annual report 2005 talarius annual report 2005
talarius cover artwork 2qxp  7406  218 am  page 1 45 annual report 2005
advisors 
company secretary
sc fadil fcis
rj hillhouse fcis
registered office
20 black friars lane
london
ec4v 6hd
principal solicitors
mayer brown rowe  maw llp
1 1 pilgrim street
london
ec4v 6rw 
joelson wilson  co
70 new cavendish street
london
w1g 8a t
principal bankers
bank of scotland
249 silbury boulevard
milton keynes
mk9 1na
auditors
kpmg audit plc
altius house
one north fourth street
milton keynes
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corporate financial advisers
marwyn capital llp
1 0th floor bucklersbury house
3 queen victoria street
london
ec4n 8el
livingstone guarantee llp
1 5 adam street
london
wc2n 6rj
stockbrokers
numis securities limited
cheapside house
1 38 cheapside
london
ec2v 6lh
registrars
capita registrars
the registry
34 beckenham road
kent
br3 4tu
financial public relations
brunswick group llp
1 6 lincoln’s inn fields
london
wc2a 3ed
general enquiries
t alarius plc 
silbury court 
368 silbury boulevard 
milton keynes
mk9 2af
t el 0 1 908 696 1 00 
fax 0 1 908 393865
group website wwwtalariuscom
investor relations
jonathon glasschris blundell
brunswick group
t el 0207 404 5959
andy hall finance director
t alarius plc
t el 0 1 908 246 1 1 1
nick harding chief executive
t alarius plc
t el 0 1 908 246 1 23
annual report copies
jackie t aylor
t alarius plc
t el 0 1 908 246 1 1 9 
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highlights
the company
t alarius plc comprises two key
gaming brands
quicksilver the uk’s largest chain
of adult gaming centres agcs
currently with 183 sites spread
across the length and breadth 
of the uk
cyberslotz launched in august
2001 a “virtual gaming machine
lounge” and amongst the top ten
most visited online gaming sites 
in the uk 
source branddriver survey june 2005
contents
01 highlights
02 chairman’s statement
06 chief executive’s statement
14 finance review
19 mission statement
22 board of directors
24 corporate governance statement
26 directors’ remuneration report
28 directors’ report
30 independent auditors’ report 
31 consolidated profit and loss account
32 balance sheets
33 consolidated cash flow statement
34 notes to the financial statements
44 notice of annual general meeting
45 advisors  contacts
talarius cover artwork 2qxp  7406  235 pm  page 2 1 annual report 2005
highlights
— placing and admission on aim
4 april 2005 raising £55m 
— further equity raising £30m june 2005
— appointed senior management team 
nick harding chief executive 
andy hall finance director
— successfully pursued strategy to consolidate
fragmented high street gaming market 
three uk acquisitions during the period 
and a fourth post year end
— built marketleading estate 1 0000 owned
and operated gaming machines – largest on
the uk high street – a signiﬁcant
competitive advantage
— successful £9m share placing january 2006
— latest acquisition adds 1 2 bingo lounges
taking total to 2 1 inside existing agc estate
potential for further gaming convergence
— outlook remains positive 2006 to date sales
growth above 9 in previous half
pro forma financial highlights
£m 2005 2004 growth
turnover 496 45 1 up 1 0
operating proﬁt postcentral costs 7 3 60 up 22
ebitda postcentral costs 1 27 1 06 up 20
xta001talariusaw4qxp  7406  216 am  page 1 2 chairman’s statement
sector consolidation the adult gaming
centre “agc” market is populated by
a handful of larger established players
together with many smaller privately run
operations ral was the largest pure agc
business trading under the “quicksilver”
brand and operating from 1 27 high street
sites with over 6000 gaming machines
spread across the uk ral gave us an
excellent base from which to pursue our
consolidation strategy recognising the
increasing interest in interactive online
gaming the management team have
developed a presence in this area through
“cyberslotz” which is making good
progress from a relatively small base
we believe that the agc market is ripe for
consolidation as the next largest players
have only an estimated 1 0 and 6 of 
the market respectively with many smaller
businesses comprising the rest of the
market we believe that further
consolidation opportunities will arise as 
we approach a more tightly regulated
environment the 2005 gambling act is
increasing the burden on many smaller
market competitors leading some to
explore a disposal of their businesses
t alarius with its economies of scale staff
incentivisation programme and tight
controls is able to offer a supportive
framework and the opportunity to integrate
such businesses within a larger group
since 1 june 2005 the team has
completed three further transactions
leisure promotions on 7 july 2005 for
£1 1m blackheath on 7 november 2005
for £20m and post the yearend leisurama
on 2 march 2006 for £1 2m
all of the sites have been or will be 
rebranded as quicksilver by the end
of july 2006 our estate now comprises 
1 83 units with nearly 1 0000 machines
debut on aim on 4 april 2005 t alarius
commenced trading on aim with the
objective of acquiring a well managed
cash generating business in a sector
capable of consolidation where the
board’s city and business experience
could assist in managing the development
of the business as proposed at the time of
the company’s ﬂotation the initial focus
was on the uk high street gaming sector
this culminated in the acquisition of ral
holdings ltd “ral ” on 1 june 2005
which delivered a strong business with an
experienced management team headed
by nick harding who was appointed as
group chief executive
the strategy has been to acquire one
or more businesses that are suitably
positioned to take advantage of growth
opportunities provided by consolidation of
the fragmented high street gaming market
in the uk and europe the directors have
initially focused on the uk because we
believe there is increasing convergence
among the high street gaming segments
this provides opportunities to create
broader integration between gaming
offerings including slot machine lounges
licensed betting shops and bingo clubs
we believe that the development of
gaming machine estates is a key driver
of proﬁtability across these offerings
we also believe there are opportunities
for organic growth through a degree of
green ﬁeld site development 
the board nick harding was appointed
chief executive of t alarius on 1 june 2005
i have known nick and his team for many
years and he has over 25 years of sector
expertise we were also pleased to
welcome andy hall to our board as
finance director andy has over 20 years
of quoted company experience within the
high street retail and leisure sectors on
20 september 2005 ben shaw stepped
down as a nonexecutive director and
mark watts was appointed mark has
extensive commercial and relevant
ﬁnancial experience t ogether with the
property expertise of robert ware one
of our other nonexecutive directors we
have a board with the experience to build
a strong business going forward
david williams chairman
xta001talariusaw4qxp  7406  216 am  page 2 3 annual report 2005
regulation 2005 was a watershed for the
uk gaming sector with the ﬁnal passing of
the gambling act 2005 the debate around
the act dragged on for over three years but
the ﬁnal structure and draft of the act was
acceptable to the vast majority of uk
operators and certainly to those of us
operating in the high street gaming market
some of the larger foreign casino operators
were disappointed that the uk market for
casinos is going to be managed and
regulated more tightly than they anticipated
t alarius has established a compliance
committee that meets regularly and
reviews all new legislation and regulation
in order to amend business strategy and
tactics as appropriate this committee is
chaired by nick harding and includes
andy hall and one of our nonexecutive
directors mark watts
investors will be aware that nick is
currently vice president of the uk coin
operated users trade association bact a
and sits on the committee that liaises
between the government and the gaming
industry he is also a trustee of the
‘responsibility in gambling t rust’ and an
advisor to the problem gambling support
charity gamcare these various positions
enable him to ensure that t alarius is fully
aware of any proposed changes to
regulation in the uk and has an input to the
way the new gambling act is interpreted
and in what form it is ultimately introduced
the ban on smoking in public places
scheduled for introduction in mid2007 
also represents shortterm uncertainty 
for our business however we will have 
an early trial of the ban in the form of the
introduction of a similar ban in scotland
where we have 1 0 sites effective from 26
march we will trial a number of measures
to cater for our customers who smoke
whilst complying with the new law such 
as ‘al fresco’ smoking areas to the rear of 
a number of our properties we believe 
the smoking ban may also represent an
opportunity for t alarius because only 22
of the uk adult population smokes and
becoming smoke free should encourage
more nonsmokers into our sites
we believe that further consolidation
opportunities will arise as we approach 
a more tightly regulated environment
shareholders we were pleased to
welcome t attersall’s as a major shareholder
of the company when they bought a
1 0 1 stake on 27 november 2005
t attersall’s is one of australia’s major
leisure and gaming businesses with a
market value in excess of a 2 billion
we recently raised £9 million via a placing
of six million shares at a price of 1 50
pence per share on 27 january 2006
this takes our number of shares in issue
to 439 million
the company keeps its dividend policy
under review we continue to pursue our
strategy of identifying and completing
acquisitions that will deliver enhanced
earnings for our group whilst remaining
mindful of the desire to make appropriate
returns to shareholders
outlook i am pleased to report that current
trading continues to be strong with agc
likeforlike sales growth in the 1 0 weeks
to 1 1 march 2006 above the 9 increase
reported for the second half of last 
year this reﬂects the strength of the
management and company structure
in ensuring the successful and speedy
integration of our acquisitions together
with the beneﬁt of the strategy put in place
by your board for the underlying business
in addition to the acquisitions plans are
also on track for a potential eight green
ﬁeld sites to be opened in 2006
we believe the current fragmented nature
of the uk high street gaming market
convergence between gaming offerings
both in the uk and europe and the
strength of our gaming machine estate
both in terms of scale and quality will
continue to provide further opportunities
in the uk and european high street
gaming markets
i would like to congratulate and thank 
all our staff and their central backup
teams who continue to provide the 
best customer service and the most
entertaining environment in each of 
our centres
david williams
chairman
xta001talariusaw4qxp  7406  216 am  page 3 4 at a glance
“all acquisitions will be rebranded 
as quicksilver by july 2006”
“we design build and operate 
all our own software”
adult gaming centres interactive
1 83 sites
1 000 empl o yees
1 0000 ma chines
1 00000 members
xta001talariusaw4qxp  7406  216 am  page 4 5 annual report 2005
where we operate
1 83 sites based in1 65 towns and cities
industry snapshot

september
a report by the henley centre supports 
the argument for a rise in stakes and 
prizes as it predicts that gaming machine
manufacturers will layoff up to 20 of
employees and experience an 1 8 drop 
in proﬁts staff from t alarius plc hand over 
a cheque for £1 6500 to linda lindsay 
of children’s charity chips
october
industry media highlight t alarius’ success
story as interim results show a six per cent
rise in proﬁts t alarius underlines section 1 6
policy stating that it will not purchase from
manufacturers that fail to comply with
gambling commission rules
november
t alarius continue on the acquisition trail with
the £20m purchase of blackheath leisure
the quicksilver brand of agc’s moves 
to the top of the table with a 1 7 market
share nick harding is quoted as being
‘ﬂattered’ by news that australian gaming
giant t attersalls has purchased a ten 
per cent share in t alarius
december
industry breathes a sigh of relief as
chancellor gordon brown announces 
that a gross proﬁts tax will not be applied 
to gaming machines under the 2005
gambling act section 1 62 1 machines
now come under the scope of va t 
january
t alarius outlines plans to cater for smokers
and nonsmokers in its scottish outlets as
total ban on tobacco smoke gets closer
around 25000 buyers attend the a tei trade
exhibition at london’s earls court t alarius
conﬁrms a 9 increase in sales for the
second half of 2005
february
t alarius raises £9m to help ﬁnance
acquisition trail parliament gives the green
light to a ban on smoking in public places in
england and wales in summer 2007 
march
t alarius purchases the leisurama business
for £1 2m the total number of agcs in the
group rises to 1 83
extracts from the t alarius leader staff magazine milton keynes head ofﬁce
xta001talariusaw4qxp  7406  216 am  page 5 6 chief executive’s statement
adult gaming centres agc like for like
sales in the second half of 2005 were
ahead by nine per cent and year on year
mature business growth in all regions of
the country continues to be very strong
despite the challenging retail environment
much of our growth has come from 
the introduction of section 1 6 “s 1 6”
machines that operate with a maximum
stake of £2 and a top cash payout of £500
compared to the 30p stake and £25 payout
in the majority of the machine estate this
introduction has outweighed much of the
downside that we might otherwise have
encountered from the view taken by the
government that any increase in stakes 
and prizes for awp machines must be held
back until after the new gambling act is
enacted in september 2007 
t otal pro forma agc sales were £47 85m
2004 £4375m up year on year by 9
operating proﬁt at £7 7m before goodwill
amortisation of £1  1m was up 30
2004 £59m blackheath exhibited the
strongest sales growth reﬂecting the fact
its sites are all located in london where 
s 1 6 machines have started most strongly
the second half beneﬁted from the
accelerated roll out of s 1 6 machines
towards our target of four in each centre
this roll out was actually achieved at the
end of february 2006 about a month
ahead of our original plans 
operating review using the quicksilver
business as the foundation for consolidation
of the high street gaming market the
group completed two acquisitions during
the year at attractive multiples on 7 july
2005 the group acquired leisure
promotions ltd and in t o save ltd
together “leisure promotions” at a total
consideration of £1 1m leisure promotions
operated 1 3 adult gaming centres “ agcs”
across northern england and scotland
with over 1 300 gaming machines the
group also acquired blackheath leisure
carousel ltd “blackheath” on
7 november 2005 for £20m blackheath
operated 24 sites in london with an estate
of nearly 1 300 machines 
by the yearend the group was operating
1 64 sites and approximately 9000
machines 
during the period the group continued
to make good progress both operationally
and ﬁnancially t o assist the understanding
of the underlying performance of the
business additional segmental
information has been included below 
for quicksilver and blackheath leisure
promotions was fully integrated within
three months and is included within the
quicksilver ﬁgures the three businesses
have been treated as though they had
existed as the “enlarged group” for the
whole of the current and prior year the
current year being 52 weeks in length 
and last year being 53 weeks
nick harding chief executive
agc likeforlike sales were
ahead by 9 and yearonyear
mature business growth in all
regions of the country continues
to be very strong despite the
challenging retail environment
xta001talariusaw4qxp  7406  216 am  page 6 7 annual report 2005
t otal ebitda was £1 3 1m up 24 on last
year 2004 £1 05m our ebitda margin
was strong progressing from 24 1 to
27 3 overall our aim is to deliver an
ebitda margin closer to 30 as we
switch all the store facia to quicksilver and
achieve synergies across the group all
leisure promotions stores have now been
rebranded as quicksilver the blackheath
stores will be rebranded by the end of
april 2006 and leisurama by the end 
of july 2006
in addition to the post balance sheet
acquisition of leisurama on 2 march 2006
which brings a further 1 9 units at a cost 
of £1 2m and at a prospective ebitda
multiple of 5 1 times we have also
identiﬁed two new sites as part of our
aim of opening eight new greenﬁeld sites
in 2006 
interactive cyberslotz our internet gaming
business continues to show strong growth
both in terms of ‘drop’ and operating proﬁt
sales grew by 30 to £1 7m 2004
£1 3m and operating proﬁt increased
to £02m from last year’s £008m
we continue to add new games to the site
to provide freshness and choice for our
players at the year end the site featured
25 games the sales trend for the ﬁrst ten
weeks of the year has moved well above
the year on year growth rate experienced
last year
our strong player retention was backed 
up by market research conﬁrming that
there was exceptionally strong loyalty 
to the cyberslotz brand and site we are
strengthening the management team 
to improve marketing and promotional
support and provide the skills necessary 
to enhance both the customerfacing
elements of our site and the back of house
service and support this also provides us
with the conﬁdence to sustain the growth
of our whitelabel interactive service
known as “interslotz” where we added
two new business afﬁliates in the year
to take the total to 16
we have recently enhanced the senior
team with the appointment of nick
pearson who joined us from camelot 
as it director his focus has been on
systematically planning the development 
of the existing site and then preparing 
it to be marketed more widely as it is
currently only made available in the uk 
competitive advantage efﬁcient machine
estate management is at the core of our
business we constantly ensure that we
own the optimum mix of gaming machines
install them in the appropriate sites and
provide the right environment to provide 
an enjoyable customer experience 
we must be innovative with our product 
to sustain customer interest our large
machine estate and in depth product
knowledge allows us to experiment and
innovate with new games and concepts
then roll out the successful machines at
considerably lower risk than our
competitors continually optimising the
performance of our estate we are also
able to extract economies of scale in
buying and maintenance from owning the
largest number of machines in the uk
high street we have seen the continued
beneﬁt of this approach during the period
especially with the accelerated roll out 
of s1 6 machines 
during this year we have introduced
quickbet sports book electronic terminal
betting alongside our camden agc and
will repeat this at another site shortly we
are also exploring the expertise we have
gained in the high street bingo market and
our metro bingo offering the acquisition
of leisurama has brought us to 2 1 bingo
lounges contained within agcs and
provides another potential avenue for
growth for the group
2 1 bingo lounges contained within agcs
provides another potential avenue for
growth for the group
9
t otal pro forma agc sales were £47 85m
2004 £4375m up year on year by 9 
30
agc operating proﬁt at £7 7m before
goodwill amortisation of £1  1m was up 30
2004 £59m 
xta001talariusaw4qxp  7406  216 am  page 7 8 delivering the best experience
delivering 
the best
experience
xta001talariusaw4qxp  7406  115 pm  page 8 9 annual report 2005
one of our key strengths lies in our people
many of whom have given us signiﬁcant
years of service and are highly experienced
gaming operators
xta001talariusaw4qxp  7406  116 pm  page 9 10 chief executive’s statement
legislation and regulation under the 2005
gambling act further reforms of uk gaming
will take effect from 2007  we continue to
view the change positively in particular we
are pleased that “category b3” machines
will take the place of the very successful
s1 6 machines we remain positive despite
the december 2005 withdrawal of the
va texempt status of s 1 6 machines and
also the government’s stated intention
to align the level of amusement machine
licence duty across all categories of
gaming machine we have already set
in motion plans to mitigate any detrimental
impact this may have 
from 26 march 2006 a ban will be
imposed on smoking in public places
in scotland where we operate 1 0 of our
1 83 centres we have taken various actions
to comply with the ban and will be trying
certain innovative approaches to continue
to provide a superior experience for our
customers the fact that the legislation
is comprehensive in nature means it is
only likely to have a shortterm impact as
customers adapt to the change it will also
act as a very good indicator of the likely
impact of the ukwide ban due in the
summer of 2007  and enables us to
monitor the effect of our innovations
we believe the cyberslotz gaming engine
is unique in the remote gaming sector 
we design build and operate all our own
software thus we have an open platform
with a wide range of slot gaming products
from a number of different suppliers –
our own virtual gaming machine lounge 
we continue to explore the opportunities
of new technology we are currently
trialling our online games on the mobile
phone platform using the opportunity 
to leverage our existing online gaming
expertise and maximise revenue from 
our nationwide customer base 
quicksilver has led the development 
of the uk agc market over the past ﬁve
years with a wide range of customer
service innovations to make its agcs the
gaming venue of choice on the high street
we position ourselves ﬁrmly in the low
stake high volume high street gaming
market where our principal objective is 
to provide ‘gaming entertainment’ for the
retail shopper our venues mainly trade 
in line with retail hours hence a key
differentiator is our focus on providing
superior customer service
we position ourselves ﬁrmly in
the low stake high volume high
street gaming market where our
principal objective is to provide
“gaming entertainment” for the
retail shopper
xta001talariusaw4qxp  7406  217 am  page 10 annual report 2005
our people the number of t alarius
employees continues to grow in line with
our acquisitions and is now slightly over
1 000 we ﬁrmly believe that one of our
key strengths lies in our people many 
of whom have given us signiﬁcant years 
of service and are highly experienced
gaming operators all our staff receive
regular customer service training we 
also use ‘mystery shoppers’ to monitor
standards of service and presentation 
we continue to review and upgrade our
recruitment and training policies through
our hr department which also regularly
reviews beneﬁts packages for all team
members to ensure that we are generally
within the upper quartile of the market 
one of the beneﬁts of our stock market
listing was the opportunity to make a
signiﬁcant number of senior and middle
managers share option holders in late
march 2006 we intend to introduce a
‘save as you earn’ share scheme open
to all staff i want to thank all employees
of the group for their contribution to our
success and i hope many of them take 
the opportunity to become shareholders
nick harding
chief executive
we have introduced quickbet sports book
electronic terminal betting alongside our
camden agc and will repeat this at another
site shortly 
11
xta001talariusaw4qxp  7406  116 pm  page 11 crea ting
winning
environments
12 creating winning environments
xta001talariusaw4qxp  7406  217 am  page 12 13
“we have taken various
actions to comply 
with the ban and will
be trying certain
innovative approaches
to continue to provide 
a superior experience
for our customers” 
annual report 2005
xta001talariusaw4qxp  7406  217 am  page 13 14 14 finance review
as this was a reverse takeover ral ’s
accounting policies and practices were
adopted by the t alarius group it operates
with 1 3 four weekly accounting periods
a ﬁrst half of 28 weeks and second of 24
weeks with a year ending the last
saturday in december 
on 7 july 2005 the £1 07m acquisition 
of leisure promotions was completed
the total drawdown at that stage was
£1875m 
on 7 november the £20m acquisition of
blackheath was completed an additional
debt facility of £1 7 5m was negotiated at
that point with deal costs of £05m and
loan arrangement fees of a further £02m
to be amortised over the loan term which
is repayable over 5 years 
the goodwill calculations for each
acquisition are again given in note 2 1  
due to the timing of the acquisitions
shortened periods of trading are included 
in these results being 30 weeks for ral
25 and a half weeks for leisure promotions
and eight weeks for blackheath t o provide
more meaningful information for
performance comparison pro forma
additional segmental information has been
provided on page 1 8 in this respect the
enlarged group represents the combined
businesses of ral and leisure promotions
which operated the quicksilver agcs
and cyberslotz interactive gaming
and blackheath
as well as turnover and operating proﬁt
earnings before interest taxation
depreciation and amortisation ebitda
are also highlighted which the directors
regard as one of the best overall
evaluation measures 
operating proﬁt operating proﬁt for 
the group comprises the results of the
quicksilver agcs and the cyberslotz
interactive gaming business less central
service costs central services consist 
of the remuneration of the board
excluding the remuneration of the two
executive directors that is charged to
agcs plus the costs associated with
being a listed company
operating proﬁt before goodwill amortisation
and exceptional items was £32m this ﬁgure
is analysed in more detail in the segmental
analysis in note 2
the performance of each business is
described in the preceding review
acquisitions the most signiﬁcant event
in the period since t alarius was ﬁrst ﬂoated
on 4 april 2005 was the acquisition of
ral this provided the platform for our
stated strategy of consolidation of high
street gaming initially focused on the uk
agc sector this was subsequently
followed by the acquisitions of leisure
promotions and blackheath
ral was acquired on 1 june 2005 with
the proceeds of the initial share placing
and a further issue of shares on readmission
to aim a total of 37 million shares was
placed in two tranches with total cash
proceeds before expenses of £357m
debt facilities of £20m were also arranged
t otal consideration was £388m plus deal
costs of £22m after allowing for the
separate treatment of £1 2m equity
fundraising costs deducted from share
premium in the balance sheet and £0 1m
of loan arrangement fees amortised over
the term of the loan resulting in goodwill 
of £29 1m as shown in note 2 1 
andy hall finance director
acquisitions
date cost business sites machines ebitda multiple
june 05 £39m ral 1 27 6000 65 x
july 05 £1 1m leisure promotions 1 3 1 300 45 x
november 05 £20m blackheath 24 1 300 58x
march 06 £1 2m leisurama 1 9 1 000 5 1x
t otal £82m 1 83 9600 58 x blended
xta001talariusaw4qxp  7406  217 am  page 14 15
post balance sheet event on 2 march
2006 the group announced the acquisition
of leisurama entertainments ltd and
leisurama holdings ltd known together
as “leisurama” the total consideration
was £1 2m funded from cash and existing
bank facilities following the successful
placing of six million shares at 1 50p which
were admitted on 27 january 2006
the consideration represented 5 1 times
estimated ebitda for the year to december
2006 the leisurama balance sheet at
completion had estimated net assets of
£1 9m and £03m of debt with deal costs
of £06m resulting in goodwill prefair
asset value review of £1 1m
interest the group’s net interest charge
was £07m which was covered 44 times
by operating proﬁt before goodwill
amortisation and exception item
taxation the effective rate of tax on group
proﬁt was 33
cash ﬂow net cash inﬂow from operating
activities was £45m the cash outﬂow
from capital expenditure was £30m new
machines at £2 1m accounted for the bulk
of the expenditure as the number of s1 6
machines was increased towards four per
site refurbishments totalled £06m and
the balance of £03m mainly related to
investment in computer systems
financial position net debt at the yearend
amounted to £303m see note 22 the
group has £37 5m of committed bank
facilities of which £3525m was drawn at
the yearend £20m is on a revolving credit
facility repayable in june 2008 and £1 7 5m
is repayable over the ﬁve years through to
november 20 1 0 in addition an overdraft
facility of £2m is available repayable on
demand the interest margin payable is
1 5 above libor on the revolving credit
facility and 2 above libor on the term
loan loan arrangement fees of £03m are
being amortised over the terms of the loans
to which they related and added £30k to
this period’s interest charge and will add
£0 1m in a full year
financial risks and treasury policies 
the key ﬁnancial risks faced by the 
group relate to the availability of funds 
to meet business needs and ﬂuctuations
in interest rates the group manages
borrowing liquidity interest rates 
and banking relationships in order 
to minimise exposures
the group ﬁnances its operations by 
a combination of internally generated cash
ﬂow and bank borrowings reﬁnancing
risk is controlled by ensuring the group
has sufﬁcient undrawn bank facilities to
meet increases in projected borrowings
over the following 1 2 month period the
group’s policy is to ﬁx or cap a proportion
of projected net debt in order to reduce
the group’s exposure to ﬂuctuations in
interest rates a 1 increase in interest
rates is estimated to have an impact of
£03m in a full year
international financial reporting 
standards ifrs 
the group has considered the implications
of ifrs the main areas affected are
goodwill share option valuation any
ﬁnancial hedging and taxation the group
will report on the impact of the standard 
for the ﬁrst time in the interim accounts 
to 1 5 july 2006
andy hall
finance director
earnings before interest taxation
depreciation and amortisation ebitda 
the directors regard as one of the best
overall evaluation measures
20
t otal group ebitda
annual report 2005
xta001talariusaw4qxp  7406  217 am  page 15 16 investing for the future
we continue to explore the opportunities 
of new technology
our large machine estate and indepth
product knowledge allows us to experiment
and innovate with new games and
concepts then roll out the successful
machines at considerably lower risk
xta001talariusaw4qxp  11406  1157 am  page 16 annual report 2005
investing
for the
future
17
xta001talariusaw4qxp  11406  1157 am  page 17 18 finance review
additional segmental analysis 
for the enlarged group prepared on a pro forma basis unaudited
52 weeks ended 53 weeks ended
31 december 2005 1 january 2005
£000 £000
turnover
adult gaming centres
quicksilver 39727 36946
blackheath 8129 6800
47856 43746
interactive gaming 1 7 09 1 3 10
t otal 49565 45056
ebitda
adult gaming centres
quicksilver 9776 8443
blackheath 3304 2 1 00
1 3080 1 0543
interactive gaming 210 90
t otal 1 3290 1 0633
operating proﬁt
adult gaming centres
quicksilver 5140 4432
blackheath 2578 1 500
7 7 1 8 5932
interactive gaming 197 7 8
t otal 7 9 1 5 60 1 0
before goodwill amortisation exceptional item and t alarius central services of £566k
“the enlarged group” represents the combined businesses of ral and leisure promotions which operated the quicksilver agcs and
cyberslotz interactive gaming and blackheath
“ebitda ” – earnings before interest taxation depreciation and amortisation
the additional segmental analysis has been prepared from management accounting information as adjusted for nonrecurring central costs
xta001talariusaw4qxp  7406  217 am  page 18 19 annual report 2005 mission statement
our aims are to provide 
the best standards of service
ambience and equipment 
in uk and european gaming 
to be the best company to work
for and by doing these things 
to be the most proﬁtable
xta001talariusaw4qxp  7406  217 am  page 19 20 driving the market
driving the
market
xta001talariusaw4qxp  11406  1157 am  page 20 21 annual report 2005
efﬁcient machine estate management 
is at the core of our business
the development of gaming machine
estates is a key driver of proﬁtability
 10 
t otal group turnover
22
t otal group operating proﬁt
we are able to extract economies of 
scale in buying and maintenance from
owning the largest number of machines 
on the uk high street
xta001talariusaw4qxp  11406  1158 am  page 21 22 board of directors
xta001talariusaw4qxp  7406  217 am  page 22 annual report 2005
david williams age 54
nonexecutive chairman
david has over 35 years’ experience
in the investment market he has served 
as chairman in both executive and non
executive capacities for a number of
companies both public and private
he has overseen the development
of these companies through both organic
and acquisitive growth as well as dealing
with turnaround situations in 1 994 david
worked with the executive team to ﬂoat
waste recycling group plc at an initial value
of £8m during his seven years as chairman
its value grew to £550m david was
chairman of ral limited an operator
of “high street” gambling sites across the
uk on its management buyout from rank
group plc in 1 996 david is currently
chairman of augean plc and zetar plc as
well as marwyn investments group limited
and associated companies 
andy hall age 50
finance director
andy has over 20 years of quoted
company experience from the high street
retail and leisure sectors after qualifying
as a chartered accountant andy worked
for pricewaterhouse from 1 978 to 1 982
he joined whitbread plc in 1 982 where he
progressed through various roles to
become group financial controller from
1 992 to 1 999 with ﬁnancial responsibility
for all aspects of the brewing and leisure
businesses which included the acquisition
and integration of david lloyd leisure
marriott hotels costa coffee cafe rouge
and bella pasta from 1 999 to 2004 he
was group finance director of blacks
leisure group plc where he oversaw the
acquisition and integration of millets just
add water and famous army stores 
from left to right robert ware david williams 
andy hall nick harding mark watts
nick harding age 48
chief executive
nick has 25 years’ experience in the 
“high street” gambling market nick
worked in a number of senior positions 
for coral bass leisure and rank group
before leading the mbo of the ral
business from rank in 1 996 in his eight
years running ral it grew to become the
uk’s leading operator in the sector with
1 29 sites together with an integrated and
proprietary online gambling business nick
is a recognised and respected industry
ﬁgure he is vice president of the trade
association bact a a t rustee of the
responsibility in gambling t rust sits on
the advisory board of gamcare and was
the founding chairman of iggba the
uk’s interactive gaming association nick
has been licensed in the uk by the gaming
board now the gambling commission
for the operation of cash bingo and agcs
together with the sale and supply of gaming
equipment as ceo of t alarius he is also
a licensed bookmaker 
robert ware age 52
nonexecutive director
robert has over1 7 years’ experience
working in the property sector robert was
a director of development securities plc
between 1 988 and 1 994 and ﬁlled the
roles of joint managing director and
finance director in the latter stage of his
tenure in 1 994 he took up the position
of managing director of dunton group plc
where he stayed until 1 996 he served as
corporate development director and then
as deputy chief executive of mepc
between 1 997 and 2003 mepc was the
fourth largest quoted property company
until 2000 when leconport estates took
the company private robert was a key
member of the management team which
achieved the targets set by leconport
estates robert is a fellow of the institute
of chartered accountants he is currently
chief executive of the conygar investment
company plc and a nonexecutive director
of t arsus group plc raven mount plc
wyevale garden centres plc and marwyn
value investors limited 
mark watts age 32
nonexecutive director
mark is a director of marwyn capital limited
and its subsidiary companies mark has
extensive corporate ﬁnance experience
including recently advising the management
of augean plc on its £1 06m acquisition of
two hazardous waste businesses in the uk
the management of zetar plc on its £32m
acquisition of a uk chocolate manufacturer
and the management of inspicio plc on its
£52m acquisition of inspectorate group 
and their subsequent related admissions 
to trading on aim mark is currently a non
executive director of zetar plc and 
inspicio plc 
23
xta001talariusaw4qxp  7406  145 pm  page 23 whilst the company is aim listed and
hence not subject to the uk listing authority
rules the board’s policy is to manage in
accordance with the principles set out in
the provisions of section 1 of the combined
code
the statement below describes how the
principles identiﬁed in the combined code
are applied the company has not appointed
a senior nonexecutive director nor as
explained below set up a nominations
committee the company has not given
all the additional disclosure required in the
remuneration report
directors the board consists of a non
executive chairman chief executive
executive directors and nonexecutive
directors all the nonexecutive directors
are considered by the board to be
independent of management and free of any
relationship which could materially interfere
with the exercise of their independent
judgement their interest in the shares of the
company are set out on page 29 and they
receive a ﬁxed fee for their services
proﬁles of the board members appear on
page 23 of this report these indicate the
high level and range of business experience
which enable the group to be managed
effectively
the board meets at least eight times each
year and more frequently where business
needs require the board has a schedule
of matters reserved for its decision which
includes material capital commitments
commencing or settling major litigation
business acquisitions and disposals and
board appointments directors are given
appropriate and timely information for each
board meeting including reports on the
current ﬁnancial and trading position of
each business
all directors have access to independent
professional advice if required and at the
company’s expense this is in addition to
the access which every director has to the
company secretary the secretary is
charged by the board with ensuring that
board procedures are followed
chairman and chief executive the roles
of the chairman and of the chief executive
have been approved by the board
the role of the chairman is to conduct
board meetings meetings of shareholders
and to ensure that all directors are properly
briefed in order to take a full and constructive
part in board discussions he is responsible
for evaluating the performance of the board
and of the executive management and of
the other nonexecutive directors this
includes addressing the development needs
of the board as a whole to enhance the
overall effectiveness
the role of the chief executive is to develop
and lead business strategies and processes
to enable the group to meet shareholder
requirements he is responsible for dealing
with investors group public relations
external communications and corporate
governance in particular gaming compliance
the role involves leading the executive team
and evaluating the performance of
executive management
board committees the board has
delegated authority to the following
committees which are set out in written
terms of reference for each committee
audit committee the audit committee
members are robert ware chairman and
the other nonexecutive directors the
committee meets at least three times a year
to review the group’s ﬁnancial statements
ﬁnancial reporting accounting policies
internal control and risk assessment
processes the group’s external auditors
attend each meeting together with the
executive directors whenever they are
requested by the committee
remuneration committee
the remuneration committee members
are david williams chairman and the other
nonexecutive directors the committee
meets at least twice a year to review the
remuneration of the executive directors
full details of directors’ remuneration and
a statement of the company’s remuneration
policy is set out in the directors’
remuneration report on pages 26 and 27 
the chief executive attends meetings of
the committee to discuss the performance
of the other executive directors and make
proposals as necessary but takes no part in
deliberations when his own position is
discussed
each executive director abstains from any
discussion or voting at full board meetings
on remuneration committee
recommendations where the
recommendations have a direct bearing on
his own remuneration package the details
of each executive director’s individual
package are ﬁxed by the committee in line
with the policy adopted by the full board
nominations committee during the period
the board as a whole has undertaken the
duties of the nominations committee
when considering appointments external
search consultants are used to ensure that
a wide range of candidates are considered
an induction to the group’s business and
training are available to directors on
appointment
any director appointed is required to retire
and seek election by shareholders at the
next annual general meeting also one third
of the directors retire by rotation each year
and seek reelection at the annual general
meeting the directors required to retire are
those in ofﬁce longest since their previous
reelection and this usually means that each
director retires at least every three years
although there is no absolute requirement
to this effect
board attendance chart
board audit remuneration
dj williams 4 4 2 2 2 2
ns harding 4 4 1 2 2 2
aj hall 4 4 2 2 – –
rte ware 4 4 2 2 2 2
mij watts 2 2 1 1 1 1
bh shaw 2 2 1 1 1 1
figures in brackets denote the maximum number of meetings that each director could have attended
24 corporate governance statement
xta001talariusaw4qxp  7406  118 pm  page 24 25
internal control the board of directors is
responsible for the group’s system of internal
control that is designed to facilitate effective
and efﬁcient operations and to ensure the
quality of internal and external reporting
and compliance with applicable laws and
regulations in devising internal controls the
directors have regard to the nature and
extent of the risk the likelihood of it
crystallising and the cost of controls
a system of internal controls is designed
to manage but not eliminate the risk of failure
to achieve business objectives and can only
provide reasonable and not absolute
assurance against the risk of material
misstatement fraud or loss
the board is reviewing the group’s
procedures in respect of internal control
with a view to complying with the ‘internal
control guidance for directors on the
combined code’ by the institute of
chartered accountants in england and
wales and will establish procedures to
ensure compliance with the guidance the
board considers that there will be an ongoing
process for the identiﬁcation evaluation and
management of the signiﬁcant risks faced
by the group this process will be completed
in 2006 and then reviewed by the board
to meet the requirements of the guidance
the key procedures that the directors have
established to provide effective internal
controls are as follows
control environment each business has
its own management group which meets
regularly to monitor all operational matters
clearly deﬁned lines of responsibility and
delegation of authority have been
established in the organisational structure
the executive directors participate at least
monthly in management meetings and
regularly review activities
risk management management has clear
responsibility for identifying risks to the
business and for establishing procedures
to mitigate and monitor such risks
financial reporting a detailed formal
budgeting process for all businesses
culminates in an annual group budget
which is approved by the board results are
reported monthly against this budget and
revised forecasts for the year are prepared
at least quarterly
capital investment the group has clearly
deﬁned guidelines for capital expenditure
these include annual budgets detailed
appraisal and review procedures deﬁned
levels of authority and due diligence
requirements where businesses are being
acquired post investment appraisals are
performed for major investments
internal controls assurance the directors
will establish a group control framework
and assess the key strategic operational
and ﬁnancial risks facing the group this
risk assessment will be monitored by the
group finance director and reported to the
audit committee
the board reviews the effectiveness of the
group’s internal ﬁnancial control system
summarising compliance for internal
operational controls equivalent processes
are being reviewed to monitor compliance
the audit committee on behalf of the board
has reviewed the effectiveness of the
system of internal control from information
provided by management and the group’s
external auditors any system of internal
control can only provide reasonable and not
absolute assurance of meeting the internal
control objectives
this review included an assessment by the
board of the key risks affecting the group
in the delivery of its longterm strategies and
considered the need for an internal audit
function t o date it has not been considered
that a separate internal audit function was
required the group currently has internal
auditors and security ofﬁcers who are
responsible for cash collection and fraud
investigations
the audit committee keeps the scope and
cost effectiveness of the external audit
under review the independence and
objectivity of the external auditors is also
considered on a regular basis with particular
regard to the level of nonaudit fees the
split between audit and nonaudit fees
appears on page 35 the nonaudit fees
were paid in respect of tax advice and
reports required for shareholder documents
and are not considered to affect the
auditors’ independence or objectivity
going concern the directors having taken
account of the group’s net cash resources
and bank facilities and having made
appropriate enquiries consider that the
group has adequate resources to continue
operations for the foreseeable future and for
this reason they continue to adopt the going
concern basis in preparing the ﬁnancial
statements
communication the company places a
great deal of importance on communication
with its shareholders shareholders have
direct access to the company via its website
and the company responds to letters and 
emails from shareholders and customers
on a wide range of issues
there is regular dialogue with individual
institutional shareholders as well as
presentations after the interim and
preliminary results all shareholders have
the opportunity to raise questions at the
annual general meeting when the
company will also highlight the latest key
business developments
code of business ethics the group takes
the view that corporate governance is not a
matter for the board or its committees alone
thus our employee handbook covers
dealings with customers suppliers and
government ofﬁcials safeguarding the
group’s assets keeping accurate and
reliable records and avoiding conﬂicts
of interest its principal message is that all
employees must observe a code of conduct
based on honesty integrity and fair dealing
environment policy the group believes
that business has a responsibility to achieve
good environmental practice and to
continue to strive for improvement in its
environmental impact the efﬁcient and
effective use of resources makes sound
commercial sense in view of this the group
sets objectives taking due account of the
business risks and opportunities
employment standards the group
ensures as far as is reasonably practicable
that a safe and healthy workplace and
working environment is provided for all its
employees to a standard which is at least as
high as that required by law 
the group is committed to a policy of equal
opportunities for staff at all levels
annual report 2005
xta001talariusaw4qxp  7406  217 am  page 25 26 directors’ remuneration report
directors’ remuneration
an analysis of director’s remuneration is set out below
basic variable beneﬁts in
salaryfees rewards kind pension t otal remuneration
2005 2005 2005 2005 2005
£000 £000 £000 £000 £000
dj williams 22 – – – 22
ns harding 102 200 18 17 337
aj hall 43 150 1 6 200
rte ware 22 – – – 22
mij watts 8–– –8
bh shaw 14–– – 14
211 350 19 23 603
dj williams bh shaw and rte ware were appointed on 3 march 2005
ns harding was appointed 1 june 2005
aj hall joined the company on 6 june 2005 and was appointed to the board on 6 september 2005
mij watts was appointed on 20 september 2005
bh shaw resigned from the board on 20 september 2005
pension contributions were made with respect to two directors
share price performance
the market price on admission to aim on
4 april 2005 was 80 pence the lowest and
highest prices during the period were 80
pence and 1 5 1 5 pence
variable rewards
executive directors
bonus schemes executive directors are
entitled to performance related bonuses
that are payable based in the main upon
ebitda growth and share price improvement
of the group and are consistent with ﬁnancial
targets as determined by the remuneration
committee the remuneration committee
reviews performance against targets at the
end of the year and may use its discretion
to adjust measures and payments in view
of operating circumstances during the year
bonus payments are nonpensionable and
are subject to approval by the committee
the achievement of the highest performance
targets in 2005 would entitle the directors
to the maximum bonus payable of 1 00
of basic salary
pension the group made pension
contributions of up to 20 of basic salary
for the executive directors these
contributions are paid into the equivalent
of money purchase pension schemes
no directors are in a deﬁned beneﬁt
pension scheme
nonexecutive directors the remuneration
of nonexecutive directors is determined
by the board as a whole and consists of fees
for their services in connection with board
committee meetings and other relevant
matters
the remuneration committee the
remuneration committee is composed
of david williams chairman robert ware
and mark watts the remuneration
committee on behalf of the board makes
recommendations regarding executive
directors’ remuneration packages
including bonuses share options and
other incentive schemes
directors’ service contracts
executive directors for each executive
director their service contract may be
terminated by either party giving six months’
notice
nonexecutive directors for each non
executive director their service contract is
for two years and may be terminated by
either party giving six months’ notice
group policy on executive directors’
remuneration the objective of the group’s
remuneration policy is to provide a level of
remuneration which will attract retain and
motivate executive directors and senior
management of high quality
share options are used and longer term
incentives will be considered as part of the
group’s remuneration policy the amounts
involved and the frequency of issue endeavour
to keep pace with current market practice
xta001talariusaw4qxp  7406  218 am  page 26 27 annual report 2005
marwyn capital limited
marwyn warrant 
the company has also entered into the
marwyn warrant marwyn is entitled to
subscribe for ﬁve per cent of the enlarged
share capital as at second admission
exercisable as follows
– 50 of the warrant is exercisable at any
time before the seventh anniversary of
second admission and
– the remaining 50 of the warrant is
exercisable following the completion
of a subsequent substantial acquisition
and before the seventh anniversary
of second admission
the exercise price per ordinary share for the
shares the subject of the marwyn warrant
was the 1 00 pence placing price the exercise
of the warrant is conditional upon the price
of an ordinary share being equal or greater
than 1 25 of the placing price at any time
after second admission
the marwyn warrant is transferable by
marwyn to its shareholders directors ofﬁcers
and employees and to any employee
beneﬁt trust for such employees of any
group company of marwyn
employee share options
shares granted under the options scheme have been granted by the remuneration 
committee to attract retain and motivate participants to achieve corporate ﬁnancial targets
the directors who served during the period had the following interests in options at 
3 1 december 2005
y ear of price dates exercisable dates exercisable 
grant number exercisable from to
ns harding
enterprise management incentive emi scheme 2005 99999 1 00p 1 june 2005 3 1 may 20 1 5
t alarius employee beneﬁt t rust ebt – class a 2005 450000 1 00p 1 3 june 2005 1 2 june 20 1 2
– class b 2005 450000 1 00p 1 3 june 2005 1 2 june 20 1 2
aj hall
t alarius employee beneﬁt t rust ebt – class a 2005 1 25000 1 00p 1 3 june 2005 1 2 june 20 1 2
– class b 2005 1 25000 1 00p 1 3 june 2005 1 2 june 20 1 2
these options were granted during the period
t alarius ebt
the ebt options were exercisable subject to
class a  the second admission of t alarius
plc on to aim at any time during the
exercise period
class b  the 30 day average midmarket
share price being equal to or
greater than 1 25 of the placing
price of 1 00 pence at any time
during the exercise period 
emi scheme
as the gross assets now exceed £30m no
further options will be granted under the emi
scheme thus the shareholders approved at
an egm on 1 8 january 2006 the company’s
share ownership plan this is intended to
permit at the board’s discretion future share
options to be granted up to a current hmrc
maximum value of £30000 to each
individual to those current and future
members of management who did not
receive the initial emi scheme grant
dj williams
remuneration committee chairman
1 3 march 2006
xta001talariusaw4qxp  7406  218 am  page 27 28 directors’ report
the directors present their report for the
nine months ended 3 1 december 2005
principal activities and business review
the company was incorporated on 3 march
2005 ﬁnanced by the issue of two ordinary
shares at 80p each all other share issues
during the year are detailed in note 1 7 
the principal activity of the group is the
provision of licensed gaming centres and
internet gaming facilities a detailed review
of the period’s activities and future
developments is given on pages 2 to1 8
results and dividends
the group proﬁt for the period is shown on
page 3 1  the directors do not recommend
the payment of a dividend
statement of directors’ responsibilities 
the directors are responsible for preparing
the directors’ report and the ﬁnancial
statements in accordance with applicable
law and regulations
company law requires the directors to
prepare ﬁnancial statements for each
ﬁnancial year under that law the directors
have elected to prepare the group and the
company ﬁnancial statements in accordance
with uk accounting standards
the group’s ﬁnancial statements are
required by law to give a true and fair view
of the state of affairs of the company and
group and of the proﬁt or loss of the group
for that period
in preparing these ﬁnancial statements the
directors are required to
– select suitable accounting policies and
apply them consistently
– make judgments and estimates that are
reasonable and prudent
– state whether applicable accounting
standards have been followed subject
to any material departures disclosed and
explained in the ﬁnancial statements
– prepare ﬁnancial statements on the going
concern basis unless it is inappropriate
to presume that the group will continue
in business
the directors are responsible for keeping
proper accounting records that disclose
with reasonable accuracy at any time the
ﬁnancial position of the group and enable
them to ensure that its ﬁnancial statements
comply with the companies act 1 985 they
have a general responsibility for taking such
steps as are reasonably open to them
to safeguard the assets of the group and
to prevent and detect fraud and other
irregularities
the directors are responsible for the
maintenance and integrity of the corporate
and ﬁnancial information included on the
company’s website legislation in the uk
governing the preparation and dissemination
of ﬁnancial statements may differ from
legislation in other jurisdictions
employees involvement the company
values the contributions that its employees
make to the success of the business
substantial investment is made in the
training development and motivation
of staff with particular focus on ensuring
customer satisfaction through the consistent
achievement of high standards of personal
care and service the involvement of
employees in the success of the business
is encouraged through companywide
communications and consultation
programmes a biannual news magazine
is produced speciﬁcally for company
employees
the management of the group is encouraged
to communicate with employees on corporate
and individual matters and provides
information to enable them to gain
awareness of ﬁnancial and economic
factors affecting the group
the company endorses the active
application of equal opportunities policies
and programmes to provide fair and
equitable conditions for all employees
regardless of sex family status religion
creed colour ethnic origin age or disability
employees who become disabled during
their working life will be retained in
employment wherever possible and given
help with rehabilitation or training
employment policies the directors
endeavour to keep the rewards for all
t alarius group employees up to date and
competitive in the market place 
employee incentives since the 1 8 january
egm and subsequent hmrc approval the
company has a company share option
plan and a savings related option scheme
these schemes are intended to facilitate
the greater participation of employees in the
future ﬁnancial success of the group 
charitable contributions during the period
donations to uk charities were £5700
supplier payment policy the group does
not follow any standard or code on payment
practice its policy is to ensure that terms
of payment speciﬁed and agreed with
suppliers are not exceeded creditor days
based on year end trade creditors for 2005
were 45 days company 37 days
disclosure of information to the auditors
the directors who held ofﬁce at the date
of approval of this directors’ report conﬁrm
that so far as they are each aware there is
no relevant audit information of which the
company’s auditors are unaware and each
director has taken all the steps that he ought
to have taken as a director to make himself
aware of any relevant audit information and
to establish that the company’s auditors are
aware of that information
auditors
kpmg audit plc were appointed ﬁrst
auditors to the company a resolution to 
reappoint kpmg audit plc as auditors will
be proposed at the forthcoming annual
general meeting
xta001talariusaw4qxp  7406  218 am  page 28 29 annual report and accounts 2005 title 29 annual report 2005
substantial interests in share capital
as at 1 3 march 2006 the directors are aware of the following
name holding 
goldman sachs 9528842 2 1 70
lehman brothers 4967 4 1 9 1 1 3 1
t attersalls 4600000 1 048
fidelity 3706000 844
killik  co 322 1 825 7 34
global asset management 27 1 6299 6 1 9
unicorn asset management 1 564300 356
other than disclosed above the directors are not aware of any person holding or beneﬁcially interested in 3 or more of the ordinary share
capital of the company
directors and directors’ interests
the directors who held ofﬁce during the period were
appointed resigned
dj williams 3 march 2005 
rte ware 3 march 2005
ns harding 1 june 2005 
aj hall 6 september 2005 
mij watts 20 september 2005
bh shaw 3 march 2005 20 september 2005 
the directors who held ofﬁce at the end of the year had the following interests in the share capital of the company 
at end of year interest at date of appointment
ordinary shares of 1 0p each issued under option issued under option
dj williams 312500 – 312500 –
ns harding 1 70000 999000 1 70000 999000
aj hall –250000 –250000
rte ware 1 25000 – 1 25000 – 
mij watts – – – –
no directors have held any beneﬁcial
interest in the shares of any of the
subsidiary undertakings since their
appointment to the board 
their biographical details are given on
page 23 
annual general meeting
the annual general meeting of the
company is to be held on 1 7 may 2006 for
the following purposes
resolutions 1 and 2 resolution 1 is the
resolution to receive the directors’ report
and financial statements for the period
ended 3 1 december 2005 resolution 2
is a resolution to approve the directors’
remuneration report which can be found
on pages 26 and 27 
the financial statements are available on
the company’s website wwwtalariuscom
resolution 3 resolution 3 seeks to revise
the sum currently permitted by the articles
to be shared amongst the directors in
payment of their fees from £1 00000 to
£200000  the articles of association
were adopted in march 2005 and in a full
year the nonexecutive director fees
agreed then will amount to £1 00000
should the company wish to appoint further
nonexecutive directors under the current
articles of association of the company
these fees would exceed the aggregate
even if the fees of the existing non
executive directors remained the same
the company believes that it would be
appropriate to maintain a certain amount of
headroom in relation to the sum to be paid
to nonexecutive directors and accordingly
asks shareholders to approve this change 
resolutions 4 to 8 resolutions 4 to 8 are
to reelect all the directors proﬁles of the
directors can be found on page 23
resolutions 9 and 1 0 resolutions 9 and
1 0 are to reappoint kpmg audit plc as
the company’s auditors and determine
their remuneration
resolutions 1 1 and 1 2 shareholders are
being asked to renew the approvals for the
company to allot shares and to do so for
cash on a non preemptive basis at
present the directors have no intention of
allotting shares other than under employee
share schemes
by order of the board
s c fadil
company secretary
1 3 march 2006 
registered ofﬁce
20 black friars lane
london
ec4v 6hd
xta001talariusp2944qxp  10406  404 pm  page 29 30 financial statements
independent auditors’ report
we have audited the group and company
ﬁnancial statements the ‘ﬁnancial
statements’ of t alarius plc for the nine
months ended 3 1 december 2005 which
comprise the consolidated proﬁt and loss
account the balance sheets the
consolidated cash flow statement and the
related notes these ﬁnancial statements
have been prepared under the accounting
policies set out on page 34
this report is made solely to the company’s
members as a body in accordance with
section 235 of the companies act 1 985
our audit work has been undertaken so
that we might state to the company’s
members those matters we are required to
state to them in an auditor’s report and
for no other purpose t o the fullest extent
permitted by law we do not accept or
assume responsibility to anyone other
than the company and the company’s
members as a body for our audit work for
this report or for the opinions we
have formed
respective responsibilities of directors
and auditors the directors’ responsibilities
for preparing the directors’ report and the
ﬁnancial statements in accordance with
applicable law and uk accounting standards
uk generally accepted accounting
practice are set out in the statement
of directors’ responsibilities on page 28
our responsibility is to audit the ﬁnancial
statements in accordance with relevant
legal and regulatory requirements and
international standards on auditing uk
and ireland
we report to you our opinion as to whether
the ﬁnancial statements give a true and fair
view and are properly prepared in accordance
with the companies act 1 985 we also
report to you if in our opinion the directors’
report is not consistent with the ﬁnancial
statements if the group has not kept proper
accounting records if we have not received
all the information and explanations we
require for our audit or if information
speciﬁed by law regarding directors’
remuneration and other transactions
is not disclosed
we read other information contained in the
annual report and consider the implications
for our report if we become aware of any
apparent misstatement within it
basis of audit opinion we conducted
our audit in accordance with international
standards on auditing uk and ireland
issued by the auditing practices board
an audit includes examination on a test
basis of evidence relevant to the amounts
and disclosures in the ﬁnancial statements
it also includes an assessment of the
signiﬁcant estimates and judgments made
by the directors in the preparation of the
ﬁnancial statements and of whether the
accounting policies are appropriate to the
group’s circumstances consistently applied
and adequately disclosed 
w e planned and performed our audit so as
to obtain all the information and explanations
which we considered necessary in order to
provide us with sufﬁcient evidence to give
reasonable assurance that the ﬁnancial
statements are free from material
misstatement whether caused by fraud
or other irregularity or error in forming our
opinion we also evaluated the overall
adequacy of the presentation of information
in the ﬁnancial statements 
opinion in our opinion the ﬁnancial
statements
– give a true and fair view in accordance
with uk generally accepted accounting
practice of the state of the group’s and
the company’s affairs as at 3 1 december
2005 and of the group’s proﬁt for the
nine month period then ended and 
– have been properly prepared in
accordance with the companies
act 1 985 
kpmg audit plc
chartered accountants 
registered auditor
milton keynes
united kingdom
1 3 march 2006
xta001talariusaw4qxp  7406  218 am  page 30 31 annual report 2005
consolidated proﬁt and loss account
for the nine months ended 3 1 december 2005
4 april to 
3 1 december 2005
note £000
turnover 12 25557
cost of sales 4066
gross proﬁt 21491
administrative expenses 19773
operating proﬁt 1718
operating proﬁt before goodwill amortisation and exceptional item 2 3180
goodwill amortisation 1126
exceptional item costs of ﬂotation 3 336
operating proﬁt 1718
net interest payable 4 721
proﬁt on ordinary activities before taxation 5 997
t axation 7 701
proﬁt retained for the period 18 296
earnings per share pence 8
basic 096p
diluted 090p
underlying 571p
all recognised gains and losses are included in the proﬁt and loss account
there is no material difference between the results stated above and the results shown on an historical cost basis
the results above related to acquisitions made in the period
xta001talariusaw4qxp  7406  218 am  page 31 32 financial statements
balance sheets
as at 3 1 december 2005
group company
2005 2005
note £000 £000 £000 £000
fixed assets
intangible assets – goodwill 9 52506 –
t angible assets 10 22158 –
investments 11 – 56620
74664 56620
current assets
stocks 12 251 –
debtors 13 4393 41012
cash at bank and in hand 4954 –
9598 41012
creditors amounts falling due within one year 14 12544 308 1 8
net current liabilitiesassets 294610194
t otal assets less current liabilities 71718 668 1 4
creditors amounts falling due after more than one year 15 32967 32967
provisions for liabilities and charges 16 2985–
net assets 35766 33847
capital and reserves
called up share capital 17 3790 3790
share premium 18 31680 3 1 680
proﬁt and loss account 18 296  1 623
equity shareholders’ funds 19 35766 33847
these financial statements were approved by the board and signed on their behalf on 1 3 march 2006
ns harding
chief executive
aj hall
finance director
xta001talariusaw4qxp  7406  218 am  page 32 33 annual report 2005
consolidated cash flow statement
for the nine months ended 3 1 december 2005
4 april to 
3 1 december 2005
note £000 £000
net cash inﬂow from operating activities 20 4456
returns on investments and servicing of ﬁnance
interest received 112
interest paid 511
finance costs incurred in raising debt 310
net cash outﬂow from return on investments and servicing of ﬁnance 709
taxation —
capital expenditure and ﬁnancial investment
purchase of tangible ﬁxed assets 2962
proceeds on sale of tangible ﬁxed assets 685
2277
acquisitions
purchase of subsidiary undertakings 21 72610
net cash acquired with subsidiaries 5483
67 127
cash outﬂow before ﬁnancing 65657
financing
issue of shares 36670
expenses paid in connection with issue of shares 1200
35470
new loans 36250
repayment of loans 1000
capital element of hire purchase payments 109
35141
increase in cash 22 4954
xta001talariusaw4qxp  7406  218 am  page 33 34 financial statements
notes to the financial statements 
for the nine months ended 3 1 december 2005
1 accounting policies
accounting policies have been applied
consistently in the group’s ﬁnancial
statements
basis of preparation the ﬁnancial statements
have been prepared in accordance with
applicable accounting standards and under
the historical cost convention
basis of consolidation the consolidated
ﬁnancial statements incorporate the
ﬁnancial statements of t alarius plc and its
subsidiaries for the period to 3 1 december
2005 subsidiary undertakings acquired
or disposed are included in the consolidated
proﬁt and loss account from the date of
acquisition or up to the date of disposal 
a separate proﬁt and loss account dealing
only with the results of the company has not
been presented in accordance with section
2304 of the companies act 1 985 
goodwill goodwill arising on acquisitions
has been capitalised and amortised on
a straightline basis over 20 years goodwill
is reviewed for impairment at the end of the
ﬁrst full year following the acquisition and
in other periods if events or changes in
circumstances indicate that the carrying
value may not be recoverable
fixed assets and depreciation
depreciation is provided to write off the cost
or valuation less the estimated residual value
of tangible and intangible ﬁxed assets by
equal installments over their estimated
useful economic lives as follows
per annum
freehold buildings – 2
fixtures and ﬁttings – 1 0 
plant and equipment – 1 050 
licence fee – 20 
short leasehold properties are depreciated
over the shorter of their estimated useful life
or the term of their lease no depreciation
is provided on freehold land
where the need for a writedown of assets is
identiﬁed provision is made for the resulting
impairment loss
leases assets acquired under ﬁnance
leases are capitalised and the outstanding
future lease obligations are shown in
creditors the interest element of rental
payments is charged against proﬁts over
the period of the lease in proportion to the
balance outstanding
operating lease rentals operating lease
income and expense in relation to rental
properties is recognised on a straight line
basis over the period of the lease
turnover turnover represents receipts from
the operation of amusement machines
internet gaming and prize bingo excluding
value added tax
stocks stocks are stated at the lower of
cost and net realisable value provision is
made for slow moving or obsolete items
where appropriate
pensions the group operates three deﬁned
contribution pension schemes the assets of
the schemes are held separately from those
of the group in independently administered
funds contributions are charged to the
proﬁt and loss in the year in which they
become payable
share options in accordance with uitf
abstract 1 7 employee share schemes the
cost of share options is assessed as the
intrinsic value the difference between the
market price of the shares at the date
of grant and the exercise price and charged
to the proﬁt and loss account over the
service period term attached to the grant
provisions a provision is recognised
as a liability when the group has a present
obligation legal or constructive as a result
of a past event and it is expected that
a transfer of economic beneﬁts will be
required to settle that obligation and
a reliable estimate of the amount of the
transfer can be made a provision is
maintained in respect of vacant leasehold
properties to take account of the net present
value of residual lease commitments over
the remaining term of the lease and of the
rental income receivable cash ﬂows are
discounted using an appropriate risk free
rate of return
taxation deferred tax is recognised
without discounting in respect of all timing
differences between the treatment of
certain items for taxation and accounting
purposes which have arisen but not reversed
by the balance sheet date in accordance
with frs 1 9
xta001talariusaw4qxp  7406  119 pm  page 34 35 annual report 2005
notes to the financial statements 
for the nine months ended 3 1 december 2005
2 segmental analysis
4 april to 
3 1 december 2005
£000
turnover
adult gaming centres 24500
interactive gaming 1057
total 25557
operating proﬁt before goodwill amortisation and exceptional item
adult gaming centres 3037
interactive gaming 143
total 3180
the net assets of the group all related to adult gaming centres all activities occurred in the uk
3 exceptional item
exceptional item related to professional fees incurred on ﬂotation
4 net interest payable 
4 april to 
3 1 december 2005
£000
bank loans and overdrafts 791
other loans 11
amortisation of ﬁnance arrangement costs 31
bank interest receivable 112
721
5 proﬁt on ordinary activities before taxation
4 april to 
3 1 december 2005
£000
proﬁt on ordinary activities before taxation is stated after chargingcrediting
auditors’ remuneration
audit fee company £5000 92
other services company £204000 219
depreciation and other amounts written off tangible ﬁxed assets
owned 2005
leased 47
operating leases
properties 3152
vehicles and other equipment 133
goodwill amortisation 1126
rents receivable 256
xta001talariusaw4qxp  7406  218 am  page 35 36 financial statements
notes to the financial statements 
for the nine months ended 3 1 december 2005
6 staff numbers and costs
the average number of persons employed including directors by the group during the period analysed by category was
4 april to 
3 1 december 2005
number of employees
operating 697
administration 48
745
the aggregate payroll cost of these persons was
4 april to 
3 1 december 2005
£000
wages and salaries 6419
social security costs 476
other pension costs 115
701 0
details of the directors’ remuneration have been audited and are shown in the directors’ remuneration report on pages 26 and 27  the
company employed the directors and no other employees 
pensions
the group operates three deﬁned contribution pension schemes for its employees the pension cost charge for the period represents
contributions payable by the group to the schemes and amounted to £1 1 5000 contributions amounting to £20000 were payable to the
schemes at the year end and are included in creditors
7 taxation
4 april to 
3 1 december 2005
£000
a analysis of tax charge in the period
current tax charge 364
deferred tax charge 337
701
b factors affecting the tax charge for the current period
the current tax charge for the period is higher than the standard rate of corporation tax in the uk of 30
the differences are explained below
proﬁt on ordinary activities before tax 997
current tax at 30 299
effects of
expenses not deductible for tax purposes 64
goodwill amortisation 338
depreciation in excess of capital allowances 277
other short term timing differences 60
current uk tax charge 364
the effective tax rate as a percentage of proﬁt before tax and goodwill amortisation was 33
xta001talariusaw4qxp  7406  208 pm  page 36 37 annual report 2005
deferred taxation
the elements of deferred taxation were
group company
£000 £000
depreciation in excess of capital allowances 478 –
other timing differences 23 1 –
t otal deferred tax asset – unprovided 709 –
the deferred tax asset has not been recognised as the directors are uncertain of its recoverability
8 earnings per share
the calculation of basic earnings is based on the proﬁt after taxation of £296000 by reference to the weighted average of 30785258
ordinary shares in issue during the period
underlying earnings per share have been calculated based on earnings excluding amortisation of goodwill and exceptional item the directors
believe this gives a better view of maintainable earnings
pence
basic 096
add back
amortisation of goodwill 366
exceptional item 109
underlying 571
the diluted earnings per share is based on 32809605 ordinary shares the difference to the basic calculation representing the additional
shares that would be issued on the marwyn warrant and the share option schemes it reduces the basic earnings per share to 09 pence and
underlying to 54 pence
9 intangible fixed assets – goodwill
group
£000
cost
at incorporation –
additions see note 2 1  53632
at end of year 53632
amortisation
charged in period 1126
at end of year 1126
net book value
at 31 december 2005 52506
notes to the financial statements 
for the nine months ended 3 1 december 2005
xta001talariusaw4qxp  7406  218 am  page 37 38 financial statements
1 0 t angible fixed assets
land and buildings
fixtures ﬁttings
freehold short leasehold plant and equipment t otal
£000 £000 £000 £000
group
cost
at beginning of period – – – –
on acquisition of subsidiary undertakings 6775 9953 28 1 36 44864
additions – 3 2959 2962
disposals – –  1 379  1 379
at end of year 6775 9956 297 1 6 46447
depreciation
at beginning of period – – – –
on acquisition of subsidiary undertakings 88 1 6287 1 5763 2293 1
charge for period 33 24 1 1 778 2052
disposals – – 694 694
at end of year 9 1 4 6528 1 6847 24289
net book value
at 31 december 2005 5861 3428 12869 22158
included in the total net book value of ﬁxtures ﬁttings plant and equipment is £235000 in respect of assets held under hire purchase contracts
depreciation for the period on these assets was £47 000
the group had no commitments in respect of capital expenditure at the end of the year
notes to the financial statements 
for the nine months ended 3 1 december 2005
xta001talariusaw4qxp  7406  218 am  page 38 39 annual report 2005
1 1 fixed asset investments
investment
in shares in
subsidiaries
£000
company
cost
at beginning of period –
acquisitions 32053
intragroup transfers 24567
net book value
at 31 december 2005 56620
the principal subsidiary undertakings all whollyowned and operating in the united kingdom at the year end and included in the consolidated
ﬁnancial statements were 
sudsidiary principal activity
ral limited provision of licensed gaming centres and operation of prize bingo
blackheath leisure carousel limited provision of licensed gaming centres and operation of prize bingo
ral interactive limited supply of equipment and software for the provision of internet gaming
ral machines limited provision of machines for licensed gaming centres
ral services limited provision of services for licensed gaming centres
ral holdings limited intermediate holding company
ral sg limited intermediate holding company
ral investments limited intermediate holding company
leisure promotions limited provision of licensed gaming centres and operation of prize bingo
in t o save limited provision of licensed gaming centres and operation of prize bingo
indirect holding
cz t rading limited provision of internet gaming and technology consultancy
with the exception of cz t rading limited these holdings were all directly owned by the company
the issued share capital of these companies was transferred on 3 1 december 2005 out of ral sg limited to t alarius plc at their net book
value of £24567 000
the assets and trade of these companies were transferred to ral limited on 3 1 july 2005
nil proﬁt or loss arose on both of the above transfers
12 stocks
there is no material difference between the replacement cost of stock and the carrying value of £25 1 000
the stock consists of miscellaneous consumable items
13 debtors
group company
2005 2005
£000 £000
t rade debtors 292 –
amounts owed by subsidiary undertakings – 40756
other debtors 1021 256
prepayments and accrued income 3080 –
4393 41012
notes to the financial statements 
for the nine months ended 3 1 december 2005
xta001talariusaw4qxp  7406  218 am  page 39 40 financial statements
notes to the financial statements 
for the nine months ended 3 1 december 2005
1 4 creditors amounts falling due within one year
group company
2005 2005
£000 £000
bank loans 2000 2000
bank overdrafts –1514
hire purchase 259 –
t rade creditors 2991 27
amounts owed to subsidiary undertakings – 26557
uk corporation tax 259 –
other taxation and social security 1855 –
other creditors 1483 459
accruals and deferred income 3697 26 1
12544 308 1 8
1 5 creditors amounts falling due after more than one year
group and 
company
2005
£000
analysis of debt repayable beyond one year
debt can be analysed as falling due
between one and two years 2500
between two and ﬁve years 30750
33250
less ﬁnance costs 283
bank loans 32967
hire purchase contracts amounting to £259000 all mature within one year
£3525m of bank facilities were drawn at the year end t otal facilities are £37 5m £20m is on a revolving credit facility repayable in june 2008
and £1 7 5m is repayable over the ﬁve years to november 20 1 0 the interest margin payable is 1 5 above libor on the revolving credit facility
and 2 above libor on the term loan
the bank has a debenture secured across the group with cross guarantees covering all subsidiary undertakings
1 6 provisions for liabilities and charges
dilapidation and 
onerous leases
£000
group
at beginning of period –
on acquisition of subsidiary undertakings 2985
at end of year 2985
provisions related to leasehold properties and future cash ﬂow commitments have been discounted at 6 where appropriate
xta001talariusaw4qxp  7406  218 am  page 40 1 7 called up share capital – group and company
2005
£000
authorised 55000000 ordinary shares of 1 0p each 5500
allotted and fully paid 37 903370 ordinary shares of 1 0p each 3790
share issues in the year
ordinary shares of 1 0p each
number
3 march 2005 2 subscriber shares at 80p each
4 april 2005 687 4998 1 0p shares issued at 80p
1 june 2005 30 1 70000 1 0p shares issued at 1 00p
7 november 2005 858370 1 0p shares issued at market price
37 903370
redeemable preference shares of 1 0p each
1 6 march 2005 500000 shares were allotted and quarter paid
22 april 2005 500000 shares were redeemed
–
share option schemes
at the year end there were outstanding options under the group’s share option schemes exercisable up to the year 20 1 5 to subscribe
for 2850684 ordinary shares at a price of 1 00 pence per share the market price of the shares at the date of grant was equal to the
exercise price
warrant
marwyn capital llp had a warrant exercisable up to 20 1 2 where the performance condition has been achieved for 1 852250 ordinary shares
at a price of 1 00 pence per share
1 8 share premium and reserves
share premium proﬁt and
account loss account
£000 £000
group
at beginning of period – –
retained proﬁt for the period – 296
premium on share issues less expenses 31680 –
at end of year 31680 296
company
at beginning of period ––
retained loss for the period –  1 623
premium on share issues less expenses 3 1 680 –
at end of year 3 1 680  1 623
1 9 equity shareholders’ funds
group company
£000 £000
proﬁtloss for the period 296  1 623
issue of new shares 35470 35470
net movement in shareholders’ funds 35766 33847
at beginning of period – –
at end of year 35766 33847
41 annual report 2005
notes to the financial statements 
for the nine months ended 3 1 december 2005
xta001talariusaw4qxp  7406  218 am  page 41 42 financial statements
notes to the financial statements 
for the nine months ended 3 1 december 2005
20 reconciliation of operating proﬁt to operating cash ﬂows
4 april to 
3 1 december 2005
£000
operating proﬁt 1718
depreciation 2052
amortisation of goodwill 1126
decrease in stocks 39
increase in debtors 711
increase in creditors 232
net cash inﬂow from operating activities 4456
21 acquisitions
the company acquired the entire share capital of ral holdings ltd limited ral on 1 june 2005 leisure promotions ltd and in t o save ltd
together leisure promotions on 7 july 2005 and blackheath leisure carousel ltd blackheath on 7 november 2005
the net book values and provisional fair values at the date of acquisition for the three businesses are presented below
leisure 
ral promotions blackheath total
£000 £000 £000 £000
fixed assets
t angible assets 1 2296 5468 4 1 69
current assets
stock 208 78 4
debtors 3375 5 1 3 255
cash acquired 4840 308 335 5483
t otal assets 207 1 9 6367 4763
creditors 6 1 59 2050  1 677
provisions for liabilities and charges  1 383 – –
provisional fair value adjustments  1 22 1  59 322
carrying value of net assets 1 1 956 4258 2764
goodwill arising on acquisition 29064 6942 1 7 626 53632
cash consideration 1 05 97 46 1 9000
repayment of debt 387 40 954 863
acquisition costs 2 1 75 500 527
t otal consideration 4 1 020 1 1 200 20390 72610
the subsidiary undertakings acquired contributed £5358000 to the group’s net operating cash ﬂows paid £1 09000 in servicing of ﬁnance
and utilised £2277 000 for capital expenditure
the results in the period of each of the above businesses from the beginning of their ﬁnancial year prior to acquisition were
£000 £000 £000
proﬁt and loss account
turnover 1 3 1 55 3443 6326
operating lossproﬁt 2387 372 752
lossproﬁt before taxation 397 4 28 1 639
t axation – – 314
lossproﬁt after taxation 397 4 28 1 325
the results in the previous ﬁnancial yearperiod prior to aquisition were
lossproﬁt after taxation  1 602 2 1 1 534
xta001talariusaw4qxp  7406  218 am  page 42 43 annual report 2005
notes to the financial statements 
for the nine months ended 3 1 december 2005
22 analysis of net debt
at incorporation cash ﬂow acquisition non cash changes at end of year
£000 £000 £000 £000 £000
cash at bank and in hand – 1 4068 – – 14068
bank overdrafts – 9 1 1 4 – – 9114
– 4954 – – 4954
debt due within one year
bank loans – 2000 – – 2000
finance leases – 1 09 368 – 259
debt due after one year
bank loans – 33250 – 283 32967
total –30187368 283 30272
noncash changes related to arrangement fees incurred on raising ﬁnance
the group has an offset arrangement with its bankers hence the net cash position is shown in the balance sheet
23 contingent liabilities
the company guaranteed bank borrowings of subsidiary undertakings which at the year end were £9 1 1 4000
24 lease commitments
the annual commitments of the group under operating leases were
land and other
buildings 2005
£000 £000
operating leases which expire
within one year 343 28
between one and ﬁve years 1085 86
over ﬁve years 4795 –
6223 114
25 post balance sheet event
on 2 march 2006 the company acquired the entire share capital of leisurama entertainments ltd and leisurama holdings limited
for a consideration of £1 2m
26 related parties
details of the principal subsidiary undertakings are included on page 39 in accordance with frs8 related party disclosures transactions
or balances between group entities that have been eliminated on consolidation are not reported
related party transactions amounted to £85 1 000 of fees paid to marwyn capital llp for corporate ﬁnancial advisory services
xta001talariusaw4qxp  7406  218 am  page 43 44 annual report and accounts 2005 title annual general meeting
notice is hereby given that the annual
general meeting “agm” of the company
will be held at the ofﬁces of mayer brown
rowe  maw llp  1 1 pilgrim street london
ec4v 6rw on wednesday 1 7 may 2006
at 1 000 am for the following purposes
as ordinary business to consider and if
thought ﬁt pass resolutions 1 to 1 0 inclusive
which will be proposed as ordinary resolutions 
1 t o receive and consider the directors’
and auditors’ reports and the financial
statements for the period ended 3 1
december 2005
2 t o approve the directors’ remuneration
report on pages 26 and 27 of the
financial statements
3 t o revise the sum currently permitted
by the articles to be shared amongst the
nonexecutive directors that the amount
of £1 00000 referred to in the articles of
association of the company being such
sum as the directors shall currently be
entitled to receive by way of fees for their
services as directors and to be divided
among directors be revised to the
amount of £200000
4 that andrew james hall be reappointed
as a director of the company
5 that nicholas simon harding be 
reappointed as a director of the company
6 that robert thomas ernest ware be 
reappointed as a director of the company
7 that mark irvine john watts be re
appointed as a director of the company
8 that david jeffreys williams be re
appointed as a director of the company
9 t o reappoint kpmg audit plc as auditors
1 0t o authorise the directors to determine
the auditors’ remuneration
as special business to consider and if
thought ﬁt pass the following resolutions
of which resolution 1 1 will be proposed
as an ordinary resolution and resolution
1 2 will be proposed as a special resolution
ordinary resolution
1 1 that the directors be and they are hereby
generally and unconditionally authorised
for the purposes of s80 companies act
1 985 the “ act” to exercise all powers of
the company to allot relevant securities
as deﬁned in s802 of the act up to an 
aggregate nominal amount of £1 46344560
to expire at the earlier of the conclusion of the
next annual general meeting of the company
after the passing of this resolution and 1 7
august 2007 save that the company may
before that expiry and the directors may allot
relevant securities in pursuance of such an
offer or agreements if the authority conferred
by this resolution had not expired 
special resolution
1 2 that subject to the passing of resolution
1 1 above the directors of the company be
and they are hereby empowered pursuant
to s95 of the companies act 1 985 the
“ act” in substitution for any previous power
conferred on the directors pursuant to that
section to allot equity securities pursuant to
the authority conferred by resolution1 1
above as if s89 1  of the act did not apply
to that allotment provided that this power
shall be limited
a to the allotment of equity securities
in connection with a rights issue and
so that for this purpose “rights issue”
means an offer of equity securities open
for acceptance for a period ﬁxed by the
directors to holders of equity securities
on the register on a ﬁxed record date in
proportion to their respective holdings of
such securities or in accordance with the
rights attached to them but subject to
such exclusions or other arrangements
as the directors may deem necessary
or expedient in relation to fractional
entitlement or legal or practical
problems under the laws of or the
requirements of any recognised
regulatory body or any stock exchange
in any territory and
b to the allotment otherwise than
pursuant to subparagraph a above
of equity securities up to an aggregate
nominal amount of £2 1 95 1 6
and shall expire at the earlier of the
conclusion of the next annual general
meeting of the company to be held after
the date of the passing of this resolution
and 1 7 august 2007 save that the
company may before that expiry make an
offer or agreement which would or might
require equity securities to be allotted after
that expiry and the directors may allot
equity securities in pursuance of that offer 
or agreement as if the power conferred by
this resolution had not expired
for the purposes of this resolution 
the expression “equity securities” and
references to the allotment of equity
securities shall respectively have the
meanings given to them in s94 of the act
by order of the board
s c fadil 
secretary
1 3 march 2006 
registered ofﬁce 20 black friars lane
london ec4v 6hd
notes
a in accordance with regulation 4 1 of the
uncertiﬁcated securities regulations
200 1  the company gives notice that only
those shareholders entered on the relevant
register of members the “register” for
certiﬁcated or uncertiﬁcated shares of the
company as the case may be at 1 000
am on 1 5 may 2006 the “speciﬁed
time” will be entitled to attend or vote
at the agm in respect of the number of
shares registered in their name at the time
changes to entries on the register after
the speciﬁed time will be disregarded
in determining the rights of any person
to attend or vote at the agm should the
agm be adjourned to a time not more than
48 hours after the speciﬁed time that
time will also apply for the purpose of
determining the entitlement of members
to attend and vote and for the purpose
of determining the number of votes they
may cast at the adjourned agm should
the agm be adjourned for a longer period
then to be so entitled members must be
entered on the register at the time which is
48 hours before the time ﬁxed for the
adjourned agm or if the company gives
notice of the adjourned agm at the time
speciﬁed in the notice
b any member entitled to attend and vote at
the agm may appoint one or more proxies
to attend and on a poll to vote on hisher
behalf a proxy need not be a member
proxy forms should be lodged with the
company’s registrar or submitted not
later than 48 hours before the time for
which the agm is convened completion
of the appropriate proxy form does not
prevent a member from attending and
voting in person if heshe is entitled to
do so and so wishes
c copies of service contracts between any
director and the company or any of its
subsidiaries are available for inspection
at the registered ofﬁce of the company
on each business day during normal
business hours and will be available on the
day of the agm at the place of the agm
from at least 1 5 minutes prior to the agm
until its conclusion the register of
directors’ interests will also be available for
inspection from the commencement of the
agm until its conclusion
notice of annual general meeting
44
xta001talariusp2944qxp  10406  404 pm  page 44 45 annual report 2005
advisors 
company secretary
sc fadil fcis
rj hillhouse fcis
registered office
20 black friars lane
london
ec4v 6hd
principal solicitors
mayer brown rowe  maw llp
1 1 pilgrim street
london
ec4v 6rw 
joelson wilson  co
70 new cavendish street
london
w1g 8a t
principal bankers
bank of scotland
249 silbury boulevard
milton keynes
mk9 1na
auditors
kpmg audit plc
altius house
one north fourth street
milton keynes
mk9 1ne
corporate financial advisers
marwyn capital llp
1 0th floor bucklersbury house
3 queen victoria street
london
ec4n 8el
livingstone guarantee llp
1 5 adam street
london
wc2n 6rj
stockbrokers
numis securities limited
cheapside house
1 38 cheapside
london
ec2v 6lh
registrars
capita registrars
the registry
34 beckenham road
kent
br3 4tu
financial public relations
brunswick group llp
1 6 lincoln’s inn fields
london
wc2a 3ed
general enquiries
t alarius plc 
silbury court 
368 silbury boulevard 
milton keynes
mk9 2af
t el 0 1 908 696 1 00 
fax 0 1 908 393865
group website wwwtalariuscom
investor relations
jonathon glasschris blundell
brunswick group
t el 0207 404 5959
andy hall finance director
t alarius plc
t el 0 1 908 246 1 1 1
nick harding chief executive
t alarius plc
t el 0 1 908 246 1 23
annual report copies
jackie t aylor
t alarius plc
t el 0 1 908 246 1 1 9 
designed by navyblue design group
photography by rob wyatt
printed by st ives westerham press 
a carbonneutral
®
company registered to
iso 1 400 1 environmental management
systemthe paper used in this report comes
from well managed forests independently
certified according to the rules of the 
forest stewardship council
highlights
the company
t alarius plc comprises two key
gaming brands
quicksilver the uk’s largest chain
of adult gaming centres agcs
currently with 183 sites spread
across the length and breadth 
of the uk
cyberslotz launched in august
2001 a “virtual gaming machine
lounge” and amongst the top ten
most visited online gaming sites 
in the uk 
source branddriver survey june 2005
contents
01 highlights
02 chairman’s statement
06 chief executive’s statement
14 finance review
19 mission statement
22 board of directors
24 corporate governance statement
26 directors’ remuneration report
28 directors’ report
30 independent auditors’ report 
31 consolidated profit and loss account
32 balance sheets
33 consolidated cash flow statement
34 notes to the financial statements
44 notice of annual general meeting
45 advisors  contacts
talarius cover artwork 2qxp  7406  235 pm  page 2 annual report 2005 talarius annual report 2005
talarius cover artwork 2qxp  7406  218 am  page 1


Summary:
 6 chief executive’s statement
adult gaming centres agc like for like
sales in the second half of 2005 were
ahead by nine per cent and year on year
mature business growth in all regions of
the country continues to be very strong
despite the challenging retail environment
much of our growth has come from 
the introduction of section 1 6 “s 1 6”
machines that operate with a maximum
stake of £2 and a top cash payout of £500
compared to the 30p stake and £25 payout
in the majority of the machine estate this
introduction has outweighed much of the
downside that we might otherwise have
encountered from the view taken by the
government that any increase in stakes 
and prizes for awp machines must be held
back until after the new gambling act is
enacted in september 2007 
t otal pro forma agc sales were £47 85m
2004 £4375m up year on year by 9
operating proﬁt at £7 7m before goodwill
amortisation of £1  1m was up 30
2004 £59m blackheath exhibited the
strongest sales growth reﬂecting the fact
its sites are all located in london where 
s 1 6 machines have started most strongly
the second half beneﬁted from the
accelerated roll out of s 1 6 machines
towards our target of four in each centre
this roll out was actually achieved at the
end of february 2006 about a month
ahead of our original plans 
operating review using the quicksilver
business as the foundation for consolidation
of the high street gaming market the
group completed two acquisitions during
the year at attractive multiples on 7 july
2005 the group acquired leisure
promotions ltd and in t o save ltd
together “leisure promotions” at a total
consideration of £1 1m leisure promotions
operated 1 3 adult gaming centres “ agcs”
across northern england and scotland
with over 1 300 gaming machines the
group also acquired blackheath leisure
carousel ltd “blackheath” on
7 november 2005 for £20m blackheath
operated 24 sites in london with an estate
of nearly 1 300 machines 
by the yearend the group was operating
1 64 sites and approximately 9000
machines 
during the period the group continued
to make good progress both operationally
and ﬁnancially t o assist the understanding
of the underlying performance of the
business additional segmental
information has been included below 
for quicksilver and blackheath leisure
promotions was fully integrated within
three months and is included within the
quicksilver ﬁgures the three businesses
have been treated as though they had
existed as the “enlarged group” for the
whole of the current and prior year the
current year being 52 weeks in length 
and last year being 53 weeks
nick harding chief executive
agc likeforlike sales were
ahead by 9 and yearonyear
mature business growth in all
regions of the country continues
to be very strong despite the
challenging retail environment
xta001talariusaw4qxp  7406  216 am  page 6 7 annual report 2005
t otal ebitda was £1 3 1m up 24 on last
year 2004 £1 05m our ebitda margin
was strong progressing from 24 1 to
27 3 overall our aim is to deliver an
ebitda margin closer to 30 as we
switch all the store facia to quicksilver and
achieve synergies across the group all
leisure promotions stores have now been
rebranded as quicksilver the blackheath
stores will be rebranded by the end of
april 2006 and leisurama by the end 
of july 2006
in addition to the post balance sheet
acquisition of leisurama on 2 march 2006
which brings a further 1 9 units at a cost 
of £1 2m and at a prospective ebitda
multiple of 5 1 times we have also
identiﬁed two new sites as part of our
aim of opening eight new greenﬁeld sites
in 2006 
interactive cyberslotz our internet gaming
business continues to show strong growth
both in terms of ‘drop’ and operating proﬁt
sales grew by 30 to £1 7m 2004
£1 3m and operating proﬁt increased
to £02m from last year’s £008m
we continue to add new games to the site
to provide freshness and choice for our
players at the year end the site featured
25 games the sales trend for the ﬁrst ten
weeks of the year has moved well above
the year on year growth rate experienced
last year
our strong player retention was backed 
up by market research conﬁrming that
there was exceptionally strong loyalty 
to the cyberslotz brand and site we are
strengthening the management team 
to improve marketing and promotional
support and provide the skills necessary 
to enhance both the customerfacing
elements of our site and the back of house
service and support this also provides us
with the conﬁdence to sustain the growth
of our whitelabel interactive service
known as “interslotz” where we added
two new business afﬁliates in the year
to take the total to 16
we have recently enhanced the senior
team with the appointment of nick
pearson who joined us from camelot 
as it director his focus has been on
systematically planning the development 
of the existing site and then preparing 
it to be marketed more widely as it is
currently only made available in the uk 
competitive advantage efﬁcient machine
estate management is at the core of our
business we constantly ensure that we
own the optimum mix of gaming machines
install them in the appropriate sites and
provide the right environment to provide 
an enjoyable customer experience 
we must be innovative with our product 
to sustain customer interest our large
machine estate and in depth product
knowledge allows us to experiment and
innovate with new games and concepts
then roll out the successful machines at
considerably lower risk than our
competitors continually optimising the
performance of our estate we are also
able to extract economies of scale in
buying and maintenance from owning the
largest number of machines in the uk
high street we have seen the continued
beneﬁt of this approach during the period
especially with the accelerated roll out 
of s1 6 machines 
during this year we have introduced
quickbet sports book electronic terminal
betting alongside our camden agc and
will repeat this at another site shortly we
are also exploring the expertise we have
gained in the high street bingo market and
our metro bingo offering the acquisition
of leisurama has brought us to 2 1 bingo
lounges contained within agcs and
provides another potential avenue for
growth for the group
2 1 bingo lounges contained within agcs
provides another potential avenue for
growth for the group
9
t otal pro forma agc sales were £47 85m
2004 £4375m up year on year by 9 
30
agc operating proﬁt at £7 7m before
goodwill amortisation of £1  1m was up 30
2004 £59m 
xta001talariusaw4qxp  7406  216 am  page 7 8 delivering the best experience
delivering 
the best
experience
xta001talariusaw4qxp  7406  115 pm  page 8 9 annual report 2005
one of our key strengths lies in our people
many of whom have given us signiﬁcant
years of service and are highly experienced
gaming operators
xta001talariusaw4qxp  7406  116 pm  page 9 10 chief executive’s statement
legislation and regulation under the 2005
gambling act further reforms of uk gaming
will take effect from 2007  we continue to
view the change positively in particular we
are pleased that “category b3” machines
will take the place of the very successful
s1 6 machines we remain positive despite
the december 2005 withdrawal of the
va texempt status of s 1 6 machines and
also the government’s stated intention
to align the level of amusement machine
licence duty across all categories of
gaming machine we have already set
in motion plans to mitigate any detrimental
impact this may have 
from 26 march 2006 a ban will be
imposed on smoking in public places
in scotland where we operate 1 0 of our
1 83 centres we have taken various actions
to comply with the ban and will be trying
certain innovative approaches to continue
to provide a superior experience for our
customers the fact that the legislation
is comprehensive in nature means it is
only likely to have a shortterm impact as
customers adapt to the change it will also
act as a very good indicator of the likely
impact of the ukwide ban due in the
summer of 2007  and enables us to
monitor the effect of our innovations
we believe the cyberslotz gaming engine
is unique in the remote gaming sector 
we design build and operate all our own
software thus we have an open platform
with a wide range of slot gaming products
from a number of different suppliers –
our own virtual gaming machine lounge 
we continue to explore the opportunities
of new technology we are currently
trialling our online games on the mobile
phone platform using the opportunity 
to leverage our existing online gaming
expertise and maximise revenue from 
our nationwide customer base 
quicksilver has led the development 
of the uk agc market over the past ﬁve
years with a wide range of customer
service innovations to make its agcs the
gaming venue of choice on the high street
we position ourselves ﬁrmly in the low
stake high volume high street gaming
market where our principal objective is 
to provide ‘gaming entertainment’ for the
retail shopper our venues mainly trade 
in line with retail hours hence a key
differentiator is our focus on providing
superior customer service
we position ourselves ﬁrmly in
the low stake high volume high
street gaming market where our
principal objective is to provide
“gaming entertainment” for the
retail shopper
xta001talariusaw4qxp  7406  217 am  page 10 annual report 2005
our people the number of t alarius
employees continues to grow in line with
our acquisitions and is now slightly over
1 000 we ﬁrmly believe that one of our
key strengths lies in our people many 
of whom have given us signiﬁcant years 
of service and are highly experienced
gaming operators all our staff receive
regular customer service training we 
also use ‘mystery shoppers’ to monitor
standards of service and presentation 
we continue to review and upgrade our
recruitment and training policies through
our hr department which also regularly
reviews beneﬁts packages for all team
members to ensure that we are generally
within the upper quartile of the market 
one of the beneﬁts of our stock market
listing was the opportunity to make a
signiﬁcant number of senior and middle
managers share option holders in late
march 2006 we intend to introduce a
‘save as you earn’ share scheme open
to all staff i want to thank all employees
of the group for their contribution to our
success and i hope many of them take 
the opportunity to become shareholders
nick harding
chief executive
we have introduced quickbet sports book
electronic terminal betting alongside our
camden agc and will repeat this at another
site shortly 
11
xta001talariusaw4qxp  7406  116 pm  page 11 crea ting
winning
environments
12 creating winning environments
xta001talariusaw4qxp  7406  217 am  page 12 13
“we have taken various
actions to comply 
with the ban and will
be trying certain
innovative approaches
to continue to provide 
a superior experience
for our customers” 
annual report 2005
xta001talariusaw4qxp  7406  217 am  page 13