Annual Report 2024 Annual Report 2024 WE’RE RAISING THE GAME CONTENTS 1 | Operating and financial review 1 | About Tabcorp 2 | Executive Chairman’s message 4 | Purpose, mission, strategy and values 5 | New Victorian licence 6 | Competitiveness, product and innovation 12 | FY24 overview 14 | Review of FY24 results 18 | Wagering and Media business 22 | Gaming Services business 24 | Sustainability 25 | Framework 27 | Customer care 30 | Community 31 | People 32 | Environment 35 | Governance 38 | Board of Directors 40 | Executive Leadership Team 42 | Risk management and material business risks 48 | TCFD/climate-related disclosures 57 | Directors’ Report 64 | Remuneration Report 92 | Financial Report 142 | Independent auditor’s report 148 | At the back 148 | Five year review 149 | Shareholder information 151 | Glossary 152 | Announcements and key dates 153 | Company directory Tabcorp Holdings Limited ABN 66 063 780 709 Tabcorp’s 2024 reporting suite The following is the suite of documents that relate to Tabcorp’s disclosures for the financial year ended 30 June 2024 (FY24). These documents can be found on Tabcorp’s website at www.tabcorp.com.au. Annual Report Investor Presentation Sustainability Report ASX Release Appendix 4G Annual Report 2024 Annual Report 2024 WE’RE RAISING THE GAME ABN 66 063 780 709 RESULTS YEAR ENDED 30 JUNE 2024 FY24 Rules 4.7.3 and 4.10.3 ASX Listing Rules Appendix 4G Page 1 Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations Name of entity Tabcorp Holdings Limited ABN/ARBN Financial year ended: 66 063 780 709 30 June 2024 Our corporate governance statement1 for the period above can be found at:2 ☐ These pages of our annual report: This URL on our website: www.tabcorp.com.au/company/corporate-governance The Corporate Governance Statement is accurate and up to date as at 28 August 2024 and has been approved by the Board. The annexure includes a key to where our corporate governance disclosures can be located.3 Date: 28 August 2024 Name of authorised officer authorising lodgement: Chris Murphy (Secretary) 1 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period. Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period. Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of Listing Rule 4.10.3. Under Listing Rule 4.7.3, an entity must also lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. The Appendix 4G serves a dual purpose. It acts as a key designed to assist readers to locate the governance disclosures made by a listed entity under Listing Rule 4.10.3 and under the ASX Corporate Governance Council’s recommendations. It also acts as a verification tool for listed entities to confirm that they have met the disclosure requirements of Listing Rule 4.10.3. The Appendix 4G is not a substitute for, and is not to be confused with, the entity's corporate governance statement. They serve different purposes and an entity must produce each of them separately. 2 Tick whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where your corporate governance statement can be found. You can, if you wish, delete the option which is not applicable. 3 Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can also, if you wish, delete the “OR” at the end of the selection. See notes 4 and 5 below for further instructions on how to complete this form. 1 ASX ANNOUNCEMENT 28 August 2024 ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Tabcorp Holdings Limited 2024 Full Year Results Announcement Attached for release to the market is Tabcorp Holdings Limited’s (Tabcorp or the Company) Full Year Results Announcement for the year ended 30 June 2024 (FY24). This announcement was authorised for release by the Tabcorp Board. For more information contact: Media Daniel Meers GM Communications +61 419 576 961 Investor Relations Terry Couper GM Investor Relations +61 408 551 935 Tabcorp Holdings Limited Level 19, Tower 2, 727 Collins Street Melbourne VIC 3008 Australia GPO Box 1943 Melbourne VIC 3001 Australia tabcorp.com.au ABN 66 063 780 709 Acknowledgement of Country Tabcorp recognises Aboriginal and Torres Strait Islander peoples as the First Australians and the Traditional Custodians of the lands on which we live, learn and work. We pay our respects to their Elders past, present and emerging. Sustainability Report 2024 WE’RE RAISING THE GAME Corporate Governance Statement Corporate Governance Statement 2024 WE’RE RAISING THE GAME ABOUT TABCORP We operate a portfolio of leading Australian brands across wagering, media and integrity services, with national scale and reach. We also operate complementary international wagering and broadcasting businesses. TAB is Australia’s biggest multi-channel wagering brand, offering a broad range of betting experiences across digital channels and in retail throughout Victoria, New South Wales, Queensland, South Australia, Tasmania, Northern Territory and the ACT. Premier Gateway International is one of the largest global wagering and tote pooling hubs, based in the Isle of Man. Sky Racing is a leader in multi-venue, multi- channel racing and sports broadcasting throughout Australia and internationally. MAX is Australia’s leading gaming services provider, offering electronic gaming machine monitoring and related integrity services, and other gaming-related services to venues. Sky Racing World is a US-based distributor of international racing content and facilitator of associated tote pools. 1 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Tabcorp Annual Report 2024 The 2023/2024 financial year (FY24) was a year of progress for Tabcorp. We secured the new exclusive 20-year Wagering and Betting Licence in Victoria, placing Tabcorp on a level playing field with our competitors and enabling us to continue to deliver an innovative and enjoyable entertainment experience for our Victorian customers. One of the keys to growth for our business is digital product, and I’m pleased TAB increased speed to market and closed gaps with the release of new products and features for our customers. TAB is now a faster, more innovative and agile organisation than it was prior to the Demerger. We completed the transformation of the Gaming Services business to a high-quality integrity services business and continued to lead the community debate on wagering reforms. However, that progress was tempered by a softer trading environment due to continued inflationary pressures and higher interest rates within the Australian economy as well as a tightening regulatory environment, which impacted our FY24 results. Despite the soft wagering market, we were pleased that TAB’s digital business performed well relative to major competitors on a wagering turnover and net revenue basis, while our retail business performed strongly, with cash wagering outperforming digital, highlighting that customers are responding to our new offerings. FY24 results The Group recorded revenue of $2,338.9m, down 3.9%, primarily reflecting softer wagering market conditions and the sale of the eBET and MAX Performance Solutions (MPS) businesses in Gaming Services(i). Group EBITDA before significant items(ii) was $317.7m, down 18.7% on the prior year. The Group reported a net loss after tax of $1,359.7m in FY24 after incurring non-cash impairment charges totalling $1,376.4m (after tax) relating to our Wagering and Media business, and other significant items totalling $11.3m (after tax)(iii). Dividend As a Board, we remain committed to delivering sustainable returns for shareholders. We announced an FY24 unfranked final dividend of 0.3 cents per share (cps), with dividends payable for the full year totalling 1.3 cps partially franked. This represents a payout ratio of 93% of net profit after tax before significant items and equity accounted loss. The unfranked nature of the final dividend reflects the material impacts of $126.3m of tax refunds received during the year, following the settlement and finalisation of several tax matters with the ATO. In the near term, the Group is unlikely to be in a position to frank dividends. Level Playing Field As I mentioned, a highlight of the year was Tabcorp being awarded the new Victorian licence, which commenced on 16 August 2024. The new licence creates a level playing field for wagering taxes and fees in Victoria and enhances Tabcorp’s ongoing competitiveness. The Victorian Government’s decision to award the new licence to Tabcorp is a vote of confidence in our ability to provide a safe, enjoyable and innovative entertainment experience for Victorian customers, while ensuring the long term sustainability for the State’s racing industry. The New South Wales (NSW) Government has commenced a review process to consider reforms to the NSW wagering tax regime, regulation and industry funding to create a sustainable NSW racing industry, which if implemented could create a level playing field and modernise retail exclusivity, similar to recent reforms in Victoria and Queensland. Tabcorp is working collaboratively with the NSW Government as part of this process. Improving digital competitiveness I’m pleased to report that TAB led the market for new product releases in FY24. Since the launch of the new TAB App in the Spring of 2022 we’ve released 20 product updates and remain focused on ensuring we continue to deliver great product for our customers. Bruce Akhurst Executive Chairman EXECUTIVE CHAIRMAN’S MESSAGE (i) The sale of the eBet business completed on 1 February 2023 and the sale of the MPS business completed on 31 October 2023. (ii) Earnings before interest, taxation, depreciation, amortisation and impairment (EBITDA) before significant items is non-IFRS financial information, and unaudited. (iii) Significant items are disclosed on page 16 and in note A1 of the Financial Report. 2 Tabcorp Annual Report 2024 Digital wagering turnover and net revenue performed well relative to major competitors in a soft market(i), a clear proof point that TAB is more competitive and benefitting from our investments in brand, data, product and offers. I’m very pleased that customers are responding to our new offering. Retail rejuvenation During the year we completed upgrades to 31 high performing TAB venues across NSW, Victoria and Queensland. The upgrades include larger screens, new branding and LED signage, exclusive in venue offers and a greater integration between TAB and Sky Racing to promote offers and enhance the customer experience. We’ve been encouraged by the response from customers to our new offerings, with upgraded venues outperforming other venues in the network(ii). We’ll continue upgrading key venues in FY25 to drive performance and leverage the potential of TAB’s unique integrated wagering ecosystem. Retail remains a core part of our business and we see continued opportunities as economic conditions encourage higher patronage in pubs and clubs. Integrity Services The pivot of Gaming Services to a focused, high-quality integrity services business with attractive economics was completed during the year, with the sale of the MPS business and the new Tasmanian electronic gaming machine monitoring licence commencing. We see significant value in this business providing regulatory technology to governments as the regulatory environment continues to evolve. Safer Gambling In line with our vision to be a leader in customer and community care, we launched our new Safer Gambling Strategy underpinned by our Player Safety Promise. Our new strategy aims to elevate safer gambling within our organisation and ensure that caring for our customers is at the heart of everything we do. Genesis program Through our Genesis program we continued our progress on transforming the Company into a simpler, leaner organisation. The Genesis program delivered cost savings of approximately $25m (before tax) in FY24, largely offsetting inflationary headwinds across the business. We also finalised an outsourcing partnership with Accenture for IT and business processes. These changes are delivering a more efficient cost base and providing capacity to reinvest in growth initiatives in a rapidly changing wagering market. Leadership changes In March 2024, the Board announced the appointment of Gillon McLachlan as Tabcorp’s new MD & CEO (subject to regulatory approvals), who commenced on 5 August 2024. Mr McLachlan is one of Australia’s leading CEOs, with a proven track record and a depth of sport, racing, media and stakeholder management experience. He has a deep affinity with our industry and we’re delighted he has decided to join Tabcorp. We look forward to Mr McLachlan leading Tabcorp during the next phase of its transformation and delivering value for our shareholders. During the year, a number of other changes were made to the Executive Leadership Team with the appointment of Mark Howell as Chief Financial Officer, Rob Fraser as Chief Transformation Officer, Paul O’Rourke as Chief Risk Officer and Neil Carabine as Interim Chief Legal Officer. Strategy update While much has been achieved since the Demerger under our TAB25 strategy, changes in economic and regulatory conditions and company performance since then mean the TAB25 targets will not be met. We remain committed to the core strategic objectives of increasing market share, levelling the playing field and creating a more valuable company for shareholders, while maintaining an unwavering focus on delivering safe and enjoyable experiences for customers. Conclusion Looking forward, Tabcorp expects the macro-economic environment for customers to remain challenging given expectations around interest rates remaining elevated and the high inflation levels that persist. In addition, the regulatory environment continues to tighten and impact the wagering market. As a result of these factors, Tabcorp expects the soft wagering market observed in 2H24 to continue in the near term The Australian wagering market is historically resilient, and we remain confident in its long term growth prospects. Our strong customer proposition, unique portfolio of assets, and improved digital competitiveness, positions us strongly for when the market returns to growth. We are part way through our transformation and substantial progress has been made. Tabcorp is a more competitive and innovative company today than it was at the time of the Demerger and I look forward to continued execution on our transformation to unlock value for our shareholders. On behalf of the Board, I would like to thank all our people for their substantial efforts and commitment during the year. I would also like to thank shareholders for their continuing support. Bruce Akhurst Executive Chairman (i) Digital includes digital and call centre channels in which a customer transacts using their account. Based on movement in rolling annual turnover and net revenue (including generosities) relative to FY23 reported results. Includes some estimates for turnover. Competitors represent 85% to 90% of industry digital revenue and include Sportsbet, Entain Australia, Pointsbet and Bluebet. (ii) Based on average turnover growth above that of non-refurbished venues from date of refurbishment to 30 June 2024, relative to 13 weeks prior to refurbishment. Tabcorp Annual Report 2024 3 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Our Purpose To create the most engaging gambling and entertainment customer experiences Our Mission We’re Raising the Game and delivering the most outstanding and cutting-edge products and services to our customers Our Strategy WIN THE GAME Create unrivalled customer experiences to win digitally across all channels GROW DIGITAL REVENUE MARKET SHARE OPTIMISED COST BASE SHAPE THE GAME Shape our industry, business and ESG stance through delivering market leading products and services LEVEL PLAYING FIELD IN EVERY STATE PIVOT GAMING SERVICES TO INTEGRITY SERVICES LEADER IN CUSTOMER AND COMMUNITY CARE CHANGE THE GAME Create new pathways for growth and innovation TARGETED INVESTMENTS FOR GROWTH Enabled by Advanced Data and Analytics Great People and Partnerships A Culture of High Performance Our Values We disrupt and spark change to make it better We do what’s right for our customers, partners, and each other, always We bring our passion and have fun doing what we love 4 Tabcorp Annual Report 2024 NEW VICTORIAN WAGERING AND BETTING LICENCE The new Victorian Licence is a win for Tabcorp, a win for Victoria and a win for the Racing Industry. SUCCESSFULLY TRANSITIONED TO EXCLUSIVE 20 YEAR LICENCE ON 16 AUGUST 2024 LEVEL PLAYING FIELD ACHIEVED FOR FEES AND TAXES IN VICTORIA ENHANCES TABCORP’S ONGOING COMPETITIVENESS AND GROWTH POTENTIAL PRO-FORMA FY24 EBITDA UPLIFT OF $115m(i) EXTENDS TABCORP’S HIGH-QUALITY PORTFOLIO OF LICENCES UPFRONT LICENCE PAYMENT OF $600M COMPLETED ON 26 JUNE 2024(ii) (i) This is a pro-forma adjustment to earnings based on the operating environment in FY24 and is not a forecast. Investors should consider turnover conditions and outcomes to form a view of FY25 impact. Includes revenue uplift of $323m, variable contribution uplift of $199m, and $84m increase in operating expenses that was previously allocated to the Victorian Racing Industry Joint Venture. Non-IFRS financial information, unaudited. (ii) In addition to a total of 19 payments of $30m p.a. (fixed, non-escalating) over the licence term, commencing August 2025. OPERATING & FINANCIAL REVIEW Tabcorp Annual Report 2024 5 FINANCIAL REPORT REMUNERATION REPORT DIRECTORS’ REPORT GOVERNANCE SUSTAINABILITY UPLIFTING DIGITAL COMPETITIVENESS AFL Miss By One Market Drifters Popular Exotics Popular Multis Faster Vision Bench Status AFL SGM Tracker Race Feed Venue Mode Hero Markets Popular Bets Hub Filters Trifecta Approximates QR Code Offers FIRST TO MARKET TAB has increased speed to market and closed gaps to competitors with the release of new product and features for customers. 798,000 Active TAB digital customers(i) 63% Digital % of TAB domestic wagering revenue +170 New TAB App features and enhancements in FY24 20 TAB App releases since September 2022 UNIQUE OFFERS Unique QR code for exclusive TAB in venue offers FASTEST VISION +12 second improvement in vision latency (i) Wagering active customers measured on a rolling 12-month basis. Tabcorp Annual Report 2024 6 INVESTING IN BRAND AND OFFERS During the year we launched our successful “Sport Is Our Sport” campaign with a modernised TAB brand and new products delivering growth in key sports category. Sport turnover +4% (vs total turnover -3%) Same Game Multi turnover +23% Tabcorp Annual Report 2024 7 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT GENEROSITY EFFICIENCY (%)(i) and GENEROSITY SPEND ($m) 90% 85% 80% 75% 70% 65% 60% $350 Jul 22 Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24 Apr 24 Jun 24 $355 $360 $365 $370 $375 $380 $385 ($m p.a.) Generosity efficiency % (LHS) FY23 FY24 generosity spend down 5% FY24 Generosity spend $m p.a. (RHS) (i) Percentage of generosity to positive revenue customers. TECHNOLOGY TRANSFORMING OUR COMPETITIVENESS... DATA AND ANALYTICS CAPABILITY SIGNIFICANTLY UPLIFTED DELIVERING IMPROVED CUSTOMER EXPERIENCE AND GREATER EFFICIENCY IN MARKETING AND GENEROSITY SPEND GENEROSITY EFFICIENCY HAS INCREASED TO 88% FROM 70% OVER THE LAST TWO YEARS Ongoing investments in technology and data are improving our competitiveness and providing the foundations for growth. Tabcorp Annual Report 2024 8 ...AND SETTING THE FOUNDATIONS FOR SUCCESS DATA ACCELERATION Deployed an enterprise data platform providing advanced analytics and insights in Q3 FY24 Improving customer engagement through data analytics and more personalised experiences, 1st tranche delivered in Q4 FY24 Piloting use of AI in secure internal environments to improve team members access to information FIXED ODDS TRANSFORMATION Fixed Odds platform to move to a market- leading cloud-based platform, expected completion in Q3 FY25 Consolidates over 10 applications into a single modern scalable platform Provides unlimited markets, 65% more bets per minute, 100% uptime, customisable for differentiation TECHNOLOGY MODERNISATION Migration to cloud platforms delivering simplicity and speed to market 20% reduction in applications delivered Migration to cloud with 63% of wagering applications in cloud at end of FY24 TAB WEBSITE EXPERIENCE Uplift of TAB website to align with App features, providing market leading customer experiences to drive market share, expected completion in Q3 FY25 EFFICIENT BUSINESS PROCESSES Outsourcing partnership with Accenture for IT and finance processes, completed in Q4 FY24 Delivering a more efficient cost base and access to market leading capabilities and capacity to accelerate transformation TECHNOLOGY SEPARATION Technology separation program following demerger of The Lottery Corporation substantially complete OPERATING & FINANCIAL REVIEW SUSTAINABILITY GOVERNANCE DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Tabcorp Annual Report 2024 9 IMPROVING DIGITAL PERFORMANCE 85 90 95 100 105 90 95 100 105 Jun-24 Dec-23 Jun-23 Jun-24 Dec-23 Jun-23 DIGITAL TURNOVER PERFORMANCE DIGITAL NET REVENUE PERFORMANCE Index TAB digital Competitors Index TAB digital performed well relative to major competitors in a soft market, driven by uplifted digital product and offers, brand investment and greater generosity efficiency. (i) Based on movement in rolling annual turnover and net revenue relative to FY23 reported results (FY23 = 100). Competitors include Sportsbet, Entain Australia, Pointsbet and Bluebet, and includes some estimates for turnover. New indexed measures provide an indicative view of TAB digital performance relative to Australian wagering market competitors(i): • Represents 85% to 90% of industry digital revenue • Based on turnover and net revenue (including generosities) • Based on competitors’ reported results 10 Tabcorp Annual Report 2024 BEST WAGERING ENTERTAINMENT EXPERIENCE TAB has an unrivalled retail network and we’re upgrading a select number of higher performing ‘Next Gen’ retail venues to drive performance and leverage the potential of TAB’s unique integrated wagering ecosystem. STRONG RETAIL PERFORMANCE NEXT GEN RETAIL UPGRADES NEXT GEN PERFORMANCE TO 30 JUNE 2024(i) (i) Average growth above that of non-refurbished venues from date of refurbishment to 30 June 2024, relative to 13 weeks prior to refurbishment. (ii) Digital in venue wagering active customers measured on a rolling 12 month basis. Cash wagering revenue flat in FY24, up 5.3% in the second half of FY24 and outperforming the digital market Driven by investments in brand, in venue offers, SKY vision/TAB integrations, retail upgrades and greater socialising in venue 31 venues upgraded in FY24 Mix of venues across QLD, VIC and NSW Positive performance in all states(i) Continued investments in FY25 +19% Turnover +12% Digital in venue active customers(ii) +26% Digital in venue turnover +18% Cash turnover OPERATING & FINANCIAL REVIEW 11 Tabcorp Annual Report 2024 FINANCIAL REPORT REMUNERATION REPORT DIRECTORS’ REPORT GOVERNANCE SUSTAINABILITY FY24 OVERVIEW FY24 GROUP RESULTS Delivered competitive performance within a soft wagering market Group revenue of $2,338.9m, down 3.9% Net loss after tax/NPAT of $1,359.7m after incurring $1,387.7m of significant items(i), compared to NPAT of $66.5m for FY23 Full year dividend totalled 1.3cps partially franked, includes final dividend of 0.3cps unfranked TECHNOLOGY TRANSFORMING COMPETITIVENESS Key product gaps closed, leading the market in speed and product releases Modernised technology and uplifted data and analytics capability delivering efficiencies and improved customer experience WAGERING COMPETITIVENESS Wagering turnover and net revenue performed well relative to major competitors Benefits of TAB’s unique omni-channel offer, with strong retail performance Leveraging investments in digital product, technology, data analytics and brand CAPITAL MANAGEMENT FY24 capex of $151m(ii) in line with guidance Gearing(iii) of 2.7x at 30 June 2024 was elevated following the new Victorian licence upfront payment on 26 June 2024 Following a review of capital structure post the award of the new Victorian licence, new target gearing of <2.5x through the cycle is considered appropriate NEW VICTORIAN WAGERING LICENCE Successfully transitioned to new exclusive Victorian Wagering and Betting Licence on 16 August 2024 Modernised licence terms and level playing field for taxes and fees Increases scale and quality of earnings STRATEGY UPDATE Pivot to integrity services completed with sale of MAX Performance Solutions The core tenants of the TAB25 strategy remain: focusing on winning in the market; levelling the playing field; and improving return on invested capital unchanged Recognising changes in economic and regulatory conditions and Group performance since Demerger, the TAB25 targets will not be met Note: Results are for FY24, or as at 30 June 2024, as applicable, unless otherwise stated, with comparisons to FY23. Results are from continuing operations, excluding the former eBet and MPS businesses. (i) Significant items are disclosed on page 16 and in note A1 of the Financial Report. (ii) FY24 excludes Demerger capex of $1.7m (FY23: $8.2m). (iii) Gearing is net debt/EBITDA on a last 12 month basis and is non-IFRS financial information and unaudited. Net debt is gross debt including lease liabilities, bank guarantees and mark to market cross currency interest rate swaps, less cash. Tabcorp Annual Report 2024 12 REVENUE $2,338.9m down 3.9% primarily reflecting softer trading conditions and the sale of the eBET and MPS businesses in Gaming Services(i) NET LOSS AFTER TAX $1,359.7m after incurring non-cash impairment charges totalling $1,376.4m (after tax) relating to our Wagering and Media business, and other significant items totalling $11.3m (after tax)(ii) (i) The sale of the eBet business completed on 1 February 2023 and the sale of the MAX Performance Solutions (MPS) business completed on 31 October 2023. (ii) Significant items are disclosed on page 16 and in note A1 of the Financial Report. FULL YEAR DIVIDENDS 1.3cps partially franked OPERATING & FINANCIAL REVIEW Tabcorp Annual Report 2024 13 FINANCIAL REPORT REMUNERATION REPORT DIRECTORS’ REPORT GOVERNANCE SUSTAINABILITY Group results The Group’s results for the financial year ended 30 June 2024 (FY24) relate to the Tabcorp Group’s two businesses: • Wagering and Media • Gaming Services Comparisons to the prior period are in respect of the continuing businesses for the financial year to 30 June 2023 (FY23). The Group reported revenues for FY24 of $2,338.9m, down 3.9% on the prior year. The Group reported a net loss after tax of $1,359.7m after incurring non-cash impairment charges totalling $1,376.4m (after tax) and other significant items totalling $11.3m (after tax)(i). This compared to a statutory net profit after tax of $66.5m in the prior year. The Group reported a net loss before income tax, net finance costs and equity accounted investment of $1,582.1m, REVIEW OF FY24 RESULTS Statutory results Results before significant items(i) Group results(ii) For the year ended 30 June FY24 $m FY23 $m Change % FY24 $m FY23 $m Change % Revenues 2,338.9 2,434.4 (3.9) 2,338.9 2,434.4 (3.9) Taxes, levies, commissions and fees (1,455.3) (1,451.7) (0.2) (1,407.2) (1,466.0) 4.0 Net operating expenses(iii) (713.8) (575.3) (24.1) (614.0) (577.4) (6.3) EBITDA(iv)(v) 169.8 407.4 (58.3) 317.7 391.0 (18.7) Depreciation and amortisation (220.3) (240.5) 8.4 (220.3) (240.5) 8.4 Impairment – goodwill(vi) (746.0) – NM(vii) – – – Impairment – other(viii) (785.6) (49.0) NM – – – (Loss)/profit before income tax, net finance costs and equity accounted investment (EBIT)(v) (1,582.1) 117.9 NM 97.4 150.5 (35.3) (Loss)/profit before income tax (1,619.8) 82.7 NM 52.0 115.3 (54.9) Net (loss)/profit after tax (1,359.7) 66.5 NM 28.0 84.3 (66.8) (Loss)/earnings per share (EPS) – cents per share (59.6) 2.9 NM 1.4 3.8 (63.2) (i) Significant items are disclosed on page 16 and in note A1 of the Financial Report. Results before significant items is non-IFRS financial information and is unaudited. (ii) Results from continuing operations. (iii) Broadcast Rights fees were previously classified across both variable costs (VC) and operating expenses. To better reflect their nature all Broadcast Rights fees are now classified as VC. This has the effect of reallocating $42.9m from operating expenses to VC in FY24 (FY23: $40.1m). (iv) Earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) and EBIT before significant items are non-IFRS financial information, and unaudited. (v) Excluding equity accounted investment. (vi) Write down of goodwill following impairment relating to the Wagering and Media segment. Refer to note C3 of the Financial Report. (vii) Percent change is not meaningful. (viii) Write down of certain operating assets relating to New South Wales, South Australia and other cash generating units. Refer to note C3 of the Financial Report. compared to earnings before income tax, net finance costs and equity accounted investment (EBIT) of $117.9m in the prior year. Group EBITDA(iv) before significant items(i) was $317.7m, down 18.7% on the prior year. Following a review of the carrying value of assets at year end, the Group has recognised non-cash impairment charges totalling $1,376.4m (after tax) in FY24 ($1,531.6m before tax), relating to the Wagering business (predominantly the NSW and South Australian assets) and goodwill relating to the Wagering and Media segment. This reflects an increase of $644.5m (after tax) to the non-cash impairment charges totalling $731.9m (after tax) recognised at the half year ended 31 December 2023 (1H24). The 1H24 impairment charges reflected, among other matters: • softness in the Australian wagering market observed during the period, driven by higher inflation and interest rates, which impacted consumer spending on wagering activity; • the impact of higher interest rates on discount rates; and • higher taxes in NSW following the end of transitional payments relating to the June 2022 NSW Point of Consumption Tax increase. Additional indicators of impairment were identified at 30 June 2024, reflecting: • a slower than expected recovery in the Australian wagering market observed in 2H24, driven by higher inflation and interest rates, which has impacted consumer spending on wagering activity, as well as a tightening of the regulatory environment; and • an increase in operational expenditure in FY24 and expectations of persistent cost inflation, impacting the outlook for operating expenditure.(vi) Tabcorp Annual Report 2024 14 The Group recorded a loss per share of 59.6 cents per share (cps). This compares to earnings per share (EPS) of 2.9cps in the prior year. EPS before significant items and equity accounted loss(i) was 1.4cps. Group revenue declined 3.9% on the prior year, primarily reflecting softness in current wagering market conditions, a tightening regulatory environment and the sale of the eBET and MPS businesses in Gaming Services(ii). The impact of these items was reflected in lower Group earnings. During the year, the Group continued its progress on executing its transformation strategy focused on winning in the market, levelling the playing field, and creating a more efficient and effective organisation. Despite a soft wagering market, TAB’s digital competitiveness continued to improve, with digital wagering turnover and net revenue performing well relative to major competitors in FY24(iii). TAB’s improved digital performance has been driven by faster speed to market with new products, investments in brand, improved generosity efficiency and personalised customer offers, combined with enhanced connectivity between TAB’s unique omni-channel offer. TAB’s retail business performed well with cash wagering revenue up 0.4% in FY24, driven by ongoing investments in brand, venue refurbishments, in venue offers, and greater integration between TAB and the SKY Racing vision onscreen. A level playing field has been delivered in Victoria with the transition to the new 20-year exclusive Wagering and Betting Licence on 16 August 2024. Tabcorp now pays the same wagering taxes and fees as online wagering competitors for bets placed in Victoria, Queensland, ACT and Tasmania. The new licence strengthens TAB’s retail exclusivity and will provide a step change in the scale and quality of the Group’s earnings. The financial benefit of the new licence will start to be realised in FY25. The Gaming Services business has now been refocused into a high-quality Integrity Services(iv) business, which continues to perform strongly. During the year the new exclusive 20-year licence to monitor all electronic gaming machines in Tasmania commenced, and the sale of the MPS business completed. Refer to pages 18 to 23 for further details about the performance of each operating business. Group operating expenditure before significant items was $614.0m, up 6.3% on FY23(v), driven by persistent inflation across most parts of the business, including regulatory and compliance costs. The Genesis cost savings of approximately $25m in FY24 largely offset the inflation headwinds experienced across the business. In addition, there was incremental investment in customer facing areas such as brand, data and analytics as well as product. Group operating expenditure, excluding the insurance proceeds benefit of $11.0m in FY23, was up 4.4% on FY23. The Group’s Genesis program is continuing to transform the Company into a more efficient organisation and support cost management despite an environment of high-cost inflation. The Group also finalised an outsourcing partnership with Accenture for IT and finance processes, delivering a more efficient cost base and providing access to market leading capabilities and capacity to accelerate transformation. During the year the Group continued to invest in its transformation strategy, including product development, data capability, and the refresh of the TAB brand, delivering improved competitiveness. The Group recorded capital expenditure of $150.8m(vi), down from $155.4m(vi) in the prior year, with approximately 64% attributable to growth and transformation initiatives, up from 49% in FY23. (i) Non-IFRS information, and unaudited. (ii) The sale of the eBet business completed on 1 February 2023 and the sale of the MPS business completed on 31 October 2023. (iii) Digital includes digital and call centre channels in which a customer transacts using their account. Based on data supplied by industry partners which accounts for approximately one-third of the wagering market. All data is before generosities. (iv) Comprises MAX Regulatory Services and non-monitoring revenue linked to monitoring contracts. (v) Broadcast Rights fees were previously classified across both VC and operating expenses. To better reflect their nature all Broadcast Rights fees are now classified as VC. This has the effect of reallocating $42.9m from operating expenses to VC in FY24 (FY23: $40.1m). (vi) FY24 excludes Demerger capex of $1.7m (FY23: $8.2m). Tabcorp Annual Report 2024 15 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT REVIEW OF FY24 RESULTS CONTINUED The FY24 statutory results include the following significant items: • Non-cash impairment charges predominantly relating to NSW and South Australian wagering assets, and goodwill relating to the Wagering and Media segment. • Genesis transformation program costs, including redundancies and one-off core transformation initiatives. • Costs associated with the new Victorian Wagering and Betting Licence including: Victorian Racing Industry (VRI) funding support of $15m for each of the first three years of the new licence; impact of fixed distributions to the VRI until the end of the previous licence; and one off licence acquisition expenses. • Demerger costs incurred to separate Tabcorp and TLC into two standalone companies. These costs exclude certain technology related separation costs which are recharged from TLC. • Tabcorp completed the sale of the MPS business on 31 October 2023 and a loss on divestment was recognised. • Net income tax benefit from the settlement of eight disputes with the ATO in relation to the tax treatment of payments for various licences and authorities. Tabcorp repatriated certain amounts from the settlement to The Lottery Corporation (TLC), including interest benefit received from the ATO, which are classified as discontinued operations (refer to note D5 of the Financial Report). • Net income tax benefit in relation to other tax matters. Tabcorp recognised a tax benefit in respect of the $150.0m Racing Queensland settlement payments made during 2023. The table below provides a reconciliation of the FY24 statutory results from continuing operations to the results from continuing operations before significant items. The results before significant items are useful to provide an understanding of the underlying financial performance of the Group. Consolidated ($m) Statutory results Impairment(i) Transform- ation costs New Victorian Wagering and Betting Licence Demerger costs MPS divestment ATO dispute settlement Other tax matters Other Results before significant items(iv) Revenues 2,338.9 – – – – – – – – 2,338.9 Taxes, levies, commissions and fees (1,455.3) – – 49.9 – – – – (1.8) (1,407.2) Net operating expenses(ii) (713.8) – 65.3 7.5 17.7 7.5 – – 1.8 (614.0) EBITDA(iii)(iv) 169.8 – 65.3 57.4 17.7 7.5 – – – 317.7 Depreciation, amortisation and impairment (1,751.9) 1,531.6 – – – – – – – (220.3) EBIT(iii) (1,582.1) 1,531.6 65.3 57.4 17.7 7.5 – – – 97.4 Equity accounted loss (3.2) – – – – – – – – (3.2) Net finance costs (34.5) – – – – – (7.7) – – (42.2) (Loss)/profit before tax (1,619.8) 1,531.6 65.3 57.4 17.7 7.5 (7.7) – – 52.0 Income tax 260.1 (155.2) (19.7) (3.6) (5.1) (1.3) (40.2) (59.0) – (24.0) (Loss)/profit after tax (1,359.7) 1,376.4 45.6 53.8 12.6 6.2 (47.9) (59.0) – 28.0 (i) Refer to page 14 for further information about the impairment charges. (ii) Broadcast Rights fees were previously classified across both VC and operating expenses. To better reflect their nature all Broadcast Rights fees are now classified as VC. This has the effect of reallocating $42.9m from operating expenses to VC in FY24 (FY23: $40.1m). (iii) Excluding equity accounted investment. (iv) Non-IFRS financial information, and unaudited. Tabcorp Annual Report 2024 16 Balance sheet and capital management On 26 June 2024, the Group made the initial $600m payment for the new Victorian Wagering and Betting Licence, funded via $980m bank debt facilities. At 30 June 2024, the Group had net assets of $1,246.9m and net debt(i) of $860.3m, driven largely by the payment for the new Victorian licence. At year end, the Group’s average maturity of debt was 4.8 years, with undrawn debt facilities of $380.0m and cash of $313.7m (this includes restricted cash). The Group continues to maintain access to diversified funding sources, with no debt maturities until FY28 following the extension of Tabcorp’s syndicated bank debt facility (SFA) to June 2029 and increasing this debt facility from $400m to $430m. The Group’s balance sheet places Tabcorp in a strong position to continue to pursue growth opportunities. Gearing(ii) was 2.7 times as at 30 June 2024, which was elevated due to the timing of the Victorian licence payments and does not include any future earnings from this licence. Given the enhanced credit quality of the Group’s cash flows following the awarding of the new Victorian licence and to provide Tabcorp with the necessary flexibility and capacity to pursue growth opportunities, Tabcorp has revised its gearing target to less than 2.5 times through the cycle. This revised gearing target is considered appropriate and consistent with the Group’s investment grade credit characteristics and will provide significant headroom to Tabcorp’s covenant with its lenders and is consistent with its calculation. (i) Net debt is gross debt including lease liabilities, bank guarantees and mark to market cross currency interest rate swaps, less cash. Non-IFRS information and unaudited. (ii) Gearing is net debt/EBITDA on a last 12-month basis and is non-IFRS financial information and unaudited. Debt maturity profile ($m) SFA (drawn) US Private Placement (drawn) SFA (undrawn) $0 $100 $200 $300 $400 $500 $600 FY33 FY32 FY31 FY30 FY29 FY28 FY27 FY26 FY25 Description FY24 final FY24 interim FY23 final Amount 0.3 cps unfranked 1.0 cps fully franked 1.0 cps fully franked Record date 3 September 2024 28 February 2024 1 September 2023 Payment date 20 September 2024 21 March 2024 18 September 2023 Total $6.9m $22.8m $22.8m Dividends A final dividend for FY24 of 0.3 cents per share (cps) unfranked has been announced. The final dividend will be payable on 20 September 2024 to shareholders registered at 3 September 2024. The ex-dividend date is 2 September 2024. The interim and final dividends payable in respect of FY24 totalled 1.3 cps partially franked. This equates to a FY24 dividend payout ratio of 93% of NPAT before significant items and equity accounted loss. The Dividend Reinvestment Plan will operate in respect of the FY24 final dividend, with no discount applicable. The unfranked nature of the final dividend reflects the material impact on the franking account of $126.3m of tax refunds received in FY24. This followed the settlement and finalisation of several tax matters with the ATO. The Company is unlikely to be in a position to frank dividends in the near term. The table below shows the dividends paid, declared or recommended by the Company since the end of the previous financial year. Further information regarding dividends may be found in note A3 to the Financial Report. Tabcorp Annual Report 2024 17 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT WAGERING AND MEDIA Tabcorp Annual Report 2024 18 With unrivalled scale and reach across Australia, our unique betting ecosystem of market leading assets is delivering the best wagering entertainment experiences for our customers. DESTINATIONS VISION & CONTENT DIGITAL OUR CUSTOMERS O N D E V I C E A T H O M E A T A D E S T I N A T I O N Unparalleled brand reach across unique omni-channel distribution network to engage with customers Modernised TAB brand Leader in Australian racing and focus on growing sports wagering No.2 – TAB market share of Australian digital wagering revenue TAB App leading the market for new product releases Speed to market increased with many TAB App innovations being first to market Data and analytics capability significantly higher and continuing to lift Market leader in Racing vision, underpinned by breadth of domestic and international broadcast rights Engaging customer experiences across digital and retail venues Greater integration between TAB and Sky Racing to promote offers and enhance customer experience No.1 – Australia’s largest venue footprint ~4,000 TAB venues consisting of agencies, hotels, pubs, clubs and on-course Exclusive customer engagement and acquisition channel Upgraded 31 Next Gen venues to increase foot traffic and conversion to TAB digital in venue customers Tabcorp Annual Report 2024 19 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT TAB is a leading omni-channel provider of wagering experiences in Australia, with a unique combination of digital, retail destination and integrated media assets. TAB’s unrivalled retail network consists of TAB agencies, hotels, pubs and clubs as well as on-course operations and live sites, and is complemented by TAB’s nationally available App on mobile devices, website and call-centre platforms. The wagering licences held by TAB across each Australian State and Territory (excluding Western Australia) enable it to offer totalisator (or pari-mutuel) and fixed odds betting on racing, sport, and other events through digital and cash betting in retail. Premier Gateway International (PGI) operates an international wagering and tote pooling hub, licensed and operating out of the Isle of Man. PGI is one of the largest global tote hubs and is also the only tote pooling hub that operates 24 hours a day, all year round. Sky Racing is a leader in multi- venue, multi-channel racing and sports broadcasting. Sky Racing operates a combination of racing and sports channels which are extensively distributed directly to TAB’s venue network, in-home to pay TV subscribers and over various digital platforms, including the Sky Racing Active App. Sky Racing World (SRW), based in the USA, manages the international marketing and distribution of international racing content. SRW also assists with importing racing content from around the world into Australia and facilitates associated tote pools. SRW holds a Totalisator Licence in North Dakota, which enables the co-mingling of US wagering operators with TAB’s domestic pools. Refer to pages 57 and 58 for further information. WAGERING AND MEDIA CONTINUED Our operations Review of FY24 performance Wagering and Media revenues in FY24 totalled $2,162.8m, down 3.0%, and EBIT was $70.3m, down 39.5% on the prior year, reflecting a decline in the overall wagering market. Wagering revenues were $1,956.1m, down 2.7% on the prior year, driven by a decline in the overall wagering market and a tightening regulatory environment. Racing turnover declined 4.9%, while Sport turnover grew 3.5%. The Sports performance was driven by our strategic focus on growing in this category and investment in the “Sport is our Sport” brand campaign during FY24. Digital wagering revenues were $922.0m, down 2.2%, reflecting a decline in turnover partly offset by higher gross yields. Digital wagering revenue showed an improving trend in the second half with revenue flat in 2H24 compared to a decline of 4.0% in 1H24. TAB’s digital competitiveness continued to improve, with digital turnover and net revenue performing well relative to major competitors in a soft market in FY24(i). The performance of TAB digital relative to the market has been driven by improved speed to market and deployment of new product and features, brand investment, improved generosity efficiency and personalised customer offers. TAB released more digital product and features for customers than its competitors in FY24, releasing the 20th update to the TAB App since launch in September 2022. Ongoing investments in technology and data analytics capability is delivering improved customer experience and greater efficiency in marketing and generosity spend. Generosity efficiency has increased to 88% from 70% over the last two years. Active TAB digital customers were 798,000 (measured on a rolling 12-month basis), a decline of 0.9%. The TAB retail business performed well, with cash wagering revenues of $821.8m, up 0.4% in FY24, and up 5.3% in 2H24 (compared to a decline of 3.8% in 1H24), outperforming digital. The performance of cash wagering was driven by effective in venue offers, which included Sky Racing making TAB offers available onscreen, venue refurbishments and greater socialising in pubs and clubs by value conscious consumers. (i) Digital includes digital and call centre channels in which a customer transacts using their account. Based on movement in rolling annual turnover and net revenue (including generosities) relative to FY23 reported results. Includes some estimates for turnover. Competitors represent 85% to 90% of industry digital revenue and include Sportsbet, Entain Australia, Pointsbet and Bluebet. Tabcorp Annual Report 2024 20 Upgrades continue to a select number of higher performing TAB retail venues, with 31 venues upgraded across NSW, Victoria and Queensland. Turnover performance and digital in venue active customers at these upgraded venues outperformed other venues in the network(i), highlighting the opportunity to drive performance and leverage TAB’s unique omni-channel ecosystem. During the year TAB entered into strategic partnerships with a number of major hotel groups in NSW, cementing Tabcorp’s commitment to enhancing customer experience at these venues through investments in innovative fit outs and personalised in venue offers. In December 2023, Tabcorp was awarded a new exclusive Victorian Wagering and Betting Licence for a period of 20 years and successfully transitioned to the new licence on 16 August 2024. The previous 50:50 joint venture with the Victorian Racing Industry has been discontinued. The new licence creates a level playing field in Victoria for wagering taxes and racing and sport product fees and enhances Tabcorp’s ongoing competitiveness. The new licence strengthens TAB’s retail exclusivity and provides a step change in scale and quality of Tabcorp’s group earnings. A level playing field has now been implemented in Victoria, Queensland, Tasmania and the Australian Capital Territory, with Tabcorp seeking a level playing field in every jurisdiction in which it holds licences. Following a review of disclosures, the activities of international wagering have been included in Wagering (previously grouped with Media) to better reflect the activities of this revenue stream. International wagering revenues were $212.3m, down 14.8% due to increased competition in global (ex-Australia) pooling markets. Revenue from the Media business declined 6.2% to $206.7m, reflecting the impact of lower wagering market turnover. A proportion of Media revenue is derived from the domestic distribution of vision to corporate bookmakers with revenue derived as a percentage of their wagering turnover. International media revenue increased from both new content and distribution into new jurisdictions. Gross licenced venue subscriptions were relatively flat on prior year, with an increase in Sky vision rebates reducing the net contribution from venue subscriptions. In February 2024, Tabcorp entered into a six-year media rights and sponsorship agreement with the Victorian Racing Club. The partnership includes domestic and international broadcast rights to the Melbourne Cup Carnival and exclusive wagering sponsorship rights. Tabcorp has also entered into an agreement to sub-licence the Melbourne Cup Carnival domestic free-to-air media rights to Nine Entertainment. Wagering and Media operating expenses were 8.6% higher to $507.0m reflecting a persistent high-cost inflation environment, regulatory and compliance costs and reinvestment of Genesis savings into strategic growth initiatives such as the TAB refresh, data analytics capability and product developments. Excluding the insurance benefit in the prior period(ii), adjusted operating expenses grew 6.1%. (i) Average growth above that of non-refurbished venues from date of refurbishment to 30 June 2024, relative to 13 weeks prior to refurbishment. (ii) One-off insurance proceeds benefit of $11.0m received in FY23. (iii) Non-IFRS financial information, unaudited. (iv) Digital includes digital and call centre channels in which a customer transacts using their account. Based on movement in rolling annual turnover and net revenue (including generosities) relative to FY23 reported results. Includes some estimates for turnover. Competitors represent 85% to 90% of industry digital revenue and include Sportsbet, Entain Australia, Pointsbet and Bluebet. TAB’S DIGITAL TURNOVER AND NET REVENUE PERFORMED WELL RELATIVE TO MAJOR COMPETITORS IN A SOFT MARKET IN FY24(iv) Wagering and Media results for the year ended 30 June FY24 $m FY23 $m Change % Digital wagering revenues 922.0 942.7 (2.2) Cash wagering revenues 821.8 818.4 0.4 Domestic wagering revenue 1,743.8 1,761.1 (1.0) International wagering revenues 212.3 249.3 (14.8) Total wagering revenues 1,956.1 2,010.4 (2.7) Media revenues 206.7 220.4 (6.2) Total revenues 2,162.8 2,230.8 (3.0) Taxes, levies, commission and fees (1,404.6) (1,455.8) 3.5 Operating expenses (507.0) (467.0) (8.6) EBITDA(iii) 251.2 308.0 (18.4) Depreciation and amortisation (180.9) (191.8) 5.7 EBIT 70.3 116.2 (39.5) Note: Results are before significant items (refer to page 16). Tabcorp Annual Report 2024 21 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT GAMING SERVICES Tabcorp Annual Report 2024 22 Gaming Services results for the year ended 30 June FY24 $m FY23 $m Change % Revenues 176.1 203.6 (13.5) Taxes, levies, commission and fees (2.6) (10.4) 75.0 Operating expenses (107.0) (110.1) 2.8 EBITDA(i) 66.5 83.1 (20.0) Depreciation and amortisation (39.4) (48.7) 19.1 EBIT 27.1 34.4 (21.2) A FOCUSED, HIGH-QUALITY INTEGRITY SERVICES BUSINESS(ii) WITH ATTRACTIVE ECONOMICS Note: Results are before significant items (refer to page 16). (i) Non-IFRS financial information, unaudited. (ii) Comprises MRS and non-monitoring revenue linked to monitoring contracts. Our operations MAX is Australia’s leading gaming services operator. We are trusted by governments and regulators to provide electronic gaming machine (EGM) monitoring and related services. MAX Regulatory Services (MRS) provides integrity services, monitoring EGMs and providing related integrity services across NSW, Queensland, Northern Territory and Tasmania. In Queensland and Northern Territory, MRS also provides additional products, technology and other gaming services. MAX Technical Services (MTS) provides technical support and maintenance services to customers nationally as well as to Tabcorp’s other operating businesses. The sale of the MAX Performance Solutions (MPS) business was completed on 31 October 2023. Refer to pages 58 and 59 for further information. Review of FY24 performance Gaming Services revenues for FY24 totalled $176.1m, down 13.5%, and EBIT was $27.1m, down 21.2% on the prior year due to the sale of the MPS business (completed in October 2023) and the eBet business (completed in February 2023). Excluding the MPS and eBET businesses, FY24 revenue was $163.4m, up 10.1%, while EBIT was $20.0m, up 14.3%. These results include the positive impact from operating the new Tasmanian licence and the sale of the lower margin businesses. Operations under a new 20-year exclusive Tasmanian Monitoring Operator Licence to monitor all EGMs in hotels and clubs in Tasmania commenced on 1 July 2023. Gaming Services is now underpinned by a high-quality Integrity Services business(ii), which continues to perform strongly. Integrity Services revenue increased 9.5% to $129.1m, driven by a 3.2% increase in the number of monitored EGMs, and contracted CPI-link price increases in NSW. Operating expenses decreased 2.8% to $107.0m in FY24. Excluding the MPS and eBET businesses, FY24 operating expenses increased 8.2%, driven by inflation as well as costs associated with the new Tasmanian licence. Tabcorp Annual Report 2024 23 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT SUSTAINABILITY Tabcorp Annual Report 2024 24 Our Sustainability Framework As part of our vision of Raising the Game, we’re committed to being here for the long term by taking care of our customers and people, being part of the community and operating our business with integrity. Our Sustainability Framework (Framework) helps to demonstrate how we’re creating long term value in the management of our environmental, social and governance (ESG) risks and opportunities. It’s aligned with our business strategy, expectations of our team members and stakeholders, and with a strong focus on customer and community care. The Framework is a result of a robust materiality assessment and consultation process completed in FY22. During FY24, we refreshed our materiality assessment and concluded that our material ESG issues remain consistent with those identified in previous years. This work confirms we have a clear understanding of what is most important to our business and stakeholders, and that we are focusing our work in the right areas. A summary of our Framework and our progress during FY24 is outlined below, including alignment with the United Nations Sustainable Development Goals. Pillars Goals Targets FY24 progress CUSTOMER CARE • Deliver customer-centric safer gambling initiatives designed to prevent and minimise harm • Build and maintain cybersecurity controls that protect our customers’ privacy and security and drive competitive advantage through customer and stakeholder trust • Safer Gambling Strategy design and implementation • No. 1 trusted wagering brand for customer care • Protect our customers’ data and personal information • Maintain cybersecurity defences that safeguards our business • Continued progress against our Customer Care Strategy, now superseded by our new Safer Gambling Strategy. Implementation is underway • No. 1 trusted wagering brand for customer care • No priority 1 or 2 cyber incidents • No Eligible Data Breaches CONTRIBUTE TO OUR COMMUNITY • Contribute to the strength of our stakeholders through shared economic benefits, industry funding and supporting jobs • Deliver strategic community partnerships and investment to support the communities we operate in • Engage on key industry issues such as animal welfare and sports integrity • Contribute to a stronger local economy • Invest in strategic programs and causes that deliver benefit to our local community • Build strategic partnerships to help address key industry issues by 2025 • Generated $880m for the Australian racing industry, $800m in payments to State and Federal Governments(i), $170m for our retail partners and $380m of employee costs and dividends to shareholders • Continued our support of grass roots charities and community organisations with $0.9m of voluntary contributions (i) Includes $600m Victorian licence upfront payment. Tabcorp Annual Report 2024 25 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Pillars Goals Targets FY24 progress SUPPORT OUR PEOPLE TO SUCCEED • Foster a diverse, equitable and inclusive workplace • Invest in the health, safety and wellbeing of our team • Attract the best talent and support our team to shape their careers • Inclusion and Diversity Strategy design and implementation • Balanced and diverse leadership team: 40:40:20 by 2027(i) • Provide a safe workplace to our people, contractors and customers • Increase team member engagement score to 70% by 2025 • Inclusion and Diversity Strategy delivered, under implementation • Female representation at 30 June 2024: 43% Non-Executive Directors(ii); 22% Executive Leadership Team; 39% Leadership Cohort(iii); and 38% whole of Tabcorp • Lost Time Injury Frequency Rate was 2.7 lost time injuries per million hours worked (compared to 2.6 in FY23) • Engagement score decreased from 59% to 58% compared to our last survey in July 2023 BUILD A SUSTAINABLE FUTURE • Deliver a robust, transparent and effective approach to ESG • Develop a Net Zero roadmap to support our GHG emission reduction targets • Source products and services responsibly and sustainably • Maintain membership and inclusion in the DJSI (World and Australia) and the FTSE4Good Index • 45% reduction in Scope 1 and 2 GHG emissions by 2030 from 2019 baseline levels • 27.5% reduction in Scope 3 GHG emissions by 2030 from 2019 baseline levels • Net zero GHG emissions by 2050 • Responsible Procurement Action Plan delivery and implementation (Human Rights/Modern Slavery focus) • Maintained membership and inclusion in the DJSI Australia and DJSI Asia Pacific Indices, and in the FTSE4Good Index • 36.4% reduction in Scope 1 and 2 emissions and 0.4% increase(iv) in Scope 3 emissions from 2019 baseline levels • Net Zero Plan developed and under implementation: – Scope 3 targets set, supported by Supplier Carbon Framework – Climate Change Steering Committee established • Responsible Procurement Action Plan for Modern Slavery and Human Rights implemented. New Anti-Modern Slavery Strategy developed, with implementation underway (i) The target refers to the percentage of females:males:other. (ii) Inclusive of Bruce Akhurst as a NED (since his role as Executive Chairman is temporary in nature). (iii) The Leadership Cohort comprises the ELT (excluding the MD & CEO), direct reports to the ELT and frontline leaders. (iv) Excluding one-off projected lifetime consumption of electricity from EGMs sold in FY24, our FY24 Scope 3 emissions were 23.1% below the 2019 baseline. SUSTAINABILITY CONTINUED Our detailed sustainability approach and performance is disclosed in our 2024 Sustainability Report, which is available at www.tabcorp.com.au. Tabcorp Annual Report 2024 26 CUSTOMER CARE Customers are, and always will be, at the heart of our business. We’re committed to demonstrating leadership in customer and community care. That means not only complying with the law, but also advocating for a well-regulated and responsible industry. We engage regularly with governments, regulators, industry groups and community groups dedicated to Safer Gambling (SG) to enhance their understanding and relevant research in this area. We also aim to equip our customers with the right tools, information and resources to help them make informed decisions about how they gamble. In line with our vision to be a leader in customer and community care, we launched our new Safer Gambling Strategy at the end of FY24. The new strategy aims to elevate safer gambling within our organisation and aligns with evolving customer, community and regulatory expectations around the use and enjoyment of our wagering products and services. Our new strategy includes: • A vision statement for Safer Gambling articulating our commitments to customers • A refreshed Player Safety Promise and Framework outlining our core focus areas • A strategic plan of initiatives to improve outcomes for customers and team members • A program of work and governance model to track implementation and communicate progress Our Player Safety Promise is outlined on the following page. Tabcorp Annual Report 2024 27 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT SUSTAINABILITY CONTINUED WE PROMISE TO: PLAYER SAFETY FRAMEWORK OUR STRATEGIC VISION Leadership in Customer and Community Care OUR PLAYER SAFETY PROMISE Caring for our customers is at the heart of what we do. That means acknowledging that while our wagering products and services are enjoyed by most of our customers as a form of entertainment, they can also negatively impact or harm our customers, the people that care for them and the community. So, we’re Raising the Game and committing to a Player Safety Promise designed to prevent and minimise gambling-related harm and drive better outcomes for individuals and the community. BE TRANSPARENT AND RAISE AWARENESS We are transparent about what we do, we raise awareness and educate our customers, their loved ones and the community by providing easy to understand and widely accessible information. Awareness Harm Minimisation and Prevention Monitoring and Intervention Culture and Training Sustainability and Community Support PREVENT AND MINIMISE HARM We are ensuring player safety is part of everything we do, from a fresh idea to product design and implementation. We provide easy to find and use tools so our customers can continue to play safely, stay within their limits and take breaks. MONITOR AND PROVIDE A SAFETY NET We are putting the individual first when patterns indicate they are at risk of gambling harm by understanding their circumstances, and taking proactive, swift action when we believe a customer is suffering from gambling- related harm. CONTINUE TO LEARN AND BUILD ON EVIDENCE We are committed to continuing to test, learn, enhance and improve our harm minimisation efforts by critically assessing our performance, engaging with researchers, community and customers while providing training to our people and partners. CONTRIBUTE AND SUPPORT THE COMMUNITY We will continue to advocate for a well-regulated and safer industry by working closely with state, territory, federal governments and regulatory authorities, and working with community services and researchers to support them. Tabcorp Annual Report 2024 28 Delivering on our Safer Gambling Strategy will be a multi-phase journey. We have made significant progress in FY24 and have a clear path forward. DELIVERED IN FY24: PATH FORWARD: Launched Safer Gambling Strategy Established a new Safer Gambling Centre of Excellence transforming our operational Safer Gambling teams Identified key focus areas across the new Player Safety Framework Uplifted retail venue Safer Gambling training content and format Refer to our 2024 Sustainability Report for detailed information about our customer care commitments, strategic approach, progress in FY24, principles and practices. Additional information is also available from our website at www.tabcorp.com.au/sustainability/customer-care. Execute key priority initiatives including delivering new enhanced Player Tracking tool Continue enhancing and expanding suite of Safer Gambling tools Continue transforming and uplifting operational Safer Gambling teams 29 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Tabcorp Annual Report 2024 COMMUNITY We’re proud of our long history of supporting the Australian economy and the community. In FY24, we returned $1,850m(i) to governments, racing industry and retail partners, representing approximately 80% of our FY24 revenue. These contributions support essential government-funded community services and are a significant source of funding for our industry partners. We also contributed to the economic development and resilience of the Australian community through job creation, buying from local businesses and supporting grass roots charities and community organisations. We have key partnerships with a range of charitable organisations that are aligned with our values and strategic direction. We engage with our strategic partners to provide financial support and share our resources, networks, skills, expertise and people. During the year we partnered with industry-linked charities and supported a number of programs and organisations, including: • Harness racing’s Team Teal supporting women’s health • Thoroughbreds Are Go • Transitioning Thoroughbreds Foundation • Riding for Disabled Association of Australia • McGrath Foundation • Prostate Cancer Foundation Australia • OzHarvest • Lifeline Canberra These initiatives and partnerships demonstrate our commitment to shape our industry and impact our communities for the better. SUSTAINABILITY CONTINUED (i) Total includes 100% of Victorian Racing Industry joint venture interest. (ii) Includes $600m Victorian licence upfront payment. State and Federal Government(ii) (Wagering taxes, GST and income taxes paid and payable) $2,230m(i) of total benefits for our stakeholders generated by Tabcorp businesses in FY24 Racing industry (Payments to state and territory racing industry bodies) Retail partners (Commissions to hotels, clubs and TAB agents) Employees and shareholders (Salaries, training and development, and dividends paid) $800m $880m $170m $380m Total FY24 economic contributions Detailed information about our commitments and community contributions in FY24 is contained in our 2024 Sustainability Report. Additional information is also available from our website at www.tabcorp.com.au/sustainability/community. Tabcorp Annual Report 2024 30 PEOPLE We’re committed to fostering a safe, inclusive and welcoming workplace, where everyone feels comfortable to be their authentic self. Because when we feel like we belong, we share our best ideas and do our best work. Our mission is to make Tabcorp the most exciting place for our people to succeed and to strive to be an inclusion and diversity leader. Our diverse workplace reflects our inclusive culture, where team members can share their unique perspectives and contribute their experience to achieve the best possible business outcomes. We’re committed to equitable remuneration across all team members in equivalent roles, irrespective of gender, race, religion, disability and any other affiliation. We provide learning and development opportunities for our team members to grow, and regularly benchmark ourselves against relevant indicators to maintain our focus on culture, inclusion and diversity, engagement, recognition, and health, safety and wellbeing. The Board People and Remuneration Committee oversees Tabcorp’s people strategies, policies and programs and the progress against our indicators. Some of the key initiatives that support our team members are summarised below. TOGETHER WE’RE RAISING THE GAME INCLUSION AND DIVERSITY TEAM MEMBER BENEFITS WELLBEING COMMUNITY Gender affirmation support Supportive and flexible work practices, such as hybrid working, bonus leave and 18 weeks of paid parental leave for all new parents Domestic and family violence support Team member and community engagement program Inclusion and diversity programs and activities ‘All Grow Academy’ learning and development programs Free confidential external support services Matched fundraising HESTA 40:40 Vision signatory Corporate discounts Wellbeing programs and activities Community volunteering Member of Pride in Diversity Employee share scheme Flexible leave, including flexible public holiday leave Volunteer leave Cultural leave Reward and Recognition Program Detailed information about our people commitments, practices, strategic approach and progress in FY24 is contained in our 2024 Sustainability Report. Additional information is also available from our website at www.tabcorp.com.au/sustainability/customer-care. Tabcorp Annual Report 2024 31 OPERATING & FINANCIAL REVIEW GOVERNANCE DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT SUSTAINABILITY ENVIRONMENT AND CLIMATE CHANGE Looking after our environment and addressing climate change is critical to building a sustainable future for our business and our industry. We recognise climate change is a significant global challenge. We’re committed to working in a responsible way to manage our environmental impact and exposure to climate change, including investing in opportunities to support the global goal of transitioning to a low carbon economy. Our Environment and Climate Change Position Statement sets out our commitments to minimising our environmental impacts through risk management practices, effective governance, enhancing transparency, and strengthening our resilience. These commitments are summarised opposite. We have set medium and long term greenhouse gas (GHG) emissions reduction targets aligned with the Paris Agreement and the Science Based Targets Initiative (SBTi)(i), which are shown on page 55. Our key Environment and Climate Change Position Statement commitments During the year, we continued our progress in this area by: • progressing our Net Zero Plan and implementing key initiatives; • setting medium and long term targets to reduce our Scope 3 GHG emissions; • developing a Supplier Carbon Framework to support the achievement of our Scope 3 targets; • introducing scenario analysis to our annual climate-related risk assessment, which confirmed that while climate-related risks exist, they currently do not have the potential to materially impact our business at a whole-of-Group level; • completing an audit across our property network to identify energy reduction opportunities; • progressing the transition of our fleet to hybrid vehicles; and • finalising arrangements to instal a 257.5kW solar system in our Frenchs Forest media facility in NSW. This solar system is expected to be installed in FY25, generate 336,500 kWh of electricity and result in savings of approximately $80,000 each year, once installed. Next year we will be relocating our Sydney office to a carbon neutral certified building that runs entirely on 100% renewable energy while minimising energy and water consumption. The building has lower operational costs and provides a contribution to tenants’ own carbon reduction targets. Electric car charging stations are also available on site, further enabling the transition to a lower carbon economy. Task Force On Climate- Related Financial Disclosures (TCFD) We support the recommendations of the TCFD and welcome the introduction of the International Sustainability Standards Board’s (ISSB) global reporting framework. While Tabcorp has a relatively small environmental footprint, we acknowledge that our business may be susceptible to future changes in climate and are committed to enhancing transparency, improving risk management, and strengthening our resilience in the face of climate-related challenges. We disclose climate-related information annually in our Annual Reports and through the CDP(ii). We continue to elevate the maturity of our climate-related disclosures each year to align with global best practices, standards and frameworks. This year we engaged an external consultancy to assess our current climate-related disclosures and internal processes against the exposure draft Australian Sustainability Reporting Standards (ASRS), which is based on the ISSB. The assessment indicated that while we’re well positioned to start disclosing against the ASRS, there are opportunities for us to address in order to be ready to report against the new ASRS requirements. We’ve started this process by developing a Roadmap, establishing a Climate Change Steering Committee, and executing a number of ‘quick win’ actions. We’ll be aligning our climate- related disclosures with the ASRS once published and in the meantime we’re continuing to enhance our TCFD disclosures and reporting practices. SUSTAINABILITY CONTINUED (i) The Science Based Targets Initiative provides companies with a clearly defined path to reduce emissions in line with the Paris Agreement goals. (ii) The CDP is an international non-profit organisation that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. It was formerly known as the Carbon Disclosure Project. Assessing environmental risks and opportunities, including those linked to climate change, and mitigating these impacts to minimise risk and leverage opportunity Risk assessment Publicly report on our environmental and climate performance and related risk management Reporting Effective governance and oversight of environmental and climate-related risks and opportunites that may impact Tabcorp Governance Tabcorp’s Environment and Climate Change Position Statement is available from our website at www.tabcorp.com.au/sustainability/sustainable-future. Tabcorp Annual Report 2024 32 TCFD alignment summary TCFD recommendation Our progress Governance Disclose the organisation’s governance around climate-related risks and opportunities • The Board with the support of the Board Risk, Compliance and Sustainability Committee (BRCSC) oversees sustainability issues, including climate change • Experience in Sustainability, including climate-change, is considered as part of our Board skills matrix assessment • Our MD & CEO and senior executives participate in an annual Short Term Incentive (STI) Plan, which includes a climate-related measure (progression of our Net Zero Plan) embedded within a sustainability assessment or modifier (refer to page 80) • Accountability for overseeing our response to current and emerging environmental and social obligations, including in relation to risks and opportunities associated with climate change, sits with the Chief Legal Officer (CLO) and the ELT. The CLO is a member of the ELT, reporting directly to the MD & CEO and to the BRCSC Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material • Climate related risks and opportunities applicable to Tabcorp are regularly identified over the short, medium, and long term through climate-related risk assessments • These assessments inform our approach to climate change, which is captured under the Sustainable Future pillar of our Sustainability Framework • Net Zero Plan in place to address our climate-related risks and opportunities (Scopes 1, 2 and 3), supported by a Supplier Carbon Framework • We have included climate-related scenario analysis in our annual climate-related risk assessment for the first time this year to better inform our strategy Risk management Disclose how the organisation identifies, assesses, and manages climate-related risks • Risk Management Framework (RMF) in place to enable the effective identification, monitoring, management and reporting of risks, including climate-related risks and opportunities • Climate change is not currently considered a material risk for Tabcorp at a whole-of-Group level Metrics and targets(i) Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material • Medium and long term targets for Scope 1, 2 and 3 greenhouse gas (GHG) emissions are in place (refer to page 55) • We disclose Scopes 1, 2 and 3 GHG emissions in our annual Sustainability Report (i) Data and performance against targets are available in our 2024 Sustainability Report. Refer to pages 48 to 56 for more information about how we’re addressing the TCFD recommendations. Tabcorp Annual Report 2024 33 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT SUSTAINABILITY CONTINUED ESG RATINGS 59 (out of 100) Ranked third globally in the Casinos and Gambling sector 4.4 (out of 5) Ranked at the 100th percentile in the global Travel and Leisure sector C+, Prime 61 (out of 100) B-, Management Tabcorp Annual Report 2024 34 Tabcorp Annual Report 2024 GOVERNANCE 35 FINANCIAL REPORT REMUNERATION REPORT DIRECTORS’ REPORT OPERATING & FINANCIAL REVIEW SUSTAINABILITY Tabcorp Annual Report 2024 GOVERNANCE MD & CEO/Executive Chairman Executive Leadership Team (ELT) Management committees including: • Disclosure Committee • Executive Risk, Compliance and Sustainability Committee • Modern Slavery Steering Committee • Inclusion and Diversity Committee • Information Security Portfolio Steering Committee • Safer Gambling Centre of Excellence • Climate Change Steering Committee • Whistleblower Committee Board of Directors Audit Committee Risk, Compliance and Sustainability Committee People and Remuneration Committee Technology Committee Nomination Committee Standing Board Committees Tabcorp’s governance framework In March 2024, Bruce Akhurst was appointed Executive Chairman following the departure of the former MD & CEO. Gillon McLachlan joined Tabcorp on 5 August 2024 and will be formally appointed as MD & CEO upon receipt of all necessary probity approvals. It is intended that Mr Akhurst be re-appointed as Non-Executive Chairman once Mr McLachlan formally commences as MD & CEO. 43% of NEDs(i) are female – meeting our target of 40%:40%:20% by 30 June 2027. All Board Committee members, including the Chairmen, are independent NEDs. Tabcorp is a signatory to the HESTA 40:40 Vision. The Board has a balanced mix of short, medium and longer tenured NEDs(i) with average tenure of 4.8 years. Tabcorp’s Directors and senior executives undergo comprehensive probity checks prior to receiving all required regulatory and ministerial approvals. Due to our scale and national reach, Tabcorp is subject to the most extensive probity requirements of any wagering operator in Australia. 20% of ELT(ii) are female – our target is 40%:40%:20% by 30 June 2027. Further information can be found in our 2024 Corporate Governance Statement, Appendix 4G, Board and Committee Charters, key policies and governance documents which are available from the Corporate Governance section of our website at www.tabcorp.com.au/company/corporate-governance. (i) Inclusive of Bruce Akhurst as a NED (since his role as Executive Chairman is temporary in nature). (ii) Inclusive of Gillon McLachlan as an ELT member. NED(i) diversity Female Male 43% of NEDs(i) are female 4 3 NED(i) tenure <3 year 3 to <5 years 5 to 10 years >10 years 2 Average of 4.8 years 3 2 1 1 NED(i) ages 51–55 56–60 61–65 >65 1 Average age is 61 years 2 3 1 Frameworks, policies, procedures and practices as approved by the Board and the ELT Other independent assurance • External Auditor • Internal Audit Legal and other professional advisers (as necessary) GOVERNANCE CONTINUED Tabcorp Annual Report 2024 36 Board skills matrix The Board Skills Matrix sets out the skills and experience considered essential to the effectiveness of the Board. The Matrix is reviewed annually to ensure the skills and experience represented on the Board address Tabcorp’s existing and emerging strategic, business and governance needs. The Matrix also assists in Board succession planning to identify potential director candidates. Critical skills Wagering and gaming industry experience Board or senior executive level in the domestic or international gambling industry or the racing industry Media and entertainment experience Board or senior executive level in the media, professional sporting or entertainment industry Leadership CEO or similar senior leadership position experience in a major organisation or listed entity, experience in P&L accountability and setting strategy and ability to provide mentorship Strategic oversight Experience formulating, implementing and/or overseeing strategic business plans, including capital allocation, budgeting and accountability, and developing long term strategic plans, including start-ups, mergers and acquisitions, and divestments Stakeholder engagement Experience in corporate affairs and communications, strategic engagement with government, investors and industry Risk management Experience in risk management and compliance frameworks, identifying and providing oversight of material business risks, setting risk appetites and crisis management Regulatory and legal Knowledge of the environment applicable to the gambling industry, experience overseeing legal and regulatory frameworks, regulatory strategy and engagement General skills Transformation and major projects Experience in enterprise wide transformation, major change programs, or major projects, including project delivery, governance, risk and oversight Innovation and disruption Experience in substantial disruption, industry transformations, emerging technology, such as AI, and navigating organisational and strategic implications Digital Experience in digital strategy, customer experience and driving growth across distribution/channel footprints, personalisation, and experience using marketing technology, digital and data platforms Technology and data Experience and knowledge of critical technology infrastructure and applications, cybersecurity, privacy, data regulation and data-led strategy Retail, marketing and brand Experience at a significant retail business, including multi-channel distribution, development of products, customer experience, service and management strategies, and marketing to retail and online consumers Financial acumen/capital management Qualifications and/or experience in accounting and/or finance, including understanding financial statements, external and internal audit, assessing financial controls, overseeing capital management, financing and funding arrangements People and culture Experience with people matters, including succession and talent management, organisational culture and employee engagement, inclusion and diversity strategies, and workplace health, safety and wellbeing Remuneration Experience in a Board Remuneration Committee (or similar) or at a senior executive level in relation to remuneration practices, including scorecard target setting, incentive plans and legislative/ contractual frameworks for remuneration Governance Non-Executive Director experience in a major organisation or listed entity with demonstrated understanding of governance and experience overseeing best practice governance frameworks Sustainability Experience in sustainability governance and reporting, including sustainability strategy, risks and oversight, climate change and climate-related risks and opportunities, human rights and modern slavery, community engagement and socially responsible operations Directors with Primary skills – Consistent ability to identify complex matters Directors with Secondary skills – Broad and general knowledge of subject area Tabcorp Annual Report 2024 37 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT BRUCE AKHURST Executive Chairman from March 2024 Non-Executive Chairman from June 2022 Independent NED from July 2017 GILLON MCLACHLAN Managing Director and Chief Executive Officer Elect from 5 August 2024(i) RAELENE MURPHY Independent NED from August 2022 BRETT CHENOWETH Independent NED from August 2022 BOARD OF DIRECTORS Bruce Akhurst was appointed as Executive Chairman on an interim basis until a permanent MD & CEO commences in the role, at which time it is intended that Bruce will revert to his previous Non-Executive Chairman role. Bruce is a Director of McMillan Shakespeare Limited (from April 2021). He is also Chairman of the Peter MacCallum Cancer Foundation and a Council Member of RMIT University. Bruce was the Executive Chairman of Adstream Holdings Pty Ltd and was a Director of Vocus Group Limited (from September 2018 to July 2021) and private investment company Paul Ramsay Holdings Pty Ltd. In his executive career, Bruce was Chief Executive Officer of Sensis Pty Ltd from 2005 to 2012 and a Director and Chairman of Foxtel. He also spent seven years as Group Managing Director and Group General Counsel at Telstra Corporation Limited, and prior to that he was a Partner at Mallesons Stephen Jaques. Bruce brings to the Board extensive experience in legal and regulatory compliance, governance and risk management, marketing and customer experience, media, digital innovation, information technology, strategy, finance and capital management. Tabcorp Committees: • Not a member of any Board Committee while serving as interim Executive Chairman Qualifications: • Bachelor of Economics (Honours) • Bachelor of Laws • Fellow of Australian Institute of Company Directors (AICD) Gillon McLachlan joined Tabcorp on 5 August 2024 in an observer capacity, and will assume the role of Managing Director and Chief Executive Officer upon receipt of all necessary regulatory approvals. Gillon was previously the Chief Executive Officer of the Australian Football League (AFL) for a decade, where he led significant change, transformation and growth. He held various other management roles during his 20-year career at the AFL. Gillon brings to the Board extensive experience in managing complex stakeholder environments and government relations. He has a proven track record and deep knowledge and understanding of wagering, sport, racing and negotiating broadcast rights. He also has extensive racing knowledge as a thoroughbred owner and breeder. Qualifications: • Bachelor of Laws (Honours) • Bachelor of Commerce • Completed the Senior Executive Program at Stanford University Raelene Murphy is a Director of Elders Limited (from January 2021), Bega Cheese Limited (from June 2015) and Integral Diagnostics Limited (from October 2017). Raelene was previously a Director of Clean Seas Seafood Limited, Service Stream Limited, Tassal Group Limited and Altium Limited (from September 2016 to November 2022). Raelene had an executive career in finance and business turnaround, and has previously been the CEO of The Delta Group and a Managing Director of KordaMentha’s 333 Management practice. Raelene brings to the Board extensive experience in finance, accounting, capital management, strategy, risk and compliance, organisational effectiveness and technology. Tabcorp Committees: • Chairman of Audit Committee • Member of Risk, Compliance and Sustainability Committee • Member of Nomination Committee Qualifications: • Bachelor of Business (Accounting) • Fellow of the Institute of Chartered Accountants Australia and New Zealand • Graduate Member of AICD • Member of Chief Executive Women Brett Chenoweth is a Director of EVT Limited (from December 2022), and holds various unlisted company directorships including Canberra Data Centres, One New Zealand Group Limited (previously Vodafone New Zealand Limited), Madman Entertainment and Surfing Australia Limited. Brett was previously the Chairman of Adairs Limited (from November 2020 to March 2024) and a Director of Janison Education Group Limited (from July 2014 to November 2022). He was MD & CEO of APN News and Media Limited, and has held senior executive roles at The Silverfern Group, Telecom New Zealand Limited, Ecorp Limited and Village Roadshow Limited. Brett brings to the Board extensive experience in retailing, marketing and consumer experience, digital innovation, technology and telecommunications, entertainment, strategy, legal, risk and compliance. Tabcorp Committees: • Chairman of Risk, Compliance and Sustainability Committee • Member of Audit Committee • Member of Technology Committee • Member of Nomination Committee Qualifications: • Bachelor of Economics • Bachelor of Laws • Graduate Diploma in Applied Finance and Investment (i) Subject to receipt of all necessary regulatory approvals. Tabcorp Annual Report 2024 38 DAVID GALLOP AM Independent NED from July 2020 JANETTE KENDALL Independent NED from August 2021 KAREN STOCKS Independent NED from March 2023 JUSTIN MILNE Independent NED from August 2011 David Gallop AM is Chairman of Step One Clothing Limited (from October 2021), Venues NSW and Alacria Pty Ltd. He is also on the Board of Cricket NSW. David was previously the Chief Executive Officer and General Secretary of Football Federation Australia from 2012 to 2019, and Chief Executive Officer of the National Rugby League from 2002 to 2012. He also held senior legal roles with the National Rugby League, News Corporation and law firm Holman Webb. David has served on numerous sports governing bodies including the Australian Sports Commission, Rugby League International Federation and the Asian Football Confederation’s 2015 AFC Asian Cup Local Organising Committee. David brings to the Board extensive experience and background in sports administration, media rights and broadcasting, digital content delivery, customer experience, legal and regulatory frameworks and stakeholder relationship management. Tabcorp Committees: • Chairman of People and Remuneration Committee • Member of Risk, Compliance and Sustainability Committee • Member of Nomination Committee Qualifications: • Bachelor of Laws • Bachelor of Arts • Graduate Member of AICD Janette Kendall is a Director of Vicinity Centres (from December 2017) and KM Property Funds Limited, and is on the Board of the Melbourne Football Club and Visit Victoria. Janette previously served as a Director of Costa Group Holdings Limited (from October 2016 to February 2024), Nine Entertainment Co. Holdings Limited, Wellcom Worldwide Pty Ltd, Australian VenueCo and the Melbourne Theatre Company. During her executive career, Janette served in various senior management roles including as Senior Vice President of Marketing at Galaxy Entertainment Group in China, Executive General Manager of Marketing at Crown Resorts, General Manager and Divisional Manager roles at Pacific Brands, Managing Director of emitch Limited, and Executive Director of Clemenger BBDO. Janette brings to the Board extensive experience in marketing, operations and digital transformation. She also has a depth of experience in the gambling, retail and hospitality industries both in Australia and overseas. Tabcorp Committees: • Chairman of Nomination Committee • Member of Audit Committee • Member of People and Remuneration Committee • Member of Technology Committee Qualifications: • Bachelor of Business (Marketing) • Fellow of AICD • Member of Chief Executive Women Justin Milne is a former Chairman of NetComm Wireless Limited, MYOB Group Limited, Australian Broadcasting Corporation and pieNETWORKS Limited, and was a Director of NBN Co Limited, SMS Management and Technology Limited, Members Equity Bank Limited and Basketball Australia Limited. Justin 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 was also the Chief Executive Officer of OzEmail and the Microsoft Network. Justin brings to the Board extensive experience in information technology, media, digital innovation, marketing and customer experience, public policy, strategic and commercial acumen and governance. Tabcorp Committees: • Chairman of Technology Committee • Member of Audit Committee • Member of Risk, Compliance and Sustainability Committee • Member of People and Remuneration Committee • Member of Nomination Committee Qualifications: • Bachelor of Arts • Fellow of AICD Karen Stocks is currently Vice President, Global Measurement Solutions at Google Inc. Karen was previously the founding Managing Director of Twitter Australia, and held several leadership roles at Google Australia, including as Managing Director, New Products and Solutions APAC, and at Vodafone Australia. Karen was previously a Director of Netball Australia. Karen is a senior technology and media executive, with extensive experience in the technology sector, media, data, and customer experience. Karen brings to the Board extensive experience in information technology, digital innovation, media and communications, marketing and customer experience. Tabcorp Committees: • Member of Technology Committee • Member of Nomination Committee Qualifications: • Bachelor of Financial Administration • Master of Business Administration • CPA Certificate • Fellow of CPA Australia GOVERNANCE FINANCIAL REPORT REMUNERATION REPORT DIRECTORS’ REPORT SUSTAINABILITY OPERATING & FINANCIAL REVIEW Tabcorp Annual Report 2024 39 JENNI BARNETT Chief Customer Officer SHARON BROADLEY Chief People Officer PAUL CAREW Chief Operating Officer ROBERT FRASER Chief Transformation Officer(i) NEIL CARABINE Interim Chief Legal Officer(i) EXECUTIVE LEADERSHIP TEAM Jenni Barnett commenced as Chief Customer Officer with Tabcorp in June 2022 following the completion of Tabcorp’s demerger of its former Lotteries and Keno business. Jenni is a senior executive with over 20 years of experience working with large organisations and in the not-for-profit sector. Her broad experience and expertise includes digital transformation, marketing, and product management. Prior to joining Tabcorp, Jenni held the role of Executive Director, Telstra Digital, where she led the digital transformation to meet customer needs and deliver on Telstra’s T22 strategy. Prior to this, Jenni worked at the Commonwealth Bank of Australia in a range of senior product and marketing roles, where she was one of the executives responsible for establishing the digital team at the Commonwealth Bank of Australia. Jenni holds a Bachelor of Social Science and a Master of Business (Marketing), and is a Graduate Member of AICD. Sharon Broadley joined Tabcorp in October 2010 as General Manager Talent and Organisational Development and was Tabcorp’s General Manager Employee Experience. She commenced as Chief People Officer of Tabcorp in June 2022 following the completion of Tabcorp’s demerger of its former Lotteries and Keno business. Sharon has led the people workstreams of major organisational change programs at Tabcorp including for the combination with Tatts and the Demerger of The Lottery Corporation. Sharon has more than 20 years of experience in organisational development, talent and performance management, culture programs, change management, employee engagement, leadership and executive development. Prior to joining Tabcorp she held senior people leadership roles including with Fosters Group Limited and Oracle Corporation. Sharon holds a Bachelor of Education and Training and an Associate Diploma of Training and Development. Neil Carabine commenced as Interim Chief Legal Officer in June 2024 (subject to regulatory approval). Neil has extensive experience in the fields of telecommunications, infrastructure, corporate, equity capital markets and highly regulated industries. Neil was a Partner of King & Wood Mallesons from 1995 to 2021 and since that time has acted as General Counsel of ASX listed companies. Neil holds a Bachelor of Laws (Honours) and a Bachelor of Commerce. Paul Carew commenced as Chief Operating Officer in August 2022 and was previously Chief Operating Officer – Gaming Services from February 2020. Since joining Tabcorp in 2006, he has held various senior management positions across the Retail Wagering, Gaming and former Keno businesses. In his current role, Paul leads a diverse portfolio of operational functions covering the Wagering and Media business and Gaming Services business. Paul has over 25 years of experience in the gaming and hospitality sector and has worked across all Australian jurisdictions. He has held senior roles in the beverage industry with Carlton and United Breweries and was previously a licenced venue owner and operator. Paul holds a Bachelor of Commerce, Marketing and Management, and has attended the University of Nevada Executive Development Program in the USA. Robert Fraser commenced as Chief Transformation Officer in January 2023 (subject to regulatory approval) and was previously General Manager Transformation and Separation at Tabcorp since April 2022. Robert has extensive experience leading strategic and transformation outcomes in large businesses. His expertise includes enterprise transformation, digital transformation, commercial management, strategic delivery, and program execution. Since joining Tabcorp, Robert has led Tabcorp’s Genesis Transformation Program, the Tabcorp-TLC Separation Program, and the establishment of the TAB25 Execution Plan. Prior to joining Tabcorp, Robert held senior roles in AusNet Services across data, AI and analytics, transformation, commercial and performance. Robert’s career prior to Tabcorp covers a range of industry and operating environments, including energy and utilities, technology, workforce solutions, and financial services. Robert holds a Bachelor of Technology and a Master of Information Technology Project Management. (i) Subject to receipt of all necessary regulatory approvals. Tabcorp Annual Report 2024 40 (i) Subject to receipt of all necessary regulatory approvals. MARK HOWELL Chief Financial Officer(i) DAMIEN JOHNSTON Commercial Director PAUL O’ROURKE Chief Risk Officer(i) ALAN SHARVIN Chief Information Officer Mark Howell commenced as Tabcorp’s Chief Financial Officer (CFO) in April 2024 (subject to regulatory approval). Mark has a wealth of experience in finance, strategy, mergers and acquisitions, treasury and investor relations. Prior to joining Tabcorp, Mark held senior finance, strategy, business development and investor relations roles at Coles Group Limited, and was General Manager Liquor Finance & Network Optimisation for Coles’ Liquor business (Liquorland, Vintage Cellars and First Choice Liquor Market). Prior to joining Coles, Mark was an investment banker at Goldman Sachs and Rothschild and worked on numerous mergers and acquisitions, equity and debt financings as well as general strategic advice for a broad range of companies. Mark holds a Bachelor of Commerce and a Master of Applied Finance. He is a member of the Institute of Chartered Accountants Australia and New Zealand, and a Graduate Member of AICD. Damien Johnston commenced as Commercial Director in April 2024 after serving as Interim CFO from September 2023. Damien is a Director of X2M Connect Limited (from February 2021) and he was a member of PwC Australia’s external Audit Quality Advisory Board (from December 2019 to August 2023). Damien was previously Tabcorp’s CFO from June 2011 to October 2018, after he initially joined Tabcorp in September 2003. He previously had a 21 year career with BHP Billiton with roles in both Australia and Asia. Damien holds a Bachelor of Commerce and is a Fellow of CPA Australia and a Member of AICD. Paul O’Rourke commenced as Chief Risk Officer in June 2024 (subject to regulatory approval). Paul brings a great depth of experience in risk management, including with respect to cybersecurity and technology risk management. Prior to joining Tabcorp, Paul was Managing Director and Partner of Boston Consulting Group where he led their Global Cyber and Digital Risk practice, and was also the Australian Risk Leader. He was previously the Global and Asia Pacific Cybersecurity Leader at PwC, and was Chief Information Security Officer of ANZ Bank Limited. Paul holds a Bachelor of Commerce (Economics) and is a Graduate Member of AICD. Alan Sharvin commenced as Chief Information Officer with Tabcorp in June 2022 following the completion of Tabcorp’s demerger of its former Lotteries and Keno business. Alan is a senior technology executive with deep experience across multi-national organisations. His expertise includes digital strategy, omni-channel, transformation and modern technology practices, with extensive experience in wagering. Prior to joining Tabcorp, Alan worked as Head of Digital at Reece Group, where he led the digital customer product and technology functions. Alan previously worked at Tabcorp from 2018 to 2019 where he led the Technology function for the Wagering and Media business. He has also held senior roles at Amazon and Sportsbet. Alan holds a Bachelor of Science, Computer Science and Mathematics. GOVERNANCE FINANCIAL REPORT REMUNERATION REPORT DIRECTORS’ REPORT SUSTAINABILITY OPERATING & FINANCIAL REVIEW Tabcorp Annual Report 2024 41 Tabcorp adopts a structured and proactive approach to understanding, identifying and managing risk aligned to the Group’s strategies and operations. The Group’s Risk Management Framework (summarised opposite) aims to enable the effective identification, monitoring, management, reporting and oversight of risks throughout the Group and is based on concepts and principles identified in the International Standard ISO 31000:2018 Risk Management Guidelines. This framework supports a strong culture of proactive risk management, helps protect our reputation and supports long term value creation for our stakeholders. The Chief Risk Officer and Executive Leadership Team, together with the business units, actively manage the Risk Management Framework, with oversight from the Board and Risk, Compliance and Sustainability Committee. The Risk Management Framework is regularly reviewed having regard to the Group’s evolving needs and changes in the internal and external environment, and enhanced where necessary to further mature the Group’s approach to risk management. For further information regarding the Group’s approach to risk and compliance management and governance, refer to Tabcorp’s 2024 Corporate Governance Statement. Outlined below are risks that could potentially have a material impact at a whole-of-Group level on the future operating or financial performance or prospects of the Group, together with existing mitigations. RISK MANAGEMENT AND MATERIAL BUSINESS RISKS Risk Management Framework Enterprise Risk Management (ERM) System Risk Management Lifecycle and Tools Key Risk Policies Material Risks Risk Governance Business Strategy Risk Risk description and potential consequences How we manage and mitigate the risk Compliance with legal and regulatory requirements and conduct risk Oversight: Risk, Compliance and Sustainability Committee The Group’s businesses are subject to complex legislative, regulatory, licence and other requirements (including, for example, relevant responsible gambling, marketing and advertising obligations and Anti-Money Laundering and Counter-Terrorism Financing and other financial crime laws). Any material breach of the relevant obligations or failure to meet compliance and conduct requirements may result in the suspension or loss of applicable material licences, renewal of licences on less favourable terms (including any exclusivity arrangements), increased supervision and oversight by regulators and other stakeholders, fines, civil or criminal penalties, brand or reputational damage, and the inability to obtain future licences or business opportunities, each of which could have an adverse impact on the financial and operating position of the Group. In addition, a breakdown in material operational processes, system errors or failure to comply with the requirements for the calculation of tote and fixed odds dividends, gambling taxes or other stakeholder returns, may require the Group to repay winnings or other financial impacts, or seek reimbursement of any overpayments, while also exposing the Group to risks of litigation or disputes. • The Group has risk management and compliance frameworks, risk appetite positions on material matters, and supporting policies, procedures, tools, training and other controls. • Team members are provided with training and support to enable them to effectively manage their risk and compliance obligations. • The Group regularly engages with regulators and has processes for testing and approving products and systems before and during deployment. • Systems, processes and equipment are regularly monitored and tested, including testing of key controls, by a controls assurance team within the Chief Risk Office. • Internal Audit periodically reviews and provides independent assurance regarding the adequacy of controls and processes for managing risk and compliance obligations. • The Group has processes in place to ensure relevant third parties are appropriately trained on requirements, and that compliance with such requirements are monitored. Tabcorp Annual Report 2024 42 Risk Risk description and potential consequences How we manage and mitigate the risk Changes in laws and the regulatory environment Oversight: Board and Risk, Compliance and Sustainability Committee The Group’s businesses operate in a highly regulated environment and are significantly affected by government policy and the manner in which governments and regulators exercise their powers. Changes in legislation, regulation, taxation or government policy (and related judicial decisions and enforcement policy) by government agencies, tribunals and departments, including as a result of changes in societal attitudes towards gambling products, may have an adverse impact, to varying degrees, on the Group’s operational and financial performance as such outcomes could result in significant changes in the nature of operations, increased compliance or other costs, resourcing demands, and potential changes in the level of competition in relevant markets. • The Group has dedicated Legal, Risk, Regulatory, Government and Industry Affairs teams with responsibility for monitoring and advising on legislative and regulatory developments, to allow the Group to adapt and take appropriate action. • The Group proactively engages with relevant regulators and governments and, from time to time, makes submissions relating to proposed changes in laws and regulatory and licensing environments, which may impact the Group. • The Group regularly reviews its operating business model and strategies to take account of changes to the regulatory and licensing environments to mitigate adverse consequences of these changes. • The Group proactively engages with industry bodies to align the Group’s business strategies with potential industry changes and ensure the sustainability of the Group’s businesses and those industries more broadly. Changes in fees and taxes Oversight: Board Each state and territory of Australia has implemented race fields arrangements, under which wagering operators pay product fees for use of that industry’s race fields information. Similar arrangements exist in relation to various sports. There is the potential that fees will increase, new fees will be introduced, or the method for determining fees will change. In addition, a material increase in the taxes and levies payable by the Group in respect of its businesses may reduce margins. Increases or changes to fees and taxes which the Group is subject to may have an adverse impact on the financial position and performance of the Group. • The Group currently has contracts in place that the Group considers will allow it to offset or provide some protection under the respective arrangements. • The Group endeavours to maintain strong relationships with industry controlling bodies, other industry partners and governments, and engages with them in respect of proposed changes to industry funding arrangements, fees and other taxes and levies. • Where possible, the Group seeks to enter into contracts with racing and sports controlling bodies that provide long term certainty of commercial arrangements. Tabcorp Annual Report 2024 43 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT RISK MANAGEMENT AND MATERIAL BUSINESS RISKS CONTINUED Risk Risk description and potential consequences How we manage and mitigate the risk Strategic Oversight: Board The Group is subject to a range of risks that could impact Tabcorp’s growth strategy, including: • Changes in consumer discretionary spending and preferences. • Competition and disruption from other suppliers of gambling and media products and services. • Failure to renew, or renewal on less favourable terms (including any exclusivity arrangements), any material licence. • Reliance on racing industries, sporting bodies and other stakeholders across Australia and internationally to provide a program of racing and sporting events. • Failure to renew, or renewal on less favourable terms, rights to broadcast or distribute content for racing and sporting events. • Disruption or decline of licensed venues, agencies and retail network. • Ineffective strategy execution. These risks may impact the execution of Tabcorp’s growth strategy, or result in a loss of market share or revenue, or missed opportunities for growth, and have an adverse impact on the Group’s operational and financial performance. • The Board and Executive Leadership Team has a broad set of skills and experience across customer, technology, innovation, media and stakeholder engagement aligned with the Group’s strategy. • The Group operates a portfolio of businesses with operations spanning multiple jurisdictions and market segments, which reduces the reliance on any single revenue stream and customer category. • In addition, the Group’s Wagering and Media business offers betting products on, and broadcasts, a wide variety of racing, sports and other events, domestically and internationally. • The Group maintains long term licences and, where the terms are appropriate, seeks new licences and to extend existing licences where possible. • The Group engages closely with holders of broadcast rights and distribution partners and actively seeks to extend those arrangements in advance of their expiry. • The Group strives for continual improvement in its product and service offering to attract and retain customers, including customer service and relationship management, and product and digital innovation across a multi-channel network. • The Group’s strategic marketing and consumer insights teams support the businesses to understand and respond to changing consumer trends. • The Group proactively engages with regulators and governments, and from time to time makes submissions relating to proposed changes in laws, and regulatory and licensing environments, which may impact the Group. Tabcorp Annual Report 2024 44 Risk Risk description and potential consequences How we manage and mitigate the risk Financial and balance sheet risks Oversight: Audit Committee The Group is exposed to various financial and trading risks arising from its operations, including risks associated with a failure to appropriately set odds in respect of wagering so as to maintain sufficient capital. The Group is also exposed to risks relating to the cost and availability of funds to support its operations, including changes in interest rates and foreign currency exchange rates, counterparty credit and liquidity risks, each of which could impact its financing activities. In addition, changes in investor, financier and other stakeholder expectations in relation to ESG practices and disclosures may adversely impact the Group’s ability to access capital or other financing in future, or to do so on reasonable financial terms, which could in turn adversely affect the financial position and performance of the Group. In addition, as part of its arrangements with its external financiers, the Group is subject to a number of customary conditions and financial covenants. A failure to comply with such conditions and covenants may require the Group to repay borrowings earlier than anticipated, or result in increased financing costs for the Group, which could in turn adversely affect the financial performance of the Group. • The Group’s finance facilities and interest rate, credit, liquidity and currency risks are managed by the Group’s Treasury function in line with policies approved by the Board. • The Group maintains an active capital management program with a range of funding sources with short and long dated maturities. • Policies and processes are in place to manage financial and trading risks arising from the Group’s operations. • The Group has adopted a Sustainability Framework, with various activities and programs in place aligned with the Group’s material ESG topics. • Refer to the sections titled “Balance sheet and capital management” on page 17 and “Capital and risk management” on pages 106 to 114. Cybersecurity, data protection and privacy Oversight: Risk, Compliance and Sustainability Committee and Technology Committee The Group’s businesses could be subject to malicious or criminal attacks on technology systems, system faults or human error resulting in the potential loss or unauthorised access to or use or disclosure of confidential customer, employee, regulated and/or commercially sensitive data. A significant cybersecurity incident, system failure or data breach could: • Impact upon the Group’s technology systems and equipment. • Prevent operation of revenue generating functions. • Result in the loss or exposure of information assets. • Result in the loss or misappropriation of customer, employee or regulatory data. Such an incident may potentially adversely impact the reputation, operations or financial performance of the Group and expose the Group to significant regulatory enforcement actions, penalties, litigation and other disputes. • The Group has policies, procedures, practices, frameworks, systems and resources in place to manage cybersecurity and data privacy. • Dedicated Information Security and Security Operations teams are tasked with protecting key information assets, detecting any attempted attacks, and responding appropriately. Regular testing, simulations, reviews and assessments with follow up actions assist ongoing defensive strategies and response readiness. • The Group’s Information Security Management System is compliant with and certified to ISO/IEC 27001:2013. The Group has also adopted the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) as an international best practice cybersecurity maturity, benchmarking and uplift prioritisation framework. • The Group maintains third party support arrangements for cybersecurity and cyber incident response and recovery and holds a cyber insurance policy. • The Group has policies and procedures in place to ensure good privacy and information management practices, including a Privacy Policy. Tabcorp has a privacy team including a Privacy Officer. • The Group has a Data Breach Response Plan that sets out procedures for employees to follow in the event of an actual or suspected data breach. Tabcorp Annual Report 2024 45 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT RISK MANAGEMENT AND MATERIAL BUSINESS RISKS CONTINUED Risk Risk description and potential consequences How we manage and mitigate the risk Technology – resilience of systems and obsolescence Oversight: Technology Committee and Risk, Compliance and Sustainability Committee The Group’s businesses rely on the successful operation of technology infrastructure, which could be adversely affected by various factors including obsolescence, complexity of core environments, ability to recover from a significant hardware, software, digital or data centre failure, and managing risks associated with outsourcing key processes and activities to third parties. The Group’s businesses also rely on technology infrastructure to support ongoing business growth. Where such infrastructure cannot efficiently support the changing needs of the business, this may potentially adversely impact the reputation, operations or financial performance of the Group. • The Group has Business Continuity Management Policies and Frameworks in place. • Business Impact Assessments have been completed for all core operational business units to identify their critical business processes. • The Group has disaster recovery (DR) plans and business continuity plans in place to manage major technology failures. • The Group undertakes regular DR testing of core systems. • Tabcorp has in place a multi-year Technology Plan focused on modernising legacy systems and uplifting resilience. Reliance on infrastructure and third party commercial arrangements Oversight: Risk, Compliance and Sustainability Committee The Group is reliant on key infrastructure and third party commercial arrangements for the operation of its business. A significant malfunction or interruption to key infrastructure, or a failure of, significant interruption to, or reduction in the quality of third party products and services that the Group relies upon for a sustained period of time, may have an adverse impact on the reputation and the operating and/or financial performance of the Group. • The Group’s procurement function maintains commercial relationships across a diverse supplier base with clear contracts, terms of engagement, agreed service levels, regular reporting and monitoring. • The Group has in place business continuity and DR plans. • The Group maintains an insurance program which includes limited recourse in the event of major failures of infrastructure or third party supply arrangements. Safer gambling Oversight: Risk, Compliance and Sustainability Committee Tabcorp is committed to caring for its customers and preventing and minimising gambling-related harm. A failure by Tabcorp to adequately protect customers and deliver safer experiences in accordance with relevant gambling regulations and codes, may result in the suspension or loss of applicable gambling licences, renewal of licences on less favourable terms (including any exclusivity arrangements), increased supervision and oversight by regulators, civil or criminal penalties, brand or reputational damage, and the inability to offer products or obtain future licences or business opportunities, each of which could have an adverse impact on the financial performance and operating position of the Group. • The Group operates under regulator prescribed Codes of Practice or company- initiated Codes of Conduct with respect to safer gambling. • The Group’s Safer Gambling Strategy sets out our approach to preventing and minimising gambling-related harm and driving better outcomes for individuals and the community (refer to pages 27 to 29 for further details). • All team members, including staff working at agencies and retail venues, are trained annually on safer gambling with additional training provided to all customer facing teams. This training includes identifying signs of potential gambling harm. • A range of safer gambling tools are offered to customers to support them to gamble safely. • The Group actively monitors customer deposit and betting behaviours using a variety of data analytics tools, including AI, to identify customers displaying potential indicators of gambling harm. • The Group has a dedicated safer gambling team accountable for reviewing potential at-risk customer accounts and proactively communicating with them. Tabcorp Annual Report 2024 46 Risk Risk description and potential consequences How we manage and mitigate the risk Environmental, social and governance (ESG) Oversight: Risk, Compliance and Sustainability Committee The Group’s social licence to operate can be impacted by: • How our customers and the broader community perceive Tabcorp on a range of relevant ESG issues including gambling, racing and sport, delivering our products safely, modern slavery, animal welfare and environmental matters. • Societal attitudes and community expectations. Changes in societal attitudes and/or adverse media attention in relation to gambling or other ESG issues relevant to Tabcorp, or a failure by Tabcorp to deliver its products responsibility or otherwise act in accordance with regulator and/or community expectations, could lead to negative legal, regulatory and/or government policy changes, which could have an adverse effect on the performance of the Group, the delivery of its strategies, its ability to attract and retain talent and/or reputational damage for the Group. • The Group has a Sustainability Framework in place. A key focus of this Framework is our commitment to delivering customer-centric safer gambling initiatives designed to minimise harm and set the benchmark for sustainability in our industry. • The Group has adopted an Environment and Climate Change Position Statement outlining our commitment to minimising our impacts on the environment. The Group has adopted greenhouse gas emission reduction targets and has developed a Net Zero roadmap to support the delivery of these targets over time. • Remuneration outcomes for the MD & CEO, executives and senior managers are linked to the achievement of our Sustainability Framework, which includes measurable ESG targets in the areas of risk and compliance management, safer gambling, climate, community and reputation management. • Refer to our Sustainability Report and our website www.tabcorp.com.au/sustainability for further information about how we manage our ESG risks. People and culture Oversight: People and Remuneration Committee The Group’s performance and the execution of its strategies depends on its ability to attract and retain key senior management and operating personnel and foster a high-performance culture. The loss of any key personnel, or the Group’s inability to attract the requisite personnel with suitable experience, could have an adverse effect on the performance of the Group and the delivery of its strategies and/or operations. A failure by the Group to appropriately manage team members’ or contractors’ physical and/or psychological health and wellbeing, or failure to comply with relevant workplace health and safety laws and regulations and other relevant workplace laws, could expose the Group (and individual employees and Directors) to civil, criminal and/or regulatory action with associated financial and reputational consequences. • The Board, People and Remuneration Committee, Chief People Officer and various management committees have responsibility for overseeing strategies and programs related to people, health, safety and wellbeing. • The Group has adopted strategies, policies and processes for the recruitment, development and retention of talent, and for fostering an inclusive, diverse and engaged workforce. • Tabcorp is committed to providing a safe working environment and actively prioritises the health, safety and wellbeing of team members and contractors. This includes protection against psychosocial hazards. The Group has implemented a health, safety and wellbeing framework which includes policies, procedures, reporting, training and education. • The Group’s remuneration framework aims to attract, motivate and retain high calibre individuals through performance-linked remuneration based on the achievement of Group and individual performance (financial and non-financial) outcomes. Tabcorp Annual Report 2024 47 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Governance The Board Risk, Compliance and Sustainability Committee (BRCSC) is responsible for overseeing the delivery of our Sustainability Framework, which includes climate-related goals and targets for climate resilience, mitigation and adaptation, together with our Risk Management Framework (RMF). Our sustainability performance is reported quarterly to this Committee, and annually in our Annual Report and Sustainability Report. The BRCSC reviews, reports to, and where appropriate, makes recommendations to the Board in relation to: • our risk appetite; • the adequacy and effectiveness of our RMF and supporting policies and processes to identify and manage our risks; • the adequacy and effectiveness of our compliance management framework and supporting policies to comply with our legal and regulatory obligations; and • the adequacy and effectiveness of our Sustainability Framework and supporting policies, processes and programs to address ESG issues that have the potential to materially affect our business, strategies and reputation. Our CLO, CRO and ELT, together with the business units, actively manage the Sustainability Framework and the RMF, with oversight from the BRCSC. Our CLO leads the Group’s legal, regulatory and governance (including sustainability) functions, while the CRO leads the Group’s risk function (including AML/CTF risk management). The CLO and CRO are members of the ELT, reporting directly to the MD & CEO, and the CRO also reports to the BRCSC. Prior to June 2024, the CLO and CRO functions operated jointly under the Chief Legal and Risk Officer until the functions were separated. Our Governance and Sustainability team is responsible for developing the Sustainability Framework, supporting and overseeing the preparation of climate resilience, mitigation and adaptation plans by the business, tracking and reporting on our progress, and coordinating the preparation of climate-related disclosures. Our Group Procurement and Property teams lead environmental initiatives working with business and functional units to achieve our climate-related goals and targets. During FY24, we established a Climate Change Steering Committee (SteerCo) to improve our practices and disclosures related to climate-related risks and opportunities. The SteerCo is sponsored by the CFO and its membership includes team members from across the organisation. Our Board and our People and Remuneration Committee oversee executive performance in relation to specific sustainability measures, such as risk and compliance management, and achievement of goals and targets under our Sustainability Framework. The MD & CEO and other executives participate in an annual STI Plan, which includes a climate-related measure (progression of our Net Zero Plan) embedded within a sustainability assessment or modifier (refer to page 80). The Board has collective oversight and responsibility for both our RMF and Sustainability Framework. Experience in sustainability, including climate- related risks and opportunities, is part of our Board Skills Matrix (refer to page 37). Strategy Our approach to climate change is captured under the Sustainable Future pillar of our Sustainability Framework. Climate-related risks and opportunities are reviewed and identified in accordance with our RMF and are embedded into our Group-wide risk management process. This year, we continued to work on improving our understanding of how the effects of climate change may impact our business. We undertook a specific climate- related risk assessment (Assessment) which involved: • discussion with senior managers across the organisation to identify direct and indirect climate risk exposures, vulnerabilities, impacts and mitigation strategies in place as well as opportunities for addressing climate-related risks; • obtaining and analysing available historical internal and external data to support assessment of risk impacts and opportunities; and • evaluation of the size and complexity of climate- related risks. TCFD DISCLOSURES Refer to page 33 for our alignment and progress against the TCFD recommendations. Tabcorp Annual Report 2024 48 Climate-related scenario analysis For the first time this year, we included a climate-related scenario analysis in our Assessment to enhance our understanding of the impacts of climate change in our business, drawing on available qualitative and quantitative information. Scenario analysis is an important tool in assessing the financial risks posed by climate change. However, there are inherent limitations with scenario analysis and it doesn’t constitute definitive outcomes or probabilities. It is difficult to predict which, if any, of the scenarios might eventuate and scenario analysis relies on assumptions that may or may not prove to be correct. We used three scenarios aligned with the Intergovernmental Panel on Climate Change (IPCC) Shared Socioeconomic Pathway (SSP), as described below. We considered physical, transitional and emerging risks, impacts, opportunities and actions for the short (0-2 years), medium (2-5 years) and long term (5-10 years). SCENARIO 1 SCENARIO 2 SCENARIO 3 Most optimistic: 1.5°C by 2050 SSP1-1.9 Middle of the road: 2.7°C by 2100 SSP2-4.5 Avoid at all costs: 4.4°C by 2100 SSP5-8.5 Assumptions: • Global carbon dioxide (CO2) emissions are cut to net zero by around 2050, in line with the Paris Agreement • Societies switch to more sustainable practices • Government policy and technological innovation are high • Extreme weather is more common, but the world has avoided the worst impacts of climate change • Warming hits 1.5°C but then dips back down and stabilises around 1.4°C by the end of the century Assumptions: • CO2 emissions hover around current levels before starting to fall mid-century, but do not reach net zero by 2100 • Progress toward sustainability is slow • Governments are largely committed to sustainability, but required technology remains either undeveloped or prohibitively expensive • Temperatures rise 2.7°C by the end of the century Assumptions: • Current CO2 emissions levels roughly double by 2050 • Government policy and technological innovation are low • The global economy grows quickly, but this growth is fuelled by exploiting fossil fuels and energy- intensive lifestyles • By 2100, the average global temperature is a scorching 4.4°C higher The Assessment confirmed that while climate-related risks exist, they are unlikely to be considered material at a whole-of-Group level. This means that none of the risks identified in this Assessment currently has the potential to materially impact our business from a strategic and financial perspective. The Assessment included quantitative analysis on key data points relating to our climate related risks. In particular, we collected data on cancelled race meetings in Australia which generally occur due to unfavourable weather conditions. Data shows there were 2,491 cancelled race meetings over a 13-year period with $89.1m in estimated lost revenue. This equates to an estimated average annual revenue impact of $6.8m(i). We are continuing to monitor the financial impacts of cancelled race meetings over time. (i) These figures should be relied upon with caution as they are estimates only. They include Australian thoroughbreds, harness and greyhounds race meetings. Tabcorp Annual Report 2024 49 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Climate change risks and mitigating actions identified are summarised in the following table. Transition Risks – risks that arise as a result of the transition to a low carbon economy Risks Mitigating actions Time horizons • Inability to meet our ESG commitments resulting in reputation risk • Changes in shareholder preferences on climate related matters • Inability to obtain required external funding due to climate related matters (e.g. increased focus from lenders on ESG) ✓ Sustainability Framework is in place, with climate change addressed in our Sustainable Future pillar ✓ Remuneration outcomes for the MD & CEO, executives and senior managers are linked to the achievement of specific sustainability measures such as risk and compliance management, reputation management, and achievement of targets under our Sustainability Framework, which includes climate-related targets ✓ The Board Risk, Compliance and Sustainability Committee has responsibility for overseeing the Sustainability Framework and ESG issues relevant to the Group, including climate change risks and opportunities ✓ We have adopted an Environment and Climate Change Position Statement outlining our commitment to minimising our impacts on the environment, reducing our GHG emissions profile and identifying and managing climate-related risks and opportunities across our business ✓ External assurance over our Sustainability Report in place since FY23 ✓ Our annual Climate Risk Assessment workshop has improved in 2024 with the introduction of climate- related scenarios. The results of this Assessment will enable better disclosures Aligning our disclosures with the proposed introduction of the new Australian Sustainability Reporting Standards (ASRS), so we’re prepared for changes. Opportunity to better address stakeholders’ expectations and assist them to make better investment decisions Short, medium and long term • Introduction of carbon tax schemes and other climate regulations resulting in financial impacts • Increase in insurance premiums due to reassessment of Tabcorp’s climate change risks resulting in financial impacts ✓ We regularly review our omni-channel strategies and seek to optimise our investment in the retail network to align with changing market and consumer trends ✓ Insurance program is reviewed on an annual basis to confirm climate impacts are adequately covered Medium and long term TCFD DISCLOSURES CONTINUED ✓ Indicates action already taken Indicates action for the future Tabcorp Annual Report 2024 50 Physical Risks – risks that arise due to changes in climate patterns Risks Mitigating actions Time horizons • Damage to Tabcorp assets due to weather events (e.g. properties, equipment, and retail agencies) • Physical damage to Tabcorp offices due to weather events and natural disasters • Increase (temperature and frequency) of hotter days impacting Tabcorp’s offices and data centres ✓ Business continuity plans and disaster recovery plans are in place to recover business operations in the event of a major climate-related disruption ✓ Customers are able to use digital platforms or other retail locations ✓ Diverse portfolio of businesses through a multi-channel strategy across retail and digital networks, which reduces the reliance on any single channel or locations Medium and long term • Financial loss due to weather events disrupting Tabcorp operations (e.g. delivery of racing vision on Sky and call centres) • Loss of turnover due to weather events disrupting third parties (e.g. racing industry and sports) ✓ Insurance program in place to limit financial impact of damage due to weather events ✓ Financial modelling and sensitivity analysis undertaken to monitor and respond to the impacts of racing and sport product supply disruptions Medium term • Impact on Tabcorp team members’ health, safety and wellbeing as a result of a weather event ✓ Health and Safety Management System is in place ✓ Flexible work arrangements are available for impacted team members Short, medium and long term Emerging Risks – newly developing or evolving risks that arise due to changes in climate patterns Risks Mitigating actions Time horizons • Tabcorp not meeting changing expectations and preferences of consumers around climate change and sustainability ✓ We have adopted an Environment and Climate Change Position Statement outlining our commitment to minimising our impacts on the environment, reducing our GHG emissions profile and identifying and managing climate-related risks and opportunities across our business ✓ Communication of the strategy in a transparent way to consumers, investors and other stakeholders Medium and long term • Prolonged hotter weather impacting animal welfare ✓ Supporting ongoing research into the health and welfare implications of animals participating in racing, and animal welfare initiatives and programs Medium and long term ✓ Indicates action already taken Tabcorp Annual Report 2024 51 OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT Climate risks also present a number of opportunities and associated potential benefits including: Opportunities Potential benefits Our management response • Adhere to high standards of corporate governance • Continuously improve climate-related risk assessment and disclosures • Reduced risk of increased scrutiny and action by regulators and other stakeholders in relation to sustainability-related disclosures by the Company, including for ‘greenwashing’ risks • Improved ESG ratings and brand perception • Sustainability Framework is in place, with climate change addressed in our Sustainable Future pillar • We’ve adopted an Environment and Climate Change Position Statement outlining our commitment to minimising our impacts on the environment, reducing our GHG emissions profile and identifying and managing climate-related risks and opportunities across our business • We disclose climate-related information to our stakeholders annually through our Annual Report and Sustainability Report, and third-party assessments (i.e. S&P Global Corporate Sustainability Assessment (DJSI), CDP, etc.) • We continue to improve our climate-related disclosures, and this year, we: – introduced scenario analysis and consideration for time horizons in our annual climate-related risk assessment to enhance our understanding of the impacts of climate change in our business; – engaged an external consultancy to assess our current climate-related disclosures and internal processes against the exposure draft ASRS, which is based on the ISSB standards; and – completed external assurance of our Scope 1 and 2 GHG baseline emissions (2019) TCFD DISCLOSURES CONTINUED Tabcorp Annual Report 2024 52 Opportunities Potential benefits Our management response • Reduce resource consumption (e.g. electricity, water, paper, etc.) • Switch to suppliers that offer low carbon alternatives • Improve energy efficiency in our buildings • Use lower emission sources of energy (e.g. renewables) • Reduced operating costs through efficiency gains and cost reductions • Reduced exposure to future fossil fuel price increases • Reduced exposure to GHG emissions and therefore less sensitivity to changes in cost of carbon • Increased market valuation through resilience planning (e.g. infrastructure, buildings) • Returns on investment in low emission technology • Enhanced resilience of our assets and infrastructure, increasing asset value • We have a Net Zero Plan in place • This year we: – set short and long term targets to reduce our Scope 3 GHG emissions, supported by a Supplier Carbon Framework – completed an audit across our property network to identify energy reduction opportunities • We’re finalising arrangements to install a solar system at our Frenchs Forest media facility in NSW in FY25 • We’ll be relocating our Sydney office to a carbon neutral certified building in FY25. The building runs entirely on 100% renewable energy while minimising energy consumption and lowering operational costs • Reduce business travel • Reduced operating costs through efficiency gains and cost reductions • Reduced exposure to GHG emissions and therefore less sensitivity to changes in cost of carbon • We have a Travel Policy in place. Under the Policy, team members are required to evaluate if a trip is necessary, or if alternatives, such as online meeting, video or phone conference facilities could be used instead • Use more efficient modes of transport (e.g. hybrid and EV in our vehicle fleet) • Reduced operating costs through efficiency gains and cost reductions • Reduced exposure to future fossil fuel price increases • We’re progressing the transition of our fleet to hybrid vehicles. Our long term plan is to completely transition to hybrid, electric or hydrogen powered vehicles in the coming years, in line with projected improvements in technology and supporting infrastructure • Diversify portfolio, business activities and distribution channels • Enhanced business resilience and ability to operate in various conditions • Diverse portfolio of businesses through a multi-channel strategy across retail and digital networks, which reduces the reliance on any single channel or locations • Financial modelling and sensitivity analysis undertaken to monitor and respond to the impacts of racing and sport product supply disruptions Additional information on how we’re addressing these opportunities is available in the next pages, and in our 2024 Sustainability Report available at www.tabcorp.com.au/investors. Tabcorp Annual Report 2024 53 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY TCFD DISCLOSURES CONTINUED We recognise that there is significant global data to conclude that current climate trends and event volatility will increase over time. It is also anticipated that there will be further focus and scrutiny on companies’ response to climate change, in particular investors, underwriters, and customers. We’ll continue to refine the assessment of our short, medium and long term exposure to climate-related risks and opportunities each year, in line with the TCFD recommendations, the ISSB and the ASRS (once published). Despite having a relatively small environmental footprint when compared with other Australian companies and industries, we recognise we have an impact on the environment, directly through our operations, and indirectly through our value chain. Most of our direct GHG emissions come from energy use in our premises and fuel use in our vehicle fleet. During FY24, we continued to reduce our GHG emissions by using less electricity in our properties, using energy-efficient technologies, recycling or donating office equipment, transitioning to hybrid vehicles in our fleet, reducing the volume of paper we use, and encouraging team members to minimise their impacts on the environment. As energy-efficiency presents the biggest opportunity for us, we worked with a third-party to perform energy-efficiency audits in selected sites. The audits helped us identify key opportunities to reduce our electricity consumption. As a result, we’ll be installing solar panels in our Frenchs Forest media facility in NSW in FY25. These panels are expected to generate 336,500 kWh of electricity and result in approximately $80,000 of savings each year. In addition, we’ll be relocating our Sydney office to a carbon neutral certified building that runs entirely on 100% renewable energy while minimising energy and water consumption in FY25. We will continue to assess climate-related risks and opportunities to improve our strategic approach to climate change and our Sustainability Framework. We’ll also elevate the scope of future assessments to improve our business resilience, in line with our Climate Change Roadmap. Risk management Climate-related risks are reviewed and identified in accordance with our RMF and our Group-wide risk management process. The RMF aims to enable the effective identification, evaluation, management, monitoring, reporting and oversight of risks throughout the Group and is based on concepts and principles identified in the International Standard ISO 31000:2018 Risk Management Guidelines. This framework supports a strong culture of proactive risk management, fosters a risk aware culture, helps protect our reputation and supports long term value creation for our stakeholders. The CLO, CRO and ELT, together with the business units, actively manage the RMF, with oversight from the Board and the BRCSC. The RMF is reviewed at least annually having regard to our evolving needs and changes in the external landscape. Where necessary, it’s enhanced to further mature our approach to risk management. Material business risks for the Group and key mitigations are disclosed on pages 42 to 47. For further information regarding our approach to risk and compliance management, refer to our 2024 Corporate Governance Statement. Tabcorp Annual Report 2024 54 Metrics and targets We’ve set medium and long term GHG(i) emission reduction targets aligned with science- based target (SBT) setting methodologies. Targets are considered “science-based” if they are in line with what the latest climate science says is necessary to meet the goals of the Paris Agreement – to limit global warming to well-below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C. SBTs provide companies with a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their GHG emissions. Our targets are: 45% reduction in Scopes 1 and 2 GHG emissions by 2030, from 2019 levels 27.5% reduction in Scope 3 GHG emissions by 2030, from 2019 levels NET ZERO GHG emissions by 2050 (Scopes 1, 2 and 3) We have an environmental reporting framework for measuring and managing our environmental footprint and impacts. This framework was developed with reference to the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards, the Greenhouse Gas Protocol Scope 3 Standards, the Australian Government National Carbon Offset Standard and the International Organisation for Standardisation (ISO) 14001 – Environmental Management Systems. We have adopted the “operational control” approach which assigns environmental reporting accountability to the organisation that has the greatest authority to introduce and implement operational and environmental processes and policies. Following the Demerger of our former Lotteries and Keno business in 2022, we re- established our 2019 GHG emissions baseline, to remove those emissions related to our discontinued businesses. This work enabled us to report our progress towards achieving our GHG emissions reduction targets post-Demerger. While undertaking this process, we have improved our data gathering processes, expanded our data coverage, adapted our operational control methodology, and enhanced our disclosures. Our 2019 baseline emissions have also been subject to external assurance for the first time this year to improve data accuracy and reliability. Emissions data and progress against our targets are available in our 2024 Sustainability Report available at www.tabcorp.com.au/investors. (i) These are net targets and relate to carbon dioxide (CO2). Our level of ambition for Scopes 1 and 2 is 1.5°C and for Scope 3 is well below 2°C (WB2D). Tabcorp Annual Report 2024 55 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY TCFD DISCLOSURES CONTINUED Scope 1 emissions Our main sources of Scope 1 (direct) emissions are from transport and stationary fuel. We operate a fleet of vehicles used by our venue support and field services teams when visiting sites across Australia, including those located in regional areas. We also use fuel in some of our offices and media transmitter sites to power diesel generators. During FY24, we continued our transition to hybrid vehicles. For our utility vehicles that don’t have hybrid models available, we have now moved to a lower emission model. Our long term goal is to completely transition to hybrid, electric or hydrogen powered vehicles, in line with projected improvements in technology and supporting infrastructure. We also promote electric vehicles to our team members through drive day events. During these events, our team can test drive some of the market’s newest electric vehicles, thanks to one of our fleet partners. Scope 2 emissions Our Scope 2 (indirect) emissions are associated with our electricity use and make up the bulk of our combined Scope 1 and 2 emissions. We use electricity sourced from the grid to power our corporate offices, warehouses, and other premises across Australia, such as TAB agencies, broadcasting and transmission infrastructure. During FY24, selected large sites in our network also consumed approximately 1,640 MWh of certified 100% renewable energy (GreenPower). We continue to increase our resource efficiency and reduce GHG emissions in areas over which we have control and influence. We completed energy audits for selected sites and finalised arrangements to install a 257.5kW solar system at our Frenchs Forest media facility in NSW. This solar system is expected to be installed in FY25, generate 336,500 kWh of electricity and result in savings of approximately $80,000 each year, once installed. We’re also working through a program of continual improvement implementing and adopting more energy-efficient technologies such as LED, as well as optimising air conditioning usage at selected sites across Australia. Scope 3 emissions Scope 3 emissions (indirect) associated with our value chain account for the majority of our total GHG emissions (86.6% in FY24). Our sources of Scope 3 emissions are categorised in accordance with the GHG Protocol and are listed below: Category Sources 1. Purchased goods and services Data centre services, paper, other goods and services related to procurement spend (i.e. communications/media and consulting services) 3. Fuel and energy-related activities (not included in Scope 1 or Scope 2) Upstream transport/losses of fuel and electricity 5. Waste generated in operations Waste generated across offices, warehouses, etc 6. Business travel Flights, taxis and hotel stays 7. Employee commuting Team members commute to and from our offices, warehouses, etc 8. Upstream leased assets Base building services. Includes HVAC, lifts, lobby lighting – electricity and natural gas 11. Use of sold products Emissions associated with end-use of EGMs sold by Tabcorp(i) 12. End-of-life treatment of sold products Waste disposal and treatment of sold EGMs at the end of their life(i) 13. Downstream leased assets Leased EGMs(i) 14. Franchises Emissions associated with the operation of retail agencies that Tabcorp can influence Note: Categories 2, 4, 9, 10 and 15 were not relevant to Tabcorp in FY24. (i) Emissions associated with leased EGMs will no longer be relevant to Tabcorp after FY24, following the sale of the MPS business on 31 October 2023. Reducing Scope 3 emissions is challenging, as we rely on our suppliers for relevant information. There may be gaps in data, issues with data quality and our ability to influence suppliers’ operational and commercial practices. These are not challenges we can solve alone, and we recognise we will need to work together with our partners to reduce Scope 3 emissions. During the year we adopted Scope 3 emission reduction targets and adopted a Climate Supplier Carbon Framework to enhance our procurement process for goods and services. Tabcorp Annual Report 2024 56 The Directors of Tabcorp Holdings Limited (Tabcorp or the Company) present their report for the consolidated entity comprising the Company and its subsidiaries (the Group) and the Group’s interests in joint arrangements and associates in respect of the financial year ended 30 June 2024 (FY24). 1. PRINCIPAL ACTIVITIES The principal activities of the Group during FY24 comprised the provision of gambling, entertainment and integrity services. The Group’s principal activities during FY24 remained unchanged from the previous financial year, with the exception that the Group completed the sale of the MAX Performance Solutions (MPS) business on 31 October 2023. 2. OPERATING AND FINANCIAL REVIEW The FY24 results of the Group comprise the continuing operations from the Wagering and Media business and the Gaming Services business. The activities and financial performance of the Group and each of the continuing operating segments for FY24 are set out on pages 1 to 23 and below. 2.1 Wagering and Media The Wagering and Media business has the following operations and licences/approvals. Wagering operations: • The business offers totalisator (or pari-mutuel) and fixed odds betting on racing, sports and other events. • The business operates through a network of TAB agencies, hotels and clubs, and on-course operations in Victoria, NSW, Queensland, South Australia, Tasmania, ACT and Northern Territory (collectively retail). • Wagering channels include retail, web, an App on mobile devices and phone via a call centre. • Trackside, a computer simulated racing product, operates in NSW, Victoria and ACT, and is licensed in other Australian and overseas jurisdictions. • The Victorian wagering business operated as a 50:50 unincorporated joint venture with the Victorian Racing Industry (VRI) until the parties agreed to discontinue the joint venture (refer to section 3.2 for further information). • International wagering and pooling is conducted through Premier Gateway International (PGI) on the Isle of Man, and Sky Racing World based in the USA also facilitates associated tote pools. Media operations: • Sky Racing television channels broadcast thoroughbred, harness and greyhound racing to audiences in TAB outlets, hotels, clubs, other licensed venues, in-home to pay TV subscribers and over various digital platforms, including the TAB App. • Sky Racing Active is a digital app providing an ‘access all areas’ pass to Sky Racing’s live and on-demand racing content across thoroughbred (excluding Victoria and South Australia), harness and greyhound racing. Sky Racing Active allows users to create their own racing playlists and showcases. • Sky Sports television channels broadcast various sports to audiences in TAB outlets, hotels, clubs and other licensed venues. • Sky Sports Radio and RadioTAB networks broadcast directly or through third parties across Australia. • The business broadcasts Australian racing throughout Australia, and distributes Australian and international racing to other countries and imports overseas racing to Australia through the Sky Racing World distribution hub in the USA. DIRECTORS’ REPORT Tabcorp Annual Report 2024 57 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT DIRECTORS’ REPORT CONTINUED Wagering licences/approvals(i): • NSW Wagering Licence expires in March 2097, with retail exclusivity period to expire in June 2033. • The Victorian Wagering and Betting Licence expired on 15 August 2024. Tabcorp was awarded the new Victorian Wagering and Betting Licence which commenced on 16 August 2024 and expires in August 2044. • Queensland Race Wagering Licence and Sports Wagering Licence expire in June 2098. • South Australian Major Betting Operations Licence expires in June 2100, with retail exclusivity period to expire in December 2032. • Tasmanian Gaming Licence expires in March 2062. • ACT Totalisator Licence expires in 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. • Northern Territory Totalisator Licence and Sports Bookmaker Licence expire in October 2035. • Isle of Man Totalisator Licence held by PGI expires in October 2028, with renewal capability every five years. • North Dakota (US) Totalisator Licence held by Sky Racing World expires in December 2024, with annual renewal capability. 2.2 Gaming Services The Gaming Services business has the following operations and licences/approvals. Gaming Services operations: • The Gaming Services business operates two units under the MAX brand: MAX Regulatory Services (MRS); and MAX Technical Services (MTS). • MRS provides integrity services, monitoring electronic gaming machines (EGMs) and providing related integrity services across NSW, Queensland, Northern Territory and Tasmania. In Queensland and Northern Territory, MRS also provides additional products, technology and other gaming services. • MTS provides technical support and maintenance services to external customers nationally as well as Tabcorp’s other operating businesses. Monitoring licences(i): • NSW Centralised Monitoring System Licence expires in November 2032. • Queensland Monitoring Operator’s Licence expires in August 2027, with indefinite rolling renewal capability. • Tasmanian Monitoring Operator Licence commenced 1 July 2023 and expires in June 2043. • Northern Territory Monitoring Provider’s Licence expires in June 2026, with indefinite rolling renewal capability. (i) Ordered by population of states/territories. Tabcorp Annual Report 2024 58 Other licences/approvals(i): • NSW Gaming Machine Dealer’s and Seller’s Licences. • Listings on the Victorian Roll of Manufacturers, Suppliers and Testers. • Queensland Service Contractor Licence. • South Australian Gaming Machine Service Licence. • Listings on the Tasmanian Roll of Recognised Manufacturers, Suppliers and Testers of Gaming Equipment. • Northern Territory listing on the Roll of Approved Gaming Equipment Suppliers, Gaming Machine Service Contractors Licence and other approvals. (i) Ordered by population of states/territories. 3. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS 3.1 Sale of MPS business On 31 October 2023, the Group completed the sale of the MPS business which leased electronic gaming machines to venues and provided related services. 3.2 New Victorian Wagering and Betting Licence On 18 December 2023, Tabcorp announced it had been awarded a new exclusive Victorian Wagering and Betting Licence (New Licence) by the Victorian Government. The New Licence is for a period of 20 years and commenced on 16 August 2024, with Licence premium payments comprising of upfront payment of $600.0m paid in June 2024 and $30.0m per annum ongoing fixed payments from August 2025 to 2043. In connection with the award of the New Licence, Tabcorp and the VRI agreed to discontinue the previous 50:50 joint venture arrangement and Tabcorp’s previous industry funding obligations which applied under the previous licence. Tabcorp agreed to pay the VRI a fixed distribution to the end of the previous licence and $15.0m of additional funding for each of the first three years of the New Licence. 3.3 Restructure and outsourcing program In January 2024, as part of its transformation agenda and cost reduction program under the TAB25 strategy, the Group commenced its plan to implement a restructuring program that includes the use of third party service providers. 3.4 Media rights and sponsorship agreement with the Victorian Racing Club In February 2024, Tabcorp entered into a six year media rights and sponsorship agreement with the Victorian Racing Club. The partnership includes domestic and international broadcast rights to the Melbourne Cup Carnival and exclusive wagering sponsorship rights. Tabcorp has also entered into an agreement to sublicence the Melbourne Cup Carnival domestic free-to-air media rights to Nine Entertainment. Other than the matters discussed in the Operating and Financial Review and elsewhere in the Directors’ Report, no other significant changes in the state of affairs of the Group have occurred since the commencement of the financial year on 1 July 2023. Tabcorp Annual Report 2024 59 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT CONTINUED 4. SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL YEAR On 22 August 2024, the Victorian Gambling and Casino Control Commission (VGCCC) issued Tabcorp Wagering (Vic) Pty Ltd a financial penalty of $4.6m for breaches occurring between August 2020 and February 2023 of its Responsible Gambling Code and the relevant Harm Minimisation Direction issued by VGCCC. A provision for this matter has been recognised in note C10 (Provisions) of the Financial Report. No other matters or circumstances have arisen since the end of the financial year, which are not otherwise dealt with in this Directors’ Report or in the Financial Report, that have significantly affected or may significantly affect the Group’s operations, the results of those operations or the state of affairs of the Group in subsequent financial years. 5. BUSINESS STRATEGIES The 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 Group continues to focus on a number of key strategies and priorities, which are discussed on pages 2 to 17. The priorities of the Group’s continuing businesses are set out on pages 18 to 23. 6. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Board participates in formal strategic review and planning processes to provide guidance to management about the Group’s strategic direction. The Group plans to continue with its business strategies, as set out in this report and referenced above. The execution of these strategies is expected to result in improved financial performance for the Group’s businesses 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 material business risks described on pages 42 to 47. The Directors have excluded from this report any further information on the likely developments in the operations of the 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 Group. 7. DIRECTORS The names and details of the Company’s Directors in office during the financial year and up to the date of this report (unless otherwise stated) are set out on pages 38 and 39 and below. Adam Rytenskild ceased as MD & CEO on 14 March 2024. Adam joined Tabcorp in 2000 and was a member of Tabcorp’s Executive Leadership Team since 2010 in various roles, and became MD & CEO in June 2022 when Tabcorp’s demerger of its former Lotteries and Keno business was completed. Adam was also a Director of the Australasian Gaming Council. 8. DIRECTORS’ INTERESTS IN CONTRACTS Some Directors of the Company, or related entities of the Directors, conduct transactions with entities within the 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. The Board assesses the independence of Directors and, among other things, takes into account any related party dealings referable to a Director which are material and require disclosure under accounting standards, and whether any Director is, or is associated with, a supplier, professional adviser, consultant to or customer of the Group which is material. No such circumstances arose during the financial year. For more information refer to the Corporate Governance Statement available on Tabcorp’s website. Tabcorp Annual Report 2024 60 9. BOARD AND COMMITTEE MEETING ATTENDANCE The Board meets as often as is required and during FY24 there was a total of 25 Board meetings, comprising 10 scheduled meetings and 15 additional out-of-cycle meetings convened for special purposes to consider a broad range of matters. The attendance of the Directors at scheduled meetings of the Board and as members of standing Board Committees during the year in review were: Board Committees(i) Scheduled meetings Audit Risk, Compliance and Sustainability People and Remuneration Technology Nomination Name A B A B A B A B A B A B Current Directors Bruce Akhurst(ii) 10 10 8 8 4 4 4 4 4 4 3 3 Brett Chenoweth 10 10 7 8 4 4 - - 4 4 3 3 David Gallop 10 10 – – 4 4 4 4 - - 3 3 Janette Kendall 10 10 8 8 – – 4 4 4 4 3 3 Justin Milne 10 10 8 8 4 4 4 4 4 4 3 3 Raelene Murphy 10 10 8 8 4 4 - - - - 3 3 Karen Stocks 10 10 – – – – - - 3 4 3 3 Former Director Adam Rytenskild(iii) 6 6 6 6 2 2 2 2 2 2 1 1 A – Number of meetings attended B – Maximum number of possible meetings available for attendance (i) Only Non-Executive Directors are members of Board Committees. (ii) While in the role of interim Executive Chairman, Mr Akhurst is not a member of any Board Committee, however he still attended Board Committee meetings. He also attended meetings of the Victorian Joint Venture Management Committee as Chairman of this Committee, until the joint venture with the VRI was discontinued in early 2024. (iii) The MD & CEO attends Committee meetings, but is not a member of any Committee. In addition to the meetings above, Directors also participated in Board Sub-Committee meetings established for special purposes and management briefings on developments and topics of special interest. The functions and memberships of the Board Committees are set out in the Company’s Corporate Governance Statement available on Tabcorp’s website. The Board and Committee Charters are also available on Tabcorp’s website. 10. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Directors and Officers of the Group are indemnified against liabilities pursuant to agreements with the Group. Members of the Group have 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. 11. COMPANY SECRETARY Chris Murphy commenced as Acting Company Secretary on 23 March 2018 and following receipt of the necessary regulatory and ministerial approvals was formally appointed as Company Secretary on 6 February 2019. Prior to joining Tabcorp, he was Assistant Company Secretary of Transurban Group and previously held company secretariat and/or legal roles at Cleanaway Limited, Alstom Limited and Melbourne Stadiums Limited. Chris holds a Bachelor of Laws (Honours), Bachelor of Commerce, a Graduate Diploma of Applied Corporate Governance and a Graduate Certificate in Applied Finance and Investment, and he is an Associate Member of the Governance Institute of Australia. Tabcorp Annual Report 2024 61 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY DIRECTORS’ REPORT CONTINUED 12. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group’s environmental obligations are regulated under both state and federal laws. The Group complies with, or in many cases exceeds, its environmental performance obligations. During FY24, no environmental breaches have been notified to the Group by any government agency. 13. POLITICAL CONTRIBUTIONS AND ENGAGEMENT As a listed entity operating in a highly regulated environment, Tabcorp has an obligation to its shareholders and stakeholders to participate in the process of public policy development. From time to time, Tabcorp holds memberships with various networking forums organised by political parties and Tabcorp team members attend networking events that support them. These forums allow Tabcorp to participate in the democratic system of parliamentary government in Australia – at both a Commonwealth and state/territory level. It also helps Tabcorp advocate for positive industry reform and promote a sustainable future for our industry. Under various Australian laws, the cost of these networking forums and events is classified as a political contribution and is sometimes required to be publicly disclosed. Tabcorp takes a strict principles-based approach when making contributions to political parties in accordance with our Political Contributions Policy. In particular, Tabcorp does not make any ‘cash only donations’ to any political party or affiliate. The Board has oversight of this policy and approves Tabcorp’s political contribution program and budget each year. Tabcorp discloses all political contributions made under our political contribution program to the Australian Electoral Commission (AEC) and other bodies, irrespective of whether such contributions are classified by law as a ‘political donation’ or are required to be disclosed. For FY24, Tabcorp’s political contributions totalled $193,093 (FY23: $161,150). These contributions were to meet the cost of memberships of business forums and attendance at events and party conference corporate days. Specific details of all political contributions for FY24 will be provided in Tabcorp’s annual disclosure report to the AEC. The public policy areas that Tabcorp advocated at networking events during FY24 included: • sustainable racing and wagering sectors across Australia, including a level playing field for wagering taxes and racing industry fees; • stronger responsible gambling, advertising and consumer protection laws; and • strategic priorities to create value for Tabcorp customers, partners, the community and shareholders. Tabcorp’s Political Contributions Policy and a link to Tabcorp’s most recent Annual Return to the AEC are available from the Corporate Governance section of Tabcorp’s website. 14. ROUNDING OF AMOUNTS Dollar amounts in the Financial Report, Directors’ Report and Remuneration Report have been rounded to the hundred thousand unless specifically stated to be otherwise, in accordance with the Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. 15. AUDITORS The Group’s external auditor is Ernst & Young. The Group’s internal audit function is resourced by Tabcorp, with specialist independent external support where necessary. More information relating to the audit functions can be found in the Company’s Corporate Governance Statement. In FY23, a tender process for the provision of external audit services for the Company and Group was conducted, overseen by the Audit Committee Chairman. Following this, the Board determined to retain Ernst & Young as the external auditor to the Company and Group. 16. INDEMNIFICATION OF EXTERNAL AUDITOR To the extent permitted by law, the Company has agreed to indemnify its external auditor, Ernst & Young Australia, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. Tabcorp Annual Report 2024 62 17. NON-AUDIT SERVICES Ernst & Young, the external auditor to the Company and the Group, provided non- statutory audit services to the Company during FY24. 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 Audit Committee regularly reviews the activities of the independent external auditor and reviews the auditor’s performance on an annual basis. The Audit Committee must approve all non-statutory audit and other work to be undertaken by the auditor (if any). Further details relating to the Audit 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 $329,491 in relation to the provision of non-statutory audit and assurance services, including assurance of sustainability indicators disclosed in the Sustainability Report, and $180,000 in relation to the provision of non-audit services, to the Company in respect of FY24. Amounts paid or payable by the Company for audit and non-statutory audit services are disclosed in note E6 to the Financial Report. 18. AUDITOR’S INDEPENDENCE DECLARATION Shown opposite is a copy of the auditor’s independence declaration provided under section 307C of the Corporations Act 2001 in relation to the audit for FY24. This auditor’s independence declaration forms part of this Directors’ Report. 19. REMUNERATION REPORT The Remuneration Report on pages 64 to 91 forms part of this Directors’ Report. This Directors’ Report has been signed in accordance with a resolution of Directors. Bruce Akhurst Executive Chairman Melbourne 28 August 2024 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Auditor’s Independence Declaration to the Directors of Tabcorp Holdings Limited As lead auditor for the audit of the financial report of Tabcorp Holdings Limited for the financial year ended 30 June 2024, I declare to the best of my knowledge and belief, there have been: a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b) No contraventions of any applicable code of professional conduct in relation to the audit; and c) No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Tabcorp Holdings Limited and the entities it controlled during the financial year. Ernst & Young Michael Collins Partner 28 August 2024 Tabcorp Annual Report 2024 63 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY REMUNERATION REPORT (AUDITED) Contents 1. LETTER FROM THE PEOPLE AND REMUNERATION COMMITTEE CHAIRMAN 65 2. KEY MANAGEMENT PERSONNEL 68 3. REMUNERATION GOVERNANCE 69 4. RESPONSE TO 2023 STRIKE 70 5. REMUNERATION FRAMEWORK 72 (a) Remuneration Strategy 72 (b) Remuneration Timeline 73 (c) Remuneration Mix 73 6. CHANGES TO THE REMUNERATION FRAMEWORK, EFFECTIVE 1 JULY 2024 (FY25) 74 7. EXECUTIVE REMUNERATION OUTCOMES IN FY24 75 (a) Five-year Group financial performance and remuneration outcomes 75 (b) FY24 STI outcomes 75 (c) FY24 LTI outcomes 77 (d) Remuneration received in FY24 78 8. REMUNERATION FRAMEWORK 79 (a) Fixed remuneration (TEC) 79 (b) Short term incentive (STI) 80 (c) Long term incentive (LTI) 82 (d) 2021 Retention Plan 84 (e) One-off equity award 84 9. MINIMUM SHAREHOLDING POLICIES AND PROHIBITION ON HEDGING 84 10. EXECUTIVE KMP EMPLOYMENT CONTRACTS 85 (a) Executive KMP notice periods 85 (b) MD & CEO cessation and appointment of Executive Chairman 85 (c) Terms of appointment of Mr Gillon McLachlan as MD & CEO 85 11. NON-EXECUTIVE DIRECTORS 86 (a) Probity 86 (b) Fees 86 12. STATUTORY REMUNERATION DISCLOSURES 88 (a) Executive KMP remuneration 88 (b) Shares (including restricted shares) held by executive KMP as at 30 June 2024 (number) 89 (c) Options granted in FY24 89 (d) Summary of executive KMP allocated, vested and lapsed equity 90 (e) Remuneration paid to Non-Executive Directors 91 (f) Shares held by Non-Executive Directors as at 30 June 2024 91 (g) Transactions and loans with KMP 91 Tabcorp Annual Report 2024 64 Tabcorp Annual Report 2024 64 1. LETTER FROM THE PEOPLE AND REMUNERATION COMMITTEE CHAIRMAN Dear Shareholder, On behalf of the Tabcorp Board of Directors, I’m pleased to present Tabcorp’s Remuneration Report for the year ended 30 June 2024 (FY24). This report covers Tabcorp’s approach to remuneration for its Key Management Personnel (KMP), the link between performance and reward and the remuneration outcomes for KMP for FY24. It also addresses the “first strike” against our 2023 Remuneration Report. FY24 performance In FY24, Tabcorp continued to transform at pace. A highlight for the year was Tabcorp being awarded an exclusive 20-year Victorian Wagering and Betting Licence. This was a significant outcome for the business, creating a level playing field in Victoria for taxes and fees and enhances our ongoing competitiveness. During the year we continued to strengthen our customer offering and improve TAB’s digital competitiveness, releasing the 20th update to the TAB App since it was launched in the Spring of 2022, providing customers with more products than ever before. We also continued our progress in transforming our Company into a simpler, more agile organisation through our Genesis program. We finalised an outsourcing partnership with Accenture for IT and finance processes and continued to refine our operating model to create a more efficient workforce. We commenced the new 20-year Tasmanian monitoring licence, monitoring all electronic gaming machines in Tasmanian hotels and clubs, and completed the sale of the MAX Performance Solutions business on 31 October 2023. Gaming Services is now underpinned by a focused, high-quality integrity services business. In line with our vision to be a leader in customer and community care, during the year we launched our new Safer Gambling Strategy, underpinned by our Player Safety Promise. Our new strategy ensures that caring for our customers is at the heart of everything we do. In FY24 we continued to face challenging near term macroeconomic conditions and a softer wagering market and a tightening regulatory environment, which impacted our financial results. Revenues for the Group were $2,338.9m, down 3.9%, and EBITDA before significant items(i)(ii) was $317.7m, down 18.7% on the previous year. The Group reported a net loss after tax of $1,359.7m in FY24 after incurring non-cash impairment charges totalling $1,376.4m (after tax) relating to our Wagering and Media business, and other significant items totalling $11.3m (after tax)(i). MD & CEO changes On 14 March 2024, we announced the resignation of Mr Adam Rytenskild as MD & CEO. Upon his resignation, Mr Rytenskild received only termination payments required by law and under his contract and forfeited all his unvested short term incentive and long term incentive awards. Following Mr Rytenskild’s resignation, Mr Akhurst was appointed Executive Chairman, effective 14 March 2024 while the search process for a new MD & CEO was conducted. As Executive Chairman, Mr Akhurst has provided continuity and strong leadership, ensuring momentum on Tabcorp’s transformation strategy continued at pace. (i) Significant items are disclosed on page 16 and in note A1 of the Financial Report. (ii) Earnings before interest, taxation, depreciation, amortisation and impairment (EBITDA) before significant items is non-IFRS financial information, and unaudited. Tabcorp Annual Report 2024 65 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY The Board was pleased to announce Mr Gillon McLachlan’s appointment as the new Tabcorp MD & CEO, who commenced on 5 August 2024 and will be formally appointed following the receipt of all necessary regulatory approvals. Until then, Mr Akhurst will continue in the role of Executive Chairman performing additional executive duties. The Board has determined that, effective 1 September 2024, the additional fees paid to Mr Akhurst while he serves as Executive Chairman will be reduced from $142,225 to $50,000 per month (including superannuation). It is the Board’s intention that Mr Akhurst will resume in the role of Non-Executive Chairman of the Board upon Mr McLachlan’s formal appointment as MD & CEO following receipt of regulatory approvals. Other executive KMP changes On 31 August 2023, Mr Daniel Renshaw stepped down as Chief Financial Officer (CFO) for personal reasons. On 24 April 2024, Mr Mark Howell commenced as our new CFO (subject to regulatory approval). Executive KMP remuneration The remuneration package of the recently appointed CFO, Mr Mark Howell, is slightly less than his predecessor, while the remuneration package for the new MD & CEO, Mr Gillion McLachlan, is the same as his predecessor. Further detail on KMP remuneration packages is provided in section 5(c). Short Term Incentive (STI) outcomes Tabcorp’s FY24 EBIT before significant items result of $97.4m fell short of the EBIT before significant items hurdle threshold of $111.2m under the FY24 STI Plan. While the executive and management team made progress against other key strategic and customer measures, in a year where financial targets were not achieved against a backdrop of challenging market and economic conditions, the Board determined that no STI pool be made available, and therefore no STI awards are to be paid to executive KMP or any other eligible employees for FY24. Refer to section 7(b) for more details. Long Term Incentive (LTI) outcomes Tabcorp currently has two LTI offers on foot which are due to vest post their three-year performance periods of 1 July 2022 to 30 June 2025 and 1 July 2023 to 30 June 2026, subject to the satisfaction of performance and service conditions. Refer to sections 8(c) and 12(c) for more details. “First strike” at 2023 AGM While we were disappointed to receive a “first strike” against our Remuneration Report at the 2023 AGM, we acknowledge the concerns of shareholders with aspects of our FY23 remuneration arrangements. Over the past 12 months, the Board has engaged with shareholders and proxy advisers to further understand their concerns and we thank those who took time to engage with us. The main areas of feedback we received related to decisions we made concerning the size of the FY23 Short Term Incentive (STI) awarded to the former MD & CEO, the level of fixed remuneration paid to the MD & CEO, as well as the level of Director and Chairman fees set post the demerger of our former Lotteries and Keno business in 2022. The Board acknowledged the feedback from shareholders on the quantum of the MD & CEO’s FY23 STI award and the treatment of savings from depreciation and amortisation due to assets held for sale during the year, which contributed to the achievement of the EBIT hurdle under the STI Plan. The Board will remain mindful of this feedback when determining STI awards for executives in future years. The former MD & CEO’s fixed annual remuneration was considered appropriate given his level of industry experience and the complex, highly regulated gambling industry. The annual remuneration has remained the same for our newly appointed MD & CEO Elect, Mr Gillon McLachlan. The Board determined this to be appropriate considering all relevant factors, including benchmark data and the need to secure a suitably qualified and experienced CEO with the right attributes to lead the organisation and deliver on its transformation strategy within a challenging market. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 66 The Board has also made some changes to our remuneration arrangements to apply in FY25: • the Board Chairman fee will reduce from $493,300 to $400,000 per annum, resulting in a total reduction of 31% from the pre-demerger fee(i); and • the STI Plan has been modified to remove the Group EBIT Hurdle and to direct focus onto a Balanced Group Scorecard, which has been simplified to target financial performance and key strategic and operational initiatives. Financial measures will represent 60% of the scorecard (an increase from 40%), while non-financial measures within strategy, customer and people will represent 40% of the scorecard. In setting remuneration arrangements for the Company, the Board remains focussed on balancing the interests of shareholders while maintaining an appropriate performance-based remuneration framework that motivates, incentivises and retains our executive talent to execute our transformation strategy. Further details regarding the “first strike” and our response, and changes to our remuneration framework for FY25, are detailed in section 4. Conclusion Despite a challenging year for the wagering industry and Australian economy more broadly in FY24, we made significant progress to modernise our business into a faster, simpler and more competitive organisation. Looking ahead, we remain focused on taking the next step to turn those foundations into value for our shareholders. On behalf of the People and Remuneration Committee and the Board, I thank you for your ongoing support of Tabcorp. David Gallop People and Remuneration Committee Chairman This Remuneration Report is presented in accordance with the requirements of the Corporations Act 2001 (Cth) (Act) and its regulations and has been audited as required by section 308(3C) of the Act. (i) Change effective upon the formal commencement of the new MD & CEO following receipt of regulatory approvals and the Executive Chairman resuming in the role of Non-Executive Chairman. Tabcorp Annual Report 2024 67 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY 2. KEY MANAGEMENT PERSONNEL This report covers the KMP of Tabcorp who have the authority and responsibility for planning, directing and controlling the activities of Tabcorp either directly or indirectly. This includes both the executive KMP as well as Non-Executive Directors. The following table lists Tabcorp’s KMP during FY24. All KMP held their positions for the duration of FY24 unless otherwise stated. Non-Executive Directors Bruce Akhurst, Chairman(i) Brett Chenoweth David Gallop Janette Kendall Justin Milne Raelene Murphy Karen Stocks Current Executive KMP Chief Financial Officer (CFO) Mark Howell from 24 April 2024 Former Executive KMP Managing Director and Chief Executive Officer (MD & CEO)(ii) Adam Rytenskild until 14 March 2024 CFO(iii) Daniel Renshaw until 31 August 2023 (i) Mr Akhurst was appointed Executive Chairman on 14 March 2024. Further details regarding terms of Mr Akhurst’s appointment as Executive Chairman are set out in section 10(b). (ii) On 17 June 2024, Tabcorp announced the appointment of Mr Gillon McLachlan as the new MD & CEO. Mr McLachlan commenced with the Company as an observer on 5 August 2024 and will be formally appointed MD & CEO upon receipt of all necessary regulatory approvals. Mr McLachlan was not a KMP during FY24 and he was not paid any remuneration during that year. (iii) On 1 September 2023, Damien Johnston commenced as Interim CFO while a recruitment process for a new CFO was undertaken. Mark Howell was appointed CFO and commenced on 24 April 2024. Given the interim nature of Mr Johnston’s appointment and the limited broader influence across the business and in controlling the activities of Tabcorp and its strategy during that time, the Board determined that Mr Johnston was not a KMP during FY24. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 68 3. REMUNERATION GOVERNANCE Tabcorp’s approach to remuneration governance and decision-making applicable during the year is summarised in the diagram below. Board The Board, with advice from the People and Remuneration Committee, approves and oversees the implementation of the Company’s remuneration framework and policies, approves the remuneration of Non-Executive Directors and the Chairman, and approves the remuneration of the MD & CEO and the executive team, including performance incentive targets and outcomes. People and Remuneration Committee (PRC) Assists the Board to fulfil its duties and responsibilities relating to: • the remuneration of Non-Executive Directors and the Chairman; • the performance and remuneration of, and incentives for, the MD & CEO and the executive team; • the remuneration framework and policies, superannuation arrangements, employee share ownership schemes and performance incentive schemes; • people strategies and policies, including talent retention, diversity and inclusion, culture and engagement; and • the health, safety and wellbeing strategy and performance. The Committee must consist of at least three Non-Executive Directors. Non-committee members, including management, may attend all or part of a meeting of the Committee at the invitation of the Committee Chairman. The Committee uses a range of inputs when assessing performance and outcomes of executives. Detailed performance assessments as well as audited financial results, external remuneration benchmarking and feedback from the Board Risk, Compliance and Sustainability Committee are also considered. The Committee and the Board review relevant information and may exercise discretion to adjust proposed remuneration outcomes. The Committee is governed by its Charter, which is available on Tabcorp’s website (www.tabcorp.com.au) under the Corporate Governance section. Management External Advisers Risk, Compliance and Sustainability Committee The PRC receives information from, and provides information to, management which may impact remuneration. The MD & CEO and the Chief People Officer attend Committee meetings, however they do not participate in formal decision-making or in discussions involving their own remuneration. The PRC may seek the advice or services of Tabcorp’s auditors, solicitors or such other independent advisers, consultants or specialists as the Committee may require. No remuneration-related advice was sought, and no remuneration recommendations were received in respect of KMP during FY24. Supports the PRC by providing feedback, which assists decision-making regarding incentive outcomes. Tabcorp Annual Report 2024 69 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY 4. RESPONSE TO 2023 STRIKE At the 2023 AGM, Tabcorp recorded a “first strike” under the Act, with more than 25% of votes cast against the resolution to adopt the 2023 Remuneration Report. In total, 65.75% of votes recorded were in favour of the resolution, with 34.25% of votes recorded against the resolution. In response to the “first strike”, Tabcorp has actively engaged with shareholders and proxy advisers during FY24 to clearly understand and respond to areas of concern that contributed to the “first strike”. This has included: • reviewing feedback received from shareholders and proxy advisers prior to the 2023 AGM; • holding additional meetings with major shareholders and proxy advisers following the 2023 AGM to seek further feedback and clarification, as required; • reviewing Tabcorp’s remuneration framework and remuneration-related disclosures; • reviewing the STI framework, including the suitability and rigour of setting targets; and • undertaking remuneration benchmark analysis against suitable peers. When reviewing the remuneration arrangements for the Group, the Tabcorp Board is mindful of the need to balance the interests of shareholders as well as the need to ensure that Tabcorp has appropriate performance-based remuneration and rewards which will attract, motivate and retain talent required to deliver the Company’s business strategy and create long term sustainable value for shareholders. The following table summarises the key concerns raised in relation to the 2023 Remuneration Report, and Tabcorp’s response. Topic Concern Response Pay for performance FY23 STI award to the MD & CEO was excessive given below expectation financial performance for the Group and the EBIT hurdle was marginally met, impacted by the application of accounting standards. • In awarding the MD & CEO an STI equivalent to 75.8% of his target STI opportunity, the Board sought to take a balanced view of financial and non-financial performance for the Group, and the individual performance for the year by the MD & CEO. • While this was considered a fair and reasonable outcome, the Board acknowledges the concerns raised by shareholders. The Board acknowledges the feedback in relation to the beneficial impact on the FY23 EBIT result from savings in depreciation and amortisation due to the MAX Performance Solutions assets being held for sale. • Given shareholder concerns were focused on the quantum of the award, rather than the structure of, or disclosures in relation to, the STI Plan, the Board determined not to make any changes to the Plan in FY24. • For FY25, the Board determined to make changes to simplify the STI Plan, removing the Group EBIT Hurdle and adopting a new simplified Group Scorecard containing upweighted financial measures representing 60% of the scorecard (up from 40%). • Changes to the STI Plan effective FY25 are summarised in section 6. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 70 Topic Concern Response Director fees The level of Board Chair fees and Non-Executive Director fees set post Demerger were considered too high. • Non-Executive Director fees are set based on workload, responsibilities, qualifications, experience, market benchmarks while considering the complex and highly regulated gambling industry which carries a higher degree of personal risk and exposure. • Following the Demerger of the Lotteries and Keno business, on 1 June 2022, the Chairman fee decreased by 15%, the Committee fees by 10% and the Director fees by 14%. • All increases in the Superannuation Guarantee rate since this time have been absorbed within current fee levels. • During the year, Director fees were benchmarked with reference to a peer group comprising of the ASX 51-200 group of companies with an annual revenue overlay of $1.0 billion to $4.0 billion (refer to section 8(a) for further information). • The Board determined that the Board Chairman fee will reduce further from $493,300 to $400,000 (including superannuation) per annum, resulting in a total reduction of 31% from the pre-Demerger fee. This will take effect when Mr Akhurst resumes the role of Non-Executive Chairman. • Refer to section 11 for further details. MD & CEO remuneration The level of MD & CEO fixed remuneration set post Demerger was considered too high. • Mr Adam Rytenskild resigned from Tabcorp on 14 March 2024. His remuneration was set to reflect the complexity and responsibility of his role and his level of industry knowledge and experience. • His package was less than his predecessor and it remained unchanged during his time in this role. • Mr Gillon McLachlan was announced as the new MD & CEO on 17 June 2024 and commenced with Tabcorp as an observer on 5 August 2024. Mr McLachlan will be formally appointed as MD & CEO upon receipt of all necessary regulatory approvals. • Mr McLachlan’s remuneration package is the same as his predecessor. In setting Mr McLachlan’s remuneration package, the Board considered all appropriate factors, including relevant benchmark data and the need to attract and secure a suitably qualified and experienced CEO with the right attributes to lead the Company and deliver on its growth strategy (further details are provided in section 5(c)). Tabcorp Annual Report 2024 71 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY 5. REMUNERATION FRAMEWORK (a) Remuneration Strategy Tabcorp’s remuneration policy and strategy are designed to support and reinforce the Company’s business strategy. The STI and LTI performance measures are directly linked to shareholder value creation. Executive KMP are assessed on performance and behaviours annually, which aims to ensure reward for results which have been delivered in a sustainable and ethical manner. REMUNERATION REPORT (AUDITED) CONTINUED Remuneration philosophy Attract, motivate and retain the best talent by rewarding for delivering the business strategy and for creating long term value for shareholders through a market-competitive, performance-linked and shareholder aligned remuneration framework Remuneration principles Competitive remuneration which is benchmarked against the external market ensuring equity between comparable roles Balances financial and non-financial performance which aligns to our purpose and values Pays fairly and appropriately for performance and value creation Aligns the interests of our people with shareholders to create sustained shareholder value Remuneration structure Set and adjusted, considering: Role responsibilities Qualifications and experience Market movements and economic data Individual performance Market benchmarks Dependent on: Group Earnings before Interest and Tax (EBIT) performance hurdle Sustainability Assessment Individual weighted scorecards Behaviours in line with Tabcorp’s values and approach to risk and compliance 40% – Financial 10% – Customer Care and Community 40% – Strategic and Customer 10% – Leadership and Culture Cash Exercise Price: determined as at the grant date Exercise window: 12 months commencing from the vesting date Shares (only granted if performance and service conditions are met and are subject to forfeiture, malus and clawback) A net settlement approach applies LTI Options (no dividends) + + Performance and service condition tested at the end of 3 years (no retesting) Long Term Incentive (LTI) – Refer section 8(c) Fixed remuneration Short Term Incentive (STI) – Refer section 8(b) Financial performance: Return on Invested Capital (ROIC) Restricted Shares (50% for the MD & CEO and 25% for the CFO). Restricted for 2 years and subject to forfeiture, malus and clawback Cash (50% for the MD & CEO and 75% for the CFO) + Tabcorp Annual Report 2024 72 (b) Remuneration Timeline Year 1 Year 2 Year 3 Year 4 Fixed remuneration TEC Cash 100% Base salary and superannuation Variable remuneration STI Cash MD & CEO 50% CFO 75% Shares restricted for two years subject to a two year service requirement, forfeiture, malus and clawback and Board discretion MD & CEO 50% CFO 25% LTI LTI Options vest at the end of year three subject to performance against ROIC targets and service requirements. Subject to forfeiture, malus and clawback and Board discretion 100% 12 month exercise period for vested Options (c) Remuneration Mix The remuneration mix is designed to achieve a balanced reward for achievement of short term objectives and the creation of long term sustainable value. The amount of remuneration received by executive KMP depends on the achievement of business and individual performance. The following diagrams show the minimum, target and maximum total remuneration opportunity for the MD & CEO and the CFO and do not include one-off grants of remuneration which are detailed elsewhere in this report. Minimum: consists of fixed remuneration (TEC): Total Employment Costs (which includes salary and statutory superannuation). Target: consists of TEC, target STI and 50% of the LTI awards (granted in that year) are assumed to vest. The potential impact of future share price movements is not included within the equity components. Maximum: consists of TEC, maximum STI and 100% of the LTI awards (granted in that year) are assumed to vest. The potential impact of future share price movements is not included within the equity components. Tabcorp Annual Report 2024 73 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY The maximum opportunities presented below represent the most that could be awarded to executive KMP, it does not reflect any intention to award that amount, unless exceptional performance has been achieved. Minimum 100% 33% 22% 17% 17% 44% 17% 17% 33% $1.5m $1.5m $1.5m $1.5m $750k $4.5m $750k $1.5m $6.75m $3.0m $1.125m $1.125m Target Maximum Incoming and former CEO(i) 0 500000 1000000 1500000 2000000 2500000 Minimum $675k $675k $675k $506k $253k $1.5m $84k $675k $1.013m $506k $2.4m $169k Target Maximum Former CFO(i) 100% 44% 17% 6% 33% 29% 21% 7% 43% 0 500000 1000000 1500000 200000 Minimum $620k $620k $620k $310k $233k $1.2m $78k $620k $620k $465k $1.9m $155k Target Maximum Current CFO(i) 100% 50% 19% 6% 25% 33% 25% 8% 33% Fixed remuneration Short term incentive – Cash Short term incentive – Restricted Shares Long term incentive (i) The above amounts and percentages are rounded for presentational purposes. 6. CHANGES TO THE REMUNERATION FRAMEWORK, EFFECTIVE 1 JULY 2024 (FY25) During FY24, a review of the Executive Remuneration Framework was undertaken as a part of the Board’s response to the “first strike” received on the 2023 Remuneration Report. The Board determined to make a number of adjustments to the STI plan, effective 1 July 2024. The Plan has been modified, with the removal of the Group EBIT Hurdle (refer section 8(b)), and the Group Scorecard has also been simplified to enhance the focus of key financial measures and initiatives and will include financial measures with a weighting of 60% (increased from 40% in the FY24 Plan) and non-financial measures (such as strategic, customer and people measures) with a weighting of 40%. All other components of the STI Plan remain unchanged – the Plan retains a Sustainability Assessment and executive’s performance continues to be assessed using individual weighted scorecards. Further details on the FY25 STI Plan will be included in the 2025 Remuneration Report. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 74 7. EXECUTIVE REMUNERATION OUTCOMES IN FY24 (a) Five-year Group financial performance and remuneration outcomes Measurement unit FY20 FY21 FY22 FY23 FY24 Net profit/(loss) after tax (NPAT) $m (870.4)(iv) 269.4(v) 6,775.9(vi) 66.5 (1,359.7)(ix) Basic earnings per share (EPS) Cents (42.9)(iv) 12.3(v) 304.6(vi) 2.9 (59.6)(ix) Return on invested capital (ROIC) % 5.7% 7.0% n/a 5.5% 2.5%(x) Closing share price at 30 June(i) $ 3.38 5.18 1.07 1.11 0.70 Dividends(ii) Cents per share 11.0 14.5 13.0 2.3 1.3 STI Group Funding Multiplier (STI pool) % of target pool 0% 100% 100% 75% 0% MD & CEO STI award % of target opportunity 0% 100% 65%(vii) 75.8% 0% % of maximum opportunity 0% 67% 43%(vii) 50.5% 0% CFO STI award(iii) % of target opportunity 0% 105% 107% 56.3% 0% % of maximum opportunity 0% 52% 54% 28.1% 0% All executive KMP LTI vesting % of maximum opportunity 0% 54% 37.5% n/a(viii) n/a(viii) (i) Opening share price as at 1 July 2019 was $0.84. (ii) Includes interim and final dividends determined. For FY20, a final dividend was not paid. (iii) Prior to FY23, represents the average award for all executive KMP excluding the MD & CEO. (iv) NPAT includes impairment of goodwill of $1,090m. FY20 EPS before impairment of goodwill was 10.9c. (v) NPAT includes impairment of goodwill of $122m. FY21 EPS before impairment of goodwill was 17.9c. (vi) FY22 includes 11 months results for Lotteries and Keno prior to the Demerger which occurred in June 2022. (vii) Represents FY22 STI award for prior MD & CEO, David Attenborough for the period 1 July 2021 to 31 May 2022. (viii) The next scheduled vesting date for LTI is at the end of the three-year performance period of 1 July 2022 to 30 June 2025. (ix) NPAT includes impairments totalling $1,376.4m (after tax). FY24 EPS before impairments was 0.7cps. (x) Invested capital has been adjusted to neutralise the impact of the FY24 impairment, and the impacts of the new Victorian Wagering and Betting Licence. EBIT has been adjusted to remove the depreciation and amortisation benefit from the impairment recognised at 31 December 2023. (b) FY24 STI outcomes When setting and approving the FY24 operating budget and STI targets, the outcome of the Victorian Wagering and Betting Licence offered by the Victorian Government was not known and the impact on Tabcorp’s financial results could not be accurately budgeted if Tabcorp’s bid was not successful. Accordingly, the Board determined to approve Tabcorp’s FY24 STI targets in two halves; 1 July 2023 to 31 December 2023 and 1 January 2024 to 30 June 2024, based on an interim operating budget. On 18 December 2023, Tabcorp announced that it had been awarded the new licence for a period of 20 years commencing August 2024. Following this, the interim operating budget was reviewed and an adjustment of $11.0m was made to budget assumptions following the end of transitional payments to Tabcorp in December 2023 from the NSW Government following the previously announced increase in the NSW Point of Consumption Tax rate in June 2022. No further changes were made to the original FY24 operating budget. Tabcorp Annual Report 2024 75 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY STI Scorecard Tabcorp’s FY24 priorities were cascaded via the MD & CEO’s KPIs to other executives in combination with other functional measures. The Board assessed the executive performance and the MD & CEO’s KPIs as follows. Category Measures Performance Financial (40%) • EBITDA $392.6m • Operating costs $587.1m(i) Not achieved • FY24 EBITDA of $317.7m before significant items(ii) • Operating costs of $614.0m(i) Strategic and Customer (40%) • Digital Turnover Market Share 21.5% • Digital Revenue Market Share 26% • Digital First Choice 31% • Win Victorian licence with implementation plan delivered • Retail Strategy • Operating Model transformation delivered • Continue to deliver TAB25 initiatives Not achieved • Digital Turnover Market Share 21%, up from FY23 of 20% – reflecting outperformance against key competitors in challenging market • Digital Revenue Market Share 23.7%, down from FY23 of 24.5% • Digital First Choice 28%, down from FY23 of 29% Achieved • Tabcorp was awarded the new Victorian Wagering and Betting Licence for the next 20 years • Retail Strategy complete and in execution, including roll-out of NextGen Venues. Retail currently experiencing growth for the first time in four years • The business has successfully re-shaped the employee operating model producing a more effective, leaner structure, generating material cost savings • Strong progress made on key TAB25 initiatives, notably generosity efficiency increased, product roadmap delivery, technology modernisation (fixed odds, data and Enterprise Resource Planning (ERP)), and revitalised brand and offers Customer Care and Community (10%) • Effective management of regulatory environments • Key initiatives delivered Partially achieved • Initiation of Quality Improvement Program • Launched new Safer Gambling Strategy, underpinned by Player Safety Promise • Experienced several show cause notices and infringements involving customer betting, marketing material and campaigns, and system incidents Leadership and Culture (10%) • Employee Engagement score >59% • Lost Time Injury Frequency Rate <2.6 • At least 40% female representation in senior leadership cohort • Leadership and succession plans in place • Continue improving on ways of working Not achieved • Employee engagement declined from 59% in FY23 to 58% • Lost Time Injury Frequency Rate increased from 2.6 in FY23 to 2.7, which were all non-traumatic injuries • Females within the senior leadership cohort improved from 37% in FY23 to 39% Achieved • Strengthened succession talent pools focusing on people development • Implementation of new ERP, with process and controls uplift activities in progress following successful go-live (i) Adjusted for Broadcast Rights re-allocation in FY24 (measure was $630m before adjustment). (ii) Non-IFRS financial information, unaudited. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 76 Tabcorp’s STI plan includes a Group Financial Hurdle of EBIT. If the EBIT hurdle is not achieved, no STI pool is available to pay STI awards, however the Board has discretion to set a smaller STI pool based on consideration of other deliverables and achievements throughout the performance year. Tabcorp’s FY24 EBIT result fell short of the EBIT hurdle threshold and although the executive and management team made progress against other key strategic and customer measures during the year, the Board determined that no STI pool be made available in a year of challenging financial results. As a result, no STI awards are to be paid to executive KMP or any other eligible employees for FY24. Due to the changes in KMP during FY24, only former CFO Daniel Renshaw was eligible for a STI award (prorated for time served during FY24). The following table provides this detail. Total STI awarded Actual STI achieved Target $ Total $ Cash portion $ Restricted portion $ as a % of maximum opportunity as a % of target opportunity STI foregone as a % of maximum opportunity Current Executive KMP(i) Former Executive KMP(ii) Daniel Renshaw(iii) 226,125 – – – – – 100% (i) Mark Howell was not eligible for a STI award given his commencement date of 24 April 2024. (ii) Due to Adam Rytenskild’s resignation on 14 March 2024, he was not eligible to participate in Tabcorp’s FY24 STI Plan. (iii) Daniel Renshaw was eligible for a pro-rata STI award due to him ceasing Tabcorp on 29 February 2024. The target amount is the prorated amount. (c) FY24 LTI outcomes There were no LTI offers which vested during FY24. The next vesting is scheduled for August 2025 at the end of the performance period 1 July 2022 to 30 June 2025. A grant of Options was made to the MD & CEO (following approval by shareholders at the 2023 Annual General Meeting and were forfeited upon his resignation on 14 March 2024), other executives and certain other eligible employees on 10 November 2023 under the FY24 LTI Plan. The Options will be tested at the end of the three-year performance period (1 July 2023 to 30 June 2026). Details of the FY24 LTI Plan grant are set out in section 8(c) of this report. Tabcorp Annual Report 2024 77 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY (d) Remuneration received in FY24 The table below provides a non-statutory voluntary disclosure of the actual remuneration received by executive KMP during FY24. Some of the figures in the table have not been prepared in accordance with the Australian Accounting Standards. This information is supplementary to the remuneration disclosure prepared in accordance with the statutory requirements and Australian Accounting Standards as detailed in section 12(a) of this report and should not be considered to be statutory or IFRS information. We believe this information helps shareholders understand the cash and other benefits received by executive KMP from the various components of their remuneration during FY24. TEC (salary plus superannuation) $ Cash STI(iv) $ Termination payment $ Total cash $ Value of restricted shares that vested during the year(v) $ Value of LTI that vested during the year(vi) $ Total remuneration received during the year $ Current Executive KMP Mark Howell(i) 102,538 – – 102,538 – – 102,538 Former Executive KMP Adam Rytenskild(ii) 2,136,170 568,125 500,000 3,204,295 101,988 – 3,306,283 Daniel Renshaw(iii) 615,064 142,388 675,000 1,432,452 411,399 – 1,843,851 Total 2,853,772 710,513 1,175,000 4,739,285 513,387 – 5,252,672 (i) Mark Howell commenced employment as an executive KMP on 24 April 2024 and the period of reporting is from that date. (ii) Adam Rytenskild ceased his role as MD & CEO on 14 March 2024 and departed Tabcorp on 13 May 2024. TEC includes two months of his notice period to 13 May 2024 and annual leave and long service leave paid to him upon departure of $839,540. His termination payment represents the remaining four months of his notice period. (iii) Daniel Renshaw ceased his role as CFO on 31 August 2023 and departed Tabcorp on 29 February 2024. TEC includes salary paid during his six months notice period of $337,500 and annual leave and long service leave paid to him upon departure of $165,064. His termination payment represents an ex-gratia payment. (iv) STI cash bonus reflects the portion of the FY23 STI which was paid in cash in September 2023. (v) Based on the market value of Tabcorp shares at the date the restrictions ceased (being 31 July 2023), multiplied by the number of shares that vested during the year. (vi) As noted in section 7(c), no LTI vested during FY24. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 78 8. REMUNERATION FRAMEWORK (a) Fixed remuneration (TEC) What constitutes fixed remuneration? Salary and statutory superannuation contributions (includes employee-elected salary sacrificed benefits). How is it set? With reference to the responsibilities and complexities of the role, the executive’s knowledge, experience and skills and market benchmarks. What is Tabcorp’s remuneration benchmarking peer group? The ASX 51-200 group of companies with an annual revenue overlay of $1.0 billion to $4.0 billion. The Board considers the peer group an appropriate reference point for Tabcorp to attract and retain suitably skilled directors and executives in the gambling industry, which is a challenging and complex sector, heavily regulated and carries a higher degree of personal risk and exposure for Directors and Officers. The revenue overlay recognises the complexities associated with generating Tabcorp’s revenue, which is derived from multiple channels (Wagering, Media and Gaming Services) each with its own set of challenges. In addition, earning revenue from within the wagering industry involves heavier regulation around safer/responsible gambling and anti-money laundering/counter terrorism related obligations not experienced by other industries. During FY24, Tabcorp used benchmark data based on market capitalisation (12-month averages to the end of January 2024) where it was ranked 146. The peer group consisted of the following 46 companies (companies where sufficient data was not available were excluded): A2 Milk Company, Adbri, ALS, AMP, Ansell, Aurizon, Bank of Queensland, Bapcor, Beach Energy, Bendigo and Adelaide Bank, Boral, Breville, Brickworks, Car Group, Challenger, Champion Iron, Cleanaway Waste Management, Costa, CSR, Domino’s Pizza Enterprises, EVT, Flight Centre Travel, GUD, Healius, IGO, Iluka Resources, Insignia Financial, Johns Lyng, Kelsian, New Hope Corporation, NIB, Nickel Industries, Nine Entertainment, Nufarm, Perpetual, Perseus Mining, Qube, Regis Resources, Reliance Worldwide, Sandfire Resources, Seek, Star Entertainment, Steadfast, Super Retail, Treasury Wine Estates, Vicinity Centres. Tabcorp Annual Report 2024 79 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY (b) Short term incentive (STI) The operation of the executive KMP FY24 STI Plan is summarised below. REMUNERATION REPORT (AUDITED) CONTINUED The Board considers sustainability measures such as risk and compliance, responsible gambling, community and reputation and may exercise discretion to adjust the pool (up or down). Assessment includes reports on risk and compliance from the Risk, Compliance and Sustainability Committee STI award Board has discretion to set a smaller pool if the target is not met Target STI opportunity Group Financial Hurdle Sustainability Assessment Cash (50% for the MD & CEO and 75% for the CFO) Restricted Shares (50% for the MD & CEO and 25% for the CFO) Individual Weighted Performance Scorecard EBIT Hurdle – If the Financial hurdle is not met no STI awards are payable Hurdle Range 0 or 1 Performance Measure Weighting Financial 40% Strategic and Customer 40% Customer Care and Community 10% Leadership and Culture 10% Range MD & CEO 0% to 150% of TEC CFO 0% to 100% of TEC Outcomes are assessed against a range of financial and non-financial performance measures within the balanced scorecard Restricted Shares are restricted for two years and subject to forfeiture, malus and clawback X X X Tabcorp Annual Report 2024 80 Eligibility Eligible permanent employees, including the MD & CEO and other executives, participate in the annual STI plan, which puts a proportion of remuneration ‘at risk’ subject to meeting specific pre-determined performance measures. Performance period The performance period is the financial year preceding the payment date. STI opportunity For ‘at target’ performance, the MD & CEO has the opportunity to receive 100% of TEC and the CFO has the opportunity to receive 50% of TEC. The minimum STI outcome is 0% (if targets are not met) and the maximum is capped at 150% of TEC for the MD & CEO and at 100% for the CFO, which is awarded for exceptional performance. Payment and restricted shares STI awards for the MD & CEO are delivered 50% in cash and 50% is deferred into restricted Tabcorp shares. STI awards for the CFO are delivered 75% in cash and 25% is deferred into restricted Tabcorp shares. Deferred shares are restricted for two years following the grant date. The restricted shares have the same dividend and voting rights as other shareholders during the restricted period. The restricted shares are subject to a holding lock during the restriction period. The restricted shares are subject to a service condition only as performance conditions applied during the STI performance year. Performance measures Individual measures (KPIs) are unique to the individual’s area of accountability. Individuals have a clear line of sight to KPIs and are able to directly affect outcomes through their own actions. KPIs consider role-related accountabilities and responsibilities in the context of business strategic priorities. An EBIT hurdle is used to determine whether a STI pool is available for distribution amongst eligible employees. EBIT provides a better reflection of performance and operating profitability. EBIT hurdle and annual pool The EBIT hurdle is based on the Group’s EBIT budget for the financial year, as approved by the Board. If the hurdle is not met, no STI awards are payable for that year. The Board has discretion to set a smaller pool if the hurdle is not met, considering other factors such as non-financial performance, key strategic achievements, and critical skill retention. Sustainability assessment The Board also considers sustainability measures such as risk and compliance, responsible gambling, community and reputation and may exercise discretion to adjust the pool (up or down). These measures are assessed by the Board utilising reports on risk and compliance from the Risk, Compliance and Sustainability Committee. Individual performance scorecard If the EBIT hurdle has been met, executive KMP STI awards are dependent on a weighted balanced scorecard of measures across financial, strategic and customer, customer care and community and leadership and culture dimensions. Weightings are agreed with the Board at the beginning of the financial year, reflecting key priorities. 40% of the STI scorecard is dependent on financial results, the remaining 60% is dependent on individual scorecard measures. Each scorecard category is assessed and is provided with a percentage from 0% to up to 200% (150% for the MD & CEO), weighted by each category. Cessation of employment If employment ceases due to resignation or termination for cause, restricted shares are forfeited (unless the Board determines otherwise). If employment ceases due to any other circumstances (including redundancy, retirement, or ill health), then restricted shares will remain on foot until the end of the original restriction period (unless the Board determines otherwise). Clawback Restricted shares may be forfeited at the Board’s discretion, based on certain adverse events or information that may come to light. If these adverse events occur or adverse information becomes available after the restricted shares have become unrestricted, the Board may require the participants to (amongst other things) repay all or part of the value of the restricted shares. Change in control The Board is required to determine, in its absolute discretion, the appropriate treatment regarding any restricted shares. Tabcorp Annual Report 2024 81 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY (c) Long term incentive (LTI) The operation of the executive KMP FY24 LTI Plan is summarised below. Formula for allocating Options Maximum LTI opportunity Fair value based on the 10 day volume weighted average price of Tabcorp shares traded on the ASX up to but not including the grant date Options Plan Return on Invested Capital (ROIC) Exercise period ends Options vest and exercise period commences Three year performance period ends 30 June 2026 Three year performance period commences 1 July 2023 Performance tested against ROIC targets (July 2026 – no retesting) Vesting and 12 month exercise period commences (August 2026) Exercise period ends. Vested unexercised Options “in the money” are automatically exercised and vested Options “out of the money” lapse (August 2027) Eligibility Participation in the FY24 LTI Plan was offered to the MD & CEO, the executive team and a limited number of senior employees. Instrument Grants were made in the form of Options at no cost to the recipient. Each Option is an entitlement to acquire one Tabcorp share at the exercise price, or at the Board’s discretion, an equivalent cash payment, on terms and conditions determined by the Board, subject to achieving vesting conditions. Options do not attract dividends or voting rights. Opportunity Participants are allocated a maximum number of Options (based on their maximum LTI opportunities) using a fair value allocation methodology determined by an independent third party using a Black-Scholes methodology. The MD & CEO’s maximum opportunity (award value) is 200% of TEC and the maximum opportunity (award value) for the CFO is 100% of TEC. The minimum vesting outcome an individual can receive is 0% of the award (if the ROIC targets are not achieved) and the maximum vesting outcome an individual can receive is capped at 100% of the award (if the ROIC targets are achieved). The number of Options allocated to the MD & CEO and the CFO is set out in section 12(c), noting the actual value that executives may derive from the Options is subject to the satisfaction of the applicable performance measure, vesting criteria and the Tabcorp share price at the time of vesting (which will also impact on whether the Options are “in the money”). Performance, exercise period and expiry The performance period is three financial years commencing 1 July in the year the grant is made. The FY24 LTI Plan grant has a performance period commencing 1 July 2023 and ending 30 June 2026. The 12-month exercise period will commence at the vesting date (expected to be within 30 days of Tabcorp releasing its FY26 financial results) allowing participants 12 months to choose whether to exercise any vested Options. The end of the exercise period is the expiry date for the Options. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 82 Performance measures Options are subject to performance against predetermined ROIC targets, continuous employment and an exercise price which is set at the grant date. The value derived from the Options is subject to achievement of the ROIC performance measure, as well as the share price following vesting. Over the exercise period, if the share price does not exceed the exercise price (set at the grant date), then the Options are “underwater” and no value is delivered to participants. Exercise price Equivalent to the market share price as at the grant date using a daily Volume Weighted Average Price (VWAP) of Tabcorp shares traded on the ASX during the previous 10 trading days. ROIC ROIC focuses management on achieving targeted returns on Tabcorp’s invested capital (equity and debt). ROIC is an absolute measure, defined as earnings before interest, tax and significant items (EBIT before significant items), divided by the average invested capital base (being shareholders’ equity plus net economic debt). Average invested capital is calculated as the average of opening and closing balances. A stretch three-year average ROIC target was set by the Board with the view that the target is of a sufficiently high value, such that its achievement would require significant growth in Tabcorp’s earnings over the three-year performance period, which would ultimately deliver healthy shareholder returns. Average three-year ROIC (between 1 July 2023 and 30 June 2026) % of Options that will vest Less than 6.5% 0% At 6.5% 35% Above 6.5% and below 7.0% Straight line vesting between 35% and 50% At 7.0% 50% Above 7.0% and below 8.9% Straight line vesting between 50% and 100% At or above 8.9% 100% Net settlement (cashless approach) The commercial effect of a net settlement is that only the value above the Option exercise price will be provided in the form of Tabcorp shares. On exercise of the vested Options the number of shares to be provided to participants will be based on the net settlement amount (the difference between the Option exercise price and market price of shares on the date of exercise, multiplied by the number of exercised Options and divided by the market price). The market price will be the daily VWAP of Tabcorp’s shares traded on the ASX during the 10 days prior to the exercise date of the Options. If the Options are not exercised by the end of the exercise period, they will automatically lapse (if the exercise price is equal to or exceeds the market price at that time) or they will be automatically exercised using the net settlement method (if the exercise price remains below the market price at that time). Any Options which do not vest will lapse. For example: Options granted Options vested Exercise price Market price (VWAP) at exercise Net settlement amount Shares granted 1,000,000 800,000 $0.89 $1.20 800,000 X $0.31 = $248,000 $248,000/$1.20 = 206,666 Cessation of employment Unvested Options: If employment ceases due to resignation or is terminated for cause, unvested Options are forfeited (unless the Board determines otherwise). If employment ceases due to any other circumstances (including redundancy, retirement or ill health), then unvested Options will remain on foot until the end of the original performance period and will be tested in the ordinary course (unless the Board determines otherwise). Vested Options: If employment is terminated for cause, all vested but unexercised Options will lapse, unless the Board determines otherwise. If employment ceases for any other reason then, unless the Board determines otherwise, vested but unexercised Options will remain on foot and will be exercisable up until the end of the exercise period (where they will either automatically lapse or be automatically exercised using the net settlement method). Tabcorp Annual Report 2024 83 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY Change in control The Board can determine, in its absolute discretion, the appropriate treatment regarding any unvested Options and vested but unexercised Options. Clawback Options may lapse at the Board’s discretion based on adverse events that have occurred or where adverse material information becomes available after the Options have vested. If this adverse event occurred or adverse information becomes available after the Options have vested and shares or cash have been awarded following exercise, the Board may require participants to repay all or part of the value of the award. (d) 2021 Retention Plan In July 2021, the Board approved the introduction of a Retention Plan in the form of restricted shares for key critical employees. The 2021 Retention Plan was established to mitigate the risk identified because of the pending Demerger (of the Lotteries and Keno business). At that time there was significant uncertainty of the impact of the Demerger on employee roles, and there was a need to retain critical skills and knowledge to ensure the Demerger was successful and to set the new organisations up for future success. The plan is described in Tabcorp’s 2023 Remuneration Report and vested on 31 July 2023. Former MD & CEO, Adam Rytenskild, and former CFO, Daniel Renshaw, participated in the 2021 Retention Plan. (e) One-off equity award When recruiting new executives externally, it may be appropriate to provide a one-off equity award. During FY24, Mark Howell was granted 481,696 restricted Tabcorp shares to the value of $350,000 as a one-off grant in recognition of him giving up equity awards with his former employer to join Tabcorp. As this grant represents forfeited equity, it is not dependent on the satisfaction of a performance condition. Rather, the grant is subject to Mark’s continued employment with Tabcorp and will vest in two equal tranches on the first and second anniversary of his commencement with Tabcorp (being 24 April 2025 and 24 April 2026 respectively). 9. MINIMUM SHAREHOLDING POLICIES AND PROHIBITION ON HEDGING Under the Executive Shareholding Policy, the MD & CEO is required to hold the equivalent of 200% of the value of his annual fixed remuneration (TEC) in Tabcorp shares. The CFO is required to hold the equivalent of 100% of the value of his TEC in Tabcorp shares. The minimum shareholding must be achieved within five years from the executive KMP’s appointment or within five years from 1 June 2022 (whichever is later). Under the Non-Executive Director Shareholder Policy, Non-Executive Directors are required to hold a minimum shareholding in Tabcorp equivalent to the annual Board Member fee, and the Board Chairman is required to hold a minimum shareholding equivalent to two times the annual Board Member fee. The minimum shareholding must be achieved within three years of appointment or from 1 June 2022 (whichever is later). Copies of these policies are available on Tabcorp’s website (www.tabcorp.com.au) under the Corporate Governance section. At the date of this report, all Non-Executive Directors and executive KMP have complied with these policies as they have either achieved their minimum shareholding or are within the accumulation periods. Participants in incentive plans are restricted from hedging against those equity awards and must not enter 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 the terms and conditions of the incentive plans and Tabcorp’s Securities Trading Policy, available on Tabcorp’s website (www.tabcorp.com.au) under the Corporate Governance section. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 84 10. EXECUTIVE KMP EMPLOYMENT CONTRACTS (a) Executive KMP notice periods Remuneration and other terms of employment for the MD & CEO and the CFO are formalised in contracts that have no specified term. Under these contracts, the MD & CEO and the CFO are eligible to participate in STI and LTI plans. The notice periods in place are outlined below: Period of notice to terminate by the executive KMP (months) Period of notice to terminate by Tabcorp (months) MD & CEO 6 12 CFO 6 9 Where Tabcorp terminates the executive KMP’s employment, Tabcorp may, at its discretion, elect to pay the executive KMP an amount in lieu of notice for any portion of the relevant notice period not worked. Tabcorp may also terminate at any time without notice for serious misconduct. On cessation of employment, STI and LTI awards may remain on-foot, vest, lapse or be forfeited in accordance with the relevant plan rules and offer terms. (b) MD & CEO cessation and appointment of Executive Chairman On 14 March 2024, Tabcorp announced the resignation of Mr Rytenskild effective immediately and the appointment of Mr Akhurst as Executive Chairman until a permanent MD & CEO commences. In his role as Executive Chairman, Mr Akhurst receives an additional fee of $142,225 (including superannuation) per month to reflect his broader responsibilities. In determining this fee, the Board considered the additional responsibilities and time commitment required by Mr Akhurst upon his appointment, the remuneration package of the former MD & CEO, opportunities foregone by Mr Akhurst in order to perform the role, and that Mr Akhurst will not be eligible to participate in Tabcorp’s STI and LTI plans. With the commencement of the new MD & CEO, Mr Gillon McLachlan, on 5 August 2024 in an observer capacity (refer section (c) below), the Board determined, effective 1 September 2024, the additional fees paid to Mr Akhurst while he serves as Executive Chairman will reduce to $50,000 (including superannuation) per month. Under the terms of his appointment, Mr Akhurst will continue as Executive Chairman until all regulatory approvals have been received for Mr McLachlan and he is formally appointed MD & CEO. Mr Akhurst’s appointment may cease by either party providing four weeks’ notice. Once Mr Akhurst ceases as Executive Chairman, the Board intends to re-appoint Mr Akhurst as Tabcorp’s Non-Executive Chairman. (c) Terms of appointment of Mr Gillon McLachlan as MD & CEO Mr Gillon McLachlan commenced with Tabcorp on 5 August 2024 as an observer and will be formally appointed as MD & CEO following the receipt of all necessary regulatory approvals. He was not a KMP during FY24 and he was not paid any remuneration during FY24. As disclosed to the ASX on 17 June 2024, the following annual arrangements apply to Mr McLachlan under his employment contract in relation to the year ending 30 June 2025: • Fixed remuneration of $1.5m (inclusive of guaranteed superannuation contributions). • Variable (at risk) STI opportunity of 100% of fixed remuneration for on-target performance with the ability to earn up to 150% of fixed remuneration for stretch performance. • Variable (at risk) LTI opportunity of 100% of fixed remuneration for on-target performance with the ability to earn up to 200% of fixed remuneration for stretch performance. Tabcorp Annual Report 2024 85 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY • Mr McLachlan may resign at any time by giving Tabcorp six months notice. Tabcorp may terminate Mr McLachlan’s employment by giving 12 months notice, or in some circumstances such as serious misconduct, without notice. • Non-solicitation and non-compete restraints of up to 12 months after termination of employment apply. Further details of Mr McLachlan’s remuneration will be included in Tabcorp’s 2025 Remuneration Report. 11. NON-EXECUTIVE DIRECTORS (a) Probity Tabcorp directors and senior executives are required to undergo extensive probity investigations and obtain clearance by applicable gambling regulators and certain government ministers prior to their appointment. Due to its scale and national reach, Tabcorp is subject to the most extensive probity requirements of any wagering operator in Australia. These extensive checks increase the complexity of recruiting Directors and executives for a gambling company and can impact a suitable candidate from accepting a position or being eligible to accept a position with Tabcorp. (b) Fees The current maximum aggregate amount of fees that can be paid to Non-Executive Directors per year for their services (including superannuation contributions) is $3.0m, as approved by shareholders at the Annual General Meeting held on 17 October 2018. The total fees paid (including superannuation) to Non-Executive Directors in FY24 was $2,410,358 which included $509,257 as additional fees paid to Mr Akhurst while in the role of Executive Chairman, which is excluded from the maximum aggregate fees payable. Non-Executive Director fees are set based on workload, responsibilities, qualifications, experience, market benchmarks while considering the complex and highly regulated gambling industry which carries a higher degree of personal risk and exposure. Board and Board Committee fees are benchmarked with reference to a peer group, comprising the ASX 51-200 group of companies with an annual revenue overlay of $1.0 billion to $4.0 billion (refer to section 8(a) for further information). Non-Executive Directors do not receive any performance or incentive-related payments. Board fees are not paid to the MD & CEO or to executives for directorships of Tabcorp or any subsidiaries. Non-Executive Directors receive a Board fee and a fee for each Board Committee that they chair or are a member of. The Board Chairman receives a single fixed fee which is inclusive of services on all standing Board Committees. Superannuation contributions form part of the fees and Non-Executive Directors are not eligible to receive any other retirement benefits. All the mandated Superannuation Guarantee increases between 1 July 2022 (post the demerger of the Lotteries and Keno business) to 1 July 2024 (from 10.5% to 11.5%) have been absorbed into existing fees at the time of each increase, resulting in no increase in overall fees (inclusive of superannuation). Non-Executive Directors may, from time to time, receive additional fees for membership of other Board Sub-Committees, however during FY24 no such fees were paid. Non-Executive Directors are entitled to be reimbursed for all business- related expenses, including travel, which may be incurred as part of their duties. During FY24 the People and Remuneration Committee and the Board undertook its annual review of Non-Executive Director fees and resolved to reduce the annual fee for the Board Chairman from $493,300 to $400,000 (including superannuation) upon the formal commencement of a new MD & CEO and the re-appointed of Bruce Akhurst as Non-Executive Chairman. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 86 Current Non-Executive Director and Board Committee fees inclusive of superannuation (per annum) are set out below: Current fees Board Chair 493,300(i) Member 160,000 Audit Committee Chair 49,280 Member 21,680 Risk, Compliance and Sustainability Committee Chair 44,350 Member 19,700 People and Remuneration Committee Chair 44,350 Member 19,700 Technology Committee Chair 44,350 Member 19,700 Nomination Committee Chair 15,000(ii) Member 7,500 (i) The Board Chair annual fee will reduce to $400,000, effective from when Mr Akhurst is re-appointed as Non-Executive Chairman upon Mr McLachlan’s formal appointment as MD & CEO (upon the receipt of all necessary regulatory approvals). (ii) A fee for the Chair of the Nomination Committee was introduced effective 14 March 2024 when Ms Kendall was appointed to this role, which followed Mr Akhurst stepping down when he commenced as Executive Chairman. Tabcorp Annual Report 2024 87 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY 12. STATUTORY REMUNERATION DISCLOSURES (a) Executive KMP remuneration Short term Long term Post- employment Share-based allocations(v) Financial year Salary and fees $ Cash bonus(iv) $ Non- monetary benefits $ Accrued leave benefits $ Super- annuation $ Restricted Shares $ Options $ Termination benefits $ Total $ Performance related(vi) Current executive KMP Mark Howell(i) FY24 109,010 – – 9,041 5,451 49,219 – – 172,721 0% Former executive KMP Adam Rytenskild(ii) FY24 1,273,798 – – 42,948 25,116 (289,256) (473,684) 500,000 1,078,922 (71%) FY23 1,474,708 568,125 – 85 25,292 281,000 473,684 – 2,822,894 45% Daniel Renshaw(iii) FY24 431,734 – – 49,757 18,266 151,678 430,885 675,000 1,757,320 28% FY23 649,708 142,388 – (8,009) 25,292 255,557 159,868 – 1,224,804 28% Total FY24 1,814,542 – – 101,746 48,833 (88,359) (42,799) 1,175,000 3,008,963 FY23 2,124,416 710,513 – (7,924) 50,584 536,557 633,552 – 4,047,698 (i) Mark Howell commenced as an executive KMP on 24 April 2024 and remuneration disclosure is from that date. He was granted 481,696 restricted shares as a one-off grant in recognition of him giving up equity awards with his former employer to join Tabcorp. This grant represents a portion of the value of unvested equity forfeited by Mark on resignation from his former employer and so is not dependent on the satisfaction of a performance condition. The one-off grant is subject to Mark’s continued employment with Tabcorp and will vest in two equal tranches on the first and second anniversary of his commencement with Tabcorp. On the allocation date, being 1 May 2024, each share had a market value of $0.71. (ii) Adam Rytenskild ceased as MD & CEO on 14 March 2024 and departed Tabcorp on 13 May 2024. He was paid two months notice until 13 May 2024 which is included within salary and fees of $245,434 and his termination benefit represents his remaining four months notice period (including superannuation). (iii) Daniel Renshaw ceased as CFO on 31 August 2023 and departed Tabcorp on 29 February 2024. He was paid $323,801 during his six months notice period from 1 September 2023 to 29 February 2024 which is included within salary and fees and the termination benefit represents an ex-gratia payment of $675,000. (iv) Cash bonus reflects the cash portion of the STI achieved in the relevant financial year, being 50% for the MD & CEO and 75% for the former CFO. The remaining portion of the STI is deferred into restricted shares and is reflected in the restricted shares column in accordance with Australian Accounting Standards. (v) Represents the fair value of share-based payments expensed by Tabcorp. (vi) Represents the sum of the cash bonus (from STI awards), Restricted Shares (from STI) and LTI Options as a percentage of total remuneration. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 88 (b) Shares (including restricted shares) held by executive KMP as at 30 June 2024 (number) Balance at start of year Granted as remuneration during the year Received on exercise of Options during the year Other changes during the year Balance at end of year Current executive KMP Mark Howell(i) – 481,696 – – 481,696 Former executive KMP Adam Rytenskild(ii) 3,094,558 579,720 – (194,921) 3,479,357 Daniel Renshaw(iii) 665,144 48,431 – – 713,575 (i) Mark Howell commenced as a member of KMP on 24 April 2024. Accordingly, his ‘Balance at start of year’ represents his shareholding on that date. Mark was granted 481,696 restricted shares to the value of $350,000 (based on a 10-day VWAP of $0.7266) as a one-off grant in recognition of him giving up equity awards with his former employer to join Tabcorp. This grant represents a portion of the value of unvested equity forfeited by Mark on resignation from his former employer and so is not dependent on the satisfaction of a performance condition. The one-off grant is subject to Mark’s continued employment with Tabcorp and will vest in two equal tranches on the first and second anniversary of his commencement with Tabcorp. On the allocation date, being 1 May 2024, each share had a market value of $0.71. (ii) Adam Rytenskild ceased to be a member of KMP on 14 March 2024. Accordingly, his ‘Balance at end of year’ represents his shareholding on 14 March 2024. (iii) Daniel Renshaw ceased to be a member of KMP on 31 August 2023. Accordingly, his ‘Balance at end of year’ represents his shareholding on 31 August 2023. (c) Options granted in FY24 Eligible executive KMP received Options under the FY24 LTI Plan with a grant date of 25 October 2023 and an allocation date of 10 November 2023. Shareholder approval to grant the MD & CEO Options under the FY24 LTI Plan was received at the Tabcorp Annual General Meeting held on 25 October 2023 and obtained under ASX Listing Rule 10.14. The Options are subject to a performance measure of ROIC, as well as Tabcorp’s share price following vesting (which is built into the exercise price). The relevant values of the grant are as follows: Grant date Exercise price(i) Fair value at grant date(ii) Share price at grant date Scheduled vesting date(iii) 25 October 2023 $0.8923 $0.13 $0.815 August 2026 (i) Tabcorp VWAP over the period 11 October 2023 to 24 October 2023 as traded on the ASX. (ii) Calculated using a Black-Scholes pricing model. This value was used to determine the number of Options allocated to each participant. (iii) Vesting is subject to assessment of the applicable performance and vesting conditions. The following table shows the number of Options granted to executive KMP during FY24. Number of Options granted Fair value at grant date Current executive KMP(i) Former executive KMP Adam Rytenskild(ii) 23,076,923 $3,000,000 Daniel Renshaw(iii) 7,788,462 $1,012,500 (i) Mark Howell did not participate in the FY24 LTI plan given his start date of 24 April 2024. (ii) Adam Rytenskild ceased his role as MD & CEO and executive KMP on 14 March 2024 and departed Tabcorp on 13 May 2024. 100% of his LTI Options were forfeited upon his resignation. (iii) Daniel Renshaw ceased his role as CFO and executive KMP on 31 August 2023 and departed Tabcorp on 29 February 2024. His LTI Options remain on foot and will vest in accordance with the plan rules on a prorated basis for the portion of the Service Period he was employed. Based on a vesting date of 31 August 2026, Mr Renshaw will forfeit 6,147,370 Options due to his departure. Tabcorp Annual Report 2024 89 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY (d) Summary of executive KMP allocated, vested and lapsed equity Allocation date Grant date Vesting date(vi) Balance at start of year Granted during year as remun- eration Vested in FY24 % of total vested Lapsed/ forfeited during year % lapsed/ forfeited during year Balance at end of year Fair value of equity(vii) Options exercised during the year Current executive KMP Mark Howell(i) One-off restricted shares 1 May 2024 24 Apr 2024 24 Apr 2025 – 240,848 – – – – 240,848 $175,000 n/a One-off restricted shares 1 May 2024 24 Apr 2024 24 Apr 2026 – 240,848 – – – – 240,848 $175,000 n/a Total restricted shares – 481,696 – – – – 481,696 $350,000 n/a Former executive KMP Adam Rytenskild(ii) FY23 LTI Options 2 Nov 2022 26 Oct 2022 Aug 2025 15,000,000 – – – (15,000,000) 100% – $3,000,000 – FY24 LTI Options 10 Nov 2023 25 Oct 2023 Aug 2026 – 23,076,923 – – (23,076,923) 100% – $3,000,000 – Total LTI Options 15,000,000 23,076,923 – – (38,076,923) – – $6,000,000 – FY22 STI restricted shares 30 Aug 2022 26 Jul 2022 30 Aug 2024 166,134 – – – (166,134) 100% – $166,965 n/a 2021 Retention restricted shares 26 Aug 2021 16 Jul 2021 31 Jul 2023 94,433 – (94,433) 100% – – – $459,000 n/a FY23 STI restricted shares 29 Sep 2023 16 Aug 2023 29 Sep 2025 – 579,720 – – (579,720) 100% – $568,125 n/a Total restricted shares 260,567 579,720 (94,433) 100% (745,854) 100% – 1,194,090 n/a Daniel Renshaw(iii) FY23 LTI Options 2 Nov 2022 26 Oct 2022 Aug 2025 5,062,500 – – – (2,400,097) 47% 2,662,403 $1,012,500 – FY24 LTI Options 10 Nov 2023 25 Oct 2023 Aug 2026 – 7,788,462 – – (6,147,370) 79% 1,641,092 $1,012,500 – Total LTI Options 5,062,500 7,788,462 – – (8,547,467) 67% 4,303,495 $2,025,000 – FY22 STI restricted shares 30 Aug 2022 26 Jul 2022 30 Aug 2024 74,564 – – – – – 74,564 $74,938 n/a 2021 Retention restricted shares 26 Aug 2021 16 Jul 2021 31 Jul 2023 60,180 – (60,180) 100% – – – $292,512 n/a 2021 Retention restricted shares(iv) 30 Aug 2022 24 Aug 2021 31 Jul 2023 179,092 – (179,092) 100% – – – $179,988 n/a Additional restricted shares(v) 30 Aug 2022 24 Aug 2021 1 Jun 2024 248,756 – (248,756) 100% – – – $250,000 n/a FY23 STI restricted shares 29 Sep 2023 16 Aug 2023 29 Sep 2025 – 48,431 – – – – 48,431 $47,462 n/a Total restricted shares 562,592 48,431 (488,028) 100% – – 122,995 $844,900 n/a (i) Mark Howell commenced as an executive KMP on 24 April 2024 and was granted 481,696 restricted shares as a one-off grant. This grant represents a portion of the value of unvested equity forfeited by Mark on resignation from his former employer and so is not dependent on the satisfaction of a performance condition. The one-off grant is subject to Mark’s continued employment with Tabcorp and will vest in two equal tranches on the first and second anniversary of his commencement with Tabcorp. On the allocation date, 1 May 2024, each share had a market value of $0.71. (ii) Adam Rytenskild ceased his role as MD & CEO and executive KMP on 14 March 2024 and departed Tabcorp on 13 May 2024. 100% of his unvested LTI Options and STI restricted shares were forfeited upon his resignation. (iii) Daniel Renshaw ceased his role as CFO and executive KMP on 31 August 2023 and departed Tabcorp on 29 February 2024. His LTI Options remain on foot and will vest in accordance with the plan rules on a prorated basis for the portion of the Service Period he was employed. Based on vesting dates of 31 August 2025 and 31 August 2026, Mr Renshaw will forfeit 8,547,467 Options due to his departure. He retained his restricted shares which continue on foot and will vest at the end of the original restricted periods. (iv) On 30 August 2022, Daniel Renshaw was allocated additional Tabcorp shares under the 2021 Retention Plan which vested on 31 July 2023. (v) Daniel Renshaw was granted 248,756 Tabcorp shares upon Demerger in recognition of his role as CFO. The grant was restricted for two years and was subject to forfeiture, malus and clawback conditions in accordance with the offer terms and conditions. (vi) Vesting is subject to the applicable performance and/or vesting conditions. (vii) Fair value at grant date for Options and the dollar value used to determine the number of restricted shares to be granted. Represents the maximum value of the grants to each executive KMP for accounting purposes. REMUNERATION REPORT (AUDITED) CONTINUED Tabcorp Annual Report 2024 90 (e) Remuneration paid to Non-Executive Directors Year Short term fees $ Non-monetary benefits $ Post-employment superannuation(iii) $ Total $ Bruce Akhurst(i)(ii) FY24 972,192 – 44,252 1,016,444 FY23 468,145 – 49,155 517,300 Brett Chenoweth FY24 224,125 – 24,654 248,779 FY23 198,238 – 20,815 219,053 David Gallop FY24 208,604 – 22,946 231,550 FY23 209,548 – 22,002 231,550 Janette Kendall FY24 207,939 – 22,873 230,812 FY23 206,860 – 21,720 228,580 Justin Milne FY24 233,481 – 25,612 259,093 FY23 231,249 – 24,281 255,530 Raelene Murphy FY24 213,045 – 23,435 236,480 FY23 211,928 – 22,252 234,180 Karen Stocks FY24 168,649 – 18,551 187,200 FY23 169,412 – 17,788 187,200 Total FY24 2,228,035 – 182,323 2,410,358 FY23 1,695,380 – 178,013 1,873,393 (i) Bruce Akhurst ceased in the role of Chairman of the Victorian Joint Venture Management Committee on 29 February 2024. In FY24, he received a fee of $16,000 (FY23: $24,000) (including superannuation) while acting in the role. This fee was borne by the Joint Venture, which was jointly controlled by Tabcorp. (ii) Following his appointment as Executive Chairman on 14 March 2024, Mr Akhurst received an additional fee of $142,255 (including superannuation) per month. With the commencement of the new MD & CEO, Mr Gillon McLachlan, on 5 August 2024 in an observer capacity, the Board determined, effective 1 September 2024, the additional fees paid to Mr Akhurst while he serves as Executive Chairman will reduce to $50,000 (including superannuation) per month. (iii) Contributions made to satisfy Tabcorp’s obligation under applicable superannuation guarantee legislation. Excludes Australian Taxation Office approved exemptions. (f) Shares held by Non-Executive Directors as at 30 June 2024 Balance at start of year Changes during the year Balance at end of year Bruce Akhurst 1,200,000 200,000 1,400,000 Brett Chenoweth 86,538 114,285 200,823 David Gallop 88,808 67,552 156,360 Janette Kendall 92,243 87,387 179,630 Justin Milne 300,846 50,000 350,846 Raelene Murphy 70,000 125,000 195,000 Karen Stocks 59,026 23,000 82,026 (g) Transactions and loans with KMP No KMP (including their related parties) have entered a material commercial relationship or transaction with the Company or a subsidiary during FY24 other than as disclosed in this Remuneration Report. All KMP related party relationships are at arm’s length and on commercial terms and none of the KMP were or are involved in any procurement or other decision-making regarding organisations with which they have an association. No KMP (including their related parties) have entered a loan (guaranteed or secured), directly or indirectly, by the Company or a subsidiary during the reporting period. Tabcorp Annual Report 2024 91 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY FINANCIAL REPORT Contents Income statement 93 Balance sheet 94 Cash flow statement 95 Statement of changes in equity 96 Notes to the financial statements 97 About this report 97 Section A – Group performance 99 Section B – Capital and risk management 106 Section C – Operating assets and liabilities 115 Section D – Group structure 126 Section E – Other disclosures 133 Consolidated entity disclosure statement 140 Directors’ declaration 141 Independent auditor’s report 142 Tabcorp Annual Report 2024 92 INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2024 Note 2024 $m 2023 $m Continuing operations Revenue A4 2,338.9 2,434.4 Other income A4 18.4 91.0 Commissions and fees (1,097.2) (1,118.4) Government taxes and levies (358.1) (333.3) Employment costs (332.8) (314.5) Communications and technology costs (126.6) (125.2) Advertising and promotions (111.5) (98.3) Other expenses A4 (161.3) (128.3) Depreciation and amortisation (220.3) (240.5) Impairment – goodwill C3 (746.0) – Impairment – other C3 (785.6) (49.0) (Loss)/profit before income tax, net finance costs and equity accounted investment (1,582.1) 117.9 Loss from equity accounted investment D4 (3.2) (2.7) Finance income 17.3 4.6 Finance costs A4 (51.8) (37.1) (Loss)/profit from continuing operations before income tax (1,619.8) 82.7 Income tax benefit/(expense) A5 260.1 (16.2) (Loss)/profit from continuing operations after income tax (1,359.7) 66.5 Discontinued operations Profit from discontinued operations after tax D5 – – Net (loss)/profit after tax (1,359.7) 66.5 Other comprehensive income Items that may be reclassified to profit or loss Change in fair value of cash flow hedges taken to equity (12.6) (6.9) Exchange differences on translation of foreign operations 0.6 7.9 Income tax relating to these items 3.8 2.1 Items that will not be reclassified to profit or loss Actuarial gains on retirement benefit obligation E2 0.1 – Income tax relating to these items – – Other comprehensive income for the year, net of income tax (8.1) 3.1 Total comprehensive income for the year (1,367.8) 69.6 2024 cents 2023 cents (Loss)/earnings per share: From continuing operations Basic (loss)/earnings per share A2 (59.6) 2.9 Diluted (loss)/earnings per share A2 (59.6) 2.9 Total attributable to shareholders of Tabcorp Basic (loss)/earnings per share A2 (59.6) 2.9 Diluted (loss)/earnings per share A2 (59.6) 2.9 Dividends per share: Declared and paid during the year A3 2.0 7.8 Determined in respect of the year A3 1.3 2.3 The accompanying notes form an integral part of this income statement. Tabcorp Annual Report 2024 93 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY Note 2024 $m 2023 $m Current assets Cash and cash equivalents C6 313.7 290.7 Receivables C7 160.9 165.8 Prepayments 70.3 51.0 Current tax assets 13.0 10.8 Derivative financial instruments B3 0.8 0.8 Assets held for sale E7 – 22.9 Other 12.4 9.8 Total current assets 571.1 551.8 Non current assets Receivables C7 3.7 6.8 Investment in associates D4 30.1 30.6 Licences C1 1,151.9 640.6 Other intangible assets C2 1,390.5 2,503.6 Property, plant and equipment C4 142.2 172.0 Right-of-use assets C5 41.8 99.7 Deferred tax assets A5 11.4 – Prepayments 31.0 33.6 Derivative financial instruments B3 0.8 4.2 Other 10.8 9.5 Total non current assets 2,814.2 3,500.6 TOTAL ASSETS 3,385.3 4,052.4 Current liabilities Payables C8 554.9 571.0 Lease liabilities C5 31.4 37.2 Provisions C10 58.7 40.0 Derivative financial instruments B3 18.0 16.4 Liabilities directly associated with assets held for sale E7 – 1.9 Other 3.6 0.8 Total current liabilities 666.6 667.3 Non current liabilities Interest bearing liabilities B2 1,032.6 431.9 Other financial liabilities C9 341.2 – Lease liabilities C5 80.4 103.3 Deferred tax liabilities A5 – 180.1 Derivative financial instruments B3 5.2 – Provisions C10 11.8 10.1 Other 0.6 0.6 Total non current liabilities 1,471.8 726.0 TOTAL LIABILITIES 2,138.4 1,393.3 NET ASSETS 1,246.9 2,659.1 Equity Issued capital 1,688.5 1,687.1 (Accumulated losses)/Retained earnings (438.8) 966.4 Reserves (2.8) 5.6 TOTAL EQUITY 1,246.9 2,659.1 The accompanying notes form an integral part of this balance sheet. BALANCE SHEET AS AT 30 JUNE 2024 Tabcorp Annual Report 2024 94 CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2024 Note 2024 $m 2023 $m Cash flows from operating activities Net cash receipts in the course of operations 2,406.1 2,526.4 Payments to suppliers, service providers and employees (2,014.5) (2,092.9) Payment of government levies, betting taxes and GST (233.4) (260.5) Finance income received 22.7 4.6 Finance costs paid (49.0) (28.1) Income tax received/(paid) 113.3 (30.2) Net cash flows from operating activities C6 245.2 119.3 Cash flows from investing activities Payment for licences (600.0) (2.0) Payment for property, plant and equipment and other intangibles (160.4) (194.9) Proceeds from sale of property, plant and equipment and other intangibles 1.4 41.2 Net proceeds from business divestment E7 21.0 59.0 Payment for acquisition of shares in associates D4 (2.8) (33.3) Proceeds from sale of other non current assets 1.1 – Net cash flows used in investing activities (739.7) (130.0) Cash flows from financing activities Proceeds from revolving bank facilities 710.0 610.0 Repayments of revolving bank facilities (110.0) (750.0) Proceeds from borrowings – 424.9 Payment of demerger transaction costs – (12.5) Payment of lease liabilities (36.5) (45.0) Dividends paid (43.8) (122.9) Payments for on-market share purchase (2.2) (2.5) Net cash flows from financing activities 517.5 102.0 Net increase in cash held 23.0 91.3 Cash at beginning of year 290.7 199.4 Cash at end of year C6 313.7 290.7 The accompanying notes form an integral part of this cash flow statement. The cash flow statement for the year ended 30 June 2024 includes the cash flows related to discontinued operations of The Lottery Corporation. Refer to note D5. Tabcorp Annual Report 2024 95 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY Issued capital Reserves Number of ordinary shares m Ordinary shares $m Treasury shares $m (Accumulated losses)/ Retained earnings $m Hedging $m Other $m Total equity $m 2024 Balance at beginning of year 2,281.5 1,687.9 (0.8) 966.4 (3.2) 8.8 2,659.1 Loss for the year – – – (1,359.7) – – (1,359.7) Other comprehensive income – – – 0.1 (8.8) 0.6 (8.1) Total comprehensive income – – – (1,359.6) (8.8) 0.6 (1,367.8) Dividends paid – – – (45.6) – – (45.6) Dividend reinvestment plan 2.1 1.8 – – – – 1.8 Share based payments expense – – 1.8 – – (0.2) 1.6 Net outlay to purchase shares – – (2.2) – – – (2.2) Balance at end of year 2,283.6 1,689.7 (1.2) (438.8) (12.0) 9.2 1,246.9 Total issued capital $1,688.5m Total reserves $(2.8)m 2023 Balance at beginning of year 2,225.7 1,636.5 (0.6) 1,074.2 1.6 (0.6) 2,711.1 Profit for the year – – – 66.5 – – 66.5 Other comprehensive income – – – – (4.8) 7.9 3.1 Total comprehensive income – – – 66.5 (4.8) 7.9 69.6 Dividends paid – – – (174.3) – – (174.3) Dividend reinvestment plan 55.8 51.4 – – – – 51.4 Share based payments expense – – 2.3 – – 1.5 3.8 Net outlay to purchase shares – – (2.5) – – – (2.5) Balance at end of year 2,281.5 1,687.9 (0.8) 966.4 (3.2) 8.8 2,659.1 Total issued capital $1,687.1m Total reserves $5.6m Issued capital Ordinary shares are issued and fully paid. They carry one vote per share and hold rights to dividends. Issued capital is recognised at the fair value of the consideration received. When issued capital is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from total issued capital. Any transaction costs directly attributable to the issue of ordinary shares are recognised directly in equity, net of tax, as a reduction of the share proceeds received. Treasury shares represent the unvested portion of Restricted Shares issued to executives as an incentive, on appointment or for retention, which is recognised as a reduction in issued capital. The amount which has been credited to the employee equity benefit reserve is transferred to issued capital to the extent the relevant Options vest or have been treated as vested. Nature of reserves Hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges. Other reserves contain the employee equity benefit reserve and the foreign currency translation reserve. The accompanying notes form an integral part of this statement of changes in equity. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024 Tabcorp Annual Report 2024 96 ABOUT THIS REPORT Tabcorp Holdings Limited (the Company) is a company limited by shares which are traded on the Australian Securities Exchange. The Company is incorporated and domiciled in Australia, and is a for-profit entity. The Financial Report of the Company for the year ended 30 June 2024 comprises the Company and its subsidiaries (the Group) and the Group’s interest in joint arrangements and associates. The Financial Report was authorised for issue by the Board of Directors on 28 August 2024. The Financial Report is a general purpose financial report which: • has been prepared in accordance with the Corporations Act 2001 (Cth), Australian Accounting Standards as issued by the Australian Accounting Standards Board and other mandatory financial reporting requirements in Australia; • complies with International Financial Reporting Standards as issued by the International Accounting Standards Board; • is presented in Australian dollars with dollar amounts rounded to the nearest hundred thousand unless specifically stated to be otherwise, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191; • is prepared on the historical cost basis, except for derivative financial instruments and equity instruments that have been measured at fair value; and • contains certain comparative information in the financial statements that have been reclassified to conform to the current year presentation and classification. The material accounting policy information has been applied consistently throughout the Group for the purposes of this Financial Report. Significant changes in state of affairs On 18 December 2023, Tabcorp announced it had been awarded a new exclusive Victorian Wagering and Betting Licence (New Licence) by the Victorian Government. The New Licence is for a period of 20 years which commenced on 16 August 2024, with licence premium payments comprising of upfront payment of $600.0m paid in June 2024 and $30.0m per annum ongoing fixed payments from August 2025-2043. A Licence asset was recognised for $886.9m in June 2024 (refer note C1). The changes under the New Licence include the cessation of the joint venture arrangement with the Victorian Racing Industry (VRI) and the termination of the industry funding obligations. As part of the transitional arrangements, funding support was agreed with the VRI in the form of fixed distributions until the end of the previous licence and paying the VRI $15.0m of additional funding for each of the first three years of the new licence (refer to note C9). Indicators of impairment were identified by the Group in respect of the Wagering business at 31 December 2023. Additional indicators of impairment to those identified at 31 December 2023 in the Group’s Wagering business were identified in the 30 June 2024 assessment (refer note C3). As a result total impairment charges for the full year ended 30 June 2024 of $1,531.6m have been recorded. Net current asset deficiency The Group’s balance sheet reflects a net current asset deficiency. This largely arises due to customer account balances being classified as current liabilities under Australian Accounting Standards as the Group does not have an unconditional right to defer payment beyond 12 months, notwithstanding these are recurring in nature and not expected to be fully settled within the next 12 months. The Group maintains sufficient undrawn facilities to meet working capital requirements, including settlement of customer account balances as required. In order to minimise finance costs, excess cash is used to reduce non current interest bearing liabilities until the current liabilities become due. Changes in comparative presentation During the current year, the Group made a classification adjustment such that broadcast rights fees previously presented as other expenses are now presented as commissions and fees. The change was made to provide the users of the financial statements more relevant and reliable information. The prior year presentation was reclassified to align with the current year. The net impact of this reclassification adjustment on the Group’s net profit after tax is nil. 2023 $m Impact on income statement Expenses – increase/(decrease) Commissions and fees 40.1 Other expenses (40.1) Net impact on profit for the year – NOTES TO THE FINANCIAL STATEMENTS: ABOUT THIS REPORT FOR THE YEAR ENDED 30 JUNE 2024 Tabcorp Annual Report 2024 97 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: ABOUT THIS REPORT FOR THE YEAR ENDED 30 JUNE 2024 Note disclosures have been grouped into five sections. The notes within each section detail the accounting policies applied, together with any key judgements and estimates used. The purpose of this format is to provide users with a clear understanding of the key drivers of the Group’s financial performance and financial position. A Group performance B Capital and risk management C Operating assets and liabilities A1 Segment information 99 B1 Capital management 106 C1 Licences 115 A2 Earnings per share 101 B2 Interest bearing liabilities 106 C2 Other intangible assets 116 A3 Dividends 101 B3 Derivative financial instruments 108 C3 Impairment testing 117 A4 Revenue and expenses 102 B4 Fair value measurement 110 C4 Property, plant and equipment 120 A5 Income tax 104 B5 Financial instruments – risk management 111 C5 Leases 121 A6 Subsequent events 105 C6 Notes to the cash flow statement 123 C7 Receivables 124 C8 Payables 124 C9 Other financial liabilities 124 C10 Provisions 125 D Group structure E Other disclosures D1 Subsidiaries 126 E1 Employee share plans 133 D2 Deed of cross guarantee 128 E2 Pensions and other post employment benefit plans 135 D3 Parent entity disclosures 130 E3 Commitments 136 D4 Investment in associates 131 E4 Contingencies 137 D5 Discontinued operations 132 E5 Related party disclosures 137 E6 Auditor's remuneration 137 E7 Assets held for sale 138 E8 Other material accounting policy information 138 Significant accounting estimates and assumptions The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of these assets and liabilities recognised in the financial statements are described in the following notes: Note Underlying estimates and assumptions A5 – Income tax Calculation of provision for income tax. B3 – Derivative financial instruments Fair value measurement. C1 – Licences Asset useful lives, recognition and capitalisation of costs. C2 – Other intangible assets C3 – Impairment testing Recoverable amount of cash generating units (CGUs) and segments. C4 – Property, plant and equipment Asset useful lives. C5 – Leases Lease term, make good and incremental borrowing rate. C10 – Provisions Present obligations and probability weighted estimate of outflow. E4 – Contingencies Assessment of possible obligation and probability of outflow. Tabcorp Annual Report 2024 98 SECTION A – GROUP PERFORMANCE A1 Segment information Operating segments reflect the business level at which financial information is provided to the Chief Operating Decision Maker, 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. The Group has two operating segments at year end and throughout the year. NOTES TO THE FINANCIAL STATEMENTS: GROUP PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2024 Tabcorp Group Wagering and Media Provision of totalisator and fixed odds betting and retail wagering networks, and global racing media business Gaming Services Gaming machine monitoring operations in New South Wales, Queensland, Tasmania and the Northern Territory and venue services nationwide Segment revenue $m 2024 2023 2,230.8 Wagering and Media 203.6 2,162.8 176.1 Segment profit before interest and tax $m 2024 2023 116.2 34.4 70.3 27.1 Gaming Services Tabcorp Annual Report 2024 99 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2024 Wagering and Media $m Gaming Services $m Total $m 2024 Segment revenue 2,162.8 176.1 2,338.9 Segment profit before interest and tax 70.3 27.1 97.4 Depreciation and amortisation 180.9 39.4 220.3 Capital expenditure(i) 125.3 25.5 150.8 2023 Segment revenue 2,230.8 203.6 2,434.4 Segment profit before interest and tax 116.2 34.4 150.6 Depreciation and amortisation 191.8 48.7 240.5 Capital expenditure(i) 116.5 38.9 155.4 (i) Capital expenditure excludes the acquisition of licences, unallocated items, make good provisions raised during the year and additions to right-of-use assets. A reconciliation of segment result to the Group’s income statement is as follows: Revenue(i) (Loss)/profit from continuing operations before income tax Depreciation and amortisation Impairment 2024 $m 2023 $m 2024 $m 2023 $m 2024 $m 2023 $m 2024 $m 2023 $m Segment total (per above) 2,338.9 2,434.4 97.4 150.6 220.3 240.5 – – Unallocated items: – significant items: – net gain on disposal of assets – – – 6.5 – – – – – onerous contract remeasurement – – – 6.5 – – – – – net gain on sale of eBET business(ii) – – – 34.2 – – – – – loss on TGS business divestment(ii) – – (7.5) – – – – – – asset write-off – – – (1.6) – – – – – demerger costs(iii) – – (17.7) (8.9) – – – – – transformation costs(iv) – – (65.3) (20.3) – – – – – costs associated with new Victorian Wagering and Betting Licence(v) – – (57.4) – – – – – – impairment – goodwill(vi) – – (746.0) – – – 746.0 – – impairment – other(vi) – – (785.6) (49.0) – – 785.6 49.0 – – (1,679.5) (32.6) – – 1,531.6 49.0 – loss from equity accounted investment – – (3.2) (2.7) – – – – – finance income – – 17.3 4.6 – – – – – finance costs(vii) – – (51.8) (37.1) – – – – – other – – – (0.1) – – – – Total per income statement 2,338.9 2,434.4 (1,619.8) 82.7 220.3 240.5 1,531.6 49.0 (i) Total revenue includes revenue from foreign operations of $244.4m (2023: $278.6m). (ii) Refer to note E7. (iii) Costs incurred to separate Tabcorp and The Lottery Corporation into two standalone companies. (iv) Includes establishment and implementation costs of the transformation program and cost reduction program under TAB25 strategy. (v) Includes associated costs to procure the New Licence and perform preparatory activities and provide funding support to the VRI. (vi) Write down of goodwill relating to Wagering and Media segment ($746.0m) (refer to note C2) and write down of certain operating assets relating to New South Wales, South Australia and Other cash generating units ($785.6m) (refer to note A4) following impairment assessments at 31 December 2023 and 30 June 2024 (refer to note C3). Prior year comprises write down of other intangible assets, property plant and equipment and other assets (refer to note C3). (vii) Current year includes interest received from continuing operations from ATO dispute settlement of $7.7m (refer to note A5). The portion relating to The Lottery Corporation has been presented as discontinued operations (refer to note D5). Tabcorp Annual Report 2024 100 A2 Earnings per share 2024 $m 2023 $m (Loss)/profit used in calculation of (loss)/earnings per share (EPS) from continuing operations (1,359.7) 66.5 2024 Number (m) 2023 Number (m) Weighted average number of ordinary shares used in calculating basic EPS 2,282.6 2,267.7 Effect of dilution from Options – – Weighted average number of ordinary shares used in calculating diluted EPS 2,282.6 2,267.7 Basic EPS is calculated as net profit after tax divided by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated on the same basis as basic EPS except that it reflects the impact of any potential commitments the Group has to issue shares in the future, for example shares to be issued upon vesting of Options. There are no dilutive Options at 30 June 2024 (2023: nil). A3 Dividends 2024 cents per share 2023 cents per share 2024 $m 2023 $m Fully franked dividends declared and paid during the year: Prior year final dividend 1.0 6.5 22.8 144.7 Interim dividend 1.0 1.3 22.8 29.6 2.0 7.8 45.6 174.3 Dividends determined in respect of the year: Interim dividend – Fully franked (2023: Fully franked) 1.0 1.3 22.8 29.6 Final dividend – Unfranked (2023: Fully franked) (declared and recognised after balance date) 0.3 1.0 6.9 22.8 1.3 2.3 29.7 52.4 Franking credits balance Franking credits available at balance date 12.1 145.5 Impact of estimated current tax refundable (13.6) (25.9) Franking credits available at the 30% company tax rate after allowing for tax payable or receivable (1.5) 119.6 Tabcorp Annual Report 2024 101 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2024 A4 Revenue and expenses (a) Disaggregated revenue information: Set out below is the disaggregation of the Group’s revenue from contract with customers: Wagering $m Media $m Gaming Services $m Total $m 2024 Revenue from contracts with customers 892.3 206.7 176.1 1,275.1 Other revenue(i) 1,063.8 – – 1,063.8 1,956.1 206.7 176.1 2,338.9 2023 Revenue from contracts with customers 984.8 220.4 203.6 1,408.8 Other revenue(i) 1,025.6 – – 1,025.6 2,010.4 220.4 203.6 2,434.4 2024 $m 2023 $m Timing of revenue recognition Goods and services transferred at a point in time 2,225.1 2,298.5 Goods and services transferred over time 113.8 135.9 2,338.9 2,434.4 (b) Other income/(loss) Loss on sale of TGS business(ii) (3.1) – Net gain on sale of eBET business(ii) – 34.2 Net gain/(loss) on disposal of assets 0.9 10.3 Transitional Services Agreement (TSA) income(iii) 16.4 30.6 Other(iv) 4.2 15.9 18.4 91.0 (c) Employment costs include: Defined contribution plan expense 27.5 25.5 (d) Finance costs Interest costs on external borrowing facilities 35.7 23.0 Commitment fees on external borrowing facilities 7.0 5.5 Interest costs on lease liabilities 4.8 5.4 Finance costs on external borrowings and lease liabilities(v) 47.5 33.9 Interest expenses on payables(vi) 1.6 1.4 Net gain on fair value of cash flow hedges – 0.2 Other(vii) 2.7 1.6 Total finance costs 51.8 37.1 Tabcorp Annual Report 2024 102 2024 $m 2023 $m (e) Impairment – other(viii) Licences 322.5 – Other intangible assets 379.1 13.1 Property, plant and equipment 33.3 26.9 Right-of-use assets 50.7 – Other assets – 9.0 785.6 49.0 (f) Other expenses(ix) 161.3 128.3 (i) Includes fixed odds betting revenue, refer accounting policy below. (ii) Refer to note E7. (iii) TSA income relates to the provision of services to The Lottery Corporation in the transition period following its demerger and is accounted for on gross basis. The technology separation costs in relation to the demerger are accounted for on a net basis. (iv) Prior year includes insurance recoveries of $11.0m. (v) Subtotal represents interest costs and commitment fees paid and payable including interest costs on lease liabilities. (vi) Interest expenses on payables represents the notional current year effective interest charge arising on the difference between the present value and the actual value of a future payment. This includes the difference associated with scheduled licence payments. (vii) Other includes amortisation of prepaid establishment fees and the notional effective finance charge on differences between present value and future value of non financial liabilities. (viii) In addition to these amounts current year includes a deferred tax benefit of $155.2m recognised following the impairment charge recognised during the year. Refer to note A5. (ix) Other expenses has increased due to the ongoing expenditure under the transformation program and ongoing separation from The Lottery Corporation. Refer to note A1. Revenue from contracts with customers is recognised when control of the goods or services is transferred to customers at an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. Incremental costs of obtaining contracts with a duration of one year or less are expensed as incurred. The following specific criteria must also be met before revenue is recognised: Wagering revenue is recognised as the residual value after deducting the return to customers from wagering turnover. Fixed odds betting revenue is classified as other revenue and recognised as the net win or loss on an event. The amounts bet on an event are recognised as a liability until the outcome of the event is determined, at which time the revenue is brought to account. Open fixed odds betting positions are carried at fair value and gains and losses arising on these positions are recognised in revenue. Media revenue includes subscription income and advertising revenue, and is recognised once the service has been rendered. Subscriptions received relating to future periods are treated as deferred revenue. Gaming services revenue is recognised once the service has been rendered or the goods have been delivered to the buyer. Contributions to defined contribution plans are recognised in the income statement as they become payable. Finance income is recognised using the effective interest rate method. Finance costs are recognised as an expense using the effective interest rate method. Tabcorp Annual Report 2024 103 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2024 A5 Income tax (a) The major components of income tax benefit/(expense) from continuing operations are: 2024 $m 2023 $m Current tax (1.3) (20.8) Adjustments in respect of current income tax of previous years(i) 36.7 7.3 Tax settlement(ii) 44.2 – Deferred tax 180.5 (2.7) 260.1 (16.2) Income tax reconciliation: (Loss)/profit from continuing operations before income tax (1,619.8) 82.7 Income tax receivable/(payable) at the 30% company tax rate 485.9 (24.8) Tax effect of adjustments in calculating taxable income: – divestment of disposal group (1.0) 12.2 – amortisation of licences (10.5) (10.5) – impairment of goodwill(iii) (223.8) – – impairment of assets (excluding goodwill)(iii) (80.4) – – tax settlement(ii) 44.2 – – research and development claims 4.1 3.4 – amounts under/(over) provided in prior years(i) 42.2 3.2 – other (0.6) 0.3 Income tax benefit/(expense) 260.1 (16.2) (i) Includes the Racing Queensland settlement previously accounted for as non-deductible. The $45.0m tax effect was previously disclosed as a permanent difference in calculating taxable income (refer to the annual report for the year ended 30 June 2022). (ii) In September 2023, Tabcorp received $94.5m refund representing disputed tax liabilities and interest from ATO in relation to the resolved dispute on income tax treatment of payments for various licences and authorities. The portion relating to Tabcorp’s continuing operations in the tax settlement represents $44.2m for disputed tax liabilities and $7.7m interest, recognised as adjustment to income tax benefit and finance income, respectively. The portion relating to The Lottery Corporation in the tax settlement has been presented as discontinued operations (refer to note D5). As at 30 June 2023, the Company had disclosed a contingent asset in connection to one matter incorporated in the overall claim. (iii) Relates to the non deductible portion arising on the decrease in net asset values from the impairment assessments at 31 December 2023 and 30 June 2024 (refer to note C3). (b) Deferred tax assets/(liabilities) Balance at 1 July 2023 $m Recognised in income statement $m Recognised directly in equity $m Recognised through disposal groups sold and held for sale $m Balance at 30 June 2024 $m Licences (217.8) 105.4 – – (112.4) Right-of-use assets (33.7) 18.6 – – (15.1) Other intangible assets 1.2 25.5 – 2.2 28.9 Research and development (9.0) (0.4) – (0.3) (9.7) Unclaimed dividends (7.0) – – – (7.0) Lease liabilities 39.4 (7.4) – – 32.0 Provisions 21.7 (1.4) – 0.3 20.6 Property, plant and equipment 12.6 3.2 – 4.4 20.2 Other 2.6 (0.6) – 0.6 2.6 Accrued expenses 8.4 (3.0) – – 5.4 Fair value of cash flow hedges 1.5 – 3.8 – 5.3 Carried forward losses – 40.6 – – 40.6 Net deferred tax assets/(liabilities) (180.1) 180.5 3.8 7.2 11.4 Tabcorp Annual Report 2024 104 Balance at 1 July 2022 $m Recognised in income statement $m Recognised directly in equity $m Recognised through disposal groups sold and held for sale $m Balance at 30 June 2023 $m Licences (225.4) 6.6 – 1.0 (217.8) Right-of-use assets (43.8) 10.1 – – (33.7) Other intangible assets 5.7 (4.4) – (0.1) 1.2 Research and development (8.7) (0.3) – – (9.0) Unclaimed dividends (5.0) (2.0) – – (7.0) Lease liabilities 50.9 (11.5) – – 39.4 Provisions 27.0 (5.3) – – 21.7 Property, plant and equipment 7.2 6.6 – (1.2) 12.6 Other (1.2) 3.6 0.4 (0.2) 2.6 Accrued expenses 14.5 (6.1) – – 8.4 Fair value of cash flow hedges (0.7) – 2.2 – 1.5 Net deferred tax assets/(liabilities) (179.5) (2.7) 2.6 (0.5) (180.1) Income tax comprises current and deferred income tax. Income tax is recognised in the income statement except when it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the period and any adjustment to tax payable in respect of previous years. Deferred tax is calculated using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for accounting purposes and the amounts used for tax purposes. The temporary differences for goodwill and the initial recognition of an asset or liability in a transaction which is not a business combination and that affect neither accounting nor taxable profit at the time of the transaction are not provided for. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. The income tax expense and deferred tax balances assume certain tax outcomes in relation to the application of tax legislation as it applies to the Group. An uncertain tax treatment occurs where there is uncertainty over whether a tax authority will accept a tax treatment adopted by the Group under tax law. The Group revisits the accounting in relation to an uncertain tax treatment when there are changes in relevant facts and circumstances (refer to note E4). A6 Subsequent events On 22 August 2024, the Victorian Gambling and Casino Control Commission (VGCCC) issued Tabcorp Wagering (Vic) Pty Ltd a financial penalty of $4.6m for breaches occurring between August 2020 and February 2023 of its Responsible Gambling Code and the relevant Harm Minimisation Direction issued by VGCCC. A provision for this matter has been recognised within Other Provisions in note C10 (Provisions) of the Financial Report. Other than the events disclosed elsewhere in this report, no additional 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. Tabcorp Annual Report 2024 105 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: CAPITAL AND RISK MANAGEMENT FOR THE YEAR ENDED 30 JUNE 2024 SECTION B – CAPITAL AND RISK MANAGEMENT B1 Capital management The Group’s objectives when managing capital are to ensure the Group continues as a going concern while providing optimal returns to shareholders and benefits for other stakeholders, and to maintain an appropriate capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or enter into new borrowing arrangements. Gearing is managed primarily through the ratio of net debt to earnings before interest, tax, depreciation, amortisation and impairment (EBITDA). Net debt is gross debt including lease liabilities, bank guarantees and mark to market cross currency interest rate swaps, less cash. At 30 June the Group’s gearing ratio was: 2024 $m 2023 $m Net debt(i) 860.3 295.0 EBITDA (before significant items)(ii) 317.7 391.0 Gearing ratio 2.7 0.8 (i) Net debt includes US private placement debt at the Australian dollar principal repayable under cross currency swaps. The comparative information reflects the current year definition. Previously, in the prior year, the reported net debt was calculated on the basis of gross debt (including lease liabilities) less cash (excluded restricted cash). (ii) EBITDA represents continuing operations (before significant items). Refer to note A1. B2 Interest bearing liabilities The Group borrows money from financial institutions and debt investors in the form of bank loans and foreign currency denominated notes. At 30 June 2024, the Group has undrawn facilities of $380.0m (2023: $950.0m). The following table details the debt facilities of the Group at 30 June: Facility Details Facility limit $m Maturity 2024 $m 2023 $m Bank loans – unsecured Floating interest rate revolving facility. Subject to financial undertakings as to gearing and interest cover. 550.0 Jul-27 550.0 – 430.0(i) Jul-29(i) 50.0 – 600.0 – US private placement Fixed interest rate US dollar debt. At 30 June 2024 aggregate US dollar principal of $289.0m. Cross currency swaps are in place for all US dollar debt. Under these swaps the aggregate Australian dollar amount payable at maturity is $424.9m. Subject to financial undertakings as to gearing and interest cover. USD 169.0 USD 120.0 Mar-30 Mar-33 253.0 179.6 252.6 179.3 432.6(ii) 431.9(ii) 1,032.6 431.9 Current – – Non current 1,032.6 431.9 1,032.6 431.9 (i) Revolving facility was extended during the current year (original facility limit and maturity date was $400.0m and July 2025, respectively). (ii) The value comprises the drawn down value of $436.3m (2023: $435.9m) less borrowing costs of $3.7m (2023: $4.0m). Tabcorp Annual Report 2024 106 B2.1 Changes in liabilities arising from financing activities: Balance at 30 June 2023 $m Cash flows $m Foreign exchange movement $m Changes in fair values $m Lease additions $m Other(i) $m Balance at 30 June 2024 $m Interest bearing liabilities Non current 431.9 600.0 0.4 – – 0.3 1,032.6 Cross currency swaps Non current assets (2.4) – – 2.4 – – – Non current liabilities – – – 8.8 – – 8.8 Lease liabilities Current 37.2 (36.5) – – 0.7 30.0 31.4 Non current 103.3 – – – 4.3 (27.2) 80.4 570.0 563.5 0.4 11.2 5.0 3.1 1,153.2 Balance at 30 June 2022 $m Cash flows $m Foreign exchange movement $m Changes in fair values $m Lease additions $m Other(i) $m Balance at 30 June 2023 $m Interest bearing liabilities Non current 135.3 280.9 11.0 – – 4.7 431.9 Cross currency swaps Non current assets – – – (2.4) – – (2.4) Lease liabilities Current 42.6 (45.0) – – 0.6 39.0 37.2 Non current 139.1 – – – 2.3 (38.1) 103.3 317.0 235.9 11.0 (2.4) 2.9 5.6 570.0 (i) Includes transfers between current and non current classification of lease liabilities. Interest bearing liabilities are recognised initially at fair value net of transaction costs, and subsequent to initial recognition are recognised at amortised cost which is calculated using the effective interest rate method. Foreign currency liabilities are carried at amortised cost and are translated at the exchange rates at reporting date. Gains and losses are recognised in the income statement when the liabilities are derecognised in addition to the amortisation process. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan. These fees are capitalised as a prepayment for liquidity services and amortised over the period of the facility to which they relate. Tabcorp Annual Report 2024 107 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: CAPITAL AND RISK MANAGEMENT FOR THE YEAR ENDED 30 JUNE 2024 B3 Derivative financial instruments The Group holds the following derivative financial instruments, all at fair value based on level 2 observable inputs, other than fixed odds open betting positions which are within level 3 in fair value hierarchy (refer to note B4): 2024 $m 2023 $m Current assets Foreign exchange forward contracts 0.8 0.8 Non current assets Foreign exchange forward contracts 0.8 1.8 Cross currency swaps – 2.4 0.8 4.2 1.6 5.0 Current liabilities Cross currency swaps 3.6 – Fixed odds open betting positions 14.4 16.4 18.0 16.4 Non current liabilities Cross currency swaps 5.2 – 23.2 16.4 Derivative financial instruments are recognised initially and subsequently at fair value (refer to note B4). The method of recognising any remeasurement gain or loss depends on the nature of the item being hedged. For the purposes of hedge accounting, the Group’s hedges were classified as cash flow hedges. At inception, hedge relationships are designated as such and documented. This includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the hedge effectiveness requirements are assessed. A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: • there is an economic relationship between the hedged item and the hedging instrument; • the effect of credit risk does not dominate the value changes that result from that economic relationship; and • the hedge ratio is the same as that resulting from actual amounts of hedged items and hedging instruments for risk management. Cash flow hedges are used to hedge the exposure to variability in cash flows attributable to a particular risk associated with a recognised asset or liability, or a highly probable forecast transaction. Hedge effectiveness is measured by comparing the change in the fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents ineffectiveness. The effective portion of any gain or loss on the hedging instrument is recognised directly in equity, with any ineffective portion recognised in the income statement. For hedged items relating to financial assets or liabilities, amounts recognised in equity are reclassified into the income statement when the hedged transaction affects the income statement (i.e. when interest income or expense is recognised). When the hedged item is the cost of a non-financial asset or liability, the amounts recognised in equity are transferred into the initial cost or other carrying amount of the non-financial asset or liability. When a hedging instrument expires or is sold, terminated or exercised, or the designation of the hedge relationship is revoked but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity and is recognised in accordance with the above when the transaction occurs. If the hedged transaction is no longer expected to take place, then the cumulative unrealised gain or loss recognised in equity is recognised immediately in the income statement. Financial instruments that do not qualify for hedge accounting are stated at fair value with any resultant gain or loss being recognised in the income statement. Tabcorp Annual Report 2024 108 B3.1 Cross currency swaps These swaps are used to reduce the exposure to the variability of movements in the forward USD exchange rate in relation to the USD private placement debt. Changes in the fair value of cross currency swaps which hedge foreign currency cash flows on the private placement debt are recognised directly in other comprehensive income and accumulated in the cash flow hedging reserve. The principal amounts and periods of expiry of the cross currency swap contracts were: 2024 2023 Pay principal AUD m Receive principal USD m Pay principal AUD m Receive principal USD m Less than one year – – – – One to five years – – – – More than five years 424.9 289.0 424.9 289.0 Notional principal 424.9 289.0 424.9 289.0 Fixed interest rate range p.a. 6.9%–8.0% 6.9%–8.0% 6.9%–8.0% 6.9%–8.0% There is an economic relationship between the hedged item and the hedged instrument as the terms and conditions in relation to the interest rate and maturity of the cross currency swaps are similar to the terms and conditions of the underlying hedged US private placement debt. The Group has established a hedge ratio of 1:1 which has been determined by comparing the notional principal of the swap with the notional amount of the designated debt. Further information about the Group’s foreign currency risk management is disclosed in note B5.2. B3.2 Foreign exchange forward contract These foreign exchange forward contracts are used to reduce the exposure to the volatility of movements in the forward USD exchange rate in relation to the USD exposure. Notional principal 2024 $m 2023 $m Less than one year 7.3 6.6 One to five years 8.1 15.4 More than five years – – Notional principal 15.4 22.0 Further information about the Group’s foreign currency risk management is disclosed in note B5.2. B3.3 Impact of hedging on balance sheet The ineffectiveness of hedging is set out in the below table. All hedging instruments are presented within derivative financial instruments in the balance sheet. 2024 $m 2023 $m Cross currency swaps – (0.2) – (0.2) The ineffectiveness recognised in the income statement was immaterial in both the current and prior financial year. Tabcorp Annual Report 2024 109 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: CAPITAL AND RISK MANAGEMENT FOR THE YEAR ENDED 30 JUNE 2024 B3.4 Impact of hedging on equity Set out below is a reconciliation of the movement in the hedging reserve: Hedging reserve $m As at 1 July 2023 (3.2) Effective portion of changes in fair value arising from: – Cross currency swaps (11.3) Transfer to profit or loss (0.4) Other (0.9) Tax effect 3.8 As at 30 June 2024 (12.0) As at 1 July 2022 1.6 Effective portion of changes in fair value arising from: – Cross currency swaps 3.8 Transfer to profit or loss (11.0) Other 0.3 Tax effect 2.1 As at 30 June 2023 (3.2) B4 Fair value measurement The fair value of financial assets and financial liabilities is estimated for recognition, measurement and disclosure purposes at each balance date. Various methods are available to estimate the fair value of a financial instrument, and comprise: Level 1 – calculated using quoted prices in active markets. Level 2 – estimated using inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3 – estimated using inputs for the asset or liability that are not based on observable market data. The carrying amount of financial assets or liabilities recognised in the financial statements is deemed to be the fair value unless stated below: Carrying amount Fair value 2024 $m 2023 $m 2024 $m 2023 $m Financial liabilities US private placement 436.3 435.9 434.1 502.8 436.3 435.9 434.1 502.8 Tabcorp Annual Report 2024 110 The fair value of the Group’s financial instruments is estimated as follows: US private placement Fair value was calculated using discounted future cash flow techniques, where estimated cash flows and estimated discount rates are based on market data at balance date, in combination with restatement to foreign exchange rates at balance date (level 2 in fair value hierarchy). Foreign exchange forward contracts Fair value is calculated using widely accepted valuation techniques including discounted cash flow analysis of the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, such as yield curves, spot and forward FX rates. The Group incorporates credit valuation adjustments to appropriately reflect the applicable counterparty’s non-performance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of non-performance risk, the Group has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees (level 2 in fair value hierarchy). Cross currency swaps Fair value is calculated using market data including both the Australian and the United States interest rate curves which include the base rates and forward curves, incorporating swap rates and foreign exchange rates. A discounted cash flow approach is used to derive the fair value of cross currency swaps at balance date (level 2 in fair value hierarchy). Fixed odds open betting positions Fair value is calculated based upon the latest open market prices on the relevant underlying sporting or other events available at the close of business at the balance date (level 3 in fair value hierarchy). Changes in the fair value of the open positions are recorded in revenue in the consolidated income statement. There are no reasonably probable changes to assumptions and inputs that would lead to material changes in the fair value methodology although final value will be determined by future sporting or other events results. Other financial liabilities Fair value was calculated using discounted future cash flow techniques, where scheduled payments were discounted to present value at the Group’s incremental borrowing rate (level 3 in fair value hierarchy). There have been no significant transfers between level 1 and level 2 during the financial year ended 30 June 2024. B5 Financial instruments – risk management The main purpose of the Group’s financial instruments is to raise finance for the Group’s operations. The Group also has various other financial assets and liabilities which arise directly from its operations. The Group uses derivative financial instruments to hedge its exposure to foreign exchange risks arising from operational, financing and investment activities, principally cross currency swaps. The Group does not hold or issue derivative financial instruments for trading purposes. The main risks arising from the Group’s financial instruments are discussed in section B5.1 to B5.4. B5.1 Interest rate risk In general, the Group has a policy of controlling exposure to interest rate fluctuations by the use of fixed and variable rate debt, interest rate swaps, capped or collar options and forward rate agreements. At 30 June 2024 approximately 42% (2023: 100%) of the Group’s borrowings are at a fixed rate of interest. Tabcorp Annual Report 2024 111 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY The following assets and liabilities are exposed to floating interest rate risk: 2024 $m 2023 $m Cash 289.2 91.6 Cash equivalents 24.5 199.1 313.7 290.7 Bank loans – unsecured (600.0) – Net exposure (286.3) 290.7 Sensitivity analysis – interest rates – AUD The Group’s sensitivity to reasonably possible changes in interest rates on the affected financial assets and financial liabilities in existence at year end is shown below. With all other variables held constant, post tax profit and other comprehensive income would have been affected as follows: Post tax profit higher/(lower) Other comprehensive income higher/(lower) 2024 $m 2023 $m 2024 $m 2023 $m AUD + 1.0% (100 basis points) 0.2 0.2 – – - 1.0% (100 basis points) (0.2) (0.2) – – The movements in profit are due to higher/lower interest costs from variable rate debt and investments. Significant assumptions used in the analysis include: • reasonably possible movements were determined based on the Group’s current credit rating and mix of debt, and the level of debt that is expected to be renewed, as well as a review of the last two years’ historical movements and economic forecasters’ expectations; and • net exposure at balance date is representative of what the Group was and is expecting to be exposed to in the next twelve months. B5.2 Foreign currency risk The Group’s primary currency exposure is to US dollars as a result of issuing US private placement debt. In order to hedge this exposure, the Group has entered into cross currency swaps to fix the exchange rate on the USD debt until maturity. The Group agrees to pay a fixed USD amount in exchange for an agreed AUD amount with swap counterparties, and to re-exchange this again at maturity. These swaps are designated to hedge the principal and interest obligations of the US private placement debt. Based on this, the Group is not materially exposed to foreign currency risk. The translation of the results of the Group’s foreign subsidiaries into the Group presentation currency has not been considered as it represents translation risk rather than transaction risk. NOTES TO THE FINANCIAL STATEMENTS: CAPITAL AND RISK MANAGEMENT FOR THE YEAR ENDED 30 JUNE 2024 Tabcorp Annual Report 2024 112 B5.3 Credit risk The Group’s credit risk arises in relation to cash and cash equivalents, receivables, term deposits, financial liabilities and liabilities under financial guarantees. Credit risk on financial assets which have been recognised on the balance sheet, is the carrying amount less any allowance for non recovery. Credit risk is managed by: • adherence to a strict cash management policy; • conducting all investment and financial instrument activity with approved counterparties with investment grade credit ratings and setting exposure limits based on these ratings; and • reviewing compliance with counterparty exposure limits on a continuous basis, and spreading the aggregate value of transactions amongst the approved counterparties; ensuring no more than 60% of investments are held with any one counterparty. Credit risk arises from the potential failure of counterparties to meet their obligations under the contract or arrangement. Credit risk includes liabilities under financial guarantees. For financial guarantee contract liabilities the fair value at initial recognition is determined using a probability weighted discounted cash flow approach. The fair value of financial guarantee contract liabilities has been assessed as nil (2023: nil), as the possibility of an outflow occurring is considered remote. Details of the financial guarantee contracts at balance date are outlined below: • The Company has entered into a deed of cross guarantee as outlined in note D2. • The maximum amount of bank guarantee contracts at balance date is $26.4m (2023: $20.4m). Tabcorp Annual Report 2024 113 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: CAPITAL AND RISK MANAGEMENT FOR THE YEAR ENDED 30 JUNE 2024 B5.4 Liquidity risk Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet its obligations to repay its financial liabilities as and when they fall due. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and notes. To help reduce liquidity risk, the Group targets a minimum level of cash and cash equivalents to be maintained, and has sufficient undrawn funds available. Due to the measures in place for managing liquidity and access to capital markets, this risk is not considered significant. At 30 June 2024 no debt facilities will mature in less than one year. The contractual cash flows including principal and estimated interest payments of financial liabilities in existence at year end are as follows: 2024 2023 < 1 year $m 1 – 5 years $m > 5 years $m < 1 year $m 1 – 5 years $m > 5 years $m Non-derivative financial instruments Financial liabilities Payables (554.9) – – (571.0) – – Bank loans – unsecured (86.9) (615.6) – – – – US private placement (33.0) (132.2) (511.9) (33.0) (132.2) (544.5) Other financial liabilities – (177.5) (460.0) – – – Lease liabilities (35.3) (89.1) (24.2) (41.4) (111.6) (33.7) Net outflow (710.1) (1,014.4) (996.1) (645.4) (243.8) (578.2) Derivative financial instruments Financial assets Cross currency swaps – receive USD fixed – – – – – 2.4 Foreign exchange forward contracts 0.8 0.8 – 0.8 1.8 – 0.8 0.8 – 0.8 1.8 2.4 Financial liabilities Fixed Odds open betting positions (14.4) – – (16.4) – – Cross currency swaps - pay USD fixed(i) (2.5) (13.7) 2.8 – – – (16.9) (13.7) 2.8 (16.4) – – Net inflow/(outflow) (16.1) (12.9) 2.8 (15.6) 1.8 2.4 (i) Derivative cash flows are based on classification of cross currency swaps as a liability. For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing date. For foreign currency receipts and payments, the amount disclosed is determined by reference to the AUD/USD rate at balance date. Tabcorp Annual Report 2024 114 SECTION C – OPERATING ASSETS AND LIABILITIES C1 Licences Wagering licences $m Gaming machine monitoring licence $m Total $m 2024 Carrying amount at beginning of year 512.6 128.0 640.6 Additions(i) 886.9 – 886.9 Amortisation (39.6) (13.5) (53.1) Impairment (refer to note C3) (322.5) – (322.5) Carrying amount at end of year 1,037.4 114.5 1,151.9 Cost 1,865.4 201.7 2,067.1 Accumulated amortisation and impairment (828.0) (87.2) (915.2) 1,037.4 114.5 1,151.9 2023 Carrying amount at beginning of year 554.0 139.4 693.4 Additions – 2.0 2.0 Amortisation (41.4) (13.4) (54.8) Carrying amount at end of year 512.6 128.0 640.6 Cost 978.5 201.7 1,180.2 Accumulated amortisation and impairment (465.9) (73.7) (539.6) 512.6 128.0 640.6 (i) On 18 December 2023, Tabcorp announced it had been awarded a new exclusive Victorian Wagering and Betting Licence (New Licence) by the Victorian Government. The New Licence is for a period of 20 years which commenced on 16 August 2024, with licence premium payments comprising of upfront payment of $600.0m paid in June 2024 and $30.0m per annum ongoing fixed payments from August 2025-2043. Amortisation policy – straight line basis over useful life (years): 12 – 93 10 – 20 Licence expiration date: – Victoria 2044 (i) – Queensland 2098 2027 – New South Wales 2097 2032 – Australian Capital Territory 2064 (ii) – South Australia 2100 – Tasmania 2043(iii) (i) New exclusive Victorian Wagering and Betting Licence for a period of 20 years commenced 16 August 2024. The previous licence amortised on a straight line basis over the life of the licence from 16 August 2012 until expiry on 15 August 2024. (ii) ACT sports bookmaking licence granted in 2014 for an initial term of 15 years with further rolling extensions to a total term of 50 years. (iii) Tasmanian monitoring operator licence commenced 1 July 2023. Licences that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. NOTES TO THE FINANCIAL STATEMENTS: OPERATING ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2024 Tabcorp Annual Report 2024 115 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OPERATING ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2024 C2 Other intangible assets Goodwill $m NSW Trackside concessions $m Customer related assets $m Brand names $m Media content and broadcast rights $m Other $m Software $m Total $m 2024 Carrying amount at beginning of year 1,734.0 128.3 112.4 112.7 30.6 25.7 359.9 2,503.6 Additions: – acquired – – – – – 17.0 18.0 35.0 – internally developed – – – – – – 72.2 72.2 Amortisation – (1.0) (13.5) (1.0) – (1.4) (79.2) (96.1) Impairment (refer to note C3) (746.0) (127.3) – (102.3) – (41.3) (108.2) (1,125.1) Disposals – – – – – – (3.8) (3.8) Other – – – – – – 4.7 4.7 Carrying amount at end of year 988.0 – 98.9 9.4 30.6 – 263.6 1,390.5 Cost 3,576.0 150.0 165.6 114.9 30.6 68.3 1,037.0 5,142.4 Accumulated amortisation and impairment (2,588.0) (150.0) (66.7) (105.5) – (68.3) (773.4) (3,751.9) 988.0 – 98.9 9.4 30.6 – 263.6 1,390.5 Includes capital works in progress of: 82.2 82.2 2023 Carrying amount at beginning of year 1,734.0 130.0 126.0 113.4 30.6 30.5 350.5 2,515.0 Additions: – acquired – – – – – – 34.9 34.9 – internally developed – – – – – – 96.5 96.5 Amortisation – (1.7) (13.1) (0.9) – (2.6) (84.7) (103.0) Impairment – – – – – – (13.1) (13.1) Transfers – – – – – – (0.2) (0.2) Disposals – – (3.3) – – (2.2) (19.3) (24.8) Transferred to assets held for sale – – – – – – (4.7) (4.7) Other – – 2.8 0.2 – – – 3.0 Carrying amount at end of year 1,734.0 128.3 112.4 112.7 30.6 25.7 359.9 2,503.6 Cost 3,576.0 150.0 165.6 114.9 30.6 51.4 947.2 5,035.7 Accumulated amortisation and impairment (1,842.0) (21.7) (53.2) (2.2) – (25.7) (587.3) (2,532.1) 1,734.0 128.3 112.4 112.7 30.6 25.7 359.9 2,503.6 Includes capital works in progress of: 100.9 100.9 Amortisation policy – straight line basis over useful life (years): 87 8 – 20 5 – Indefinite Indefinite 20 3 – 15 Expiration date: 2097 2033(i) (i) In line with New South Wales Wagering Licence retail exclusivity period. Goodwill arising in a business combination represents the excess of the consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed. All business combinations are accounted for by applying the acquisition method. Any contingent consideration is recognised at fair value at the acquisition date. Negative goodwill arising on an acquisition is recognised directly in the income statement. Goodwill is not amortised, and is stated at cost less any accumulated impairment losses. Any impairment losses recognised against goodwill cannot be reversed. Brand names, media content and broadcast rights with indefinite useful lives are not amortised as the Board of Directors believe that the life of these intangibles to the Group will not materially diminish over time, and the residual value at the end of that life would be such that the amortisation charge, if any, would not be material. During the year, the Group entered into a Sponsorship and Media Rights agreement with the Victoria Racing Club (VRC). The intangible asset related to the exclusive media rights will be recognised once control of the asset is established. Other intangible assets, including NSW Trackside concessions and customer related assets, that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. The cost of internally developed software includes the cost of materials, direct labour and an appropriate proportion of overheads. Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred. Tabcorp Annual Report 2024 116 C3 Impairment testing In accordance with the Group’s accounting policy, goodwill and indefinite life intangible assets are tested for impairment annually at 30 June each year, or whenever there is an indicator of impairment. Impairment assessment at 31 December 2023 Indicators of impairment were identified by the Group in its assessment at 31 December 2023 in respect of the Wagering business, which is within the Group’s Wagering and Media segment. These indicators included softness in the wagering market driven by higher inflation and interest rates impacting consumer spending, higher discount rates and higher taxes in NSW. Accordingly, the Group undertook an impairment assessment consistent with the methodology used at 30 June 2024 as outlined below. This assessment resulted in impairment charges of $852.0m being recorded ($596.4m for the NSW CGU, $42.8m for the SA CGU, and $212.8m for the Wagering and Media segment). Impairment assessment at 30 June 2024 The year end impairment assessment identified additional indicators of impairment to those identified at 31 December 2023 in the Group’s Wagering business. These included: • expectation that the wagering market will continue to be subdued in the near term for a period longer than anticipated at half year. The macroeconomic environment for customers remains challenging given expectations around interest rates and the high inflation levels that persist. In addition, the regulatory environment continues to tighten and impact the wagering market. • TAB25 operating expense targets are considered to be unlikely to be met. The Company previously provided a TAB25 target range for operating expenditure. Whilst our Genesis program is expected to deliver further benefits in FY25 and beyond, this has been considered to be unlikely to offset persistent cost inflation and reinvestment into the business. Both these conditions have impacted the Group’s forward cash flow estimates. Accordingly, the Group estimated the recoverable amount for: • Each Cash Generating Unit (CGU) within the Wagering and Media segment; and • The Wagering and Media segment (group of CGUs), which is the level at which goodwill is monitored by the Group. Individual CGUs within the Wagering and Media segment (group of CGUs) have been identified as: • Each State in which the Group holds its wagering and betting licences (Victoria, New South Wales (NSW), Queensland, Australian Capital Territory (ACT), Northern Territory (NT), Tasmania, South Australia (SA)); • The International wagering business; and • The media operation (Sky Channel and Radio). No indicators of impairment were identified in respect of the Gaming Services segment or related CGUs. Key assumptions and outcomes of the 30 June 2024 impairment test for the Wagering and Media segment and CGUs are discussed below. Assumptions and approach The recoverable amount of each CGU within the Wagering and Media segment, as well as the total Wagering and Media segment (group of CGUs) at which goodwill is managed, is determined based on fair value less costs of disposal (FVLCD), calculated using a discounted cash flow (DCF) technique. The fair value determined is Level 3 within the fair value hierarchy (refer to note B4 for details of the levels). The key estimates and assumptions used to determine the FVLCD of a CGU are based on management’s current expectations which is informed by current and past performance and external information. Tabcorp Annual Report 2024 117 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OPERATING ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2024 The testing methodology applied to determine the recoverable amount (on a FVLCD basis) is as follows: • Cash flows are forecast over a 20-year forecast period. A 20-year period is considered appropriate to adjust for the impact of licence expiries and assumed renewals. The 20-year forecast after tax cash flow projections are based on the following: – Through to 30 June 2028: cash flow forecasts are based on outcomes of the Group’s budgeting and forecasting process. – From 1 July 2028 to 2044: cash flow forecasts are extrapolated using a long-term growth rate of 2.5% (June 2023: 2.5%, December 2023: 2.5%). • A terminal value for each CGU is determined using a long-term growth rate of 2.0% (June 2023: 2.0%, December 2023: 2.0%). • Where applicable based on the specific licence term for each state-based CGU, an estimate of the licence renewal cost is made at the point of licence expiry. • A discount rate of 9.1% is applied determined based on the post-tax weighted average cost of capital (June 2023: 8.9%, December 2023: 9.3%). Key assumptions within the determination of recoverable amount in addition to those outlined above include: • Existing licensing arrangements, state tax regimes and the regulatory environment in which the Group currently operates remain largely unchanged, other than those publicly announced. • Race fields arrangements implemented in each State and Territory of Australia remain largely unchanged. Impairment testing outcomes The impairment assessment has determined that as a result of the indicators outlined above, the carrying value of the NSW, SA, ACT and NT CGUs as well as the Wagering and Media segment, including allocation of corporate assets, exceeded their recoverable amount at 30 June 2024. The recoverable amounts for the Wagering and Media segment was $2,091.7m. The recoverable amount for the impaired CGUs are not significant. A total impairment charge of $679.6m was recognised as a result of the 30 June 2024 assessment including $100.9m for the NSW CGU, $21.0m for the SA CGU, $24.5m for the other CGUs in the segment and $533.2m for the Wagering and Media segment. The total annual impairment charges recognised for the full year ended 30 June 2024 are included below: 2024 $m NSW CGU 697.3 SA CGU 63.8 Other CGUs(i) 24.5 Wagering and Media segment 746.0 Total impairment recognised 1,531.6 (i) Other includes the combined impairment charge in ACT and NT. Allocation of impairment to assets 2024 $m Licences 322.5 Goodwill 746.0 Other intangible assets (excluding Goodwill) 379.1 Property, plant and equipment 33.3 Right-of-use assets 50.7 Total impairment recognised 1,531.6 Tabcorp Annual Report 2024 118 An income tax benefit of $155.2m was recognised in respect of the decrease in asset values from the impairments outlined above. Refer note A5. Following the impairment charges discussed above the carrying amount of goodwill and other intangible assets with indefinite useful lives allocated to each cash generating unit (CGU) or segment are outlined below: 2024 $m 2023 $m Goodwill Wagering and Media 988.0 1,734.1 Other Intangible assets with indefinite useful lives Media 37.3 37.3 ACT Wagering 1.0 4.5 NSW Wagering – 98.8 38.3 140.6 Sensitivity to changes in assumptions and reasonably possible changes Changes to the key estimates and assumptions outlined above may lead to further impairment. The following summarises the effect of a change in a key assumption on the recoverable amount of the Wagering and Media segment (group of CGUs). These sensitivities assume the specific assumption moves in isolation, whilst all other assumptions are held constant. In reality, a change in these assumptions may accompany a change in another assumption. A change in assumptions may also impact the recoverable amounts determined for the NSW, SA, ACT, and NT CGUs. Assumption Wagering and Media (higher)/lower $m +0.5 percentage point (pp) long term growth 89.0 -0.5pp long term growth (84.0) +0.5pp post-tax discount rate (140.8) -0.5pp post-tax discount rate 162.8 +1% EBITDA across all forecast years 37.0 -1% EBITDA across all forecast years (37.0) Gaming Services No impairment indicators were identified in the year ended 30 June 2024. During the prior year, the impairment assessment for the Tabcorp Gaming Solutions (TGS) business has determined the carrying value of the disposal group exceeded its recoverable amount at the time of classification as a disposal group held for sale. As a result, a reduction in the carrying value of assets for the disposal group totalling $49.0m was recognised in the income statement. Tabcorp Annual Report 2024 119 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OPERATING ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2024 C4 Property, plant and equipment Freehold land $m Buildings $m Leasehold improvements $m Plant and equipment $m Total $m 2024 Carrying amount at beginning of year 17.5 10.1 29.8 114.6 172.0 Additions – 1.3 3.8 50.9 56.0 Disposals (1.8) (2.3) – (1.5) (5.6) Depreciation – (0.5) (9.5) (36.9) (46.9) Impairment (refer to note C3) – (0.5) (7.5) (25.3) (33.3) Carrying amount at end of year 15.7 8.1 16.6 101.8 142.2 Cost 15.7 32.9 138.8 505.2 692.6 Accumulated depreciation and impairment – (24.8) (122.2) (403.4) (550.4) 15.7 8.1 16.6 101.8 142.2 Includes capital works in progress of: – – 16.1 16.1 2023 Carrying amount at beginning of year 17.5 10.8 35.5 159.1 222.9 Additions – 0.1 4.1 40.7 44.9 Disposals – – – (8.8) (8.8) Depreciation – (0.8) (9.8) (39.8) (50.4) Transfer to assets held for sale – – – (9.7) (9.7) Impairment – – – (26.9) (26.9) Carrying amount at end of year 17.5 10.1 29.8 114.6 172.0 Cost 17.5 34.3 137.2 466.2 655.2 Accumulated depreciation and impairment – (24.2) (107.4) (351.6) (483.2) 17.5 10.1 29.8 114.6 172.0 Includes capital works in progress of: – 3.8 24.2 28.0 Depreciation policy – straight line basis over useful life (years): 20 – 40 7 – 10 4 – 10 Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where parts of an item of property, plant equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate. Tabcorp Annual Report 2024 120 C5 Leases (a) Group as a lessee The Group has lease contracts for various properties, motor vehicles and other equipment with remaining lease terms expiring from 1 to 20 years. Leases generally provide the Group with a right of renewal at which time all terms are renegotiated. Lease payments comprise a base amount plus an incremental contingent rental. Contingent rentals are based on either movements in the Consumer Price Index or are subject to market rate review. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year: Property $m Other $m Total $m 2024 Carrying amount at beginning of year 93.5 6.2 99.7 Additions 0.4 4.6 5.0 Lease remeasurements 13.4 1.2 14.6 Terminations (2.2) (0.4) (2.6) Depreciation (20.9) (3.3) (24.2) Impairment (refer to note C3) (47.9) (2.8) (50.7) Carrying amount at end of year 36.3 5.5 41.8 2023 Carrying amount at beginning of year 120.9 5.6 126.5 Additions 0.4 2.5 2.9 Lease remeasurements 2.8 0.7 3.5 Terminations (0.9) (0.1) (1.0) Depreciation (29.7) (2.5) (32.2) Carrying amount at end of year 93.5 6.2 99.7 Set out below are the carrying amounts of lease liabilities and the movements during the year: 2024 $m 2023 $m Carrying amount at beginning of year 140.5 181.7 Additions 5.0 2.9 Lease remeasurements 5.8 2.3 Interest expense 4.8 5.4 Terminations (3.0) (1.4) Payments (cash outflow) (41.3) (50.4) Carrying amount at end of year 111.8 140.5 Current 31.4 37.2 Non current 80.4 103.3 111.8 140.5 Tabcorp Annual Report 2024 121 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OPERATING ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2024 (b) Group as a lessor The Group has sub-leased properties that have previously been presented as part of right-of-use assets. The sub-leases have remaining terms of 1 and 3 years and the Group has classified the leases as finance sub-leases. The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the reporting date. 2024 $m 2023 $m Less than one year 1.8 3.3 Between one to two years 1.9 2.7 Between two to three years 1.9 1.9 Between three to four years – 1.9 Total undiscounted lease receivable 5.6 9.8 Unearned finance income (0.3) (0.6) 5.3 9.2 When a contract is entered into, the Group assesses whether the contract contains a lease. A lease arises when the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At commencement of the lease, the Group recognises a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Right-of-use assets are recognised at the commencement date of the lease, which is when the underlying assets are available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, any make good costs, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. The right-of-use assets are also subject to impairment. Lease liabilities are recognised at the commencement date of the lease, measured at the present value of lease payments to be made over the lease term using the Group’s incremental borrowing rate if the rate implicit in the lease cannot be readily determined. Lease payments include fixed payments or variable lease payments that depend on an index or a rate, incorporating the Group’s expectations of extension options which is a key area of judgement. Option periods are only included in determining the lease term at inception when they are reasonably certain to be exercised. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for lease payments made. Lease liabilities are remeasured when there is a modification, a change in the lease term, or changes in future lease payments arising from a change in rates or index used to determine the payments. Short term leases (lease term of 12 months or less) and leases of low value assets are recognised as an expense as incurred. The Group enters into lease arrangements as lessor in respect of some property leases. When the Group is an intermediate lessor it accounts for its interests in the head lease and the sub-lease separately. The sub-lease is a finance lease where it transfers substantially all the risks and rewards of ownership to the lessee. All other sub-leases are operating leases. The determination of whether a sub-lease is classified as a finance lease or operating lease is made by reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. The Group recognises on the balance sheet a net investment in a lease as the sum of the lease payments receivable plus any unguaranteed residual value, discounted at the interest rate implicit in the lease. Tabcorp Annual Report 2024 122 C6 Notes to the cash flow statement (a) Cash and cash equivalents comprise: 2024 $m 2023 $m Cash on hand and in banks 293.0 91.6 Cash equivalents 20.7 199.1 313.7 290.7 For the purpose of the cash flow statement, cash comprises cash and cash equivalents including short term deposits with an original maturity of three months or less, and bank overdrafts. Restrictions The Group operates under various state based licences which have regulatory requirements in place that restrict the Group’s use of certain cash balances. The carrying amount of these cash balances included within the consolidated financial statements is $78.7m (2023: $63.0m). (b) Reconciliation of net (loss)/profit after tax to net cash flows from operating activities 2024 $m 2023 $m Net (loss)/profit after tax (1,359.7) 66.5 Add items classified as investing/financing activities: – gain/(loss) on demerger of The Lottery Corporation (net of transaction costs) – 12.5 – loss on sale of TGS business 7.5 – – gain on sale of eBET business – (34.2) – net gain on disposal of property, plant and equipment and intangibles (0.8) (10.3) – net gain on disposal of non current assets (1.1) – – other 0.9 (5.4) Add non cash income and expense items: – depreciation and amortisation 220.3 240.5 – impairment – goodwill 746.0 – – impairment – other 785.6 49.0 – share based payments expense 1.8 3.8 – unwinding of prepaid borrowing costs 1.1 1.2 – loss from equity accounted investment 3.2 2.7 – onerous contract provision release – (6.5) – other 16.9 9.9 Net cash provided by operating activities before changes in assets and liabilities 421.7 329.7 Changes in assets and liabilities: (Increase)/decrease in: – debtors 5.8 (39.5) – prepayments (16.8) (1.1) – net current tax assets 1.4 (16.4) – other assets (10.6) 0.9 (Decrease)/increase in: – payables (10.0) 4.2 – other financial liabilities 38.2 – – provisions (0.2) (160.3) – deferred tax assets/liabilities (186.6) 2.5 – other liabilities 2.3 (0.7) Net cash flows from operating activities 245.2 119.3 Tabcorp Annual Report 2024 123 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OPERATING ASSETS AND LIABILITIES FOR THE YEAR ENDED 30 JUNE 2024 C7 Receivables 2024 $m 2023 $m Current Trade debtors 92.0 103.1 Allowance for expected credit losses (2.8) (0.8) 89.2 102.3 Finance lease receivable(i) 1.6 3.0 Other 70.1 60.5 160.9 165.8 Non current Trade debtors – 0.6 Finance lease receivable(i) 3.7 6.2 3.7 6.8 (i) Further information about the Group’s leases is disclosed in note C5. Trade debtors are recognised and carried at original invoice amount less an allowance for any uncollectible amount. Expected credit losses for the Group are calculated using a lifetime expected loss allowance under the simplified approach of AASB 9. The expected credit loss is based on historical credit loss experience adjusted for forward-looking factors specific to the debtors and the economic environment. C8 Payables 2024 $m 2023 $m Current Payables 554.9 571.0 Current payables consist of trade payables, accruals, customer account balances and other payables. C9 Other financial liabilities 2024 $m 2023 $m Non current Licence-related payments 286.9 – Other 54.3 – 341.2 – Non current other financial liabilities consist of licence-related payments relating to the Victorian wagering and betting licence and other payments relating to additional funding payments to VRI are financial instruments and recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Tabcorp Annual Report 2024 124 C10 Provisions 2024 $m 2023 $m Current Employee benefits 37.5 37.1 Premises 4.3 1.0 Other 16.9 1.9 58.7 40.0 Non current Employee benefits 5.8 4.5 Premises 6.0 5.6 11.8 10.1 Movement in provisions other than employee benefits during the year are set out below: Premises $m Other $m Carrying amount at beginning of year 6.6 1.9 Provisions made during year 5.0 20.8 Provisions reversed during year (0.3) – Provisions used during year (1.0) (5.8) Carrying amount at end of year 10.3 16.9 Premises provisions comprise make good provisions for leasehold properties requiring remedial work at the end of the lease arrangement. A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and the amount can be reliably estimated. Provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recorded as a finance cost. Employee benefits (short term) are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided and the obligation can be estimated reliably. Employee benefits (long term) – the Group’s net obligation is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is discounted to determine its present value. Remeasurements are recognised in the income statement in the period in which they arise. This excludes pension plans. Tabcorp Annual Report 2024 125 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP STRUCTURE FOR THE YEAR ENDED 30 JUNE 2024 SECTION D – GROUP STRUCTURE D1 Subsidiaries The ultimate parent entity within the Group is Tabcorp Holdings Limited. The consolidated financial statements incorporate the assets, liabilities and results of Tabcorp Holdings Limited and the following controlled entities, that were held in both current and prior period unless otherwise stated: 100% owned Australian subsidiaries in a deed of cross guarantee with Tabcorp Holdings Limited (refer to note D2): Tabcorp Assets Pty Ltd Tabcorp Services Pty Ltd Ubet SA Pty Ltd Aussie Fair Play Coalition Pty Ltd Tabcorp Finance Pty Ltd Ubet Tas Pty Ltd Luxbet Pty Ltd Sky Channel Pty Ltd Tasradio Pty Ltd Tabcorp Wagering Holdings Pty Ltd 2KY Broadcasters Pty Ltd Maxgaming Holdings Pty Ltd Tabcorp ACT Pty Ltd Tabcorp Training Pty Ltd Maxgaming NSW Pty Ltd Tabcorp Gaming Holdings Pty Ltd Tabcorp International Pty Ltd Maxgaming Qld Pty Ltd Tabcorp Wagering (Vic) Pty Ltd Tabcorp International No.4 Pty Ltd Reaftin Pty Ltd Tabcorp Wagering Assets (Vic) Pty Ltd Ubet Qld Limited Bytecraft Systems Pty Ltd Tabcorp Wagering Participant (Vic) Pty Ltd Ubet NT Pty Ltd Bytecraft Systems (NSW) Pty Ltd Tab Limited Ubet Radio Pty Ltd Tabcorp Maxgaming Holdings Limited 100% owned Australian subsidiaries Tabcorp International No.6 Pty Ltd Sky Australia International Racing Pty Ltd Ubet Enterprises Pty Ltd Maxgaming Investments Pty Ltd COPL Pty Ltd Maxgaming TAS Pty Ltd Tabcorp Ventures Pty Ltd Tabcorp Employee Share Administration Pty Ltd Tabcorp Ventures Australia 1 Pty Ltd Tabcorp Wagering Manager (Vic) Pty Ltd Sky Channel Marketing Pty Ltd Tabcorp VIC Pty Ltd 100% previously owned Australian subsidiaries sold and deregistered during the period: Tabcorp Gaming Solutions (NSW) Pty Ltd(i) Tabcorp Investments No.6 Pty Ltd(i) Tabcorp Investments No.10 Pty Ltd(ii) Tabcorp Gaming Solutions Pty Ltd(i) Tabcorp International No.5 Pty Ltd(ii) OneTab Australia Pty Ltd(ii) Tabcorp Gaming Solutions (ACT) Pty Ltd(i) Tabcorp Investments No.9 Pty Ltd(ii) OneTab Holdings Pty Ltd(ii) Tabcorp Gaming Solutions (Qld) Pty Ltd(i) (i) Control of these entities was lost on 31 October 2023 on the sale of the TGS business. (ii) Control of these entities was lost on 9 August 2023 on the deregistration of the businesses. Tabcorp Annual Report 2024 126 International subsidiaries Name Country of incorporation % equity interest Premier Gateway International Limited Isle of Man 100 Premier Gateway Services Limited Isle of Man 100 Tabcorp Europe Holdings Limited Isle of Man 100 Tabcorp Europe Limited Isle of Man 100 Bytecraft Systems (NZ) Limited New Zealand 100 Sky Racing World Holdco, LLC United States of America 100 Sky Racing World, LLC United States of America 100 Tabusa, LLC United States of America 100 Subsidiaries are entities controlled by the Company. The Group controls an entity if and only if the Group has: • power over the entity; • exposure, or rights, to variable returns from its involvement with the entity; and • the ability to use its power over the entity to affect its returns. The financial statements of subsidiaries are included in the consolidated financial report from the date control commences until the date control ceases. On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of the exchange prevailing at balance date, and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. Elimination of intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are undertaken in preparing the consolidated financial statements. All investments are initially recognised at cost, being the fair value of the consideration given, and if acquired prior to 1 July 2009 included acquisition charges associated with the investment. Subsequently investments are carried at cost less any impairment losses. A joint arrangement is an arrangement over which the Group has joint control with other parties and is bound by a contractual arrangement. A joint arrangement is classified as either a joint operation or a joint venture depending upon the rights and obligations of the parties to the arrangement. • A joint operation is where the parties have rights to the assets and obligations for the liabilities, relating to the arrangement. The Group recognises in relation to its interest in a joint operation its assets, including its share of assets held jointly; its liabilities, including its share of any liabilities incurred jointly; its revenue including its share of revenue from the sale of the output by the joint operation; and its expenses, including its share of any expenses incurred jointly. • A joint venture is where the parties have rights to the net assets of the arrangement. Investments in joint ventures are accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since acquisition date. Tabcorp Annual Report 2024 127 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP STRUCTURE FOR THE YEAR ENDED 30 JUNE 2024 D2 Deed of cross guarantee The parties to the deed of cross guarantee, as identified in note D1, each guarantee the debts of the others. By entering into the deed, the subsidiaries are relieved from the requirements of preparation, audit and lodgement of a financial report and a Directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785. Together with Tabcorp Holdings Limited, the entities represent a ‘Closed Group’ for the purposes of the ASIC Instrument. The consolidated income statement and balance sheet of all entities included in the Closed Group are set out below. Income statement 2024 $m 2023 $m Revenue 2,211.0 2,264.7 Expenses (3,762.8) (2,227.1) (Loss)/profit before income tax and net finance costs (1,551.8) 37.6 Finance income 15.0 3.7 Finance costs (51.7) (37.1) (Loss)/profit before income tax (1,588.5) 4.2 Income tax benefit/(expense) 262.7 (14.1) Loss for the period (1,325.8) (9.9) Profit from discontinued operations after tax – – Net loss after tax (1,325.8) (9.9) Other comprehensive income Change in fair value of cash flow hedges taken to equity that may be reclassified to profit or loss (9.1) (6.9) Income tax on items that may be reclassified to profit or loss 0.6 2.1 Items that will not be reclassified to profit or loss 0.1 – Income tax on items that will not be reclassified to profit or loss – – Other comprehensive income for the year, net of income tax (8.4) (4.8) Total comprehensive income for the year (1,334.2) (14.7) Retained earnings at beginning of year 886.9 991.8 Adjustment for companies exiting the Closed Group (26.3) 79.3 Net loss after tax (1,325.8) (9.9) Other comprehensive income 0.1 – Dividends paid (45.6) (174.3) (Accumulated losses)/Retained earnings at end of year (510.7) 886.9 Tabcorp Annual Report 2024 128 Balance sheet 2024 $m 2023 $m Cash and cash equivalents 231.9 218.5 Receivables 175.3 105.2 Prepayments 69.7 50.5 Current tax assets 13.4 11.2 Derivative financial instruments 0.8 0.8 Assets held for sale – 22.9 Other 8.4 13.2 Total current assets 499.5 422.3 Receivables 3.7 6.8 Investment in controlled entities 7.2 7.2 Licences 1,151.9 638.6 Other intangible assets 1,354.9 2,460.7 Property, plant and equipment 136.2 165.7 Right-of-use assets 41.8 99.7 Deferred tax assets 11.4 – Prepayments 31.0 33.6 Derivative financial instruments 0.8 4.2 Other 9.5 4.0 Total non current assets 2,748.4 3,420.5 TOTAL ASSETS 3,247.9 3,842.8 Payables 498.2 449.0 Lease liabilities 31.4 37.2 Provisions 58.7 39.9 Derivative financial instruments 18.0 16.4 Liabilities directly associated with assets held for sale – 1.9 Other 2.4 0.5 Total current liabilities 608.7 544.9 Interest bearing liabilities 1,032.6 431.9 Other financial liabilities 341.2 – Lease liabilities 80.4 103.3 Deferred tax liabilities – 180.2 Provisions 11.8 10.0 Derivative financial instruments 5.2 – Other 0.6 – Total non current liabilities 1,471.8 725.4 TOTAL LIABILITIES 2,080.5 1,270.3 NET ASSETS 1,167.4 2,572.5 Issued capital 1,688.5 1,687.1 (Accumulated losses)/Retained earnings (510.7) 886.9 Reserves (10.4) (1.5) TOTAL EQUITY 1,167.4 2,572.5 Tabcorp Annual Report 2024 129 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP STRUCTURE FOR THE YEAR ENDED 30 JUNE 2024 D3 Parent entity disclosures Tabcorp Holdings Result of the parent entity 2024 $m 2023 $m (Loss)/profit for the year (3,242.2) 231.2 Other comprehensive income (0.1) – Total comprehensive income for the year (3,242.3) 231.2 Financial position of the parent entity Current assets 164.7 188.9 Total assets 1,247.6 4,431.8 Current liabilities 43.8 38.1 Total liabilities 54.1 41.4 Total equity of the parent entity comprising of: Issued capital 1,688.5 1,687.1 Retained earnings and reserves (495.0) 2,703.3 Total equity 1,193.5 4,390.4 Contingent liabilities Refer to note E4. Capital expenditure Refer to note E3(b). Parent entity guarantees in respect of debts of its subsidiaries The parent entity has entered into a deed of cross guarantee with the effect that the Company guarantees debts in respect of its subsidiaries. Further details of the deed of cross guarantee and the subsidiaries subject to the deed, are set out in note D2. Tax consolidation Tabcorp Holdings Limited (the Head Company) and its 100% owned Australian tax resident subsidiaries have formed an income tax consolidation group, and are therefore taxed as a single entity. Members of the tax consolidation group entered into a tax sharing arrangement that provides for the allocation of income tax liabilities between the entities should the Head Company default on its tax payment obligations. At balance date, the possibility of default is remote. Members of the tax consolidation group have entered into a tax funding agreement which requires each member of the tax consolidation group to make a tax equivalent payment to or from the Head Company, based on the current tax liability or current tax asset of the member. These amounts are recognised as either an increase or decrease in the subsidiaries’ intercompany accounts with the Head Company. Tabcorp adopts the ‘stand-alone taxpayer’ approach as defined in AASB Interpretation 1052 Tax Consolidation Accounting, which requires each subsidiary member to record income taxes as though they each continued to be a taxable entity in their own right. Tabcorp Annual Report 2024 130 D4 Investment in associates In October 2022, the Group acquired 4,106,756 shares equivalent to a 20% interest in Dabble Sports Pty Ltd (Dabble Sports) for a purchase price of $32.8m paid in cash. As a result of additional share purchase of $2.8m, the Group’s interest in the Dabble Sports Group (Dabble Sports Pty Ltd and its controlled entities) at 30 June 2024 is 23%. Dabble Sports, a private entity that is incorporated in Australia, is a popular online racing and sports bookmaker in Australia that holds a betting licence in the Northern Territory. Dabble Sports LLC, also within the Dabble Sports Group is a private entity operating Dabble Fantasy Sports games in United States of America. The Group has representation on Dabble Sports’ Board of Directors and participates in the significant financial and operating decisions. The Group has therefore determined that it has significant influence over the investee. The following table illustrates the summarised financial information of the Group’s investment in the Dabble Sports Group. 2024 2023(i) $m $m Revenue 117.8 48.3 Expenses (131.9) (62.0) Loss before income tax (14.1) (13.7) Income tax expense – – Loss for the year (14.1) (13.7) Group’s share of loss for the year – 23% (2023: 20%) (3.2) (2.7) Current assets 26.4 16.6 Non current assets 10.6 9.5 Current liabilities (22.1) (10.0) Non current liabilities (0.8) (0.6) Equity 14.1 15.5 Group’s share of the associate’s equity – 23% (2023: 20%) 3.2 3.1 Group’s carrying amount of the investment 30.1 30.6 There were no dividends received from the investee during the year. (i) Loss for the year from date of acquisition to 30 June 2023. An associate is an entity over which the Group has significant influence but not control or joint control. Significant influence is the power to participate in the financial and operating decisions of the investee. Investments in associates are accounted for using the equity method. Tabcorp Annual Report 2024 131 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: GROUP STRUCTURE FOR THE YEAR ENDED 30 JUNE 2024 D5 Discontinued operations Demerger of The Lottery Corporation Limited The Lottery Corporation was demerged on 1 June 2022 and was reported as a discontinued operation. The Lottery Corporation operates Lotteries and Keno pursuant to licences and approvals in certain Australian states and territories. The results of discontinued operations for the current period includes an income tax benefit of $37.1m from the portion relating to The Lottery Corporation in the ATO dispute settlement, and a $5.5m portion relating to the interest income received (refer note A5). Both of these amounts were received by Tabcorp as the party to the ATO dispute settlement and subsequently paid to The Lottery Corporation under the terms of the Separation Deed dated 25 March 2022. The profit from discontinued operations after tax is nil for the period (30 June 2023: nil). Cash flows from operating activities (contained in the Group cash flow statement) include amounts from discontinued operations. As such, $42.6m is included in payments to suppliers, service providers and employees, $5.5m in finance income received and $37.1m in income tax received. The net impact on the cash flows from operating activities is nil. Further information on the demerger of The Lottery Corporation is available in the annual report for the year ended 30 June 2022. A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations, or is a controlled entity acquired or held exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative income statement is re-presented as if the operation had been discontinued from the start of the comparative period. Tabcorp Annual Report 2024 132 SECTION E – OTHER DISCLOSURES E1 Employee share plans The Company operates share plans which provide equity instruments to senior executives and management as a component of their remuneration. Long Term Incentive Plan (LTI) The Company granted Options as part of its Long Term Incentive Plans to senior level employees. The exercise price of the share options is equal to the market share price as at grant date using a daily Volume Weighted Average Price (VWAP) of Tabcorp shares traded on the ASX during the previous 10 trading days. The share options vest if and when the Company’s predetermined ROIC targets are met over a three year period and the participant remains employed on such date. The share options granted will not vest if the ROIC performance condition is not met. The fair value of the share options is estimated at the grant date, participants are allocated a maximum number of Options (based on their maximum LTI opportunities) using a fair value allocation methodology determined by an independent third party using a Black-Scholes methodology. The fair value is recognised as an employee expense (with a corresponding increase in equity) over the vesting period. The performance period is three financial years commencing 1 July in the year the grant is made. The 2022 LTI grant has a performance period commencing 1 July 2022 and ending 30 June 2025 and the 2023 LTI grant has a performance period commencing 1 July 2023 and ending 30 June 2026. The 12-month exercise period will commence at the vesting date allowing participants 12 months to choose whether to exercise any vested Options. The end of the exercise period is the expiry date for the Options. There are no cash settlement alternatives, the Company does not have a past practice of cash settlement for these share options. The Company accounts for the options as an equity-settled plan. The dilutive effect, if any, of outstanding Options is reflected in the computation of diluted earnings per share. Short Term Incentive Plan (STI) For senior management it is mandatory to defer 25% of their STI into Restricted Shares, which are subject to a two year service condition. The cost of the Restricted Shares is recognised over the vesting period. The maximum number of shares that can be outstanding at any time under these plans is limited to 5% of the Company’s issued capital. The share based payments expense in respect of the equity instruments granted is recognised in the income statement for the period. In addition, the Company has granted Restricted Shares to key critical employees including executives as part of a one-off retention plan as a result of the demerger. At the time of the demerger, Restricted Shares issued under this plan were cancelled for employees ceasing employment and a reversal of the expense was recognised. For continuing employees, the cost of the Tabcorp Restricted Shares was recognised over the vesting period until July 2023. Further explanation of the share plans is disclosed in the Remuneration Report. NOTES TO THE FINANCIAL STATEMENTS: OTHER DISCLOSURES FOR THE YEAR ENDED 30 JUNE 2024 Tabcorp Annual Report 2024 133 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OTHER DISCLOSURES FOR THE YEAR ENDED 30 JUNE 2024 Options (number) Details of and movements in Options granted under the LTI that existed during the current or prior year are: Balance at start of year Movement during the year Balance at end of year Grant date Expiry date Granted Forfeited Expired Vested 2024 25 October 2023 31 August 2027 – 83,435,586 (35,001,446) – – 48,434,140 26 October 2022 31 August 2026 45,368,858 – (21,626,698) – – 23,742,160 45,368,858 83,435,586 (56,628,144) – – 72,176,300 2023 26 October 2022 31 August 2026 – 47,993,858 (2,625,000) – – 45,368,858 – 47,993,858 (2,625,000) – – 45,368,858 Fair value of equity instruments Options have been independently valued at the date of grant using a Black-Scholes methodology. The weighted average fair value of Options granted during the year was $0.13 (2023: $0.20). The assumptions underlying the Options valuations are: Grant date Expiry date Share price at date of grant $ Expected volatility in share price % Expected dividend yield % Risk free interest rate % Value per Options $ 2024 25 October 2023 31 August 2027 0.82 27.00 2.88 4.27 0.13 2023 26 October 2022 31 August 2026 0.99 30.00 2.84 3.49 0.20 (i) Reflects the assumption that the historical volatility is indicative of future trends. (ii) Reflects the assumption that the current payout ratio will continue with no anticipated increases. (iii) Represents the zero coupon interest rate derived from government bond market interest rates on the valuation date and vary according to each maturity date. Tabcorp Annual Report 2024 134 E2 Pensions and other post employment benefit plans The Group has one defined benefit superannuation plan which is closed to new entrants. This plan is governed by the employment laws of Australia and the Group contributes to the plan at rates based on actuarial advice. Reconciliation of the net defined benefit asset/(liability) recognised in the balance sheet(i) Fair value of plan assets $m Present value of defined benefit obligation $m Net defined benefit plan assets/ (liabilities) $m Balance at 30 June 2022 11.4 (7.0) 4.4 Actuarial gains – (0.3) (0.3) Actual return on plan assets excluding interest income 0.3 – 0.3 Benefits paid (1.7) 1.7 – Other (0.8) (0.4) (1.2) Balance at 30 June 2023 9.2 (6.0) 3.2 Actuarial gains – (0.2) (0.2) Actual return on plan assets excluding interest income 0.3 – 0.3 Benefits paid (0.5) 0.5 – Other 0.5 (0.4) 0.1 Balance at 30 June 2024 9.5 (6.1) 3.4 (i) Net defined benefit plan assets and net defined benefit plan liabilities are recognised on the balance sheet in other non current assets and other non current liabilities respectively. 2024 $m 2023 $m Amounts recognised in other comprehensive income 0.1 – Tabcorp Annual Report 2024 135 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OTHER DISCLOSURES FOR THE YEAR ENDED 30 JUNE 2024 Fair value of plan assets The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: 2024 % 2023 % Cash 44.0 4.0 Fixed interest 11.0 19.0 Australian equities 15.0 25.0 International equities 17.0 24.0 Property 4.0 8.0 Alternatives 9.0 20.0 100.0 100.0 The Trustees are responsible for the governance and administration of the funds, the management and investment of the fund assets and compliance with other applicable regulations. The defined benefit fund assets are invested with independent fund managers and have a diversified asset mix. The funds have no significant concentration of investment risk or liquidity risk. The Group’s total defined benefit obligation is not materially sensitive to changes in assumptions. Defined benefit plans are recognised in the balance sheet as the difference between the present value of the estimated future benefits that will be payable to plan members and the fair value of the plan’s assets. An annual adjustment is made to recognise all movements in the carrying amount of the plan in the income statement, except for the portion of the movement that is attributable to actuarial gains and losses, which are recognised directly in equity. Actuarial gains and losses represent the difference between previous actuarial assumptions of future outcomes and the actual outcome, in addition to the effect of changes in actuarial assumptions. E3 Commitments 2024 $m 2023 $m (a) Capital expenditure commitments Property, plant and equipment 2.4 2.3 Software 14.8 7.5 17.2 9.8 Tabcorp Annual Report 2024 136 E4 Contingencies Details of contingencies where the probability of future payments is not considered remote are set out below as well as details of contingencies, which although considered remote, the Directors consider should be disclosed as they are not disclosed elsewhere in the notes to the financial statements. Contingent liabilities (a) Charge A controlled entity, Tabcorp Wagering Participant (Vic) Pty Ltd, which was a participant in the joint venture outlined in note E5(a), has previously entered into a deed of cross charge with its joint venture partner to cover the non payment of a called sum in the event of the joint venture incurring a loss. The charge is over undistributed and future earnings of the joint venture to the level of the unpaid call. (b) Regulatory matters and legal challenges There are outstanding regulatory matters and legal actions on foot and other potential legal exposures between controlled entities and third parties at 30 June 2024. It is expected that any liabilities arising from such regulatory matters, legal actions or other potential exposures would not have a material adverse effect on the Group’s financial position. E5 Related party disclosures (a) Transactions with joint arrangements The Group conducted an unincorporated joint venture with VicRacing Pty Ltd in Victoria (the joint venture). The principal activity of the joint venture was the organisation, conduct, promotion and development of wagering and betting in Victoria. The Group received 50% of the revenue and expenses of the joint venture. The joint venture arrangement ceased on 15 August 2024. The Group charged the joint venture for the provision of employee, management and asset services. On consolidation, 50% of the charges eliminate. Charges for the remaining 50% (being the Group’s interest in the joint venture up until 29 February 2024 and the Group’s contractual rights for the remainder of the period) of $94,997,949 were received by the Group in 2024 (2023: $87,813,746). (b) Compensation of Key Management Personnel (KMP) 2024 $ 2023 $ Short term 4,042,577 4,530,309 Other long term 101,746 (7,924) Post employment 231,156 228,597 Share based payments (131,158) 1,170,109 Termination benefits 1,175,000 – 5,419,321 5,921,091 E6 Auditor’s remuneration 2024 $ 2023 $ Amounts received or due and receivable by Ernst and Young for: – audit and review of the statutory financial reports of the Group and subsidiaries 2,960,876 2,927,155 – other assurance and agreed upon procedures services under other legislation or contractual arrangements 329,491 304,900 – other services(i) 180,000 363,000 3,470,367 3,595,055 (i) The Group engages Ernst and Young to provide permitted non-audit services where there is a compelling reason to do so provided stringent independence requirements are satisfied. Tabcorp Annual Report 2024 137 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY NOTES TO THE FINANCIAL STATEMENTS: OTHER DISCLOSURES FOR THE YEAR ENDED 30 JUNE 2024 E7 Assets held for sale (a) Disposal group sold during the year On 31 October 2023, the Group completed the sale of the Tabcorp Gaming Solutions (TGS) business (trading as MAX Performance Solutions) to PVS Australia Pty Ltd and Nexus Services Pty Ltd for $21.0m in cash, including customary working capital and other minor adjustments, as part of the Group’s pivot toward integrity services. TGS is a supplier of electronic gaming machines and specialised services to licensed gaming venues, and is part of the Group’s Gaming Services operating segment. The loss on TGS business divestment of $7.5m (refer to note A1) includes loss on sale of business of $3.1m (refer to note A4(b)), onerous contract provision of $1.7m, inventory write-off of $2.0m and separation costs of $0.7m. In the prior year, a net write down of assets of $41.5m (post tax) was recognised immediately prior to classification as held for sale. (b) Disposal group sold during the prior year In February 2023, the Group completed the sale of its eBET business to Venue Digital Technology Pty Ltd for $59.0m in cash, including customary working capital and other minor adjustments, as part of the Group’s pivot toward integrity services. eBET is a supplier of loyalty and tracking systems to gaming venues in Victoria and NSW, and was part of the Group’s Gaming Services operating segment. During the prior year, the net gain on sale of $34.2m was recognised in Other Income (refer to note A4(b)). Assets classified as held for sale (and all assets and liabilities in a disposal group) are recognised at the lower of carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale are included in the income statement. The same applies to gains and losses on subsequent remeasurement. No depreciation or amortisation is charged on these assets while they are classified as held for sale. E8 Other material accounting policy information (a) Statement of compliance (i) Changes in accounting policy and disclosures A number of new and amended accounting standards became mandatorily applicable for the Group for the first time in the current financial year. The adoption of these new and amended standards had no impact on the financial position or performance of the Group, or the disclosures included in this Financial Report except for the amendments set out below. The amendments to AASB 101 Presentation of Financial Statements and AASB Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their `significant’ accounting policies with a requirement to disclose their `material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. The amendments have had an impact on the Group’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group’s financial statements. Global minimum top-up tax Tabcorp has adopted AASB 2023-2 Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules (AASB 2023-2) issued by the Australian Accounting Standards Board in June 2023 in response to the Organisation for Economic Co-operation and Development’s (OECD) Two Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. Pillar Two of those proposals seeks to apply a global minimum top-up tax (15%) and is expected to apply to the Group from 1 July 2024. AASB 2023-2 applies to entities reporting in Australia and provides a temporary mandatory exception from deferred tax accounting for the top-up tax, which is effective immediately, and requires new disclosures in relation to the Pillar Two exposure. The mandatory exception applies retrospectively. The retrospective application has no impact on the Group’s Consolidated Financial Statements as legislation implementing the top-up tax has not been enacted or substantively enacted as at 30 June 2024 and is expected to apply to the Group from 1 July 2024. Tabcorp Annual Report 2024 138 Future tax developments Tabcorp continues to monitor and evaluate the OECD Two Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy. Pillar Two of those proposals seeks to apply a global minimum top-up tax (15%). Tabcorp is in the process of evaluating the cash tax implications of the global minimum tax rules and will include disclosures related to expected impacts, if any, once legislation has been substantially enacted. No new legislation implementing the top-up tax was enacted or substantively enacted as at 30 June 2024 in any jurisdiction in which the Group operates. (ii) New Australian Accounting Standards or International Financial Reporting Standards issued but not yet effective A number of new or amended accounting standards and interpretations have been recently issued by the Australian Accounting Standards Board or International Accounting Standards Board but not yet effective. These new or amended accounting standards and interpretations have not been early adopted and are not expected to have a material impact on the financial position or performance of the Group, other than from AASB 18 Presentation and Disclosure in Financial Statements. AASB 18 will become effective on 1 January 2027 and will apply to the Group for the financial year commencing 1 July 2027. This standard aims to provide greater consistency in presentation of the income statement and cash flow statement, and more disaggregated information, and will change how the Group presents their results on the face of the income statement and disclose information in the notes to the financial statements. (b) Goods and services tax Revenues, expenses, assets and liabilities are recognised net of the amount of GST except: • when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; • wagering revenues, due to the GST being offset against government taxes; and • receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. (c) Foreign currency translation and balances Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at balance date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement with the exception of differences on foreign currency borrowings that are in an effective hedge relationship. These are taken directly to equity until the liability is extinguished at which time they are recognised in the income statement. Refer to note B3 for further detail. Non monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined. Tabcorp Annual Report 2024 139 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY CONSOLIDATED ENTITY DISCLOSURE STATEMENT AS AT 30 JUNE 2024 The consolidated entity disclosure statement is required by section 295(3A) of the Corporations Act. It includes disclosures about entities consolidated within the Tabcorp Group as at 30 June 2024, including details about tax residency of each entity. Name Entity type Place formed or incorporated % of share capital held Australian or Foreign resident Jurisdiction for Foreign resident Tax Residency Tabcorp Holdings Limited Body corporate Australia Australian N/A Australia 2KY Broadcasters Pty Ltd Body corporate Australia 100 Australian N/A Australia Aussie Fair Play Coalition Pty Ltd Body corporate Australia 100 Australian N/A Australia Bytecraft Systems (NSW) Pty Ltd Body corporate Australia 100 Australian N/A Australia Bytecraft Systems Pty Ltd Body corporate Australia 100 Australian N/A Australia COPL Pty Ltd Body corporate Australia 100 Australian N/A Australia Luxbet Pty Ltd Body corporate Australia 100 Australian N/A Australia Maxgaming Holdings Pty Ltd Body corporate Australia 100 Australian N/A Australia Maxgaming Investments Pty Ltd Body corporate Australia 100 Australian N/A Australia Maxgaming NSW Pty Ltd Body corporate Australia 100 Australian N/A Australia Maxgaming Qld Pty Ltd Body corporate Australia 100 Australian N/A Australia Maxgaming TAS Pty Ltd Body corporate Australia 100 Australian N/A Australia Reaftin Pty Ltd Body corporate Australia 100 Australian N/A Australia Sky Australia International Racing Pty Ltd Body corporate Australia 100 Australian N/A Australia Sky Channel Marketing Pty Ltd Body corporate Australia 100 Australian N/A Australia Sky Channel Pty Ltd Body corporate Australia 100 Australian N/A Australia Tab Limited Body corporate Australia 100 Australian N/A Australia Tabcorp ACT Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Assets Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Employee Share Administration Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Finance Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Gaming Holdings Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp International No.4 Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp International No.6 Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp International Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Maxgaming Holdings Limited Body corporate Australia 100 Australian N/A Australia Tabcorp Services Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Training Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Ventures Australia 1 Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Ventures Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp VIC Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Wagering (Vic) Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Wagering Assets (Vic) Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Wagering Holdings Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Wagering Manager (Vic) Pty Ltd Body corporate Australia 100 Australian N/A Australia Tabcorp Wagering Participant (Vic) Pty Ltd Body corporate Australia 100 Australian N/A Australia Tasradio Pty Ltd Body corporate Australia 100 Australian N/A Australia Ubet Enterprises Pty Ltd Body corporate Australia 100 Australian N/A Australia Ubet NT Pty Ltd Body corporate Australia 100 Australian N/A Australia Ubet Qld Limited Body corporate Australia 100 Australian N/A Australia Ubet Radio Pty Ltd Body corporate Australia 100 Australian N/A Australia Ubet SA Pty Ltd Body corporate Australia 100 Australian N/A Australia Ubet Tas Pty Ltd Body corporate Australia 100 Australian N/A Australia Bytecraft Systems (NZ) Limited Body corporate New Zealand 100 Foreign New Zealand New Zealand Premier Gateway International Limited Body corporate Isle of Man 100 Foreign Isle of Man Isle of Man Premier Gateway Services Limited Body corporate Isle of Man 100 Foreign Isle of Man Isle of Man Tabcorp Europe Holdings Limited Body corporate Isle of Man 100 Foreign Isle of Man Australia Tabcorp Europe Limited Body corporate Isle of Man 100 Foreign Isle of Man Australia Sky Racing World GP Partnership USA N/A Foreign USA USA(i) Sky Racing World Holdco, LLC Body corporate USA 100 Foreign USA USA Sky Racing World, LLC Body corporate USA 100 Foreign USA USA Tabusa, LLC Body corporate USA 100 Foreign USA USA (i) Sky Racing World GP is treated as a general partnership for Australian taxation purposes and is therefore not considered to be an Australian tax resident. Tabcorp Annual Report 2024 140 DIRECTORS’ DECLARATION In the opinion of the Directors of Tabcorp Holdings Limited: (a) the financial statements and notes of the Group are in accordance with the Corporations Act 2001 (Cth), including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporations Regulations 2001 (Cth); (b) the financial statements and notes also comply with International Financial Reporting Standards; (c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and (d) the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and correct. This declaration has been made after receiving the declarations required to be made to the Directors by the Executive Chairman and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2024. In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the Closed Group identified in note D2 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee. Signed in accordance with a resolution of Directors. Bruce Akhurst Executive Chairman Melbourne 28 August 2024 Tabcorp Annual Report 2024 141 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Independent Auditor's Report to the Members of Tabcorp Holdings Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Tabcorp Holdings Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June 2024, the consolidated income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the Directors' declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and of its consolidated financial performance for the year ended on that date; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. INDEPENDENT AUDITOR’S REPORT Tabcorp Annual Report 2024 142 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. Impairment Assessment of licence intangibles, other intangibles and goodwill Why significant How our audit addressed the key audit matter As at 30 June 2024 the Group has licence intangibles of $1,151.9 million, other intangibles of $138.9 million and goodwill of $988.0 million as disclosed in note C1 and C2. The Group performs an annual impairment assessment, or more frequently if there is an indicator that goodwill and indefinite life intangibles may be impaired. Finite life intangibles are assessed for impairment when there is a trigger. This assessment involves a comparison of the carrying value of the Cash Generating Unit with its recoverable amount. The impairment assessment involves estimates and assumptions based on future performance, forecast cash flows, discount rates, license renewals and terminal growth rates. Impairment indicators existed at both the half year 31 December 2023 and at 30 June 2024, which led to impairment assessments being undertaken at both these reporting dates. As at 30 June 2024 an impairment charge of $1,531.6 million was recognised. Accordingly, the value of goodwill, licences and other intangibles, the existence of impairment indicators, the judgements and estimation involved in the Group’s impairment assessments, and the sensitivity of the assessment to these assumptions, this was a key audit matter. Our audit procedures included the following: ► Evaluated the Group’s future cash flow forecasts which are a key input to the impairment assessments for goodwill, licence intangibles, other intangibles, and the related non-current assets within the Group’s cash generating units (CGUs) and segments. ► Evaluated the appropriateness of the forecasts by comparing the future cash flows to approved budgets and compared the Group’s results to historical forecasts to assess forecast accuracy. ► Assessed the discount rates applied by comparing them to the cost of capital for the Group and with comparable businesses. ► Involved our valuation specialists to assess whether the methodology applied is in accordance with the requirements of Australian Accounting Standards and evaluated key assumptions including licence renewal and terminal values, long term growth rates, discount rates, capital expenditure assumptions and working capital requirements applied in the Group’s impairment model. We also tested the mathematical accuracy of the discounted cash flow models. ► Performed sensitivity analysis on the key assumptions to ascertain the extent of change in those assumptions that would either individually or collectively result in an additional impairment charge. ► Performed market capitalisation and earnings multiples cross checks in comparison with other comparable businesses to corroborate the output of impairment testing models. ► Assessed the Group’s determination of the CGUs used for its impairment assessment in accordance with Australian Accounting Standards. ► We also assessed the adequacy and appropriateness of the disclosures included in note C3 - Impairment testing to the financial report. Tabcorp Annual Report 2024 143 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Reliance on automated processes and controls related to Wagering revenue Why significant How our audit addressed the key audit matter The Group’s financial reporting processes are heavily reliant on IT systems with automated processes and controls over the capture and recording of Wagering revenue transactions. Given the significance of these processes and controls to the accounting records and financial reporting process, the impact of these IT systems, and the related processes and controls was a key audit matter. With the involvement of our IT specialists, we assessed the effectiveness of the control environment and transaction processing controls relevant to the recording of Wagering revenue transactions. When testing controls was not considered an appropriate or efficient testing approach, alternative audit procedures were performed on the financial information being produced by IT systems. Information Other than the Financial Report and Auditor’s Report Thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2024 Annual Report, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of: a. The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and; b. The consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: INDEPENDENT AUDITOR’S REPORT CONTINUED Tabcorp Annual Report 2024 144 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation i The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii The consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Tabcorp Annual Report 2024 145 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. INDEPENDENT AUDITOR’S REPORT CONTINUED Tabcorp Annual Report 2024 146 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Report on the Audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Tabcorp Holdings Limited for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Michael Collins Matt Biernat Partner Partner Melbourne 28 August 2024 Tabcorp Annual Report 2024 147 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY Unit FY24 FY23 FY22(i) FY21 FY20 Financial performance Revenue from continuing operations $m 2,338.9 2,434.4 2,373.3 5,685.7 5,223.9 Revenue from discontinued operations $m – – 3,232.2 – – EBITDA(ii) $m (1,361.8) 358.4 211.3 1,031.4 (195.6) Profit/(loss) from continuing operations before interest and tax $m (1,619.8) 82.7 (75.1) 651.2 (573.7) Profit/(loss) after income tax attributable to members $m (1,359.7) 66.5 6,775.9 269.4 (870.4) Dividend(iii) $m 29.7 52.4 289.4 321.8 222.9 Financial position and cash flow Total assets $m 3,385.4 4,052.4 4,048.7 11,867.8 12,415.6 Total liabilities $m 2,138.4 1,393.3 1,337.6 5,171.7 6,389.0 Shareholders’ funds/total equity $m 1,246.9 2,659.1 2,711.1 6,696.1 6,026.6 Net cash flows from operating activities $m 245.2 119.3 737.0 719.5 670.9 Capital expenditure – payments $m 160.4 194.9 202.5 181.8 290.0 Cash at end of year $m 313.7 290.7 199.4 424.4 348.5 Shareholder value Earnings per share cents (59.6) 2.9 304.6 12.3 (42.9) Dividends per share(iii) cents 1.3 2.3 13.0 14.5 11.0 Operating cash flow per share(iv) cents (15.6) (3.5) 24.0 24.6 18.8 Net assets per share $ 0.55 1.20 1.22 3.07 2.97 Return on shareholders’ funds % (69.1) 1.6 (2.2) 4.1 (12.8) Total shareholder return(v) % (35.5) 12.5 15.1 55.8 (19.9) Share price close $ 0.70 1.11 1.07 5.18 3.38 Market capitalisation $m 1,598.6 2,532.5 2,370.4 11,508.0 6,869.2 Segment revenue from continuing operations(vi) Wagering and Media $m 2,162.8 2,230.8 2,181.9 2,298.0 2,084.1 Gaming Services $m 176.1 203.6 192.9 183.2 220.9 Employee Safety(vii) LTIFR 2.7 2.6 1.3 2.3 4.1 Females in the Leadership Cohort(viii) % 39 37 42 43 39 FIVE YEAR REVIEW (i) The Tabcorp-The Lottery Corporation demerger was implemented on 1 June 2022, therefore FY22 includes 11 months results from the Lotteries and Keno business as a discontinued operation. Periods prior to FY22 have not been re-presented. (ii) Includes impairment of: FY24: Goodwill – $746.0m and other assets – $785.6m. FY23: Other assets – $49.0m. FY22: Other assets – $5.0m. FY21: Goodwill – $122m and other assets – $10m. FY20: Goodwill – $1,090m and other assets – $43m. (iii) Dividends attributable to the year, but which may be payable after the end of the period. (iv) 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. (v) Total shareholder return (TSR) is calculated from 1 July to 30 June. The share price used for calculating TSR is the volume weighted average share price used in the Tabcorp Dividend Reinvestment Plan (DRP). For FY22, includes the value of The Lottery Corporation Limited shares at 31 May 2022 of $4.74, prior to implementation of the Demerger. (vi) Revenue includes both external and internal revenue. (vii) The lost time injury frequency rate (LTIFR) is the number of lost time injuries per million hours worked. (viii) The Leadership Cohort comprises the ELT (excluding the MD & CEO), direct reports to the ELT and frontline leaders. Tabcorp Annual Report 2024 148 Securities on issue (as at the date of this report) Tabcorp has on issue 2,283,648,566 fully paid ordinary shares (shares) which are quoted on the Australian Securities Exchange (ASX) under the code ‘TAH’. The issued capital has increased since 30 June 2023 due to shares issued pursuant to Tabcorp’s Dividend Reinvestment Plan. These shares represent the only Company securities quoted on the ASX. There currently isn’t a share buy-back in operation in respect of the Company’s shares. Tabcorp also has 81,912,149 Options issued to executives pursuant to Tabcorp’s long term incentive arrangements which are not quoted on the ASX. During FY24, a total of 2,308,993 shares were acquired on market at an average price of $0.97 per share for the purpose of allocating shares to employees pursuant to Tabcorp’s employee incentive plans. Shareholding restrictions There are a number of restrictions applying to shareholdings in Tabcorp, which arise under legislation, requirements of various regulatory authorities and in the Company’s Constitution. Some of these restrictions limit the number of shares and/or voting power in the Company that can be held by a shareholder. In particular, the Company’s Constitution (to be read in conjunction with applicable legislation) contains restrictions prohibiting a person from having voting power in the Company in excess of 10% without obtaining the written consent of the relevant Government Minister in NSW. In addition, legislative change to the Totalizator Act 1997 (NSW) (and related legislation) would also be required in order for a person to hold in excess of 10% of the shares in the Company (or the NSW Wagering Licence holder, TAB Limited). The Company may refuse to register any transfer of shares which would contravene relevant shareholding restrictions or require divestiture of the shares that cause an individual to exceed the shareholding restrictions. Voting rights Shares issued by Tabcorp carry one vote per share. 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. Substantial shareholders The following is a summary of the substantial shareholders pursuant to notices lodged with the ASX in accordance with section 671B of the Corporations Act 2001: Name Date of interest Number of ordinary shares(i) % of issued capital(ii) AustralianSuper Pty Ltd 13 July 2022 213,701,339 9.60 Magellan Financial Group Limited 16 May 2024 118,950,990 5.20 Vanguard Group 17 August 2023 114,610,313 5.02 (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. SHAREHOLDER INFORMATION Tabcorp Annual Report 2024 149 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY SHAREHOLDER INFORMATION Twenty largest registered holders of ordinary shares (as at 31 July 2024) Investor name Number of ordinary shares % of issued capital J P Morgan Nominees Australia Pty Limited 600,634,220 26.30 HSBC Custody Nominees (Australia) Limited 498,040,505 21.81 Citicorp Nominees Pty Limited 325,969,459 14.27 BNP Paribas Nominees Pty Ltd105,240,790 4.61 National Nominees Limited 60,626,018 2.65 UBS Nominees Pty Ltd 28,661,939 1.26 Citicorp Nominees Pty Limited 22,965,979 1.01 BNP Paribas Noms Pty Ltd 16,796,764 0.74 Pacific Custodians Pty Limited 11,513,812 0.50 HSBC Custody Nominees (Australia) Limited 10,748,969 0.47 BNP Paribas Nominees Pty Ltd 9,203,574 0.40 Wentworth Investments Pty Limited 7,654,934 0.34 HSBC Custody Nominees (Australia) Limited 5,327,537 0.23 Wentworth Investments Pty Ltd 5,311,910 0.23 Neweconomy Com Au Nominees Pty Limited <900 A/C> 5,176,455 0.23 BNP Paribas Nominees Pty Ltd 4,373,800 0.19 Netwealth Investments Limited 4,262,958 0.19 Pacific Custodians Pty Limited 4,229,976 0.19 Woodross Nominees Pty Ltd 4,179,007 0.18 UBS Nominees Pty Ltd 3,821,656 0.17 Total of top 20 registered holders 1,734,740,262 75.96 Distribution of securities held (as at 31 July 2024) Ordinary shares(i) Options(ii) Number of securities held Number of holders Number of securities % of securities Number of holders Number of securities % of securities 1 – 1,000 65,548 21,601,566 0.95 - - - 1,001 – 5,000 51,514 123,476,037 5.41 - - - 5,001 – 10,000 8,417 60,507,250 2.65 - - - 10,001 – 100,000 7,794 192,949,232 8.44 - - - 100,001 and over 430 1,885,114,481 82.55 22 81,912,149 100.00 Total 133,703 2,283,648,566 100.00 22 81,912,149 100.00 (i) Ordinary shares includes Restricted Shares provided to employees under the Company’s employee incentive arrangements. (ii) Options were issued pursuant to the Company’s long term incentive arrangements. Refer to the Remuneration Report on pages 64 to 91 for more information about the Company’s employee incentive arrangements. Unmarketable parcels (as at 31 July 2024) There were 58,803 shareholders holding less than a marketable parcel of ordinary shares ($500 or more, equivalent to 776 ordinary shares) based on a market price of $0.645 at the close of trading on 31 July 2024. Tabcorp Annual Report 2024 150 AASB Australian Accounting Standards Board ACT Australian Capital Territory ACTTAB The Tabcorp business located in the ACT AGM Annual General Meeting AML/CTF Anti-Money Laundering/Counter-Terrorism Financing ASX Australian Securities Exchange AUD Australian dollar Board The Company’s Board of Directors Company or Tabcorp Tabcorp Holdings Limited (ABN 66 063 780 709) CGU Cash generating unit Dabble Tabcorp has a 23% equity interest in Dabble Sports Pty Ltd (as at 30 June 2024), the socialised digital wagering platform Demerger The demerger of the Group’s former Lotteries and Keno business was implemented on 1 June 2022 and is now operated by The Lottery Corporation Limited (TLC) Director Director of the Company DPS Dividends per share DRP Dividend Reinvestment Plan EBIT Earnings before interest and tax EBITDA Earnings before interest, tax, depreciation and amortisation, and which is non-IFRS financial information EGM Electronic gaming machine EPS Earnings per share ESG Environmental, social and governance sustainability matters Financial year or FY The Group’s financial year is 1 July to 30 June Gaming Services The Group’s business that provides services to licensed gaming venues and EGM monitoring services Group The Tabcorp group of companies IFRS International Financial Reporting Standards KMP Key management personnel Lotteries and Keno The Group’s former business that is reported as a discontinued operation following the Demerger LTI Long term incentive MAX The Group’s Gaming Services brand MD & CEO Managing Director and Chief Executive Officer NED Non-Executive Director NM Not meaningful NPAT Net profit after tax NSW New South Wales Options Securities allocated to executives under the LTI plan, which may vest subject to achieving specified performance hurdles PGI The Premier Gateway International wagering pooling hub located in Europe QLD Queensland Restricted Shares Ordinary shares allocated to executives under the STI plan, and which may not be traded for a specified period ROIC Return on invested capital SA South Australia Sky Racing Part of the Group’s Media business, broadcasting racing and sport throughout Australia and internationally SRW Sky Racing World is the vision distribution and wagering pooling hub based in the US STI Short term incentive TAB The Group’s wagering brand TAH The ASX ticker code used to identify Tabcorp Trackside The Group’s animated racing game USD United States dollar Wagering and Media The Group’s business that operates fixed odds and pari-mutuel betting products and services on racing, sport and novelty products, and racing and sports broadcasting GLOSSARY Tabcorp Annual Report 2024 151 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY INDICATIVE KEY DATES MAJOR ANNOUNCEMENTS 2024(i) Annual Report and full year results announcement 28 August Ex-dividend for final dividend 2 September Record date for final dividend 3 September Last date for receipt of DRP elections 4 September Last date for receipt of AGM director nominations 4 September Final dividend payment 20 September AGM 23 October 2025(i) Half year results announcement 20 February Ex-dividend for interim dividend 25 February Record date for interim dividend 26 February Last date for receipt of DRP elections 27 February Interim dividend payment 14 March End of financial year 30 June Annual Report and full year results announcement 27 August Ex-dividend for final dividend 1 September Record date for final dividend 2 September Last date for receipt of DRP elections 3 September Last date for receipt of AGM director nominations 4 September Final dividend payment 19 September AGM 23 October (i) Proposed dates set out above are subject to change. The determination of any dividend is subject to law, business performance and Board approval, and details of any dividend, including key dates, will be confirmed to the ASX. Refer to the ASX and the Company’s website for any updates. Notice of meeting The Annual General Meeting of Tabcorp Holdings Limited will commence at 10.00am (Sydney time) on 23 October 2024. Tabcorp’s major announcements since the previous annual report were: 2023 Tax treatment resolved for various licences 11 September 1Q24 trading update 12 October AGM addresses and presentations by the Chairman and MD & CEO 25 October Mark Howell appointed as Chief Financial Officer (subject to regulatory approval) 28 November New Victorian Wagering and Betting Licence awarded to Tabcorp 18 December 2024 Half year results 22 February MD & CEO, Adam Rytenskild, to leave Tabcorp 14 March NSW Government announced a review of the NSW wagering tax regime, regulation and industry funding 14 June Gillon McLachlan appointed as MD & CEO (subject to regulatory approval) 17 June Annual Report and full year results 28 August MDM Design® Tabcorp Annual Report 2024 152 Registered office Tabcorp Holdings Limited Level 19, Tower 2, Collins Square 727 Collins Street Melbourne VIC 3008 Australia Telephone 03 9246 6010 Email enquiries@tabcorp.com.au 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 tabcorp@linkmarketservices. com.au Website www.linkmarketservices.com.au Website www.tabcorp.com.au New South Wales office Level 31 680 George Street Sydney NSW 2000 Telephone 02 9218 1000 Queensland office Level 13 180 Ann Street Brisbane QLD 4000 Telephone 07 3877 1010 Sky Racing/Sky Sports Radio 79 Frenchs Forest Road Frenchs Forest NSW 2086 Telephone 02 9452 8400 Follow us on COMPANY DIRECTORY Corporate information The Company is a company limited by shares that is incorporated and domiciled in Australia. Stock exchange listing The Company’s ordinary shares are quoted on the Australian Securities Exchange (ASX) under the code ‘TAH’. 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. Currency References to currency are in Australian dollars unless otherwise stated. Forward-looking statements This report contains forward-looking statements (Statements) in relation to the Tabcorp Group, including statements regarding the Group’s intent, belief, goals, objectives, opinions, initiatives, commitments or current expectations with respect to the Group’s business and operations, market conditions, results of operations and financial conditions, and risk management practices. This report also includes Statements regarding climate change and other environmental and energy transition scenarios. Examples of these Statements include words such as ‘estimate’, ‘plan’, ‘will’, ‘anticipate’, ‘may’, ‘believe’, ‘should’, ‘expect’, ‘intend’, and other similar expressions. Any Statements are based on the Group’s current knowledge and assumptions, including with respect to financial, market, risk, regulatory and other relevant environments that will exist and affect the Group’s business and operations in the future. The Group does not give any assurance that the assumptions will prove to be correct. These Statements involve known and unknown risks, uncertainties and assumptions, that could cause our actual results, performances or achievements to be materially different from the relevant Statements. There are also limitations with respect to scenario analysis, and it is difficult to predict which, if any, of the scenarios might eventuate. Scenario analysis is not an indication of probable outcomes and relies on assumptions that may or may not prove to be correct or eventuate. We caution readers not to place undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the Group does not undertake to publicly update, review or revise any of the forward- looking statements or to advise of any change in assumptions on which any such statement is based. Past performance cannot be relied upon as a guide for future performance. Tabcorp Annual Report 2024 153 DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL REPORT OPERATING & FINANCIAL REVIEW GOVERNANCE SUSTAINABILITY TABCORP.COM.AU