Mr. Seamus McCarthy:

Horse Racing Ireland, HRI, was established to provide a statutory basis for the control, regulation and development of the horse racing industry in Ireland. It operates racing and betting activities through eight subsidiaries. In addition, it has a one third shareholding in an associated company called Curragh Racecourse Limited, CRL.

HRI received State funding of €67.2 million in 2019, sourced from the Vote for the Department of Agriculture, Food and the Marine through the Horse and Greyhound Racing Fund. HRI's other main sources of income in the year were contributions from horse owners and sponsors towards racing prize money, totalling €23.4 million; sales of media rights to the value of €6.8 million; registration fee income of €2.6 million; industry contributions to Irish Thoroughbred Marketing of €443,000; and net income of €294,000 from racing activities arising from totaliser betting and HRI-owned racecourses. On the expenditure side in 2019, HRI paid out €67.6 million in prize money. Expenditure of €12.6 million was incurred on integrity and racecourse services, mainly comprising grants to the Irish Horse Racing Regulatory Board. Overall, the HRI group incurred a deficit of just over €1 million for 2019.

The 2019 financial statements received a clear audit opinion. However, without qualifying that opinion, my report drew attention to two matters related to HRI's activity in the year. First, I drew attention to the fact that the statement of income and expenditure disclosed a group loss of €2.064 million in 2019 relating to HRI's investment in CRL. This is a company established to provide for the redevelopment and management of the Curragh racecourse. The redevelopment involved the construction of a new stand and other racing facilities, which opened in mid-2019. Ownership of the company is split between HRI, the Turf Club and private investors. Notes Nos. 37 and 39 of the group financial statements explain that HRI had contributed funding to CRL totalling €36 million up to the end of 2019. This comprised an investment of €23 million in return for an equity share, grant funding of €12.5 million for the construction project, and €500,000 paid for the right to use a hospitality suite at the racecourse for 30 years. In addition, the group financial statements reflect a loan of €500,000 given by HRI to CRL during 2019 to fund additional works on the racecourse's parade ring. As at 31 December 2019, HRI held a 35.29% economic share in CRL. The carrying value of HRI's investment at 31 December 2019 was €18.5 million, indicating cumulative losses incurred by HRI amounting to €4.5 million.

Second, I drew attention to the disclosure in the statement on internal control for 2019 of a financial loss by HRI of €389,000 in respect of cash-in-transit services. The service provider went into liquidation while holding cash relating to HRI's racecourses and its Tote Ireland subsidiary.

The chief executive will be able to update the committee on these matters.