www.inspiredgaminggroup.com
Inspired Gaming Group plc  Annual Report and Accounts 2006
The Leader in  
Open Server Based Gaming
Inspired Gaming Group plc Annual Report and Accounts 
For the period ended 30 September 2006
3 The Maltings 
Wetmore Road
Burton-on-Trent
Staffordshire
United Kingdom
DE14 1SE
Email: enquiries@inspiredgaminggroup.com
T el: +44 (0)1283 512777
Fax: +44 (0)1283 519200 Insp Ired Gam In G Group p LC annua L report and a CCounts 2006
Inspired Gaming Group plc is the leading provider of Server Based Gaming systems and is the 
pioneer of Open Server Based Gaming (Open SBG™). Its Open SBG™ software platform supports 
an extensive range of content and hardware from third parties. This unprecedented flexiblity enables  
our customers to maximise the benefits of Server Based Gaming through the provision of greater 
choice to their player bases.
In the UK, the Group
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 has built on its heritage as the largest operator of analogue gaming machines 
by transforming itself into the leading provider of SBG terminals. It currently operates 20,000 digital 
networked terminals including the largest estate of Fixed Odds Betting Terminals and skill with prize 
machines. Key customers include William Hill, Gala Coral Group, J D Wetherspoon and Mitchells & 
Butlers. The Group currently operates over 87,000 machines in the UK in total.
Inspired Gaming Group plc provides Open SBG™ software systems and digital networked terminals 
in eight countries today. Currently over 14,300 terminals located overseas are connected to its 
platform. Key customers include The Coca-Cola Company and Tabcorp.
The Group operates a number of highly regarded brands in the field of machine operation, software 
development, content development and machine design.
Business Highlights 1 
Our Markets 2 
Our Products 3
Chairman’s Statement 4 
Group Co-Chief Executives’ Statement 8
Business and Financial Review 12
Board of Directors 16
Directors’ Report 18
Corporate Governance Report 21
Statement of Directors’ 23 
Responsibilities 
Independent Auditors’ Report 24
Consolidated Profit and Loss Account 25 
Balance Sheets 26
Consolidated Cash Flow Statement 27
Consolidated Statement of T otal Recognised 
Gains and Losses  28
Reconciliation of Movements in Equity 
Shareholders’ Funds  28
Notes to the Financial Statements 29
Definitions and Glossary of T erms  54
Company Information and Professional 
Advisors  55
Insp Ired Gam In G Group p LC annua L report and a CCounts 2006 
1
 Refer to Definitions and Glossary of Terms for an explanation of key terms used in this Annual Report. 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Business Highlights
Highlights in respect of both the 21 week Statutory Period for the Group, and 
proforma 53 week period for the underlying group, ended 30 September 2006.
Successful admission to AIM
Reduction in Group bank borrowings from £160.7m to £89.2m 
following admission to AIM. In addition, the Group had cash on 
balance sheet of £15.2m at 30 September 2006
Strong improvement in sales mix during the 53 weeks ended 
30 September 2006
– Overall SBG revenues accounted for 33% of total (2005: 27%)
– SBG Machine Management revenues up 22.6%
– SBG software sales up 69.2%  
UK SBG machines up 13% to 18,745 (21% of total estate) during 
the 53 weeks ended 30 September 2006 (currently 19,767,  
23% of total estate)
SBG and digital content contract wins and extensions with  
William Hill, J D Wetherspoon, Tabcorp and Ladbrokes
 and since the year end:
Contract wins with Gala Coral Group, PartyGaming and 
Entertainment UK 
Agreement for extended commercial trial of SBG digital vending with 
The Coca-Cola Company 
Current financial year has started strongly, in line with expectations, 
with unaudited first quarter EBITdA (16 weeks ended 20 January 
2007) up between 35–40% year on year
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• 	 2 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Our Markets
t he	p ub	m arket t he	Gaming 	m arket t he	Leisure 	m arket
The Group operates over 8,100
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skill gaming SBG terminals and over 
1,400
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 SBG jukeboxes in pubs across 
the UK.
Customers include J D Wetherspoon, 
Mitchells & Butlers, Enterprise 
Inns and Spirit Group. In total the  
Group operates 40,500 machines 
in this sector.
“ Theitboxcontinuestooutperform  allotherUKskillwithprizeproducts deliveringanimportantsourceof revenuetoLaurelandenjoymentto  ourcustomers.”
Alistair Burford
Director of Music & Entertainment,  
Laurel Pub Company
The Group provides over 15,000 coin 
operated products in leisure retail 
venues including family entertainment 
centres, universities, airports, motorway 
services and seaside arcades.
Customers include Bourne Leisure, 
Welcome Break, Hollywood Bowl 
and many others. In total the Group 
operates 15,800 machines in this sector.
“ Bourne  Leisure Ltd and their brands Butlins, Haven, British Holidays and Warners have enjoyed another successful year in 2006 with our arcade partners Leisure Link. Contributing factors to this success are Leisure Link’s ability to recognise new opportunities and investing in these opportunities plus their positive energy investing in people.”
Ronnie Cryer
Operations Director,
Bourne Leisure Limited 
The Group operates over 9,300
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SBG Fixed Odds Betting Terminals 
to the UK bookmakers including 
William Hill, Paddy Power, Betfred  
and others.
 
Gala Coral Group has over 8,800 
Multi-Win Roulette and bingo machines 
supplied by the Group within Gala 
bingo and casino venues around the 
UK. In total the Group operates 30,700 
machines in  this sector.
“ Open  SBG™, in the form of Gala Gaming Platform (GGP), has allowed  us to mould electronic roulette to suit our vision for casino operations. It is an exciting time for us, as GGP allows us  to be truly innovative to differentiate ourselves from the competition. Our only limitation now is our imagination, rather than the life of a piece of equipment.” Peter Hannibal Group Electronic Gaming Director, 
Gala Coral Group
International	o perations
The Group has growing SBG  
software and services presence  
in seven countries: Benelux,  
Ireland, Czech Republic, Italy,  
Australia, USA and Vietnam. 
Customers include Tabcorp  
and The Coca-Cola Company.
Inspired Gaming Group plc operates over 100,000 machines across many different markets in the UK and overseas. 
1
 Numbers taken from the Company’s asset records as at January  	 2 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Our Products
The Group’s Open SBG™ solution delivers, 
whatever our customers’ business. Our open, 
networked, flexible software platform delivers 
games and entertainment direct to the player 
on any cabinet across multiple platforms, 
increasing revenue and reducing costs.
Our Open Application Programming 
Interfaces (APIs) support any kind of third-
party content, while the Open SBG™ 
software platform is stable, reliable and 
extendable, enabling our customers to 
manage their entire estate remotely or locally 
in real-time. With the ability to deliver core 
offerings to a global audience, our customers 
can choose from over 30 functional 
In order for the Group to fully capture 
the growth opportunity and maintain 
its market leadership position, Inspired 
Gaming Group plc has invested heavily 
in implementing Open SBG™ platforms 
across its entire estate.
components tailoring the platform to their 
specific needs.
Our services underpin the Open SBG™ 
platform, providing the latest in reporting, 
licence management, content management 
and release, product management and 
bespoke consultancy. The Group provides 
support services to its customers 
internationally.
Inspired	Gaming	Group	plc’s	o pen	s erver	Based	Gaming	s olution
Inspired Gaming Group plc provides and operates a wide range of SBG and analogue entertainment, gaming and retail terminals.
Cabinets
Choose	 from	 our	 range	 of	 cabinets	 to	 suit	 the	 customer’s	 environment
Open SBG™ Software Platform
Core	 components
o ptional	 components:	p ick	 and	 mix	 	 from	 the	 Group's	 0+	 functional	 components	 to	 suit	 the	 needs	 of	 	 the	 customer’s	 business
Open SBG™ Managed Services
o ptional	 managed	 services
t he	 Group	 has	 developed	 state-of-
the-art	 software	 products	 suitable	 for	 a	 range	 of	 markets
Applications
Management  
T oolset
Head-to-head
multiplayer
Cashless
Bet, stake and prize 
configuration tools
Others
Licence  
Management
Reporting
Content Management  
and Release
Product  
Management
Consultancy
Global Support Services
Field Operations
Estate Management
Configuration Database
Menu Management
Credit Management
Messaging
Hardware Management
Gaming entertainment V ending
Casino Slots
AWP/Street Gaming 
FOBT/VLT  
Electronic Table Gaming
Virtual Sports
SWP
SWoP
Music
Digital Vending 	  Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Chairman’s 
Statement
I am pleased to report on the Group’s maiden financial results as an AIM 
listed company covering the period from incorporation on 3 May 2006 to 
30 September 2006. This represents a 21 week Statutory Period and, following 
the acquisition of Ever 2533 Limited and Inspired Broadcast Networks 
Limited on 2 June 2006, a 17 week trading period. The statutory results of 
Inspired Gaming Group plc are discussed in the Business and Financial Review 
later in this report. This Annual Report also focuses on the performance of the 
underlying group for the 53 weeks ended 30 September 2006.
The underlying results for the 53 week period are broadly in line with our 
expectations and, notwithstanding tough trading conditions during the summer 
heatwave in the UK, we delivered strong SBG sales growth both in the UK and 
internationally. 
This creditable performance has been underpinned by the significant progress the 
Group has made, both in the financial year and subsequent to it, in expanding its 
leading position in Server Based Gaming. The Group also generated cash ahead 
of expectations.
The performance of the Group was:
 
 a udited Unaudited  Unaudited  Annual 
 statutory  proforma  proforma change +/- 
 2	weeks	ended	 53 weeks ended  52 weeks ended 
  0	s ept	2006  30 Sept 2006  24 Sept 2005  
 £’m £’m £’m 
Group turnover  8.0m 171.1m 162.7m  +5.2%
Group EBITdA
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 (before share  
based payment charge and  
exceptional items)  0.0m 21.0m 19.2m +9.4%
Group EBITA
2
 (before share  
based payment charge and  
exceptional items) 8.6m 17.0m 16.8m +1.2%
1
  ‘EBITdA’ represents Earnings Before Interest, Taxation, non-machine depreciation and Amortisation. EDITdA is, in  
the opinion of the Directors, the most appropriate measure of cash profits after recurring investment in machines.
2
  ‘EBITA’ represents Earnings Before Interest, Taxation and Amortisation.
	s trategy
The Group’s strategy remains to drive earnings growth and maximise shareholder returns through:
the transition of the UK machine base from analogue gaming machines to higher margin 
Server Based terminals and segments;
using Server Based Gaming to improve our operational efficiency; and
the development and sale of our Server Based software platforms and CGI/digital content 
internationally.
The Group has continued to deliver on its strategic goals.
In the Statutory Period, the Group:
contracted with Tabcorp for the deployment of Server Based entertainment product in 
Australia under the brand name ‘Barry’;
opened its new global SBG support facility in Bangor, North Wales; and
completed the acquisition of Red Vision, enabling the Group to extend the range of its 
virtual sports products into other broadcast media.
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• 	  Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Since the end of the Statutory Period, the 
Group:
announced that The Coca-Cola Company 
has entered into an exclusive trial of SBG 
digital vending machines;
renewed its service contract with Gala 
Coral Group, increasing its volume to 
100% of the bingo and casino estate and 
extending tenure from three to five years;
exhibited for the first time at the G2E 
gaming show in Las Vegas; and
launched its SBG Video AWP products for 
the UK market. 
t rading	and	m arkets
In the UK, the Group continues to own and 
operate the largest estate of Server Based 
machines. 
As identified in the Group’s trading update 
on 1 November 2006, trading conditions, 
particularly in our pub and leisure sectors, 
were challenging due to the unprecedented 
hot weather experienced across the UK 
during the summer months. However, this 
effect was mitigated, in part, by strong SBG 
performance in the UK gaming and 
international markets.
As stated previously, the Group has 
continued to win business with Gala Coral 
Group, Paddy Power and the continuing 
rollout of our market leading SBG 
entertainment product into the pubs sector.
Internationally, we continue to make good 
progress. In Italy, there are now some 14,300 
machines running on our software on the 
Gmatica network. The recent contract with 
Tabcorp is now in rollout phase and we are 
well positioned with a number of new 
markets including, amongst others, Southern 
and Eastern Europe, Latin America, Benelux 
and Germany.
The Group will continue to seek organic 
growth, both in the UK and overseas. In 
addition, the Directors continue to review a 
variety of other opportunities available to the 
Group including acquisitions.
r egulatory	d evelopments
On 6 October 2006, the Department for 
Culture Media and Sport (DCMS) announced 
an increase in stakes and prizes for Category 
C AWP machines from 30p and £25 to 50p 
and £35 respectively. This was effective from 
27 October 2006. Historically, stakes and 
prizes have been increased every three years 
(‘The Triennial Review’) and the industry 
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Entertainment 
Skill With Prize
Inspired Gaming Group plc has one of the 
world’s largest networks of skill with prizes 
terminals, spanning multiple countries and 
continents. The terminals allow the  
end user to play more than 30 exciting  
and challenging games, competitions  
and tournaments.
Benefits
New content downloaded instantly to the 
customer’s venue every six weeks 
Big cash prize tournaments with real-time 
updated national leader boards 
Unique game experiences, such as  
multi-player head-to-head games
Features	 Central menu control to make real-time 
changes to terminal layout
On-terminal tools to help venue managers 
increase revenues 
Fault management via remote diagnostics 
tools
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secure	 with	e xciting	 Content 	 6 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  r egulatory	d evelopments	 continued
normally witnesses improved revenues on 
each occasion. However, at the last review, no 
increase was implemented due to the passage 
of the 2005 Gambling Act. The DCMS also 
confirmed that the next review would take 
place in 2009. This is positive news for the 
Group and the wider industry as a whole as  
it should remove further downward pressure 
on AWP machine rents and provide some 
mitigation to the smoking ban which comes 
into effect in England on 1 July 2007.
There has been much comment on the 
impact the smoking ban may have on the 
gaming machines industry in England. The 
experience in many other countries such as 
Italy and Australia, suggests that incomes fall 
for a period of time before reverting to 
previous levels. Our own experience in Italy, 
where the Group monitors AWP machine 
incomes operating on its platform, confirms 
this trend. In Scotland, where the Group 
operates an estate of approximately 1,500 
machines, AWP rents and volumes have both 
remained stable. The Group has seen a 
decline in its shared income products but the 
overall fall in incomes has been c.5%, in line 
with industry expectations. However, the 
Directors recognise that these results may 
not reflect the full impact of the ban and will 
monitor the situation closely. We will also 
continue to seek operating efficiencies to 
absorb any impact.
 
The introduction of the Gaming Act 2005 
in September 2007 provides a number of 
opportunities for the Group. The most 
significant will be the ability for the Group to 
share in AWP machine revenues for the first 
Chairman’s 
Statement
continued
time. This is particularly apposite given the 
recent launch of the Group’s SBG Category 
C AWP machine. We are optimistic that 
this product will follow the trend of the 
Group’s previous SBG machine releases 
which have all delivered significant income 
uplifts compared to their traditional analogue 
counterparts. The new Gaming Act will 
therefore enable the Group to participate in 
these increased incomes. The Group also 
expects to benefit from the regulated growth 
in the casino estate in the UK, through its 
suite of SBG casino product and machine 
services and supply.
Finally, the Group did not and does not have 
any exposure to the US online gaming market 
and our trading was thus entirely unaffected 
by the legislation that affected that sector in 
October 2006.
people
Our employees continue to deliver 
outstanding loyalty, commitment, hard work 
and talent. I would like to thank them all for 
the superb way in which they have performed 
throughout a period of enormous change.
Board
Julian Paul and David Mace joined the Board 
as Non-Executive Directors when the Group 
was admitted to AIM. I am extremely grateful 
for their assistance and wise counsel during 
the IPO process. Subsequently, Christopher 
Mills joined the Board on 29 September 2006 
as a Non-Executive Director. Christopher 
brings a wealth of experience of the public 
markets and adds significant value to the 
Board’s deliberations. On behalf of all of the  	 6 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Directors, I welcome him to the Board. David 
Page, Chief Financial Officer, retires from the 
Board today and will leave the Company at 
the end of September 2007. David has served 
the group for 24 years and has made a 
significant contribution to its development. 
On behalf of all of our Directors I wish him 
well for a long and happy retirement. I am 
pleased to announce the appointment of 
Simon Kerry as Group Finance Director 
reporting to the Board. Simon joined the 
group in 1990 and has subsequently held a 
number of senior accounting positions, most 
recently UK Finance Director. Simon played a 
key role during the Group’s admission to AIM 
and has an extensive knowledge of the 
Group and the industry as a whole.
summary	and	Current	t rading
The 2006 result is broadly in line with market 
expectations. The Directors are pleased with 
the considerable progress made since 
admission to AIM. We have achieved several 
major strategic milestones including the Gala 
Coral Group contract extension, SBG deals 
with Tabcorp and The Coca-Cola Company, 
and the launch of our new SBG video AWP 
products. Whilst the Group faces well 
understood challenges such as the ban on 
smoking in public places and the pace of SBG 
rollout, the considerable progress made since 
admission and the strong year on year SBG 
revenue growth leaves the Group set fair  
for 2007.
The new financial year has started strongly, 
especially in SBG segments where machine 
incomes and volumes are well ahead year  
on year, in line with our expectations. It is 
expected that unaudited first quarter EBITdA 
(before share based payment charge) will 
be up between 35–40% ahead of the 
corresponding period last year. While this is 
extremely encouraging the Board is mindful 
that the financial performance of the Group 
is, as ever, weighted towards the second half 
of the financial year.
r ussell	 Hoyle
Chairman
22 January 2007
Inspired Gaming Group plc is a leading 
supplier of virtual events to the betting 
community, with our unique and innovative 
Virtual Sports platform. Around 40 virtual 
events are broadcast every day in UK  
betting shops.
The Virtual Sports platform is available for  
all popular betting events, including horse 
racing, football, dog racing and speedway, 
across a wide range of broadcast, internet, 
terminals and other distribution channels. 
Through Red Vision, our BAFTA award-
winning computer graphics interface 
production company, the Group is able  
to deliver an exciting, realistic gaming 
experience with unparalleled movie  
quality graphics.
Benefits
Wide variety of betting events
High returns
Full margin control
Independent of real-world events 
Allows customer control
Features
Revolutionary film and television 
originated computer graphics 
Randomised race events with infinite race 
scenarios
Simple back-end technology for use by 
administrators
Automated print-out of simplified race 
content for commentators
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Compelling	 Computer	 Generated	 Imagery
Gaming  
Virtual Events 	 8 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Group
Co-Chief 
Executives’ 
Statement
o verview
2006 was an eventful year for the group. The 
Company’s admission to AIM in June following 
many years of private equity ownership led to 
a significantly reduced debt level and a more 
appropriate capital structure for a business 
with global growth ambitions. The group has 
continued to consolidate its strong leadership 
in the SBG market by increasing the number of 
SBG terminals within its own machine estate 
and by signing new agreements with third 
parties who will deploy the group’s SBG 
software. In the UK, the group renewed and 
extended a number of major contracts to 
supply SBG and traditional gaming machines to 
key customers. Internationally, the group 
continued to rollout SBG terminals and signed 
new strategic SBG agreements in key markets. 
In June, Inspired Broadcast Networks Limited 
acquired Red Vision, its partner in virtual-
sports content creation, bringing in-house the 
expertise that has created the UK’s leading 
supplier to this exciting segment of the 
betting market. 
The group also delivered financial results that 
were broadly in line with market expectations 
with proforma EBITdA up 9.4% and proforma 
EBITA up 1.2% (both before share based 
payment charge and exceptional items).
u K	m achine	m anagement	–	 	 sBG	and	t raditional
Volumes	 In 2006, the group operated an estate of 
91,322 (2005: 89,941) (average during year) 
gaming and entertainment machines which 
it supplied to a range of retailers ranging from 
casinos, licensed betting offices, bingo halls, 
pubs, motorway service stations and holiday 
parks in the UK in return for a rent or a share 
of revenues. In the majority of cases, the group 
provides the financial capital for the machines 
and a fully managed service including yield 
management, installation, repairs and 
collections provided by over 1,400 staff. 
t urnover	 The increased penetration of SBG terminals 
within the UK estate is a core value driver. 
Revenues from the group’s SBG machines 
increased by 23% in the year to £48.3m (2005: 
£39.1m) and accounted for 30% of total 
machine management revenues (2005: 26%). 
At 30 September 2006, the number of SBG 
machines increased to 18,700 (2005: 16,600) 
accounting for 21% of the total estate (2005: 
18%) driven by the completion of the rollout 
at William Hill of our FOBTs and the ongoing 
rollout of our entertainment and music 
variants through the pub and leisure channels.
Revenues from machine management overall, 
SBG and analogue, increased by 5% to £160.7m 
(2005: £152.8m) which compared favourably to 
the 2% increase in the number of average 
machines. The improvement in income per 
machine was largely driven by an increase in the 
average number of SBG machines owned and 
operated in the year to 17,987 (2005: 13,746) 
which deliver higher incomes than the Group’s 
traditional analogue machines. However, 
machine management revenues in the pub and 
leisure sectors were dampened by the effects of 
the hot summer. We estimate that the extreme 
weather conditions had an adverse impact of 
approximately £1.6m on the group’s operating 
The Group’s maiden financial results cover the trading period from 2 June 2006 
to 30 September 2006, following the incorporation of the Company on 3 May 
2006. The statutory results for this short period are covered in the Business and 
Financial Review. In this section, we focus on the performance of the underlying 
group for the 53 weeks ended 30 September 2006. 
“  The group continued to rollout SBG terminals and signed 
new strategic SBG agreements in key markets. In June, Inspired 
Broadcast Networks Limited acquired Red Vision, its partner in 
virtual-sports content creation, bringing in-house the expertise 
that has created the UK’s leading supplier to this exciting segment 
of the betting market.”
£57 .1 m
33%
%	sales	 from	sBG
(unaudited	 proforma		 weeks	 	 ended	0	september	 2006)
sales	 from	sBG
(unaudited	 proforma		 weeks	 ended	0	september	 2006) 	 8 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  profit in the year, although much of this was 
mitigated. Since the summer months incomes in 
pubs and leisure have recovered strongly and 
are now tracking in line with our expectations. 
The focus on SBG has led to a corresponding 
decrease in the group’s ownership and 
operation of analogue machines which at  
30 September 2006 was 69,171 (of which 8,689 
were serviced but not owned) (2005: 74,713, of 
which 7,587 service-only). Machine management 
revenues from the group’s traditional analogue 
machines declined by 1% in the year to £112.4m 
(2005: £113.7m) despite a 4% decline in average 
machines highlighting an improvement in mix 
away from the pub market, to more profitable 
segments. The Directors will continue to 
evaluate opportunities to withdraw from 
unattractive analogue machine contracts as 
they come up for renewal. 
Costs	 SBG machines typically deliver higher revenues 
to both customers and the group and are 
more economic to operate than their 
traditional counterparts through a combination 
of higher income generation (as a result of an 
improved customer experience) and lower 
operating costs. Costs are typically lower for a 
variety of reasons. 
With SBG:
machine content is changed remotely by 
uploading from a central server. With 
analogue machines, content can only be 
changed by physically replacing the 
machine;
repairs can often be conducted remotely 
‘over the wire’, obviating the need for 
expensive field staff visits; and 
incomes are also monitored remotely 
unlike traditional machines where the 
income data has to be manually retrieved. 
This allows the group to outsource, in 
some instances, the process of cash 
collection to its retailer partners. These 
benefits increase with scale. 
During the year the Group rationalised its depot 
structure down to 18 due to the process of the 
conversion to SBG, providing the benefit of 
lower operating costs for the future.
profit	 Overall, UK machine management EBITdA 
(before share based payment charge and 
exceptional items) increased by 7% to £22.6m 
(2005: £21.2m). 
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Gaming  
Fixed Odds Betting T erminal
r eal-t ime	r eporting
Benefits
Exceptional uptime
Regular content updates downloaded 
remotely
Terminals connected via high-speed  
ADSL network, allowing real-time,  
remote monitoring 
Real-time reporting for up-to-the-minute 
performance data
Features
Great content, managed at terminal level
Leading-edge graphics and touch screen 
technology 
Back office cashier terminal for payments 
and credit management
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Inspired Gaming Group plc provides the 
leading Open Server Based Gaming (Open 
SBG™) platform for Video Lottery and Fixed 
Odds Betting Terminals. Currently deployed 
on more than 8,800 terminals, the Open 
SBG™ platform allows content and currency, 
as well as gaming and betting rules, to be 
modified in each market to comply with local 
needs and legislative requirements. Content 
includes Roulette, Virtual Sports and numbers 
games, some of which offer bonus features.
“ WehavechosenInspiredasourstrategic partnerforFixedOddsBettingTerminals  and2006sawtheextremelysuccessful replacementofourestatewiththeirbest  inbreedRainmakerterminal.”
Ian Chuter
Operations Director (Slots),
William Hill Organization 	  0 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Group
Co-Chief 
Executives’ 
Statement
continued
sBG	s oftware	and	s ervices	( sBGss )
SBGSS made excellent progress during the 
year with sales increasing by 69% to £8.8m 
(2005: £5.2m). This includes a contribution  
of £1.3m from Red Vision. SBGSS activities 
comprise of the sale to third parties, both  
in the UK and overseas, of the Group’s SBG 
software platform, games and other content 
including Red Vision’s computer generated 
imagery (CGI), virtual sports and SBG 
hardware. Revenue streams include SBG 
licence fees and associated recurring support 
fees, content royalties, margins on hardware 
sales and consulting fees. SBGSS customers 
include leading machine operators and 
retailers such as Gala Coral Group, Europe’s 
largest gambling operator, and Tabcorp, 
Australasia’s premier gambling and 
entertainment group. These customers have 
chosen the Group as their technology partner 
to assist them in harnessing SBG to transform 
the profitability of their own machine estates. 
These customers typically provide the financial 
capital for the SBG machines. Consequently, 
SBGSS contracts produce higher revenues and 
returns on investment than those in machine 
management. The SBGSS business model 
forms the basis of the Group’s international 
expansion strategy and the Group now has 
machines running on its technology in seven 
countries outside the UK.
SBGSS revenue growth during the year has 
been driven by contracts with new name 
customers as well as by sales to existing 
customers. Existing SBGSS customers include 
Gala Coral Group, which is using the Group’s 
SBG platform and games in both its bingo and 
casino divisions and Gmatica, a leading Italian 
gaming machine concessionary in which the 
Group has an investment. The number of 
Italian AWP machines connected to the 
group’s SBG platform grew by over 110% 
during the year to reach 14,300 (2005: 6,800). 
Note, these are not owned or operated by the 
Group. The most significant new-name gaming 
customer win during the year was Tabcorp, 
which entered into a five year exclusive 
strategic partnership to deploy the Group’s 
platform in its gaming division.
The group also made progress in broadening 
the application of its technology to segments 
other than gaming. Technical trials continued 
in Ireland for digital vending equipment with 
The Coca-Cola Company during the year. 
The success of these resulted in an extended 
commercial trial, announced after the year 
end, to deploy digital vending machines in the 
USA, Germany and Ireland. The Group is 
working with The Coca-Cola Company on 
an exclusive basis and the opportunity is, in 
our opinion, one of the most significant facing 
the Group.
Red Vision made good progress during the 
year securing virtual sports content revenues 
from a range of customers including William 
Hill and Ladbrokes. Since the year end, its 
product has also launched on PartyGaming’s 
PartyCasino.com website. 
During the year, the group continued to invest 
in its SBGSS technology and operating 
infrastructure, which included the creation  
of its SBG Global Support Service centre in 
North Wales which remotely monitors and 
manages SBG terminals connected to our 
platform worldwide (including those owned  
by third parties) on a 24/7 basis. Despite this 
investment, the strong growth in sales resulted 
“ SBGSS revenue growth during the year has been driven by 
contracts with new name customers as well as by sales to  
existing customers.”
“ The group also made progress in broadening the application  
of its technology to segments other than gaming.” 	  0 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  in a reduced EBITdA loss for SBGSS of £1.2m 
(2005: £1.5m loss). Since its acquisition, Red 
Vision has contributed EBITdA profit of £0.4m. 
o rganisational	r estructuring
Prior to IPO, SBG activities were not fully 
integrated because the majority of the software 
and services capability, including ownership of 
the SBG technology platform, was provided by 
Inspired Broadcast Networks which was only 
65% owned on a fully diluted basis by the 
former parent company, Ever 2533 Limited.  
The IPO resulted in the acquisition of the IBN 
minority interest. This has allowed the Group 
to be fundamentally restructured so that it is 
now completely focused on harnessing its SBG 
expertise across all functions from sales to 
operations and research and development. 
The restructuring rationalises our field and 
central support functions including the 
reduction in the number of operating depots 
(six closed since the IPO). The cost of this 
fundamental restructuring, which will be 
completed during 2007 is £2.1m and has been 
treated as an exceptional charge to the profit 
and loss account.
o utlook	for	the	Forthcoming 	 Financial	Year
Trading in the current financial year has started 
well. SBG machine management incomes in 
LBOs and pubs are performing particularly 
strongly and SBGSS has a strong pipeline of 
opportunities both in the UK and overseas. 
Since the year end, the Group has announced 
that it has renewed its service contract with 
Gala Coral Group for a further five years and 
extended the contract to cover the whole 
Gala casino and bingo estate. We are 
continuing to roll new FOBTs and SBG skill 
with prize into new UK customers. The Group 
also launched its SBG AWP on 28 November 
2006 to customers and the trade press and 
the reaction has been favourable. Traditional 
analogue AWPs account for approximately 
40% of the Group’s machine estate, a 
significant proportion of which have a two 
year useful economic life compared to five 
years for the SBG variant which will improve 
the economics of operating this product.
In addition to organic growth the Directors 
continue to review opportunities for potential 
acquisitions. The Group remains cash 
generative and we are confident of making 
significant strategic and financial progress 
during the coming year.
Luke	a lvarez	 &	norman 	 Crowley
Group Co-Chief Executives 
22 January 2007
Graphically	r ich	 Content
The Player is the revolutionary broadband 
enabled video AWP. The graphically rich 
content and variety of stakes and prizes 
provide a compelling gaming experience 
appealing to customer’s current, new and 
lapsed players.  
 
Benefits
Optimised fresh content without 
continually removing and installing cabinets 
Proven engineering principles and familiar 
player ergonomics 
A multi-game product which will increase 
site life and prolong sales 
Networked, broadband terminals allowing 
remote monitoring, minimising fault rates 
and engineer callouts 
 Features
A more user friendly platform than 
traditional reel based games 
Touch screen technology allows easy 
playability and browsing 
Vast range of game styles with graphically 
rich content 
Configurable menus to allow single or 
multi-game offer across venues 
More new games, more often
•
•
•
•
•
•
•
•
•
Gaming 
 Video Amusement With Prize 	  2 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Business and 
Financial 
Review
r esults	for	the	p eriod
Inspired Gaming Group plc is reporting results for the Statutory Period from incorporation on 
3 May 2006 to 30 September 2006, a 21 week period.
In addition, indicative ‘proforma’ results for the underlying group for the 53 weeks ended  
30 September 2006 are also presented.
It is the Director’s opinion that these non-statutory, non-audited, proforma results provide a valuable 
indication of the performance of the business for the 53 week year ended 30 September 2006. 
t rading	p eriod
The reported financial results include the period from the acquisition of the Ever 2533 Limited  
and Inspired Broadcast Networks Limited businesses on 2 June 2006, to 30 September 2006,  
a 17 week period of trading.
t urnover
   Unaudited 
     proforma total for 
 Unaudited a udited statutory	 53 weeks ended  
 36 weeks ended period	(including	 30 September 
  2 June
1
  	weeks	trading)  2006 
 £’000  £’000  £’000
t urnover
Machine Management (SBG and analogue) 107,651   ,0 160,688
SBG Software and Services 3,935   , 8,848
Analogue assembly business
2 
  1,564 – 1,564
Total 113,150   , 0 171,100
1
 Source: Extracted from financial records of the underlying group.
2
  Analogue assembly ceased in January 2006 and as such there is no result for the division in the Statutory Period.
Group
Total revenue in the Statutory Period was £58.0m and on a proforma basis showed growth of 
5.2%, up to £171.1m (2005: £162.7m). This was despite difficult trading conditions in the pubs and 
leisure sectors during the extreme summer weather conditions.
Turnover growth was primarily from the gaming and leisure sectors. Growth in these sectors, and 
the exit from supply to Punch Taverns has reduced the Group’s dependency on the pub sector. 
The pub sector now accounts for 44% of the group revenue compared to 47% in the previous year. 
The trading period of 17 weeks from 2 June through to 30 September included the Group’s peak 
trading period in the gaming and leisure sectors. Licensed betting offices benefit from extended 
trading hours during this period. The leisure sector includes the highly seasonal holiday parks which 
peak during the months of July through to September.
eBIt da	before	exceptional	costs	and	share	based	payment	charge
 	  Unaudited  
    proforma total for 
 Unaudited  a udited	statutory 53 weeks ended  
 36 weeks ended  period (including 30 September 
  2 June
1
  	weeks	trading)  2006 
 £’000  £’000  £’000
earnings	 before	 interest,	 tax,	 non	 machine	 	 depreciation,	 amortisation,	 exceptional	 costs	 and	 share	 based	 payment	 charge
 Machine management (SBG and analogue) 13,314   , 2 22,638
SBG Software and Services (2,207)   ,0 (1,196)
Analogue assembly business (158)  – (158)
Central
4
 – (2 ) (291)
Total 10,949   0,0 20,993
3
  EBITdA (EBITDA less machine depreciation). This profit measure is used by management as a proxy for cash profits 
after recurring investment in machines.
4
   Central costs primarily represent the costs necessarily incurred by the Company as a result of its admission to AIM. 	  2 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Group
Earnings before interest, tax, non machine depreciation, amortisation (EBITdA) and 
exceptional costs and share based payment charges was £10.0m in the Statutory Period, and 
on a proforma basis was £21.0m (+9.4%).
machine	m anagement
Machine management proforma EBITdA (before share based payment charge and exceptional 
costs) increased by 6.9% to £22.6m, driven by the increased rollout of SBG machines and 
growth in the leisure channel through our holiday park business. 
Connectivity and content costs relating to SBG machines reduced to 16% of digital SBG 
revenue (2005: 18.7%) reflecting increased site density and scale related purchasing benefits. 
SBG machines benefit from a longer useful economic life than their analogue equivalents, and 
are therefore more economic to operate. Machine depreciation as a percentage of revenue 
reduced to 33% in the year from 35% in 2005. 
sBG	s oftware	and	s ervices
The software and services sector is still in the early stages of growth. The business has 
continued to build up its SBGSS infrastructure during the second half of the year. 
Notwithstanding the costs of investment, there was a reduction in the proforma EBITdA 
loss (before share based payment charge and exceptional costs) basis from £1.5m in the 
prior year, to £1.2m.
Group	o perating	p rofit	before	goodwill	amortisation	and	exceptional	costs
      Unaudited  
    proforma total for 
 Unaudited  a udited	statutory 53 weeks ended  
 36 weeks ended  period (including 30 September 
  2 June
1
  	weeks	trading)  2006 
 £’000  £’000  £’000
Machine management (SBG and analogue) 12,291  8,6 20,946
SBG Software and Services (3,239)  20 (3,038)
Analogue Assembly business (642)  – (642)
Central –  (2 ) (291)
Total before share option charge 8,410  8, 6 16,975
Share options charge  –  ( ,2 )  (3,233)
o perating	profit	before	goodwill	amortisation   
and	exceptional	costs 8,410   , 2  13,742
Operating profit, before goodwill amortisation, exceptional items and accounting for share 
option schemes in the Statutory Period is £8.6m, and after share options charges, goodwill 
amortisation and exceptional costs is £0.5m.
The share option charge has been incurred for the first time following issue of 12,160,862 
options to the Board members during the Statutory Period. The charge has been calculated in 
accordance with the provisions of FRS20 ‘Share Based Payments’.
exceptional	Items
Costs of £1.1m which were attributable to the AIM admission process and refinancing of the 
Group’s debt have been treated as exceptional costs by the Group.
£2.1m of organisational restructuring costs have been expensed as part of the major  
Group restructuring following the IPO, and are discussed in the Group Co-Chief  
Executives’ Statement. 	  Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Key	p erformance	Indicators
    
  Proforma 
 	weeks	ended 53 weeks ended 
  0	s eptember  30 September	 Definition and  
 2006 2006	 method of calculation
Financial   
Sales growth n/a 5.2% Growth in sales in the period 
   expressed as a percentage.
Operating profit margin  .8% 9.9% Operating profit before 
   exceptional items, goodwill
   and share based payment 
   charge as a percentage of 
   sales in the period. 
Capital investment (£’000)  2, 00 53,900 Purchase of tangible and  
   intangible assets net of receipts 
   from sales of fixed assets.
n on	Financial	 	 	 Growth in owned machines ( , 6) (4,485) Changes in the number of  
   machines owned and operated 
   in the period. 
Growth in total machines ( ,28 ) (3,383) Changes in the number of 
   machines operated and serviced  
   in the period.
Digital vs. analogue  22% 24% Number of digital machines 
   operated as a percentage of the 
   total number of machines operated.
Balance	s heet
Goodwill
Goodwill on the balance sheet amounts to £104.4m, which arose on the acquisition of Ever 
2533 Limited and Inspired Broadcast Networks Limited (£88.6m in total) and the subsequent 
acquisition of Red Vision Limited and its subsidiaries (£17.4m) less amortisation in the Statutory 
Period of £1.6m, as shown in note 11 to the financial statements. The Directors have reviewed 
the carrying value of this asset and are satisfied it is fairly stated.
 
t angible	Fixed	a ssets
Net capital investment in the Statutory Period was £11.1m, and in the full year £51.7m. Tangible 
fixed assets at 30 September 2006 were £97.2m. Plant and machinery, fixtures and fittings and 
amusement machines accounted for £96.8m with the overwhelming majority of this being 
amusement machines.
 
Borrowings	 At the balance sheet date the net debt of the Group was £72.2m. This represented bank 
borrowings of £89.2m, (the Group increased its utilisation of its acquisition facility by £3.2m 
from the point of acquiring the Red Vision businesses) other loans of £0.4m and finance leases 
of £0.2m, offset in part by the capitalisation of debt issue costs arising on refinancing of £2.4m 
and £15.2m of cash. 
The Group’s borrowings are at variable rates of interest, although the Group actively manages 
its interest exposure. Although there were no hedges in place at the end of the Statutory 
Period, current hedging arrangements are in place for 82% of current bank debt. 
Cash	Flow	s tatement
The Group generated net cashflow from operating activities of £17.3m in the Statutory Period. 
This resulted in free cashflow of £2.9m after interest payments (£2.0m), and capital 
expenditure (£12.4m). 
Machine capital expenditure, net of disposals, for the full year was £48.5m. £13.0m (26.8%) 
was spent on digital SBG machines. In the full year, capital investment in software and services 
and other technology developments relating to the field operations efficiency programme was 
£5.3m. Business growth during the year in the gaming and leisure sectors required expansion 
capital expenditure of c.£4m. 
Interest
The Group incurred net interest charges of £2.6m during the period, of which £2.2m is in 
respect of the Group’s £89.2m of bank borrowings. £0.4m relates to the amortisation of debt 
issue costs capitalised in accordance with FRS4 ‘Capital Instruments’.
Business and 
Financial 
Review
continued 	  Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  t axation
The Group has maximised its use of capital allowances on its short life assets to reduce the 
charge for the Statutory Period to £13,000. At 30 September 2006 the Group carried forward 
a deferred tax asset of £14.5m, in respect of recognition of remaining unutilised capital 
allowances which are anticipated to be recovered in the proceeding financial years.
a cquisitions
The Company acquired Ever 2533 Limited and Inspired Broadcast Networks Limited for a 
total of £89.3m on 2 June 2006. On 8 June 2006, the Group acquired Red Vision Limited and 
its subsidiaries for initial consideration of £3.3m and deferred consideration of up to £16.7m 
dependent upon earn out targets.
r esearch	and	d evelopment
The main focus of development by the Group is in the areas of ongoing software,  
platform and new machine projects. Total development costs expensed to the consolidated 
profit and loss account in the period were £108,000, with a further £618,000 capitalised.
eps/d ividends
Underlying earnings per share which exclude goodwill amortisation, exceptional items and 
share based payment charge was 8.4 pence for the period. Basic earnings per share, which 
includes these items, were a loss of 3.2 pence.
The Board have recommended that no dividend will be payable in relation to the period 
ended 30 September 2006. 
It is the Directors’ intention that, subject to the requirements of the Companies Act, 
a first dividend will be paid for the 2007 financial year.
Financial	r isks
Interest	r ate	r isk
The Group finances its operations through a mixture of retained profits and bank borrowings. 
The Group borrows at floating rates and manages its exposure to interest rate fluctuations by 
fixed rate hedges on its borrowing facility. At the date of signing the financial statements, 82% 
of Group borrowings were hedged. 
Currency	r isk
The Group usually buys currency at spot rate, however, the Group recognises that its currency 
exposure may increase in the future due to the growth in overseas sales, and as more 
production is outsourced to overseas suppliers. The Group will look to minimise any increased 
exposure to foreign exchange fluctuations through the use of currency instruments if 
appropriate. Currently the Group holds small amounts of foreign currency to settle monthly 
trading transactions.
Liquidity	r isk
The Group policy is to ensure that it has committed borrowing facilities in place in excess of 
its peak gross borrowings. The Group refinanced its operations at the time of the flotation, 
which has ensured that the Group has sufficient borrowing facilities in place for at least the 
next 12 months. 
International	Financial	r eporting	s tandards
The EU have directed that all AIM listed companies must comply with EU adopted 
International Financial Reporting Standards (IFRS) for their consolidated financial statements 
for accounting periods beginning after 1 January 2007. As a result the September 2008 Group 
consolidated financial statements will be prepared using IFRS. A review is being undertaken to 
manage the transition to IFRS which will determine the implications for the Group and identify 
the requirements for a seamless transition. It is anticipated that the major impacts on the 
Group will be in accounting for intangibles, goodwill, leases, deferred taxation and the 
presentation of financial statements.
d avid	p age
Chief Financial Officer
22 January 2007 	  6 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  Board of  
Directors
norman	 Crowley
Group Co-Chief Executive
russell	 Hoyle	 Executive Chairman
Luke	alvarez	 Group Co-Chief Executive
James	o’Halleran
Chief Executive Officer UK and Ireland
d avid	p age	a Cma
Chief Financial Officer
Julian	paul	 FCa
Senior Non-Executive Director
Christopher	mills
Non-Executive Director
david	mace
Non-Executive Director
susan	albion
Company Secretary 	  6 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	  executive	d irectors	 russell	 Hoyle
executive	Chairman	(aged	 )
Russell was the managing director of 
Freetraders Group, the wholesale drinks 
business of Matthew Clark, during the period 
from 1993 to 1996. In 1998, he led the 
management buy-in of the company, then 
called Bass Leisure Machine Services and 
went on to serve as the chief executive 
officer of the Leisure Link Group to the 
acquisition by the Company and admission  
to AIM on 2 June 2006. 
Luke	alvarez
Group	Co-Chief	e xecutive	(aged	 )
Luke worked at The Boston Consulting 
Group and was head of FMCG software 
development at the US enterprise software 
company, Comshare. Luke moved on to 
become vice president of business 
development at boo.com before becoming 
chief operating officer of Emap Digital,  
the internet division of Emap plc. Luke was  
a joint founder of Inspired Broadcast 
Networks Limited.
norman	 Crowley
Group	Co-Chief	e xecutive	(aged	 6)
Norman was head of operations for BG 
Turnkey, one of the first turnkey vendors in 
the world and was responsible for fulfilment 
of global rollouts for Microsoft and Computer 
Associates. In 1995, Norman founded and 
became chief executive officer of Trinity 
Commerce, one of Europe’s first e-services 
firms. In May 1999, Norman successfully sold 
the majority of the business to Eircom plc 
and saw the handover of the business to a 
new management team. Norman was a joint 
founder of Inspired Broadcast Networks 
Limited. 
James	o’Halleran
Chief	e xecutive	o fficer	u K	and	Ireland	 	 (aged	 6)
Jim was a board member of Freetraders 
Group during the period from 1993 to 1996. 
Prior to this Jim had been the sales director 
for Grants of St. James. Jim was part of the 
management buy-in of Bass Leisure Machine 
Services in 1998 and went on to serve as a 
board member of the Leisure Link Group and 
as managing director of Leisure Link Group 
Limited to the acquisition by the Company 
and admission to AIM on 2 June 2006. 
david	page	a Cma
Chief	Financial	o fficer	(aged	)
After spending three years in the newspaper 
industry and 10 years with Allied Domecq, 
David held a number of senior accounting 
positions in Bass Leisure Machine Services 
during the period 1983 to 1992 and went on 
to serve as finance director of Bass Leisure 
Machine Services Limited. He went on to 
become finance director of the Leisure Link 
Group from 1998 to the acquisition by  
the Company. Upon admission to AIM  
on 2 June 2006 David became Chief 
Financial Officer.
susan	albion
Company	s ecretary	(aged	)
Susan qualified as a solicitor with DLA  
in 1998, and spent the early part of her career 
working in DLA’s Technology, Media and 
Communications team. In 2001 she joined the 
legal team at Bass Brewers and played an 
integral role in the hive out and sale of the 
business to Coors following the judicial review 
of the Interbrew acquisition. She spent five 
years working for Coors Brewers in senior 
roles in the legal, and latterly strategy, teams 
before joining the Leisure Link Group in 
February 2006. Following the admission to 
AIM of the Company in June 2006 Susan 
became Chief Commercial Officer and 
Company Secretary of the Group. 
n on-executive	d irectors	 Julian	paul	 FCa
senior	n on-executive	d irector	(aged	6  )
Julian is a chartered accountant who spent  
20 years as a commercial and merchant 
banker. Since 1991 he has held several senior 
board positions with companies in the media 
and entertainment sectors. He is currently 
deputy chairman of Eagle Rock Entertainment 
Limited, of which he was a founder 
shareholder, and non-executive chairman of 
Cellcast plc, the global interactive digital 
broadcaster. He is also a non-executive 
director of Entertainment Rights plc, Pilat 
Media Global plc, Stagecoach Theatre Arts 
plc, Ekay plc, Edge Performance VCT plc and 
The Regent Organisation Limited.
david	mace
n on-executive	d irector	(aged	 )
David has been involved in developing 
businesses internationally over the last  
25 years. In 1987, he led the management 
buyout of Sea Life Centre (Holdings) Ltd, 
through to its subsequent flotation in 1992 as 
Vardon plc, the leisure group. David has 
served as a non-executive director of private 
and venture capital backed companies in 
France and the UK and has also acted as 
management consultant to businesses in 
Europe, the Far East and New Zealand.  
He is a non-executive director of GW 
Pharmaceuticals plc and Lookers plc.
Christopher	mills
n on-executive	d irector	(aged	)	 Christopher was appointed to the Board on 
29 September 2006. Christopher has been 
director and chief investment officer of JO 
Hambro Capital Management (a significant 
shareholder in the Company) since 1993 and 
managing director/investment manager  
of North Atlantic Smaller Companies 
Investment Trust plc (NASCIT) and 
American Opportunity Trust plc since 1984 
and 1989 respectively. Christopher was a 
director of MIM Limited and Samuel Montagu 
International Limited up to 1984 after which 
he continued as a consultant to MIM. During 
this time Christopher was responsible for 
strategic development of the group and held 
positions as head of North American Venture 
Capital at INVESCO MIM and head of North 
American Investments at INVESCO MIM. 
Christopher is a non-executive director of 
the NASDAQ listed firms, W H Energy 
Services, Lesco, Netbank and Sterling 
Construction and is a board member  
of a number of private businesses.   	 18 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 19
The	Directors	present	the	audited	financial	statements	of	the	Group	 for	the	21	weeks	ended	30	September	2006.	 principal	a ctivities
The	 principal	 activity	 of	 the	 Group	 is	 the	 provision	 of	 gaming	 machines	 for	the	leisure	and	gaming	markets.	The	Group	also	provides	SBG	 software	systems	and	SBG	digital	and	networked	terminals.	 The	principal	activity	of	the	Company	is	that	of	a	holding	company	for	 the	Group.
Change	of	n ame	and	o rdinary	s hare	Capital
The	Company	was	incorporated	as	Inspired	Gaming	Limited	on	3	May	 2006,	changing	its	name	to	Inspired	Gaming	Group	Limited	on	17	May	 2006.	The	Company	re-registered	as	Inspired	Gaming	Group	plc	on	 18	May	2006.
On	incorporation	the	Company’s	authorised	share	capital	was	£1,000	 consisting	of	1,000,	£1	ordinary	shares.	This	was	increased	to	£50,000	 on	16	May	2006	by	the	creation	of	49,000	further	ordinary	shares	of	 £1	each.	On	24	May	the	share	capital	was	sub-divided	into	50,000	 Ordinary	Shares	of	1p	each	and	4,950,000	convertible	deferred	 shares	of	1p	each.	Also	on	24	May	the	authorised	share	capital	of	the	 Company	was	increased	to	£1,000,000	divided	into	95,050,000	 Ordinary	Shares	of	1p	each	and	4,950,000	of	convertible	deferred	 shares	of	1p	each	(see	note	20).
r eview	of	Business	and	Future	d evelopments
On	 4	 May	 2006	 the	 Company	 reached	 agreement	 with	 the	 shareholders	 of	 Ever	 2533	 Limited	 and	 Inspired	 Broadcast	 Networks	 Limited	 to	 purchase	 the	 entire	 issued	 share	 capital	 of	 these	 companies	 (see	 note	 11).	 This	 acquisition	 was	 completed	 contemporaneously	 with	 the	 admission	 to	 trading	 of	 the	 Company’s	 shares	 on	 the	 Alternative	 Investment	 Market	 on	 2	 June	 2006.	 The	 Company	 placed	 60,000,000	 Ordinary	 Shares	 of	 1p	 each	 in	 connection	 with	 its	 AIM	 listing.
On	8	June	2006	the	Company	completed	its	acquisition	of	Red	Vision	 Limited	and	its	subsidiaries,	a	computer	generated	imagery	and	visual	 effects	production	group.	The	consideration	was	£3.3m,	plus	an	 amount	calculated	by	reference	to	an	earn-out	(see	note	11).
These	financial	statements	therefore	incorporate	the	trade	of	Ever	 2533	Limited	and	Inspired	Broadcast	Networks	Limited	businesses	 from	acquisition	on	2	June	2006	to	30	September	2006,	a	17	week	 trading	period,	and	the	trade	of	Red	Vision	from	acquisition	on	8	June	 2006	to	30	September	2006,	a	16	week	trading	period.	 A	review	of	activities	is	given	in	the	Group	Co-Chief	Executives’	 Statement	which,	taken	with	the	Chairman’s	Statement	and	Business	 and	Financial	Review,	represents	the	Company’s	Business	Review.
The	Directors	do	not	expect	there	to	be	any	significant	change	in	the	 principal	activity	of	either	the	Group	or	the	Company	in	the	 foreseeable	future.	 r esults	and	d ividends	 The	loss	for	the	financial	period	of	£2,059,000	has	been	transferred	 from	reserves.	The	Directors	do	not	propose	the	payment	of	a	 dividend	on	the	Ordinary	Shares.	 d irectors	and	their	Interests
The	Directors	who	have	served	during	the	period	are:
N	V	Crowley	 (appointed	3	May	2006)
J	B	Paul	 (appointed	16	May	2006)
D	C	Mace	 (appointed	2	June	2006)
R	B	Hoyle	 (appointed	2	June	2006)
L	L	Alvarez	 (appointed	2	June	2006)
D	Page	 (appointed	2	June	2006)
J	W	O’Halleran	 (appointed	2	June	2006)
C	H	B	Mills	 (appointed	29	September	2006)
The	beneficial	interests	of	Directors	who	held	office	at	30	September	 2006	in	the	share	capital	of	the	Company	are	shown	below:
	 	 a t	date	of		 a t	30	s eptember	 	 appointment		 2006	 	 o rdinary	 o rdinary	 	 	s hares		 shares	 	 n umber	 n umber
N	V	Crowley	 1	 513,653
J	B	Paul	 1	 1
D	C	Mace	 –	 –
R	B	Hoyle	 124,706	 124,706
L	L	Alvarez	 380,357	 380,357
D	Page	 –	 –
J	W	O’Halleran	 –	 –
C	H	B	Mills	 –	 –
As	director	and	chief	investment	officer	of	J	O	Hambro	Capital	 Management,	C	H	B	Mills	is	considered	to	have	an	interest	in	the	 shares	owned	by	J	O	Hambro	Capital	Management,	a	substantial	 shareholder	of	26.7%	of	issued	share	capital.
N	V	Crowley	and	L	L	Alvarez	both	hold	100,000	shares	in	The	Cloud	 Networks	Limited,	an	investment	of	the	Group	(see	note	11)	as	at	 	 30	September	2006.
In	the	period	since	30	September	no	additional	shares	have	been	 purchased	by	Directors.
Directors’	 Report
for	 the	 21	 weeks	 ended	 30	s eptember	 2006 	 18 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 19
In	addition,	N	V	Crowley	holds	4,949,001	convertible	deferred	shares,	and	J	B	Paul	holds	99	convertible	deferred	shares.	The	rights	to	these	 shares	are	set	out	in	note	20.
N	V	Crowley	has	been	granted	conditional	options	over	3,395,154	Ordinary	Shares	in	the	Company	as	described	further	in	note	20.	If	the	 vesting	and	exercise	conditions	of	such	options	are	met,	N	V	Crowley	will	have	the	right	to	convert	up	to	3,395,154	deferred	shares	into	 Ordinary	Shares	on	a	one-to-one	basis	in	the	tranches	and	at	the	times	set	out	in	the	table	below.	N	V	Crowley	has	no	other	ability	to	convert	 his	holding	of	deferred	shares	into	Ordinary	Shares	other	than	as	a	result	of	the	vesting	and	exercise	of	his	conditional	options	and	unless	 additional	options	or	other	rights	in	the	Company	are	granted,	the	balance	of	his	deferred	shares	will	not	be	convertible	into	Ordinary	Shares.	 Any	unconverted	deferred	shares	which	are	not,	or	are	no	longer,	the	subject	of	an	option	grant	are	non-transferable	and	will	be	cancelled 	 in	due	course.
Details	of	Directors’	interests	in	share	options	(and	in	the	case	of	NV	Crowley,	conditional	options	to	convert	deferred	shares)	are	 	 shown	below:
executive	s hare	o ption	s cheme
	 	 	 	 	 	 exercise	 exercise	 d ate	of	grant	 r	B	Hoyle	 L	L	a lvarez	 n	V	Crowley
1
	 J	W	o ’Halleran	 d	p age	 price	 period
2	June	2006
–Tranche	1	 408,508	 408,508	 408,508	 213,101	 159,847	 £nil	 Jan	2007–May	2016
–Tranche	2	 415,770	 415,770	 415,770	 216,890	 –	 £nil	 Jan	2008–May	2016
–Tranche	3	 869,668	 869,668	 869,668	 453,669	 –	 £nil	 Jan	2009–May	2016
–Tranche	4	 415,770	 415,770	 415,770	 216,890	 –	 £nil	 June	2006–Feb	2011
–Tranche	5	 	 869,668	 	 869,668	 869,668	 453,669	 –	 £nil	 June	2006–Feb	2011
–Tranche	6	 	 415,770	 	 415,770	 415,770	 216,890	 –	 £nil	 June	2006–Feb	2011
As	at	30	September	2006	 3,395,154	 3,395,154	 3,395,154	 1,771,109	 159,847
1
	 	 N	V	Crowley	conditional	conversion	of	deferred	shares.
In	addition	to	the	above,	J	B	Paul	and	D	C	Mace	were	both	granted	22,222	options	on	19	July	2006	with	an	exercise	price	of	£1.80. 	 The	exercise	period	for	these	options	is	July	2009	–	July	2016.
No	gains	have	arisen	on	the	exercise	of	share	options	in	the	period.	Further	details	on	the	Executive	Share	Option	Scheme	are	included	 	 in	note	20.	 employees	 Applications	for	employment	by	disabled	persons	are	always	fully	considered,	bearing	in	mind	the	respective	aptitudes	and	abilities	of	the	 applicant	concerned.	In	the	event	of	members	of	staff	becoming	disabled,	every	effort	is	made	to	ensure	that	their	employment	with	the	Group	 continues	and	that	the	appropriate	training	is	arranged.	It	is	policy	of	the	Group	that	the	training,	career	development	and	promotion	of	a	 disabled	person	should,	as	far	as	possible,	be	identical	to	that	of	a	person	who	does	not	suffer	from	a	disability.	 Consultation	with	employees	or	their	representatives	occurs	at	all	levels,	with	the	aim	of	enabling	views	to	be	taken	into	account	when	 decisions	are	made	that	are	likely	to	affect	their	interest,	and	that	employees	are	aware	of	the	financial	and	economic	performance	of	their	 business	units	and	of	the	Group	as	a	whole.	 policy	and	p ractice	on	p ayment	of	Creditors	 The	Group	agrees	payment	terms	individually	with	suppliers	prior	to	the	commencement	of	trading	and	adheres	to	the	terms	of	arrangements	 made.	Trade	creditors	at	the	period	end	represented	75	days.	 r esearch	and	d evelopment
The	main	focus	of	development	for	the	Group	is	in	the	areas	of	software,	platform	and	new	machine	projects.	Total	development	costs	 expensed	to	the	consolidated	profit	and	loss	account	in	the	period	were	£108,000,	with	a	further	£618,000	capitalised. 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 21 	 20 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006
Directors’	 Report	 continued
for	 the	 21	 weeks	 ended	 30	s eptember	 2006
substantial	s hareholdings
As	at	15	December	2006,	the	Company	had	been	notified	of	the	following	beneficial	holdings	in	excess	of	3%	of	the	issued	Ordinary	Share	 capital	of	the	Company:
	 	 	 	 	 	 	 	 		 percentage	 	 	 	 	 	 	 	 	 n umber	of	 of	issued 	 	 	 	 	 	 	 	 	 o rdinary	 share 	 	 	 	 	 	 	 	 	 shares	 	capital
J	O	Hambro	Capital	Management	 	 	 	 	 	 	 17,050,003		 26.7%
FMR	Corp	and	Fidelity	International	 	 	 	 	 	 	 8,082,700		 12.6%
Artemis	Investment	Management	 	 	 	 	 	 	 7,043,000		 11.0%
Trafelet	&	Company	 	 	 	 	 	 	 	 6,407,556		 	10.0%
Goldman	Sachs	Group	 	 	 	 	 	 	 	 5,154,081		 	8.6%
Insight	Investment	Management	 	 	 	 	 	 	 3,075,000		 	4.8%
Financial	Instruments
Details	of	financial	risks	are	set	out	in	the	Business	and	Financial	Review.
political	and	Charitable	d onations
During	the	period	the	Group	made	no	political	donations,	and	charitable	donations	with	a	value	of	£5,000	were	made,	consisting	of	small	 donations	to	a	variety	of	local	charities	and	charities	in	which	our	employees	are	involved.
a uditors
PricewaterhouseCoopers	LLP	were	appointed	auditors	during	the	period.	A	resolution	to	approve	the	appointment	and	to	reappoint	 PricewaterhouseCoopers	LLP	will	be	proposed	at	the	Annual	General	Meeting.
By	order	of	the	Board
Luke	a lvarez	 &	n orman	 Crowley
Group	 Co-Chief	 Executives
22	 January	 2007 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 21
Inspired	Gaming	Group	plc	was	admitted	to	AIM	in	June	2006.	As	an	 AIM	listed	company	Inspired	Gaming	Group	plc	is	not	required	to	 comply	with	the	Combined	Code.	However,	the	Directors	 acknowledge	the	importance	of	sound	and	effective	corporate	 governance	practices	and,	as	set	out	in	the	Company’s	admission	 document,	intend	to	comply	with	these	in	so	far	as	is	reasonable	for	a	 business	of	the	Company’s	size	and	nature.	 t he	Board	 During	 the	 period,	 the	 Board	 of	 Directors	 consisted	 of	 an	 Executive	 Chairman,	 two	 Group	 Co-Chief	 Executives,	 a	 Chief	 Executive	 Officer	 UK	 and	 Ireland,	 a	 Chief	 Financial	 Officer,	 and	 three	 Non-Executive	 Directors,	 two	 of	 whom	 are	 independent,	 being	 Julian	 Paul	 and	 David	 Mace.	 The	 Chief	 Financial	 Officer,	 David	 Page	 will	 retire	 from	 the	 Board	 with	 effect	 from	 22	 January	 2007.	 The	 biographies	 of	 Board	 members	 are	 set	 out	 in	 the	 Board	 of	 Directors	 section	 of	 this	 Annual	 Report.
Although	 Russell	 Hoyle	 is	 not	 considered	 independent	 under	 the	 Combined	 Code,	 having	 previously	 been	 chief	 executive	 officer	 of	 the	 underlying	 group,	 the	 Board	 believes	 him	 to	 be	 the	 best	 candidate	 for	 the	 position	 of	 Chairman	 due	 to	 his	 detailed	 knowledge	 of	 the	 business,	 commitment	 to	 the	 Group	 and	 reputation	 in	 the	 wider	 industry.	 With	 effect	 from	 1	 October	 2006,	 Russell	 moved	 to	 a	 three	 day	 working	 week	 with	 a	 proportional	 reduction	 in	 salary.	 Russell	 acts	 as	 a	 non-executive	 director	 of	 Business	 in	 Sport	 and	 Leisure	 Limited,	 an	 organisation	 which	 represents	 the	 interests	 of	 private	 sector	 companies	 in	 the	 sport,	 leisure	 and	 hospitality	 industry,	 which	 is	 an	 unpaid	 position	 requiring	 an	 average	 of	 half	 a	 day	 a	 month’s	 involvement.
Luke	Alvarez	and	Norman	Crowley	are	the	Group	Co-Chief	 Executives.	They	have	successfully	worked	together	over	a	number	of	 years	and	have	complementary	skills	and	knowledge	which	span	the	 diverse	activities	of	the	Group.	 Norman	serves	on	the	boards	of	Right	to	Sight	and	The	Next	Step,	 both	of	which	are	registered	charities	in	Southern	Ireland.	In	addition,	 Norman	is	a	director	of	Crowley	Lalor	Limited,	a	holding	company	 registered	in	Southern	Ireland.	Each	of	these	positions	is	unpaid.	In	 total,	Norman	spends	an	average	of	half	a	day	a	month’s	involvement	 with	the	three	positions.
Non-Executive	Directors	Julian	Paul	and	David	Mace	were	both	 granted	22,222	options	on	19	July	2006	with	an	exercise	price	of	 £1.80,	but	are	still	considered	to	be	independent	as	the	options	have	 no	performance	conditions	attached	to	them.
The	Board	considers	that,	with	the	exception	of	Christopher	Mills	 who	represents	a	significant	shareholder	(J	O	Hambro	Capital	 Management),	the	Non-Executive	Directors	satisfy	the	criteria	of	the	 Combined	Code	to	act	as	independent	non-executive	directors	and	 that	the	Company	thereby	satisfies	the	criteria	that	smaller	companies	 should	have	at	least	two	independent	non-executive	directors.	The	 independent	Non-Executive	Directors	were	selected	for	their	 considerable	appropriate	business	knowledge	and	experience.	 The	 Board	 believes	 its	 members	 to	 have	 an	 appropriate	 and	 overall	 good	 balance	 of	 skills	 and	 experience	 to	 direct	 the	 Group	 and	 that	 no	 individual	 or	 group	 of	 individuals	 dominates	 the	 Board’s	 decision	 making.	 The	Board	approves	the	Group’s	strategic	plans,	annual	budgets	and	 three	year	plans,	strategic	changes	to	the	financial	structure,	material	 transactions,	interim	and	preliminary	announcements,	annual	report	 and	accounts	and	business	developments.
Corporate	 Governance	 Report
The	Board’s	corporate	timetable	provides	for	10	full	board	meetings	 per	year	to	establish	future	strategy,	review	business	performance	and	 financial	results	and	approve	budgets.	Additional	meetings	are	 scheduled	as	and	when	required.	The	Board	believes	that	these	 meetings	enable	the	Directors	to	remain	fully	up	to	date	on	 developments	within	the	Group	and	to	exercise	appropriate	control	 over	Group	activities.	New	members	to	the	Board	receive	 appropriate	induction	on	joining	the	Board	to	enable	them	to	 understand	the	business	of	the	Group.
The	Chairman	is	responsible	for	ensuring	that	agendas	for	Board	 meetings	are	set	in	advance	and	that	Directors	receive	information	 sufficiently	in	advance	of	the	meeting	to	facilitate	informed	discussion.	 The	Company	Secretary	attends	all	Board	meetings	and	is	responsible	 for	advising	the	Board	on	corporate	governance	matters.
All	Directors	have	access	to	the	advice	and	services	of	the	Company	 Secretary	and,	if	appropriate,	independent	professional	advice	at	the	 expense	of	the	Company.
The	Group	maintains	appropriate	directors’	and	officers’ 	 insurance	cover.
The	Company	has	established	separate	audit,	remuneration	and	 nomination	committees,	as	detailed	below.	Each	committee	has	its	 own	terms	of	reference	which	are	available	on	the	Company’s	 website.	At	least	once	per	year,	each	committee	will	review	its	own	 performance,	constitution	and	terms	of	reference	to	ensure	that	it	is	 operating	at	maximum	effectiveness	and	recommend	any	changes	it	 considers	necessary	to	the	Board	of	Directors	for	approval.
a udit	Committee
An	Audit	Committee	has	been	established	with	agreed	terms	of	 reference,	consisting	of	Julian	Paul	(Chairman)	and	David	Mace,	both	 of	whom	are	independent	Non-Executive	Directors	of	the	Company.	 The	Audit	Committee	carries	out	duties	in	respect	of	the	Group 	 as	a	whole.	 The	 Audit	 Committee	 meets	 at	 least	 twice	 a	 year.	 It	 is	 responsible	 for	 ensuring	 that	 the	 financial	 performance,	 position	 and	 proposals	 of	 the	 Group	 are	 properly	 monitored	 and	 reported	 on	 and	 for	 meeting	 the	 external	 auditors,	 reviewing	 their	 reports	 and	 statements	 relating	 to	 interim	 and	 full	 year	 accounts	 and	 assessing	 and	 monitoring	 their	 independence	 and	 objectivity.	 It	 will	 consider	 and	 make	 recommendations	 on	 the	 appointment	 and	 re-appointment	 of	 external	 auditors.	 Going	 forward	 the	 Audit	 Committee	 will	 also	 review	 the	 effectiveness	 of	 the	 Group’s	 internal	 controls	 and	 risk	 management	 systems.	 Details	of	the	amounts	paid	to	the	external	auditors	during	the 	 period	for	audit	and	other	services	are	set	out	in	note	3	of	the	Notes	 to	the	Financial	Statements.	The	Audit	Committee	monitors 	 the	level	of	non-audit	work	undertaken	by	the	auditors	and	ensures 	 it	is	work	which	they	are	best	suited	to	perform	and	does	not 	 present	a	risk	to	their	objectivity.	As	a	result	of	either	regulatory	 requirements	or	their	existing	knowledge	of	the	Group,	the	Group’s	 auditors	are	in	some	cases	able	to	provide	certain	services	more	 efficiently	than	other	parties.	In	other	circumstances,	assignments 	 are	subject	to	independent	tender	and	decisions	on	the	allocation	of	 work	are	made	on	the	basis	of	competence	and	cost-effectiveness. 	 22 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 23
r emuneration	Committee
A	Remuneration	Committee	has	been	established	with	agreed 	 terms	of	reference,	consisting	of	David	Mace	(Chairman)	and 	 Julian	Paul,	both	of	whom	are	independent	Non-Executive	Directors	 of	the	Company.	 The	Remuneration	Committee	will	meet	at	least	twice	a	year. 	 It	will	review	the	performance	of	the	Executive	Directors	and	will	 determine	and	agree	with	the	Board	policy	for	remuneration	of	the	 Executive	Directors	and	other	senior	executives	including	pension	 rights,	bonuses	and	other	benefits.	The	Committee	will	determine	 targets	for	any	Group	wide	bonus	scheme	and	approve	option	grants	 to	individuals	in	the	Group.
n omination	Committee
A	Nomination	Committee	has	been	established	with	agreed	terms	of	 reference,	consisting	of	Russell	Hoyle	(Chairman),	Luke	Alvarez,	David	 Mace	and	Julian	Paul,	the	latter	two	members	being	independent	 Non-Executive	Directors	of	the	Company.	 The	Board	believe	that	the	members	of	the	Nomination	Committee	 have	a	balance	of	skills	and	experience	relevant	to	the	wide	ranging	 activities	of	the	Group	and	that	the	structure	is	therefore	appropriate	 with	regard	to	the	size	and	activities	of	the	Group.
	 The	Nomination	Committee	will	meet	as	and	when	necessary,	but	 not	less	than	once	a	year	to	review	the	structure,	size	and	 composition	of	the	Board,	recommend	changes,	consider	succession	 planning,	 and	 identifying	 and	 nominating	 Board	 candidates	 for	 approval	 by	the	Board.
	 r isk	m anagement/Internal	Control
The	Board	is	responsible	for	the	Group’s	system	of	internal	controls	 and	risk	management	and	for	reviewing	the	effectiveness	of	the	 Group’s	risk	procedures.	Any	such	system	is	designed	to	manage	 rather	than	to	eliminate	the	risk	of	failing	to	meet	its	business	 objectives	and	can	only	provide	reasonable,	and	not	absolute,	 assurance	against	material	misstatement	or	loss.	The	role	of	 management	is	to	implement	the	Board’s	policies	on	risk	and	control	 including	reporting.	 The	Board	has	delegated	responsibility	to	the	Audit	Committee	to	 monitor	the	effectiveness	of	internal	controls	and	risk	management	 systems	and	to	make	recommendations	to	the	Board.
For	 a	 number	 of	 years	 the	 group	 has	 had	 an	 income	 protection	 team	 which	 focused	 on	 collection	 of	 machines,	 cash	 handling	 and	 cash	 security,	 being	 key	 areas	 of	 risk	 to	 the	 business.	 The	 Company	 has	 recently	 appointed	 a	 Director	 of	 Risk	 and	 Compliance	 who	 will	 undertake	 a	 review	 of	 current	 processes	 and	 procedures	 surrounding	 the	 Groups	 system	 of	 internal	 controls	 and	 make	 recommendations	 to	 the	 Audit	 Committee.	 Part	 of	 this	 review	 will	 include	 an	 assessment	 of	 the	 need	 for	 an	 internal	 audit	 function	 and	 the	 Board	 will	 consider	 this	 during	 2007.	 The	 Director	 of	 Risk	 and	 Compliance	 will	 meet	 with	 the	 Audit	 Committee	 at	 least	 once	 per	 year	 without	 management	 being	 present,	 and	 shall	 have	 right	 of	 direct	 access	 to	 the	 Group	 Co-Chief	 Executives	 and	 Audit	 Committee.	 Due	 to	 the	 short	 period	 of	 account,	 no	 review	 of	 the	 Group’s	 system	 of	 internal	 controls	 has	 been	 undertaken	 in	 the	 period.	 Similarly	 no	 formal	 review	 has,	 as	 yet,	 	 been	 completed	 of	 the	 Group’s	 whistle	 blowing	 procedures.
r esponsible	Gaming
Inspired	Gaming	Group	plc	is	one	of	the	largest	providers	of	gaming	 machines	for	the	leisure	and	gaming	market	in	the	UK	and	a	leading	 player	in	the	worldwide	SBG	market.	It	is	committed	to	supporting	 and	promoting	responsible	gaming.	 The	Group	contributes	to	The	Responsibility	In	Gambling	Trust,	 thereby	contributing	to	the	support	of	problem	gamblers	in	Britain	 through	organisations	such	as	GamCare.
To	promote	responsible	gambling	and	in	compliance	with	the	machine	 code	of	conduct	agreed	by	the	Department	of	Culture	Media	and	 Sport,	the	Group	displays	the	GamCare	helpline	number	on	relevant	 newly	purchased	gaming	machines	sited	in	the	UK	and	signage	 forbidding	play	by	under	18s	on	all-cash	AWPs	in	the	UK.	This	 programme	will	continue	on	relevant	newly	purchased	gaming	 machines	until	all	relevant	gaming	machines	sited	by	the	Group	in	 	 the	UK	display	such	information.	 Gambling	a ct	2005
The	Gambling	Act	2005	has	been	subject	to	extensive	consultation	 and	the	Group	has	taken	an	active	part	in	this	process.	The	Group 	 fully	supports	the	objectives	of	the	Gambling	Act	being:
keeping	crime	out	of	gambling;
making	sure	that	gambling	is	fair	and	open;	and	 protecting	children	and	vulnerable	people	from	harm.
Health	and	s afety
It	is	the	objective	of	the	Group	to	ensure	the	health	and	safety	of	its	 employees	and	of	any	other	persons	who	could	be	affected	by	its	 operations.	It	is	the	Company’s	policy	to	provide	working	 environments	which	are	safe	and	without	risk	to	health	and	provide	 information,	instruction,	training	and	supervision	to	ensure	the	health	 and	safety	of	its	employees.
r elations	with	s hareholders
The	Company	values	the	views	of	its	shareholders	and	recognises	 their	interest	in	the	Group’s	strategy	and	performance,	Board	 membership	and	quality	of	management.	 r e-election	of	d irectors
All	of	the	Directors,	excluding	David	Page	who	retired	from	the	 	 Board	on	22	January	2007,	will	retire	and	seek	re-election	at	the	 Annual	General	Meeting	which	is	the	first	Annual	General	Meeting	 since	the	Company’s	incorporation.	All	Directors	are	required	to	 	 seek	re-election	on	an	on-going	basis	at	intervals	of	no	more	than	 three	years.
Going	Concern	s tatement
After	making	enquiries	and	reviewing	the	Group’s	budget	for	the	 period	of	12	months	from	the	date	of	these	financial	statements,	the	 Board	considers	that	the	Company	and	the	Group	have	adequate	 resources	to	continue	operating	in	the	foreseeable	future.	Therefore	 the	going	concern	basis	has	been	adopted	in	preparing	these	financial	 statements.
Julian	p aul
Senior	 Independent	 Non-Executive	 Director
	 22	 January	 2007
•
•
•
Corporate	 Governance	 Report	 continued 	 22 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 23
Statement	 of	 Directors’	 Responsibilities
UK	company	law	requires	the	Directors	to	prepare	financial	 statements	for	each	financial	period	which	give	a	true	and	fair	view	of	 the	state	of	affairs	of	the	Company	and	the	Group,	and	of	the	profit	 or	loss	and	total	recognised	gains	and	losses	of	the	Group	for	that	 period.
The	Directors	confirm	that	appropriate	accounting	policies	have	been	 used	 and	 applied	 consistently,	 and	 reasonable	 and	 prudent	 judgements	 and	estimates	made	in	the	preparation	of	the	financial	statements	for	 the	period	to	30	September	2006.	The	Directors	also	confirm	that	 applicable	accounting	standards	have	been	followed	and	that	the	going	 concern	basis	is	appropriate.
The	Directors	are	responsible	for	keeping	proper	accounting	records	 which	disclose	with	reasonable	accuracy	at	any	time	the	financial	 position	of	the	Company	and	the	Group	and	to	enable	them	to	 ensure	that	the	financial	statements	comply	with	the	Companies	Act	 1985.	They	are	also	responsible	for	the	system	of	internal	control,	 safeguarding	the	assets	of	the	Company	and	the	Group	and	hence	for	 taking	reasonable	steps	for	the	prevention	and	detection	of	fraud	and	 other	irregularities.
The	maintenance	and	integrity	of	the	Group’s	website	is	the	 responsibility	of	the	Directors.
Legislation	in	the	United	Kingdom	governing	the	preparation	and	 dissemination	of	financial	statements	may	differ	from	legislation	in	 other	jurisdictions.
a uditors	and	d isclosure	of	Information	to	a uditors	 Each	of	the	Directors	at	the	date	of	approval	of	this	report	confirms	 that,	so	far	as	the	Director	is	aware,	there	is	no	relevant	audit	 information	(being	information	needed	by	the	Company’s	auditors	in	 connection	with	preparing	their	report)	of	which	the	Company’s	 auditors	are	unaware.	In	addition,	each	Director	confirms	that	he	has	 taken	all	the	steps	that	he	ought	to	have	taken	as	a	Director	in	order	 to	make	himself	aware	of	any	relevant	audit	information	and	to	 establish	that	the	Company’s	auditors	are	aware	of	that	information	 By	order	of	the	Board
susan	a lbion
Company	 Secretary
22	 January	 2007 	 24 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 25
Independent	 Auditors’	 Report	 to	 the	 Members	 of	 	 Inspired	 Gaming	 Group	 plc
We	have	audited	the	group	and	parent	company	financial	statements	 (the	‘financial	statements’)	of	Inspired	Gaming	Group	plc	for	the	 period	ended	30	September	2006	which	comprise	the	consolidated	 profit	and	loss	account,	the	Group	and	Company	balance	sheets,	the	 consolidated	cash	flow	statement,	the	consolidated	statement	of	total	 recognised	gains	and	losses,	the	reconciliation	of	movements	in	equity	 shareholders’	funds,	and	the	related	notes.	These	financial	statements	 have	been	prepared	under	the	accounting	policies	set	out	therein.
r espective	r esponsibilities	of	d irectors	and	a uditors
The	Directors’	responsibilities	for	preparing	the	Annual	Report	and	 the	financial	statements	in	accordance	with	applicable	law	and	United	 Kingdom	Accounting	Standards	(United	Kingdom	Generally	Accepted	 Accounting	Practice)	are	set	out	in	the	Statement	of	Directors’	 Responsibilities.
Our	responsibility	is	to	audit	the	financial	statements	in	accordance	 with	relevant	legal	and	regulatory	requirements	and	International	 Standards	on	Auditing	(UK	and	Ireland).	This	report,	including	the	 opinion,	has	been	prepared	for	and	only	for	the	Company’s	members	 as	a	body	in	accordance	with	Section	235	of	the	Companies	Act	1985	 and	for	no	other	purpose.	We	do	not,	in	giving	this	opinion,	accept	or	 assume	responsibility	for	any	other	purpose	or	to	any	other	person	to	 whom	this	report	is	shown	or	into	whose	hands	it	may	come	save	 where	expressly	agreed	by	our	prior	consent	in	writing.
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	1985.	We	also	report	to	you	whether	in	our	 opinion	the	information	given	in	the	Directors’	Report	is	consistent	 with	the	financial	statements.	 In	addition	we	report	to	you	if,	in	our	opinion,	the	Company	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	whether	it	is	consistent	with	the	audited	financial	statements.	 This	other	information	comprises	only	the	Directors’	Report,	the	 Business	Highlights,	the	Chairman’s	Statement,	the	Group	Co-Chief	 Executives’	Statement,	the	Business	and	Financial	Review	and	the	 Corporate	Governance	Report.	 	 We	consider	the	implications	for	our	report	if	we	become	aware	 	 of	any	apparent	misstatements	or	material	inconsistencies	with	 	 the	financial	statements.	Our	responsibilities	do	not	extend	to	 	 any	other	information.
We	also,	at	the	request	of	the	Directors	(because	the	Company	 applies	the	Listing	Rules	of	the	Financial	Services	Authority	as	if	it	 were	a	listed	company),	review	whether	the	Corporate	Governance	 Statement	 reflects	 the	 Company’s	 compliance	 with	 the	 nine	 provisions	 of	the	Combined	Code	(2003)	specified	for	our	review	by	the	Listing	 Rules	of	the	Financial	Services	Authority,	and	we	report	if	it	does	not.	 We	are	not	required	to	consider	whether	the	Board’s	statements	on	 internal	control	cover	all	risks	and	controls,	or	form	an	opinion	on	the	 effectiveness	of	the	Group’s	corporate	governance	procedures	or	its	 risk	and	control	procedures.
Basis	of	a udit	o pinion
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	judgements	 made	by	the	Directors	in	the	preparation	of	the	financial	statements,	 and	of	whether	the	accounting	policies	are	appropriate	to	the	Group’s	 and	Company’s	circumstances,	consistently	applied	and	adequately	 disclosed.
We	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.
o pinion
In	our	opinion:
the	financial	statements	give	a	true	and	fair	view,	in	accordance	 	 with	United	Kingdom	Generally	Accepted	Accounting	Practice,	 	 of	the	state	of	the	Group’s	and	the	parent	company’s	affairs	 	 as	at	30	September	2006	and	of	the	Group’s	loss	and	 	 cash	flows	for	the	period	then	ended;
the	financial	statements	have	been	properly	prepared	in	accordance	 with	the	Companies	Act	1985;	and
the	information	given	in	the	Directors’	Report	is	consistent	with	the	 financial	statements.
pricewaterhouseCoopers	 LLp
Chartered	 Accountants	 and	 Registered	 Auditors
East	Midlands
22	 January	 2007
•
•
• 	 24 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 25
Consolidated	 Profit	 and	 Loss	 Account	 for	 the	 21	 weeks	 ended	 30	s eptember	 2006
	 	 	 	 	 	 	 r esults	before		 Goodwill
	 	 	 	 	 	 	 goodwill		 amortisation
	 	 	 	 	 	 	 amortisation	 &	exceptional
	 	 	 	 	 	 	 &	exceptional	 items
	 	 	 	 	 	 	 items	 (note	3)	 t otal	
	 	 	 	 	 	 n ote	 £’000	 £’000	 £’000
Turnover	 	 	 	 	 	 2	 57,950	 –	 57,950
Operating	costs	less	other	operating	income	 	 	 	 3	 (52,618)	 (4,800)	 (57,418)
	EBITdA ¹	before	share	based	payment	charge		 	 	 	 	 10,044	 (3,168)	 6,876
	Share	based	payment	charge		 	 	 	 	 20	 (3,233)	 –	 (3,233)
	Non-machine	depreciation	and	amortisation	 	 	 	 3	 (1,479)	 (1,632)	 (3,111)
Operating profit	 	 	 	 	 	 3	 5,332	 (4,800)	 532
	 	 	 	 Interest	payable	and	similar	charges	 	 	 	 	 5	 (2,384)	 (381)	 (2,765)
Interest	receivable	and	other	finance	income		 	 	 	 6	 187	 –	 187
Loss on ordinary activities before taxation	 	 	 	 	 3,135	 (5,181)	 (2,046)
Tax	on	loss	on	ordinary	activities	 	 	 	 	 7	 (1,003)	 990	 (13)
Loss for the financial period 	 	 	 	 21	 2,132	 (4,191)	 (2,059)
	 	 	 	 Basic loss per share	 	 	 	 	 	 8	 	 	 (3.2p)
1
	 	 ‘EBITdA’	represents	Earnings	before	Interest,	Taxation,	non-machine	depreciation	and	Amortisation.
There	is	no	difference	between	the	loss	on	ordinary	activities	before	taxation	and	the	loss	for	the	financial	period	stated	above	and	their	 historical	cost	equivalents.	 All	results	relate	to	acquired	continuing	operations.
The	above	results	represent	the	17	week	trading	period	following	the	acquisition	of	Ever	2533	Limited	and	Inspired	Broadcast	Networks	 Limited	by	the	Company	on	2	June	2006,	and	the	16	week	trading	period	following	the	acquisition	of	Red	Vision	Limited	and	its	subsidiaries 	 on	8	June	2006	(note	11). 	 26 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 27
Balance	 Sheets	 as	 at	 30	s eptember	 2006
	 	 	 	 	 	 	 	 Group		 Company
	 	 	 	 	 	 	 n ote	 £’000	 £’000
Fixed assets	 	 	 Intangible	assets	–	goodwill	 	 	 	 	 	 	 9	 104,464	 –
	 	 –	development	costs	and	licences	 	 	 	 	 9	 4,441	 –
Tangible	assets	 	 	 	 	 	 	 10	 97,244	 –
Investments	 	 	 	 	 	 	 11	 766	 57,362
	 	 	 	 	 	 	 	 206,915	 57,362
Current assets	 	 	 Stocks		 	 	 	 	 	 	 12	 5,105	 –
Debtors		 	 	 	 	 	 	 13	 48,378	 183,502
Cash	at	bank	and	in	hand	 	 	 	 	 	 	 14	 15,154	 296
	 	 	 	 	 	 	 	 68,637	 183,798
Creditors:	amounts	falling	due	within	one	year		 	 	 	 	 15	 (57,328)	 (2,414)
Net current assets	 	 	 	 	 	 	 	 11,309	 181,384
Total assets less current liabilities	 	 	 	 	 	 	 218,224	 238,746
Creditors:	amounts	falling	due	after	more	than	one	year		 	 	 	 16	 (99,386)	 (129,567)
Provisions for liabilities and charges	 	 	 	 	 	 19	 (2,591)	 –
Net assets (excluding pension deficit)		 	 	 	 	 	 116,247	 109,179
Pension deficit 	 	 	 	 	 	 24	 (6,569)	 –
Net assets (including pension deficit)		 	 	 	 	 	 109,678	 109,179
Capital and reserves	 	 	 Called	up	share	capital		 	 	 	 	 	 	 20	 689	 689
Share	premium	account		 	 	 	 	 	 	 21	 108,111	 108,111
Profit	and	loss	reserve	 	 	 	 	 	 	 21	 878	 379
Equity shareholders’ funds	 	 	 	 	 	 	 109,678	 109,179
The	financial	statements	including	notes	1	to	25	were	approved	by	the	Board	of	Directors	on	22	January	2007	and	were	signed	on	its	 	 behalf	by:
Luke	a lvarez	 	 d avid	p age
Group	 Co-Chief	 Executive	 Chief 	 Financial	 Officer 	 26 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 27
Consolidated	 Cash	 Flow	 Statement	 for	 the	 21	 weeks	 ended	 30	s eptember	 2006
	 Group
	 	 	 	 	 	 	 	 n ote	 £’000	 £’000
Net cash inflow from operating activities	 		 	 	 	 23a	 	 17,289
Returns on investment and servicing of finance	 	 	 Interest	received	 	 	 	 	 	 	 	 131	
Interest	paid	 	 	 	 	 	 	 	 (2,148)	
Finance	lease	interest	paid	 	 	 	 	 	 	 	 (4)
Issue	and	other	facility	costs	incurred	on	borrowings	 	 	 	 	 	 (4,274)	
Net cash outflow from returns on investments and servicing of finance	 	 	 	 	 (6,295)
Tax paid	 	 	 	 	 	 	 	 	 (25)
Capital expenditure and financial investment	 	 	 Purchases	of	tangible	fixed	assets	 	 	 	 	 	 	 (13,901)	
Receipts	from	sale	of	fixed	assets	 	 	 	 	 	 	 2,752	
Purchase	of	intangible	fixed	assets	 	 	 	 	 	 	 (1,259)	
Net cash outflow from capital expenditure and financial investment	 	 	 	 	 (12,408)
Management of liquid resources	 	 	 Increase	in	cash	held	in	escrow	 	 	 	 	 	 	 	 (419)
Acquisitions	 	 	 Cash	outflow	on	acquisition	of	subsidiary	undertakings	 	 	 	 	 11	 (27,597)	
Cash	acquired	on	acquisition	of	subsidiary	undertakings	 	 	 	 	 11	 12,456	
Fees	incurred	on	acquisition	 	 	 	 	 	 	 11	 (451)	
Net cash outflow from acquisitions	 	 	 	 	 	 	 	 (15,592)
Financing	 	 	 Issue	of	ordinary	share	capital		 	 	 	 	 	 	 110,050	
Costs	incurred	on	issue	of	share	capital	 	 	 	 	 	 	 (6,250)	
Movement	in	borrowings	 	 	 	 	 	 	 23c	 (71,615)	
Net cash inflow from financing	 	 	 	 	 	 	 	 32,185
Increase in net cash	 	 	 	 	 	 	 23e	 	 14,735 	 28 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 29
Consolidated	 Statement	 of	 Total	 Recognised	 Gains	 and	 Losses
for	 the	 21	 weeks	 ended	 30	s eptember	 2006
	 	 	 	 	 	 	 	 Group	 Company
	 	 	 	 	 	 	 n ote	 £’000	 £’000
Loss for the financial period	 	 	 	 	 	 	 (2,059)	 (2,854)
Actuarial	loss	recognised	in	respect	of	the	pension	scheme	 	 	 	 24	 (296)	 –
Total losses recognised in the period	 	 	 	 	 	 	 (2,355)	 (2,854)
Reconciliation	 of	 Movements	 in	 Equity	 Shareholders’	 Funds	 for	 the	 21	 weeks	 ended	 30	s eptember	 2006
	 	 	 	 	 	 	 	 Group	 Company
	 	 	 	 	 	 	 n ote	 £’000	 £’000
Total losses recognised in the period	 	 	 	 	 	 	 (2,355)	 (2,854)
Credit	associated	with	issue	of	share	options	 	 	 	 	 20	 3,233	 3,233
Issue	of	share	capital	 	 	 	 	 	 	 20	 115,050	 115,050
Costs	associated	with	issue	of	shares	 	 	 	 	 	 21	 (6,250)	 (6,250)
Closing equity shareholders’ funds	 	 	 	 	 	 	 109,678	 109,179 	 28 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 29
1	 a ccounting	p olicies
The	financial	statements	have	been	prepared	in	accordance	with	the	Companies	Act	1985	and	applicable	accounting	standards	in	the	United	 Kingdom.	A	summary	of	the	significant	policies,	which	have	been	applied	consistently,	is	set	out	below.	 Basis	of	a ccounting
The	financial	statements	have	been	prepared	in	accordance	with	the	historical	cost	convention.	Due	to	the	fact	that	this	is	the	Company’s	first	 accounting	period	there	are	no	comparatives	included.	 The	directors	have	reviewed	the	accounting	policies	and	consider	them	to	be	the	most	appropriate	ones	for	the	Company	and	the	Group.	 Basis	of	Consolidation
The	consolidated	financial	statements	incorporate	the	financial	information	of	the	Company	and	all	of	its	subsidiaries.	The	results	of	subsidiaries	 or	businesses	acquired	or	disposed	of	during	the	period	are	included	in	the	consolidated	profit	and	loss	account	from	the	date	of	acquisition	or	 up	to	the	date	of	their	disposal.	Intra-group	sales,	profits	and	balances	are	eliminated	fully	on	consolidation.	 a ccounting	r eference	d ate
The	Group’s	accounting	reference	date	is	30	September.	These	financial	statements	have	been	drawn	up	for	the	21	week	period	ended	 	 30	September	2006.	Future	financial	statements	will	be	drawn	up	for	a	52	week	period	ending	within	seven	days	of	the	accounting	reference	 date,	as	permitted	by	the	Companies	Act	1985,	except	where	this	falls	beyond	seven	days	of	the	accounting	reference	date,	at	which	time	a	53	 week	period	will	be	used.
r evenue	r ecognition
Turnover	represents	the	amounts	receivable	in	the	ordinary	course	of	business	for	goods	sold	and	services	provided	after	deducting	discounts,	 customer	incentives,	sales	taxes	and	eliminating	turnover	within	the	Group.	The	main	revenue	streams	relate	to	rental	income	in	respect	of	 machines	out	on	third	party	sites,	along	with	software	licence	fee	and	development	income	and	hardware	sales.
Machine	Management
Fixed	rental	income	is	recognised	on	an	accrued	basis,	based	upon	contracted	rental	rates.	Rentals	based	upon	percentage	share	of	machine	 take	are	recognised	on	an	accrued	basis,	based	upon	actual	machine	takings	and	contracted	percentage	shares.
Server	Based	Gaming	Software	and	Services
Revenue	from	both	the	sale	of	software	and	the	grant	of	software	licences	is	recognised	when	the	relevant	software	has	been	accepted	by	the	 customer	and	the	product	or	licence	has	been	received	by	the	customer.	 For	fees	earned	in	relation	to	the	development	of	commissioned	software,	revenue	is	recognised	when	all	performance	criteria	are	complete,	 acceptance	is	received	from	the	customer,	and	rights	to	consideration	become	unconditional.	Revenue	is	recorded	in	relation	to	sign-on	fees	at	 the	point	they	become	unconditional.	Where	contracts	allow	for	billings	based	upon	the	successful	completion	of	pre-defined	stages	of	 development,	revenue	is	recognised	based	upon	the	specific	terms	of	each	contract	and	the	entitlement	of	the	Group	to	the	revenue.	Where	 the	right	to	revenue	is	contingent	upon	a	future	rental	or	licence	agreement,	revenue	is	recognised	once	both	the	performance	criteria	and	the	 right	to	consideration	have	been	met.	 Revenue	from	hardware	system	sales	is	recognised	once	the	risks	and	rewards	of	ownership	have	passed	to	the	customer.	This	is	generally	 deemed	to	be	the	point	at	which	the	hardware	is	accepted	by	the	customer,	and	it	is	probable	that	economic	benefit	will	flow	to	the	Group.	 In	all	instances,	where	no	further	vendor	obligations	remain	and	any	future	products	or	services	are	supplied	on	an	arm’s	length	basis,	the	total	 billed	amount	is	recognised	as	turnover.	Where	significant	vendor	obligation	remains,	a	proportion	of	the	revenue	is	deferred	and	only	 recognised	once	these	obligation	have	been	satisfied.	Similarly	where	future	products	and	services	are	supplied	at	a	discount,	a	proportion	is	 deferred	over	the	period	to	which	the	discount	relates.
For	software	covered	by	maintenance	and	service	contracts,	revenue	for	the	contracts	is	credited	to	the	profit	and	loss	account	over	the	period	 to	which	the	contract	relates.	 Professional	services,	such	as	implementation,	training	and	consultancy,	are	recognised	when	the	services	are	performed	or	accepted	by	 	 the	client.
t angible	Fixed	a ssets
All	tangible	fixed	assets	are	stated	at	cost	less	depreciation.	Volume	rebates	receivable	on	machine	purchases	are	offset	against	the	cost	of	the	 underlying	machines.	 Costs	associated	with	internally	produced	fixed	assets	are	capitalised	within	the	cost	of	the	underlying	fixed	assets	to	the	extent	that	they	are	 directly	attributable	to	the	production	of	that	asset.	Internally	produced	machines	in	the	course	of	construction	are	held	in	stock	until	they	are	 brought	into	operation,	at	which	point	they	are	transferred	to	tangible	fixed	assets.
Notes	 to	 the	 Financial	 Statements 	 30 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 31
1	 a ccounting	p olicies	continued
d epreciation
Depreciation	is	provided	on	all	tangible	fixed	assets,	other	than	freehold	land,	at	rates	calculated	to	write	off	the	cost,	less	the	estimated	 residual	value.	It	is	based	on	prices	prevailing	at	the	date	of	acquisition	in	order	to	write	off	the	cost	of	each	asset	evenly	over	its	expected	 useful	life	as	follows:
Freehold	buildings	 over	50	years
Leasehold	buildings	 over	the	shorter	of	the	lease	term	and	50	years
Plant	and	machinery	 over	4–8	years
Information	technology	equipment	 over	3–5	years
Amusement	machines	 over	2–11	years
Vehicles	 over	3–5	years
The	Directors	consider	the	net	recoverable	value	of	amusement	machines	on	an	annual	basis	and,	where	applicable,	increase	the	depreciation	 charge	accordingly.
In	light	of	the	useful	economic	life	of	amusement	machines,	any	difference	between	proceeds	and	net	book	value	on	sale	is	considered	to	be	an	 adjustment	to	depreciation.
d evelopment	Costs	and	Licences
Expenditure	on	research	and	development	of	new	products	is	charged	to	the	consolidated	profit	and	loss	account	in	the	period	in	which	it	is	 incurred	with	the	exception	of	expenditure	on	the	development	of	certain	major	new	product	projects	where	the	outcome	of	those	projects	is	 assessed	as	being	reasonably	certain	as	regards	viability	and	technical	feasibility.	Such	expenditure	is	capitalised	at	cost	as	an	intangible	fixed	 asset	and	amortised	over	a	period	of	three	to	five	years	from	the	date	of	first	sale	or	installation	of	the	product.	Licences	are	stated	at	cost	less	 amortisation.	Amortisation	is	provided	on	all	licences	to	write	off	the	cost,	less	residual	value,	over	two	to	three	years.
stocks
Stocks	are	stated	at	the	lower	of	cost	and	net	realisable	value,	due	allowance	being	made	for	obsolete	and	slow	moving	items.
Goodwill
Positive	goodwill	arising	on	acquisitions	is	capitalised,	classified	as	an	asset	on	the	consolidated	balance	sheet	and	amortised	on	a	straight-line	 basis	over	its	useful	economic	life	up	to	a	presumed	maximum	of	20	years.	It	is	reviewed	for	impairment	at	the	end	of	the	first	full	financial	year	 following	the	acquisition	and	in	other	periods	if	events	or	changes	in	circumstances	indicate	that	the	carrying	value	may	not	be	recoverable.
If	a	subsidiary	or	business	is	subsequently	sold	or	closed,	any	goodwill	arising	on	the	acquisition	that	has	not	been	amortised	through	the	 consolidated	profit	and	loss	account	is	taken	into	account	in	determining	the	profit	or	loss	on	sale	or	closure.
Investments
Investments	are	stated	individually	at	cost	less	any	provision	for	permanent	diminution	in	value.	Where	deferred	consideration	is	payable	on	an	 acquisition,	an	assessment	is	made,	based	upon	the	information	currently	available,	of	the	expected	deferred	consideration	payable.	This	 amount	is	discounted	at	a	rate	which	is	based	upon	the	Group’s	weighted	average	cost	of	capital	with	appropriate	adjustment	for	the	risks	 associated	with	the	relevant	business.	Deferred	consideration	is	reassessed	at	each	period	end	and	adjusted	for	any	changes	in	the	expected	 amount	payable.
	 Impairment
Tangible	and	intangible	fixed	assets	are	reviewed	for	impairment	if	events	or	changes	in	circumstances	indicate	that	the	carrying	amount	may	 not	be	recoverable.	When	a	review	of	impairment	is	conducted,	the	recoverable	amount	is	assessed	by	reference	to	the	net	present	value	of	 expected	future	cash	flows	of	the	relevant	income	generating	unit,	or	disposal	value	if	higher.	The	discount	rate	applied	is	based	upon	the	 Group’s	weighted	average	cost	of	capital	with	appropriate	adjustment	for	the	risks	associated	with	the	relevant	business.
Foreign	Currencies
Transactions	in	foreign	currencies	are	recorded	at	the	rate	ruling	at	the	date	of	the	transaction	or	at	the	contracted	rate	if	the	transaction	is	 covered	by	a	forward	foreign	currency	contract.	Monetary	assets	and	liabilities	denominated	in	foreign	currencies	are	retranslated	at	the	rate	of	 exchange	ruling	at	the	balance	sheet	date	or,	if	appropriate,	at	the	forward	contract	rate.	All	differences	are	taken	to	the	consolidated	profit	and	 loss	account.	 Exchange	 differences	 arising	 from	 the	 translation	 into	 Sterling	 of	 the	 net	 equity	 interest	 in	 overseas	 subsidiaries	 and	 associated	 undertakings	 are	 treated	 as	 movements	 in	 reserves	 net	 of	 exchange	 differences	 on	 translation	 of	 foreign	 currency	 borrowings	 used	 to	 finance	 overseas	 investments.	 Notes	 to	 the	 Financial	 Statements	 continued 	 30 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 31
1	 a ccounting	p olicies	continued
Cash
Cash	includes	cash	floats	in	gaming	machines	on	third	party	sites,	as	well	as	cash	at	bank	or	in	hand	and	any	restricted	cash.
Leasing	and	Hire	p urchase	Commitments
Assets	held	under	finance	leases,	which	are	leases	where	substantially	all	the	risks	and	rewards	of	ownership	of	the	asset	have	passed	to	the	 Group,	and	hire	purchase	contracts	are	capitalised	in	the	consolidated	balance	sheet	and	are	depreciated	over	their	useful	lives.	The	capital	 elements	of	future	obligations	under	leases	and	hire	purchase	contracts	are	included	as	liabilities	in	the	consolidated	balance	sheet.	The	interest	 elements	of	the	rental	obligations	are	charged	in	the	consolidated	profit	and	loss	account	over	the	years	of	the	leases	and	hire	purchase	 contracts	and	represent	a	constant	proportion	of	the	balance	of	capital	repayments	outstanding.
Rentals	payable	under	operating	leases	are	charged	in	the	consolidated	profit	and	loss	account	on	a	straight-line	basis	over	the	lease	term.	Lease	 incentives	are	capitalised	and	released	to	the	consolidated	profit	and	loss	account	over	the	life	of	the	underlying	lease.
Capital	Instruments
Shares	are	included	in	shareholders’	funds.	Other	instruments	are	classified	as	liabilities	if	they	contain	obligations	to	transfer	economic	benefits	 and	if	not	they	are	included	in	shareholders’	funds.	The	finance	cost	recognised	in	the	consolidated	profit	and	loss	account	in	respect	of	capital	 instruments,	other	than	equity	shares,	is	allocated	over	the	term	of	the	instrument	at	a	constant	rate	on	the	carrying	amount,	unless	the	 Directors	believe	that	a	different	basis	more	appropriately	reflects	the	substance	of	a	particular	investment.	The	Group	capitalises	the	costs	of	 issuing	debt	and	amortises	this	over	the	primary	debt	repayment	period.	 d eferred	t axation
Deferred	taxation	is	accounted	for	to	recognise	timing	differences	between	the	recognition	of	gains	and	losses	in	the	financial	statements	and	 their	recognition	for	taxation	purposes.	Full	provision	is	made	for	deferred	tax	assets	and	liabilities	arising	from	timing	differences	between	the	 recognition	of	gains	and	losses	in	the	financial	statements	and	their	recognition	for	taxation	purposes.
A	deferred	tax	liability	is	recognised	if	transactions	result	in	the	Group	having	an	obligation	to	pay	more	tax	in	future	years.	Where	transactions	 or	events	that	have	occurred	before	the	balance	sheet	date	give	the	Group	the	right	to	pay	less	tax	in	the	future,	a	deferred	tax	asset	will	only	 be	recognised	to	the	extent	that	it	is	considered	to	be	more	likely	than	not	that	it	will	be	recovered.	Deferred	tax	balances	are	not	discounted.
	 Financial	r isk	m anagement
The	Group’s	policies	in	relation	to	financial	risk	management	are	set	out	in	note	18.
pensions
The	Group	operates	a	combined	scheme	which	comprises	a	Defined	Benefit	Section	and	a	Defined	Contribution	Section.	The	assets	of	the	 schemes	are	held	in	separate	trustee	administered	funds.	 Deferred	Benefit	Section	 Pension	scheme	assets	are	measured	at	fair	value	and	liabilities	are	measured	on	an	actuarial	basis	using	the	projected	unit	method	and	are	 discounted	at	the	rate	of	return	of	a	high	quality	corporate	bond	of	equivalent	term	to	the	scheme	liabilities.	The	current	service	costs	and	gains	 and	losses	on	settlement	and	curtailments	are	charged	to	operating	profit.	Past	service	costs	are	recognised	in	the	consolidated	profit	and	loss	 account	if	the	benefits	have	vested	or,	if	they	have	not	vested,	over	the	period	until	vesting	occurs.	The	interest	cost	and	the	expected	return	 on	assets	are	included	as	other	financing	income	or	interest	payable.	Actuarial	gains	and	losses	are	recognised	in	the	consolidated	statement	of	 total	recognised	gains	and	losses.	The	surplus,	to	the	extent	that	it	is	considered	recoverable,	or	deficit	is	recognised	in	full	and	presented	on	 the	face	of	the	consolidated	balance	sheet	net	of	any	related	deferred	tax.	 Defined	Contribution	Section	 Contributions	are	charged	to	the	consolidated	profit	and	loss	account	as	incurred.	 exceptional	Items
Exceptional	items	are	disclosed	in	the	financial	statements	in	accordance	with	Financial	Reporting	Standard	3	‘Reporting	Financial	Performance’	 and	comprise	material,	non-recurring	items	which	derive	from	events	or	transactions	that	fall	within	the	ordinary	activities	of	the	Group. 	 32 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 33
1	 a ccounting	p olicies	continued
share	Based	p ayments
On	the	IPO	of	the	Company,	a	2006	Company	Share	Option	Plan	was	introduced.	The	fair	value	of	the	employee	services	received	in	exchange	 for	the	grant	of	the	options	is	recognised	as	an	expense,	and	the	corresponding	credit	for	the	equity	settled	share	based	payment	charges	is	 made	to	the	profit	and	loss	reserve.	The	total	amount	to	be	expensed	over	the	vesting	period	is	determined	by	reference	to	the	fair	value	of	 the	options	granted,	excluding	the	impact	of	any	non	market	vesting	conditions.	Non	market	vesting	conditions	are	included	in	the	assumptions	 about	the	number	of	options	that	are	expected	to	become	exercisable.	At	each	balance	sheet	date	and	if	appropriate,	the	directors	revise	their	 estimate	of	the	number	of	options	that	are	expected	to	become	exercisable.	The	impact	of	any	revision	to	the	original	estimates	is	recognised	 in	the	consolidated	profit	and	loss	account.	 provisions	for	Liabilities	and	Charges
Where	the	unavoidable	costs	of	meeting	the	Group’s	obligations	under	contractual	arrangements	exceeds	the	economic	benefits,	the	present	 net	obligations	are	recognised	as	a	provision	for	onerous	contracts.	Provisions	for	other	liabilities,	including	reorganisation	expenditure,	are	 recognised	when	there	is	a	legal	or	constructive	obligation	to	settle	such	liabilities.
estimation	t echniques
The	preparation	of	the	financial	statements	requires	management	to	make	estimates	and	assumptions	that	affect	the	reported	amounts	of	 assets	and	liabilities	and	disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	financial	statements	and	the	reported	amounts	of	income	 and	expenditure	in	the	reporting	period.	Actual	results	could	differ	from	those	estimates.	Estimates	are	principally	used	when	accounting	for	 pension	costs,	the	useful	economic	lives	of	fixed	and	intangible	assets	and,	in	certain	instances,	in	revenue	recognition.
	 2	 s egmental	r eporting
The	tables	below	indicates	the	sector	analysis	used	during	the	period	to	manage	the	Group’s	business.
The	‘Machine	Management	(SBG	and	Analogue)’	segment	relates	to	the	supply	of	gaming	and	entertainment	machines	to	a	range	of	retailers,	in	 return	for	a	rent	or	share	of	revenues.	In	the	majority	of	cases,	this	includes	the	provision	of	the	financial	capital	for	the	machines	and	a	fully	 managed	service	including	yield	management,	installation,	repairs	and	collection	services.
The	‘SBG	Software	and	Services’	sector	includes	the	sale	of	Group’s	SBG	software	platform,	games	(including	Red	Vision’s	computer	generated	 imagery),	and	SBG	hardware	sales.	The	revenues	generated	from	these	sales	include	SBG	licence	fees,	content	royalties,	hardware	sales	and	 consulting	fees.	This	segment	also	includes	the	results	for	the	Group’s	Italian	subsidiary	(Inspired	Leisure	Link	Italia	S.p.A.)	which	has	14,300	 networked	terminals	connected	to	the	Group’s	SBG	platform.
The	‘Central’	segment	reflects	the	cost	incurred	in	respect	of	non-executive	fees,	audit	fees,	group	insurance	and	other	corporate	costs	not	 directly	attributable	to	the	other	segments.	 	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 profit	before	 	 	 	 	 	 	 	 	 taxation,	goodwill	 	 	 	 	 	 	 	 	 amortisation	and		 	 Loss 	 	 	 	 	 	 t urnover	 	exceptional	costs	 	before	taxation 	 	 	 	 	 	 £’000	 	 £’000	 	 £‘000
Business analysis:
Machine	Management	(SBG	and	analogue)	 	 	 53,037	 8,655	 5,722
SBG	Software	and	Services	 	 	 	 4,913	 201	 161
Central	 	 	 	 –	 (3,524)	 (5,351)
	 	 	 	 57,950	 5,332	 532
Net	interest	payable	 	 	 	 –	 (2,197)	 (2,578)
Total	 	 	 	 57,950	 3,135	 (2,046)
Geographical analysis by destination:
United	Kingdom	 	 	 	 	 55,698	 	 2,701	 	 (2,480)
Rest	of	the	World	 	 	 	 	 2,252	 	 434	 	 434
Total    	 57,950	 	 3,135	 	 (2,046)
All	turnover	and	profits/(losses)	had	a	geographical	origin	in	the	United	Kingdom	with	the	exception	of,	£186,000	of	turnover	and	£9,000	of	 losses	before	tax,	and	before	tax	goodwill	amortisation	and	exceptional	costs	,	which	relates	to	the	Rest	of	the	World.
Notes	 to	 the	 Financial	 Statements	 continued 	 32 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 33
2	 s egmental	r eporting	continued
	 	 	 	 	 	 	 	 	 n et	assets 	 	 	 	 	 	 	 	 	 	 at	30	s eptember	 	 	 	 	 	 	 	 	 	 	 2006 	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Business analysis	 	 	 	 	 	 	 	 	 Machine	Management	(SBG	and	analogue)	 	 	 	 	 	 	 	 8,332
SBG	Software	and	Services	 	 	 	 	 	 	 	 	 6,934
Central	 	 	 	 	 	 	 	 	 94,412
Total	 	 	 	 	 	 	 	 	 109,678
Geographical analysis	 	 	 	 	 	 	 	 	 United	Kingdom	 	 	 	 	 	 	 	 	 109,747
Rest	of	World	 	 	 	 	 	 	 	 	 (69)
Total	 	 	 	 	 	 	 	 	 109,678
Central	net	assets	comprise	assets	partially	offset	by	liabilities,	that	cannot	practically	be	divided	between	the	segments,	and	principally	includes	 goodwill,	deferred	tax,	borrowings	and	other	corporate	net	assets.	The	pension	deficit	is	disclosed	in	the	Machine	Management	(SBG	and	 Analogue)	segment,	as	the	beneficiaries	to	the	pension	scheme	are	employed	in	this	segment.
3	 o perating	p rofit	 Operating	profit	is	stated	after	charging:
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 Before		 	 	 	 	 	 	 	 	 goodwill	and		 Goodwill	and 	 	 	 	 	 	 	 	 exceptional	 exceptional	 	 	 	 	 	 	 	 	 items	 items	 t otal	 a dministration	costs	 	 	 	 	 	 n ote	 £’000	 £’000	 £’000
Staff	cost	 	 	 	 	 	 4	 21,210	 2,355	 23,565
	Staff	costs		 	 	 	 	 	 	 17,977	 –	 17,977
	Share	based	payment	charge		 	 	 	 	 	 3,233	 –	 3,233
	Exceptional	staff	costs	 	 	 	 	 	 	 –	 2,355	 2,355
	 	 	 Depreciation	of	tangible	and	intangible	fixed	assets	 	 	 	 	 18,687	 1,632	 20,319
	Depreciation	charge	on	amusement	machines	 	 	 	 10	 17,208	 –	 17,208
	Depreciation	charge	on	other	owned	assets	 	 	 	 10	 855	 –	 855
	Depreciation	charge	on	assets	held	under	finance	lease	 	 	 	 10	 26	 –	 26
	Amortisation	of	development	costs	and	licences		 	 	 	 9	 598	 –	 598
	Amortisation	of	goodwill	in	subsidiaries		 	 	 	 	 9	 –	 1,632	 1,632
	 	 	 Other	operating	leases	 	 	 	 	 	 	 2,032	 –	 2,032
	Hire	of	plant	and	machinery	 	 	 	 	 	 	 1,190	 –	 1,190
	Other	operating	leases	 	 	 	 	 	 	 842	 –	 842
	 	 	 Operating	charges	 	 	 	 	 	 	 10,689	 813	 11,502
	Research	and	development	costs	 	 	 	 	 	 108	 –	 108
	Other	operating	charges	 	 	 	 	 	 	 10,581	 –	 10,581
	Exceptional	operating	charges	 	 	 	 	 	 –	 813		 813
	 	 	 Operating costs less other operating income	 	 	 	 	 52,618	 4,800	 57,418
The	parent	company	has	taken	advantage	of	Section	230	of	the	Companies	Act	1985	and	has	not	presented	its	Company	profit	and	loss	 account	in	these	financial	statements.	The	Group	loss	includes	a	£2,854,000	loss	for	the	period	in	respect	of	the	Company.	 	 34 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 35
Notes	 to	 the	 Financial	 Statements	 continued
3	 o perating	p rofit	 continued
services	p rovided	by	the	Group’s	a uditor
During	the	period	the	Group	(including	its	overseas	subsidiaries)	obtained	the	following	services	from	the	Group’s	auditors	at	costs	detailed	 below:	 	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 a udit	s ervices	 	 	 	 	 	 	 	 	 £’000
Fees	payable	to	the	company	auditor	for	the	audit	of	the	parent	company	and	the	consolidated	financial	statements	 	 86
	 n on-audit	services		 Fees	payable	to	the	Company’s	auditor	and	its	associates	for	other	services:	
	 The	audit	of	the	Company’s	subsidiaries	pursuant	to	legislation	 	 	 	 	 	 70
	 Other	services	pursuant	to	legislation	 	 	 	 	 	 	 	 225
	 Tax	services		 	 	 	 	 	 	 	 	 57
In	addition	to	the	above	services,	the	Group’s	auditor	acted	as	auditor	to	the	pension	scheme	and	the	fee	paid	in	respect	of	this	audit	is	agreed	 by	the	trustees	of	the	scheme	who	act	independently	from	the	management	of	the	Group.	 The	aggregate	fees	paid	to	the	Group’s	auditor	for	audit	services	to	the	pension	scheme	during	the	period	was	£11,000.
exceptional	Items
Exceptional	items	represent	the	following:
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group
	 	 	 	 	 	 	 	 	 £’000
a dministration	costs
Restructuring	 	 	 	 	 	 	 	 	 2,069
IPO	transaction	 	 	 	 	 	 	 	 	 1,099
	 	 	 	 	 	 	 	 	 3,168
Interest	payable	and	similar	charges
Amortisation	of	issue	cost	of	bank	loans	(note	5)	 	 	 	 	 	 	 381
	 	 	 	 	 	 	 	 	 3,549
r estructuring
Prior	to	acquisition	of	Ever	2533	Limited	and	Inspired	Broadcast	Networks	Limited,	the	underlying	group’s	activities	were	not	fully	integrated	as	 the	majority	of	the	software	and	services	capability	was	provided	by	Inspired	Broadcast	Networks	Ltd,	which	was	only	65%	owned	on	a	fully	 diluted	basis	by	the	Group.	The	acquisition	of	the	IBN	minority	interest	has	allowed	the	Group	to	undertake	a	fundamental	restructure	of	its	 operations	so	that	it	can	harness	its	SBG	expertise	across	all	functions	of	the	Group.
Ipo	t ransaction
The	fees	and	costs	incurred	in	respect	of	the	refinancing	and	accelerated	IPO,	which	resulted	in	the	Company	being	admitted	to	the	AIM	 market	of	the	London	Stock	Exchange	in	June	2006.
a mortisation	of	Issue	Cost	of	Bank	Loans
Debt	issue	fees	incurred	upon	the	refinancing	of	the	business	were	deducted	from	the	amount	of	consideration	received,	and	have	been	 capitalised	against	borrowings	(see	note	17).	The	proportion	of	issue	costs	in	relation	to	the	revolving	credit	facility	that	is	undrawn	as	at	 	 30	September	2006	has	been	written	off	to	the	profit	and	loss	accounts	as	an	exceptional	interest	cost.
The	tax	credit	in	respect	of	exceptional	items	is	£990,000.	Net	cash	inflow	from	operating	activities	includes	a	cash	outflow	of	£1,659,000	in	 respect	of	the	exceptional	items	set	out	above.
4	 s taff	Costs
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 Costs	 	 	 	 	 	 	 	 	 £’000
Wages	and	salaries	(including	exceptional	costs	of	restructuring	of	£1,662,000	and	of	IPO	transaction	of	£693,000)	 	 17,787
Social	security	costs	 	 	 	 	 	 	 	 	 1,808
Share	based	payment	charge	 	 	 	 	 	 	 	 	 3,233
Pension	costs	 	 	 	 	 	 	 	 	 737
	 	 	 	 	 	 	 	 	 23,565 	 34 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 35
4	 s taff	Costs	 continued
	 average	number	of	employees	(including	executive	directors)	 	 	 	 	 	 	 Group
Field	staff	 	 	 	 	 	 	 	 	 2,042
Design	and	development	 	 	 	 	 	 	 	 	 164
Digital	manufacture	 	 	 	 	 	 	 	 	 36
Management	and	administration	 	 	 	 	 	 	 	 344
Average number of employees	 	 	 	 	 	 	 	 2,586
The	Company	employs	only	five	executive	directors.
d irectors’	e moluments
Directors’	emoluments	were	paid	in	respect	of	Directors	of	the	Group	as	follows:
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Non-Executive	Directors’	fees	 	 	 	 	 	 	 	 30
Executive	Directors’	salaries,	benefits	and	charges	in	relation	to	share	based	payments	 	 	 	 	 3,915
Aggregate	value	of	contributions	in	respect	of	defined	contribution	pension	schemes	 	 	 	 	 53
Total	 	 	 	 	 	 	 	 	 3,998
Of	the	five	Executive	Directors	in	office	at	the	period	end,	one	is	a	member	of	the	Leisure	Link	Defined	Benefit	–	Executive	Pension	Scheme	 and	four	are	members	of	the	Leisure	Link	Defined	Contribution	Executive	Pension	Scheme.	 	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 salary/fees	 	 share	 	 a nnual	salary 	 	 	 	 	 	 and	benefits	 	 based		 	 and	cash 	 	 	 	 	 	 in	kind	 Bonus	 payment	 t otal	 	allowances 	 	 	 	 	 	 £’000	 £’000	 £’000	 £’000	 	£’000
R	B	Hoyle	 	 	 	 	 89	 –	 826	 915	 320
L	L	Alvarez	 	 	 	 	 89	 –	 826	 915	 320
N	V	Crowley	 	 	 	 	 113	 –	 826	 939	 320
J	W	O’Halleran	 	 	 	 	 83	 –	 431	 514	 308
D	Page	 	 	 	 	 58	 250	 324	 632	 198
J	B	Paul	 	 	 	 	 15	 –	 –	 15	 40
D	C	Mace	 	 	 	 	 15	 –	 –	 15	 35
C	H	B	Mills	 	 	 	 	 –	 –	 –	 –	 35
Total	 	 	 	 	 462	 250	 3,233	 3,945	 1,576
The	bonus	of	£250,000	has	been	included	within	the	IPO	transaction	exceptional	item	(note	3).
The	highest	paid	director	is	a	member	of	the	Defined	Contribution	Executive	Pension	Scheme,	no	contributions	were	made	into	the	scheme	 on	his	behalf	in	the	period.
	 5	 Interest	p ayable	and	s imilar	Charges
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Interest	payable	on	bank	loans	and	overdrafts	 	 	 	 	 	 	 2,167
Interest	payable	on	other	loans	and	finance	leases	 	 	 	 	 	 	 92
Amortisation	of	issue	costs	on	bank	and	other	loans
1
	 	 	 	 	 	 	 477
Bank	charges	 	 	 	 	 	 	 	 	 29
Total interest payable and similar charges	 	 	 	 	 	 	 2,765
	 1
	 	 Included	within	amortisation	of	issue	costs	on	bank	loans	above	is	£381,000	of	costs	incurred	as	a	result	of	the	Group’s	refinancing	on	2	June	2006	which	has	been	included	as	an	 exceptional	interest	cost	(note	3). 	 36 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 37
6	 Interest	r eceivable	and	o ther	Finance	Income
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Bank	interest	receivable	 	 	 	 	 	 	 	 	 131
Other	finance	income	(note	24)	 	 	 	 	 	 	 	 56
Total interest receivable and other finance income	 	 	 	 	 	 187
	 7	 t ax	on	Loss	on	o rdinary	a ctivities
a nalysis	of	Charge	in	p eriod
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
United Kingdom
Corporation	tax	at	30%	 	 –	current	period	 	 	 	 	 	 	 	 	 –
Foreign tax
Corporation	taxes	 	 	 	 	 	 	 	 	 11
Total	current	tax	charge	 	 	 	 	 	 	 	 	 11
Deferred taxation
Origination	and	reversal	of	timing	differences:	 	 	 	 –	current	period		 	 	 	 	 	 	 	 	 2
Total	deferred	tax	(note	13)	 	 	 	 	 	 	 	 	 2
Total taxation charge	 	 	 	 	 	 	 	 	 13
Factors	a ffecting	the	t ax	Charge	for	the	p eriod
The	tax	rate	for	the	period	is	different	to	the	standard	rate	of	corporation	tax	in	the	UK	of	30%.	The	differences	are	explained	below:
	 	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group	 	 	 	 	 	 	 	 	 	 	 £’000
Loss	on	ordinary	activities	before	tax	 	 	 	 	 	 	 	 (2,046)
Loss	on	ordinary	activities	multiplied	by	standard	rate	of	corporation	tax	of	30%	 	 	 	 	 (614)
Effects of:	 	 	 Expenses	not	deductible	for	tax	purposes,	including	goodwill	amortisation	 	 	 	 	 616
Accelerated	capital	allowances	and	other	timing	differences	 	 	 	 	 	 (2)
Foreign	tax	 	 	 	 	 	 	 	 	 11
Current	tax	charge	for	the	period	 	 	 	 	 	 	 	 11
Factors	t hat	m ay	a ffect	Future	t ax	Charges
In	the	future	goodwill	amortisation	will	continue	to	represent	a	disallowable	item.	The	future	tax	charge	will	also	be	impacted	by	the	 recognition	and	utilisation	of	the	Group’s	deferred	tax	asset	(note	13).
	 Notes	 to	 the	 Financial	 Statements	 continued 	 36 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 37
8	 Loss	per	s hare
Basic	earnings	per	share	are	calculated	by	dividing	the	loss	attributable	to	ordinary	shareholders	of	£2,059,000	by	63,938,888	ordinary	shares,	 being	the	weighted	average	number	of	ordinary	shares	in	issue	during	the	period.
Underlying	earnings	per	share	which	excludes	exceptional	items,	goodwill	amoristation	and	share	based	payment	charge	is	disclosed	to	provide	 what	the	directors	consider	to	be	a	more	appropriate	measure	of	the	underlying	business:
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 pence	 £’000
Loss	attributable	to	ordinary	shareholders	 	 	 	 	 	 	 (3.2)	 (2,059)
Excluding:
Exceptional	items	 	 	 	 	 	 	 	 5.5	 3,549
Goodwill	amortisation	 	 	 	 	 	 	 	 2.6	 1,632
Share	based	payment	charge			 	 	 	 	 	 	 5.1	 3,233
Related	tax	effect	 	 	 	 	 	 	 	 (1.6)	 (990)
Underlying	earnings	per	share		 	 	 	 	 	 	 8.4	 5,365
d iluted
Potential	shares	are	treated	as	diluted	when	they	decrease	net	profit	or	increase	net	loss	per	share	from	continuing	operations.	In	the	case	of	 the	Group,	the	diluted	loss	per	share	would	show	the	number	of	ordinary	shares	in	issue	adjusted	to	assume	conversion	of	all	dilutive	potential	 ordinary	shares	from	the	start	of	the	accounting	period.	The	potentially	dilutive	ordinary	shares	are	the	share	options	granted	to	the	Directors	 (note	20),	where	the	exercise	price	is	less	than	the	average	market	price	of	the	Company’s	shares	in	the	period.	The	number	of	ordinary	shares	 used	in	the	diluted	loss	per	share	calculation	is	76,099,750.	However,	as	the	Group	has	made	a	loss,	the	effect	of	increasing	the	denominator	 would	be	to	reduce	the	loss	per	share	and	therefore	the	options	are	anti-dilutive.	As	such	they	are	not	included	in	the	diluted	loss	per	share	 calculation,	and	so	the	basic	and	diluted	loss	per	share	are	the	same.	 9	 Intangible	Fixed	a ssets
	 	 	 	 	 	 	 	 d evelopment	 	 	 	 	 	 	 	 	 costs	and 	 	 	 	 	 	 	 	 Goodwill		 licences	 t otal	 Group	 	 	 	 	 	 	 £’000	 £’000	 £’000
Cost
At	3	May	2006	 	 	 	 	 	 	 –	 –	 –
Acquisition	of	business	assets	(note	11)	 	 	 	 	 	 106,096		 3,780	 109,876
Other	additions	 	 	 	 	 	 	 –	 1,259	 1,259
At 30 September 2006 	 	 	 	 	 	 	 106,096	 5,039	 111,135
Amortisation	 	 	 At	3	May	2006	 	 	 	 	 	 	 –	 –	 –
Charge	for	the	period	 	 	 	 	 	 	 1,632		 598	 2,230
At 30 September 2006	 	 	 	 	 	 	 1,632	 	598	 2,230
Net book amount
At 30 September 2006	 	 	 	 	 	 	 104,464	 4,441	 108,905
At 3 May 2006	 	 	 	 	 	 	 –	 –	 –
The	goodwill	arising	on	the	acquisition	of	Ever	2533	Limited,	Inspired	Broadcast	Networks	Limited	and	Red	Vision	Limited	and	its	subsidiaries,	is	 being	amortised	on	a	straight-line	basis	over	20	years,	being	the	period	over	which	the	directors	estimate	that	the	values	of	the	underlying	 businesses	acquired	are	expected	to	exceed	the	values	of	the	underlying	assets. 	 38 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 39
9	 Intangible	Fixed	a ssets	continued
Details	of	own	work	capitalised	in	the	21	week	period,	within	development	costs	and	licences,	are	detailed	below:
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Amounts	capitalised	in	the	period	 	 	 	 	 	 	 	 471
Net	book	value	of	amounts	capitalised	at	the	end	of	the	period	 	 	 	 	 	 458
	 10	 t angible	Fixed	a ssets
	 	 	 	 	 	 	 	 plant	and		 	 	 	 	 	 	 	 	 	 machinery,	 	 	 	 	 	 	 	 	 	 fixtures	and	 	 	 	 	 	 	 	 	 	 fittings,	 	 	 	 	 	 	 Land	and		 a musement	 motor	 (including	I t	 	 	 	 	 	 	 buildings	 machines	 vehicles	 equipment)	 t otal	 Group	 	 	 	 	 £’000	 £’000	 £’000	 £’000	 £’000
Cost
At	3	May	2006	 	 	 	 	 –	 –	 –	 –	 –
Acquisition	of	business	assets	(see	note	11)	 	 	 	 405	 96,233	 23	 7,523	 104,184
Additions	 	 	 	 	 –	 12,390	 –	 1,511	 13,901
Disposals	 	 	 	 	 –	 (3,432)	 –	 (165)	 (3,597)
At 30 September 2006	 	 	 	 	 405	 105,191	 23	 8,869	 114,488
Accumulated Depreciation	 	 	 	 	 At	3	May	2006	 	 	 	 	 –	 –	 –	 –	 –
Charge	for	the	period	 	 	 	 	 10	 17,208	 6	 865	 18,089
Disposals	 	 	 	 	 –	 (845)	 –	 –	 (845)
At 30 September 2006	 	 	 	 	 10	 16,363	 6	 865	 17,244
Net book amount	 	 	 	 	 At 30 September 2006	 	 	 	 	 395	 88,828	 17	 8,004	 97,244
At 3 May 2006	 	 	 	 	 –	 –	 –	 –	 –
Included	in	the	cost	of	land	and	buildings	are	£395,000	of	properties	improvements	held	under	short	leasehold	arrangements,	on	which	 £10,000	of	depreciation	has	been	charged	during	the	period.
Details	of	own	work	capitalised	in	the	21	week	period	are	detailed	below:
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Amounts	capitalised	in	the	period	 	 	 	 	 	 	 	 3,833
Net	book	value	of	amounts	capitalised	at	the	end	of	the	period	 	 	 	 	 	 3,767
Capital	Commitments
Amounts	contracted	for,	but	not	provided	in	the	accounts,	amounted	to	£nil.	 11	 Investments
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 Investments
Group	 	 	 	 	 	 	 	 	 £’000
Cost and net book amount
At	3	May	2006	 	 	 	 	 	 	 	 	 –
Acquisition	of	business	assets	(see	below)	 	 	 	 	 	 	 	 567
Additions	 	 	 	 	 	 	 	 	 199
At 30 September 2006	 	 	 	 	 	 	 	 	 766
Notes	 to	 the	 Financial	 Statements	 continued 	 38 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 39
11	 Investments	continued
Investments	include	£53,000	in	relation	to	the	Group’s	18.9%	interest	in	The	Cloud	Networks	Limited	and	£713,000	in	relation	to	the	Group’s	 20%	interest	in	G.Matica	S.r.l.	Although	the	Group	holds	a	20%	interest	in	G.Matica	S.r.l	this	investment	has	not	been	equity	accounted	for	as,	 due	to	the	governance	structure	of	this	company,	the	directors	do	not	consider	the	Group	to	have	significant	influence	over	its	operations.
During	the	period	the	Group	participated	in	a	capitalisation	round	in	G.Matica	S.r.l	for	£199,000.
In	January	2007,	the	board	of	G.Matica	S.r.l	resolved	to	ask	its	shareholders	to	recapitalise	that	company	with	an	injection	of	€3,000,000. 	 The	cost	to	the	Group	will	be	€600,000.
	 	 	 	 	 	 	 	 	 Investment	in	 	 	 	 	 	 	 	 	 	 	 subsidiary	 	 	 	 	 	 	 	 	 	 	 undertakings	 Company	 	 	 	 	 	 	 	 	 £’000
Cost and net book value
At	3	May	2006	 	 	 	 	 	 	 	 	 –
Additions	(see	below)		 	 	 	 	 	 	 	 	 89,366
Disposal	 	 	 	 	 	 	 	 	 (32,004)
At 30 September 2006	 	 	 	 	 	 	 	 	 57,362
On	2	June	2006	the	Company	acquired	Ever	2533	Limited	and	Inspired	Broadcast	Networks	Limited,	for	a	total	consideration	of	£57,342,000	 and	£32,004,000	respectively.	On	29	September	2006,	the	Company	disposed	of	its	interest	in	Inspired	Broadcast	Networks	Limited	to	Ever	 2532	Limited,	a	subsidiary	undertaking,	at	book	value.	 Details	of	the	principal	investments	in	which	the	Group	holds	20%	or	more	of	the	nominal	value	of	any	class	of	share	capital	at	the	period	end	 (all	of	which	are	incorporated	in	the	United	Kingdom,	unless	otherwise	noted)	are	as	follows:
	 	 	 proportion	 	 	 	 of	voting	 	 	 	 rights	and		 n ature	 n ame	of	company	 Holding	 shares	held	 of	business
Subsidiary undertakings:	 	 	 Ever	2533	Limited	 Ordinary	shares	 100%	 Holding	company
Leisure	Link	Group	Limited	 Ordinary	shares	 100%	 Management	of	electronic
	 	 	 entertainment	and
	 	 	 amusement	machines
Revolution	Entertainment	Systems	Holdings	Limited	 Ordinary	shares	 100%	 Holding	company
Revolution	Entertainment	Systems	Limited		 Ordinary	shares	 100%	 Manufacture	and	supply	of	electronic	entertainment	 Revolution	Entertainment	Systems	(2)	Limited		 Ordinary	shares	 100%	 Supply	of	electronic	entertainment
Inspired	Broadcast	Networks	Limited		 Ordinary	shares	 100%	 Broadcasting	pay-to-play	entertainment	content	to		 	 	 	 	 network	devices
Inspired	 Leisure	 Link	 Italia	 S.p.A.	 (incorporated	 in	 Italy)	 Ordinary	shares	 100%	 Network 	 provider	 for	 pay-to-play	 network	 devices
Ever	2532	Limited	 Ordinary	shares	 100%	 Holding	company
115CR	(150)	Limited	 Ordinary	shares	 100%	 Holding	company
Inspired	Technology	Limited	(incorporated	in	Ireland)	 Ordinary	shares	 100%	 Holding	company
Inspired	Technology	UK	Limited	 Ordinary	shares	 100%	 Non-trading
Willowmont	Limited	(incorporated	in	Ireland)	 Ordinary	shares	 100%	 Non-trading
MAM	Services	Limited	 Ordinary	shares	 100%	 Leasing	company
Howmore	Limited	 Ordinary	shares	 100%	 Holding	Company
Leisure	Link	Electronic	Entertainment	Limited	 Ordinary	shares	 100%	 Agent	for	Leisure	Link	Group	Limited
Other:	 	 	 The	Cloud	Networks	Limited	 Ordinary	shares	 18.9%	 Wireless	technology
G.Matica	S.r.l	(incorporated	in	Italy)	 Ordinary	shares	 20.0%	 Concession	to	manage	Italian	digital	network	 	 40 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 41
11	 Investments	continued
a cquisition	of	e ver	2533	Limited	and	Inspired	Broadcast	n etworks	Limited	 On	2	June	2006	the	Group	acquired	Ever	2533	Limited	and	Inspired	Broadcast	Networks	Limited	for	a	total	consideration	of	£89,346,433,	 satisfied	by	the	issue	of	3,888,888	ordinary	shares	1p	at	£1.80	each,	£42,219,641	cash	consideration,	and	the	assumption	of	£40,126,792	of	debt.
The	investments	in	Ever	2533	Limited,	and	Inspired	Broadcast	Networks	Limited	have	been	included	in	the	Company’s	balance	sheet	at	their	 fair	value	at	the	date	of	acquisition.
Analysis	of	the	acquisition	of	Ever	2533	Limited	and	Inspired	Broadcast	Networks	Limited:
	 	 	 	 	 	 	 Book		 r evaluation	 Fair	value
	 	 	 	 	 	 	 value	 adjustments	 	to	Group
n et	liabilities	at	the	date	of	acquisition	were	as	follows:	 	 	 	 	 £’000	 £’000	 £’000
Intangible	fixed	assets	 	 	 	 	 	 	 3,780	 –	 3,780
Tangible	fixed	assets	 	 	 	 	 	 	 103,993	 –	 103,993
Investments	 	 	 	 	 	 	 567	 –	 567
Stocks	 	 	 	 	 	 	 5,968	 –	 5,968
Debtors	 	 	 	 	 	 	 68,261	 13,176	 81,437
Cash		 	 	 	 	 	 	 31,815	 (19,504)	 12,311
Creditors	due	within	one	year	 	 	 	 	 	 	 (80,188)	 –	 (80,188)
Creditors	due	in	greater	than	one	year	 	 	 	 	 	 (139,524)	 –	 (139,524)
Provisions		 	 	 	 	 	 	 (201)	 (494)	 (695)
Pensions	 	 	 	 	 	 	 (6,409)	 –	 (6,409)
Net	liabilities	 	 	 	 	 	 	 (11,938)	 (6,822)	 (18,760)
	 	 	 	 	 Goodwill	arising	on	acquisition	 	 	 	 	 	 	 	 88,622
	 	 	 	 	 	 	 	 	 69,862
Discharged	by:	 	 	 Cash	consideration	 	 	 	 	 	 	 42,220	 (19,504)	 22,716
Shares	issued	(including	£2.0m	of	cash	proceeds	from	the	sale	of	1,111,111	shares)	 	 	 6,999	 –	 6,999
Assumption	of	debts	 	 	 	 	 	 	 40,127	 –	 40,127
Costs	associated	with	the	acquisition	 	 	 	 	 	 20	 –	 20
	 	 	 	 	 	 	 89,366	 (19,504)	 69,862
	 A	fair	value	exercise	was	completed	following	the	acquisition	of	the	businesses.	The	fair	value	of	the	assets	and	liabilities	acquired	have	been	 reflected	in	these	financial	statements.
The	following	fair	value	adjustments	have	been	made:
Reassessment	of	the	deferred	tax	asset;
Adjustment	to	cash	and	consideration	paid	as	a	result	of	the	fact	that	£19,504,000	of	the	cash	consideration	paid	for	Inspired	Broadcast	 Networks	Limited	was	effectively	re-acquired	as	part	of	the	acquisition	of	Ever	2533	Limited	(this	company	having	previously	been	Inspired	 Broadcast	Networks	Limited’s	ultimate	parent	company);	and	 Provision	has	been	made	for	exit	costs	on	property	committed	to	be	exited	in	2007,	for	dilapidations	inherent	at	the	date	of	acquisition.	 In	accordance	with	FRS	7	‘Fair	value	in	acquisition	accounting’,	the	fair	values	set	out	above	represent	provisional	evaluations.	It	is	the	director’s	 intention	to	monitor	these	fair	values	during	the	next	financial	period	and	to	make	any	required	adjustments	in	the	2007	financial	statements.	 •
•
•
Notes	 to	 the	 Financial	 Statements	 continued 	 40 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 41
11	 Investments	continued
Ever	2533	Limited,	Inspired	Broadcast	Networks	Limited	and	their	subsidiaries	earned	a	profit	after	tax	of	£1,098,000	for	the	52	weeks	ended	 24	September	2005.	The	summarised	profit	and	loss	account	for	the	period	from	25	September	2005	to	2	June	2006	is	as	follows:
	 	 	 	 	 	 	 	 	 £’000
Turnover	 	 	 	 	 	 	 	 	 113,150
EBITdA	before	exceptional	items	 	 	 	 	 	 	 	 10,949
Operating	profit	before	goodwill	amortisation	and	exceptional	items		 	 	 	 	 	 8,410
Operating	profit	 	 	 	 	 	 	 	 	 84
Net	interest	payable	 	 	 	 	 	 	 	 	 (13,873)
Loss	before	taxation	 	 	 	 	 	 	 	 	 (13,789)
Taxation	 	 	 	 	 	 	 	 	 7,953
Loss	for	the	36	weeks	ended	2	June	2006	 	 	 	 	 	 	 	 (5,836)
a cquisition	of	r ed	Vision	Limited	and	its	s ubsidiaries
On	8	June	2006	the	Group	acquired	Red	Vision	Limited	and	its	subsidiaries,	for	an	initial	consideration	of	£3,300,000,	satisfied	by	the	issue	of	 £419,100	loan	notes	and	£2,880,900	cash	consideration,	and	a	deferred	consideration	of	up	to	£16,700,000.
	 	 	 	 	 	 	 	 	 Book	value 	 	 	 	 	 	 	 	 	 	 and	provisional 	 	 	 	 	 	 	 	 	 	 fair	value 	 	 	 	 	 	 	 	 	 	 to	Group 	 n et	assets	at	date	of	acquisition	were	as	follows:	 	 	 	 	 	 	 	 £’000
Tangible	fixed	assets	 	 	 	 	 	 	 	 	 191
Stocks	 	 	 	 	 	 	 	 	 37
Debtors	 	 	 	 	 	 	 	 	 315
Cash		 	 	 	 	 	 	 	 	 145
Creditors	due	within	one	year	 	 	 	 	 	 	 	 	 (341)
Creditors	due	in	greater	than	one	year	 	 	 	 	 	 	 	 (26)
Net	assets	 	 	 	 	 	 	 	 	 321
Goodwill	arising	on	acquisition	 	 	 	 	 	 	 	 17,474
	 	 	 	 	 	 	 	 	 17,795
Discharged	by:	 	 	 Cash	consideration	 	 	 	 	 	 	 	 	 2,881
Loan	notes	 	 	 	 	 	 	 	 	 419
Deferred	consideration	 	 	 	 	 	 	 	 	 16,700
Discounting	of	deferred	consideration	 	 	 	 	 	 	 	 (2,636)
Costs	associated	with	the	acquisition	 	 	 	 	 	 	 	 431
	 	 	 	 	 	 	 	 	 17,795
Deferred	consideration	has	been	discounted	over	the	earn-out	period	based	upon	the	Group’s	weighted	average	cost	of	capital. 	 42 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 43
11	 Investments	continued
Red	Vision	Limited	and	its	subsidiaries	earned	a	profit	after	tax	of	£75,000	for	its	nine	month	period	ended	30	September	2005.	The	 summarised	profit	and	loss	account	for	the	period	from	1	October	2005	to	the	effective	date	of	acquisition	is	as	follows:
	 	 	 	 	 	 	 	 	 £’000
Turnover	 	 	 	 	 	 	 	 	 1,927
Total	profit	before	interest	and	tax	 	 	 	 	 	 	 	 387
Net	interest	payable	 	 	 	 	 	 	 	 	 (11)
Profit	before	taxation	 	 	 	 	 	 	 	 	 376
Taxation	 	 	 	 	 	 	 	 	 (113)
Profit	for	the	37	weeks	ended	8	June	2006	 	 	 	 	 	 	 	 263
	 	 There	were	no	recognised	gains	and	losses	in	the	37	weeks	ended	8	June	2006	other	than	the	profit	of	£263,000	above.	 12	 s tocks
	 a t	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Raw	materials,	consumables	and	trial	machines	 	 	 	 	 	 	 4,591
Work	in	progress	 	 	 	 	 	 	 	 	 154
Finished	goods	 	 	 	 	 	 	 	 	 360
	 	 	 	 	 	 	 	 	 5,105
The	replacement	cost	of	stocks	is	not	materially	different	to	the	value	at	which	they	were	stated	in	the	financial	statements.	The	Company	has	 no	stocks	as	at	30	September	2006.
13	 d ebtors
	 a t	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group	 Company 	 	 	 	 	 	 	 	 	 £’000	 £’000
Trade	debtors	 	 	 	 	 	 	 	 28,215	 –
Amounts	owed	by	Group	undertakings	 	 	 	 	 	 	 –	 181,956
Corporate	tax	 	 	 	 	 	 	 	 –	 237
Other	debtors	 	 	 	 	 	 	 	 2,732	 101
Deferred	tax	 	 	 	 	 	 	 	 14,490	 970
Prepayments	and	accrued	income	 	 	 	 	 	 	 2,941	 238
	 	 	 	 	 	 	 	 48,378	 183,502
All	Group	debtors,	other	than	the	deferred	tax	asset,	represent	amounts	recoverable	within	one	year.
Amounts	owed	by	group	undertakings	carry	interest	at	the	Group’s	weighted	average	cost	of	capital	and	are	repayable	on	demand.
d eferred	tax
Provided	 The	movement	in	deferred	tax	during	the	period	is	as	follows:
	 	 	 	 	 	 	 	 	 £’000
At 3 May 2006	 	 	 	 	 	 	 	 	 –
Acquisition	of	business	assets	 	(note	11)	 	 	 	 	 	 	 	 14,492
Debited	to	profit	and	loss	account	in	the	period	(note	7)	 	 	 	 	 	 	 (2)
At 30 September 2006	 	 	 	 	 	 	 	 	 14,490
Notes	 to	 the	 Financial	 Statements	 continued 	 42 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 43
13	 d ebtors	continued
The	deferred	tax	asset,	which	is	recoverable	after	more	than	one	year,	comprises:
	 	 	 	 	 	 provided	 u nprovided	 provided	 u nprovided	 	 	 	 	 	 	 Group	 Group	 Company	 Company 	 	 	 	 	 	 	 £’000	 £’000	 £’000	 £’000
Excess	of	capital	allowances	over	depreciation	 	 	 	 12,636	 –	 –	 –
Short-term	timing	differences		 	 	 	 	 970	 –	 970	 –
Losses	 	 	 	 	 	 884	 –	 –	 –
Deferred	tax	asset	included	within	current	assets	 	 	 	 14,490	 –	 970	 –
Deferred	tax	asset	included	within	net	pension	liability	(note	24)	 	 	 –	 1,971	 –	 –
Total deferred tax asset 	 	 	 	 	 14,490	 1,971	 970	 –
	 14	 Cash
	 a t	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group	 Company 	 	 	 	 	 	 	 	 	 £’000	 £’000
Cash	at	bank	and	in	hand	 	 	 	 	 	 	 	 11,490	 296
Cash	in	escrow	 	 	 	 	 	 	 	 1,797	 –
Machine	floats	 	 	 	 	 	 	 	 1,867	 –
	 	 	 	 	 	 	 	 15,154	 296
Cash	in	escrow	includes	guarantees	given	in	respect	of	G.Matica	S.r.l.	of	£1,378,000	at	30	September	2006,	and	£419,000	in	respect	of	cash	to	 be	paid	to	settle	2011	loan	notes	(note	11).	 15	 Creditors:	a mounts	Falling	d ue	Within	o ne	Year
	 a t	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group	 Company 	 	 	 	 	 	 	 	 	 £’000	 £’000
Bank	loans	 	 	 	 	 	 	 	 2,000	 2,000
Trade	creditors	 	 	 	 	 	 	 	 22,850	 –
Corporate	taxation	 	 	 	 	 	 	 	 11	 –
Other	taxation	and	social	security	 	 	 	 	 	 	 6,297	 –
Accrued	charges	and	deferred	income	 	 	 	 	 	 	 18,865	 399
Finance	leases	 	 	 	 	 	 	 	 77	 –
Other	creditors		 	 	 	 	 	 	 	 7,228	 15
	 	 	 	 	 	 	 	 57,328	 2,414
Bank	loans	above	include	£325,000	of	debt	issue	costs	capitalised.
16	 Creditors:	a mounts	Falling	d ue	a fter	m ore	t han	o ne	Year
	 a t	30	s eptember	2006
	 	 	 	 	 	 	 	 	 Group	 Company 	 	 	 	 	 	 	 	 	 £’000	 £’000
Bank	loans	 	 	 	 	 	 	 	 84,812	 84,812
Amounts	owed	to	Group	undertakings	 	 	 	 	 	 	 –	 44,755
Finance	leases	 	 	 	 	 	 	 	 73	 –
Accrued	charges	and	deferred	income	 	 	 	 	 	 	 18	 –
2011	Loan	notes	 	 	 	 	 	 	 	 419	 –
Deferred	consideration	 	 	 	 	 	 	 	 14,064	 –
	 	 	 	 	 	 	 	 99,386	 129,567
Bank	loans	above	include	£2,063,000	of	debt	issue	costs	capitalised.
The	2011	Loan	notes	and	deferred	consideration	creditor	arose	as	a	result	of	the	acquisition	of	Red	Vision	Limited	and	its	subsidiaries	(note	11). 	 44 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 45
17	 Loans	 Amounts	are	repayable	as	follows:
	 a t	30	s eptember	2006	 	 	 	 	 	 	 	 	 	 	 Group	 Company 	 	 	 	 	 	 	 	 	 £’000	 £’000
Amounts	payable:	 	 	 Within	one	year	 	 	 	 	 	 	 	 2,325	 2,325
Between	one	and	two	years	 	 	 	 	 	 	 	 3,487	 3,487
Between	two	and	five	years	 	 	 	 	 	 	 	 18,275	 18,275
After	five	years	 	 	 	 	 	 	 	 65,113	 65,113
	 	 	 	 	 	 	 	 89,200	 89,200
security
The	bank	loans	are	secured	by	fixed	and	floating	charges	over	all	the	property	and	assets	of	the	Company	and	its	subsidiary	undertakings.
The	loans	acquired	on	acquisition	of	the	businesses	of	£160,742,000	were	immediately	repaid	and	new	facilities	were	drawn	down	as	set	out	in	 note	18.	 On	2	June	2006	and	immediately	following	the	Company’s	admission	to	AIM,	a	refinancing	of	the	Group	was	completed.	In	total,	£2,865,000	of	 directly	attributable	issue	and	other	finance	costs	were	incurred,	of	which	£381,000	were	charged	as	an	exceptional	interest	cost	(note	3),	 £2,484,000	were	capitalised	within	the	underlying	loan	balances,	of	which	£96,000	has	been	amortised	during	2006.	 18	 Financial	Instruments
t reasury	r isk	m anagement
The	objectives	of	the	Treasury	function	are	to	protect	the	assets	of	the	Group	and	to	identify	and	then	manage	financial	risk.
Medium	and	long-term	borrowing	requirements	are	met	through	syndicated	Senior	debt	facilities.	Short-term	borrowing	requirements	are	met	 through	a	revolving	credit	facility.	 The	principal	risk	facing	the	Group	is	an	exposure	to	interest	rate	fluctuations.	The	Group	is	not	exposed	to	significant	foreign	exchange	risk,	as	 most	purchases	and	sales	receipts	are	invoiced	in	Sterling.	These	risks	are	described	below:
Interest	r ate	r isk
The	Group	finances	its	operations	through	a	mixture	of	retained	profits	and	bank	borrowings.	The	Group	borrows	at	floating	rates	and	its	 policy	is	to	manage	its	exposure	to	interest	rate	fluctuations	by	fixed	rate	hedges	on	its	borrowing	facility.	 Currency	r isk
The	Group	usually	buys	currency	at	spot	rate,	however,	the	Group	recognises	that	its	currency	exposure	may	increase	in	the	future	due	to	the	 growth	in	overseas	sales,	and	as	more	production	is	outsourced	to	overseas	suppliers.	The	Group	will	look	to	minimise	any	increased	exposure	 to	foreign	exchange	fluctuations	through	the	use	of	currency	instruments	if	appropriate.	Currently	the	Group	holds	small	amounts	of	foreign	 currency	to	settle	monthly	trading	transactions
Liquidity	r isk
The	Group	policy	is	to	ensure	that	it	has	committed	borrowing	facilities	in	place	in	excess	of	its	peak	gross	borrowings.	The	Group	refinanced	 its	operations	at	the	time	of	the	flotation,	which	has	ensured	that	the	Group	has	sufficient	borrowing	facilities	in	place	for	at	least	the	next	 	 twelve	months.
short-t erm	d ebtors	and	Creditors
Short-term	debtors	and	creditors	have	been	excluded	from	all	the	following	disclosures,	other	than	the	currency	risk	disclosures.
Interest	r ate	r isk	p rofile	of	Financial	a ssets	and	Liabilities
The	interest	rate	risk	profile	of	the	Group’s	financial	assets	and	liabilities	for	the	period	end	were:
Financial	Liabilities
	 	 	 	 	 	 	 	 	 Financial 	 	 	 	 	 	 	 	 Floating		 Fixed	 liabilities 	 	 	 	 	 	 	 	 rate		 rate	 on	which 	 	 	 	 	 	 	 	 financial		 financial	 no	interest 	 	 	 	 	 	 	 t otal	 liabilities	 liabilities	 is	paid 	 Currency	 	 	 	 	 	 £’000	 £’000	 £’000	 	£’000
Sterling	at	30	September	2006	 	 	 	 	 106,442	 89,619	 150	 16,673
Following	the	period	end,	the	Group	has	entered	into	interest	rate	swaps	which	converted	£75,000,000	of	floating	rate	debt	to	fixed	rate.
Notes	 to	 the	 Financial	 Statements	 continued 	 44 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 45
18	 Financial	Instruments	 continued
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Bank loans 
Tranche	A	term	loan	was	drawn	down	on	2	June	2006	and	is	repayable	by	instalments.	 	 The	instalments	vary	over	the	life	of	the	loan	but	result	in	full	repayment	by	June	2013.	 	 Interest	is	payable	at	2.00%	(plus	mandatory	costs)	over	LIBOR.	 	 	 	 	 	 31,000
Tranche	B	term	loan	was	drawn	down	on	2	June	2006	and	is	repayable	in	June	2014.	 	 Interest	is	payable	at	3.00%	(plus	mandatory	costs)	over	LIBOR.	 	 	 	 	 	 27,500
Tranche	C	term	loan	was	drawn	down	on	2	June	2006	and	is	repayable	in	June	2015.	 	 Interest	is	payable	at	3.00%	(plus	mandatory	costs)	over	LIBOR.	 	 	 	 	 	 27,500
Tranche	D	(acquisition	facility)	was	drawn	down	on	8	June	2006	and	is	repayable	by	instalments.	 	 The	instalments	vary	over	the	life	of	the	loan	but	result	in	full	repayment	by	June	2013.	 	 Interest	is	payable	at	2.00%	(plus	mandatory	costs)	over	LIBOR.		 	 	 	 	 	 3,200
Other loans
2011	Loan	notes.	Interest	is	payable	at	the	lower	of	1.50%	over	LIBOR	and	the	rate	obtainable	if	 	 an	equivalent	value	is	invested	at	Barclays	Bank.	 	 	 	 	 	 	 419
	 	 	 	 	 	 	 	 	 89,619
Less:	directly	attributable	issue	and	other	finance	costs	 	 	 	 	 	 	 (2,388)
	 	 	 	 	 	 	 	 	 87,231
	 Interest	r ate	r isk	of	Financial	a ssets
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
	 	 	 	 	 	 	 	 Cash	at 	 	 	 	 	 	 	 	 		 bank	and	 Cash	in 	 	 	 	 	 	 	 	 Investments	 in	hand	 	escrow
Sterling	 	 	 	 	 	 	 53	 13,261	 419
Euro	 	 	 	 	 	 	 713	 96	 1,378
t otal	 	 	 	 	 	 	 766	 13,357	 1,797
The	above	cash	balances	attract	floating	rates	of	interest	based	on	relevant	national	LIBOR	equivalents	and	are	placed	with	banks.	 maturity	of	Financial	Liabilities	and	Borrowing	Facilities
The	maturity	profile	of	the	financial	liabilities	and	borrowings,	other	than	short-term	trade	creditors	and	accruals,	is	shown	below:
	 	 	 	 	 	 	 	 	 o ther	 	 	 	 	 	 	 Gross		 Finance	 financial 	 	 	 	 	 	 	 borrowings	 leases	 liabilities	 t otal	 	 	 	 	 	 	 £’000	 £’000	 £’000	 £’000
Within	one	year,	or	on	demand	 	 	 	 	 2,325	 77	 2,609	 5,011
Between	one	and	two	years	 	 	 	 	 	 3,487	 34	 –	 3,521
Between	two	and	five	years	 	 	 	 	 	 18,275	 39	 14,064	 32,378
Over	five	years	 	 	 	 	 	 65,532	 –	 –	 65,532
At 30 September 2006	 	 	 	 	 	 89,619	 150	 16,673	 106,442
	 	 46 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 47
18	 Financial	Instruments	 continued
Borrowing	Facilities
The	Group	had	the	following	undrawn	borrowing	facilities	available	at	the	period	end	in	respect	of	which	all	conditions	precedent	had	been	met	 at	that	date:
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Expiring	in	greater	than	one	year:	 	 	 Acquisition	facility	 	 	 	 	 	 	 	 	 11,800
Revolving	credit	facility	 	 	 	 	 	 	 	 	 15,000
Fair	Values	of	Financial	a ssets	and	Financial	Liabilities
The	following	table	provides	a	comparison	by	category	of	the	carrying	value	amounts	and	the	fair	value	amounts	of	the	Group’s	financial	assets	 and	financial	liabilities	at	30	September	2006.	Fair	value	is	the	amount	at	which	a	financial	instrument	could	be	exchanged	in	an	arm’s	length	 transaction	between	informed	and	willing	parties,	other	than	a	forced	or	liquidation	sale	and	excludes	accrued	interest.	Where	available,	market	 values	have	been	used	to	determine	fair	values.	Where	market	values	are	not	available,	fair	values	have	been	calculated	by	discounting	expected	 cash	flows	at	prevailing	interest	rates.	Set	out	below	the	table	is	a	summary	of	the	methods	and	assumptions	used	for	each	category	of	financial	 instrument.	 	 a s	at	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Book	 Fair	 	 	 	 	 	 	 	 	 value	 value 	 primary	financial	instruments	held	or	issued	to	finance	the	Group’s	operations	 	 	 	 	 £’000	 £’000
Bank	loans	 	 	 	 	 	 	 	 (89,200)	 (89,200)
Other	loans	 	 	 	 	 	 	 	 (419)	 (419)
Finance	leases	 	 	 	 	 	 	 	 (150)	 (150)
Accruals	due	in	greater	than	one	year	 	 	 	 	 	 	 (14,082)	 (14,082)
Provisions	 	 	 	 	 	 	 	 (2,591)	 (2,591)
Investments	 	 	 	 	 	 	 	 766	 766
Cash	at	bank	and	in	hand	 	 	 	 	 	 	 	 11,490	 11,490
Cash	in	escrow	 	 	 	 	 	 	 	 1,797	 1,797
Cash	in	machines	 	 	 	 	 	 	 	 1,867	 1,867
Total	 	 	 	 	 	 	 	 (90,522)	 (90,522)
	 summary	of	m ethods	and	a ssumptions
Borrowings,	Finance	Leases	and	Cash
In	the	case	of	bank	loans	and	finance	leases,	the	fair	value	approximates	to	the	carrying	value	reported	in	the	consolidated	balance	sheet	as	all	 balances	are	at	floating	rate	where	payments	are	reset	to	market	rates	at	intervals	of	less	than	one	year.	 Accruals	due	in	greater	than	one	year
As	accruals	are	discounted	based	upon	the	Group’s	weighted	average	cost	of	capital,	book	values	are	considered	to	equate	to	fair	values.
Provisions
Provisions	are	subject	to	ongoing	reassessment	and	are	as	such	deemed	to	be	at	fair	value.
Investments
In	the	opinion	of	the	Directors,	the	fair	value	of	investments	equates	to	the	book	value	that	the	assets	are	carried	at	on	30	September	2006.
Notes	 to	 the	 Financial	 Statements	 continued 	 46 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 47
18	 Financial	instruments	 continued
Currency	e xposures
The	tables	below	show	the	extent	to	which	Group	companies	have	monetary	assets	and	liabilities	in	currencies	other	than	the	Group’s	 functional	currency.	Foreign	exchange	differences	on	retranslation	of	these	assets	and	liabilities	are	taken	to	the	consolidated	profit	and	loss	 account	of	the	Group.
n et	Foreign	Currency	m onetary	a ssets
	 	 	 	 	 	 	 sterling	 euro	 t otal	 	 	 	 	 	 	 	 £’000	 £’000	 £’000
Functional currency of Group operation
Sterling	 	 	 	 	 	 	 –	 1,408	 1,408
Euro	 	 	 	 	 	 	 –	 66	 66
Total at 30 September 2006	 	 	 	 	 	 –	 1,474	 1,474
Hedges
The	Group’s	policy	is	to	hedge	interest	rate	risk	exposures	using	interest	rate	swaps	and	options.	Although	there	were	no	hedges	in	place	at	 	 30	September	2006,	following	the	period	end,	the	Group	has	entered	into	interest	rate	swaps	which	converted	£75,000,000	of	floating	rate	 debt	to	fixed	rate.	 	 19	 p rovisions	for	Liabilities	and	Charges
	 	 	 	 	 	 	 o nerous	 	 	 	 	 	 	 	 	 lease	 	 	 	 	 	 	 	 	 costs	and		 Group 	 	 	 	 	 	 	 	 dilapidations	 restructuring	 Group 	 	 	 	 	 	 	 	 £’000	 £’000	 £’000
At	3	May	2006	 	 	 	 	 	 	 –	 –	 –
Acquisition	of	business	liabilities	(note	11)	 	 	 	 	 	 695	 –	 695
Charged	in	the	period	 	 	 	 	 	 	 6	 1,890	 1,896
At 30 September 2006	 	 	 	 	 	 	 701	 1,890	 2,591
The	Group	has	a	number	of	vacant	and	sub-let	properties.	Provisions	represent	costs	expected	to	be	borne	in	respect	of	lease	rentals	and	 dilapidation	costs.	The	Directors	anticipate	that	the	provisions	will	be	utilised	over	the	years	to	2012.
Provisions	for	Group	restructuring	are	discussed	in	note	3.	The	Directors	anticipate	the	provision	to	be	substantially	utilised	within	one	year.	 	 20	 s hare	Capital	 a uthorised	s hare	Capital
The	authorised	share	capital	of	the	Company	on	incorporation	was	£1,000	of	£1	ordinary	shares,	this	was	increased	to	£50,000	on	16	May	 2006	by	the	creation	of	49,000	further	ordinary	shares	of	£1	each.	On	24	May	this	was	sub-divided	into	50,000	ordinary	shares	of	1p	each	and	 4,950,000	convertible	deferred	shares	of	1p	each.	Also	on	24	May,	the	authorised	share	capital	of	the	Company	was	increased	to	£1,000,000	 divided	into	95,050,000	ordinary	shares	of	1p	each	and	the	4,950,000	of	convertible	deferred	shares	of	1p	each.	 	 48 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 49
20	 s hare	Capital	 continued
Issued	s hare	Capital	 	 	 	 	 	 	 	 d eferred	 	 t otal	 	 	 	 	 	 o rdinary	shares		 n ominal	 shares	of	 n ominal	 nominal 	 	 	 	 	 	 of	1	pence	each	 value	£	 1 	pence	each
1
	 value	£	 value	£
On	incorporation	 	 	 	 	 50,000	 500	 4,950,000	 49,500	 50,000
Placement	on	2	June	2006	(issued	at	£1.80	per	share)	 	 	 60,000,000	 600,000	 –	 –	 600,000
Purchase	of	Ever	2533	(issued	at	£1.80	per	share)	 	 	 1,111,111	 11,111	 –	 –	 11,111
Purchase	of	IBN	minority	(issued	at	£1.80	per	share)	 	 	 2,777,777	 27,778	 –	 –	 27,778
At 30 September 2006	 	 	 	 	 63,938,888	 639,389	 4,950,000	 49,500	 688,889
1
	 	 	 Deferred	shares	have	no	voting	or	dividend	rights.	N	V	Crowley	holds	4,949,901	deferred	shares	of	1p	each	which	were	created	at	the	time	the	company	re-registered	as	a 	 public	limited	company	in	May	2006	and	the	company’s	authorised	share	capital	was	increased	to	£50,000	of	which	N	V	Crowley	held	49,999	ordinary	shares	of	£1	each.	Each 	 ordinary	share	of	£1	was	subsequently	subdivided	into	one	ordinary	share	of	1p	each	and	99	deferred	shares	of	1p	each.	The	conversion	rights	relating	to	N	V	Crowley’s	deferred 	 shares	are	set	out	in	the	Directors’	Report.	Any	unconverted	deferred	shares	which	are	not,	or	are	no	longer,	the	subject	of	an	option	grant,	are	non-transferable	and	will	be	 cancelled	in	due	course.
share-Based	p ayments
Following	its	listing,	the	Company	granted	share	options	for	the	first	time	under	the	2006	Share	Option	Plan	to	Executive	Directors	and	senior	 employees.	The	award	had	a	nil	exercise	price,	and	was	split	into	six	tranches	on	the	terms	set	out	below:
	 n umber	of	o rdinary	 exercise	 shares	subject	 of	conversion	 performance	 to	r ights	 period	 conditions
First	t ranche
1,598,472	 Post	announcement	of		 The	pre-exceptional	EBITA	for	the	financial	
	 Company’s	results	for	the	period	ending		 year	ending	September	2006	is	equal	to	or 	 	 September	2006	to	the	tenth	anniversary	grant.	 	exceeds	90	per	cent	of	the	target	pre-exceptional	EBITA 	 	 	 set	by	the	Remuneration	Committee.	 second	t ranche
1,464,200	 Post	announcement	of	Company’s	results		 The	EPS	for	the	financial	year	ending	September	2007	is	equal 	 	 for	the	period	ending	September	2007	 to	or	exceeds	90	per	cent	of	the	target	EPS	set	by	the	 	 	 to	the	tenth	anniversary	of	grant.	 Remuneration	Committee.
t hird	t ranche
3,062,673	 Post	announcement	of	Company’s	results	 The	EPS	for	the	financial	year	ending	September	2008 	 	 for	the	period	ending	September	2008	to		 is	equal	to	or	exceeds	90	per	cent	of	the	target 	 	 the	tenth	anniversary	of	grant.	 EPS	set	by	the	Remuneration	Committee.
Fourth	t ranche
1,464,200	 Post	the	date	of	Admission	until	30	days	post	the		 The	total	return	to	shareholders	from	the	date	of	grant 	 	 publication	of	the	Company’s	results	for	the		 (being	the	share	price	appreciation	plus	dividends	and	taking	account 	 	 period	ending	September	2010.	 	of	any	share	capital	reorganisations,	splits	or	buy-backs)	to	equal	or		 	 	 exceed	100	per	cent	for	a	period	of	30	consecutive	days.
Fifth	t ranche
3,062,673	 Post	the	date	of	Admission	until	30	days	post	the		 The	total	return	to	shareholders	from	the	date	of	grant	 	 	 publication	of	the	Company’s	results	for	the	 (being	the	share	price	appreciation	plus	dividends	and	taking	account 	 	 period	ending	September	2010.	 of	any	share	capital	reorganisations,	splits	or	buy-backs)	to	equal	or 	 	 	 exceed	200	per	cent	for	a	period	of	30	consecutive	days.
sixth	t ranche
1,464,200	 Post	the	date	of	Admission	until	30	days	post		 The	total	return	to	shareholders	from	the	date	of	grant 	 	 the	publication	of	the	Company’s	results	for		 	(being	the	share	price	appreciation	plus	dividends	and	taking	account 	 	 the	period	ending	September	2010.	 of	any	share	capital	reorganisations,	splits	or	buy-backs)	to	equal	or	 	 	 	 exceed	300	per	cent	for	a	period	of	30	consecutive	days.
Notes	 to	 the	 Financial	 Statements	 continued 	 48 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 49
20	 s hare	Capital	 continued
share-Based	p ayments	 continued
The	documented	performance	criteria	as	set	out	in	the	Group’s	AIM	Admission	Document	in	respect	of	tranches	4	to	6	of	the	Company	Share	 Option	Plan	were	misstated	as	200%,	300%	and	400%	respectively	compared	to	the	intended	performance	criteria	set	out	above.	The	period	 charge	is	therefore	based	on	the	intended	performance	criteria.
No	shares	vested	or	were	forfeited	in	the	period,	and	no	further	awards	were	made,	subsequent	to	those	set	out	in	the	Directors’	Report.
In	accordance	with	the	provisions	of	FRS	20	‘Share-based	payments’,	the	Group	has	recognised	a	total	expense	of	£3,233,000	in	respect	 	 of	this	grant.	 The	fair	values	and	the	assumptions	used	are	shown	in	the	table	below.	For	tranches	1	to	3,	the	performance	conditions	are	non-market-based	 and	the	fair	value	is	the	share	price	at	grant	less	dividends	foregone.	As	tranches	4	to	6	have	market-based	performance	criteria,	a	Monte	Carlo	 model	has	been	used	to	calculate	fair	values,	incorporating	expectations	of	share	price	volatility	based	on	data	for	comparable	companies.	 Dividend	assumptions	are	based	on	the	Company’s	intention	to	pay	its	first	dividend	for	the	2007	financial	year.
	 	 	 	 	 t ranche	1	 t ranche	2	 t ranche	3	 t ranche	4	 t ranche	5	 t ranche	6
Fair	value	–	pence	 	 	 	 180p	 180p	 172p	 101p	 62p	 40p
	 	 	 	 	 	 Volatility	 	 	 	 n/a	 n/a	 n/a	 40%	 40%	 40%
Expected	vesting	period	–	years	 	 	 0.62	 1.62	 2.62	 2.21	 2.86	 3.21
Risk	free	interest	rate	 	 	 	 4.7%	 4.7%	 4.7%	 4.7%	 4.7%	 4.7%
	 	 	 	 	 	 An	employee	trust	has	been	established	to	facilitate	the	holding	of	shares	for	employee	share	schemes.	During	the	period	no	share	transactions	 had	taken	place	with	the	employee	trust.
21	 m ovements	on	r eserves
	 	 	 	 	 	 	 share	 profit	 t otal
	 	 	 	 	 	 share	 premium	 and	loss	 shareholders’ 	 	 	 	 	 	 	 capital	 account	 account	 funds
	 	 	 	 	 	 £’000	 £’000	 £’000	 £’000
Group
As	at	3	May	2006	 	 	 	 	 	 –	 –	 –	 –
Loss	for	the	financial	period	 	 	 	 	 	 –	 –	 (2,059)	 (2,059)
Credit	associated	with	issue	of	share	options	 	 	 	 –	 –	 3,233	 3,233
Actuarial	loss	on	pension	scheme	 	 	 	 	 –	 –	 (296)	 (296)
Issue	of	shares	 	 	 	 	 	 689	 114,361	 –	 115,050
Costs	associated	with	the	issue	of	shares	 	 	 	 	 –	 (6,250)	 –	 (6,250)
At 30 September 2006	 	 	 	 	 	 689	 108,111	 878	 109,678
Company
As	at	3	May	2006	 	 	 	 	 	 –	 –	 –	 –
Loss	for	the	financial	period	 	 	 	 	 	 –	 –	 (2,854)	 (2,854)
Credit	associated	with	issue	of	share	options	 	 	 	 –	 –	 3,233	 3,233
Issue	of	shares	 	 	 	 	 	 689	 114,361	 –	 115,050
Costs	associated	with	the	issue	of	shares	 	 	 	 	 –	 (6,250)	 –	 (6,250)
At 30 September 2006	 	 	 	 	 	 689	 108,111	 379	 109,179
	 	 50 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 51
22	 Contingent	Liabilities	and	Financial	Commitments
(a)	 s ecurity
The	Company	has	a	term	loan	facility,	and	an	undrawn	revolving	credit	facility	at	the	period	end,	which	are	secured	by	a	composite	guarantee	 and	debenture	in	favour	of	GE	Corporate	Finance	Branch	SAS,	London	Branch.	The	facility	is	secured	by	fixed	and	floating	charges	over	the	 Company	and	its	subsidiary	undertakings,	property	and	assets.	 (b)	 o perating	Leases
At	30	September	2006,	the	Group	had	annual	commitments	under	non-cancellable	operating	leases	as	set	out	below:
	 	 	 Land	and	buildings	 o ther
	 	 	 	 	 	 	 	 Group	 Company	 Group	 Company
	 	 	 	 	 	 £’000	 £’000	 £’000	 £’000
Operating	leases	which	expire:	 	 	 	 	 Within	one	year	 	 	 	 	 	 200	 –	 606	 –
In	two	to	five	years	 	 	 	 	 	 681	 –	 2,775	 –
In	over	five	years	 	 	 	 	 	 1,368	 –	 –	 –
	 	 	 	 	 	 2,249	 –	 3,381	 –
	 23	 n otes	to	the	Consolidated	s tatement	of	Cash	Flows	 (a)	r econciliation	of	o perating	p rofit	to	n et	Cash	Inflow	from	o perating	a ctivities
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Operating	profit	 	 	 	 	 	 	 	 	 532
Depreciation	charge	 	 	 	 	 	 	 	 	 18,089
Amortisation	of	intangible	assets	 	 	 	 	 	 	 	 2,230
Difference	between	pension	charge	and	cash	contributions	 	 	 	 	 	 (80)
Non	cash-share	based	payment	charge	 	 	 	 	 	 	 	 3,233
Movement	in	stocks	 	 	 	 	 	 	 	 	 900
Movement	in	debtors	 	 	 	 	 	 	 	 	 (6,511)
Movement	in	creditors	and	provisions	 	 	 	 	 	 	 	 (1,104)
Net cash inflow from operating activities 	 	 	 	 	 	 17,289
(b)	 a nalysis	of	the	Balances	of	Cash	and	n et	d ebt	as	shown	in	the	Balance	s heet
	 	 	 	 	 	 	 	 o ther	 a t	30 	 	 	 	 	 	 a t	3	m ay		 d ebt	 	 non-cash	 september	 	 	 	 	 	 2006	 acquired	 Cash	flow	 movements
1
	 2006 	 Group	 	 	 	 	 £’000	 £’000	 £’000	 £’000	 £’000
Cash	at	bank	and	in	hand	 	 	 	 	 –	 –	 15,154
2
	 –	 15,154
Debt	due	within	one	year	 	 	 	 	 –	 (21,492)	 19,415	 (2)	 (2,079)
Debt	due	after	one	year	 	 	 	 	 –	 (139,473)	 54,903	 (732)	 (85,302)
	 	 	 	 	 –	 (160,965)	 89,472	 (734)	 (72,227)
	 1
	 	 Non-cash	movements	relate	to	amortisation	of	debt	fees,	offset	in	part	by	accrued	fee	costs,	and	the	issue	of	loan	notes	on	the	acquisition	of	Red	Vision	Limited	and	its	subsidiaries.
2
	 	 Includes	£12,456,000	of	cash	acquired	in	the	period	from	acquisitions,	and	£419,000	of	cash	held	in	escrow.
(c)	 m ovement	in	borrowings
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group	 	 	 	 	 	 	 	 	 	 	 £’000
Repayment	of	finance	leases	 	 	 	 	 	 	 	 	 73
Repayment	of	Senior	facility	 	 	 	 	 	 	 	 	 73,363
Repayment	of	Mezzanine	facility	 	 	 	 	 	 	 	 87,379
Drawdown	of	new	facility	 	 	 	 	 	 	 	 	 (89,200)
Net cash inflow	 	 	 	 	 	 	 	 	 71,615
(d)	 Cash	flow	relating	to	exceptional	items
Operating	cash	flows	include	an	outflow	of	£1,659,000	which	relates	to	the	operating	exceptional	items	discussed	in	note	3.
Notes	 to	 the	 Financial	 Statements	 continued 	 50 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 51
23	 n otes	to	the	Consolidated	s tatement	of	Cash	Flows	 continued
(e)	 r econciliation	of	n et	Cash	Flow	to	m ovement	in	n et	d ebt
	 21	weeks	ended	30	s eptember	2006
	 	 	 	 	 	 	 	 	 	 Group	 	 	 	 	 	 	 	 	 	 	 £’000
Increase	in	cash	in	the	period	 	 	 	 	 	 	 	 	 14,735
Increase	in	cash	held	in	escrow	 	 	 	 	 	 	 	 419
Total	movement	in	cash	in	the	period	 	 	 	 	 	 	 	 15,154
Net	debt	acquired	on	acquisition	 	 	 	 	 	 	 	 (160,965)
Repayment	of	old	facilities	 	 	 	 	 	 	 	 	 160,742
Drawdown	of	new	facilities	 	 	 	 	 	 	 	 	 (89,200)
Repayment	of	finance	leases	 	 	 	 	 	 	 	 	 73
Issue	and	other	facility	costs	incurred	on	borrowings	 	 	 	 	 	 	 2,703	
Non	cash	items:	 	 Issue	of	loan	notes	 	 	 	 	 	 	 	 	 (419)
	 Accrual	for	issue	and	other	costs	incurred	on	borrowings	 	 	 	 	 	 	 162
	 Amortisation	of	debt	fees	 	 	 	 	 	 	 	 	 (477)
Movement	in	the	period	 	 	 	 	 	 	 	 	 (72,227)
Opening	net	debt	 	 	 	 	 	 	 	 	 –
Closing net debt	 	 	 	 	 	 	 	 	 (72,227)
24	 p ension	Costs
The	Group	operates	a	combined	scheme	which	comprises	a	Defined	Benefit	Section	and	a	Defined	Contribution	Section.	A	full	actuarial	 valuation	was	carried	out	as	at	31	March	2006	and	updated	to	30	September	2006	by	Punter	Southall	&	Co,	an	independent	qualified	actuary.	 The	disclosures	provided	in	respect	of	the	30	September	valuation	of	the	Defined	Benefit	Section	are	detailed	below.
As	the	Defined	Benefit	Section	is	closed,	it	should	be	noted	that	the	current	service	cost	will	increase	as	the	members	of	the	Scheme	approach	 retirement.
The	main	actuarial	assumptions	used	are	as	follows:
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 %
Rate	of	increase	in	salaries	–	Non-Executives	 	 	 	 	 	 	 3.0
	 	–	Executives	 	 	 	 	 	 	 	 3.0
Rate	of	increase	in	pensions	payment	 	 	 	 	 	 	 	 3.0
Discount	rate	 	 	 	 	 	 	 	 	 5.1
Inflation	assumption	 	 	 	 	 	 	 	 	 3.0
In	respect	of	cash	commutation	the	assumption	applied	is	allowance	for	75%	of	members	expected	to	commute	25%	of	their	pension	for	a	cash	 lump	sum	on	retirement	to	do	so.
The	assets	in	the	scheme	and	the	expected	rate	of	return	were:
	 	 	 	 	 	 	 	 Long-term	 	 	 	 	 	 	 	 	 	 rate	of	return 	 	 	 	 	 	 	 	 	 expected	at	 Value	at 	 	 	 	 	 	 	 	 	 30	s eptember		 30	s eptember	 	 	 	 	 	 	 	 	 2006	 2006 	 Group	 	 	 	 	 	 	 	 %	 £’000
Equities	 	 	 	 	 	 	 	 6.95	 30,836
Bonds	 	 	 	 	 	 	 	 4.55	 12,366
Cash	 	 	 	 	 	 	 	 4.75	 252
	 	 	 	 	 	 	 	 	 43,454
Present	value	of	scheme	liabilities	 	 	 	 	 	 	 	 (50,023)
Deficit	in	the	scheme	 	 	 	 	 	 	 	 	 (6,569)
Related	deferred	tax		 	 	 	 	 	 	 	 	 –
Net pension deficit	 	 	 	 	 	 	 	 	 (6,569) 	 52 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 53
24	 p ension	Costs	 continued
A	deferred	tax	asset	in	relation	to	the	pension	deficit	will	be	recognised	once	the	Directors	consider	recoverability	of	the	asset	to	be	more	 likely	than	not	in	the	imminent	future.
	 	 	 	 	 	 	 	 	 Group 	 	 	 	 	 	 	 	 	 	 £’000
Analysis of amount charged to operating profit in respect of defined benefit schemes
Current	service	 	 	 	 	 	 	 	 	 511
Total operating charge	 	 	 	 	 	 	 	 	 511
Movement in deficit during the period
Opening	position	 	 	 	 	 	 	 	 	 –
Deficit	acquired	on	acquisition	(note	11)	 	 	 	 	 	 	 	 (6,409)
Current	service	cost	 	 	 	 	 	 	 	 	 (511)
Contributions	 	 	 	 	 	 	 	 	 591
Other	finance	income	 	 	 	 	 	 	 	 	 56
Actuarial	loss	 	 	 	 	 	 	 	 	 (296)
Deficit in the scheme at the end of the period 	 	 	 	 	 	 (6,569)
Analysis of amount credited to other finance income in respect of defined benefit schemes
Expected	return	on	pension	scheme	assets	 	 	 	 	 	 	 	 860
Interest	on	pension	scheme	liabilities	 	 	 	 	 	 	 	 (804)
Net return 	 	 	 	 	 	 	 	 	 56
Analysis of amount recognised in consolidated statement of total recognised gains and losses
Actual	return	less	expected	return	on	pension	scheme	 	 	 	 	 	 	 878
Experience	gains	and	losses	arising	on	the	scheme	liabilities	 	 	 	 	 	 (36)
Changes	in	the	assumptions	underlying	the	present	value	of	the	scheme	liabilities	 	 	 	 	 (1,138)
Actuarial loss	 	 	 	 	 	 	 	 	 (296)
History	of	e xperience	Gains	and	Losses
 
Group	 	 	 	 	 	 	 	 	 2006
Difference between the expected and actual return on scheme assets:	 Amount	(£’000)	 	 	 	 	 	 	 	 	 878
Percentage	of	scheme	assets		 	 	 	 	 	 	 	 	 2.0%
Experience gains and losses on scheme liabilities:
Amount	(£’000)	 	 	 	 	 	 	 	 	 (36)
Percentage	of	scheme	liabilities		 	 	 	 	 	 	 	 (0.1%)
Total amount recognised in the consolidated statement of total recognised gains and losses:
Amount	(£’000)	 	 	 	 	 	 	 	 	 (296)
Percentage	of	scheme	liabilities		 	 	 	 	 	 	 	 (0.6%)
Notes	 to	 the	 Financial	 Statements	 continued 	 52 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 53
24	 p ension	Costs	 continued
d efined	Contribution	s cheme
The	pension	charge	for	the	period	represents	contribution	paid	by	the	Group	to	the	scheme	in	respect	of	Group	employees	and	amounted	to	 £226,000.	An	accrual	of	£113,000	existed	in	respect	of	pension	costs	at	30	September	2006.	 	 25	 r elated	p arty	t ransactions
The	Group	had	the	following	transactions	with	other	Group	undertakings	during	the	period:
	 	 	 	 	 	 	 	 profit	and		 d ebtor/	 	 	 	 	 	 	 	 	 loss	account	 (creditor) 	 	 	 	 	 	 	 	 	 £’000	 £’000
The Cloud Networks Limited
Amount	owed	by	The	Cloud	Networks	Limited		 	 	 	 	 	 –	 (3)
G.Matica S.r.l.
Amounts	owed	by	G.Matica	S.r.l.	 	 	 	 	 	 	 182	 283
The	Group	has	taken	advantage	of	the	exemption	under	FRS	8	‘Related	Party	Disclosures’	not	to	disclose	related	party	transactions	between	 companies	which	are	90%	owned	by	the	ultimate	parent	company.	 N	V	Crowley	and	L	L	Alvarez	held	2,525,527	and	1,014,949	respectively	of	the	issued	shares	and	4,206,487	of	share	options	each,	in	Inspired	 Broadcast	Networks	Limited	prior	to	the	acquisition	of	the	company	by	the	Group	on	2	June.	In	total,	this	represented	5.0%	of	the	issued,	and	 14.2%	of	the	diluted	share	capital	of	this	company.	The	consideration	paid	to	N	V	Crowley	and	L	L	Alvarez	by	the	Company	for	these	shares	 was	£2,854,000	and	£2,119,000	respectively. 	 54 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 55
a Im	 	 –		 Alternative	Investment	Market
a Wp		 –		 Amusement	With	Prize
CGI	 	 –		 Computer	Generated	Imagery
Combined	Code 		–		 Combined	Code	of	Corporate	Governance
Companies	a ct	 –	 The	Companies	Act	1985	(as	amended)	 Company	or 	 Inspired		 –		 Inspired	Gaming	Group	plc
eBItda 	 	 –		 	Earnings	before	interest,	tax,	depreciation	 	 and	amortisation
eBIt da 	 –		EBITDA	less	machine	depreciation
Fo Bt	 	 –		 Fixed	Odds	Betting	Terminal
Gmatica		 –		 	G.Matica	S.r.l.	an	Italian	gaming	machine	 concessionary	in	which	the	Group	has	 investment
Group	 	 –		 	The	Company	and	its	subsidiaries	for	the	period	 from	2	June	2006
group	 	 –		 	Ever	2533	Limited,	Inspired	Broadcast	Networks	 Limited	and	their	subsidiaries	for	the	period	from	 25	September	2005	to	30	September	2006	 IBn	 	 –		 Inspired	Broadcast	Networks	Limited
Ipo	 	 –		 Initial	Public	Offering
Definitions	 and	 Glossary	 of	 Terms
Leisure	Link 	 Group		 –		 	Leisure	Link	Holdings	Limited	and	its	subsidiaries	 prior	to	the	purchase	of	the	entire	share	capital	 of	Ever	2533	Limited	and	Inspired	Broadcast	 Networks	Limited	by	Inspired	Gaming	Group	plc
LBo	 	 –		 Licensed	Betting	Office
LLee	 	 –		 Leisure	Link	Electronic	Entertainment	Limited
LLG	 	 –		 Leisure	Link	Group	Limited
o rdinary	shares	 	 –		 	Ordinary	shares	of	1p	each	in	the	capital	of	the	 Company
proforma	 53	week 		 –		 	The	period	of	53	weeks	commencing	on 	 25	September	2005	and	ending	on 	 30	September	2006
sBG		 –		 Server	Based	Gaming
o pen	s BG™	 	 –		 Open	Server	Based	Gaming
sBGss	 	 –		 SBG	Software	and	Services
statutory	p eriod	 	–		 The	period	3	May	2006	to	30	September	2006
sWp	 	 –		Skill	With	Prize
sWop	 	 –		Skill	Without	Prize
VLt	 	 –		Video	Lottery	Terminal 	 54 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006 	 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006	 55
d irectors
R	B	Hoyle	 Executive	Chairman
L	L	Alvarez	 Group	Co-Chief	Executive
N	V	Crowley	 Group	Co-Chief	Executive
J	W	O’Halleran	 Chief	Executive	Officer	UK	and	Ireland
D	Page	 	Chief	Financial	Officer	–	to	22	January	2007
J	B	Paul	 Senior	Non-Executive	Director
D	C	Mace	 Non-Executive	Director
C	H	B	Mills	 Non-Executive	Director
Company	s ecretary
S	Albion
r egistered	o ffice	a ddress
3	The	Maltings
Wetmore	Road
Burton-on-Trent
Staffordshire	DE14	1SE
Company	number
05804323
a uditors
PricewaterhouseCoopers	LLP
Donington	Court
Pegasus	Business	Park
Castle	Donington
East	Midlands	DE74	2UZ
solicitors
Reed	Smith
Minerva	House
5	Montague	Close
London	SE7	9BB
Travers	Smith
10	Snow	Hill
London	EC1A	2AL
Company	 Information	 and	 Professional	 Advisors
n ominated	a dvisor	and	Broker
Evolution	Securities	Limited
100	Wood	Street
London	EC2V	7AN
Financial	a dvisor	to	the	Company
Sphere	Partners	Limited
50	Albemarle	Street
London	W1S	4BD
Financial	p ublic	r elations
Mantra	PR
4th	Floor
121	Great	Portland	Street
London	W1W	6QL
Bank
Royal	Bank	of	Scotland
135	Bishopsgate
London	EC2M	3UR
r egistrars
Capita	Registrars
The	Registry
34	Beckenham	Road
Kent	BR3	4TU 	 56 	 Insp Ired 	 Gam In G	G roup 	p LC	 annua L	 report 	 and 	 a CCounts 	 2006
Notes Insp Ired Gam In G Group p LC annua L report and a CCounts 2006
Inspired Gaming Group plc is the leading provider of Server Based Gaming systems and is the 
pioneer of Open Server Based Gaming (Open SBG™). Its Open SBG™ software platform supports 
an extensive range of content and hardware from third parties. This unprecedented flexiblity enables  
our customers to maximise the benefits of Server Based Gaming through the provision of greater 
choice to their player bases.
In the UK, the Group
1
 has built on its heritage as the largest operator of analogue gaming machines 
by transforming itself into the leading provider of SBG terminals. It currently operates 20,000 digital 
networked terminals including the largest estate of Fixed Odds Betting Terminals and skill with prize 
machines. Key customers include William Hill, Gala Coral Group, J D Wetherspoon and Mitchells & 
Butlers. The Group currently operates over 87,000 machines in the UK in total.
Inspired Gaming Group plc provides Open SBG™ software systems and digital networked terminals 
in eight countries today. Currently over 14,300 terminals located overseas are connected to its 
platform. Key customers include The Coca-Cola Company and Tabcorp.
The Group operates a number of highly regarded brands in the field of machine operation, software 
development, content development and machine design.
Business Highlights 1 
Our Markets 2 
Our Products 3
Chairman’s Statement 4 
Group Co-Chief Executives’ Statement 8
Business and Financial Review 12
Board of Directors 16
Directors’ Report 18
Corporate Governance Report 21
Statement of Directors’ 23 
Responsibilities 
Independent Auditors’ Report 24
Consolidated Profit and Loss Account 25 
Balance Sheets 26
Consolidated Cash Flow Statement 27
Consolidated Statement of T otal Recognised 
Gains and Losses  28
Reconciliation of Movements in Equity 
Shareholders’ Funds  28
Notes to the Financial Statements 29
Definitions and Glossary of T erms  54
Company Information and Professional 
Advisors  55
Insp Ired Gam In G Group p LC annua L report and a CCounts 2006 
1
 Refer to Definitions and Glossary of Terms for an explanation of key terms used in this Annual Report. www.inspiredgaminggroup.com
Inspired Gaming Group plc  Annual Report and Accounts 2006
The Leader in  
Open Server Based Gaming
Inspired Gaming Group plc Annual Report and Accounts 
For the period ended 30 September 2006
3 The Maltings 
Wetmore Road
Burton-on-Trent
Staffordshire
United Kingdom
DE14 1SE
Email: enquiries@inspiredgaminggroup.com
T el: +44 (0)1283 512777
Fax: +44 (0)1283 519200