aristocratARISTOCRAT LEISURE LIMITED ABN 44 002 818 368 changing the gaming environment
no borders For personal use only use personal For
Annual report 2007 TWELVE MONTHS ended 31 decEMBER 2007 “2007 was a particularly challenging year for the industry. I am disappointed by the modest growth, however, our result demonstrates the underlying strength and sustainability of our business in some of the most adverse operating conditions many in the gaming industry can recall. While these market conditions impacted trading in our core businesses, I am particularly pleased with our results in emerging markets, where we have captured a significant share of new opportunities.”
Paul Oneile, Chief Executive Officer and Managing Director For personal use only use personal For
Cover: During 2007, Aristocrat released its new Viridian Gen7 product which is now “changing the gaming environment.” The logo on the cover and each page of this report is the new Viridian logo. Contents
Company Profile/Key Dates 2 Directors’ Report 3 Management Discussion and Analysis: – Financial Report 8 – Business Segment Review 17 Australia 17 The Americas 18 Japan 20 New Zealand 21 Other International 22 Remuneration Report 25 Auditor’s Independence Declaration 54 Corporate Governance Statement 55 Five Year Summary 62 Financial Statements 63 Independent Auditor’s Report to the members 136 Shareholder Information 138
Corporate Directory 142 For personal use only use personal For .2
For personal use Dates only Key Profile Company
*
2007 Annual Report www.aristocratgaming.com The Company’s CorporateProfile Documentisavailablefrom theCompany’s website, change. to subject Dates * 2009 AnnualGeneralMeeting Payment DateforFinalDividend Record DateforFinalDividend Shares Trade Ex-FinalDividend Final ResultsAnnouncementfor2008 Results 2008 Payment DateforSUD Record DateforSUD Shares Trade Ex-SUD Announcement ofSUD Payment DateforInterimDividend Record DateforInterimDividend Shares Trade Ex-InterimDividend Interim ResultsAnnouncement(6monthsending30June2008) Payment DateforSUD Record DateforSUD Shares Trade Ex-SUD Announcement ofSupplementaryUnfrankedDividend(‘SUD’) 2008 AnnualGeneralMeeting Results 2007 the Company’s website at www.aristocratgaming.com information systems. visit management For casino further and tables interactive machines, systems, gaming terminal electronic video electronic including of range productsservices adiverse and Aristocrat offers the around are available world. inover countries 90 services and CompanyThe is licensed by over 200 regulators and its products the competition. thatof solutions consistently gaming outperform Aristocrat Leisure Limited (ASX: provider global isaleading ALL) Comp any profile/Key dates 30 September2008 28November2008 24 November2008 9 September2008 3 September2008 4 December2008 24 February2009 . 28 August2008 5 January2009 30 March 2009 6 March 2009 2 March 2009 10 June2008 28 April2009 29 April2008 29 April2008 3 June2008 1 July2008
directors ofAristocratLeisure Limited(‘Company’)duringthe12monthsended31December2007anduptodateofthisreport are: the 12monthsended31December2007.Theinformationinthisreport iscurrent asat26February2008unlessotherwisespecified.The The directors present theirreport togetherwiththefinancialstatementsofAristocratLeisure Limitedand itscontrolled entities(‘Group’) for 2007 31 December ended 12 the For months Directors’ Report ForAge 56 MPhilosophy personalBEc (Hons), Davis RA Age 68 BA Baker WM Age 59 BEc Oneile PN useAge 67 FCPA Simpson DJ onlyDirector • • • • • Nominated November2004.AppointedJune2005. • • • Nominated August1998.AppointedMay1999. • • • Nominated December2003.AppointedJune2004. • • Nominated July2003.AppointedFebruary2004. Experience Limited Former Group ManagingDirector, ANZ BankingGroup the UnitedStatesandJapan Former SeniorExecutive,CiticorpandCitigroup Inc.in Limited andMacquarieOfficeManagement Director, Territory InsuranceOffice, Trust Company Chairman, CentricWealth Advisers Limited Australia Limited Consulting Director –Investment Banking,Rothschild Former President, TheMotionPicture Association Former AssistantDirector oftheFBI Global Investigations,Inc Director, J.EdgarHooverFoundationandFortress Organisation PtyLimited Former ManagingDirector, TheGreater Union PicturesInternational (UIP) Former ChairmanandChiefExecutiveOfficer, United Director, FilmFinanceCorporationAustraliaLimited Former FinanceDirector, Tabcorp HoldingsLimited Director, CSL Limited 2007 Annual Report ctors’ Report Dire Chair, RegulatoryandComplianceCommittee Member, RemunerationCommittee Member, AuditCommittee Member, Committee NominationandGovernance Chairman responsibilities Special Member, AuditCommittee Chair, Committee NominationandGovernance Chief ExecutiveOfficerandManagingDirector
.3 .4
For personal use only Directors’ Report Age 65 BA, MLA AW Steelman Age 48 LLB, LLM Pitkin SAM Age 59 FRAIA, FAICD MEnvSc, DipCD, AM, BArch (Hons), P Morris Age 44 CA, MAICD BA (Hons),FCA, Kelly SCM Director • • • • • Nominated August1998.AppointedMay1999. • • • Nominated November2004.AppointedJune2005. • • • • Nominated August2003.AppointedFebruary2004. • • • Nominated andappointedFebruary2007. Experience software, regulation gamingstrategyandgovernment experiencein Management Consultantwithinternational Former President, MaxagerTechnology Software Former Board Member, Texas Growth FundandSterling Advisor, Proudfoot ConsultingPlc Former USCongressman Former Partner and Special Counsel, Clayton Utz, Lawyers Leisure &GamingLimited Golden Casket Lottery Corporation Limited and National Limited, CeramicFuelCellsEnergex Former Director, AustralianLeisure &HospitalityGroup and InsuranceCorporation Director, ChandlerMacleodLimitedandExportFinance Former Group Executive,LendLeaseProperty Services Department ofAdministrativeServices Former Director ofCommonwealthProperty, Australia Post Country RoadLimited,IndigenousLandCorporationand Smith Limited,ColonialStateBank,EnergyAustralia, Principal Real Estate Investors (Australia) Limited, Howard Landcom, StrathfieldGroup Limited,Jupiters Former Director, SydneyHarbourForeshore Authority, Australia and BowelCancerDigestiveResearch Institute Candle AustraliaLimited),NSWInstituteofTeachers Director, MirvacLimited,ClariusGroup Limited(formerly Member NationalExecutive,Group of100 (Sydney andLondon) Former SeniorManager, PricewaterhouseCoopers Director Group –International, AccountingManager Officer, Finance GeneralManager–International, Financial Officer–ConsumerFoods,ChiefInformation Former executiveGoodmanFielderLimited–Chief 2007 Annual Report ctors’ Report Dire Member, RegulatoryandComplianceCommittee Chair, RemunerationCommittee Member, Committee NominationandGovernance Member, RemunerationCommittee Chair, AuditCommittee Chief FinancialOfficerandFinanceDirector responsibilities Special Member, AuditCommittee Forin respect ofthe2007final dividend. DRP. Similarly, theDRPwillalsooperate to satisfythoseshares provided underthe Zealand. Shares were acquired on-market shareholders resident inAustraliaandNew personalsupplementary unfrankeddividendfor was inoperationfortheinterimand The DividendReinvestmentPlan(‘DRP’) of 2007was49centspershare. The totaldividendpaidorpayableinrespect months ended30June2007. 18 September2007inrespect ofthesix per share ($65.0million)waspaidon A fullyfrankedinterimdividendof14cents months ended31December2007. on 7January2008inrespect ofthe12 10 centspershare ($46.4million)waspaid A supplementaryunfrankeddividendof franked. 7 March 2008.Thefinaldividendwillbefully shareholders ontheregister at5:00pmon useand willbepaidon31March 2008to share ($116.1million)hasbeendeclared ended 31December2007of25centsper A finaldividendin respect ofthe12months Dividends 12 monthsended31December2007. in thenature ofthoseactivitiesduringthe solutions. There were nosignificantchanges onlybe theleadingglobalprovider ofgaming services. TheCompany’s objectiveisto systems andotherrelated equipmentand marketing ofgamingmachines,software, design, development,manufacture and the 12monthsunderreview were the The principalactivitiesoftheGroup during activities Principal (c) (b) (a) affected ormaysignificantly affect: 31 December2007thathassignificantly or circumstance thathasarisensince directors are notaware ofanyothermatter 2007. To thebestoftheirknowledge, have arisensubsequentto31December matters requiring disclosure inthisreport Discussion andAnalysis,nomaterial debt facilitiesreferred tointheManagement Other thantherefinancing oftheGroup’s date balance after Events 2007. during the12monthsended31December changes inthestateofaffairs oftheGroup in thisreport, there were nosignificant Except asoutlinedbelowandelsewhere affairs of state in changes Significant on theCompany’s website. policiescanbefound and keygovernance Statement, Board andCommitteecharters The Company’s CorporateGovernance highest standards ofcorporategovernance. The Board iscommittedtomaintainingthe governance Corporate million aftertaxandminorityinterest. December 2007wasaprofit of$247.2 shareholders forthe12monthsended31 result oftheGroup attributableto of thisDirectors’ Report.Theoperating Discussion andAnalysiswhichformspart is setoutintheattachedManagement the 12monthsended31December2007 A review oftheoperationsGroup for operations of results and Review 2007 Annual Report financial years. the Group’s stateofaffairs infuture years; or the Group’s operationsinfuture financial financial years;or the results ofthoseoperations infuture ctors’ Report Dire
.5 .6 (Meetings attended/held) AW Steelman Director set outinthetablebelow: meetings ofwhichtheyare membersis members ofCommitteesatCommittee at Board meetingsandattendanceof The attendanceofmemberstheBoard 2007 during meetings Committee and Board at attendance Directors’ of theGroup. speculative and/orprejudice theinterests operations would,intheiropinion,be Group andthelikelyresults ofthose developments intheoperationsof of furtherinformationastolikely The directors believethatdisclosure Analysis whichformspartofthisreport. to intheManagementDiscussionand expected results ofoperationsare referred the Group infuture financialyearsandthe Likely developmentsintheoperationsof results expected and developments Likely Directors’ Report DJ Simpson P Morris SCM Kelly RA Davis WM Baker PN Oneile ForSAM Pitkin personal use only Board 12/12 12/12 12/12 12/12 11/12 12/12 12/12 12/12 2007 Annual Report Company reimbursement policy. and officers.Thepolicyisprimarilya in respect ofinsurancecoverdirectors a Directors’ andOfficers’Insurancepolicy Act, as‘officers’).TheCompanymaintains pursuant tosection9oftheCorporations as ‘executiveofficers’andnowdefined, and anumberofofficers(formerlyknown indemnities withdirectors, secretaries Company hasexecuteddocumentary 23.4 oftheCompany’s Constitution,the the Company”.Inaccordance withClause a director, secretary orexecutiveofficerof indemnify everypersonwhoisorhasbeen Corporations Act)theCompanymust extent permittedbylaw(includingthe provides that:“tothemaximum Clause 23.1oftheCompany’s Constitution premiums insurance and Indemnities Report. 25 to53whichformspartofthisDirectors’ attached RemunerationReportonpages Corporations Act2001are includedinthe The requirements ofsection300Athe executives senior and members Board of emoluments and Remuneration Audit 4/4 4/4 4/4 4/4 ctors’ Report Dire Nomination and Governance Governance 3/3 3/3 3/3 independent auditorsoftheCompany. insurance doesnotprovide coverforthe in linewithnormalbusinesspractices.The for reasonably foreseeable contingencies, assets oftheGroup are adequatelyinsured and thoserelating tootherliabilities.The relating totheinsuranceagainstlegalcosts apportion thepremium betweenamounts insurance contract.Itisnotpossibleto are confidentialunderthetermsof terms ofcoversecured bythatpremium practice, thepremium paidandthe In accordance withusualcommercial or tocausedetrimenttheCompany. advantage forthemselvesorsomeoneelse of theirpositionorinformationtogain by thedirectors, secretaries orofficers secretaries orofficerstheimproper use a wilfulbreach ofdutybythedirectors, liabilities ariseoutofconductinvolving such proceedings, otherthanwhere such secretaries orofficersinconnectionwith from liabilitiesincurred bythedirectors, the Group, andanyotherpaymentsarising in theircapacityasofficersofentities against thedirectors, secretaries orofficers criminal proceedings thatmaybebrought may beincurred indefendingcivilor The liabilitiesinsured are legalcoststhat Regulatory and Compliance 9/9 9/9 Remuneration 4/4 4/4 4/4 ForCorporations Act2001. the Companyundersection237of any applicationbeenmadeinrespect of of theCorporationsAct2001norhas behalf oftheCompanyundersection236 personalNo proceedings havebeen brought on Company the of behalf on Proceedings organisations. solicitors forAustralianpubliclylisted in privatepracticeandalsoascorporate Both havepreviously workedassolicitors on 21December2007. Secretary untilheresigned from thisposition JFC Carr-Gregg wasalsojointCompany The CompanySecretary isMrBJYahl. Mr Company secretary the 12monthsended31December2007. significant environmental incidentsduring of anyenvironmental legislationorofany The directors are notaware ofanybreaches manufacturing andassemblyprocesses. useuses limitedamountsofchemicalsinits under contractinJapan.TheCompany and Japan.Machinesare alsoassembled machines andsystemsintheUSA,Macau The Companyintegrates(assembles) Australian federalenvironmental legislation. the subjectofNewSouthWales and local Environmental Plan114andare which are zonedIndustrial(4)under onlyand systemsatitsAustralianfacilities manufactures gamingmachines,games and integrationactivities.TheCompany regulations inrespect ofitsmanufacturing is subjecttoanumberofenvironmental impact ontheenvironment. TheGroup The Group’s operationshavealimited regulation Environmental • for thefollowingreasons: requirements oftheCorporationsAct2001 not compromise theauditor independence in Note34tothefinancialstatementsdid non-audit servicesbytheauditor, assetout directors are satisfiedthattheprovision of imposed bytheCorporationsAct2001.The standard ofindependenceforauditors services iscompatiblewiththegeneral satisfied thattheprovision ofthenon-audit advice received from theAuditCommitteeis the positionand,inaccordance withthe The Board ofDirectors hasconsidered statements. year are setoutinNote34tothefinancial non-audit servicesprovided duringthe to theCompany’s auditor, forauditand Details oftheamountspaidorpayable related service. Company’s auditorforanynon-audit followed priortotheengagementof procedures whichare required tobe auditor. Thecharteralsosetsoutthe cannot beperformedbytheCompany specifies thosenon-auditserviceswhich a charterofauditindependencewhich Group are important.TheCompanyhas experience withtheCompanyand/or where theauditor’s expertiseand additional totheirstatutoryauditduties the Company’s auditor, onassignments decide toemployPricewaterhouseCoopers, the ChairofAuditCommittee,may The Company, withthepriorapproval of by auditor provided services Non-audit of theCorporationsAct2001. in officeaccordance withsection327 PricewaterhouseCoopers continues Auditors 2007 Annual Report objectivity oftheauditor; do notimpacttheimpartialityand by theAuditCommitteetoensure they all non-auditserviceshavebeenreviewed ctors’ Report Dire 26 February2008 Chairman DJ Simpson for andonbehalfofthedirectors. a resolution ofthedirectors andissigned This report ismadeinaccordance with Class Order. thousand dollarsinaccordance withthat have beenrounded off tothenearest Directors’ ReportandFinancialStatements Financial Statements.Amountsinthe of amountsintheDirectors’ Reportand Commission relating tothe‘rounding off’ Australian Securities&Investments in ClassOrder 98/0100issuedbythe The Companyisofakindreferred to dollars thousand nearest to amounts of Rounding this report. declaration isattachedonpage54of A copyoftheauditor’s independence • sharing economicriskandrewards. advocate fortheCompanyorjointly capacity fortheCompany, actingas in amanagementordecision-making auditing theauditor’s ownwork,acting Accountants, includingreviewing or 110 CodeofEthicsforProfessional independence assetoutinAPES general principlesrelating toauditor none oftheservicesundermine
.7 .8 Key performanceindicatorsforthecurrent andprioryearare setoutbelow: Summary For personal use only Financial Report ** Operating cash flow per share. per flow cash Operating ** 2006. in applying rates using rates exchange translational for Adjusted * revenue. months’ 12 last of percentage a As ^ Total Revenuefrom Ordinary Activities Earnings BeforeEarnings Interest, Tax andR&DCosts Earnings BeforeEarnings Interest andTax (‘EBIT’) Profit after Tax Profit after Tax andMinorityInterest Net Working Capital/Revenue^ Operating CashFlow Closing NetDebt Earnings PerShareEarnings (FullyDiluted) Cash FlowPerShare (FullyDiluted)** Total DividendsPerShare 2007 Annual Report 2007 $Million currency* Constant 1,203.2 (122.9) 11.3% 466.0 356.4 266.3 265.6 229.8 56.7c 49.1c 49.0c 2007 $Million Financial Report Reported 1,122.0 (111.8) 12.1% 436.5 332.3 247.9 247.2 222.2 52.8c 47.4c 49.0c
2006 $Million Reported 1,074.5 430.5 335.3 240.1 239.0 204.8 50.9c 43.6c 36.0c (40.8) 7.7% currency* % Constant 201.2% 12.0% 10.9% 11.1% 12.2% 11.4% 12.6% 36.1% 3.6pts 8.3% 6.3% Variance vs Reported % 174.0% 36.1% 4.4pts -0.9% 4.4% 1.4% 3.2% 3.4% 8.5% 3.7% 8.7% For personalcontinue todevelop. growth asgamingmarketsintheseregions underlying operatingrevenue andprofit and SouthAmerica–experiencedstrong markets –AsiaPacific,Europe, SouthAfrica The Group’s businessesinemerging for theyearremained modest. towards theendofyear, overallsales improvement insentimenttoRegulation5 installed basehasdeclined.Despitean in October, theoverallsizeofpachislot market fullytransitionedtoRegulation5 usemarket opportunities.WhiletheJapanese towards stepperproduct andlimitednew remained depressed withdemandskewed In NorthAmerica,thereplacement cycle technology. Ticket-out take upofTicket-in coupled withdelaysintheapproval and the introduction ofnon-smokinglegislation The Australianmarketwasimpactedby onlygrowth duringtheperiod. demand andlimitedcatalystsforoverall circumstances, resulting insubduedmarket Each experiencedtheirownparticular remained difficultthroughout theyear. Australia, NorthAmericaandJapan– across theGroup’s three largestregions – Overall marketandregulatory conditions 6.3% compared totheprior year. Revenue increasing 12.0% andEBITup growth wassignificantlyhigher with Total In constantcurrency terms,theunderlying decreased marginallyto$332.3million. 4.4% to$1,122.0millionwhileEBIT In reported terms,Total Revenueincreased (9.5%) abovetheprioryear. $104.2 million,approximately $9.0million and developmentspendfortheyearwas fully expensedagainstprofit. Total research through research and development, which is ongoing commitmenttoinvestinitsfuture During theperiod,Group maintainedits management isincludedlaterinthisReport. and transactionalimpactstheir discussion onforeign exchangetranslational Profit after Tax $266.3million.Further would havebeen$1,203.2millionand impact offoreign exchange,Revenue terms, whenadjustingforthetranslational over theyearwasinsignificant.Inoverall local currency denominatedtransactions impact (‘transactionalimpact’)onunderlying The nettransactionalforeign exchange million andProfit after Tax by$18.4million. year reduced reported Revenueby$81.2 impact’). Thetranslationalimpactforthe foreign (‘translational denominatedearnings effect ofreducing thetranslatedvalueof compared withtheprioryear. Thishadthe and 12.4%againsttheJapaneseYen appreciating 11.3%againsttheUSDollar Dollar overtheperiodwithcurrency by thestrengthening oftheAustralian Reported results were significantlyimpacted 2007 Annual Report Financial Report the yearby36.1%to49.0centspershare. to increase overalldividend paymentsfor and cashflowpershare enabledtheGroup The combinationofthestrength ofearnings Share increased 3.8centsto47.4cents. flow generation,OperatingCashFlowPer Consistent withtheGroup’s focusoncash improved 11.4%. for-like pershare exchangerates,earnings per share, a3.7%increase on2006.Atlike- persharefully dilutedearnings of52.8cents share buy-backprogram, havedelivered on issueresulting from theGroup’s ongoing a lowerweightedaveragenumberofshares year result. Thisprofit increase togetherwith enabled theGroup toreport arecord full of businessesinemergingmarketshas largest regions, thestrong performance market conditionsintheGroup’s three the Australiandollarandongoingdifficult Despite thesubstantialstrengthening of operating cashflow. capital expenditure fortheperiodoffset by capital managementinitiativestogetherwith to shareholders through dividendsandother the netimpactof$253.0millionreturned end oftheprioryear. Thisincrease reflects increase from thenetdebtpositionat on handby$111.8million,a$71.0million At 31December, debtexceededcash prior period. to lowertaxpaymentscompared tothe revenue. Thisincrease ismainlyattributable $222.2 million,representing 19.8%of Operating cashflowincreased 8.5%to
.9 .10 Segment Segment Results below. The operatingresults are summarised a 3.4%increase ontheprioryear. Tax andMinorityInterest of$247.2million, The Group reported afullyearProfit after basis*. to theresults reported onamanagement Analysis throughout thissectionrefers Loss and Profit Analysis and Discussion Management * Australia Segment Results North America South America New Zealand Japan Other International Other International ACE Interactive lkrnˇcekElektron Total SegmentResults Research andDevelopment Unallocated Expenses Foreign Exchange Corporate/Other Income Total UnallocatedExpenses Earnings BeforeEarnings Interest andTax Interest Profit Before Tax Income Tax Profit After Tax Minority Interest Profit After Tax andMinorityInterest For personal use only Group’s share of the jointly controlled entity’s after Tax is included as a one line income item only.item income line entity’sGroup’scontrolledone jointly a Taxthe as after of shareincluded is the basis, reported statutory a On Taxlines. respectiveand Interest entity’sGroup’stheir controlled(EBIT), Profit the on jointly Segmental includes the Revenue, basis of share Management 1,160.5 280.1 483.6 217.2 2007 23.2 25.2 91.2 38.5 $m 1.5 Segment revenue 2007 Annual Report 1,109.8 276.2 565.2 127.5 2006 27.5 26.6 50.4 34.0 $m 2.4 -14.4 -15.6 -37.5 81.0 70.4 13.2 -5.3 Var 1.4 4.6 % (104.2) (82.4) 333.7 Management discussionan anALYSIS 109.5 203.9 (11.6) 416.1 327.7 (79.8) 247.9 247.2 2007 (6.0) 80.1 10.1 15.2 (0.7) $m 8.7 9.5 5.9 6.6 Profit/(loss) (87.2) 109.7 252.4 425.9 338.7 336.3 240.1 239.0 (95.2) (96.2) 2006 12.2 11.5 42.5 (5.6) (2.4) 10.6 (7.4) (0.1) (1.1) $m 8.1 150.0 -19.2 -28.7 -17.4 -17.0 -36.4 88.5 56.8 87.7 -2.3 -5.5 -1.5 -2.6 -0.2 -4.7 -9.5 Var n/a n/a 3.2 3.4 %
2007 39.1 42.2 37.5 37.7 36.9 26.2 35.9 28.8 28.2 21.4 21.3 -9.0 -7.1 -0.5 -6.9 -0.1 n/a 6.5 0.6 1.3 % % Revenue % Margin 2006 39.7 44.7 44.4 43.2 33.3 31.2 38.4 30.5 30.3 21.6 21.5 -7.9 -8.6 -0.2 -8.7 -0.1 n/a n/a 0.7 % - (2.5) (1.7) (2.1) (0.2) (0.2) (0.6) (2.5) (6.9) (5.5) (5.0) (0.4) (0.6) (0.3) Pts Var n/a 3.6 n/a 0.6 0.8 1.8 - of this rapidly expanding region. continued tocapture asignificantshare (up approximately 100%)astheGroup with Asia Pacific reporting strong growth Elsewhere, revenue performance waspositive cash collectionsonpriorperiodsales. favourable comparativeresult whichincluded Forrevenue recognition andtheparticularly of thetimingcashreceipts whichimpacted America reported revenue declined as a result expected to pick up over 2008, while in South regulatory requirements withthemarket continues tobeimpactedbyadverse In otherregions, revenue inNewZealand personalcompetition. product aslongpossibleandfierce price resistance topurchasing newRegulation5 million) to$91.2milliondespiteoperators’ In Japan,revenue increased (81.0%,$40.8 video, partiallyoffset byimproved pricing. (mechanical) product attheexpenseof of marketdemandtowards stepper overall marketvolumesandtheskewing 4.8% ($27.0million)reflecting adeclinein terms whileinlocalthedeclinewas (14.4%, $81.6million)inAustralianDollar North Americanreported revenue declined with theprioryear. the reported valueofrevenues compared the strong Australiandollarwhichreduced America inparticularwere exacerbatedby revenue declinesinNorthandSouth useposted doubledigitrevenue growth. The ˇcekEurope andSouthAfrica)Elektron (comprisingAsiaPacific, Other International reporting revenue declineswhileJapan, New ZealandandACEInteractive(‘ACE’) of theprioryear, NorthandSouthAmerica, Australian performancemarginallyahead businesses variedsignificantlywiththe onlyReported revenue results ofindividual 4.6%) to$1,160.5million. Revenue increased by$50.7million(up stronger Australiandollar, totalSegment regions andtheadverseimpactof conditions across theGroup’s three largest Despite thedifficultmarketand regulatory revenue Segment
modules purchased from strategicsuppliers. integrator focusedonthelocalassembly of integrated manufacturer tooneofaregional to transitionfrom atraditionalvertically further progressed the Group’s strategy manufacturing operations.Thischangehas relocation oftheGroup’s Australian costs associatedwiththeclosure and redundancy andothernon-recurring in partby$6.0millionofrelocation, improved supplychainefficiency offset almost 88%($7.1million)reflecting Corporate/Other Incomeimproved by in research anddevelopmentcosts. offset byanincrease of$9.0million(9.5%) foreign exchangegainsonhedgingactivities net Corporate/OtherIncomeandfavourable million (5.5%).Thisprimarilyreflects higher Total unallocatedexpensesdeclined$4.8 decline inNorthAmericaandAustralia. points to35.9%,predominantly drivenbya Overall margindeclinedby2.5percentage increased inventoryprovisioning. the priorperiodlossof$5.6million,despite $5.9 million,an$11.5millionturnaroundon The Japanesebusinessreported aprofit of Australian result wasflat. from businessesinemergingmarkets.The growth, withparticularlystrong increases Zealand andACEreported earnings except NorthandSouthAmerica,New In constantcurrency termsallbusinesses corresponding period. or $5.0millioncompared withtheprior Management EBITwaslowerby1.5% Earnings regulatory approvals were received. continued toexpanditssalesreach as of 13.3%($4.5million),asthebusiness amounted to$38.5million,anincrease ˇcekits multi-terminalbusiness(Elektron ) The Group’s 50%share ofrevenue of develop. by 16%asopportunitiescontinuedto over 60%andSouthAfricanrevenues grew European operatingrevenues increased 2007 Annual Report Management discussionan anALYSIS 70% of annual earnings goingforward.70% ofannualearnings to fullyfrankdividendsintheorder of60%- world, theGroup anticipates itwillcontinue various taxationauthoritiesaround the mixandagreedearnings positionswith franked. Subjecttomaintenanceofcurrent payable on31March 2008 willbefully remain positiveandthe2007 finaldividend The dividendfrankingoutlookcontinuesto on landandbuildingsheldforsale. and therecognition ofdeferred taxlosses taxable profit onthedisposalofproperty favourable overseastaxregimes, thenon- concessions, thebenefitsofmore factors includingresearch anddevelopment current yearhasbeendrivenbyanumberof year rateof24.8%.Thisreduction inthe and marginallylowerthanthe2007half is lowerthanthe28.6%fullyear2006rate The effective taxratefortheyearof24.4% Tax period andhigheraverageinterest rates. reflects higheraveragenetdebtoverthe $2.4 millionintheprioryearto$6.0 The increase ininterest expensefrom compared to8.6%in2006. expenditure rose to9.0%fortheperiod of revenue, research anddevelopment of ACEexpenditure. Asapercentage technologies andafullperiod’s charge delivery output,investmentinnew result from anincrease innewproduct Higher research anddevelopmentcosts dispute. settlement costofanintellectualproperty manufacturing siteoffset bythe$4.0million on thepartialsaleofAustralian includes the$4.9millionprofit recognised In addition,Corporate/OtherIncome customer service,flexibilityandcost. Australia, includeimproved speedtomarket, fully operationalinNorthAmerica,Asiaand Key benefits of this model, which is now
.11 .12 these impacts.NetWorking Capitalasa and tradereceivables partiallyoffset A reduction inNorthAmericaninventories on theincrease inWorking Capital. the endofyearalsohadaninfluence increased momentuminJapan towards ofAustralian sales andthe markets. Timing competitive thaninmore established where tradingtermsare generallymore higher receivables inemerging markets million. Themaindriverofthisincrease was million at31December2006to$135.5 Net Working Capitalincreased from $83.9 3.8 centsto47.4(up8.7%). Share alsostrengthened, increasing Fully dilutedOperatingCashFlowPer by 1.8centsto53.0(up3.5%). persharecents. Basicearnings increased increasing by1.9cents(up3.7%)to52.8 resulted pershare infullydilutedearnings Group’s capitalmanagementinitiatives,has average numberofshares asaresult ofthe together withthereduction intheweighted The improvement inProfit after Tax, Share Per Earnings Analysis and Discussion Management Shareholders’ Funds Net Debt Funds Employed Net Tax Balances Provision forSupplementaryUnfrankedDividend Other Current/Non-Current Liabilities Intangible Assets Other Companies Investments inJointlyControlled Entityand Property, PlantandEquipment Other Current/Non-Current Assets Net Working Capital For personal useThe balancesheetcanbesummarisedasfollows: sheet Balance only 2007 Annual Report following the resolution of disputed amounts. following theresolution ofdisputedamounts. legacy contracts with the underlying asset and the offsetting of deferred revenue on Value Added Service Agreements (‘VASA’) current receivables in Australia relating to million primarilyresults from lowernon- The 40.1% decline in Other Assets to $45.5 target overthenext12months. ratio is expected to trend back towards this the Group’s targetof10%, althoughthiskey was 12.1%at31December2007,outside percentage ofthelast12months’ revenue $Million (111.8) 320.8 432.6 (40.5) (80.2) 128.2 130.5 135.5 2007 26.0 87.6 45.5 Management discussionan anALYSIS
$Million (111.9) 365.0 405.8 146.4 122.5 (40.8) 2006 93.2 75.9 83.9 (4.2) - strengthening oftheAustralianDollar. translation reserve asaresult ofthe million movementintheforeign currency from shares boughtbackanda$14.6 $52.4 millionreduction inequity arising $222.1 millionofdividendpayments,a profit aftertaxfortheperiod offset by This changereflects the$247.2 million December 2006to$320.8million. decreased from $365.0millionat31 In overallterms,Shareholders’ Funds period. by accruedtaxinrespect of thecurrent 2007 relating to2006profits, partiallyoffset liabilities followingtaxpaymentsmadein mainly asaresult ofareduction intax Net Tax Balancesmoved$30.2million announced inAugust2007. Group’s capitalmanagementstrategy of theinitiationnextphase 7 January2008.Thisdividendformspart 10 centspershare whichwaspaidon supplementary unfrankeddividendof was provided inrespect oftheinaugural At 31December2007,$40.5million million ofamortisation. closing foreign exchangeratesand$5.9 American andSwedishcomponentsat due totheretranslation oftheNorth million since31December2006,primarily Intangible assetshavedeclinedby$18.2 to $16.4million. business” capitalexpenditure amounting integration centre withongoing“stay-in- the openingofGroup’s newAustralian base. Afurther$4.0millionwasspenton a result ofthenetincrease intheinstalled participation unitswas$31.8millionas depreciation. Total capitalspendon of $52.2millionoffset bydisposalsand $8.0 millionreflecting capitalexpenditure Property, Plant andEquipmentincreased of the28.3%declineto$80.2million. Other Liabilitieswhichwasthemaindriver An equivalentreduction wasrecognised in Net debt-closingbalance Effect ofexchangeratechangesonnetdebt Movement innetcash Net repayment ofborrowings Dividends paid Payments toemployeeshare trust Payments forshares bought back Proceeds from exercise ofoptions Repayments/(Loans) tonon-related parties Proceeds from saleofinterest insubsidiary Net cashoutflowfrom otherinvestingactivities Payments foracquisitions Net cashinflowfrom operatingactivities Change inoperatingassetsandliabilities Net taxpaid Net interest paid - Non-cashinterest income - Expensingofcostsshare-based payments - Netforeign exchangedifferences - Netprofit onsaleofinterest insubsidiary lkrnˇcek- Share ofElektron profits aftertax - Net(profit)/loss onsaleofnon-current assets Non-cash adjustments: EBITDA Depreciation andamortisation EBIT Net (debt)/cash-openingbalance For personal use onlymovements issetoutbelow: cash), aftereliminatingforeign exchange The movementinnetdebt(debtless to beoneoftheGroup’s keystrategies. Effective cashflowmanagementcontinues flows cash of Statement 2007 Annual Report $Million (111.8) (182.6) (82.1) (18.0) (52.4) (52.2) 222.2 (43.4) (96.8) 368.7 332.3 (40.8) 2007 11.1 (3.1) (6.0) (0.9) (8.6) (2.7) 36.4 3.0 1.0 9.4 2.5 - - -
Management discussionan anALYSIS $Million (224.2) (149.3) (153.5) (115.4) 204.8 366.7 335.3 183.7 (40.8) (56.0) (34.6) (36.1) (47.8) 2006 31.4 (0.3) (9.0) (0.4) (5.8) (6.2) (7.2) 7.1 9.6 4.7 8.2 0.8 -
.13 .14
in theFinancialStatements. Cash flowinthestatutoryformatissetout ForGroup’s debtisUSdollardenominated. $11.1 millionasalargeproportion ofthe December 2006amountedtoafavourable exchange ratesonnetdebtsince31 The overallimpactofchangesinforeign employee share-based remuneration plans. million shares tosatisfyobligations under also spentacquiringapproximately 1.2 personalduring theyear, withafurther$18.0million the Group’s share buy-backprogram approximately 3.4millionshares under A totalof$52.4millionwasspentacquiring Australian integrationcentre. participation unitsandtheopeningof representing increased investmentin $16.1 millionto$52.2primarily Expenditure thisperiodincreased undertaken across theGroup’s operations. activities represents capitalexpenditure The netcashoutflowonotherinvesting acquisition. ˇcek outpaymentontheElektron earn in thecurrent periodreflects thefinal amounted to$141.4million.Thepayment ACE andPokerTek, Inc.whichcollectively use ˇcekthe acquisitionofinterests inElektron , prior periodresult waslargelydrivenby fell $150.4millionto$3.1asthe The netcashoutflowfrom acquisitions reduction inVASA balances. in emergingmarketspartiallyoffset bya capital associatedwithexpandingbusiness result from theincrease innetworking onlyin operatingassetsandliabilitiesprimarily compared totheprioryear. Movements lower taxpaymentsinAmericaandJapan paid reduced $18.6millionasaresult of EBITDA andlowertaxpayments.Taxes as aresult ofacombinationhigher million (8.5%)to$222.2mainly Operating cashflowimproved $17.4 Analysis and Discussion Management 2007 Annual Report payout ratiowas73.6%. supplementary unfrankeddividend,the share inrespect of2006.Excludingthe total dividendpayoutof36centsper This represents a36.1%increase onthe share, withaveragefrankingof79.6%. the 2007yearamountto49.0centsper Total dividendsdeclared inrespect of management initiatives on 23 August 2007. announced aspartoftheGroup’s capital 10 centspershare on7January2008, supplementary unfrankeddividendof In addition,theGroup paidaninaugural 2007. ($65.0 million)waspaidon18September An interimdividendof14centspershare will applyindeterminingtheDRPissueprice. to beprovided undertheDRP. Nodiscount acquired on-markettosatisfythoseshares Australia andNewZealand),withshares dividend (forshareholders resident in Plan (‘DRP’)willoperateinrespect ofthis 31 March 2008. The Dividend Reinvestment has beendeclared andwillbepaidon per share fullyfranked($116.1million) ended 31December2007of25cents A finaldividendin respect oftheyear Dividends Management discussionan anALYSIS – through: into thebalancesheet.Thiswillbeeffected would bringamore optimal levelofgearing management, theGroup announced thatit and acontinuedfocusoncashflow with tightcontrols overworking capital its projected organicgrowth combined limited demandsforcapitaltosupport cash flowsandfinancialposition,with Given theGroup’s strong underlying acquired overthattime. shares (5.2%ofopeningshare capital) October 2004,withatotalof24.7million $400 millionbacktoshareholders since which havecollectivelydistributedalmost program. Thisnextphasefollowsinitiatives the nextstageofitscapitalmanagement On 23August2007,theGroup announced – – during theyear: number ofcapitalmanagementinitiatives The Group hascontinuedtoprogress a management Capital approximate 60%-70% of annual earnings; approximate 60%-70%ofannualearnings; to expected ability,are franking dividends which, subject to the Group’s an ongoing flow of fully franked obligations were covered; and of outstandingactualandpotential during theyear. Atyearend95% (total cost$18.0million)were purchased an averagepriceof$15.31pershare approximately 1.2millionshares at plans astheycrystallise.Atotalof employee share-based remuneration necessary tosatisfyobligationsunder issues whichwouldotherwisebe mitigate thedilutionaryimpactofshare shares were acquired on-marketto at anaveragepriceof$13.50pershare. the second program to 7.4 million shares acquired, bringingtotalpurchases under approximately 3.4millionshares buy-back wasconcluded,with its second$100millionon-market
on anongoingbasis. review capitalmanagementinitiatives The Group willcontinuetoproactively focus oncashflowmanagement. controls overworkingcapital andcontinued to grow organicallycombined withtight business requiring limited capital investment for cashflow remains positive, withthe management objectives.Theoutlook are consistentwithitsoverall capital ample financialflexibilityanditsactions The Group isconfidentthat it retains back program. $16.5 million)underitslatestshare buy- average priceof$9.78pershare (totalcost of approximately 1.7millionshares atan this report, theGroup acquired atotal Since theendofyear, tothedateof available. management opportunitiesbecoming moreor alternative, effective capital strategicdemandsonfunds alternative prevailing economiccircumstances, performance, subject toitsoverallearnings program overtheplannedtimehorizon, the proposed on-marketshare buy-back on anongoingbasisandtocomplete of supplementaryunfrankeddividends The Group expectstocontinuethepayment January 2008. 2007, withpurchases commencingon8 program wasannouncedon17December tranche oftheon-marketshare buy-back on 7January2008.Thefirst$100million announced on22October2007andpaid dividend of10centspershare was The inauguralsupplementaryunfranked – – each; and unfranked dividendsof10centspershare annum, payableastwosupplementary dividends totalling20centspershare per the payment of supplementary unfranked For personal use onlyto fiveyeartimeframe. up to$100millionperannumoverathree an on-marketshare buy-backprogram of they arise. Group toexecutestrategicopportunitiesas and provide sufficientflexibilitytoenablethe the ongoingrequirements ofthebusiness these facilitiesremain adequatetomeet the strong cashgenerationofthebusiness, The Group remains confidentthat,given grade credit rating. and financialstrength anditsinvestment to theGroup’s strong underlyingbusiness reported Thisresult earnings. istestament will nothaveamaterialimpactonfuture facility haveincreased onlymarginallyand issues, financingcostsunderthisnew environment followingtheUSsubprime program. Despitetheprevailing weakcredit stage oftheGroup’s capitalmanagement These increased facilitiessupportthenext USD200 millionLetterofCredit facility. a newthree year$835milliondebtand replaced itsexistingdebtfacilitieswith Subsequent tobalancedate,theGroup to $164.3millionat31December2006. which $192.5millionwasdrawncompared of Credit facilityat31December2007,of of $400millionandaUSD200Letter The Group hadcommittedbankfacilities Bank facilities * Net Debt/EBITDA* Debt/EBITDA* EBITDA*/Interest Expense* Ratio The Group’s interest anddebtcoverageratiosremain verystrong: ratios Debt 2007 Annual Report inclusive of interest received.interest of inclusive is which EBITDA representsBank EBITDA results. months’ 12 preceding the on based are Expense Interest and EBITDA Management discussionan anALYSIS outlook. operational andfinancialposition reflecting theGroup’s strong strategic, rating isBBB-whichinvestmentgrade, The Group’s Standard &Poor’s credit Credit rating currently haslittlemeaning. management initiatives,thismeasure reduced through theexecutionofcapital of accountingshareholders’ fundshas balance sheetposition.Asthe to equityratiosgivenitsrelatively unique The Group hasceasedreporting debt of aninvestmentgraderating. are wellwithinthoseconsidered appropriate to operateatdebtcoverageratioswhich conservative debtlevelsandtocontinue The Group’s objectiveistomaintain as more relevant thangearingcalculations. Group toserviceitsdebtandisregarded Expense) asitreflects theabilityof the interest coverratio(EBITDA/Interest the Group paysparticularattentionto For financialmanagementpurposes, 31 December2007 29.0X 0.3X 0.5X 31 December2006 28.3X 0.1X 0.4X .15 .16
magnitude ofoverseasprofits change. Profit after Tax. Thisimpactwillvaryasthe translational impactontheGroup’s reported rate results in an estimated $2.1 million cent changeintheUSD/AUDexchange the Group’s USdollarprofits. AUSD1 Fortranslational foreign exchange results from profitability, themajorexposure to Based ontheGroup’s 2007 mixof $14.6 million. foreign currency translationreserve) was controlled entities(recognised through the retranslation ofthenetassets offoreign personalperiod. Inaddition,theneteffect ofthe compared withthepriorcorresponding the generallystronger Australiandollar as aresult ofthetranslationalimpact $81.2 millionand$18.4respectively after Tax were adverselyimpactedby In thecurrent period,RevenueandProfit naturally where possible. in nature andare nothedged,otherthan Translational exposures are accounting rates prevailing atthereporting date. liabilities are translatedatexchange prevailing monthendrate.Assetsand translated intoAustraliandollarsatthe Monthly profitsoffshore earned are Translational foreignexchange use• • only twocategories: These impactscanbeclassifiedinto movements inforeign exchangerates. its reported results are impactedby derivedfromits earnings overseas, operations andthepercentage of Given theextentofGroup’s global exchange Foreign Analysis and Discussion Management denominated transactions. business undertakesforeign currency local currency results where thelocal in exchangeratesonunderlying transactional –theimpactofchanges net assets;and of foreignand denominatedearnings exchange ratesonthetranslatedvalue translational –theeffect ofchangesin 2007 Annual Report AUD: * Average of monthly exchange rates only.applied. rates weighting exchange No monthly of Average * SEK EUR JPY NZD USD follows: prior periodsforkeycurrencies are as Foreign exchangeratescompared with profit andlossaccount. denominated transactionsthrough the of therecognition offoreign exchange of theGroup’s businessandthetiming Future impactswilldependonthemix the yearisestimatedtobeinsignificant. exchange impactontheGroup’s profit for differences, thetransactionalforeign specific andnaturalhedgestiming In overallterms,takingintoaccount natural hedges. hedging ofspecifictransactionsand and riskmanagement,includingthe exposures are subjecttoactivemonitoring can onlybeestimated.Cashflow exchange ontheprofit andlossaccount the impactoftransactionalforeign the profit andlossaccount.Asa result, cash flowsandtheir recognition through timing differences ofthevariouscurrency is dependentontheactualrealisation of The transactionalforeign exchangeimpact Transactional foreignexchange 31 December Management discussionan anALYSIS 5.7010 0.5980 1.1354 0.8816 98.77 2007 31 December 5.3357 0.6012 1.1216 0.7913 94.13 2006 Average* 5.6162 0.6113 1.1385 0.8432 98.93 2007
Average* 5.5064 0.5991 1.1639 0.7574 87.99 2006
For personal use using exchangeratesapplyingin2006. currency amountsrefer toresults restated onlyincluded intheunallocatedcategory. Constant assets. Thetotalamountoftheseitemsis of intangibleassetsandothernon-trading pricing agreements andanyimpairment servicerecharges,international advance development costs,corporateexpenses, charges forlicencefees,research and In thisreview, segmentprofit/(loss) isbefore Business SegmentReview at 67%. Group’s share oftheinstalledbaseremains conversion volumesincreased 8.4%.The Platformvolumesfell11.6%while Victoria. NSW andtheintroduction ofnewtaxesin by theincrease inclubtaxationrates on gamingfloors.Thiswasexacerbated with aconsequentialimpactonspending adversely impactedoperatorrevenues andSouthAustralia (‘NSW’), Victoria full smokingbansinNewSouthWales Although marketsentimentisimproving, increased volumes. unfavourable mixingamessalesdespite reduction inmarginswastheimpactof to overallmargin.Alsocontributingthe revenue althoughthesewere unfavourable machines alsocontributedtoincreased volumes. Salesofmulti-terminalgaming and price)offset byareduction inplatform average unitprices(acombinationofmix increased by1.4%primarilydrivenhigher Despite difficultmarketconditions, revenue Australia Revenue Margin Profit 2007 Annual Report Business Segment review $Million 39.1% 109.5 280.1 2007
$Million 39.7% Hyperlink Stand AloneProgressive titlesandanew game titles,3newdualscreen Double included more than18standalone range ofnewgamesreleased which Sales inNSWwere drivenbythelarge such asthenewViridian innovative premium product offerings environment istocontinuefocuson mature andhighlyregulated operating The Group’s strategyinthischallenging, successful. dollar gamestoclubsandhotelsproved while inQueenslandtherelease ofnew transition toPlayerInformationDisplays benefitedfromin Victoria the required Viridian next 12months.Operatorfeedbackonthe expected toprogressively improve overthe related capitalworks,themarketis most Statesandasoperatorscomplete smokingrestrictions nowinplace With business model. the developmentofarecurring revenue Gen 7 in marketdemand. positioned tobenefitfrom improvements been verypositiveandtheGroup iswell be launchedprogressively over2008,has 109.7 276.2 2006 ™ ™ platform, Ticket-in Ticket-out, and Ticket-out, platform,Ticket-in cabinetandGen7 ™ concept,BankBuster Variance $Million (0.2) 3.9 ™ cabinetand ™ platform,to Variance ™ (0.6) pts . Sales (0.2) 1.4 %
.17 .18 Margin Profit Revenue Reported ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ Revenue Currency^ At Constant Margin Profit gaming, theViridian future opportunitiessuchasserver-based to supportnewproducts anddeveloping to 2.4%despiteinvestmentinresources administration costincreases were limited Underlying selling,marketing,generaland relative fixedcostbaseofthebusiness. lower recurring revenue marginsandthe a result ofacombinationadversemix, by improved pricing.Margindeclinedas overall salesvolumesonlypartiallyoffset profit by9.9%, reflecting a reductionin terms, revenue declinedby4.8%and and profit fell19.2%.Inconstantcurrency Reported revenue decreased by14.4% America North Americas The Analysis and Discussion Management market segment when compared with2006. new video sales, albeit in a smaller overall retaining its approximate 40% share of all 22.6% to13,807unitswiththeGroup share ofoverallsales.Platformsalesdeclined where video has made up the dominant contrary to the trend of the past few years Fortowards stepper(mechanical) product, same time,marketvolumeswere skewed jurisdictions openingupintheperiod.At replacement cycle and the lack of new reflecting boththesubdued stateofthe The overallsizeofthemarketdeclined and expandingjurisdictions. platform, multi-terminalproducts andnew personal use only ™ cabinetandGen7 $Million $Million 42.2% 42.3% 203.9 483.6 538.2 227.4 2007 2007
™
2007 Annual Report $Million $Million Jackpot Deluxe was drivenbystrong placements of to 7,473unitsovertheyear. Thisincrease installed baseincreasing by1,012units base ofrecurring revenue units,withthe The Group continuedtogrow itsinstalled trial/order. participation, withafurther538unitson been sold,452unitswere placedon end oftheyear, atotalof586unitshad the rateofsales.Nevertheless,by units withoutatrialperiod,whichslowed been reluctant tocommitpurchasing field hasbeenencouraging,operatorshave of falsestarts.Whileperformanceinthe stepper product inAugust,afteranumber The Group finally re-launched its5-reel machines. proportion ofjackpotvsnon-jackpot to USD50in2006)asaresult ofalower declined toUSD45perday(compared Loot Jack 44.7% 44.7% 252.4 565.2 565.2 252.4 2006 2006 ™ ™ . However, averagerevenue perday , CashmanTonight ™ Variance Variance , Sopranos $Million $Million (48.5) (81.6) (27.0) (25.0) Business Segment review ™
, andLoco ® , Outback Variance Variance (2.5)pts (2.4)pts (19.2) (14.4) (4.8) (9.9) % %
cabinet andGen7 over theyear. progressively launchedacross theregion Pennsylvania, takingtheGroup’s OASIS the year, includingthefirstinstallationin new customerswere brought onlineduring feedback inrelation toitsnew Viridian expecting tobenefitfrom positive operator stepper sales.Inaddition,theGroup is volumes, andafullyear’s contributionof mix expectedtobenefittheGroup’s sales a normallevelofvideovssteppersales open up,aprogressive reversion towards expected toincrease asnewjurisdictions positive withtheoverallsizeofmarket The 2008outlookforthebusinessis America. 42% ofthesystemsinstalledinNorth base to239,representing approximately Casino ManagementSystemcustomer III million, largelydrivenbysalesofSentinel Systems revenue grew 8.2%toUSD38.2 ™ player-tracking interfacehardware. 15 ™ platform,whichwillbe ™
™
recording amarginof39.7%. profit 39%yearonwiththebusiness currency revenue increased 28%and of collectionsonlegacycontracts,constant full accrualsbasis,priortotherecognition distorted margininpercentage terms.Ona The timingofthisrevenue recognition also collections of2005andlegacyrevenues. corresponding periodhavingbenefitedfrom timing ofsalesandcollections,withtheprior Revenue andprofit declinedduetothe Currency^ At Constant Reported South America ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ Revenue Revenue Profit Profit For personal useMargin Margin only $Million $Million 37.3% 37.5% 2007 2007 26.0 23.2 9.7 8.7
$Million $Million to expand. base asmarketsintheregion continue sales anditsrecurring revenue installed American product librarytoincrease both to addselectedproducts toitsSouth principal gamingoperatorsandwillcontinue accounts, comprisingmanyoftheregion’s efforts onasmallgroup ofselectedkey The Group continuestofocusitssales 2007 Annual Report 44.4% 44.4% 2006 2006 27.5 27.5 12.2 12.2 Variance Variance $Million $Million (1.5) (4.3) (2.5) (3.5) Business Segment review Variance Variance (7.1) pts (6.9) pts (15.6) (20.5) (28.7) (5.5) % %
.19 .20 Revenue Reported ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ Revenue Currency ^ At Constant was insignificant. although attheprofit leveltheimpact with thepriorcorresponding period, Australian DollaragainsttheYen compared average 12.4%strengthening ofthe Reported results were impactedbythe 2006 to27.3%inthecurrent year. selling costsimproved from 23.4%in before inventoryprovisioning andfixed constant currency terms,gross margin from thetransitiontoRegulation 5.In booked forredundant inventory resulting (2006: $7.4million)provision whichwas business andtheeffect ofthe$8.3million low volumevsthefixedcostbaseof Regulation 4asaresult oftherelatively the 20+%recorded inprioryearsunder at 6.5%remains substantiallybelow to newRegulation5games.Themargin work costsassociatedwiththetransition offset byinventoryprovisioning andre- a broadly flat Yen gross marginperunit, $5.9 millionreflecting highervolumesat from alossof$5.6milliontoprofit of average sellingprice.Theresult improved an increase inunitsalesalbeitatalower Revenue increased by81%driven Japan Analysis and Discussion Management Margin Profit/(Loss) For personal useMargin Profit/(Loss) only $Million $Million 100.5 6.5% 5.9% 2007 2007 91.2 5.9 5.9
2007 Annual Report $Million $Million Cashman 5 gamesubmissions. approval process applicabletoRegulation the testingauthority, tothetestingand and thechangingapproach ofSECTA, compared withRegulation 4games lower performanceofRegulation5 in themarketislargelyaresult ofthe The highdegree ofuncertainty prevailing and manufactured bySammy. Japanese gamesinacabinetdesigned the Group released three ofitsseven Group continuestobeclose.During2007 between SammyCorporationandthe The long-termworkingrelationship 15,000 units. Regulation 5gametodate,sellingover proved tobetheGroup’s mostsuccessful Kyofu Shimbun Seven Regulation5games(Kaido-oh last fewyearsofRegulation4.Tetsuya the annual85,000+unitssoldin sold in2006,butsignificantlylowerthan 29,843 unitssold,wellabovethe12,043 were marketedduring2007withatotalof 2006 2006 50.4 50.4 (5.6) (5.6) n/a n/a ™ , Danceman ™ Variance Variance , Tetsuya $Million $Million 40.8 50.1 11.5 11.5 ™ , ZooMania Business Segment review
™ , andPandora Variance Variance ™ ™ , ™ , 81.0 99.4
n/a n/a n/a n/a % % ™ )
than itspeakofafewyearsago. the shorttermwillbesomewhatsmaller market share, albeitinamarket whichin confident of re-establishing its5%-6% 5 environment andtheGroup remains market adjuststothenewRegulation outlook for2008ispositiveasthe operator interest innewproduct. The selling pricesstabilisingandaheightened positive changeinoperatorsentiment,with the year, there appearstohavebeena to Regulation5inthefinalquarterof an uncertainstate,sincethefulltransition Although thepachislotmarketremains in declined toapproximately 1.1millionunits. installed baseofpachislotmachineshaving fallen byapproximately 15%andthe number ofpachinko/pachislothallshaving significantly overthelasttwoyearswith The pachislotmarkethaschanged half of2009. for complianceover2008andthefirst to commencereplacement andupgrades of July2009.Themarketisexpected to theregulatory PIDcompliance date are notexpectedtoimprove untilcloser The adverseprevailing market conditions to 20,163attheendofSeptember2007. over 20%from apeakof25,221 in2003 gaming machinesinclubsandhotelsby reduced thenationalinstalledbaseof Player InformationDisplay(‘PID’)have legislation requiring randominterruptive and theintroduction ofresponsible gaming The restrictive regulatory environment 5.5 percentage points. 17.4% withmarginsdeterioratingby of thebusinessresulted inprofit declining volumes, whiletherelatively fixedcostbase revenue fellby5.3%asaresult oflower friendly’ grandfathered games.Reported new product soastoretain more ‘player operators continuedtodeferpurchases of The marketremained difficultin2007as Currency^ At Constant Reported New Zealand ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ Revenue Revenue Profit Profit For personal useMargin Margin only $Million $Million 37.7% 37.7% 2007 2007 24.7 25.2 9.3 9.5
$Million $Million 2007 Annual Report 43.2% 43.2% 2006 2006 26.6 26.6 11.5 11.5 Variance Variance $Million $Million (1.9) (1.4) (2.2) (2.0)
Business Segment review Variance Variance (5.5) pts (5.5) pts (19.1) (17.4) (7.1) (5.3) % %
.21 .22 Revenue Reported ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ Revenue Currency^ At Constant Group maintained its80%marketshare in continued to growand Vietnam andthe Cambodia, thePhilippines,South Korea Elsewhere intheregion, salesto approximate 60%. Overall marketshare inMacau continuesto Venetian, Ponte16andtheMGMGrand. including theGrandLisboa,Crown Macau, new casinosthatopenedduringtheyear The Group madesignificant salestothe 38% tomore than10,000 over theyear. installed baseofgamingmachinesgrew expanded theiroperations,theoverall new casinos opened and existing casinos expanding market.Asanumberofmajor performance oftheGroup’s products inthis standout, driven by the outstanding The Group’s growth inMacauwasthe market positionintheregion. continued toimprove onitsdominant with profit improving by93%astheGroup Revenue grew byapproximately 100% Pacific Asia (i) and SouthAfrica. –AsiaPacific,Europe‘Other International’ results across allthree regions comprising increased by88.5%drivenimproved Revenue improved by70.4%andProfit InternationalOther Analysis and Discussion Management Profit Margin Profit For personal use Margin only $Million $Million 37.2% 36.9% 217.2 232.0 2007 2007 80.1 86.2
2007 Annual Report $Million $Million across muchoftheregion. increased demand for the Group’s products strong gameperformanceresulting in with regulation changescombinedwith particularly strong inFrance andSlovenia, premium product sales.Salesvolumeswere unit volumesandahigherproportion of increased byalmost160% drivenbyrecord Revenue increased by 63% and profit Europe (ii) the openingofnewcasinosinregion. results willbeinfluenced by thetimingof opportunities developalthoughreported maintain andgrow itspositionasnew the region andremains wellplacedto The Group istheleadingsupplieracross sales intheyear. the Elixir group, which resulted in significant preferred supplierstatusfortheregion with modest. TheGroup hasalsoestablisheda revenues atthisstageremain relatively Group’s participationagreement, although been placedinPAGCOR venuesunderthe Philippines, furthergamingmachineshave expected toopenuntil2009/10.Inthe currently beingconstructedbutare not Singapore, where twomajorcasinosare 33.3% 33.3% 127.5 127.5 2006 2006 42.5 42.5 Variance Variance $Million $Million 104.5 89.7 37.6 43.7 Business Segment review Variance Variance 3.9 pts 3.6 pts 102.8 70.4 82.0 88.5 % %
casino markets)inwhichitoperates. management systemsandtraditional across allthree segments (LPM,casino growth intheregion, withongoingsuccess The Group isoptimisticaboutfurther segment. expanding LimitedPayoutMarket(‘LPM’) The Group retains an80%share ofthe Johannesburg GoldReefCityproperty. the region attheSilverstar Casino,anew Prime Group alsoinstalledthefirst System7000 an increase of131%onthe prioryear. The product installedbaseofover 900units, period, theGroup hadarecurring revenue revenue. Attheendofreporting recurring revenue placementsandsystems increased over30%,reflecting higher Revenue increased 16%andprofit Africa South (iii) into theSpanishmarketin2008. region andexpectstolaunchitsfirstgame expanding intonewjurisdictionsinthe and cabinetapprovals. TheGroup isalso dependent onthereceipt ofkeyproduct continue in2008althoughthisisheavily growth experiencedduringtheyearto The Group expectsthemomentumand ™ casinomanagementsystemin Currency^ At Constant Reported ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ went livewith50AceInteractive In September, CasinoSlovakiasuccessfully planned duringthefirsthalfofyear. GLI inthefirstquarterof2008,withtrials approved foruseinClass III casinosby standards. Thissystemis expected tobe (‘GLI’) Gaming LaboratoriesInternational and toensure itcomplieswiththevarious to meetthedemandsofcasinooperators included buildingadditionalfunctionality was undertakenduringtheyear. Thiswork Interactive Terminals (IvTs) connectedtotheAce Server-based GamingPlatform Significant developmentworkontheACE terminal (‘VLT’) markets. both thecasino(‘ClassIII’)andvideolottery The ACEproduct hasbeendesignedfor technology. utilising a leading edge server-based gaming video terminalhardware andsoftware next generationinteractivesystemsand ACE develops,manufactures andmarkets ACE platform. first commercial installationoftheAIGS Revenue Revenue Profit Profit For personal useMargin Margin only ™ AIGS ™ platform.Thiswasthe $Million $Million ™ (12.8) (11.6) 2007 2007 ™ (AIGS Video Video n/a n/a 1.7 1.5
™ ™ )
$Million $Million in anumberofcasinooperations. new ClassIIIserver-based gamingplatform type opportunitiesinadditiontotriallingits actively pursueandidentifyotherglobalVLT Looking forward, ACEwillbecontinuingto operational duringthesecondhalfof2008. 500 terminalsexpectedtobeinstalledand connected totheACEsystemwithfirst with NTtoresume therollout ofVLTs in 2002.ACEhasbeenactivelyworking server-baseda turnkey gamingsolution awarded thecontractbyNTtoprovide system inNorway. ACEhadoriginallybeen to recommence therollout ofACE’s VLT (‘NT’),allowingit against NorskTipping achallenge Association Courtoverturned During theyear, theEuropean Free Trade 2007 Annual Report 2006 2006 (7.4) (7.4) 2.4 2.4 n/a n/a Variance Variance $Million $Million (0.7) (0.9) (5.4) (4.2) Business Segment review Variance Variance (29.2) (37.5) 73.0 56.8 n/a n/a % %
.23 .24 Organic Revenue Reported ^ Adjusted for translational exchange rates using rates applying in 2006. in applying rates using rates exchange translational for Adjusted ^ Revenue Currency^ At Constant Interblock ˇcek2006. Elektron tradesunderthe based inSlovenia,wasacquired inJanuary ˇcekThe Group’s 50%interest inElektron , ˇcekElektron (50%ownership) Analysis and Discussion Management Roulette, Sic-BoandanewrangeofG4 gaming machines(‘MTGMs’)including range ofelectro-mechanical multi-terminal potential. installed, whichwillimpedetheproducts’ a caponthenumberofunitsthat maybe hassubsequentlyannounced Government products totheNSWclub market,the ˇcekapproval wasobtainedto sell Elektron in thesemarkets.InAustralia,although hindered theproduct from gainingtraction to ongoingregulatory delays whichhave Australia were lowerthanexpected due 61%. SalesintheUnitedStatesand installed baseofMTGMsfrom 55%to ˇcekElektron hasgrown itsshare ofthe sales inEurope andAsia.In Macau, ˇcekThe Elektron businessachievedstrong 5.7%. increased 14.1%andprofit increased million. Inconstantcurrency, revenue while profit decreased 4.7%to$10.1 Revenue increased 13.2%to$38.5million Margin Profit For personal useMargin Profit only ™ products. ™ brandname,manufacturinga $Million $Million 26.2% 28.9% 2007 2007 38.5 38.8 10.1 11.2
™
2007 Annual Report $Million $Million product directly. PokerPro States andCanadawhere PokerTek places venues across theglobeoutside theUnited branded technologysolutions,togaming Challenge the exclusiverightstodistributeHeads-Up for dealertipping.TheGroup alsoholds dealer mistakes,andremoves theneed hands perhour, eliminatesplayerand electronic pokertablewhich deliversmore PokerPro exclusive rightstooffer PokerTek’s (NASDAQ: PTEK)underwhichitacquired distribution agreement with‘PokerTek’, Inc. In January2006,theGroup signeda PokerTek (16.6% interest) profit growth. is expectedtobeakeydriverofsalesand progressive receipt ofregulatory approvals, Blackjack product which,togetherwiththe range ofproducts includingthenewG4 gaming andnon-gamingvenues. action. Thisproduct willbeplacedinboth eliminate thedealerandspeedup the one anotherusingcomputerscreens that permits twoplayerstocompete against Zealand, anewnon-gamingproduct that promoting andsellingitslatestG4 ˇcekIn 2008,Elektron willbeactively 31.2% 31.2% 2006 2006 34.0 34.0 10.6 10.6 ® ® tables,andotherPokerPro tablesinAustraliaandNew Variance Variance $Million $Million (0.5) 4.5 4.8 0.6 Business Segment review ® isaninnovative Variance Variance ™ (5.0) pts (2.3) pts
® 13.2 14.1
(4.7) ™ 5.7
% %
for approval tosellPokerPro Bulgaria andGermanyapplications Group inMacau,SouthAfrica,Italy, world. Challenge approvals are received andasHeads-Up continue tobuildmomentumasregulatory jurisdictions. Thebusinessisexpectedto are beingpursuedinanumberofother PokerPro ® ® tablesare beingsoldbythe tablesare rolled outaround the ® products Remuneration eport * AW Steelman SAM Pitkin P Morris RA Davis WM Baker directors Non-executive Finance Director SCM Kelly*–ChiefFinancialOfficerand Managing Director PN Oneile–ChiefExecutiveOfficerand directors Executive DJ Simpson -non-executive Chairman the Companyduringfinancialyear: The followingpersonswere directors of Directors pages: individuals are specifiedinthefollowing The remuneration detailsforthefollowing executives. and serviceagreements ofdirectors and the financialyear, andthe remuneration and theCompany’s performancefor between remuneration policyandprinciples and executivesoftheCompany, thelink theremunerationthat govern ofdirectors This report detailsthepolicyandprinciples 2007 31 December ended 12 the For months personnel disclosures. shown underexecutivekeymanagement the full2006year, SCMKelly’s detailsare Forshown underdirector disclosures. For to SCMKellyforthefull2007yearare Throughout thisreport, detailsinrelation management personnelforthatperiod. and metthedefinitionofexecutivekey Kelly heldtherole ofChief FinancialOfficer year ended31December2006,SCM date ofhisappointmentandforthefull personaldirector on20February2007. Uptothe SCM Kellywasappointedanexecutive use only - - value toshareholders by: structured todeliverlong-term sustainable to ensure thattheCompany iseffectively remuneration policyandits principlesis The objectiveoftheCompany’s remuneration policy Objectives andprinciplesof (Audited) policy 1 Remuneration 300A(1)(c) oftheCorporationsAct2001. are covered withinthedefinitionofsection Chief ExecutiveOfficer–TheAmericas, Australasia andTJParrott, President and WP Jowett,ExecutiveGeneralManager In additiontokeymanagementpersonnel, executives nominated Other the fullyearended31December2007. executive keymanagementpersonnelfor All oftheabovepersonswere considered during thefinancialyearare asfollows: (‘executive keymanagementpersonnel’) controlling ofactivitiestheGroup for theoverallplanning,directing and The executiveswhowere responsible personnel key management Executive BJ Yahl IH Timmis GS Phillips SJ Parker Name 2007 Annual Report clearly linkingshortandlong-term cash establishing apayforperformance culture, retaining highcalibre staff; attracting, motivating,rewarding and Company Secretary Commercial andLegal, Group GeneralManager, Development Business andStrategic Group GeneralManager, Chief Technology Officer and Marketing Research &Development Group GeneralManager, Position Remuneration report - alignmentwithshareholders’ interests. - payforperformance;and relativities;- equitableinternal competitiveness; - external comprise: The principlesthatunderpintheframework - - driven environment. in aheavilyregulatory andcompliance placed onexecutivesrequired tooperate business andtheadditionalresponsibilities recognising theglobalnature ofthe remuneration trends; and account current bestpracticeinexecutive competitive tothemarketthattakesinto equitableyet framework whichisinternally establishing atransparent remuneration sustainable shareholder value; this performancewiththecreation of long-term businessobjectivesandaligning of specificandmeasurableshort and equity-basedrewards toachievement
.25 .26
For personalout inthefollowingtable. indicators overthelastfiveyearsare set Details oftheCompany’s keyshareholder and objectives. is alignedwithitsoverallbusinessstrategy competitive remuneration frameworkthat consultants tostructure amarket from remuneration independentexternal in itsrole, advicehasbeenobtained To assisttheRemunerationCommittee sustainable shareholder valuecreation. its performanceindeliveringlong-term enable theCompanytoclearlyevaluate usecomparator group. Thesespecificmeasures Per Share Growth (‘EPSG’)targetsversusa Shareholder Return (‘TSR’) and/or Earnings rewards require achievementofTotal personal objectives.Long-termincentive combination ofcorporate,businessand Employed targetsasmeasured againsta of specificNetOperatingProfit andFunds term incentiveonly rewards require achievement to leveragelong-termperformance.Short- have alargerproportion of‘atrisk’reward remuneration is by design structured to the remuneration policy. Seniorexecutive principles toachievetheaboveobjectiveof incentive strategiesisalignedwiththese components includingshortandlong-term The combinationoffixedandvariablepay Report Remuneration 2007 Annual Report ** The** closing share price for 2004 and prior has not been restated to reflect the capital return of 21 cents per shareAIFRS. under restated been not paid have 2003 infor statements 2005. Financial * - - - this committeeinclude: directors. Theprimaryresponsibilities of and comprisesthree non-executive This committeeischaired bySAMPitkin (Audited) Committee Remuneration 2 The operational performanceforshareholders. Company todeliverlong-termsustainable overall performance,assistingthe a positivecontributortotheCompany’s (and asdescribedinthisreport) hasbeen remuneration policyandprinciplesin2004 The introduction ofthecurrent of year(cps) Dividends paidinrespect Capital return(cps) Share buy-back($m) December** ($) Closing share priceat31 share (cps) per Fully dilutedearnings minority interest ($m) Net profit aftertax equity onshareholders’Return arrangements; and the Company’s superannuation competitiveness; and external measurements, businessalignment components, performance strategy includingremuneration the Company’s overallremuneration management; training policiesandprocedures forsenior succession planning,terminationand the recruitment, remuneration, retention, Remuneration report 77.1% 11.25 247.2 2007 49.0 52.4 52.8 - 65.7% 15.90 239.0 2006 - 36.0 34.6 50.9 • • • making recommendations to the Board on: fees. Chairman andnon-executivedirector incentives andhurdles; and remuneration includingperformance performance andequity-based CEO andseniormanagement remuneration frameworkandlevels; CEO andseniormanagementfixed - 69.5% 102.4 12.32 244.3 2005 30.0 21.0 51.1 38.0% 142.2 2004 10.7 9.95 29.2 8.0 - (48.5%) (106.0) 2003* (22.9) 1.72 6.0 - - fee inadditiontotheirannualremuneration. of acommittee,receive asupplementary directors whoalsochair, orare amember responsibilities. Othernon-executive additional feesforhiscommittee The Chairmandoesnotreceive any July 2007are setoutinthe tablebelow. Current feesfordirectors effective from 1 the AnnualGeneralMeetinginMay2004. A$1,750,000 approved by shareholders at the maximumaggregate amountof committee fees,are setbytheBoard within Non-executive directors’ fees,including 3.1 market place. positions andiscompetitiveintheexternal with thedemandsandresponsibilities ofthe that thelevelofdirectors’ feescorresponds remunerationexternal consultantstoensure Advice hasbeenobtainedfrom independent periods. shares on-marketduringappropriate trading a portion oftheirremuneration topurchase executive directors are abletocontribute short-term incentiveplans;however, non- executive directors donotparticipateinany are reviewed annuallybytheBoard. Non- Non-executive directors’ feesandpayments expenses whichare reimbursed asincurred. addition tofeesisthecostofreasonable superannuation) fortheirservices.Theonly directors onlyreceive fees(including operates. TheCompany’s non-executive jurisdictions inwhichtheCompany directors byregulators oftheglobal requirements placedonnon-executive include aprovision fortheonerous probity that theCompanyoperatesin.Fees scope andhighlyregulatory environment associated withtheirroles andtheglobal reflect thedemandsand responsibilities The feespaidtonon-executivedirectors (Audited) directors 3 Non-executive
For personal fees Directors’ use only Chairman Position Australian resident non-executivedirector US resident non-executivedirector Member of Nomination and Governance Committee Member ofNominationandGovernance Member ofRemunerationCommittee Member ofRegulatoryandComplianceCommittee US resident memberofAuditCommittee Member ofAuditCommittee Committee Chair ofNominationandGovernance Chair ofRemunerationCommittee US resident ChairofRegulatoryandComplianceCommittee Chair ofAuditCommittee 2007 Annual Report Remuneration report Currency US$ US$ US$ A$ A$ A$ A$ A$ A$ A$ A$ A$ (per annum) 365,000 155,000 131,549 12,731 21,218 10,000 12,500 15,000 15,500 20,000 30,000 7,750 Fee
.27 .28 Remuneration Report Remuneration PN Oneile Executive directors ** Represents the Consumer Price Index adjustment to frozen allowances. Refer to section 3.2. section to Refer allowances. frozen to adjustment Index Price Consumer the Represents ** individual. the of discretion the at benefits other of lieu in sacrificed amounts include fees and salary cash as shown Amounts * The remuneration detailsofexecutiveandnon-executivedirectors are setoutbelow: Name SCM Kelly DJ Simpson Non-executive directors WM Baker RA Davis P Morris SAM Pitkin AW Steelman ForTotal personal use only 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Year 1,805,596 1,737,046 3,613,292 2,882,939 salary and 605,274 334,862 314,220 169,666 177,925 169,037 155,046 200,250 178,502 172,018 163,579 156,589 156,621 Cash fees* n/a $ 1,334,200 1,295,529 1,680,609 1,295,529 346,409 Short-term benefits bonus 2007 Annual Report Cash n/a ------$
monetary benefits 62,435 39,105 14,429 16,597 17,984 91,374 73,686 6,930 7,580 Non- n/a ------$ annuation 12,908 12,413 12,908 30,138 28,280 15,213 13,954 13,322 15,482 14,787 92,616 88,538 Super- 1,788 1,662 4,179 4,120 Remuneration report n/a - $ employment Retirement benefits** benefits 11,698 16,839 6,003 8,641 5,695 8,198 Post- n/a ------$ Performance Share Rights Options and 1,549,572 1,940,261 2,118,781 1,940,261 payments 569,209 Share- based n/a ------$ 4,764,711 5,024,354 7,608,370 6,297,792 1,548,229 365,000 342,500 184,387 204,825 184,250 169,000 200,250 191,824 187,500 178,366 174,043 186,923 Total n/a $ Remuneration consisting of share-based payments 32.5 38.6 36.8 27.8 30.8 n/a 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 % Forlevels. considered indetermining remuneration in whichtheCompanyoperatesare also by regulators oftheglobal jurisdictions probity requirements placedonexecutives determining remuneration. Theonerous performance, are considered when personalof knowledge,skills,experienceand of theexecutives,inadditiontomix operations andtheglobalresponsibilities natureinternational oftheCompany’s to ensure competitivepositioning.The companies (basedonmarketcapitalisation) identified peergroup ofAustralian to similarsizedroles from aspecifically marketandcomparedagainst theexternal Fixed remuneration isreviewed annually remuneration package. remuneration’ componentoftheirtotal other benefitswhichmakesupthe‘fixed comprising cashsalary, superannuationand Executives receive acompetitivebasesalary 4.1 remuneration Fixed variable remuneration. useRemuneration ismadeupoffixedand (Audited) Remuneration 4 Executive actually leavetheBoard. may onlybepaidoutwheneligibledirectors Consumer PriceIndex(AllGroups) and and indexedtotheannualchangein 2004. Thefrozen allowancesare preserved had theirentitlementsfrozen asat1June onlyaccrued retirement allowanceswhohave appointed priortoMay2003withexisting remain twoeligibledirectors whowere appointed afterMay2003.There currently retirement allowancesforanydirectors General MeetinginMay2004tocease A resolution waspassedattheAnnual directors for allowances Retirement 3.2 targets andtheirrespective weightings. considered whenestablishing incentive Company andbusinessunitperformance plan witheachindividual’s abilitytoinfluence measures appliestoallparticipants inthe objectives. Acombinationofthese targets andperformanceagainstindividual performance againstbusinessunitfinancial overall Companyfinancialtargets, The planrewards performanceagainst the remuneration review cycle. targets are reviewed annuallyaspartof shareholders. Theshort-termincentive performance andincrease valuefor able todirectly influencetheCompany’s plan appliestothoseexecutiveswhoare be achieved.Theshort-termincentive funds employedtargetswhichneedto to shareholders bydefiningkeyprofit and clear linkagebetweenreward andreturns The short-termincentiveplanensures a plan incentive Short-term 4.2.1 remuneration Variable 4.2 benefits. Executives donotreceive retirement life insurance,andtaxationadvice. accommodation allowances,traveland receive additionalsupportincluding As appropriate, expatriateexecutives appropriate professional associations. are abletomaintainmemberships fixed remuneration. Inaddition,executives the costsofwhichare includedwithin consultation, annualhealthassessments, and disabilityinsurance,financialplanning including salarycontinuance,trauma,death Executives alsoreceive otherbenefits their fixed remuneration. the provision ofavehicleprovided outof additional superannuationcontributionsand to haveacombinationofbenefitsincluding Executives havetheflexibilityandchoice 2007 Annual Report Remuneration report the Board maydetermine. market conditionsandotherfactorswhich may varyfrom yeartodependentupon performance measures, criteriaandtargets the Company’s fullyearresults. Actual Committee andtheannouncementof made atthediscretion oftheRemuneration prior topaymentfollowinganyadjustments Remuneration CommitteeandtheBoard All incentivesrequire finalapproval from the exceeding targetlevels. payments are provided forperformance detailed below. Above-targetincentive executive directors andexecutivesare and paymentthresholds asappliedto measures, associatedrangeofweightings plan forthefollowingyear. Thevarious Board review andapproval oftheannual Financial targetsare establishedfollowing of inexcess20%fixed remuneration. executives havetargetshort-termincentives seniority oftheindividual.Typically, senior remuneration dependingontherole and incentives varyfrom 10%to76%offixed performance scale.Target short-term Employed/Working Capitalonagraduated and lessthan125%oftargetFunds net operatingprofit aftertax(‘NOPAT’) business unitachievesover85%oftarget incentive paymentiftheCompanyor participants are eligibletoreceive an These targetsare structured sothat
.29 .30 more detailinthefollowingsections. Employee Share Planare describedin has beendiscontinued,andtheGeneral Employee Share OptionPlan,which Both oftheseplans,togetherwiththe Performance Share Plan. has onlyoffered participationinthe of shareholders. To date,theCompany which alignstheirinterests withthose executives withalong-termincentive of thetwo,willbeusedtoprovide key that eitheroftheseplans,oracombination Performance OptionPlan.Itisintended – thePerformanceShare Planandthe long-term incentiveplanssince2004 The Companyhasintroduced twonew plans incentive Long-term 4.2.2 Short-term incentivemeasures Report Remuneration For personal useTotal Key performanceobjectives Non-financial controllable fundsemployed onlyBusiness unit–segmentprofit andaverage average fundsemployed Group –netoperatingprofit aftertaxand Financial 2007 Annual Report Securities Exchange. rights, and are not quoted on the Australian transferred, havenovotingordividend Performance Share Rightscannotbe the designatedperformanceperiod.The group ofcompanies,oncompletion targets versusaspecifiedcomparator Company achievingcertainperformance ordinary shares whichvest,subjecttothe executives conditionalentitlementsto implemented in2004whichoffered key A long-termincentiveplanwas (‘PSP’) Plan Share Performance - incentive Long-term 4.2.3 Weighting 20 –70 30 –80 100 % Minimum payment Remuneration report % 0 0 Maximum payment 150 200 % will bemet. and thelikelihoodthatvestingconditions expected dividendyield,timetomaturity shares, theriskfree rateofreturn, the dateofgrant,volatilityunderlying influenced bytheCompany’s share priceat commencement ofaperformanceperiodis of aPerformanceShare Rightatthe in thefuture. TheRemunerationValue Rights beingcontingentrightstoshares period asaresult ofPerformanceShare the commencementofperformance equal tothemarketvalueofashare at a PerformanceShare Rightwillnotbe will bemet.ThisRemunerationValue of the likelihoodthatvestingconditions (‘Deloitte’), havingtakenintoaccount performed byDeloitteTouche Tohmatsu based onanaccountingvaluation Share RightisdeterminedbytheBoard The RemunerationValue ofaPerformance Share Right. the RemunerationValue ofaPerformance equals theParticipationValue dividedby of PerformanceShare Rightsissued performance period–thatis,thenumber Share Right’)atthecommencementof (‘Remuneration Value ofaPerformance the purposesofremuneration packaging of eachPerformanceShare Rightfor determined basedonanassessedvalue Share Rightstobeallocatedisthen retention risk.ThenumberofPerformance responsibility, performance,potentialand a combinationofeachexecutive’s levelof from 40%to76%,isdeterminedbasedon This designatedpercentage, whichranges percentage oftheirfixed remuneration. Value’) inthePSP, beingadesignated value ofparticipation(‘Participation Key executivesare allocatedacertain For personalpercentile. of theiroffered shares atorabovethe75th at the50.1stpercentile, andupto100% usethe Companyachievesperformanceranked be allocated45%oftheiroffered shares if and resources companies.Aparticipantwill financial services,property trust/investment start oftheperformanceperiod,excluding market capitalisationoftheCompanyat companies ofasimilarsize,basedonthe The comparatorgroup comprises50 onlyLimited share of$15.90. 31 December2006)ofanAristocratLeisure compared withaclosingmarketprice(on the abovemethodology, as$7.79pershare Right wasdetermined,inaccordance with Remuneration Value of a Performance Share of PerformanceShare Rights,the At 1January2007,forthe2007grant offer tooffer. terms ofindividualplansmayvaryfrom and shareholders, where applicable.The remuneration, andapproval oftheBoard plans, future directions inexecutivevariable ability oftheCompanytooffer suchshare times asare appropriate, subjecttothe under thisPlanannually, oratsuchother It istheCompany’s intentiontomakeoffers Committee andapproved bytheBoard. is determinedbytheRemuneration Share Rightsoffered toeachparticipant period andthequantityofPerformance measures, thedesignatedperformance Participation inthePlan,performance performance period. shareholders overathree tofiveyear and deliveringsustainablereturnsto the long-termobjectivesofCompany individual performanceandreward with Plan reinforces direct alignmentbetween performance measures. Indoingso,the shares uponachievementoftheprescribed in theCompanyformofperformance opportunity forparticipantstoacquire equity been specificallydesignedtoprovide an success oftheCompany. ThePlanhas who candirectly influencethelong-term reward andretain thosekeyexecutives The Planisdesignedtoattract,motivate, 2007 Annual Report Remuneration report shareholders. value creation delivered totheCompany’s comparable shareholder returnsand as aneffective methodofassessing EPSG measures are widelyrecognised representative groups. BoththeTSRand discussions withvariousshareholder another performancemeasure following subsequent plans,EPSGwasaddedas market.Forthe2005and the external against aspecifiedcomparatorgroup from performance tobeobjectivelyassessed incentive plan.TSRallowstheCompany’s measure forSeries1and2ofthelong-term companies wasinitiallyselectedasthesole TSRs ofaspecifiedcomparatorgroup of TSR performanceagainsttheindividual 3 2 1 measure Performance specified comparatorgroup the individualEPSGsof Fully dilutedEPSGagainst group. the specifiedcomparator the individualEPSGsof Growth (‘EPSG’)against PerShareBasic Earnings comparator group. TSRs ofthespecified (‘TSR’) againsttheindividual Total Shareholder Return Description
.31 .32
For personal use only Report Remuneration *** The performance measures are used to determine actual allocation levels based on the vesting scale. vesting the on based levels allocation actual determine to used aremeasures performance The *** ** * Series 1A* 2* 1B** 3A** 3B** 4A** 4B** 5A 6A 5D 5C 5B 7A 6B 7B 8A 9A 8B 9B be allocated in full. in allocated be would 2 and 1A series period, performance the over measures performance specified Company’sthe the against on performance based that, determined Board the 2007, February 20 On These changes will be reflected in 2008 remuneration disclosures.remuneration 2008 in reflected be will changes These lapsed. series these of each of balance unallocated The 83.25%. 4B Series and 0% 4A Series 83.25%; 3B Series 0%; 3A Series 100%; 1B Series - made be would allocations following the period, performance the over measures performance specified Company’sthe the against on performance based that, determined Board the 2008, February 26 On Grant date 2-Sep-04 21-Dec-04 1-Jan-05 17-May-05 17-Oct-05 1-Jan-06 2-May-06 1-Jan-07 2-May-07 2007 Annual Report Performance period 31-Dec-07 1-Jan-04 to 31-Dec-06 1-Jan-04 to 31-Dec-06 1-Jan-04 to 31-Dec-07 1-Jan-05 to 31-Dec-07 1-Jan-05 to 31-Dec-10 1-Jan-06 to 31-Dec-09 1-Jan-06 to 31-Dec-08 1-Jan-06 to 31-Dec-08 1-Jan-06 to 31-Dec-09 1-Jan-07 to 31-Dec-09 1-Jan-07 to Remuneration report Performance Measure*** 1 1 1 1 2 1 2 3 1 3 1 3 1 1 3 3 1 3 1 participants (at Number of inception)
155 155 140 140 110 110 1 7 7 1 1 3 3 3 3 1 1 2 2 Share Rights(at Performance Number of inception) 1,208,723 1,208,723 380,000 553,128 553.129 440,845 440,845 111,487 111,488 26,557 26,556 34,172 34,171 14,148 14,149 14,149 14,149 99,001 99,002 Number unvested 1 January2007 1,055,172 1,055,172 380,000 524,120 524,121 23,781 23,781 34,172 34,171 14,148 14,149 14,149 14,149 99,001 99,002 at - - - -
Number lapsed (133,446) (75,799) (75,800) (22,276) (22,276) in year (4,716) (4,717) (4,716) (4,716) ------
Number vested (1,055,172) (380,000) (18,652) in year ------
Number granted 440,845 440,845 114,887 114,888 in year ------
31 December2007 Number unvested 903,074 448,321 448,321 418,569 418,569 114,887 114,888 23,781 23,781 34,172 34,171 99,001 99,002 9,432 9,432 9,433 9,433 at - -
Series *** The performance measures are used to determine actual allocation levels based on the vesting scale. vesting the on based levels allocation actual determine to used aremeasures performance The *** ** * 1A* 2* 1B** 3A** 4A** 3B** 5A 4B** 6A 5D 5C 5B 7A 6B 8A 7B 9A 8B 9B be allocated in full. in allocated be would 2 and 1A series period, performance the over measures performance specified Company’sthe the against on performance based that, determined Board the 2007, February 20 On These changes will be reflected in 2008 remuneration disclosures.remuneration 2008 in reflected be will changes These lapsed. series these of each of balance unallocated The 83.25%. 4B Series and 0% 4A Series 83.25%; 3B Series 0%; 3A Series 100%; 1B Series - made be would allocations following the period, performance the over measures performance specified Company’sthe the against on performance based that, determined Board the 2008, February 26 On Grant date 2-Sep-04 21-Dec-04 1-Jan-05 17-May-05 17-Oct-05 1-Jan-06 2-May-06 1-Jan-07 2-May-07 Performance period 31-Dec-07 1-Jan-04 to 31-Dec-06 1-Jan-04 to 31-Dec-06 1-Jan-04 to 31-Dec-07 1-Jan-05 to 31-Dec-07 1-Jan-05 to 31-Dec-10 1-Jan-06 to 31-Dec-09 1-Jan-06 to 31-Dec-08 1-Jan-06 to 31-Dec-08 1-Jan-06 to 31-Dec-09 1-Jan-07 to 31-Dec-09 1-Jan-07 to Performance Measure*** 1 1 1 2 1 2 1 3 1 3 1 3 1 3 1 3 1 3 1 participants (at Number of inception)
155 155 140 140 110 110 1 7 7 1 1 3 3 3 3 1 1 2 2 For personal use only Share Rights(at Performance Number of inception) 1,208,723 1,208,723 380,000 553,128 553.129 440,845 440,845 111,487 111,488 26,556 26,557 34,171 34,172 14,148 14,149 14,149 14,149 99,002 99,001 Number unvested 1 January2007 1,055,172 1,055,172 380,000 524,120 524,121 23,781 23,781 34,171 34,172 14,148 14,149 14,149 14,149 99,002 99,001 at - - - -
2007 Annual Report Number lapsed (133,446) (75,799) (75,800) (22,276) (22,276) in year (4,716) (4,717) (4,716) (4,716) ------
Remuneration report Number vested (1,055,172) (380,000) (18,652) in year ------
Number granted 440,845 440,845 114,887 114,888 in year ------
31 December2007 Number unvested 903,074 448,321 448,321 418,569 418,569 114,887 114,888 23,781 23,781 34,171 34,172 99,002 99,001 9,432 9,432 9,433 9,433 at - -
.33 .34
For personal use only The comparatorgroup foreachseriesofthePSPisshownbelow: Comparator groups Series 1and2 Comparator group Adelaide Brighton Alinta Amsell Austar UnitedCommunications Austereo Group Australand Property Group Australian PharmaceuticalIndustries Australian PipelineTrust Australian Leisure &HospitalityGroup Baycorp Advantage Brickworks Burns Philp&Company Burns Coates Hire Cochlear Corporate Express Australia Crane Group David Jones Downer EDi Envestra Futuris Corporation Graincorp Gunns GWA International Hills Industries Incitec Pivot Ion Mcguigan SimeonWines Mia Group National Foods Novogen Nufarm Onesteel Pacifica Group Primary HealthCare Ramsay HealthCare Reece Australia Resmed Inc Rural Press Seven Network Sigma Pharmaceuticals Sims Group Smorgan SteelGroup Southern CrossSouthern Broadcasting Spotless Group STW CommunicationGroup Ten NetworkHoldings The HillsMotorwayGroup Transfield Services Unitab Holdings West AustralianNewspaper Series 3and4 Comparator group Alinta Amcor Ansell APN News&Media Australand Property Group Australian GasLightCompany AWB Billabong International Bluescope Steel Boral Brambles Industries Burns Philp&Company Burns Coca-Cola Amatil Coles Myer Computershare Consolidated MediaHoldings CSL CSR Fairfax MediaLimited Flight Centre International Foodland Associated Fosters Group Harvey NormanHoldings James Hardie IndustriesN.V. Leighton Holdings Lend Lease Lion Nathan Macquarie Airports Macquarie Infrastructure Group Mayne Group Metcash Trading National Foods Onesteel Orica Pacific Brands Paperlinx Patrick Corporation Qantas Airways Resmed Inc Rinker Group Rural Press Sonic Healthcare Southcorp Tabcorp Holdings Telecom CorporationNZ Ten NetworkHoldings Toll Holdings Transurban Group Virgin BlueHoldings Virgin Holdings West AustralianNewspaper 2007 Annual Report Series 5,6and7 Comparator group ABC Learning Alinta Amcor Ansell APN News&Media Auckland Airport Australian GasLightCompany AWB Billabong International Boral Brambles Industries Burns Philp&Company Burns Carter HoltHarvey Coca-Cola Amatil Cochlear Coles Myer Computershare Consolidated MediaHoldings CSL CSR DCA Group Downer EDi Fairfax MediaLimited Fletcher Building Foster's Group Harvey NormanHoldings James Hardie IndustriesN.V. Leighton Holdings Lion Nathan Macquarie Airports Macquarie Infrastructure Group Metcash Trading News Corporation Nufarm Orica Patrick Corporation Qantas Airways Rinker Group Rural Press Seven Network Sky CityEntertainmentGroup Sonic Healthcare Tabcorp Holdings Tattersall’s Telecom CorporationNZ Telstra Corporation Toll Holdings Transurban Group Wesfarmers Woolworths Remuneration report Series 8and9 Comparator group ABC Learning Alinta Amcor APN News&Media Auckland Airport Australian GasLightCompany Babcock &Brown Infrastructure Group Billabong International Billabong International Boral Brambles Industries Coca-Cola Amatil Cochlear Health Coles Myer Computershare Consolidated MediaHoldings CSL CSR Downer EDi Fairfax MediaLimited Fletcher Building Foster's Group Goodman Fielder Harvey NormanHoldings James Hardie IndustriesN.V. Leighton Holdings Lion Nathan Macquarie Airports Macquarie CommunicationsInfrastructure Macquarie Infrastructure Group Mayne Pharma Metcash Trading News Corporation Orica Qantas Airways Resmed Inc Rinker Group Seven Network Sigma Pharmaceuticals Sky CityEntertainmentGroup Sonic Healthcare Symbion Health Tabcorp Holdings Tattersalls Telecom CorporationNZ Telstra Corporation Toll Holdings Transurban Group Wesfarmers West AustralianNewspapersHoldings Woolworths Foreach optionseries. to performancehurdles, under thetermsof the Board). Optionsare exercisable, subject otherwise determinedatthediscretion of any relevant lawsrelating totaxationoras date orperiodasensures compliance with including thegrantdate(orsuchother the oneweekperiodleadinguptoand personalAustralian SecuritiesExchangeduring for allshares intheCompanysoldon is basedontheweightedaverageprice Exchange. Theexercise priceoftheoptions not quotedontheAustralianSecurities no votingordividendrightsandtheyare The optionscannotbetransferred, have vest assoontheybecomeexercisable. Employees’ entitlementstotheoptions 18, 30,42and54monthsrespectively. tranches thatmustbeheldforatleast Options were dividedintofourequal no considerationandforafiveyearperiod. Options were grantedundertheplanfor to itsdiscontinuanceare exercised orlapse. remain inplaceuntilalloptionsgrantedprior Plan detailedabove,however, theplanwill the introduction ofthePerformanceShare useplan were discontinuedduring2004on in November1998.Newissuesunderthis The ESOPwasapproved byshareholders (ESOP) Plan Option Share –Employee incentive Long-term 4.2.5 have been no grants under the POP to date. paid ordinary shares intheCompany. There onlyconditional entitlementstooptionsoverfully for eligibleemployeestobeoffered operating performance.ThePOPprovides continuing improvement intheCompany’s incentive schemedesignedtodrivethe in May2005.ThePOPisanexecutive The POPwasapproved byshareholders (POP) Plan Option Performance – incentive Long-term 4.2.4 employee share-based remuneration plans. acquire shares inlieuofobligationsunder which hasbeenestablishedduring2005to reserves ifpurchased undertheshare trust recognised asshare capitalifissuedoras receivable ontheexercise oftheoptionsare executives toexercise options.Amounts The Companydoesnotmakeloansto – – Options vestifoneofthefollowingapplies: of theminimumholdingperiod. ongoing basiscommencingontheexpiry The performancehurdle istestedonan for drivingshareholder returnandvalue. considered tobethemostappropriate was establishedthesemeasures were TSR performance.AtthetimeESOP based oneithershare pricegrowth or be achievedbefore theoptionsvestis The performancehurdle whichmust 2007 Annual Report ASX 200accumulationindex’s TSR. if theCompany’s TSRisgreater thanthe during thatperiod;or ASX 200accumulationindexshare price greater thanthepercentage growth ofthe were issuedandthedateoftestingis share pricebetweenthedateoptions the percentage growth intheCompany’s Remuneration report a periodofthree years. subject totheircontinuedemployment for under theGeneralEmployeeShare Plan, employees) inlieuofashare allocation employees; 2006:47,212shares to638 number ofshares (51,681 shares to749 or acontingentallocationofanequivalent either adeferred bonusof A$1,000 cash eligible staff locatedoverseas were issued this plan.Duetotaxcomplexitiescertain employees (2006:1,145)inAustraliaunder 80,040 shares (2006:90,455)to1,160 During theyear, theCompanyissued offer. daysimmediatelybefore thedateof five Australian SecuritiesExchangeduringthe the Company’s shares are tradedonthe by theweightedaveragepriceatwhich in theplanisoffer amountdivided The numberofshares issuedtoparticipants cessation ofemployment. the earlierofthree yearsafterissueorthe withdrawn from theplanordisposeduntil the plan,however, shares mustnotbe voting rightsinrespect ofshares heldunder able toreceive dividendsandexercise employees. Participantsinthisplanare eligible permanentfull-timeandpart-time no cashconsiderationandismadetoall shares tobeallocatedperemployeefor value ofA$1,000fullypaidordinary The planallowsforuptoamaximum offers ofqualifyingshares willbemade. The Board determineseachyearwhether Company objectivesandshareholders. align theinterests ofemployeeswith an annualshare allocationdesignedto gain someequityintheCompanythrough The planenableseligibleemployeesto November 1998AnnualGeneralMeeting. was approved byshareholders atthe share plan,referred toasGESP, which The Companyoperatesanemployee (GESP) Plan Share Employee General 4.2.6
.35 .36
For personal usefollowing table: as at31December2007are setoutinthe personnel andothernominatedexecutives, for executivedirectors, keymanagement the agreements relating toremuneration in serviceagreements. Keyprovisions of onlyother nominatedexecutives*are formalised management personnelgroup andthe of theexecutiveswhichmakeupkey Officer andFinanceDirector, andeach and ManagingDirector, ChiefFinancial employment fortheChiefExecutiveOfficer Remuneration andothertermsof agreements Service 4.3 2007 Annual Report initiated) Termination benefit(employee initiated) Termination benefit(Company Short-term incentivetarget superannuation &benefits) Fixed remuneration (including Contract expirydate Start date Position Name Remuneration report 3 monthsnotice 12 monthsnotice 1,400,000 1,850,000 31 December2008 1 December2003 Managing Director Officer and Chief Executive PN Oneile 3 monthsnotice remuneration - 9months Severance 3 monthsnotice. 336,974 673,947 No fixedterm 1 September2003 Director Officer andFinance Chief Financial SCM Kelly 3 monthsnotice 3 monthsnotice 250,715 501,429 No fixedterm 1 December2002 Marketing & Developmentand Manager, Research Group General For personalthe of (1)(c) 300A section of definition the Within * use onlySJ Parker 6 monthsnotice 6 monthsnotice GBP18,500 GBP185,000 No fixedterm 3 November2003 Officer Chief Technology GS Phillips Corporations Act 2001. Act Corporations 3 monthsnotice 3 monthsnotice 168,709 421,773 2007 Annual Report No fixedterm 28 July2003 Development and Strategic Manager, Business Group General IH Timmis 3 monthsnotice 6 monthsnotice 309,944 619,887 No fixedterm 29 March 2004 Secretary Legal, Company Commercial and Manager, Group General BJ Yahl Remuneration report 3 monthsnotice remuneration 12 months Severance - 3 monthsnotice. 261,605 523,210 No fixedterm 27 April1987 Australasia General Manager Executive WP Jowett* 3 monthsnotice remuneration 12 months Severance - 3 monthsnotice. USD170,000 USD450,000 No fixedterm 18 September2006 The Americas President &CEO- TJ Parrott*
.37 .38
For personal use only their personally-related entities,are setoutbelow: including entity, consolidated the Remuneration detailsofexecutivekeymanagementpersonnelandothernominatedexecutives remuneration executive of Details 4.4 Name BJ Yahl IH Timmis GS Phillips SJ Parker SCM Kelly personnel management Executive key Total TJ Parrott ** * WP Jowett executives*** Other nominated ***
Amounts shown as cash salary and fees include amounts sacrificed in lieu of other benefits at the discretion of the individual. the of discretion the at benefits other of lieu in sacrificed amounts include fees and salary cash as shown Amounts (‘GESP’). Plan Share Employee General the under allocated A$1,000 of value the to shares includes payments based Share Within the definition of section 300A (1)(c) of the of (1)(c) 300A section of definition the Within 2006 2007 2006 2007 2006 2007 2006 2007 2007 2006 2007 2006 2006 2007 2006 2007 Year Cash salary and fees** 2,685,313 2,559,545 525,858 555,536 326,776 342,738 382,467 391,261 360,288 440,869 563,420 522,785 400,736 432,124 n/a n/a $ Corporations Act 2001. Act Corporations Short-term benefits Cash bonus 2007 Annual Report 1,130,578 1,234,336 295,267 286,078 141,295 160,780 181,340 238,931 345,060 107,214 229,828 303,903 41,546 33,672 n/a n/a $ monetary 156,222 171,201 benefits 26,501 44,391 97,803 16,021 50,015 46,889 7,235 9,967 9,851 9,327 9,423 Non- n/a n/a - $ Remuneration report Superannuation employment 188,728 193,310 benefits 47,327 49,998 29,410 30,846 32,841 35,213 30,671 38,362 12,413 36,066 38,891 Post- n/a n/a - $ Performance Share Rights Share-based Options and payments* 1,907,014 1,627,723 254,746 337,455 252,412 263,072 274,826 253,268 256,068 282,166 556,415 166,063 312,547 325,699 n/a n/a $
6,045,845 5,808,125 1,149,699 1,236,302 1,009,751 1,493,329 1,029,192 1,147,506 794,284 895,239 741,647 723,265 837,694 796,062 Total n/a n/a $
Remuneration Remuneration consisting of consisting of share-based payments 31.54 28.02 22.2 27.3 31.8 29.4 37.1 35.0 30.6 27.9 37.3 20.9 30.4 28.4 n/a n/a % ended 31December2007are setoutbelow: other nominatedexecutivesfortheyear executive keymanagementpersonneland and performanceshare rightsvestedof Details ofcashbonusespaidandoptions options and bonuses Cash 4.5 Name *** ** * PN Oneile Executive Director SCM Kelly SCM Kelly management personnel Executive key SJ Parker GS Phillips IH Timmis BJ Yahl WP Jowett executives*** Other nominated ForTJ Parrott personal use only Within the definition of section 300A (1)(c) of the of (1)(c) 300A section of definition the Within Report. Remuneration 2008 the in reflected be will 2008 February 26 on Board the by determined 4 and 3 1B, series of vesting year.of current level the The in vested as shown are These full. in allocated be would 2 and 1A series 2006, December 31 to 2004 January 1 period the over group comparator specified the of TSRs individual the against Company’sthe performance on TSR based that, determined Board the 2007 February 20 On 2006. December 31 ended year the during lapsed or vested Rights Share Performance No year.financial following the of quarter first the in paid are and relate they which to year financial the in accrued are Bonuses 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Year Corporations Act 2001. Act Corporations Payable % 2007 Annual Report 51.5 58.8 55.6 61.8 51.5 60.1 43.4 50.4 51.5 47.2 49.9 53.7 61.1 61.3 30.9 Bonuses* n/a n/a n/a Forfeited % 48.5 41.2 44.4 38.2 48.5 39.9 56.6 49.6 48.5 52.8 50.1 46.3 38.9 38.7 69.1 n/a n/a n/a Remuneration report Vested % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a Options Forfeited % n/a n/a n/a n/a n/a 0.0 n/a n/a 0.0 0.0 0.0 0.0 0.0 n/a 0.0 n/a 0.0 n/a Performance Share Rights** Vested % 100.0 100.0 100.0 100.0 100.0 100.0 n/a n/a n/a 0.0 n/a 0.0 0.0 0.0 0.0 0.0 0.0 n/a Forfeited % n/a n/a n/a 0.0 0.0 n/a 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 n/a .39 .40
For personal use onlypersonally related entities,are setoutbelow: of theconsolidatedentity, includingtheir personnel or other nominated executives any executivedirector orkeymanagement in theCompanyheldduringyearby The numbers of Performance Share Rights holdings rights and remuneration as provided Rights Share 4.6 Performance 31 December2007 GS Phillips SJ Parker management personnel Executive key SCM Kelly PN Oneile Executive directors Series 8B 6B 1B 8B 6B 1B 9B 6B 3B 9B 7B 4B 8A 6A 1A 8A 6A 1A 9A 6A 3A 9A 7A 4A 2 period expiry Performance 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2007 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2007 31 Dec2006 2007 Annual Report date Value perright at grantdate $15.25 $11.25 $15.25 $11.25 $14.41 $11.25 $14.41 $13.09 $8.41 $6.01 $6.25 $6.45 $8.41 $6.01 $6.25 $6.45 $7.79 $6.01 $6.10 $6.10 $7.79 $8.18 $6.10 $6.10 $8.68 Remuneration report Balance asat 31 December 380,000 16,137 16,138 38,165 38,166 25,122 25,123 10,853 10,854 99,002 99,001 13,920 13,920 41,572 41,572 34,171 34,172 2006 ------Granted during remuneration the yearas 11,785 11,786 16,092 16,092 21,628 21,629 89,859 89,859 ------Vested and during the allocated (380,000) (41,572) (38,166) year ------Balance asat 31 December 11,785 11,786 13,920 13,920 41,572 16,092 16,092 16,137 16,138 38,165 21,628 21,629 25,122 25,123 10,853 10,854 89,859 89,859 99,002 99,001 34,171 34,172 2007 - - - 31 December2007 T Parrott WP Jowett executives Other nominated BJ Yahl For personal useIH Timmis Executive directors only Series 8B 8B 6B 1B 8B 6B 1B 8B 6B 1B 8A 8A 6A 1A 8A 6A 1A 8A 6A 1A period expiry Performance 31 Dec2009 31 Dec2009 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2009 31 Dec2009 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 2007 Annual Report date Value perright at grantdate $15.25 $15.25 $11.25 $15.25 $11.25 $15.25 $11.25 $8.41 $8.41 $6.01 $6.25 $6.45 $8.41 $6.01 $6.25 $6.45 $8.41 $6.01 $6.25 $6.45 Remuneration report Balance asat 31 December 20,516 20,516 46,593 46,593 24,746 24,746 30,000 30,000 16,838 16,838 41,627 41,628 2006 ------Granted during remuneration the yearas 22,306 22,306 16,791 16,791 19,893 19,894 13,535 13,536 ------Vested and during the allocated (46,593) (30,000) (41,628) year ------Balance asat 31 December 22,306 22,306 16,791 16,791 20,516 20,516 46,593 19,893 19,894 24,746 24,746 30,000 13,535 13,536 16,838 16,838 41,627 2007 - - - .41 .42 For personal use only 31 December2006 BJ Yahl IH Timmis GS Phillips SJ Parker SCM Kelly management personnel Executive key PN Oneile Executive director Series 1A* 1A* 1A* 1A* 6B 1B 6B 1B 6B 1B 6B 1B 6B 3B 7B 4B 6A 6A 6A 6A 6A 3A 7A 4A 2* period expiry Performance 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2007 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2007 31 Dec2006 2007 Annual Report date Value perright at grantdate $11.25 $11.25 $11.25 $11.25 $11.25 $13.09 $6.01 $6.25 $6.45 $6.01 $6.25 $6.45 $6.01 $6.25 $6.45 $6.01 $6.25 $6.45 $6.01 $6.10 $6.10 $8.18 $6.10 $6.10 $8.68 Remuneration report Balance asat 31 December 380,000 30,000 30,000 41,627 41,628 41,572 41,572 38,165 38,166 10,853 10,854 34,171 34,172 2005 ------Granted during remuneration the yearas 24,746 24,746 16,837 16,838 13,920 13,920 16,137 16,138 25,122 25,123 99,002 99,001 ------Vested and during the allocated year ------December 380,000 Balance as at31 24,746 24,746 30,000 30,000 16,837 16,838 41,627 41,628 13,920 13,920 41,572 41,572 16,137 16,138 38,165 38,166 25,122 25,123 10,853 10,854 99,002 99,001 34,171 34,172 2006 is allocatedequallyoverthevestingperiod. The accountingvaluationofrightsissued likelihood that vesting conditions will be met. of return,expecteddividendyieldandthe the underlyingshares, the risk free rate price atthedateofgrant,volatility factors suchastheCompany’s share This pricingmodeltakesintoaccount vesting scaleonthevalueofshares. the impactofperformancehurdles andthe simulation-based modelwhichincorporates Deloitte hasdevelopedaMonte-Carlo model TSR model. Thesemodelsare describedbelow. PerShareand anEarnings Growth (EPSG) a Total Shareholdermodel(TSR) Return valuation oftherights,Deloittehasused performed byDeloitte.Inundertakingthe at theirrespective grantdateshasbeen each trancheofPerformanceShare Rights An independentaccountingvaluationfor Rights Share Performance of valuation 4.6.1 Accounting 31 December2006 *** ** * For personal use onlyWP Jowett executives*** Other nominated Within the definition of section 300A (1)(c) of the of (1)(c) 300A section of definition the Within Report. Remuneration 2008 the in reflected be will 2008 February 26 on Board the by determined 4 and 3 1B, series of vesting of level The year.2007 the in shown is vesting This full. in allocated be would 2 and 1A series 2006, December 31 to 2004 January 1 period the over group comparator specified the of TSRs individual the Company’sagainst the performance on TSR based that, determined Board the 2007 February 20 On Series 1A* 6B 1B 6A Corporations Act 2001. Act Corporations period expiry Performance 31 Dec2008 31 Dec2008 31 Dec2007 31 Dec2006 remuneration packaging. from thevalueallocatedforpurposesof accounting expense and disclosures differing requiring shareholder approval results in EPSG andshare basedremuneration of non-marketvestingconditionssuchas Standard AASB 2 in relation to the treatment at that time. The requirements of Accounting Performance Share Rights toeachexecutive this valuationbestreflects thefairvalueof Performance Share Rights tobeallocatedas adopted fordeterminingthetotalnumberof commencement of the performance period is the TSRaccountingvaluationasat For thepurposesofremuneration packaging, performance period. account theactuallevelofvestingover over thevestingperiodsoastotakeinto valuation ofrightsissuedisallocated yield andtimetomaturity. Theaccounting risk free rateofreturn,expecteddividend volatility oftheunderlyingshare price,the grant, current priceoftheunderlyingshares, the Company’s share priceatthedateof model takesintoaccountfactorssuchas share performancecondition.Thispricing per incorporates theimpactofearnings of PerformanceShare Rightswhich was usedtodeterminethefairvalue The Black-ScholesGeneralisedmodel model EPSG 2007 Annual Report date Value perright at grantdate $11.25 $6.01 $6.25 $6.45 Remuneration report Balance asat 31 December 46,593 46,593 2005 - - Granted during remuneration the yearas share oftheCompany. each optionisconvertibleintooneordinary entity are setoutbelow. Whenexercisable, nominated executivesoftheconsolidated any keymanagementpersonnelorother the Companyprovided asremuneration to Details ofoptionsoverordinary shares in of theissuedshare capitalatthatdate. 2007, representing 0.12%(2006:0.26%) outstanding optionsasat31December There were 537,500(2006:1,205,000) No optionswere issuedduringtheyear. holdings option and remuneration as provided 4.7 Options 20,516 20,516 - - Vested and during the allocated year - - - - Balance asat 31 December 20,516 20,516 46,593 46,593 2006 .43 .44 For personal use only 31 December2007 WP Jowett Other nominatedexecutives GS Phillips SJ Parker Specified executives SCM Kelly Executive director 2007 Annual Report Note 5 5 5 5 4 3 2 1 4 3 Remuneration report Series 31C 29C 31D 29D 31B 31A 28 26 26 30 28 26 Aug2008 26 Aug2008 Expiry date 3 Nov2008 1 Sep2009 1 Sep2009 1 Sep2009 1 Sep2009 1 Sep2008 1 Sep2008 7 Mar2007 7 Mar2007 Exercise price* $1.3497 $5.7431 $5.7431 $2.2177 $1.3497 $8.2016 $7.7016 $7.2016 $6.7016 $2.9503 $2.4503 Balance asat31 December 2006 100,000 100,000 100,000 125,000 125,000 125,000 125,000 125,000 125,000 - - Exercised during 125,000 125,000 125,000 the year 50,000 50,000 50,000 - - - - - Balance asat31 December 2007 125,000 125,000 125,000 50,000 50,000 50,000 - - - - - Vested during 125,000 125,000 the year 50,000 12,500 12,500 50,000 50,000 - - - -
exercise date$ Fair valueat 1,128,550 1,659,963 750,015 661,615 719,015 719,800 - - - - - exercisable atthe end oftheyear Vested and ------31 December2007 WP Jowett Other nominatedexecutives GS Phillips SJ Parker Specified executives SCM Kelly Executive director Note 5 5 5 5 4 3 2 1 4 3 Series 31C 29C 31D 29D 31B 31A 28 26 26 30 28 26 Aug2008 26 Aug2008 Expiry date 3 Nov2008 1 Sep2009 1 Sep2009 1 Sep2009 1 Sep2009 1 Sep2008 1 Sep2008 7 Mar2007 7 Mar2007 Exercise price* $1.3497 $5.7431 $5.7431 $2.2177 $1.3497 $8.2016 $7.7016 $7.2016 $6.7016 $2.9503 $2.4503
For personal use only Balance asat31 December 2006 100,000 100,000 100,000 125,000 125,000 125,000 125,000 125,000 125,000 - - Exercised during 125,000 125,000 125,000 the year 50,000 50,000 50,000 - - - - - 2007 Annual Report Balance asat31 December 2007 125,000 125,000 125,000 50,000 50,000 50,000 - - - - - Remuneration report Vested during 125,000 125,000 the year 50,000 12,500 12,500 50,000 50,000 - - - -
exercise date$ Fair valueat 1,128,550 1,659,963 750,015 661,615 719,015 719,800 - - - - - exercisable atthe end oftheyear Vested and ------.45 .46
For5 –Optionsare exercisable in4equaltranchesatintervalsof18,30,42and54monthsafterthegrantdate. 4 –Optionsare exercisable 54monthsaftergrantdate. 3 –Optionsare exercisable 42monthsaftergrantdate. personal2 –Optionsare exercisable 30monthsaftergrantdate. 1 –Optionsare exercisable 18monthsaftergrantdate. Notes tothetable: use only 31 December2006 WP Jowett Other nominatedexecutives** GS Phillips SJ Parker SCM Kelly management personnel Executive key ** * Within the definition of section 300A (1)(c) of the of (1)(c) 300A section of definition the Within above. shown than higher cents 21 was price exercise the return capital the to prior exercisedwere options Where 2005. July in paid return capital cent 21 the for adjusted been has price exercise option The Corporations Act 2001. Act Corporations 2007 Annual Report Note 5 5 5 5 4 3 2 1 4 3 2 Remuneration report Series 31C 29C 31D 29D 31B 29B 31A 28 26 30 28 1 September2009 1 September2009 1 September2009 1 September2009 1 September2008 1 September2008 1 September2008 3 November2008 26 August2008 26 August2008 7 March 2007 Expiry date Exercise price* $1.3497 $5.7431 $2.2177 $1.3497 $8.2016 $7.7016 $7.2016 $6.7016 $2.9503 $2.4503 $1.9503 Balance asat31 December 2005 150,000 150,000 150,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 25,000 Exercised during 125,000 the year 50,000 25,000 50,000 50,000 ------Balance asat31 December 2006 100,000 100,000 100,000 125,000 125,000 125,000 125,000 125,000 125,000 - - Vested duringthe 125,000 50,000 25,000 50,000 50,000 year ------exercise date$ Fair valueat 1,349,963 571,015 179,298 566,115 570,015 ------exercisable atthe end oftheyear Vested and 125,000 ------31 December2006 WP Jowett Other nominatedexecutives** GS Phillips SJ Parker SCM Kelly management personnel Executive key ** * Within the definition of section 300A (1)(c) of the of (1)(c) 300A section of definition the Within above. shown than higher cents 21 was price exercise the return capital the to prior exercisedwere options Where 2005. July in paid return capital cent 21 the for adjusted been has price exercise option The Corporations Act 2001. Act Corporations Note 5 5 5 5 4 3 2 1 4 3 2 Series 31C 29C 31D 29D 31B 29B 31A 28 26 30 28 1 September2009 1 September2009 1 September2009 1 September2009 1 September2008 1 September2008 1 September2008 3 November2008 26 August2008 26 August2008 7 March 2007 Expiry date Exercise price* $1.3497 $5.7431 $2.2177 $1.3497 $8.2016 $7.7016 $7.2016 $6.7016 $2.9503 $2.4503 $1.9503
For personal use only Balance asat31 December 2005 150,000 150,000 150,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 25,000 Exercised during 125,000 the year 50,000 25,000 50,000 50,000 ------2007 Annual Report Balance asat31 December 2006 100,000 100,000 100,000 125,000 125,000 125,000 125,000 125,000 125,000 - - Vested duringthe Remuneration report 125,000 50,000 25,000 50,000 50,000 year ------exercise date$ Fair valueat 1,349,963 571,015 179,298 566,115 570,015 ------exercisable atthe end oftheyear Vested and 125,000 ------.47 .48
For personalentities, are setoutinthefollowingtables: entity, includingtheirpersonallyrelated nominated executivesoftheconsolidated of thekeymanagementpersonnelorother 2007, andthecomparativeyear, byany GESP duringtheyearended31December The numbersofshares heldunderthe remuneration as provided Plan Share Employee General 4.8 out innote32ofthefinancialstatements. grant datesandvestingconditionsare set vesting date.DetailsoftheESOPincluding equally overtheperiodfrom grantdateto The valueofoptionshasbeenallocated dividend yieldandtimetomaturity. price, theriskfree rateofreturn,expected usethe grant,volatilityofunderlyingshare share priceatthedateof account factorssuchastheCompany’s of option.Thispricingmodeltakesinto or Binomialmodelsforvaluingthistype is more appropriate thantheBlackScholes hurdle. Deloittehasadvisedthatthismodel the optionsare subjecttoaperformance model becauseittakesintoaccountthat onlyBarrier Optionmodel.Itiscalleda‘Barrier’ version oftheMertonReinerRubinstein Deloitte hasusedaTSRmodel,modified undertaking thevaluationofoptions, has beenperformedbyDeloitte.In of optionsattheirrespective grantdate An independentvaluationofeachtranche 4.7.1 options of Valuation 2007 Annual Report Remuneration report 31 December2006 31 December2007 PN Oneile Executive directors ** * PN Oneile Executive Director SCM Kelly SCM Kelly management personnel Executive key SJ Parker management personnel Executive key SJ Parker GS Phillips* GS Phillips* IH Timmis IH Timmis BJ Yahl WP Jowett Other nominatedexecutives** BJ Yahl TJ Parrott ForWP Jowett Other nominatedexecutives** personal use only Within the definition of section 300A (1)(c) of the of (1)(c) 300A section of definition the Within years. three of period a for employment continued to subject Plan, Share Employee General the under allocation share a of lieu in year the during shares 74 to right contingent a granted was Phillips GS employee, overseas an As Corporations Act 2001. Act Corporations Balance asat31 Balance asat31 December 2005 December 2006 2007 Annual Report 431 352 431 951 337 263 431 352 168 431 951 89 - - - Shares issued/ Shares issued/ granted during granted during Remuneration report the year the year (263) (263) (263) (263) (263) 79 79 74 79 79 79 - - - -
during theyear during theyear Shares vested Shares vested (599) (599) 69 69 69 69 69 69 ------31 December2007 31 December2006 Balance asat Balance asat 168 237 143 237 237 237 431 431 337 431 168 431 69 - -
.49 .50
For personalare shownas‘non-beneficiallyheld’. family oftheindividualdirector orexecutive useParty Disclosuresasclosemembersofthe who are definedbyAASB124Related ‘benefically held’.Shares heldbythose director orexecutivetheyare shownas the jointorseveralcontrol oftheindividual director orexecutiveandanyentityunder Where shares are heldbytheindividual are unpaidonanyoftheshares issued. entities, are setoutbelow. Noamounts onlyentity, includingtheirpersonallyrelated management personnel of the consolidated year, byeachdirector andexecutivekey 31 December2007,andthecomparative the Companyheldduringyearended unvested undertheGESPandPSP)in The numbersofshares (excludingthose (Audited) 5 Shareholdings 2007 Annual Report Remuneration report 31 December2007 * WM Baker DJ Simpson Non-executive directors SCM Kelly* PN Oneile Executive directors BJ Yahl ForIH Timmis GS Phillips personalSJ Parker management personnel Executive key AW Steelman SAM Pitkin P Morris RA Davis use only share price at the time the contract was entered into. This contract is scheduled to expire within an authorised trading window.trading authorised an within expire to scheduled is contract This into. entered was contract the time the at price share the above levels nominated to gains price in participation enabling and into entered was contract the time the at price share the below level a at shares the of value the protecting of effect the has ZCC This 2008. March 10 of expiry an with 2007 March 5 on into enteredshares, 125,000 over arrangement (ZCC) Collar Cost Zero a in interest an retains Kelly SCM Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Type Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Beneficially held Non-beneficially held Non-beneficially held Non-beneficially held 2007 Annual Report Balance asat 31 December 106,000 325,000 103,201 Remuneration report 80,599 16,000 12,560 4,700 6,000 4,505 7,000 3,449 2006 572 658 ------GESP shares Performance shares and exercised, 375,263 380,000 Options 30,000 41,891 91,835 88,429 vested ------Other Net Changes the year (41,628) (69,123) during 1,489 8,830 6,834 4,100 3,205 ------
Balance asat 31 December 700,263 380,000 106,000 125,913 169,028 30,000 22,834 12,560 11,100 4,700 6,000 2,061 9,488 6,654 4,505 2007 263 ------.51 .52 For personal use only 31 December2006 PN Oneile Executive director DJ Simpson Non-executive directors WM Baker RA Davis P Morris SAM Pitkin AW Steelman SCM Kelly management personnel Executive key SJ Parker GS Phillips IH Timmis BJ Yahl Type Beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held Beneficially held Non-beneficially held 2007 Annual Report Balance asat 31 December Remuneration report 106,000 200,000 169,867 12,560 16,000 50,000 6,000 4,700 1,200 6,000 4,505 2005 ------GESP shares Performance shares and exercised, 125,000 Options 50,000 50,000 vested ------Net Changes during the (116,666) (19,401) 2,249 1,000 year 658 572 ------Balance asat 31 December 106,000 325,000 103,201 12,560 16,000 80,599 6,000 4,700 3,449 7,000 4,505 2006 658 572 ------For personalduring thefinancialyear. personnel heldanyloanswiththeCompany No directors orexecutivekeymanagement management personnel key executive and directors to 5.1 Loans useis assumedtobenil. shareholding ofthatpersonallyrelated entity declines toprovide shareholding details,the In theeventthatapersonallyrelated entity substantiate theshareholdings declared. affairs ofthepersonallyrelated entitiesto no control orinfluenceoverthefinancial the representations madeastheyhave onlymanagement personnelhaverelied upon entities. Directors andexecutivekey AASB 124definitionofpersonally related made tothembythepartieswithin have beendisclosedunderrepresentation ‘non-beneficially held’includethosethat key managementpersonnelreported as Shareholdings ofdirectors andexecutive secured bythatpremium are confidential. the premium paidandthetermsofcover a Directors andOfficersinsurancepolicy, indemnified party. TheCompanymaintains which arisesoutofapersonalmatterthe party knowstobewrongful; and(iii)liability faith; (ii)conductwhichanindemnified respect ofconductinvolvingalackgood restricted soasnottocover:(i)liabilityin the Companyorofitssubsidiariesbutare director, secretary orexecutiveofficerof party servingorhavingservedasa those arisingasaresult oftheindemnified liabilities covered bythoseindemnitiesare or executiveofficeroftheCompany”.The who isorhasbeenadirector, secretary “the Companymustindemnifyeveryperson The Company’s Constitutionprovides that: 6 personnel. directors andexecutivekeymanagement for detailsofrelated partytransactionswith Refer toNote35ofthefinancialstatements personnel key management executive and directors with transactions Other 5.2 2007 Annual Report Indemnity of officers of Indemnity Remuneration report
.53 .54 For personal use only Partner R LGavin This declarationisinrespect ofAristocratLeisure Limited andtheentitiesitcontrolled duringtheperiod. b) nocontraventionsofanyapplicablecodeprofessional conductinrelation totheaudit. a) nocontraventionsoftheauditorindependencerequirements oftheCorporationsAct2001inrelation totheaudit;and my knowledgeandbelief,there havebeen: As leadauditorfortheauditofAristocratLeisure Limitedfortheyearended31December2007,Ideclare thattothebestof Auditors’ IndependenceDeclaration 2007 Annual Report Auditors’ in depenc laration Sydney 26 February2008 Facsimile +61282669999 Telephone +61282660000 www.pwc.com/au Australia DX 77Sydney SYDNEY NSW1171 GPO Box2650 201 SussexStreet Darling ParkTower 2 ABN 52780433757 PricewaterhouseCoopers – the Board’s mainresponsibilities includethe: www.aristocratgaming.com. Insummary, is available ontheCompany’s website, responsibilities intoaBoard Charterwhich The Board hasformaliseditsroles and Board rolesandresponsibilities oversight and management for foundations solid 1–Lay Principle publication. consistent withtheabovenamed prepared andpresented inaformat of reference, thisStatementhasbeen the 2007reporting period.Forease principles whichwere inplacethroughout (the ‘Company’)corporategovernance Set outbelowisasummaryofAristocrat’s Principles andRecommendations. principles andpoliciescomplywiththe believes thatitscorporategovernance Council,and ASX CorporateGovernance and Recommendationspublishedbythe revised CorporateGovernancePrinciples The Board haschosentoearlyadoptthe highest standards ofcorporategovernance. The Board iscommittedtomaintainingthe 2007 December 31 ended 12 the For months Corporate GovernanceStatement – – – – review andapproval ofCompanystrategy; regulatory regimes to whichtheCompany to ensure compliancewiththelegaland establishment andmonitoringofpolicies Forreporting systems; of appropriate riskmanagement and Company andcontinuedmonitoring evaluation oftheprincipalrisks Chief Financial Officer(‘CFO’); Chief Executive Officer(‘CEO’)and and performanceevaluationofthe selection, appointment,remuneration personalconduct; Company performanceandoverall responsibility forthemonitoringof performance managementwithspecific use only endorsement. which reports itsfindings to theBoard for annually withtheRemunerationCommittee, the performanceofseniorexecutives ongoing basis.TheCEOformallyreviews and reviews theirperformance onan KPIs ofseniorexecutiveteammembers authority oftheBoard, determines the each year. TheCEO,underthedelegated evaluation beingcompletedattheendof these onanongoingbasis,withaformal annually andreviews performanceagainst CEO’s keyperformanceindicators(‘KPIs’) Committee,determinesthe Governance conjunction withtheNominationand from theRemunerationCommitteein The Board, basedonrecommendations risk managementprocedures. position, strategies,operations,policiesand with knowledgeoftheCompany’s financial new seniorexecutivestoprovide them An inductionprogram isinplaceforall termination. and responsibilities, andentitlementson out theirtermofoffice,duties,rights with formallettersofappointmentsetting including theCEOandCFOare provided Upon appointment,seniorexecutives evaluation forseniorexecutives Appointment, induction and performance are reserved fortheBoard only. Charter clearlyspecifiesthosemattersthat administration oftheCompany. TheBoard including theday-to-dayoperationand responsibilities toseniorexecutives The Board hasdelegatedcertain Delegation toseniorexecutives – 2007 Annual Report and itsstakeholders. communication betweentheCompany promotion ofopenandproper standards ofcorporateconduct;and is subjectandtoensure thehighest Corporate G overnance Statement to impactonthebusiness. factors impactingonthebusiness orlikely to posequestionsabouttheGroup and place duringtheyearpermittingdirectors and tutorialsfromexpertstakes external through ongoing management presentations A continuingeducationprocess fordirectors Continuing educationofdirectors to augmentorcomplementthoseskills. on whetheranyactionneedstobetaken experience ofitsmembersanddecides The Board annuallyreviews theskillsand – – legalandregulatory experience;and – marketingexperience; – – financialexperience; businessexperience; – international – experienceasaChiefExecutive; be represented ontheBoard: following skillsandexperienceto The Board considersitimportantforthe a broad rangeofskillsandexperience. The Board comprisesmemberswith in theDirectors’ Report. each memberoftheBoard, canbefound and informationonotherdirectorships heldby term ofoffice,qualificationsandexperience, two executivedirectors. Detailsincludingthe six independentnon-executivedirectors and 31 December2007,theBoard comprisesof is between seven and nine members. As at The Board has determined that its optimal size Board composition value add to Board the 2–Structure Principle annually inthefirstquarterofeachyear. andseniorexecutivesisundertaken The performanceevaluationoftheCEO management experience. andrisk corporate governance software orcomputerindustries; technology experienceespeciallyinthe
.55 .56 – – meet thefollowingcriteria: are considered tobeindependentifthey whether theyare independent.Directors directors againstspecificcriteriatodecide assesses eachofthenon-executive During Board meetings,theBoard Director independence management. meetings withoutthepresence ofexecutive year thenon-executivedirectors alsoheld and present atBoard meetings.Duringthe management isregularly invitedtoattend tabled intheDirectors’ Report.Executive meetings attendedbyeachdirector is on strategyandbudget.Thenumberof included twotwo-daymeetingsfocused the Board metatotalof12timeswhich The Board meets regularly and during 2007 Board meetings Corporate Statement Governance For– – personal– – use only Company; Company; by theCompanyorasubsidiaryof executive capacity in the last three years they have not been employed in an the bestinterests oftheCompany. interfere withthedirector’s abilitytoactin reasonably beperceived tomaterially or personal,whichcould they are free from anyinterest, business (other thanas adirector); and relationship withtheCompany they havenomaterialcontractual subsidiary oftheCompany; customer oftheCompanyorany they are notamaterialsupplieror past three years; advisor totheCompanyduring principal ofamaterialprofessional they havenotbeenemployedasa of the Company; of theCompany; officer ofasubstantialshareholder shareholder oftheCompanyoran they are not a substantial (5% or greater)
2007 Annual Report – conductingandleadingBoard meetings; – settingBoard meetingagendas; role including: ensuring effectiveness inall aspectsofits responsible fortheleadership oftheBoard, not heldbythesameperson.TheChairis The ChairandtheofficeofCEOare an independentnon-executivedirector. The ChairisselectedbytheBoard andis Chair oftheBoard entire Board. the adviceshouldbemadeavailableto director andtheCompanyacopyof be commissionedinthejointnamesof Whenever practicable,theadviceshould with thepriorconsentofChair. matter attheexpenseofCompany adviceinrelationexternal toanyBoard Any director mayseekindependent Independent professionaladvice December 2007orthroughout theyear. status ofanynon-executivedirector at31 relationships affecting theindependent Board wasoftheviewthatthere were no Having considered thesecriteria,the – – – following criteria: relationship tobematerialifitmeetsthe or customer, theBoard considersthat such asasupplier, professional advisor relationship existswithathird party In determiningwhetherornotamaterial the Company)exceedsA$1million. the director (otherthanasadirector of relationship betweentheCompanyand where thetotalvalueofanycontractor revenue; or than 5%ofthesupplier’s consolidated if theCompanyaccountsformore gross revenue perannum; than 5%oftheCompany’s consolidated where thecustomeraccountsformore Corporate G overnance Statement contained intheDirectors’ Report. meetings andattendancebymembers is auditors. Thenumberofactualcommittee both theCompany’s andinternal external between theChairofcommittee and separate meetingsalsotookplace addition toscheduledcommitteemeetings, throughout theyear. Duringtheyearin committee isscheduledtomeetfourtimes DJ SimpsonandMrAW Steelman.The Mrs PMorris(Chair),MrRADavis, The current committeemembers are chair whoisnottheChairofBoard. committee ischaired byan independent independent non-executivedirectors. The The committeecomprisesfour Audit Committee committees isprovided below: responsibilities ofeachtheBoard An overviewofthecompositionand reappointment attheendoftheirterm. continuing tobeadirector, are eligiblefor the officeofdirector) and,subjectto term (orshortertimeastheyremain in Members are appointedforathree year – RemunerationCommittee. – Committee; – NominationandGovernance – AuditCommittee; four Board committeesare asfollows: website www.aristocratgaming.com. The The Charters are available on the Company’s regularly reviewed andapproved bytheBoard. committee is governed by a Charter which is responsibilities byfourcommittees.Each The Board isassistedinfulfillingits Board committees – – – and Regulatory andComplianceCommittee; the Board andtheCEO. being themainpointofcontactbetween meetings; and conducting andleadingshareholder shareholders; ensuring effective communicationwith
– The committeeresponsibilities include: – – – – – – – Directors’ Report. at meetingsbymembersiscontainedinthe actual committeemeetingsandattendance meet three timesperyear. Thenumberof Simpson. Thecommitteeisscheduledto Davis (Chair),MrsPMorrisandMrDJ current committeemembers are MrRA independent non-executivedirectors. The The committeecomprisesthree Nomination andGovernanceCommittee and riskmanagementfunction; Company’s control internal environment evaluating andmonitoringofthe For personalindependence ismaintainedatalltimes. auditorstoensureor external their audit servicesprovided bytheinternal reviewing andpre-approving ofanynon- and Company’s variousdisclosure obligations; ongoing financialmonitoringofthe effectiveness; monitoring oftheirimplementationand accounting policiesandtheongoing reviewing andapproving offinanceand year andfullaccounts); useand statutoryreporting (includingthehalf reviewing theCompany’s management auditors; andexternal appointment ofinternal recommending totheBoard the management; committee byboththeauditorsand reviewing thereports presented tothe only audits; external and quality andcostoftheinternal overseeing andreviewing thescope, – – – – The committeeresponsibilities include: Report. members iscontainedintheDirectors’ meetings andattendanceatby per year. Thenumberofactualcommittee committee isscheduledtomeetfourtimes a memberofexecutivemanagement.The member, MrHKeating,andBJYahl as Ms SAMPitkin,anindependentexternal another independentnon-executivedirector, director. Thecommitteealsocomprises who isanindependentnon-executive The committeeischaired byMrWMBaker andComplianceCommittee Regulatory – – – – – The committeeresponsibilities include: 2007 Annual Report are met. conditions andregulatory requirements monitoring andensuringlicensing Board; and and makingrecommendations tothe conducting investigationsasappropriate compliance; business undertakingsforregulatory reviewing ofexistingandproposed or continuingbusinessassociations; of hiringkeypersonnelandenteringinto necessary tomakedecisionsinthearea management inobtaininginformation assisting theBoard andexecutive KPIs. Committee, settingtheCEO’s annual in conjunctionwiththeRemuneration policies andprocedures; and overall Companycorporategovernance performance assessment; the Board andindividualdirector induction andeducationofdirectors; and committeemembership; membership, tenure, successionplanning recommendations onBoard structure, Corporate G overnance Statement Annual GeneralMeetingoftheCompany. for electionbyshareholders atthenext director appointedduring the yearwillstand probity andintegrity. Anynon-executive qualifications andbackground including including professional skills, experience, by thecommitteeagainstarangeofcriteria directors. Thosenominated are assessed consultants are used to identify potential Governance Committee. Generally, external directors are madebytheNominationand Recommendations for the nomination of new process ofnewdirectors Nomination, selectionandappointment – – The committeeresponsibilities include: Directors’ Report. at meetingsbymembersiscontainedinthe actual committeemeetingsandattendance to meetfourtimesperyear. Thenumberof DJ Simpson.Thecommitteeisscheduled SAM Pitkin(Chair),MrsPMorrisandMr The current committeemembersare Ms independent non-executivedirectors. The committeecomprisesthree Remuneration Committee • • • • on: making recommendations totheBoard procedures forseniormanagement; succession planning,trainingpoliciesand the recruitment, remuneration, retention, arrangements. the Company’s superannuation and Chair andnon-executivedirector fees; performance incentivesandhurdles; remuneration plansincluding performance andequity-based CEO andseniormanagement remuneration frameworkandlevels; CEO andseniormanagementfixed
.57 .58
follow upofanymattersraised. responsible fordeterminingtheappropriate the AuditCommittee,asapplicable, is Audit Committee.TheChairor of relates totheChair, withtheChairof Fordirector withtheChair, oriftheconcern regarding theperformanceofanyother encouraged toraiseanyissuesofconcern On anongoingbasis,alldirectors are during thefourthquarterof2007. committee. Thesereviews were undertaken set out in the relevant charter of each personalcontext of the objectives and responsibilities committee performanceisreviewed inthe set outintheevaluationprocess, while by reference tothecore competencycriteria Board performanceasawholeisreviewed Board anditscommittees. once everyyearoftheperformance collectively undertakingareview atleast involves thenon-executivedirectors The Board performanceevaluationprocess directors Board committeesandindividual Performance evaluationfortheBoard, company withtheapproval oftheBoard. appointment totheboard ofanotherlisted listed company. The CEO should only accept more thanoneotherpositionasChairofa useCompany. TheChairisrequired nottohold is availabletoattendtheaffairs ofthe to fiveinorder toensure thatsufficienttime of directorships of other listed companies Directors are required tolimitthenumber Other directorships including theCEOandhisdirect reports. and meetingswithseniormanagement onlytogether withlatestbudgets/forecasts copy ofthestrategicplanforCompany provided withadirector’s handbook,a induction program whichincludesbeing all directors. Allnewdirectors undergoan service agreements are entered intowith to thosejoiningtheBoard andindividual Formal lettersofappointmentare issued Corporate Statement Governance 2007 Annual Report website, www.aristocratgaming.com. The CodeisavailableontheCompany’s – – – – – (but notlimitedto): set of generalbusinessethicsincluding business isconductedandcontainsa behavioural frameworkfortheway The Code provides anethicaland programs andCompanypublications. is reinforced through varioustraining directors andallemployees.TheCode Conduct (the‘Code’)whichappliesto The Board hasadoptedaCodeof Code ofConduct decision-making responsible and ethical 3–Promote Principle in thisreport. No mattersofsignificancewere identified performance againstbestpractice. and procedures andtobenchmarkits consultant toreview Board processes a report byanindependentthird party During theyear, theBoard commissioned the performanceevaluationprocess. responsibility formanagingandoverseeing Committeehasoverall Governance The ChairoftheNominationand matters unlessauthorisedtodoso. make anypubliccommentonCompany other thanasrequired bylawandnot relating totheCompanyor itsbusinesses not discloseinformationordocuments and property are usedproperly andefficiently; ensure thatCompanyresources and conduct; report suspectedcorruptorunethical and regulations; abide andcomplywithallapplicablelaws professional courtesyandintegrity; and toconductbusinesswithstrict act honestlyandfairlyinalldealings Corporate G overnance Statement gaming legislation. fair trading,restrictive tradepracticesand training torelevant employees onprivacy, In addition,theCompanyhasprovided all employeesare required tocomplete. operational compliancegloballywhich workplace, discrimination,legaland courses dealingwithharassmentinthe The Companyhasimplementedtraining – privacy. – marketdisclosure; and – dealinginCompanysecurities; – gifts,gratuitiesanddonations; – conflictsofinterest; – tradepractices; – occupational,healthandsafety; has policieswhichgovern: In additiontotheCode,Companyalso termination ofemployment. could leadtodisciplinaryactionincluding any breaches are treated seriouslyand Code. ItismadeclearintheCodethat to monitoroverallcompliancewiththe The Companyhasprocedures inplace employees, regulators andthecommunity. shareholders, customers,suppliers, of honesty, integrityandfairtradingwith Company maintainsthehigheststandards in thisPrincipleare aimedatensuringthe The Codetogetherwiththepolicieslisted requirements containedinit. that theyhaveread andunderstoodthe (prior tocommencingtheiremployment) the Codeandtheyare required tocertify which containsamongstotherthings, are issuedwithanemployeehandbook distributed toemployees.Newemployees The Codeisregularly communicatedand and theprinciplescontainedwithinit. the Companyare committedtotheCode The Board andseniormanagementof – after untilthe42ndcalendardayfollowing: in theshares oftheCompanyfrom theday directors and senior executives may only deal price-sensitive information.Subjecttothis, Company iftheyare inpossessionofany or employeedealinginthesecuritiesof The Company’s policyprohibits anydirector Securities Trading Policy Anonymousserviceprovider.the Tip-offs and theChairofAuditCommitteeby reported directly totheChairofBoard incidents involvingseniorexecutivesare to theAuditCommittee.Anyreported incidents andactiontakenisprovided to betaken.Asummaryofallreported decide ontheappropriate courseofaction select group ofseniorexecutiveswho All reported incidentsare reviewed bya is availabletoallemployeesworldwide. suspected workplacemisconduct.Theservice employees toanonymouslyreport instancesof service thatprovides aneffective channelfor confidential telephone,emailandpostal Anonymous”isanindependent, “Tip-offs “Tip-offs Anonymous”program website, www.aristocratgaming.com. The policycanbefoundontheCompany’s irrespective oftradingwindows. Performance Share Rights atalltimes, of unvestedoptionsand The Companyprohibits the hedging that awindowcanbeopened. guidance issufficientlycomprehensive determines, atitsdiscretion, thatsuch is released totheASXwhere theBoard any halfyearorfullprofit guidance a share tradingwindowto openwhere Securities Trading Policytoprovide for During theyear, theBoard amendedthe – – theAnnualGeneralMeeting;and year results; announcement ofthehalfyearandfull For personalCompany. the issueofanyprospectus bythe use only by theChairofAuditCommittee. auditorsneedtobepre-approvedexternal which are tobeprovided or bytheinternal auditors. Inaddition,anynon-auditservices provided orexternal byeithertheinternal the typesofnon-auditservicesthatcanbe of Audit Independence. The Charter restricts The CompanyhasadoptedaformalCharter Auditor independence ensuing year. of theCompany’s auditorforthe external recommends totheBoard theappointment auditor’sthe external performanceand Every year, theAuditCommitteeassesses – cost. – – relevant industryexperience; – overallauditapproach andmethodology; – independence; criteria: submissions received onthefollowing Audit Committeeassesseseachofthe As partofthatselectionprocess, the auditor. Board ontheappointmentofexternal making aformalrecommendation tothe each ofthesubmissionsreceived and process. Thisprocess includesassessing auditorselection overseeing theexternal The AuditCommitteeisresponsible for Selection ofauditor Principle 2ofthisStatement. and responsibilities are provided under The AuditCommittee’s composition,roles Audit Committee reporting financial in integrity 4–Safeguard Principle 2007 Annual Report staff; and experience, andqualificationsofkeyaudit Corporate G overnance Statement the Directors’ Report. 2007 hasbeenreceived and isattachedto declaration fortheyearended31December Independence. Theauditor’s independence Act andtheCompany’s CharterofAudit relevant provisions intheCorporations assessment, theBoard had regard to auditor independence.Whenmakingthis scope oftheseservicesdidnotcompromise The Board issatisfiedthat thenature and financial statements. the Directors’ ReportandNote34tothe auditor are disclosedandexplainedinboth Non-audit servicesprovided bytheexternal provided Non-audit services auditor’s role. relating totheconductofauditand Company andtorespond toquestions attend theAnnualGeneralMeetingof auditor to Company expectstheexternal employees oftheauditorfirms.The on thehiringofemployeesorformer years. TheCharteralsoplacesrestrictions auditpartnertorotateexternal everyfive a year. TheCompanyrequires thesenior independence oftheauditorsfourtimes The AuditCommitteereviews the – – – – – auditors: external services tobeprovidedor bytheinternal The Charterdoesnotallowthefollowing services. actuarial, investmentadvisoryorbanking functions; and management orhumanresource opinions); appraisals orfairness business valuationservices(including and implementation; financial informationsystemsdesign statements; to accountingrecords orfinancial bookkeeping orotherservicesrelated
.59 .60 – continuous disclosure responsibilities: procedures inorder tocomplywithits The Companyhasinplacethefollowing website www.aristocratgaming.com. disclosure isavailableontheCompany’s The Company’s policyoncontinuous Listing RulesandtheCorporationsAct. and responsibilities underboththeASX with theCompany’s disclosure obligations The Companyhaswrittenpoliciesdealing disclosure balanced and timely 5–Make Principle Corporate Statement Governance – For– personal– – use only announcement isrequired; Chair (where appropriate), whether an who willdecide,inconsultationwiththe the CEOorCompanySecretary by 5% or more, must immediately consult Company’s profit or balance sheet totals or whichhasthecapacitytoaffect the the price of the Company’s securities of informationwhichislikelytoaffect any employee who comes into possession in ListingRule3.1A; the ASX in accordance with the principles if anyannouncementshouldbemadeto and Legalconferregularly todetermine the Group GeneralManager, Commercial Listing Rule3.1A.TheCEO,CFOand subject totheexceptionssetoutin on thepriceofCompany’s securities would expecttohaveamaterialeffect information whichareasonable person to immediatelyadvisetheASXofany announcements. signoff procedure forallintended there isanestablishedprotocol and responsibilities; and the lightofcontinuousdisclosure to whichtheCompanyisexposedin normally meetsmonthlytoreview risks and RiskReviewCommitteewhich the establishmentofSeniorExecutive media, analystsorshareholders; only personsauthorisedtotalkthe Manager, Commercial andLegalare the the Chair, CEO,CFOandGroup General 2007 Annual Report www.aristocratgaming.com. on theCompany’s website Communication Policyisavailable The Company’s Shareholder link ontheCompanywebsite. accessed through theinvestorinformation webcasts are archived andcanbe full yearandhalfresults presentation each year. TheCompany’s mostrecent The AnnualGeneralMeetingiswebcast policies. governance charter, committeechartersandkey shareholders direct accesstotheBoard Governance section of the website allows investors andanalysts.TheCorporate briefing materials, and presentations to announcements totheASX,annualreports, which is regularly updated with all recent a website(www.aristocratgaming.com) auditor’s report. The Company maintains and thepreparation andcontentofthe questions about the conduct of the audit and beavailabletoanswershareholder auditor to attend the Annual General Meeting The Company also invites the external Company’s strategy, goalsandperformance. of accountabilityanddiscussionthe general meetings to ensure a high level encourages effective participation at communication withshareholders and The Companypromotes effective interests ofotherstakeholders. shareholders takingintoaccountthe long-term sustainabilityofreturnsto of theBoard istohaveregard tothe One ofthemostsignificant responsibilities shareholders of rights the 6–Respect Principle Corporate G overnance Statement
– – – – – management systeminclude: Elements oftheCompany’s risk Management. Australian Standard AS4360:2004Risk Board andisinaccordance withthe have beencontinuallyreviewed bythe and effectiveness ofthisprocess in pursuingitsobjectives.Theadequacy exposed to,bytheCompany material businessrisksfaced,orpotentially assessing, monitoringandmanagingthe a formalongoingprocess foridentifying, andhasputinplace corporate governance controlmanagement andinternal togood a soundframeworkofriskoversight, The Board recognises theimportanceof risk manage and 7–Recognise Principle strategies whichexisttomanage therisk; and thelevelofcurrent controls and occurrence, possibleconsequence the ratingofrisksforlikelihood market related risks; resources, financial reporting and product orservicequality, human reputation orbrand,technological, to: operational,compliance,strategic, These risksincludebutare notlimited identify andratematerialbusinessrisks. and meetingsacross thebusiness to formal riskidentificationworkshops Management Policy; requirements oftheCompany’s Risk managers inthearea ofriskandthe the trainingofkeyexecutivesand function; audit and RiskCommitteeinternal the Board, AuditCommittee,Executive well-defined roles andaccountabilitiesof www.aristocratgaming.com; available ontheCompany’s websiteat Company’s RiskManagementPolicyis 4360:2004 RiskManagement.The is basedonAustralianStandard AS a formalriskmanagementpolicywhich – – – acomprehensive insurance program; and – – – – – – – – – Board onamonthlybasis. Company’s riskprofile, are provided tothe business risksincludingchangestothe Company’s managementofitsmaterial formal riskmanagementupdatesonthe program deployedworldwide. Tip-offs Anonymous a confidential Foremployment practices; occupational healthandsafety program coveringlicensure, environment, a group-wide regulatory compliance systems foralloperatingunits; annual budgetingandmonthlyreporting personalcontrols; credit, treasury andrequired internal in theareas ofexpenditure authorisations, detailed financialpoliciesandprocedures delegated authorityandapproval limits; accountability andappropriate levelsof scopes ofresponsibility, clearlinesof an organisationstructure withwell-defined audit plan; the developmentofarisk-basedinternal control system; Company’s riskmanagementandinternal the adequacyandeffectiveness ofthe analysis andindependentappraisalof assurance totheBoard bycarryingout auditfunctionprovidesthe internal usethe Board andmanagement; auditorandhasdirectexternal accessto function whichisindependentofthe audit the establishmentofaninternal Executive andRiskReviewCommittee; the monthlyreview ofrisksbythe Management Policies; onlyin implementingtheBoard’s Risk is responsible forassistingmanagement a dedicated‘Group Risk&AuditTeam’ the Directors’ Report. with Companyperformanceare provided in remuneration schemesincludingtheirlink the Company’s executivefixedandvariable Details oftheprinciplesandamounts corporate performance and seniorexecutivestheirlinkwith Remuneration ofexecutivedirectors set outintheDirectors’ Report. remuneration ofnon-executive directors are Details oftheprinciplesandamounts Remuneration ofnon-executivedirectors Principle 2ofthisStatement. and responsibilities are provided under The compositionofthecommittee,itsroles Remuneration Committee responsibly and fairly 8–Remunerate Principle volatile outcomesfrom arising. misstatement, adverseeventsormore not absoluteassuranceagainstmaterial and canonlyprovide reasonable but of failure toachievebusinessobjectives, to manageratherthaneliminatetherisk control,internal thesystemsare designed in anysystemofriskmanagementand Due tothelimitationsthatare inherent reporting risks. all materialrespects inrelation tofinancial that thesystemisoperatingeffectively in controlof riskmanagementandinternal statements) isfoundedonasoundsystem Corporations Act(theintegrityoffinancial in accordance withsection295Aofthe and theCFOthatdeclarationprovided on 26February2008from boththeCEO The Board received awrittencertification Certification fromtheCEOandCFO activities. risk register andtotrackriskmanagement update andmaintenanceoftheCompany’s and compliancesoftware tofacilitatethe risk The Companyusesagovernance, 2007 Annual Report Corporate G overnance Statement is provided intheDirectors’ Report. description ofequity-basedremuneration performance hurdles. Amore detailed it includesavestingscaleandtougher is more stringentthantheESOPplanas The PSPwhichreplaced theolderESOP Corporations Actfortheotherparticipants. required undertheASXListingRulesor in thePSP. Shareholder approval wasnot Mr PNOneileandtheCFO,SCMKelly obtained fortheparticipationofCEO, approval from shareholders hasbeen The PSPwasimplementedin2004.Annual Meeting oftheCompany. shareholders atthe2005AnnualGeneral in theCompany. ThePOPwasapproved by entitlements to options over fully paid shares employees tobeoffered conditional performance. ThePOPprovides foreligible improvement intheCompany’s scheme designedtodrivethecontinuing The POPisanexecutiveincentive – – – equity basedremuneration plans: The Companyhasinplacethefollowing Equity basedremuneration Established 1998. Employee Share OptionPlan(‘ESOP’)– Established 2004;and Performance Share Plan(‘PSP’)– Established 2005; Performance OptionPlan(‘POP’)–
.61 .62 Net cash(debt)/equity Net (cash)/debt(iii) Issued shares atyearend Dividend payoutratio Total dividendspershare -ordinary Net tangibleassetspershare Basic earnings pershareBasic earnings Return onAristocratshareholders'Return equity Employees atyearend Other information Net assets Total liabilities Other non-current liabilities Non-current provisions Non-current borrowings Current taxliabilitesandprovisions Current borrowings Current payablesandotherliabilities Total assets Other non-current assets Intangible assets Property, plantandequipment Other current assets Cash andcashequivalents Total equity Minority interest Retained earnings Reserves Contributed equity Balance sheetitems Total dividendpaid-parent entityonly Net profit attributabletomembersofAristocratLeisure Limited Minority interest Profit/(loss) from ordinary activitiesafterincometaxexpense Income taxexpense Profit/(loss) from ordinary activitiesbefore incometaxexpense Net interest revenue/(expense) EBIT Depreciation andamortisation EBITDA Revenue from operatingactivities(ii) Profit andlossitems $000(except where indicated) 12 monthsended31December: (i) Five Y (ii) (iii) For personal use only
The comparative year 2003 has been prepared under previous AGAAP and has not been amended for the adoption of AIFRS. of adoption the for amended been not has and AGAAP previous preparedunder been has 2003 year comparative The Revenue from operating activities as per Note 5 to the financial statements. financial the to 5 Note per as activities operating from Revenue Current and non-current borrowings net of cash and cash equivalents. cash and cash of net borrowingsnon-current and Current ear Summary 2007 Annual Report Number Cents Cents $'000 '000 % % %
$ 1,121,969 (101,635) 111,841 464,296 320,801 505,097 147,459 203,243 825,898 159,730 128,212 103,004 354,334 320,801 420,470 182,827 247,172 247,936 326,231 332,258 368,693 17,104 18,008 74,283 45,000 80,618 78,295 (6,027) 36,435 (34.9) 2,219 1,291 (764) 2007 92.8 49.0 0.41 53.0 77.1 675 Five yearsummary
1,074,534 467,713 364,969 512,993 164,287 209,547 877,962 201,907 146,392 117,846 288,321 123,496 364,969 395,420 149,947 238,998 240,055 332,928 335,292 366,707 (85,131) 40,791 47,929 20,039 71,191 53,633 92,873 31,415 (1,057) (2,364) 2,282 1,047 (11.2) 2006 70.7 36.0 0.47 51.2 65.5 -
1,067,420 1,296,323 (183,724) 470,536 351,557 715,863 116,798 175,808 354,294 136,284 116,455 378,966 359,532 351,557 305,245 244,321 244,321 119,626 363,947 358,376 398,111 (41,928) 50,671 18,292 76,183 88,240 66,746 39,735 2,140 5,571 2005 52.3 58.7 30.0 0.59 51.4 69.5 - - -
1,132,854 (119,590) 476,898 374,488 533,907 166,383 225,106 908,395 127,221 117,462 305,103 285,973 374,488 126,430 282,449 142,172 142,172 225,458 230,013 265,914 (34,391) 41,073 19,401 81,944 72,636 33,210 83,286 35,901 (4,555) 2,080 2004 31.9 27.3 0.63 29.9 38.0 8.0 - - -
(106,040) (106,040) 470,226 218,678 513,409 172,844 233,402 732,087 120,297 109,496 327,661 103,993 218,678 265,733 995,226 (70,091) (99,795) (15,768) (84,027) (39,352) 2003 (i) 70,226 33,158 17,292 55,338 70,640 23,036 43,477 44,675 2,039 1,375 6,245 (32.1) (26.2) (22.9) (48.5) 0.31 6.0 - -
For personal use only Financial Statements
.63 .64 website: www.aristocratgaming.com. the investorinformationsectiononour and otherinformationare availablein All press releases, financial reports, globally atminimumcosttotheGroup. reporting istimely, completeandavailable Company ensures thatitscorporate Through the theuseofinternet, amend andreissue thefinancial report. 2008. TheCompanyhasthepowerto issue bythedirectors on26February The financial report wasauthorisedfor of whichare notpartofthisfinancial report. report andintheDirectors’ Report,both Management DiscussionandAnalysis its principalactivitiesisincludedinthe consolidated Group’s operationsand A descriptionofthenature ofthe Australia. Lane CoveNSW2066 71 LonguevilleRoad Aristocrat Leisure Limited office andprincipalplaceofbusinessis: domiciled inAustralia.Itsregistered limited byshares, incorporatedand Aristocrat Leisure Limitedisacompany presented inAustraliancurrency. subsidiaries. Thefinancial report is of AristocratLeisure Limitedandits and theconsolidatedentityconsisting Leisure Limitedasanindividualentity This financial report coversbothAristocrat For the 12 months ended 31 December 2007 31 December ended 12 the For months For personal use only Financial Statements 2007 Annual Report 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Notes tothefinancialstatements Statements ofcashflows Statements ofchangesinequity Balance sheets Income statements 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Independent auditreport tothemembers Directors’ declaration
Payables Intangible assets Deferred taxassets Property, plantandequipment Current assets-non-current assetsclassifiedasheld forsale Other assets Financial assets Inventories Receivables Cash andcashequivalents Dividends Income taxexpense Profit from ordinary activities Segment information Critical accountingestimatesandjudgements Financial riskmanagement Summary ofsignificantaccountingpolicies Borrowings Provisions Other liabilities Contributed equity Reserves andretained earnings Minority interest Events occurringafterreporting date Contingent liabilities Commitments Subsidiaries Partial saleofsubsidiary Business combinations Interest injointlycontrolled entity Employee benefits Share-based payments Key managementpersonneldisclosures Remuneration ofauditors Related parties Earnings pershareEarnings to netcashflowfrom operating activities Reconciliation ofprofit from ordinary activitiesafterincometax Deed ofcross guarantee Financial Statements 100 101 103 103 104 105 107 107 107 109 110 111 112 113 114 114 121 128 129 131 132 136 135 133 99 98 97 97 96 95 95 92 92 91 89 87 84 83 80 69 69 68 67 66 65 The above income statements should be read in conjunction with the accompanying notes. accompanying the with conjunction in read be should statements income above The share per earnings Diluted share per earnings Basic Company the of holders equity ordinary the to attributable profit for share per Earnings interest Minority Limited Leisure Aristocrat of Members to: attributable is Profit expense tax income after activities ordinaryfrom Profit (expense)/credit tax Income expense tax income before activities ordinaryfrom Profit entity controlled jointly of profits net of Share Finance costs Finance the net investment in a foreign operation foreign a in investment net the of part formed which loan long-term a of settlement partial the from differencesarising exchange Realised General and administration costs administration and General costs marketing and Sales costs development and Research Other revenue and other income other and revenue Other profitGross activities operating fromrevenue of Cost activities operating from Revenue
For personal use only 2007 31 December ended 12 the For months Income statements 2007 Annual Report Notes financial statements 36 36 23 30 6 5 5 5
1,121,969 (131,576) (107,108) (104,158) (470,443) 247,936 326,231 247,936 247,172 651,526 (78,295) (14,447) 23,381 Cents
2007 8,613 $’000 52.8 53.0 764 –
Consolidated 1,074,534 (125,354) (431,599) 332,928 238,998 642,935 240,055 240,055 (92,873) (15,085) (95,713) (95,206) 20,176 Cents $’000 (5,975) 2006 1,057 7,150 50.9 51.2
198,566 200,454 200,454 200,454 198,702 $’000
1,888 2007 (136) – – – – – – – – –
Parent entity Parent 108,346 99,452 99,435 99,452 99,452 $’000 (7,695) (1,216) 2006 17 .65 .66 Totalassets current sale for held as classified assets Non-current
The above balance sheets should be read in conjunction with the accompanying notes. accompanying the with conjunction in read be should sheets balance above The Totalliabilities current liabilities Other Provisions
Other assets Other assets Financial Inventories Totalassets Totalassets non-current assets Intangible assets tax Deferred Property,equipment and plant assets Financial Receivables equivalents cash and Cash assets Current 2007 31 December ended 12 the For months Totalequity interest Minority interest entity Parent earnings Retained Reserves equity Contributed Equity assets Net Totalliabilities Totalliabilities non-current liabilities Other Provisions Borrowings liabilities Non-current liabilities tax Current Borrowings Payables Current liabilities Receivables assets Non-current For personal use only Balance sheets
2007 Annual Report Notes 22(b) 22(a) Financial statements 13 20 19 11 10 16 15 14 11 23 21 20 19 18 18 17 12 9 8 9
(101,635) 434,952 407,501 322,526 320,801 320,801 251,657 825,898 390,946 128,212 103,004 320,126 505,097 182,571 147,459 177,467 420,470 27,451 25,776 59,777 14,506 61,357 80,618 40,528 98,878 20,324 17,104 18,008 45,000
2007 $’000 4,816 9,053 1,291 675
Consolidated 411,817 407,217 280,738 364,969 364,969 204,416 123,496 877,962 466,145 146,392 117,846 106,088 363,922 512,993 232,255 164,287 190,429 395,420 (85,131) 19,118 24,774 46,417 69,902 42,206 53,613 53,633 47,929 20,039 $’000 2006 4,600 1,797 7,606 1,047 –
119,200 22,823 22,823 62,930 40,827 56,270 56,270 18,624 22,785 96,377 31,186 64,161 56,270 62,930 49,921 $’000
1,030 1,291 3,479 5,058 2007 38 – – – – – – – – – – – – –
Parent entity Parent 119,247 119,247 172,520 109,290 119,247 63,230 63,230 53,273 49,794 63,200 21,649 86,608 53,273 53,633 37,355 28,259 $’000 2006 1,033 3,479 30 –
The above statements of changes in equity should be read in conjunction with the accompanying notes. accompanying the with conjunction in read be should equity in changes of statements above The interest Minority Total equity at the end of the financial year financial the of end Totalthe at equity interest minority to attributable reserves in movement Net shareholder minority to paid Dividend interest minority of acquisition of date at earnings Retained dividends Equity Members of Aristocrat Leisure Limited Leisure Aristocrat of Members to: attributable is year financial the for Totalexpense and income recognised reserve trust payments share-based in movement Net Net movement in share-based payments reserve payments share-based in movement Net payments dividend unclaimed of lieu in issued Shares Shares bought back on-market and cancelled (including transaction costs) transaction (including cancelled and on-market back bought Shares holders equity as capacity their in Transactionsholders equity with Total recognised income and expense for the financial year financial the for Totalexpense and income recognised Profit for the financial year financial the for Profit Net income recognised directly in equity in directlyrecognised income Net reserverevaluationavailable-for-sale investments in movement Net Net movement in foreign currency translation reserve translation currencyforeign in movement Net year financial the of beginning Totalthe at equity
For personal use only 2007 31 December ended 12 the For months Statements of changes in equity 2007 Annual Report 22(a)(iv) 22(a)(iii) 22(a)(ii) 22(a)(i) Notes Financial statements 23 23 23 21 21 7
(222,122) (274,491) 230,323 320,801 229,443 230,323 247,936 364,969 (52,342) (52,432) (17,613) (14,589)
(1,020) (7,287) (3,024) 2007 8,396 $’000 (116) 880 90 –
Consolidated (148,823) (224,808) 237,238 238,220 240,055 351,557 238,220 364,969 (36,394) (34,607) (34,607) $’000 (4,974) (1,835) (4,303) 2006 2,468 (508) 982 456 42 –
(223,655) (263,431) 200,454 200,454 200,454 200,454 119,247 (52,342) (52,432) 56,270 12,566 $’000
2007 90 – – – – – – – –
Parent entity Parent (149,947) (167,826) 119,247 187,621 (34,607) (34,607) 99,452 99,452 16,728 99,452 99,452 $’000 2006 – – – – – – – – –
.67 .68 Net cash (outflow)/inflow from investing activities investing from (outflow)/inflow cash Net The above statements of cash flows should be read in conjunction with the accompanying notes. accompanying the with conjunction in read be should flows cash of statements above The year financial the of end the at equivalents cash and Cash Proceeds from sale of property,equipment of and sale fromProceedsplant Effects of exchange rate changes on cash and cash equivalents cash and cash on changes rate exchange of Effects activities operating from inflow cash Net Proceeds from partial sale of share in subsidiary in share of sale partial fromProceeds Loan repayments from non-related party non-relatedfrom repayments Loan Cash and cash equivalents at the beginning of the financial year financial the of beginning the at equivalents cash and Cash held equivalents cash and cash (decrease)/increasein Net activities financing from outflow cash Net shareholder minority to paid Dividends paid Dividend paid taxes Income Loans from related parties relatedfrom Loans Proceeds from borrowingsfrom Proceeds paid costs Finance Loan to non-related party non-related to Loan
Interest receivedInterest income Other Repayments of borrowings of Repayments Payment for patents, trademarks and computer technology computer and trademarks patents, for Payment tax) services and goods of employees(inclusive and suppliers to Payment Payments for shares bought back bought shares for Payments Trustthe by purchasedShares Payments for available-for-sale financial assets available-for-salefinancial for Payments entity controlled jointly in investment for Payments tax) services and goods of (inclusive customers from Receipts activities operating from flows Cash 2007 31 December ended 12 the For months Plan Option Share Employee the under options of exercise and issue fromProceeds activities financing from flows Cash acquired entity,cash controlled of of purchasenet for Payment activities investing from flows Cash Payment for property,equipment for and Payment plant For personal use only Statements of flows cash
2007 Annual Report 22(a)(iii) Notes 32(d) 29(b) 30(a) Financial statements 37 28 23 8 7 5
1,179,924 (181,567) (204,961) (857,328) 123,496 222,157 322,596 (54,315) (96,765) (15,133) (37,119) (52,432) (17,971) (52,243) 80,618 45,000
(5,759) (1,020) (1,658) (3,072) 2007 1,663 8,397 $’000 3,062 3,029 995 – – – – – –
Consolidated 1,264,880 (190,417) (115,355) (148,823) (238,560) (224,205) (210,069) (944,952) 123,496 359,532 204,772 204,287 319,928 (11,831) (11,713) (34,592) (23,217) (55,980) (35,319) (59,639) (70,620) 11,295 $’000 (8,984) (2,386)
1,044 8,217 7,125 2006 (508) 487 617
(182,737) (232,140) 232,052 232,052 (52,432) $’000
3,029 2007 (135) (135) 231 38 30 96 8 – – – – – – – – – – – – – – – – – –
Parent entity Parent (149,947) (347,482) (170,068) 343,583 343,583 (34,592) $’000 (4,395) 2006 3,919 8,346 7,125 (32) (32) 30 10 20
(b) (a) (‘Group’). subsidiaries its and Limited Leisure Aristocrat of consisting entity consolidated the and entity individual an as Limited Leisure Aristocrat for statements financial separate includes report financial The stated. otherwise unless presented, years the all to applied consistently been have policies below.These out set arereport financial the of preparation the in adopted policies accounting principal The Note 1. of significant Summary accounting policies 2007 31 December ended 12 the For months Notes to the financial statements
Principles of consolidation preparation of Basis (ii) For personal(i) 3. Note in disclosed are statements, financial the to significant are estimates and assumptions whereareas complexity,or judgement or of degree higher a Group’sinvolving areasthe The applying policies. of processaccounting the in judgement its exercise to requiresmanagement also It estimates. accounting critical certain of use requiresthe AIFRS with conformity in statements financial of preparation The estimates accounting Critical cost. deemed at measured been have which property,equipment for and and plant loss or profitthrough value fair at instruments) derivative (including liabilities and assets financial assets, available-for-salefinancial of revaluation the by modified as convention, cost historical the preparedunder been have statements financial These convention cost Historical useGroup. the of position financial the or loss and profit the on effect no been has There statements. financial these in disclosure the affected only has standard this of adoption The 7 AASB adopted has Group The standard accounting new of Adoption IFRS. with comply also notes and statements financial entity parent The (‘IFRS’). Standards Reporting Financial International with comply Limited Leisure Aristocrat of notes and statements financial consolidated the that ensures AIFRS with Compliance Standards. Reporting Financial International to equivalents Australian include Standards Accounting Australian IFRS with Compliance 2001. Act Corporations onlythe and InterpretationsGroup Issues Urgent (‘AASB’), BoardStandards Accounting Australian the of pronouncements authoritative other (‘AIFRS’), Standards Reporting Financial International to equivalents Australian with accordance preparedin been has report financial purpose general This that provides evidence of the impairment of an asset transferred. asset an of impairment the of evidence provides that loss unrealised an to relate they unless sale, or consumption on entity controlled jointly the by realisedare they as time such until interest ownership Group’sthe of extent the to eliminated are entity the with transactions and entity controlled jointly the establishing transactions on losses or Profits sheet. balance the in reserves in recognised is reserves in movements of share the and statement, income the in recognised is entity controlled jointly the of losses or profits the of share the method, entity.equity parent the the Under by cost at carried is and method equity the using statements financial consolidated the in for accounted is entity controlled jointly a in investment The entities controlled Jointly changed where necessary to ensure consistency with the policies adopted by the Group. the by adopted policies the with consistency ensure to necessary where changed been have subsidiaries of policies Accounting transferred. asset the of impairment the of evidence provides transaction the unless eliminated also are losses Unrealised eliminated. are companies Group between transactions on gains unrealised and balances transactions, Intercompany 1(i). Note to Refer Group. the by subsidiaries of acquisition the for account to used is accounting of method purchase The ceases. control that date the from deconsolidated are They Group. the to transferred is control which on date the from consolidated fully are Subsidiaries entity.another controlsGroup the whether assessing when consideredare convertible or exercisablecurrently are that rights voting potential of effect and existence The rights. voting the of one-half than more of shareholding a accompanying generally policies, operating and financial the govern to power the has Group the which over entities) purpose special (including entities those all are Subsidiaries Group. the as report financial this in referredto are together subsidiaries its and Limited Leisure Aristocrat ended. then year the for subsidiaries all of results the and 2007 December 31 at as entity’) ‘parent or (‘Company’ Limited Leisure Aristocrat of subsidiaries all of liabilities and assets the incorporate statements financial consolidated The Subsidiaries and all consequential amendments which became applicable on 1 January 2007. January 1 on applicable became which amendments consequential all and Disclosures Instruments: Financial 2007 Annual Report Financial statements
.69 .70 Note 1. of significant Summary accounting policies continued 2007 31 December ended 12 the For months
(e) (d) (c) Notes to the financial statements
For personal use only Revenue recognition Revenue translation currency Foreign reporting Segment (iii) (ii) (i) follows: as activities business major the for recognised is Revenue paid. taxes and duties and discounts settlement allowances, trade returns, of net arerevenue as disclosed Amounts receivable. or received consideration the of value fair the at measured is Revenue (i) environments. economic other in operating segments of those differentfromare that returns and risks to subject is and environment economic particular a within services or productsproviding in engaged is segment geographical A segments. business other of those differentto are that returns and risks to subject are that services or productsproviding in engaged operations and assets of group a is segment business A – follows: as currencypresentation the into translated arecurrency presentation the differentfromcurrency functional a have that economy) hyperinflationary a of currency the has which of (none companies Group the all of position financial and results The companies Group available-for-sale investments revaluation reserve in equity.in reserverevaluationavailable-for-sale investments the in included are assets, available-for-salefinancial as classified equities as such Translationitems, loss. non-monetary or differenceson gain value fair the of part as reportedare loss, or profitthrough value fair at held equities as such Translationitems, non-monetary differenceson hedges. investment net qualifying and hedges flow cash qualifying as equity in deferred when except statement, income the in recognisedare currencies foreign in denominated liabilities and assets monetary of rates year-endexchange at translation the from and transactions such of settlement the fromresulting losses and gains exchange Foreign transactions. the of dates the at prevailing rates exchange the using currency functional the into translated are transactions currencyForeign Transactionsbalances and provided for warranty conversions. Where appropriate, receivables are discounted to present values at the relevant implicit interest rates. interest implicit relevant the at values present to discounted arereceivables appropriate, Where conversions. warranty for provided fee service the for basis straight-line a on contract the of term the over and games, and machines gaming of case the in delivery on recognised is level, agreed the above or at performance productensure to conversions warranty for contract the of term the over payable is fee service a and periods extended for customers to licensed are games and machines gaming whereAgreements Service ValuefromAdded arising Revenue Agreements Service Added Value rates. interest implicit relevant the at values present to discounted arereceivables appropriate, Where delivered. are services or goods long-term the as only conversions, including items other for and games, and machines gaming of case the in delivery on recognised is periods, extended for customers to licensed are items incidental other and conversions games, machines, gaming whereAgreements Customer ValuefromAdded arising Revenue Agreements Customer Added Value Group. the to flow will benefits economic future that probable customer,is it and the to passed have order,risks sales associated a the to pursuant customer a to despatched been have goods when recognised is Revenue sales Platform/machine goods of sale the from Revenue Limited’sLeisurecurrency.presentation Aristocrat and functional is which Dollars, Australian in presentedare statements financial consolidated The currency’). ‘functional (the operates entity the which in environment economic primary the of currencyGroup’s the the using of measuredare each entities of statements financial the in included Items currencypresentation and Functional – – translated at the closing rate. closing the at translated and entity foreign the of liabilities and assets as treatedare entity foreign a of acquisition the on arising adjustments value fair and Goodwill statement. income the in recognised differencesis exchange such of shareproportionate a repaid,borrowings or sold is operation equity.foreign in a reserve When translation currencyforeign the to taken are investments, such of hedges as designated instruments currency other and borrowings of and entities, foreign in investment net any of translation the fromdifferences arising exchange consolidation, On assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; balance that of date the at rate closing the at translated arepresented sheet balance each for liabilities and assets transactions); and transactions); the of dates the at translated are expenses and income case which in dates, transaction the on prevailing rates the of effect cumulative the of approximationreasonable a not is this (unless rates exchange average at translated are statement income each for expenses and income all resulting exchange differences are recognised as a separate component of equity.of component separate a as recogniseddifferencesare exchange resulting all 2007 Annual Report Financial statements
(g) (f) Tax consolidation legislation Tax consolidation tax Income (or distribution from) wholly-owned tax consolidated entities. consolidated tax wholly-owned from) distribution (or to contribution a as recognisedare agreement funding tax the under payable or receivable amounts and assumed amounts the differencebetween Any 6. Note in disclosed areagreement funding tax the about Details group. consolidated tax the in entities other to payable or fromreceivable amounts as recognisedare entities consolidated tax the with agreement funding tax the under arising liabilities or Assets group. consolidated tax the in entities controlledfrom assumed credits tax unused and losses tax unused from arising assets tax deferred the and assets) (or liabilities tax current the recognises also Limited Leisure Aristocrat amounts, tax deferred and current own its to addition In For1052 UIG in described as approachgroup’ a within payer tax ‘separate and payer’ tax alone ‘stand the between combination a uses which approach, allocation group a applying by measuredare amounts tax These amounts. tax deferred and current own their for account to continue group consolidated tax the in entities controlled the and entity,Limited, head Leisure The Aristocrat 2004. January 1 of as legislation consolidation tax the implemented have entities controlled Australian wholly-owned its and Limited Leisure Aristocrat future.foreseeable the in reverse not differenceswill the that probable is it differencesand temporary the of reversal the of timing the control to able is entity parent the where entities controlled in investments of bases tax and amount carrying the differencesbetween temporary for recognised not are assets and liabilities tax Deferred personalequity.in directlyrecognised are equity in directlyrecognised amounts to attributable balances tax deferred and Current credits. tax and differences,losses temporary those utilise to available be will amounts taxable future that probable is it if only credits tax unused and losses tax unused differencesand temporary deductible for recognisedare assets tax Deferred loss. or profit taxable or loss or profit accounting either affect not did transaction the of time the at that combination, business a than other transaction, a in arose they differencesif temporary to relation in recognised is liability or asset liability.tax a deferred or No asset an of recognition initial the from differencesarising temporary certain for made liability.is or exception asset An tax deferred the measure differencesto temporary taxable and deductible of amounts cumulative the to applied are rates tax relevant The jurisdiction. each for enacted substantively or enacted are which rates those on based settled, are liabilities recoveredor are assets the when apply to expected rates tax the differencesat temporary for recognisedare liabilities and assets tax Deferred statements. financial the in amounts carrying their and liabilities and assets of bases tax the differencebetween a is there when arise differenceswhich temporary to attributable are liabilities and assets tax Deferred credits. tax unused and losses tax unused years, prior of tax income current liabilities, and assets tax deferred in changes for adjusted jurisdiction each for rate tax income the on period’scurrentbased the income on taxable payable tax the is period the for revenue or expense tax income The use only(ii) balance date in respect of future periods are treated as revenue in advance and are included in current liabilities. current in included are and advance in revenue as treatedare periods future of respect in date balance at received Amounts agreement.respective each of life the over basis pro-rata a on apportioned is contracts service prepaidfrom derived Revenue advance in Revenue agreement. service the of period the over evenly recognised is revenuewhere agreements, service for than other performed, is work as recognised is revenue Service revenue Service contract. lease operating the of term the over basis straight-line a on recognised is leases operating from income Rental Rental machines. participating of turnover of percentage a upon based fee agreed an (ii) or period; reporting the in floor venue the on operating been has machine the days of number total the by fee daily a multiplying (i) either: by calculated is recognisedrevenue of amount The based. performance or fixed be either can which day per fee a for return in venues in operator licensed a throughindirectly or Group the by Group’sdirectly the placed whereare is machines revenue owned Participation revenue Participation services and operations gaming from Revenue extent of costs incurred, where it is probable that the costs will be recovered.be will costs the that probable is it whereincurred, costs of extent the to recognised is revenue made, be cannot estimate reliable a Where method. completion of percentage the using made, be can estimate reliable a wherever contracts, individual of period the progressivelyover recognised is installations similar and systems for contracts long-term on Revenue contracts Long-term 2007 Annual Report Financial statements TaxAccounting. Consolidation
.71 .72 For the 12 months ended 31 December 2007 31 December ended 12 the For months
(m) (l) (k) (j) (i) (h) Notes to the financial statements
For personal use onlyNote 1. of significant Summary accounting policies continued
Cash and cash equivalents cash and Cash assets of Impairment Leases (ii) (i) receivables. of terms original the to according due amounts all collect to able be not will Group the that evidence objective is there when established is receivables trade of impairment for provision A off. written are uncollectible be to known are which Debts basis. ongoing an on reviewed is debtors trade of collectability The impairment. for provision less cost, amortised at measured subsequently and value fair Tradeat initially recognisedare receivables sheet. balance the on liabilities current in borrowings within shown be will overdrafts bank Any overdrafts. bank and value, in changes of risk insignificant an to subject are which and cash of amounts known to convertible readilyare that less or months three of maturities original with investments liquid highly short-term, other institutions, financial with call at held deposits hand, on cash include equivalents cash and Cash units). cash-generating is, (that flows cash identifiable separately arethere which for levels lowest the at groupedare assets impairment, assessing of purposes the For value-in-use. and sell, to costs asset’sless value fair an of higher the is amount recoverable The amount. recoverable its asset’sexceeds the amount which carrying by amount the for recognised is loss impairment An recoverable. be not may amount carrying the that indicate circumstances in changes or events whenever impairment for reviewedare amortisation to subject are that Assets impairment. for annually tested are and amortisation to subject not are life useful indefinite an have that Assets conditions. and terms comparable under financier independent an from obtained be could borrowing similar a which at rate Group’sthe the being is rate, used borrowingincremental rate discount The exchange. of date the at as value present their to discounted arefuture the in payable amounts the deferred, is consideration cash of part any of settlement Where acquired. assets net the of measurement and identification the of reassessment a after only but statement, income the in directlyrecognised differenceis the acquired, subsidiary the of assets net the of value fair the than less is acquisition of cost the If 1(t)). Note to (refer goodwill recordedas is acquired assets net identifiable the Group’sthe of value of sharefair the over acquisition of cost the of excess The interest. minority any of extent the of irrespective date, acquisition the at values fair their at initially measuredare combination business a in assumed liabilities contingent and liabilities and acquired assets Identifiable equity.in directlyrecognised are instruments equity of issue the on Transactionvalue. arising fair costs of measurereliable more a provide methods valuation and evidence other that and value fair of indicator unreliable an is exchange of date the at price published the that demonstrated be can it circumstances,rare in unless, exchange of date the at as price market published their is instruments the of value the acquisition, an in issued are instruments equity Where acquisition. the to attributable directly costs plus exchange of date the at assumed or incurred liabilities or issued shares given, assets the of value fair the as measured is Cost acquired.are assets other or instruments equity whether regardlessof combinations, business all for account to used is accounting of method purchase The lease. the of period the over basis straight-line a on statement income the to charged are lessor) the fromreceived incentives any of (net leases operating under made Payments leases. operating as classified are lessor the by retainedare ownership rewardsof and risks the of portion significant a which in Leases Inventories Receivables Business combinations reduced to the level of recoverability less progressbillings. less recoverability of level the to reduced progressis in work the completion, on indicated is Group’sloss the a Wherewith operations. connection contract in incurred expenses overhead of allocation an and contracts specific to relateddirectly costs all includes Cost progressbillings. less cost at stated progressis in work Contract progressin work Contract variable production overheads. Standards are reviewed on a regular basis. regular a on reviewedare Standards overheads. production variable and fixed of proportionappropriate an and labour direct materials, direct includes goods finished progressand in work for cost Standard costs. standard principally using value realisable net and cost of lower the at stated are goods finished progressand in work stores, and materials Raw goods finished progressand in work stores, and materials Raw 2007 Annual Report Financial statements
(p) (o) (n) Investments and other financial assets financial other and Investments sale for held assets Non-current rights property Intellectual (iv) (iii) (ii) For personal(i) date. reporting each at designation this re-evaluates Group’sand recognitionthe initial of at classification investments the determines Management acquired.were investments the which for purpose the on depends classification The assets. available-for-salefinancial and investments, held-to-maturity receivables,use and loans loss, or profitthrough value fair at assets financial categories: following the in investments its classifies Group The sheet. balance the in assets other the from separately presentedare sale for held as classified assets Non-current sale. for held as classified are they while amortised or depreciated not are assets Non-current derecognition. of date the at recognised is asset non-current the of sale the of date the by recognisedpreviously not loss or gain A recognised.previously loss impairment cumulative any of excess in not but asset, an sell to costs less value fair in increases subsequent any for recognised is gain A sell. to costs less value fair to asset the of writedown subsequent or initial any for recognised is loss impairment An onlyuse. continuing through than rather transaction sale a through recoveredprincipally be will amount carrying their if sell to costs less value fair and amount carrying their of lower the at stated are sale for held as classified are that assets Non-current consumed. are tags licence the when and as expensed subsequently and capitalised are rights These States. United the in systems gaming cashless to relating technology certain to tags licence of form the in rights property intellectual purchase to agreement an into entered has entity controlled A accumulated fair value adjustments are included in the income statement as gains and losses from investment securities. investment from losses and gains as statement income the in included are adjustments value fair accumulated the impaired, or available-for-salesold areas classified securities When reserve.revaluationavailable-for-sale investments the in equity in recognised available-for-saleareas classified securities monetary non of value fair the in changes from arising losses and gains Unrealised arise. they which in period the in statement income the in included are category loss or profitthrough value fair at assets financial the of value fair the in changes from arising losses and gains unrealised and Realised method. interesteffective the using cost amortised at carried are investments held-to-maturity and receivables and Loans value. fair at carried subsequently are loss or profitthrough value fair at assets financial and Available-for-saleassets financial ownership. rewardsof and risks the all substantially transferred has Group the and transferred been have or expired have assets financial the from flows cash receive to rights the when derecognised are assets Financial loss. or profitthrough value fair at carried not assets financial all for costs transaction plus value fair at recognised initially are Investments asset. the sell or purchase to commits Group the which on date the date, trade on recognisedare investments of sales and Purchases date. sheet balance the of months 12 within investment the of dispose to intends management unless assets non-current in included are They categories. other the of any in classified not or category this in designated either are that non-derivatives are securities, equity marketable principally comprising Available-for-saleassets, financial Available-for-saleassets financial management has the positive intention and ability to hold to maturity.to hold to ability and intention positive the has management Group the that maturities fixed and payments determinable or fixed with assets financial non-derivative are investments Held-to-maturity investments Held-to-maturity receivables are included in receivables in the balance sheet. balance the in receivables in included arereceivables and Loans assets. non-current as classified are which date sheet balance the after months 12 than greater maturities with those for except assets, current in included are They receivable. the selling of intention no with debtor a to directly money,services providesGroup or the goods when arise They market. active an in quoted not are that payments determinable or fixed with assets financial non-derivative arereceivables and Loans receivables and Loans classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date. sheet balance the of months 12 within realised be to expected are or trading for held either are they if assets current as classified are category this in Assets hedges. as designated are they unless trading for held as categorised also are Derivatives value. fair in changes frequent to subject is asset the and term short the in sold be will it possibility the exists there if asset financial a designate to is management of policy The management. by designated so if or term short the in selling of purpose the for principally acquired if category this in classified is asset financial A recognition. initial on loss or profitthrough value fair at designated those and trading, for held assets financial sub-categories: two has category This loss or profitthrough value fair at assets Financial 2007 Annual Report Financial statements
.73 .74 For the 12 months ended 31 December 2007 31 December ended 12 the For months
For (r) personal use (q) only (p) Note 1. of significant Summary accounting policies continued Notes to the financial statements
Fair value estimation value Fair continued assets financial other and Investments (iii) (ii) price; the appropriate quoted market price for financial liabilities is the current ask price. ask current the is liabilities financial for price market quoted appropriate the price; bid current the is Group the by held assets financial for used price market quoted The date. sheet balance the at prices market quoted on based is available-for-salesecurities) and trading and derivatives, traded publicly as (such markets active in traded instruments financial of value fair The purposes. disclosure for and measurement and recognition for estimated be must liabilities financial and assets financial of value fair The (i) items. hedged of flows cash or values fair in changes offsetting in effective highly be, to continue will and been, have transactions hedging in used are that derivatives the whether of basis, ongoing an on and inception hedge at both assessment, its documents also Group The transactions. hedge various undertaking for strategy and objective management risk its as well as items, hedged and instruments hedging between relationship the transaction the of inception the at documents Group The hedges’). flow (‘cash transactions forecastprobable highly of hedges (ii) or hedges’); value (‘fair commitment firm a or liabilities or assets recognised of value fair the of hedges (i) either: as derivatives certain designates Group The hedged. being item the of nature the so, if and instrument, hedging a as designated is derivative the whether on depends loss or gain resulting the recognising of method The value. fair their remeasuredto subsequently are and into entered is contract derivative a date the on value fair at recognised initially are Derivatives (iv) Derivatives hedge accounting are recognised immediately in the income statement. income the in immediately recognisedare accounting hedge for qualify not does that instrument derivative any of value fair the in Changes accounting. hedge for qualify not do instruments derivative Certain accounting hedge for qualify not do that Derivatives immediately transferred to the income statement. income the to transferred immediately is equity in reported was that loss or occur,gain to cumulative expected the longer no is transaction forecast a When statement. income the in recognised ultimately is transaction forecast the when recognised is and equity in remains time that at equity in existing loss or gain cumulative any accounting, hedge for criteria the meets longer no hedge a when or terminated, or sold is or expires instrument hedging a When liability.or asset the of amount carrying or cost initial the of measurement the in included and equity fromtransferred are equity in deferredpreviously losses liability,and non-financial gains a the or inventories) example, (for asset financial non- a of recognition the in results hedged is that transaction However,forecast place). the takes when hedged is that sale forecast the when instance, (for loss or profitaffect will item hedged the when periods the in statement income the in recycledare equity in accumulated Amounts statement. income the in immediately recognised is portion ineffective the to relating loss or gain The reserve. hedging a in equity in recognised is hedges flow cash as qualify and designated are that derivatives of value fair the in changes of portion effective The hedges flow Cash any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. hedged the to attributable are that liability or asset hedged the of value fair the in changes any with together statement, income the recordedin are hedges value fair as qualify and designated are that derivatives of value fair the in Changes hedges value Fair Available-for-saleassets financial statement on equity instruments are not reversed through the income statement. income the throughreversed not are instruments equity on statement income the in recognised losses Impairment statement. income the in recognised and equity fromremoved is - loss and profit the in recognised previously asset financial that on loss impairment any less value, fair current the and cost acquisition the differencebetween the as measured - loss cumulative the assets, available-for-salefinancial for exists evidence such any If impaired. is security the whether determining in considered is cost its below security a of value fair the in decline prolonged or significant available-for-sale,a as classified securities equity of case the In impaired. is assets financial of group or asset financial a that evidence objective is there whether date balance each at assesses Group The issuer’sthe reflectcircumstances. to refinedspecific models pricing option and analysis, flow cash discounted same, the substantially are that instruments other or instruments same the involving arm’srecent of transactions, values length fair the referenceto include These techniques. valuation using by value fair the establishes Group the securities), unlisted for (and active not is asset financial a for market the If prices. bid current on based are investments quoted of values fair The continued 2007 Annual Report Financial statements
(t) (s) Intangible assets Intangible equipment and plant Property, (iii) (ii) statement. income the in included are These amount. carrying with proceeds comparing by determined are disposals on losses and Gains 1(j)). Note to (refer amount recoverable estimated its than greaterasset’s is the amount if carrying amount recoverable its to immediately down written asset’sis An amount carrying date. sheet balance each at appropriate, if adjusted and reviewed,are lives useful and values residual assets’ The equipment and Plant – improvements Leasehold – For personal(i) Buildings – follows: as lives, useful remaining estimated their over values, residual their of net cost, their allocate to method straight-line the using calculated is assets other on Depreciationdepreciated. not is Land incurred.are they which in period financial the during usestatement income the to charged are maintenance reliably.measuredand repairs be other can All item the of cost the and Group the to flow will item the with associated benefits economic future that probable is it when only appropriate, as asset, separate a as recognisedasset’s or the amount in carrying included are costs Subsequent property,equipment. of purchasescurrencyand plant foreign of hedges flow cash qualifying on gains/losses any of equity from transfers include also may Cost items. the of acquisition the to attributable directly is that expenditure includes cost Deemed depreciation. accumulated less cost deemed at stated areproperty, equipment All and plant instruments. financial similar for Group the to available is that rate interest market current the at flows cash contractual future the discounting by estimated is purposes disclosure for liabilities financial onlyof value fair The values. fair their approximate to assumed are payables and receivables trade of adjustments credit estimated less value nominal The date. sheet balance the at rates market exchange forward using determined is contracts exchange forward of value fair The flows. cash future estimated the of value present the as calculated is swaps rate interest of value fair The instruments. financial remaining the for value fair determine to used are flows, marketdealerpricessimilarquotesorforinstruments long-termareforusedinstrumentsdebt held.Othertechniques,estimated assuchdiscounted cash Quoted date. balance each at existing conditions market on based are that assumptions makes and methods of variety a uses Group The techniques. valuation using determined is over-the-counterderivatives) example, (for market active an in traded not are that instruments financial of value fair The 12 years. 12 to threefrom vary which lives, useful estimated their over licences and trademarks of cost the allocate to method straight-line the using calculated is Amortisation losses. impairment and amortisation accumulated less cost at carried are and life useful finite a Trademarkshave licences and Trademarkslicences and allocate the value of computer technology over its estimated useful life, which varies from three to 10 years. 10 to threefrom varies which life, useful estimated its over technology computer of value the allocate to method straight-line the using calculated is Amortisation date. acquisition at value fair at measured is combination business a throughacquired technology Computer losses. impairment and amortisation accumulated less cost at carried is and life useful finite a has technology Computer technology Computer investment in each region of operation by each primary reporting segment. Refer to Note 16. Note to Refer segment. reporting primary each by operation of region each in investment Group’srepresentsthe units cash-generating those of Each testing. impairment of purpose the for units cash-generating to allocated is Goodwill sold. entity the to relating goodwill of amount carrying the include entity an of disposal the on losses and Gains losses. impairment accumulated less cost at carried is and impaired, be might it that indicate circumstances in changes or events annually,if frequentlyimpairment more for or tested is goodwill Instead, amortised. not is combinations business in acquired Goodwill assets. intangible in included is subsidiaries of acquisitions on Goodwill acquisition. of date the at subsidiary acquired the of assets Group’sidentifiable the net of the value of sharefair the over acquisition an of cost the of excess representsthe Goodwill Goodwill 2-10 years 2-10 years 2-10 40 years 40 2007 Annual Report Financial statements
.75 .76 For the 12 months ended 31 December 2007 31 December ended 12 the For months
(x) (w) (v) (u) (t) Note 1. of significant Summary accounting policies continued Notes to the financial statements
For personal use only
Borrowing costs Borrowing Borrowings Payables continued assets Intangible (i) small. be may obligations of class same the in included item one any to respect with outflow an of likelihood the if even recognised is provision A whole. a as obligations of class the considering by determined is settlement requiredin be will outflow an that likelihood the obligations, similar of number a arethere Where losses. operating future for recognised not areProvisions estimated. reliably been has amount the (iii) and obligation; the settle requiredto be resourceswill of outflow an that not than likely more is it (ii) events; past of result a as obligation constructive or legal present a has Group the (i) when: recognisedare Provisions expensed. are costs borrowing Other sale. or use intended its for asset the prepareand complete requiredto is that time of period the during capitalised are asset qualifying any of construction the for incurred costs Borrowing date. sheet balance the after months 12 least at for liability the of settlement defer to right unconditional an has Group the unless liabilities current as classified areBorrowings method. interesteffective the using borrowings the of period the over statement income the in recognised is amount redemption the and costs) transaction of (net proceeds the differencebetween Any cost. amortised at measured subsequently areBorrowings incurred. costs transaction of net value, fair at recognised initially areBorrowings 1(y). Note to Refer benefits. employee include Payables recognition. of days 30-120 within paid usually are and unsecuredare amounts The unpaid. are which year financial of end the to prior Group the to provided services and goods for representTradeliabilities creditors other and (iv) Provisions component amount at which time any unaccrued portion is expensed. is portion unaccrued any time which at amount component base the accrued fully has Group the before hit be may combination winning a that exists possibility The played. coins of number the on based rate a at increases progressivecomponent The analysis. statistical on based expected play of level the with sales of cost to charged are jackpots Base progressivecomponent. the of value present the to equal amount sum lump a (ii) or winning; after years 20 or 19 over out paid annuity an (i) either: by followed amount initial an as paid are which progressivejackpots, for liable is Group the States, United the in jurisdictions certain In liabilities Progressivejackpot – are: activity development the for criteria recognition The demonstrated. be can criteria recognition the of all when recognised only is expenditure development from arising asset intangible An incurred. as expensed is expenditureResearch development and Research – – – – – Other development costs are recognised in the income statement as incurred. as statement income the in recognisedare costs development Other costs. development capitalised no arethere date, balance at As the technical feasibility of completing the intangible asset so that it will be available for use or sale; or use for available be will it that so asset intangible the completing of feasibility technical the the intention to complete the intangible asset and use or sell it; sell or use and asset intangible the complete to intention the the ability to use or sell the intangible asset; intangible the sell or use to ability the asset; intangible the of internally,usefulness used the be to or,is itself it asset if intangible the or asset intangible the of output the for market a of existence the demonstrate can Group the things, other Among benefits. economic futureprobable of asset intangible the by generation the the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and asset; intangible the sell or use to and development the complete resourcesto other and financial technical, adequate of availability the the ability to measure reliably the expenditure attributable to the intangible asset during its development. its during asset intangible the to attributable expenditure the reliablymeasure to ability the 2007 Annual Report Financial statements
-payable benefits Employee (y) (iii) (ii) (iii) For personal use(i) only(ii) recognised each period takes into account the most recent estimate. recent most the account into takes period each recognised expense benefits employee The exercisable. become to expected are that options of number the of estimate its revises entity the date, sheet balance each At exercisable. become to expected are that options of number the about assumptions in included are conditions vesting Non-market targets). growth sales and profitability example, (for conditions vesting non-market any of impact the excludes granted options the of value fair The reserves. in increasecorresponding a with expense benefits employee an as recognised is Plan Share Employee General the under consideration cash no for employees to issued shares of value market The (iii). and 22(a)(ii) Note in disclosed areshares these to relating Information reserves. payments Trustshare-based Plan the recordedEquity in are Employee Aristocrat by acquiredshares treasury equity.in reserve Similarly,payments share-based the in recognised Trustbe Plan to Equity continue Employee Aristocrat through issued Shares equity.contributed from issue new a areshares the if only capital share to transferred is rights or options those to relatingreserve payments share-based the of balance the rights, or options of exercise the Upon criteria. performance and vesting the and right share the of term the yield, dividend expected the volatility,rate, interestprice risk-freeshare the expected estimated the date, grant at price share the account into takes that model Scholes Black- a or model Pricing Simulation-based Monte-Carlo a either using determined independently is date grant at rights share of value fair The option. the of term the for rate interestrisk-free the and yield dividend expected the and share, underlying the of volatility price expected the criteria, vesting the date, grant at price share the option, the of nature non-tradeable the option, the of life expected the price, exercise the account into takes model The applicable. is barrier hurdle return shareholder total a where options with deal to modified been has model The model. Option Barrier Rubinstein Reiner Merton the of version modified a using determined independently is date grant at options of value fair The rights. and options the to entitled unconditionally become employees the which during period the over recognised and date grant at measured is value fair The reserves. in increasecorresponding a with expense benefits employee an as recognised is Plan Share Performance the and TermPlan Long Option the Performance Plan, Option Share Employee the under granted rights and options of value fair The 2005 January 1 after vested and 2002 November 7 after granted rights and options Shares, equity.contributed to allocated received proceeds the and exercisedare options the when recognisedare shares The rights. or options these of respect in recognised is expense No 2005 January 1 before vested and/or 2002 November 7 before granted rights and options Shares, Plan. Share Employee General the and Plan Share Performance the Long-TermPlan, the Option Plan, Performance Option Share Employee the via employees to providedare benefits compensation Share-based payments Share-based Contributions are recognised as an expense when they become payable. become they when expense an as recognisedare Contributions funds. contribution defined approved Australian-based to salary base employees’ of 9% of minimum a contribute Australia in entities controlled The obligations benefit Retirement contracts. lease the in clauses good make the satisfy requiredto be to expected flows cash discounted estimated the is provision the of amount The date. balance at held still leases requiredon where liability estimated the for made is Provision allowances good Make and measured at the rates paid or payable. or paid rates the at measured and taken is leave the when recognisedare leave sick non-accumulating for Liabilities settled. are liabilities the when paid be to expected amounts the at measuredare and date reporting the to up services employees’ of respect in payables other in recognisedare date sheet balance the of months 12 within settled be to expected leave sick accumulating and leave annual benefits, non-monetary including salaries, and wages for Liabilities leave sick and leave annual salaries, Wagesand material. not is discounting of effect the as value present its to discounted not is provision The obligations. warranty the of risks the and experience warranty service the regardto having obligations, warranty the settle requiredto be to expected flows cash estimated the is provision the of amount The date. balance at warranty under still products all on liability estimated the for made is Provision Warranties 2007 Annual Report Financial statements
.77 .78 Employee benefits – payable continued –payable benefits Employee (y) Note 1. of significant Summary accounting policies continued 2007 31 December ended 12 the For months
For (ac) personal(ab) (aa) (z) use only Notes to the financial statements
Employee benefits –provision benefits Employee Contributed equity Contributed Earnings per share per Earnings Dividends (vi) (ii) (v) (i) date. balance at distributed not but period the of end the before or on declared dividend any of amount the for made is Provision (iii). and 22(a)(ii) Note in disclosed areshares these to relating Information reserves.Trust payments Plan share-based recordedEquity in areTreasury Employee Aristocrat by acquiredshares consideration. purchase the of part as acquisition the of cost the in included not are business, a of acquisition the for options or shares new of issue the to attributable directly costs Incrementalproceeds. the from tax, of net deduction, a as equity contributed in shown are options or shares new of issue the to attributable directly costs Incremental equity.contributed as classified areshares Ordinary outflows. cash future estimated the possible, as closely as match, that currency and maturity to terms with bonds government national on date sheet balance the at yields market using discounted are payments future Expected service. of periods and departures employee of experience levels, salary and wage future expected to given is Consideration method. credit unit projected the using date sheet balance the to up employees by provided services of respect in made be to payments future expected of value present the as measured and benefits employee for provision the in recognised is leave service long for liability The (iv) are measured at the amounts expected to be paid when they are settled. are they when paid be to expected amounts the at measuredare months 12 within settled be to expected benefits termination for Liabilities creditors. other in recognisedare benefits termination for liabilities The out. carried be will terminations the that affected employees those in raised been has expectation valid a and developed been has terminations the for plan detailed a when recognisedare operation, or entity an of acquisition the with connection in not benefits, termination for Liabilities Terminationbenefits assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.ordinary potential dilutive to relation in consideration no for issued been have to assumed shares of number average weighted the and sharesordinary potential dilutive with associated costs financing other and interest of effect tax post-income the account into take to share per earnings basic of determination the in used figures the adjusts share per earnings Diluted share per earnings Diluted liabilities. as recognisedare relate they which to benefits employee the when costs and liabilities benefit employee in included and recognisedare tax, payroll including on-costs, benefit Employee on-costs benefit Employee ordinary shares issued during the year.the during issued sharesordinary in elements year,bonus the for during adjusted outstanding sharesordinary of number average weighted the by shares,ordinary than other equity servicing of Company,costs the any of excluding holders equity to attributable profit the dividing by calculated is share per earnings Basic share per earnings Basic settled. are they when paid be to expected amounts the at measuredare and months 12 within settled be to expected are plans bonus for Liabilities obligation. the of amount the of evidence clear gives practice past – or statements; financial the of completion of time the before determined are paid be to amounts the – benefits; the of amount the determining for plan the in terms formal arethere – met: is conditions following the of one least at and liability the settle to but alternative realistic no is there when recognised is plans bonus of form the in benefits employee for liability A plans Bonus 2007 Annual Report Financial statements
(ae) (ad)
AASB Accounting Standards issued but not yet effective yet not but issued Standards Accounting AASB dollars, or in certain cases, the nearest dollar.nearest the cases, certain in or dollars, thousand nearest the to Order Class that with accordance in offrounded been have report financial the in Amounts report. financial the in amounts of off’ ‘rounding the to relating Commission, Investments & Securities Australian the by issued 98/0100, Order Class in referredto kind a of is Company The Group’sthe on report.impact financial any have to expected not are amendments the so payments, share-basedGroup’s for the policies with accounting consistent existing is This parent. the of instruments equity involving arrangements payment share-basedsubsidiary’s for a statements in financial accounting the specifies also It 2. AASB under transactions cash-settled as or equity-settled as for accounted be should services) and good of suppliers other (or employees with transactions payment based AASB Group’sthe on report.impact financial any have to expected not are amendments the such as and assets qualifying with associated costs borrowing no has Group The capitalised. be must asset qualifying a with (Revised) 123 AASB statements. two or statement single a as income comprehensive of statement new the present to whether stage this at determined not has Group The 101. AASB current the under amounts of recognition and measurement the on impact direct a have Group’snot the will of and presentationreport the financial affect only to expected are amendments The statements. financial the of titles the to changes and dividends requirementsfor presentation the in changes statements, financial the in items of reclassifications or restatements requirementsfor equity,in presentation changes new of statement the in items of presentation the on impacts include revisions Other income. comprehensive (Revised) 101 AASB standard. this adopting of impact the stage this at determined not has Group The segments. operating resourcesto allocate to how deciding and performance segment operating evaluating for internally used is as basis same the on reported be requiredto Generally,is segments. information reportable financial its about information descriptive and financial report to entity requiresan 8 AASB 2008: January 1 after or on beginning periods reporting annual after until effective not are they as Group the by adopted been not have but AASB the by issued been have standards accounting following The For personal amounts of Rounding use only , effective on or after 1 January 2008. This addresses whether certain types of share- of types certain whether addresses This 2008. January 1 after or on effective Payment, Share-based 2 AASB of Scope 11 Interpretation , effective on or after 1 January 2009. This replaces AASB 114 AASB replaces This 2009. January 1 after or on effective Segments, Operating , effective on or after 1 January 2009. The amendments to AASB 123 require that all borrowing costs associated costs borrowing all requirethat 123 AASB to amendments The 2009. January 1 after or on effective Costs, Borrowing of statement a introducesrevision main The 2009. January 1 after or on effective Statements, Financial of Presentation 2007 Annual Report Financial statements and applies to listed companies only.companies listed It to applies and Reporting Segment
.79 .80 For the 12 months ended 31 December 2007 31 December ended 12 the For months
For personal use (a) risk. financial significant any to exposed not is entity parent The liquidity.excess of investment and instruments financial derivative of use risk, credit risk, rate interest risk, exchange foreign as such areas, specific covering policies as well as management, risk overall for principles written Group’sprovidesBoard the The with units. cooperation operating close in risks financial hedges Treasuryand evaluates identifies, GroupDirectors. of Board the Treasury’)(‘Groupby approved department treasurypolicies central under a by out carried is management risk Financial onlyrisk. credit for analysis aging and risks price other and exchange foreign rate, interest of case the in analysis sensitivity include methods These exposed. is it which to risk of differenttypes measure to differentnecessary.methods uses when Groupexposures The risk certain hedge to swaps rate interest and contracts exchange foreign as such instruments financial derivative uses Group The Group. the of performance financial the on effects adverse potential minimise to seeks and markets financial of unpredictability the on Group’sfocuses programThe management risk. risk liquidity overall and risk; credit risk); price and risk exchange foreign risk, rate interest value fair and flow cash (including risk market include: which risks, financial of variety a Group’sto The it expose activities Note 2. Financial risk management Notes to the financial statements Market risk Market (iii) (ii) (i)
A sensitivity analysis of price risk on the Group’s financial assets and liabilities is provided in the table at Note 2(a)(iv). Note at table the in provided is Group’sliabilities the and on assets risk financial price of analysis sensitivity A sensitivity Group States. United the in Index NASDAQ the on PokerTekGroup’straded in The publicly sharesis Inc. investment equity material. be to likely considered not is and indirect is Group’savailable-for-sale.risk The price commodity to exposure as sheet balance the on classified and Group the by held investment an from arises This risk. price securities equity to exposed is Group The risk Price A sensitivity analysis of foreign exchange risk on the Group’s financial assets and liabilities is provided in the table at Note 2(a)(iv). Note at table the in provided is Group’sliabilities the and on assets risk financial exchange foreign of analysis sensitivity A sensitivity Group basis. monthly Group’sa the on to statement taken areincome contracts exchange foreign outstanding on losses or gains Unrealised transactions. denominated currency foreign specific on risk exchange foreign of hedges as level Group the at designated are contracts exchange foreign External horizon. 12-month a over primarily exposures, transactional with associated risk exchange foreign the reduce to Group’sis The policy hedging exchange foreign currencies.foreign in denominated payables and receivables for 17(a) entity’sand the 9(i) currency.Notes functional to Refer not is that currency a in denominated are liabilities and assets recognised and transactions commercialfuture when arises risk exchange Foreign Dollar.US the to respect with primarily exposures,currency various from arising risk exchange foreign to exposed is and internationally operates Group The risk exchange Foreign 2(a)(iv). Note at table the in provided is Group’sliabilities the and on assets risk financial rate interest of analysis sensitivity A sensitivity Group Group’sthe of details borrowings.further for 18 Note to Refer nil). (2006: period the of end the at place in swaps rate interest no wereThere only). borrowings denominated USD rate floating (2006: 2007 during borrowings denominated USD and AUD rate floating had Group The basis. regular a on reviewed is debt rate Treasuryfloating Group and the fixed Under policy,between rates. mix fixed the to floating fromborrowings converting of effect economic the have swaps rate interest Such swaps. rate interest floating-to-fixed using by risk rate interest floating manage to ability the necessary,has deemed Group If the facilities. debt bank under drawn borrowings rate floating from Group’sarises The risk rate interest main risk rate interest value fair and flow Cash 2007 Annual Report Financial statements PokerTek.in Investment * * Investment in PokerTek.in Investment * 2006
2007 Cash and cash equivalents cash and Cash assets Financial Cash and cash equivalents cash and Cash assets Financial Receivables Receivables Loans - other - Loans Financial assets: Financial Loans - other - Loans Financial assets: Financial Payables liabilities Financial Borrowings Progressive jackpot liabilities Progressivejackpot Totalincrease/(decrease) Payables liabilities Financial Borrowings Progressive jackpot liabilities Progressivejackpot Totalincrease/(decrease) available-for-sale,current securities Equity non-current* available-for-sale, securities Equity available-for-sale,current securities Equity maturity held-to- securities Debt controlled entity controlled jointly in Investment non-current* available-for-sale, securities Equity held-to-maturity securities Debt controlled entity controlled jointly in Investment The parent entity is not exposed to any significant financial risk. financial significant any to exposed not is entity parent The For personal use only(iv) price risk. These sensitivities are prior to the offsetting impact of hedging instruments: hedging of impact offsetting the to prior are sensitivities These risk. price and risk exchange foreign risk, rate interest to liabilities Group’sfinancial the and of assets sensitivity financial the summarises table following The analysis sensitivity Summarised
Carrying 265,001 177,467 192,459 Carrying 123,496 250,391 amount 190,429 164,287 amount 80,618 15,890 12,674 71,744 18,911 18,914 14,496 74,272 19,397 6,980 7,623 $000 7,638 6,012 $000 (1,217) 1,643 1,925 1,073 $000 $000 Profit Profit (775) (145) (127) 194 346 189 (69) (60) (63) (76) – – – – – – – – -1% -1% Interest rate risk rate Interest Interest rate risk rate Interest Equity Equity $000 $000 2007 Annual Report – – – – – – – – – – – – – – – – – – – – – – (1,073) (1,643) (1,925) 1,217 $000 $000 Profit Profit (194) (346) (189) 775 145 127 69 60 63 76 +1% +1% – – – – – – – – Equity Equity $000 $000 – – – – – – – – – – – – – – – – – – – – – – (9,254) (7,954) (8,329) (9,348) $000 $000 Profit Profit Financial statements (694) (635) (700) (290) -10% -10% Foreign exchange risk exchange Foreign – – – – – – – – – – – – – – Foreign exchange risk exchange Foreign (10,274) (14,935) (16,384) 17,203 19,989 (2,155) (9,805) (2,101) Equity Equity 7,269 4,738 2,102 1,610 1,766 1,408 1,490 1,380 $000 $000 668 847 922 2 – – 6,128 6,814 1,337 8,314 7,827 $000 $000 Profit Profit 849 776 237 +10% +10% – – – – – – – – – – – – – – (14,076) (16,355) 18,254 13,405 (1,129) (5,947) (3,876) (1,719) (1,318) (1,445) (1,152) Equity Equity 8,406 1,763 4,815 8,022 1,719 $000 $000 (547) (693) (754) (1) – – $000 $000 Profit Profit -10% -10% – – – – – – – – – – – – – – – – – – – – – – (1,589) (1,891) (1,589) (1,891) Equity Equity $000 $000 Price risk Price Price risk Price – – – – – – – – – – – – – – – – – – $000 $000 Profit Profit +10% +10% – – – – – – – – – – – – – – – – – – – – – – Equity Equity 1,891 1,589 1,891 1,589 $000 $000 – – – – – – – – – – – – – – – – – – .81 .82 Note 2. Financial risk management continued 2007 31 December ended 12 the For months (c) (b) Notes to the financial statements (d) Progressive jackpot liabilities Progressivejackpot Borrowings Payables 2007 – Group Progressive jackpot liabilities Progressivejackpot Borrowings Payables 2006 – Group Payables 2007 – entity Parent Payables 2006 – entity Parent For personal use only Liquidity risk Liquidity risk Credit Fair value estimation value Fair contractual undiscounted cash flows. cash undiscounted contractual the are tables the in disclosed amounts The date. maturity contractual the to date reporting the at period remaining the on based groupings maturity relevant into instruments financial derivative Group’ssettled the net entity’sparentanalyse and the below liabilities and tables financial The facilities. available of details for 18(a) Note flow.See cash expected of Group’sbasis the the of on forecastsreserverolling liquidity monitors Management time. any at facilities committed of sum the of 80% below remain must facilities committed of portion Treasurydrawn Group the available. requiresthat lines creditpolicy committed keeping by funding in flexibility Treasurymaintaining at aims Group businesses, underlying the of nature dynamic the to Due positions. market out close to ability the and facilities credit committed of amount adequate an through funding of availability the securities, marketable and cash sufficient maintaining implies management risk liquidity Prudent institution. financial one any to exposurecredit of amount the limit that policies has Group The institutions. financial quality credit high to limited are transactions cash and counterparties Derivative history.creditappropriate an with customers to made are services and products of sales that ensure to place in policies has Group The risk. credit of concentration significant no has Group The basis. Group a on managed is risk Credit Refer to Note 1(r). Note to Refer Refer to Note 9(i) for receivables denominated in foreign currencies.foreign in denominated receivables for 9(i) Note to Refer contracts. Group’sthe hedge of exchange profilesforeign maturity existing the for 18(b) Note to Refer items. capital and inventory denominated currency foreign of purchase the manage to also and receivables denominated currencyforeign hedge to contracts exchange forward into enters Group The 2007 Annual Report Less than 1 year 1 than Less Less than 1 year 1 than Less Less than 1 year 1 than Less Less than 1 year 1 than Less 177,467 190,429 45,000 7,667 $’000 6,494 $’000 3,479 $’000 3,479 $’000 – Financial statements Between 1 and 5 year(s) 5 and 1 Between Between 1 and 5 year(s) 5 and 1 Between Between 1 and 5 year(s) 5 and 1 Between Between 1 and 5 year(s) 5 and 1 Between 147,459 164,287 5,265 $’000 6,042 $’000 $’000 $’000 – – – – Over 5 years 5 Over Over 5 years 5 Over Over 5 years 5 Over Over 5 years 5 Over 5,979 $’000 6,861 $’000 $’000 $’000 – – – – – – For personal useassumptions. the to changes of impact potential the and assumptions these of details for 16 Note to Refer assumptions. of use requirethe calculations These sell. to cost less value fair and calculations value-in-use on based determined been have units cash-generating of amounts recoverable The 1(t). Note in stated policy accounting the with accordance in impairment, sufferedany has goodwill whether annually tests Group The onlygoodwill. of impairment to relation in are year financial next the within liabilities and assets of amounts carrying the to adjustment material a causing of risk significant a have that assumptions and estimates The results. actual related the equal seldom definition, by will, estimates accounting resulting The future. the concerning assumptions and estimates makes Group The assumptions and estimates accounting Critical circumstances. the under reasonable be to believed are that events future of expectations including factors, other and experience historical on based are and evaluated continually are judgements and Estimates Note 3. Critical accounting estimates and judgements 2007 Annual Report Financial statements
.83 .84
Net profit after tax after profit Net Investments in associates in Investments Income tax expense tax Income Totalliabilities Totalrevenue consolidated Profit before income tax expense tax income beforeProfit Unallocated liabilities Unallocated Interest income Interest (excluding interest) (excluding Totalrevenue/income segment Segment liabilities Segment expense interest Net Other non-cash expenses non-cash Other Totalrevenue sales Depreciation and amortisation expense amortisation and Depreciation Other income (excluding interest) (excluding income Other Totalassets entity controlled jointly of profits net of Share segments –geographical reporting Primary Note 4. Segment information 2007 31 December ended 12 the For months assets Segment liabilities and Assets result Segment Result Inter-segmentsales customers external to Sales Revenue 2007 other non-current segment assets segment non-current other and assets intangible equipment, property,of and Acquisition plant information segment Other Notes to the financial statements
For personalassets Unallocated use only 418,414 119,705 406,228 480,997 291,986 126,131 280,097 Australia Australia 23,383 10,288 12,186 10,981 $’000 $’000
2007 Annual Report 484,864 483,562 213,481 483,562 America America 77,123 16,495 33,430 (7,848) 1,940 1,302 $’000 $’000 North North –
America America 23,237 23,192 30,633 23,192 1,880 $’000 $’000 8,304 South South 789 251 909 45 –
Financial statements 91,369 31,929 91,205 77,480 91,205 (2,860) 8,132 1,505 $’000 $’000 Japan Japan 164 594 –
25,233 25,233 25,233 Zealand Zealand 2,218 $’000 $’000 5,106 562 700 New New 96 31 – –
219,944 218,680 218,680 131,333 24,794 27,464 1,195 1,264 7,334 $’000 $’000 8,451 Other Other –
1,263,061 1,248,100 1,121,969 operations operations continuing continuing 257,649 126,131 317,746 939,030 35,535 14,961 36,435 54,396 $’000 $’000 Total Total
Inter-segment Inter-segment eliminations/ eliminations/ unallocated unallocated (126,131) (126,131) (126,131) (246,726) $’000 $’000 5,897 – – – – – –
Consolidated Consolidated 1,145,350 1,136,930 1,121,969 1,121,969 247,936 505,097 326,231 247,448 257,649 825,898 133,594 323,643 692,304 (78,295) 35,535 14,961 36,435 54,396 (6,025) 8,420 8,613 $’000 $’000 – –
Net profit after tax after profit Net Investments in associates in Investments Totalrevenue consolidated Income tax expense tax Income Totalliabilities Interest income Interest interest) (excluding Totalrevenue/income segment Profit before income tax expense tax income beforeProfit Unallocated liabilities Unallocated liabilities Segment Other income (excluding interest) (excluding income Other Totalrevenue sales Net interest expense interest Net Other non-cash expenses non-cash Other Totalassets Depreciation and amortisation expense amortisation and Depreciation Inter-segmentsales controlled entity controlled jointly of profits net of Share assets segment non-current other and assets intangible equipment, property,of and Acquisition plant information segment Other assets Segment liabilities and Assets result Segment Result customers external to Sales Revenue 2006 Unallocated assets Unallocated For personal use only 376,656 158,280 376,515 100,516 515,022 295,137 275,999 Australia Australia 10,745 11,515 10,360 $’000 $’000 141
565,234 564,780 232,097 564,780 America America 84,099 14,720 19,734 17,303 2007 Annual Report (1,397) $’000 $’000 North North 454 –
America America 27,510 27,505 28,662 27,505 11,988 3,040 2,181 $’000 $’000 2,015 South South 173 5 –
(11,448) 50,365 33,720 50,358 84,211 50,358 6,532 1,194 $’000 $’000 1,493 Japan Japan Financial statements 7 –
26,566 26,566 26,566 Zealand Zealand 2,557 $’000 $’000 6,985 399 650 674 New New 87 – –
136,174 129,326 108,765 129,326 13,939 13,786 85,781 6,848 $’000 $’000 3,414 Other Other 342 –
1,182,505 1,175,050 1,074,534 operations operations continuing continuing 295,635 100,516 120,057 327,416 975,742 18,490 31,415 7,455 $’000 $’000 Total Total
Inter-segment Inter-segment eliminations/ eliminations/ unallocated unallocated (100,516) (100,516) (100,516) (233,172) $’000 $’000 726 – – – – – –
Consolidated Consolidated 1,094,710 1,081,989 1,074,534 1,074,534 240,055 512,993 332,928 217,358 877,962 295,635 135,392 120,057 328,142 742,570 (92,873) 12,721 18,490 31,415 (2,364) 7,455 7,150 $’000 $’000 – – .85 .86 of gaming machines and systems. and machines gaming of service and distribution sale, manufacture, development, the is which business single a within predominantlyare Group the in entities the of activities The segments –business reporting Secondary Note 4. Segment information continued 2007 31 December ended 12 the For months Head office expenses are included in the segment result as they are allocated and charged out to each of the segments. the of each to out charged and allocated are they as result segment the in included are expenses office Head expenses office Head revenues. of percentage a as costs, material direct as well as on-costs related and labour being activities, operating fromrevenue of cost less revenues as measuredare margins Gross consolidation. on arm’s-lengtheliminated arean and on basis priced are transfers Such segments. between transfers include results and expenses revenues, Segment Inter-segment transfers entity.controlled jointly in investment the include liabilities and assets Unallocated liabilities. bearing interest and taxes income include not do liabilities and assets Segment warranties. for provision and benefits employee payables, of primarily consist liabilities Segment usage. of estimates reasonable on based allocated are segments by jointly used assets certain of amounts carrying the segments, individual to attributable directly be can assets these of most While provisions.related of net assets, intangible other and goodwill and property,equipment inventories, and plant receivables, cash, operating of primarily consist and segment a by used assets all include assets Segment basis. reasonable a on segment the to allocated be can that portion relevant the and segment a to attributable directlyare that those are liabilities and assets expenses, revenues, Segment 114 AASB and 1 Note in disclosed as Group the of policies accounting the with conformity preparedin is information Segment policies Accounting For personal use only Notes to the financial statements 2007 Annual Report Financial statements Segment Reporting. Segment
(c) Expenses income other and revenue Other (b) activities operating from Revenue (a) Note 5. Profit from activities ordinary
Foreign exchange gains exchange Foreign Other revenue Other (i) Depreciation and amortisation and Depreciation (i) Dividends Interest goods of Sale Gain on disposal of property,equipment of and disposal plant on Gain Gaming operations and services and operations Gaming Gain on partial sale of subsidiary of sale partial on Gain Other income Other Other income Other Total other revenue and other income Totalother and revenue other For expense benefits Employee (ii) personal use only – Buildings – property,equipment of and amortisation plant and Depreciation – Leasehold improvements Leasehold – – Plant and equipment and Plant – Total depreciation and amortisation of property,Totalequipment of and amortisation plant and depreciation – Computer technology Computer – assets intangible of Amortisation – Copyrights, patents, trademarks and licensing rights licensing and trademarks patents, Copyrights, – Total amortisation of intangible assets Totalintangible of amortisation Totalamortisation and depreciation Salaries and wages and Salaries Superannuation costs Superannuation Post-employment benefits other than superannuation than other benefits Post-employment Employee benefits expense benefits Employee expense payments Share-based 2007 Annual Report Notes 1(e)(ii) 1(e)(i) 32(e) 5(d) Financial statements 5(e) 28 14 16 37
1,121,969 875,988 245,981 206,983 232,785 27,737 30,507 14,961 23,381 36,435 10,168
2007 $’000 6,613 8,420 8,420 5,286 2,252 3,062 5,799 5,928 6,236 9,398 518 129 – –
Consolidated 1,074,534 821,338 253,196 198,437 219,317 12,721 12,721 24,275 26,936 20,176 31,415
$’000 2,140 6,219 7,455 4,350 9,528 1,748 9,604 4,479 2006 607 521 617 129 12 –
198,702 198,469 198,702 $’000
2007 233 – – – – – – – – – – – – – – – – – – – – –
Parent entity Parent 108,346 100,000 108,346 $’000 2006 8,346 1,145 1,145 .87 .88
Note 5. Profit from activities ordinary continued 2007 31 December ended 12 the For months (e) (d) (c) Notes to the financial statements
For personal use only
Net gain/(loss) on disposal of property, plant and equipment and plant property, of disposal on gain/(loss) Net gain/(loss) exchange foreign Net Expenses Net foreign exchange gain/(loss) exchange foreign Net items significant Other (iv) Net gain/(loss) on disposal of property,equipment of and disposal plant on gain/(loss) Net property,equipment of and disposal plant on Loss property,equipment of and disposal plant on Gain operation foreign a in investment net the of part formed which loan long-term a of settlement partial the from differencesarising exchange Realised loss exchange Foreign gain exchange Foreign (iii) – Legal costs Legal – – Write down of inventories to net realisable value realisable net to inventories of down Write – debtors trade – debts doubtful and Bad – assets against charges/(credits) Other payments lease Minimum – leases operating to relating expense Rental payments Lease continued 2007 Annual Report Notes Financial statements 37
20,127 18,390 11,860
(2,620) 2007 $’000 6,609 2,666 5,286 6,613 423 (4) –
Consolidated 19,553 12,467 12,004 $’000 (6,117) (2,532) (5,975) 2006 (852) (749) (840) 607 12
$’000
2007 – – – – – – – – – – –
Parent entity Parent $’000
2006 –
(c) (b) (a) are:expense/(credit) tax income of components Major Note 6. expense Income tax
Decrease in deferred tax liabilities tax deferred in Decrease asset tax deferred in Decrease comprises: expense tax income in included expense tax income Deferred Income tax expense/(credit) tax Income Adjustments in respect of current income tax of previous years previous of tax income current of respect in Adjustments Deferred income tax expense included in income tax expense tax income in included expense tax income Deferred Deferred income tax income Deferred Amounts recognised directly in equity in directly recognised Amounts payable tax facie prima to expense/(credit) tax income of Reconciliation expense/(credit) tax Income Current income tax – credited directly to equity to directlycredited – tax income Current equity to credited or debited directly but profit net in recognised not and period reporting the in arising tax deferred and currentAggregate 30%) (2006: 30% of rate tax TaxAustralian the at expense tax income before activities ordinaryfrom Profit tax income Current Net deferred tax – debited directly to equity to directly debited – tax deferred Net development and Research income: taxable calculating in deductible/(taxable) not areTax which amounts of effect directly credited/(debited) to equity to credited/(debited)directly period reporting the in arising tax deferred and currentAggregate payments Share-based Share of net profits in jointly controlled entity controlled jointly in profits net of Share Non-taxable dividends Non-taxable Profit on partial sale of subsidiary of sale partial on Profit Sale of land and buildings not taxable not buildings and land of Sale Overseas exempt income exempt Overseas Other Difference in overseas tax rates tax overseas Differencein Difference in exchange rates on overseas tax rates tax overseas on rates exchange Differencein Taxrecognised not losses held for sale and recognition of capital tax losses tax capital of recognition and sale for held buildings and land to due liability tax deferred in Decrease Deferred income tax income Deferred Current income tax income Current years: previous of tax income current of respect in Adjustments Average effective tax rate tax effectiveAverage Forexpense/(credit) tax Income personal use only
2007 Annual Report Financial statements
326,231 24.00% 78,295 76,542 97,869 84,256 78,295
(4,436) (2,180) (2,577) (1,530) (8,694) (3,005) (1,268) (4,436) 2007 $’000 6,859 6,189 6,189 1,420 1,420 1,932 (670) 262 459 647 195 621 – –
Consolidated 332,928 27.90% 83,930 99,878 96,592 92,873 92,873 $’000 (3,603) (2,159) (2,146) (1,866) (5,755) (1,661)
9,936 9,580 1,942 2,219 2,701 9,580 2006 (356) (637) (637) 330 336 (28) – – – –
198,566 (59,541) (0.95%) 59,570 $’000 (1,888) (1,917) (1,917) (1,888)
2007 27 29 2 2 2 – – – – – – – – – – – – – – – –
Parent entity Parent (30,000) (0.02%) 29,831 99,435
$’000 2006 (697) 695 695 695 172 (17) (15) (15) (17) (5) 3 – – – – – – – – – – – .89 .90
Note 6. expense Income continued tax 2007 31 December ended 12 the For months (f) (e) (d) For personal use only Notes to the financial statements entities. Australian by incurredwere losses tax capital unused Limited’sLeisureAll Aristocrat subsidiaries. by incurredoverseas were losses revenue Unused relation to this is set out in Note 1(f). Note in out set is this to relation in policy accounting The recognised. been not Limited’sLeisurehave Aristocrat investments to overseas relationindirect in balances tax deferred The group. consolidated tax the within investments to relation in recognised or measured been not have liability tax deferred differencesand temporary occur. result, events a those As when recognised only is that status tax of change a be to group consolidated tax the leaving or entering entities the of effects the considers group consolidated tax The time. that at holds entity leaving the that liabilities and assets the and group consolidated tax the leaves entity each when upon depend thereforewill group consolidated tax the within investments of disposal the on made ultimately loss or entity.profit each taxable in The recognised events and transactions the with line in vary which entity leaving the of liabilities and assets of values carrying and/or values tax the including factors, of range a on depends group the leaving entity an to relation in group consolidated tax a by made profit taxable law,the tax Australian Under benefit tax Potential Tax consolidation legislation Tax consolidation differences temporary Unrecognised losses tax capital and Revenue current intercompany receivables (refer to Note 9). Note to (referreceivables intercompany current as recognisedare amounts funding The instalments. tax pay to obligations its with assist to amounts funding interim of requirepayment also may entity.entity head head the The from advice funding the of receipt upon due areagreement funding tax the under receivable/payable amounts The Accounting. Consolidation 1052 UIG of implementation the from arising adjustments equity no areThere group’. a within payer tax ‘separate a and payer’ tax alone ‘stand the between combination a account into taking approach, allocation group a applies which agreement funding tax the referenceto by determined are amounts funding The legislation. consolidation tax the under Limited Leisure Aristocrat to transferredare that credits tax unused or losses tax unused to relating assets tax deferred and receivable tax current any for Limited Leisure Aristocrat by compensated are and assumed payable tax current any for Limited Leisure Aristocrat compensate fully entities wholly-owned the which under agreement funding tax a into entered also have entities The entity,Limited. head Leisure the Aristocrat by default a of case the in entities wholly-owned the of liability several and joint the limits directors, the of opinion the in which, agreement sharing tax a into enteredgroup consolidated tax the in entities the legislation, consolidation tax of adoption On 1(g). Note in out set is legislation this to relation in policy accounting The 2004. January 1 of as legislation consolidation tax implemented have entities controlled Australian wholly-owned its and Limited Leisure Aristocrat sale for held land on assets tax Deferred differencestemporary general on assets tax Deferred recognised been has asset tax deferred no which for losses tax capital gross Unused recognised been has asset tax deferred no which for losses tax gross Unused
2007 Annual Report Financial statements
28,517 96,770 72,521 24,249
2007 $’000 71 71 –
Consolidated 10,176
2006 $’000 2,846 1,243 1,140 9,692 103 484
21,756 72,521 72,521 $’000
2007 – – – –
Parent entity Parent $’000
Tax 2006 145 484 484
follows: as satisfied were paid Dividends – franking credits that may be prevented from being distributed in subsequent financial years. financial subsequent in distributed being fromprevented be may that credits franking – – liability; tax current the of payment the from arise will that credits franking – year,financial for: the adjusted of end the at as account franking the of balance representthe amounts above The
Total dividends paid and provided during the year the during providedTotal and paid dividends 2008 January 7 on payable share paid fully per unfranked, cents, 10.0 - 2007 – year the during provided dividend unfranked Supplementary
based on a tax rate of 30% (2006: 30%) (2006: 30% of rate tax a on based years financial subsequent for available be to expected credits franking Estimated recognised as a liability at the end of the year is: year the of end the at liability a as recognised not but 2007, December 31 at profitsretained of out 2008 March 31 on paid be to expected dividend final proposed the of amount aggregate The franked). 100% (2006: franked 100% share,ordinary paid fully per cents) 24.0 (2006: cents 25.0 of dividend final a of payment the recommendedyear, have the directors of the end the Since end year at recognised not Dividends – – year the during paid dividends Interim
– Zealand. Thedirectors have determined that theDividend Reinvestment Plan will operate inrespect ofthe2007 final dividend forshareholders New and Australia in Plan Reinvestment Dividend dividends Franked – year the during paid dividends Final Ordinary shares Note 7. Dividends franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and date; reporting the at liability a as recognised dividends of payment the from arise will that debits franking paid on 19 September 2006 September 19 on paid share paid fully per 30%, at paid tax on franked 100% cents, 12.0 - 2006 paid on 18 September 2007 September 18 on paid share paid fully per 30%, at paid tax on franked 100% cents, 14.0 - 2007 paid on 24 March 2006 March 24 on paid share paid fully per 30%, at paid tax on franked 100% cents, 20.0 - 2005 paid on 23 March 2007 March 23 on paid share paid fully per 30%, at paid tax on franked 100% cents, 24.0 - 2006 Shares issued in lieu of unclaimed dividend payments dividend unclaimed of lieu in issued Shares Paid in cash in Paid Dividend received by Aristocrat Employee Equity Plan TrustPlan Equity Employee Aristocrat by received Dividend For personalPlan Reinvestment Dividend the through Paid use only
2007 Annual Report Financial statements
141,314 222,122 181,657 111,562 46,067 64,493 41,423
(1,170) 2007 2007 $’000 $’000 90 – – –
Consolidated Consolidated 149,947 148,823 148,823 55,493 93,330 $’000 $’000 (1,124) 2006 2006 - – – – – –
141,314 223,655 116,074 182,827 112,224 46,430 80,896 65,001 41,423 $’000 $’000
2007 2007 90 – – –
Parent entity Parent Parent entity Parent 149,947 149,947 149,947 112,251 95,617 56,126 93,821 $’000 $’000
2006 2006 – – – – – – .91 .92
Loan to non-related parties - secured - parties non-related to Loan
Short-term deposits bear floating interest rates between 3.70% and 6.75% (2006: between 4.85% and 6.35%) per annum. per 6.35%) and 4.85% between (2006: 6.75% and 3.70% between rates interest floating bear deposits Short-term Group. the requirementsof cash immediate the on depending month one and day one between of periods varying for made are deposits Short-term rates. deposit bank daily on based rates floating at interest earns hand in and bank at Cash Loan to non-related parties - secured - parties non-related to Loan receivables Other impaired. not but due past were $39,016,000) (2006: $34,816,000 of receivables trade and impairedconsidered and due past were $2,664,000) (2006: $2,119,000 of receivables trade 2007, December 31 of As Other receivables Other Tax related amounts receivable from wholly-owned entities* Taxwholly-owned fromreceivable amounts related
2006 Consolidated 2006 2007 deposits Short-term Receivable from wholly-owned entities** wholly-owned from Receivable debts doubtful for Provision
Note 8. Cash andequivalents cash 2007 31 December ended 12 the For months (a) entities. wholly-owned fromreceivables to relating conditions and terms for 35 Note to Refer ** Tradereceivables Non-current billing. of date the from terms day 30 on generally are and bearing non-interestare parties non-related to loan than other receivablesCurrent arrangements. compensation and sharing tax of details for 6 Note to Refer * Tradereceivables Current Note 9. Receivables hand in and bank at Cash Notes to the financial statements
For personal use only Parent entity Parent
At 31 December, the ageing analysis of trade receivables is as follows: as is receivables trade of December,analysis 31 ageing At the Tradecurrent – receivables
Consolidated Parent entity Parent 2007 Annual Report 192,341 216,497 $’000 Total – –
150,661 179,562 Current $’000 Financial statements – –
0-30 days 0-30 251,657 209,543 216,497 20,324 39,493 80,618 37,435 24,672 34,054 13,866 55,946
$’000 (6,954) 2007 2,621 4,359 2,099 $’000 – – – –
Consolidated 31-60 days 31-60 204,416 123,496 185,177 192,341 53,613 17,749 63,709 45,182 59,787 $’000 $’000 (7,164)
1,490 6,148 2,283 4,309 1,454 2006 – – – –
61-90 days 61-90 22,785 64,161 22,685 64,161 $’000 $’000
2007 100 913 575 38 38 – – – – – – – – – –
Parent entity Parent 91+ days 91+ 63,200 86,608 63,100 86,608 $’000 $’000 2006
(977) 100 852 30 30 – – – – – – – – – –
Tradecurrent(a) – receivables Note 9. Receivables continued
(g) (f) (e) (d) (c) (b) At 1 January 1 At follows: as are debts doubtful for provision the in Movements Charge for the year the for Charge Transferreceivablesnon-current to Foreign currency exchange differencesexchange currencyForeign Receivables written off during the year as uncollectible as year the during off written Receivables At 31 December 31 At
For personalvalue. fair their approximate to assumed is amount carrying their receivables, these of nature short-term the to Due current – risk value Fair 2. Note in disclosed areexposure risk rate interest and exchange regardingforeign Details risk exchange foreign and rate Interest shareholders. minority the to operations African the by payment dividend the from funded arerepayments annual The percent. one less rate overdraft bank prime African South the is rate year.interest each annual of The March in due payments interest and principal annual with years seven of term a for is loan The 35). Note to (refer operations African the in subsidiary a of sale partial the on party third a to issued loan representsa This parties non-related to Loan interest. earn not do which and conditions and terms normal under incurredreceivables other and prepayments and deposits long-term include These non-current – receivables Other interest. earn not do which and conditions and terms normal under incurredreceivables other and prepayments include These current – receivables Other impaired. not but due past or impairedare that receivables non-current other no areThere $1,896,000). (2006: receivablesnon-current the against recognised been has $1,737,000 of debts doubtful for provision A Tradenon-current – receivables usecash. additional recovering of expectation no is there when off written generally are account provision the to charged Amounts statement. income the in costs administration and general in included been has receivablesimpaired for provision the of release and creation The only
continued 2007 Annual Report Financial statements
(7,164) (2,253) (6,954) 2007 $’000 1,737 687 39
Consolidated (10,204) $’000 2,243 (7,164) 2006 680 117 –
$’000
2007 – – – – – –
Parent entity Parent
$’000 2006 .93 .94
(i) (h) Note 9. Receivables continued 2007 31 December ended 12 the For months (j) For personal use only Notes to the financial statements * Includes current and non-current trade receivables. trade non-current and current Includes * Krona). Swedish Dollars, Zealand New Rand, Yen,African (Japanese currenciesSouth Euro,of basket a to refers Other * Non-current receivablesNon-current Current receivablesCurrent Other* Australian Dollars Australian Tradeguarantees without receivables* Dollars US Tradeguarantees with receivables* The carrying amounts of the Group’s and parent entity’s current and non-current receivables are denominated in the following currencies: following Group’sthe the in of entity’sparentdenominated amounts are receivablesand non-currentcarrying and The current risk currencyforeign and rate Interest values. carrying discounted their approximatereceivables non-current of values fair The non-current – value Fair balances over which guarantees are held is detailed below: detailed is held are guarantees which over balances debtor of value The customers. certain of debts the over guarantees holds Group The Group. the of policy management risk the on information more for 2 Note to Refer above. mentioned receivables of class each of amount carrying the is date reporting the at risk credit to exposure maximum The risk Credit 2. Note in disclosed areexposure risk exchange foreign and rate regardinginterest Details
2007 Annual Report Financial statements
271,981
206,249 251,657 271,981 223,409 127,894
20,324 56,411 87,676 17,160
2007 2007 $’000 $’000
Consolidated Consolidated 258,029 204,416 258,029 230,359 224,970 115,182 53,613 45,229 97,618 $’000 5,389 $’000 2006 2006
86,946 64,161 22,785 86,946 86,946 $’000 $’000
2007 2007
– – – – –
Parent entity Parent Parent entity Parent 149,808 149,808 149,808 86,608 63,200 $’000 $’000 2006 2006 – – – – –
entity controlled jointly in Investment entities* controlled unlisted in Investment held-to-maturity securities Debt (a) * Theincreaseininvestmentunlistedcontrolledentities,isanon-cashmovementasresult ofshare-basedpaymentstransactions. available-for-salesecurities Equity held-to-maturity securities Debt Non-currentavailable-for-salesecurities Equity Current Note 11. Financial assets $302,638,398). (2006: $321,271,256 to amounted 2007 December 31 ended year the during expense an as recognised Inventories Inventory expense cost at – transit in Inventories progressin work Contract obsolescence for Provision cost at – goods Finished progressin Work obsolescence for Provision cost at – stores and materials Raw Current Note 10. Inventories
(b)
Additions Balance at the beginning of the year the of beginning the at Balance available-for-salesecurities Equity Revaluation accounting. of method equity the using statements financial consolidated the in for accounted is entity controlled jointly a in investment The entity controlled jointly in Investment Balance at the end of the year the of end the at Balance For personal use only
2007 Annual Report 22(a)(iv) Notes 30(c) 11(a) 11(a) Financial statements
(26,900) 98,878 71,744 24,926 15,890 11,244 61,357 33,644 40,340 19,018 45,918 23,513 (6,696) (3,024) 2007 $’000 9,053 1,430 7,623 4,481 2,160 2,054 1,611 –
Consolidated 106,088 (13,200) (22,276) 74,272 18,914 12,902 41,972 55,172 22,063 44,339 23,144 69,902 24,926 $’000 (4,303) 2006 1,594 6,085 6,012 4,675 7,606 649 543 –
31,186 31,186 $’000
2007 – – – – – – – – – – – – – – – – – – – –
Parent entity Parent 21,649 21,649 $’000 2006 – – – – – – – – – – – – – – – – – – – –
.95 .96
(e) (d) (c) Note 11. Financial assets continued 2007 31 December ended 12 the For months Intellectual property rights property Intellectual Note 12. Other assets For personal use only Notes to the financial statements disclosed in Note 2. Note in disclosed are investment this on exposure risk exchange regardingforeign Details risk. exchange foreign to subject is entity controlled jointly a in investment The entity controlled jointly a in investment – exposure risk and Impairment Note in disclosed areexposure risk exchange foreign and rate regardinginterest Details Dollars. US in denominated are investments held-to-maturity All impaired. or due past either are investments held-to-maturity the of None ‘AA’ rated entities by issued were investments All investments. the of amount carrying the is date reporting the at risk credit to exposure maximum The investments held-to-maturity – exposure risk and Impairment 2. Note to refer risk, price and exchange foreign rate, interest to assets available-for-salefinancial of sensitivity the of analysis an For impaired. or due past either are assets financial the of None ‘AA’ rated entities by issued were investments All investments. the of amount carrying the is date reporting the at risk credit to exposure maximum The assets available-for-salefinancial – exposure risk and Impairment or higher.or or higher.or 2. There is also no exposure to price risk as the investments will be held to maturity.to held be will investments the as risk price to exposure no also is There 2.
2007 Annual Report Notes Financial statements 1(n)
2007 $’000 4,816
Consolidated $’000
1,797 2006
$’000
2007 –
Parent entity Parent $’000
2006 Carrying amount at 31 December 2007 December 31 at amount Carrying Foreign currency exchange differencesexchange currencyForeign Depreciation and amortisation and Depreciation Transfer to current asset – non-current asset held for sale for held asset non-current – Transferasset current to Disposals Additions Carrying amount at 31 December 2006 December 31 at amount Carrying Foreign currency exchange movements exchange currencyForeign Depreciation and amortisation and Depreciation Transfer to current asset – non-current asset held for sale for held asset non-current – Transferasset current to Additions through acquisition of entity of acquisition through Additions
Disposals Additions
Carrying amount at 1 January 2006 January 1 at amount Carrying Consolidated below: out set are year financial current the of end and beginning the at property,equipment of and class plant each of amounts carrying the of Reconciliations Reconciliations Totalequipment and plant depreciation Accumulated cost at – owned equipment and Plant equipment and Plant cost deemed at – buildings and Land buildings and Land Note 14. Property, plant and equipment 2008. October is 2007 December 31 at sale for held assets of sale the of commencement for timeframe expected The 2007. during sold were year prior the in sale for held as classified $4,600,000 totalling buildings and Land Australia. in buildings and land surplus its selling of process the commenced has Group The buildings and Land Note 13. Current assets –non-current assets as held for classified sale Totalbuildings and land amortisation Accumulated cost at – improvements Leasehold
For personal use only
2007 Annual Report Notes Financial statements 14
buildings Land and Land (102,895) 103,004 191,652 (12,059) (27,451) 36,864 42,408 88,757 27,451 27,451 14,247 18,190
(4,600) 2007 8,116 $’000 $’000 8,116 6,131 (928) (518) (683) (521) 149 260 – – –
improvements Consolidated Leasehold (103,583) 177,072 117,846 (10,268) 73,489 36,864 44,357 17,761 $’000 (2,252) (2,140) 2006 1,358 7,493 2,959 $’000 7,257 4,600 7,493 6,131 4,600 (468) (298) (285) – – – –
equipment Plant and Plant (27,737) (24,275) 88,757 51,231 73,489 33,719 66,790 $’000 (4,535) (3,691) (2,481) (1,604)
1,340 $’000 2007 – – – – – – – – – – – – –
Parent entity Parent 103,004 117,846 116,455 (30,507) (27,451) (26,936) 52,738 36,938 $’000 (5,931) (3,691) (3,462) (4,600) (1,889) 2006 1,340 $’000 Total .97 .98 Net deferred tax assets tax deferred Net Identifiable intangible assets on acquisition of subsidiary of acquisition on assets intangible Identifiable Gross deferred tax assets tax deferredGross Other Taxlosses Unrealised gains and losses and gains Unrealised Overseas tax obligations tax Overseas Share-based equity Share-based Provision for stock obsolescence stock for Provision Prepayments Land and buildings and Land Plant, equipment and intangible assets intangible and equipment Plant, Convertible subordinated bonds subordinated Convertible Closing balance at 31 December 31 at balance Closing Employee benefits Employee Foreign exchange currency movements currency exchange Foreign subsidiary of acquisition on assets intangible Identifiable
Deferred revenueDeferred exchange differences)exchange currencyforeign and equity (share-based equity to Charged Charged to the income statement income the to Charged debts Doubtful Note 15. assets Deferred tax 2007 31 December ended 12 the For months Opening balance at 1 January 1 at balance Opening Movements provisions other and Accruals to: differencesattributable temporary comprises balance The For personal use only Notes to the financial statements
2007 Annual Report Notes 6(a) Financial statements 29
40,528 45,958 40,528 10,828 42,206 10,361
(5,430) (1,081) (4,816) (6,189) 2007 4,353 8,020 1,794 8,525 6,132 $’000 1,024 5,103 (603) (592) 892 529 – –
Consolidated 42,206 48,968 11,377 42,206 62,844 13,051
(6,762) (8,981) (3,005) (7,455) (3,603) (9,580)
9,466 8,002 6,948 9,223 $’000 1,120 1,070 2006 (177) 873 1 – –
$’000
1,030 1,030 1,030 1,033 1,044 2007 (17) (1) – (2) 3 – – – – – – – – – – – – –
Parent entity Parent $’000 2006 1,033 1,033 1,033 1,728 1,044 (695) (17) 6 Carrying amount at 31 December 2007 December 31 at amount Carrying Foreign currency exchange differencesexchange currencyForeign Amortisation charge Amortisation Additions on acquisition of subsidiary of acquisition on Additions Additions Carrying amount at 31 December 2006 December 31 at amount Carrying Foreign currency exchange differencesexchange currencyForeign Amortisation charge Amortisation subsidiary of acquisition on Additions
(a) Additions 2006 January 1 at amount Carrying Consolidated amortisation Accumulated technology Computer amortisation Accumulated rights licensing and trademarks patents, Copyrights, Goodwill Note 16. Intangible assets
Impairment tests for goodwill for tests Impairment For(i) below: presented is CGU by allocation goodwill the of summary A segments. reporting personalprimary the to according units business geographical the as identified areGroup’s which the (‘CGUs’) to units allocated cash-generating is Goodwill use only
Wholly-owned controlled entities controlled Wholly-owned
North America North Other – South Africa South – Other Other – ACE Interactive ACE – Other use calculation. use value-in- a Group’supon the based all determined wereof CGUs amount recoverable the 2007, and 2006 December 31 ended years financial the In
59,105 92,023 32,164 $’000 2007 754
2007 Annual Report 102,501 65,850 35,834 $’000 2006 817
Notes Financial statements 29 29
Goodwill 102,501 128,212 (ii) Jointly controlled entity controlled Jointly (ii)
Ohr–Eeto ˇcekElektron – Other
(28,390) (10,478) 92,023 37,298 71,662 35,802 64,192 92,023
(1,197) (6,459) 2007 $’000 1,584 $’000 387 – – – – –
trademarks and trademarks
licensing rights
Consolidated Copyrights, patents, 102,501 146,392 (23,219) 43,375 66,594 $’000 (1,072) 2006 1,588 $’000 (129) (129) 387 516 645 516 – – – – – –
technology Computer 35,802 43,375 42,030 63,618 $’000 $’000 (3,432) (5,799) (4,350)
1,658 2,386 3,876 $’000 2007 2007 (567) – – – – – – – – –
Parent entity Parent 128,212 146,392 (13,910) 79,328 76,183 67,972 $’000 $’000 (5,928) (7,026) (4,479)
1,658 2,386 $’000 Total 2006 2006 – .99 .100
Other creditors Other
(b) Note 16. Intangible assets continued 2007 31 December ended 12 the For months (b) * Otherreferstoabasketofcurrencies(Japanese Yen,Euro,SouthAfricanRand,NewZealandDollars,SwedishKrona). (a) Tradecreditors Note 17. Payables (d) (c) Notes to the financial statements
For personal use only Key assumptions used for value-in-use calculations value-in-use for used Key assumptions Fair value Fair risk currency Foreign charge Impairment key assumptions in changes possible of Impact Other* (i) Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value. fair their approximate to assumed is value carrying their payables, these of nature short-term the to Due Dollars Australian Dollars US currencies:Group’s following the the of entity’sparentin amounts and denominated carrying are The payables 2006. or 2007 either in CGUs the requiredfor is charge impairment no indicates test impairment annual The amounts. recoverable their exceed materially to CGUs the of value carrying the cause would assumptions key the of any in change possible reasonably no that believes management CGUs, the of value-in-use the of assessment the regardto With
4. in local industry reports. industry local in found rates growthforecast and expectations future and performance past CGUs the on model the in assumptions the based has Management 3. 1. adopted: been have assumptions and Group’sinputs the following The CGUs. of analysis the in impacts), tax and costs borrowing(before flows cash investing and operating on based used been has flow cash discounted A Value-in-use 2.
an allocation of head office assets. office head of allocation an ˇcekElektron – Other Other – ACE Interactive ACE – Other Other – South Africa South – Other North America North a terminal growth rate, which does not exceed the long-term average growth rate for the gaming industry in the regions: the in industry gaming the for rate growth average long-term the exceed not does which rate, growth terminal a ˇcekElektron – Other Other – ACE Interactive ACE – Other Other – South Africa South – Other North America North 2012. until assumed Interactive, ACE for growth ˇcek,no Elektron and and America Africa North South for for annum annum per per 15% 10% of thereafter rates growth with America, North ˇcekElektron and Interactive ACE for Africa, 2008 South to for and 2010 to management, by approved plans, strategic and budgets financial a pre-tax annual discount rate of: rate discount annual pre-tax a 2007 Annual Report 14.6% 15.4% 18.6% 15.6% 3.0% 0.0% 3.0% 3.0% 2007 2007 Financial statements
177,467 126,190 177,467
51,277 37,068 82,295 58,104 14.7% 15.2% 18.6% 14.7%
2007 $’000 3.0% 5.0% 3.0% 3.0% 2006 2006
Consolidated 190,429 190,429 127,877 37,510 89,824 63,095 62,552 $’000 2006
$’000
2007 3,479 3,479 3,479 3,479 – – –
Parent entity Parent 3,479 $’000 3,479 3,479 2006 3,479 – – –
(a) loans Bank Secured Non-current loans Bank Secured Current Note 18. Borrowings
(iv) (iii) (ii) (i) Financing arrangements Financing – Bank overdraft Bank – Totalfacilities arrangements standby Credit credit: of lines following the to date balance at available was access Unrestricted – Bank loans Bank – – Letter of credit of Letter – Other – – Bank overdraft Bank – date balance at Used – Bank loans Bank – – Letter of credit of Letter – – Other – – Bank overdraft Bank – date balance at Unused – Bank loans Bank – – Letter of credit of Letter – – Other – Other facilities relate to the Japanese note issuance facilities which are subject to annual review.annual to subject are which facilities issuance note Japanese the to relate facilities Other agreement. mutual by extension with annually reviewed is facility The 2008. April 29 matures facility credit of letter The end. year to Group’ssubsequent occuredthe has of refinancingfacilities 24, debt Note in referredto As 2008. July 23 on maturing facility the with rate floating a at areborrowings The companies. Australian to limited being facility this under borrowing than other above, referredto Facility Syndicated the as conditions and terms same the exactly on remains and 2007 July 26 on into entered was facility bank committed The 2008. July 23 maturing facility advance cash million $100 – Facility Bilateral 2009. May For2 facility,on the matures of which B Facility under drawn areborrowings The rate. floating a at areborrowings The date. balance at covenants imposed the with compliance in was Group The Group. the on covenants certain imposes that pledge negative a by secured is 2006, May 2 on amended was which facility bank committed The 2009. May 2 maturing tranche million $200 – B Facility – agreement. mutual by extension with annually reviewed is facility The 2008. April 29 maturing tranche million $100 totalling – C and A Facility – Facility Syndicated follows: as structuredare facilities loan bank The review.annual to subject is facility overdraft bank The personal use only
2007 Annual Report Notes Financial statements (iv) (iii) (ii) (i)
147,459 147,459 400,000 226,860 648,060 192,459 192,459 207,541 226,860 455,601 45,000 45,000 16,200 16,200
2007 $’000 5,000 5,000 – – –
Consolidated 164,287 300,000 252,749 164,287 135,713 252,749 164,287 574,737 164,287 410,450 16,988 16,988 $’000
5,000 5,000 2006 – – – – –
$’000
2007 – – – – – – – – – – – – – – – – – – –
Parent entity Parent
$’000 2006 .101 .102 2. Note to refer risk, exchange foreign and rate interest to borrowings of sensitivity the of analysis an For
(b) Note 18. Borrowings continued 2007 31 December ended 12 the For months (d) (c) receivables. in included is above derivatives the of value fair net The 1(d)(ii). Note to Refer * For personal use only Notes to the financial statements Australian Dollars Australian Dollars US Total AUD/ZAR AUD/NZD AUD/EUR AUD/JPY AUD/USD Forward exchange contracts exchange Forward Foreign currency risk currency Foreign liabilities and assets financial of value fair Net (ii) Group’scontracts: the hedge of exchange foreignvalue existing fair net the on date balance at as information provides table following The items. capital and inventory denominated currencyforeign of purchase the manage to also and receivables denominated currencyforeign hedge to contracts exchange forward of form the in derivatives into enters Group The The carrying amounts of the Group’s borrowings are denominated in the following currencies: following Group’sthe the in of denominated amounts areborrowings carrying The (i) certain contingencies disclosed in Note 25. Note in disclosed contingencies certain from arise may which liabilities potential those than other liabilities, or assets financial sheet off-balance no werethere 2007, December 31 At sheet Off-balance of the Syndicated Facility (per Note 18b(ii)). Note (per Facility Syndicated the of B) (Facility tranche year three the from drawn is and rate floating a is borrowing USD the that given value carrying the to equated is also borrowings non-current of value fair The significant. not is discounting of impact the as amount, carrying their equals borrowingscurrent of value fair The sheet On-balance
2007 Annual Report Financial statements
average Weighted
exchange rate exchange
192,459 147,459 96.6700 1.1402 0.8296 45,000 6.0307 0.5963
2007 $’000
Consolidated 1 year or less or year 1 164,287 164,287 Maturity profile Maturity 71,727 54,557 $’000 $’000 2006 4,643 1,849 7,515 3,163 –
1 to 7 year(s) 7 to 1 $’000 $’000 2007 6,581 5,665 916 – – – – – –
Parent entity Parent Net fair value fair Net gain/(loss)* $’000 $’000 2006 3,538 2,994 490 53 (5) 6 –
Carrying amount at 31 December 2007 December 31 at amount Carrying Foreign currency exchange differencesexchange currencyForeign Reversal of provisions recognisedprovisions of Reversal Additional provisions recognisedprovisions Additional Payments Consolidated - current and non-current and current - Consolidated Carrying amount at 1 January 2007 January 1 at amount Carrying
Other revenueDeferred Unsecured Non-current revenueDeferred Unsecured Current Note 20. Other liabilities below: out set are benefits, year,employee financial than the other during provision of class each in Movements provisions in Movements allowances good Make benefits Employee Non-current Plan. Reinvestment Dividend the under shares of purchase the by settled was 2008, January 7 payable dividend, unfranked supplementary the of million $5.6 * settlement Deferred benefits Employee Dividend* Current Note 19. Provisions Make good allowances good Make Progressive jackpot liabilities Progressivejackpot Progressive jackpot liabilities Progressivejackpot
For personal use Warranties only
2007 Annual Report 1(x)(iii) 1(x)(iii) 1(x)(ii) Notes 1(x)(i) 1(x)(i) 1(y) 1(y) Financial statements 30 7
allowances Make good Make 40,465 17,104 11,441 25,776 11,244 18,008 59,777
$’000 2007 2007 1,609 1,333 $’000 $’000 5,385 9,229 5,663 1,379 2,186 7,667 307 230 (31) – – –
liabilities jackpot
Consolidated Consolidated Progressive 19,397 41,912 12,903 18,911 47,929 19,118 20,039 24,774 $’000 $’000 (1,990) 2006 2006 1,841 $’000 6,036 8,273 6,017 6,653 1,100 3,121 6,494 (337) 233 – –
Warranties 40,827 40,827 $’000 $’000 $’000 (3,007)
2,186 2,088 3,121 2007 2007 (13) (3) – – – – – – – – – – – – –
–
Parent entity Parent entity Parent 22,706 23,851 $’000 $’000 $’000 (2,034) (3,007) 2006 2006 4,236 Total (340)
– .103 .104 Ordinary shares at the end of the financial year financial the of end the at sharesOrdinary payments dividend unclaimed of lieu in issued Shares issues Plan Share Employee General cancelled and on-market back bought Shares year the of beginning the at sharesOrdinary capital shareordinary in Movements
For the 12 months ended 31 December 2007 31 December ended 12 the For months
For personal (d) (c) (b) use (a) onlypaid fully shares,Ordinary Note 21. Contributed equity Notes to the financial statements *BankEBITDA=+interestreceived Interest coverage ratio (Bank EBITDA*/interest expense) EBITDA*/interest (Bank ratio coverage Interest EBITDA*) debt/bank (gross ratio Gearing Capital management Capital Plan Share Employee General cancelled and on-market back bought Shares shares Ordinary The Group manages its capital through interest and debt coverage ratios as follows: as ratios coverage debt and interestthrough capital its manages Group The available. becoming opportunities management capital effective,more alternative, or funds on demands strategic alternative circumstances, economic prevailing performance, earnings overall its to subject horizon, time planned the over program buy-back share on-market proposed the complete to and basis ongoing an on dividends unfranked supplementary of payment the continue to expects Group The 2008. January commencing timeframe, year five to three a over annum per million $100 to up of program buy-back share on-market an – – earnings; annual of Group’s70% the to to 60% approximateability,subject to franking which, expected aredividends franked fully of flow ongoing an – through:effected be Group’swill The objectives management capital (S&P). minus’ ‘BBB of rating credit a holds Group The rating. credit grade) (investment appropriate an maintaining while rating equity maximum the achieve to looks Group The sheet. balance the onto gearing of level optimal more a bring to intends it management; flow cash on focus continued a and capital working over controls tight with combined growth organic projected its evaluate and monitor to continues Company The opportunities. strategic any underwrite to and business the of demands operational the fund to flexibility sufficient provides which structure, funding conservative a maintain to is Group’sobjective The management entity’sparentcapital the strategic and overall 32(b). Note in out set is Plan Share Employee General the concerning Information share. per $15.80 to $14.70 from ranging prices with share per $11.93) (2006: $15.31 of price average an at acquiredwere shares The program. the under shares 2,912,848) (2006: 3,423,820 purchased had Company the 2007, December 31 At program. buy-back share on-market million $100 a commenced Company the 2005, December 8 On vote. one to entitled is share each poll a upon and vote, one proxy,to by entitled or is person in meeting a at presentshares ordinary of holder every hands, of show a On held. shares the on, paid amounts and of, number the to proportion in Company the of up winding the and dividends in participate to holder the entitle and value par no have sharesOrdinary 10 cents each, payable in January and July each year, commencing January 2008; and year,2008; each January July commencing and January in payable each, cents 10 of dividends unfranked supplementary two as payable annum, per share per cents 20 totalling dividends unfranked supplementary of payment the
2007 Annual Report
Notes Financial statements (b) (c) (a)
464,295,501 467,713,246 464,295,501 (3,423,820)
Shares 2007 6,075 29.0x 2007 0.5x –
467,713,246 467,713,246 470,535,639 Parent entity Parent (2,912,848) Shares 90,455
28.3x 2006 2006 0.4x –
(52,432) 53,633 $’000
1,291 1,291 2007 90 –
Parent entity Parent
53,633 (34,607) 53,633 88,240 $’000
2006 –
* (a) Note 22. and retained Reserves earnings
Aristocrat Employee Equity Plan Trust.Plan Equity Employee Aristocrat the throughpurchased shares from employees the to issued been have shares The options. share of exercise the on employees fromreceived proceeds the Represents
Reserves Movements Foreign currency translation reserve translation currencyForeign (i) Available-for-salereserverevaluation investments reserves payments Share-based For personal(ii) use only
1d(iii). Note to Refer operations. foreign in investment net the of part forming items monetary currencyforeign of translation the or operation foreign a Company’sin the investment hedge net that transactions of translation the operations, foreign of translation the from differencesarising exchange currencyforeign recordsthe reserve translation currencyforeign The reserve translation currencyForeign year financial the of beginning the at reserve translation currencyForeign (post-income tax) (post-income subsidiaries in investment net differenceson exchange Realised Exchange differences on partial sale of subsidiary of sale partial differenceson Exchange net investment in foreign operations and related hedges related and operations foreign in investment net entities, controlledforeign of translation differenceson exchange Net Net movement in foreign currency translation reserve translation currencyforeign in movement Net Foreign currency translation reserve at the end of the financial year financial the of end the at reserve translation currencyForeign Issues from the Trust to satisfy vested shares Trustvested the satisfy from to Issues issues* Plan Option Share Employee expense payments Share-based year financial the of beginning the at reserve payments Share-based plans. share employee various the under exercised not but issued and issued both rights and options shares, all of value fair the recognise to used is reserve payments share-based The reserve payments Share-based Share-based tax adjustment tax Share-based Share-based payments reserve at the end of the financial year financial the of end the at reserve payments Share-based reserve payments share-based in movement Net
2007 Annual Report
Notes (ii),(iii) Financial statements (iv) 28 (i)
(101,635) (57,648) (36,660) (43,059) (14,589) (14,589) (57,648) (26,395) 18,095 10,808
(7,327) (7,287) 2007 $’000 3,029 9,528 6,551 – –
Consolidated (43,059) (37,769) (45,527) (23,540) (85,131) (43,059) 23,069 18,095 $’000 (4,303) (3,877) (4,974) 2006 5,975 2,468 7,124 9,487 1,955 370
49,921 49,921 37,355 49,921 12,566 $’000
3,029 9,537 2007 – – – – – – – – – –
Parent entity Parent 37,355 37,355 20,627 37,355 16,728 $’000 2006 7,124 9,604 .105 .106
For the 12 months ended 31 December 2007 31 December ended 12 the For months
For personal (b) use only (a) Note 22. and retained Reserves earnings continued Notes to the financial statements Retained earnings Retained continued Reserves Retained earnings at the end of the financial year financial the of end the at earnings Retained Dividends paid or provided for provided or paid Dividends Net profit attributable to members of Aristocrat Leisure Limited Leisure Aristocrat of members to attributable profit Net Retained earnings at the beginning of the financial year financial the of beginning the at earnings Retained (iv) (iii) * Represents 3,630,078 shares (2006: 4,680,500). (2006: shares 3,630,078 Represents * of the financial year financial the of Totalend the at reservesrevaluationavailable-for-sale investments reserverevaluationavailable-for-sale investments in movement Net year financial the of Totalbeginning the at reserverevaluationavailable-for-sale investments impaired. or sold are assets associated the when statement income the in recognisedare Amounts 1p(iv). Note in described as assets available-for-salefinancial as classified equities of translation on arising differencesexchange currencyforeign and value fair the in changes the recognise to used is reserverevaluationavailable-for-sale investments The Available-for-salereserverevaluation investments year* financial the of end the at reserve trust payments Share-based reserve trust payments share-based in movement Net shares Trustvested the satisfy from to Issues Taxpurchases the on effect Purchases year financial the of beginning the at reserve trust payments Share-based Trust.Plan Equity Employee Aristocrat the throughpurchased shares of tax, post-income cost, the recognise to used is reserve trust payments share-based The reserve trust payments Share-based year financial the of end Totalthe at reserve payments share-based reserves payments share-based in movement Net year financial the of beginning Totalthe at reserves payments share-based Totalreserves payments share-based
2007 Annual Report Notes Financial statements 7
(222,122) 420,470 247,172 395,420 (47,468) (17,971) (55,864) (36,660) (37,769) 26,395
(7,327) (4,303) (3,024) 2007 $’000 8,396 1,109 (28)
Consolidated (148,823) 395,420 238,998 305,245 (55,864) (36,394) (55,980) (19,470) (37,769) (41,368) 23,540 $’000 (4,303) (3,954) (4,303) 2006 3,599 –
(223,655) 200,454 28,259 49,921 12,566 37,355 $’000
5,058 2007 – – – – – – – – –
Parent entity Parent (149,947) 28,259 99,452 78,754 37,355 16,728 20,627 $’000 2006
(v) (iv) (iii) (ii) (i) matters: following the of respect in 2007 December 31 at liabilities contingent have entity parent and Group The Note 25. Contingent liabilities years. financial future in Group, the of affairs of state the or operations, those of results the Group, the of operations the Company,significantly the affect to of directors the of likely,opinion nature the unusual in and material a of event or transaction item, any report this of date the and year financial the of end the between interval the in arisen, not has there Analysis, and Discussion Management the Group’sin the referredto of refinancingfacilities, the debt than Other Note 24. Events occurring after reporting date Reserves earnings Retained paid Dividend expense tax income after activities ordinaryfrom Profit earnings Retained comprises: entity controlled in interest equity Outside Note 23. interest Minority
terminated the rights of the bondholders to convert. Various bondholders subsequently intervened in the case. the in intervened subsequently Variousbondholders convert. to bondholders the of rights the terminated bonds the of redemption for call the (2) and rate; intended the reflect to reformedIndenture the and corrected be should error rate exchange an (1) that Court the from declaration a seeking YorkCourt’), New ‘District of (the District Southern the for Court District States United the in action legal commenced day,same Company the the On rights. conversion bondholder terminating therebyIndenture, the with accordance in bonds the of redemption the for call to sufficient and necessary believed it which 2004 December 20 on steps the took Company the agreement, parties’ the of view its with Consistent price. conversion Forthe of 140% exceeding price a at days trading consecutive 30 of period a during days trading 20 than more of period a Company’sfor the traded after have sharesbonds the of redemption the for call to Company the permits Indenture The 2001. June 7 and 2001 May 31 on 2006 May 31 due (‘bonds’) bonds subordinated convertible 5% of million USD130 issued Company the members; group potential all for act not do however,lawyers noted, those is that It million. $400 to million $200 of range the in be could act they whom for members group the by claimed damages of quantum the that statements made have members group some and Dorajay for acting lawyers The members. group to exposure potential its of estimate reliable a provide to Company the for possible not is it that means claimed) loss of quantum the (including claims their of details provided yet not have Dorajay from apart members group that fact The claims. those determine finally not will judgement reserved the and Court the or Company the to claimed) loss of quantum the (including claims their of details provided yet not have Dorajay from apart members group but members, group all personalto common issues with dealt also hearing That reserved. is judgement and 2007 October in place took Dorajay by made claim the to relation in hearing A defended. being areproceedings The costs. and interest declarations, damages, unspecified seeks group The period. that during performance financial its entity’sto parentrelating the information to of relatedisclosure 2003, May 26 to 2002 February 19 from period the in sharesacquired who shareholders of behalf on commenced proceedings, The Australia. of Court Federal the in continuing are Company the against proceedingsgroup occurs; termination which in circumstances specific the upon depend paid, be may which amounts, The circumstances. individual on depending agreements the to parties individual the of option the at executives, senior to entity controlled a or Company the by paid be requiredto be may benefits termination contracts, service held currently of terms the under actions; these of result a as arise will loss material no that opinion the of aredirectors The actions. civil to parties areGroup the within entities controlled of number a entity,controlled Technologiesa Ltd; Aristocrat Pty Australia to extended facilities leasing and purchasehire advances, loans, of respect in Company the by given guarantee a to relation in exists liability contingent a use only
2007 Annual Report Notes Financial statements 28
(1,020) 2007 $’000 1,005 675 749 764 (74)
Consolidated $’000 2006 1,005 1,057 1,047 (508) 456 42
$’000
2007 – – – – – –
Parent entity Parent $’000 2006
.107 .108 For the 12 months ended 31 December 2007 31 December ended 12 the For months For personal (x) (ix) (viii) (vii) (vi) use only Note 25. Contingent liabilities continued Notes to the financial statements the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity,Limited. head Leisure the Aristocrat by default a of case the in entities wholly-owned the of liability several and joint the limits directors, the of opinion the in which, agreement sharing tax a into enteredgroup consolidated tax the in entities the legislation, consolidation tax of adoption on and $60,952); (2006: $56,952 to amounts benefits associated and vehicle motor the providing of cost annual estimated The period. indefinite an for Director Executive former the to provided vehicle motor a of costs certain fund to obliged Director,is Executive entity controlledformer a a with agreements severance of terms the under Australia; of Bank Commonwealth by provided facility guarantee a of respect in $380,486) (2006: $380,486 of 2007 December 31 at liability contingent a have entities controlled its and Company the proceedings; these of outcome likely the determine to possible not is it report, this of date the of As defended. being areproceedings The patents. other to as well as asserted being patent the of ownership to claim made has party Another plaintiff. the of secrets trade misappropriated Company the that and patent US a infringe Company’smachines the gaming progressivethat jackpot Hyperlink things, other among alleges, industry.gaming plaintiff the The in defendants party third and Company the against damages and compensation unspecified seeking is plaintiff The case; the from Limited Leisure Aristocrat releasingorder an granted Reno Court, District Federal the 2005, February In plaintiff. the as substituted been has estate his for administrator the and away passed individual the 2004, March In individual. US-based a of behalf on (‘Aristocrat’) Technologies,Aristocrat and TechnologiesInc. Ltd Aristocrat Pty Limited, LeisureAustralia Aristocrat on 2004 February in served was complaint a guarantee; cross of deed the to added were Limited Pty (Macau) Aristocrat and Limited Pty (Asia) Aristocrat 2006, December 31 ended year financial the During 38. Note in discussed as Commission Investments & Securities Australian the by approved and with lodged been has which guarantee cross of deed a to parties areTechnologies Ltd Aristocrat Pty and Australia Ltd Pty International Aristocrat Limited, Leisure Aristocrat facilities; bank and cash from million, USD130 approximately totalling payments, these funded Company The Court. in deposited subsequently was principal, remaining the to equal million, USD0.5 of amount An 2006). May (30 maturity to interest and principal being million, USD1.1 approximately of total a bondholder’spaying that resolvedby Company claim the which under bondholder one with agreement an into entered also Company The bonds. the of amount principal the of sharespro-rata respective their to equal amount representingan sum a bondholders those paid Company the agreements, these Under bondholders. the of three but all with Agreements’ Release and ‘Receipt into entered Company the 2006, During will appeal that when or entered be will judgement final when on comment to possible place. take not is it report, this of date the of As judgement. final of entry upon Opinion Court’s2006 District May the 30 of aspects certain and OrderCourt’s 2005 the August appeal 12 to intends Company The 9%. of rate prescribed statutorily a at awarded ultimately amounts damage the on interestprejudgement to entitled be would bondholders the that held further Court The Court. the by determined amount damages cash a than rather bondholders, the to stock common its of shares deliver to requiredAristocrat have would that remedy performance specific a for petition bondholders’ the denied it but bondholders the to shares deliver to failing for Indenture the of breach in was Company the that declaration a requested it as insofar motion the granted Court The bondholders. the by filed motion judgement summary a deciding Opinion further a issued Court District the 2006, May 30 On counterclaims. various on ruling deferred otherwise Court The bondholders. the or Company the by argued not Indenture the of interpretation an adopted Court the holding, so In 2004. December 20 of as terminated been not had rights conversion bondholder that and corrected be should rate exchange the that Order and Opinion an issued Court District the 2005, August 12 On 2007 Annual Report Financial statements
Commitments not recognised in the financial statements financial the in recognised not Commitments years five than Later years five than later not but year one than Later year one Within follows: as payable are leases operating non-cancellable to relation in payments lease minimum for Commitments leases Operating commitments Lease year one within payable liabilities, as recognised not but date balance the at contracted commitments other and equipment Capital commitments Capital Note 26. Commitments
For personal use only
2007 Annual Report Financial statements
115,326 63,094 42,127 10,105
2007 $’000 364
Consolidated 55,469 34,905 97,285 $’000 2006 6,911 2,011
$’000
2007 – – – – –
Parent entity Parent $’000 2006
.109 .110
(d) (c) (b) (a) For the 12 months ended 31 December 2007 31 December ended 12 the For months
Aristocrat TechnologiesLimited Aristocrat Pty Australia Limited Pty (Holdings) Aristocrat entities Controlled Limited Leisure Aristocrat entity parent Ultimate Note 27. Subsidiaries Notes to the financial statements Aristocrat Funding GP Funding Aristocrat Aristocrat Employee Equity Plan TrustPlan Equity Employee Aristocrat entities controlled Other
Aristocrat International Pty Limited Pty International Aristocrat Aristocrat Properties Pty Limited Pty Properties Aristocrat Aristocrat TechnicalLimited Aristocrat Pty Services
For personal use only – Trust;the of and activities the of benefits the of majority the obtain to powers making decision the has Group the – – criteria: following the meets it because consolidated is which entity purpose Trustspecial The a is legislation. local relevant under 2007 December 31 requiredat not are audits statutory which for entities Controlled firms. PricewaterhouseCoopers other by audited entities Controlled 38. Note to refer information, further For Commission. Investments & Securities Australian the by issued Orders Class with accordance in prepareaccounts to necessity the fromrelief granted been have entities controlled These ASSPALimited Pty Aristocrat Technology Gaming Systems Pty Limited TechnologyPty Aristocrat Systems Gaming Aristocrat Leisure Cyprus Limited Cyprus Leisure Aristocrat Aristocrat (Argentina) Pty Limited Pty (Argentina) Aristocrat (formerly known as Aristocrat (Puerto Rico) Pty Limited) Pty Rico) (Puerto Aristocrat as known (formerly Limited Pty Rico) AI(Puerto Aristocrat (Latin America) Pty Limited Pty America) (Latin Aristocrat Aristocrat (Asia) Pty Limited Pty (Asia) Aristocrat Aristocrat TechnologiesAristocrat Limited (Holdings) Europe Aristocrat Technologies,Aristocrat Inc. Aristocrat TechnologiesAristocrat Limited NZ Aristocrat TechnologiesAristocrat KK Aristocrat Africa (Pty) Limited (Pty) Africa Aristocrat Aristocrat CA Aristocrat entity. purpose special the of ownership to incidental risks the to Trustexposed the is of and benefits the of majority the obtain to rights has Group the according to its specific business needs and the Group obtains benefits from the Trust’sthe from benefits obtains Group the and operation; needs business specific its to according Group the of behalf on conducted being are plans share employee various the for shares issue and purchase Trustto the is of which activity the Aristocrat Gaming LLC Gaming Aristocrat ACEI AB ACEI Aristocrat (Macau) Pty Limited Pty (Macau) Aristocrat Aristocrat (Philippines) Pty Limited Pty (Philippines) Aristocrat Aristocrat (Malaysia) Pty Limited Pty (Malaysia) Aristocrat Aristocrat (Cambodia) Pty Limited Pty (Cambodia) Aristocrat Aristocrat (Singapore) Pty Limited Pty (Singapore) Aristocrat Aristocrat TechnologiesAristocrat LLC ASSPALimited (UK) Aristocrat TechnologiesAristocrat Limited Europe Limited TechnologyLeisureCo. Aristocrat (Beijing) Development Aristocrat TechnologiesAristocrat S.L. Spain Aristocrat TechnologiesAristocrat Inc. Canada, Aristocrat Argentina S.A. Argentina Aristocrat Corporation Funding Aristocrat Aristocrat Funding Corporation Pty Limited Pty Corporation Funding Aristocrat Aristocrat Hanbai KK Hanbai Aristocrat Aristocrat TechnologiesLimited Aristocrat (Pty) Africa ACE Interactive Software Norway AS Norway Software Interactive ACE 2007 Annual Report Financial statements
(b) & (c) & (b) (b) & (c) & (b) Notes (b) (b) (d) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (b) (a) (c) (a) (c) (c) (c) (a) (a) (c) (c) (c) (c) (c)
New Zealand New incorporation South Africa South South Africa South Venezuela Country of Country Argentina Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Sweden Canada Norway Cyprus Russia Russia Japan Japan China Spain USA USA USA UK UK UK
2007 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
72 72 % –
Equity holding Equity 2006 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
72 72 % – – – Cash and cash equivalents cash and Cash Gain on partial sale of subsidiary of sale partial on Gain Totalsold assets net Cash and cash equivalents cash and Cash Portion of foreign currency translation reserve disposed reserve translation currencyforeign of Portion Cost of sale of Cost follows: as are sale partial the of Details Portion of net assets disposed assets net of Portion
liabilities Current
assets Non-current
assets Current sold assets net of portion of value Book proceeds Cash Consideration Limited. (Pty) Investments Matemeku by led consortium a being YabohleLtd, (Pty) Investments company,local a to operations African its in interest 28% a of sale the completed Limited Leisure Aristocrat of entity wholly-owned a 2006, June 26 On 2006. during occurred subsidiary a of sale partial following The 2007. during subsidiaries of sales no wereThere Note 28. Partial of sale subsidiary
Other Provisions Current tax liabilities tax Current Payables (includes intercompany) (includes Payables Intangible assets Intangible Deferred tax assets tax Deferred Property,equipment and plant Receivables Inventories Receivables For personal assets Cash use only
2007 Annual Report Financial statements
22(a)(i) Notes 23 5
$’000 (1,172) (2,721)
7,045 6,219 7,045 8,217 1,069 2006 826 370 456 181 245 171 201 183 693 503 (38) (31) .111 .112 For the 12 months ended 31 December 2007 31 December ended 12 the For months
cash of Outflow
For personal (c) (b) use (a) sale. of date the seller’sto the up structurewithin legal AB Interactive Essnet of structure operating and legal the to due impractical be would 2006 December 31 ended year the for profit consolidated and revenue consolidated pre-acquisition of Disclosure 2006. December 31 to 2006 May 5 from period the for Group the to $6,803,000 of loss net a and $2,409,000 of revenues contributed business acquired The onlycompany,AB. Interactive Essnet gaming technology high Scandinavian-based the in shares issued the of all acquired Limited Leisure Aristocrat of entity wholly-owned a 2006, May 5 On ACE Interactive 2006. during occurred acquisition following The 2007. during acquisitions no wereThere Note 29. Business combinations Notes to the financial statements Assets and liabilities acquired liabilities and Assets consideration Purchase acquisition of Summary Net identifiable assets acquired assets identifiable Net Net assets Net Other liabilities Other liabilities tax Deferred Tradecreditors Interactive’sACE offerings.productof lottery server-basedsale Group’svideo the the from to flows attributable cash futureis goodwill The Intangible assets: computer technology computer assets: Intangible equipment and Plant Other current assets current Other Inventories Goodwill below) (c) to (referacquired assets identifiable net of value Fair Other receivables Other Totalconsideration purchase Tradereceivables acquired balance Cash - acquisition the to relating costs Direct Cash follows: as are acquisition the from arising liabilities and assets The consideration Cash - acquired: subsidiary,cash acquire of to net cash of Outflow paid Cash below): (b) to (refer consideration Purchase follows: as are goodwill and acquired liabilities and assets the of value fair the of Details
2007 Annual Report Financial statements
carrying amount carrying
Acquiree’s 17,231 17,231 15,403 $’000 (3,570) 1,340 3,044 135 216 138 591 (66) –
Fair value Fair 71,211 71,211 (33,913) 33,913 33,913 42,030 37,298 70,512 70,620 $’000 $’000 (7,455) (3,570) 1,340 2006 699 (591) 135 554 216 138 591 (66)
(c) (b) (a) products. gaming multi-terminal electro-mechanical of range a manufactures in shares issued the of 50% acquired Limited Leisure Aristocrat of entity wholly-owned a 2006, January 27 On ˇcekElektron Note 30. Interest in jointly controlled entity
segment of the gaming market and therefore for the future cash flows generated from this business. this from generated flows cash future the thereforefor and market gaming the of segment to attributable is goodwill The Goodwill acquired assets/(liabilities) identifiable net of value Fair Totalconsideration purchase 2007 in paid settlement deferred Net Adjustment on settlement of deferred amount deferred of settlement on Adjustment acquisition) on estimate (initial settlement Deferred Net assets Net Carrying amount at the beginning of the year the of beginning the at amount Carrying Net profits - accounted for using the equity method equity the using for accounted - profits Net Unrealised profits on related party transactions party related on profitsUnrealised Profit from ordinary activities after income tax expense tax income after activities ordinaryfrom Profit Income tax expense relating to ordinary activities ordinary to relating expense tax Income Profit from ordinary activities before income tax expense tax income before activities ordinaryfrom Profit Expenses from ordinary activities ordinaryfrom Expenses Revenue from ordinary activities ordinaryfrom Revenue acquisition the to relating costs Direct Cash paid in 2006 in paid Cash consideration: Purchase Interest in jointly controlled entity controlled jointly in Interest Group’s share of results of jointly controlled entity controlled jointly of results of share Group’s acquisition of Summary Non-current liabilities Non-current liabilities Current Dividend declared Dividend Movement in foreign currency exchange translation reserve translation exchange currencyforeign in Movement entity’scontrolled jointly of Sharereserves entity’scontrolledtax jointly after profitof Sharenet Investment in jointly controlled entity controlled jointly in Investment Details of the fair value of the assets and liabilities acquired and goodwill are as follows: as are goodwill and acquired liabilities and assets the of value fair the of Details Non-current assets Non-current assets Current entity’scontrolledliabilities: jointly and in assets movement of Share Foryear the of end the at amount Carrying personal use only
lkrnˇcekElektron multi-terminal popular increasingly the in profitability’s and position market strong 2007 Annual Report Financial statements
lkrnˇcekElektron ˇcek’)(‘Elektron d.d. which ,
71,744 (29,040) 74,272 38,542 $’000
$’000 (1,627) (8,361) (3,776) 8,964 6,490 8,613 7,875 9,502 $’000 6,070 2,474 8,613 3,234 2007 2007 2007 738
(760) 420 955
41
62,711 59,639 12,858 39,006 59,110 66,487 74,272 (26,148) 63,618 11,106 10,787 3,072 6,848 $’000 $’000 $’000 7,150 $’000 (3,776) (1,727) (2,260) (3,448) (2,236) 9,379 7,150 9,410 2006 2006 2006 529 572 (907) 509 319 63 – – .113 .114
*** Note 31. Employee benefits 2007 31 December ended 12 the For months ** GrowthShare Per Earnings - TotalEPSG - TSR Return; Shareholder* follows: as are 2006 December 31 and 2007 December 31 ended years financial the during granted Rights Share Performance of values fair accounting assessed The granted Rights Share Performance of value fair Accounting (a) payments. share-based on disclosure detailed provides also attached, separately is which Report Directors’ the in presented Report, Remuneration The Note 32. Share-based payments liabilities on-cost related and benefits employee Aggregate non-current - benefits employee for Provision current - benefits employee for Provision current - payables in Included liabilities on-cost related and benefits Employee Notes to the financial statements For personal use only Performance Share Right with a TSR vesting condition is lower than that with an EPSG vesting condition. vesting EPSG an with that than lower is condition vesting TSR a with Right Share Performance a of Accordingly,value met. accounting be the will condition vesting the that likelihood the account into take not does EPSG) example, (for condition vesting non-market a with Right Share Performance a of Deloitte, by determined independently as valuation, accounting the Whereas, met. be will condition vesting the that likelihood the incorporates TSR) example, (for condition vesting market a Touchewith Deloitte Right Shareby Performance Tohmatsudetermined a independently of as (‘Deloitte’), valuation, accounting the standards, accounting with accordance In of approval by shareholders. by approval of date the at performed been has Deloitte, by determined as director,valuation a accounting to the granted were Rights Share Performance these as standards, accounting with accordance In Performance Share Plan (‘PSP’) Plan Share Performance As at 31 December 2007, 200 employees (2006: 188) were entitled to 3,211,469 (2006: 3,909,090) Performance Share Rights under this plan. this under Rights Share Performance 3,909,090) (2006: 3,211,469 to entitled were 188) (2006: employees 200 2007, December 31 at As below.detailed are which periods, and conditions performance than other respects all in identical are PSP the under issued Rights Share Performance Rights’). Share (‘Performance entity parent the in sharesordinary paid fully to entitlements offeredconditional be to employees eligible for provides that scheme share employee long-term a is PSP The Performnance Share Performnance Issued 2007 Issued Issued 2006 Issued
Right series Right
Series 6B Series Series 9B Series 8B Series Series 7B*** Series Series 6A Series Series 9A Series 8A Series Series 7A*** Series period start date start period Performance 1-May-07 1-May-07 1-Jan-06 1-Jan-06 1-Jan-06 1-Jan-06 1-Jan-07 1-Jan-07 2007 Annual Report period expiry date expiry period Performance 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 Notes Financial statements 19 19 17
Performance condition* 52,837 38,223
2007 $’000 5,385 9,229 ESPG ESPG ESPG ESPG TSR TSR TSR TSR
Consolidated 53,907 39,598
$’000 6,036 8,273 2006 valuation date valuation Accounting
2-May-06 2-May-06 2-May-07 2-May-07 1-Jan-06 1-Jan-06 1-Jan-07 1-Jan-07 $’000
2007 – – – –
Parent entity Parent Accounting valuation**
13.09 11.25 15.25 14.41 2006 $’000 6.01 8.18 7.79 8.41
$
(a)
Performance Share Plan (‘PSP’) continued (‘PSP’) Plan Share Performance (i) model. (‘EPSG’) GrowthShare Per Earnings an and model Total(‘TSR’) a using Return ShareholderDeloitte by performed been have valuations The dates. grant respective their at Rights Share Performance of tranche each of valuation independent representsthe valuation accounting The (ii) underlying share rights. share underlying the of nature long-term the to due Company the of price share the of volatility historical annualised the on based is volatility price expected The For personal use only (a) included: 2007 December 31 ended year the during granted rights share for inputs model The years). five or four three, (either period vesting the over equally allocated been has rights the of valuation accounting The maturity.to time and return of rate free risk yield, dividend expected price, share underlying the of volatility grant, of date Company’sthe the at as price sharefactors such account into takes model pricing This rights. share the of value the on scale vesting the and hurdles performance of impact the incorporates which model Simulation-based Monte-Carlo a developed has Deloitte model Total(‘TSR’) Return Shareholder (b) (c) (d) (e) (f) (g) (a) included: 2007 December 31 ended year the during granted rights share for inputs model The years). five to threefrom (ranging period vesting the over equally allocated been has rights the of valuation accounting The maturity.to time and return of rate free risk yield, dividend expected price, share underlying the of volatility grant, of date Company’sthe the at as price sharefactors such account into takes model pricing This rights. share of value fair the determine to model Generalised Black-Scholes the utilised has Deloitte model (‘EPSG’) GrowthShare Per Earnings (b) (c) (d) (e) (f) (g)
share rights are granted for no consideration and have a three to five year life; year five to three a have and consideration no for granted are rights share exercise price: zero consideration; zero price: exercise the grant date and expiry dates: refer to tables below; tables to refer dates: expiry and date grant the $14.00; - 7A series and $12.32 - 6A series 2006: and $16.43; - 9A series and $15.79 - 8A series 2007: date: grant at price share 30.38%; - 7A series and 27.28% - 6A series 2006: and 29.54%; - 9A series and 29.75% - 8A series 2007: Company’sthe of shares:volatility price 3.00%; - 7A series and 3.03% - 6A series 2006: and 2.83%; - 9A series and 3.10% - 8A series 2007: yield: dividend 6.04%. - 7A series and 5.61% - 6A series 2006: and 6.40%; - 9A series and 6.45% - 8A series 2007: rate: interestrisk-free share rights are granted for no consideration and have a three to five year life; year five to three a have and consideration no for granted are rights share exercise price: zero consideration; zero price: exercise the grant date and expiry dates: refer to tables below; tables to refer dates: expiry and date grant the 2006: series 6B - $12.32 and series 7B - $14.00; - 7B series and $12.32 - 6B series 2006: and $16.43; - 9B series and $15.79 - 8B series 2007: date: grant at price share 2006: series 6B - 27.28% and series 7B - 30.38%; - 7B series and 27.28% - 6B series 2006: and 29.54%; - 9B series and 29.75% - 8B series 2007: Company’sthe of shares:volatility price 2006: series 6B - 3.03% and series 7B - 3.00%; - 7B series and 3.03% - 6B series 2006: and 2.83%; - 9B series and 3.10% - 8B series 2007: yield: dividend 2006: series 6B - 5.61% and series 7B - 6.04%. - 7B series and 5.61% - 6B series 2006: and 6.40%; - 9B series and 6.45% - 8B series 2007: rate: interestrisk-free
2007 Annual Report Financial statements
.115 .116 Right series Right Right series Right (a) Note 32. Share-based payments continued 2007 31 December ended 12 the For months –2007 entity parent and Consolidated Series 1A Series PSP –2006 entity parent and Consolidated Notes to the financial statements Series 1A Series PSP Series 1B Series Series 1B Series Series 2 Series Series 2 Series Series 3A Series Series 3A Series Series 3B Series Series 3B Series Series 4A Series Series 4A Series Series 4B Series Series 4B Series Series 5A Series Series 5A Series Series 5B Series Series 5B Series Series 5C Series Series 5C Series Series 5D Series Series 5D Series Series 6A Series Series 6A Series Series 6B Series Series 6B Series Series 7A Series Series 7A Series Series 7B Series Series 7B Series Series 8A Series
Series 8B Series Series 9A Series Series 9B Series For personal use only Performance Share Plan (‘PSP’) continued (‘PSP’) Plan Share Performance Performance Share Rights are detailed in the tables below: tables the in detailed are Rights Share Performance 17-May-05 17-May-05 17-May-05 17-May-05 21-Dec-04 21-Dec-04 17-Oct-05 17-Oct-05 17-Oct-05 17-Oct-05 17-Oct-05 17-Oct-05 17-Oct-05 17-Oct-05 2-May-06 2-May-06 2-May-06 2-May-06 1-May-07 1-May-07 2-Sep-04 2-Sep-04 2-Sep-04 2-Sep-04 1-Jan-05 1-Jan-05 1-Jan-05 1-Jan-05 1-Jan-06 1-Jan-06 1-Jan-06 1-Jan-06 1-Jan-07 1-Jan-07 Grant Grant date date
period expiry period period expiry period Performance Performance 31-Dec-06 31-Dec-06 31-Dec-07 31-Dec-07 31-Dec-06 31-Dec-06 31-Dec-07 31-Dec-07 31-Dec-07 31-Dec-07 31-Dec-07 31-Dec-07 31-Dec-07 31-Dec-07 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-10 31-Dec-10 31-Dec-10 31-Dec-10 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 2007 Annual Report date date
start of year of start start of year of start 1,055,172 1,155,932 1,055,172 1,155,932 2,864,364 3,909,088 Rights at Rights Rights at Rights 380,000 380,000 524,121 524,120 Number Number 23,781 23,781 23,781 23,781 34,172 34,172 34,171 34,171 14,149 14,149 14,149 14,149 14,149 14,149 14,148 14,148 99,001 99,002 – – – – – – – –
Financial statements rights issued rights rights issued rights 1,304,260 1,104,665 Add: new Add: Add: new Add: 553,130 553,127 440,845 440,845 111,488 111,487 Number Number 99,001 99,002 – – – – – – – – – – – – – – – – – – – – – – – – – –
rights exercised rights rights exercised rights 1,055,172 1,453,824 380,000 Number Number 18,652 Less: Less: – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
rights lapsed rights rights lapsed rights 100,760 133,446 100,760 259,536 348,462 Number Number 75,800 29,009 75,799 29,007 22,276 22,276 4,716 4,716 4,717 4,716 Less: Less: – – – – – – – – – – – – – – – – – – – – –
end of year of end end of year of end 1,055,172 1,055,172 3,909,088 3,211,467 Rights at Rights Rights at Rights 903,074 380,000 448,321 524,121 448,321 524,120 418,569 418,569 111,488 111,487 Number Number 23,781 23,781 23,781 23,781 34,172 34,172 34,171 34,171 14,149 14,149 14,149 14,148 99,001 99,001 99,002 99,002 9,433 9,433 9,432 9,432 – –
(c) (b)
* Issued from the Aristocrat Employee Equity Plan Trust.Plan * Equity Employee Aristocrat the from Issued Long-term Performance Option Plan (‘POP’) Plan Option Performance Long-term (‘GESP’) Plan Share Employee General 30-Jun-07* on: employees participating to Plan the under issued Shares There have been no invitations issued to participate in this Plan. this in participate to issued invitations no been have There satisfied. not are Criteria Performance the if sold and forfeited be will they and expire will options) associated the (and shares unallocated to Rights shares. unallocated called are These exercised. being option the and satisfied being Criteria Performance to prior is, that shares, the allocated be to entitled becoming employee eligible the to prior employee eligible the of behalf on trustee or agent an of name the in or employee eligible the of name the registeredin then are which shares on-market acquire or issue to Company,discretion, the its permit in rules POP The dishonestly.or fraudulently act employees eligible where as such circumstances limited in Company,the only by but forfeited be POP.may the POP of the rules under the allocated Shareswith accordance in lifted, restrictions disposal the have to entitled is employee eligible the until restrictions, disposal to subject price, exercise the of payment and option the of exercise on employee eligible the of name the registeredin and allocated be to shares for provides POP the Period, Performance the of end the at satisfied are Criteria Performance the If respectively). Period’, ‘Performance and Criteria’ ‘Performance (the Directors of Board the by specified period performance a within and criteria performance of satisfaction the on dependent employee eligible the to vesting with grant at shares paid fully underlying the of value the on based price exercise an have will options Performance period. performance set a within Board the by specified criteria performance meeting to subject employees, eligible to allocated be options, such may,Company,sharesof the exercisethat in on such sharesordinary paid fully over options to entitlements offeredconditional be to employees eligible for provides POP The 2005. May in Company the of Meeting General Annual the at approved Company’sthe was in improvementperformance, continuing the drive to scheme incentive executive an Plan, Option Performance Long-term The offer.the of date the before immediately days five the during Exchange Stock Australian the on traded Company’sthe which aresharesat price average weighted the by divided amount offer the is Plan the in participants to issued shares of number The years. three of period a for employment continued their to subject Plan, Share Employee General the under allocation share a of lieu in employees) 638 to shares 47,212 2006: employees; 749 to shares (51,681 shares of number equivalent an of allocation contingent a or cash A$1,000 of bonus deferred a either issued were overseas located staff eligible certain complexities, tax to Due plan. this under Australia in 1,145) (2006: employees 1,160 to 90,455) (2006: shares 80,040 year,issued the Company During the TaxIncome Act. Australian Assessment the of 139CD section of provisions the under entity parent the in shares with employees provide to designed is Plan Share Employee General The For personal use30-Jun-06 only
2007 Annual Report Weightedaverage market price market 14.47 12.64 Financial statements
$
Number 80,040 80,040 2007 –
Consolidated Number 90,455 90,455 2006 –
Number 2007 – – –
Parent entity Parent
Number 90,455 90,455
2006
.117 .118 For the 12 months ended 31 December 2007 31 December ended 12 the For months For personal use only (d) Note 32. Share-based payments continued Notes to the financial statements Series 26 Series ESOP Series 27 Series series Employee Share Option Plan (‘ESOP’) Plan Option Share Employee Weighted average exercise price exercise average Weighted * Theoptionexercisepricehasbeenadjustedforthe$0.21persharecapitalreturnpaidinJuly2005. 28 Series Option –2007 entity parent and Consolidated Options are detailed in the tables below: tables the in detailed are Options rules. Plan Option Share Employee the to subject exercisableare plan the to pursuant issued Options 2004. in discontinued was Plan Option Share Employee The plan. this under options 1,205,000) (2006: 537,500 to entitled were 13) (2006: employees five 2007, December 31 at As Group. the of employees to entity parent the in sharesordinary over options issue to established was Plan Option Share Employee The (b) (a) Notes: table. above the by covered period the during forfeited were options No years. 1.15 was 2007 December 31 at as outstanding options of life contractual remaining average weighted The $16.44. was 2007 December 31 ended year the during exercised options those of exercise of date the at price share average weighted The 29C Series Series 30 Series 29D Series Series 31A Series Series 31B Series 31D Series 31C Series Options under Tranche D are exercisable 54 months after grant date. grant after months Tranche54 exercisableunder are Options D date. grant after months Tranche42 exercisableunder are Options C date. grant after months Tranche30 exercisableunder are Options B date. grant after months Tranche18 exercisableunder are Options A date. grant after months 54 and months 42 months, 30 months, 18 of intervals at tranches equal four in exercisableare Options Notes (b) (b) (b) (b) (b) (b) (a) (a) (a) (a) 26-Aug-03 1-Sep-03 3-Nov-03 1-Sep-03 1-Sep-04 1-Sep-04 1-Sep-04 1-Sep-04 7-Mar-02 2-Jul-02 Grant date 26-Aug-08 1-Sep-08 3-Nov-08 1-Sep-08 1-Sep-09 1-Sep-09 1-Sep-09 1-Sep-09 7-Mar-07 2-Jul-07 2007 Annual Report Expiry date
Exercise 5.7431 5.2002 1.3497 2.4503 2.2177 2.9503 6.7016 7.2016 8.2016 7.7016 price $* price
Financial statements start of year of start Options at Options 1,205,000 225,000 125,000 100,000 125,000 125,000 125,000 125,000 125,000 Number 85,000 45,000 $4.69
Less: options Less: exercised 112,500 125,000 125,000 125,000 667,500 Number 85,000 45,000 50,000 $4.54 – – –
Less: options Less: Number lapsed – – – – – – – – – – – – end of year of end Options at Options 112,500 125,000 125,000 125,000 537,500 Number 50,000 $4.87
– – – – – (d) Series 21 Series ESOP Series 22 Series series Consolidated and parent entity – 2006 – entity parent and Consolidated continued (‘ESOP’) Plan Option Share Employee Weighted average exercise price exercise average Weighted 2005. July in paid return capital share per $0.21 the for adjusted been has price exercise option The * 25 Series 24 Series Option (b) (a) Notes: table. above the by covered period the during forfeited were options No years. 1.52 was 2006 December 31 at as outstanding options of life contractual remaining average weighted The $13.26. was 2006 December 31 ended year the during exercised options those of exercise of date the at price share average weighted The 26 Series Series 27 Series Series 28 Series Series 29B Series Series 30 Series 29D Series 29C Series For personal 31D Series 31C Series 31B Series use31A Series only Options under Tranche D are exercisable 54 months after grant date. grant after months Tranche54 exercisableunder are Options D date. grant after months Tranche42 exercisableunder are Options C date. grant after months Tranche30 exercisableunder are Options B date. grant after months Tranche18 exercisableunder are Options A date. grant after months 54 and months 42 months, 30 months, 18 of intervals at tranches equal four in exercisableare Options Notes (b) (b) (b) (b) (b) (b) (b) (a) (a) (a) (a) (a) (a) (a) (a)
13-Aug-01 18-Dec-01 26-Aug-03 25-Oct-01 20-Jul-01 1-Sep-03 3-Nov-03 1-Sep-03 1-Sep-03 1-Sep-04 1-Sep-04 1-Sep-04 1-Sep-04 7-Mar-02 2-Jul-02 Grant date
13-Aug-06 18-Dec-06 26-Aug-08 25-Oct-06 20-Jul-06 1-Sep-08 3-Nov-08 1-Sep-08 1-Sep-08 1-Sep-09 1-Sep-09 1-Sep-09 1-Sep-09 7-Mar-07 2-Jul-07 Expiry 2007 Annual Report date
Exercise 6.3303 6.5720 6.0928 6.1415 5.7431 5.2002 1.3497 1.9503 2.2177 2.9503 2.4503 8.2016 7.7016 7.2016 6.7016 price $* price
Financial statements start of year of start Options at Options 2,888,000 106,750 987,500 140,000 562,500 125,000 150,000 125,000 125,000 125,000 125,000 125,000 125,000 Number 50,000 15,000 $4.58 1,250
Less: options Less: 1,488,000 exercised 106,750 872,500 187,500 125,000 Number 50,000 95,000 50,000 $4.79 1,250 – – – – – – –
Less: options Less: 150,000 195,000 Number 15,000 30,000 lapsed $2.39 – – – – – – – – – – – –
end of year of end Options at Options 1,205,000 225,000 125,000 125,000 125,000 125,000 125,000 125,000 100,000 Number 85,000 45,000 $4.69 – – – – – .119 .120 For the 12 months ended 31 December 2007 31 December ended 12 the For months Notes to the financial statements For personal use only (d) Note 32. Share-based payments continued Employee Share Option Plan (‘ESOP’) continued (‘ESOP’) Plan Option Share Employee There are been no options exercised since the end of the financial year.financial the of end the since exercised options no been areThere option. the of exercise of date the on price exercise the less price market the as calculated is which option, the of value intrinsic the is above reflected value The * below: detailed are options of exercise the on employees to issued shares of number and year financial the during exercised Options
12-Feb-07 ESOP Exercise date Exercise 26-Feb-07 26-Feb-07 26-Feb-07 26-Feb-07 1-Mar-07 2-Mar-07 2-Mar-07 2-Mar-07 2-Mar-07 7-Mar-07 7-Mar-07 21-Mar-07 29-May-07 28-Aug-07
Value of sharesValue of at issue date* issue at
13.28
15.20
10.50 11.63 11.68 11.68 12.22 11.01 14.38 15.00 11.15 13.23
9.03 9.99 5.76 $
2007 Annual Report
Number 125,000 125,000 125,000 667,500 15,000 20,000 15,000 50,000 40,000 50,000 25,000 12,500 50,000 7,500 5,000 2,500 2007
Consolidated and parent entity parent and Consolidated
Financial statements Exercise date Exercise 10-May-06 14-Sep-06 18-Sep-06 20-Sep-06 27-Sep-06 19-Dec-06 14-Mar-06 24-Mar-06 29-Mar-06 15-Jun-06 20-Jun-06 16-Oct-06 20-Oct-06 4-Dec-06 3-Mar-06 6-Mar-06 1-Jun-06 4-Oct-06 5-Apr-06 ESOP
Value of sharesValue of at issue date* issue at 10.28 8.23 7.79 6.82 8.96 7.66 8.34 7.95 8.58 6.36 6.27 7.39 7.33 7.67 8.39 8.09 8.09 7.83 9.73 $
1,488,000 Number 403,750 103,750 153,750 332,500 95,000 22,500 10,000 22,500 58,750 19,250 32,500 22,500 90,000 87,500 10,000 10,000 3,750 5,000 5,000 2006
All of the above persons were considered executive key management personnel for the full year ended 31 December 2007. December 31 ended year full the for personnel management key executive consideredwere persons above the of All YahlBJ Timmis IH Phillips GS Parker SJ Name follows: as are year financial the during personnel’) management key (‘executive Group the of activities of controlling and directing planning, overall the for responsibleare who executives The personnel management key Executive * directors Non-executive directors Executive non-executive - Chairman year: financial the during Company the of directorswere persons following The Directors Note 33. Key management personnel disclosures (e) continued (‘ESOP’) Plan Option Share Employee (d)
disclosures. For the full 2006 year SCM Kelly’s details are shown under executive key management personnel disclosures. personnel management key executive Kelly’sunder SCM shown areyear details 2006 full the For disclosures. director under shown are year 2007 full the for Kelly SCM to relation in details report, this Throughout period. that for personnel management key executive of definition the met and Officer Financial Chief of role the held Kelly SCM 2006, December 31 ended year full the for and appointment his of date the to Up 2007. February 20 on director executive an appointed was Kelly SCM their issue date issue their at as options of exercise the on employees to issued sharesValue of reserves in recognised and options of exercise the on employees fromreceived proceeds Aggregate expense payments Share-based Share rights issued under Performance Share Plan Share Performance under issued rights Share follows: as were expense benefits employee of part as period the during recognised transactions Totalpayment share-basedfrom arising expenses Options vested at the reporting date reporting the at vested Options For personalPlan Option Share Employee under issued Options Plan Share Employee General under issued Shares use only Group General Manager, Commercial and Legal and Company Secretary.Company and Manager,Legal General Groupand Commercial Development Manager,Strategic General and Group Business TechnologyChief Officer Marketing and Manager,Development General Group& Research Position Steelman. AW Pitkin SAM Morris P Davis RA Baker WM Director* Finance and Officer Financial Chief - Kelly SCM Director Managing and Officer Executive Chief - Oneile PN Simpson DJ 2007 Annual Report
Financial statements
7,257,389 3,029,086 Number 130,000 $‘000 2007 2007 2007 8,000 9,398 1,158 240 $
Consolidated Consolidated Consolidated 11,759,555 7,124,591 Number 210,000 2006 2006 2006 $‘000 8,092 1,145 9,604 367 $
7,257,389 3,029,086 Number 130,000 $‘000 2007 2007 2007 $ – – – –
Parent entity Parent Parent entity Parent entity Parent 11,759,555 7,124,591
210,000 Number $‘000 2006 2006
1,145 1,145 2006 $ – – .121 .122 Oneile PN directors Executive 2007 For the 12 months ended 31 December 2007 31 December ended 12 the For months below: out set are entities, related personally their including Group, the of personnel management key any by year financial the during held Company the in Rights Share Performance of numbers The holdings rights and remuneration as provided rights Plan Share Performance attached. separately is which Report Directors’ the in presented Report, Remuneration the to disclosuresremuneration detailed the transferred has and 06/50 Order Class Commission Investments & Securities Australian by providedrelief the of advantage taken has Company The Remuneration Note 33. Key management personnel disclosures continued Notes to the financial statements
SCM Kelly SCM
Parker SJ personnel management key Executive
Phillips GS
Timmis IH
YahlBJ
For personal use only 2007 Annual Report Series 4B 7B 9B 3B 6B 9B 1B 6B 8B 1B 6B 8B 1B 6B 8B 1B 6B 8B 4A 7A 9A 3A 6A 9A 1A 6A 8A 1A 6A 8A 1A 6A 8A 1A 6A 8A 2
period expiry period Performance 31-Dec-07 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-07 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-09 31-Dec-09 date
Financial statements Per right at right Per grant date grant 13.09 14.41 11.25 14.41 11.25 15.25 11.25 15.25 11.25 15.25 11.25 15.25 6.10 8.68 6.10 8.18 7.79 6.10 6.10 6.01 7.79 6.45 6.25 6.01 8.41 6.45 6.25 6.01 8.41 6.45 6.25 6.01 8.41 6.45 6.25 6.01 8.41 $
Balance as at as Balance 31 Dec 2006 Dec 31 380,000 Number 34,172 34,173 99,001 99,002 10,854 10,853 25,123 25,122 38,166 38,165 16,138 16,137 41,572 41,572 13,920 13,920 41,628 41,627 16,838 16,837 30,000 30,000 24,746 24,746 – – – – – – – – – – – –
Granted/(vested) during the year the during (380,000) (38,166) (41,572) (41,628) (30,000) Number 89,859 89,859 21,629 21,628 16,092 16,092 11,786 11,785 13,536 13,535 19,894 19,893 – – – – – – – – – – – – – – – – – – – –
Balance as at as Balance 31 Dec 2007 Dec 31 Number 34,172 34,173 99,001 99,002 89,859 89,859 10,854 10,853 25,123 25,122 21,629 21,628 38,165 16,138 16,137 16,092 16,092 41,572 13,920 13,920 11,786 11,785 41,627 16,838 16,837 13,536 13,535 30,000 24,746 24,746 19,894 19,893 – – – – –
2006 continued holdings rights and remuneration as provided rights Plan Share Performance PN Oneile PN director Executive
Kelly SCM personnel management key Executive
SJ Parker SJ
GS Phillips GS
Timmis IH
BJ YahlBJ
For personal use only Series 4B 7B 3B 6B 1B 6B 1B 6B 1B 6B 1B 6B 4A 7A 3A 6A 1A 6A 1A 6A 1A 6A 1A 6A 2
2007 Annual Report period expiry period Performance 31-Dec-06 31-Dec-07 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-07 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 31-Dec-06 31-Dec-07 31-Dec-08 31-Dec-08 date Per right at right Per grant date grant Financial statements 13.09 11.25 11.25 11.25 11.25 11.25 8.68 6.10 6.10 8.18 6.10 6.10 6.01 6.45 6.25 6.01 6.45 6.25 6.01 6.45 6.25 6.01 6.45 6.25 6.01 $
Balance as at as Balance 31 Dec 2005 Dec 31 380,000 Number 34,172 34,171 10,854 10,853 38,166 38,165 41,572 41,572 41,628 41,627 30,000 30,000
– – – – – – – – – – – –
Granted/(vested) during the year the during Number 99,001 99,002 25,123 25,122 16,138 16,137 13,920 13,920 16,838 16,837 24,746 24,746 – – – – – – – – – – – – –
Balance as at as Balance 31 Dec 2006 Dec 31 380,000 Number 34,172 34,171 99,001 99,002 10,854 10,853 25,123 25,122 38,166 38,165 16,138 16,137 41,572 41,572 13,920 13,920 41,628 41,627 16,838 16,837 30,000 30,000 24,746 24,746 .123 .124 Company.the of shareordinary one into convertible is option each exercisable, below.When out set areGroup the of personnel management key any to remuneration as provided Company the in sharesordinary over options of Details holdings option and remuneration as provided Options 2007 31 December ended 12 the For months date. grant the after months 54 and 42 30, 18, of intervals at tranches equal four in exercisableare Options – 5 date. grant after months 54 exercisableare Options – 4 date. grant after months 42 exercisableare Options – 3 date. grant after months 30 exercisableare Options – 2 date. grant after months 18 exercisableare Options – 1 Notes: ** Thevaluereflectedaboveistheintrinsicofoption,whichcalculatedas market pricelesstheexerciseondateofoption. * Note 33. Key management personnel disclosures continued Notes to the financial statements
SCM Kelly SCM personnel management key Executive 2007
SJ Parker SJ GS Phillips GS
SCM Kelly SCM personnel management key Executive 2006
SJ Parker SJ For personalPhillips GS use only shown above. The optionexercisepricehasbeenadjustedforthe21centcapitalreturnpaidinJuly2005. Whereoptionswereexercisedpriortothecapitalreturn,exercisepricewas21centshigherthan Note Note 3 4 1 2 3 4 5 5 2 3 4 1 2 3 4 5 5
Series Series 29C 31C 29C 29D 31C 31D 29D 31B 31D 29B 31B 31A 31A 28 30 28 30 Expiry date Expiry Expiry date Expiry 26-Aug-08 26-Aug-08 1-Sep-08 1-Sep-08 1-Sep-09 1-Sep-09 1-Sep-09 1-Sep-09 3-Nov-08 1-Sep-08 1-Sep-08 1-Sep-08 1-Sep-09 1-Sep-09 1-Sep-09 1-Sep-09 3-Nov-08
2007 Annual Report Exercise Exercise 2.45 2.95 6.70 7.20 7.70 8.20 1.35 2.22 1.95 2.45 2.95 6.70 7.20 7.70 8.20 1.35 2.22 price price $ $
31 Dec 2006 Dec 31 31 Dec 2005 Dec 31 125,000 125,000 125,000 125,000 125,000 125,000 100,000 100,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 150,000 150,000 Number Balance Number Balance as at as as at as
Exercised Exercised Financial statements 125,000 125,000 125,000 125,000 Number the year the Number the year the 50,000 50,000 50,000 50,000 during during – – – – – – – – –
31 Dec 2007 Dec 31 31 Dec 2006 Dec 31 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 100,000 100,000 Number Balance Number Balance 50,000 50,000 as at as as at as
– – – –
125,000 125,000 125,000 Number the year the Number the year the 50,000 50,000 50,000 50,000 Vested Vested during during – – – – – – – – – –
1,659,963 1,128,550 1,349,693 719,800 719,015 661,615 570,015 566,115 exercise exercise Valueat Valueat date** date** – $ $ – – – – – – – –
Vestedand Vestedand exercisable exercisable of the year the of of the year the of at the end the at at the end the at 125,000 Number Number – – – – – – – – – – – – – – – – – beneficially held beneficially – Oneile PN directors Executive held’. ‘non-beneficially as shown are personnel management key individual the of family the of members 124 AASB by defined are who those by held Shares held’. ‘benefically as shown are they personnel, management key individual the of control several or joint the under entity any and personnel management key individual the by held areshares Where issued. shares the of any on unpaid are amounts below.No out set are entities, related personally their including Group, the of personnel management key each by year financial the during held Company the in Plan) Share Performance the and Plan Share Employee General the under unvested those (excluding shares of numbers The Shareholdings * * below: out set are entities, related personally their including Group, the of personnel management key the of any by year financial the during Plan Share Employee General the under held shares of numbers The remuneration as provided (‘GESP’) Plan Share Employee General
– non-beneficially held non-beneficially – Kelly SCM personnel management key Executive Kelly SCM personnel management key Executive SJ Parker SJ – beneficially held beneficially – Kelly SCM Parker SJ Phillips* GS – beneficially held beneficially – Simpson DJ directors Non-executive GS Phillips* GS Timmis IH – beneficially held beneficially – Baker WM Timmis IH YahlBJ – beneficially held beneficially – Davis RA YahlBJ For personalemployment foraperiodofthreeyears. As anoverseasemployee,GSPhillipswasgrantedacontingentrightto74sharesduringtheyearinlieuofshareallocationunderGeneralEmployeeSharePlan,subjectcontinued useemployment foraperiodofthreeyears. As anoverseasemployee,GSPhillipswasgrantedacontingentrightto69sharesduringtheyearinlieuofshareallocationunderGeneralEmployeeSharePlan,subjectcontinued only
2007 Annual Report 2006 Dec 31 31 Dec 2005 Dec 31 2006 Dec 31
325,000 106,000 Financial statements Balance Balance Balance 6,000 4,700 3,449 as at as as at as at as 352 431 431 951 337 263 431 352 168 89 –
Options exercised, Options PSP and GESP and PSP during the year the during year the during issued/granted issued/granted shares vested shares 380,000 375,263 Shares Shares 79 69 79 69 74 69 79 69 79 – – – – –
as close as Disclosures Party Related changes during changes vested during vested during vested Net other Net the year the the year the year the Shares Shares 3,205 (263) (263) (263) (263) (599) – – – – – – – – – –
31 Dec 2007 Dec 31 31 Dec 2006 Dec 31 2007 Dec 31 380,000 700,263 106,000 Balance Balance Balance 6,000 4,700 6,654 as at as as at as at as 431 168 237 431 143 337 237 431 237 168
.125 .126 Shareholdings 2007 31 December ended 12 the For months Note 33. Key management personnel disclosures continued Notes to the financial statements directors Non-executive – beneficially held beneficially – Morris P – non-beneficially held non-beneficially – – beneficially held beneficially – Pitkin SAM – non-beneficially held non-beneficially – – beneficially held beneficially – Steelman AW – non-beneficially held non-beneficially – – beneficially held beneficially – Parker SJ personnel management key Executive – beneficially held beneficially – – beneficially held beneficially – Phillips GS – beneficially held beneficially – YahlBJ IH Timmis IH
– non-beneficially held non-beneficially – Oneile PN director Executive – beneficially held beneficially – Simpson DJ directors Non-executive – beneficially held beneficially – Baker WM – beneficially held beneficially – Davis RA – beneficially held beneficially – Morris P – non-beneficially held non-beneficially – – beneficially held beneficially – Pitkin SAM – non-beneficially held non-beneficially – – beneficially held beneficially – Steelman AW – non-beneficially held non-beneficially – – beneficially held beneficially – Kelly SCM personnel management key Executive – beneficially held beneficially – Parker SJ – beneficially held beneficially – Phillips GS – beneficially held beneficially – Timmis IH held beneficially – YahlBJ For personal use only
continued continued 2007 Annual Report
31 Dec 2006 Dec 31 31 Dec 2005 Dec 31 103,201 106,000 200,000 169,867 Balance Balance Financial statements 12,560 16,000 80,599 12,560 16,000 50,000 7,000 4,505 6,000 4,700 1,200 6,000 4,505 as at as as at as 658 572 – – – – – –
Options exercised, Options Options exercised, Options PSP and GESP and PSP PSP and GESP and PSP shares vested shares shares vested shares 125,000
88,429 41,891 91,835 30,000 50,000 50,000 – – – – – – – – – – – – – – – – – –
changes during changes changes during changes Net other Net Net other Net (116,666) the year the the year the (41,628) (69,123) (19,401) 8,830 1,489 4,100 6,834 2,249 1,000 658 572 – – – – – – – – – – – – –
31 Dec 2007 Dec 31 31 Dec 2006 Dec 31 169,028 125,913 106,000 325,000 103,201 Balance Balance 12,560 11,100 22,834 30,000 12,560 16,000 80,599 9,488 2,061 4,505 6,000 4,700 3,449 7,000 4,505 as at as as at as 263 658 572 – –
SCM Kelly SCM personnel management key Executive below: shown are personnel management key by year the during exercised Options Shareholdings
SJ Parker SJ
GS Phillips GS
For personalpersonnel. management key with transactions party related of details for 35 Note to Refer personnel management key with transactions Other year.financial the during Company the with loans any held personnel management key No personnel management key to Loans nil. be to assumed is entity related personally that of shareholding the details, shareholdingprovide to declines entity related personally a that event the In declared.shareholdings the substantiate to entities related personally the of affairs financial the over influence or control no have they as representationsmade the upon relied have personnel management key and Directors entities. related personally of definition 124 AASB the usewithin parties the by them to made representationunder disclosed been have that those include held’ ‘non-beneficially as reported personnel management key and directors of Shareholdings only continued 2007 Annual Report 2007 2006 2007 2006 2007 2006
Exercise date Exercise 25-May-07 28-Aug-07 31-May-06 28-Feb-06 28-Feb-06 5-Mar-07 5-Mar-07 5-Mar-07 Financial statements
Options exercised Options 125,000 125,000 125,000 125,000 Number 50,000 50,000 50,000 50,000
Paid per share per Paid $2.45 $6.70 $7.20 $1.95 $1.35 $1.35 $2.22 $2.22 $ Unpaid per share per Unpaid $ – – – – – – – – .127 .128 Audit fees for the parent entity were paid by a subsidiary.a by paid were entity parent the for fees Audit Totalservices advisory for remuneration – firm: Australian PricewaterhouseCoopers to paid Fees Advisory services Totalservices assurance for remuneration services Totalassurance other for remuneration firm Australian PricewaterhouseCoopers of practices related to paid Fees firm Australian PricewaterhouseCoopers to paid Fees services assurance Other Totalservices audit for remuneration firm Australian PricewaterhouseCoopers of practices related to paid Fees – Note 34. Remuneration of auditors 2007 31 December ended 12 the For months firm: Australian PricewaterhouseCoopers to paid Fees services Audit services Assurance practices: related its and entity parent the of auditor the to paid were year,fees the following During the For personal use only Notes to the financial statements Legal and compliance and Legal under the under work audit other and reports financial of review and Audit Corporations Act 2001 Act Corporations
2007 Annual Report Financial re port
1,344,405 1,158,383 186,022 730,044 428,339 13,318 13,318 87,985 98,037 2007
$
Consolidated 1,042,798 107,337 491,000 444,461 935,461 10,000 97,337 2006 9,900 9,900
$
2007 $ – – – – – – – – –
Parent entity Parent 2006 $ Receivable from wholly-owned entities wholly-owned from Receivable Non-current entities Taxwholly-owned fromreceivable amounts related Current date balance at group wholly-owned the in entities fromreceivable amount net Aggregate loan intercompany to relation in losses exchange Foreign Dividend revenue Dividend revenueInterest group wholly-owned the in entities with transactions fromresulted that tax income before activities ordinaryfrom profit of determination the in included amounts Aggregate
(b) (a) Note 35. Related parties Wholly-owned group group Wholly-owned personnel key management with transactions Other Aristocrat International Pty Ltd in 2006 was 6.376% per annum. per 6.376% was 2006 in Ltd Pty International Aristocrat to loan the on charged rate Company.interest the average by The advanced loans on principal of repayment the for terms fixed no wereThere repaid. and year,advanced prior loans werethe there In rates. market at and conditions and terms commercial normal on made were transactions above The (ii) For personal use(i) of: consisted 2006 December 31 and 2007 December 31 ended years the during group wholly-owned the in entities other and TransactionsCompany the between consolidation. on eliminated been have 2006 December 31 and 2007 December 31 ended years the during group wholly-owned the within entities between transactions All 27. Note in out set entities controlled wholly-owned onlyits and entity parent the of consists group wholly-owned The chairman. non-executive of position the held Pitkin SAM which of Limited, Gaming & Leisure National by owned venues to conditions and terms normal on provided $898,531 of machines gaming of sale the was 2006 December 31 ended year the during transaction only The 2007. December 31 ended year the during personnel management key other and directors with transactions no wereThere a tax sharing and funding agreement. funding and sharing tax a the payment of dividends to the Company; and Company; the to dividends of payment the 2007 Annual Report Financial Report
198,468,716 22,684,866 64,160,889 2007 $ – –
Parent entity Parent 100,000,000 86,607,945 63,100,692 3,074,868 7,609,370 2006 $
.129 .130 The annual interest rate payable is at 1% less than the prime bank overdraft rate charged by an approved bank of the Republic of South Africa. South of Republic the of bank approved an by charged rate overdraft bank prime the than less 1% at is payable rate interest annual The balance. loan shareholder’sthe the against repaymentsand redirectedas areentity dividends legal African South the of shares the over secured is loan The ZAR43,400,000. of loan year seven Group’sa operations, African South the of shareholder minority the entity,YabohleLimited, wholly-owned to (Pty) a advanced Investments Ltd, Pty International Aristocrat 2006, May 31 On loan – entity relatedfrom Receivable Non-current Receivable from related entity – loan – entity relatedfrom Receivable Receivable from related entity – interest – entity relatedfrom Receivable Current date balance at as interest minority fromreceivable amount Net receivables Other payables Current receivablesCurrent equipment gaming of Purchase services and goods of Purchase Reimbursement of travel and accommodation and travel of Reimbursement Service fee Service Revenue entity legal controlled Jointly
For the 12 months ended 31 December 2007 31 December ended 12 the For months For personal use only (c) Note 35. Related continued parties Notes to the financial statements Transactions with related parties related with Transactions The following transactions occurred with related parties: related with occurred transactions following The
services) and goods of (purchase (dividend receivable from receivable (dividend (service fee) (service lkrnˇcekElektron ) 2007 Annual Report Financial statements
4,358,737 1,499,892 1,121,585 4,406,711 8,361,204 171,046 175,030 2007
$ – –
Consolidated 13,831,341 6,148,092 1,009,548 7,923,338 480,735 55,087 17,881 55,087 2006 $ –
2007 $ – – – – – – – – –
Parent entity Parent
2006
$ – Earnings used in calculating diluted earnings per share per earnings diluted calculating in used Earnings Net profit attributable to members of Aristocrat Leisure Limited Leisure Aristocrat of members to attributable profit Net share per earnings diluted calculating in used earnings of Reconciliation
calculating diluted earnings per share per earnings diluted calculating in denominator the as used sharesordinary potential and sharesordinary of number average Weighted Effect of Performance Share Rights Share Performance of Effect Effect of options of Effect Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share per earnings basic calculating in denominator the as used sharesordinary of number average Weighted Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share per earnings basic calculating in denominator the as used sharesordinary of number average Weighted
Basic earnings per share per earnings Basic Diluted earnings per share per earnings Diluted
(c) (b) (a) securities of classification the concerning Information Note 36. Earnings share per
share. per earnings basic calculating in denominator the as used sharesordinary of number average weighted the of calculation the of purpose the for capital equity contributed from issued shares as treated been have options of Trustexercise Plan the Equity on Employee Aristocrat the through issued Shares Forshare. per earnings basic calculating in denominator the as used sharesordinary of number average weighted the of calculation the of purpose the for cancelled and back bought shares as Trusttreated Plan been Equity have Employee Aristocrat the through on-market purchasedShares trust payments Share-based year.the during lapsed had that Rights Share Performance 87,475) (2006: 50,322 werethere Rights, Share Performance to relatedshares ordinary potential of number average weighted the within Included 33. and 32 Notes in out set are rights the to relating Details share. per earnings basic of determination the in included been not have rights The share. per earnings diluted of determination the in included been have and sharesordinary potential be to consideredare Plan Share Performance the under employees to granted Rights personalRights Share Performance year.the during exercised been had 381,482) that (2006: options 125,790 and year the during lapsed had that options 63,738) (2006: nil werethere options, to relatedshares ordinary potential of number average weighted the within Included 33. and 32 Notes in out set are 2007 December 31 ended year the to relation in options of Details share. per earnings basic of determination the in included been not have options The share. per earnings diluted of determination the in included been have and sharesordinary potential be to consideredare Plan Option Share Employee the and Plan Option Share Employee Aristocrat the under employees to granted Options Options use only
2007 Annual Report Financial statements
468,370,013 466,587,598 466,587,598 1,207,988 Number 247,172 247,172 574,427 Cents $‘000 2007 2007 2007 53.0 52.8
Consolidated Consolidated Consolidated 469,445,200 466,585,445 466,585,445 1,754,804 1,104,951 Number 238,998 238,998
$‘000 Cents 2006 2006 2006 51.2 50.9 .131 .132 Net cash inflow from operating activities operating from inflow cash Net – Decrease in other provisions other in Decrease – – Decrease in payables in Decrease – – Decrease in tax balances tax in Decrease – – Increase in other operating assets operating other in Increase – – Decrease in inventories in Decrease – – Decrease/(increase) in receivables and deferred revenuedeferred and receivables Decrease/(increase)in – Change in operating assets and liabilities: and assets operating in Change Gain on partial sale of subsidiary of sale partial on Gain operation foreign a in investment net the of part formed which loan long-term a of settlement partial the from differencesarising exchange Realised Net foreign currency exchange differencesexchange currencyforeign Net Share of net profits of jointly controlled entity controlled jointly of profits net of Share Net (gain)/loss on sale of property,equipment of and sale plant on (gain)/loss Net Non-cash interest expense interest Non-cash Equity-settled share-based payments share-based Equity-settled Dividends Depreciation and amortisation and Depreciation Profit from ordinary activities after income tax income after activities ordinaryfrom Profit
from operating activities Note 37. Reconciliation of profit from activities ordinary to after income tax net flow cash 2007 31 December ended 12 the For months For personal use only Notes to the financial statements
2007 Annual Report Financial statements
222,157 247,936 (13,186) (23,712) (21,057) 36,435 (2,808) (6,333) (8,613) (2,666) 2007 8,341 9,398 $’000 (644) (934) – – –
Consolidated (143,518) 204,772 240,055 (31,450) 14,274 96,319 31,415 $’000 (8,185) (6,219) (7,150) 2006 5,975 3,472 9,604 (660) 840 – –
(198,469) 200,454 (39,681) 37,792
$’000 2007 96 – – – – – – – – – – – –
Parent entity Parent (100,000) (14,021) 15,214 99,452 $’000 (4,015) 2006 3,919 2,744 3,400 1,145 Set out below is a consolidated balance sheet of the Closed Group: Closed the of sheet balance consolidated a is below out Set year financial the of end the at earnings Retained Dividends paid Dividends Totalassets Profit for the year the for Profit Totalassets non-current Retained earnings at the beginning of the financial year financial the of beginning the at earnings Retained Group: Closed the of earnings retained consolidated in movements of summary a is below out Set year the for Profit Intangible assets Intangible Income tax expense tax Income Deferred tax assets tax Deferred Totalassets current Profit before income tax income beforeProfit Property,equipment and plant Inventories
Financial assets Financial Receivables For personalReceivables assets Non-current equivalents cash and Cash assets Current use Group: Closed the of statement income consolidated condensed a is below out Set onlyGroup’. Closed ‘Extended Company,representthe the also by they controlledare that deed the to parties other Order,no arethereClass as the and of purposes the for Group’ ‘Closed representa companies abovenamed The Commission. Investments & Securities Australian the by issued 02/1017) and 02/0248 01/1087, 00/0321, 98/2017, Orders Class by amended (as 98/1418 Order Class under reportdirectors’ and report financial preparea requirementto the fromrelieved been have entities wholly-owned the deed, the into entering By companies. named other the of debts the guarantees companies abovenamed the of each deed, the Under 2006. December 22 on deed the joined Limited Pty (Macau) Aristocrat and Limited Pty (Asia) Aristocrat Commission. Investments & Securities Australian the by approved and with lodged been has that 2005 in guarantee cross of deed a to parties wereTechnologies Ltd Aristocrat Pty and Australia Ltd Pty Company, The International Aristocrat Note 38. of Deed cross guarantee 2007 Annual Report Financial statements
(221,186) 342,456 534,003 234,214 209,226 329,428 234,214 324,777 309,240 107,841 262,769 (75,026) 20,241 50,380 17,289 28,371 44,719 $’000 2007 2,393
(149,947) 329,428 553,512 234,015 401,740 245,360 234,015 151,772 325,094 246,305 (91,079) 20,724 55,195 21,839 60,979 77,262 68,954 2,254 $’000 2006 .133 Notes to the financial statements
For the 12 months ended 31 December 2007
Note 38. Deed of cross guarantee continued
2007 2006 $’000 $’000
Current liabilities Payables 88,807 97,771 Borrowings 45,000 – Current tax liabilities 18,265 48,111 Provisions 52,215 11,249 Other liabilities 12,707 7,615
Total current liabilities 216,994 164,746
Non-current liabilities Provisions 3,510 4,534 Other liabilities 10,388 39,067
Total non-current liabilities 13,898 43,601
Total liabilities 230,892 208,347
Net assets 303,111 345,165
Equity Contributed equity 1,231 53,573 Reserves (40,576) (37,836) Retained earnings 342,456 329,428
Total equity 303,111 345,165 For personal use only use personal For 134 .
Annual Report 2007 Financial statements
(a) opinion: directors’ the In 2007 31 December ended year the For Directors’ declaration 26 February 2008 February 26 Sydney Chairman Simpson DJ directors. the of resolution a with accordance in made is declaration This the of 295A section requiredby officer financial chief and officer executive chief the by declarations given been have directors The (d) (c) (b)
(i) the financial statements and notes set out on pages 63 to 134 are in accordance with the with accordance in are 134 to 63 pages on out set notes and statements financial the to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in Note 38. Note in described guarantee cross of deed the of virtue by subject become, may or are, they which to liabilities or obligations any meet to able be will 38 Note in identified Group Closed Extended the of members the that believe to groundsreasonable are there declaration, this of date the at the and Disclosures Party Related 124 AASB Standards Accounting with comply Report Directors’ the of 53 to 25 pages on out set disclosuresremuneration audited the payable; and due become they when and as debts its pay to able be will Company the that believe to groundsreasonable are there For personal use only (ii) complying with Accounting Standards, the Standards, Accounting with complying financial year ended on that date; that on ended year financial the for performance, their of and 2007 December 31 Company’sat entity’sthe as consolidated of position and view financial fair and true a giving ; and 2001; Regulations Corporations and other mandatory professional reporting requirements;and reportingprofessional mandatory other and 2001 Regulations Corporations 2007 Annual Report Financial statements including: 2001 Act Corporations Corporations Act 2001. Act Corporations
.135 .136For personal use only of AristocratLeisure Limited Independent auditor’s report tothemembers report basedonouraudit. responsibility istoalsoexpress anopinionontheremuneration disclosures containedinthedirectors’ to obtainreasonable assurancewhetherthefinancial report isfree from material misstatement.Our comply withrelevant ethicalrequirements relating toauditengagements and planperformtheaudit our auditinaccordance with AustralianAuditingStandards. TheseAuditingStandards require thatwe Our responsibility istoexpress anopiniononthefinancial report basedonour audit. We conducted Auditor’s responsibility directors’ report. The directors ofthecompany are alsoresponsible fortheremuneration disclosures containedinthe FinancialReportingStandards.with International Standards ensures thatthefinancial report, comprisingthefinancialstatements andnotes,complies FinancialReporting Statements, thatcompliancewiththeAustralianequivalentstoInternational directors alsostate,inaccordance withAccountingStandard AASB101PresentationofFinancial policies; andmakingaccountingestimatesthatare reasonable inthecircumstances. InNote1a,the material misstatement,whetherduetofraudorerror; selectingandapplyingappropriate accounting controlinternal relevant tothepreparation andfairpresentation ofthefinancial report thatisfree from Interpretations) andtheCorporationsAct2001.Thisresponsibility includesestablishingandmaintaining report inaccordance withAustralianAccountingStandards (includingtheAustralianAccounting The directors ofthecompanyare responsible forthepreparation andfairpresentation ofthefinancial contained inthedirectors’report Directors’ responsibilityforthefinancialreportandAASB124remunerationdisclosures report andnotinthefinancial report. Related PartyDisclosures,undertheheading“remuneration report” inpages25 to53ofthedirectors’ of directors andexecutives(“remuneration disclosures”), required by AccountingStandard AASB124 the CorporationsRegulations2001,companyhasdisclosedinformationaboutremuneration We havealsoauditedtheremuneration disclosures containedinthedirectors’ report. Aspermittedby to timeduringthefinancialyear. consolidated entitycomprisesthecompanyandentitiesitcontrolled attheyear’s endor from time Limited (thecompany)andtheAristocratLeisure LimitedGroup (theconsolidatedentity).The accounting policies,otherexplanatorynotesandthedirectors’ declarationforbothAristocratLeisure changes inequityandcashflowstatementfortheyearendedonthatdate,asummaryofsignificant comprises thebalancesheetasat31December2007,andincomestatement,statementof We haveauditedtheaccompanyingfinancial report ofAristocratLeisure Limited(thecompany),which directors’ report Report onthefinancial report andtheAASB124 remuneration disclosures containedinthe 2007 Annual Report Indepenent au ditor’s Reporttothe members Facsimile +61282669999 Telephone +61282660000 www.pwc.com/au Australia DX 77Sydney SYDNEY NSW1171 GPO Box2650 201 SussexStreet Darling ParkTower 2 ABN 52780433757 PricewaterhouseCoopers For personal use only Partner R LGavin PricewaterhouseCoopers comply withAccountingStandard AASB124. In ouropinion,theremuneration disclosures thatare containedinpages25to53ofthedirectors’ report Auditor’s opinionontheAASB124remunerationdisclosurescontainedindirectors’report c) thefinancialFinancialReportingStandardsreport alsocomplieswithInternational asdisclosedinNote1a. and theCorporationsRegulations2001; b) complyingwithAustralianAccountingStandards (includingtheAustralianAccountingInterpretations) December 2007andoftheirperformancefortheyearendedonthatdate; a) givingatrueandfairviewofthecompany’s andconsolidatedentity’s financialpositionasat31 Act 2001,including: In ouropinion,thefinancial report ofAristocratLeisure Limitedisinaccordance withtheCorporations Auditor’s opiniononthefinancialreport In conductingouraudit,wehavecompliedwiththeindependencerequirements oftheCorporationsAct2001. Independence our auditopinions. We believethattheauditevidencewehaveobtainedissufficientandappropriate toprovide abasisfor management. Our auditdidnotinvolveananalysisoftheprudencebusinessdecisionsmadebydirectors or For furtherexplanationofanaudit,visitourwebsitehttp://www.pwc.com/au/financialstatementaudit. contains anymaterialinconsistencieswiththefinancial report. Our procedures includereading theotherinformationinAnnualReporttodeterminewhetherit report andtheremuneration disclosures containedinthedirectors’ report. accounting estimatesmadebythedirectors, aswellevaluatingtheoverallpresentation ofthefinancial audit alsoincludesevaluatingtheappropriateness ofaccountingpoliciesusedandthereasonableness of but notforthepurposeofexpressing anopinionontheeffectiveness oftheentity’s control. internal An in thedirectors’ report inorder todesignauditprocedures thatare appropriate inthecircumstances, entity’s preparation andfairpresentation ofthefinancial report andthe remuneration disclosures contained to fraudorerror. control Inmakingthoseriskassessments,theauditorconsidersinternal relevant tothe of thefinancial report andthe remuneration disclosures containedinthedirectors’ report, whetherdue selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement in thefinancial report andthe remuneration disclosures containedinthedirectors’ report. Theprocedures An auditinvolvesperformingprocedures toobtainauditevidenceabouttheamountsanddisclosures 2007 Annual Report Indepenent au ditor’s Reporttothe members 26 February2008 Sydney
.137 .138 + Fully paid ordinary shares (excludes unexercised options and unvested performance share rights that have not been converted into shares). into converted been not have that rights share performance unvested and options unexercised (excludes sharesordinary paid Fully + non-transferable. and unquoted are 3+Plan the of rules the to subject Company the of capital the in sharesordinary up take to (“3+Plan”) Plan Performance Plus” “Three the under allocated rights share All # transferable. non- and unquoted are Plan the of rules the to subject Company the of capital the in sharesordinary up take to “Plan”) (the Plan Share Option Executive the under issued options All ∫ Statements. Financial the in 25 Note to Refer listed. not are which Bonds Convertible USD130m the to relation in redemption of notice a issued has Company The * 5.28% ofAristocrat’s totalissuedcapital. 24,494,145 shares, whichrepresented its associateshadarelevant interest in advised that,asat25July2007,itand Commonwealth BankofAustralia 6.135% ofAristocrat’s totalissuedcapital. 28,485,030 shares, whichrepresented its associateshadarelevant interest in advised that,asat18June2007,itand The CapitalGroup Companies,Inc. 2008 February 27 at as Shareholders Substantial 2008* February 27 at as Securities Equity of Distribution Shareholder Information For personal useLess thanamarketable only parcel of$500.00 10,001 -100,000 100,001 –over 5,001 -10,000 1,001 -5,000 1 -1,000 Holding Size of TOTAL
Holders∫ Option 5 1 4 0 0 0 2007 Annual Report
Share Rights# Performance Holders of 162 751 45 35 80 1 shareholder information Shareholders 15,519 6,423 7,451 361 126 662 857 462,613,545 421,442,844 of Shares+ 16,395,528 14,915,010 6,246,767 3,613,396 Number 6,479
% ofIssued Capital 100.00 91.10 .001 3.55 1.35 3.22 .78
# holders share rightholdersandconvertible bond one vote.Optionholders,performance one voteanduponapoll,eachshare has member present inperson orbyproxy has shares are thatonashowofhandsevery The votingrightsattachingtoordinary Rights Voting Name Queensland InvestmentCorporation Argo InvestmentsLtd Pacific CustodiansPtyLtd PSS Board Tasman AssetManagementLtd RBC DexiaInvestorServices CJHA PtyLtd ECA 1PtyLtd UBS NomineesPtyLtd Cogent NomineesPtyLtd Maaku PtyLtd Arminella PtyLtd ANZ NomineesLtd Thunderbirds Are GoPtyLtd Writeman PtyLtd Citicorp NomineesPtyLtd Serioso PtyLtd National NomineesLtd JP MorganNomineesAustraliaLtd HSBC CustodyNominees(Australia)Ltd 2008 February 27 at as Shareholders Twenty Largest
Refer to Note 25 in the Financial Statements. Financial the in 25 Note to Refer listed. not are which Bonds Convertible USD130m the to relation in redemption of notice a issued has Company The For personal use only # havenovotingrights. of theCompany. options havebeenissuedtofiveexecutives Plans andremain unexercised. These under theCompanyExecutiveShare Option non-transferable optionshavebeenissued As at27February2008,537,500unlisted Securities Equity Unquoted 2007 Annual Report Ordinary Shares Number of 10,162,624 14,666,055 16,973,432 17,692,200 17,712,095 26,116,788 29,276,160 30,097,521 30,525,772 49,372,933 57,948,118 58,019,222 2,114,107 2,270,000 2,696,107 3,844,083 4,302,920 7,097,693 8,500,000 8,596,098 Held shareholder information % Issued 10.67% 12.53% 12.54% Capital 1.53% 1.84% 1.86% 2.20% 3.17% 3.67% 3.82% 3.83% 5.65% 6.33% 6.51% 6.60% .46% .49% .58% .83% .93%
.139 .140
Forpostcode recorded onyourholdingrecord. Number (HIN) and as well and your surname Number (SRN)orHolderIdentification login usingyourSecurityholderReference can accessthisinformationviaasecurity personalholding record anddownloadforms.You holding information,makechangestoyour com.au andaccessawidevarietyof www.linkmarketservices.details. Visit registry managesallyourshareholding provide current share prices.Theshare the AustralianSecuritiesExchangeto website. Inaddition,there isalinkto communicate withtheCompanyviaits reports. Shareholders mayalso announcements, presentations and has thelatestinformationonCompany website, www.aristocratgaming.com, Aristocrat’sholdings viatheinternet. Aristocrat Leisure Limitedandyour about information access can You enquiries Shareholder usewho maybeunsuitable. amounts toshareholders orotherpersons rights and withhold payments of certain require divestiture ofshares, suspendvoting also givestheCompanypowerstodivestor require memberstoprovide informationand Constitution containsprovisions thatmay to theCompanyanditssubsidiaries, only Because oftheimportancelicensing that personcontinuestobeashareholder. person isunsuitabletobeashareholder, jurisdictions if,afterreceiving noticethata action by gaming authorities in some subsidiaries couldbesubjecttodisciplinary Aristocrat Leisure Limited and its Shareholders affecting Considerations Regulatory Information Shareholder
2007 Annual Report (i) Services advisingthat: will receive anoticefrom LinkMarket already completedandreturnedthisform Services. Shareholders whohavenot website) andreturnittoLinkMarket Form (availablefrom theCompany’s and submitaDirectCreditofDividends Australia whowere requested tocomplete program forshareholders resident in mandatory direct paymentofdividends In 2008,theCompanyintroduced a Electronic FundsTransfer Dividends the record dateoftherelevant dividend. a DirectCreditofDividendsFormby have notalready completedandsubmitted Such noticesare senttoshareholders who (iv) (iii) (ii) not beenreceived; held asdirect credit instructionshave the relevant dividendamountisbeing instructions; as possibleonreceipt ofdirect credit the nominatedbankaccountassoon the relevant dividendwillbecredited to the paymentdate;and are notprovided withinsixmonthsof Constitution ifdirect credit instructions under clause18.14BoftheCompany’s the relevant dividendwillbereinvested being withheld. no interest ispayableonthedividend shareholder information after thepaymentdate. that havenotbeenpresented sixmonths which are thesubjectofdividendcheques the automaticreinvestment ofdividends Company’s Constitutionwhichprovides for the Companyunderclause18.14Bof dividend chequesmaybedealtwithby Shareholders shouldnotethatunpresented as soonconvenientlypossible. outside Australia)shouldbebanked Dividend cheques(shareholders resident Dividend Cheques For personalthe PaymentDateis31March 2008. the closeofbusinesson7March 2008and The Record Dateforthefinaldividendwas brokerage costsare payable. rounded uptothenearest share and(vi)no (vi) thenumberofshares allocatedwillbe Australia) are notpermittedtoparticipate; hold thelegalinterest andare resident in custodians, nomineesortrustees(who New Zealand,whoholdshares through resident inallforeign countries,otherthan than NewZealand,and(d)shareholders resident inallforeign countries,other Employee EquityPlanTrust, (c)shareholders (v) (a)ASSPA PtyLimited,(b)theAristocrat on thebasisthatnodiscountistoapply; business dayaftertheRecord Date);(iv) commencing on11March 2008(thenext useperiod ofnotlessthanfivebusinessdays the purchase ofDRPshares comprisesa to participate;(iii)thepricingperiodfor shareholding applyinorder tobeeligible being issued);(ii)nominimumormaximum permitting this(andtotheextentnecessary, on-market subjecttomarketconditions on thebasisthat:(i)shares are purchased onlyDirectors determinedthattheDRPoperated In relation tothefinaldividendfor2007, operate eachtimeadividendisdeclared. Directors considerwhethertheDRPshould in respect ofthe2007finaldividend.The (“DRP”) wasactivatedon25February2008 The Company’s DividendReinvestmentPlan Dividend ReinvestmentPlan [email protected])). fax ((02)92870303))oremail(myshares. completed formtoLinkMarketServicesby Information). Shareholders shouldreturnthe Investor Information/InvestorTools/Dividend website www.aristocratgaming.com under Form” are availablefrom theCompany’s Reinvestment PlanApplicationorVariation The DRPRulesandthe“Dividend determinable ontheRecord Date. DRP participantswillreceive willnotbe provide thatthenumberofshares that the DRPdoesoperate,rules is madeforeachdividend);and(iii)when of anyfurtherdividends(aseparatedecision mean thattheDRPwilloperateinrespect 2007 finaldividenddoesnotnecessarily that theDRPoperatedinrespect ofthe occasion theDRPisactivated;(ii)fact will automaticallyparticipateonthenext DRP andwhodonotrevoke theirelections shareholders whoelecttoparticipateinthe Shareholders shouldnotethat:(i) 11 March 2008. of “notlessthanfivebusinessdays”from average ofthedailyVWAPs overaperiod share pricecalculatedbyreference tothe in reference tothe2007finaldividendata Shares were allocatedtoDRPparticipants 2007 Annual Report shareholder information
.141 .142
For www.aristocratgaming.com personalInternet Site Facsimile: +61294201352 Telephone: +61294136300 Australia Lane CoveNSW2066 71 LonguevilleRoad Aristocrat Leisure Limited Headquarters Global BJ Yahl Secretary Non-executive Director RA Davis Non-executive Director SAM Pitkin useNon-executive Director AW Steelman Non-executive Director P Morris Non-executive Director WM Baker Chief FinancialOfficerandFinanceDirector onlySCM Kelly Director Chief ExecutiveOfficerandManaging PN Oneile Non-executive Chairman DJ Simpson Directors Corporate Directory 2007 Annual Report Facsimile: +61296974830 Telephone: +61296974007 Australia Rosebery NSW2018 151 DunningAvenue Gaming Aristocrat Global Facsimile: +61298493601 Telephone: +61298493608 Australia Pemulwuy NSW2145 2-4 ButuWargun Drive Limited Aristocrat Technologies AustraliaPty Manufacturing Facsimile: +61294201329 Telephone: +61294136769 Australia Rosebery NSW1445) (PO Box155 Rosebery NSW2018 55 Mentmore Avenue Limited Aristocrat Technologies AustraliaPty &Development Research Australia CORPORATE D IRECTORY Facsimile: +6568424533 Telephone: +6564445666 Singapore 417943 Shun LiIndustrialPark#04-29 61 KakiBukitAvenue 1 Aristocrat Technologies Singapore Fax: +85328722783 Telephone: +85328722777 Macau Carlos d’Assumpcao 335-341 AlamedaDrive 17th Floor, HotlineCentre Aristocrat (Macau)PtyLimited Macau Asia Telephone/ Fax:+541147085400 Argentina, SouthAmerica Buenos Aires CP1642 San Isidro San Vladimiro 3056,1PisoOf,7 Aristocrat (Argentina)PtyLtd South America Facsimile: +17022701001 Telephone: +17022701000 USA Nevada 89119 Las Vegas 7230 AmigoStreet Aristocrat Technologies, Inc. America North Americas The International ForFacsimile: +27116080030 Telephone: +27115792900 South Africa2090 Linbro Park Linbro BusinessPark personal40 GalaxyAvenue Aristocrat Technologies Africa(Pty)Limited South Africa Facsimile: +6492592001 Telephone: +6492592000 Auckland, NewZealand 22 Vestey Drive,MtWellington Aristocrat Technologies NZLtd Zealand New Facsimile: +81358350523 Telephone: +81358350521 Tokyo Japan101-0031 2-5-12 Higashi-kandaChiyoda-ku 7th Floor, Building Ryukakusan Aristocrat Technologies KK Japan useFacsimile: +4686424714 Telephone: +46852215800 Sweden SE-120 07Stockholm Box 92079 Hammarby Kajväg16 ACE Interactive(ACEIAB) Sweden onlyFacsimile: +441895618501 Telephone: +441895618500 Middlesex UB82YFU.K. Uxbridge 25 RiversideWay Aristocrat Technologies Europe Ltd Great Britain Europe [email protected] Investors maysendemailqueriesto: Address Email Investor CODE: ALL Securities Exchange Ordinary Shares are listedontheAustralian Aristocrat Leisure Limited Listings Exchange Stock Sydney NSW1171Australia 201 SussexStreet PricewaterhouseCoopers Auditor Australia Locked BagA14,SydneySouthNSW1235 Website: www.linkmarketservices.com.au linkmarketservices.com.au Email: myshares.aristocrat@ Sydney NSW2000Australia Level 12,680GeorgeStreet Link MarketServicesLimited Registry Share Investor Contacts 2007 Annual Report CORPORATE D IRECTORY
.143 .144For personal use only For personal use only For personal use only