Annual Report 2005 Talarius Annual Report 2005
TALARIUS COVER ARTWORK 2.qxp  7/4/06  2:18 am  Page 1 45 Annual Report 2005
Advisors 
Company secretary
SC Fadil, FCIS
RJ Hillhouse, FCIS
Registered office
20 Black Friars Lane
London
EC4V 6HD
Principal solicitors
Mayer, Brown, Rowe & Maw LLP
1 1 Pilgrim Street
London
EC4V 6RW 
Joelson Wilson & Co
70 New Cavendish Street
London
W1G 8A T
Principal bankers
Bank of Scotland
249 Silbury Boulevard
Milton Keynes
MK9 1NA
Auditors
KPMG Audit Plc
Altius House
One North Fourth Street
Milton Keynes
MK9 1NE
Corporate financial advisers
Marwyn Capital LLP
1 0th Floor, Bucklersbury House
3 Queen Victoria Street
London
EC4N 8EL
Livingstone Guarantee LLP
1 5 Adam Street
London
WC2N 6RJ
Stockbrokers
Numis Securities Limited
Cheapside House
1 38 Cheapside
London
EC2V 6LH
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Kent
BR3 4TU
Financial public relations
Brunswick Group LLP
1 6 Lincoln’s Inn Fields
London
WC2A 3ED
General enquiries
T alarius plc 
Silbury Court 
368 Silbury Boulevard 
Milton Keynes
MK9 2AF
T el: 0 1 908 696 1 00 
Fax: 0 1 908 393865
Group website: www.talarius.com
Investor Relations
Jonathon Glass/Chris Blundell
Brunswick Group
T el: 0207 404 5959
Andy Hall, Finance Director
T alarius plc
T el: 0 1 908 246 1 1 1
Nick Harding, Chief Executive
T alarius plc
T el: 0 1 908 246 1 23
Annual Report Copies
Jackie T aylor
T alarius plc
T el: 0 1 908 246 1 1 9 
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Highlights
The Company
T alarius plc comprises two key
gaming brands:
Quicksilver, the UK’s largest chain
of Adult Gaming Centres (AGCs)
currently with 183 sites spread
across the length and breadth 
of the UK.
Cyberslotz, launched in August
2001, a “virtual gaming machine
lounge” and amongst the top ten
most visited online gaming sites 
in the UK. 
(Source: Branddriver survey, June 2005)
Contents
01 Highlights
02 Chairman’s Statement
06 Chief Executive’s Statement
14 Finance Review
19 Mission Statement
22 Board of Directors
24 Corporate Governance Statement
26 Directors’ Remuneration Report
28 Directors’ Report
30 Independent Auditors’ Report 
31 Consolidated Profit and Loss Account
32 Balance Sheets
33 Consolidated Cash Flow Statement
34 Notes to the Financial Statements
44 Notice of Annual General Meeting
45 Advisors & Contacts
TALARIUS COVER ARTWORK 2.qxp  7/4/06  2:35 pm  Page 2 1 Annual Report 2005
Highlights
— Placing and Admission on AIM
4 April 2005, raising £5.5m 
— Further equity raising £30m June 2005
— Appointed senior management team: 
Nick Harding: Chief Executive; 
Andy Hall: Finance Director
— Successfully pursued strategy to consolidate
fragmented high street gaming market: 
three UK acquisitions during the period, 
and a fourth post year end
— Built market-leading estate: 1 0,000 owned
and operated gaming machines – largest on
the UK High Street – a signiﬁcant
competitive advantage
— Successful £9m share placing January 2006
— Latest acquisition adds 1 2 bingo lounges
taking total to 2 1 inside existing AGC estate;
potential for further gaming convergence
— Outlook remains positive; 2006 to date sales
growth above 9% in previous half
Pro Forma Financial Highlights
£m 2005 2004 Growth
Turnover 49.6 45. 1 up 1 0%
Operating proﬁt (post-central costs) 7 .3 6.0 up 22%
EBITDA (post-central costs) 1 2.7 1 0.6 up 20%
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 1 2 Chairman’s Statement
Sector Consolidation The Adult Gaming
Centre “AGC” market is populated by
a handful of larger established players,
together with many smaller privately run
operations. RAL was the largest pure AGC
business, trading under the “Quicksilver”
brand and operating from 1 27 high street
sites, with over 6,000 gaming machines
spread across the UK. RAL gave us an
excellent base from which to pursue our
consolidation strategy. Recognising the
increasing interest in interactive online
gaming, the management team have
developed a presence in this area through
“Cyberslotz”, which is making good
progress from a relatively small base.
We believe that the AGC market is ripe for
consolidation as the next largest players
have only an estimated 1 0% and 6% of 
the market respectively, with many smaller
businesses comprising the rest of the
market. We believe that further
consolidation opportunities will arise as 
we approach a more tightly regulated
environment. The 2005 Gambling Act is
increasing the burden on many smaller
market competitors, leading some to
explore a disposal of their businesses.
T alarius with its economies of scale, staff
incentivisation programme and tight
controls is able to offer a supportive
framework and the opportunity to integrate
such businesses within a larger group.
Since 1 June 2005 the team has
completed three further transactions:
Leisure Promotions on 7 July 2005 for
£1 1m, Blackheath on 7 November 2005
for £20m and post the year-end Leisurama
on 2 March 2006 for £1 2m.
All of the sites have been or will be 
re-branded as Quicksilver by the end
of July 2006. Our estate now comprises 
1 83 units with nearly 1 0,000 machines.
Debut on AIM On 4 April 2005 T alarius
commenced trading on AIM with the
objective of acquiring a well managed,
cash generating business in a sector
capable of consolidation, where the
Board’s city and business experience
could assist in managing the development
of the business. As proposed at the time of
the Company’s ﬂotation, the initial focus
was on the UK high street gaming sector.
This culminated in the acquisition of RAL
Holdings Ltd (“RAL ”) on 1 June 2005,
which delivered a strong business with an
experienced management team headed
by Nick Harding, who was appointed as
Group Chief Executive.
The strategy has been to acquire one
or more businesses that are suitably
positioned to take advantage of growth
opportunities provided by consolidation of
the fragmented high street gaming market
in the UK and Europe. The Directors have
initially focused on the UK because we
believe there is increasing convergence
among the high street gaming segments.
This provides opportunities to create
broader integration between gaming
offerings, including slot machine lounges,
licensed betting shops and bingo clubs.
We believe that the development of
gaming machine estates is a key driver
of proﬁtability across these offerings.
We also believe there are opportunities
for organic growth through a degree of
green ﬁeld site development. 
The Board Nick Harding was appointed
Chief Executive of T alarius on 1 June 2005.
I have known Nick and his team for many
years and he has over 25 years of sector
expertise. We were also pleased to
welcome Andy Hall to our Board as
Finance Director. Andy has over 20 years
of quoted company experience within the
high street retail and leisure sectors. On
20 September 2005 Ben Shaw stepped
down as a Non-Executive Director and
Mark Watts was appointed. Mark has
extensive commercial and relevant
ﬁnancial experience. T ogether with the
property expertise of Robert Ware, one
of our other Non-Executive Directors, we
have a Board with the experience to build
a strong business going forward.
David Williams Chairman
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 2 3 Annual Report 2005
Regulation 2005 was a watershed for the
UK Gaming sector with the ﬁnal passing of
the Gambling Act 2005. The debate around
the Act dragged on for over three years but
the ﬁnal structure and draft of the Act was
acceptable to the vast majority of UK
operators and certainly to those of us
operating in the high street gaming market.
Some of the larger foreign casino operators
were disappointed that the UK market for
casinos is going to be managed and
regulated more tightly than they anticipated.
T alarius has established a compliance
committee that meets regularly and
reviews all new legislation and regulation
in order to amend business strategy and
tactics as appropriate. This committee is
chaired by Nick Harding and includes
Andy Hall and one of our Non-Executive
Directors, Mark Watts.
Investors will be aware that Nick is
currently Vice President of the UK coin-
operated users trade association (BACT A)
and sits on the committee that liaises
between the government and the gaming
industry. He is also a trustee of the
‘Responsibility in Gambling T rust’ and an
advisor to the problem gambling support
charity, GamCare. These various positions
enable him to ensure that T alarius is fully
aware of any proposed changes to
regulation in the UK and has an input to the
way the new Gambling Act is interpreted
and in what form it is ultimately introduced.
The ban on smoking in public places,
scheduled for introduction in mid-2007 ,
also represents short-term uncertainty 
for our business. However, we will have 
an early trial of the ban in the form of the
introduction of a similar ban in Scotland,
where we have 1 0 sites, effective from 26
March. We will trial a number of measures
to cater for our customers who smoke
whilst complying with the new law, such 
as ‘al fresco’ smoking areas to the rear of 
a number of our properties. We believe 
the smoking ban may also represent an
opportunity for T alarius, because only 22%
of the UK adult population smokes and
becoming smoke free should encourage
more non-smokers into our sites.
We believe that further consolidation
opportunities will arise as we approach 
a more tightly regulated environment.
Shareholders We were pleased to
welcome T attersall’s as a major shareholder
of the Company when they bought a
1 0. 1% stake on 27 November 2005.
T attersall’s is one of Australia’s major
leisure and gaming businesses with a
market value in excess of A$ 2 billion.
We recently raised £9 million via a placing
of six million shares at a price of 1 50
pence per share on 27 January 2006.
This takes our number of shares in issue
to 43.9 million.
The Company keeps its dividend policy
under review. We continue to pursue our
strategy of identifying and completing
acquisitions that will deliver enhanced
earnings for our Group, whilst remaining
mindful of the desire to make appropriate
returns to shareholders.
Outlook I am pleased to report that current
trading continues to be strong with AGC
like-for-like sales growth in the 1 0 weeks
to 1 1 March 2006 above the 9% increase
reported for the second half of last 
year. This reﬂects the strength of the
management and Company structure
in ensuring the successful and speedy
integration of our acquisitions together
with the beneﬁt of the strategy put in place
by your Board for the underlying business.
In addition to the acquisitions, plans are
also on track for a potential eight green
ﬁeld sites to be opened in 2006.
We believe the current fragmented nature
of the UK high street gaming market,
convergence between gaming offerings
both in the UK and Europe and the
strength of our gaming machine estate
both in terms of scale and quality will
continue to provide further opportunities
in the UK and European high street
gaming markets.
I would like to congratulate and thank 
all our staff, and their central back-up
teams, who continue to provide the 
best customer service and the most
entertaining environment in each of 
our centres.
David Williams
Chairman
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 3 4 At a Glance
“All acquisitions will be rebranded 
as Quicksilver by July 2006.”
“We design, build and operate 
all our own software.”
Adult Gaming Centres Interactive
1 83 SITES
1 ,000 EMPL O YEES
1 0,000 MA CHINES
1 00,000 MEMBERS
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 4 5 Annual Report 2005
Where we operate
1 83 sites based in1 65 towns and cities.
Industry snapshot
*
September
A report by the Henley Centre supports 
the argument for a rise in stakes and 
prizes, as it predicts that gaming machine
manufacturers will lay-off up to 20% of
employees and experience an 1 8% drop 
in proﬁts. Staff from T alarius plc hand over 
a cheque for £1 6,500 to Linda Lindsay 
of children’s charity CHIPS.
October
Industry media highlight T alarius’ success
story as interim results show a six per cent
rise in proﬁts. T alarius underlines Section 1 6
policy, stating that it will not purchase from
manufacturers that fail to comply with
Gambling Commission rules.
November
T alarius continue on the acquisition trail with
the £20m purchase of Blackheath Leisure.
The Quicksilver brand of AGC’s moves 
to the top of the table with a 1 7% market
share. Nick Harding is quoted as being
‘ﬂattered’ by news that Australian gaming
giant T attersalls has purchased a ten 
per cent share in T alarius.
December
Industry breathes a sigh of relief as
Chancellor Gordon Brown announces 
that a gross proﬁts tax will not be applied 
to gaming machines under the 2005
Gambling Act. Section 1 6/2 1 machines
now come under the scope of VA T .
January
T alarius outlines plans to cater for smokers
and non-smokers in its Scottish outlets as
total ban on tobacco smoke gets closer.
Around 25,000 buyers attend the A TEI trade
exhibition at London’s Earls Court. T alarius
conﬁrms a 9% increase in sales for the
second half of 2005.
February
T alarius raises £9m to help ﬁnance
acquisition trail. Parliament gives the green
light to a ban on smoking in public places in
England and Wales in Summer 2007 .
March
T alarius purchases the Leisurama business
for £1 2m. The total number of AGCs in the
Group rises to 1 83.
*Extracts from the T alarius Leader staff magazine Milton Keynes head ofﬁce
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 5 6 Chief Executive’s Statement
Adult Gaming Centres AGC like for like
sales in the second half of 2005 were
ahead by nine per cent and year on year
mature business growth in all regions of
the country continues to be very strong,
despite the challenging retail environment.
Much of our growth has come from 
the introduction of Section 1 6 (“S- 1 6”)
machines that operate with a maximum
stake of £2 and a top cash payout of £500
compared to the 30p stake and £25 payout
in the majority of the machine estate. This
introduction has outweighed much of the
downside that we might otherwise have
encountered from the view taken by the
government that any increase in stakes 
and prizes for AWP machines must be held
back until after the new Gambling Act is
enacted in September 2007 .
T otal pro forma AGC sales were £47 .85m
(2004: £43.75m), up year on year by 9%.
Operating proﬁt at £7 .7m (before goodwill
amortisation of £1 . 1m) was up 30%
(2004: £5.9m). Blackheath exhibited the
strongest sales growth, reﬂecting the fact
its sites are all located in London where 
S- 1 6 machines have started most strongly.
The second half beneﬁted from the
accelerated roll out of S- 1 6 machines
towards our target of four in each centre.
This roll out was actually achieved at the
end of February 2006, about a month
ahead of our original plans. 
Operating Review Using the Quicksilver
business as the foundation for consolidation
of the high street gaming market, the
Group completed two acquisitions during
the year at attractive multiples. On 7 July
2005 the Group acquired Leisure
Promotions Ltd and In T o Save Ltd
(together “Leisure Promotions”) at a total
consideration of £1 1m. Leisure Promotions
operated 1 3 Adult Gaming Centres (“ AGCs”)
across Northern England and Scotland
with over 1 ,300 gaming machines. The
Group also acquired Blackheath Leisure
(Carousel) Ltd (“Blackheath”) on
7 November 2005 for £20m. Blackheath
operated 24 sites in London with an estate
of nearly 1 ,300 machines. 
By the year-end the Group was operating
1 64 sites and approximately 9,000
machines. 
During the period the Group continued
to make good progress both operationally
and ﬁnancially. T o assist the understanding
of the underlying performance of the
business, additional segmental
information has been included below 
for Quicksilver and Blackheath. Leisure
Promotions was fully integrated within
three months and is included within the
Quicksilver ﬁgures. The three businesses
have been treated as though they had
existed as the “Enlarged Group” for the
whole of the current and prior year; the
current year being 52 weeks in length 
and last year being 53 weeks.
Nick Harding Chief Executive
AGC like-for-like sales were
ahead by 9% and year-on-year
mature business growth in all
regions of the country continues
to be very strong despite the
challenging retail environment.
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 6 7 Annual Report 2005
T otal EBITDA was £1 3. 1m up 24% on last
year (2004: £1 0.5m). Our EBITDA margin
was strong, progressing from 24. 1% to
27 .3%. Overall our aim is to deliver an
EBITDA margin closer to 30% as we
switch all the store facia to Quicksilver and
achieve synergies across the Group. All
Leisure Promotions stores have now been
re-branded as Quicksilver. The Blackheath
stores will be re-branded by the end of
April 2006, and Leisurama by the end 
of July 2006.
In addition to the post balance sheet
acquisition of Leisurama on 2 March 2006
(which brings a further 1 9 units at a cost 
of £1 2m and at a prospective EBITDA
multiple of 5. 1 times), we have also
identiﬁed two new sites as part of our
aim of opening eight new greenﬁeld sites
in 2006. 
Interactive Cyberslotz, our internet gaming
business, continues to show strong growth,
both in terms of ‘drop’ and operating proﬁt.
Sales grew by 30% to £1 .7m (2004:
£1 .3m) and operating proﬁt increased
to £0.2m from last year’s £0.08m.
We continue to add new games to the site
to provide freshness and choice for our
players. At the year end the site featured
25 games. The sales trend for the ﬁrst ten
weeks of the year has moved well above
the year on year growth rate experienced
last year.
Our strong player retention was backed 
up by market research conﬁrming that
there was exceptionally strong loyalty 
to the Cyberslotz brand and site. We are
strengthening the management team 
to improve marketing and promotional
support and provide the skills necessary 
to enhance both the customer-facing
elements of our site and the back of house
service and support. This also provides us
with the conﬁdence to sustain the growth
of our white-label interactive service,
known as “Interslotz”, where we added
two new business afﬁliates in the year
to take the total to 16.
We have recently enhanced the senior
team with the appointment of Nick
Pearson who joined us from Camelot 
as IT Director. His focus has been on
systematically planning the development 
of the existing site and then preparing 
it to be marketed more widely, as it is
currently only made available in the UK. 
Competitive advantage Efﬁcient machine
estate management is at the core of our
business. We constantly ensure that we
own the optimum mix of gaming machines,
install them in the appropriate sites and
provide the right environment to provide 
an enjoyable customer experience. 
We must be innovative with our product 
to sustain customer interest. Our large
machine estate and in depth product
knowledge allows us to experiment and
innovate with new games and concepts,
then roll out the successful machines at
considerably lower risk than our
competitors, continually optimising the
performance of our estate. We are also
able to extract economies of scale in
buying and maintenance from owning the
largest number of machines in the UK
high street. We have seen the continued
beneﬁt of this approach during the period,
especially with the accelerated roll out 
of S-1 6 machines. 
During this year we have introduced
Quick-Bet sports book electronic terminal
betting alongside our Camden AGC and
will repeat this at another site shortly. We
are also exploring the expertise we have
gained in the high street bingo market and
our Metro Bingo offering. The acquisition
of Leisurama has brought us to 2 1 bingo
lounges contained within AGCs and
provides another potential avenue for
growth for the Group.
2 1 bingo lounges contained within AGCs
provides another potential avenue for
growth for the Group.
+9%
T otal pro forma AGC sales were £47 .85m
(2004: £43.75m), up year on year by 9%. 
+30%
AGC operating proﬁt at £7 .7m (before
goodwill amortisation of £1 . 1m) was up 30%
(2004: £5.9m). 
XTA001_Talarius_AW4.qxp  7/4/06  2:16 am  Page 7 8 Delivering the Best Experience
DELIVERING 
THE BEST
EXPERIENCE
XTA001_Talarius_AW4.qxp  7/4/06  1:15 pm  Page 8 9 Annual Report 2005
One of our key strengths lies in our people,
many of whom have given us signiﬁcant
years of service and are highly experienced
gaming operators.
XTA001_Talarius_AW4.qxp  7/4/06  1:16 pm  Page 9 10 Chief Executive’s Statement
Legislation and regulation Under the 2005
Gambling Act further reforms of UK gaming
will take effect from 2007 . We continue to
view the change positively. In particular, we
are pleased that “Category B3” machines
will take the place of the very successful
S-1 6 machines. We remain positive despite
the December 2005 withdrawal of the
VA T-exempt status of S- 1 6 machines and
also the Government’s stated intention
to align the level of Amusement Machine
Licence Duty across all categories of
gaming machine. We have already set
in motion plans to mitigate any detrimental
impact this may have. 
From 26 March 2006 a ban will be
imposed on smoking in public places
in Scotland, where we operate 1 0 of our
1 83 centres. We have taken various actions
to comply with the ban and will be trying
certain innovative approaches to continue
to provide a superior experience for our
customers. The fact that the legislation
is comprehensive in nature means it is
only likely to have a short-term impact as
customers adapt to the change. It will also
act as a very good indicator of the likely
impact of the UK-wide ban due in the
summer of 2007 , and enables us to
monitor the effect of our innovations.
We believe the Cyberslotz gaming engine
is unique in the remote gaming sector. 
We design, build and operate all our own
software. Thus we have an open platform
with a wide range of slot gaming products
from a number of different suppliers –
our own virtual gaming machine lounge. 
We continue to explore the opportunities
of new technology. We are currently
trialling our online games on the mobile
phone platform, using the opportunity 
to leverage our existing online gaming
expertise and maximise revenue from 
our nationwide customer base. 
Quicksilver has led the development 
of the UK AGC market over the past ﬁve
years with a wide range of customer
service innovations to make its AGCs the
gaming venue of choice on the high street.
We position ourselves ﬁrmly in the low
stake, high volume high street gaming
market where our principal objective is 
to provide ‘gaming entertainment’ for the
retail shopper. Our venues mainly trade 
in line with retail hours, hence a key
differentiator is our focus on providing
superior customer service.
We position ourselves ﬁrmly in
the low stake, high volume, high-
street gaming market where our
principal objective is to provide
“gaming entertainment” for the
retail shopper.
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 10 Annual Report 2005
Our people. The number of T alarius
employees continues to grow in line with
our acquisitions and is now slightly over
1 ,000. We ﬁrmly believe that one of our
key strengths lies in our people, many 
of whom have given us signiﬁcant years 
of service and are highly experienced
gaming operators. All our staff receive
regular customer service training. We 
also use ‘mystery shoppers’ to monitor
standards of service and presentation. 
We continue to review and upgrade our
recruitment and training policies through
our HR department, which also regularly
reviews beneﬁts packages for all team
members to ensure that we are generally
within the upper quartile of the market. 
One of the beneﬁts of our stock market
listing was the opportunity to make a
signiﬁcant number of senior and middle
managers share option holders. In late
March 2006 we intend to introduce a
‘Save as you earn’ share scheme open
to all staff. I want to thank all employees
of the Group for their contribution to our
success and I hope many of them take 
the opportunity to become shareholders.
Nick Harding
Chief Executive
We have introduced Quick-Bet, sports book
electronic terminal betting alongside our
Camden AGC and will repeat this at another
site shortly. 
11
XTA001_Talarius_AW4.qxp  7/4/06  1:16 pm  Page 11 CREA TING
WINNING
ENVIRONMENTS
12 Creating Winning Environments
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 12 13
“We have taken various
actions to comply 
with the ban and will
be trying certain
innovative approaches
to continue to provide 
a superior experience
for our customers.” 
Annual Report 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 13 14 14 Finance Review
As this was a reverse takeover, RAL ’s
accounting policies and practices were
adopted by the T alarius Group. It operates
with 1 3 four weekly accounting periods,
a ﬁrst half of 28 weeks and second of 24
weeks, with a year ending the last
Saturday in December. 
On 7 July 2005 the £1 0.7m acquisition 
of Leisure Promotions was completed.
The total drawdown at that stage was
£18.75m. 
On 7 November the £20m acquisition of
Blackheath was completed. An additional
debt facility of £1 7 .5m was negotiated at
that point, with deal costs of £0.5m and
loan arrangement fees of a further £0.2m
to be amortised over the loan term which
is repayable over 5 years. 
The goodwill calculations for each
acquisition are again given in note 2 1 . 
Due to the timing of the acquisitions
shortened periods of trading are included 
in these results; being 30 weeks for RAL,
25 and a half weeks for Leisure Promotions
and eight weeks for Blackheath. T o provide
more meaningful information for
performance comparison, pro forma
additional segmental information has been
provided on page 1 8. In this respect, the
Enlarged Group represents the combined
businesses of RAL and Leisure Promotions,
which operated the Quicksilver AGCs
and Cyberslotz interactive gaming,
and Blackheath.
As well as turnover and operating proﬁt,
earnings before interest, taxation,
depreciation and amortisation (EBITDA)
are also highlighted, which the Directors
regard as one of the best overall
evaluation measures. 
Operating proﬁt. Operating proﬁt for 
the Group comprises the results of the
Quicksilver AGCs and the Cyberslotz
interactive gaming business, less central
service costs. Central services consist 
of the remuneration of the Board,
(excluding the remuneration of the two
Executive Directors that is charged to
AGCs), plus the costs associated with
being a listed company.
Operating proﬁt before goodwill amortisation
and exceptional items was £3.2m. This ﬁgure
is analysed in more detail in the segmental
analysis in note 2.
The performance of each business is
described in the preceding Review.
Acquisitions. The most signiﬁcant event
in the period since T alarius was ﬁrst ﬂoated
on 4 April 2005 was the acquisition of
RAL. This provided the platform for our
stated strategy of consolidation of high
street gaming, initially focused on the UK
AGC sector. This was subsequently
followed by the acquisitions of Leisure
Promotions and Blackheath.
RAL was acquired on 1 June 2005 with
the proceeds of the initial share placing
and a further issue of shares on readmission
to AIM. A total of 37 million shares was
placed in two tranches with total cash
proceeds before expenses of £35.7m.
Debt facilities of £20m were also arranged.
T otal consideration was £38.8m, plus deal
costs of £2.2m after allowing for the
separate treatment of £1 .2m equity
fundraising costs, deducted from share
premium in the balance sheet and £0. 1m
of loan arrangement fees, amortised over
the term of the loan, resulting in goodwill 
of £29. 1m as shown in note 2 1 .
Andy Hall Finance Director
Acquisitions
Date Cost Business Sites Machines EBITDA Multiple
June 05 £39m RAL 1 27 6,000 6.5 x
July 05 £1 1m Leisure Promotions 1 3 1 ,300 4.5 x
November 05 £20m Blackheath 24 1 ,300 5.8x
March 06 £1 2m Leisurama 1 9 1 ,000 5. 1x
T otal £82m 1 83 9,600 5.8 x Blended
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 14 15
Post balance sheet event. On 2 March
2006 the Group announced the acquisition
of Leisurama Entertainments Ltd and
Leisurama Holdings Ltd known together
as “Leisurama”. The total consideration
was £1 2m funded from cash and existing
bank facilities following the successful
placing of six million shares at 1 50p, which
were admitted on 27 January 2006.
The consideration represented 5. 1 times
estimated EBITDA for the year to December
2006. The Leisurama balance sheet at
completion had estimated net assets of
£1 .9m and £0.3m of debt; with deal costs
of £0.6m resulting in goodwill, pre-fair
asset value review, of £1 1m.
Interest. The Group’s net interest charge
was £0.7m which was covered 4.4 times
by operating proﬁt before goodwill
amortisation and exception item.
Taxation. The effective rate of tax on Group
proﬁt was 33%.
Cash ﬂow. Net cash inﬂow from operating
activities was £4.5m. The cash outﬂow
from capital expenditure was £3.0m. New
machines at £2. 1m accounted for the bulk
of the expenditure as the number of S-1 6
machines was increased towards four per
site. Refurbishments totalled £0.6m and
the balance of £0.3m mainly related to
investment in computer systems.
Financial position. Net debt at the year-end
amounted to £30.3m (see note 22). The
Group has £37 .5m of committed bank
facilities of which £35.25m was drawn at
the year-end. £20m is on a revolving credit
facility repayable in June 2008 and £1 7 .5m
is repayable over the ﬁve years through to
November 20 1 0. In addition an overdraft
facility of £2m is available repayable on
demand. The interest margin payable is
1 .5% above LIBOR on the revolving credit
facility and 2% above LIBOR on the term
loan. Loan arrangement fees of £0.3m are
being amortised over the terms of the loans
to which they related and added £30k to
this period’s interest charge and will add
£0. 1m in a full year.
Financial risks and treasury policies. 
The key ﬁnancial risks faced by the 
Group relate to the availability of funds 
to meet business needs and ﬂuctuations
in interest rates. The Group manages
borrowing, liquidity, interest rates 
and banking relationships in order 
to minimise exposures.
The Group ﬁnances its operations by 
a combination of internally generated cash
ﬂow and bank borrowings. Reﬁnancing
risk is controlled by ensuring the Group
has sufﬁcient undrawn bank facilities to
meet increases in projected borrowings
over the following 1 2 month period. The
Group’s policy is to ﬁx or cap a proportion
of projected net debt in order to reduce
the Group’s exposure to ﬂuctuations in
interest rates. A 1% increase in interest
rates is estimated to have an impact of
£0.3m in a full year.
International Financial Reporting 
Standards (IFRS) 
The Group has considered the implications
of IFRS. The main areas affected are
goodwill, share option valuation, any
ﬁnancial hedging and taxation. The Group
will report on the impact of the standard 
for the ﬁrst time in the interim accounts 
to 1 5 July 2006.
Andy Hall
Finance Director
Earnings before interest, taxation,
depreciation and amortisation (EBITDA) 
the Directors regard as one of the best
overall evaluation measures.
+20%
T otal Group EBITDA
Annual Report 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 15 16 Investing for the Future
We continue to explore the opportunities 
of new technology.
Our large machine estate and in-depth
product knowledge allows us to experiment
and innovate with new games and
concepts, then roll out the successful
machines at considerably lower risk.
XTA001_Talarius_AW4.qxp  11/4/06  11:57 am  Page 16 Annual Report 2005
INVESTING
FOR THE
FUTURE
17
XTA001_Talarius_AW4.qxp  11/4/06  11:57 am  Page 17 18 Finance Review
Additional segmental analysis 
for the Enlarged Group prepared on a pro forma basis (unaudited)
52 Weeks ended 53 Weeks ended
31 December 2005 1 January 2005
£000 £000
Turnover
Adult gaming centres
Quicksilver 39,727 36,946
Blackheath 8,129 6,800
47,856 43,746
Interactive gaming 1, 7 09 1 ,3 10
T otal 49,565 45,056
EBITDA*
Adult gaming centres
Quicksilver 9,776 8,443
Blackheath 3,304 2, 1 00
1 3,080 1 0,543
Interactive gaming 210 90
T otal 1 3,290 1 0,633
Operating Proﬁt*
Adult gaming centres
Quicksilver 5,140 4,432
Blackheath 2,578 1 ,500
7 ,7 1 8 5,932
Interactive gaming 197 7 8
T otal 7 ,9 1 5 6,0 1 0
*Before goodwill amortisation, exceptional item and T alarius Central Services of £566k.
“The Enlarged Group” represents the combined businesses of RAL and Leisure Promotions, which operated the Quicksilver AGCs and
Cyberslotz interactive gaming, and Blackheath.
“EBITDA ” – earnings before interest, taxation, depreciation and amortisation.
The additional segmental analysis has been prepared from management accounting information as adjusted for non-recurring central costs.
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 18 19 Annual Report 2005 Mission Statement
Our aims are to provide 
the best standards of service,
ambience and equipment 
in UK and European Gaming, 
to be the best company to work
for and, by doing these things, 
to be the most proﬁtable.
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 19 20 Driving the Market
DRIVING THE
MARKET
XTA001_Talarius_AW4.qxp  11/4/06  11:57 am  Page 20 21 Annual Report 2005
Efﬁcient machine estate management 
is at the core of our business.
The development of gaming machine
estates is a key driver of proﬁtability.
+ 10 %
T otal Group Turnover
+22%
T otal Group Operating Proﬁt
We are able to extract economies of 
scale in buying and maintenance from
owning the largest number of machines 
on the UK high street.
XTA001_Talarius_AW4.qxp  11/4/06  11:58 am  Page 21 22 Board of Directors
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 22 Annual Report 2005
David Williams (age: 54)
Non-Executive Chairman
David has over 35 years’ experience
in the investment market. He has served 
as Chairman in both executive and non-
executive capacities for a number of
companies, both public and private.
He has overseen the development
of these companies through both organic
and acquisitive growth as well as dealing
with turnaround situations. In 1 994 David
worked with the executive team to ﬂoat
Waste Recycling Group plc at an initial value
of £8m. During his seven years as Chairman,
its value grew to £550m. David was
Chairman of RAL Limited, an operator
of “high street” gambling sites across the
UK on its management buyout from Rank
Group plc in 1 996. David is currently
Chairman of Augean plc and Zetar plc as
well as Marwyn Investments Group Limited
and associated companies. 
Andy Hall (age: 50)
Finance Director
Andy has over 20 years of quoted
company experience from the high street
retail and leisure sectors. After qualifying
as a chartered accountant Andy worked
for PriceWaterhouse from 1 978 to 1 982.
He joined Whitbread plc in 1 982 where he
progressed through various roles to
become Group Financial Controller from
1 992 to 1 999, with ﬁnancial responsibility
for all aspects of the brewing and leisure
businesses, which included the acquisition
and integration of David Lloyd Leisure,
Marriott Hotels, Costa Coffee, Cafe Rouge
and Bella Pasta. From 1 999 to 2004 he
was Group Finance Director of Blacks
Leisure Group plc where he oversaw the
acquisition and integration of Millets, Just
Add Water and Famous Army Stores. 
From Left to Right: Robert Ware, David Williams, 
Andy Hall, Nick Harding, Mark Watts
Nick Harding (age: 48)
Chief Executive
Nick has 25 years’ experience in the 
“high street” gambling market. Nick
worked in a number of senior positions 
for Coral, Bass Leisure and Rank Group
before leading the MBO of the RAL
business from Rank in 1 996. In his eight
years running RAL, it grew to become the
UK’s leading operator in the sector with
1 29 sites, together with an integrated and
proprietary online gambling business. Nick
is a recognised and respected industry
ﬁgure. He is Vice President of the trade
association BACT A, a T rustee of the
Responsibility in Gambling T rust, sits on
the advisory board of GamCare and was
the founding Chairman of iGGBA, the
UK’s interactive gaming association. Nick
has been licensed in the UK by the Gaming
Board (now the Gambling Commission)
for the operation of cash bingo and AGCs,
together with the sale and supply of gaming
equipment. As CEO of T alarius he is also
a licensed bookmaker. 
Robert Ware (age: 52)
Non-Executive Director
Robert has over1 7 years’ experience
working in the property sector. Robert was
a Director of Development Securities plc
between 1 988 and 1 994 and ﬁlled the
roles of Joint Managing Director and
Finance Director in the latter stage of his
tenure. In 1 994, he took up the position
of Managing Director of Dunton Group plc,
where he stayed until 1 996. He served as
Corporate Development Director and then
as Deputy Chief Executive of MEPC
between 1 997 and 2003. MEPC was the
fourth largest quoted property company
until 2000 when Leconport Estates took
the company private. Robert was a key
member of the management team which
achieved the targets set by Leconport
Estates. Robert is a Fellow of the Institute
of Chartered Accountants. He is currently
Chief Executive of The Conygar Investment
Company plc and a Non-Executive Director
of T arsus Group plc, Raven Mount plc,
Wyevale Garden Centres plc and Marwyn
Value Investors Limited. 
Mark Watts (age: 32)
Non-Executive Director
Mark is a Director of Marwyn Capital Limited
and its subsidiary companies. Mark has
extensive corporate ﬁnance experience
including recently advising the management
of Augean plc on its £1 06m acquisition of
two hazardous waste businesses in the UK,
the management of Zetar plc on its £32m
acquisition of a UK chocolate manufacturer,
and the management of Inspicio plc on its
£52m acquisition of Inspectorate Group, 
and their subsequent related admissions 
to trading on AIM. Mark is currently a Non-
Executive Director of Zetar plc and 
Inspicio plc. 
23
XTA001_Talarius_AW4.qxp  7/4/06  1:45 pm  Page 23 Whilst the Company is AIM listed and
hence not subject to the UK listing Authority
rules, the Board’s policy is to manage in
accordance with the principles set out in
the provisions of Section 1 of the Combined
Code.
The statement below describes how the
principles identiﬁed in the Combined Code
are applied. The company has not appointed
a senior Non-Executive Director nor, as
explained below, set up a Nominations
Committee. The Company has not given
all the additional disclosure required in the
Remuneration Report.
Directors The Board consists of a Non-
Executive Chairman, Chief Executive,
Executive Directors and Non-Executive
Directors. All the Non-Executive Directors
are considered by the Board to be
independent of management and free of any
relationship which could materially interfere
with the exercise of their independent
judgement. Their interest in the shares of the
Company are set out on page 29 and they
receive a ﬁxed fee for their services.
Proﬁles of the Board members appear on
page 23 of this report. These indicate the
high level and range of business experience
which enable the Group to be managed
effectively.
The Board meets at least eight times each
year and more frequently where business
needs require. The Board has a schedule
of matters reserved for its decision which
includes material capital commitments,
commencing or settling major litigation,
business acquisitions and disposals and
Board appointments. Directors are given
appropriate and timely information for each
Board meeting, including reports on the
current ﬁnancial and trading position of
each business.
All Directors have access to independent
professional advice if required and at the
Company’s expense. This is in addition to
the access which every Director has to the
Company Secretary. The Secretary is
charged by the Board with ensuring that
Board procedures are followed.
Chairman and Chief Executive The roles
of the Chairman and of the Chief Executive
have been approved by the Board.
The role of the Chairman is to conduct
Board meetings, meetings of shareholders
and to ensure that all Directors are properly
briefed in order to take a full and constructive
part in Board discussions. He is responsible
for evaluating the performance of the Board
and of the Executive Management and of
the other Non-Executive Directors. This
includes addressing the development needs
of the Board as a whole to enhance the
overall effectiveness.
The role of the Chief Executive is to develop
and lead business strategies and processes
to enable the Group to meet shareholder
requirements. He is responsible for dealing
with investors, Group public relations,
external communications and corporate
governance, in particular gaming compliance.
The role involves leading the executive team
and evaluating the performance of
Executive Management.
Board Committees The Board has
delegated authority to the following
committees, which are set out in written
terms of reference for each Committee.
Audit Committee The Audit Committee
members are Robert Ware (Chairman) and
the other Non-Executive Directors. The
Committee meets at least three times a year
to review the Group’s ﬁnancial statements,
ﬁnancial reporting, accounting policies,
internal control and risk assessment
processes. The Group’s external auditors
attend each meeting, together with the
Executive Directors whenever they are
requested by the Committee.
Remuneration Committee
The Remuneration Committee members
are David Williams (Chairman) and the other
Non-Executive Directors. The Committee
meets at least twice a year to review the
remuneration of the Executive Directors.
Full details of Directors’ remuneration and
a statement of the Company’s remuneration
policy is set out in the Directors’
Remuneration Report on pages 26 and 27 .
The Chief Executive attends meetings of
the Committee to discuss the performance
of the other Executive Directors and make
proposals as necessary, but takes no part in
deliberations when his own position is
discussed.
Each Executive Director abstains from any
discussion or voting at full Board meetings
on Remuneration Committee
recommendations where the
recommendations have a direct bearing on
his own remuneration package. The details
of each Executive Director’s individual
package are ﬁxed by the Committee in line
with the policy adopted by the full Board.
Nominations Committee During the period,
the Board as a whole has undertaken the
duties of the Nominations Committee.
When considering appointments, external
search consultants are used to ensure that
a wide range of candidates are considered.
An induction to the Group’s business and
training are available to Directors on
appointment.
Any Director appointed is required to retire
and seek election by shareholders at the
next Annual General Meeting. Also one third
of the Directors retire by rotation each year
and seek re-election at the Annual General
Meeting. The Directors required to retire are
those in ofﬁce longest since their previous
re-election and this usually means that each
Director retires at least every three years,
although there is no absolute requirement
to this effect.
Board attendance chart
Board Audit Remuneration
DJ Williams 4 (4) 2 (2) 2 (2)
NS Harding 4 (4) 1 (2) 2 (2)
AJ Hall 4 (4) 2 (2) – (–)
RTE Ware 4 (4) 2 (2) 2 (2)
MIJ Watts 2 (2) 1 (1) 1 (1)
BH Shaw 2 (2) 1 (1) 1 (1)
Figures in brackets denote the maximum number of meetings that each Director could have attended.
24 Corporate Governance Statement
XTA001_Talarius_AW4.qxp  7/4/06  1:18 pm  Page 24 25
Internal Control The Board of Directors is
responsible for the Group’s system of internal
control that is designed to facilitate effective
and efﬁcient operations and to ensure the
quality of internal and external reporting
and compliance with applicable laws and
regulations. In devising internal controls, the
Directors have regard to the nature and
extent of the risk, the likelihood of it
crystallising and the cost of controls.
A system of internal controls is designed
to manage but not eliminate the risk of failure
to achieve business objectives and can only
provide reasonable and not absolute
assurance against the risk of material
misstatement, fraud or loss.
The Board is reviewing the Group’s
procedures in respect of internal control
with a view to complying with the ‘Internal
Control: Guidance for Directors on the
Combined Code’ by the Institute of
Chartered Accountants in England and
Wales and will establish procedures to
ensure compliance with the guidance. The
Board considers that there will be an ongoing
process for the identiﬁcation, evaluation and
management of the signiﬁcant risks faced
by the Group. This process will be completed
in 2006 and then reviewed by the Board
to meet the requirements of the guidance.
The key procedures that the Directors have
established to provide effective internal
controls are as follows:
Control Environment Each business has
its own management group, which meets
regularly to monitor all operational matters.
Clearly deﬁned lines of responsibility and
delegation of authority have been
established in the organisational structure.
The Executive Directors participate at least
monthly in management meetings and
regularly review activities.
Risk Management Management has clear
responsibility for identifying risks to the
business and for establishing procedures
to mitigate and monitor such risks.
Financial Reporting A detailed formal
budgeting process for all businesses
culminates in an annual Group budget
which is approved by the Board. Results are
reported monthly against this budget and
revised forecasts for the year are prepared
at least quarterly.
Capital Investment The Group has clearly
deﬁned guidelines for capital expenditure.
These include annual budgets, detailed
appraisal and review procedures, deﬁned
levels of authority and due diligence
requirements where businesses are being
acquired. Post investment appraisals are
performed for major investments.
Internal Controls Assurance The Directors
will establish a Group control framework
and assess the key strategic, operational
and ﬁnancial risks facing the Group. This
risk assessment will be monitored by the
Group Finance Director and reported to the
Audit Committee.
The Board reviews the effectiveness of the
Group’s internal ﬁnancial control system,
summarising compliance. For internal
operational controls equivalent processes
are being reviewed to monitor compliance.
The Audit Committee on behalf of the Board
has reviewed the effectiveness of the
system of internal control from information
provided by management and the Group’s
external auditors. Any system of internal
control can only provide reasonable and not
absolute assurance of meeting the internal
control objectives.
This review included an assessment by the
Board of the key risks affecting the Group
in the delivery of its long-term strategies and
considered the need for an internal audit
function. T o date it has not been considered
that a separate internal audit function was
required. The Group currently has internal
auditors and security ofﬁcers who are
responsible for cash collection and fraud
investigations.
The Audit Committee keeps the scope and
cost effectiveness of the external audit
under review. The independence and
objectivity of the external auditors is also
considered on a regular basis, with particular
regard to the level of non-audit fees. The
split between audit and non-audit fees
appears on page 35. The non-audit fees
were paid in respect of tax advice and
reports required for shareholder documents
and are not considered to affect the
auditors’ independence or objectivity.
Going Concern The Directors, having taken
account of the Group’s net cash resources
and bank facilities and having made
appropriate enquiries, consider that the
Group has adequate resources to continue
operations for the foreseeable future and for
this reason they continue to adopt the going
concern basis in preparing the ﬁnancial
statements.
Communication The Company places a
great deal of importance on communication
with its shareholders. Shareholders have
direct access to the Company via its website
and the Company responds to letters and 
e-mails from shareholders and customers
on a wide range of issues.
There is regular dialogue with individual
institutional shareholders as well as
presentations after the interim and
preliminary results. All shareholders have
the opportunity to raise questions at the
Annual General Meeting when the
Company will also highlight the latest key
business developments.
Code of Business Ethics The Group takes
the view that corporate governance is not a
matter for the Board or its committees alone.
Thus our Employee handbook covers
dealings with customers, suppliers and
government ofﬁcials, safeguarding the
Group’s assets, keeping accurate and
reliable records, and avoiding conﬂicts
of interest. Its principal message is that all
employees must observe a code of conduct
based on honesty, integrity and fair dealing.
Environment Policy The Group believes
that business has a responsibility to achieve
good environmental practice and to
continue to strive for improvement in its
environmental impact. The efﬁcient and
effective use of resources makes sound
commercial sense. In view of this the Group
sets objectives taking due account of the
business risks and opportunities.
Employment Standards The Group
ensures, as far as is reasonably practicable,
that a safe and healthy workplace and
working environment is provided for all its
employees to a standard which is at least as
high as that required by law. 
The Group is committed to a policy of equal
opportunities for staff at all levels.
Annual Report 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:17 am  Page 25 26 Directors’ Remuneration Report
Directors’ remuneration
An analysis of Director’s remuneration is set out below
Basic Variable Beneﬁts in
salary/fees rewards kind Pension T otal remuneration
2005 2005 2005 2005 2005
£000 £000 £000 £000 £000
DJ Williams 22 – – – 22
NS Harding 102 200 18 17 337
AJ Hall 43 150 1 6 200
RTE Ware 22 – – – 22
MIJ Watts 8–– –8
BH Shaw 14–– – 14
211 350 19 23 603
DJ Williams, BH Shaw and RTE Ware were appointed on 3 March 2005
NS Harding was appointed 1 June 2005
AJ Hall joined the Company on 6 June 2005 and was appointed to the Board on 6 September 2005
MIJ Watts was appointed on 20 September 2005
BH Shaw resigned from the Board on 20 September 2005
Pension contributions were made with respect to two Directors.
Share price performance
The market price on admission to AIM on
4 April 2005 was 80 pence. The lowest and
highest prices during the period were 80
pence and 1 5 1 .5 pence.
Variable Rewards
Executive Directors
Bonus schemes Executive Directors are
entitled to performance related bonuses
that are payable based, in the main, upon
EBITDA growth and share price improvement
of the Group and are consistent with ﬁnancial
targets as determined by the Remuneration
Committee. The Remuneration Committee
reviews performance against targets at the
end of the year and may use its discretion
to adjust measures and payments in view
of operating circumstances during the year.
Bonus payments are non-pensionable and
are subject to approval by the Committee.
The achievement of the highest performance
targets in 2005 would entitle the Directors
to the maximum bonus payable of 1 00%
of basic salary.
Pension The Group made pension
contributions of up to 20% of basic salary
for the Executive Directors. These
contributions are paid into the equivalent
of money purchase pension schemes.
No Directors are in a deﬁned beneﬁt
pension scheme.
Non-Executive Directors The remuneration
of Non-Executive Directors is determined
by the Board as a whole and consists of fees
for their services in connection with Board,
Committee meetings and other relevant
matters.
The Remuneration Committee The
Remuneration Committee is composed
of David Williams (Chairman), Robert Ware
and Mark Watts. The Remuneration
Committee, on behalf of the Board, makes
recommendations regarding Executive
Directors’ remuneration packages
including bonuses, share options and
other incentive schemes.
Directors’ service contracts
Executive Directors For each Executive
Director, their service contract may be
terminated by either party giving six months’
notice.
Non-Executive Directors For each Non-
Executive Director, their service contract is
for two years and may be terminated by
either party giving six months’ notice.
Group policy on Executive Directors’
remuneration The objective of the Group’s
remuneration policy is to provide a level of
remuneration which will attract, retain and
motivate Executive Directors and senior
management of high quality.
Share options are used and longer term
incentives will be considered as part of the
Group’s remuneration policy. The amounts
involved and the frequency of issue endeavour
to keep pace with current market practice.
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 26 27 Annual Report 2005
Marwyn Capital Limited
(Marwyn) Warrant 
The Company has also entered into the
Marwyn Warrant, Marwyn is entitled to
subscribe for ﬁve per cent. of the Enlarged
Share Capital as at Second Admission,
exercisable as follows:
– 50% of the warrant is exercisable at any
time before the seventh anniversary of
Second Admission; and
– the remaining 50% of the warrant is
exercisable following the completion
of a subsequent substantial acquisition
and before the seventh anniversary
of Second Admission.
The exercise price per ordinary share for the
shares the subject of the Marwyn Warrant
was the 1 00 pence Placing Price. The exercise
of the warrant is conditional upon the price
of an ordinary share being equal or greater
than 1 25% of the Placing Price at any time
after Second Admission.
The Marwyn Warrant is transferable by
Marwyn to its shareholders, directors, ofﬁcers
and employees, and to any employee
beneﬁt trust for such employees of any
group company of Marwyn.
Employee Share options
Shares granted under the options scheme have been granted by the Remuneration 
Committee to attract, retain and motivate participants to achieve Corporate ﬁnancial targets.
The Directors, who served during the period, had the following interests in options at 
3 1 December 2005:
Y ear of Price Dates exercisable Dates exercisable 
grant Number exercisable from to
NS Harding
Enterprise Management Incentive (EMI) Scheme 2005* 99,999 1 00p 1 June 2005 3 1 May 20 1 5
T alarius Employee Beneﬁt T rust (EBT) – Class A 2005* 450,000 1 00p 1 3 June 2005 1 2 June 20 1 2
– Class B 2005* 450,000 1 00p 1 3 June 2005 1 2 June 20 1 2
AJ Hall
T alarius Employee Beneﬁt T rust (EBT) – Class A 2005* 1 25,000 1 00p 1 3 June 2005 1 2 June 20 1 2
– Class B 2005* 1 25,000 1 00p 1 3 June 2005 1 2 June 20 1 2
*These options were granted during the period.
T alarius EBT
The EBT options were exercisable subject to:
Class A:  the Second Admission of T alarius
plc on to AIM at any time during the
exercise period
Class B:  the 30 day average mid-market
share price being equal to or
greater than 1 25% of the Placing
Price of 1 00 pence, at any time
during the exercise period. 
EMI scheme:
As the gross assets now exceed £30m no
further options will be granted under the EMI
scheme. Thus the shareholders approved at
an EGM on 1 8 January 2006 the Company’s
Share Ownership Plan. This is intended to
permit, at the Board’s discretion, future share
options to be granted up to a current HMRC
maximum value of £30,000 to each
individual, to those current and future
members of management who did not
receive the initial EMI scheme grant.
DJ Williams
Remuneration Committee Chairman
1 3 March 2006
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 27 28 Directors’ Report
The Directors present their report for the
nine months ended 3 1 December 2005.
Principal activities and business review
The Company was incorporated on 3 March
2005, ﬁnanced by the issue of two ordinary
shares at 80p each. All other share issues
during the year are detailed in note 1 7 .
The principal activity of the Group is the
provision of licensed gaming centres and
internet gaming facilities. A detailed review
of the period’s activities and future
developments is given on pages 2 to1 8.
Results and dividends
The Group proﬁt for the period is shown on
page 3 1 . The Directors do not recommend
the payment of a dividend.
Statement of Directors’ responsibilities 
The Directors are responsible for preparing
the Directors’ Report and the ﬁnancial
statements in accordance with applicable
law and regulations.
Company law requires the Directors to
prepare ﬁnancial statements for each
ﬁnancial year. Under that law the Directors
have elected to prepare the Group and the
Company ﬁnancial statements in accordance
with UK Accounting Standards.
The Group’s ﬁnancial statements are
required by law to give a true and fair view
of the state of affairs of the Company and
Group and of the proﬁt or loss of the Group
for that period.
In preparing these ﬁnancial statements, the
Directors are required to:
– select suitable accounting policies and
apply them consistently;
– make judgments and estimates that are
reasonable and prudent;
– state whether applicable accounting
standards have been followed, subject
to any material departures disclosed and
explained in the ﬁnancial statements;
– prepare ﬁnancial statements on the going
concern basis unless it is inappropriate
to presume that the Group will continue
in business.
The Directors are responsible for keeping
proper accounting records that disclose
with reasonable accuracy at any time the
ﬁnancial position of the Group and enable
them to ensure that its ﬁnancial statements
comply with the Companies Act 1 985. They
have a general responsibility for taking such
steps as are reasonably open to them
to safeguard the assets of the Group and
to prevent and detect fraud and other
irregularities.
The Directors are responsible for the
maintenance and integrity of the corporate
and ﬁnancial information included on the
Company’s website. Legislation in the UK
governing the preparation and dissemination
of ﬁnancial statements may differ from
legislation in other jurisdictions.
Employees involvement The Company
values the contributions that its employees
make to the success of the business.
Substantial investment is made in the
training, development and motivation
of staff with particular focus on ensuring
customer satisfaction through the consistent
achievement of high standards of personal
care and service. The involvement of
employees in the success of the business
is encouraged through Company-wide
communications and consultation
programmes. A bi-annual news magazine
is produced speciﬁcally for Company
employees.
The management of the Group is encouraged
to communicate with employees on corporate
and individual matters and provides
information to enable them to gain
awareness of ﬁnancial and economic
factors affecting the Group.
The Company endorses the active
application of equal opportunities, policies
and programmes to provide fair and
equitable conditions for all employees
regardless of sex, family status, religion,
creed, colour, ethnic origin, age or disability.
Employees who become disabled during
their working life will be retained in
employment wherever possible and given
help with rehabilitation or training.
Employment policies The Directors
endeavour to keep the rewards for all
T alarius Group employees up to date and
competitive in the market place. 
Employee incentives Since the 1 8 January
EGM and subsequent HMRC approval, the
Company has a Company Share Option
Plan and a Savings Related Option Scheme.
These schemes are intended to facilitate
the greater participation of employees in the
future ﬁnancial success of the Group. 
Charitable contributions During the period
donations to UK charities were £5,700.
Supplier payment policy The Group does
not follow any standard or code on payment
practice, its policy is to ensure that terms
of payment speciﬁed and agreed with
suppliers are not exceeded. Creditor days
based on year end trade creditors for 2005
were 45 days (Company: 37 days).
Disclosure of information to the auditors
The Directors who held ofﬁce at the date
of approval of this Directors’ report conﬁrm
that, so far as they are each aware, there is
no relevant audit information of which the
Company’s auditors are unaware; and each
Director has taken all the steps that he ought
to have taken as a Director to make himself
aware of any relevant audit information and
to establish that the Company’s auditors are
aware of that information.
Auditors
KPMG Audit Plc were appointed ﬁrst
auditors to the Company. A resolution to 
re-appoint KPMG Audit Plc as auditors will
be proposed at the forthcoming Annual
General Meeting.
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 28 29 Annual Report and Accounts 2005 Title 29 Annual Report 2005
Substantial interests in Share Capital
As at 1 3 March 2006, the Directors are aware of the following:
Name Holding %
Goldman Sachs 9,528,842 2 1 .70
Lehman Brothers 4,967 ,4 1 9 1 1 .3 1
T attersalls 4,600,000 1 0.48
Fidelity 3,706,000 8.44
Killik & Co 3,22 1 ,825 7 .34
Global Asset Management 2,7 1 6,299 6. 1 9
Unicorn Asset Management 1 ,564,300 3.56
Other than disclosed above, the Directors are not aware of any person holding, or beneﬁcially interested in, 3% or more of the ordinary share
capital of the Company.
Directors and Directors’ interests
The Directors who held ofﬁce during the period were:
Appointed Resigned
DJ Williams 3 March 2005 
RTE Ware 3 March 2005
NS Harding 1 June 2005 
AJ Hall 6 September 2005 
MIJ Watts 20 September 2005
BH Shaw 3 March 2005 20 September 2005 
The Directors who held ofﬁce at the end of the year had the following interests in the share capital of the Company: 
At end of year Interest at date of appointment
Ordinary shares of 1 0p each Issued Under option Issued Under option
DJ Williams 312,500 – 312,500 –
NS Harding 1 70,000 999,000 1 70,000 999,000
AJ Hall –250,000 –250,000
RTE Ware 1 25,000 – 1 25,000 – 
MIJ Watts – – – –
No Directors have held any beneﬁcial
interest in the shares of any of the
subsidiary undertakings since their
appointment to the Board. 
Their biographical details are given on
page 23. 
Annual General Meeting
The Annual General Meeting of the
Company is to be held on 1 7 May 2006 for
the following purposes:
Resolutions 1 and 2 Resolution 1 is the
resolution to receive the Directors’ Report
and Financial Statements for the period
ended 3 1 December 2005. Resolution 2
is a resolution to approve the Directors’
Remuneration Report, which can be found
on pages 26 and 27 .
The Financial Statements are available on
the Company’s website (www.talarius.com).
Resolution 3 Resolution 3 seeks to revise
the sum currently permitted by the Articles
to be shared amongst the Directors in
payment of their fees from £1 00,000 to
£200,000.  The Articles of Association
were adopted in March 2005 and in a full
year the Non-Executive Director fees
agreed then will amount to £1 00,000.
Should the Company wish to appoint further
Non-Executive Directors, under the current
Articles of Association of the Company,
these fees would exceed the aggregate,
even if the fees of the existing Non-
Executive Directors remained the same.
The Company believes that it would be
appropriate to maintain a certain amount of
headroom in relation to the sum to be paid
to Non-Executive Directors and accordingly
asks Shareholders to approve this change. 
Resolutions 4 to 8 Resolutions 4 to 8 are
to re-elect all the Directors. Proﬁles of the
Directors can be found on page 23.
Resolutions 9 and 1 0 Resolutions 9 and
1 0 are to re-appoint KPMG Audit Plc as
the Company’s auditors and determine
their remuneration.
Resolutions 1 1 and 1 2 Shareholders are
being asked to renew the approvals for the
Company to allot shares, and to do so for
cash on a non pre-emptive basis. At
present, the Directors have no intention of
allotting shares other than under employee
share schemes.
By order of the Board
S C Fadil
Company Secretary
1 3 March 2006 
Registered Ofﬁce
20 Black Friars Lane
London
EC4V 6HD
XTA001_Talarius_P29_44.qxp  10/4/06  4:04 pm  Page 29 30 Financial Statements
Independent Auditors’ Report
We have audited the Group and Company
ﬁnancial statements (the ‘ﬁnancial
statements’) of T alarius plc for the nine
months ended 3 1 December 2005 which
comprise the Consolidated Proﬁt and Loss
Account, the Balance Sheets, the
Consolidated Cash Flow Statement and the
related notes. These ﬁnancial statements
have been prepared under the accounting
policies set out on page 34.
This report is made solely to the Company’s
members, as a body, in accordance with
section 235 of the Companies Act 1 985.
Our audit work has been undertaken so
that we might state to the Company’s
members those matters we are required to
state to them in an auditor’s report and
for no other purpose. T o the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company and the Company’s
members as a body, for our audit work, for
this report, or for the opinions we
have formed.
Respective responsibilities of Directors
and Auditors The Directors’ responsibilities
for preparing the Directors’ Report and the
ﬁnancial statements in accordance with
applicable law and UK Accounting Standards
(UK Generally Accepted Accounting
Practice) are set out in the Statement
of Directors’ Responsibilities on page 28.
Our responsibility is to audit the ﬁnancial
statements in accordance with relevant
legal and regulatory requirements and
International Standards on Auditing (UK
and Ireland).
We report to you our opinion as to whether
the ﬁnancial statements give a true and fair
view and are properly prepared in accordance
with the Companies Act 1 985. We also
report to you if, in our opinion, the Directors’
Report is not consistent with the ﬁnancial
statements, if the Group has not kept proper
accounting records, if we have not received
all the information and explanations we
require for our audit, or if information
speciﬁed by law regarding Directors’
remuneration and other transactions
is not disclosed.
We read other information contained in the
annual report and consider the implications
for our report if we become aware of any
apparent misstatement within it.
Basis of audit opinion We conducted
our audit in accordance with International
Standards on Auditing (UK and Ireland)
issued by the Auditing Practices Board.
An audit includes examination, on a test
basis, of evidence relevant to the amounts
and disclosures in the ﬁnancial statements.
It also includes an assessment of the
signiﬁcant estimates and judgments made
by the Directors in the preparation of the
ﬁnancial statements, and of whether the
accounting policies are appropriate to the
Group’s circumstances, consistently applied
and adequately disclosed. 
W e planned and performed our audit so as
to obtain all the information and explanations
which we considered necessary in order to
provide us with sufﬁcient evidence to give
reasonable assurance that the ﬁnancial
statements are free from material
misstatement, whether caused by fraud
or other irregularity or error. In forming our
opinion we also evaluated the overall
adequacy of the presentation of information
in the ﬁnancial statements. 
Opinion In our opinion the ﬁnancial
statements:
– give a true and fair view, in accordance
with UK Generally Accepted Accounting
Practice, of the state of the Group’s and
the Company’s affairs as at 3 1 December
2005 and of the Group’s proﬁt for the
nine month period then ended; and 
– have been properly prepared in
accordance with the Companies
Act 1 985. 
KPMG Audit Plc
Chartered Accountants 
Registered Auditor
Milton Keynes
United Kingdom
1 3 March 2006
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 30 31 Annual Report 2005
Consolidated Proﬁt and Loss Account
for the nine months ended 3 1 December 2005
4 April to 
3 1 December 2005
Note £000
Turnover 1,2 25,557
Cost of sales (4,066)
Gross proﬁt 21,491
Administrative expenses (19,773)
Operating proﬁt 1,718
Operating proﬁt before goodwill amortisation and exceptional item 2 3,180
Goodwill amortisation (1,126)
Exceptional item: costs of ﬂotation 3 (336)
Operating proﬁt 1,718
Net interest payable 4 (721)
Proﬁt on ordinary activities before taxation 5 997
T axation 7 (701)
Proﬁt retained for the period 18 296
Earnings per share (pence) 8
Basic 0.96p
Diluted 0.90p
Underlying 5.71p
All recognised gains and losses are included in the proﬁt and loss account.
There is no material difference between the results stated above and the results shown on an historical cost basis.
The results above related to acquisitions made in the period.
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 31 32 Financial Statements
Balance sheets
as at 3 1 December 2005
Group Company
2005 2005
Note £000 £000 £000 £000
Fixed assets
Intangible assets – goodwill 9 52,506 –
T angible assets 10 22,158 –
Investments 11 – 56,620
74,664 56,620
Current assets
Stocks 12 251 –
Debtors 13 4,393 41,012
Cash at bank and in hand 4,954 –
9,598 41,012
Creditors: amounts falling due within one year 14 (12,544) (30,8 1 8)
Net current (liabilities)/assets (2,946)10,194
T otal assets less current liabilities 71,718 66,8 1 4
Creditors: amounts falling due after more than one year 15 (32,967) (32,967)
Provisions for liabilities and charges 16 (2,985)–
Net assets 35,766 33,847
Capital and reserves
Called up share capital 17 3,790 3,790
Share premium 18 31,680 3 1 ,680
Proﬁt and loss account 18 296 ( 1 ,623)
Equity Shareholders’ funds 19 35,766 33,847
These Financial Statements were approved by the Board and signed on their behalf on 1 3 March 2006.
NS Harding
Chief Executive
AJ Hall
Finance Director
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 32 33 Annual Report 2005
Consolidated Cash Flow Statement
for the nine months ended 3 1 December 2005
4 April to 
3 1 December 2005
Note £000 £000
Net cash inﬂow from operating activities 20 4,456
Returns on investments and servicing of ﬁnance
Interest received 112
Interest paid (511)
Finance costs incurred in raising debt (310)
Net cash outﬂow from return on investments and servicing of ﬁnance (709)
Taxation —
Capital expenditure and ﬁnancial investment
Purchase of tangible ﬁxed assets (2,962)
Proceeds on sale of tangible ﬁxed assets 685
(2,277)
Acquisitions
Purchase of subsidiary undertakings 21 (72,610)
Net cash acquired with subsidiaries 5,483
(67 ,127)
Cash outﬂow before ﬁnancing (65,657)
Financing
Issue of shares 36,670
Expenses paid in connection with issue of shares (1,200)
35,470
New loans 36,250
Repayment of loans (1,000)
Capital element of hire purchase payments (109)
35,141
Increase in cash 22 4,954
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 33 34 Financial Statements
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
1 Accounting policies
Accounting policies have been applied
consistently in the Group’s ﬁnancial
statements.
Basis of preparation The ﬁnancial statements
have been prepared in accordance with
applicable accounting standards and under
the historical cost convention.
Basis of consolidation The consolidated
ﬁnancial statements incorporate the
ﬁnancial statements of T alarius plc and its
subsidiaries for the period to 3 1 December
2005. Subsidiary undertakings acquired
or disposed are included in the consolidated
proﬁt and loss account from the date of
acquisition or up to the date of disposal. 
A separate proﬁt and loss account dealing
only with the results of the Company has not
been presented in accordance with section
230(4) of the Companies Act 1 985. 
Goodwill Goodwill arising on acquisitions
has been capitalised and amortised on
a straight-line basis over 20 years. Goodwill
is reviewed for impairment at the end of the
ﬁrst full year following the acquisition and
in other periods if events or changes in
circumstances indicate that the carrying
value may not be recoverable.
Fixed assets and depreciation
Depreciation is provided to write off the cost
or valuation less the estimated residual value
of tangible and intangible ﬁxed assets by
equal installments over their estimated
useful economic lives as follows:
Per annum
Freehold buildings – 2%
Fixtures and ﬁttings – 1 0% 
Plant and equipment – 1 0-50% 
Licence fee – 20% 
Short leasehold properties are depreciated
over the shorter of their estimated useful life
or the term of their lease. No depreciation
is provided on freehold land.
Where the need for a write-down of assets is
identiﬁed, provision is made for the resulting
impairment loss.
Leases Assets acquired under ﬁnance
leases are capitalised and the outstanding
future lease obligations are shown in
creditors. The interest element of rental
payments is charged against proﬁts over
the period of the lease in proportion to the
balance outstanding.
Operating lease rentals Operating lease
income and expense in relation to rental
properties is recognised on a straight line
basis over the period of the lease.
Turnover Turnover represents receipts from
the operation of amusement machines,
internet gaming and prize bingo, excluding
value added tax.
Stocks Stocks are stated at the lower of
cost and net realisable value. Provision is
made for slow moving or obsolete items
where appropriate.
Pensions The Group operates three deﬁned
contribution pension schemes. The assets of
the schemes are held separately from those
of the Group in independently administered
funds. Contributions are charged to the
proﬁt and loss in the year in which they
become payable.
Share Options In accordance with UITF
abstract 1 7 Employee share schemes the
cost of share options is assessed as the
intrinsic value (the difference between the
market price of the shares at the date
of grant and the exercise price) and charged
to the proﬁt and loss account over the
service period term attached to the grant.
Provisions A provision is recognised
as a liability when the Group has a present
obligation, legal or constructive, as a result
of a past event and it is expected that
a transfer of economic beneﬁts will be
required to settle that obligation and
a reliable estimate of the amount of the
transfer can be made. A provision is
maintained in respect of vacant leasehold
properties to take account of the net present
value of residual lease commitments over
the remaining term of the lease, and of the
rental income receivable. Cash ﬂows are
discounted using an appropriate risk free
rate of return.
Taxation Deferred tax is recognised,
without discounting, in respect of all timing
differences between the treatment of
certain items for taxation and accounting
purposes which have arisen but not reversed
by the balance sheet date, in accordance
with FRS 1 9.
XTA001_Talarius_AW4.qxp  7/4/06  1:19 pm  Page 34 35 Annual Report 2005
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
2 Segmental analysis
4 April to 
3 1 December 2005
£000
Turnover
Adult gaming centres 24,500
Interactive gaming 1,057
Total 25,557
Operating proﬁt before goodwill amortisation and exceptional item
Adult gaming centres 3,037
Interactive gaming 143
Total 3,180
The net assets of the Group all related to Adult gaming centres. All activities occurred in the UK.
3 Exceptional item
Exceptional item related to professional fees incurred on ﬂotation.
4 Net interest payable 
4 April to 
3 1 December 2005
£000
Bank loans and overdrafts 791
Other loans 11
Amortisation of ﬁnance arrangement costs 31
Bank interest receivable (112)
721
5 Proﬁt on ordinary activities before taxation
4 April to 
3 1 December 2005
£000
Proﬁt on ordinary activities before taxation is stated after charging/(crediting):
Auditors’ remuneration:
Audit fee (Company: £5,000) 92
Other services (Company: £204,000) 219
Depreciation and other amounts written off tangible ﬁxed assets:
Owned 2,005
Leased 47
Operating leases:
Properties 3,152
Vehicles and other equipment 133
Goodwill amortisation 1,126
Rents receivable (256)
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 35 36 Financial Statements
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
6 Staff numbers and costs
The average number of persons employed (including Directors) by the Group during the period, analysed by category, was:
4 April to 
3 1 December 2005
Number of employees
Operating 697
Administration 48
745
The aggregate payroll cost of these persons was:
4 April to 
3 1 December 2005
£000
Wages and salaries 6,419
Social security costs 476
Other pension costs 115
7,01 0
Details of the Directors’ remuneration have been audited and are shown in the Directors’ Remuneration report on pages 26 and 27 . The
Company employed the Directors and no other employees. 
Pensions
The Group operates three deﬁned contribution pension schemes for its employees. The pension cost charge for the period represents
contributions payable by the Group to the schemes and amounted to £1 1 5,000. Contributions amounting to £20,000 were payable to the
schemes at the year end and are included in creditors.
7 Taxation
4 April to 
3 1 December 2005
£000
a) Analysis of tax charge in the period
Current tax charge 364
Deferred tax charge 337
701
b) Factors affecting the tax charge for the current period
The current tax charge for the period is higher than the standard rate of corporation tax in the UK of 30%
The differences are explained below:
Proﬁt on ordinary activities before tax 997
Current tax at 30% 299
Effects of:
Expenses not deductible for tax purposes 64
Goodwill amortisation 338
Depreciation in excess of capital allowances (277)
Other short term timing differences (60)
Current UK tax charge 364
The effective tax rate as a percentage of proﬁt before tax and goodwill amortisation was 33%.
XTA001_Talarius_AW4.qxp  7/4/06  2:08 pm  Page 36 37 Annual Report 2005
Deferred taxation
The elements of deferred taxation were:
Group Company
£000 £000
Depreciation in excess of capital allowances 478 –
Other timing differences 23 1 –
T otal deferred tax asset – unprovided 709 –
The deferred tax asset has not been recognised as the Directors are uncertain of its recoverability.
8 Earnings per share
The calculation of basic earnings is based on the proﬁt after taxation of £296,000 by reference to the weighted average of 30,785,258
ordinary shares in issue during the period.
Underlying earnings per share have been calculated based on earnings excluding amortisation of goodwill and exceptional item. The Directors
believe this gives a better view of maintainable earnings.
Pence
Basic 0.96
Add Back:
Amortisation of goodwill 3.66
Exceptional item 1.09
Underlying 5.71
The diluted earnings per share is based on 32,809,605 ordinary shares, the difference to the basic calculation representing the additional
shares that would be issued on the Marwyn warrant and the share option schemes. It reduces the Basic earnings per share to 0.9 pence and
underlying to 5.4 pence.
9 Intangible Fixed Assets – goodwill
Group
£000
Cost
At incorporation –
Additions (see note 2 1 ) 53,632
At end of year 53,632
Amortisation
Charged in period 1,126
At end of year 1,126
Net book value
At 31 December 2005 52,506
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 37 38 Financial Statements
1 0 T angible Fixed Assets
Land and buildings
Fixtures, ﬁttings,
Freehold Short leasehold plant and equipment T otal
£000 £000 £000 £000
Group
Cost
At beginning of period – – – –
On acquisition of subsidiary undertakings 6,775 9,953 28, 1 36 44,864
Additions – 3 2,959 2,962
Disposals – – ( 1 ,379) ( 1 ,379)
At end of year 6,775 9,956 29,7 1 6 46,447
Depreciation
At beginning of period – – – –
On acquisition of subsidiary undertakings 88 1 6,287 1 5,763 22,93 1
Charge for period 33 24 1 1 ,778 2,052
Disposals – – (694) (694)
At end of year 9 1 4 6,528 1 6,847 24,289
Net book value
At 31 December 2005 5,861 3,428 12,869 22,158
Included in the total net book value of ﬁxtures, ﬁttings, plant and equipment is £235,000 in respect of assets held under hire purchase contracts.
Depreciation for the period on these assets was £47 ,000.
The Group had no commitments in respect of capital expenditure at the end of the year.
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 38 39 Annual Report 2005
1 1 Fixed Asset Investments
Investment
in shares in
subsidiaries
£000
Company
Cost
At beginning of period –
Acquisitions 32,053
Intra-Group transfers 24,567
Net book value
At 31 December 2005 56,620
The principal subsidiary undertakings, all wholly-owned and operating in the United Kingdom, at the year end and included in the consolidated
ﬁnancial statements were: 
Sudsidiary Principal activity
RAL Limited Provision of licensed gaming centres and operation of prize bingo
Blackheath Leisure (Carousel) Limited Provision of licensed gaming centres and operation of prize bingo
RAL InterActive Limited Supply of equipment and software for the provision of internet gaming
*RAL Machines Limited Provision of machines for licensed gaming centres
*RAL Services Limited Provision of services for licensed gaming centres
RAL Holdings Limited Intermediate holding company
RAL S&G Limited Intermediate holding company
RAL Investments Limited Intermediate holding company
**Leisure Promotions Limited Provision of licensed gaming centres and operation of prize bingo
**In T o Save Limited Provision of licensed gaming centres and operation of prize bingo
Indirect holding
CZ T rading Limited Provision of internet gaming and technology consultancy
With the exception of CZ T rading Limited, these holdings were all directly owned by the Company.
*The issued share capital of these companies was transferred on 3 1 December 2005 out of RAL S&G Limited to T alarius plc. at their net book
value of £24,567 ,000.
**The assets and trade of these companies were transferred to RAL Limited on 3 1 July 2005.
Nil proﬁt or loss arose on both of the above transfers.
12 Stocks
There is no material difference between the replacement cost of stock and the carrying value of £25 1 ,000.
The stock consists of miscellaneous consumable items.
13 Debtors
Group Company
2005 2005
£000 £000
T rade debtors 292 –
Amounts owed by subsidiary undertakings – 40,756
Other debtors 1,021 256
Prepayments and accrued income 3,080 –
4,393 41,012
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 39 40 Financial Statements
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
1 4 Creditors: amounts falling due within one year
Group Company
2005 2005
£000 £000
Bank loans 2,000 2,000
Bank overdrafts –1,514
Hire purchase 259 –
T rade creditors 2,991 27
Amounts owed to subsidiary undertakings – 26,557
UK corporation tax 259 –
Other taxation and social security 1,855 –
Other creditors 1,483 459
Accruals and deferred income 3,697 26 1
12,544 30,8 1 8
1 5 Creditors: amounts falling due after more than one year
Group and 
Company
2005
£000
Analysis of debt repayable beyond one year:
Debt can be analysed as falling due:
Between one and two years 2,500
Between two and ﬁve years 30,750
33,250
Less: ﬁnance costs (283)
Bank loans 32,967
Hire purchase contracts amounting to £259,000 all mature within one year.
£35.25m of bank facilities were drawn at the year end. T otal facilities are £37 .5m, £20m is on a revolving credit facility repayable in June 2008
and £1 7 .5m is repayable over the ﬁve years to November 20 1 0. The interest margin payable is 1 .5% above LIBOR on the revolving credit facility
and 2% above LIBOR on the term loan.
The bank has a debenture secured across the Group with cross guarantees covering all subsidiary undertakings.
1 6 Provisions for liabilities and charges
Dilapidation and 
onerous leases
£000
Group
At beginning of period –
On acquisition of subsidiary undertakings 2,985
At end of year 2,985
Provisions related to leasehold properties and future cash ﬂow commitments have been discounted at 6%, where appropriate.
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 40 1 7 Called up share capital – Group and Company
2005
£000
Authorised 55,000,000 Ordinary shares of 1 0p each 5,500
Allotted and fully paid 37 ,903,370 Ordinary shares of 1 0p each 3,790
Share issues in the year
Ordinary shares of 1 0p each:
Number
3 March 2005 2 Subscriber shares at 80p each
4 April 2005 6,87 4,998 1 0p shares issued at 80p
1 June 2005 30, 1 70,000 1 0p shares issued at 1 00p
7 November 2005 858,370 1 0p shares issued at market price
37 ,903,370
Redeemable preference shares of 1 0p each:
1 6 March 2005 500,000 Shares were allotted and quarter paid
22 April 2005 (500,000) Shares were redeemed
–
Share option schemes
At the year end there were outstanding options under the Group’s share option schemes, exercisable up to the year 20 1 5 to subscribe
for 2,850,684 ordinary shares at a price of 1 00 pence per share. The market price of the shares at the date of grant was equal to the
exercise price.
Warrant
Marwyn Capital LLP had a warrant exercisable up to 20 1 2 where the performance condition has been achieved for 1 ,852,250 ordinary shares
at a price of 1 00 pence per share.
1 8 Share premium and reserves
Share premium Proﬁt and
account loss account
£000 £000
Group
At beginning of period – –
Retained proﬁt for the period – 296
Premium on share issues less expenses 31,680 –
At end of year 31,680 296
Company
At beginning of period ––
Retained loss for the period – ( 1 ,623)
Premium on share issues less expenses 3 1 ,680 –
At end of year 3 1 ,680 ( 1 ,623)
1 9 Equity Shareholders’ Funds
Group Company
£000 £000
Proﬁt/(loss) for the period 296 ( 1 ,623)
Issue of new shares 35,470 35,470
Net movement in shareholders’ funds 35,766 33,847
At beginning of period – –
At end of year 35,766 33,847
41 Annual Report 2005
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 41 42 Financial Statements
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
20 Reconciliation of operating proﬁt to operating cash ﬂows
4 April to 
3 1 December 2005
£000
Operating proﬁt 1,718
Depreciation 2,052
Amortisation of goodwill 1,126
Decrease in stocks 39
Increase in debtors (711)
Increase in creditors 232
Net cash inﬂow from operating activities 4,456
21 Acquisitions
The Company acquired the entire share capital of RAL Holdings Ltd Limited (RAL) on 1 June 2005, Leisure Promotions Ltd and In T o Save Ltd
(together Leisure Promotions) on 7 July 2005 and Blackheath Leisure (Carousel) Ltd (Blackheath) on 7 November 2005.
The net book values and provisional fair values at the date of acquisition for the three businesses are presented below:
Leisure 
RAL Promotions Blackheath Total
£000 £000 £000 £000
Fixed assets
T angible assets 1 2,296 5,468 4, 1 69
Current assets
Stock 208 78 4
Debtors 3,375 5 1 3 255
Cash acquired 4,840 308 335 5,483
T otal assets 20,7 1 9 6,367 4,763
Creditors (6, 1 59) (2,050) ( 1 ,677)
Provisions for liabilities and charges ( 1 ,383) – –
Provisional fair value adjustments ( 1 ,22 1 ) (59) (322)
Carrying value of net assets 1 1 ,956 4,258 2,764
Goodwill arising on acquisition 29,064 6,942 1 7 ,626 53,632
Cash consideration 1 05 9,7 46 1 9,000
Repayment of debt 38,7 40 954 863
Acquisition costs 2, 1 75 500 527
T otal consideration 4 1 ,020 1 1 ,200 20,390 72,610
The subsidiary undertakings acquired contributed £5,358,000 to the Group’s net operating cash ﬂows, paid £1 09,000 in servicing of ﬁnance
and utilised £2,277 ,000 for capital expenditure.
The results in the period of each of the above businesses from the beginning of their ﬁnancial year prior to acquisition were:
£000 £000 £000
Proﬁt and loss account
Turnover 1 3, 1 55 3,443 6,326
Operating (loss)/proﬁt (2,387) 372 752
(Loss)/proﬁt before taxation (3,97 4) 28 1 639
T axation – – 314
(Loss)/proﬁt after taxation (3,97 4) 28 1 325
The results in the previous ﬁnancial year/period prior to aquisition were:
(Loss)/proﬁt after taxation ( 1 ,602) 2 1 1 534
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 42 43 Annual Report 2005
Notes to the Financial Statements 
for the nine months ended 3 1 December 2005
22 Analysis of net debt
At incorporation Cash ﬂow Acquisition Non cash changes At end of year
£000 £000 £000 £000 £000
Cash at bank and in hand – 1 4,068 – – 14,068
Bank overdrafts – (9, 1 1 4) – – (9,114)
– 4,954 – – 4,954
Debt due within one year
Bank loans – (2,000) – – (2,000)
Finance leases – 1 09 (368) – (259)
Debt due after one year
Bank loans – (33,250) – 283 (32,967)
Total –(30,187)(368) 283 (30,272)
Non-cash changes related to arrangement fees incurred on raising ﬁnance.
The Group has an offset arrangement with its bankers hence the net cash position is shown in the balance sheet.
23 Contingent liabilities
The Company guaranteed bank borrowings of subsidiary undertakings which at the year end were £9, 1 1 4,000.
24 Lease commitments
The annual commitments of the Group under operating leases were:
Land and Other
buildings 2005
£000 £000
Operating leases which expire:
Within one year 343 28
Between one and ﬁve years 1,085 86
Over ﬁve years 4,795 –
6,223 114
25 Post balance sheet event
On 2 March 2006 the Company acquired the entire share capital of Leisurama Entertainments Ltd and Leisurama Holdings Limited
for a consideration of £1 2m.
26 Related parties
Details of the principal subsidiary undertakings are included on page 39. In accordance with FRS8: Related Party Disclosures, transactions
or balances between Group entities that have been eliminated on consolidation are not reported.
Related party transactions amounted to £85 1 ,000 of fees paid to Marwyn Capital LLP for corporate ﬁnancial advisory services.
XTA001_Talarius_AW4.qxp  7/4/06  2:18 am  Page 43 44 Annual Report and Accounts 2005 Title Annual General Meeting
Notice is hereby given that the Annual
General Meeting (“AGM”) of the Company
will be held at the ofﬁces of Mayer Brown
Rowe & Maw LLP , 1 1 Pilgrim Street, London
EC4V 6RW on Wednesday, 1 7 May 2006
at 1 0:00 a.m for the following purposes:
As ordinary business to consider and, if
thought ﬁt, pass Resolutions 1 to 1 0 inclusive
which will be proposed as ordinary resolutions. 
1 T o receive and consider the Directors’
and Auditors’ Reports and the Financial
Statements for the period ended 3 1
December 2005.
2 T o approve the Directors’ Remuneration
Report on pages 26 and 27 of the
Financial Statements.
3 T o revise the sum currently permitted
by the Articles to be shared amongst the
Non-Executive Directors. That the amount
of £1 00,000, referred to in the Articles of
Association of the Company being such
sum as the Directors shall currently be
entitled to receive by way of fees for their
services as Directors and to be divided
among Directors, be revised to the
amount of £200,000.
4 That Andrew James Hall be re-appointed
as a Director of the Company.
5 That Nicholas Simon Harding be 
re-appointed as a Director of the Company.
6 That Robert Thomas Ernest Ware be 
re-appointed as a Director of the Company.
7 That Mark Irvine John Watts be re-
appointed as a Director of the Company.
8 That David Jeffreys Williams be re-
appointed as a Director of the Company.
9 T o re-appoint KPMG Audit Plc as Auditors.
1 0T o authorise the Directors to determine
the Auditors’ remuneration.
As special business to consider and, if
thought ﬁt, pass the following Resolutions
of which Resolution 1 1 will be proposed
as an ordinary resolution and Resolution
1 2 will be proposed as a special resolution:
Ordinary resolution
1 1 That the Directors be and they are hereby
generally and unconditionally authorised
for the purposes of s80 Companies Act
1 985 (the “ Act”) to exercise all powers of
the Company to allot relevant securities
(as deﬁned in s80(2) of the Act) up to an 
aggregate nominal amount of £1 ,463,445.60
to expire at the earlier of the conclusion of the
next Annual General Meeting of the Company
after the passing of this Resolution and 1 7
August 2007 save that the Company may
before that expiry and the Directors may allot
relevant securities in pursuance of such an
offer or agreements if the authority conferred
by this Resolution had not expired. 
Special resolution
1 2 That, subject to the passing of Resolution
1 1 above the Directors of the Company be
and they are hereby empowered pursuant
to s95 of the Companies Act 1 985 (the
“ Act”) in substitution for any previous power
conferred on the Directors pursuant to that
section to allot equity securities pursuant to
the authority conferred by Resolution1 1
above as if s89( 1 ) of the Act did not apply
to that allotment provided that this power
shall be limited:
(a) to the allotment of equity securities
in connection with a rights issue and
so that for this purpose “rights issue”
means an offer of equity securities open
for acceptance for a period ﬁxed by the
Directors to holders of equity securities
on the register on a ﬁxed record date in
proportion to their respective holdings of
such securities or in accordance with the
rights attached to them but subject to
such exclusions or other arrangements
as the Directors may deem necessary
or expedient in relation to fractional
entitlement or legal or practical
problems under the laws of, or the
requirements of any recognised
regulatory body or any stock exchange
in, any territory; and
(b) to the allotment (otherwise than
pursuant to sub-paragraph (a) above)
of equity securities up to an aggregate
nominal amount of £2 1 9,5 1 6.
and shall expire at the earlier of the
conclusion of the next Annual General
Meeting of the Company to be held after
the date of the passing of this Resolution
and 1 7 August 2007 save that the
Company may before that expiry make an
offer or agreement which would or might
require equity securities to be allotted after
that expiry and the Directors may allot
equity securities in pursuance of that offer 
or agreement as if the power conferred by
this Resolution had not expired.
For the purposes of this Resolution, 
the expression “equity securities” and
references to the allotment of equity
securities shall respectively have the
meanings given to them in s94 of the Act.
By order of the Board
S C Fadil 
Secretary
1 3 March 2006 
Registered Ofﬁce: 20 Black Friars Lane
London EC4V 6HD
Notes
(a) In accordance with Regulation 4 1 of the
Uncertiﬁcated Securities Regulations
200 1 , the Company gives notice that only
those shareholders entered on the relevant
register of members (the “Register”) for
certiﬁcated or uncertiﬁcated shares of the
Company (as the case may be) at 1 0.00
a.m. on 1 5 May 2006 (the “Speciﬁed
Time”) will be entitled to attend or vote
at the AGM in respect of the number of
shares registered in their name at the time.
Changes to entries on the Register after
the Speciﬁed Time will be disregarded
in determining the rights of any person
to attend or vote at the AGM. Should the
AGM be adjourned to a time not more than
48 hours after the Speciﬁed Time, that
time will also apply for the purpose of
determining the entitlement of members
to attend and vote (and for the purpose
of determining the number of votes they
may cast) at the adjourned AGM. Should
the AGM be adjourned for a longer period,
then to be so entitled, members must be
entered on the Register at the time which is
48 hours before the time ﬁxed for the
adjourned AGM or, if the Company gives
notice of the adjourned AGM, at the time
speciﬁed in the notice.
(b) Any member entitled to attend and vote at
the AGM may appoint one or more proxies
to attend and, on a poll, to vote on his/her
behalf. A proxy need not be a member.
Proxy Forms should be lodged with the
Company’s Registrar or submitted not
later than 48 hours before the time for
which the AGM is convened. Completion
of the appropriate Proxy Form does not
prevent a member from attending and
voting in person if he/she is entitled to
do so and so wishes.
(c) Copies of service contracts between any
Director and the Company or any of its
subsidiaries are available for inspection
at the Registered Ofﬁce of the Company
on each business day during normal
business hours and will be available on the
day of the AGM, at the place of the AGM,
from at least 1 5 minutes prior to the AGM
until its conclusion. The Register of
Directors’ Interests will also be available for
inspection from the commencement of the
AGM until its conclusion.
Notice of Annual General Meeting
44
XTA001_Talarius_P29_44.qxp  10/4/06  4:04 pm  Page 44 45 Annual Report 2005
Advisors 
Company secretary
SC Fadil, FCIS
RJ Hillhouse, FCIS
Registered office
20 Black Friars Lane
London
EC4V 6HD
Principal solicitors
Mayer, Brown, Rowe & Maw LLP
1 1 Pilgrim Street
London
EC4V 6RW 
Joelson Wilson & Co
70 New Cavendish Street
London
W1G 8A T
Principal bankers
Bank of Scotland
249 Silbury Boulevard
Milton Keynes
MK9 1NA
Auditors
KPMG Audit Plc
Altius House
One North Fourth Street
Milton Keynes
MK9 1NE
Corporate financial advisers
Marwyn Capital LLP
1 0th Floor, Bucklersbury House
3 Queen Victoria Street
London
EC4N 8EL
Livingstone Guarantee LLP
1 5 Adam Street
London
WC2N 6RJ
Stockbrokers
Numis Securities Limited
Cheapside House
1 38 Cheapside
London
EC2V 6LH
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Kent
BR3 4TU
Financial public relations
Brunswick Group LLP
1 6 Lincoln’s Inn Fields
London
WC2A 3ED
General enquiries
T alarius plc 
Silbury Court 
368 Silbury Boulevard 
Milton Keynes
MK9 2AF
T el: 0 1 908 696 1 00 
Fax: 0 1 908 393865
Group website: www.talarius.com
Investor Relations
Jonathon Glass/Chris Blundell
Brunswick Group
T el: 0207 404 5959
Andy Hall, Finance Director
T alarius plc
T el: 0 1 908 246 1 1 1
Nick Harding, Chief Executive
T alarius plc
T el: 0 1 908 246 1 23
Annual Report Copies
Jackie T aylor
T alarius plc
T el: 0 1 908 246 1 1 9 
Designed by navyblue design group
Photography by Rob Wyatt
Printed by St Ives Westerham Press, 
a CarbonNeutral
®
company registered to
ISO 1 400 1 Environmental Management
System.The paper used in this report comes
from well managed forests independently
certified according to the rules of the 
Forest Stewardship Council.
Highlights
The Company
T alarius plc comprises two key
gaming brands:
Quicksilver, the UK’s largest chain
of Adult Gaming Centres (AGCs)
currently with 183 sites spread
across the length and breadth 
of the UK.
Cyberslotz, launched in August
2001, a “virtual gaming machine
lounge” and amongst the top ten
most visited online gaming sites 
in the UK. 
(Source: Branddriver survey, June 2005)
Contents
01 Highlights
02 Chairman’s Statement
06 Chief Executive’s Statement
14 Finance Review
19 Mission Statement
22 Board of Directors
24 Corporate Governance Statement
26 Directors’ Remuneration Report
28 Directors’ Report
30 Independent Auditors’ Report 
31 Consolidated Profit and Loss Account
32 Balance Sheets
33 Consolidated Cash Flow Statement
34 Notes to the Financial Statements
44 Notice of Annual General Meeting
45 Advisors & Contacts
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