Alamos Gold
Annual Report 2021

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ANNUAL REPORT 2021 Ainsworth Game Technology ABN: 37 068 516 665 10 Holker Street, Newington New South Wales, Australia 2127 T: +61 2 9739 8000 F: +61 2 9648 4327 www.agtslots.com A I N S W O R T H G A M E T E C H N O L O G Y A N N U A L R E P O R T 2 0 2 1 Ainsworth 2021 Annual Report Contents Performance Overview New Products Board of Directors Sustainability Statement Chairperson’s Report Chief Executive Officer’s Report Shareholder Information Directors’ Report 2 4 6 6 8 10 12 14 Financial Statements Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Lead Auditor’s Independent Declaration Corporate Directory 39 44 90 91 97 98 AINSWORTH GAME TECHNOLOGY | ANNUAL REPORT 2021 Notice of Annual General MeetingAinsworth Game Technology Limited ABN 37 068 516 665Notice is hereby given that the 2021 Annual General Meeting of the members of Ainsworth Game Technology Limited will be held on Thursday 25th November 2021 at 10:00am AEDT.In light of the continued uncertainty and potential health risks associated with the COVID-19 pandemic, Ainsworth will be webcasting the AGM online – details will be included in the AGM Notice of Meeting.RESULTS ANNOUNCEMENT FOR SIX MONTHS ENDING 31ST DECEMBER 2021:Tuesday 22nd February 2022Dates may be subject to changeRESULTS ANNOUNCEMENT FOR YEAR ENDING 30TH JUNE 2022:Tuesday 23rd August 2022Dates may be subject to changeIn accordance with ASX Listing Rule 4.10.3, Ainsworth Game Technology’s Corporate Governance Statement can be found on its website at: https://www.agtslots.com/investor/corporate-governance • Positive adjusted EBITDA of A$15.5 million (excludes currency and one-off items), improvement on the A$5.8 million reported in FY20. • Strong balance sheet to enable further investment in product development. • Cash at 30 June 2021 was A$42.4 million (30 June 2020: A$26.5 million). • Net cash of A$5.1 million compared to net debt of (A$17.5 million) at pcp. • Revenue of A$159.5 million, +7% from pcp. • Effective management and control of operational expenses resulting in operating costs at A$98.4 million, -20% from pcp. • R&D as a percentage of revenue at 21% (2020: 28%). Rest of the World • Revenues of A$13.7 million, +96% due to the increased in unit sales in Europe and New Zealand. • Profit was up by 136% to A$6.6 million. • Online contributed A$5.9 million of revenues, up 28% compared to pcp. Increase in revenue was primarily from the launch of Real Money Gaming (“RMG”) in New Jersey in April 2020 and progressively going live with seven major operators. Online Gaming • Further progress in accelerating monetisation of on-line real money and social gaming was achieved in the period. • Following the successful launch of RMG in New Jersey, AGT has partnered with GAN to provide exclusive distribution to AGT game titles in USA for a 5-year term with expectation that this contractual agreement will generate US$30.0 million over the 5 years from FY22. • Continuing strong partnership with Zynga in providing AGT’s established and high performing game titles in social online gaming. North America • Revenue increased by 23% as market recovers from pandemic. • Segment profit at 44%, increased by 9% resulting from improved revenue and effective cost control management in place. • The number of machines on participation was 2,712 (Class II: 1,731 and Class III: 981), +17%. • Participation revenue increased by A$15.3 million due to increased in placements and high average yield per day from Historical Horse Racing (“HHR”) products. • MTD Gaming contributed positive impact on revenue within the North America segment and provide avenues of future growth in premium performing Poker, Keno and Video Reel content. Australia • Profit was up to A$2.4 million given increased revenue by 38% with improved performance from new hardware and recently released game titles. • Further extended lockdowns across New South Wales and other states within Australia have created an element of uncertainty and risk associated for this Cash Generating Unit (CGU) resulted in a one-off (non-cash) impairment charge of A$8.0 million recognised in ‘Other Expenses’. Latin America • Delivered loss of A$($8.6) million compared to profit of A$2.3 million in FY20 due to the prolonged severe impacts of COVID-19. • Decline in revenue to A$18.3 due to closures the primary markets of Mexico, across Argentina, and Peru. • Results in H2 FY21 saw some recovery with revenues of A$13.5 million compared to A$4.8 million reported in H1 FY21. Further recoveries in FY22 as vaccination rates increase and expectation that Government restrictions be further eased. • An impairment review of this CGU has resulted in a one-off (non-cash) impairment charge of A$24.7million recognised in ‘Other Expenses’. 2 AINSWORTH GAME TECHNOLOGY Performance OverviewFinancial HighlightsHistorical Performance - AUD (M) (by Half and Full Fiscal Year) Domestic Revenue International Revenue Adjusted Profit /(Loss) After Tax 107.3 87.8 19.5 (0.7) H1FY20 87.4 67.6 19.8 (0.8) H2FY21 72.1 52.9 19.2 H1FY21 (16.8) 42.1 33.3 8.8 H2FY20 (28.7) 149.4 121.1 28.3 FY20 (29.4) 159.5 120.5 39.0 FY21 (17.6) *Adjusted Profit/(Loss) After Tax excludes currency impacts and other one-off non-recurring items Revenues - AUD (M) (by Half and Full Fiscal Year) 149.4 159.5 107.3 42.1 87.4 72.1 H1FY20 H2FY20 H1FY21 H2FY21 FY20 FY21 *Note 1: Significant decline in revenue impacted by the onset of COVID-19 at beginning of Calender Year 2020 Reported and Adjusted EBITDA - AUD (M) (by Half and Full Fiscal Year) 18.5 14.6 14.4 10.2 1.1 H1FY20 H2FY20 H1FY21 H2FY21 (12.7) (23.6) (36.8) 5.8 FY20 (9) 15.5 FY21 (26.6) Reported Adjusted * Adjusted EBITDA excludes currency impacts and other one-off non-recurring items ANNUAL REPORT 2021 3 CABINETS ONLINE A-StarTM Curve XL & A-StarTM Slant Adding to the A-StarTM Dual Screen and Curve cabinets which were launched globally in February 2020, Ainsworth introduces the A-StarTM Curve XL and the A-StarTM Slant to the cabinet family. The A-StarTM Curve XL features a 4K 55-inch floating infinity monitor, dynamic LED lighting, and a state- of-the-art LCD button deck and was unveiled in the Americas July, 2021. The brand-new premium cabinet was released with the new Take It or Leave It game series. The A-StarTM Slant will make its global debut at G2E in October, 2021. This sleek new Slant cabinet offers a modular design, and all the features the A-StarTM cabinet is known for but in a sightline friendly low- profile display. B2B Real Money Gaming (RMG) Ainsworth Interactive signed a 5-year partnership with Game Account Network (GAN) for a minimum guaranteed amount of US$30 million for the exclusive supply of Ainsworth real money online games in the USA. Ainsworth’s existing online operations in New Jersey are incorporated in the Agreement, as well as the planned expansions into Michigan and Pennsylvania. 80 online games were developed and certified in New Jersey for the US market along with releasing them in parallel to European operators. For FY21, we launched our online content into the US market with Caesars Entertainment, Rush Street Interactive, Borgata, BetMGM, Party Casino, Mohegan Sun, Resorts Atlantic City and WynnBet casinos. B2B Social Casino Business Ainsworth further expanded the relationship with social casino partner, Zynga. Zynga has agreed to provide engineering resources to develop games, expediting the launch of the new games on their Hit It Rich app. HISTORICAL HORSE RACING (HHR) from manufacturers Aristocrat, Ainsworth’s award-winning Historical Horse Racing System is experiencing continued success in North America. Most recently, content and cabinets IGT, Konami and Scientific Games can be connected to Ainsworth’s HHR System. There are now more than 2,000 Ainsworth games in operation across Kentucky, Alabama and Virginia with over 100 titles and 6 terminal styles directly available. 4 AINSWORTH GAME TECHNOLOGY New ProductsNEW GAMES Cash StacksTM Cash StacksTM is Australia’s latest multi-denom product with scalable bonuses and multiple free games options in both stand-alone and link progressive configurations. Cash Stacks™ brings a fresh concept with 5th reel bonusing and the new Hold n’ StackTM credit collection feature. This feature provides an aspiring credit collection whereby the more free games awarded, the greater the potential stack award and increasing chance of Major and Grand Jackpots. Take It or Leave ItTM Take It or Leave ItTM launches Ainsworth’s A-STARTM Curve XL premium slot cabinet. This two-game series – Super Hot 7s ClassicTM and Solid Gold 8s ClassicTM – combines popular QuickSpin ClassicTM wheel play mechanics and proven Ainsworth High Denomination math into a powerful Linked Progressive bank built for the biggest gamblers. The player chase focuses on a line-win Progressive and the Take It or Leave ItTM wheel bonus. Lucky StarsTM Ainsworth’s library of innovative game content expands with the release of the Lucky Stars LinkTM. Two unique titles – Blazin’ Hot Lucky StarsTM and Emperor’s Lucky StarsTM – offer players the chance to try to win two Jackpots during an exciting Symbol Collection Feature. These new multi-denom games also include metamorphic pots and a fun Bonus Wheel. Rio Grande RapidsTM The Rio Grande RapidsTM brand is celebrating 10 years of uninterrupted fun with customers in Latin American casinos. In addition to being a widely recognized game, after 10 years it continues to offer high productivity rates. Rio Grande RapidsTM offers an interconnected progressive jackpot with three jackpot levels and an exciting, stacked symbol feature that triggers numerous prize rounds. The titles that make up the brand are Rio ExpressTM, Rio SunsetTM, & Rio GoldTM. Danny Gladstone Harald Neumann Chairperson and Non-Executive Director Member of the Audit and Risk Committee Appointed Non-Executive Director 1 July 2019 Chairperson since 26 November 2019 Chief Executive Officer and Executive Director Former Senior Advisor to Novomatic AG Appointed 21 February 2017 Chief Executive Officer since 1 October 2021 (Subject to regulatory approval) Graeme Campbell OAM Lead Independent Non-Executive Director Chairperson of the Audit and Risk Committee Member of the Remuneration and Nomination Committee Appointed 18 September 2007 Colin Henson Dip-Law BAB, FCPA, FCG (CS, CGP) FAICD Independent Non-Executive Director Chairperson of the Remuneration and Nomination Committee Chairperson of the Regulatory and Compliance Committee Member of the Audit and Risk Committee Appointed 3 April 2013 • Recycling of paper and cardboard waste, used metal (such as that found in end-of-life used gaming machines) and water; • Ongoing minimisation of use of hazardous substances in the design and manufacture of the Company’s products; • Continuous initiatives to reduce paper usage by incorporating paperless transactions and record keeping where possible. Despite the impacts of the pandemic on operations over the period, the Company has maintained a range of initiatives directed towards ensuring its business and operations make a positive contribution towards sustainable development. ENVIRONMENT & ENERGY Mission: Minimise the impact of the Company’s business activities on the environment. Example of initiatives: • Implementation of solar energy technologies and industrial standard energy saving high lumen LED lighting throughout its Newington premises and factory; 6 AINSWORTH GAME TECHNOLOGY Board of DirectorsSustainability Statement• Through the Company’s full membership and support of the Gaming Technologies Association of Australia (‘GTA’), assisting in the provision of responsible gaming resources to the general public that allow players to make informed decisions about their participation in gaming machine play. More information on these initiatives is available from the GTA website: www.gamingta.com. LICENSING & COMPLIANCE Mission: Ensuring that we operate in accordance with global compliance best practice across global markets. OUR PEOPLE Mission: Build an engaged, skilled, and responsible workforce guided by values that support our strategy. Example of initiatives: • Provide a safe and enjoyable work environment, with programs that support and incentivise employees; Example of initiatives: • The conduct of employee training in support of the Company’s global compliance efforts, including training for employees on what constitutes bribery, unlawful/corrupt conduct and money the penalties laundering and associated with such conduct; • An ongoing assessment of the workplace health and safety risks of all Ainsworth employees, the proactive encouragement of including COVID-19 vaccine take up by all employees worldwide and allowing all employees to utilise flexible work conditions where practicable to minimise the disruption to both employees and the Company’s business caused by the COVID-19 pandemic. RESPONSIBLE GAMBLING Mission: While we strive to deliver excellence in gaming global solutions, supporting and promoting responsible gambling is one of our core values. Example of initiatives: • Ensuring the Company’s gaming products are regularly tested and approved in accordance with relevant local laws and technical standards to ensure they operate with fairness and integrity and that they facilitate responsible gaming machine play; • Proactive approach to compliance and probity by having vigorous policies and procedures ensuring that we maintain our licences around the world; • The regular vetting and review of all new and existing significant customers and suppliers of the Company by a dedicated and professionally trained regulatory compliance function overseen by the Company’s Regulatory and Compliance Committee, to ensure all persons that do business with the Company are aligned with Ainsworth’s ethical and compliance values and requirements. these values For more details concerning and requirements please see the Ainsworth Regulatory and Compliance Committee Charter, published on the Company’s website. ETHICAL SOURCING Mission: Ensuring that those involved in our supply chain are treated fairly and operate in a safe environment and conforming to local requirements. Example of initiative: • The ongoing efforts of the Company to minimise the risk of modern slavery within the Company’s domestic and global supply chain as detailed in the Company’s Modern Slavery Statement and published on the Company’s website. ANNUAL REPORT 2021 7 improved performance for the 2HFY21 with a loss of $2.6 million. remain Our goals further expand our to international footprint and build our participation fleet to improve the quality of earnings. International markets contributed $120.5 million in revenue for FY21, representing 76% of the group’s FY21 total revenue. This delivered an improved performance overall with 2HFY21 representing $67.6 million, up 28% on 1HFY21. Recurring revenues continue to grow, accounting for 28% of total revenues (26% in PCP). AGT’s units under gaming operation increased by 9% to 7,052, generating annuity style recurring revenues. Operating costs were well controlled in FY21 with a decrease of 20% on the $122.7 million in the prior year. Current economic challenges resulted in the instigation of effective management and control of operational expenses, including agreed rental concessions, voluntary employee salary reductions and receipt of available government subsidies. Headcount reductions towards the end of FY20 provided additional overhead savings during the year as costs were maintained despite growth in revenue. remained Despite these significant operational challenges, we innovation and focused on developing superior products for our customers. This commitment underpins our strategy and sustainability. The imminent appointment of our new Chief Product Officer, Mr David Bollesen, combined with increased collaboration from Novomatic AG will ensure greater emphasis on creating more diverse product offerings across our global markets. I would like to highlight two examples of our commitment to innovation and excellence. The first is AGT’s leading Historical Horse Racing (HHR) products and system, which continued to perform well in the year. AGT is pursuing new revenue opportunities in current established markets and new jurisdictions where legislation including New recently been passed, has Hampshire, Wyoming and Louisiana. Dear Shareholders, 2021 has clearly been a challenging year for our customers, communities, and colleagues. I am proud of the way Ainsworth has supported our teams through these anxious times and delivered a strong recovery in results in the second half of the financial year. With progress in vaccine roll outs and the progressive reopening of customers’ venues across most markets, we look forward to further improvement in trading conditions in FY22. For FY21, AGT reported a Loss before Tax of $59.2 million. This loss reflects the impact of the pandemic and government imposed mandatory closures of customers’ venues, particularly in the first six months of FY21. The results also included $42.1 million relating to currency impacts and other one-off non-recurring items, including non- cash impairment charges of $41.7 million. Excluding currency translation impacts and one- off items noted above, the Loss before Tax for the year was $17.1 million. This compares to a loss of $34.0 million in FY20 on a similar basis. The results for the second half of FY21 showed a significant improvement on the first half results. Our performance has followed the progress of vaccination programs and increased customer activity. Compared to the $56.6 million Loss before Tax reported for 1HFY21, AGT delivered The previously launched A-StarTM cabinet is another example of Ainsworth at its best. We successfully exhibited the A-StarTM at the National Indian Gaming Association trade show in July 2021, the first to take place since the declaration the pandemic. The positive customer of 8 AINSWORTH GAME TECHNOLOGY Chairperson’s Reportresponses and feedback bode well for future growth. The effectiveness of our R&D investment will continue to be a primary objective with the efficient production of innovative, high performing products being the key to our future success. I would also like to express the Board’s gratitude to Lawrence Levy, who resigned from the CEO role in September for personal reasons. On behalf of the Board, I would like to thank Lawrence for his contribution, and we wish him well for the future. I would like to acknowledge and thank my fellow Board members for their efforts and support during difficult and challenging times. I would like to close by thanking the rest of the highly capable executive team in Australia and the Americas, as well as our dedicated and loyal employees, my fellow shareholders and of course, our customers. Danny Gladstone Chairperson sheet and In line with the strategic priority to protect AGT during this challenging period, the Company’s balance liquidity have been strengthened. At 30 June 2021, AGT had a cash balance of $42.4 million and since then, the cash balance has further increased. As a result of the exclusive distribution agreement for Real Money Gaming within the USA, AGT received the initial US$5 million contribution from GAN Limited in July 2021. Given the focus on liquidity and ensuring AGT is well placed during challenging market conditions, the dividend program remains suspended. implemented While the FY21 results were significantly affected by the pandemic, the proactive measures we have to strengthen AGT and position the Company for further recovery, should lead to improved performance as customer activity continues to increase. As you will have heard me say before, we have a professional workforce, an excellent industry reputation and a well-established footprint across our markets. We also have a new CEO to lead our growth and recovery. Subject to regulatory approvals, Harald Neumann commenced as CEO on 1st October 2021. As the former successful CEO of Novomatic AG, our major shareholder, and a director of AGT, he brings a wealth of knowledge and experience to the role with a thorough understanding of AGT. He will be able to seamlessly transition to the new position. Harald will be based primarily in Las Vegas where he can lead AGT in our largest market and continue to drive our success. (and recently traveled to Australia I the United States) to review our operations and opportunities. While I was there, I had the benefit of talking with shareholders, customers and many of my colleagues including management, sales and marketing teams and product developers. It became very clear to me that we have the ability, as pandemic restrictions are removed, to deliver on our potential to be a larger and more profitable company in our major markets. The improved results we delivered in the second half of FY21 highlight this recovery potential. Revenue in 2H increased by 21% compared to the first half. Loss after tax for 2H, including $12.5 million of non-cash impairments, was $3.3 million compared to a loss of $50.1 million in the first six months. Underlying EBITDA, a more reflective measure of operational performance, vastly improved in 2HFY21, and increased year on year. AGT reported underlying EBITDA of $15.5 million for FY21 compared to $5.8 million in the Prior Corresponding Period (PCP). Underlying EBITDA for 2HFY21 was $14.4 million compared to $1.1 million in 1HFY21. While these results don’t reflect Ainsworth’s real earnings potential, they are much better results than we reported for the first half. The North America region was once again the highlight of the results. The region reported revenue of $88.5 million, up 23%. Customer activity has recovered strongly as many markets reopened once vaccination programs advanced. Assets on participation were up 17% to 2,712. Participation and lease revenue increased by 66% year on year, and now contribute a greater share of overall regional revenue at 44% (32% in FY20). Following the close of the financial year, AGT completed a cash sale to Kentucky Downs of 400 machines previously under participation. The sale represents a mixture of hardware configurations including a portion of the newly released A-StarTM curve cabinets. The agreement provides for AGT to receive connection fees in FY22 and beyond. This sale gives us a good start to the new financial year. Australia delivered a good result in FY21, with solid growth over the PCP. The new A-StarTM curve cabinet and suite of innovative games were launched in the year. Revenue grew by 38% and EBITDA by 15% to $5.4 million (PCP: $4.7 million). Revenue increased in all states except Victoria. Dear Shareholders, I am delighted to provide my first report as your recently appointed Chief Executive Officer (CEO). As many of you will know, I started in my new role on the 1 October this year. Although my appointment is recent, I am not new to Ainsworth, or to the industry. I have been a director of your Company since 2017 and this will be my fifth Annual General Meeting of shareholders. Previously I was the CEO of Novomatic for five years and during this time, I was heavily involved in the due diligence and acquisition of the AGT shareholding. It is a privilege to be appointed to this executive leadership position at Ainsworth at such an important and challenging time in the company’s development. Given my experience and directorship, I have been able to build a strong knowledge of the business and a good understanding of our strengths and opportunities. Our key strengths include our trusted brand, our highly capable staff, the company’s enduring commitment to developing superior game technologies and our customer relationships across our major markets, particularly in North America. It is the potential to leverage these strengths into large market opportunities to deliver sustained growth and improved returns for shareholders that appeals to me about the role and excites me about Ainsworth. 10 AINSWORTH GAME TECHNOLOGY Chief Executive Officer’s ReportWhile the latest lockdowns in some states of Australia are creating further uncertainties, customers are looking to invest in their gaming floors to ensure they are competitively placed and appropriately resourced for when venues are permitted to reopen. Latin America was heavily impacted by the pandemic with high transmission rates, Government mandated closures and access in Mexico, to customer venues restrictions Argentina, and Peru. These restrictions affected performance. Revenues for the region were $18.3 million, a reduction of 56% compared to PCP. Results in 2HFY21 saw some recovery with revenues of $13.5 million compared to $4.8 million reported in 1HFY21. Of the 625 machines AGT sold in the region last year, 514 were in 2HFY21. As these markets increase vaccination rates, it is expected that Government restrictions will be eased within FY22 and further revenue opportunities can be expected as previously deferred purchasing decisions are progressed across the region. Online revenue grew by 28% to $5.9 million in the year following the launch of Real Money Gaming in New Jersey in April 2020 and progressively going live with AGT content with seven (7) major operators. The success of this business led to the US exclusivity agreement AGT executed with GAN Limited, ensuring continued growth for FY22 and beyond. The gross margin in FY21 was 56%, an increase on the 52% reported in the 1HFY21, however an overall reduction on the 61% in the PCP. The reduced margin was primarily due to further write down of older style cabinets, higher production overhead costs resulting from lower production units and sales forecasts in most jurisdictions. Despite all the challenges of the pandemic across our regions, AGT today is well placed for further recovery and long-term growth. We proactively took the opportunities the pandemic presented to enhance product development, streamline our cost base, expand our market presence, and strengthen our balance sheet. These initiatives have improved our financial results. We will conduct a broad review of our operations and investments to ensure we are maximizing our assets and opportunities so that we are well positioned for the future. We have an optimistic outlook. Our North American business is performing well. Markets there, with have effectively reopened over social distancing. We are pursuing new growth opportunities for our market leading Historical Horse Racing (HHR) products in new jurisdictions following the passing of new legislation. We are excited by the opportunities to extend MTD, which we acquired in H2FY20 across our jurisdictions to drive new sales and we can promote the A-StarTM cabinet, which is still not known in the US given so many trade shows and exhibitions were canceled last year. Our Australian business is also making progress despite the recent lockdowns. The commitment to employing the best talent available to drive effective and efficient product to our success. To development enhance our efforts in this area we are pleased to announce the appointment of our new Chief Product Officer, David Bollesen. is critical Our strong financial model supports our growth ambitions. 28% of group revenues recur and 76% of our sales are from offshore markets. In FY21 we refinanced a $50 million flexible loan facility and closed the year with a cash balance of $42.4 million. AGT is purposefully a different company to the one we were before the pandemic. We have deliberately taken advantage of the opportunities available to us over the last year to become more streamlined, more efficient, and more competitive. We are well positioned for recovery and growth. I wish to express my appreciation to my fellow Board members, including Danny Gladstone as the Chairman for their ongoing contribution to the Company. Danny has tremendous industry knowledge and proven expertise and I look forward to working closely with him. I would also like to thank Mark Ludski our CFO and Company Secretary, the executive teams from North America, Latin America and Australia and our talented employees, supportive shareholders and, importantly, our customers for their trust and support. Harald Neumann Chief Executive Officer ANNUAL REPORT 2021 11 Shareholder Information INFORMATION ABOUT SHAREHOLDERS Shareholder the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in this report is set out below: required by information Distribution of shareholders SHARE HOLDINGS (AS AT 20 SEPTEMBER 2021) Number of shareholders and shares on issue The issued shares in the Company were 336,793,929 ordinary shares held by 3,698 shareholders. Substantial shareholders The number of shares held by substantial shareholders and their associates are set out below: Category 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over NUMBER OF EQUITY SHAREHOLDERS Ordinary Shares Options 985 1,548 493 613 59 3,698 1 21 24 297 4 347 Number of Ordinary Shares Total 178,150,817 The number of shareholders holding less than a marketable parcel of ordinary shares is 494 (66,293 ordinary shares). On market buy-back There is no current on market buy-back of ordinary shares. Unquoted equity securities At 20 September 2021, 8,353,648 unlisted non-transferable options have been issued to 347 employees, respectively. These options remain unexercised. Regulatory considerations affecting shareholders The Company is subject to a strict regulatory regime in regard to the gaming licences and operations within the gaming industry. It is necessary for the Company to regulate the holding of shares to protect the businesses of the Company in respect of which a gaming licence is held. By accepting shares, each potential investor acknowledges that having regard to the gaming laws, in order for the Company to maintain a gaming licence, the Company must ensure that certain persons do not become or remain a member of the Company. The Constitution of the Company contains provisions that may require shareholders to provide certain information to the Company and the Company has powers to require divesture of shares, suspend voting rights and suspend payments of certain amounts to shareholders. Shareholder Novomatic AG Votraint No. 1019 Pty Ltd (MCA Private Investment A/C) Allan Gray Investment Management Spheria Asset Management 30,133,804 28,342,992 24,762,821 Voting rights Ordinary shares The voting rights attaching to ordinary shares are that on a show of hands every member present in person or by proxy has one vote and upon a poll, each share shall have one vote. Options Option holders have no voting rights. 12 AINSWORTH GAME TECHNOLOGY Shareholder Information (continued) Twenty largest shareholders Name NOVOMATIC AG CITICORP NOMINEES PTY LIMITED VOTRAINT NO 1019 PTY LIMITED THE PAVILION MOTOR INN OF WAGGA WAGGA PTY LTD BNP PARIBAS NOMINEES PTY LTD CASOLA HOLDINGS PTY LTD

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