Page 11 - Key Concepts and Questions Part 1

What does Aristocrat Leisure Pty Ltd Actually Do?

QUESTION 1 - What were the Areas of Financial Statements I didn't understand

When reading through the reports I found that the reports had different names for the Spreadsheet requirement. These being the following:-
o Balance Sheet – Consolidated statement of financial Position
o Income Statement – Consolidated statement of comprehensive Income
o Statement of Changes of Equity – Consolidated statement of changes of equity
In some ways this led to some confusion when entering data to the spreadsheet. One of the questions I placed on Facebook to Martin Turner showed up a small confusion to me. I have had to use my Consolidated Statement of Comprehensive Income for Statement of Income. Can you tell me if I need to add in the section that says "Normalised profit" (before controlling interest) and "Reported Profit / loss" and if so do is use "before or after tax".


QUESTION 2 - What were the Areas of Business that are most critical or important to me

When looking at Aristocrat Leisure I see a company that can either be good or bad to those involved. The most critical areas of business to me are as follows:

- Company Standing

Aristocrat has been operating for over sixty years and seeing it develop from an idea to a major company throughout the world shows that success has been alongside this company. However if the company fails to follow its values it will lead to utter disaster. However through reading its company reports and business review I can see this company successfully staying in good standing in the future.

- Customer satisfaction

With the implementation of a range of gaming initiatives customer satisfaction is well balanced

- Product satisfaction

As the industry develops more improved games product satisfaction will come to the fore.

QUESTION 3 - What are the Key Challenges the Aristocrat Leisure is facing

Risks affecting the Company – While Aristocrat aims to manage risks inorder to avoid adverse impacts on its financial standing, there will be some risks that outside the groups Control.

1. With Changing economic conditions and other factors affecting the gaming industry Aristocrat will need to keep working to develop new and innovative technologies and products to meet customer needs and working to partner with their customers to provide value adding solutions.

2. Increasing competition Aristocrat will be continuing to invest in key skills and talent and have also strengthen their insights function to enhance their ability to produce innovative new product portfolios to drive entry into new markets and support share growth.

QUESTION 4 - How successful is Aristocrat Leisure in meeting its challenges?

In 2013 the primary focus was to execute the growth strategy across the world. Aristocrat made solid progress with an unrelenting commitment to deliver their customers the best possible games.

They needed to step up their investment in world-leading and technical and creative talent and working hard to embed a high performance culture thus being recognised as an employer of choice across the global industry.

Aristocrat needed to also sharpen their focus on what local customers and players wanted hence challenging themselves to live up to the company’s promise of truly ‘transform the game’.

A new benchmark was set for the business generating positive customer and market feedback on the quality and breadth of portfolios that Aristocrat showcased over their major tradeshows.

QUESTION 5 - What strategies has Aristocrat Leisure set in place?

Aristocrat strategy focuses on three key pillars – Core Momentum, Industry Transformation and People and Culture.

Core Momentum

- Focused on core gaming business and taking necessary steps to underpin share growth over coming years.

- Major investment in new and existing creative talent to continue to build competitive gaming and jackpot portfolios.

- Add further excitement and performance to gaming operations product. This included having legendary names such as Dan Marks, Scott Olive and Je Kaminkow joining their talented global group of artists and designers hence making an impact in quality of core game portfolio

Industry Transformation

- Made investments over the year to secure future position in emerging social gaming category
- Acquired an Internet Gaming System (IGS) and Remote Game Server (RGS) to enabling Aristocrat game content in both the online wager and free-to-play environments

People and Culture

- Commitment to building a high performance culture ensuring that Aristocrat attracts and retains the best performers with the right capability and behaviours to bring the company’s strategy to life.

- Rollout of High Performance Kit to support their key leaders to maximise their effectiveness every day.

- Implementation of range of improvement measures in response to global employee survey and bedded down comprehensive talent and management program

QUESTION 6 - What concerns do I have at this stage?

I did have some concerns to start with on how Aristocrat operates and whether or not they have some responsible gambling procedures in place. As gambling can be classed as both good and bad I needed to know if Aristocrat was a company that not just looked after company interests or that they actually looked after the individual that ends up using their machines for gambling purposes.

Today I did some research and found that they have done an evaluation of Responsible Gambling Features.
See link below.

http://www.aristocrat.com.au/company/Documents/Blue%20Gum%20Gaming%20Machine%20An%20evaluation%20of%20responsible%20gambling%20features.pdf

Aristocrat’s Role in a Sustainable Industry

Aristocrat works closely with industry leaders to promote responsible gaming initiative and support the adoption of evidence based responsible gaming practices and policies.

Responsible Gaming and Harm Initiatives are as follows:-
- Reducing problem gambling without unduly impacting the overwhelming majority of recreational gamers or limiting their choices, amenity and enjoyment
- Foster player empowerment and informed decision making while protecting individual privacy
- Be implemented with a high degree of integrity from both a technological and legal perspective
- Are affordable and viable for customers and ultimately for the players

Investment Initiative such as Blue Gum TM electronic gaming machines which incorporates a range of harm minimisation features including:-

- Special messages and animations to encourage players to gamble responsibly
- Bank meter allowing players to ‘bank’ any wins
- An alarm clock to help players to monitor the amount of time spent playing
- A ‘charity meter’ to direct part of the winnings to a registered charity



QUESTION 7 - What are the Similarities or Differences in the way each of the following firms present their Financial Statements
Aristocrat Leisure Pty Ltd, Echo Entertainment and Ainsworth Gaming will be the companies that I will be comparing.

Similarities

1. Layout of financial statements form both Aristocrat and Ainsworth are very similar in what they have inputted into their reports

2. Responsible gaming Programs - Both Aristocrat and Echo Entertainment have these set in place.