Good morning, everyone. My name is Doug McTaggart, and I am the Chairman of The Lottery Corporation Limited. On behalf of the board, I welcome you to our 2024 Annual General Meeting. I begin by acknowledging the traditional custodians of the land on which we meet today, the Wurundjeri peoples of the Kulin Nation. I pay my respects to their elders, past and present. I also acknowledge and pay my respects to the Aboriginal and Torres Strait Islander peoples joining us today. I've been informed that a quorum of shareholders is present, and I declare the 2024 AGM open. Allow me to introduce our board. Joining us today are our independent Non-Executive Directors, Harry Boon, Anne Brennan-
Morning.
John O'Sullivan-
Morning
... Megan Quinn-
Morning
And Stephen Morro. Joining me on stage is Sue van der Merwe, our Managing Director and Chief Executive Officer, and Daniel Csillag, our very excellent Company Secretary. I'd also like to introduce you to the members of The Lottery Corporation's executive leadership team. I'll ask them to stand as I introduce them. Adam Newman, our Chief Financial Officer; Nicholas Allton, our Chief Legal Officer; Antony Moore, our Chief Channel Officer; Callum Mulvihill, our Chief Commercial Officer; Andrew Shepherd, our Chief Customer and Marketing Officer; Loren Somerville, our Chief Information Officer; and Robert Ure, our Chief Corporate Development Officer, and Michelle Williams, our Chief People Officer. She's new in the job . Very, very capable hands. Before we move to the formal business of the meeting, I will outline procedures for asking questions and submitting votes.
As set out in the Notice of Meeting, only shareholders and proxyholders are entitled to ask questions or make comments and to vote on the resolutions. We will provide a reasonable opportunity for shareholders as a whole to ask questions and to make comments as each item of business is considered. Please ensure your question or comment is relevant to the item of business being considered and to shareholders as a whole. If you have a matter that you would like to raise as a customer of The Lottery Corporation, these will be referred to our customer relations team for a response. For those wishing to ask a question or make a comment, please make your way to one of the microphones in the room, where stands are, and make yourself known to the relevant staff member.
Please show your voting or proxy holder card, and when invited, introduce yourself to the meeting. If you are attending as a proxy holder, please also state the name of the shareholder you are representing today. Only those persons holding a yellow or blue voting card are entitled to speak. We respectfully ask that shareholders observe a two-question limit per agenda item to ensure that as many shareholders as possible have an opportunity to ask questions. Thank you to those shareholders who have submitted questions prior to the meeting. Some of those questions will be answered through my address or the CEO's address, both of which have been released on the ASX's Market Announcements Platform prior to the commencement of this meeting or in the course of this meeting. Voting resolutions will be conducted via a poll.
I appoint The Lottery Corporation's share registry, Link Market Services, as the Returning Officer for the conduct of the poll. I now declare the poll open. Shareholders and proxyholders wishing to vote today must complete a yellow voting card. These will be collected by Link Market Services staff following the close of the meeting. If you are voting today and need to leave early, please remember to submit your paper voting card to the share registry staff before you leave. The poll will close approximately five minutes after the conclusion of the meeting. Details of the proxies received prior to the meeting on each resolution will be shown in the presentation slides after discussion on that item. I am holding open proxies in my capacity as chairman of the meeting, and I intend to vote all available proxies in favor of all resolutions.
The final results of the poll will be lodged with the ASX as soon as possible after the meeting. In the unlikely event of a significant technical issue or an emergency here in this room, it may be necessary to adjourn the meeting. If this occurs, we will provide further details on our website via the ASX Market Announcements Platform. We have published on the ASX and on our website the Notice of Meeting and the formal addresses and presentations to be delivered today. Following the conclusion of the meeting, a recording and transcript will be available on our website. It's now my pleasure to address you as shareholders today. Six months ago, I was privileged to be elected chairman of The Lottery Corporation. The Lottery Corporation is a world-class lottery business. In fact, we are globally unique as the only large-scale, listed, pure-player lottery company.
The licenses and approvals we hold are long-dated and/or exclusive and are in attractive markets. Our lotteries model is low spend, low frequency, and mass participation. This underpins our wide community acceptance of our products and grants us a valuable social license to operate. We have a diversified and balanced portfolio of high profile brands, and it's the combination of these and other attributes that gives the group its highly defensive nature and resilient nature, with a proven history of delivering long-term market growth. The 2023, 2024 financial year, I'll refer to that as FY 2024 hereafter, was a very successful one for The Lottery Corporation. The company delivered record revenue, EBITDA and NPAT, and we did so despite a challenging inflationary and consumer spending environment.
Proactive game management and strategic investments in product, brand, and customer experience continued to deliver ongoing commercial benefits, including a big step up in registered customer numbers. Significant milestones were also achieved in responsible gambling, data security, and safeguarding consumers' privacy. These initiatives help set the company up for future success and support our vision to be the world's best lottery operator. I'm also pleased to confirm that we've materially completed our separation from Tabcorp. This was a complex project that was well executed by the management team. The board is very focused on returns to shareholders. As part of our capital management framework, we have set a long-term value creation target of total shareholder return in the top quartile of companies in the S&P/ASX 100, other than those in metals and mining and the oil and gas sectors.
We were pleased to determine total ordinary dividends for the year, comprising interim and final dividends of AUD 0.16 per share. This represents a dividend payout ratio of 86% in FY 2024 NPAT, before significant items. A special dividend of AUD 0.025 per share brought the total dividend for the year, comprising the ordinary and the special dividends, to AUD 0.185 per share, fully franked. This total dividend represents a payout ratio of 100% of FY 2024 NPAT before significant items. The special dividend reflected a highly favorable year for jackpots relative to the model outcomes and our strong balance sheet position. Our dividend payout ratio is targeted to be between 80% and 100% of full year NPAT before significant items, with a long-term leverage target range of 3x to 4x EBITDA.
This reflects the underlying quality of the business and of our licenses. Turning now to matters relating to the board. The Lottery Corporation operates in a complex environment, with a license framework underpinned by state-based regulations. The board thus requires a balance of director skills and experience to be effective in overseeing the company's strategic direction and responsiveness to risks and opportunities. We regularly assess the board's performance to seek to maintain a highly effective board with a mix of relevant skills, expertise, and experience drawn from diverse backgrounds. In December 2023, Stephen Morro commenced as a Non-Executive Director. He had been an observer to the board since June 2023. Stephen brings more than 30 years of experience in the gaming industry in supplier, operational, and regulatory roles. He is standing for election at today's meeting. Megan Quinn and I offer ourselves for re-election today.
Stephen, Megan, and I will address the meeting later today in respect of our elections and re-elections. As a result of my stepping into the chairman's role in March, we changed the composition of our board committees to ensure they continue to effectively help the board to carry out its responsibilities. As part of those changes, John O'Sullivan was appointed chairman of the Risk and Compliance Committee. Anne Brennan has continued as Chair of the Audit Committee, and Harry Boon continues as Chairman of the People and Remuneration Committee. Throughout FY 2024, the board continued to oversee the identification and evaluation of risks and opportunities that may impact the company's ability to achieve its objectives. We know that culture matters in an organization, and that a healthy culture is linked with commercial success.
To that end, the board continues to oversee the development of a high-performing culture and a safe, respectful, and supportive environment where our people feel included and appropriately rewarded. Our aim is to have fair and competitive remuneration arrangements that encourage strong business performance and shareholder value creation, while aligning with our approach to risk management and compliance. The board considered feedback from shareholders last year on our remuneration arrangements and has made adjustments which we'll cover when we get to them Item 4. The board also remains focused on managing risks, including cybersecurity risks, and continues to oversee investments and projects that help protect our data and our systems. This involves promoting a culture where managing cybersecurity risk is prioritized.
The board is very engaged on ensuring the integrity of the lottery's regulatory framework is upheld, so it continues to protect consumers and our social license to operate. The Lottery Corporation holds 13 licenses and approvals, some of them extending out as far as 2072. The board has been active in overseeing a program of work to preserve and enhance the value of these licenses. As part of this, we've been active in considering current and future market scenarios. At The Lottery Corporation, 60% of a typical lottery entry, excluding commission to retailers, is returned to winners, and over 30% is paid in taxes to states and territories and the federal government. This means that more than 90% of an entry into Australia's official lotteries is returned to the players or through the community.
This is not the case with other lottery products operating in Australia. In FY 2024, our operations delivered AUD 1.9 billion in lottery and Keno tax revenues to state and territory governments, and AUD 725 million in commissions to our retail business partners. This illustrates the benefits of a healthy lotteries and Keno ecosystem. We are dedicated to ensuring our licenses continue to deliver value widely. In closing my address, I'd like to thank management and all of our people for driving a very successful FY 2024. Similarly, on behalf of the board, I'd like to thank the many organizations we work alongside to deliver our games. This includes our retail business partners, community partners, suppliers, regulators, and governments. We have a proven strategy and a record of delivery over an extended period.
We will continue to execute it while adapting to changes in the marketplace and to consumer preferences. We have a strong balance sheet and a clear capital management framework that guides how we allocate your capital, and we operate in an industry that has shown resilience through the economic cycle, and where we continue to see favorable industry dynamics driving growth. Thank you for your support, and I look forward to addressing you again later in the meeting. I will now pass to Sue, our CEO.
Thank you, Doug. Good morning, shareholders. It is my pleasure to provide my address for the 2023-2024 financial year, a year of continuing to add excitement to Australians' lives and delivering life-changing wins. A total of AUD 4.4 billion was returned to lottery players in prizes overall, and more than 320 players became overnight millionaires or multimillionaires. The record AUD 200 million Powerball event was a history-making moment in Australian lotteries, a one-in-seven-year statistical event in which two winning entries shared the Division One prize. Shareholders, retail businesses, and governments received record returns. All in all, a record year highlighting once again how lotteries and Keno deliver winning moments across our stakeholders. We achieved strong top-line growth, and we also increased margins. Group revenue was up 13.8% on the prior year to just under AUD 4 billion.
EBITDA was up 16% to AUD 827 million, and group NPAT was AUD 414 million. We're actively managing the business, and we saw the results of this in FY 2024. Looking now at the lottery's performance in more detail, revenue was up 14.7% on the prior year. This was driven by our active game and sequence management, highly favorable jackpot outcomes, and positive impacts from the Powerball price increase and the commission increase, which we successfully introduced in May last year. The result is a great example of our portfolio strategy delivering. With AUD 771 million of extra value in jackpot offers versus the prior period, we delivered a 27% increase in jackpot game turnover, with most base or non-jackpot games down only 2% to 4% on a like-for-like basis, and this shows the business's strength and resilience.
Active registered customer numbers increased to 4.75 million, and that's an uplift of almost 500,000 customers. This was driven by a customer acquisition and retention strategy that's delivering, as well as big Australian events, including the 200 million Powerball draw and the 90 million Oz Lotto draw held on Boxing Day. These draws captivate the public, and the technology platform that powered them was robust and resilient. At peak times, our systems processed more than 70,000 transactions a minute. We delivered growth across both our retail and digital channels. Retail remains an important part of our offering, and it was pleasing to see turnover grow 6.6%. Our retail presence in formats such as news agents, lottery agencies, and convenience stores gives The Lott extensive brand exposure.
It provides connection and convenience for our customers, and it supports thousands of small businesses. While our game portfolio drove increased foot traffic into retail outlets, our Store Syndicates Online product continued to be very popular with customers and retailers. This customer-led initiative is providing a fantastic fusion between our retailers and the convenience and scale of our digital capabilities. Continued investments in our registered player programs, major event draws driven by game management, and customer-led initiatives like Store Syndicates Online, have further digitized the player experience. Digital is an important growth channel, with almost 41% of lottery sales generated through this channel in FY 2024. We continue to demonstrate our strong capability in game innovation, and we've been delighted with the launch of the Weekday Windfall lottery game.
This refresh of Monday and Wednesday Lotto, with the addition of the Friday draw, has been a great success, delivering an estimated AUD 135 million in additional annualized turnover. In addition, we continue to strengthen our all-important brands with a revitalized campaign for Oz Lotto and a new campaign for Instant Scratch-Its tickets to support everyday purchasing and gifting occasions. Turning to Keno, a well-established and popular product, this game is centered around licensed venues, and it's also offered online where that's permitted through our Victorian and ACT licenses. Revenues grew 2.7%, with strong in-venue performance, particularly in Queensland, underpinning the result. Earnings are, however, impacted by changes to commercial arrangements with retail partners, an increasingly competitive online Keno market, and a shift of some digital turnover from our higher-margin ACT license to Victoria, as required by our Victorian license.
In May, we launched our new Together We Play campaign, which differentiates our Keno game from others in the market, showcasing it as a social experience that brings people together. We are seeing positive results from our marketing activity, with strong brand health metrics and growth in customer participation. Responsible play is an important focus at The Lottery Corporation, and it's embedded in our culture. We have a comprehensive responsible play program. It recognizes that while for most Australians, playing our games is fun, for a very small number of people, playing can become a problem. Our program complies with our license and regulatory commitments, and it's informed by research and stakeholder engagement. It's made up of policies, processes, systems, and tools that encourage responsible play across game design, employee and retailer training, customer education, and support and responsible advertising.
In FY 2024, we enhanced the use of our data analytics in our early intervention models to more effectively identify customers showing potential signs of gambling harm. We are also proud to hold the highest level of accreditation in the World Lottery Association Responsible Gambling Framework. This Level 4 accreditation has been held since 2017 and was recertified in June 2024. On the topic of the broader gambling market, there is growing sentiment in the Australian community that some forms of online gambling are too readily available and the associated advertising is excessive. Governments have responded to this with various reforms and inquiries. In this context, it's important to reinforce that lotteries are quite different. Lotteries are generally a low-spend purchase, with the average weekly spend by our customers in FY 2024 being around AUD 13.
They are a low-harm product, largely because of the game structure, where there's typically one draw each week or each day. We await the federal government's response to a parliamentary committee inquiry into online gambling and its impact on those experiencing gambling harm. We also acknowledge the federal government's recently announced review into the impact of online Keno and foreign matched lottery products. As you would expect, we're participating in the process. Moving now to our people and the workplace. Our people are central to the delivery of our business strategy and our strong business performance. To that end, we are very proud to have a highly engaged team who are passionate about what they do and about The Lottery Corporation and its success.
This is evidenced in our most recent employee engagement survey, where we scored 71%, slightly above target and an increase of five percentage points on the previous survey. We continue to make good progress towards better outcomes in diversity, equity, and belonging. Looking now to this financial year, we are pleased with the start to FY 2025. We've seen a stabilization and signs of improvement in lottery sales with similar offers across our base games. Keno has continued its good momentum, and sales for the 100 million Powerball draw in August were above the equivalent draw in May. We will continue to actively manage the portfolio to maximize game performance, including our prize offers based on market conditions. We remain focused on taking a customer-centric approach to everything we do, ensuring we maximize customer lifetime value in a responsible and sustainable way.
We continue to invest in initiatives that further grow our registered customer numbers. Among the many initiatives we're executing this year is an easier way for players to join our retail membership program using their digital device in store. This will modernize the sign-up experience for customers and for our retailers. We're also implementing a new customer data platform that will enable us to have better personalized communications with our customers at scale. We know in this era of personalization that customers are more loyal, engaged, and satisfied if they have more personalized experiences. Subject to the necessary approvals, we're intending to introduce two new initiatives. First, our next game change is planned to be to Saturday Lotto, the second most popular game in our portfolio.
This is part of our normal evolution of our games, and would include a change to the price and the Division One prize offer. We're also planning to introduce charitable games products into The Lott's digital channel. This will mean customers can buy a Play For Purpose ticket to support their charity of choice, for example, through The Lott app. As always, we continue to prioritize rigorous cost management and disciplined capital allocation. We have a highly variable cost base, and we'll seek to contain OpEx growth to below a normalized revenue growth. A focus on optimization activities will facilitate cost management and support funding of initiatives to reinvest back into the business to help drive top-line growth. Our strong balance sheet provides flexibility for us to be able to grow and to continue to deliver value to our shareholders.
In closing, I'd like to thank each member of The Lottery Corporation team for their part in delivering winning moments to our customers and our communities in FY 2024. I would also like to thank the board for their support and leadership. All in all, we'll continue to do what lotteries have been doing for decades: making positive impacts for customers, shareholders, governments, small business, and the community. Thank you for your support, and I'll now hand you back to Doug.
We now come to the formal business of today's meeting. The Notice of Meeting has been published and made available to all shareholders, and I will take it as read. Each of the resolutions to be put to the meeting will be moved in the order set out in the Notice of Meeting. At the end of each item of business, shareholders and proxy holders will be provided an opportunity to ask questions. May I please ask that you keep your questions relevant to the agenda items? The first item on the agenda is to receive and consider the financial report, the director's report, and the auditor's report for the year ended thirty June, 2024. These reports were approved by the board and released on the 21st of August, 2024. They're also published on the ASX's Market Announcements Platform and on our website.
There is no vote on this item. However, in a moment, I will ask that questions submitted prior to the meeting on these reports and on the performance of the company, which have not been answered in my address or Sue's address. I will then invite questions from the floor. Ernst & Young is the company's External Auditor. Michael Collins, the partner of Ernst & Young, who is responsible for the audit, is present today. Where is Michael? And he's available to answer questions which should be restricted to audit matters. I'll now ask the Company Secretary to read out questions received prior to the meeting.
Thank you, Chairman. The first question is from Mr. Lawrence Colclough. Mr. Colclough asks: As an Australian, are we to pay taxes on winnings from other countries? If so, how are the winnings paid to us from overseas? Can we trust that we will get the entire amount due to the winning ticket?
Thank you for your question, Mr. Colclough. First, it is worth noting that The Lottery Corporation's lotteries are operated and regulated in Australia, and the prize winners receive winnings directly from us, not from a foreign country. We understand that prizes from other operators, including operators of foreign matched lotteries, may be subject to taxes and other requirements in the overseas country where the prize originates. We understand why there are concerns about these models, and as Sue mentioned earlier, the federal government is conducting a review into the impact of foreign matched lottery products. Are there questions from the floor? If so, would you step up to the microphone, make yourself known to a staff member?
Sorry. Oh, it's Christine Haydon. Good morning, Chair. My name is Christine Haydon, and I am a volunteer monitor for the Australian Shareholders Association. And we'd like to ask a question, just bear with me one moment, around the AGM. And we think it's great that you're rotating the AGM to various locations, and it's great to see you in Melbourne. But there's no opportunity to ask live questions or voting online during the meeting. And so we would like to ask you to share the reasons that you're not enabling shareholders' online participation at the AGM, and we'll also ask you to consider adopting a hybrid meeting forum in the future.
Well, thank you, Ms. Haydon, for your relevant and topical question. We are holding a face-to-face meeting today, but we are broadcasting the meeting live, and of course, we will provide a webcast available after the meeting for people who want to access it then... We've also provided the opportunity for people, shareholders, to provide their questions prior to the meeting, and we'll addressing them now. Our experience has been in the past, when we have held hybrid meetings, very few people took the opportunity to either vote online or to ask questions. Given the cost, we felt it was in shareholders' interest to restrict the meeting to a face-to-face meeting. Of course, every year, we will make a decision. We'll consider the issues and the options, and we will make a decision at the time.
Thank you for your question. Are there any more questions from the floor? As there are no more questions, that concludes this item of business, and we'll move to the next item. The next items of business relate to the election and re-election of directors. Item 2A on the agenda is the election of Stephen Morro as a Director of the company. Steve was appointed as a Non-Executive Director of The Lottery Corporation on 11 December 2023, following the receipt of all necessary regulatory approvals and ministerial consents. He served as an observer to the board from 30 June 2023 to 10 December 2023. He retires in accordance with the Constitution, and being eligible, he has offered himself for election. Steve is a member of the Risk and Compliance Committee, the People and Remuneration Committee, and the Nominations Committee.
The board considers Steve's deep experience in the gaming and entertainment industry, along with his experience in ASX-listed companies, to be of value to The Lottery Corporation. He's considered by the board to be independent. The board, with Steve abstaining, unanimously supports his election as a director of the company and recommends that shareholders vote in favor of this resolution. I would now like to invite Steve to address the meeting.
Thank you, Chairman. Good morning, ladies and gentlemen. It's an honor to appear before you as a candidate for the board of Directors of The Lottery Corporation. I have over 35 years' experience in the highly regulated gaming industry and have been licensed in over a 150 jurisdictions worldwide. I'm one of the few people that have experience in the three segments of the gaming industry: regulatory, operations, and supplier, as well as experience as a non-executive director in Australia and the United States. I started my career as a regulator of casinos in the U.S. This is where I gained the appreciation for the special standards of honesty, integrity, and financial responsibility demanded of participants in the gaming industry. I had a 20-year career at International Game Technology. My last two positions at IGT were President of the Gaming Division and Chief Operating Officer.
In these positions, I had global responsibility for day-to-day operations, as well as the product roadmap for games, products, systems, and intellectual property. After IGT, I made the move to the boardroom and served 10 years as a non-executive director of Aristocrat Leisure Limited, listed here on the ASX. I'm currently a non-executive director and chair of the Regulatory Compliance Committee of Light & Wonder, a leading omni-channel games company listed on Nasdaq with a dual listing on the ASX. I'm committed to advocating for strong corporate governance, as well as creating long-term shareholder value. I believe as a member of the board, I would provide a view and opinions that are complementary to those of the existing board members. I ask for your support of my nomination and an opportunity to contribute to secure TLC's position as the premier lottery operator. Thank you.
Thank you, Steve. I will now take questions on this agenda item. Are there any questions from the floor? As there are no more questions or any questions, we have now finalized discussion on this item. The proxy votes received prior to the meeting in relation to this resolution are shown on the slide presentation. It seems from the proxies received that this resolution will pass. Congratulations, Steve.
Thank you.
As the next item of business relates to my re-election, I will ask Anne Brennan to assume the Chair of the Meeting.
Thank you, Doug. This item of business is the re-election of Doug McTaggart as a director of the company. Doug is the Chairman of the Board of The Lottery Corporation. He's also the Chairman of the Nomination Committee. He's been a Non-Executive Director since October 2022, and he was appointed Chairman in March 2024. Doug retires in accordance with the Constitution, and being eligible, he has offered himself for re-election. The board considers Doug's extensive experience as a Non-Executive Director and background in finance, treasury, risk, and compliance matters to be of value to the company. He is considered by the board to be independent. The board, with Doug abstaining, unanimously supports Doug's re-election as a Director of the company and recommends that shareholders vote in favor of this resolution. I now invite Doug to address the meeting.
Good morning again, ladies and gentlemen. Thank you for the opportunity to stand for re-election to the board of The Lottery Corporation. You first elected me in 2022. At that meeting, I discussed my background and diverse career experience. Variously, I have been an economics professor, an Under Treasurer for the State of Queensland, and CEO of the Queensland Investment Corporation. Since 2012, I have had a NED career sitting on the board, the boards of listed entities UGL and Suncorp for 12 years, stepping down late last year, and chairing Spark Infrastructure for 5 years before it was sold to private equity and delisted. I've chaired various other entities, including the Queensland Institute of Medical Research, the Investment and Financial Services Association, which is now the Financial Services Council, Sun Central Maroochydore, and the Queensland Public Service Commission.
Currently, I'm Chairman of Indigenous Business Australia Asset Management. My accumulated experience in serving these various entities gives me deep insight into matters regarding economics, finance, risk management, corporate governance, and a strong familiarity with the broader workings of both government and business. With this background, I was delighted to step up as the chair of The Lottery Corporation earlier this year. The timing of this move was ideal, in that we now have completed separations from Tabcorp and are well-placed to continue to grow the business and to deal with both opportunities and risks going forward. As I said in my opening address, The Lottery Corporation is an excellent business with long-dated or exclusive licenses in strong markets with a strong portfolio of brands.
We have a very strong Social License to Operate, and we have a very strong management team who are amongst the best lottery operators in the world. Our challenges going forward are to protect and enhance the value of our licenses, continue to build the culture of The Lottery Corporation, to what it aspires to, and to continue to innovate our games portfolio to ensure steady growth and strong returns to shareholders. We also need to work with regulators and the community to ensure that gambling harm is minimized and that the integrity of the regulated lotteries is maintained. With your support, I will work with this excellent board to ensure we meet those challenges and to continue to deliver for all shareholders. Thank you. I now hand back to Anne.
Thank you, Doug. I'll now take questions on this agenda item. Are there any questions from the floor?
Chairman, I would like to reintroduce shareholder Christine Haydon.
Thank you, and I hope this question is appropriate for this particular part. It's very difficult to know when to get some of these questions in. But it's a general question about board skills, and at the moment you identify skills in a matrix, skills and experience of individual directors. And this year, the matrix was upgraded to from two categories to three, which is of assistance. Given, however, that the election of directors is a key part of the AGM, will you consider identifying the strengths of individual directors next year? Because we are asked to vote as in on each director, and while we know generic skills, we don't know who in particular are holding those skills.
Again, thank you, Ms. Haydon, for an excellent question and one that, we as a board discussed at length, considering the options, and as you note, we've made some changes to the skills matrix, upgrading it as we can. The challenge I have, or the board has, with identifying all individual directors with their individual skills is not to give the... We don't want to give the impression to the market and to shareholders that that particular director might have a special responsibility for that particular skill. It's very important to us as a board that we act collectively. The decisions made by the board, we are all responsible for, and I think if we went down the path, and we discussed this, the path you advocate, then perhaps that could be misconstrued.
For the directors coming up for election today, we do list in the Notice of Meetings where we think those particular skills rest, and I think that's about as far as we can go for the moment. Again, however, having said that, it is something we'll continue to monitor, so thank you again.
Thank you, Doug. Are there any other questions from the floor? As there are no more questions, we have now finalized discussion on this item. Proxy votes received prior to the meeting in relation to this resolution are shown on the slide presentation. Seems that the proxies received, that the resolution will pass. Congratulations, Doug. I'll now hand back to Doug.
Thank you. Thank you, Anne. We will now move on to the next item of business. Item 2C on the agenda is the re-election of Megan Quinn as a director of the company. Megan has been a non-executive director of The Lottery Corporation since October 2022. She retires in accordance with the Constitution, and being eligible, she has offered herself for re-election. Megan is a member of the People and Remuneration Committee, the Risk and Compliance Committee, and the Nominations Committee. The board considers Megan's customer, innovation, global brand, digital transformation, and multi-channel experience and background as well as experience of a public company director, to be of value to The Lottery Corporation. She is considered by the board to be independent.
The board, with Megan abstaining, unanimously supports her re-election as a director of the company and recommends that shareholders vote in favor of this resolution. I would now like to invite Megan to address the meeting.
Thank you, Doug, and good morning, everyone. It's a privilege to serve you, the shareholders, and the stakeholders of The Lottery Corporation. The board and management are ambitious for this company, and we pride ourselves on the social license TLC has earned over the years. My international experience as an entrepreneur and an executive with companies across a range of industries ensures that I bring a global perspective and a continuous improvement mindset to every discussion and decision we make, and because of my wide-ranging background, I'm very adaptable, which is an asset in the ever-evolving business and social landscape. I believe that my diverse skill set and experience of the last 35 years put me in good stead to make a valuable contribution to The Lottery Corporation. My focus remains leading by example, exemplary customer service, stakeholder relationships, innovation, agility, continuous improvement, and measured risk.
I'm drawn to the quality and ambitions of this board and the management team. The shared commitment for growth, innovation, and continued meaningful contributions to the community are all very important to me. The multi-channel opportunities are very exciting. I appreciate the challenges and opportunities of rapidly evolving economic and customer landscapes, and understand the importance of a keen awareness of disruption across industries. With your support, I'd very much like to continue to focus on our ambitions to continue to create positive impacts and customer-centric initiatives to deliver long-term, sustainable, and responsible growth. Thank you very much. Thank you, Doug.
Thank you, Megan. I will now take questions on this agenda item. Are there any questions from the floor?
I'd like to reintroduce shareholder Christine Haydon.
Chairman, I'd hoped someone else would ask the questions, but I, I'd like to ask a question in relation to Director Megan Quinn, and I'd have to say the Australian Shareholders Association value board members having a significant personal investment in the company. In other words, we call that skin in the game. Director Megan Quinn's shareholdings appear to be relatively low compared with board remuneration. Could you please confirm that that is going to be addressed under the board's policy to increase the shareholdings of directors, and that demonstrates, of course, alignment with the shareholders' interests? Thank you.
Thank you, Ms. Haydon, for yet another relevant and topical question, and I do thank the Australian Shareholders Association for their active interest in the management and corporate governance of the business, so thank you. We do have a policy which requires non-executive directors to hold to get to a minimum shareholding requirement over a three-year period. As it stands at the moment, four of our directors now meet that requirement with Anne Brennan achieving that after the annual report went out, so Megan and I are outstanding, but we are on the path, and we will achieve those targets within the policy stated time, so thank you for your interest. If there are no other questions, we have finalized discussion on this item.
The proxy votes received prior to the meeting in relation to this resolution are shown on the slide. It seems from the proxies received that this motion will pass. Congratulations, Megan. We'll now move on to the next item of business. Item three on the agenda relates to the adoption of the company's remuneration report for the financial year ended thirty June 2024. The Lottery Corporation's remuneration philosophy is based on appropriately recognizing, rewarding, and retaining high-performing talent. This enables us to, among other things, create value for shareholders. The remuneration report contains the details of The Lottery Corporation's approach to remuneration and the outcomes for the most recent financial year. I'd like to briefly touch on the FY 2024 short-term incentive outcomes, for which the board considered a range of financial and non-financial outcomes.
In determining the formation and size of the STI pool, the short-term incentive pool, for FY 2024, the board considered the group's performance against pre-established targets across financial, strategic, customer, people, and culture categories. Based on the actual financial outcomes, an initial pool of 118% of target would have been generated. In balancing all applicable factors, including financial, non-financial, risk, sustainability, and favorable jackpot outcomes, the board applied its judgment to adjust the pool down to 108% of target, appropriately reflecting the record year. The board unanimously recommends that shareholders vote in favor of this resolution. The vote on this resolution is advisory only and does not bind the directors or the company.
However, the directors will take the outcome of the vote and shareholder feedback into consideration when setting remuneration practices for future years. I will now ask the Company Secretary to read out questions received prior to the meeting.
Thank you, Chairman. This question comes from Mr. Trevor Robinson. Mr. Robinson asks: Under what conditions or criteria would a bonus not be paid to any employee or board member? If bonuses are considered a regular or expected payment, why then are they not incorporated as a normal salary or sitting payment, rather than being masked as a bonus?
Thank you, Mr. Robinson, for your question. Incentives are at risk and are therefore not considered to be part of a regular or expected payment. At an overall level, business performance and performance against set KPIs, key performance indicators, are used to assess the outcomes. We set threshold performance levels each year. If the company misses the threshold performance requirements, then no bonuses are paid unless the board deems otherwise. At an individual level, should an employee not meet overall behavioral or performance expectations, then no incentive would be paid. I hasten to point out that no board members participate in any of our variable incentive plans. I will now take questions on this agenda item. As there are no more questions or any questions, we have now finalized discussion on this item.
The proxy votes received prior to the meeting in relation to this resolution are shown on the slide. It appears from the proxies that this resolution will pass. We now move on to the next item of business. Item 4 is the proposed grant of performance rights to the MD and CEO, Sue van der Merwe, under The Lottery Corporation's long-term incentive plan. Shareholders are asked to approve the grant of performance right, performance rights to Sue as a long-term incentive component of her remuneration package for fiscal year twenty-five. In accordance with the formula set out in the Notice of Meeting, it is proposed to grant six hundred and five thousand five hundred and twenty-two performance rights to Sue. If share, excuse me.
If shareholder approval is obtained, vesting of the MD and CEO's performance rights will be subjected to two separate tranches, with each tranche having its own performance measures and conditions. 50% of the MD and CEO's performance rights will be subject to a performance measure based on relative total shareholder return, TSR, over a three-year performance period from the second of October 2024 to the first of October 2027. Vesting of the TSR tranche is also subject to an absolute TSR gateway. This means that unless the board determines otherwise, the company's TSR over the performance period must be positive for any performance rights to vest, even if the relative TSR performance conditions have been met.
50% of the MD and CEO's performance rights will be subject to a performance measure based on the achievement of average return on invested capital, or ROIC, measured over three financial years from 1 July 2024 to 30 June 2027 inclusive. The ROIC performance condition was chosen as the second performance measure because it focuses management on achieving targeted returns on The Lottery Corporation's invested capital, which is equity plus debt. The board has set threshold, target, and stretch targets for the ROIC tranche that are considered to be challenging in relation to our strategic plan. Given the commercially sensitive nature of the targets, the ROIC threshold, target, and stretch goals will be published at the end of the performance period. Vesting of all performance rights is also subject to a service condition.
Performance rights will lapse if performance and service conditions are not satisfied at the end of the applicable performance and service periods. All performance and service conditions in the absolute TSR gateway will be tested on or around the second of October 2027. As is The Lottery Corporation's practice, the LTI plan will be re-reviewed each year as it continues to be, to ensure it continues to be effective, to effectively incentivize and reward for the creation of long-term shareholder value. The board, with Sue abstaining, recommends that shareholders vote in favor of this resolution. I will now take questions on this agenda item. Do we have any questions from the floor? As there are no more questions, we now have finalized discussion on this item. The proxy votes prior to the meeting in relation to this resolution is shown on the slide.
It appears from the proxies that this resolution will pass. We will now move to the final item of business. Item five relates to the renewal of proportional takeover provisions in the company's Constitution. These provisions prohibit the registration of transfers of shares acquired under a proportional takeover bid, unless the resolution is passed by the shareholders approving the bid. As provided in Rule 6 of the Constitution, these provisions will cease to have effect at the end of three years after they were adopted or approved by shareholders, unless renewed. As the company's Constitution was adopted on the 3rd of March 2022, the provisions in Rule 6 of the company's Constitution will expire on the third of March 2025, unless renewed. Rule 6 is set out in full in the company's Constitution, which is available on the company's website.
Details of what constitutes a proportional takeover bid, the effect of Rule 6, the reasons for proposing the resolution, and the potential advantages and disadvantages in renewing the proportional takeover provisions are set out in the explanatory notes of the Notice of Meeting. The board considers that, on balance, the renewal of the proportional takeover provisions in the Constitution is in the best interests of shareholders, and accordingly, recommends shareholders vote in favor of renewing the proportional takeover provisions. I will now take questions on this agenda item, and do we have any questions from the floor? I'm grateful for that one. As there are no more questions, we have now finalized discussion on this item. The proxy votes received prior to the meeting in relation to this resolution is shown on the slide. It appears from the proxies received that this resolution will also pass.
That concludes the formal business of the meeting. If you haven't already done so, please submit your votes in respect of all resolutions now by using the paper voting card. We will leave the poll open for a further five minutes after the close of the meeting to enable shareholders to cast their votes. The results of the poll will be released on the ASX Market Announcements Platform as soon as possible after the meeting. On behalf of the board and management, I would like to thank you all for attending The Lottery Corporation's Annual General Meeting and for submitting questions and comments to help make this an engaging meeting. Thank you again for your time today and for your continued support of The Lottery Corporation. I now declare the meeting closed. Please join the board and our executive leadership team in the foyer for refreshments. Thank you.