Concise Annual Report
2015
Love the game At the front
1 Vision, Mission & Purpose
2
Information about Tabcorp
4 Financial performance
5 Financial benefits to stakeholders
6 Chairman’s message
8 Chief Executive Officer’s message
10 Wagering and Media business
12 Gaming Services business
14 Keno business
16 Sustainability
16 Responsible gambling
18 People
20 Community
21 Environment
22 Corporate governance
24 Board of Directors
26 Senior Executive Leadership Team
With the financials
28 Directors’ report
39 Remuneration report
57 Income statement
58 Balance sheet
59 Cash flow statement
60 Statement of changes in equity
61 Notes to the concise financial statements
63 Directors’ declaration
64 Independent auditor’s report
65 Five year review
At the back
66 Shareholder information
68 Online shareholder services
69 Company directory
69 Key dates
About the Annual Report
Tabcorp’s Annual Report consists of two documents – the Concise Annual Report (which incorporates
the concise financial statements) and the full financial report. The concise financial statements
included in the Concise Annual Report comprise extracts from the full financial report and are derived
from the full financial report. 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.
Tabcorp Holdings Limited ABN 66 063 780 709
Notice of meeting
The Annual General Meeting of Tabcorp Holdings Limited will be held at the Clarendon Ballroom,
The Langham Melbourne, 1 Southgate Avenue, Southbank (Melbourne), Victoria on Thursday,
29 October 2015 at 10.00am (AEDT).
Tabcorp’s
Vision
To be the most valuable
player in the global gambling
entertainment industry.
Tabcorp’s
Mission &
Purpose
We create experiences that
bring alive the passion, thrills
and enjoyment of the Australian
way of life.
We give back to the
community and take our social
responsibilities seriously.
We want you to love the game
like we do.
1
Tabcorp Concise Annual Report 2015 Tabcorp is a leading Australian
gambling entertainment company
• Diversified across three businesses: Wagering
and Media, Gaming Services, and Keno.
• Holding secure long term licences in Australia’s
most attractive markets.
• Possessing a portfolio of iconic Australian brands
with market-leading positions.
• Operating a unique multi-product, multi-channel
model.
• A top 100 public company listed on the Australian
Securities Exchange and one of the world’s
largest publicly listed gambling companies.
• Recognised as a global industry leader in
responsible gambling.
• Employing more than 3,000 people.
Delivering enjoyment to
millions of customers
2
Tabcorp Concise Annual Report 2015 Achievements in the year
• Strong performance by the Wagering and Media
Our FY16 focus is on:
• Maintaining market leadership in wagering
business, reflecting market leadership in fixed odds
and digital wagering.
• ACTTAB acquisition completed, strengthening
Wagering and Media portfolio.
through digital integration across retail, product
expansion and innovation, supported by strong
customer engagement.
• Enhancing the Sky Thoroughbred Central channel.
• Gaming Services extended a number of contracts
• Expanding TGS with additional venue sign-ups
with Victorian venues and signed new venues in NSW.
and improving the performance of existing venues.
• Keno rebrand launched.
• Agreements in place for Victorian and NSW
thoroughbred media rights.
• Completed 1 for 12 pro rata accelerated renounceable
entitlement offer with retail entitlements trading.
• Progressing the Keno brand and product
transformation, and commencing Keno jackpot pooling
with Queensland, subject to regulatory approvals.
• Achieving our 14% target return on invested capital
by FY17.
• Ensuring the highest levels of regulatory compliance
and resolving matters raised by AUSTRAC as a priority.
Tabcorp’s businesses are performing
well and are strongly positioned
for the future
Tabcorp Concise Annual Report 2015
3
Financial performance
• Statutory net profit after tax (NPAT) of $334.5 million, up 157.5% comprising:
Net profit after tax1
$ million
– NPAT from continuing operations before significant items of $171.3 million,
up 14.7%.
– NPAT from significant items of $163.2 million relating to income tax benefits1.
• Earnings before interest, tax, depreciation and amortisation (EBITDA) before
significant items of $508.1 million, up 4.5%.
• Operating expenses of $458.6 million, up 5.8%. Excluding $14 million relating
to ACTTAB acquisition, operating expenses were up 2.6%.
• Revenues of $2,155.5 million, up 5.7%.
• Statutory earnings per share (EPS) of 42.4 cents per share, up 146.5%
– EPS from continuing operations before significant items of 21.7 cents
per share, up 9.6%.
• Full year ordinary dividends totalled 20 cents per share fully franked
representing a payout ratio of 93% of NPAT from continuing operations
before significant items.
• Special dividend of 30 cents per share fully franked paid in March 2015.
The 2016 financial year target dividend payout
ratio to increase to 90% of NPAT before amortisation
of the Victorian Wagering and Betting Licence
4
FY15
FY14
FY13
129.9
126.6
Revenue2
$ million
FY15
FY14
FY13
334.5
2,155.5
2,039.8
2,003.2
EBITDA before significant items2,3
$ million
FY15
FY14
FY13
508.1
486.1
463.9
Dividends per share 4
Cents per share (fully franked)
FY15
50
FY14
16
FY13
19
Tabcorp Concise Annual Report 2015 Revenue by business
$ million
EBIT by business5
$ million
Wagering and Media
1,856.9
Gaming Services
99.6
Keno
199.0
Wagering and Media
247.2
Gaming Services
41.6
Keno
47.5
For the year ended 30 June
Revenue
Taxes, levies, commission and fees
Operating expenses
Depreciation and amortisation
EBIT
NPAT (including discontinued operations)
FY15
$m
2,155.5
(1,188.8)
(458.6)
(173.5)
334.6
334.5
FY14
$m
2,039.8
(1,120.3)
(433.4)
(164.4)
321.7
129.9
Change
%
5.7
6.1
5.8
5.5
4.0
157.5
Notes:
1. FY15 NPAT was positively impacted by income tax benefits relating to the Victorian Wagering and Gaming
Licences payment and the NSW Trackside payment and associated interest income, which totalled $163.2 million.
2. Refers to continuing operations.
3. EBITDA is non-IFRS financial information.
4. Dividends include a special dividend of 30 cents per share paid in March 2015.
5. Business results do not aggregate to Group total due to unallocated items.
Financial benefits to stakeholders
• Taxes on gambling paid $459.6 million, up 4.6%.
• Returns to the racing industry of $773.2 million,
up 5.2%:
– Victorian racing industry received $348.6 million.
– New South Wales racing industry received
$263.3 million.
– Race field fees of $91.7 million.
– Broadcast rights and international contributions
of $69.6 million.
• Income taxes paid and payable of $84.8 million,
up 27.1%.
• Voluntary contributions of $0.7 million to support
community not-for-profit organisations.
Tabcorp’s businesses generated
more than $1.2 billion in gambling
taxes and racing industry funding in
the 2015 financial year, highlighting
the value that Tabcorp’s operations
provide to stakeholders
5
Tabcorp Concise Annual Report 2015 Chairman’s message
“The strong FY15 financial performance, growth initiatives
and effective capital management have enabled Tabcorp
to deliver increased returns to shareholders.”
I am pleased to present the 2015 Tabcorp
Annual Report.
The 2015 financial year (FY15) was a successful
one for Tabcorp. We have strengthened our
position as a leading Australian gambling
entertainment company and operator of one
of the world’s largest Wagering businesses. Our
Group is diversified, with market-leading brands
and an extensive customer base. The Company
is well placed to continue to maximise value
for its shareholders.
Financial and strategic highlights
Tabcorp reported Net Profit After Tax (NPAT)
of $334.5 million in FY15, up 157.5% on the prior
financial year. This reflected strong operational
performance and one-off income tax benefits
relating to the Victorian Wagering and
Gaming licences payment and the NSW
Trackside payment. NPAT from continuing
operations before significant items was
$171.3 million, up 14.7%. Group revenues
were $2,155.5 million, up 5.7%.
The Group result was underpinned by a
strong performance by our Wagering and
Media business. Tabcorp has been competing
strongly in the competitive wagering
environment and we continue to lead the
market. Customers are responding to our
wagering offer, which is an endorsement of
the investments we have made in integrating
our unique retail, digital and media assets,
as well as in product innovation.
experience was launched to the market in
June, commencing in Victoria. A new brand
proposition, supported by an in-venue and
media campaign, has aimed to make Keno
more contemporary and drive participation.
The pooling of jackpots between NSW and
Victoria has commenced and this has enhanced
the Keno product. Queensland is planned to
follow, subject to regulatory approvals.
The Gaming Services business, Tabcorp
Gaming Solutions (TGS), has been enhanced
through the extension of a number of venue
contracts in Victoria and expansion in NSW.
These initiatives have made TGS a more
sustainable business for shareholders.
Our Keno and Gaming Services have been
strengthened during FY15 and are now
set up for growth. The new Keno customer
Tabcorp also advanced its strategic position
during the year by integrating ACTTAB.
The ACTTAB business has provided Tabcorp
with long-dated licences that complement
our existing Wagering, Keno and
Trackside operations.
We have successfully finalised media rights
arrangements for NSW and Victorian
thoroughbred racing. This is a pleasing
outcome for our customers, venue partners,
the racing industry and Tabcorp. Our
customers can watch every Australian race
on Sky Racing in our retail venues and at
home and, for the first time, through TAB’s
website and digital apps. This sets Tabcorp
apart from online wagering operators.
Shareholder returns
The strong FY15 financial performance, growth
initiatives and effective capital management
have enabled Tabcorp to deliver increased
6
Tabcorp Concise Annual Report 2015 returns to shareholders. The Company
announced ordinary dividends totalling
20 cents per share fully franked in respect
of the financial year. This was an increase
of 25% on the previous full year dividend
and represented a distribution of 93% of
NPAT from continuing operations before
significant items.
A special dividend of 30 cents per share fully
franked was also paid in March this year. To
maintain Tabcorp’s balance sheet and capital
position, Tabcorp completed a one-for-twelve
pro rata accelerated renounceable entitlement
offer with retail entitlements trading.
Tabcorp’s confidence in its ongoing financial
performance and underlying businesses has
enabled the Company to increase its target
dividend payout ratio for FY16 to 90% of NPAT
(before the $35 million amortisation of the
Victorian Wagering and Betting Licence).
Capital management
During the year Tabcorp refinanced a
$400 million bank facility, which extended
the maturity profile of our debt facilities. The
next refinancing activity is not due until 2017.
At the end of FY15, the Company’s Gross Debt
to EBITDA ratio stood at 2.1 times, down from
2.3 times at December 2014.
Tabcorp continues to have well diversified
sources of funding and a strong balance sheet.
Tabcorp and responsible gambling
Tabcorp’s commitment to promoting
responsible gambling is ingrained in the
company’s culture.
It was therefore pleasing that Tabcorp was
once again recognised as the global gambling
industry leader by the Dow Jones Sustainability
Index in September 2014. This was the ninth
time in the last ten years that Tabcorp has
received this recognition. Tabcorp ranked
highest in eleven of the 19 categories,
including ‘Promoting Responsible Gaming’,
‘Corporate Governance’ and ‘Occupational
Health and Safety’.
Our commitment to responsible gambling
and operating with the highest levels of
integrity is ongoing.
Racing returns and taxes
Tabcorp’s businesses generated $459.6 million
in gambling taxes in FY15. A further $773.2
million was generated in returns to the racing
industry, a 5.2% increase on the prior financial
year. Tabcorp’s commercial performance
underpins the financial success of the racing
industry. We look forward to continuing to
work jointly with the racing industry and our
venue partners and other key stakeholders
in 2016.
Legal proceedings
In May 2015, the High Court of Australia
granted Tabcorp special leave to appeal
a judgment of the Court of Appeal of the
Supreme Court of Victoria. That judgment
relates to Tabcorp’s claim for a payment
of approximately $686.8 million from
the State of Victoria. The appeal is likely
to be heard by the end of 2015.
Separately, in February 2015 the High Court
declined to grant Tabcorp special leave to
appeal in relation to a Court of Appeal of the
Supreme Court of Victoria judgment on the
Health Benefit Levy. This was fully provided
for in Tabcorp’s FY14 earnings ($19.5 million
after tax) and did not have any financial
impact on Tabcorp in FY15.
AUSTRAC civil proceedings
In July 2015, the Australian Transaction Reports
and Analysis Centre (AUSTRAC) brought civil
proceedings against Tabcorp and our NSW
and Victorian wagering businesses. The claim
includes matters which have been raised by
and discussed with AUSTRAC over an extended
period. A program of works, underway for some
time, has been expanded and accelerated.
Tabcorp is committed to the highest levels
of regulatory compliance and resolving the
matters raised by AUSTRAC as a priority.
Tabcorp’s people
Tabcorp’s more than 3,000 employees ensure
we deliver great entertainment experiences
to our customers. I would like to acknowledge
the commitment of our people, led by our
Managing Director and Chief Executive
Officer, David Attenborough, and his Senior
Executive Leadership Team. We are very
focused on talent management and the
engagement of Tabcorp’s workforce. Our
ongoing success as a business will be
supported by our ability to grow, attract
and retain talent.
Focus on the future
In closing, it is pleasing to be able to report
that Tabcorp ended FY15 in a stronger
financial and strategic position.
The Company has a portfolio of quality,
integrated gambling entertainment
businesses that are well placed to deliver
profitable growth. Our businesses are
underpinned by long-dated licences,
geographic diversification and strong
stakeholder relationships.
In 2016, we will continue to focus on investing
in the customer experience. We will also
continue to prioritise investment in high-
growth areas that can set us apart from our
competitors. These include our retail, digital
and media assets, our market-leading brands
and product and service innovation.
Finally, I would like to thank you for your
support of Tabcorp. I look forward to
shareholders joining us for our Annual
General Meeting on 29 October 2015, which
will be held at The Langham in Melbourne.
For those who cannot attend in person,
but would like to follow the proceedings,
the meeting will be webcast live through
www.tabcorp.com.au.
Paula J Dwyer
Chairman
7
Tabcorp Concise Annual Report 2015 Chief Executive Officer’s message
“Tabcorp’s FY15 performance demonstrates the success
of the Company’s multi-channel strategy and the benefits
of our ongoing focus on customers, products and brands.”
Tabcorp’s 2015 financial year (FY15) performance
demonstrates the success of the Company’s
multi-channel strategy and the benefits of
our ongoing focus on customers, products
and brands.
We are pleased to have delivered a successful
FY15 and are now well set up to continue
delivering on our objective of increasing
returns to shareholders.
Group performance overview
Group revenues were $2,155.5 million, up 5.7%
on the prior financial year.
Operating expenses were $458.6 million, up
5.8%. Excluding $14 million in costs relating
to ACTTAB, operating expenses were up
2.6%. We remain very focused on disciplined
expense management and operating within
the framework of a 21% operating expenses
to revenue ratio. Earnings Before Interest,
Tax, Depreciation and Amortisation (EBITDA)
before significant items were $508.1 million,
up 4.5%.
I will now outline the performance of each
of our three businesses.
Wagering and Media
Tabcorp integrated its Wagering and Media
businesses during the year to provide greater
alignment of wagering and our Sky media
assets. This is important as media and vision
are key drivers of wagering activity.
This combined business performed very
strongly in FY15 and underpinned the overall
Group result. Revenues were $1,856.9 million,
up 6.9%. Operating expenses, including
one-off ACTTAB acquisition and integration
costs, were $381.7 million, up 6.8%. EBITDA
was $375.8 million, up 7.2%. On a total
business basis, that is including the Victorian
Racing Industry’s 50% share of the Victorian
Joint Venture, Wagering and Media revenues
grew 6.2%.
TAB Racing revenues were $1,666.3 million,
up 5.1%. This comprised $1,236.7 million in
totalisator revenues, down 2.1%, and fixed
odds revenues of $429.6 million, up 33.0%. TAB
Sports revenues were $219.2 million, up 16.2%.
During the year we launched a fixed odds
Cash Out product across all channels, an
example of ongoing product innovation.
As well as driving new sales, Cash Out has
changed the customer conversation and
has driven high levels of engagement.
A focus on the customer experience and
successful execution of major events such as
the Spring Racing Carnival, The Championships
and Soccer World Cup underpinned the result.
Trackside revenues were $99.9 million,
up 11.9%, while Luxbet revenues were
$53.1 million, up 10.9%.
The largest drivers of Tabcorp’s Wagering
growth in recent years, fixed odds and digital
wagering, were again the strongest contributors.
8
Tabcorp Concise Annual Report 2015 Media revenues were $173.3 million, up 6.3%,
with the growth driven by the expanded
distribution of Australian and New Zealand
racing to foreign markets and international
co-mingling. One of the achievements of
the period was commencing the co-mingling
of pools with Hong Kong. During the year,
Tabcorp also launched the new Sky
Thoroughbred Central racing channel
on the FOXTEL platform.
Tabcorp’s multi-channel business offers
its customers more channels through
which they can place bets than any other
wagering operator.
Wagering turnover in Tabcorp’s NSW,
Victoria and ACT retail channel grew 0.3%
to $6,601.0 million. Digital channels continued
to drive Wagering growth, with turnover of
$3,416.8 million, up 17.8%. At the end of FY15,
the use of mobile devices accounted for 63%
of all digital turnover. Tabcorp has prioritised
the ongoing integration of its digital and
retail channels. More than 20 of Tabcorp’s
‘Future Retail’ pilot sites are scheduled to
be rolled out by the end of the calendar year.
Gaming Services
Revenues grew by 1.5% to $99.6 million.
Operating expenses were flat at $31.2 million,
while EBITDA was $67.6 million, up 0.9%.
In FY15 we progressed the expansion of Tabcorp
Gaming Solutions (TGS) into new markets.
TGS successfully signed new venues in NSW,
as well as in Victoria where the business is
well established. The positive performance
of our first two venues in NSW has created
confidence that TGS can drive value for
licensed venues in that market.
At the time of writing, TGS had 9,300
gaming machines under contract, up from
approximately 8,600 at the start of the
2015 financial year.
TGS has also extended a number of contracts
across the Victorian network, with 84% of these
arrangements now contracted through to 2022.
This, in addition to the sign-up momentum
in NSW, means TGS is well placed to deliver
sustainable, long-term performance.
Keno
Total Keno network turnover was up 2.7%.
This was the result of improved customer
activity in NSW and Victoria, offset by a
softer Queensland market.
Revenues were $199.0 million, down 2.4%,
impacted by jackpot activity. Operating
expenses were $44.0 million, up 6.8%. The
growth in expenses reflects investments
in capability, the Keno brand and product
transformation. EBITDA was $66.4 million,
down 8.0%.
The relaunch of the Keno brand and customer
experience has been designed to broaden the
game’s appeal. While it is in its early stages,
the initial results indicate that the Keno
transformation has been well received by
customers and venues alike.
Tabcorp’s people and stakeholders
I would like to acknowledge the contribution
that our 3,000-plus employees made
throughout FY15. Their collective efforts
have contributed to the successful year.
We are on an ongoing journey at Tabcorp
to drive high levels of employee engagement
and to enable our people to perform and
grow. We also continue to drive and embrace
diversity across the workforce because we
know that more diverse workplaces result
in fundamentally better businesses.
I would also like to acknowledge the many
stakeholders who contribute to the success
of Tabcorp’s operations such as our racing
industry and venue partners.
9
REVENUE
5.7%
$2,155.5m
EBITDA
4.5%
$508.1m
NPAT
157.5%
$334.5m
The priority for TGS is to improve the
performance of its existing venues and expand
venue sign-ups.
At the same time, we are resolving the
matters raised by AUSTRAC as a priority. We
are committed to achieving the highest levels
of regulatory compliance across the business.
As a Group, we remain well positioned to
drive future performance, maintain expense
discipline and deliver on our target of achieving
Return on Invested Capital of 14% by FY17.
David R H Attenborough
Managing Director and
Chief Executive Officer
Tabcorp in the community
Tabcorp has a proud record of sharing
the proceeds of its operations with the
community. In FY15, our Tabcare program,
which encourages employees to volunteer
and fundraise, partnered with FareShare,
OzHarvest, Conservation Volunteers and
The Pyjama Foundation. Tabcorp also
committed to a renewed charitable
partnership with the National Jockeys
Trust, which provides relief to jockeys,
apprentice jockeys and their families when
faced with serious injury, illness or death.
Future priorities
Tabcorp is well positioned to continue to
deliver growing returns to shareholders.
Our three businesses have specific priorities.
In Wagering and Media, we are focused on
progressing the integration of our retail and
digital channels. We will direct investment
towards product and service innovation,
data analytics and compliance systems.
For Keno, we will be focused on the successful
execution of the new brand proposition and
new products. Keno is a social game with good
potential for growth and we are investing to
realise that potential.
Tabcorp Concise Annual Report 2015 Wagering and Media business
Operations
• Network of TAB agencies, hotels and clubs,
and on-course totalisators in Victoria, NSW
and ACT.
Licences and approvals
• Victorian Wagering and Betting Licence
expires in August 2024, and may be
extended for a further two year period.
• Wagering channels include retail, internet,
• NSW Wagering Licence expires in March
mobile devices, phone and pay TV.
• Totalisator and fixed odds betting offered
2097, with retail exclusivity period expiring
in June 2033.
on racing and sporting events.
• ACT Totalisator Licence expires in
• Luxbet offers a racing, sport and novelty
product bookmaking service by phone,
internet and mobile devices.
• Trackside, a computer simulated racing
product, operating in Victoria, NSW and
ACT, and licensed in other Australian and
overseas jurisdictions.
October 2064.
• ACT Sports Bookmaking Licence expires
in October 2029, with further rolling
extensions to October 2064.
• ACT Approval to Conduct Trackside expires
in October 2064.
• Luxbet’s Northern Territory licence expires
• Wagering and pooling through Premier
in June 2020.
• Luxbet Europe’s UK Combined Remote
Operating Licence has no expiry, and its
Isle of Man licence expires in January 2019.
Gateway International (PGI) joint venture
in the Isle of Man (50% interest).
• Three Sky Racing television channels
broadcasting thoroughbred, harness
and greyhound racing and other sports
to audiences in TAB outlets, hotels, clubs
and other licensed venues, and into
homes to pay TV subscribers.
• Sky Sports Radio network in NSW and
ACT, and advertising and sponsorship
arrangements with Radio Sport National.
• Broadcasting Australian racing to 52
countries and importing overseas racing
to Australia.
• 2,900 TAB retail outlets (approx).
• TAB Rewards members exceed 300,000
(up 38% from prior year).
• Mobile devices represent 63% of digital
wagering turnover (up 9%).
• Sky Racing available in 2.6 million
Australian homes (approx).
• Broadcasting to 5,400 Australian outlets.
FY15 highlights
• Continued growth in fixed odds and
digital wagering.
Future objectives
• Complete ACTTAB integration and launch TAB
brand and customer experience into ACT.
• Completed the ACTTAB acquisition.
• Maintain market leadership and drive
• Success from major events, such as the
Spring Racing Carnival, The Championships
and Soccer World Cup.
• Increased focus on customer driven
strategies and investing in multi-channel
customer experience.
industry transformation.
• Focus on increased digital integration
across the retail network following Future
Retail pilot.
• Develop new, and enhance existing, products
to grow share of wallet.
• Fixed Odds Cash Out successfully launched
across all channels, an example of ongoing
product innovation.
• Strengthen customer relationships and
retention through loyalty and customer
relationship management programs.
• Commenced pooling into Hong Kong pools.
• Further integrate vision and data with
• Expanded distribution of Australian and
New Zealand racing to foreign markets
and international co-mingling.
wagering products.
• Maximise customer engagement from
broadcast media rights.
• Launched new tab.com.au website.
• Pursue disciplined, close to core,
• TAB active account customers up 12% in FY15.
• Negotiated Victorian and NSW thoroughbred
media rights.
international expansion.
Summary financial performance
For the year ended 30 June
Revenue
Taxes, levies, commission and fees
Operating expenses
EBITDA
Depreciation and amortisation
EBIT
10
FY15
$m
1,856.9
(1,099.4)
(381.7)
375.8
(128.6)
247.2
FY14
$m
1,737.8
(1,029.8)
(357.3)
350.7
(116.6)
234.1
Change
%
6.9
6.8
6.8
7.2
10.3
5.6
Tabcorp Concise Annual Report 2015 Total revenue growth of 6.2%
(including Victorian Racing
Industry interest)
Revenues of $1,856.9 million,
up 6.9%
EBIT of $247.2 million,
up 5.6%
11
Tabcorp Concise Annual Report 2015 Gaming Services business
Operations
• Tabcorp Gaming Solutions (TGS) currently
operates across Victoria and NSW.
• TGS provides a mix of gaming expertise,
specialised services, strategic advice and
financing to licensed gaming venues, with
the aim of optimising gaming and total
venue performance.
• TGS partnered with 168 hotels and clubs
in Victoria and NSW in FY15, with over 8,820
EGMs under contract.
• TGS operates a loyalty program on behalf of
its network, with a total membership base of
over 340,000 (up by 24% over previous year).
Licences and approvals
• Victorian Listing on the Roll of
Manufacturers, Suppliers and Testers.
• NSW Gaming Machine Dealer’s Licence.
• ACT Supplier Certificate.
• Tasmanian Listing on the Roll of Recognised
Manufacturers, Suppliers and Testers of
Gaming Equipment.
Summary financial performance
For the year ended 30 June
Revenue
Taxes, levies, commissions and fees
Operating expenses
EBITDA
Depreciation and amortisation
EBIT
FY15 highlights
• TGS established operations in NSW in FY15,
with NSW venues achieving an average
of over 50% net machine revenue growth.
• The business’ partner network expanded,
with 10 new venue signings across NSW
and Victoria.
Future objectives
• Extend TGS partner network across Victoria
and NSW and into other jurisdictions.
• Seamlessly introduce voluntary pre-
commitment for Victorian venue partner
network.
• Continue to drive gaming and venue
• TGS extended a number of venue partner
contracts across the Victorian network, with
84% now contracted through to 2022.
performance for our partners, offering deep
gaming customer knowledge and expertise
in customer experience.
• TGS’s first to market in-EGM loyalty system is
operating in over 75% of the Victorian network.
• Deliver the best performing gaming floors,
with market-first, insight-driven product.
• Voluntary pre-commitment preparation
for TGS’s Victorian venue partners is well
advanced, with government trial underway.
• Drive visitation through loyalty, customer
relationship management and
marketing programs.
• Continue to evolve the TGS value proposition
to ensure that the business delivers the best
outcomes for its venue partners.
FY15
$m
99.6
(0.8)
(31.2)
67.6
(26.0)
41.6
FY14
$m
98.1
-
(31.1)
67.0
(27.3)
39.7
Change
%
1.5
n/a
0.3
0.9
(4.8)
4.8
12
Tabcorp Concise Annual Report 2015 Revenues of $99.6 million,
up 1.5%
EBIT of $41.6 million,
up 4.8%
13
Tabcorp Concise Annual Report 2015 Keno business
Operations
• Keno is a random number game that is
played every 3 minutes with the chance for
customers to win instant prizes and life-
changing jackpots.
FY15 highlights
• Total Keno network turnover was up 2.7%,
reflecting record growth in NSW and Victoria,
offset by a softer Queensland market.
Future objectives
• Continue Keno’s transformation across NSW,
Queensland and the ACT, positioning Keno
as a contemporary, fun and social game.
• Keno’s turnover and revenue was impacted
• Extend Keno’s product offer, launching
• In FY15 Keno customers won a record 21
spot-10 jackpots totalling over $38 million.
by above theoretical jackpot wins in
Queensland and Victoria.
new products that drive participation and
reinforce Keno’s new brand positioning.
• Keno has a distributed network of over
3,600 venues across clubs, hotels and TABs
in Victoria, Queensland and ACT, and in
clubs and hotels in NSW.
• The business’ retail distribution extends
across approximately 6,400 terminals
and 17,000 game screens.
Licences and approvals
• Victorian Keno Licence expires in April 2022.
• NSW Keno Licence expires in July 2022.
• In NSW Tabcorp operates Keno under a
management agreement with ClubKENO
Holdings Pty Ltd.
• Queensland Keno Licence expires in June 2047.
• ACT Approval to Conduct Keno expires in
October 2064.
Summary financial performance
For the year ended 30 June
Revenue
Taxes, levies, commissions and fees
Operating expenses
EBITDA
Depreciation and amortisation
EBIT
• In FY15, Keno launched its customer-led
business transformation, which saw:
• Expand Keno jackpot pooling across
other jurisdictions.
– Pooling of the 7,8,9 and 10 jackpots
• Develop and launch converged digital
experiences that integrate with Keno retail.
• Build deep customer insight to further
develop Keno’s customer experience.
between NSW and Victoria, delivering
bigger and more frequent jackpots.
– The launch of a new Keno brand in
Victoria; which included a new logo,
advertising campaign and customer
experience across retail game screens,
self-service terminal interface, game
card and signage.
– Launch of a new website, keno.com.au.
• Keno’s network extended in FY15 to
incorporate the ACT via ACTTAB acquisition.
• Keno’s technology foundation was improved
with the adoption of similar infrastructure
used by NSW, Queensland, Victoria and
ACT hosts.
FY15
$m
199.0
(88.6)
(44.0)
66.4
(18.9)
47.5
FY14
$m
203.9
(90.5)
(41.2)
72.2
(20.5)
51.7
Change
%
(2.4)
(2.1)
6.8
(8.0)
(7.8)
(8.1)
14
Tabcorp Concise Annual Report 2015 Total Keno turnover
up 2.7%
Revenues of $199.0 million,
down 2.4%
EBIT of $47.5 million,
down 8.1%
15
Tabcorp Concise Annual Report 2015 Sustainability
Responsible gambling
Tabcorp takes its social responsibilities seriously and is committed to the long term
sustainability of its operations and industry. It recognises that there are sustainability challenges
and opportunities associated with social, environmental, workplace, economic and governance
risks, which are managed to ensure optimal outcomes are achieved for our stakeholders.
Tabcorp’s sustainability practices are aligned to its business strategies and objectives, and are
mapped against the organisation’s risk profile and risk management framework. This enables
Tabcorp to identify the most significant challenges and sustainability issues facing the Group,
which are monitored and reported to the Senior Executive Leadership Team and to the Board.
The organisation commits resources to appropriately manage these in accordance with the
company’s risk profile and business priorities.
A key priority and area of focus for Tabcorp is promoting the responsible service of its products,
and supporting customers to help them gamble responsibly. Tabcorp’s other main sustainability
areas include having a great workplace for our employees, supporting the community, helping
our environment, and having sound corporate governance practices. The following sections
outline Tabcorp's commitment to providing long term sustainability in these areas. Further
information may also be found under the Sustainability section of Tabcorp’s website
www.tabcorp.com.au.
Tabcorp is independently recognised as the leader in sustainability within the gambling
entertainment industry. In the annual assessment for the Dow Jones Sustainability Index
announced in September 2014, Tabcorp was ranked as the overall global gambling industry leader.
Tabcorp has achieved this outstanding result in nine of the last ten years. Tabcorp was also
acknowledged as a leading sustainable company in the annual FTSE4Good ESG Ratings released
in July 2015 and included in the FTSE4Good Index. These indices are used by investors to identify
companies that meet globally recognised corporate responsibility standards. For inclusion in these
indices, Tabcorp is independently assessed each year on environmental, social and governance
(ESG) criteria. Tabcorp’s inclusion in the Dow Jones Sustainability Index and the FTSE4Good Index
since 2001 demonstrates the company’s long term commitment to sustainability.
Tabcorp has been ranked as the overall global gambling
industry leader in nine of the last ten years in the annual
assessments for the Dow Jones Sustainability Index.
The Tabcorp Group takes a leadership position in the responsible delivery of its gambling
products and support for customers. We are committed to promoting sustainable gambling
practices and providing our products and services in a responsible manner for the enjoyment
of customers. While we create enjoyable entertainment experiences for our customers, we have
in place systems and processes to minimise the potential harm that gambling may cause. We
take our social responsibilities seriously and have embedded responsible gambling into Tabcorp’s
Mission and Purpose, and reinforced it through our company values of Think customer; Do the
right thing; and Be accountable.
Over many years Tabcorp has developed and enhanced its programs and practices, and we
continue to adopt new technologies and respond to industry changes. Our long term commitment
has resulted in Tabcorp being recognised as an industry leader in promoting responsible gambling
in the Dow Jones Sustainability Index, and a leader in customer responsibility in the FTSE4Good
ESG Ratings. Tabcorp engages with customers, governments, regulators, community organisations
and industry partners to enable our responsible gambling practices to remain effective and
industry leading.
Framework
The Tabcorp Group’s responsible gambling strategies and initiatives are based upon a social
health framework of informed choice, incorporating primary prevention, secondary protection
and safety net measures. Tabcorp’s integrated multi-layered framework incorporates strategies,
codes of conduct, policies and programs which are centred on promoting responsible gambling
among customers, the community, and employees. This framework is applied consistently across
each of the Tabcorp Group’s businesses, while certain elements are tailored to the specific
circumstances of each business. Regular engagement with our stakeholders is an important
aspect of this framework which helps inform us to be more effective.
Appropriate management and oversight are important aspects for maintaining effective practices.
Employees and executives with specific expertise and roles relating to responsible gambling,
compliance, risk management, and customer management have responsibilities for delivering
the responsible gambling strategies and programs in support of this framework. Regular reports
are prepared for management, and the Board is regularly informed about key initiatives, risk
assessments and internal audits.
Codes of Conduct
The Tabcorp Group has developed individual Responsible Gambling Codes of Conduct for
each of its businesses of TAB, Luxbet and Keno. This enables the Codes to be responsive to the
particular needs and circumstances applicable to individual customers within those businesses
while maintaining compliance with the specific requirements in each State or Territory. These
Codes are regularly reviewed to ensure they remain relevant for customers and for the business.
As a requirement in Victoria, we report annually to the Victorian Commission for Gambling and
Liquor Regulation on the effectiveness of our Victorian Responsible Gambling Codes of Conduct.
The report includes analysis and results of surveys undertaken by hundreds of customers to
measure their awareness of Tabcorp’s responsible gambling Codes and their effectiveness.
16
Tabcorp Concise Annual Report 2015 Codes of Conduct relevant to each of the Tabcorp Group’s businesses are available from the
Responsible Gambling section of Tabcorp’s website at www.tabcorp.com.au and are also
provided to customers upon request. Each of the TAB, Luxbet and Keno websites contain
information on responsible gambling and links to the relevant Codes of Conduct.
Customer initiatives
Tabcorp operates its BetCare self-exclusion program across its Victorian and NSW TAB retail
network. BetCare is a voluntary self-exclusion program which customers can access free of
charge to help them manage their gambling behaviour. As a member of BetCare, customers
can exclude themselves from up to 15 TAB agencies and 15 hotels or clubs in either Victoria or
NSW. TAB customers can also opt to have their TAB betting account closed until they demonstrate
they can manage their gambling behaviour and gamble responsibly. Keno account customers
can also self-exclude by electing to have their accounts suspended.
In addition, TAB and Keno customers can set voluntary pre-commitment limits on their betting
accounts. This enables customers to select their own maximum value for weekly deposits.
The Tabcorp Gaming Solutions (TGS) business was the first to launch in-EGM voluntary pre-
commitment in the Victorian gaming market. Customers in TGS partner gaming venues
can elect to set a playing time or value limit on their loyalty card.
Community engagement
Tabcorp takes an active role in partnering with governments and community organisations to
promote responsible gambling and raise awareness among the communities in which we operate.
In May 2015, Tabcorp supported the NSW Responsible Gambling Awareness Week (RGAW). The
event sees government, community groups and the gambling industry working in partnership
to promote responsible gambling practices and behaviors within the community. The aim of
RGAW is to increase the community’s awareness of responsible gambling strategies so people can
make informed decisions about their gambling choices and know how to seek assistance if they
need it. This year’s event focused on raising awareness among young people. Tabcorp supported
RGAW by providing RGAW collateral distributions costs, contributing employee time and
expertise, and promoting the event by displaying RGAW collateral in NSW TAB agencies.
to inform and promote responsible gambling awareness with stakeholders, including customers,
venue staff, industry partners, governments, regulators and local community organisations.
Educating employees
Tabcorp’s ongoing training and communications programs ensure employees understand and
are informed about Tabcorp’s responsible gambling program. Regular education and awareness
is provided to enable employees to be equipped with tools and information to help identify
responsible versus problem gambling behaviours, and respond accordingly. Information is
initially conveyed through the new employee induction program, with annual refresher training
for employees with customer facing roles. Training and communication programs are delivered
via a number of mediums, including written, face to face and online.
We also communicate regularly with our agents and operators within our retail network to
provide training and communications packs to them regarding responsible gambling initiatives,
compliance obligations and informative alerts. Material is conveyed to our retail network via
newsletters, bulletins and online. We also ensure all venues are well equipped with responsible
gambling posters and brochures in prominent areas, for example, at the betting counter, near
self-service terminals and posters on walls around the venues.
Tabcorp’s internal audit teams regularly visit venues to assess their level of compliance with
responsible gambling obligations, such as correctly displaying responsible gambling posters
and brochures. In addition, our operations are routinely subjected to audits and compliance
assessments by gambling regulators.
Employee gambling policy
Many of Tabcorp’s employees enjoy gambling and do it responsibly. Tabcorp’s Employee Gambling
Policy is a key component of Tabcorp’s commitment to delivering gambling products responsibly
and caring for our employees. We recognise that employees use our products and services for their
own personal recreational purposes, and for many their jobs involve interacting with our products
and services. Tabcorp’s Employee Gambling Policy seeks to provide the right balance between
accessibility and restricting interactions so that no person can gain, or be perceived to gain,
an unfair advantage in using our gambling products.
Employees of Tabcorp are appointed members of the Victorian Responsible Gambling
Ministerial Advisory Committee and the Queensland Responsible Gambling Advisory Committee.
These committees include representatives from government, community groups and industry
organisations. They provide advice to relevant government ministers on initiatives, policies
and codes of practice to promote responsible gambling.
Under the policy, Tabcorp Directors, employees and contractors may not gamble whilst on
duty, whether on Tabcorp’s gambling products or those of another gambling 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. Anyone who gambles off duty must do so responsibly
and within their means.
Tabcorp employees also maintain relationships with problem gambling counselling services
and other related community groups. They are members of Venue Support Workers Reference
Groups and RGAW Steering Committees. They attend various community and industry forums
Annually, the Tabcorp Group conducts surveys of employees within specific businesses to evaluate
the level of problem gambling risks within the workplace. The results of the assessment conducted
during the 2015 financial year indicated that for those employees who gamble, they do so responsibly,
and there were no indicators they were at risk of developing problem gambling behaviours.
17
Tabcorp Concise Annual Report 2015 People
Tabcorp continues to build a great place to work for its 3,000-plus employees. We invest in
and support our employees to reach their full potential and contribute to the success of the
organisation. To support growth, Tabcorp has people strategies and programs that are aligned
with organisational goals and objectives. Some of the main areas of focus for Tabcorp are
outlined below, along with the key achievements of the 2015 financial year.
Engagement
The engagement levels of employees are a key contributor to organisational success. A workforce
which is highly engaged closely correlates to improved organisational outcomes, such as better
customer service, productivity and added value.
For the fourth successive year, Tabcorp has measured employee engagement using the Gallup
assessment tool, which assesses employee engagement on a scale of 0 to 5. Once again, the FY15
results indicated that employee engagement had improved, and that Tabcorp has maintained
top-quartile growth in engagement levels since 2011.
Tabcorp understands that our employees’ connection to our vision, mission and purpose is
integral to high engagement. A key focus in 2015 was the development and communication
of Tabcorp’s Vision statement, to further support our Mission and Purpose (launched in 2014).
We also continued to drive a new way of working that is underpinned by enabling technology
and the creation of collaborative work environments. People leaders have engagement targets
embedded in their scorecards to continue to drive employee engagement, and meet its goal
of achieving Gallup top quartile results by 2016.
Gender diversity
Tabcorp recognises the value of having a diverse workforce which comprises people with a range
of backgrounds, ideas, skills, experience, and talents that enable us to create a well-balanced,
inclusive, and high performing workforce. Tabcorp remains focussed on embracing diversity
across its workforce and delivering greater gender balance.
This is being achieved through a number of initiatives which support the organisations’ gender
diversity strategy and objectives. These include a Diversity Council comprised of the Senior
Executive Leadership Team to drive the Group’s diversity agenda, diversity education programs
for leaders, a Senior Women’s Forum, and targeted acquisition of diverse leadership talent.
A key initiative is the Women’s Mentoring Program. Female leaders from across the organisation
are partnered in small groups with a member of the Senior Executive Leadership Team and a
General Manager. The groups undertake a structured 12 week mentoring program which aims
to enable female managers to take ownership of their careers and development.
The organisation’s diversity objective to have at least 33% female representation in senior
management roles by 2015 has been met. Tabcorp has now set a 2018 target to achieve at least
40% female representation in senior management roles, which comprise 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 determined
by meeting a minimum role size).
The proportion of women at various levels within the Tabcorp Group at the end of the financial
year is shown in the chart opposite.
Tabcorp’s 2014-15 annual public report regarding workplace gender equality was submitted to the
Workplace Gender Equality Agency and is published under the Sustainability section of Tabcorp’s
website at www.tabcorp.com.au.
Tabcorp’s Diversity Policy is also available from the Sustainability section of Tabcorp’s website.
Health, safety and wellbeing
Tabcorp is committed to providing a healthy and safe working environment and has a track record
of successfully managing its health and safety risks. The low rate of 1.0 lost time injury per million
hours worked achieved in FY15 demonstrates that Tabcorp has a strong health and safety culture.
Tabcorp has a Health and Safety Policy which is supported by systems and processes to assist
in identifying, monitoring and managing risks. Tabcorp’s Health and Safety team coordinate
and support activities within each Tabcorp business and at each location to ensure a consistent
focus on health, safety and wellbeing across the Tabcorp Group. Risk assessments of each Tabcorp
business unit are undertaken regularly and discussed with management. Risks and incidents
are reported regularly to the Senior Executive Leadership Team and to the Board Audit, Risk
and Compliance Committee.
Our focus has been on promoting health and safety through employee awareness campaigns
and training programs. By engaging with our employees we have been able to promote a stronger
culture and improved working practices. Employees are better equipped to identify risks, report
them, and where appropriate with support implement corrective actions to address risks before
incidents occur.
Tabcorp also supports a number of activities that promote health and wellbeing among
employees, including sponsoring 406 employees in the Global Corporate Challenge. The event
is conducted over 100 days and provides opportunities for employees to come together in
teams and lead more active and healthier lives. Tabcorp also supported the national R U OK Day
to inspire our employees to connect with fellow colleagues, family and friends to check their
wellbeing and prevent their isolation should there be something troubling them.
Tabcorp’s Health and Safety Policy is available from the Sustainability section of Tabcorp’s website.
18
Tabcorp Concise Annual Report 2015 Employee Assistance Program (EAP)
Tabcorp’s EAP is a confidential personal and professional development resource available for all
employees and their immediate family members. The EAP is designed to help maintain the right
balance between wellbeing and performance. The service is able to assist with a wide range of
situations and issues and aims to help individuals develop positive strategies to resolve their
concerns. Employees and their immediate family have access to a range of resources and
professional services which provide counselling, support, coaching and mentoring to help them
deal with work and life issues. The EAP also provides coaching and support for managers and
supervisors dealing with difficult or complex people issues. Access to these EAP services is free
for Tabcorp employees and their immediate family members.
Code of Conduct
During the 2015 financial year, the Tabcorp Code of Conduct was relaunched under the title
‘Do the Right Thing’, supported by an online learning program for employees. The Code of
Conduct is underpinned by the Tabcorp Ways of Working, and establishes the standards of
behaviour that are expected of all employees, Directors and contractors. It provides guidance
to employees, and assists them to make the right choices by providing behavioural examples.
The Code refers to Tabcorp Group policies including those in relation to bullying, discrimination,
harassment, corruption, bribery, diversity, insider trading, privacy, whistleblowing, and
social media.
Recognition
Tabcorp has an established employee recognition program called ‘Tabcorp Legends’. The program
recognises and rewards employees who go ‘above and beyond’ what is expected of them and
demonstrate Tabcorp’s Ways of Working (our values) in an outstanding manner.
The Tabcorp Legends program provides two avenues for employees to be recognised:
• On-the-spot recognition, whereby employees can receive instantaneous recognition in the
workplace with an accompanying reward.
• Quarterly and annual recognition, where employees who have been nominated for displaying
the Ways of Working in an exceptional way are recognised at regular quarterly events,
culminating in an annual award for the most outstanding Legend.
Our Ways of Working
Tabcorp's values are expressed in Our Ways
of Working, which are:
• Be One Team: collaborate within and across teams;
seek to understand and communicate openly.
• Think Customer: know our customers and
• Be Accountable: count on each other; deliver
understand their needs; exceed their expectations.
on your commitments.
• Think Big: always look for better ways and
• Do the Right Thing: always act with integrity;
be open to new ideas.
be community minded.
Talent development
Tabcorp supports its employees to learn and grow, providing them with opportunities and
resources to develop their skills, knowledge and capabilities. There are many ways which Tabcorp
provides this support, including through its study assistance program which may include financial
assistance for course fees and textbooks, or paid study leave.
Developing leadership talent is an important component of Tabcorp’s employee development
framework. Tabcorp has two premier programs aimed at meeting the current and future
leadership needs of Tabcorp and to support its succession strategy. The ‘Leading the Tabcorp Way’
leadership development program immerses our people leaders in what it means to be
a successful leader within our business. The program is built upon our Ways of Working and
the Tabcorp Leadership Capability Model, which sets out the areas of competency required of
successful leaders at Tabcorp. In addition, Tabcorp’s ‘High Performance Organisation’ program
is a week-long experiential leadership program which provides senior leaders with the
opportunity to further develop their leadership skills and capabilities to support the
development of high performing teams.
New on-boarding program
Tabcorp’s on-boarding program was redesigned during the year and incorporates new features to
substantially enhance the experience for new employees starting at Tabcorp. The new program has
been developed to make employees feel welcome and to help them be successful in their new role.
On-boarding guides for new starters and their managers, along with online pre-start material
and a buddy system support new employees as they transition to their new roles. All new
employees also participate in a ‘Discover Tabcorp’ day, an interactive session and field trip that
introduces new starters to Tabcorp’s businesses, products, customer experience, and culture.
Lost time injury
frequency rate
Number of lost time
injuries per million
hours worked
7
.
2
4
.
1
5
.
1
0
.
1
FY12
FY13
FY14
FY15
Proportion of female employees
As at 30 June 2015
Employee engagement
As assessed by Gallup
Non Executive
Directors
Senior Executive
Leadership Team
Senior Executive
Leadership Team &
Senior Management
Team
Whole of Tabcorp
33%
33%
33%
9
8
.
3
1
8
.
3
5
6
.
3
7
4
.
3
50%
FY12
FY13
FY14
FY15
19
Tabcorp Concise Annual Report 2015 Community
Tabcorp is a proud supporter of the communities in which it operates and gives back to those
communities. Employees are encouraged to volunteer and fundraise for community organisations
through the Tabcare program. The Tabcorp Group’s businesses also contribute cash donations,
employee time for volunteering activities, in-kind support, partnerships and sponsorships which
benefit many charities, not for profit groups and local community organisations. These voluntary
contributions in the 2015 financial year totalled $0.7 million. The Tabcorp Group will continue
to partner with organisations and help communities through establishing positive connections
with our businesses and our people.
Other contributions
Tabcorp is also a significant financial contributor to governments, and our success provides
direct financial benefits for the public. Our businesses contribute a significant funding each
year which helps governments to deliver vital community services and public infrastructure,
such as healthcare facilities.
In addition to the above voluntary contributions, for FY15 Tabcorp’s businesses also generated:
Tabcare program
Tabcare is the Tabcorp Group’s community and employee engagement program. It supports
community involvement among employees by encouraging volunteering and fundraising
by Tabcorp employees which directly benefits community groups. Tabcare has the following
two elements:
• The volunteering program encourages employees to volunteer their time for their nominated
non-profit organisation or one of the community organisations with which Tabcorp partners.
Tabcorp provides one day of paid volunteer leave each year to eligible employees for them to
use under this program.
• The matched fundraising program supports employees in team based activities to raise
money for registered charities. Tabcorp matches any funds raised up to $10,000 per charitable
organisation, enabling donations to be widely shared among charities.
Tabcorp has established Tabcare community support partnerships with:
• $459.6 million in taxes on gambling; and
• $84.8 million in income taxes paid and payable.
Tabcorp also generated returns to the racing industry of $773.2 million in FY15 as set out on page 5.
National Jockeys Trust
In July 2015, Tabcorp’s TAB and Sky Racing businesses announced a three year partnership
with the National Jockeys Trust. This significant sponsorship deal sees TAB and Sky Racing
become the principal partners and will donate $120,000 over the course of the next three years
to the National Jockeys Trust. The National Jockeys Trust is a public charitable trust dedicated
to providing relief to jockeys, apprentice jockeys and their families when faced with serious
injury, illness and even death.
Refer to the Sustainability section of Tabcorp’s website at www.tabcorp.com.au for
further information.
• Conservation Volunteers in NSW and Victoria;
• FareShare in Victoria;
• OzHarvest in the ACT, NSW and Victoria; and
• The Pyjama Foundation in Queensland.
The main objectives for expanding the Tabcare program during FY15 were achieved. Tabcare
was rolled out across our newly acquired ACT business, and ACT based employees took part
in volunteering and fundraising programs. OzHarvest in Canberra commenced as a Tabcare
partner, and Tabcare sponsored a number of other charities and community organisations
in the ACT. Group wide employee volunteering also increased, with 19.3% of eligible employees
participating, substantially up from 12.7% in the previous year.
Tabcare donations totalled $116,000 which benefitted 16 charities, and supported our employees
raising an additional $41,000 in matched fundraising contributions. In addition, TAB donated
$50,000 to OzHarvest to meet a ‘charity challenge’ issued by former South Sydney Rabbitohs
legend George Piggins ahead of the 2014 NRL Grand Final. Beneficiaries of Tabcare funding
during the year included Men of League Foundation, Connecting Skills Australia as this year’s
winner of the TAB Great Chase, the Cancer Council, the Peter Mac Cancer Centre, Little Wings,
and the Westmead Children’s Hospital.
Tabcare promotes community
and employee engagement
20
Employee volunteering
% of eligibile employees
who took volunteer leave
19.3
12.7
7.6
FY13
FY14
FY15
Tabcorp Concise Annual Report 2015 Environment
The Tabcorp Group considers that it has a very low environmental risk profile. Its operations
have a small environmental footprint, because it is a low energy and water consumer, and is
low carbon emitter. Nevertheless, the Tabcorp Group is committed to operating as efficiently
as possible, and reducing its impact on the environment.
the Tabcare program, the Tabcorp Group has also partnered with Conservation Volunteers
to encourage and support the participation of employees in environmental and wildlife
conservation projects in Victoria and NSW.
Each year the Tabcorp Group seeks to further reduce its impact on the environment and adopt
practices that benefit the environment. Tabcorp recognises that reducing its consumption
of energy, water and other resources will have direct environmental benefits and subsequent
economic benefits to the organisation. The Tabcorp Group’s objective is to reduce its consumption
of energy resources (electricity, gas and vehicle fuels) each year, which will reduce greenhouse
gas emissions while also minimising operating costs associated with energy consumption.
Similar objectives for reducing water use and paper consumption will also benefit the
environment and Tabcorp.
Reduction in electricity consumption
The use of electricity is the Tabcorp Group’s largest direct contributor to greenhouse gas emissions,
and represents the most significant cost of all utility services. Therefore, it was pleasing to see
that for the 2015 financial year Tabcorp’s electricity consumption dropped 9.1% from the prior year.
This substantial reduction in electricity consumption is mainly attributable to Tabcorp’s Sydney
office moving to more modern premises which consume less electricity.
Water saving practices
The relocation of Tabcorp’s Sydney office has also resulted in water consumption not being
measureable at this new premise, and therefore reportable water use has dropped. Although
Tabcorp's water consumption is not material, Tabcorp remains committed to reducing water
consumption at its office properties. Modern water saving technologies are employed in
bathroom facilities at Tabcorp’s two largest offices in Melbourne and Sydney, which greatly assist
in minimising water usage.
Reducing paper consumption
The Tabcorp Group has managed to reduce its total consumption of paper in FY15 by 6.3%. Also,
of the paper it consumed during the year, it has significantly increased the proportion that is
carbon neutral to 99.7% from 78.9% in the prior year. There were two major contributing factors
which lead to this outcome. Firstly, Tabcorp introduced ‘follow-me’ printing at the start of 2015.
The adoption of this new print management technology helped improve copying and printing
behaviours by reducing excessive and wasteful printing. Secondly, Tabcorp’s Procurement team
identified an opportunity to source more carbon neutral paper in order to help reduce Tabcorp's
carbon footprint.
Employee awareness
Employees are encouraged to adopt environmentally friendly practices and initiatives. Tabcorp
supports employees participating in events that have positive environmental outcomes. During
the year, Tabcorp supported Earth Hour and promoted awareness campaigns to encourage
employees to minimise electricity and water use, and reduce paper consumption. Through
21
Performance
The main measureable environmental performance indicators applicable to the Tabcorp Group
are in relation to the use of office buildings and fleet vehicles. The Tabcorp Group has systems
and practices in place for monitoring, reporting and managing the environmental impact
associated with its operations. The performance during FY15 and comparisons to the prior
years are shown in the charts below.
Further information is available under the Sustainability section of Tabcorp’s website at
www.tabcorp.com.au.
FY15 environmental performance indicators (and comparisons to the prior year)
Electricity
Fleet vehicles
Natural gas
Water
Paper
Greenhouse
gas emissions
16,010,699 kilowatt hours (kWh), down 9.1%
653,641 litres of liquid fuels, up 6.3%
4,266,865 megajoules (MJ), up 26.8%
23,540 kilolitres (kl), down 6.7% (i)
4.899 million A4 equivalent pages, down 6.3%
99.7% carbon neutral, up from 78.9%
19,515 tonnes of carbon dioxide equivalent (tCO2-e), down 8.4%, which comprised:
• 10.1% Scope 1 emissions resulting from fleet vehicle fuels and natural gas
used for heating offices; and
• 89.9% Scope 2 emissions from electricity used to power Tabcorp offices.
Greenhouse
gas emissions
tCO2-e
4
9
6
,
2
2
3
0
0
,
2
2
8
0
3
,
1
2
5
1
5
,
9
1
Electricity use
kWh
Water use (i)
kl
Paper consumption
Million A4
equivalent pages
9
9
6
,
7
9
3
,
8
1
,
2
4
8
4
7
9
,
7
1
8
5
0
,
2
2
6
,
7
1
,
9
9
6
0
1
0
6
1
,
9
7
1
,
5
2
0
2
2
,
5
2
1
6
1
,
3
2
0
4
5
,
3
2
9
7
9
6
.
2
3
0
6
.
1
3
2
.
5
9
9
8
4
.
FY12 FY13
FY14
FY15
FY12 FY13
FY14
FY15
FY12 FY13
FY14
FY15
FY12 FY13
FY14
FY15
(i) Sydney office water use no longer measured from January 2015.
Tabcorp Concise Annual Report 2015 Corporate Governance
Introduction
The Tabcorp Group strongly supports the principles of good corporate governance and has
practices and policies in place to enable it to maintain high standards of integrity. Tabcorp’s
governance arrangements are reviewed regularly and enhanced where necessary to ensure
they continue to meet the needs of the Group.
The Tabcorp Group complied with the Corporate Governance Principles and Recommendations,
3rd Edition published by the ASX throughout the 2015 financial year and to the date of this
report. The following is a summary of the key corporate governance developments which
occurred since the start of the 2015 financial year and matters of relevance to Tabcorp.
For full details refer to Tabcorp’s Corporate Governance Statement and its Appendix 4G which
are available from the corporate governance section of Tabcorp’s website at www.tabcorp.com.
au/about-us_corporate-governance.aspx together with other governance related information.
Key developments
Since the start of the 2015 financial year, the key enhancements to the Tabcorp Group’s
corporate governance practices were as follows.
Adopted a Board skills matrix
The Board adopted a matrix setting out the relevant skills and experience which the Board
currently has and is looking to achieve in its membership. The matrix covers the criteria of:
Leadership; Strategy and development; Financial acumen; Governance, risk and compliance;
Information technology; Digital innovation; International experience; Retailing and marketing;
People; Remuneration; Sustainability/corporate social responsibility; Public policy; and Industry
experience. The Board believes it currently has an appropriate mix of these skills and experience
amongst its membership to enable the Board to operate effectively. Further details are set out
in the Corporate Governance Statement. Biographical details for the Directors can be found
on pages 24 to 25 of this report.
Revised the Code of Conduct
The Tabcorp Group revised and relaunched its Code of Conduct during the year. The Code of
Conduct is titled ‘Do the Right Thing’ and builds upon Tabcorp’s Ways of Working which are:
Think customer; Think big; Be one team; Be accountable; and Do the right thing. The Code
of Conduct applies to all Tabcorp Group employees, Directors and contractors. It sets out the
standards of behaviour expected at Tabcorp and gives guidance in areas where Tabcorp people
may need to make personal and ethical decisions. The Code of Conduct is available from the
corporate governance section of the Tabcorp website at www.tabcorp.com.au/about-us_
corporate-governance.aspx.
Set new diversity objective
Since Tabcorp met its diversity objective of at least 33% female representation in senior
management roles by 2015, the Board and senior management have set a revised target to have
at least 40% female representation in senior management roles by 2018. Senior management
roles comprise 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 determined by meeting a minimum role size).
Tabcorp’s Diversity Policy is available from the corporate governance section of the Tabcorp
website at www.tabcorp.com.au/about-us_corporate-governance.aspx. Also, Tabcorp’s annual
report under the Workplace Gender Equality Act is available from the sustainability section
of Tabcorp’s website at www.tabcorp.com.au/sustainability_employees.aspx.
Commenced a Board performance assessment
The Board commenced a self-evaluation performance assessment during the 2015 financial
year. An independent external consultant assisted in preparing the evaluation questionnaire
and made recommendations to enhance the assessment process. The assessment will include
evaluation of the Board structure and its role, Board meetings and processes, the Board’s
relationship with management, the effectiveness of each Board Committee, and the
performance of the Chairman, the Chairman of each Committee and each individual Director.
Director independence
The Board has agreed criteria against which Non Executive Directors are assessed to determine
whether they are independent of management and free of any business or other relationship
that could materially interfere with the exercise of their unfettered and independent judgment.
The Tabcorp Board determined that throughout the 2015 financial year and at the date of this
report all Non Executive Directors of Tabcorp were independent. In reaching this determination,
the Board considered, among other things, that:
• Paula Dwyer’s independence is not affected by her 10 years of service on the Board; and
• There were no circumstances regarding a Director’s association with a supplier, professional
adviser, consultant to or customer of the Tabcorp Group that affected independence.
22
Tabcorp Concise Annual Report 2015 Board Committees
There are three committees of the Tabcorp Board:
• Audit, Risk and Compliance
• Remuneration
• Nomination
Tabcorp received the highest rating for corporate
governance among companies in the global gambling
sector in the last Dow Jones Sustainability Index results
released in September 2014.
Board Committee membership is restricted to Non Executive Directors only. Each Committee
is comprised of at least three members, and all Committee members are independent. The
Chairman of the Board does not serve as the Chairman of the Audit, Risk and Compliance
Committee or the Chairman of the Remuneration Committee.
Each Board Committee has terms of reference which set out the roles, responsibilities,
composition and processes of each Committee. These terms of reference are available from
the corporate governance section of the Tabcorp website at www.tabcorp.com.au/about-us_
corporate-governance.aspx.
Risk management
The Audit, Risk and Compliance Committee oversees the Risk Management Framework and
Compliance Framework applicable to the Tabcorp Group. These frameworks together with the
Internal Audit Plan and associated policies and procedures set out the roles, responsibilities and
guidelines for managing financial and operational risks associated with the Group’s operations.
Each year the Audit, Risk and Compliance Committee reviews the risk profiles of the Tabcorp
Group and the appropriateness of its Risk Management Framework. During the 2015 financial
year the Audit, Risk and Compliance Committee introduced a risk deep dive process which
enabled Directors and management to explore specific risk profiles relevant to key operating
business units.
For further details relating to the Tabcorp Group’s risk management practices, refer to the
Corporate Governance Statement.
The key operating and financial risks and uncertainties for the Tabcorp Group are disclosed
on pages 33 to 36 of the Directors’ report.
23
Tabcorp Concise Annual Report 2015 Board of Directors
Paula Dwyer
Chairman since June 2011 and Non
Executive Director since August 2005
Bachelor of Commerce; Fellow of the Chartered
Accountants Australia and New Zealand;
Fellow of the Australian Institute of Company
Directors (AICD); Senior Fellow of the Financial
Services Institute of Australasia.
Paula Dwyer is Chairman of Healthscope
Limited, and a Director of Australia and New
Zealand Banking Group Limited and Lion Pty
Ltd. She is also a Member of the ASIC External
Advisory Panel and the Kirin Holdings
International Advisory Board.
Ms Dwyer was formerly a Director of Leighton
Holdings Limited, Suncorp Group Limited,
Foster’s Group 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 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 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.
David Attenborough
Managing Director and Chief Executive
Officer since June 2011
Bachelor of Science (Honours); Masters
of Business Administration.
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).
Elmer Funke Kupper
Non Executive Director since June 2012
Bachelor of Business Administration; Master of
Business Administration; Member of the AICD.
Elmer Funke Kupper was Tabcorp’s Managing
Director and Chief Executive Officer from
September 2007 to June 2011, and previously
he was Tabcorp’s Chief Executive Australian
Business from February 2006.
Mr Funke Kupper is Managing Director and
Chief Executive Officer of ASX Limited. He is
a director of the Business Council of Australia
and a Male Champion of Change.
Mr Funke Kupper’s 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 he 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
Non Executive Director since July 2012
Bachelor of Commerce.
Steven Gregg is a Director of thoroughbred
bloodstock company William Inglis & Son
Limited and of Challenger Limited. He is also
a Consultant and Senior Adviser to the Grant
Samuel Group, Trustee of the Australian
Museum Trust and a Director of The Lorna
Hodgkinson Sunshine Home. He is the former
Chairman of Goodman Fielder Limited and
former Chairman of Austock Group Limited.
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 is a member of the Tabcorp Audit,
Risk and Compliance Committee, Tabcorp
Nomination Committee and Tabcorp
Remuneration Committee.
24
Tabcorp Concise Annual Report 2015 Jane Hemstritch
Non Executive Director since
November 2008
Bachelor of Science (First Class Honours);
Fellow of the Chartered Accountants Australia
and New Zealand; Fellow of the Institute of
Chartered Accountants in England and Wales;
Fellow of the 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
member of the Global Board of Herbert Smith
Freehills Global LLP, Chairman of Victorian
Opera Company Limited 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 managed 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.
Justin Milne
Non Executive Director since
August 2011
Bachelor of Arts; Member of the AICD.
Justin Milne is Chairman of MYOB Group
Limited and Chairman of NetComm Wireless
Limited. He is also a Director of NBN Co Limited,
Members Equity Bank Limited and SMS
Management and Technology Limited.
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,
former Director of Basketball Australia 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 AO
Non Executive Director since
October 2006
Bachelor of Science (Honours); PhD (Nuclear
Physics); Fellow of the AICD.
Zygmunt Switkowski is the Chairman of
Suncorp Group Limited and Chairman of NBN
Co Limited. He is also a Director of Oil Search
Limited and Chancellor of the Royal
Melbourne Institute of Technology. He is a
former Director of Lynas Corporation Limited
and Healthscope Limited, and he is the former
Chairman of the Australian Nuclear Science
and Technology Organisation and former
Chairman of Opera Australia.
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.
25
Tabcorp Concise Annual Report 2015 Senior Executive Leadership Team
Damien Johnston
Chief Financial Officer
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.
David Attenborough
Managing Director and Chief
Executive Officer
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.
Kerry Willcock
Executive General Manager –
Corporate, Legal and Regulatory
Kerry joined Tabcorp in February
2005. She is Tabcorp’s Group General
Counsel and Company Secretary.
She is also responsible for regulatory,
government relations, corporate
affairs, internal communications,
responsible gambling and
community at Tabcorp. Kerry
was previously General Counsel
of Australia Post.
She is a founding member of
the Australian Corporate Lawyers
Association (ACLA) General Counsel
100 Group, a Member of AICD and
a Fellow of Governance Institute
of Australia.
Kerry is also a Member of the
Victorian Government’s Responsible
Gambling Ministerial Advisory
Committee.
Kerry holds a Bachelor of Laws and
a Bachelor of Arts.
Merryl Dooley
Executive General Manager –
Human Resources
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.
Doug Freeman
Executive General Manager –
Commercial Development
Since joining Tabcorp in June 2005,
Doug has held several senior finance
and strategy roles within Tabcorp’s
wagering and media businesses.
Most recently, Doug was Executive
General Manager Strategy and
Business Development before
commencing his current role in
July 2013.
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.
26
Tabcorp Concise Annual Report 2015 Craig Nugent
Chief Operating Officer –
Wagering and Media
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
Pty Ltd, he has held senior executive
roles in Fixed Odds Racing and
Wagering, Oncourse Operations
and International Sales. He
commenced his current role
in March 2014.
Prior to joining Tabcorp, he held
management roles in the New
South Wales racing industry bodies
Australian Jockey Club and Sydney
Turf Club.
Adam Rytenskild
Chief Operating Officer –
Keno and Gaming
Adam joined Tabcorp in 2000 as
State Manager – Retail Wagering
and since then he has held numerous
senior management roles. Following
Tabcorp’s demerger in June 2011,
Adam was appointed to the role
of Executive General Manager –
Distribution, responsible for
leading Tabcorp’s customer
distribution channels including
the establishment of Digital and
growing the Retail business.
He has extensive experience leading
multi-channel businesses, including
a nine year career with Mobil Oil
prior to joining Tabcorp.
Adam holds a Masters of Business
Administration and has attended
the Senior Executive Programme
at London Business School.
Michael Smith
Chief Marketing Officer
Michael joined Tabcorp in January
2015 to lead the strategic marketing
and customer agenda for Tabcorp.
Previously he held the position of
Chief Commercial Officer, Digital
Life for SingTel (Singapore) with
responsibility for leading the group
digital agenda including identifying
and growing new digital revenue
streams. His previous roles include
Managing Director, Consumer
(Optus) and Chief Marketing Officer
(SingTel Optus), and he has also
held commercial roles with the
Commonwealth Bank of Australia.
Michael holds a Bachelor of Business.
Kim Wenn
Chief Information Officer
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.
She has extensive experience
managing and leading technology
businesses, including a five year
career with Quest Software prior
to joining Tabcorp.
Kim holds a Masters in Management
and Technology, a Bachelor of Science
(Computing) and has attended the
Advanced Management Programme
at Harvard Business School. She is
a Graduate Member of the AICD.
27
Tabcorp Concise Annual Report 2015 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 2015.
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 24 and 25.
2. 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 2012, and the period for which each directorship has been held.
Name
Paula Dwyer
Listed entity
Australia and New Zealand
Banking Group Limited
Healthscope Limited (i)
Period directorship held
April 2012 to present
June 2014 to present
Leighton Holdings Limited
January 2012 to May 2014
David Attenborough
Nil
Elmer Funke Kupper
ASX Limited
October 2011 to present
Steven Gregg
Challenger Limited
October 2012 to present
Jane Hemstritch
Goodman Fielder Limited
February 2010 to March 2015
Commonwealth Bank
of Australia
Lend Lease Group
Santos Limited
October 2006 to present
September 2011 to present
February 2010 to present
Justin Milne
MYOB Group Limited
March 2015 to present
NetComm Wireless Limited
March 2012 to present
Quickflix Limited
July 2011 to November 2012
Zygmunt Switkowski
Lynas Corporation Limited
February 2011 to August 2013
Oil Search Limited
Suncorp Group Limited (ii)
November 2010 to present
September 2005 to present
(i) Healthscope Limited recommenced listing on the ASX on 28 July 2014.
(ii) Includes the period as a Director of Suncorp-Metway Limited prior to the corporate restructure of the Suncorp Group.
3. 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. 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 a Founding Member of the Australian Corporate Lawyers Association
GC100, a Member of the Victorian Government’s Responsible Gambling Advisory Committee, a
Liaison Delegate of the Business Council of Australia, and a Member of the Australian Institute
of Company Directors.
Michael Scott was appointed as an additional Company Secretary in August 2012. He has been
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 Governance Institute of Australia, Graduate Member of
the Australian Institute of Company Directors and Fellow of Leadership Victoria’s Williamson
Community Leadership Program.
4. Principal activities
The principal activities of the Tabcorp Group during the financial year comprised the provision
of gambling and entertainment services. The Tabcorp Group’s principal activities remain
unchanged from the previous financial year, except as disclosed elsewhere in this report.
5. Operating and financial review of the Tabcorp Group
The financial results of the Tabcorp Group for the financial year ended 30 June 2015 relate
to the Tabcorp Group’s operations, which comprise its three businesses of Wagering and Media,
Gaming Services, and Keno.
A summary of the Tabcorp Group’s financial performance for the year ended 30 June 2015
and comparison to the prior financial year is shown in the table below.
Summary financial performance of the Tabcorp Group
For the year ended 30 June
Revenue
Taxes, levies, commissions and fees
Operating expenses
Depreciation and amortisation
EBIT
NPAT (including discontinued operations)
2015
$m
2,155.5
(1,188.8)
(458.6)
(173.5)
334.6
334.5
2014
$m
2,039.8
(1,120.3)
(433.4)
(164.4)
321.7
129.9
Change
%
5.7
6.1
5.8
5.5
4.0
157.5
28
Tabcorp Concise Annual Report 2015 Reported net profit after income tax (NPAT) of the Tabcorp Group for the financial year was
$334.5 million, which was 157.5% above the previous financial year. NPAT was positively impacted
by income tax benefits relating to the Victorian Wagering and Gaming Licences payment and
the New South Wales (NSW) Trackside payment and associated interest income which totalled
$163.2 million (refer to sections 7.4 and 7.5). NPAT from continuing operations for the financial
year excluding these income tax benefits and related interest was $171.3 million, which was
14.7% above the previous financial year. The reported NPAT for the prior 2014 financial year was
impacted by a loss of $19.5 million comprised of the Health Benefit Levy (HBL) and associated
costs which related to the former Tabaret Victorian Gaming business and was reported as
a discontinued operation.
Revenue was $2,155.5 million, which was 5.7% above the previous financial year.
Tabcorp’s 2015 financial performance demonstrates the progress made in the delivery of our
multi-channel distribution strategy and our focus on customers, products and brands. The
Wagering and Media business achieved strong revenue and EBITDA growth in the financial
year, with customers responding to our integrated retail and digital offer. This business
continues to lead the market on the back of our product and channel innovation.
The Tabcorp Gaming Solutions (TGS) business has been enhanced by extending a number
of contracts and signing new venues in NSW and Victoria. TGS is providing value to licensed
venues and becoming a more sustainable business for Tabcorp shareholders.
Keno is undergoing a brand and product transformation, which commenced in June 2015.
Initial results have been pleasing and we are well placed to continue to benefit from investments
we are making in the network.
Tabcorp’s businesses generated more than $1.2 billion in gambling taxes and racing industry
funding in FY15, highlighting the value that Tabcorp’s operations provide to stakeholders.
Shareholders’ funds as at the end of the financial year totalled $1,690.1 million, which was
14.1% above the previous financial year.
Refer to section 6 for information about the financial and operational performance of each
business unit within the Tabcorp Group.
5.1 Earnings per share
In respect of continuing operations, basic earnings per share for the period were 42.4 cents,
up 114.1% on the previous financial year, and diluted earnings per share for the period were
42.2 cents, up 114.2% on the previous financial year.
Total basic earnings per share were 42.4 cents, up 146.5% on the previous financial year, and
total diluted earnings per share were 42.2 cents, up 146.8% on the previous financial year.
Earnings per share are disclosed in note 6 to the Financial Report.
5.2 Dividends
A final dividend of 10 cents per share has been announced. The final dividend will be fully
franked and payable on 24 September 2015 to shareholders registered at 20 August 2015.
The ex-dividend date is 18 August 2015.
The interim and final dividends payable in respect of the full year totalled 20 cents per share
fully franked, which represented a dividend payout ratio of 93% of full year NPAT from continuing
operations excluding the income tax benefits and related interest referred to in section 5.
In addition, a special dividend of 30 cents per share fully franked was paid on 16 March 2015.
The Board intends that the target dividend payout ratio will increase to 90% of NPAT before
amortisation of the Victorian Wagering and Betting Licence for the 2016 financial year.
Tabcorp’s Dividend Reinvestment Plan (DRP) will operate in respect of this final dividend, with
no discount or underwriting applicable.
The following dividends have been paid, declared or recommended by the Company since the
end of the preceding financial year:
2015 final dividend
Final fully franked dividend for 2015 of 10 cents per share on ordinary shares as
announced on 13 August 2015 with a record date of 20 August 2015 and payable
on 24 September 2015.
2015 special dividend
Special fully franked dividend of 30 cents per share on ordinary shares (other than
on new shares issued under the pro rata accelerated renounceable entitlement offer)
as announced on 5 February 2015 with a record date of 11 March 2015 and payable
on 16 March 2015.
2015 interim dividend
Interim fully franked dividend for 2015 of 10 cents per share on ordinary shares (other
than on new shares issued under the pro rata accelerated renounceable entitlement
offer) as announced on 5 February 2015 with a record date of 11 March 2015 and payable
on 16 March 2015.
2014 final dividend
Final fully franked dividend for 2014 of 8 cents per share on ordinary shares as
announced on 7 August 2014 with a record date of 14 August 2014 and payable
on 24 September 2014.
Further information regarding dividends may be found in note 5 to the Financial Report.
$m
82.9
229.7
76.6
61.0
29
Tabcorp Concise Annual Report 2015
Directors’ report (continued)
6. Operating and financial review of each business
The Tabcorp Group’s structure comprises the following three businesses:
• Wagering and Media;
• Gaming Services; and
• Keno.
In the first half of the financial year, the Tabcorp Group’s previous Media and International
business was combined with the Wagering business as the nature of products and services
are inherently related.
The activities and results for these operations during the financial year are discussed below.
6.1 Wagering and Media business
The Tabcorp Group conducts wagering activities under the TAB brand in Victoria and NSW,
and the ACTTAB brand in the Australian Capital Territory (ACT) through a network of agencies,
hotels and clubs; provides on-course totalisators at thoroughbred, harness and greyhound
metropolitan and country race meetings; and via the internet, mobile devices, phone and pay TV.
TAB customers can wager on a wide range of totalisator and fixed odds betting products offered
on racing and sporting events. In Victoria, the business operates under a 50/50 Joint Venture
with the Victorian Racing Industry. The Victorian Wagering and Betting Licence expires in August
2024, but the licence may be extended for a further period of up to two years at the discretion
of the responsible minister. The NSW Wagering Licence expires in March 2097 with the retail
exclusivity period expiring in June 2033. The ACT Totalisator Licence expires in October 2064,
the ACT Sports Bookmaking Licence is for an initial term of 15 years expiring in October 2029
with further rolling extensions to a total term of 50 years (to October 2064), and the ACT
Approval to Conduct Trackside expires in October 2064.
Tabcorp’s Wagering and Media business operates Luxbet, offering a racing, sport and novelty
product bookmaking service to Australian customers by phone, internet and mobile devices
based in the Northern Territory. Luxbet operates under a licence to conduct a racing and sports
bookmaker business in the Northern Territory which expires in June 2020. The Luxbet Europe
business commenced during the year pursuant to a UK Combined Remote Operating Licence
which has no expiry date, and an Isle of Man licence to conduct online gambling which expires
in January 2019.
The business operates Trackside, a computer simulated racing product, in Victoria, NSW and
the ACT, and also licences the product for use in other domestic and overseas jurisdictions.
The Tabcorp Group has a 50% interest in the Premier Gateway International (PGI) joint venture
in the Isle of Man, which provides wagering services for PGI customers and pooling services
to the Tabcorp Group and other international wagering operators in various jurisdictions
outside Australia.
In addition, the business has specialist television and radio operations focused on the racing
industry and other associated content. The business operates three Sky Racing television
channels and broadcasts thoroughbred, harness and greyhound racing and other sports to
audiences in TAB outlets, hotels, clubs and other licensed venues, and into homes to pay TV
subscribers. The business manages the export of Australian racing to 52 other countries (as
at 30 June 2015) which includes vision, form guides and wagering data, and also the import
of racing content to Australian customers. The business also operates the Sky Sports Radio
network which broadcasts throughout NSW and the ACT, and has advertising and sponsorship
arrangements with Radio Sport National.
Summary financial performance of the Wagering and Media business
For the year ended 30 June
Revenue
Taxes, levies, commissions and fees
Operating expenses
EBITDA*
Depreciation and amortisation
EBIT
2015
$m
1,856.9
(1,099.4)
(381.7)
375.8
(128.6)
247.2
2014
$m
1,737.8
(1,029.8)
(357.3)
350.7
(116.6)
234.1
Change
%
6.9
6.8
6.8
7.2
10.3
5.6
* EBITDA (earnings before interest, tax, depreciation and amortisation) is non-IFRS financial information.
Wagering and Media revenues were $1,856.9 million, up 6.9%. Operating expenses, including
one-off ACTTAB acquisition and integration costs, were $381.7 million, up 6.8%. EBITDA was
$375.8 million, up 7.2%.
On a total business basis, including the Victorian Racing Industry’s 50% share of the Victorian
Joint Venture, Wagering and Media revenues were up 6.2%.
The largest drivers of Tabcorp’s Wagering growth in recent years, Fixed Odds and Digital Wagering,
were again the strongest contributors in the financial year. The strong performance was supported
by a focus on the customer experience and successful execution of major events such as the
Spring Racing Carnival, The Championships and Soccer World Cup.
TAB Racing revenues were $1,666.3 million, up 5.1%. This comprised $1,236.7 million in totalisator
revenues, down 2.1%, and fixed odds revenues of $429.6 million, up 33.0%.
TAB Sports revenues were $219.2 million, up 16.2%. TAB’s Fixed Odds Cash-Out product
was successfully introduced into the market across all channels, an example of ongoing
product innovation.
Trackside revenues were $99.9 million, up 11.9%. Luxbet revenues were $53.1 million, up 10.9%.
30
Tabcorp Concise Annual Report 2015 Media revenues were $173.3 million, up 6.3%, with the growth driven by the expanded distribution
of Australian and New Zealand racing to foreign markets and international co-mingling. Tabcorp
commenced pooling into Hong Kong in the first half of the 2015 financial year.
Wagering turnover in Tabcorp’s NSW, Victoria and ACT retail channel grew 0.3% to $6,601.0
million. Digital channels continued to drive Wagering growth, with turnover of $3,416.8 million,
up 17.8%. The use of mobile devices now accounts for 63% of all digital turnover. The integration
of the digital and retail channels is progressing with Tabcorp’s Future Retail pilot sites going
live this half.
6.2 Gaming Services business
The Tabcorp Group operates TGS in Victoria and NSW. The business provides services to licensed
gaming venues in areas including marketing, compliance, responsible gambling, venue
refurbishment and machine procurement.
Summary financial performance of the Gaming Services business
6.3 Keno business
The Tabcorp Group operates Keno in licensed venues and TABs in Victoria, Queensland and the
ACT, and in licensed venues in NSW. The Victorian Keno Licence expires in April 2022, the NSW
Keno Licence expires in July 2022, the Queensland Keno Licence expires in June 2047, and the
ACT Approval to Conduct Keno expires in October 2064.
Summary financial performance of the Keno business
For the year ended 30 June
Revenue
Taxes, levies, commissions and fees
Operating expenses
EBITDA
Depreciation and amortisation
EBIT
2015
$m
199.0
(88.6)
(44.0)
66.4
(18.9)
47.5
2014
$m
203.9
(90.5)
(41.2)
72.2
(20.5)
51.7
Change
%
(2.4)
(2.1)
6.8
(8.0)
(7.8)
(8.1)
For the year ended 30 June
Revenue
Taxes, levies, commissions and fees
Operating expenses
EBITDA
Depreciation and amortisation
EBIT
2015
$m
99.6
(0.8)
(31.2)
67.6
(26.0)
41.6
2014
$m
98.1
-
(31.1)
67.0
(27.3)
39.7
Change
%
1.5
n/a
0.3
0.9
(4.8)
4.8
TGS revenues were $99.6 million, up 1.5%. Operating expenses were flat at $31.2 million, while
EBITDA was $67.6 million, up 0.9%.
TGS has made good progress by signing new venues in the NSW market as well as in Victoria
where it is well established. TGS has added Club Cats Geelong, Maitland Leagues Club, Illawarra
Steelers Club and Bankstown Trotting Recreational Club to its portfolio of venues and now has
9,300 gaming machines under contract.
TGS has also extended a number of contracts across the Victorian network, with 84% of the base
now contracted through to 2022.
The business is well placed to continue delivering additional venue sign-ups and sustainable,
long-term performance. During the 2016 financial year TGS will expand its resources and
capability to support its growth. The additional operating expenditure associated with these
initiatives is expected to be $5 million per year from the 2016 financial year.
Total Keno network turnover was up 2.7%, reflecting improved customer activity in NSW and
Victoria, offset by a softer Queensland market.
Keno revenues were $199.0 million, down 2.4%, impacted by jackpot activity. Operating expenses
were $44.0 million, up 6.8% reflecting investments in capability, the Keno brand and product
transformation. EBITDA was $66.4 million, down 8.0%.
The new Keno experience has been well received by customers in Victoria and NSW, where it
has been launched. The linking of jackpots between NSW and Victoria has commenced, with
Queensland planned to follow, subject to regulatory approvals.
7. 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 2014.
7.1 ACTTAB acquisition
On 14 October 2014, the Tabcorp Group acquired the ACTTAB business from the ACT Government.
As part of the acquisition, the Tabcorp Group was issued a 50 year exclusive totalisator licence, a
sports bookmaking licence for an initial term of 15 years with further rolling extensions to a total
term of 50 years, and ongoing approvals to offer Keno and Trackside products for 50 years.
31
Tabcorp Concise Annual Report 2015 Directors’ report (continued)
7.2 Media rights
The short term agreement between Sky Channel Pty Ltd (‘Sky Racing’), a Tabcorp Group
subsidiary, and ThoroughVisioN Pty Ltd (‘TVN’) for NSW and Victorian thoroughbred racing
media rights expired on 17 December 2014 which resulted in vision for NSW and Victorian
thoroughbred race meetings not being available for broadcast on Sky Racing channels from
18 December 2014. Broadcasting of NSW and Victorian thoroughbred racing resumed on Sky
Racing channels on 31 December 2014 following interim arrangements agreed with respective
rights holders.
The NSW and Victorian shareholders of TVN decided to pursue different media strategies and
in March 2015 TVN ceased broadcasting. The Tabcorp Group has agreed separate media rights
arrangements for the broadcasting rights of NSW thoroughbred racing and Victorian
thoroughbred racing with respective rights holders.
Tabcorp announced on 28 January 2015 that binding heads of agreement were finalised for
Sky Racing to have the domestic and international media rights, as well as non-exclusive digital
rights, for all NSW thoroughbred racing for 10 years. The Company also announced that it had
concluded arrangements for Sky Racing’s thoroughbred showcase channel, Sky Racing World,
to be included on FOXTEL’s base tier.
On 7 August 2015, Tabcorp announced that it had reached agreement on a media rights deal
for Victorian thoroughbred racing. The arrangements, which expire in 2020, include domestic,
digital and international rights for Victorian thoroughbred racing.
These long term media rights arrangements deliver certainty for Tabcorp, the racing industry,
retail venue partners and wagering customers.
7.5 Tax treatment for Victorian licences payment
In May 2015, Tabcorp resolved with the Australian Taxation Office the tax treatment of the
$597.2 million paid to the State of Victoria in 1994 in relation to the Gaming and Wagering
Licences granted at that time. The agreed tax treatment provides Tabcorp with an allowable
deduction of $429.6 million, with the balance generating a capital loss of $167.6 million. As
a result, Tabcorp recognised an income tax benefit of $128.9 million in the 2015 financial year.
7.6 Victorian licence payment Supreme Court proceedings
In August 2012, Tabcorp commenced proceedings in the Supreme Court of Victoria seeking a
payment from the State of Victoria of an estimated $686.8 million. Tabcorp claims that the State
of Victoria was obliged to make the payment to Tabcorp in August 2012, when Tabcorp’s Gaming
and Wagering Licences expired and new licences were granted. The claim is based on a statutory
provision included in legislation from 1994 when the State privatised the Victorian TAB and listed
Tabcorp on the Australian Securities Exchange. Tabcorp’s initial public offering was underpinned
by this statutory entitlement, the terms of which were clearly set out in the prospectus.
However, in its judgment handed down on 26 June 2014 the Supreme Court held that the State
of Victoria was not obliged to make the payment to Tabcorp. The Court accepted the State’s
argument that amendments to the legislation made by the State in 2008 and 2009 impliedly
repealed the statutory provision which gave rise to the payment entitlement. Tabcorp was
unsuccessful in its subsequent appeal to the Court of Appeal of the Supreme Court of Victoria
which handed down its judgment on 4 December 2014.
On 15 May 2015, the High Court of Australia granted Tabcorp special leave to appeal in respect
for the judgment of the Court of Appeal in relation to its claim based on the statutory provision.
All Australian racing vision is available on the Sky Racing broadcast and TAB digital platforms.
The appeal is likely to be heard in the High Court during 2015.
7.3 Special dividend and entitlement offer
The Company paid a fully franked special dividend of 30 cents per ordinary share (other than
on new shares issued under the pro rata accelerated renounceable entitlement offer) on
16 March 2015 to shareholders registered at 11 March 2015. The special dividend was paid out
of retained earnings. To maintain Tabcorp’s current balance sheet and capital position, the
special dividend was funded through a pro rata fully underwritten accelerated renounceable
entitlement offer with retail entitlements rights trading which raised $236 million. Under
the entitlement offer, eligible shareholders could acquire one additional ordinary share for
every 12 existing ordinary shares held at the record date of 10 February 2015.
7.4 Trackside tax treatment
In November 2014, Tabcorp resolved with the Australian Taxation Office the tax treatment
of the $150 million paid to the NSW Government under the Trackside Agreement entered into
in December 2010 in relation to the operation of Trackside in NSW. As a result, Tabcorp recognised
an income tax benefit of $31.5 million in the 2015 financial year.
7.7 Victorian Health Benefit Levy on gaming machines
The Victorian Government applied a Health Benefit Levy on the Tabcorp Group’s former Tabaret
Gaming business for the financial year ended 30 June 2013. The levy was not applied pro rata and
it does not reflect that Tabcorp ceased to operate gaming machines on 15 August 2012 when its
Victorian Gaming Licence expired. Tabcorp commenced legal proceedings in the Supreme Court
of Victoria to challenge the Victorian Government’s determination in respect of the levy.
On 24 June 2013 the Supreme Court of Victoria ruled in favour of Tabcorp, deciding that
the Victorian Government has a discretion under the Gambling Regulation Act 2003 (Vic)
to calculate the levy on a pro rata basis rather than on the full financial year. The Victorian
Government appealed the judgment, and on 1 July 2014 the Court of Appeal of the Supreme
Court of Victoria ruled in favour of the Victorian Government. This impacted Tabcorp’s
earnings for the 2014 financial year by $19.5 million after tax. Tabcorp applied for special leave
to appeal to the High Court of Australia in respect of the judgment of the Court of Appeal,
however on 13 February 2015 the High Court of Australia declined to grant Tabcorp special leave.
There is no further impact on Tabcorp’s financial accounts as a result of that decision.
32
Tabcorp Concise Annual Report 2015 7.8 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.
• Keno
– Improve customer experience to drive participation
– Rebrand, and refresh in-venue offer with digital innovation
8. Business strategies
The Tabcorp Group is one of Australia’s leading gambling entertainment companies and seeks
to deliver sustainable superior returns to its shareholders through the delivery of financial,
operational and leadership excellence.
To achieve these outcomes, the Tabcorp Group continues to focus on the following key
business priorities:
• Group
– Provide superior returns to shareholders and key stakeholders
– Target a disciplined investment and expenditure profile
– Maintain investment grade credit rating
– Deliver customer service excellence
– Secure and extend licence duration while improving regulatory arrangements
and managing key risks
– Attract, develop and retain talent
– Create a highly engaged and diverse workforce
– Be recognised as a global leader in responsible gambling
• Wagering and Media
– Maintain market leadership and drive industry transformation
– Focus on increased digital integration across the retail network
– Develop new products, partnerships and digital platforms
– Strengthen customer relationships and retention through loyalty and customer
relationship management programs
– Further integrate vision and data with wagering products
– Maximise customer engagement from broadcast media rights
– Pursue disciplined, close to core, international expansion
• Gaming services
– Grow revenue and gaming performance in the NSW and Victorian markets
– Extend Victorian five year contracted venues to 10 years
– Expand NSW business
– Enter the ACT market and evaluate entry into other states
– Expand customer loyalty program
33
– Introduce new product offerings and expand jackpot pooling to include Queensland
– Establish digital Keno offering
9. Likely developments and expected results
Each year the Board undertakes a formal strategic planning process to provide guidance
to management about the Tabcorp Group’s strategic direction. The Tabcorp Group plans to
continue with its business strategies, as set out in this report. The execution of these strategies
is expected to result in improved financial performance over the coming financial years.
The achievement of the expected results in future financial years is dependent on a range
of factors, and may be adversely affected by any number of events, and are subject to, among
other things, the key risks and uncertainties described in section 10 below.
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.
10. Key risks and uncertainties
The Tabcorp Group has a structured and proactive approach to understanding and managing
risk. The key focus of the risk management approach is to ensure alignment of strategy,
processes, people, technology and knowledge, and evaluate and manage 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 Company’s corporate governance
statement available on Tabcorp’s website.
Set out below are summaries of the key risks that may materially impact the execution and
achievement of the business strategies and prospects for the Tabcorp Group in future financial
years. These key risks should not be taken to be a complete or exhaustive list of the risks and
uncertainties associated with the Tabcorp Group. Many of the risks are outside the control of the
Directors. There can be no guarantee that Tabcorp will achieve its stated objectives, that it will
meet trading performance or financial results guidance that it may provide to the market, or that
any forward looking statements contained in this report will be realised or otherwise eventuate.
Tabcorp Concise Annual Report 2015
Directors’ report (continued)
10.1 Regulation and changes to the regulatory environment
The activities of the Tabcorp Group are conducted in highly regulated industries. The gambling
activities that members of the Tabcorp Group conduct, and will conduct, and the level of
competition that they experience, and will experience, depend to a significant extent on:
• the licences granted to the Tabcorp Group and to third parties; and
• government policy and the manner in which the relevant governments exercise their broad
powers in relation to the manner in which the relevant businesses are conducted.
The rapid deregulation of the national wagering market has seen a dramatic growth in
market share by the corporate bookmakers, mostly located in the Northern Territory, and the
introduction of race fields fees legislation across Australia (which allows racing codes in a state
or territory to charge wagering operators for the use of race fields information, irrespective
of the domicile of the operator). This rapid deregulation has the potential to have an adverse
impact on the Tabcorp Group’s earnings in the short term as market changes continue. Tabcorp
continually adjusts its wagering business model to take account of the changed market
dynamics and to mitigate the adverse consequences of deregulation.
Changes in legislation, regulation or government policy may have an adverse impact on
the Tabcorp Group’s operational and financial performance. Court decisions concerning the
constitutionality or interpretation of such legislation, regulations or government policy may
have an adverse effect on the operational and financial performance of the Tabcorp Group.
Potential changes, which would potentially negatively affect the value of the licences granted
to members of the Tabcorp Group, and potentially the Tabcorp Group’s financial
performance, include:
• changes in state wagering, Keno or other gambling tax rates and levies;
• changes or decisions concerning race fields and sports product fees, advertising restrictions
and the distribution of gambling products, including through particular channels;
• changes impacting on aspects of retail exclusivity;
• variations to permitted deduction rates and returns to players;
• variations to arrangements for racing industry funding in Victoria, NSW and ACT;
• changes to the conditions in which venues offering products of members of the Tabcorp
Group must operate;
• the introduction of additional legislation to guard against money laundering;
• the introduction of further legislation to implement further responsible gambling measures;
• changes or decisions by government or industry concerning wagering, Keno or other forms
of gambling; and
• any other legislative change.
Any non-renewal of licences currently held by members of the Tabcorp Group, or the issue of
additional wagering, Keno or other gambling licences to third parties, would potentially result
in the Tabcorp Group not generating the revenue it currently generates from its licences, which
could adversely impact the Tabcorp Group’s financial performance and financial position.
Changes to the regulatory environment in some of the jurisdictions in which the Tabcorp Group
operates that have been made or foreshadowed and that may have an adverse effect on the
operational and financial performance of the Tabcorp Group include the expansion throughout
Australia of sports product fees or increases in those fees for sports betting operators. This risk,
and the similar race fields fee risk, are detailed below.
As a leader in the Australian gambling industry, the Tabcorp Group takes a proactive approach
to engaging with relevant regulators and governments, and lodges submissions in respect
of changes to the industry which may impact the Tabcorp Group and its stakeholders.
The Tabcorp Group operates a diverse portfolio of businesses spread across a number of
jurisdictions, business segments and customer categories which reduces the reliance on any one
specific business or jurisdiction. The Tabcorp Group maintains long term gambling licences, and
seeks new licences and to extend existing licences where possible. During the financial year, the
Tabcorp Group was successful in acquiring ACTTAB which secured long term licences in the ACT.
10.2 Disciplinary action and cancellation of licences
In certain situations (including if the Tabcorp Group fails to meet the terms and conditions
of its licences or other compliance requirements), the authorities that regulate the licences
and authorisations that have been granted to members of the Tabcorp Group (including the
Victorian Wagering and Betting Licence; the Victorian, NSW and Queensland Keno Licences;
the ACT Keno authorisation, the NSW and ACT totalisator and sports bookmaking licences;
and the Northern Territory sports bookmaking licence) may take disciplinary action against
relevant members of the Tabcorp Group.
The disciplinary action that may be taken includes the issue of a letter of censure, the imposition
of fines, the variation of the terms of, or imposition of new terms on, a licence or authorisation,
and the suspension, termination or cancellation of a licence or authorisation.
The suspension, cancellation or termination of any of the key licences or authorisations held
by a member of the Tabcorp Group would potentially result in a loss of revenue and profit for
the Tabcorp Group, which would adversely affect the Tabcorp Group’s financial performance
and financial position.
Certain licences held by members of the Tabcorp Group, including the Victorian Wagering
and Betting Licence, impose conditions requiring the licensee to comply with applicable laws,
a breach of which is grounds for disciplinary action. In this respect, refer to section 11 below.
34
Tabcorp Concise Annual Report 2015 10.3 Competition
In a broad sense, gambling activities compete with other consumer products for consumers’
discretionary expenditure and, in particular, with other forms of leisure and entertainment
including cinema, restaurants, sporting events, the internet and pay television.
Further, the Tabcorp Group’s Wagering and Media business currently competes with bookmakers
in Victoria and NSW, and other interstate and international wagering operators who accept
bets over the telephone or internet (such as corporate bookmakers based in the Northern
Territory and betting exchanges). The internet and other new forms of distribution have allowed
new competitors to enter the Tabcorp Group’s traditional markets of Victoria and NSW without
those competitors being licensed in those states. Further, recent court decisions, the significant
relaxation of advertising laws (or the way in which they have been administered) and the
increasing application of competition policy have allowed other wagering operators to gain
greater freedom to compete nationally.
Competition from interstate and international operators may extend to the Tabcorp Group’s
retail wagering network.
Equally, the Tabcorp Group’s Keno and TGS businesses each face competition in their
respective industries.
If the Tabcorp Group does not adequately respond to the competition which it faces, there
may be a change in consumer spending patterns which may have an adverse effect on the
operational and financial performance of the Tabcorp Group.
The Tabcorp Group adopts a range of strategies, including leveraging its exclusive retail network,
expanding its TAB customer loyalty program, enhancing its customer service and relationship
management, and driving digital excellence across its multi-channel network.
10.4 Racing products
The Tabcorp Group’s Wagering and Media business is reliant on the Victorian, NSW and other
interstate racing industries providing a program of events for the purposes of wagering. A
significant decline in the quality or number of horses or greyhounds, or number of events, or
the occurrence of an event which adversely impacts on the Australian racing industry or any
State or Territory racing industry, or which otherwise disrupts the scheduled racing program
(such as an outbreak of equine influenza or other equine pandemic), would have a significant
adverse effect on wagering revenue and may have an adverse effect on the operational and
financial performance of the Tabcorp Group. The Tabcorp Group engages and works closely with
racing bodies and industry stakeholders to optimise racing schedules and broadcasts to provide
the best racing product available to customers and ameliorate the potential for adverse impacts
that may result from a decline in racing product. In addition, the Tabcorp Group has business
continuity plans to help manage and respond to significant events which may impact upon
the supply of racing product.
10.5 Race field and sports product fees
Each State and Territory of Australia has implemented race fields arrangements, under which
each State or Territory or its racing industry charges wagering operators product fees for use
of that industry’s race fields information (or otherwise charges fees in respect of the operator’s
race betting operations in that State or Territory). Consequently, the Tabcorp Group is required
to pay product fees to the relevant racing controlling body. Similarly, legislation has been
introduced or proposed in various jurisdictions to support the imposition by sports controlling
bodies of fees payable by wagering operators betting on relevant sporting events. In 2014, some
bodies introduced new fee models and rates which increased the expenses of the Wagering
and Media business in the 2015 financial year. There is also the potential for further increases
in, or the introduction of new, such fees which may have an adverse effect on the operational
and financial performance of the Tabcorp Group. However, the Tabcorp Group has mitigation
strategies to partly ameliorate such impacts, including that members of the Tabcorp Group
currently have contracts that the Tabcorp Group considers will allow them to offset some of
the fees or obtain damages under contract. Members of the Tabcorp Group may in the future
disagree with various racing industry bodies regarding the application of certain aspects of
the race fields regimes or contracts that govern product fees. Such disagreements may lead
to litigation or other dispute resolution processes, including negotiated settlement.
10.6 Sky Channel arrangements
Sky Channel requires and holds rights to broadcast various race meetings and other sporting
events held throughout Australia and internationally. Certain of the contracts pursuant to
which these broadcast rights are held have expired or will expire, and new contracts are being
negotiated or will require renegotiation. The Tabcorp Group was in negotiations with rights
holders of thoroughbred horse racing broadcast rights of Victorian and NSW racetracks with
a view to entering into new broadcast rights arrangements. Binding heads of agreement were
finalised in January 2015 in respect of certain NSW thoroughbred racing broadcast rights for a
period of ten years. On 7 August 2015, the Tabcorp Group reached agreement on a media rights
deal for Victorian thoroughbred racing which expires in 2020. These long term media rights
arrangements deliver certainty for Tabcorp, the racing industry, retail venue partners and
wagering customers. If, for any reason, the Tabcorp Group is unable to renegotiate any of its
key broadcast arrangements or to renegotiate them on materially the same or similar terms,
then this may adversely impact the operational and financial performance of the Tabcorp
Group’s Wagering and Media business. The Tabcorp Group has alternative business plans to
mitigate potential adverse impacts should they arise. In addition, the Tabcorp Group continues
to expand the export of Australian racing vision to more countries around the world and
import racing content to Australian customers.
10.7 Victorian licence payment Supreme Court proceedings
As referred to in section 7.6, Tabcorp is seeking a payment from the State of Victoria of
$686.8 million. Tabcorp has been granted special leave to appeal to the High Court of Australia
in respect of the judgment of the Court of Appeal of the Supreme Court of Victoria handed down
in favour of the State of Victoria. The financial impact to the Tabcorp Group resulting from the
35
Tabcorp Concise Annual Report 2015 Directors’ report (continued)
write down of the receivable in respect of the Victorian Gaming and Wagering Licences has been
dealt with in previous financial years. Due to the nature of adversarial litigation, the outcome
cannot be predicted with any certainty. Tabcorp may ultimately not succeed in recovering the
payment from the State of Victoria. If Tabcorp is unsuccessful in its claim, there should be no
further adverse financial effect on the Company other than arising from the payment of legal
costs in relation to pursuing the claim.
Notwithstanding that Tabcorp’s appeal will be heard by the High Court, Tabcorp resolved with
the Australian Taxation Office the tax treatment of the $597.2 million paid to the State of Victoria
in 1994. As a result, Tabcorp recognised an income tax benefit of $128.9 million in its financial
statements for the year ended 30 June 2015. Further information is available in section 7.5.
10.8 Technology security risks
The Tabcorp Group’s businesses rely on the successful operation of technology infrastructure.
A technology security failure, such as a cyber attack, could impact upon the Tabcorp Group’s
technology systems and equipment, which may potentially adversely impact the operational
and financial performance of the Group. Significant resources are allocated to managing the
Group’s information technology portfolio, including specialist resources dedicated to
information security and responding to cyber risks. The Tabcorp Group’s information security
management system has been certified to ISO 27001 standard. The Tabcorp Group continues
to evolve and strengthen its practices to effectively manage technology security risks.
11. Significant events after the end of the financial year
In July 2015, Tabcorp announced that civil proceedings had been brought by the CEO of
Australian Transaction Reports and Analysis Centre (AUSTRAC) against Tabcorp Holdings
Limited and the Tabcorp Group’s NSW and Victorian wagering businesses. The statement of
claim includes matters which have been raised by and discussed with AUSTRAC over an extended
period. Tabcorp has been actively managing these matters in consultation with AUSTRAC, and
continues to work on resolving them as a priority. Tabcorp notes that certain matters referred
to by AUSTRAC in its statement of claim were, at the time of occurrence and where appropriate,
reported to the relevant gambling regulators and police authorities. Notifications were not
made to AUSTRAC in all cases. Tabcorp takes its regulatory compliance obligations extremely
seriously. Tabcorp acknowledges the matters raised by AUSTRAC and is committed to ensuring
they are resolved. A program of works, underway for some time, has been expanded and
accelerated. At this stage it is not practicable to determine the extent of any potential financial
impact to the Tabcorp Group.
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 24 to the Financial Report.
12. Auditors
The Tabcorp Group’s external auditor is Ernst & Young.
The Tabcorp Group’s internal audit function is fully resourced by Tabcorp, with specialist
independent external support where necessary.
More information relating to the audit functions can be found in the Tabcorp Group’s corporate
governance statement.
13. 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.
14. 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 environmental performance obligations.
No environmental breaches have been notified to the Tabcorp Group by any government agency.
15. Directors’ interests in Tabcorp securities
At the date of this report, 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:
Number of securities
Ordinary
Shares
54,166
541,084
54,166
15,000
25,112
9,208
91,949
Performance
Rights
-
1,536,773
-
-
-
-
-
Tabcorp
Subordinated
Notes
-
-
-
-
-
-
-
Name
Paula Dwyer
David Attenborough
Elmer Funke Kupper
Steven Gregg
Jane Hemstritch
Justin Milne
Zygmunt Switkowski
36
Tabcorp Concise Annual Report 2015 16. Board and Committee meeting attendance
During the financial year ended 30 June 2015 the Company held 10 meetings of the Board
of Directors.
The attendance of the Directors at meetings of the Board and its Committees during the year
in review were:
Name
Paula Dwyer (i)
David Attenborough (ii)
Elmer Funke Kupper
Steven Gregg
Jane Hemstritch (iii)
Justin Milne
Zygmunt Switkowski
Board of
Directors
B
A
10
10
10
10
10
10
10
10
10
10
10
10
10
10
Audit, Risk and
Compliance
Committee
B
A
4
4
4
4
4
4
4
4
4
4
4
4
4
4
Nomination
Committee
B
A
2
2
2
2
2
2
2
2
2
2
2
2
2
2
Remuneration
Committee
B
A
4
4
4
4
-
-
4
4
-
-
-
-
4
4
A Number of meetings attended.
B Maximum number of possible meetings available for attendance.
(i) Paula Dwyer also attended meetings of the Victorian Joint Venture Management Committee as Chairman of this Committee.
(ii) David Attenborough attends Board Committee meetings, but he is not a member of any Board Committee. Only
Non Executive Directors are members of Board Committees.
(iii) Jane Hemstritch also attended meetings of the Due Diligence Committee which oversaw the due diligence process
for the Entitlement Offer. She was Chairman of this Committee.
The terms of reference and details of the functions and memberships of the Committees
of the Board are set out in the Company’s corporate governance statement available on
Tabcorp’s website.
17. 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.
18. 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 2015. 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.
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 Board 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
Board Audit, Risk and Compliance Committee and the engagement of auditors are available
in the Company’s corporate governance statement available on the Tabcorp website.
Ernst & Young, acting as the Company’s external auditor, received or are due to receive $375,000
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.
19. Corporate governance
The Directors of the Company support and adhere to the ASX Corporate Governance Principles
and Recommendations, 3rd Edition, recognising the need for maintaining high standards of
corporate behaviour and accountability. The Company’s corporate governance statement is
available under the corporate governance section of the Company’s website at www.tabcorp.
com.au/about_governance.aspx.
20. 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, dollar
amounts in the financial report and the Directors’ report have been rounded to the nearest
hundred thousand unless specifically stated to be otherwise.
37
Tabcorp Concise Annual Report 2015 Directors’ report (continued)
21. 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 2015.
This auditor’s independence declaration forms part of this Directors’ report.
This report has been signed in accordance with a resolution of Directors.
Paula J Dwyer
Chairman
Melbourne
13 August 2015
38
Tabcorp Concise Annual Report 2015
Remuneration report (audited)
1. Purpose
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 controlled entities for the financial year ended 30 June
2015. 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 Senior Executive Leadership Team. The same group of individuals is regarded
as KMP for both the Company and the Group.
2. Remuneration philosophy
The key objective of Tabcorp’s remuneration philosophy is to enable Tabcorp to attract,
motivate and retain high calibre individuals across the organisation (including Board and
senior management levels) through a market-competitive, shareholder-aligned remuneration
framework. The Board Remuneration Committee regularly reviews the remuneration philosophy
and underlying principles to ensure they remain contemporary and consistent with generally
accepted market practice and Tabcorp’s business objectives.
3. Governance
The Board Remuneration Committee assists the Board in the oversight of Tabcorp’s remuneration
strategy and framework. 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 2015 and to the date of this report, no remuneration consultant
provided a remuneration recommendation in respect of any KMP.
Tabcorp’s remuneration framework is underpinned by the following key principles which help
drive the Company’s philosophy:
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.
Creating long term shareholder value
Reward for the creation of sustained long term shareholder value
Driving performance
Appropriately reward for superior Group, business unit and
individual performance
Market competitive
Remuneration levels that are market competitive
Driving the right behaviours
A framework that fosters the values and Tabcorp’s Ways of Working
The Tabcorp remuneration framework for executives and senior management is thus heavily
focused on variable components that reward the individual for superior Group, business unit
and individual performance that ultimately leads to shareholder value creation. As such,
executive and senior management remuneration comprises three components – a fixed
remuneration package, a short term incentive (‘STI’) and a long term incentive (‘LTI’).
At least 45 per cent of each KMP’s remuneration is ‘at risk’ and tied to the achievement of specific
Group, business unit and individual performance objectives.
39
Details regarding the composition of the Board Remuneration Committee, including biographies
of each member are set out in the Directors’ report.
4. Summary of the year ended 30 June 2015
Area
Reward mix
Summary
The Board Remuneration Committee reviewed the
remuneration packages of the Senior Executive Leadership
Team. With the exception of the Managing Director and
Chief Executive Officer, there were no changes to the overall
reward mix (i.e. the split between fixed and variable pay)
for KMP for the year ended 30 June 2015.
Reference
Section 8.2
Figure 4
Tabcorp Concise Annual Report 2015
Remuneration report (audited) (continued)
Area
STI structure
STI payout
LTI grants
LTI vesting
Chief Operating
Officer Wagering
and Media
remuneration
Summary
From 1 July 2014, Divisional Multipliers were introduced into
the STI plan. The purpose of this was to drive clearer executive
accountability for the performance of each business unit
and ultimately the Group. Divisional Multipliers were also
introduced to create a stronger link between reward and
performance measures that are within the executive’s scope
of influence.
For the year ended 30 June 2015, Short Term Incentive
payments were awarded to senior managers (payable in
August 2015), following the assessment of Tabcorp’s targets
for the year and overall performance. On average, 95 per cent
of the STI target will be payable to KMP (38 per cent of the
maximum) for the year ending 30 June 2015.
During the year, an allocation of Performance Rights was
made to eight members of the Senior Executive Leadership
Team. In addition, an allocation of Performance Rights under
the LTI was also made to the Managing Director and Chief
Executive Officer following shareholder approval at the 2014
Tabcorp Annual General Meeting. Vesting of the allocated
Performance Rights for all participants will depend on the
Company’s relative total shareholder return performance
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. All the Performance Rights will vest only
where the highest performance threshold is met at the
end of the three year period.
An LTI test date occurred on 23 September 2014 for the 2011
LTI grant. The relative TSR ranking at the test date for this
grant placed Tabcorp just over the 69th percentile when
compared to the peer group. As a result, 88 per cent of the
Performance Rights for this grant vested (12 per cent lapsed).
In February 2015, the domestic media business was integrated
into the Wagering business unit. The purpose of this was to
create a consolidated business aligned to driving domestic
growth in an increasingly competitive market. Following an
in-depth remuneration benchmarking exercise, the Board
Remuneration Committee approved an increase to the fixed
remuneration for the Chief Operating Officer Wagering and
Media (equating to 4.2 per cent, effective 1 February 2015)
which reflects the increased size and complexity of the
expanded business unit.
Reference
Section 8.4.1.4
Figure 5
Figure 6
Figure 7
Figure 17A
Area
Managing
Director and
Chief Executive
Officer
remuneration
Non Executive
Director fees
Summary
As communicated in the 2014 Remuneration report, to further
improve alignment of the Managing Director and Chief Executive
Officer’s remuneration with comparable roles in the market, an
increase in fixed remuneration (from $950,000 to $1,100,000)
and target short term incentive (from $640,000 to $750,000)
was provided to him during the year ended 30 June 2015.
Following a review of the Non Executive Director fees during
the year, the base Board fee for the Chairman was increased
from $400,000 to $410,000 per annum as well as the Non
Executive Directors (from $135,000 to $140,000 per annum).
There were no increases to Board Committee fees for the year.
Reference
Section 8.5.1
Section 7.3
Figure 17B
5. Proposed changes from 1 July 2015
Summary
The Board Remuneration Committee reviewed the LTI plan during the
year ended 30 June 2015. As a result of the review, the Committee approved
extending the eligibility of participation in the plan to include those senior
managers either identified as successors to the Senior Executive Leadership
Team or who are employed in roles that are critical to driving business
success. The purpose of extending eligibility is to:
• Enhance retention of key skills in the senior management team;
• Create further alignment between shareholders and the senior management
team (through equity based remuneration, vesting of which is dependent
on driving shareholder return); and
• Align senior management across long term performance goals thereby
improving the focus on long term shareholder value creation.
This change will be implemented for plan offers made in the financial year
commencing 1 July 2015.
The Board Remuneration Committee is also currently reviewing the LTI
allocation methodology. Tabcorp currently utilises a Fair Market Value allocation
methodology and the Committee is reviewing the appropriateness of this
methodology for the Company going forward (as compared to a Face Value
allocation methodology).
Area
LTI structure
Figure 14
Figure 16C
Figure 16D
40
Tabcorp Concise Annual Report 2015
Area
LTI claw back
Managing
Director and
Chief Executive
Officer Short
Term Incentive
Summary
Following a review of the LTI plan during the year, the Remuneration
Committee also approved the implementation of an LTI claw back policy. The
Board may claw back LTI awards if it is considered appropriate having regard
to any information that has come to light after the delivery of the LTI award,
including but not limited to fraud, misconduct or any material misstatement
or omission in Tabcorp’s prior financial statements. The Board has the capacity
to introduce further terms and conditions that may specify additional
circumstances in which a participant’s awards may be subject to claw back.
From 1 July 2015, fifty per cent of all Short Term Incentive payments made
to the Managing Director and Chief Executive Officer will continue to be
subject to deferral. Deferral will be in the form of Restricted Shares and
will be subject a two year restriction period.
7. Non Executive Director remuneration
7.1 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.
6. Key management personnel (KMP)
Name
Paula Dwyer
Elmer Funke Kupper
Steven Gregg
Jane Hemstritch
Justin Milne
Zygmunt Switkowski
David Attenborough
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Position held
Chairman and Director (Non Executive)
Director (Non Executive)
Director (Non Executive)
Director (Non Executive)
Director (Non Executive)
Director (Non Executive)
Managing Director and Chief Executive Officer
Chief Financial Officer
Chief Operating Officer Wagering and Media
Chief Operating Officer Keno and Gaming
Executive General Manager, Corporate, Legal and Regulatory
There were no changes to KMP or positions during the year.
Details of Director qualifications, experience and other responsibilities are set out on pages 24,
25 and 28 of the Directors’ report.
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.
7.2 Structure
Non Executive Directors’ remuneration comprises the following components:
• Board fee;
• Board Committee fees (excluding the Chairman); and
• Superannuation Guarantee Contribution (9.5 per cent of total fees for the year ended
30 June 2015, uncapped).
The Chairman receives a fixed fee which is inclusive of services on all Board Committees.
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 Board Remuneration Committee – Paula Dwyer was Chairman
of this Committee throughout the year;
• Observer fees, equivalent to the applicable Board and Committee fees (for attending Board
and Committee meetings and induction whilst awaiting regulatory approval) – no Observer
fees were paid during the year; or
• Membership of other Committees, which may be required from time to time – no additional
Committee fees were paid during the year.
41
Tabcorp Concise Annual Report 2015
Remuneration report (audited) (continued)
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.
8. Senior management remuneration (including Managing Director
and Chief Executive Officer)
The Board Remuneration Committee has responsibility for reviewing the remuneration
framework of the Group and recommending to the Board the appropriate remuneration
arrangements. The Board Remuneration Committee approves the remuneration and incentives
for members of the Senior Executive Leadership Team and makes recommendations to the Board
in relation to the Managing Director and Chief Executive Officer.
7.3 Current annual fees
The Board Remuneration Committee reviews Non Executive Director fees annually, having
regard to both the remuneration framework and structure described in Sections 7.1 and 7.2
and contemporary market practice, and submits recommendations to the Board for review
and approval. A review of Non Executive Director remuneration levels was conducted in the
year ended 30 June 2015. To ensure continued competitiveness of Non Executive Director
remuneration levels, the following adjustments were made:
• Chairman’s fee – increased from $400,000 to $410,000;
• Non Executive Director Board fee – increased from $135,000 to $140,000; and
• Board Committee fees – remain unchanged.
The annual fees are detailed in Figure 1 for Non Executive Directors and Board Committee
memberships.
Figure 1: Non Executive Director and Board Committee fixed annual fees effective from
1 September 2014
8.1 Remuneration framework
The remuneration framework for senior management comprises a mix of both fixed and variable
remuneration components. Figure 2 depicts the current framework.
Figure 2: Senior management remuneration framework
Variable remuneration
Fixed
remuneration
Short Term
Incentive (‘STI’)
Long Term
Incentive (‘LTI’)
Total
Remuneration
The level of fixed
remuneration an
individual receives
reflects the scope and
responsibilities of their
role, their knowledge,
skills and experience
and relativities to
other similar roles
in the market.
The level of STI paid is
dependent upon the
achievement of annual
Group, business unit
and individual
performance targets
and stretch goals.
The value of the LTI
that vests into Tabcorp
shares is dependent
on the achievement
of relative total
shareholder return
hurdles over a
three year period.
Represents the total
remuneration package
for an individual
encompassing both
fixed and variable pay.
Position
Chairman (ii)
Non Executive Director
Committee Chairman
Committee Member
Board fees (i)
$
410,000
140,000
Board Committee fees (i)
Audit, Risk &
Compliance
$
Remuneration
$
Nomination
$
Cash (i)
Cash (i) or a mix of cash
and Restricted Shares (ii)
Performance Rights (iii)
40,000
20,000
30,000
15,000
7,500
7,500
Reviewed annually
Annual targets
Long term shareholder
value creation
(3 years)
(i) Fees exclude superannuation contributions.
(ii) The Chairman’s fee is inclusive of service on all Tabcorp Board Committees.
(i)
Individuals may voluntarily elect to salary sacrifice cash and STI payments for additional superannuation contributions.
Individuals may also elect to package items such as motor vehicle novated leases as part of their fixed remuneration package.
(ii) Deferral of STI into Restricted Shares is mandatory for all members of the Senior Executive Leadership Team (including
KMP) and certain other senior management. Restricted Shares are issued under the Tabcorp Employee Deferred Share Plan
and vesting is subject to the individual remaining employed with Tabcorp for the duration of the vesting period.
(iii) Performance Rights may vest on the third anniversary after the allocation date, subject to meeting relevant performance
based hurdles. The total number of Performance Rights that are allocated to a participant in any given year will only vest
if the maximum performance hurdle has been achieved.
42
Tabcorp Concise Annual Report 2015 The remuneration framework within Tabcorp is structured to align shareholder, Company
and senior management interests as depicted in Figure 3.
Figure 4: KMP target reward mix for the year ended 30 June 2015
Figure 3: Aligning Tabcorp, senior management and shareholder interests
MD and CEO
39.3%
13.4%
13.4%
33.9%
Shareholders
Senior Managers
The Tabcorp remuneration framework is structured to
align Company, senior management and shareholder
interests through:
• Rewarding for long term shareholder value creation
through the use of total shareholder return relative
to other companies within the LTI;
• The use of financial measures such as net profit
after tax before non-recurring items (NPAT) as
the primary reward measure for short term
performance outcomes;
• Recognising and rewarding for superior Group,
business unit and individual performance that
aligns to Tabcorp’s short and long term strategic
plans and contributes to long term shareholder
value creation;
• The use of equity in both the short term and long
term incentive plans, the value of which can grow
as senior management perform;
• The ability to attract, motivate and retain high calibre
individuals to deliver on the Company’s objectives;
• The fostering of a culture of high performance in
a team based environment including rewarding
those individuals excelling in displaying the
Tabcorp values and Ways of Working;
• Linking reward with performance measures
that are within the scope of influence of senior
management; and
• Providing upside opportunity for superior Group
performance and increased shareholder value.
8.2 Target reward mix
To ensure that Tabcorp’s Total Remuneration is competitive, fair and reasonable, extensive market
benchmarking is regularly undertaken against a wide range of organisations. The target reward
mix (i.e. the split between fixed and target variable pay) aims to position Total Remuneration at
the market median where target performance has been achieved. The target reward mix for the
KMP (including the Managing Director and Chief Executive Officer) is outlined in Figure 4.
43
CFO/EGM Corporate,
Legal & Regulatory
COO Wagering
& Media/COO
Keno & Gaming
50%
55%
19%
6%
25%
20.6%
6.9%
17.5%
0%
20%
40%
60%
80%
100%
Fixed remuneration
Short term incentive cash
Short term incentive deferred
Long term incentive
8.3 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 a range of factors. These
factors are also considered annually as part of the annual remuneration review process.
These include:
• The scope and responsibilities of their role;
• Their knowledge, skills and experience;
• Their performance (as assessed through the Group’s performance management process);
• Market data for similar roles in comparable companies;
• Rarity and market demand for their skill set; and
• Relativity of remuneration to other similar roles internally.
The Board 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 year ended 30 June 2015, the fixed remuneration packages of executive KMP,
excluding the Managing Director and Chief Executive Officer (refer to section 8.5.1.1), increased
by 3.1 per cent on average.
Tabcorp Concise Annual Report 2015 Remuneration report (audited) (continued)
8.4 Variable (at risk) remuneration
8.4.1 Short term incentive (STI)
8.4.1.1 Overview
8.4.1.4 The STI calculation
An individual’s short term incentive is calculated by taking three key factors into account. These
are depicted in Figure 5 below:
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.
Figure 5: STI calculation
8.4.1.2 Eligibility
The Senior Executive Leadership Team (including KMP), senior managers and mid-level managers
are eligible to participate in the STI plan.
8.4.1.3 The STI pool (Group Funding Multiplier)
During each financial year, the Board Remuneration Committee reviews Tabcorp’s performance
against Net Profit After Tax (NPAT) targets. At the end of the financial year, the Board determines,
in its own discretion, the Group Funding Multiplier with reference to NPAT. The Group Funding
Multiplier sets the overall STI pool which is then distributed to participants in the STI plan,
depending on individual performance:
• If the Group’s NPAT target (aligned to the Tabcorp strategic corporate plan) is achieved for
the year, 100 per cent of the STI pool will generally be funded (i.e. a Group Funding Multiplier of 1).
To achieve the strategic corporate plan NPAT target, a level of stretch performance is required;
• If the Group’s NPAT performance for the year is below target, a smaller STI pool may be funded
(at the Board’s discretion) or the Board may elect to have no STI pool (i.e. a Group Funding
Multiplier range of 0 to <1), in which case no STI payments would be made; and
• If the Group’s NPAT performance for the year is above target, a larger STI pool may be funded,
capped at 125 per cent of the target pool (i.e. a Group Funding Multiplier of >1 but <=1.25).
The Board considers NPAT to be an appropriate performance measure to determine the STI
pool as:
• It aligns to the Group’s remuneration philosophy of creating shareholder value;
• It is directly linked to driving business results; and
• It is within senior management’s scope of influence.
For the purposes of the STI pool calculation, NPAT is adjusted for non-recurring items.
Group Funding
Multiplier
STI Pool
Target STI ($)
Divisional
Multiplier (DM)
Individual
Performance
Multiplier (IPM)
Short Term
Incentive Payment 1,2
1. For the Senior Executive Leadership Team (including the KMP, but excluding the Managing Director and Chief Executive
Officer), the Short Term Incentive payment comprises cash (75 per cent) and Restricted Shares (25 per cent), which are
restricted for a two year period. For the Managing Director and Chief Executive Officer, the Short Term Incentive payment
comprises cash (50 per cent) and Restricted Shares (50 per cent), which are restricted for a two year period.
2. The sum of the Short Term Incentive payments cannot exceed the STI pool which is capped at 125 per cent of the target
pool and is dependent on NPAT performance.
The Divisional and Individual Performance Multipliers are modelled to ensure that STI spend
does not exceed the allocated STI pool.
Figure 6 describes each component of the calculation.
44
Tabcorp Concise Annual Report 2015
Figure 6: Components of the STI calculation
Component
Definition
How is it calculated?
See section 8.4.1.3
Individual
Performance
Multiplier (IPM)
Component
Definition
How is it calculated?
Group Funding
Multiplier
Target STI ($)
Divisional
Multiplier (DM)
The Group Funding Multiplier
is calculated with reference to
Tabcorp’s NPAT performance.
The Group Funding Multiplier
sets the size of the STI pool that
is distributed to STI participants.
The Divisional Multipliers and
Individual Performance Multipliers
are set with reference to the
Group Funding Multiplier to
ensure that overall STI spend is
aligned to the STI pool.
Each participant in the STI plan
is eligible to receive an on-target
STI payment upon the
achievement of target Group,
business unit and individual
performance.
The Target STI is calculated as
a percentage of an individual’s
Total Remuneration (see Figure 4)
and is determined with reference
to market benchmarks and
nature of the role.
The Divisional Multiplier aims
to reward STI participants for
delivering superior business unit
performance and to recognise
each business unit’s contribution
to the overall Group results. The
Divisional Multiplier applicable
to an individual is dependent
on the role they perform. There
are three Divisional Multipliers
as follows:
• Wagering and Media
• Keno and Gaming
• Corporate
The Divisional Multiplier is
based on the contribution to
NPAT of each business unit. The
Divisional Multiplier may thus
be higher or lower than the Group
Funding Multiplier, depending
on the respective business unit’s
performance. The Divisional
Multiplier for Group or Corporate
functions will generally be the
same as the Group Funding
Multiplier. The Divisional Multipliers
are modelled to ensure that STI
payout does not exceed the
overall STI pool.
45
Individual performance is assessed
using a balanced scorecard of
individual measures that align
to and are reflective of the Group’s
annual objectives (see Figure 7).
In addition to the Balanced
Scorecard measures, key strategic
priorities are also set and
assessed annually.
Specific Group financial and non-
financial strategic key performance
objectives, which are aligned to
creating superior shareholder
returns, are determined and
approved by the Board for the
Managing Director and Chief
Executive Officer at the start
of each financial year and then
cascaded across the organisation.
At the end of the financial year,
each participant undergoes
a performance review in line
with Tabcorp’s performance
management process. Objectives
are assessed and an overall
performance rating is assigned
(taking into consideration
performance against objectives
as well as behaviours (Ways of
Working)).
The performance rating translates
into an Individual Performance
Multiplier which scales up or
down depending on the overall
performance rating and can range
from zero (for below expectations
performance) up to two (for
exceptional performance). The
Individual Performance Multipliers
are also set with reference to the
overall STI pool to ensure that
STI payout does not exceed the
determined pool. As such, the
range for Individual Performance
Multipliers may change from
year to year but will never exceed
a value of two for exceptional
performance.
Further details of specific key performance targets for the Senior Executive Leadership Team
during the financial year are provided in section 8.4.1.8 and Figure 7.
To be eligible to receive an STI payment, participants need to demonstrate required levels
of behaviours in line with Group values (Ways of Working) and must not have any significant
controllable compliance breaches.
Tabcorp Concise Annual Report 2015
Remuneration report (audited) (continued)
8.4.1.5 Delivery
Figure 7: STI measures and summary of FY15 achievements
The STI is delivered in cash, or a mix of cash and Restricted Shares. It is mandatory for all KMP
and participants at a senior management level to defer 25 per cent of their total STI into
Restricted Shares (50 per cent for the Managing Director and Chief Executive Officer). Senior
management, for the purposes of STI deferral, is defined as all members of the Senior Executive
Leadership Team and any senior manager where the STI component of their Total Remuneration is
30 per cent or greater at target. Restricted Shares are subject to a two year service condition
during which time the Restricted Shares may not be traded, however participants have full
entitlement to dividends and voting rights. These shares will be forfeited if the individual leaves
the Group (subject to Board discretion).
Objective
Financial
Measures
Revenue
Profit (e.g. NPAT)
Balance sheet
Return (e.g. ROIC)
The objectives of the deferral element of STI include:
• Building share ownership in Tabcorp which further aligns the interests of senior managers
with shareholders;
• Reducing long term risk; and
• Assisting with the retention of key senior managers which provides increased continuity
for the business.
8.4.1.6 Claw back
Restricted Shares are subject to claw back if the Board considers this to be appropriate having
regard to any information which has come to light after the delivery of the Restricted Shares
to participants, including but not limited to misconduct or any material misstatement or
omission in Tabcorp’s prior financial statements.
The Board has the capacity to introduce further terms and conditions that may specify
additional circumstances in which a participant’s Restricted Shares may be subject to claw back.
8.4.1.7 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 executive KMP. Restricted
Shares are expensed on a straight line basis over the vesting period.
8.4.1.8 STI performance
For the year ended 30 June 2015, short term incentive measures and targets were derived from the
Board approved strategic corporate plan which comprised financial and non-financial objectives.
These objectives were subsequently included in the balanced scorecards for the Senior Executive
Leadership Team. A list of these measures is included in Figure 7 including a summary of key
achievements during the year.
Achievements for the year
• Net Profit After Tax (NPAT) from continuing operations
before significant items $171.3 million, up 14.7%
• Group revenues of $2,155.5 million, up 5.7%
• Strong balance sheet, with Gross debt(i)/EBITDA ratio of 2.1x
• Dividends totalled 20 cents per share, fully franked
representing a payout ratio of 93% of NPAT (from
continuing operations before significant items)
• Special dividend of 30 cents per share
• ROIC target exceeded due to the strong operational
earnings performance and the business is well positioned
to achieve 14% ROIC following the integration of ACTTAB
Customers
and Growth
Customer activity
and loyalty
• Appointed new Chief Marketing Officer and up-weighted
data and insights capability
Delivery of new
products and
digital initiatives
• Continued investment in digital channels, including
seamless launch of new TAB website
• Progressed digital integration into TAB’s exclusive
retail channels
• Keno brand transformation commenced to rejuvenate
the customer experience
• Growth in loyalty program members: TAB Rewards (total
members now more than 300,000)
People and
Leadership
Employee
engagement
• Overall employee engagement score of 3.89 out of 5. This
is up 0.08 on the previous year
Gender diversity
• Focus on workplace diversity, with 33% female
Health & Safety
representation in senior leader roles
• Improved lost time injury frequency rate of 1.0 per million
hours worked
Organisation Regulatory and
• Once again ranked the global gambling industry leader
licence compliance
in the annual Dow Jones Sustainability Index
Stakeholder
engagement
Operational
effectiveness
• Financial benefits to stakeholders: taxes on gambling
$459.6 million, returns to the racing industry $773.2 million
• Core systems performance consistently at or above target
levels, especially strong through the Spring Carnival and
Championship period
46
Tabcorp Concise Annual Report 2015
Objective
Strategic
Measures
Business
expansion
opportunities
Achievements for the year
• ACTTAB acquisition completed and integration on track
Media Rights
• Long term agreement reached for NSW thoroughbred
media rights
• Victorian Thoroughbred Media Rights negotiation concluded
Figure 8: Summary of the Tabcorp LTI plan
Who is eligible to
participate in the
LTI plan?
(i) Gross debt includes USPP debt at the A$ principal repayable under cross currency swaps.
How is LTI delivered?
For the year ended 30 June 2015, the Senior Executive Leadership Team
was eligible to participate in the LTI plan. From 1 July 2015, in addition
to the Senior Executive Leadership Team, a select group of senior
managers will be eligible to participate. The Tabcorp Board elected
to broaden participation to further align senior management and
shareholder interests through equity-based remuneration and to
strengthen the link between reward and shareholder value creation.
Senior management that participate in the LTI plan are allocated
a maximum number of Performance Rights at the beginning of the
performance period. Performance Rights provide senior management
with the right to receive Tabcorp shares subject to meeting market based
performance conditions, at no cost to the participant. Performance
Rights do not attract dividends and do not provide voting rights.
The Board considers Performance Rights to be an effective instrument
for delivering long term reward to senior management.
How long is the
performance period?
The vesting of Performance Rights issued under the LTI is dependent
on meeting the minimum performance hurdle at the third anniversary
of the date of the allocation (i.e. a three year performance period).
Are Performance
Rights forfeitable?
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.
What is the
performance
measure?
Performance Rights will also lapse if performance conditions are not met.
The performance measure for Performance Rights issued under the LTI
is relative total shareholder return (relative TSR). Relative 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. Tabcorp engages an external consultant to calculate TSR
relative to a 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 a peer group, over the long term.
Key issues that were work in progress as at 30 June 2015 included Queensland Keno jackpot
pooling, the Victorian licence compensation claim, the integration of ACTTAB and resolution
of matters referred to in the AUSTRAC statement of claim, as advised in Tabcorp’s ASX release
of 24 July 2015.
For the year ended 30 June 2015, the Board awarded short term incentives to senior management
that reflected the assessed performance of the Group. The Board determined that the maximum
Group Funding Multiplier (i.e. 125 per cent) should be applied for the year. See Figure 17A for more
detail.
8.4.2 Long term incentive (LTI)
8.4.2.1 Overview
The Tabcorp LTI is designed to reward senior management for contributing to the creation
of long term shareholder value and to retain key critical talent within the organisation. Figure 8
provides a summary of the LTI plan.
47
Tabcorp Concise Annual Report 2015
What are the relative
TSR performance
hurdles? (continued)
This testing schedule and vesting criteria are common practice adopted
by companies in the S&P/ASX100 index, which is consistent with Tabcorp’s
remuneration philosophy (refer to Section 2) and senior management
remuneration framework (refer to Section 7.1).
For Performance Rights that 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.
Performance Rights that have not vested after testing will lapse (there
is no retesting).
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 in Section 9.1 (Figures 16C & 16D)
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 17D. The actual value of vested
Performance Rights received by KMP for the year is disclosed in Figure 16E.
Remuneration report (audited) (continued)
Which companies
are included in
the peer group?
The peer group used for assessing Tabcorp’s relative TSR performance
is the S&P/ASX 100 index excluding property trusts, infrastructure
groups and mining companies (represented by the S&P Global
Industry Classification Standards (GICS) of Metals & Mining, Oil
and Gas, Transportation, Infrastructure, Utilities and Real Estate
Investment Trusts).
This peer group was selected as it contains organisations of comparable
size to that of Tabcorp as well as organisations that exhibit similar
operational structures in comparable industries. Finally, the peer group
was also chosen as the constituent companies represent competitors
for similar executive talent.
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.
Accounting
treatment
What are the relative
TSR performance
hurdles?
The number of Performance Rights that will vest at the end of the
performance period is dependent on Tabcorp’s relative TSR ranking
as at the applicable test date as follows:
Tabcorp’s relative TSR ranking
Below 50th percentile
Percentage of Performance Rights
that will vest
0%
At 50th percentile
50%
Above 50th percentile and below
75th percentile
At or above the 75th percentile
Pro rata between 50% (at 50th
percentile) and 100% (at 75th
percentile)
100%
48
Tabcorp Concise Annual Report 2015 8.4.2.2 Allocation
8.4.2.3 Vesting
The Performance Rights granted under the LTI are generally allocated annually. The number
of Performance Rights allocated is calculated as outlined in Figure 9.
Figure 9: Allocation calculation
Target LTI ($)
Fair value of
Performance Right
Number of Performance
Rights allocated
The number of Performance Rights that are allocated to a participant under the LTI
represents the maximum number. This means that, in order for all of the Performance Rights
to vest, the highest performance hurdle must be achieved (i.e. achieving a 75th percentile
relative TSR ranking).
If the minimum performance hurdle is achieved (i.e. achieving a 50th percentile relative TSR
ranking) half the Performance Rights will vest and the other half of the Performance Rights
will lapse.
Component
Target LTI ($)
Fair value of
Performance Right
Definition
The Target LTI ($) amount is based
on a percentage of the individual’s
Total Remuneration and is
benchmarked to ensure that it
is competitive and appropriate
within the market.
The fair market value of a
Performance Right reflects the
realistic value a participant is likely
to receive taking into consideration
the Tabcorp share price, volatility
of the share price, the historical
dividend yield, the performance
period and the difficulty in achieving
the performance conditions.
How is it calculated?
The Target LTI ($) is based on a
percentage of the individual’s Total
Remuneration (refer to Figure 4).
8.4.2.4 LTI performance
In the 2015 financial year, there was one test date on 23 September 2014 for the 2011 allocation
under the LTI. The relative TSR percentile ranking of this allocation at the test date was a little
over the 69th percentile, and accordingly 88 per cent of the Performance Rights vested and
12 per cent of the Performance Rights lapsed. Figure 17C discloses the number of executive
KMP Performance Rights vesting during the year.
The fair market value of a
Performance Right is independently
calculated by an external consultant.
The methodology used is called the
Monte Carlo simulation-based model
and takes into consideration factors
such as the Tabcorp share price, the
volatility of the share price, the
historical dividend yield, the
performance period, the risk-free
rate of return and the difficulty in
achieving the performance
conditions. The Monte Carlo model
is a standard valuation methodology
used within the market and adheres
to the Australian Accounting Standards
(AASB2 ‘Share Based Payments’).
8.4.3 Appointment/retention incentives
8.4.3.1 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 8.4.2).
No appointment or retention incentives were provided to executive KMP during the year ended
30 June 2015.
8.4.3.2 Accounting treatment
The fair value of Restricted Shares is expensed as remuneration over the relevant vesting period.
At the date disposal restrictions and forfeiture provisions are waived, the fair value of the
Restricted Shares is fully expensed.
As Performance Rights are issued under the LTI, they are expensed in the same manner as described
in Section 8.4.2.1.
Number of
Performance
Rights allocated
The number of Performance Rights
allocated to participants reflects the
maximum number that could vest
at the end of the performance period
for the achievement of the highest
relative TSR performance hurdle.
The number of Performance Rights
allocated is calculated by taking
the Target LTI ($) value and dividing
it by the fair market value of a
Performance Right.
49
Tabcorp Concise Annual Report 2015 Remuneration report (audited) (continued)
8.4.4 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.
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.
8.5 Managing Director and Chief Executive Officer current remuneration
arrangements
8.5.1 Current remuneration
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.
As communicated in the 2014 Remuneration report, changes implemented in the current
financial year in relation to Mr Attenborough’s remuneration have resulted in an increase in
both fixed remuneration and the short term performance award, with the long term incentive
award remaining unchanged. This overall increase in remuneration recognises Mr Attenborough’s
success in leading the transformation of Tabcorp to drive sustained performance, and improves
alignment with comparable roles in the market. Previously, Mr Attenborough received cash
reimbursements of up to $3,500 per week for living away from home expenses (e.g.
accommodation) and four return business class airfare tickets between Australia and South
Africa per annum. These two benefits ceased in the prior financial year (on 9 April 2014).
8.5.1.1 Fixed remuneration
Mr Attenborough’s fixed remuneration (inclusive of statutory superannuation contributions)
increased to $1,100,000 per annum from 1 September 2014 (previously $950,000).
8.5.1.2 Short term incentive
For the year ended 30 June 2015, Mr Attenborough was 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 annual short term performance
award was equivalent to $750,000 at target and is delivered in cash and Restricted Shares
as outlined in section 8.4.1.5, with the opportunity for Mr Attenborough to voluntarily
sacrifice part of the cash component into additional superannuation contributions.
For the year ended 30 June 2015, Mr Attenborough was awarded an STI payment of $850,000 which
equated to 113 per cent of his target incentive (45 per cent of his maximum incentive). The Board
deemed this to be appropriate given Tabcorp’s performance levels over the year (see Figure 7).
50 per cent of this STI payment is subject to deferral into Restricted Shares (restricted for 2 years).
8.5.1.3 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, which would be subject
to a performance hurdle, with the grant of such Performance Rights being subject to obtaining
any necessary shareholder approvals at the relevant time. For the year ended 30 June 2015, Mr
Attenborough’s long term incentive award was equivalent to $950,000 at target, unchanged
from the prior year. The structure and operation of this long term incentive is the same as that
which applies to the LTI offers to other senior managers in Section 8.4.2, other than as set out
in this section. Since being appointed as Managing Director and Chief Executive Officer,
Mr Attenborough has received four grants of Performance Rights under the Tabcorp Long Term
Performance Plan, which were approved by shareholders at the Company’s previous Annual
General Meetings. The details of the current allocations (i.e. allocations still on foot) follow:
Effective date
20 September 2012
18 September 2013
16 September 2014
Number
427,586
590,062
519,125
Test date
20 September 2015
18 September 2016
16 September 2017
Expiry date
20 September 2015
18 September 2016
16 September 2017
Upon termination of employment, all unvested Performance Rights will lapse immediately.
However, in situations where termination is as a result of an event beyond the control of the
incumbent (e.g. death, permanent disablement or other Board determined appropriate reason)
a pro rata number of Performance Rights may vest into shares. The exact number of Performance
Rights that will vest will be determined by the duration of the performance period that has
already elapsed and relative TSR performance outcomes as at the appropriate test date.
50
Tabcorp Concise Annual Report 2015 Partial lapse of unvested Performance Rights 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.
Further information relating to these Performance Rights is available in the notice of meeting
for the Company’s 2012, 2013 and 2014 Annual General Meetings.
8.7 Performance of Tabcorp and shareholder wealth
Tabcorp’s annual financial performance and indicators of shareholder wealth over the five year
period ended 30 June 2015 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 green bars.
Figure 10: Net profit after tax
Figure 11: EPS (basic)
8.5.1.4 Changes for the 2016 financial year
Mr Attenborough’s fixed remuneration will remain unchanged for the 2016 financial year.
Mr Attenborough’s target Short Term Incentive opportunity will increase to $1,100,000 (from
$750,000) for the 2016 financial year. Fifty per cent of any applicable Short Term Incentive payments
made to Mr Attenborough will be subject to deferral in Restricted Shares for a two year period.
Mr Attenborough’s Long Term Incentive target opportunity will increase to $1,100,000 (from
$950,000), and will be subject to the same terms and conditions as the Long Term Incentive
detailed in Figure 8.
As a result of the above changes, Mr Attenborough will have a greater proportion of his
remuneration package as performance-based variable pay.
8.6 Executive contracts – KMP (including the Managing Director and
Chief Executive Officer)
The table below contains details of the contracts of the current executive KMP. The current
contracts do not provide for any termination payments, other than payment in lieu of notice.
Name
David Attenborough
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Position
Managing Director and
Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Wagering and Media
Chief Operating Officer
Keno and Gaming
Executive General Manager
Corporate, Legal and Regulatory
Minimum notice
period (months)
Contract
duration
Executive Tabcorp
Open ended
12
Open ended
Open ended
Open ended
Open ended
6
6
6
6
12
9
9
9
12
51
600
500
400
300
200
)
m
$
(
x
a
t
r
e
t
f
a
t
i
f
o
r
p
t
e
N
100
0
.
8
4
3
5
.
0
0
4
3
(i)
5
.
4
3
3
.
6
6
2
1
.
9
9
2
1
10/11
11/12
12/13
13/14
14/15
)
s
t
n
e
c
(
e
r
a
h
s
r
e
p
s
g
n
n
r
a
E
i
90
80
70
60
50
40
30
20
10
0
7
.
0
8
6
.
7
4
4
.
2
4
2
.
7
1
2
.
7
1
10/11
11/12
12/13
13/14
14/15
Figure 12: Full year dividend in respect
of each financial year (includes interim,
final and special dividends)
Figure 13: Company share price at the end
of each financial year
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
60
50
40
30
20
10
0
(ii)
0
.
3
4
(iii)
.
0
0
5
.
0
4
2
.
0
9
1
.
0
6
1
)
$
(
e
c
i
r
p
e
r
a
h
S
6
5
4
3
2
1
0
5
5
.
4
(ii)
9
2
.
3
3
9
.
2
5
0
.
3
6
3
.
3
10/11
11/12
12/13
13/14
14/15
10/11
11/12
12/13
13/14
14/15
(i)
Includes $163.2 million as a result of receiving income tax benefits relating to the Victorian wagering and gaming licences
payment and the NSW Trackside payment and associated interest income.
(ii) Whilst the closing share price is after the demerger of Echo Entertainment Group, it is before the declaration of the final
dividend which was based on Group earnings pre-demerger inclusive of Echo Entertainment Group.
(iii) Dividends include a special dividend of 30 cents per share declared in February 2015.
Tabcorp Concise Annual Report 2015
Remuneration report (audited) (continued)
Figure 14 shows Tabcorp’s relative TSR ranking at test dates.
Figure 14: Relative TSR ranking
Grant year Grant date Allocation to
Test date
2011
23 Sep 2011
26 Oct 2011 MD and CEO
Senior management
23 Sep 2014
% of Performance
Rights
Vested
Lapsed
88%
12%
TSR result
at test date
69.2
percentile
Figure 15 shows Tabcorp’s currently existing LTI allocations, together with future test dates.
Figure 15: Current LTI allocations
Grant year
2012
2013
2014
Grant date
4 Oct 2012
31 Oct 2012
2 Oct 2013
31 Oct 2013
28 Oct 2014
Test and expiry date
Allocation to
Senior management
MD and CEO
Senior management
MD and CEO
MD and CEO, senior management 16 Sep 2017
18 Sep 2016
20 Sep 2015
9. Remuneration tables
9.1 Remuneration of KMP
Figure 16A: KMP remuneration for the year ended 30 June 2015 – Non Executive Directors
KMP
Paula Dwyer (i)
Elmer Funke Kupper
Steven Gregg
Jane Hemstritch
Justin Milne
Zygmunt Switkowski
Total
Short term
Salary & fees
$
408,333
166,667
181,667
186,667
166,667
196,667
1,306,668
Post employment
Superannuation
$
38,792
15,833
17,258
17,733
15,833
18,683
124,132
Total
$
447,125
182,500
198,925
204,400
182,500
215,350
1,430,800
(i) In addition Ms Dwyer received a fee of $30,000 (excluding superannuation at 9.5%) for undertaking the role of Chairman
of the Victorian Joint Venture Management Committee throughout the year.
Figure 16B: KMP remuneration for the year ended 30 June 2014 – Non Executive Directors
KMP
Paula Dwyer (ii)
Elmer Funke Kupper
Steven Gregg
Jane Hemstritch
Justin Milne
Zygmunt Switkowski
Total
Short term
Salary & fees
$
400,000
160,833
175,000
180,833
160,833
190,000
1,267,499
Post employment
Superannuation
$
37,000
14,877
16,187
16,727
14,877
17,575
117,243
Total
$
437,000
175,710
191,187
197,560
175,710
207,575
1,384,742
(ii) In addition Ms Dwyer received a fee of $29,167 (excluding superannuation at 9.25%) for undertaking the role of Chairman
of the Victorian Joint Venture Management Committee throughout the year.
52
Tabcorp Concise Annual Report 2015
Figure 16C: KMP remuneration for the year ended 30 June 2015 – Executives
Short term
Salary & fees (i)
Cash bonus (ii)
$
$
1,056,300
425,000
630,158
637,488
506,717
552,008
3,382,671
275,000
271,338
157,650
134,379
1,263,367
KMP
Executive Director
David Attenborough
Executives
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Total
Non-monetary
benefits (iii)
$
1,145
-
1,380
-
-
2,525
Long term
Accrued leave
benefits
$
Post
employment
Superannuation
$
Total
excluding
charge for
share based
allocations
$
Charge for
share based allocations (iv)
Restricted
Shares
$
Performance
Rights
$
Total
$
44,337
18,783
1,545,565
214,837
968,936
2,729,338
13,554
16,984
(16,602)
34,562
92,835
18,783
18,783
18,783
18,783
93,915
937,495
945,973
666,548
739,732
4,835,313
67,869
63,141
47,601
48,093
441,541
335,281
191,514
163,374
293,958
1,953,063
1,340,645
1,200,628
877,523
1,081,783
7,229,917
Performance
related (v)
%
59%
51%
44%
42%
44%
(i) Comprises salary and salary sacrificed benefits (including superannuation and motor vehicle novated leases where applicable).
(ii) Cash bonus reflects 75% (50% for the MD & CEO) of the STI achieved in the year. The remaining 25% (50% for the MD & CEO) of the STI is deferred into Restricted Shares, and is reflected in remuneration during the vesting period.
(iii) Comprises the cost to the Company for providing car parking, where applicable.
(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 cash bonus, Restricted Shares and Performance Rights as a percentage of total remuneration, excluding termination payments.
53
Tabcorp Concise Annual Report 2015
Remuneration report (audited) (continued)
Figure 16D: KMP remuneration for the year ended 30 June 2014 – Executives
Short term
Salary & fees (i)
Cash bonus (ii)
benefits (iii)
$
$
$
Non-monetary
Long term
Accrued leave
benefits
$
Post
employment
Superannuation
$
Total
excluding
charge for
share based
allocations
$
Charge for
share based
allocations (iv)
Performance
Rights
$
Total
$
Performance
related (v)
%
928,974
506,250
306,967
(5,837)
17,775
1,754,129
758,858
2,512,987
614,057
157,766
130,708
513,429
2,344,934
249,638
64,565
53,804
219,713
1,093,970
-
459
-
-
307,426
(3,009)
36,058
12,959
18,605
58,776
17,775
4,580
4,580
17,775
62,485
878,461
263,428
202,051
769,522
3,867,591
282,932
41,949
34,799
247,533
1,366,071
1,161,393
305,377
236,850
1,017,055
5,233,662
50%
46%
35%
37%
46%
KMP
Executive Director
David Attenborough
Executives
Damien Johnston
Craig Nugent (vi)
Adam Rytenskild (vi)
Kerry Willcock
Total
(i) Comprises salary and salary sacrificed benefits (including superannuation and motor vehicle novated leases).
(ii) Cash bonus reflects 75% of the STI achieved in the year. The remaining 25% of the STI is deferred into Restricted Shares, and is reflected in remuneration during the vesting period.
(iii) Comprises the cost to the Company for providing relocation expenses, living away from home benefits, accommodation, car parking, and airfares, where applicable.
(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 cash bonus and Performance Rights as a percentage of total remuneration, excluding termination payments.
(vi) Commenced as a KMP on 28 March 2014. Remuneration reflects period as a KMP. Salary & fees and long service leave reflect increase in annual leave and long service leave accruals due to new salary levels.
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 short term incentives (the Restricted Shares portion) and long term incentives to KMP. The Restricted Shares portion of the short term incentive are expensed by the Company over the vesting period.
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 16C and 16D 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 8.4.2 and 8.5.1.3.
54
Tabcorp Concise Annual Report 2015 9.2 Other remuneration tables
Figure 17A: Short term incentive (STI) achieved
For the year ended 30 June 2015
Actual STI achieved
Restricted
Shares
portion (ii)
Cash
portion (i)
$
KMP
David Attenborough 425,000
275,000
Damien Johnston
271,338
Craig Nugent
157,650
Adam Rytenskild
134,379
Kerry Willcock
$
425,000
91,666
90,446
52,550
44,793
Actual STI
achieved
as a % of
Actual STI
STI not
achieved achieved
as a % of
as a % of
target STI maximum STI (iii)
$ target STI
113%
113%
107%
80%
63%
45%
45%
43%
32%
25%
0%
0%
0%
20%
37%
Total
850,000
366,666
361,784
210,200
179,172
(i)
75% (50% for the MD & CEO) of the actual STI achieved is paid as cash, and is included in remuneration of the current
financial year.
(ii) 25% (50% for the MD & CEO) of the actual STI achieved is deferred in the form of Restricted Shares which are subject
to a two year service restriction from the grant date. The Restricted Shares will be granted after the end of the financial
year, and the value will be reflected in remuneration during the vesting period.
(iii) Maximum STI for KMPs may vary, as it is subject to Board discretion.
Figure 17B: Performance Rights granted during the year
For the year ended 30 June 2015
KMP
David Attenborough
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Grant date Number
519,125
178,101
112,641
91,368
156,653
28 October 2014
28 October 2014
28 October 2014
28 October 2014
28 October 2014
Fair value at
grant date
$
2.42
2.42
2.42
2.42
2.42
Exercise
price
$
Nil
Nil
Nil
Nil
NIl
Expiry date
16 September 2017
16 September 2017
16 September 2017
16 September 2017
16 September 2017
An overview of the actual value of remuneration received by KMP during the year is outlined
in Figure 16E. The information in the table differs to that outlined in Figure 16C, as Figure 16C is
prepared in accordance with the Corporations Act and measured in accordance with accounting
standards. This information is provided as it is considered to be of interest to users of the
Remuneration report.
Figure 16E: Actual value of remuneration received by KMP during the year ended 30 June 2015
Salary
and fees (i)
Cash
Super-
bonus (ii) annuation STI vested (iii)
Value of
$
$
$
KMP
Executive Director
David
Attenborough
Executives
Damien
Johnston
Craig Nugent
Adam
Rytenskild
Kerry Willcock
Total
1,056,300
506,250
18,783
630,158
637,488
249,638
221,288
506,717
552,008
3,382,671
200,025
219,713
1,396,914
18,783
18,783
18,783
18,783
93,915
Value of
LTI vested (iv)
$
Total
$
1,446,086
3,027,419
723,041
383,427
1,621,620
1,260,986
268,398
632,660
3,453,612
993,923
1,423,164
8,327,112
$
-
-
-
-
-
-
(i) Comprises salary and salary sacrificed benefits as calculated in Figure 16C.
(ii) Cash bonus reflects the 75% of the FY14 STI paid during the year, including the period the individual was not a KMP.
(iii) Value of Restricted Shares vesting during the year as part of the short term incentive, calculated based on the market
value of Tabcorp shares at the date of vesting.
(iv) Value of shares issued during the year on the vesting of Performance Rights as part of the long term incentive,
calculated based on the market value of Tabcorp shares at the date of vesting.
55
Tabcorp Concise Annual Report 2015 Remuneration report (audited) (continued)
Figure 17C: Performance Rights vested and shares issued during the year
Figure 17E: KMP interests in Performance Rights of Tabcorp Holdings Limited (number)
KMP
David Attenborough
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Total
During the year ended 30 June 2015
For the year ended 30 June 2015
Performance
Rights vested
(number)
394,029
197,014
104,476
73,133
172,387
941,039
Shares issued
(number)
394,029
197,014
104,476
73,133
172,387
941,039
Amount paid
per share
$
Nil
Nil
Nil
Nil
Nil
KMP
David Attenborough
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Total
(i)
Includes forfeitures.
Balance at
start of year
1,465,409
634,880
342,198
280,666
555,496
3,278,649
Granted as
remuneration
519,125
178,101
112,641
91,368
156,653
1,057,888
Vested
(394,029)
(197,014)
(104,476)
(73,133)
(172,387)
(941,039)
Net change
other (i)
(53,732)
(26,866)
(14,247)
(9,973)
(23,508)
(128,326)
Balance at
end of year (ii)
1,536,773
589,101
336,116
288,928
516,254
3,267,172
Figure 17D: Value of Performance Rights granted as part of remuneration – granted, vested
and lapsed during the year
(ii) The number of Performance Rights vested and exercisable at year end was nil.
Figure 17F: KMP interests in shares of Tabcorp Holdings Limited (number)
During the year ended 30 June 2015
For the year ended 30 June 2015
Granted (i)
Vested (ii)
Lapsed (iii)
As a % of
remuneration (iv)
KMP
David Attenborough
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Total
$
1,256,283
431,004
272,591
221,111
379,100
2,560,089
$
1,446,086
723,041
383,427
268,398
632,660
3,453,612
$
197,196
98,598
52,286
36,601
86,274
470,955
%
36%
25%
16%
19%
27%
(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 20 of the Tabcorp Financial Report.
(ii) Represents the value of Performance Rights vested during the year. The value is calculated based on the market value
of Tabcorp shares at the date of vesting.
(iii) Represents the value of Performance Rights that lapsed as a result of not satisfying the performance conditions during
the year. The value is determined assuming the performance conditions had been achieved, and is calculated based
on the market value of Tabcorp shares at the date of lapsing.
(iv) 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.
KMP
Non Executive Directors
Paula Dwyer
Elmer Funke Kupper
Steven Gregg
Jane Hemstritch
Justine Milne
Zygmunt Switkowski
Executive Director
David Attenborough
Executives
Damien Johnston
Craig Nugent
Adam Rytenskild
Kerry Willcock
Total
Balance at
start of year
Granted as
remuneration (i)
On vesting of
Performance Net change
Balance at
other (ii) end of year
50,000
40,000
10,000
23,181
8,500
84,876
-
-
-
-
-
-
Rights
-
-
-
-
-
-
4,166
14,166
5,000
1,931
708
7,073
54,166
54,166
15,000
25,112
9,208
91,949
58,609
46,825
394,029
41,621
541,084
66,383
-
21,643
126,211
489,403
23,193
20,559
18,583
20,412
129,572
197,014
104,476
73,133
172,387
941,039
(42,501)
-
(92,993)
30,112
(30,717)
244,089
125,035
20,366
349,122
1,529,297
(i)
Includes Restricted Shares issued during the year as part of the short term incentive.
(ii) Includes participation in capital raisings, the Tabcorp Dividend Reinvestment Plan and other voluntary
on-market transactions.
56
Tabcorp Concise Annual Report 2015
Income statement
For the year ended 30 June 2015
Revenue
Other income
Government taxes and levies
Commissions and fees
Employment costs
Communications and technology costs
Depreciation and amortisation
Property costs
Advertising and promotions
Other expenses
Profit before income tax expense and net finance costs
Finance income
Finance costs
Profit from continuing operations before income tax expense
Income tax benefit/(expense)
Profit from continuing operations after income tax
Discontinued operations
Loss from discontinued operations, net of tax
Net profit after tax
Other comprehensive income
Change in fair value of cash flow hedges taken to equity that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Income tax on items that may be reclassified to profit or loss
Items that will not be reclassified to profit or loss
Income tax on items that will not be reclassified to profit or loss
Other comprehensive income/(loss) for the year, net of income tax
Total comprehensive income for the year
Earnings per share:
From continuing operations
Basic earnings per share (cents)
Diluted earnings per share (cents)
Total attributable to shareholders of Tabcorp
Basic earnings per share (cents)
Diluted earnings per share (cents)
57
2015
$m
2,155.5
(3.7)
(365.2)
(823.6)
(176.0)
(78.5)
(173.5)
(41.7)
(41.9)
(116.8)
334.6
5.3
(81.1)
258.8
75.7
334.5
-
334.5
1.9
0.7
(0.6)
2.1
(0.6)
3.5
338.0
42.4
42.2
42.4
42.2
2014
$m
2,039.8
0.7
(349.5)
(770.8)
(165.1)
(75.9)
(164.4)
(41.3)
(38.1)
(113.7)
321.7
3.4
(100.6)
224.5
(75.1)
149.4
(19.5)
129.9
(4.9)
(0.2)
1.5
(0.4)
0.1
(3.9)
126.0
19.8
19.7
17.2
17.1
Tabcorp Concise Annual Report 2015 Balance sheet
As at 30 June 2015
Current assets
Cash and cash equivalents
Receivables
Consumables
Derivative financial instruments
Current tax assets
Other
Total current assets
Non current assets
Receivables
Property, plant and equipment
Intangible assets – licences
Intangible assets – other
Derivative financial instruments
Other
Total non current assets
TOTAL ASSETS
Current liabilities
Payables
Current tax liabilities
Provisions
Derivative financial instruments
Other
Total current liabilities
Non current liabilities
Interest bearing liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Other
Total non current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Accumulated losses
Reserves
TOTAL EQUITY
58
2015
$m
160.0
35.1
4.9
1.9
76.2
18.1
296.2
14.2
325.1
700.9
1,924.7
79.2
43.7
3,087.8
3,384.0
334.1
14.2
27.3
24.0
6.7
406.3
1,147.7
58.1
25.1
53.0
3.7
1,287.6
1,693.9
1,690.1
2,426.2
(32.0)
(704.1)
1,690.1
2014
$m
126.8
39.9
4.7
-
0.7
8.9
181.0
16.8
312.6
726.6
1,833.9
21.6
12.6
2,924.1
3,105.1
340.9
-
25.9
22.6
7.2
396.6
1,094.3
66.9
10.9
50.5
4.5
1,227.1
1,623.7
1,481.4
2,188.7
(0.7)
(706.6)
1,481.4
Tabcorp Concise Annual Report 2015 Cash flow statement
For the year ended 30 June 2015
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 refund/(paid)
Net cash flows from operating activities
Cash flows from investing activities
Payment for business acquisition, net of cash acquired
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
Net cash flows from revolving bank facilities
Proceeds from long term borrowings
Repayment of long term borrowings
Dividends paid
Proceeds from issue of shares
Payment of transaction costs for share issue
Payments for on-market share purchase
Proceeds from sale of treasury shares
Net cash flows used in financing activities
Net increase in cash held
Cash at beginning of year
Cash at end of year
The cash flow statement for the prior period includes the cash flows of the discontinued gaming operations.
59
2015
$m
2014
$m
2,193.3
(1,407.3)
(311.3)
5.3
(83.1)
2.8
399.7
(103.3)
(131.6)
-
3.2
-
(231.7)
-
-
-
(357.6)
235.8
(7.1)
(5.9)
-
(134.8)
33.2
126.8
160.0
2,091.0
(1,274.7)
(253.6)
3.8
(103.9)
(75.2)
387.4
-
(198.4)
2.1
40.9
(0.1)
(155.5)
(154.5)
434.5
(434.5)
(67.0)
7.0
-
(0.4)
0.1
(214.8)
17.1
109.7
126.8
Tabcorp Concise Annual Report 2015 Statement of changes in equity
For the year ended 30 June 2015
Issued capital
Ordinary
shares
$m
Treasury
shares
$m
Accumulated
losses
$m
Net
unrealised
losses
reserve
$m
Employee
equity
benefit
reserve
$m
Foreign
currency
translation
reserve
$m
Demerger
reserve
$m
2,189.2
-
-
-
-
9.7
235.8
(5.0)
2.1
-
-
(4.8)
2,427.0
2,129.3
-
-
-
-
59.9
-
-
-
2,189.2
(0.5)
-
-
-
-
-
-
-
-
(1.1)
0.8
-
(0.8)
(0.6)
-
-
-
-
-
(0.4)
0.4
0.1
(0.5)
(0.7)
334.5
1.5
336.0
(367.3)
-
-
-
-
-
-
-
(32.0)
(10.4)
129.9
(0.3)
129.6
(119.9)
-
-
-
-
(0.7)
(40.5)
-
1.3
1.3
-
-
-
-
-
-
-
-
(39.2)
(37.1)
-
(3.4)
(3.4)
-
-
-
-
-
(40.5)
4.0
-
-
-
-
-
-
-
(2.1)
-
2.6
-
4.5
1.9
-
-
-
-
-
-
2.1
-
4.0
(669.9)
-
-
-
-
-
-
-
-
-
-
-
(669.9)
(669.9)
-
-
-
-
-
-
-
-
(669.9)
(0.2)
-
0.7
0.7
-
-
-
-
-
-
-
-
0.5
-
-
(0.2)
(0.2)
-
-
-
-
-
(0.2)
Total
equity
$m
1,481.4
334.5
3.5
338.0
(367.3)
9.7
235.8
(5.0)
-
(1.1)
3.4
(4.8)
1,690.1
1,413.2
129.9
(3.9)
126.0
(119.9)
59.9
(0.4)
2.5
0.1
1,481.4
2015
Balance at beginning of year
Profit for the year
Other comprehensive income
Total comprehensive income
Dividends paid
Dividend reinvestment plan
Ordinary shares issued (i)
Transaction costs for share issue
Transfers
Restricted shares issued
Share based payments expense
Net outlay to purchase shares (ii)
Balance at end of year
2014
Balance at beginning of year
Profit for the year
Other comprehensive loss
Total comprehensive income
Dividends paid
Dividend reinvestment plan
Restricted shares issued
Share based payments expense
Disposal of shares
Balance at end of year
(i) Ordinary shares issued under an accelerated renounceable entitlement offer.
(ii) Net outlay for the purchase of Company shares for vested Performance Rights in lieu of issuing new share capital.
60
Tabcorp Concise Annual Report 2015 Notes to the concise financial statements
For the year ended 30 June 2015
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.
Dividends declared after balance date
Since the end of the financial year, the Directors declared the
following dividend:
Final dividend for 2015 of 10.0 cents per share to be paid on
24 September 2015 (2014: 8.0 cents per share)
2015
$m
2014
$m
82.9
61.0
A full description of the accounting policies adopted by the Group is provided in the 2015
financial statements which form part of the full financial report.
The financial effect of this dividend has not been brought to account in the financial statements
and will be recognised in subsequent financial reports.
2. Income tax
In November 2014, Tabcorp resolved with the Australian Taxation Office the tax treatment of
the NSW Trackside concessions payment of $150 million, which was recognised as an asset in
2010. Under the settlement Tabcorp is entitled to a tax deduction of $105 million over a 10 year
period. The Group considers the settlement changes the tax base of the asset, resulting in a
new temporary difference arising. An income tax benefit of $31.5 million representing the entire
deduction has been recognised during the year ended 30 June 2015, together with a deferred tax
asset that will unwind as the tax deductions are claimed or prior assessments are amended.
In May 2015, Tabcorp resolved with the Australian Taxation Office the income tax treatment
of the $597.2 million it paid to the State of Victoria in 1994 in relation to the Victorian licences
granted at that time. The agreed tax treatment provides Tabcorp with an allowable deduction
of $429.6 million, with the balance generating a capital loss of $167.6 million. As a result, Tabcorp
has recognised an income tax benefit of $128.9 million in the year ended 30 June 2015.
2015
$m
2014
$m
3. Dividends
Dividends declared and paid during the year on ordinary shares:
(a) Interim dividend for 2015 of 10.0 cents per share paid on
16 March 2015 (2014: 8.0 cents per share paid on 24 March 2014)
76.6
60.3
(b) Special dividend for 2015 of 30.0 cents per share paid on
16 March 2015 (2014: nil)
229.7
-
(c) Final dividend for 2014 of 8.0 cents per share paid on
24 September 2014 (2013: 8.0 cents per share paid on
24 September 2013)
61.0
367.3
59.6
119.9
61
Dividends on ordinary shares are fully franked at a tax rate of 30%.
4. 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 measure of segment
profit used excludes significant items not considered integral to the ongoing performance of
the segment, which are outlined in the reconciliation below. Intersegment pricing is determined
on commercial terms and conditions.
The Group has three operating segments:
Wagering and Media
Comprises:
– Totalisator and fixed odds betting activities.
– National and international broadcasting of racing and sporting events.
Gaming Services
Supply of electronic gaming machines and specialised services to
licensed gaming venues.
Keno
Keno operations in licensed venues and TABs in Victoria, Queensland
and the ACT, and in licensed venues in NSW.
During the period the previous Media and International segment was combined with the
Wagering segment, as the nature of products and services are inherently related. This follows
revisions in the internal management structure. The prior period has been restated accordingly.
Tabcorp Concise Annual Report 2015
Notes to the concise financial statements (continued)
For the year ended 30 June 2015
5. Subsequent events
Civil proceedings
On 21 July 2015 the Australian Transaction Reports and Analysis Centre (AUSTRAC) commenced
civil proceedings against Tabcorp Holdings Limited, Tab Limited and Tabcorp Wagering (Vic) Pty Ltd
alleging certain breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act
2006. The Statement of Claim in these proceedings included matters which have been raised by
and discussed with AUSTRAC over an extended period. The Company has been actively managing
these matters in consultation with AUSTRAC, and continues to work on resolving them as a
priority. At this stage it is not practicable to determine the extent of any potential financial
impact to the Group.
Other than the events disclosed elsewhere in this report, no other matters or circumstances have
arisen since the end of the financial year, that may significantly affect the Group’s operations,
the results of those operations or the state of affairs of the Group.
4. Segment information (continued)
2015
Revenue
Segment profit before interest
and tax
Depreciation and amortisation
Capital expenditure
2014
Revenue
Segment profit before interest
and tax
Depreciation and amortisation
Capital expenditure
Wagering
and Media
$m
Gaming
Services
$m
1,856.9
247.2
128.6
79.2
1,737.8
234.1
116.6
73.3
99.6
41.6
26.0
46.9
98.1
39.7
27.3
43.5
Reconciliation of segment profit
Segment profit before interest and tax
Unallocated items:
– finance income
– finance costs
– other
Profit from continuing operations before income tax expense
Keno
$m
Total
$m
199.0
2,155.5
47.5
18.9
16.6
336.3
173.5
142.7
203.9
2,039.8
51.7
20.5
15.9
2015
$m
336.3
5.3
(81.1)
(1.7)
258.8
325.5
164.4
132.7
2014
$m
325.5
3.4
(100.6)
(3.8)
224.5
62
Tabcorp Concise Annual Report 2015 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 2015:
(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 J Dwyer
Chairman
David R H Attenborough
Managing Director and Chief Executive Officer
Melbourne
13 August 2015
63
Tabcorp Concise Annual Report 2015 Independent auditor’s report
64
Tabcorp Concise Annual Report 2015 Five year review
Total revenue
EBITDA 1
Profit before interest and tax 2
Profit after income tax attributable
to members of parent entity 3
Dividend 4
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 share 4
Operating cash flow per share 5
Return on shareholders’ funds
Net assets per share
Revenue6
Wagering and Media 7
Gaming Services
Keno
Gaming 8
Casinos 9
Unallocated/elimination
Normalisation adjustment
Total
2015
$m
2,155.5
508.1
334.6
2014
$m
2,039.8
459.4
295.0
2013
$m
2,133.4
472.3
313.1
2012
$m
3,038.5
725.2
591.7
2011
$m
4,469.6
774.7
856.3
334.5
389.2
129.9
121.3
126.6
140.3
340.0
173.0
534.8
295.1
160.0
136.2
700.9
1,924.7
462.2
3,384.0
-
406.3
1,147.7
139.9
1,693.9
1,690.1
131.6
cents
42.4
50.0
34.0
21.3%
$2.14
$m
1,856.9
99.6
199.0
-
-
-
-
2,155.5
126.8
54.2
726.6
1,833.9
363.6
3,105.1
-
396.6
1,094.3
132.8
1,623.7
1,481.4
198.4
cents
17.2
16.0
25.0
8.9%
$1.96
$m
1,737.8
98.1
203.9
-
-
-
-
2,039.8
109.7
111.6
750.3
1,772.4
400.6
3,144.6
432.9
356.7
821.5
120.3
1,731.4
1,413.2
204.2
cents
17.2
19.0
8.2
9.0%
$1.92
$m
1,711.5
86.3
205.4
130.2
-
-
-
2,133.4
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
1,776.5
4.7
183.1
1,074.2
-
-
-
3,038.5
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
1,699.6
-
169.6
1,077.4
1,439.4
(4.2)
87.8
4,469.6
65
1. 2013 includes impairment of $65.8 million, 2011 includes impairment of $358.0 million and excludes net gain on demerger
of Echo Entertainment Group before income tax benefit of $304.6 million.
2. 2011 includes net gain on demerger of Echo Entertainment Group before income tax benefit of $304.6 million.
3. 2011 includes net gain on demerger of Echo Entertainment Group of $351.2 million. 2015 includes $163.2 million as a result
of receiving income tax benefits relating to the Victorian wagering and gaming licence payment and the NSW Trackside
payment and associated interest income.
4. Dividends attributable to the year, but which may be payable after the end of the period. 2015 includes a special dividend
of 30.0 cents per share.
5. Net operating cash flow per the cash flow statement 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 $418.7 million.
6. Revenue includes both external and internal revenue.
7. During the period the previous Media and International segment was combined with the Wagering segment. The prior
period has been restated accordingly.
8. Gaming includes the Victorian Tabaret business which ceased operations on 15 August 2012.
9. The Casino revenues are normalised.
Tabcorp Concise Annual Report 2015 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
Northcape Capital Pty Ltd
National Australia Bank Limited
Date of
interest
22 July 2014
17 July 2015
Number of
% of issued
ordinary shares (i)
54,626,100
41,852,545
capital (ii)
7.16%
5.046%
(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 12,074 shareholders holding less than a marketable parcel of ordinary shares
($500 or more, equivalent to 102 ordinary shares) based on a market price of $4.95 at the close
of trading on 14 August 2015.
Shareholder information
As at 14 August 2015
Ordinary shares
Tabcorp has on issue 829,399,821 fully paid Ordinary Shares which are listed on the Australian
Securities Exchange (ASX) under the code TAH. The issued capital has increased from last year
due to Ordinary Shares issued under the 1 for 12 pro rata accelerated renounceable entitlement
offer which concluded in March 2015. There currently isn’t a share buy-back in operation in
respect of the Company’s Ordinary Shares.
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% per annum. If Tabcorp does not elect to redeem the Tabcorp Subordinated
Notes on 22 March 2017 (the First Call Date), then the fixed margin increases by 0.25% per annum.
Shareholding restrictions
The Company’s Constitution, together with an agreement entered into with the State
of Queensland, contain restrictions prohibiting an individual from having a voting power
of more than 10% in the Company. The Company may refuse to register any transfer of shares
which would contravene these shareholding restrictions or require divestiture of the shares
that cause an individual to exceed the shareholding restrictions.
Voting rights
All Ordinary Shares issued by Tabcorp Holdings Limited carry one vote per Ordinary Share.
Tabcorp 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 operates a benefits scheme for shareholders. The scheme is aligned with Tabcorp’s
key wagering business and associated racing industries, and provides free entry into nominated
thoroughbred, harness and greyhound racing events. Shareholders only have to register once,
then they will receive a new benefits card in July each year. Details of the scheme and its terms
and conditions are available on Tabcorp’s website www.tabcorp.com.au.
66
Tabcorp Concise Annual Report 2015 Twenty largest registered holders of ordinary shares
Twenty largest registered holders of Tabcorp Subordinated Notes
Investor name
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
Citicorp Nominees Pty Limited
BNP Paribas Noms Pty Ltd
AMP Life Limited
Citicorp Nominees Pty Limited
HSBC Custoday Nominees (Australia) Limited (NT-Comnwlth
Super Corp A/C>
Questor Financial Services Limited
BNP Paribas Nominees Pty Ltd
UBS Nominees Pty Ltd
Argo Investments Limited
CS Fourth Nominees Pty Ltd
National Nominees Limited
RBC Investor Services Australia Nominees Pty Limited
Pacific Custodians Pty Limited
SBN Nominees Pty Limited <10004 Account>
RBC Investor Services Australia Nominees Pty Limited
Questor Financial Services Limited
UBS Wealth Management Australia Nominees Pty Ltd
Total of top 20 registered holders
Number of
ordinary
shares
179,101,488
163,819,799
99,671,275
67,320,428
23,914,629
8,669,338
6,628,977
6,008,267
6,000,448
4,959,970
4,239,937
2,850,670
2,691,412
2,553,000
2,062,132
1,996,905
1,800,000
1,737,219
1,376,478
1,332,446
588,734,818
% of
issued
capital
21.59
19.75
12.02
8.12
2.88
1.05
0.80
0.72
0.72
0.60
0.51
0.34
0.32
0.31
0.25
0.24
0.22
0.21
0.17
0.16
70.98
Investor name
Citicorp Nominees Pty Limited
National Nominees Limited
UBS Nominees Pty Ltd
UBS Wealth Management Australia Nominees Pty Ltd
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
BNP Paribas Noms Pty Ltd
Arrowcrest Group Pty Ltd
First Option Credit Union Ltd
Mr Masaji Kitagawa
RBC Investor Service Australia Nominees Pty Limited
Navigator Australia Ltd
Nulis Nominees (Australia) Limited
BT Portfolio Services Limited
Trijon Nominees Pty Ltd
Netwealth Investments Limited
Ramm Investments Pty Ltd
Strandell Pty Ltd
Mr Edward Furnival Griffen & Mrs Deborah Ann Griffen
Wythenshawe Pty Ltd
Total of top 20 registered holders
Number of
Subordinated
Notes
183,056
182,274
150,259
139,706
111,817
82,345
42,355
22,500
20,000
20,000
18,382
16,683
13,108
12,250
12,125
10,828
10,500
10,100
10,000
10,000
1,078,288
% of
total
Notes
7.32
7.29
6.01
5.59
4.47
3.29
1.69
0.90
0.80
0.80
0.74
0.67
0.52
0.49
0.49
0.43
0.42
0.40
0.40
0.40
43.12
Distribution of securities held
Number of securities held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Ordinary shares (i)
Number of holders Number of securities
22,881,223
76,083,472
41,594,418
72,203,535
616,637,173
829,399,821
75,234
34,692
5,974
3,662
114
119,676
Tabcorp Subordinated Notes
Number of holders Number of securities
883,836
428,067
129,809
291,176
767,112
2,500,000
3,295
205
17
13
5
3,535
Performance Rights (ii)
Number of holders Number of securities
-
-
-
45,174
4,396,343
4,441,517
-
-
-
1
9
10
(i) Ordinary shares includes Restricted Shares and Deferred Shares offered to employees under the Company’s incentive arrangements.
(ii) Performance Rights were issued pursuant to the Company’s long term incentive arrangements.
Refer to the Remuneration report on pages 39 to 56 for more information about the Company’s incentive arrangements.
67
Tabcorp Concise Annual Report 2015
Shareholder information (continued)
As at 14 August 2015
Online shareholder services
Major announcements
Tabcorp’s major Company announcements since the previous annual report are listed below.
These announcements are available on the Company’s website at www.tabcorp.com.au
following their release to the Australian Securities Exchange.
Use the internet to easily manage your shareholding
Shareholders can use the online share registry facility available on the Company’s website
www.tabcorp.com.au, or through the share registry’s website www.linkmarketservices.com.au
to conduct standard shareholding enquiries and transactions, including:
2015
13 Aug
7 Aug
22 Jul
21 May
15 May
4 May
29 Apr
13 Feb
5 Feb
5 Feb
28 Jan
2014
17 Dec
4 Dec
24 Nov
28 Oct
16 Oct
15 Oct
14 Oct
12 Sep
Full year results – statutory net profit after tax of $334.5 million, up 157.5%
Sky Racing concludes Victorian thoroughbred racing media rights arrangements
AUSTRAC brings civil proceedings against Tabcorp
Tabcorp resolved with the Australian Taxation Office the tax treatment of the 1994
Victorian licences payment, resulting in an income tax benefit of $128.9 million
Tabcorp’s claim for approximately $686 million – High Court of Australia grants
Tabcorp special leave to appeal
Trading update for the third quarter of the 2015 financial year
Tabcorp enters into global partnership with USA-based gaming, eSports and
entertainment company Unikrn
Levy on gaming machines – High Court of Australia declines to grant Tabcorp special
leave to appeal
Tabcorp announces 30 cent per share special dividend and $236 million capital raising
Half year results – statutory net profit after tax of $122.4 million, up 64.1%
Sky Racing reaches agreement on NSW thoroughbred media rights
Tabcorp’s claim for approximately $686 million – Tabcorp applies for special leave to
appeal to the High Court of Australia
Tabcorp’s claim for approximately $686 million – Supreme Court of Victoria dismisses
Tabcorp’s appeal
Tabcorp resolved with the Australian Taxation Office the tax treatment of the
payment relating to NSW Trackside, resulting in an income tax benefit of $31.5 million
Chairman’s and Managing Director’s Annual General Meeting addresses
Investor day presentation
Trading update for the first quarter of the 2015 financial year
Tabcorp completes acquisition of ACTTAB
Tabcorp has again been ranked as the global gambling industry leader in Dow Jones
Sustainability Index
• 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 undeposited cheques, and
reduces the likelihood of mail fraud. Shareholders can provide and update their bank account
details by using the online 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 Ordinary Shares without incurring any brokerage or handling costs. The DRP
did not operate in respect of the interim and special dividends paid on 16 March 2015. To elect to
participate in the Company’s DRP, use the online share registry facility or contact the share registry.
Annual Report
Tabcorp’s interactive nnual Reports are available online 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 online share registry facility or contacting the share registry.
68
Tabcorp Concise Annual Report 2015 Company directory
Key dates
Registered office
Tabcorp Holdings Limited
5 Bowen Crescent
Melbourne VIC 3004
Australia
Telephone 03 9868 2100
Facsimile 03 9868 2300
Email
investor@tabcorp.com.au
Website
www.tabcorp.com.au
Stock exchange listings
The Company’s securities are quoted on the
Australian Securities Exchange (ASX) under
the codes TAH for ordinary shares and TAHHB
for Tabcorp Subordinated Notes.
New South Wales office
Level 31
680 George Street
Sydney NSW 2000
Telephone 02 9218 1000
Sky Racing/Sky Sports Radio
79 Frenchs Forest Road
Frenchs Forest NSW 2086
Telephone 02 9451 0888
Queensland office
Level 16
15 Adelaide Street
Brisbane QLD 4000
Telephone 07 3243 4100
Share registry
Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Australia
Telephone 1300 665 661
Telephone 02 8280 7418
Facsimile 02 9287 0303
Facsimile 02 9287 0309 (proxy forms only)
Email
Website www.linkmarketservices.com.au
tabcorp@linkmarketservices.com.au
2015
Annual General Meeting (The Langham, Melbourne)
2016*
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
* These are proposed dates.
See the Company’s website for updates (if any).
29 October
4 February
9 February
11 February
16 March
30 June
4 August
9 August
11 August
20 September
25 October
Currency
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.
Investment warning
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.
69
Tabcorp Concise Annual Report 2015 www.tabcorp.com.au