Aristocrat Leisure Limited Annual Report 2009 ARISTOCRAT LEISURE LIMITED ABN 44 002 818 368 ANNUAL REPORT 2009 Aristocrat Leisure Limited Annual Report 2009 CONTENTS 02 Company Profile & Key Dates 03 Directors’ Report 08 Review of Operations – Financial Report – Regional Segment Review – North America – Australia – Japan – Rest of World – Capital Management 22 Remuneration Report 50 Auditor’s Independence Declaration 51 Corporate Governance Statement 58 Corporate Social Responsibility 60 Five Year Summary 61 Financial Statements 129 Independent Auditor’s Report 131 Shareholder Information 133 Corporate Directory 01 Aristocrat Leisure Limited Annual Report 2009 Company Profile Aristocrat Leisure Limited (ASX: ALL) is a leading global provider of gaming solutions. The Group is licensed by over 200 regulators and its products and services are available in over 90 countries around the world. Aristocrat offers a diverse range of products and services, including electronic gaming machines, interactive video terminal systems and casino management systems. For further information, visit the Group’s website at www.aristocratgaming.com. Key Dates1 2010 2010 Annual General Meeting 28 April 2010 Interim Results Announcement (6 months ending 30 June 2010) 24 August 2010 Shares Trade Ex-Interim Dividend 3 September 2010 Record Date for Interim Dividend 9 September 2010 Payment Date for Interim Dividend 30 September 2010 2011 Final Results Announcement for 2010 24 February 2011 Shares Trade Ex-Final Dividend 1 March 2011 Record Date for Final Dividend 8 March 2011 Payment Date for Final Dividend 28 March 2011 2011 Annual General Meeting 3 May 2011 1 Dates subject to change. 02 Aristocrat Leisure Limited Annual Report 2009 Directors’ Report For the 12 months ended 31 December 2009 The Directors present their Report together with the financial statements of Aristocrat Leisure Limited (Company) and its controlled entities (Group) for the 12 months ended 31 December 2009. The information in this Directors’ Report is current as at 23 February 2010 unless otherwise specified. Directors’ particulars, experience and special responsibilities Current Directors The Directors of the Company throughout the 12 months ended 31 December 2009 and up to the date of this Directors’ Report are: Director Experience and other directorships Special responsibilities DJ Simpson Nominated July 2003. Appointed February 2004. Non-Executive Chairman FCPA – Director, CSL Limited Member, Nomination and Age 69 – Former Finance Director, Tabcorp Holdings Limited Governance Committee Member, Audit Committee Member, Human Resources and Remuneration Committee JR Odell Nominated December 2008. Appointed May 2009. Managing Director and Chief MBA – Special Director and Chairman, Gaming Executive Officer Age 51 Technologies Association Limited – Former Managing Director, Australia and Asia Pacific, Foster’s Group Limited – Former Executive, Allied Domecq in the UK and Asia Pacific WM Baker Nominated August 1998. Appointed May 1999. Chair, Regulatory and BA – Director, J. Edgar Hoover Foundation Compliance Committee Age 70 – Former Assistant Director of the Federal Bureau of Investigations (FBI) – Former President, The Motion Picture Association RA Davis Nominated November 2004. Appointed June 2005. Chair, Nomination and BEc (Hons), – Consulting Director – Investment Banking, Governance Committee M Philosophy Rothschild’s Australia Limited Member, Audit Committee Age 58 – Director, Territory Insurance Office (TIO), Trust Member, Innovation and Company Limited, Macquarie Office Management Development Committee Limited, Ardent Leisure Limited and Bank of Queensland Limited – Former Senior Executive, Citicorp and CitiGroup Inc in the United States and Japan – Former Group Managing Director, ANZ Banking Group Limited RV Dubs Nominated December 2008. Appointed June 2009. Chair, Innovation and BSc (Hons), – Chair, Space Industry Innovation Council Development Committee Dr ès Sc, FAICD – Former Deputy Vice-Chancellor (External Relations), Member, Regulatory and Age 57 University of Technology Sydney Compliance Committee – Former Director, Structural Monitoring Systems Plc – Former Director, Thales ATM Pty Limited, Thales ATM Inc (USA) and Thales ATM Navigation GmbH (Germany) – Former Chairman, Thales ATM spA (Milan) 03 Aristocrat Leisure Limited Annual Report 2009 Directors’ Report Current Directors continued Director Experience and other directorships Special responsibilities P Morris AM Nominated August 2003. Appointed February 2004. Chair, Audit Committee BArch (Hons), – Director, Mirvac Limited, Mirvac Funds Management Member, Human Resources MEnvSc, Dip CD, Limited, Clarius Group Limited, NSW Institute of and Remuneration Committee FRAIA, FAICD Teachers, and Bowel Cancer and Digestive Research Member, Nomination and Age 61 Institute Australia Governance Committee – Former Director, Jupiters Limited, Australia Post, Country Road Limited, Colonial State Bank, Howard Smith Limited, Energy Australia, Indigenous Land Corporation, Sydney Harbour Foreshore Authority, Landcom, Strathfield Limited and Principle Real Estate Investors (Australia) Limited – Former Director of Australian and Overseas Property for the Commonwealth Government – Former Group Executive, Lend Lease Property Services SAM Pitkin Nominated November 2004. Appointed June 2005. Chair, Human Resources and LLB, LLM, FAICD – Director, ASC Pty Limited, Export Finance and Remuneration Committee Age 50 Insurance Corporation, Committee for Economic Member, Regulatory and Development of Australia and UniQuest Pty Limited Compliance Committee – Member, Queensland Competition Authority Member, Innovation and – Trustee, Brisbane Girls Grammar School Development Committee – Member, Council of the Queensland Division of the AICD – Former Director, Chandler Macleod Limited – Former Partner and Special Counsel, Clayton Utz, Lawyers Directors (Elect) The following individuals were nominated by the Board during the year to be appointed Directors of the Company on receipt of regulatory approval: Director Experience and other directorships ID Blackburne Nominated November 2009. Appointment pending regulatory approval. BSc (Hons), MBA, – Chairman, CSR Limited PhD – Director, Suncorp-Metway Limited Age 63 – Director, Teekay Corporation (listed on the NYSE) – Former Chairman, Australian Nuclear Science and Technology Organisation – Former Managing Director, Caltex Australia Limited – Former Director, Symbion Health Limited SW Morro Nominated November 2009. Nomination effective from 9 January 2010. Appointment pending BA, Business regulatory approval. Administration Former Chief Operating Officer and President, IGT Gaming Division Age 51 04 Aristocrat Leisure Limited Annual Report 2009 Directors’ Report Former Director The following Director held office for part of the 12 months ended 31 December 2009: Director Experience and other directorships Special responsibilities SCM Kelly Nominated and appointed February 2007. Chief Financial Officer and BA (Hons), FCA, Ceased office 31 July 2009. Finance Director CA, MAICD Company Secretary Age 46 (from 25 July 2008) Company Secretary Review and results of operations Likely developments The Company Secretary was A review of the operations of the and expected results SCM Kelly until he ceased office on Group for the 12 months ended Likely developments in the 31 July 2009. JR Odell then acted 31 December 2009 is set out in operations of the Group in future as interim Company Secretary the Review of Operations which financial years and the expected from 31 July to December 2009 forms part of this Directors’ Report. results of operations are referred to pending PJ McGlinchey’s, BEc The operating result of the Group in the Review of Operations which (SocSc) LLB (Hons), regulatory attributable to shareholders for the forms part of this Directors’ Report. approval in selected jurisdictions. 12 months ended 31 December The Directors believe that disclosure PJ McGlinchey was subsequently 2009 was a loss of $157.8 million of further information as to the likely appointed Company Secretary after tax and minority interests. developments in the operations in December 2009. Significant changes in the of the Group and the likely results Principal activities state of affairs of those operations would, in their The principal activities of the Group Except as outlined below and opinion, be speculative and/or during the 12 months under review elsewhere in this Directors’ Report, prejudice the interests of the Group. were the design and development, there were no significant changes assembly, sale, distribution and in the state of affairs of the Group service of gaming machines during the 12 months ended and systems. The Company’s 31 December 2009. objective is to be the leading global Events after balance date provider of gaming solutions. There were no significant changes No material matters requiring in the nature of those activities disclosure in this Directors’ during the 12 months ended Report have arisen subsequent to 31 December 2009. 31 December 2009. To the best of their knowledge, the Directors Dividends are not aware of any other matter Since the end of the year, the or circumstance that has arisen Directors have recommended since 31 December 2009 that the payment of a final dividend has significantly affected or may of nil cents (2008: 10.0 cents, significantly affect: 100% franked) per fully paid (a) the Group’s operations in future ordinary share. financial years; or (b) the results of those operations