Concise Annual Report 2012
Australia’s leading wagering,
racing media and Keno operator
Secure long term licences in Australia’s most attractive markets
Iconic Australian brands with market leading positions such as
TAB, Sky Racing and Keno
Extensive multi channel distribution footprint through retail,
mobile, internet, phone and self service
Strong earnings, cash flows, and balance sheet
Established relationships with industry partners
Recognised as global leader in responsible gambling
Notice of meeting
The Annual General Meeting
of Tabcorp Holdings Limited
will be held at The Grand
Ballroom, Four Seasons
Hotel, 199 George Street,
Sydney, New South Wales on
Wednesday 31 October 2012 at
10am (AEDT).
Key achievements during the year
Awarded the new Victorian Wagering and Betting Licence
Launched Victorian Keno business
Prepared for Tabcorp Gaming Solutions start up
Expanded Sky Channel international export
Launched Premier Gateway International wagering hub in Isle of Man
Refinanced FY13 debt maturities
Strong revenue growth continued in fixed odds, Trackside and Luxbet.
Retail wagering and online turnover also grew
Completed demerger separation of former casinos business
chief executive officer’s message
Financial performance
At the front:
1
2 chairman’s message
4
6 business overview
8 responsible gambling
9
people
10 community
environment
11
12 board of directors
14
senior executive leadership team
With the financials:
16 corporate governance
27 directors’ report
35 remuneration report
income statement
49
50 balance sheet
51 cash flow statement
52 statement of changes in equity
53
notes to the concise financial
statements
55 directors’ declaration
56
57 Five year review
independent audit report
At the back:
58 shareholder information
60 online shareholder services
ibc company directory
ibc Key dates
tabcorp holdings limited acn 063 780 709
Financial Year ended 30 JUne 2012
Financial performance
■■ net profit after tax (npat) from continuing operations of $340.0 million, up 12.7%(1)
■■ earnings before interest and taxation (ebit) from continuing operations of $591.7 million, up 5.2%(2)
■■ revenues of $3,038.5 million, up 3.1%. operating expenses up 5.2% to $416.1 million include start up costs for
Victorian Keno and tabcorp gaming solutions
Net profit after tax(3)(4)
$ million
.
2
0
9
4
.
2
6
9
4
3
.
7
7
4
.
3
6
8
4
■■ earnings per share from continuing operations of 47.6 cents, up 4.6%(2), following capital management activities
■■ declared dividends totaling 24 cents per share fully franked, including final dividend of 11 cents per share.
8
0
/
7
0
9
0
/
8
0
0
1
/
9
0
dividend pay out ratio 50.9% of npat
■■ taxes on gambling paid from continuing operations of $1,121.9 million, up 0.6%, including:
P contribution to state community benefit funds in australia of $78.7 million, up 0.5%
■■ income generated for the racing industry up 1.7% to $652.7 million:
P Victorian racing industry up 0.6% to $324.2 million
P new south Wales racing industry up 1.0% to $238.6 million
P race field fees up 10.0% to $38.0 million
P broadcast rights and international contributions up 6.6% to $51.9 million
■■ income taxes paid and payable from continuing operations of $157.0 million, up 24.1%
1
1
/
0
1
8
.
1
8
3
4
,
Revenue(3)
$ million
0
.
1
5
9
3
,
7
.
0
7
1
,
4
.
0
2
3
2
4
,
8
0
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7
0
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1
Earnings per share(3)(4)
Cents per share
.
4
3
9
7
.
8
8
.
4
8
7
.
4
3
7
.
0
0
4
3
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6
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7
4
(1) prior year npat of $534.8 million included $591.2 million profit from discontinued operations and impairment of $358.0 million, resulting in FY11 npat from continuing operations of
$301.6 million. FY11 result included interest expense of $134.4 million, which reflected the higher debt levels prior to the demerger of the casinos business, compared with $94.7 million
in the current period.
(2) prior year comparative from continuing operations excludes impairment of $358.0 million.
(3) For periods before FY11/12, earnings and revenue is normalised to reflect the theoretical win rate of the Vip rebate business of the now-demerged casinos division, and earnings excludes
one-off demerger related items.
(4) For periods before FY08/09, comparatives adjusted to include Victorian licence amortisation.
(5) FY07/08 includes the special dividend declared in august 2008 of 47 cents per share which was declared as a substitute for the final dividend for FY07/08.
8
0
/
7
0
9
0
/
8
0
0
1
/
9
0
1
1
/
0
1
2
1
/
1
1
Dividends per share(5)
Cents per share (fully franked)
4
9
5
6
8
0
/
7
0
9
0
/
8
0
5
5
0
1
/
9
0
3
4
1
1
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0
1
4
2
2
1
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1
1
1
ConCise annual report 2012
i am pleased to present the 2012 annual report for tabcorp holdings
limited.
2012 – A successful year
the 2012 financial year was a successful year for tabcorp on both a
financial and operational front. it was a year in which tabcorp secured
its leadership position in australian gambling and entertainment by
winning new licences.
tabcorp completed the operational separation following the demerger
of the former casinos business in June 2011, which now trades on the
australian securities exchange (asX) as echo entertainment group.
the company is now clearly focussed on our continuing businesses of
Wagering, media and international, Keno and gaming.
tabcorp’s businesses again demonstrated their resilience in 2012, as
evidenced by growth in revenues of 3.1% to $3,038.5 million and growth in
earnings before interest and taxes (ebit) of 5.2% to $591.7 million1.
a significant area of attention for tabcorp during the year centred on
preparing for a seamless transition to Victoria’s new gambling industry
structure, which was implemented in august 2012.
in december 2011, tabcorp was awarded the new Victorian Wagering and
betting licence in a competitive tender. We were delighted to be chosen
by the Victorian government as the preferred tenderer. the new licence,
which commenced in august 2012 and runs until august 2024, has given
tabcorp the opportunity to operate a new 50/50 Joint Venture with the
Victorian racing industry. the sole licence allows tabcorp to offer on-
course and off-course wagering and betting on thoroughbred, harness
and greyhound racing and approved sporting and other events. tabcorp
continues to be a key part of racing and wagering in Victoria, which is
core to our company heritage.
in april 2012, tabcorp launched the lottery game Keno into Victoria, after
having been awarded Victoria’s first ever stand-alone Keno licence in
march 2011.
We transitioned out of our Victorian tabaret gaming operation in august
2012 and commenced the new tabcorp gaming solutions (tgs) business.
Under Victoria’s new gaming industry model, tgs is the state’s leading
gaming services provider, helping licensed venues manage their gaming
offer to patrons.
Financial highlights and dividend
tabcorp reported net profit after tax (npat) from continuing operations
of $340.0 million, up 12.7%2 for the year to 30 June 2012. the result reflects
underlying earnings growth particularly in the Wagering and media
and international businesses, and the benefit of lower interest expense
following the demerger.
the company’s financial performance was also reflected in the growth in
earnings per share (eps) to 47.6 cents, up 4.6%3.
While general market conditions continued to be challenging in 2012, it
was positive that the company recorded strong ebit and profit growth.
tabcorp’s 2012 financial performance reflects the effective management
of regulatory change, targeted investments and our commitment to
innovation and new technologies.
tabcorp declared a final dividend of 11 cents per share for the second
half, fully franked and payable on 26 september 2012 to shareholders
registered at 22 august 2012. the full year dividend was 24 cents, which
constituted a dividend payout ratio of 50.9% of annual npat. this was in
line with previous guidance.
Capital management
tabcorp successfully completed a number of refinancing activities in
2012, resulting in the company now having a staggered and long-term
debt maturity profile. tabcorp refinanced its FY2013 debt maturities by:
■■ raising a$250 million through the offer of tabcorp subordinated notes;
■■ raising a$210 million from the Us private placement (Uspp) market;
and
■ extending the maturity date of a$400 million of our syndicated bank
facility from June 2013 to June 2015.
the Uspp and subordinated notes offer were well supported by investors,
which is a positive endorsement of the investment credentials of
tabcorp.
the company’s funding is now diversified across bank facilities, retail
bonds, institutional bonds and the Uspp market.
“tabcorp is
well placed for
the future, with
a clear strategy of
leadership in our
chosen markets.”
2
3
prior year comparative from continuing operations excludes impairment of $358.0 million.
1
2
prior year comparative from continuing operations excludes impairment of $358.0 million.
prior year npat of $534.8 million included $591.2 million profit from discontinued operations and impairment of $358.0 million, resulting in FY2011 npat from continuing operations of $301.6 million.
FY2011 result included interest expense of $134.4 million, which reflected the higher debt levels prior to the demerger of the casinos business, compared with $94.7 million in the current period.
tabcorp holdings limited Chairman’s message Board
in June 2012, elmer Funke Kupper was appointed a non-executive
director of the company after receiving the requisite regulatory
approvals. as the company’s former ceo, elmer has deep knowledge of
tabcorp’s businesses and strong relationships with our partners.
in July 2012, steven gregg was also granted the necessary regulatory
approvals and was appointed a non-executive director. steven brings
strong credentials to the tabcorp board, having held senior executive
roles in investment banking and management consulting.
i welcome elmer and steven to the tabcorp board.
Supreme Court proceedings
in august, i wrote to all shareholders outlining that tabcorp has filed a
Writ and a statement of claim in the supreme court of Victoria seeking
a payment from the state of Victoria of an estimated $686.8 million.
the state of Victoria’s obligation to make the payment to tabcorp
came into existence when it privatised the Victorian tab and listed
tabcorp on the asX in 1994. the Gaming and Betting Act 1994 provided
for a payment by the state of Victoria to tabcorp on the grant of new
licences, irrespective of whether tabcorp was the new licensee.
Your directors have given due and careful consideration to the decision
to lodge this claim. the board considers that the company is entitled
to a payment, and that the company has a duty to tabcorp’s many
individual shareholders to pursue that entitlement.
Management and employees
i would like to acknowledge the leadership of our ceo david
attenborough and his management team during the 2012 financial
year. i would also like to acknowledge the outstanding contribution
of tabcorp’s more than 3,000 full-time and casual employees across
australia. tabcorp’s strong financial and operational performance
reflects their collective commitment to our businesses and their focus
on our customers.
Tabcorp and the community
tabcorp has been a reliable and trusted operator of gambling
businesses since the company’s establishment in 1994. We are proud
of our corporate social responsibility record. tabcorp was once again
recognised by the dow Jones sustainability index as the overall global
leader in the gambling industry and a world leader in the promotion of
responsible gambling in its 2011 ratings.
in 2012 tabcorp announced the launch of tabcare, a new employee
engagement program which supports our people in undertaking
activities that benefit the broader community. this program
complements the many existing community-based activities that
tabcorp supports. tabcorp has partnered with the Westpac life saver
rescue helicopter and conservation Volunteers australia (nsW), riding
develops abilities Victoria and Fare share (Victoria) and the pyjama
Foundation (Queensland), to help deliver tabcare.
tabcorp was also proud to once again be the major supporter of
greyhound racing Victoria’s the great chase, which raises funds and
provides social activities for disability services groups.
The future
tabcorp is well placed for the future, with a clear strategy of leadership
in our chosen markets.
our financial results in 2012 demonstrate that our businesses are
trading well in their respective markets, despite the economic
uncertainty and challenging market conditions.
Further, tabcorp has cemented its leadership in the australian
gambling industry through the launch of our new Victorian Wagering
and betting licence and our new Victorian Keno and tgs businesses.
the company has a portfolio of well recognised brands and products,
a diversified presence in retail and online distribution and a number
of long-dated licences. these assets allow us to provide a competitive
entertainment experience for our customers and position us to deliver
strong returns for our shareholders.
in closing, i would like to thank you for your continued support of
tabcorp. i would also like to acknowledge our many racing industry,
venue and business partners. it is through our joint efforts that we
serve the hundreds of thousands of customers who continue to choose
our market-leading brands and products.
Paula Dwyer
chairman
3
ConCise annual report 2012 i am pleased to report that the 2012 financial year was a successful
one for tabcorp. it was not only a year in which the company delivered
strong financial results despite the tough and competitive trading
environment, it was also a year in which the company positioned itself
to continue to be a major operator in Victoria.
Following a seamless transition to the new Victorian gambling industry
structure in august 2012, the company is now operating under its new
Wagering and betting licence, has decommissioned the old tabaret
business and successfully launched tabcorp gaming solutions (tgs).
in executing these key deliverables, the company has ensured it maintains
its leadership position in australian gambling and entertainment.
Group performance overview
the company’s reported net profit after tax (npat) from continuing
operations was $340.0 million, up 12.7%1 for the year to 30 June 2012.
this result reflects the benefit of lower interest expense following the
demerger of echo entertainment group.
the best measure of the company’s financial performance is the
growth in earnings before interest and taxes (ebit), which was up
5.2%2 to $591.7 million. this was achieved in what have been widely
recognised as challenging economic conditions.
i will now take you through the performance of each of our four businesses.
Wagering
EBIT $242.23 million, up 10.0%
tabcorp is australia’s market leader in wagering. core to our Wagering
business is the distribution of a full range of fixed odds and totalisator
products to customers through a multi-channel strategy across retail,
online and mobile channels. the 10.0% growth in ebit demonstrates
that the strategy is resonating with our customers.
Wagering revenues for the year were $1,637.4 million, up 4.4% on the
prior year. operating expenses were $279.8 million, up 6.2%, driven by
investment in technology for growth initiatives, such as the trackside,
fixed odds and self-service expansion.
odds betting. tabcorp is largely driving this migration as a result of giving
customers greater choice between tote odds and fixed odds products.
tabcorp’s animated racing game, trackside, delivered 65.6% revenue
growth to $82.3 million, as a result of its expansion in nsW and
continued growth in Victoria, where it has been long established.
our retail channel is a critical element of our multi-channel strategy.
the social experience associated with betting in a hotel, club or tab
agency provides us with a key competitive advantage. retail wagering
turnover was up 6.5% in nsW to $3,911.0 million with the growth largely
aided by fixed odds racing and a full year of trackside. Victorian retail
wagering turnover also grew to $3,047.8 million, up 0.9%. the company
added 186 new sites to the retail network in FY12 across nsW and
Victoria, largely by using our cost-effective kiosk model.
online turnover, excluding our northern territory-based bookmaking
business, was $2,159.2 million, up 14.5%. online gambling purchases
continue to grow as more and more consumers have access to mobile
technology and the internet.
a major operational achievement of the year was the launch of our
international totalisator gateway, premier gateway international
(pgi), which is based on the isle of man. pgi intends to expedite the co-
mingling of overseas totalisator pools into our local pools.
total returns to the australian racing industry from tabcorp’s Wagering
business were $600.8 million. racing industry contributions in Victoria
were $324.2 million, up 0.6%, and in nsW were $238.6 million, up 1.0%.
race field fees were $38.0 million, up 10.0%. this significant level of funding
underscores the importance of tabcorp to australian racing.
Media and International
EBIT $57.1 million, up 8.1%
tabcorp’s media and international business is a core part of tabcorp.
the co-ordination of vision, data and commentary through our sky
media platform is integral to the success of our Wagering businesses.
sky also provides other vital services, such as delivering trackside to
approximately 2,500 venues in Victoria and nsW.
Fixed odds revenues were again one of the standouts for the business,
growing 41.5% on the prior year to $321.4 million. this offset a decline in
totalisator revenues as customer preferences continue to shift towards fixed
the media and international business achieved revenue growth of
6.1% to $190.2 million, primarily as a result of increased export and
subscription revenue.
“We are stepping
up our investment
in new products
and strengthening
our multi-channel
strategy, which
differentiates
us from our
competitors.”
4
1
2
3
prior year npat of $534.8 million included $591.2 million profit from discontinued operations and impairment of $358.0 million, resulting in FY11 npat from continuing operations of $301.6 million.
FY11 result included interest expense of $134.4 million, which reflected the higher debt levels prior to the demerger of the casinos business, compared with $94.7 million in the current period.
prior year comparative from continuing operations excludes impairment of $358.0 million.
prior year comparative from continuing operations excludes impairment of $358.0 million.
tabcorp holdings limited Chief Executive Officer’s message operating expenses for the year were $113.4 million, up 4.6%,
and were driven by investments in outside broadcast television
production, rights fees and digital media. these investments
enhanced the quality of the vision delivered to sky’s viewers.
media and international also continued to expand the distribution of
vision online and internationally. australian and new Zealand racing
is now exported to 31 countries, while the hours of distribution of our
racing World australia channel in the UK was also expanded.
Finally, sky retained the south australian and tasmanian
thoroughbred media rights in 2012. a focus for the second half
of the 2012 calendar year will be securing the nsW and Victorian
thoroughbred media rights, which expire in december 2012.
Gaming
EBIT $244.1 million, up 1.1%
the gaming division’s focus in FY12 centred on managing the
transition out of tabaret to the new gaming industry structure, while
preparing tgs for launch.
gaming revenues for the year were up 0.1% to $1,078.9 million.
operating expenses, which incorporated $8 million in start-up
expenses for tgs, were well controlled at $35.4 million, down 3.5% on
the prior year.
as we have foreshadowed previously, there will be a goodwill write-
off relating to the tabaret gaming business, which is expected to be
$47 million in the first half of FY13.
as we look to the future, tgs is our new gaming services provider,
which has been established to help hotels and clubs manage their
gaming offer.
tgs continued to enter into contracts with venues in FY12, with more
than 8,500 gaming machines now signed up. the expected ebitda
from tgs is $55 million per year from august 2012.
Keno
EBIT $48.3 million, down 1.0%
Keno recorded strong revenue performance, with total revenues up
8.0% to $183.1 million. Queensland revenues grew 6.9%, while revenue
growth in nsW was 7.6%. the nsW and Queensland businesses
continue to perform well.
Keno’s overall ebit result, down 1.0%, was negatively impacted by
$4 million in start-up costs associated with the new Victorian Keno
business. excluding these start up costs, Keno would have delivered
ebit growth of approximately 9%.
Keno was successfully launched into more than 600 Victorian venues
in FY12 and is a growing and important part of the tabcorp group.
Our people and partners
i would like to acknowledge the hard work and commitment of our
employees in helping to achieve a successful 2012. our employees are
now encouraged to live out the new tabcorp Ways of Working, which
is based on the pillars of ‘think customer’, ‘think big’, ‘be one team’,
‘be accountable’ and ‘do the right thing’.
tabcorp operates its businesses with the support of a vast number
of important stakeholders. it is important our interests are aligned.
on that note, i would like to acknowledge each of our stakeholders for
their support in 2012.
Tabcorp looking forward
tabcorp’s continuing businesses started the 2013 financial year with
good momentum.
We are stepping up our investment in new products and
strengthening our multi-channel strategy, which differentiates
us from our competitors. We have also embraced the opportunity
to create a new identity for our tab brand. the new branding is
presenting a fresh and innovative face to the wagering marketplace
and highlights tab’s ability to create magic moments. We will
continue to make the investments that allow us to remain at the
forefront of emerging trends in gambling entertainment.
there is much to look forward to in 2013 including executing our
new licences, developing compelling new products and channels and
building on our customer focus.
We have a great platform. this positions tabcorp well for a
sustainable and profitable future.
David Attenborough
managing director and
chief executive officer
5
ConCise annual report 2012 Business overview
Wagering
Operations
■■ network of agencies, hotels, clubs and
on-course totalisators in Victoria and nsW
■■ totalizator and fixed odds betting
offered on racing and sporting events
■■ luxbet.com offering racing, sport and
novelty product fixed odds bookmaking
service by telephone and online
■■ trackside, a computer simulated racing
product, in Victoria and nsW, and
licensed overseas
■■ Wagering and pooling through premier
gateway international (pgi) joint
venture in the isle of man
■■ 2,800 (approx) tab retail outlets
■■ over 92,000 customer loyalty members
What happened during the year
■■ awarded new Victorian Wagering
and betting licence
■■ expanded retail network with
186 new sites
■■ launched new tab.com.au website
■■ expanded fixed odds offering
■■ launched pgi in the isle of man
■■ renewed Wa and act pooling
arrangements
■■ invested in technology to expand
trackside, fixed odds and self service
Key objectives for the year ahead
■■ strengthen our customer relationships
through our customer management
program and promoting brand loyalty
■■ build on strength in retail
■■ continue fixed odds expansion
■■ expand online with best in class
offering (including social media)
■■ grow international wagering revenues
Summary financial performance of Wagering business
2012
$million
1,637.4
(1,044.1)
(279.8)
313.5
(71.3)
242.2
14.8%
For the year ended 30 June
revenue
taxes, levies, commissions and fees
operating expenses
ebitda
depreciation and amortisation
ebit
ebit/revenue
all information as at 30 June 2012, unless otherwise stated.
2011
$million
1,569.1
(1,018.1)
(263.5)
287.5
(67.3)
220.2
14.0%
Change
%
4.4
2.6
6.2
9.0
5.9
10.0
0.8
6
Media and
International
Operations
■■ broadcasting through sky racing
nationally and internationally
■■ sky sports radio network in
new south Wales
■■ sky racing available in approximately
2.4 million australian homes
■■ broadcasting to 5,400 australian outlets
■■ covering over 86,000 races per annum
■■ broadcasting australian racing to
31 countries
What happened during the year
■■ revenue growth from subscriptions
and increased international export
■■ media rights retained including
tasmanian and south australian
thoroughbreds
■■ racing World australia extended
coverage into 14 million UK homes
■■ invested in outside broadcast tV
production, media rights fees and digital
capabilities
Key objectives for the year ahead
■■ maintain growth (including through
retaining media rights)
■■ expand vision and data distribution
reciprocity (including racing World
australia)
Summary financial performance of Media and International business
2011
$million
179.3
(11.1)
(108.4)
59.8
(7.0)
52.8
29.5%
For the year ended 30 June
revenue
taxes and operator commissions
operating expenses
ebitda
depreciation and amortisation
ebit
ebit/revenue
2012
$million
190.2
(11.1)
(113.4)
65.7
(8.6)
57.1
30.0%
Change
%
6.1
(0.0)
4.6
9.9
22.9
8.1
0.5
revenues and expenses do not aggregate to group total due to intercompany eliminations between Wagering and
media and international businesses.
tabcorp holdings limited Gaming
Keno
Operations
■■ to 15 august 2012, operated electronic
gaming machines (egms) in licensed
hotels and clubs under the tabaret brand
in Victoria
■■ From 16 august 2012, commenced
tabcorp gaming solutions (tgs) to be
the leading gaming services provider to
licensed venues under the new Victorian
gaming industry structure
■■ at year end, tabaret market share was
53.3%, with 13,107 egms (average) in 255
Victorian venues
What happened during the year
■■ managed transition from tabaret to tgs
■■ tabcorp gaming solutions contracted
over 8,500 Victorian egms
■■ launched diamond rewards loyalty
program with over 100 live venues
■■ invested in tgs startup while maximised
returns from tabaret
Key objectives for the year ahead
■■ optimise Victorian gaming earnings
until licence expiry on 15 august 2012
■■ deliver tgs as the leading gaming
services provider in Victoria
■■ continue to expand tgs
Operations
■■ Keno in 3,457 licensed venues in Victoria,
new south Wales and Queensland
■■ 5,482 Keno terminals in Victoria,
new south Wales and Queensland
What happened during the year
■■ commenced new Victorian Keno licence
in april 2012
■■ launched Victorian Keno in over 600 live
venues and over 700 signed
■■ nsW hotel expansion nearing conclusion
with 761 additional live venues (up 74
from start of year)
■■ number of tickets sold increased 2.8% to
94.6 million (in Queensland and nsW)
■■ invested in start up of new Victorian
Keno business
Key objectives for the year ahead
■■ grow Keno in current and new markets
■■ expand distribution, self service and
product offerings
Summary financial performance of Gaming business
Summary financial performance of Keno business
For the year ended 30 June
revenue
taxes, levies, commissions and fees
operating expenses
ebitda
depreciation and amortisation
ebit
ebit/revenue
2012
$million
1,078.9
(760.9)
(35.4)
282.6
(38.5)
244.1
22.6%
2011
$million
1,077.4
(761.1)
(36.7)
279.6
(38.2)
241.4
22.4%
Change
%
0.1
0.0
(3.5)
1.1
0.8
1.1
0.2
For the year ended 30 June
revenue
taxes, levies, commissions and fees
operating expenses
ebitda
depreciation and amortisation
ebit
ebit/revenue
2012
$million
183.1
(81.1)
(38.6)
63.4
(15.1)
48.3
26.4%
2011
$million
169.6
(74.8)
(34.2)
60.6
(11.8)
48.8
28.8%
Change
%
8.0
8.4
12.9
4.6
28.0
(1.0)
(2.4)
statistics relate to Victorian tabaret only.
Victorian tabaret revenues and expenses are net of 25% allocation to joint venture partner
ticket count for prior year restated due to change in Queensland Keno bonus reporting methodology
7
ConCise annual report 2012
Responsible gambling
the tabcorp group is committed to promoting a sustainable gambling industry, and
delivering its products and services responsibly. responsible gambling is a key component
of our operating philosophy and company values. We actively engage our employees,
customers, governments, industry partners, community groups, and other stakeholders in
creating the most enjoyable gambling and entertainment experiences, whilst proactively
taking steps to minimise the potential harm that gambling can cause for some individuals.
Framework
For many years, the tabcorp group has been at the forefront of promoting responsible gambling,
and continues to evolve its practices to meet the changing needs of customers, industry and the
wider community. tabcorp’s responsible gambling framework is a multi-layered approach which
includes measures to help people make informed choices, reduce problem gambling behaviour
and supporting people who may have developed problem gambling behaviours. such measures
include making available to customers and the wider community a range of information to
inform them about tabcorp’s products and services. tabcorp has responsible gambling codes of
practice that are specific to the operations of each business, and are therefore responsive to the
specific needs of customers of those businesses. responsible gambling personnel implement
the tabcorp group’s initiatives, promote awareness, and support self-exclusion and counselling
services.
the board audit, risk and compliance committee oversees the responsible gambling
framework and monitors the effectiveness of practices that are in place within each
business, so that customer care initiatives are consistently delivered.
Employee awareness
the tabcorp group’s employee responsible gambling strategy was refreshed and enhanced
during the year. a new responsible gambling employee resource centre was developed,
which includes videos and other resources for use by employees covering tabcorp’s
commitment to responsible gambling, tabcorp’s employee gambling policy, the fun and risks
of gambling, identifying responsible versus problem gambling behaviours, and how to seek
further assistance.
this year, employees within key businesses were surveyed by an external independent
firm to identify to what extent they are at risk of problem gambling. pleasingly, the results
indicated that of our employees who gamble, all of them consider that they gamble
responsibly.
responsible gambling awareness forms an integral part of the group’s induction
program and is maintained by annual refresher training for employees and agents
within our retail network.
the group’s employee gambling policy, which establishes the conduct that is expected of
employees and contractors with regard to their gambling behaviour, was updated and
relaunched in July 2012. refer to section 17 of the corporate governance statement on page
23 for more information.
8
Community awareness
in may 2012, the tabcorp group again supported the annual Victorian responsible
gambling awareness Week through the provision of the services of our expert
employees, promotion within our venues, and by assisting in the funding of the week’s
activities. this event, which represents a partnership between government, the broader
gambling industry and community organisations, highlights to gamblers that when
they gamble they should do so responsibly and stay in control, and provides useful
information and resources to customers and the community.
more information regarding responsible gambling and tabcorp’s codes of practice
are available from the responsible gambling section of tabcorp’s website at
www.tabcorp.com.au.
tabcorp has received a 100% rating for promoting responsible gambling
in the annual dow Jones sustainability index assessment in each of the
past five years.
tabcorp holdings limited People
Within our businesses there are more than 3,000 employees
dedicated to providing the most exciting and engaging
gambling and entertainment experiences. in order for
tabcorp to perform and grow its businesses, we invest in
attracting and developing quality people who share our
vision for success and have the capabilities and qualities
to support our organisational goals and strategies.
tabcorp employees have personal and professional growth
opportunities, and are supported through leadership
experiences, training, secondments, rotations, projects,
and career advancement opportunities. a new talent
management program commenced during the year to
identify and develop high calibre managers. the program is
aligned with tabcorp’s succession planning process.
Engagement
tabcorp recognises the importance of having an engaged
workforce in order to maximise performance and execute
on the growth strategies of the businesses. during the
year, tabcorp adopted a new survey approach to better
understand its workplace and assess employee engagement.
this survey, which was facilitated by an international
consulting firm, followed the organisational changes that
stemmed from the demerger and sets a new benchmark for
tabcorp to build upon. in response to the survey’s findings,
employees have been involved in seminars, briefings,
leadership training and focus group meetings. strategies
and plans have been developed to address specific areas
of focus to improve the way employees interact within
the workplace and to foster long term individual and
organisational success.
Proportion of female employees
(as at 30 June 2012)
Board of Directors
Senior Executive Leadership Team
Senior Executive Leadership Team
and Senior Managem ent Team
33%
30%
31%
Whole of Tabcorp
49%
Lost time injury frequency rate
(number of lost time injuries per
million hours worked, excluding
former casinos business)
8.3
4.6
3.0
08/09
09/10
10/11
11/12
1.4
Diversity
during the year, tabcorp introduced a diversity policy
which sets out the company’s policy in relation to diversity
amongst the board of directors and senior management. in
accordance with the policy, the board has set an objective
to have at least 33% female representation in senior
management roles by 2015. the proportion of women at
various levels within the tabcorp group at the end of the
financial year is shown in the chart below. Further details are
available in section 18 of the corporate governance statement
on page 23 and in the diversity policy, which is available from
the sustainability section of tabcorp’s website.
Health and safety
tabcorp is committed to providing safe and healthy
workplaces for all employees, contractors and visitors.
systems, policies and procedures are in place to assist in
managing, reporting and controlling risks, hazards and
incidents throughout the workplace. these were further
developed during the year, by creating greater awareness
and engagement amongst employees, increased focus on
proactively identifying and managing hazards and risks, and
including additional lead indicators to monitor performance.
these practices are overseen by the board audit, risk and
compliance committee and occupational health and
safety committees established in each tabcorp location.
as a consequence of continually strengthening tabcorp’s
management of workplace health, safety and wellbeing,
tabcorp’s lost time injury frequency rate has reduced by
83% since FY08/09 (note: this result would be improved
if tabcorp’s former casinos business was included in the
years prior to FY11/12). tabcorp’s health and safety policy is
available from the sustainability section of tabcorp’s website.
Award for shared services
tabcorp’s business services team received an award for
“excellence in Value creation” at the 2012 australasian shared
services and outsourcing excellence awards. this award
recognised the team’s outstanding contribution to value
creation for delivering the tabcorp demerger program of
work six months early and under budget while maintaining
high levels of service.
9
ConCise annual report 2012 Other contributions
in addition, tabcorp’s businesses contribute significant funding which is utilised by
governments to support many services and projects throughout the community. during
the year, tabcorp’s businesses contributed:
■■ $1,121.9 million in taxes on gambling, including gaming levies and state community
benefit funds; and;
■■ $157.0 million in income taxes paid and payable.
major community services and facilities, such as roads, hospital and health facilities
and other community infrastructures benefit from the funds generated by tabcorp’s
businesses.
refer to tabcorp’s website at www.tabcorp.com.au for further information about how
the tabcorp group supports the communities in which it operates.
Community
as an integral part of the racing, gaming and entertainment industry, tabcorp’s
businesses play a substantial role in supporting the communities in which they operate.
the tabcorp group has a number of programs and services in Victoria, new south
Wales and Queensland which provide donations, partnerships, sponsorships, employee
engagement opportunities and in kind benefits to a range of charities, not for profit
groups and local community organisations. these activities are reviewed regularly
to enhance the employee experience, meet the changing needs of these community
groups, and align with the strategies and priorities of tabcorp’s businesses.
Tabcare
Following a review of tabcorp’s community support strategy and investment programs
during the year, and in consideration of the organisational changes and business
priorities following the demerger, the tabcorp group launched its new community
engagement program, called tabcare, in July 2012. tabcare enables employees to
contribute their energies and passions through a volunteering program and a matched
fundraising program. eligible employees are offered one day’s volunteer leave annually
which they can use at their nominated local community non-profit organisation or
with other employees at one of the community organisations with which tabcorp has
established a partnership: Fareshare and riding develops abilities in Victoria; Westpac
life saver rescue helicopters and conservation Volunteers in new south Wales; and
the pyjama Foundation in Queensland. through the fundraising program, tabcorp
encourages teams of employees to raise money for registered charities, where tabcorp
will match any funds raised up to $10,000 per charitable organisation to enable the
money to be shared around. tabcorp has dedicated up to $200,000 in donations for
matched fundraising activities in this financial year.
Community partnerships
during the year, tabcorp’s employees, businesses and brands contributed a total of
approximately $1 million of voluntary funding to local communities and charitable
organisations. this included employee volunteering and support services through
tabcorp’s roar program: a partnership with the tigers in the community Foundation, a
non-profit charitable organisation associated with the richmond Football club, helping
to deliver community programs in inner melbourne. also, through tabcorp’s partnership
with greyhound racing Victoria, the tab sportsbet great chase series delivered funds to
community groups, with Wintringham community services receiving $5,000 in the final
event of the series. other activities included the provision of sky channel advertising,
sponsoring and partnering with local community organisations, and supporting
employees with fundraising events.
10
tabcorp holdings limited
Environment
the tabcorp group is committed to operating as efficiently as possible and managing
environmental risks and opportunities in accordance with applicable legislation.
processes and systems are in place to monitor, evaluate and manage tabcorp’s
environmental commitments which assist in minimising the consumption of energy,
water and waste.
Greenhouse gas emissions
tabcorp’s measurable greenhouse gas emissions for the financial year ended 30 June
2012 totalled 21,484 tco2-e up 4.6% on the prior year. these emissions comprised:
■■ 7.5% scope 1 emissions resulting from fleet vehicle fuels (6.6%) and natural gas used
as a consequence of the demerger of tabcorp’s former casinos business in June 2011,
the environmental impacts of the tabcorp group have substantially lessened. at the
time to demerger, the former casinos business represented 80% of the tabcorp group’s
total energy consumption and greenhouse gas emissions and 95% of total water usage.
accordingly, the tabcorp group no longer meets the criteria required to participate
in the Federal government’s energy efficiency opportunities (eeo) initiative and the
national greenhouse energy reporting system (ngers).
despite formally withdrawing from these government programs, the tabcorp group
continues to work with local communities, employees, suppliers and other stakeholders
to identify and implement initiatives that are environmentally sustainable. tabcorp
encourages employees to reduce the consumption of paper, materials, energy and water,
and to recycle waste wherever appropriate. through the tabcare community program,
employees are able to contribute to helping the environment through volunteering for
local community not-for-profit organisations.
for heating offices (0.9%); and
■■ 92.5% scope 2 emissions from electricity used to power offices and buildings.
Electricity
tabcorp’s measurable electricity usage at its offices and buildings (excluding the
company’s former casinos business) was 17,861,111 kWh, down 2.7% from the prior year.
Water
For the financial year, tabcorp’s measurable water consumption at its offices and
buildings (excluding the company’s former casinos business) was 25,563 kl, down 0.3%
from the prior year.
refer also to page 31 in the directors’ report for additional information regarding the
tabcorp group’s environmental regulation and performance.
Greenhouse gas emissions*
(tCO2-e)
Electr icity use*
(kWh)
Water use*
(kl)
7
3
5
,
0
2
4
8
4
,
1
2
9
1
5
,
9
1
,
8
2
8
4
5
3
,
8
1
1
1
1
,
1
6
8
,
7
1
,
9
6
8
9
5
5
,
7
1
2
2
2
,
2
3
4
3
6
,
5
2
3
6
5
,
5
2
09/10
10/11
11/12
09/10
10/11
11/12
09/10
10/11
11/12
* excluding former casinos business
11
ConCise annual report 2012 Board of Directors
Paula Dwyer
David Attenborough
Elmer Funke Kupper
Steven Gregg
Chairman since June 2011 and
Non Executive Director since August 2005
Managing Director and
Chief Executive Officer since June 2011
Bachelor of Commerce; Fellow of the Institute of
Chartered Accountants in Australia; Fellow of
the Australian Institute of Company Directors
(AICD); Fellow of the Financial Services Institute of
Australasia
Bachelor of Science (Honours);
Masters of Business Administration
paula dwyer is a director of australia and
new Zealand banking group limited, leighton
holdings limited and lion pty ltd. she is also
a member of the takeovers panel and deputy
chairman of the baker idi heart and diabetes
institute.
david attenborough joined tabcorp in april
2010 as managing director - Wagering.
he became managing director and chief
executive officer when tabcorp’s demerger
of echo entertainment group limited was
completed in June 2011.
mr attenborough was previously the
chief executive officer (south africa) of
phumelela gaming and leisure limited, the
leading wagering operator in south africa.
his previous experience also includes the
development of casino, bookmaking and
gaming opportunities for british bookmaking
company ladbrokes (formerly part of the
hilton group plc).
ms dwyer had an executive career in finance
holding senior positions in investment
management, investment banking and
chartered accounting with ord minnett
(now Jp morgan) and pricewaterhousecoopers.
ms dwyer was formerly a director of suncorp
group limited, Foster’s group limited,
healthscope limited, david Jones limited,
astro Japan property group limited and is a
former member of the Victorian casino and
gaming authority and of the Victorian gaming
commission from 1993 to 1995.
ms dwyer is chairman of the Victorian
Joint Venture management committee
and chairman of the tabcorp nomination
committee. she is a member of the tabcorp
audit, risk and compliance committee and
tabcorp remuneration committee.
12
Non Executive Director since June 2012
Non Executive Director since July 2012
Bachelor of Business Administration;
Master of Business Administration
Bachelor of Commerce
elmer Funke Kupper was tabcorp’s managing
director and chief executive officer from
september 2007 to June 2011, and previously
tabcorp’s chief executive australian business
from February 2006.
mr Funke Kupper is also managing director
and chief executive officer of asX limited. his
prior executive career includes several senior
executive positions with the australia and
new Zealand banking group limited, including
group head of risk management, group
managing director asia pacific and managing
director personal banking and Wealth
management. previously mr Funke Kupper
was a senior management consultant with
mcKinsey & company and at Kearney.
mr Funke Kupper is a member of the tabcorp
audit, risk and compliance committee and
tabcorp nomination committee.
steven gregg is a director of goodman Fielder
limited and of thoroughbred bloodstock
company William inglis & son limited. he is
also consultant and senior adviser to the grant
samuel group and a director of the lorna
hodgkinson sunshine home.
mr gregg had an executive career in
investment banking and management
consulting, having held senior executive roles
with abn amro bank, and partner and senior
adviser to mcKinsey & company.
mr gregg was formerly chairman of austock
group limited.
mr gregg is a member of the tabcorp audit,
risk and compliance committee, tabcorp
nomination committee and tabcorp
remuneration committee.
tabcorp holdings limited Jane Hemstritch
Justin Milne
Zygmunt Switkowski
Non Executive Director since November 2008
Non Executive Director since August 2011
Non Executive Director since October 2006
Bachelor of Science (First Class Honours);
Fellow of the Institute of Chartered Accountants
in Australia; Fellow of the Institute of Chartered
Accountants in England and Wales; Fellow of
AICD; Member of Chief Executive Women Inc.
Jane hemstritch is a director of the
commonwealth bank of australia, lend
lease group and santos limited. she is also
a director of the Victorian opera company,
deputy chairman of the global Foundation, a
member of the research and policy council for
the committee for economic development of
australia, and a member of the council of the
national library of australia.
mrs hemstritch was managing director - asia
pacific for accenture limited where she was
a member of accenture’s global executive
leadership team and headed up its business
portfolio in asia pacific spanning twelve
countries.
mrs hemstritch is chairman of the tabcorp
audit, risk and compliance committee
and a member of the tabcorp nomination
committee.
Bachelor of Arts; Member of AICD
Bachelor of Science (Honours);
PhD (Nuclear Physics); Fellow of AICD
Justin milne is a director of basketball
australia limited and commissioner of
the national basketball league. he is also a
director of Quickflix limited and netcomm
Wireless limited, a board member of the
sydney children’s hospital advisory network
and chairman of the sydney children’s
hospital Foundation building appeal.
mr milne had an executive career in
telecommunications, marketing and media.
From 2002 to 2010 he was group managing
director of telstra’s broadband and media
businesses, and headed up telstra’s bigpond
new media businesses in china. he is also the
former chairman of pienetWorKs limited
and former chief executive officer of ozemail
and the microsoft network.
mr milne is a member of the tabcorp audit,
risk and compliance committee and tabcorp
nomination committee.
Zygmunt switkowski is the chairman of
suncorp group limited and is a director of oil
search limited and lynas corporation limited.
he is also chancellor of the royal melbourne
institute of technology and chairman of
opera australia. he is a former director of
healthscope limited and is the immediate
past chairman of the australian nuclear
science and technology organisation.
dr switkowski was the chief executive
officer and managing director of telstra
corporation limited from 1999 to 2005, and
is a former chief executive officer of optus
communications. he worked for Kodak
(australasia) for 18 years, serving as the
chairman and managing director from 1992
to 1996.
dr switkowski is chairman of the tabcorp
remuneration committee. he is also a
member of the tabcorp audit, risk and
compliance committee and tabcorp
nomination committee.
13
ConCise annual report 2012 Senior Executive Leadership Team
David Attenborough
Damien Johnston
Kerry Willcock
Merryl Dooley
Doug Freeman
Managing Director and
Chief Executive Officer
Chief Financial Officer
Executive General Manager –
Corporate, Legal and Regulatory
Executive General Manager –
Human Resources
damien joined tabcorp in
september 2003. he was tabcorp’s
deputy chief Financial officer, being
responsible for tabcorp’s corporate
Finance function including treasury
and investor relations, and became
chief Financial officer upon
implementation of the tabcorp
demerger in June 2011.
he previously had a 21 year career
with bhp billiton with key finance
roles in both australia and asia.
these included both operational
finance and corporate roles.
damien holds a bachelor of
commerce and is a member of cpa
australia.
Kerry joined tabcorp in February
2005. she has extensive commercial,
legal, litigation and government
relations experience having worked
with allens arthur robinson, clayton
Utz and with the australian postal
corporation, where she held the
position of general counsel.
Kerry holds a bachelor of arts and a
bachelor of laws and is a qualified
mediator.
she is also a member of the
australian corporate lawyers
association (acla) general counsel
group and a member of the
australian institute of company
directors.
merryl commenced with tabcorp
in october 1990 and has held
numerous positions across a
range of discipline areas including
human resources, training and
development, communications and
sales. she became executive general
manager - human resources in June
2011 following the implementation
of the tabcorp demerger.
merryl holds a masters of business
administration (executive) and a
bachelor of arts.
david joined tabcorp in april 2010
as managing director - Wagering.
he became managing director and
chief executive officer following
tabcorp’s demerger in June 2011.
he has an extensive background in
totalisator and fixed-odds betting,
racing and broadcasting. he was
previously the chief executive
officer (south africa) of phumelela
gaming and leisure limited, the
leading wagering operator in south
africa. his previous experience
includes the development
of casino, bookmaking and
gaming opportunities for british
bookmaking company ladbrokes
(formerly part of the hilton group
plc).
david holds a bachelor of science
(honours) and a masters of business
administration.
14
Executive General Manager –
Strategy and Business
Development
since joining tabcorp in June 2005,
doug has held several senior finance
and strategy roles within tabcorp’s
wagering and media businesses.
he commenced his current role
following tabcorp’s demerger in
June 2011.
he previously held senior finance
and general management roles
in medium to large multinational
organisations in the service and
manufacturing industries, including
george Weston Foods limited,
optus group, and alexander &
alexander group.
doug holds a bachelor of commerce
and is a member of institute of
chartered accountants.
tabcorp holdings limited
David Ginnane
Craig Nugent
Brendan Parnell
Adam Rytenskild
Kim Wenn
Executive General Manager –
Marketing
Managing Director – Fixed Odds
Chief Operating Officer –
Media and International
Executive General Manager –
Distribution
Chief Information Officer –
Tabcorp Technology
david joined tabcorp as business
development manager in the
gaming marketing team in april
2004. since this time, he has held
several general management roles
across the gaming and Wagering
businesses. most recently, david
was general manager products
& customer experience before
commencing his current role in
august 2012.
before joining tabcorp, he held
senior business and corporate
management roles with general
motors acceptance corporation,
including responsibilities for
domestic and international regions.
david holds a masters of business
administration and a bachelor of
business.
craig joined tab limited in 1999 as
manager oncourse Wagering and
international sales. throughout
his time with tabcorp, and tabcorp
subsidiaries tab limited and luxbet,
he has held senior executive roles in
sportsbetting, oncourse wagering
and international sales.
prior to joining tabcorp, he held
management roles in the new
south Wales racing industry bodies
- australian Jockey club and sydney
turf club.
brendan commenced with sky
channel in 1995 and in 2003 became
general manager broadcasting.
in 2007 he was appointed as chief
operating officer of tabcorp’s
media and international division
overseeing the television, radio and
international wagering operations.
he began his broadcasting career
as a news and sports reporter /
producer in regional television
including seven network
Queensland where he was network
sports editor.
brendan holds a graduate
certificate of management and a
bachelor of arts (Journalism).
adam joined tabcorp in april 2000
as state manager – retail and since
then he has held numerous senior
management roles. Following
tabcorp’s demerger in June 2011,
adam was appointed to his current
role, responsible for leading
tabcorp’s customer distribution
channels including retail, online,
phone and oncourse.
he has extensive experience
managing and leading multi-
channel businesses, including a nine
year career with mobil oil prior to
joining tabcorp.
adam holds a masters of business
administration.
Kim commenced at tabcorp in april
2005 and has held several positions
in tabcorp’s wagering technology
field before being appointed to her
current role in June 2011 following
tabcorp’s demerger.
previously, she has worked in
research, development, logistics and
project management within the
information technology industry at
Quest software, microlistics, tech-
precision and amcor.
Kim holds a masters in
management and technology, and
a bachelor of science (computing).
15
ConCise annual report 2012
Corporate governance
Tabcorp again received the highest rating for corporate governance out of all global
gambling companies in the 2011 Dow Jones Sustainability Index assessment.
Tabcorp also received the highest possible rating for corporate governance in the 2012
FTSE4Good ESG (Environmental, Social and Governance) Ratings.
1. Tabcorp’s approach to corporate governance
tabcorp’s board of directors and management strongly support the principles of good
corporate governance, and are committed to building on the group’s strong reputation
for integrity. this is particularly important given the highly regulated industry in which
the tabcorp group operates, and is essential for increasing our opportunities to win and
retain gambling licences, and for the long term sustainability of our businesses.
this corporate governance statement outlines the tabcorp group’s main corporate
governance practices and policies in place during the financial year and at the date
of this report. the group’s corporate governance practices are reviewed regularly and
will continue to be developed and refined to meet the needs of the group and taking
account of best practice. since the start of the 2012 financial year, the group’s corporate
governance practices were enhanced through the adoption of a diversity policy (refer
section 18), a policy limiting the number of other directorships that non executive
directors may hold (refer section 6), revision of the employee gambling policy (refer section
17), and the launch of a new sustainability section on tabcorp’s website (refer section 27).
in developing the appropriate corporate governance practices, the group takes into
account all applicable legislation and recognised standards, which include, but are not
limited to:
■■ Corporations Act 2001 (Cth) (Corporations Act);
■■ australian securities exchange (asX) Listing Rules;
■■ state legislation governing the licences issued to the tabcorp group to conduct
gambling and related activities; and
■■ Australian Standard AS 8000 – Good Governance Principles.
this corporate governance statement and other related information is available from
the corporate governance section of tabcorp’s website at www.tabcorp.com.au/
about_governance.aspx.
2. ASX Corporate Governance Principles
the tabcorp group adopts the “Corporate Governance Principles and Recommendations, 2nd
edition” which was published by the asX corporate governance council (asX cgc) in august
2007 and as amended. the group complies with these principles and recommendations
and has processes in place to maintain ongoing compliance. statements in this corporate
governance section have been referenced to the applicable asX cgc recommendation and
are indicated by the symbol .
;;
16
tabcorp holdings limited
the asX cgc “Corporate Governance Principles and Recommendations, 2nd edition”
are available from the asX website at www.asxgroup.com.au/corporate-governance-
council.htm.
3. Composition of the Board
at the date of this report, the tabcorp board consisted of six non executive directors,
including the chairman, and the managing director and chief executive officer. tabcorp’s
constitution requires that the number of directors (not including alternate directors) shall
not exceed twelve, nor be less than three. a director, other than any managing director,
may not hold office for a continuous period in excess of three years or past the third
annual general meeting following the director’s last election or re-election to the board,
whichever is the longer, without submitting for re-election. the board has the power to
appoint any person as a director, either to fill a casual vacancy or as an addition to the
board, subject to receiving all necessary regulatory and government ministerial approvals,
but that person must stand for election at the following annual general meeting.
the appointment and removal of the managing director and chief executive officer
is a matter for the board as a whole, in association with the recommendations of the
nomination committee.
as set out in section 10, the nomination committee assists the board with the
recruitment of new directors, election or re-election of directors, membership of each
board committee and board succession. in carrying out these responsibilities, the board
considers the knowledge, skills, experience, competencies, diversity, qualifications,
behaviours, specific areas of expertise and personal characteristics that are desirable for
directors of tabcorp. the board believes it has the appropriate mix of these attributes
amongst its directors to enable the board to operate effectively.
the appointment of steven gregg as an additional non executive director during the
financial year was facilitated through a formal recruitment process undertaken by the
board. the board established selection criteria, having regard to the mix of attributes
required on the board and those of existing directors. an independent executive search firm
was engaged by the board to assist with the process. the chairman held an initial meeting
with mr gregg, and each director had the opportunity to meet with mr gregg prior to the
board decision.
details of the directors, their qualifications and experience are included on pages 12 and 13.
tabcorp’s constitution is available from the corporate governance section of
tabcorp’s website at www.tabcorp.com.au/about_governance.aspx.
the terms of reference for each of the board committees are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendations 1.1, 2.1, 2.2, 2.3, 2.4, 2.6, 4.2, 4.4
4. Responsibilities and functions of the Board and management
the board has agreed the responsibilities and functions of the board as a whole, and
those of directors, the chairman and the managing director and chief executive officer.
the board’s role includes:
■■ reviewing and approving the strategies, budgets and business plans prepared by
management;
■■ assuring itself of the effectiveness of arrangements for the governance of the
tabcorp group including:
P the quality of the executive team;
P the appropriateness of organisational arrangements and structure; and
P the adequacy of internal controls, policies, procedures and processes;
■■ overseeing performance against targets and objectives; and
■■ overseeing reporting to shareholders and other stakeholders on the strategic direction,
governance and performance of the tabcorp group.
to assist the board with carrying out its responsibilities and functions, certain powers
have been delegated to management, including the authority to undertake transactions
and incur expenditure on behalf of the tabcorp group up to specified thresholds. these
are referred to in tabcorp’s delegated authorities and approval limits (‘daal’) group
policy, which has been agreed by the board and management. the policy includes the
financial and non-financial matters that the board has delegated to management,
the capital and operational expenditure approval limits applicable to each level of
management, and specific key responsibilities within each division of the tabcorp group.
management provides relevant information to the board in a concise and timely manner
to enable the board to make informed decisions and effectively discharge their duties.
the board regularly monitors the flow of information it receives from management, and
directors may request additional information where necessary.
a summary of the responsibilities and functions of the board, directors, the
chairman and managing director and chief executive officer matters are available
from the corporate governance section of tabcorp’s website at www.tabcorp.com.
au/about_governance.aspx.
;; asX cgc’s recommendation 1.1, 2.3
5. Director independence
directors are required to be meticulous in their disclosure of any material contract
or relationship, including relevant interests of family companies and spouses and
involvement with other companies or professional firms. directors are required to
adhere strictly to the constraints on their participation and voting in relation to matters
in which they may have an interest, in accordance with the corporations act and policies
of the tabcorp group.
a register of directors’ material interests is maintained and is regularly sent to every
director. Where directors are involved with other companies or professional firms, which
from time to time have dealings with the tabcorp group, all such dealings are at arms
length and on normal commercial terms.
details of offices held by directors with other organisations are set out on pages 12, 13 and 27.
the board periodically assesses the independence of each director. For this purpose,
an independent director is a non executive director whom the board considers to be
independent of management and free of any business or other relationship that could
materially interfere with the exercise of their unfettered and independent judgment.
all of the non executive directors of tabcorp throughout the financial year and at the
date of this report, with the exception of elmer Funke Kupper, have been determined by the
board to be independent directors. in reaching that determination, the board has taken into
account (in addition to the matters set out above):
■■ the specific disclosures made by each director as referred to above;
■■ that no director is, or is associated directly with, a substantial shareholder of
tabcorp;
■■ that no director has ever been employed in the last three years in any other capacity
by tabcorp or any of its subsidiaries;
■■ that no director personally carries on any role for the tabcorp group other than as a
director of tabcorp;
■■ there are no related party dealings referable to a director which are material and
require disclosure under accounting standards; and
■■ that no director is, or is associated with, a supplier, professional adviser, consultant
to or customer of the tabcorp group which is material for the purposes of the asX
cgc corporate governance recommendations, given that any fees paid by tabcorp
to any such associate were less than 1% of annual earnings for both tabcorp and the
respective associate, and that any remuneration received by a director from any such
associate was not impacted in any way by the fees paid by tabcorp except as follows;
paula dwyer is considered by the board as independent despite fees of $42,856
paid by tabcorp to back page lead pty ltd (backpagelead) of which ms dwyer’s
17
ConCise annual report 2012
Corporate governance (continued)
spouse is a director and has an ownership interest. the fees exceeded 1% of
annual earnings for backpagelead during the year, however any related income
received by her spouse from backpagelead as a consequence of the fees was not
material to either ms dwyer or her spouse. Further, all arrangements between
tabcorp and backpagelead were at arms length and on normal commercial
terms, and ms dwyer did not participate in any decisions in respect of these
arrangements. the board is satisfied that these circumstances did not affect the
independence of paula dwyer.
steven gregg is considered by the board as independent despite fees of $166,000 paid
by tabcorp to William inglis & son limited (William inglis) of which mr gregg is a
director. the fees exceeded 1% of annual earnings for William inglis during the year,
however all arrangements between tabcorp and William inglis were at arms length
and on normal commercial terms and mr gregg did not participate in any decisions
in respect of these arrangements. the board is satisfied that these circumstances did
not affect the independence of steven gregg.
Justin milne is considered by the board as independent despite fees of $85,020
paid by tabcorp to pienetworks limited (pienetworks) of which mr milne was a
director. the fees exceeded 1% of annual earnings for pienetworks during the
year, however all arrangements between tabcorp and pienetworks were at arms
length and on normal commercial terms and mr milne did not participate in
any decisions in respect of these arrangements. the board is satisfied that these
circumstances did not affect the independence of Justin milne.
elmer Funke Kupper returned to the board of tabcorp as an observer in January 2012
and commenced as a non executive director in June 2012 following the receipt of all
necessary regulatory approvals, having ceased as tabcorp’s managing director and chief
executive officer on 8 June 2011 in connection with the demerger. the board considers
that mr Funke Kupper’s experience, knowledge of the market and relationships with
industry partners will add considerable value to board deliberations.
tabcorp does not consider that term of service on the board should be considered as a
factor affecting a director’s independence and the ability to act in the best interests of
the tabcorp group.
the board also has procedures in place to ensure it operates independently of
management. For example, at every board meeting, the non executive directors meet
together in the absence of executive directors and other executives of the tabcorp
group. Where appropriate, executives are also excluded from board discussions that
relate to specific management issues, such as executive remuneration.
;; asX cgc’s recommendations 2.1, 2.2, 2.3, 2.6
18
tabcorp holdings limited
6. Other directorships
directors are required continually to evaluate the number of boards on which they
serve to ensure that they can give the time and attention required to fulfil their duties
and responsibilities. directors are required to seek approval from the chairman prior
to accepting an invitation to become a director of any corporation, and in the case
of the chairman, seek approval from the chairman of the audit, risk and compliance
committee.
the board has adopted a policy that non executive directors are permitted to hold a
maximum number of four directorships of asX listed companies, other than tabcorp,
with a chairmanship equivalent to two directorships, subject to the discretion of
the chairman (or in the case of the chairman, the chairman of the audit, risk and
compliance committee),
details of the directorships for each director are available on pages 12, 13 and 27.
;; asX cgc’s recommendations 2.1, 2.2, 2.4, 2.5
7. Board and Committee meetings
the board and its committees meet regularly to discuss matters relevant to the tabcorp
group. additional meetings may be scheduled to address specific matters.
any director with a material personal interest in a matter being considered by the board
must not be present when the matter is being considered and may not vote on the
matter, unless all other directors present resolve otherwise.
the company secretary is responsible for coordinating and distributing materials
for board meetings, shareholder meetings and board committee meetings. the
appointment and removal of the company secretary is a matter for discussion by the
board as a whole, and all directors have access to the company secretary.
directors are required to attend all board meetings, shareholder meetings and board
committee meetings for which they are members, subject to any unusual or unforeseen
circumstances which may prevent them from attending.
the number of board and committee meetings and the attendance of each director are
set out on page 32.
;; asX cgc’s recommendations 2.5, 2.6, 4.4, 8.1, 8.3
8. Committees of the Board
to assist the board in achieving the highest standards of corporate governance, the
directors involve themselves with the critical areas of the group’s activities through
board committees.
the board committees as at the date of this report were:
■■ audit, risk and compliance (see section 9);
■■ remuneration (see section 10); and
■■ nomination (see section 11).
board committee membership is restricted to non executive directors only.
all non executive directors are members of the audit, risk and compliance committee
and the nomination committee, in addition to membership of other board committees
as appointed. tabcorp’s board committee arrangements reflect similar board committee
structures in other large australian companies.
each board committee has terms of reference which set out the roles, responsibilities,
composition and processes of each committee. these terms of reference are reviewed
regularly.
the terms of reference for tabcorp board committees are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendations 1.1, 2.4, 4.1, 4.3, 8.1
9. Audit, Risk and Compliance Committee
the audit, risk and compliance committee provides the board with additional
assurance and oversight relating to financial accounting practices, financial and
operational risk management, compliance management, internal control systems,
external reporting and the internal and external audit functions.
the key responsibilities of the audit, risk and compliance committee are as follows:
Audit:
■■ oversee compliance with statutory responsibilities relating to financial disclosure,
and approval of full year and half year financial statements as well as the financial
statements in the annual report;
■■ review the activities of the internal audit function and the external auditor (ernst &
Young) and review their performance on an annual basis;
■■ review the adequacy of the group’s internal controls;
■■ monitor related party transactions and potential conflicts of interest; and
■■ review the process for management assurance to the board (refer to section 14 of
this corporate governance statement for more information)
Risk and Compliance:
■■ reviewing and approving the group’s risk and compliance policies and frameworks;
■■ assessing the appropriateness of risk and compliance management systems, related
control processes, and reporting systems;
■■ monitoring the effectiveness of systems and processes in place to ensure compliance
requirements are being satisfied and performing adequately;
■■ evaluating the effectiveness of the group’s systems and controls to monitor and manage
risks that are significant to the fulfilment of the group’s business objectives; and
■■ ensuring that sufficient resources are dedicated to managing risk and compliance.
the chairman of the audit, risk and compliance committee is required to meet regularly
with the external auditor in the absence of management. the chairman of the audit,
risk and compliance committee is also required to meet with tabcorp’s general
manager audit, risk and compliance on a regular basis.
the annual internal audit plan and the scope of work to be performed is set in consultation
with the audit, risk and compliance committee. the committee approves the annual
internal audit plan and reviews progress and reports made pursuant to that plan.
the audit, risk and compliance committee is committed to maintaining auditor
independence and limiting the engagement of the external auditor for only audit
related services, unless exceptional circumstances necessitate the involvement of the
external auditor. the chairman of the audit, risk and compliance committee must
approve all non-audit related work to be undertaken by the external auditor (if any).
tabcorp will maintain the rotation of the lead external audit partner every five years or
less, as required by the corporations act. the external auditor attends tabcorp’s annual
general meeting and is available to answer shareholder questions regarding aspects of
the external audit and their report.
refer also to section 12 for internal control framework and section 13 for management of risk.
19
ConCise annual report 2012 Corporate governance (continued)
Composition of the Audit, Risk and Compliance Committee
Composition of the Remuneration Committee
chairman:
other members: paula dwyer
Jane hemstritch
elmer Funke Kupper (from 25 June 2012)
steven gregg (from 18 July 2012)
Justin milne (from 1 august 2011)
Zygmunt switkowski
the terms of reference for the audit, risk and compliance committee are available
from the corporate governance section of tabcorp’s website at www.tabcorp.com.
au/about_governance.aspx.
;; asX cgc’s recommendations 1.1, 2.5, 4.1, 4.2, 4.3, 4.4, 6.2, 7.1, 7.3
10. Remuneration Committee
the remuneration committee has responsibility for, among other things:
■■ reviewing and making recommendations to the board on remuneration packages
and policies applicable to the chairman, directors, the managing director and chief
executive officer, and senior executives reporting to the managing director and
chief executive officer;
■■ reviewing and making recommendations to the board on the tabcorp group’s
general remuneration practices and policies, including terms and conditions of any
employee share ownership and option schemes, incentive performance packages,
superannuation entitlements, retirement and termination entitlements;
■■ reviewing and approving participation of executives in incentive plans, including
option and share plans;
■■ reviewing and making recommendations to the board regarding the group’s
remuneration arrangements with respect to gender;
■■ reviewing with reference to market benchmarks, the remuneration arrangements
for the managing director and chief executive officer and making recommendations
to the board; and
■■ overseeing the preparation of the annual remuneration report.
details relating to the remuneration of the chairman, directors, the managing director
and chief executive officer, the company secretary and other senior executives of the
tabcorp group are set out in the remuneration report on pages 35 to 48.
20
tabcorp holdings limited
chairman:
Zygmunt switkowski
other members:
paula dwyer
steven gregg (from 18 July 2012)
the terms of reference for the remuneration committee are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendations 1.1, 2.5, 8.1, 8.2, 8.3
11. Nomination Committee
the main responsibilities of the nomination committee are to:
■■ manage a process to identify suitable candidates for appointment to the board and
board committees;
■■ make recommendations to the board regarding succession planning for the board
(refer to section 23 for further information);
■■ make recommendations to the board on candidates it considers appropriate for
appointment to the board and board committees, including whether the board
should support the election or re-election of any director required to retire at a
general meeting;
■■ annually review the skills, experience, expertise, diversity and attributes required
of directors to discharge the board’s duties and the extent to which they are
represented in the composition of the board and each board committee;
■■ Facilitate an independent three yearly assessment of the effectiveness and
performance of the board, board committees and directors (refer to section 22 for
further information); and
■■ ensure that an effective board induction process is in place (refer to section 24 for
more information).
Composition of the Nomination Committee
chairman:
other members: Jane hemstritch
paula dwyer
elmer Funke Kupper (from 25 June 2012)
steven gregg (from 18 July 2012)
Justin milne (from 1 august 2011)
Zygmunt switkowski
the terms of reference for the nomination committee are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendations 1.1, 2.4, 2.5, 2.6
12. Internal control framework
the board reviews and approves the internal control structure of the tabcorp group.
this includes the role performed by the group’s internal audit, risk management and
compliance functions.
also, the group’s strategic plan (see section 27) and a detailed budget are prepared
annually and subject to the approval of the board.
Forecasts for the tabcorp group and each of the operating divisions are regularly
updated and reported to the board throughout the year to enable directors to monitor
performance against the annual budget.
the tabcorp group has detailed procedural guidelines for the approval of capital
expenditure including annual budgeting, review and approval of individual proposals
and specific levels of authority between the board, the managing director and chief
executive officer and other levels of management.
processes for the investment of surplus cash, management of debt and currency, and
interest rate risk management have been approved by the board and are the subject
of ongoing reporting to the board. tabcorp enters into interest rate swaps and cross
currency swaps to hedge interest rate and foreign exchange risk on debt. the tabcorp
group treasury department is responsible for managing the tabcorp group’s finance
facilities and interest rate, credit, liquidity and currency risks in line with policies set by
the board.
the tabcorp group’s internal audit function is resourced by tabcorp employees
supplemented by relevant industry experts, and is independent of the external auditor.
internal audit reports are regularly submitted to the chief Financial officer, to the audit,
risk and compliance committee and, where appropriate, to the board. the audit, risk
and compliance committee approves the internal audit plan annually.
the tabcorp compliance policy and Framework was developed to align with:
■■ australian standard as 3806 – compliance programs;
■■ australian standard as 8000 – good governance principles;
■■ applicable legislation; and
■■ the tabcorp group’s organisational structure and strategy.
the tabcorp group utilises an enterprise wide compliance system, which provides a
consistent and uniform approach to collating and reporting relevant information from
across all divisions. the system monitors whether practices and processes designed to
ensure compliance have been operating effectively, increases the visibility of potential
issues, and assists the processes for resolving issues.
the standards as 3806 – compliance programs and as 8000 – good governance
principles are available from sai global’s website at www.saiglobal.com.
;; asX cgc’s recommendations 1.1, 3.1, 3.3, 7.1, 7.2, 7.3
13. Management of risk
the tabcorp group has in place a risk management Framework, policies and procedures,
which set out the roles, responsibilities and guidelines for managing financial and
operational risks associated with the group’s businesses.
during the financial year tabcorp’s audit, risk and compliance department updated and
monitored the risk profiles for each of the group’s operating businesses and all major
projects. these profiles identify the:
■■ nature and likelihood of occurrence for specific material risks;
■■ Key controls that are in place to mitigate and manage the risk;
■■ sources and levels of assurance provided on the effective operation of key controls;
and
■■ responsibilities for managing these risks.
the risk profiles for each key operating division are reported to the board audit, risk
and compliance committee and are considered as part of the annual internal audit
planning process. risks identified within each business are captured on an on-line risk
management system, which provides ongoing reporting and enhances the monitoring
of the risk profiles throughout the year.
21
ConCise annual report 2012 Corporate governance (continued)
management risk and compliance committees operate within each business to:
■■ establish a platform to coordinate risk management and compliance across all parts
of the business in an efficient, effective and consistent manner;
■■ provide a stronger risk management and compliance focus through principled
leadership;
■■ monitor and report on risk management and compliance activities; and
■■ transfer organisational learning.
the tabcorp group’s risk management Framework is based on concepts and
principles identified in the australian/new Zealand standard on risk management
(as/nZs iso 31000:2009).
the risk framework, policies and procedures will continue to be enhanced as the
tabcorp group’s existing operations develop and its range of activities expands. the
implementation of these policies and procedures is monitored and reviewed at least
annually by the board audit, risk and compliance committee.
the terms of reference for the audit, risk and compliance committee are available
from the corporate governance section of tabcorp’s website at www.tabcorp.com.
au/about_governance.aspx.
the standard as/nZs iso 31000:2009– risk management is available from sai
global’s website at www.saiglobal.com.
;; asX cgc’s recommendations 7.1, 7.2, 7.3
14. Management assurance
at the board meetings to approve the tabcorp group’s annual and half yearly results, the
board received and considered statements in writing from the managing director and
chief executive officer and the chief Financial officer in relation to the tabcorp group’s
system of risk oversight and management and internal control.
the certificate of assurance stated that the financial statements had been prepared in
conformity with generally accepted accounting principles and that they gave a true and
fair view of the state of affairs of tabcorp and of the tabcorp group.
the certificate of assurance also stated that the risk management and internal compliance
and control systems were operating effectively, in all material respects, based on the as/nZs
iso 31000:2009 – risk management standard adopted by the tabcorp group. the certificate
of assurance also included statements that all information had been made available to the
external auditor, and that there were not any irregularities or significant issues identified
that would have a material impact on the tabcorp group.
the standard as/nZs iso 31000:2009– risk management is available from sai
global’s website at www.saiglobal.com.
;; asX cgc’s recommendations 1.1, 4.4, 7.2, 7.3, 7.4
22
15. Code of Conduct
the tabcorp group has a group-wide code of conduct. compliance with the code of
conduct and associated policies, guidelines and procedures is a requirement for all
employees, directors and contractors of the tabcorp group. the code is founded on
the tabcorp group’s values, and establishes the behaviour that is expected from all
employees, directors and contractors, including the maintenance of ethical standards,
honesty, teamwork, fairness, courtesy and integrity.
the code includes, among other things, references to specific tabcorp group policies
regarding money laundering, corruption, bribery, bullying and harassment, equal
opportunity in the workplace, insider trading, whistleblowing, conflicts of interest and
restrictions on the use of the group’s gambling products.
the code of conduct and relevant policies are included in the tabcorp group’s induction
program, with annual refresher training and compliance awareness conducted across
the tabcorp group.
in addition to adhering to the high ethical standards set by the code of conduct,
tabcorp’s directors and key personnel are also required to undergo extensive probity
investigation and clearance by applicable gambling regulators and government
ministers in australia and overseas.
tabcorp’s code of conduct is available from the corporate governance section of
tabcorp’s website at www.tabcorp.com.au/about_governance.aspx.
;; asX cgc’s recommendation 3.1, 3.3
16. Tabcorp Integrity Protection Service (TIPS)
tips is an independent, anonymous crime and misconduct reporting service delivered
by deloitte, an international consulting and forensic investigations specialist. it is one of
tabcorp’s processes to prevent, detect, and respond to crime and misconduct.
tips is available 24 hours a day, 7 days a week to tabcorp’s people and stakeholders in
australia and overseas.
the program is managed by the tabcorp group’s compliance team and has
accountability at the highest levels with the chairman of the board audit, risk and
compliance committee able to access reports relating to all employees and review the
action taken. tips was introduced to achieve australian and international best practice,
reflecting tabcorp’s commitment to integrity and befitting the responsibilities of a
publicly listed company.
tabcorp’s commitment to integrity and information regarding tips are available
from the integrity section of tabcorp’s website at www.tabcorp.com.au/about_
integrity.aspx.
Further information on tips is available from its website at www.tips.deloitte.com.au.
;; asX cgc’s recommendation 3.1, 3.3
tabcorp holdings limited 17. Responsible Gambling
the tabcorp group takes a leadership position in the responsible delivery of its gambling
products and support for customers.
the tabcorp group was one of the first australian gambling companies to launch a voluntary
responsible gambling code of practice in 2001. tabcorp’s responsible gambling code of
practice set common standards for the responsible delivery of gambling products for all
of the group’s gambling operations and venue facilities. compliance with the code was
independently reviewed by Kpmg each year.
australian state governments regulate the gambling industry, and are increasingly
moving towards mandated responsible gambling codes that have varying requirements.
in light of this development, the tabcorp group decided in 2008 to gradually replace
its group-wide code with a specific code for each of its businesses. the evolution from
a group-wide code to individual codes has enabled the tabcorp group to maintain
its compliance with the specific requirements of state governments. the codes are
specific to each business and are therefore more responsive to individual gambler’s
circumstances. the tabcorp group will continue to refine its responsible gambling
practices and its codes to strengthen its commitment to customer care.
the tabcorp group has an employee gambling policy which was updated in July 2012.
directors, employees and contractors may not gamble whilst on duty, whether on
tabcorp’s gambling products or those of another operator. limited exemptions apply,
which require written authorisation. gambling off duty is subject to specific restrictions
which apply to directors, executives and direct reports to executives, and other groups
according to the nature of their work.
Further details about the tabcorp group’s commitment to responsible gambling are
available on page 8 of this report and on tabcorp’s website.
tabcorp’s responsible gambling codes are available from the responsible gambling
section of tabcorp’s website at www.tabcorp.com.au/responsible.aspx.
;; asX cgc’s recommendations 3.1, 3.3
18. Diversity
tabcorp has adopted a diversity policy in relation to diversity of the board and
senior management within the tabcorp group. the board nomination committee
is responsible for overseeing the policy, monitoring tabcorp’s diversity strategy and
reviewing progress against measurable objectives established to achieve tabcorp’s
diversity goals.
the board has set an objective to have by 2015 at least 33% female representation in
senior management roles, which comprises the senior executive leadership team (chief
executive officer and direct reports) and the senior management team (direct reports
to the senior executive leadership team, and their direct reports).
as at 30 June 2012, the proportion of women employees across the tabcorp group was:
■■ 33% of the board of directors (following the commencement of steven gregg as a
director on 18 July 2012, the board comprises 29% female directors);
■■ 30% of the senior executive leadership team;
■■ 31% of the combined senior executive leadership team and senior management
team; and
■■ 49% of the entire tabcorp group.
tabcorp’s diversity policy is available from the corporate governance section of
tabcorp’s website at www.tabcorp.com.au/about_governance.aspx.
;; asX cgc’s recommendations 3.2, 3.3, 3.4, 3.5
19. Securities trading policy
tabcorp has a policy regarding trading in tabcorp securities which applies to all
directors, employees and contractors. this policy also extends to any person or entity,
which may in the circumstances be reasonably associated with the tabcorp group or
any director, employee or contractor (for example a spouse, dependent children, family
trust, family company or joint venture partner).
directors, executives reporting directly to the managing director and chief executive
officer (“executives”), all direct reports to those executives (“executive direct reports”),
and their associates are not permitted to trade in tabcorp’s securities during blackout
periods and subject to the processes set out in the policy.
the applicable blackout periods:
■■ commence on 1 January and end on the day tabcorp announces its half year results
(asX appendix 4d) inclusively;
■■ commence on 1 July and end on the day tabcorp announces its preliminary final year
results (asX appendix 4e) inclusively.
the tabcorp board, chairman, chief executive officer or company secretary may also
decide other blackout periods at any time.
approval for trading in a blackout period or within 12 months of acquisition will only be
granted in exceptional circumstances and where the trade is the only reasonable course
of action available. the nature of exceptional circumstances and the approval process to
be followed are set out in the policy.
directors are required to obtain written approval from the chairman prior to a director
or an associate of a director trading in tabcorp securities. in the case of a proposed
trade by the chairman or their associate, approval is required from the chairman of the
audit, risk and compliance committee.
23
ConCise annual report 2012 Corporate governance (continued)
if any executive or executive direct report or any associate of an executive or executive
director report wishes to trade in tabcorp’s securities at any time, the executive or
executive direct report must obtain the prior written approval of either the company
secretary or the managing director and chief executive officer.
the policy also contains restrictions on margin lending. directors, executives and
executive direct reports must receive prior consent from the chairman (in the case
of the chairman, prior consent from the chairman of the audit, risk and compliance
committee) before entering into margin loans or similar financing arrangements.
the details of tabcorp securities held by directors are available in the directors’ report
on page 31.
tabcorp’s securities trading policy is available from the corporate governance
section of tabcorp’s website at www.tabcorp.com.au/about_governance.aspx.
;; asX cgc’s recommendations 3.2, 3.3
20. Continuous disclosure
the tabcorp group has a disclosure and investor communications policy and
procedures are in place to ensure that information is reported to the asX in accordance
with the continuous disclosure requirements of its listing rules. the board reviews
tabcorp’s compliance with its continuous disclosure obligations at each of its meetings.
the tabcorp group’s executive general manager – corporate, legal and regulatory,
in her capacity as company secretary, is responsible for coordinating disclosure of
information to the asX, the australian securities and investments commission and
shareholders. the company secretary is referred to as the disclosure officer in this
policy.
the disclosure officer must be kept informed by management of disclosure related
issues, and each executive committee member must notify the disclosure officer
immediately of any information that may require disclosure.
in addition to the disclosure officer, there are a limited number of authorised tabcorp
spokespersons. only authorised tabcorp spokespersons may speak on the group’s behalf
to people such as analysts, brokers, journalists and shareholders, and comments must
be limited to their expertise. if an employee of the tabcorp group is not an authorised
tabcorp spokesperson, and receives an inquiry about the group from a journalist,
analyst or other external party, they must refer the inquiry to an authorised tabcorp
spokesperson.
authorised tabcorp spokespersons liaise closely with the disclosure officer to ensure all
proposed public comments are within the bounds of information that is already in the
public domain, and/or is not material.
24
tabcorp’s disclosure and investor communications policy is available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendations 5.1, 5.2
21. Independent professional advice
an individual director may, after discussion with the chairman, and advising the managing
director and chief executive officer, obtain independent professional advice at the expense
of the tabcorp group. such advice is to be made available to all other directors.
board committees and committee members may also obtain independent professional
advice, subject to the terms of reference for the applicable committee.
the terms of reference for each board committee are available from the corporate
governance section of tabcorp’s website at www.tabcorp.com.au/about_governance.aspx.
;; asX cgc’s recommendations 1.1, 2.1, 2.6, 8.1
22. Performance assessment
the nomination committee is responsible for facilitating an independent review of
the performance and effectiveness of the board, its committees and directors every
three years. the next independent assessment is scheduled to commence in the
first half of the 2012-2013 financial year. the previous independent assessment was
undertaken during the 2008/9 financial year. the assessment process included surveys
and interviews with current directors and the executive committee. the results were
benchmarked against those of other companies for comparative purposes. the board
reviewed the findings and recommendations contained in the report, and further
enhancements were implemented.
Formal performance and development evaluations are conducted every six months for
each employee, including executives and the managing director and chief executive
officer. individual performance is assessed using a balanced scorecard setting out
individual targets that are aligned to and are supportive of the tabcorp group’s annual
objectives. refer to page 39 of the remuneration report for further information.
employees are also assessed on whether they have exhibited tabcorp’s five values of
customer, performance, teamwork, innovation and integrity. performance assessments
for senior executives were undertaken in relation to the end of the financial year and
half year in accordance with the process disclosed above.
the terms of reference for the nomination committee are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendation 1.2, 2.4, 2.5, 2.6
tabcorp holdings limited 23. Succession planning
the tabcorp group has a succession plan for members of its board and senior
management. this plan identifies the best candidates for leadership and management
roles so that the board and executive committee comprise high calibre people with the
necessary and desirable experience and competencies that best meet the organisation’s
needs.
the nomination committee is responsible for making recommendations to the board
to facilitate the orderly succession of board membership and to manage a process
to identify suitable candidates for appointment to the board and for the optimal
composition of board committees.
refer to section 3 for information regarding the attributes the board considers when
appointing new directors and the process involved.
directors regularly discuss succession matters at meetings of the board and the
nomination committee.
the terms of reference for the nomination committee are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendation 2.4, 2.6
24. Induction
the appointment of any new director is subject to regulatory and government
ministerial approvals. While these approvals are being sought, the person, with the
approval of the regulators, may attend board and committee meetings as an observer.
this assists their transition into their role, but they may not vote on any matter.
each observer undertakes an induction program and is provided with access to tabcorp’s
online directors’ Knowledge centre, the tabcorp group’s strategic plan and other
materials to assist them to participate fully and actively in all board decision-making at
the earliest opportunity. in addition, upon being invited to join the tabcorp board, every
observer receives a letter of appointment setting out the key information and terms and
conditions applicable to their appointment as a director of tabcorp.
the induction program aims to provide the observer with the relevant knowledge
regarding the processes of the tabcorp board, board culture, the role and responsibilities
of a tabcorp director, the tabcorp group’s strategic direction, the nature of the group’s
businesses, industry matters, the group’s financial position, key senior management,
operational and risk management practices and the major issues facing the tabcorp
group. the induction program includes meetings with each executive committee
member and their leadership team, site tours, and specific matters of interest to each
observer.
the board nomination committee is responsible for ensuring that an effective
induction process is in place, and regularly reviews its effectiveness in accordance with
industry best practice and including incorporation of feedback from newly appointed
directors.
tabcorp has a formal induction program for all employees, including executives. this
program is conducted by skilled trainers and provides information about the structure
and operations of the tabcorp group, tabcorp’s code of conduct, key employee policies
(such as the use of tabcorp’s gambling products, harassment and bullying), occupational
health and safety, and equal opportunity. in addition, employees receive orientation
regarding their specific responsibilities, duties and rights, meet with executives and
team members and undergo familiarisation in their workplace.
employees have agreed position descriptions and balance scorecards that set out
their duties, responsibilities, objectives and key performance indicators. letters
of appointment or employment contracts set out other key terms of employment,
including term of office, rights, responsibilities, and entitlements on termination of
employment.
the terms of reference for the nomination committee are available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendation 1.1, 3.1, 3.3
25. Directors’ continuing education
all directors have access to continuing education to update and enhance their skills
and knowledge to enable them to continue to carry out their duties as directors in an
efficient and knowledgeable manner.
the continuing education program includes information concerning key developments in
the tabcorp group and the industry and environments within which it operates, including
site visits to the group’s properties, updates to relevant policies, discussion of relevant legal
developments, corporate governance updates and other matters of interest for directors.
;; asX cgc’s recommendation 1.1, 2.5
25
ConCise annual report 2012 Corporate governance (continued)
26. Group strategic planning
tabcorp has a formal strategic planning process whereby a strategic plan is approved by
the board each year. the intent of the annual review is to consider a range of strategies
and provide management with guidance on those strategies that in the board’s opinion
will enhance shareholder value.
;; asX cgc’s recommendation 1.1
27. Sustainability
tabcorp is committed to the long term sustainability of its operations and aims to
optimise the social, environmental, workplace and economic impact of its operations for
the benefit of all stakeholders.
tabcorp’s commitment to responsible gambling, its employees and community well-
being is discussed on pages 8 to 10 of this report.
although the operations of the tabcorp group are considered to have minor impact on
the environment, tabcorp is committed to protecting the environment and minimising
the impact wherever appropriate. tabcorp’s environmental performance is set out on
page 11 and in the directors’ report on page 31.
tabcorp’s commitment to long term sustainability is recognised by its inclusion in
several investment indices:
■■ dow Jones sustainability index
■■ Ftse4good index
details about tabcorp’s sustainability practices are available from the sustainability
section of tabcorp’s website at www.tabcorp.com.au/about-us_sustainability.aspx.
;; asX cgc’s recommendation 3.1
28. Engaging shareholders
the tabcorp group’s disclosure and investor communications policy sets out tabcorp’s
procedures and guidelines relating to continuous disclosure and the communication
of information to investors. information is communicated to shareholders through
tabcorp’s website, annual report, dividend mailings, email broadcasts, the asX, and
other means where appropriate.
the tabcorp group’s website provides stakeholders with a range of information about
the group, including its operations, history, strategies, values, brands, community
involvement, share price performance and shareholder reports. there is also a facility
for any interested person to receive email notifications of all major tabcorp news releases
published on the website. major announcements, such as the annual and half-year results
26
and the annual general meeting, are webcast live on tabcorp’s website. Webcasts are
archived and accessible on the website for at least twelve months.
tabcorp provides a service for its shareholders to receive all shareholder related
communications electronically, including dividend statements, notices of meeting,
and the annual report. this email service provides a quick and convenient means for
receiving this information while reducing costs and being environmentally friendly.
shareholders can also use the website to lodge their proxy appointment prior to the
annual general meeting.
dedicated shareholder relations personnel are available to assist in responding promptly
to all shareholder inquiries. contact details are available at the back of this report.
tabcorp has a shareholder enquiries and complaints policy that sets out the way in
which tabcorp addresses concerns and feedback from shareholders.
tabcorp encourages its shareholders to participate fully at its annual general meeting.
important issues are presented to shareholders as single resolutions and full discussion
of each item is encouraged. explanatory memoranda, where considered appropriate, are
included with the notice of annual general meeting in respect of items to be voted on at
the meeting.
other shareholder related information is available at the back of this report.
tabcorp’s website is available at www.tabcorp.com.au.
shareholders can elect to receive all communications electronically by following the
instructions on tabcorp’s website at www.tabcorp.com.au/investor_holder_eshare.
aspx.
sign up to receive email notification of major tabcorp news releases through the
news section of tabcorp’s website at www.tabcorp.com.au/news_enews.aspx.
tabcorp’s disclosure and investor communications policy is available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
tabcorp’s shareholder enquiries and complaints policy is available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au/about_
governance.aspx.
;; asX cgc’s recommendations 6.1, 6.2
tabcorp holdings limited Directors’ report
the directors of the company submit their report for the consolidated entity comprising
the company and its controlled entities (collectively referred to as “the tabcorp group”)
in respect of the financial year ended 30 June 2012.
1. Directors
the names and details of the company’s directors in office during the financial year and
until the date of this report (except as otherwise stated) are set out on pages 12 and 13.
Changes to the Board’s composition
2.
2.1 Appointments
Elmer Funke Kupper
mr Funke Kupper ceased as tabcorp’s managing director and chief executive officer
in June 2011 upon the implementation of the demerger of echo entertainment group
limited from the company pursuant to tabcorp’s scheme booklet dated 15 april 2011
(demerger). as previously foreshadowed, in January 2012 mr Funke Kupper rejoined the
tabcorp board as an observer and commenced as a non executive director on 25 June
2012 following the receipt of all necessary regulatory approvals.
Steven Gregg
mr gregg commenced as a non executive director on 18 July 2012 following the receipt
of all necessary regulatory approvals.
Justin Milne
3. Directorships of other listed companies
the following table shows, for each person who served as a director during the financial year
and up to the date of this report (unless otherwise stated), all directorships of companies
that were listed on the asX or other financial markets operating in australia, other than
tabcorp, since 1 July 2009, and the period for which each directorship has been held.
Name
paula dwyer
Listed entity
astro Japan property group (i)
australia and new Zealand
banking group limited
Foster’s group limited
healthscope limited
leighton holdings limited
suncorp group limited (ii)
Period directorship held
February 2005 to december 2011
april 2012 to present
may 2011 to december 2011
march 2010 to october 2010
January 2012 to present
april 2007 to February 2012
david attenborough nil
elmer Funke Kupper
asX limited
steven gregg
Jane hemstritch
austock group limited
goodman Fielder limited
commonwealth bank of
australia
lend lease group
santos limited
october 2011 to present
march 2009 to may 2012
February 2010 to present
october 2006 to present
september 2011 to present
February 2010 to present
mr milne commenced as a non executive director on 1 august 2011 following the receipt
of all necessary regulatory approvals.
Justin milne
pienetWorKs limited
netcomm Wireless limited
Quickflix limited
march 2011 to February 2012
march 2012 to present
July 2011 to present
Zygmunt switkowski healthscope limited
lynas corporation limited
oil search limited
suncorp group limited (ii)
January 2006 to october 2010
February 2011 to present
november 2010 to present
september 2005 to present
(i)
(ii)
ms dwyer was a director of astro Japan property group limited and astro Japan property management
limited which were associated with listed stapled securities of the astro Japan property group.
includes the period as a director of suncorp-metway limited prior to the corporate restructure of the suncorp
group.
27
ConCise annual report 2012
Directors’ report (continued)
4. Company Secretaries
Kerry Willcock joined the tabcorp group in February 2005 as executive general manager,
corporate and legal. she holds a bachelor of arts and a bachelor of laws, and is a
qualified mediator. she has extensive commercial, legal, litigation and government
relations experience having worked with allens arthur robinson, clayton Utz and the
australian postal corporation, where she held the position of general counsel. Kerry is
also a member of the australian corporate lawyers association general counsel group
and a member of the australian institute of company directors.
michael scott was appointed as an additional company secretary on 8 august
2012. he has been in the role of assistant to the company secretary since joining the
tabcorp group in september 2002. he holds a graduate diploma of applied corporate
governance and a bachelor of land information (cartography). michael is a Fellow
of chartered secretaries australia, graduate member of the australian institute
of company directors and Fellow of leadership Victoria’s Williamson community
leadership program.
5. Principal activities
the principal activities of the tabcorp group during the financial year comprised the
provision of leisure and entertainment services (particularly in relation to gambling).
the demerger of echo entertainment group limited from tabcorp, which was
implemented in June 2011, resulted in tabcorp retaining its wagering, media and
international, gaming and keno businesses while echo entertainment group limited
now holds the casinos business previously held by tabcorp.
other than in respect of the discontinued casinos business resultant from the demerger, the
tabcorp group’s principal activities remain unchanged from the previous financial year.
6. Financial results
the financial results of the tabcorp group for the prior financial year to 30 June 2011
include the operations of the casinos business up until the demerger was implemented.
the financial results of the tabcorp group for the financial year to 30 June 2012, and
comparisons to the prior financial year to 30 June 2011, relate to the continuing operations
of its wagering, media and international, gaming and keno businesses, unless otherwise
stated.
profit after income tax was $340.0 million.
earnings before interest and tax (ebit) was $591.7 million.
revenue was $3,038.5 million, which was 3.1% above the previous financial year.
the financial results reported for the prior financial year, which included a full year
contribution from the now demerged casinos business and an impairment of
$358.0 million, were profit after income tax of $534.8 million, ebit of $856.3 million
and revenue of $4,469.6 million.
7. Earnings per share
basic earnings per share for the period were 47.6 cents.
diluted earnings per share for the period were 47.5 cents.
earnings per share reported for the previous financial year, which included a full year
contribution from the casinos business prior to demerger, were basic earnings per share
of 80.7 cents and diluted earnings per share of 80.4 cents.
earnings per share is disclosed in note 6 to the Financial report.
8. Dividends
a final dividend of 11 cents per ordinary share has been declared. the final dividend
will be fully franked and payable on 26 september 2012 to shareholders registered at
22 august 2012. the ex-dividend date is 16 august 2012. there will be no discount and
no underwriting applicable to the tabcorp dividend reinvestment plan.
the following dividends have been paid, declared or recommended by the company
since the end of the preceding financial year:
2012 final dividend
Final fully franked dividend for 2012 of 11 cents per share on ordinary shares as
announced on 9 august 2012 with a record date of 16 august 2012 and payable
on 26 september 2012.
2012 interim dividend
interim fully franked dividend for 2012 of 13 cents per share on ordinary shares
as announced on 9 February 2012 with a record date of 20 February 2012 and
payable on 26 march 2012.
2011 final dividend *
Final fully franked dividend for 2011 of 19 cents per share on ordinary shares as
announced on 16 august 2011 with a record date of 25 august 2011 and payable
on 23 september 2011.
$m
80.3
92.7
130.7
* - based on earnings inclusive of the casinos business prior to demerger.
Further information regarding dividends may be found in note 5 to the Financial report.
28
tabcorp holdings limited 9. Review of operations
the tabcorp group’s structure post the demerger, comprises the following four
businesses:
■■ Wagering;
■■ media and international;
■■ gaming; and
■■ Keno.
the activities and results for these continuing businesses during the financial year are
discussed below.
9.1 Wagering business
the tabcorp group conducts wagering activities in Victoria and new south Wales (nsW)
through a network of agencies, hotels and clubs, and provides on-course totalizators at
thoroughbred, harness and greyhound metropolitan and country race meetings. also,
totalizator and fixed odds betting is offered on sporting events. the business operates
lUXbet.com, offering a racing, sport and novelty product bookmaking service by
telephone and online based in the northern territory. in addition, the tabcorp group is
party to the premier gateway international (pgi) joint venture in the isle of man.
the Wagering business achieved ebit (and before impairment) of $242.2 million, which
was 10.0% above the previous financial year. the business’s revenue increased by 4.4%
to $1,637.4 million.
9.2 Media and International business
the tabcorp group has specialist television and radio operations focused on the racing
industry and other sporting activities. the business operates sky racing, sky sports
radio and other domestic and international broadcasting services.
the media and international business achieved ebit of $57.1 million, which was
8.1% above the previous financial year. the business’s revenue increased by 6.1%
to $190.2 million.
9.3 Gaming business
in Victoria, the tabcorp group owns and operates electronic gaming machines (egms)
in licensed hotels and clubs under the tabaret brand pursuant to the Victorian gaming
licence. refer to section 10.3 regarding changes to this business which are scheduled to
occur in mid august 2012.
the gaming business achieved ebit of $244.1 million, which was 1.1% above the previous
financial year. the business’s revenue increased by 0.1% to $1,078.9 million.
9.4 Keno business
the tabcorp group operates Keno in Victoria, new south Wales and Queensland.
on 15 april 2012 a new 10 year Victorian Keno licence commenced under which a
member of the tabcorp group conducts and distributes approved Keno games in hotels,
clubs and wagering outlets in Victoria. refer to section 10.2 for further information.
prior to the commencement of the new Victorian Keno licence, the tabcorp group’s club
Keno business operated in Victoria through a joint venture arrangement.
the Keno business achieved ebit of $48.3 million, which was 1.0% below the previous
financial year. the business’s revenue increased by 8.0% to $183.1 million.
10. Significant changes in the state of affairs
the following events, which may be considered to be significant changes in the state of
affairs of the tabcorp group, have occurred since the commencement of the financial
year on 1 July 2011.
10.1 Victorian Wagering and Betting Licence
the new Victorian Wagering and betting licence (“the new licence”) was issued to
tabcorp Wagering (Vic) pty ltd, a wholly owned subsidiary of tabcorp, on 19 december
2011. the new licence period is 12 years and will commence after the expiry of the
current Victorian Wagering licence on 15 august 2012. at the discretion of the
responsible minister, the new licence may be extended for a further period of up to
two years.
the new licence will allow tabcorp to offer on-course and off-course wagering and
betting on thoroughbred, harness and greyhound racing and approved sporting and
other events in Victoria. it also allows for the offering of approved simulated racing
games and the operation of a betting exchange.
the documents governing the formal relationship between tabcorp Wagering (Vic) pty ltd
and the Victorian racing industry were executed on 21 december 2011.
tabcorp paid the $410 million fee for the new licence to the Victorian government in
January 2012.
29
ConCise annual report 2012 Directors’ report (continued)
10.2 Victorian Keno
the tabcorp group commenced operations under the new 10 year Victorian Keno licence
on 15 april 2012. the licence authorises tabcorp investments no. 5 pty ltd, a wholly owned
subsidiary of tabcorp, to conduct and distribute Keno games in approved hotels, clubs (with
full and restricted club liquor licences) and wagering outlets throughout Victoria. the new
stand-alone licence also includes the right to offer approved simulated racing games in a
broader range of approved venues.
10.3 Victorian Gaming / TGS
tabcorp’s Victorian gaming licence expires on 15 august 2012, which follows the
Victorian government’s decision to move to a new industry structure for gambling in
Victoria. Upon the expiry of this licence, tabcorp will no longer be licensed to conduct,
and will therefore cease to operate, its current gaming business.
tabcorp has responded to this new industry structure by introducing a new business called
tabcorp gaming solutions (tgs) to supply egms and provide specialised consulting and
support services for the new operators of egms. tgs is currently contracted in respect of
over 8,500 egms in Victoria and is on track to commence operations on 16 august 2012.
10.4 Tabcorp Subordinated Notes
the company raised $250 million from the offer of tabcorp subordinated notes
pursuant to the prospectus dated 22 February 2012. tabcorp subordinated notes are
unsecured, subordinated, cumulative notes listed on asX under the code tahhb. holders of
tabcorp subordinated notes are entitled to receive quarterly interest payments (subject to
deferral) equal to the sum of the 3 month bank bill rate plus a margin of 4.0% per annum.
tabcorp subordinated notes will mature on 22 march 2037, unless redeemed earlier. tabcorp
subordinated notes were issued on 22 march 2012 at a price of $100 each and the minimum
investment was for $5,000.
10.5 Debt refinancing
tabcorp announced on 30 april 2012 that it had completed the refinancing of debt
facilities which were due to mature in the financial year ending 30 June 2013. the
refinancing consisted of Us$220 million of debt raised from the Us private placement
market (“Uspp”) and extending the maturity of a$400 million of existing syndicated
bank facility from June 2013 to June 2015.
the Uspp comprised the issue of Us$87 million of notes maturing in 2019 and
Us$133 million of notes maturing in 2022. the Us dollar proceeds were converted
into $210.5 million australian dollars through the use of cross currency swaps.
30
10.6 Changes to the Board of Directors
a number of changes occurred to the composition of the board during the year. refer to
section 2 for information.
10.7 Other significant changes in the state of affairs
there were no significant changes in the state of affairs of the tabcorp group that
occurred during the financial year other than as set out in this directors’ report.
11. Business strategies
the key strategic priorities of the tabcorp group are as follows:
■■ Wagering
P build on strength in retail
P drive fixed odds expansion whilst maintaining parimutuel positioning
P drive online with best in class offering (including social media)
P deepen our customer relationships via our customer relationship management
program and through promoting brand loyalty
P grow international wagering revenues
■■ media and international
P maintain growth (including retaining media rights)
P expand vision and data distribution reciprocity (including racing World
australia)
■■ gaming / tgs
P optimise Victorian gaming earnings until licence expires
P commence tgs operations in Victoria
P expand tgs
■■ Keno
P grow Keno in current and new markets
P expand distribution, self service and product offerings
tabcorp holdings limited 12. Significant events after the end of the financial year
as announced on 24 July 2012, the tabcorp group received confirmation that the
australian taxation office has allowed a claim for refunds of gst paid by the group’s
Victorian and nsW wagering businesses. the refunds will have a net profit after tax
impact of $14.3 million to the group, which will be recognised in the financial year
ending 30 June 2013. the refunds relate to gst paid between may 2006 and march 2010
on wagering turnover derived from overseas based customers.
no other matters or circumstances have arisen since the end of the financial year,
which are not otherwise dealt with in this report or in the Financial report, that have
significantly affected or may significantly affect the operations of the tabcorp group,
the results of those operations or the state of affairs of the tabcorp group in subsequent
financial years.
refer also to note 28 to the Financial report.
13. Likely developments and expected results
the tabcorp group will continue with its strategies, as set out in this report.
the directors have excluded from this report any further information on the likely
developments in the operations of the tabcorp group and the expected results of those
operations in future financial years, as the directors have reasonable grounds to believe
that to include such information will be likely to result in unreasonable prejudice to the
tabcorp group.
14. Auditors
the tabcorp group’s external auditor is ernst & Young.
the tabcorp group’s internal audit function is fully resourced by tabcorp, with Kpmg
providing specialist independent external support where necessary.
more information relating to the audit functions can be found in the corporate
governance statement of the concise annual report.
15. Directors’ interests in contracts
some directors of the company, or related entities of the directors, conduct transactions
with entities within the tabcorp group that occur within a normal employee, customer
or supplier relationship on terms and conditions no more favourable than those with
which it is reasonable to expect the entity would have adopted if dealing with the
director or director-related entity on normal commercial terms and conditions.
16. Environmental regulation and performance
the tabcorp group’s environmental obligations and waste discharge quotas are
regulated under both state and federal laws. the tabcorp group has a record of
complying with, and in most cases exceeding, its environment performance obligations.
no environmental breaches have been notified to the tabcorp group by any government
agency.
the tabcorp group’s environmental impacts reduced significantly when the former
casinos business was demerged in June 2011. consequently, the tabcorp group no longer
meets the criteria for the Federal government’s energy efficiency opportunities (eeo)
initiative and the national greenhouse energy reporting system (ngers).
17. Risk management
the tabcorp group has a structured and proactive approach to understanding and
managing risk. the key focus of the risk management approach is to align strategy,
processes, people, technology and knowledge with evaluating and managing the
uncertainties and opportunities faced by the tabcorp group. overviews of the tabcorp
group’s risk management processes and internal control framework are disclosed in the
corporate governance statement of the concise annual report.
18. Directors’ interests in Tabcorp securities
at the date of this report (except as otherwise stated), the directors had the following
relevant interests in the securities of the company, as notified to the asX in accordance
with section 205g(1) of the corporations act 2001:
Name
paula dwyer
david attenborough
elmer Funke Kupper
steven gregg
Jane hemstritch
Justin milne
Zygmunt switkowski
Number of securities
Ordinary
Shares
Performance
Rights
Tabcorp
Bonds
Tabcorp
Subordinated
Notes
34,292
58,609
-
-
23,181
-
84,876
-
447,761
232,136
-
-
-
-
-
-
1,500
-
2,000
-
-
-
-
-
-
-
-
-
31
ConCise annual report 2012 Directors’ report (continued)
19. Board and Committee meeting attendance
during the financial year ended 30 June 2012 the company held 14 meetings of the board
of directors, of which seven were standard board meetings and seven board meetings
were held to discuss special business.
the attendance of the directors at meetings of the board and its committees during the
year in review were:
Audit,
Risk and
Compliance
Committee
Board of
Directors
Nomination
Committee
Remun-
eration
Committee
Name
paula dwyer
david attenborough (i)
elmer Funke Kupper (ii)
steven gregg (iii)
Jane hemstritch
Justin milne (iv)
Zygmunt switkowski
A
14
14
7
10
12
14
14
B
14
14
7
10
14
14
14
A
5
5
3
4
5
5
5
B
5
5
3
4
5
5
5
a – number of meetings attended
b – maximum number of possible meetings available for attendance
A
2
2
1
1
2
2
2
B
2
2
1
1
2
2
2
A
5
5
-
3
-
-
5
B
5
5
-
3
-
-
5
(i) the managing director and chief executive officer attends board committee meetings, but is not a member
of any board committee. only non executive directors are members of board committees.
(ii) commenced as a non executive director on 25 June 2012 following the receipt of all necessary regulatory
approvals. the meetings disclosed above relate to the period when mr Funke Kupper attended meetings as
an observer whilst awaiting regulatory approval, for which he was not required to attend and could not vote
on any matter.
(iii) commenced as a non executive director on 18 July 2012 following the receipt of all necessary regulatory
approvals. the meetings disclosed above relate to the period when mr gregg attended meetings as an
observer whilst awaiting regulatory approval, for which he was not required to attend and could not vote on
any matter.
(iv) commenced as a non executive director on 1 august 2011 following the receipt of all necessary regulatory
approvals. the meetings disclosed above include one board meeting where mr milne attended as an observer
whilst awaiting regulatory approval, for which he was not required to attend and could not vote on any
matter.
32
the details of the functions and memberships of the committees of the board are set
out in the corporate governance statement of the concise annual report. the terms of
reference for each board committee are available from the corporate governance section
of the company’s website.
20. Indemnification and insurance of Directors and Officers
the directors and officers of the tabcorp group are indemnified against liabilities
pursuant to agreements with the tabcorp group. tabcorp has entered into insurance
contracts with third party insurance providers, and in accordance with normal
commercial practices, under the terms of the insurance contracts, the nature of the
liabilities insured against and the amount of premiums paid are confidential.
21. Non-statutory audit and other services
ernst & Young, the external auditor to the company and the tabcorp group, provided
non-statutory audit services to the company during the financial year ended 30 June
2012. the directors are satisfied that the provision of non-statutory audit services
during this period was compatible with the general standard of independence for
auditors imposed by the corporations act 2001. the nature and scope of each type
of non-statutory audit service provided means that auditor independence was not
compromised. these statements are made in accordance with advice provided by the
company’s audit, risk and compliance committee.
the company’s board audit, risk and compliance committee reviews the activities of
the independent external auditor and reviews the auditor’s performance on an annual
basis. the chairman of the audit, risk and compliance committee must approve all non-
statutory audit and other work to be undertaken by the auditor (if any). Further details
relating to the audit, risk and compliance committee and the engagement of auditors
are available in the corporate governance statement of the concise annual report.
ernst & Young, acting as the company’s external auditor, received or are due to receive
$434,000 in relation to the provision of non-statutory audit services to the company.
amounts paid or payable by the company for audit and non-statutory audit services are
disclosed in note 3 to the Financial report.
tabcorp holdings limited 22. Corporate governance
the directors of the company support and adhere to the asX corporate governance
council’s Corporate Governance Principles and Recommendations, 2nd edition,
recognising the need for the highest standard of corporate behaviour and accountability.
the company’s corporate governance statement is contained in the concise annual
report, and associated information is available under the corporate governance section
of the company’s website at www.tabcorp.com.au/about_governance.aspx.
23. Rounding of amounts
tabcorp holdings limited is a company of the kind specified in australian securities
and investments commission class order 98/0100. in accordance with that class order,
amounts in the financial report and the directors’ report have been rounded to the
nearest hundred thousand dollars unless specifically stated to be otherwise.
24. Auditor’s independence declaration
attached is a copy of the auditor’s independence declaration provided under section
307c of the corporations act 2001 in relation to the audit for the financial year ended
30 June 2012. this auditor’s independence declaration forms part of this directors’
report.
this report has been signed in accordance with a resolution of directors
Paula Dwyer
chairman
melbourne
9 august 2012
33
ConCise annual report 2012 Directors’ report (continued)
34
tabcorp holdings limited Remuneration report (audited)
Introduction
this remuneration report outlines the remuneration policy and arrangements for
tabcorp’s directors, executives and senior management in accordance with the
requirements of the corporations act 2001 and its regulations. the information
provided in this remuneration report has been audited as required by section 308(3c)
of the corporations act.
the remuneration report relates to the key management personnel (Kmp) of the
consolidated entity comprising the company and its consolidated entities for the
financial year ended 30 June 2012. Kmp are those persons having authority and
responsibility for planning, directing and controlling the activities of the group, and
comprises all the directors of tabcorp and certain members of the executive committee.
the same group of individuals is regarded as Kmp for both the company and the group.
as detailed in this remuneration report, the annual reward structure for the most senior
managers comprises three components: a fixed base salary, a short term incentive and
a long term incentive in the form of performance rights. For Kmp who are executives,
at least 50% of their total annual reward is ‘at risk’ in the form of short term or long
term incentives tied to the achievement of specific group, business unit and individual
performance objectives and targets.
For the year ended 30 June 2012, short term incentives were awarded to senior managers
and will be paid in august 2012. With regard to long term incentives, during the year,
an allocation of performance rights was made to 8 senior managers. in addition, an
allocation of performance rights under the long term incentive plan was also made to
the managing director and chief executive officer following shareholder approval at the
2011 tabcorp annual general meeting.
Whether the allocated performance rights generate value for the senior managers
will depend on the company’s total shareholder return over a three year period. if,
at the end of the three year period, the minimum performance hurdle is not met, all
performance rights will lapse. the maximum number of performance rights will vest
only if the highest performance threshold is met at the end of the three year period.
the board reviews the remuneration for non executive directors each calendar year.
the fees for the 2012 financial year are lower than the fees for the 2011 financial year,
as the fees were adjusted to reflect the changes in tabcorp following the demerger of
echo entertainment group limited (echo) from the company pursuant to tabcorp’s
scheme booklet dated 15 april 2011 (the demerger). the details of non executive director
remuneration are included in section 5.3.
1. Significant changes since 30 June 2011
1.1 Non Executive Directors
Justin milne, elmer Funke Kupper and steven gregg commenced as non executive
directors on 1 august 2011, 25 June 2012 and 18 July 2012 respectively, following the
receipt of all necessary regulatory approvals.
1.2 Senior Management Remuneration Framework
as a result of tabcorp’s demerger of echo and reorganisation of the Wagering and
gaming businesses, the use of a divisional performance multiplier to determine the
sti pool available for these businesses has been discontinued. this change ensures
senior managers who participate in the sti program are aligned to the achievement of
tabcorp’s overall financial objectives whilst also ensuring business unit financial and
non-financial targets are considered in determining individual sti outcomes.
2. Governance
the main responsibilities of the board remuneration committee are:
■■ establishing and maintaining fair and reasonable remuneration policies and
practices that apply to the group;
■■ reviewing and recommending to the board the remuneration of Kmp and the terms
and conditions of any incentive plans; and
■■ agreeing benchmarks against which annual salary reviews are evaluated.
in exercising its responsibilities, the board remuneration committee assesses the
appropriateness of the nature and amount of remuneration of directors and executives
every year by reference to relevant employment market conditions with the overall
objective of ensuring maximum stakeholder benefit from the retention of a high quality
and high performing board and executive team.
to assist in exercising its responsibilities, the board remuneration committee receives
independent advice on matters such as remuneration strategies, mix and structure,
as appropriate. during the year ended 30 June 2012 and to the date of this report, no
remuneration consultant provided a remuneration recommendation in respect of any
Kmp.
the board remuneration committee is governed by its terms of reference, which are
available on tabcorp’s website at www.tabcorp.com.au under the About Us – Corporate
Governance section.
35
ConCise annual report 2012 Remuneration report (audited) (continued)
3. Remuneration philosophy
the key objective of tabcorp’s remuneration philosophy is to enable tabcorp to attract,
motivate and retain high calibre individuals at both board and senior management level.
to achieve this, tabcorp’s remuneration framework is based upon the following key
principles:
■■ creating shareholder value relative to our peer group;
■■ maintaining market competitiveness; and
■■ measuring and rewarding individual, business unit and group performance.
For executive and senior management remuneration, this involves aligning the reward
components with the individual’s ability to influence results and to increase the focus
on variable reward that is leveraged for superior performance.
there has been no significant change in the remuneration strategy since the previous
financial year.
4. Key management personnel (KMP)
Name
Position held
Non Executive Directors
Current
chairman and director (non executive)
paula dwyer
director (non executive)
elmer Funke Kupper
director (non executive)
Jane hemstritch
Justin milne
director (non executive)
Zygmunt switkowski director (non executive)
Future, pending regulatory approval
steven gregg (i)
Executives
Will be appointed director (non executive)
Current Executive Director
david attenborough managing director and
chief executive officer
Current Executives
mohan Jesudason
damien Johnston (ii)
Kerry Willcock
managing director, gaming & group
marketing
chief Financial officer
executive general manager, corporate,
legal and regulatory
Period in
position if less
than full year
From 25 June 2012
From 1 august 2011
n/a
From 12 July 2011
(i) commenced as a director and a Kmp on 18 July 2012, following the receipt of all necessary regulatory
approvals.
(ii) commenced in position on 9 June 2011, and as a Kmp on 12 July 2011 following the receipt of all necessary
regulatory approvals.
details of director qualifications, experience and other responsibilities are set out on
pages 12 to 13 and page 27 of the directors’ report.
36
tabcorp holdings limited board fees are structured by having regard to the responsibilities of each position
within the board. board committee fees are structured to recognise the differing
responsibilities and workload associated with each committee, and the additional
responsibilities of each committee chairman.
board fees are not paid to the managing director and chief executive officer, or to
executives for directorships of any subsidiaries.
5.3 Current annual fees
the annual fees are detailed in Figure 1 for non executive directors and board
committee memberships. the fees for the 2012 financial year are lower than the fees for
the 2011 financial year, because the fees were adjusted to reflect the changes in tabcorp
following the demerger.
Figure 1: Non Executive Director and Board Committee fixed annual fees
Board fees (i)
$
350,000
120,000
Position
chairman
non executive director
committee chairman
committee member
(i) Fees exclude superannuation contributions.
Board Committee fees (i)
Audit, Risk &
Compliance
$
Remuneration
$
Nomination
$
40,000
20,000
25,000
10,000
7,500
7,500
5. Non Executive Director remuneration
5.1 Remuneration framework
the board remuneration committee has responsibility for reviewing and
recommending to the board appropriate remuneration arrangements for non executive
directors, taking into consideration factors including:
■■ the group’s remuneration philosophy;
■■ the level of fees paid to board members of other publicly listed australian
companies;
■■ operational and regulatory complexity;
■■ the responsibilities and workload requirements of each board member; and
■■ advice from independent remuneration consultants.
non executive directors’ fees are reviewed yearly and the current aggregate annual
limit (including superannuation contributions) is set at $2 million, as approved by
shareholders at the annual general meeting on 28 november 2005.
non executive directors do not receive any performance or incentive payments and
are not eligible to participate in any of tabcorp’s incentive plans. this policy aligns with
the principle that non executive directors act independently and impartially. elmer
Funke Kupper has retained some performance rights in relation to his former position
of managing director and chief executive officer, as outlined in section 6.4.2.8. these
performance rights are not expected to deliver any value to mr Funke Kupper, and the
fair value was fully expensed on cessation of employment in the prior year.
5.2 Structure
non executive directors’ remuneration comprises the following components:
■■ board fee;
■■ board committee fees; and
■■ superannuation (currently 9% of total fees, uncapped).
some directors may receive additional remuneration and associated superannuation
(where applicable) for:
■■ chairmanship of the Victorian Joint Venture management committee, receiving a
fee equivalent to chairman of the remuneration committee;
■■ observer fees, equivalent to the applicable board and committee fees (for attending
board and committee meetings and induction whilst awaiting regulatory approval);
or
■■ membership of other committees, such as the previous year’s demerger due
diligence committee.
37
ConCise annual report 2012 Remuneration report (audited) (continued)
6. Senior management remuneration (including Executive Director)
the remuneration committee and the board has responsibility for reviewing the
remuneration framework of the group and recommending to the board the appropriate
remuneration arrangements. the remuneration committee approves the remuneration
and incentives for members of the executive committee and makes recommendations
to the board in relation to the managing director and chief executive officer.
6.1 Remuneration framework
the remuneration framework for senior management comprises a mix of both fixed
and variable remuneration components. the level of fixed remuneration an individual
receives reflects the scope and responsibilities of their role, their knowledge, skills
and experience as well as benchmark market data. Variable remuneration depends
on the achievement of group, business unit and individual performance targets, and
shareholder value hurdles. Variable remuneration may be delivered in the form of cash
or a mix of cash and restricted shares for achievement of short term performance
targets, and performance rights subject to the achievement of long term performance
targets.
the objective of structuring a remuneration framework comprising both fixed and
variable components is to ensure remuneration is market competitive and aligned to:
■■ shareholders’ interests through:
P the use of financial measures, such as net profit after tax before non-recurring
items as the primary reward measure for short term performance outcomes.
P rewarding long term company performance measured by reference to a
comparable group of companies in the s&p/asX 100 index, which over the long
term should lead to attractive value creation for shareholders.
P aligning group, business unit and individual performance targets to the
performance objectives in tabcorp’s annual and long term strategic plans.
P attracting, motivating and retaining individuals of the highest calibre.
P Fostering a culture of high performance in a team based environment.
■■ senior managements’ interests through:
P differentiating reward outcomes based upon individual performance and
capability.
P linking the form of reward delivery with the ability to influence results.
P providing upside opportunity for superior group performance and increased
shareholder value.
the reward structure is outlined in Figure 2.
38
Figure 2: Senior management reward structure
Component
Delivery
Performance
alignment
Strategic
objective
Cash(i)
Superannuation
Market median
Cash(i), or mix of Cash
and Restricted Shares(ii)
Group performance
Individual performance
Short term targets
(12 month period)
Performance Rights(iii)
Total shareholder
return
Shareholder value creation
(3 year period)
Fixed
+
Short
term
incentive
+
Long
term
incentive
)
k
s
i
r
t
a
(
e
l
b
a
i
r
a
V
=
Total Annual Reward
(TAR)
(i) may voluntarily elect to salary sacrifice for additional superannuation contributions and motor vehicle
novated leases (for fixed component only).
(ii) applicable to certain senior management, issued under the tabcorp employee deferred share plan and
subject to a three year service condition.
(iii) may vest on the third anniversary after the grant, subject to meeting relevant performance based hurdles.
6.2 Target reward mix
the target reward mix aims to position total annual reward (tar) at the market median
when all performances have been achieved at target. it is set after benchmarking
against a wide range of organisations to ensure that the incentive and tar are
competitive, fair and reasonable. senior management with greater responsibility in key
business units have a greater proportion of at risk remuneration.
the target reward mix for the Kmp (other than non executive directors and the
managing director and chief executive officer) is outlined in Figure 3. this target
reward mix excludes appointment incentives and additional compensation (refer
section 6.6.2). refer to section 6.5 for details of the managing director and chief
executive officer’s remuneration.
tabcorp holdings limited
Figure 3: KMP target reward mix
6.4.1.2 Determining Factors
% target reward mix
Variable (at risk)
incentives
Short term
(cash)
Long term
(equity)
Fixed
45
50
50
30
25
25
25
25
25
Total
Annual
Reward
100
100
100
KMP
mohan Jesudason
damien Johnston
Kerry Willcock
6.3 Fixed remuneration
senior managers receive a fixed remuneration package comprising cash salary, statutory
superannuation contributions and other benefits they may elect to receive on a salary
sacrifice basis (i.e. additional superannuation contributions and motor vehicle novated
leases).
an individual’s fixed remuneration is set taking into consideration the scope and
responsibilities of their role, their knowledge, skills and experience as well as
benchmark market data for similar roles from similar sized companies based on market
capitalisation.
Fixed remuneration is reviewed annually taking into consideration an individual’s
performance (as assessed through the group’s performance management process)
and relativity with the external market data. the remuneration committee
approves the fixed remuneration for the senior executive leadership team and makes
recommendations to the board in relation to the managing director and chief executive
officer.
during the 2012 financial year, the fixed remuneration of Kmp has not increased.
6.4 Variable (at risk) remuneration
6.4.1 Short term incentive (STI)
6.4.1.1 Overview
the sti is designed to reward employees for the achievement of group, business unit
and individual performance goals over the relevant 12 month performance period, which
are aligned to and supportive of the group’s annual objectives for each financial year.
an individual’s short term incentive is calculated by taking the following three key
factors into account:
Figure 4: STI calculation
Target STI
($)
X
Group
Funding
Multiplier
X
Individual
Performance
Multiplier
=
Short Term
Incentive
■■ Target STI
this amount is based on a percentage of the individual’s total annual reward (tar)
(refer to Figure 3 above).
■■ Group Funding Multiplier (GFM)
the gFm is linked to the achievement of tabcorp’s target net profit after tax before non
recurring items (npat) as approved by the board. the board considers npat to be an
appropriate performance measure as it aligns the group’s remuneration philosophy
with creating value, and is within the scope of influence of participants. the gFm
determines the overall sti pool available for distribution. if the financial performance
target is not met, individual awards may be funded at a reduced level, at the discretion
of the board.
■■ Individual Performance Multiplier (IPM)
individual performance is assessed using a balanced scorecard of individual measures
that align to and are reflective of the group’s annual objectives. the balanced scorecard
assesses four performance areas – customers, people, organisation, and shareholders.
specific key performance objectives, including the achievement of business unit
financial and non-financial targets and strategic objectives are agreed upon for each
performance area at the start of the financial year against which the individual is
assessed. in the pursuit of superior shareholder returns and value creation, such metrics
include the achievement of profit measures and cost management targets; providing
the best gambling and entertainment experience for customers; providing operational
excellence, regulatory compliance and positive company image; ensuring tabcorp is a
great place to work; and delivering strategic value/opportunities.
to be eligible to receive a sti, participants need to demonstrate required levels of
behaviours in line with group values and must not have any significant controllable
compliance breaches.
39
ConCise annual report 2012
Remuneration report (audited) (continued)
6.4.1.3 Delivery
the sti is delivered in cash, or a mix of cash and restricted shares. it is mandatory for
participants at a senior management level, where the target sti is 30% or more of tar
and who do not participate in the long term incentive plan, to defer one third of their
total sti into restricted shares. restricted shares are subject to a three year service
condition during which time the shares may not be traded, however participants have
full entitlement to dividends and voting rights.
6.4.1.4 Accounting treatment
the financial impact of the sti (excluding any restricted shares) is expensed in the
relevant financial year and is reflected in the remuneration disclosures for Kmp.
restricted shares are expensed on a straight line basis over a three year period,
commencing from the time the restricted shares are granted to the participant, which
occurs after the end of the financial year.
6.4.1.5 STI performance
For the year ended 30 June 2012, short term incentive targets were derived from the
board approved business plan which included financial and non-financial goals. the
board awarded short term incentives to senior management that reflected the financial
performance of the group against the targets set. the financial performance of the
group for the year ended 30 June 2012 was assessed by the board as consistent with the
business plan expectations and at target.
6.4.2 Long term incentive (LTI)
6.4.2.1 Overview
the lti is principally designed to reward senior management for contributions to long
term shareholder value creation, measured on the third anniversary after the date of
grant. Ultimate value from the lti is only delivered to senior management if certain
shareholder returns are achieved on the test date, resulting in the equity instruments
vesting.
the lti is delivered through performance rights that provide the senior manager with
the opportunity to acquire shares, subject to meeting the market based performance
condition, at no cost to the senior manager. performance rights are considered an
effective instrument for delivering incentives to senior management which is aligned to
achieving shareholder value over the three year period.
performance rights issued under the lti plan have the following features:
■■ tested against the relevant performance hurdle at the third anniversary of the date
of grant;
■■ may vest at the third anniversary of the date of grant, with any unvested
performance rights lapsing immediately;
40
■■ Upon vesting, the company will issue or transfer ordinary shares to the senior
manager; and
■■ the fair value will be expensed over a three year period from the grant date in
accordance with accounting standards.
6.4.2.2 Allocation
the performance rights under the lti are generally allocated annually in september. the
number of performance rights allocated is calculated as outlined in Figure 5.
Figure 5: Allocation calculation
Target LTI
($)
÷
Fair
Value of
Performance
Right
=
Number of
Performance
Rights
allocated
6.4.2.3 Vesting conditions
the vesting of performance rights issued under the lti is dependent on meeting a
minimum performance hurdle at the test date (third anniversary of the date of grant), as
discussed below.
the performance hurdle for performance rights issued under the lti is relative total
shareholder return (relative tsr).
tsr measures the return received by shareholders (capital returns, dividends and
share price movement) over a specific period relative to a peer group of companies. if
there is any change in the dividend payment timetable of a company in the peer group
(including tabcorp), then the tsr performance of that company is adjusted to remove
any artificial distortion in the outcome. tabcorp engages an external consultant to
calculate tabcorp’s tsr relative to the peer group of companies.
the board considers relative tsr to be an appropriate performance measure as it reflects
the group’s remuneration philosophy of creating shareholder value relative to our peer
group, and recognises that the company is in the midst of transitioning to the new
licence arrangements in 2012 and 2013, the result of which means the setting of future
earnings targets remains volatile. the use of an alternative measure such as earnings
per share (eps) either instead of, or in addition to relative tsr, may be considered by the
board in the future.
the peer group used for assessing tabcorp’s relative tsr is based upon the following
companies.
tabcorp holdings limited Basis
s&p/asX 100 index
Exclusions
■■ property trusts;
■■ infrastructure groups; and
■■ mining companies
represented by the s&p global industry classification standards
of metals & mining, transportation infrastructure, Utilities and
real estate investment trusts.
the composition of the peer group may change as a result of specific external events,
such as mergers and acquisitions, capital returns, delistings and capital reconstruction.
the board remuneration committee has agreed guidelines for adjusting the peer group
following such events, and has the discretion to determine any adjustment to the peer
group of companies.
the table below sets out the percentage of performance rights that will vest depending
on tabcorp’s relative tsr ranking as at the applicable test date:
Tabcorp’s relative TSR ranking
Percentage of Performance Rights that will vest
below 50th percentile
at 50th percentile
0%
50%
above 50th and below 75th percentile pro-rata between 50% (at 50th percentile) and
100% (at 75th percentile)
at or above 75th percentile
100%
6.4.2.6 Accounting treatment
performance rights issued under the lti are expensed on a straight line basis over a three
year period, commencing from the grant date. Under accounting standards, tabcorp is
required to recognise an expense irrespective of whether the performance right ultimately
vests to the senior manager. a reversal of the expense is only recognised in the event the
performance rights lapse due to cessation of employment within the three year period.
the ‘remuneration of Kmp’ tables at section 7.1 (Figures 11c & 11d) reflect the accounting
expense recognised in the relevant financial year, not the total fair value of performance
rights allocated to the executive during the year, which is disclosed in Figure 12e.
6.4.2.7 LTI performance
in the 2012 financial year, there were three scheduled test dates for past allocations
under the lti (to the former managing director and chief executive officer as outlined
in section 5.1). the performance hurdle for vesting was not achieved for any allocations.
6.4.2.8 Prior year treatment of LTI under the Demerger
in the prior year, as a result of the demerger, the board determined to collapse all
existing employee share schemes prior to the implementation date of the demerger.
Under the lti, in relation to performance rights and performance options retained
by holders who were employees and former employees, the testing of relevant
performance conditions was accelerated to the date on which the scheme became
effective. the acceleration applied only to the pro rata portion of the unvested
performance rights that was equal to the proportion of the standard vesting period of
three years that had elapsed at 3 June 2011.
this testing schedule and vesting criteria are common practice adopted by the
companies in the s&p/asX100 index, which is consistent with tabcorp’s remuneration
philosophy (refer to section 3) and senior management remuneration framework (refer
to section 6.1).
any performance rights or performance options that did not vest upon testing lapsed,
and any performance rights that did not qualify for testing on a pro rated basis were
cancelled in the prior year. the fair value of all performance rights and performance
options were fully expensed at the date of accelerated testing or cancellation.
For performance rights which have vested, the company will issue or transfer ordinary
shares to the senior manager, with full voting and dividend rights corresponding to the
rights of all other holders of ordinary shares.
6.4.2.4 Lapsing conditions
performance rights that have not vested after testing will lapse.
6.4.2.5 Cessation of employment
all unvested performance rights will lapse immediately upon cessation of employment.
however, the board remuneration committee has discretion in special circumstances to
determine the number of performance rights retained and the terms applicable. special
circumstances include events such as retirement, redundancy, death and permanent disability.
in relation to the former managing director and chief executive officer, following the
demerger there were 232,136 performance rights left on foot (as referred to in section
5.1), which will continue to be tested at the respective test dates. the performance
hurdles applying in respect of those performance rights that remained on foot were
not adjusted to reflect the fact that following the demerger, the tsr on tabcorp shares
exclude (at least in part) the value of echo shares and distributions on such shares
during the testing period.
41
ConCise annual report 2012 Remuneration report (audited) (continued)
6.4.3. Appointment/retention incentives
6.4.3.1 Criteria for issue
restricted shares may be issued to senior managers as an incentive upon appointment
(either on joining tabcorp or transfer to a new position internally) or for retention.
these are ordinary shares in the company, and in order to act as a retention mechanism
are subject to time based restrictions of up to three years.
additionally, senior managers may also be issued performance rights upon
appointment. these instruments are issued under the lti and are subject to the same
performance hurdles and vesting conditions (refer section 6.4.2).
a combination of equity instruments such as restricted shares, subject to time based
restrictions, and performance rights, subject to performance and time based hurdles,
are employed to attract, retain and compensate senior management for equity forfeited.
no new appointment or retention incentives were provided to Kmp during the year
ended 30 June 2012.
6.4.3.2 Accounting treatment
the fair value of restricted shares is expensed as remuneration over the relevant
restriction period. at the date disposal restrictions and forfeiture provisions were
waived, the fair value of the restricted shares was fully expensed.
as performance rights are issued under the lti, they are expensed in the same manner
as described in section 6.4.2.6.
6.4.4 Policy prohibiting hedging
participants in the incentive plans (sti and lti) are restricted from hedging the value of
restricted shares and unvested performance rights, and must not enter into a derivative
arrangement in respect of the equity instruments granted under these plans. breaches
of the restriction will result in equity instruments being forfeited by the senior manager.
these prohibitions are included in tabcorp’s securities trading policy, available from the
corporate governance section of tabcorp’s website at www.tabcorp.com.au and in the
terms and conditions of the incentive plans.
equity instruments granted under the incentive plans can only be registered in the name
of the participant, are identified as non tradable on the share register, and cannot be
traded or transferred to another party until vested or until any trading restriction period
has expired (where applicable).
the board at its discretion can request a senior manager to provide a statutory
declaration that the senior manager has complied with this policy. during the year, the
board did not require any such declarations.
42
6.5 Executive director contract – Managing Director and
Chief Executive Officer
6.5.1 Current contract
david attenborough is managing director and chief executive officer. in accordance
with his employment contract, mr attenborough receives fixed remuneration and
the opportunity to receive variable remuneration through short term and long term
incentive arrangements. mr attenborough’s contract is for a continuing term capable
of being terminated on 6 months’ notice by mr attenborough and 12 months’ notice by
tabcorp. the contract does not require any termination payments, other than payment
in lieu of notice (if applicable).
6.5.1.1 Fixed remuneration
mr attenborough receives fixed remuneration (inclusive of statutory superannuation
contributions) of $900,000 per annum. during the 2012 financial year, the fixed
remuneration of mr attenborough has not increased, reflecting the timing of his
appointment to the position effective 9 June 2011.
6.5.1.2 Short term incentive
mr attenborough is eligible to receive a short term performance award based on his
individual performance and the group’s performance over the annual performance
review period. mr attenborough’s short term performance award is equivalent to
$600,000 at target and is delivered in cash, with the opportunity for mr attenborough
to voluntarily sacrifice part of the award into additional superannuation contributions.
this short term incentive is similar to that which applies to the sti in section 6.4.1.
6.5.1.3 Long term incentive
the company intends that the long term incentive component of mr attenborough’s
remuneration package will involve annual grants of performance rights or options,
which would be subject to a performance hurdle, with the grant of such performance
rights or options being subject to obtaining any necessary shareholder approvals at
the relevant time. this long term incentive is similar to that which applies to the lti in
section 6.4.2, other than as set out in this section.
tabcorp holdings limited since being appointed as managing director and chief executive officer, mr attenborough
has received one grant of performance rights under the tabcorp long term incentive
plan, which was approved by shareholders at the company’s 2011 annual general
meeting. the details follow:
Effective date
23 september 2011
Number
447,761
Test date
Expiry date
23 september 2014
23 september 2014
Upon termination of employment (other than at the discretion of the board in special
circumstances such as, but not limited to, death and permanent disablement), all
unvested performance rights or options will lapse immediately. in all circumstances
of termination of employment (other than for serious misconduct, in which case
all performance rights or options will lapse immediately), a pro-rata number of
performance rights or options based on the time served from effective date to test date
will be tested. in addition, partial lapse of unvested performance rights or options may
occur in circumstances where mr attenborough takes parental leave or extended unpaid
leave. in the event of a takeover offer for the company or any other transaction resulting
in a change of control of the company, the board is required to determine, in its absolute
discretion, the appropriate treatment regarding any unvested performance rights.
6.6 Executive contracts - KMP
6.6.1 Current contracts
the table below contains details of the contracts of the executives who are Kmps,
excluding the managing director and chief executive officer. the current contracts do
not provide for any termination payments, other than payment in lieu of notice.
Name
Position
Minimum notice period
(months)
Contract
duration
Executive
Tabcorp
mohan Jesudason managing director,
open ended
gaming & group
marketing
damien Johnston
chief Financial officer
open ended
Kerry Willcock
executive general
manager, corporate,
legal and regulatory
open ended
6
6
6
9
9
12
Further information relating to these performance rights is available in the notice of
meeting for the company’s 2011 annual general meeting.
6.6.2
Additional Compensation
6.5.1.4 Other benefits
mr attenborough’s contract includes benefits comprising of:
Living away from home expenses – mr attenborough receives reimbursement of up to
$3,500 per week for living away from home expenses (such as accommodation) until
9 april 2014.
Home leave - mr attenborough receives 4 return business class tickets for travel between
australia and south africa each year until 9 april 2014.
FBT – tabcorp bears the cost of any fringe benefits tax payable in respect of housing and
location assistance until 9 april 2014.
no new additional compensation arrangements were entered into during the year ended
30 June 2012. arrangements that were previously put in place are as follows.
Managing Director, Gaming & Group Marketing
mr Jesudason’s contract includes additional compensation that requires him to be an
employee of tabcorp on 30 september 2012 and satisfy certain business outcomes. the
maximum compensation payable is $1,000,000. it was put in place in 2010 and any
payment will be made during the financial year ending 30 June 2013.
43
ConCise annual report 2012 Remuneration report (audited) (continued)
Chief Financial Officer
mr Johnston’s contract includes additional compensation that requires him to be an
employee of tabcorp on 30 June 2012. the additional compensation of $182,000 was put
in place in 2008 and will be paid during the financial year ending 30 June 2013.
Executive General Manager – Corporate, Legal and Regulatory
ms Willcock’s contract includes additional compensation that requires her to be an
employee of tabcorp on 15 december 2012 and satisfy certain business outcomes. the
additional compensation of $525,000 was put in place in 2010 and will be paid during the
financial year ending 30 June 2013.
6.7 Performance of Tabcorp and shareholder wealth
tabcorp’s annual financial performance (which is presented on a pre impairment
basis to align with the performance measure for the sti, as outlined in section 6.4.1.2)
and indicators of shareholder wealth over the five year period ended 30 June 2012 are
highlighted in the graphs below. For periods up to and including the year ended
30 June 2011, the financial performance included echo entertainment group, as indicated
by the grey bars. the financial performance of tabcorp post the demerger of echo
entertainment group is indicated by the blue bars.
Figure 6: Net profit after tax (i)
Figure 7: EPS (basic) (i)
543.0
521.7
541.6
469.5
340.0
600
500
400
300
200
100
0
)
m
$
(
x
a
t
r
e
t
f
a
t
i
f
o
r
p
t
e
N
103.4
93.2
77.1
81.7
120
100
80
60
40
20
0
)
s
t
n
e
c
(
e
r
a
h
s
r
e
p
s
g
n
n
r
a
E
i
07/08
08/09
09/10
10/11
11/12
07/08
08/09
09/10
10/11
11/12
(i) the results for the 10/11 year are before both impairment of $358.0m and gain on demerger of echo
entertainment group, net of tax of $351.2m.
the results for the 07/08 year are before impairment of $707.6m.
44
Figure 8: Full year dividend in respect of each Figure 9: Company share price at the
financial year (includes interim, final and end of each financial year (iii)
special dividends) (ii)
12
d
e
k
n
a
r
f
y
l
l
u
f
e
r
a
h
s
r
e
p
s
t
n
e
C
100
94.0
90
80
70
60
50
40
30
20
10
0
65.0
55.0
43.0
24.0
10
9.81
)
$
(
e
c
i
r
p
e
r
a
h
S
8
6
4
2
0
7.16
6.33
3.29
2.93
07/08
08/09
09/10
10/11
11/12
07/08
08/09
09/10
10/11
11/12
(ii) the 07/08 year includes the special dividend declared in august 2008 of 47.0 cents per share. this dividend
was declared as a substitute for the final dividend for the 07/08 year.
(iii) the closing share price for 10/11 is after the demerger of echo entertainment group and before the declaration of
the final dividend which was based on group earnings pre-demerger inclusive of echo entertainment group.
Figure 10 shows tabcorp’s tsr performance relative to the peer group of companies at test
dates during the test periods for currently existing lti allocations made both pre and post
the demerger, together with future test dates.
Figure 10: Current LTI allocations
47.6
Grant date
Allocation to
Expiry date First
Second
Third
Relative TSR percentile ranking at
test date /Future test date
Allocations post Demerger
23 sep 2011
senior
management
23 sep 2014 23 Sep 2014 n/a
26 oct 2011 md&ceo
23 sep 2014 23 Sep 2014 n/a
n/a
n/a
Allocations pre Demerger
23 oct 2008 Former md&ceo
15 sep 2015
19 oct 2009 Former md&ceo
17 Jun 2016
18th
percentile
18th
percentile
18th
percentile
15 Sep 2012
17 Dec 2012
17 Jun 2013
25 oct 2010
Former md&ceo
14 sep 2017
14 Sep 2014 n/a
n/a
tabcorp holdings limited
7. Remuneration tables
7.1 Remuneration of KMP
Figure 11A: KMP remuneration for the year ended 30 June 2012 –
Non Executive Directors
Short term
Salary & fees (i)
$
Post
employment
Superannuation
$
KMP
Current
paula dwyer
elmer Funke Kupper (ii)
Jane hemstritch
Justin milne (iii)
Zygmunt switkowski
Future
steven gregg (iv)
Total
412,500
73,750
167,500
147,500
172,500
101,666
1,075,416
Total
$
449,625
80,388
182,575
160,775
188,025
37,125
6,638
15,075
13,275
15,525
8,850
96,488
110,516
1,171,904
(i) comprises salary and fees, including fees earned whilst an observer.
(ii) appointed as an observer on 1 January 2012, and commenced as a director and Kmp on 25 June 2012,
following the receipt of all necessary regulatory approvals. total remuneration for the period whilst a
Kmp was $3,100.
(iii) appointed as an observer on 18 october 2010, and commenced as a director and Kmp on 1 august 2011,
following the receipt of all necessary regulatory approvals. total remuneration for the period whilst a
Kmp was $147,377.
(iv) appointed as an observer on 14 october 2011, and commenced as a director and Kmp on 18 July 2012
following the receipt of all necessary regulatory approvals. total remuneration for the period whilst a
Kmp was nil.
Figure 11B: KMP remuneration for the year ended 30 June 2011 –
Non Executive Directors
KMP
Current
paula dwyer
Jane hemstritch
Zygmunt switkowski
Future
Justin milne (ii)
Former
John story (iii)
John o’neill (iii)
brett paton (iii)
Total
Short term
Salary & fees (i)
$
Post
employment
Superannuation
$
297,500
200,379
210,076
26,775
18,034
18,907
Total
$
324,275
218,413
228,983
116,515
10,486
127,001
401,591
176,136
216,136
36,143
15,852
19,452
437,734
191,988
235,588
1,618,333
145,649
1,763,982
(i) comprises salary and fees, including fees earned whilst an observer.
(ii) appointed as an observer on 18 october 2010, and commenced as a director and Kmp on 1 august 2011
following the receipt of all necessary regulatory approvals. total remuneration for the period whilst a
Kmp was nil.
(iii) ceased as a Kmp on 8 June 2011 as a result of the demerger to join echo.
45
ConCise annual report 2012
Remuneration report (audited) (continued)
Figure 11C: KMP remuneration for the year ended 30 June 2012 – Executives
KMP
Salary & fees (i)
$
Bonus
$
Non-
monetary
benefits (ii)
$
Other (iii)
$
Short term
Long
term
Long
service
leave
$
Post
employment
Superannuation
$
Total
excluding
charge for
share based
allocations
$
Charge for
share based
allocations (iv)
Performance
Rights
$
Performance
related (v)
%
Termination
benefits
$
Total
$
Current Executive Director
david attenborough (vi)
Current Executives
mohan Jesudason
damien Johnston (vii)
Kerry Willcock
Total
891,191
690,000
409,566
-
4,424
15,775
2,010,956
210,683
2,221,639
629,238
220,000
577,327
390,000
492,922
266,000
-
-
-
850,000
182,000
16,742
15,458
525,000
28,082
15,775
15,775
15,775
1,731,755
1,180,560
1,327,779
100,308
1,832,063
83,333
1,263,893
72,916
1,400,695
2,590,678
1,566,000
409,566 1,557,000
64,706
63,100
6,251,050
467,240
6,718,290
41%
17%
37%
24%
-
-
-
-
-
(i) comprises salary, salary sacrificed benefits (including superannuation and motor vehicle novated leases) and annual leave expense.
(ii) comprises the cost to the company for providing relocation expenses, living away from home benefits, accommodation, car parking, and airfares, where applicable.
(iii) comprises additional compensation as outlined in section 6.6.2, and will be paid during the year ending 30 June 2013.
(iv) represents the fair value of share based payments expensed by the company. Value only accrues to the Kmp when conditions have been met.
(v) represents the sum of bonus and performance rights as a percentage of total remuneration, excluding termination payments.
(vi) non-monetary benefits include increased Fbt charges relating to living away from home expenses. these benefits are outlined in section 6.5.1.4.
(vii) commenced as Kmp on 12 July 2011, following the receipt of all necessary regulatory approvals. total remuneration for the period whilst a Kmp was $1,246,996.
the amounts that appear under the heading ‘charge for share based allocations’ are the amounts required under the accounting standards to be expensed by the company in respect of
the allocation of long term incentives and restricted shares to Kmp. each year, the board may decide to allocate long term incentives to executives. currently, these long term incentives
are allocated in the form of performance rights, which are expensed by the company over the three year vesting period. Figures 11c and 11d represent the expenses incurred during
the year in respect of current and past incentive allocations. these amounts are therefore not amounts actually received by executives during the year. Whether executives receive
any value from the allocation of long term incentives in the future will depend on the performance of the company relative to a peer group of listed companies. the mechanism which
determines whether or not long term incentives vest in the future is described in sections 6.4.2 and 6.5.1.3.
46
tabcorp holdings limited
Figure 11D: KMP remuneration for the year ended 30 June 2011 – Executives
Short term
Long
term
Post
Employment
Charge for share based
allocations(iv)
Accelerated Charge for
Share based payments (v)
Salary &
fees (i)
$
Non-
monetary
benefits (ii)
$
Bonus
$
Other (iii)
$
Long
service
leave
$
Super-
annuation
$
Total
excluding
charge for
share based
allocations
$
Performance
Options &
Rights
Restricted
Shares
Performance
Options &
Rights
Restricted
shares &
former LTI
loans
$
$
$
$
Performance
related (vi)
%
Termination
benefits
$
Total
$
717,685
470,000
257,539
-
2,040
15,199
1,462,463
22,109
201,387
66,326
69,444
1,821,729
638,249
514,436
475,000
350,000
13,322 300,000
-
-
41,863
26,556
15,199
15,199
1,483,633
906,191
351,204
244,314
67,811
23,868
1,386,938 2,475,000
-
-
-
-
38,422
921
131,022
-
(58,106)
15,199
3,819,031
1,330,928
-
-
-
-
1,272,356
728,771
379,651
1,268,182
587,121
253,636
5,705,897 5,902,807
557,365
30,779
-
859,005
-
-
-
300,000
2,797
17,399
3,972
74,943
-
15,199
14,278
91,194
3,100,700
1,379,269
651,537
12,933,846
182,292
417,120
107,512
2,655,479
119,508
-
-
320,895
27%
29%
38%
18%
-
-
-
-
555,022
394,171
422,584
-
2,812,443
1,544,676
-
(294,357)
500,000
661,991
253,425
2,136,578
131,022
-
-
4,855,602
78%
3,000,000
44,533
-
-
536,561
3,947,033
2,458,380
1,012,474
18,583,359
37%
41%
36%
-
-
-
3,000,000
KMP
Current Executive Director
david attenborough (vii) (viii)
Current Executives
mohan Jesudason
Kerry Willcock
Future Executive
damien Johnston (ix)
Former Executive Director
elmer Funke Kupper (x)
Former Executives
larry mullin (vii) (xi) (xii)
matt bekier (xii)
louise marshall (xiii)
Total
(i) comprises salary, salary sacrificed benefits (including superannuation, motor vehicle novated leases and school fees) and annual leave expense.
(ii) comprises the cost to the company for providing low interest loan to acquire shares in the company pursuant to issues made under a previous employee share plan, relocation expenses, living away from home benefits, car parking,
accommodation, airfares and travel costs, where applicable.
(iii) comprises cash appointment incentives and retention payments, where applicable.
(iv) represents the fair value of share based payments expensed by the company, which includes amounts expensed on cessation of employment where equity instruments are retained, and reversal of previously recognised remuneration
on cessation of employment where equity instruments lapse. Value only accrues to the Kmp when conditions have been met.
(v) as a result of the demerger, the remaining fair value of share based payments not already recognised was expensed where the date of testing was accelerated, the equity instruments were cancelled or disposal restrictions and
forfeiture provisions were waived. the balance includes the reversal of previously recognised remuneration where equity instruments lapse on cessation of employment resulting from the demerger.
(vi) represents the sum of bonus, performance options and performance rights (excluding accelerated charge) as a percentage of total remuneration, excluding termination payments.
(vii) share based allocations include restricted shares that were granted as appointment incentives.
(viii) commenced employment on 9 april 2010, and as a Kmp on 29 July 2010 following the receipt of all necessary regulatory approvals. total remuneration for the period whilst a Kmp was $1,698,708. non-monetary benefits restated for
certain costs not previously included of $78,223.
(ix) commenced in role on 9 June 2011. salary & fees reflects increase in annual leave accrual due to new salary level. commenced as a Kmp on 12 July 2011 following the receipt of all necessary regulatory approvals. total remuneration for
the period whilst a Kmp was nil.
(x) ceased employment and as a Kmp on 8 June 2011. in addition to the amounts disclosed above, payment of annual leave on cessation amounted to $188,335.
(xi) received cash in lieu of superannuation, due to being a senior executive temporary resident of australia. these amounts are disclosed under salary and fees.
(xii) ceased employment and as a Kmp on 8 June 2011 as a result of the demerger to join echo.
(xiii) ceased as a Kmp on 8 June 2011 as a result of the demerger. the remuneration report for the year ended 30 June 2011 included accrued termination benefits of $337,500. no termination benefits were paid, as ms marshall joined echo
following the demerger.
the amounts that appear under the heading ‘accelerated charge for share based payments’ are the amount required under the accounting standards to be expensed by the company,
in respect of the allocation of long term incentives and restricted shares to Kmp, resulting from the collapsing of the company’s employee share schemes prior to the implementation
of the demerger. these amounts are therefore not amounts actually received by executives during the year.
47
ConCise annual report 2012
Remuneration report (audited) (continued)
7.2 Other remuneration tables
Figure 12A: Short term incentive (STI) achieved
For the year ended 30 June 2012
KMP
david attenborough
mohan Jesudason
damien Johnston
Kerry Willcock
Actual STI
payment $
690,000
220,000
390,000
266,000
Actual STI
payment
as a % of
maximum
STI (i)
51%
23%
58%
45%
Actual STI
payment
as a % of
target STI
STI not
achieved
as a % of
target STI
115%
51%
130%
101%
-
49%
-
-
KMP
david attenborough
mohan Jesudason
damien Johnston
Kerry Willcock
Total
Figure 12C: Performance Rights granted during the year
For the year ended 30 June 2012
Rights granted
23 September 2011
Number
-
269,485
223,880
195,895
689,260
Rights granted
26 October 2011
Number
447,761
-
-
-
447,761
(i) maximum sti for Kmps may vary, as it is subject to board discretion.
Figure 12D: Performance Rights vested and exercised during the year
For the year ended 30 June 2012
Figure 12B: Terms and conditions of Performance Rights granted during the year
no performance rights vested or were exercised during the current year.
For the year ended 30 June 2012
Fair value
at grant
date
$
Exercise
price
$
Exercise and
expiry date
Last exercise/
expiry date
1.34
1.49
- 23 september 2014 23 september 2014
- 23 september 2014 23 september 2014
Grant date
23 september 2011 (i)
26 october 2011 (i)
(i) terms and conditions of the performance rights are the same. grant date differs due to performance rights
granted to the managing director and chief executive officer which required shareholder approval at the
agm. Fair value under accounting standards is determined at grant date.
Figure 12E: Value of Performance Rights granted as part of remuneration
During the year ended 30 June 2012
KMP
david attenborough
mohan Jesudason
damien Johnston
Kerry Willcock
Total
Granted (i)
$
667,164
361,110
299,999
262,499
1,590,772
Exercised
$
Lapsed
$
As a % of
remuneration(ii)
%
-
-
-
-
-
-
-
-
-
-
9%
5%
7%
5%
(i) represents the value of performance rights granted during the year. For details on the valuation of the
performance rights, including models and assumptions used, refer to note 23 of the tabcorp Financial report.
(ii) represents the fair value of performance rights expensed during the year as a percentage of total
remuneration, excluding termination payments. total remuneration includes share based payments.
48
tabcorp holdings limited
Income statement
For the year ended 30 June 2012
revenue
other income
government taxes and levies
commissions and fees
employment costs
depreciation and amortisation
property costs
advertising and promotions
other expenses
impairment
Profit before income tax expense and net finance costs
Finance income
Finance costs
Profit from continuing operations before income tax expense
income tax expense
Profit/(loss) from continuing operations after income tax
Discontinued operations
profit from discontinued operations and net gain on demerger of echo
entertainment group, net of tax
Net profit after tax
Other comprehensive income
change in fair value of cash flow hedges taken to equity
recycling of discontinued cash flow hedges to income statement
actuarial gain/(loss) on defined benefit plan
income tax benefit on items of other comprehensive income
Other comprehensive income/(loss) for the period, net of income tax
Total comprehensive income for the period
Earnings per share:
From continuing operations
basic earnings per share
diluted earnings per share
Total attributable to shareholders of Tabcorp
basic earnings per share
diluted earnings per share
2012
$m
3,038.5
15.0
(892.8)
(1,004.4)
(151.5)
(133.5)
(39.7)
(35.4)
(204.5)
-
591.7
6.3
(101.0)
497.0
(157.0)
340.0
-
340.0
(45.8)
-
(1.8)
14.2
(33.4)
306.6
47.6
47.5
47.6
47.5
2011
$m
2,947.5
35.7
(887.5)
(977.5)
(163.4)
(124.3)
(38.5)
(30.9)
(198.6)
(358.0)
204.5
9.7
(144.1)
70.1
(126.5)
(56.4)
591.2
534.8
7.1
(40.5)
1.3
9.6
(22.5)
512.3
(8.5)
(8.5)
80.7
80.4
in June 2011, tabcorp demerged echo entertainment group. as a result, certain items in the income statement are not directly
comparable between years.
49
ConCise annual report 2012 Balance sheet
as at 30 June 2012
Current assets
cash and cash equivalents
receivables
inventories
property, plant and equipment
other
Total current assets
Non current assets
property, plant and equipment
intangible assets - licences
intangible assets - other
receivables
derivative financial instruments
other
Total non current assets
TOTAL ASSETS
Current liabilities
payables
interest bearing liabilities
current tax liabilities
provisions
derivative financial instruments
other
Total current liabilities
Non current liabilities
payables
interest bearing liabilities
deferred tax liabilities
provisions
derivative financial instruments
other
Total non current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
issued capital
retained earnings/(accumulated losses)
reserves
TOTAL EQUITY
50
2012
$m
151.4
52.1
4.8
4.9
15.0
228.2
313.3
814.8
1,803.2
58.8
17.7
13.0
3,020.8
3,249.0
384.3
-
42.7
31.5
19.8
11.9
490.2
-
1,224.0
63.1
5.8
59.5
0.6
1,353.0
1,843.2
1,405.8
2,084.0
23.4
(701.6)
1,405.8
2011
$m
147.1
80.1
9.4
-
14.3
250.9
280.5
430.2
1,805.7
56.8
-
14.4
2,587.6
2,838.5
367.7
449.8
59.5
65.9
3.7
5.4
952.0
75.0
515.2
63.3
6.2
15.1
0.8
675.6
1,627.6
1,210.9
1,973.0
(91.9)
(670.2)
1,210.9
tabcorp holdings limited Cash flow statement
For the year ended 30 June 2012
Cash flows from operating activities
net cash receipts in the course of operations
payments to suppliers, service providers and employees
payment of government levies, betting taxes and gst
Finance income received
Finance costs paid
income tax paid
Net cash flows from operating activities
Cash flows from investing activities
payment for property, plant and equipment and intangibles
proceeds from sale of property, plant and equipment and intangibles
loan repayments received from customers
loans advanced to customers
Net cash flows used in investing activities
Cash flows from financing activities
proceeds from issue of shares
payment of transaction costs for share issue
payment of transaction costs for capital reduction
payment of transaction costs for demerger
net cash flows from revolving bank facilities
proceeds from long term borrowings
repayment of long term borrowings
cash reduction through demerger of entities
dividends paid
payments for on-market share purchase
proceeds from sale of treasury shares
Net cash flows used in financing activities
net increase/(decrease) in cash held
cash at beginning of year
Cash at end of year
2012
$m
3,127.0
(1,572.6)
(765.7)
6.2
(111.1)
(158.3)
525.5
(631.0)
1.2
0.8
(5.0)
(634.0)
-
-
(0.8)
(34.7)
250.0
460.5
(450.0)
-
(111.4)
(0.8)
-
112.8
4.3
147.1
151.4
2011
$m
4,439.3
(2,357.2)
(1,075.2)
8.1
(159.2)
(197.7)
658.1
(595.6)
2.1
-
(47.6)
(641.1)
427.7
(12.7)
(21.1)
(64.7)
(210.0)
1,090.0
(938.6)
(124.5)
(269.7)
(9.8)
1.6
(131.8)
(114.8)
261.9
147.1
the cash flow statement for the prior year includes the cash flows of the echo entertainment group for the period up to the demerger date.
51
ConCise annual report 2012 Statement of changes in equity
For the year ended 30 June 2012
2012
Balance at beginning of year
profit for the period
other comprehensive income/(loss)
Total comprehensive income for the period
dividends paid
dividend reinvestment plan
transaction costs for capital reduction
restricted shares issued
share based payments expense
Balance at end of year
2011
Balance at beginning of year
profit for the period
other comprehensive income/(loss)
Total comprehensive income for the period
dividends paid
dividend reinvestment plan
echo entertainment group demerger distribution
ordinary shares issued
transaction costs for share issue and capital reduction
transfers
restricted shares issued
share based payments expense
payment on performance rights cancellation
net outlay to purchase shares (i)
disposal of shares
Balance at end of year
Issued capital
Ordinary
shares
$m
1,973.0
-
-
-
-
112.0
(0.6)
-
-
2,084.4
3,737.6
-
-
-
-
47.9
(2,219.8)
427.7
(24.4)
12.8
-
-
-
(8.8)
-
1,973.0
Treasury
shares
$m
-
-
-
-
-
-
-
(0.8)
0.4
(0.4)
(3.7)
-
-
-
-
-
-
-
-
-
(1.0)
3.1
-
-
1.6
-
Retained
earnings/
(accumulated
losses)
$m
Net
unrealised
losses
reserve
$m
Employee
equity
benefit
reserve
$m
Demerger
reserve
$m
(91.9)
340.0
(1.3)
338.7
(223.4)
-
-
-
-
23.4
(310.0)
534.8
0.9
535.7
(317.6)
-
-
-
-
-
-
-
-
-
-
(91.9)
(0.3)
-
(32.1)
(32.1)
-
-
-
-
-
(32.4)
23.1
-
(23.4)
(23.4)
-
-
-
-
-
-
-
-
-
-
-
(0.3)
-
-
-
-
-
-
-
-
0.7
0.7
7.7
-
-
-
-
-
-
-
-
(12.8)
-
6.6
(1.5)
-
-
-
(669.9)
-
-
-
-
-
-
-
-
(669.9)
-
-
-
-
-
-
(669.9)
-
-
-
-
-
-
-
-
(669.9)
Total
equity
$m
1,210.9
340.0
(33.4)
306.6
(223.4)
112.0
(0.6)
(0.8)
1.1
1,405.8
3,454.7
534.8
(22.5)
512.3
(317.6)
47.9
(2,889.7)
427.7
(24.4)
-
(1.0)
9.7
(1.5)
(8.8)
1.6
1,210.9
(i) net outlay for the purchase of company shares for performance rights exercised by certain executives in lieu of issuing new share capital.
52
tabcorp holdings limited Notes to the concise financial statements
For the year ended 30 June 2012
1. Accounting policies
this concise financial report has been prepared in accordance with the corporations
act 2001 and accounting standard aasb 1039 concise Financial reports. the financial
statements and specific disclosures required by aasb 1039 are an extract of, and
have been derived from the group’s full financial report for the financial year. other
information included in the concise financial report is consistent with the group’s full
financial report.
all amounts are presented in australian dollars.
a full description of the accounting policies adopted by the group is provided in the
2012 financial statements which form part of the full financial report.
2. Dividends
Dividends declared and paid during the year on ordinary
shares:
(a) interim dividend for 2012 of 13.0 cents per share paid on
26 march 2012 (2011: 24.0 cents per share paid on
21 march 2011)
(b) Final dividend for 2011 of 19.0 cents per share paid on
23 september 2011 (2010: 25.0 cents per share paid on
20 september 2010)
Dividends declared after balance date
since the end of the financial year, the directors declared
the following dividend:
Final dividend for 2012 - 11.0 cents per share
(2011: 19.0 cents per share)
2012
$m
2011
$m
92.7
164.4
130.7
223.4
153.2
317.6
80.3
130.7
the financial effect of this dividend has not been brought to account in the financial
statements and will be recognised in subsequent financial reports (refer to note 4).
dividends on ordinary shares are fully franked at a tax rate of 30%.
3. Segment information
the group’s operating segments have been determined based on the internal
management reporting structure and the nature of products and services provided by
the group. they reflect the business level at which financial information is provided
to management for decision making regarding resource allocation and performance
assessment.
the group has four operating segments:
Wagering
totalisator and fixed odds betting activities.
Media & International
national and international broadcasting of racing and
sporting events.
Gaming
Keno
electronic gaming machine operations and services in
licensed hotels and clubs.
Keno operations in licensed clubs and hotels within Victoria,
nsW and Queensland.
53
ConCise annual report 2012
Notes to the concise financial statements (continued)
For the year ended 30 June 2012
3. Segment information (continued)
2012
revenue - external
revenue - intersegment
segment revenue
Segment profit before
impairment, interest and tax
depreciation and
amortisation
impairment losses
recognised in the income
statement
capital expenditure (i)
Wagering
$m
Media &
International
$m
Gaming
$m
1,637.4
-
1,637.4
139.1
51.1
190.2
1,078.9
-
1,078.9
Keno
$m
183.1
-
183.1
Total
$m
3,038.5
51.1
3,089.6
242.2
57.1
244.1
48.3
591.7
71.3
8.6
38.5
15.1
133.5
-
487.0
-
16.9
-
33.0
-
31.1
-
568.0
(i) Wagering capital expenditure includes $418.5 million for the Victorian wagering and betting licence.
2011
revenue - external
revenue - intersegment
segment revenue
Segment profit before
impairment, interest and tax
depreciation and
amortisation
impairment losses
recognised in the income
statement
capital expenditure (ii)
1,569.1
-
1,569.1
130.5
48.8
179.3
1,077.4
-
1,077.4
169.6
-
169.6
2,946.6
48.8
2,995.4
220.2
52.8
241.4
48.8
563.2
67.3
7.0
38.2
11.8
124.3
(358.0)
217.8
-
9.9
-
26.1
-
75.8
(358.0)
329.6
(ii) Wagering capital expenditure includes $150.0 million for the nsW trackside concessions.
Keno capital expenditure includes $61.0 million for the Victorian Keno licence.
Reconciliation of reportable segment
revenue and profit
(a) Revenue
segment revenue
Unallocated items
intersegment revenue elimination
consolidated revenue
(b) Segment profit before impairment,
interest and tax
impairment
Profit before interest and tax
Unallocated items:
- finance income
- other income and expenses
- finance costs
profit from continuing operations before
income tax expense
2012
$m
2011
$m
3,089.6
-
(51.1)
3,038.5
591.7
-
591.7
6.3
-
(101.0)
497.0
2,995.4
0.9
(48.8)
2,947.5
563.2
(358.0)
205.2
9.7
(0.7)
(144.1)
70.1
4. Subsequent events
(a) Dividends
since 30 June 2012, the directors have declared a final dividend of 11.0 cents per
ordinary share. the total amount of the final dividend is $80.3 million. this has
not been provided for in the 30 June 2012 financial statements (refer to note 2).
(b) GST refund
since 30 June 2012, the group received confirmation that the australian
taxation office has allowed a claim for refunds of gst paid by the group’s
Victorian and nsW wagering businesses. the refunds will have a net profit
after tax impact of $14.3 million to the group, which will be recognised in the
next financial year. the refunds relate to gst paid between may 2006 and
march 2010 on wagering turnover derived from overseas based customers.
54
tabcorp holdings limited Directors’ declaration
in the opinion of the directors of tabcorp holdings limited the accompanying
concise financial report of the consolidated entity, comprising tabcorp
holdings limited and its controlled entities for the year ended 30 June 2012:
(a) has been derived from or is consistent with the full financial report
for the financial year; and
(b)
complies with accounting standard aasb 1039 concise Financial
reports.
this declaration has been made after receiving the declarations required to be
made to the directors in accordance with sections 295a of the corporations act
2001.
signed in accordance with a resolution of directors.
Paula Dwyer
chairman
David Attenborough
managing director and chief executive officer
melbourne
9 august 2012
55
ConCise annual report 2012
Independent audit report
56
tabcorp holdings limited Five year review
total revenue
ebitda1
profit before interest and tax
profit after income tax attributable to
members of parent entity2
dividend3
cash and deposits
other current assets
intangible assets - licences
intangible assets - other
other non current assets
total assets
current interest bearing liabilities
other current liabilities
non current interest bearing liabilities
other non current liabilities
total liabilities
shareholders' funds
capital expenditure - payments
earnings per share
dividends per share3
operating cash flow per share4
return on shareholders' funds
net assets per share
Revenue5
casinos6
Wagering
media & international7
gaming
Keno8
Unallocated/elimination
normalisation adjustment
Total
2012
$m
3,038.5
725.2
591.7
340.0
173.0
151.4
76.8
814.8
1,803.2
402.8
3,249.0
-
490.2
1,224.0
129.0
1,843.2
1,405.8
631.0
cents
47.6
24.0
(14.8)
25.9%
$1.97
$m
-
1,637.4
190.2
1,078.9
183.1
(51.1)
-
3,038.5
2011
$m
4,469.6
774.7
856.3
534.8
295.1
147.1
103.8
430.2
1,805.7
351.7
2,838.5
449.8
502.2
515.2
160.4
1,627.6
1,210.9
595.6
cents
80.7
43.0
9.4
18.5%
$1.83
$m
1,439.4
1,569.1
179.3
1,077.4
169.6
(53.0)
87.8
4,469.6
2010
$m
4,219.8
998.0
794.4
2009
$m
4,211.3
1,072.6
895.4
469.5
335.5
521.7
367.6
261.9
119.2
652.6
3,627.5
1,796.5
6,457.7
175.0
671.0
1,816.8
340.2
3,003.0
3,454.7
408.1
cents
77.1
55.0
48.2
13.9%
$5.68
$m
1,371.9
1,553.5
164.0
1,037.2
157.2
(51.8)
(12.2)
4,219.8
291.4
111.8
688.1
3,641.8
1,606.3
6,339.4
-
697.0
2,040.9
324.7
3,062.6
3,276.8
256.5
cents
93.2
65.0
74.3
17.8%
$5.86
$m
1,357.7
1,593.4
-
1,069.4
156.1
(5.9)
40.6
4,211.3
2008
$m
3,992.5
367.6
174.7
(164.6)
493.4
173.2
128.3
723.9
3,506.8
1,589.5
6,121.7
-
615.8
2,269.7
478.9
3,364.4
2,757.3
222.0
cents
(31.4)
94.0
82.0
-5.1%
$5.25
$m
1,323.2
1,477.6
-
1,154.2
-
(3.9)
41.4
3,992.5
1
2011 includes impairment of $358.0 million and 2008 includes impairment of $707.6 million.
2 2011 includes net gain on demerger of echo entertainment group of $351.2 million.
3
4
dividends attributable to the year, but which may be payable after the end of the period. 2008 includes
a special dividend declared in august 2008.
net operating cash flow per the statement of cashflows does not include payments for property plant
and equipment and intangibles, whereas these items are included in the calculation for the operating
cash flow per share ratio. 2012 includes payment for the Victorian Wagering and betting licence of
$418.5 million.
5 revenue includes both external and internal revenue.
6 the casino revenues are normalised.
7
8
included in Wagering prior to 2010.
included in gaming prior to 2009.
57
ConCise annual report 2012
Shareholder information as at 17 august 2012
Ordinary shares
tabcorp has on issue 730,113,969 fully paid ordinary shares. the issued capital has
increased from last year due to ordinary shares issued pursuant to tabcorp’s dividend
reinvestment plan. there currently isn’t a share buy-back in operation in respect of the
company’s ordinary shares.
Tabcorp Bonds
tabcorp has on issue 2,844,712 tabcorp bonds which are five year debt securities listed
on the australian securities exchange (asX) under the code tahha. they were initially
issued on 1 may 2009 to successful applicants pursuant to the tabcorp bonds prospectus
dated 1 april 2009.
holders of tabcorp bonds are entitled to receive quarterly interest payments and $100
cash per tabcorp bond upon redemption.
the interest rate is equal to the three month bank bill rate plus a fixed margin of 4.25% p.a.
Tabcorp Subordinated Notes
tabcorp has on issue 2,500,000 tabcorp subordinated notes which are unsecured,
subordinated, cumulative debt securities listed on the asX under the code tahhb. they
were initially issued on 22 march 2012 to successful applicants pursuant to the tabcorp
subordinated notes prospectus dated 22 February 2012.
holders of tabcorp subordinated notes are entitled to receive quarterly interest
payments (subject to deferral) and $100 cash per tabcorp subordinated note upon
redemption.
the interest rate is equal to the three month bank bill rate plus a fixed margin of 4.00% p.a.
Shareholding restrictions
gambling legislation in Victoria, new south Wales and Queensland and part 2 (rules 131
to 139) of the constitution of the company contain provisions regulating the ownership
of shares issued in the company and the extent of voting rights (as applicable). in
particular, it should be noted that a person cannot have voting power in the company
of more than 10%, without obtaining regulatory and ministerial approvals. the relevant
minister has the power to request information to determine whether a person has a
prohibited shareholding interest. if a person fails to furnish these details within the time
specified or, in the opinion of the minister, the information is false or misleading, then
the minister can declare the voting rights of those shares suspended.
58
Voting rights
all ordinary shares issued by tabcorp holdings limited carry one vote per share. tabcorp
bonds, subordinated notes and performance rights do not carry any rights to vote
at general meetings of the company’s shareholders. Failure to comply with certain
provisions of the Victorian gambling regulation act 2003 or tabcorp’s constitution,
including the shareholder restrictions discussed above, may result in suspension of
voting rights.
Shareholder Benefits Scheme
tabcorp introduced a benefits scheme for shareholders in april 2004. the scheme
provides free entry into nominated thoroughbred, harness and greyhound racing events.
the current benefits expire on 31 march 2013. details of the scheme and its terms and
conditions are available on tabcorp’s website, www.tabcorp.com.au.
Substantial shareholders
the following is a summary of the current substantial shareholders pursuant to notices
lodged with the asX in accordance with section 671b of the corporations act 2001:
Name
national australia bank limited
Jcp investment partners pty ltd
northcape capital pty ltd
blackrock investment
management (australia) ltd
Date of interest
17 august 2012
16 august 2012
14 June 2012
Number of
ordinary shares (i)
39,980,189
39,695,487
36,637,610
% of issued
capital (ii)
5.476
5.44
5.02
19 september 2011
35,334,738
5.14
(i) as disclosed in the last notice lodged with the asX by the substantial shareholder.
(ii) the percentage set out in the notice lodged with the asX is based on the total issued share capital of tabcorp
at the date of interest.
Marketable parcel
there were 41,076 shareholders holding less than a marketable parcel of ordinary shares
($500, equivalent to 175 ordinary shares) based on a market price of $2.86 at the close of
trading on 17 august 2012.
tabcorp holdings limited Twenty largest registered shareholders*
Twenty largest registered bondholders*
Investor group name
hsbc custody nominees (australia) limited
J p morgan nominees australia limited
national nominees limited
citicorp nominees pty limited
cogent nominees pty limited
Ubs Wealth management australia nominees pty ltd
amp life limited
bnp paribas noms pty ltd
rbc dexia investor services australia nominees pty limited
Ubs nominees pty ltd
Woodross nominees pty ltd
argo investments limited
bond street custodians limited
Questor Financial services limited
Queensland investment corporation
australian United investment co limited
bainpro nominees pty limited
cs Fourth nominees pty ltd
merrill lynch (australia) nominees pty ltd
glenn hargraves investments pty ltd
Total of top 20 registered shareholders
Number of
ordinary shares
144,858,869
144,810,645
106,537,021
32,444,424
15,375,879
6,227,691
5,993,413
5,863,234
4,204,249
3,138,164
2,755,206
2,631,388
2,361,104
2,306,507
2,054,655
2,000,000
1,962,200
1,446,324
1,418,254
900,000
489,289,227
% of issued
capital
19.84
19.83
14.59
4.44
2.11
0.85
0.82
0.80
0.58
0.43
0.38
0.36
0.32
0.32
0.28
0.27
0.27
0.20
0.19
0.12
67.02
Investor group name
Ubs Wealth management australia nominees pty ltd
national nominees limited
Ubs nominees pty ltd
hsbc custody nominees (australia) limited
citicorp nominees pty limited
J p morgan nominees australia limited
Questor Financial services limited
dimbulu pty ltd
anZ trustees limited
First option credit Union ltd
australian leaders Fund
cogent nominees pty limited
link enterprises (international) pty ltd
m F custodians ltd
avanteos investments limited
invia custodian pty limited
Jilliby pty ltd
nulis nominees (australia) limited
delmos pty ltd
rbc investor service australia nominees pty limited
Total of top 20 registered bondholders
Number of
Tabcorp Bonds
198,165
137,781
104,236
102,069
72,069
52,500
48,178
20,000
19,000
18,852
14,500
14,204
10,000
9,418
7,871
7,600
7,500
7,454
7,000
6,000
864,397
% of total
Bonds
6.97
4.84
3.66
3.59
2.53
1.85
1.69
0.70
0.67
0.66
0.51
0.50
0.35
0.33
0.28
0.27
0.26
0.26
0.25
0.21
30.39
* on a grouped basis
* on a grouped basis
Distribution of securities held
Ordinary Shares(i)
Tabcorp Bonds
Number of
securities held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
holders
89,201
38,330
5,616
3,206
136
136,489
Number of
securities
29,481,315
83,279,991
40,312,072
67,661,498
509,379,093
730,113,969
Number of
holders
6,237
225
15
10
3
6,490
Number of
securities
1,452,414
514,652
106,003
331,461
440,182
2,844,712
Tabcorp Subordinated Notes
Number of
securities
821,225
492,014
220,023
470,924
495,814
2,500,000
Number of
holders
3,047
205
28
13
1
3,294
Performance Rights (ii)
Number of
holders
-
-
-
2
8
10
Number of
securities
-
-
-
171,091
1,722,954
1,894,045
(i) ordinary shares includes restricted shares and deferred shares offered to employees under the company’s incentive arrangements
(ii) rights were issued pursuant to the company’s long term incentive arrangements.
refer to the remuneration report on pages 35 to 48 for more information about the company’s incentive arrangements.
59
ConCise annual report 2012
Shareholder information as at 17 august 2012
(continued)
Twenty largest registered noteholders*
Investor group name
Ubs Wealth management australia nominees pty ltd
citicorp nominees pty limited
national nominees limited
J p morgan nominees australia limited
Ubs nominees pty ltd
hsbc custody nominees (australia) limited
h & tsc pty limited
m F custodians ltd
cogent nominees pty limited
arrowcrest group pty ltd
mr masaji Kitagawa
avanteos investments limited
abn amro clearing sydney nominees pty ltd
ms caroline esther cohen
escor investments pty ltd
mr edward Furnival griffin + mrs deborah ann griffin
Warramboo holdings pty ltd
Woodlea group pty ltd
Wythenshawe pty ltd
netwealth investments limited
Total of top 20 registered noteholders
* on a grouped basis
Number of
Subordinated
Notes
495,814
109,825
84,310
57,750
56,703
40,921
37,000
27,970
24,900
22,500
20,000
15,052
12,152
10,000
10,000
10,000
10,000
10,000
10,000
9,710
1,074,607
% of total
Notes
19.83
4.39
3.37
2.31
2.27
1.64
1.48
1.12
1.00
0.90
0.80
0.60
0.49
0.40
0.40
0.40
0.40
0.40
0.40
0.39
42.98
Online shareholder services
Use the internet to easily manage your shareholding
On-line share registry facility
shareholders can use the on-line share registry facility on the company’s website,
www.tabcorp.com.au, or through www.linkmarketservices.com.au to conduct
standard shareholding enquiries and transactions, including:
■■ download dividend statements
■■ Update registered address
■■ check current and previous shareholding balances
■■ appoint a proxy to vote at the annual general meeting
■■ lodge or update banking details
■■ participate in the dividend reinvestment plan
■■ notify tax File number / australian business number
Dividend payments
all dividends paid by tabcorp to shareholders with a registered address in australia
are paid by direct credit into a nominated bank account with an australian financial
institution. payments are electronically credited on payment date, allowing shareholders
to utilise their funds immediately without any mailing or handling delays. there are
also no misplaced or un-deposited cheques, and reduces the likelihood of mail fraud.
shareholders can provide or update their bank account details by using the on-line share
registry facility or by contacting the share registry.
Dividend reinvestment plan (DRP)
tabcorp operates a drp which enables participants to reinvest their dividends into
acquiring additional tabcorp shares without incurring any brokerage or handling costs.
there was no discount applied to the price at which shares were issued under the drp in
respect of the final dividend payable on 26 september 2012. to elect to participate in the
company’s drp, contact the share registry.
Annual report
tabcorp’s interactive annual reports are available on-line from the company’s website,
www.tabcorp.com.au. annual reports are sent to those shareholders who have
requested to receive a copy. shareholders who no longer wish to receive a hard copy of
the annual report or wish to receive the annual report electronically should contact the
share registry or make their election by using the on-line share registry facility at
www.tabcorp.com.au.
60
tabcorp holdings limited Online shareholder services
Company directory
Registered office
tabcorp holdings limited
5 bowen crescent
melbourne Vic 3004
australia
telephone: 03 9868 2100
Facsimile: 03 9868 2300
e-mail: investor@tabcorp.com.au
Website
www.tabcorp.com.au
Stock exchange listing
the company’s securities are
quoted on the australian securities
exchange (asX) under the codes
“tah” for ordinary shares, “tahha”
for tabcorp bonds and “tahhb” for
tabcorp subordinated notes.
New South Wales office
495 harris street
Ultimo nsW 2007
telephone: 02 9218 1000
Queensland office
level 16
15 adelaide street
brisbane Qld 4000
telephone: 07 3243 4100
Sky Racing /
Sky Sports Radio
79 Frenchs Forest road
Frenchs Forest nsW 2086
telephone: 02 9451 0888
Share Registry
link market services limited
locked bag a14
sydney south nsW 1235
telephone: 1300 665 661 (local call
cost within australia)
telephone: 02 8280 7418
Facsimile: 02 9287 0303
Facsimile: 02 9287 0309 (proxy
forms only)
e-mail: tabcorp@
linkmarketservices.com.au
Website: www.linkmarketservices.com.au
Key dates
2012
annual general meeting
(Four seasons hotel, sydney)
2013*
half-year results announcement
ex-dividend for interim dividend
record date for interim dividend
interim dividend payment
end of financial year
Full-year results announcement
ex-dividend for final dividend
record date for final dividend
Final dividend payment
annual general meeting
31 october
7 February
12 February
18 February
25 march
30 June
9 august
14 august
20 august
24 september
31 october
* these dates may change.
see the company’s website for updates.
thoroughbred photo on cover courtesy of bradley photographers
nrl photo on cover courtesy of action photographics
About this Annual Report
Currency
Investment warning
tabcorp’s annual report consists of two documents – the
concise annual report (which incorporates the concise
financial statements) and the Financial report. the concise
financial statements included in the concise annual report
cannot be expected to provide as full an understanding
of tabcorp’s performance, financial position and investing
activities as provided by the full Financial report. a copy
of tabcorp’s Financial report is available, free of charge, on
request and can be accessed via the company’s website at
www.tabcorp.com.au.
references to currency are in australian dollars unless
otherwise stated.
Copyright
information in this report has been prepared by tabcorp,
unless otherwise indicated. information may be reproduced
provided it is reproduced accurately and not in a misleading
context. Where the material is being published or issued
to others, the sources and copyright status should be
acknowledged.
past performance of shares is not necessarily a guide to
future performance. the value of investments and any
income from them is not guaranteed and can fall as well
as rise. tabcorp recommends investors seek independent
professional advice before making investment decisions.
Privacy
tabcorp respects the privacy of its stakeholders. tabcorp’s
privacy policy is available on the company’s website at
www.tabcorp.com.au.
tabcorp holdings limited