 271 316

Disposals - (236) (236)

At31December2017 1,127 2,637 3,764

Netbookvalue

At31December2017 97 509 606

At1January2016 88 509 597

72 73

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

11 FIXED ASSET INVESTMENTS - COMPANY

SharesinGroup

Undertakings Total

£'000 £'000

Cost

At1Januaryand31December2017 4,004 4,004

Provision

At1January (400) (400)

Impairmentchargefortheyear (148) (148)

and31December2017 (548) (548)

Netbookvalue

At31January2017 3,456 3,456

At1January2017 3,604 3,604

TheCompanyhasthefollowingdirectinvestments:

Countryof Numberof Classof Ownership2017 Ownership2016

incorporation shares sharesheld % %

BritishHorseracing

DatabaseLimited UK 4,003,932 Ordinary 100 100

BritishHorseracingLimited* UK 2 Ordinary 100 100

BritishHorseracing

BoardLimited* UK 2 Ordinary 100 100

RacingForAll* UK 2 Ordinary 100 100

HorseracingRegulatory

AuthorityLimited* UK 1,000 Ordinary 100 100

Thefourcompaniesmarkedwith*arealldormantcompaniesandnolongertrade.Alloftheabovecompanieshave

theirregisteredofficeat75HighHolborn,London,WC1V6LS.

TheCompanyhasthefollowingindirectinvestmentsthroughitssubsidiaries:

Countryof Numberof Classof Ownership2017 Ownership2016

incorporation shares sharesheld % %

GreatBritishRacingLimited

(formerlyRacingEnterprisesLimited) UK 4,003,932 Ordinary 99.99985 99.99985

BritishChampionsSeriesLimited UK 139 Ordinary 13.9 13.9

Alloftheabovecompanieshavetheirregisteredofficeat75HighHolborn,London,WC1V6LS.

12 DEBTORS

Group Group Company Company

2017 2016 2017 2016

£'000 £'000 £'000 £'000

Tradedebtors 4,104 3,367 4,104 3,286

Amountsowedbygroup

undertakings - - 180 321

Corporationtaxasset 164 161 137 161

Deferredtaxasset 53 - 36 -

Otherdebtors 2,721 2,270 2,721 2,244

VAT 29 - - -

AmountsowedbyBCSLimited 2,076 2,212 - -

Prepaymentsandaccruedincome 899 714 694 714

10,046 8,724 7,872 6,726

Duewithinoneyear 8,063 6,648 7,828 6,726

Dueafteroneyear 1,983 2,076 44 -

10,046 8,724 7,872 6,726

Includedwithincompanyandgroupotherdebtorsisabalanceof£200,000(2016:£250,000)withtheHorsemen’sGroup

whichhasbeenfullyprovidedforandthereforehasanetcarryingvalueof£nil(2016:£nil).Arepaymentof£50,000was

receivedduringtheyearinrelationtothisbalance.

IncludedintheabovegroupbalanceowedbyBCSLimitedisaloanbalanceof£2,076,000whichrepresentsanamount

drawndownbyBCS.Thisloanwillberepaidbetween1January2016and31December2025overwhichtimeinterest

of£486,000willhavebeenearned.Theinterestratechargedvariesaccordingtowhichelementoftheloanitrelatesto.

Thenextrepaymentof£363,000isscheduledforDecember2018.£226,000hasbeenrepaidtodate.

TheloantoBCSLimitedisstatedatfairvaluecalculatedusinganinterestratewhichthedirectorsbelieveaccurately

representsamarketrate.Allotherfinancialinstrumentsareheldatfairvalueastheyarerepayableondemand.

13 CASH - GROUP AND COMPANY

Includedwithinthegroupcashbalanceof£12,415,000(2016:£13,428,000)andcompanycashbalancesof£10,811,000

(2016:£11,559,000)arethefollowingringfencedbalances.

2017 2016

£'000 £'000

EarlyClosingmonies 513 518

DevelopmentFund 391 184

OnCoursephysios 1 20

Plus10bonusscheme 2,068 2,423

BHAGrantScheme 183 659

Trainersbenevolentfund 17 4

Industryrecruitmentandtraininggrantfund 810 642

July2018LLP - 327

Prizemoneyduefordistribution 1,998 1,873

5,981 6,650

74 75

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

14 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Group Company Company

2017 2016 2017 2016

£'000 £'000 £'000 £'000

Tradecreditors 2,932 2,939 2,695 2,666

Amountsowedtogroup

undertakings - - 71 251

Ringfencedfunds(note13) 5,981 6,650 5,981 6,650

Corporationtax 2 11 - -

Othertaxesandsocialsecurity 746 753 740 711

Othercreditors 4,795 3,466 4,724 3,415

Accrualsanddeferredincome 552 1,221 552 1,221

15,008 15,040 14,763 14,914

Allfinancialinstrumentsareheldatfairvalueandarepayableondemand.

15 CARRYING AMOUNT OF FINANCIAL INSTRUMENTS - GROUP

Thecarryingamountsofthefinancialassetsandliabilitiesinclude:

Group Group Company Company

2017 2016 2017 2016

£'000 £'000 £'000 £'000

Assetsmeasuredatfairvalue

throughprofitorloss 15,540 14,626 11,835 10,760

Liabilitiesmeasuredatfairvalue

throughprofitorloss 7,827 6,553 7,590 6,480

AlloftheGroup’sfinancialassetsandliabilitiesareheldatfairvalue.Inthecaseofdebtorsthisisthesameasbook

valueasthedebts,withtheexceptionoftheloanfromGBRtoBCS,arerepayableondemand.Similarlyallfinancial

liabilitiesareheldatfairvalueastheyarepayableondemand.

InrelationtotheloanfromGBRtoBCSthefairvaluehasbeendeterminedbyreviewinganappropriaterateof

borrowingavailablebothatthetimeoftheinitialloanbeinggrantedin2011andwhentheloanwasextendedand

renegotiatedin2013.GiventhatBCSisjointlyownedbyacombinationofthegroup(whoown13.9%)andother

largerracecoursesandracecoursegroups,itisreasonableindetermininganappropriatediscountratetoreview

themajorshareholdersabilitytoborrowasawayofassessinghowtovaluetheloan.Usingavarietyofindicators

includingliborplus0.8%,liborplus2.5%andtheinterestrateonloanavailablefromwithintheRacingindustry,

averagingthesesourcesgivesarateof3.25%whichhasbeenapplied.Usingthisratetodiscounttheloansgives

afairvalueinlinewiththeamountshowninnote12.

ThedirectorsbelievethatthereisminimalcreditriskgiventhesuccessofBCSsinceinceptionandunlessthefirst

repaymentduein2016isnotmadeinaccordancewiththerepaymentplanthenitwillcontinuetotakeapositive

viewoftherecoverabilityandthereforefairvalueofthisloangoingforward.

16 RESERVES

GROUP Profitand

Capitalreserve lossaccount Total

£'000 £'000 £'000

At1January2017 19 (7,434) (7,415)

Profitforthefinancialyear - 1,162 1,162

Remeasurementofthenetdefinedbenefitliability - (2,217) (2,217)

At31December2017 19 (8,489) (8,470)

COMPANY Profitand

Capitalreserve lossaccount Total

£'000 £'000 £'000

At1January2017 19 (7,593) (7,574)

Profitforthefinancialyear - 1,229 1,229

Remeasurementofthenetdefinedbenefitliability - (2,217) (2,217)

At31December2017 19 (8,581) (8,562)

17 PENSION SCHEME

Overview

TheCompanyoperatesapensionschemeforitsemployees,theBritishHorseracingAuthorityPensionScheme(‘the

Scheme’).TheSchemehastwosections,adefinedbenefitsectionwhichclosedtofutureaccrualon31December2015

andadefinedcontributionsection.Thedefinedcontributionsectionisalsousedforthepurposesofautoenrolment.

Defined benefit section

Thedefinedbenefitsectionwasclosedtofutureaccrualon31December2015.Priortothis,thedefinedbenefitsection

hasbeenbaseduponcareeraveragerevaluedearnings.

ThelatestfullactuarialvaluationofthedefinedbenefitsectionoftheSchemewascarriedoutat31December2014and

wasupdatedforFRS17purposesto31December2017byaqualifiedindependentactuary.

Thecompanywillcontribute£1,158,000asanannualdeficitrepairpaymentin2018andhasarecoveryplanagreedwith

thetrusteesoftheSchemethatisinplaceuntilSeptember2024.

ThetrusteesoftheSchemehaveaguaranteefromtheHorseraceBettingLevyBoard(‘HBLB’)thatiftheBHAdoesnot

makeitsannualpaymentsforeithertheannualdeficitpaymentoritsongoingservicescontributionsthentheHBLB

willmakethesepayments.Thisguaranteeiseffectiveuntiltheearlierof30September2024orthedateatwhichthe

Schemedeficitusingthe2007actuarialassumptionshasbeenfullypaidoff.

InadditiontheEmployermeetsthecostsofadministeringtheScheme,thecostoflumpsumdeathinserviceinsurance

premiumsandLeviespayablebytheScheme.

76 77

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

Netpensionliability:

Valueat31 Valueat31

December2017 December2016

£'000 £'000

Definedbenefitobligation (91,576) (87,776)

Planassets 73,661 71,363

Deficit (17,915) (16,413)

Relateddeferredtaxasset - -

Netpensionliability (17,915) (16,413)

Movementsinpresentvalueofdefinedbenefitobligation:

Valueat31 Valueat31

December2017 December2016

£'000 £'000

Atstartofyear 87,776 72,126

Currentservicecost - -

Interestcost 2,409 2,698

Actuariallosses/(gains)duetoassumptionchanges 4,116 2,698

Experience(gain)/loss 757 (318)

Contributionsbymembers - -

Benefitspaid (3,482) (2,265)

Atendofyear 91,576 87,776

Movementsinfairvalueofplanassets:

Valueat31 Valueat31

December2017 December2016

£'000 £'000

Atstartofyear 71,363 59,325

Interestonassets 1,966 2,234

Actuarialgain/(loss)onschemeassets 2,656 10,869

Contributionsbyemployer 1,158 1,200

Contributionsbymembers - -

Benefitspaid (3,482) (2,265)

Atendofyear 73,661 71,363

Expenserecognisedintheprofitandlossaccount:

31December2017 31December2016

£'000 £'000

Currentservicecost - -

Netinterestonnetdefinedbenefitliability (443) (464)

Totalexpenserecognisedinprofitandloss (443) (464)

Thetotalamountrecognisedinothercomprehensiveincomeisalossof£2,217,000(2016:lossof£4,348,000).

Cumulativeactuariallossesreportedinothercomprehensiveincomeforaccountingperiodsendingonorafter

22June2002,arelossesof£22,425,000(2016:£20,208,000).

Schemeassets:

ThefairvalueoftheScheme’sassets,whicharenotintendedtoberealisedintheshorttermandmaybesubjectto

significantchangebeforetheyarerealised,were:

Valueat31 Valueat31

December2017 December2016

£'000 £'000

Equitiesandotherreturnseekingassets 19,712 20,192

Bondsandotherdefensiveassets 51,045 49,818

Property 2,364 1,222

Cash 529 120

Annuity 11 11

Totalmarketvalueofassets 73,661 71,363

Actualreturnonplanassets 4,622 13,103

78 79

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

Themajorassumptionsusedinthisvaluationbytheactuarywere(innormalterms):

31December2017 31December2016

% %

Discountrate 2.50 2.80

Inflation(ConsumerPriceIndex) 2.80 2.80

Inflation(RetailPriceIndex) 3.60 3.60

Pensionincrease(RPImax5%) 3.40 3.40

Pensionincrease(RPImax2.5%) 2.30 2.30

Pensionincrease(CPImax2.5%) 2.10 2.10

Invaluingtheliabilitiesofthepensionfundat31December2017,mortalityassumptionshavebeenmadeasindicatedbelow.

Theassumptionsrelatingtolongevityunderlyingthepensionliabilitiesatthebalancesheetdatearebasedonstandard

actuarialmortalitytablesandincludeanallowanceforfutureimprovementsinlongevity.

The assumptions are equivalent to expecting a 65-year old to live for a number of years as follows:

Currentpensioneraged65:22.9years(male),25.0years(female).

Futureretiree,currentlyaged45,uponreaching65:24.2years(male),26.5years(female).

Theassumptionsusedbytheactuaryarechosenfromarangeofpossibleactuarialassumptionswhich,duetothe

timescalecovered,maynotnecessarilybeborneoutinpractice.

Thehistoryoftheplansforthecurrentandpriorperiodsisasfollows:

2017 2016 2015 2014 2013

£'000 £'000 £'000 £'000 £'000

Presentvalueofschemeliabilities (91,576) (87,776) (72,126) (71,668) (61,083)

Fairvalueofschemeassets 73,661 71,363 59,325 60,053 50,131

Deficit (17,915) (16,413) (12,801) (11,615) (10,952)

Experienceadjustments:

Yearending Yearending Yearending

31December2017 31December2016 31December2015

Differencebetweentheexpectedandactualreturnonschemeassetsgain/(loss):

Amount(£'000) 2,656 10,869 (2,396)

Percentageofyearendschemeassets 4% 15% 4%

Experience(gains)andlossesonschemeliabilities:

Amount(£'000) (757) 318 (3,147)

Percentageofyearendschemeliabilities 0.8% 0.3% 4%

Totalamountrecognisedinothercomprehensiveincome:

Amount(£'000) (2,217) (4,348) (1,785)

Percentageofyearendschemeliabilities 2% 5% 2%

Thedefinedbenefitelementoftheschemewasclosedtofutureaccrualon31December2015andthereforefrom2016

onwards,theonlycontributionsbeingpaidintothissectionrelatetotheagreeddeficitrepaircontributionsattherates

recommendedbytheSchemeActuary.Cashcontributionstothedefinedbenefitelementamountedto£1,158,000to

theSchemein2017(2016:£1,158,000).The£1,200,000showninthisnoteinrespectofemployercontributionsin2017

includes£42,000relatedtoDecember2016andisthereforeatimingdifferenceonly.

Analysisofamountrecognisedinothercomprehensiveincome:

Yearending Yearending Yearending

31December2017 31December2016 31December2015

£'000 £'000 £'000

Actuarialgain/(loss)onschemeassets 2,656 10,869 (2,396)

Changesinactuarialassumptions (4,116) (15,535) 3,758

Experiencegains/(losses) (757) 318 (3,147)

Actuariallossrecognisedinothercomprehensiveincome (2,217) (4,348) (1,785)

Analysisofamountrecognisedinothercomprehensiveincome(continued):

Yearending Yearending

31December2014 31December2013

£'000 £'000

Actuarial(loss)/gainonschemeassets 8,090 (599)

Changesinactuarialassumptions (9,371) 1,499

Experiencegains/(losses) - 11

Actuarial(loss)/gainrecognisedinothercomprehensiveincome (1,281) 911

Defined contribution section

TheCompany’scontributiontothedefinedcontributionschemeischargedtotheprofitandlossaccountintheperiodin

whichtheyarepaidandamountedto£1,261,356in2017(2016:£1,241,103).

Theamountpayabletothepensionfundasat31December2017was£209,000(2016:£208,000)

InadditiontheCompanypaid£23,000intothepersonalpensionschemesofcertainemployees(2016:£17,000).

18 LIABILITY OF MEMBERS

ThefourmembersoftheCompanyhaveundertakentocontributeasumnotexceeding£1eachtomeettheliabilitiesof

theCompanyintheeventthatitiswoundup.

80 81

FINANCIAL STATEMENTSFINANCIALSTATEMENTS

19 COMMITMENTS

TheGrouphasacontractwithWeatherbysThoroughbredLimitedfortheprovisionofsubstantialracingandgeneral

administrationserviceswhichexpiresattheendof2020.At31December2017theGroupandCompanyhadannual

commitmentsundernon-cancellableoperatingleasesasfollows:

2017 2017 2016 2016

LandandBuildings Other LandandBuildings Other

£'000 £'000 £'000 £'000

Expiringwithinoneyear 849 297 849 396

Expiringbetweenone

andfiveyearsinclusive 1,112 227 1,961 510

Overfiveyears - - - -

1,961 524 2,810 906

Theleasecommitmentsincludedinotherrelatetomotorcars.

20 ANALYSIS OF NET FUNDS

At1January2017 CashFlow At31December2017

£'000 £'000 £'000

Cashatbankandinhand 6,006 (346) 5,660

Ringfencedcash 6,650 (669) 5,981

Shorttermdeposits 772 2 774

Total 13,428 (1,013) 12,415

21 RELATED PARTY TRANSACTIONS

Identity of related parties with which the Company has transacted

Thecompanyhastransactedwiththefollowingrelatedparties,allofwhicharerelatedbyvirtueofoneoftheir

employees/appointments/directorsbeingamemberoftheBoardoftheCompany,orasamemberbodyoftheCompany.

Otherrelatedpartytransactions: Salesto Administrativeexpensesincurredfrom

2017 2016 2017 2016

£'000 £'000 £'000 £'000

RacecourseAssociationLimited 43 41 1 3

RacehorseOwnersAssociationLimited 98 93 - -

ThoroughbredBreedersAssociation 37 36 - -

FakenhamRacecourseLimited 185 181 - -

TheHamiltonParkRacecourse

CompanyLimited 256 250 6 -

NationalTrainersFederation 1 3 - -

Horsemen’sGroup - 4 (50) (75)

PointtoPointAuthorityLimited 145 145 - -

RetrainingofRacehorsesLimited - - 1 1

RacingtoSchoolLimited 5 8 - -

JockeyClubRacecoursesLimited 8 13 26 16

JockeyClubEstates - - 2 6

RacingWelfare 4 2 2 1

HorseraceBettingLevyBoard 44 35 - -

GreatBritishRacingLimited 969 709 10 126

BritishHorseracingDatabaseLimited 5,365 5,329 5,380 5,344

CrimestoppersEnterprisesLimited - - 9 9

BritishChampionsSeriesLimited 34 50 - 1

7,194 6,899 5,387 5,432

Receivablesoutstanding Creditorsoutstanding

2017 2016 2017 2016

£'000 £'000 £'000 £'000

RacecourseAssociationLimited 9 4 - -

RacehorseOwnersAssociationLimited 27 28 - -

ThoroughbredBreedersAssociation - - - -

FakenhamRacecourseLimited - - - -

TheHamiltonParkRacecourse

CompanyLimited - - - -

NationalTrainersFederation - - - -

Horsemen’sGroup - - - -

PointtoPointAuthorityLimited 44 43 - -

RetrainingofRacehorsesLimited 171 217 - -

RacingtoSchoolLimited 62 143 - -

JockeyClubRacecoursesLimited - 13 - -

JockeyClubEstates - - - -

RacingWelfare - - - -

HorseraceBettingLevyBoard 1 34 - -

GreatBritishRacingLimited 180 184 - 61

BritishHorseracingDatabaseLimited - - 71 53

CrimestoppersEnterprisesLimited - - - -

BritishChampionsSeriesLimited 2,078 2,212 - -

2,572 2,212 71 114

RacecourseAssociationLimited

RacehorseOwnersAssociationLimited

ThoroughbredBreedersAssociation

FakenhamRacecourseLimited

NationalTrainersFederation

Horsemen’sGroup

BritishChampionsSeriesLimited

TheHamiltonParkRacecourseCompanyLimited

PointtoPointAuthorityLimited

RetrainingofRacehorsesLimited

RacingtoSchoolLimited

JockeyClubRacecoursesLimited

JockeyClubEstates

RacingWelfare

BritishHorseracingDatabaseLimited

GreatBritishRacingLimited

CrimestoppersEnterprisesLimited

HorseraceBettingLevyBoard

82 83

FINANCIAL STATEMENTS

All figures within the document are correct as of time of print 06.06.17

Certain images within this publication are reproduced with the permission of Focusonracing.com

84

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