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Phoenix IT Group plc
Technology House, Hunsbury Hill Avenue, 
Northampton, NN4 8QS
t: +44 (0) 1604 769000
f: +44 (0) 1604 764323
www.phoenixitgroup.com
Phoenix IT Group plc
Annual Report and Accounts for 
the year ended 31 March 2011
making it possible
Phoenix IT Group plc  Annual Report and Accounts for the year ended 31 March 2011 20325.04 14/06/2011 Proof 4 20325.04 14/06/2011 Proof 4
About us
Phoenix IT Group companies provide managed IT infrastructure support 
services, including systems management, communications, remote 
telephone support, high-touch field services, project and consultancy 
services, business continuity and  business availability services.
complete solutions Our Performance Corporate Governance Financial Statements Company Information
Phoenix IT Group plc
Annual Report and Accounts 2011
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Highlights
Financial Performance
 
Group revenues increased 10.5% to £271.6m  
(2010: £245.8m)
 
Underlying profit from operations
(1)
 increased 4.6% to 
£36.0m (2010: £34.4m)
 
Underlying profit before tax 
(2)
 increased by 8.7% to  
£32.0m (2010: £29.5m)
 
Underlying diluted earnings per share
(2)
 increased 5.5%  
to 30.6p (2010: 29.0p)
 
Proposed final dividend of 7.00p per share, a 62.8% 
increase in total dividend to 10.50p per share  
(2010: 6.45p) reflecting rebasing of dividend policy  
and the Boards confidence in the future
 
Retirement benefit obligation reduced to £0.7m  
(2010: £5.1m) 
 
Good cash generation and further reduction in net  
debt (including finance leasing) of £5.5m to £62.4m  
(2010: £67.9m)
Statutory Performance
 
Profit before tax increased to £25.3m (2010: £25.2m)
 
Profit from operations decreased to £29.6m  
(2010: £30.1m)
 
Diluted earnings per share decreased to 24.2p (2010: 24.6p)
 
Basic earnings per share decreased to 25.0p (2010: 25.4p)
Operational Highlights
 
Integration of three large outsource contracts won  
during 2010 now complete
 
ICM and Servo divisions merged from 4 April 2011, benefits 
coming through as expected
 
Targeted investment in Hosting and “Cloud” Services to 
meet growing demand
 
Continuing high demand for managed hosting 
 
New banking facilities materially increase the financial 
resources of the Group
 
Good cash generation and further reduction in net debt 
(including finance leases)
 
Continuing high demand for managed hosting (35% 
increase in annual contract base)
 
Strong platform for future growth
(1)  Underlying — adjusted for non-recurring items £3.3m (2010: £1.2m) and amortisation  
of acquired intangibles.
(2) Underlying — adjusted for non-recurring items £3.6m (2010: £1.2m) and amortisation  
of acquired intangibles.
Corporate Governance
Board of Directors 10
Directors’ Report 11
Corporate Governance 14
Corporate Social Responsibility 17
Directors’ Responsibilities Statement 18
Audit Committee Report 19
Directors’ Remuneration Report 20
Our Perfomance
Highlights 01
Chairman’s Statement 02
Business Review 03
 Chief Executive’s Review 03
 Finance Review 06
Financial Statements
Independent Auditor’s Report 
on the Group Financial Statements 25
Consolidated Statement of Income 26
Consolidated Statement of Comprehensive Income 27
Consolidated Balance Sheet 28
Consolidated Statement of Changes in Equity 29
Consolidated Cash Flow Statement 30
Notes to the Consolidated Financial Statements 31
Independent Auditor’s Report  
on the Company Financial Statements 63
Company Balance Sheet 64
Notes to the Company Financial Statements 65
Five Year Summary 69
Company Information
Notice of Annual General Meeting 70
Advisers and Financial Calendar 74 02
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Chairman’s Statement
Peter Bertram
“I am pleased to report that 
Phoenix IT Group plc has had a 
successful year with all three 
divisions delivering organic 
growth in both revenue and 
underlying profit from 
operations.” 
Review of the Year
I am pleased to report that Phoenix IT Group plc has had a successful 
year with all three divisions delivering organic growth in both revenue 
and underlying profit
(1)
 from operations, and the Group continues to 
be cash generative. We have completed the integration of ICM and 
Servo into a single end-user business and following the investments 
made during the year in increasing hosting capacity and capability 
we are well positioned to take advantage of the market shift towards 
“Cloud” computing in both of our end-user and Partner Services 
divisions. The breadth of services that we can offer via the merged 
end-user division leads us to anticipate further growth in managed 
hosting and “Cloud” services into the current Financial Year. Whilst 
growth predictions are more cautious in respect of the Partner Services 
division, the Group has a diverse customer base and retains good 
visibility of forward revenues giving a strong platform on which to 
build for the future.
A review of the year’s trading and results is given in the Business 
Review.
Results
Group revenues increased as expected by 10.5% to £271.6m (2010: 
£245.8m) and profit before tax increased by 0.7% to £25.3m (2010: 
£25.2m). Underlying
(2)
 profit before tax increased by 8.7% to £32.0m 
(2010: £29.5m). Diluted earnings per share decreased by 1.6% to 24.2p 
(2010: 24.6p) and underlying
(2)
 diluted earnings per share increased 
by 5.5% to 30.6p (2010: 29.0p). The Group continues to be highly cash 
generative and despite the increase in capital investment during the 
year net debt (including finance leases) reduced by £5.5m to £62.4m 
(2010: £67.9m).
Dividend
As announced in November 2010 in the Interim Results, after careful 
consideration the Board has decided to rebase the Group’s dividends 
in light of its continued strong cash generation and the greater 
flexibility afforded by the recent refinancing of its borrowing facilities.  
The Group has investment opportunities, both organic and acquisitive, 
within its chosen growing markets and the Board believes these can 
be comfortably afforded within a higher dividend pay-out ratio.  The 
Board’s objective will be to at least maintain the rebased level of 
dividends in real terms within a pay-out ratio of between about 35 and 
45% of profit, subject to unusual events or circumstances. The Board 
recommends a proposed final dividend of 7.00p per share (2010: 4.30p) 
which, combined with the interim dividend of 3.50p per share, gives a 
total dividend per share for the year of 10.50p (2010: 6.45p), an increase 
of 62.8%. If approved, the final dividend will be paid on 3 August 2011 
to shareholders on the register at 17 June 2011. 
Board
As previously announced, Steve Clutton was appointed as Group 
Finance Director on 1 March 2011. Steve was most recently Group 
Finance Director of IG Group Holdings plc between 2006 and 2010. He 
brings extensive financial and commercial experience from operating 
within a range of companies having previously held senior finance 
roles within Barclays Bank, Interoute Telecommunications Limited and 
British Telecom.
 
Employees
On behalf of the Board and the Shareholders I would like to thank all 
our staff for their commitment and hard work during the year.
Annual General Meeting
The Annual General Meeting will be held at the Group’s registered 
office, Technology House, Hunsbury Hill Avenue, Northampton on  
28 July 2011 at 10.30 a.m.
Peter Bertram
Chairman
6 June 2011
(1) Underlying — adjusted for non-recurring items £3.3m (2010: £1.2m) and amortisation of acquired 
intangibles
(2) Underlying — adjusted for non-recurring items £3.6m (2010: £1.2m) and amortisation of acquired 
intangibles Phoenix IT Group plc
Annual Report and Accounts 2011
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Our Performance
“Recognising the growth 
opportunity in “Cloud” services  
we have continued to invest 
significantly in these areas.” 
Introduction
The Group has had a solid year financially with revenues increasing 
by 10.5% to £271.6m (2010: £245.8m) and underlying profit before 
tax
(2)
 increasing by 8.7% to £32.0m (2010: £29.5m). There were no 
acquisitions during the year and all three businesses delivered organic 
growth in both revenue and underlying profit from operations
(1)
.
We have seen some confidence returning to the IT services market 
in the UK with businesses now proceeding with IT projects which had 
been deferred and many organisations, in both the public and private 
sectors, continuing to see outsourcing as a key method of reducing 
their own cost bases. Although current economic conditions and the 
recent spending review by the Government have created a degree of 
uncertainty, the overall trend for outsourcing remains promising and 
our Phoenix IT Services (Partner Services) Division remains well placed 
to support outsourcing companies in delivering essential services at a 
lower cost.
The emergence of “Cloud” computing marks a major shift in the IT 
services market driven by developments in virtualisation, web-based 
architecture and improvements in network capacity. Recognising the 
growth opportunity in “Cloud” services we have continued to invest 
significantly in these areas, particularly our managed hosting annuity 
contracts business and as a result the Group is able to offer customised 
services which have significant business advantages in terms of 
flexibility, risk reduction and compliance to its customer base. 
Growth in these “Cloud” services combined with reducing costs 
elsewhere in the Group has helped to mitigate revenue declines in 
areas where there is price competition or where we are reducing 
emphasis. However, this planned transition has had the effect of 
constraining short-term profitability, particularly within the Servo 
(Mid-market Services) Division but we continue to be encouraged 
by improvements in the pipeline, and we are currently bidding for a 
number of opportunities with both new and existing customers.
(1) Underlying — adjusted for non-recurring items £3.3m (2010: £1.2m) and amortisation of acquired 
intangibles.
(2) Underlying — adjusted for non-recurring items £3.6m (2010: £1.2m) and amortisation of acquired 
intangibles.
Simplified organisational structure
The ICM Continuous Business (Business Continuity) and Servo (Mid-
market Services) Divisions merged to create a single end-user based 
organisation operating as one business within the Phoenix IT Group 
from 4 April 2011. The combined business, which will be reported from 
1 April 2011 in our Financial Statements as one division, will be known 
as ICM.
The combined business operates from 23 UK locations and offers a full 
breadth of IT and business continuity solutions, from Managed Hosting 
and “Cloud” Services to Business Continuity and Disaster Recovery, 
as well as a full range of Infrastructure Management and Professional 
Services. 
In recent years, there has been a move away from traditional IT disaster 
recovery solutions towards the more holistic all-round concept of 
business resilience, which encompasses a company’s strategy for 
identifying, mitigating and responding to potential business risks. The 
merger of the two divisions allows the Group to offer an end-to-end 
business proposition centred around resilience.
The Servo (Mid-market Services) Division brings expertise in the 
design, implementation and hosting of resilient solutions, while ICM 
Continuous Business (Business Continuity) provides business continuity 
services designed around the workings of these solutions. Whilst other 
organisations offer similar services to our individual component parts, our 
combined offering provides customers with a complete service, which on 
a standalone basis we believe will be unrivalled in the UK market.
ICM Continuous Business (Business Continuity)
 Year ended  Year ended
 31 March 31 March
 2011 2010 Change
Revenue £55.5m £53.1m +4.4%
Underlying profit  
from operations £14.4m £13.3m +8.5%
Underlying operating  
margin 26.0% 25.0% 
Order book £113.7m £104.3m +9.1%
Annual contract value £55.4m £54.5m +1.8%
Revenues for the year were £55.5m (2010: £53.1m), an increase of 
4.4% including £2.1m (2010: £0.3m) in respect of Shadow Planner, 
our business continuity planning tool business which was acquired 
on 23 December 2009. Excluding the impact of Shadow Planner, 
Divisional revenues increased by 1.1% with revenue growth held 
back by lower, traditional IT disaster recovery revenues. The growth 
in “Cloud” services and in particular virtualisation continues to create 
new solutions for IT business continuity as an alternative to traditional 
disaster recovery options. 
This modest revenue growth is reflected in the order book and annual 
contract values at 31 March 2011. Order book increased by 9.1% to 
£113.7m (2010: £104.3m) bolstered by a £17.2m five year extension in 
June 2010 to the Division’s largest business continuity contract. This 
contract, due to expire in March 2011 was extended until March 2016. 
The annual contract value increased to £55.4m as at 31 March 2011  
(2010: £54.5m) providing good visibility of future revenues which will 
be recognised during the current financial year.
Business Review
Chief Executive’s Review Nick Robinson 04
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Chief Executive’s Review continued
Underlying profit from operations was £14.4m (2010: £13.3m) with 
Shadow Planner contributing £0.5m (2010: £nil). During the second 
half of the year, underlying profitability improved as a result of tight 
controls on the cost base and this translated into a year on year 
improvement in operating margin from 25.0% to 26.0%. 
During the year, the Division has continued to invest for growth 
through expenditure on developing new products and services within 
the “Cloud” as well as expanding its infrastructure and business 
continuity capacity. Up-grades have taken place at the Birmingham, 
Hamilton and Farnborough data-centres, as well as a power upgrade 
at our Wapping facility. This capacity expansion programme will 
continue into 2012 and 2013 to meet the increased demand for work-
area capacity, particularly in the London financial markets.
The merger of the ICM Continuous Business (Business Continuity) with 
our Servo (Mid-market Services) Division from 4 April 2011 will provide 
further opportunities to sell business continuity services and hosting to 
a significantly wider customer base. 
“. . . our combined offering 
provides customers with a 
complete service, which on a 
standalone basis we believe will  
be unrivalled in the UK market.”
Servo (Mid-market Services)
 Year ended  Year ended
 31 March 31 March
 2011 2010 Change
Revenue £98.2m £88.5m +11.0%
Underlying profit  
from operations £8.3m £8.0m +2.6%
Underlying operating  
margin 8.4% 9.1%
Order book £73.6m £54.3m +35.5%
Annual contract value £49.1m £47.9m +2.6%
Despite a slow start to the year, Divisional revenues grew by 11.0% 
mainly due to the acquisition of support contracts from KCOM Group 
plc during the last quarter of the previous Financial Year, combined 
with an increase in managed hosting activity and stronger project and 
professional services revenues. There has been further progress in 
improving the quality of business mix in the Division as the proportion 
of non-annuity contract revenue continues to fall and managed 
hosting revenues increase.
Underlying profit from operations increased to £8.3m (2010: £8.0m). 
During the year, the Division continued to strengthen its sales and 
marketing effort and this investment has had the effect of constraining 
profitability in the short-term and diluting the underlying operating 
margin percentage from 9.1% to 8.4% for the year as a whole.
Despite the loss of £3.5m of annual contract value, announced in our 
Q1 IMS in August 2010, which resulted from the decision by a customer 
to in-source some of the activities provided by the Group, there has 
been significant growth in the order book driven by new business wins 
during the year. The Divisional order book grew by 35.5% to £73.6m 
at 31 March 2011 (2010: £54.3m) and the annualised contract value 
increased by 2.6% to £49.1m at 31 March 2011 (2010: £47.9m).
The business has continued to extend its presence in the mid-market 
sector and grow its managed hosting annuity business. The hosting 
annual contract base increased by 35.3% to £13.0m at 31 March 2011 
(2010: £9.6m) clearly demonstrating the strength of its service offering 
as customers switch to hosting technology within our business. The 
increase in managed hosting business, aided by investment in the sales 
force in the first half of the year, has been the driving force behind a 
significant increase in underlying operating margin from 7.1% in the 
first half to 9.6% during the second half of the year.
Whilst the focus remains on growing managed hosting annuity 
revenues it has also been encouraging to see stronger year on year 
project and professional services revenues. This is a reflection of 
confidence returning to the market, as businesses are now willing 
to proceed with projects which had previously been delayed or 
postponed. 
The growth in managed hosting, supported by a carefully directed 
capacity expansion programme, should ensure that higher and more 
sustainable underlying operating margins are achievable in this 
business.
Business Review Phoenix IT Group plc
Annual Report and Accounts 2011
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Our Performance
Phoenix IT Services (Partner Services)
 Year ended  Year ended
 31 March 31 March
 2011 2010 Change
Revenue £117.9m £104.2m +13.1%
Underlying profit  
from operations £16.7m £16.4m +2.2%
Underlying operating  
margin 14.2% 15.7%
Order book £140.7m £194.4m -27.6%
Annual contract value £95.3m £101.3m -5.9%
Divisional revenues increased by 13.1% to £117.9m (2010: £104.2m), 
partly due to a recovery in project and professional services revenues 
from the low levels reported last Financial Year, combined with the 
year on year benefit of three outsourcing contracts secured during 
the latter part of the previous Financial Year. The integration of these 
contracts into the existing business is now complete and profitability 
is in line with our expectations. With the introduction of efficiency 
savings we expect to see improved profitability on these contracts, 
moving into low double-digit margins in the coming Financial Year. 
Underlying profit from operations increased to £16.7m (2010: 
£16.4m) despite the continued competitive pricing environment. As 
anticipated, underlying operating margins were diluted by the lower 
margins achieved on the three outsourcing contracts referred to 
above. The underlying operating margin excluding the effect of these 
outsourcing contracts increased from 16.1% to 16.7%, reflecting in 
part tight control over the cost base during the year.
Whilst we have seen some improvement in market conditions during 
2011, there was a scarcity of large contract opportunities to be won. 
The Divisional order book, which was boosted at the beginning of the 
year by a number of large contract wins in the previous year, reduced 
by £53.7m to £140.7m (2010: £194.4m). This reduction has in part been 
driven by a structural move in our market to shorter contracts. While 
this provides the customer with more flexibility, we typically see these 
shorter contracts renew. The annual contract value at 31 March 2011 
was £95.3m (2010: £101.3m). 
Despite a decline in order book and annual contract value there have 
been some encouraging developments within the business this year. 
The work performed in integrating the three large contracts has laid 
the platform for further success and brought in considerable retail 
sector expertise. In addition, towards the end of the Financial Year, 
the Division acquired a five year lease on a co-location facility allowing 
the Division to increase the breadth of services within its portfolio. 
Initial take-up has been promising and the expansion of the service 
offering into the provision of hosting services to partners will enable 
the Division to take advantage of the increasing shift towards “Cloud” 
technology. The Division’s wide range of service options, multiple 
technologies and optimised infrastructure availability leave it well 
positioned to enable its partners’ push into the “Cloud”. 
Whilst we have seen some encouraging activity during the year and 
have a strong pipeline of future prospects, we anticipate that future 
new business wins are likely to be offset by pressure on margins. 
Outlook
Following the investments made during the year in increasing hosting 
capacity and capability, we are well positioned to take advantage 
of the market shift towards “Cloud” computing in both operating 
divisions. The breadth of services that we can offer via the merged end 
user division leads us to anticipate further growth in managed hosting 
and “Cloud” services into the current Financial Year. Whilst growth 
predictions are more cautious in respect of the Partner Services 
division, the Group as a whole retains good visibility of forward 
revenues giving a strong platform on which to build for the future.
Nick Robinson
Chief Executive
6 June 2011
“The Division’s wide range of 
service options, multiple 
technologies and optimised 
infrastructure availability leave  
it well positioned to enable its 
partners’ push into the “Cloud”.” 06
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Finance Review Steve Clutton
Business Review
Summary of results
The 2011 financial results represent another positive year for the Group 
with organic revenue growth in all three divisions. Underlying profit 
from operations
(1)
 increased by 4.6% and underlying profit before tax
(2)
 
increased by 8.7%. The Group continues to enjoy strong operating 
cashflow and is now on a much sounder footing in terms of its banking 
facilities having re-financed in August 2010. Net debt (including finance 
leases) decreased to £62.4m (2010: £67.9m) at 31 March 2011. 
It is pleasing that this performance has been achieved in an 
environment of market competitive pricing and during a period of 
continued economic uncertainty. 
The key financial highlights for the year are as follows:
 2011 2010  
 £m £m Change 
Revenue 271.6 245.8 +10.5% 
Underlying profit 
from operations
(1)
 36.0 34.4 +4.6% 
Underlying profit before tax
(2)
 32.0 29.5 +8.7% 
Net debt (including 
finance leases) (62.4) (67.9) (5.5)m 
Annual contract value 199.8 203.7 (3.9)m 
Order book 328.0 353.0 (25.0)m 
Diluted earnings per share  24.2p 24.6p -1.6% 
Underlying diluted earnings 
per share
(2)
 30.6p 29.0p +5.5% 
Dividend (p) 10.50p 6.45p +62.8% 
(1) Underlying — adjusted for non-recurring items £3.3m (2010: £1.2m) and amortisation of acquired 
intangibles.
(2) Underlying — adjusted for non-recurring items £3.6m (2010: £1.2m) and amortisation of acquired 
intangibles.
Revenue and profits
Group revenues increased by 10.5% to £271.6m (2010: £245.8m) with 
organic revenue growth in all three divisions. The Phoenix IT Services 
(Partner Services) Division has seen revenues increase significantly due 
to the full year effect of three large outsourcing contract wins during 
the latter part of the previous Financial Year. In addition, there has 
been notable year-on-year revenue growth in the Servo (Mid-market 
Services) Division as it continues to grow its hosting and professional 
services revenues.
Whilst underlying profit from operations
(1)
 increased by 4.6% to 
£36.0m (2010: £34.4m) the Group’s underlying operating margin 
reduced to 13.2% (2010:14.0%) reflecting an environment of market 
competitive pricing and the full-year margin dilutive effect of the 
three large outsourcing contracts won in the latter part of the previous 
Financial Year. Excluding the impact of these large outsourcing 
contracts the underlying operating margin for the Group was flat year 
on year at 14.1%. 
Underlying profit before tax
(2)
 increased in the year by 8.7% to £32.0m 
(2010: £29.5m).
Earnings and dividends
Underlying diluted earnings per share
(2)
 increased by 5.5% to 30.6p 
(2010: 29.0p). Diluted earnings per share were 24.2p (2010: 24.6p) and 
basic earnings per share were 25.0p (2010: 25.4p).
The Board recommends a proposed final dividend of 7.00p per share 
(2010: 4.30p) which, combined with the interim dividend of 3.50p per 
share, gives a total dividend per share for the year of 10.50p (2010: 
6.45p), an increase of 62.8%. If approved, the final dividend will be paid 
on 3 August 2011 to shareholders on the register at 17 June 2011.
Investment income and finance costs
Finance costs, net of investment income for 2011 were £4.3m (2010: 
£4.9m). Included within finance costs is £0.3m (2010: £nil) of un-
amortised costs relating to the previous banking facility. These costs 
have been shown as non-recurring un-amortised loan costs and loan 
break costs in the Consolidated Statement of Income.
Excluding non-recurring un-amortised loan costs and loan break 
costs, total finance costs net of investment income were £4.0m (2010: 
£4.9m).The decrease year on year is due to the combined effect of a 
lower level of average net debt and a reduction in the average cost of 
borrowing during the year. 
In order to mitigate the risk of a rise in UK interest rates the Group 
entered into a three year interest rate swap on 28 September 2007 
at an interest rate of 5.78% plus applicable margin against 75% of 
the amortising balance of the principal term loan. This interest rate 
swap expired on 30 September 2010. Given the Board’s preference to 
manage risks without the use of derivatives and the recent stable low 
interest rates no further instruments were entered into during the 
second half of the year. 
Other items included in finance costs are finance lease interest of 
£0.5m (2010: £0.7m), a net pension charge of £nil (2010: £0.1m), and 
amortisation of loan issue costs of £0.4m (2010: £0.3m).
The Group places surplus cash on deposit. This generated investment 
income of £nil in the year (2010: £0.1m). Phoenix IT Group plc
Annual Report and Accounts 2011
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Our Performance
Non-recurring items
Including £0.3m of un-amortised loan costs and loan break costs 
in respect of the previous banking facility, £3.6m (2010: £1.2m) of 
non-recurring items were incurred during the year, of which £1.7m 
relates to re-structuring expenses arising from the merger of the ICM 
Continuous Business (Business Continuity) and Servo (Mid-market 
Services) Divisions. These one-off restructuring costs will be offset by 
synergies and cost savings over the next 18 months. 
The ICM Computer Group Pension and Assurance Scheme was closed to 
future service accrual with an effective date of 30 September 2010. The 
closure of the scheme to future service accrual resulted in a non-cash 
curtailment gain of £0.4m. One-off fees of £0.4m were incurred in closing 
the Scheme to future service accrual and these have been deducted 
from the curtailment gain and disclosed as a non-recurring cost.
During the year we had issues, in part beyond our control, in delivering 
a specific commitment to a customer which resulted in that customer 
incurring disruption and additional costs. As a consequence, non-
recurring costs also include a one-off settlement payment of £1.6m  
to the customer. 
Taxation
The taxation charge for the year was £6.6m (2010: £6.0m), a full 
analysis of which is set out in note 12.
The effective tax rate for the period was 25.9% (2010: 24.1%). The 
increase is due to the rate in 2010 being abnormally low, having 
benefitted from some one-off credits relating to enquiries by HMRC 
that were settled favourably during that year. The effective tax rate 
after adjusting for these one-off items was 25.9% (2010:26.9%).
The Finance Act 2010 was enacted during the year and included a 
reduction in the main rate of corporation tax from 28% to 27% with 
effect from 1 April 2011. The budget announcement on 23 March 2011 
further reduced the corporation tax to 26% with effect from 1 April 2011. 
The impact on the annual effective tax rate is a reduction 1.7%. The 
underlying effective tax rate for the period was 27.6% (2010: 26.9%).
Borrowing facilities and liquidity
On 20 August 2010, the Group signed a new £90.0m, four-year 
revolving credit facility and renewed its £10.0m overdraft for a further 
twelve months. The new facility was used to refinance the Group’s 
existing facility (due to expire in May 2012) and significantly increases 
the Group’s capacity to invest in its businesses. The new facilities are 
provided by Barclays Bank plc, HSBC Bank plc, The Royal Bank of 
Scotland plc and Yorkshire Bank. 
Arrangement and legal fees amounting to £1.6m in respect of the new 
facility are being amortised straight line over the first 36 months of the 
new facility. 
The Group’s bank debt carries a variable rate of interest linked to 
prevailing LIBOR rates and the revolving credit facility is subject to 
financial covenants relating to leverage (net debt : EBITDA) and 
interest cover (EBITDA : net finance costs).
During April 2011 the Board took the decision to enter into interest 
rate swaps, following their expectation of future interest rate rises in 
the UK economy. On 28 April 2011 the Group entered into an interest 
rate swap to hedge risks associated with interest rate fluctuations on 
variable rates related to its revolving credit facility. The combined 
interest rate swaps hedge £30.0m until 28 April 2014 and £15.0m 
between 29 April 2014 and 28 April 2016. The interest rate swap settles 
on a quarterly basis and was fixed at 2.63% - 2.695% plus applicable 
margins based on three months LIBOR. 
Cash flow and liquidity
The Group has continued to enjoy strong operating cashflow and 
exercises tight controls over the working capital and conversion of 
profit to cash. Year-end net debt (including finance leases) decreased 
to £62.4m (2010: £67.9m) and the Group remains confident that it 
will continue to see strong cash generation, enabling further debt 
reduction. 
As at 31 March 2011 the Group had total bank borrowings (excluding 
finance leases) of £53.0m consisting of £68.8m drawn down on the 
revolving credit facility and £15.8m of cash and cash equivalents. 
The Group’s borrowings are subject to financial covenants set by the 
lenders and covenant compliance is measured quarterly. During the 12 
month period to 31 March 2011 there were no breaches of covenants. 
In addition to these financial covenants, the Group’s borrowing 
agreements include general covenants and potential events of default. 
The Group has complied in all respects with the terms of its borrowing 
agreements at the date of this report and is forecast to do so for the 
foreseeable future. 
Treasury policies and objectives 
The Group operates within policies and guidelines approved by 
the Board using conventional financial instruments and specified 
derivatives. It is the Board’s preference to manage market risks 
without the use of derivatives but they will be used where necessary 
and appropriate to reduce the levels of volatility to both income and 
equity. The use of derivatives is strictly controlled and they are not 
permitted to be used for speculative or trading purposes.
The Group’s main treasury risks relate to the availability of funds 
to meet its future requirements. The Group’s policy with respect to 
facilities is to ensure that these are sufficient to cover the expected 
needs of the Group, having reflected the inherent uncertainty of 
projections and forecasts. 
Whist the Group maintains uncommitted facilities to maintain short-
term flexibility its principal debt funding comprises committed bank 
facilities which are detailed above. 
Capital expenditure
Total capital expenditure for the year, net of proceeds from disposals 
was £16.7m (2010: £5.2m). This includes expenditure on intangible 
assets of £0.3m (2010: £0.2m). A further £3.7m (2010: £1.9m) of capital 
expenditure had been incurred but not paid for at 31 March 2011.
Capital expenditure has significantly increased compared to the 
previous financial year reflecting in part an element of deferral, 
together with substantial investment in the business continuity work 
area, IT facilities and selective investment in hosting facilities and data 
centre upgrades. This targeted investment has created additional 
capacity to meet the high demand for managed hosting services and 
to develop the Group’s portfolio of “Cloud” services. 08
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Capital investment and significant disposals are subject to stringent 
levels of authorisation and clearly defined authority levels are in place 
throughout the Group. Whilst the nature of business continuity and 
hosting activities are significantly more capital intensive than the other 
areas of activity, additional capital expenditure is only incurred with clear 
visibility of the demand for the services that the Group can then provide. 
Assets held for sale
The Group has several freehold properties that continue to be held 
for sale. Despite ongoing active marketing throughout the year, the 
properties remained unsold at 31 March 2011 and so continue to be 
classified as current assets. An additional property was added to the 
sale portfolio on 31 March 2011.
Independent valuations, performed on each of the properties at  
31 March 2011, indicated that the current book value of £2.7m 
(2010: £2.2m) was reasonable. However, given current conditions 
in the property market we cannot discount the possibility of further 
impairment provisions being required in the future.
Pension Scheme
Following the acquisition of ICM Computer Group plc on 29 May 2007 
the Group continued to operate a defined benefit scheme (the “ICM 
Computer Group Pension and Assurance Scheme” or the “Scheme”) 
for certain of its employees. As at 6 April 2009, the date of the last full 
actuarial valuation, there were 469 members of the scheme. The Group 
does not operate any other defined benefit pension schemes.
On 6 June 2010 the Group reached agreement with the Trustees on the 
terms of the triennial valuation as at 6 April 2009 and related funding 
plan. On the basis of the assumptions agreed, the actuarial deficit as at 
6 April 2009 was £7.8m. This deficit has increased from £2.6m at 6 April 
2006 primarily due to the valuation date coinciding with a low point 
in asset values. Under the revised funding plan the Group’s annual 
payments increased from £0.7m to £1.9m for the year to March 2011. 
The annual payments will then reduce to £1.5m per year for the five 
years to March 2016.
Following an extensive consultation process the Group closed the 
Scheme to future accrual on 30 September 2010. All former members 
have been given the opportunity to join the Group’s defined 
contribution pension scheme. The majority of the active membership 
opted out of the Scheme and joined a Group Self-Invested Pension 
Plan. The closure of the pension scheme to future accrual reduces the 
Group’s exposure to increasing gross pension scheme liabilities with 
the potentially uncapped and increasing costs associated with the 
provision of such pensions. This step will also reduce the volatility in the 
income statement relating to the operating profit charge for pensions. 
The pension deficit at 31 March 2011 was £0.7m (2010: £5.1m) and 
further details relating to the pension scheme are presented in note 10. 
The deficit has decreased significantly during the year principally due 
to better than expected investment returns combined with favourable 
movements in discount rates applied to the Scheme’s future liabilities. 
In addition, following the Government announcement in July 2010 and 
the subsequent approval by the House of Commons in February 2011 
to allow the change of index link for pensions, and with subsequent 
agreement with the Trustees, the move from the retail price index (RPI) 
to the consumer price index (CPI) has reduced the defined benefit 
liability by £1.2m and during the Financial Year ended 31 March 2011 
the Group made incremental contributions of £1.2m under the revised 
funding plan agreed with the Trustees on 6 June 2010. 
Going concern 
The Group’s business activities, together with the factors likely to 
affect its future development, performance and position are set out 
in the Chief Executive’s Review on pages 3 to 5. The financial position 
of the Group, its cash flows, liquidity position and borrowing facilities 
are described above. In addition notes 18 and 19 to the financial 
statements include the Group’s objectives, policies and processes for 
managing its capital; its financial risk management objectives; details 
of its financial instruments and hedging activities; and its exposure to 
credit and liquidity risk. 
The Directors have reviewed the Group’s future cash forecasts and 
revenue projections for a period in excess of 12 months from the date 
of signing the accounts, which they believe are based on prudent 
market data and past experience. They have formed a judgement that 
at the time of approving these financial statements, based on those 
forecasts and projections there is a reasonable expectation that the 
Group has adequate resources to continue in operational existence for 
the foreseeable future. 
Although economic conditions continue to be challenging and the 
spending review by the Government in October 2010 creates a certain 
degree of uncertainty in terms of public sector spending levels, the 
Group has a number of long term contracts, a range of customers 
across different business sectors, high levels of committed income and 
a strong order book. As a consequence, the directors believe that the 
Group is well placed to manage its business risks successfully despite 
the continued period of economic uncertainty.
The Group is subject to a number of risks and uncertainties which arise 
as a result of the current economic environment. In determining that 
the Group is a going concern, these risks have been considered by the 
Directors. The Directors have determined that the key risks detailed below 
do not currently represent a significant threat to the Group.
l Whilst the Directors have considered reasonable changes in market 
conditions and competitive pressures, in the current environment 
a further significant downturn could impact Group revenues and 
margins to a greater extent than they have currently envisaged.
l Liquidity risks are greater because of the difficulties within the 
banking sector. However, the Group currently has £90.0m of rolling 
credit facilities (excluding overdraft) until August 2014 that provide 
it with sufficient headroom for the foreseeable future. 
l Interest rate movements present a risk to the Group, although they 
are reduced through the use of an interest rate swap. The Group’s 
previous interest rate swap expired on 30 September 2010, and 
the Group entered into new swaps on 28 April 2011. The combined 
interest rate swaps hedge £30.0m until 28 April 2014 and £15.0m 
between 29 April 2014 and 28 April 2016.
Finance Review continued
Business Review Phoenix IT Group plc
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Our Performance
l Credit risk is heightened as a result of difficulties that might be faced 
by some of the Group’s customers in the current climate and also 
because of credit risks associated with other counterparties, such as 
banks, with which the Group has dealings.
l The Group has a defined benefit pension scheme which has an 
accounting deficit at 31 March 2011 of £0.7m. Any deterioration in 
the scheme’s funding position could impact the Group’s liquidity. 
The scheme was closed to future accrual on 30 September 2010, 
which reduces the Group exposure to increasing liabilities.
Taking into account the level of headroom within the existing facilities 
and covenants and the results of the sensitivity testing, which assumes 
some of those risks detailed above occur and the mitigating actions 
available to the Group, the Directors have a reasonable expectation 
that the Group has adequate resources to continue in operational 
existence for the foreseeable future and therefore they continue to 
adopt the going concern basis in preparing the financial statements.
Principal risks and uncertainties
As a result of the contracted revenues in the order book, the Group 
has a high degree of forward visibility of its revenues over the next 
twelve months. Nonetheless, there are a number of potential risks and 
uncertainties, in addition to those noted above, which could have a 
material impact on the Group’s performance over the next financial 
year and which could cause the Group’s actual results to materially 
deviate from historical and expected results. These principal risks have 
not changed during the year under review and have been analysed as:
Macroeconomic risk
The Group has seen an increase in activity compared to the prior year, 
partly due to customer demand to cut costs by outsourcing and the 
undertaking of projects postponed in prior years. Nonetheless, the 
uncertainty in the UK economy creates an increased risk of business 
failures among our key customers resulting in contract cancellations, 
as well as a lengthening of the decision-making cycle between 
prospect and new contract. For the Group these risks are mitigated 
by stringent working capital and cash management and by the high 
proportion of long-term contracted annuity business, meaning that we 
could withstand a certain level of cancellations.
Competitor risk
The IT services industry is highly competitive. Several competitors, 
including, in some cases, Phoenix’s partners, have longer operating 
histories, higher brand recognition and greater financial, technical, 
marketing, personnel and other resources than the Group. The 
Group’s competitors have, and other potential competitors may have, 
well established relationships with current and potential customers of 
the Group. As a result, these competitors may be able to respond more 
quickly to new or emerging technology and changes in customer 
requirements, or to devote greater resources to the development, 
promotion and sale of their services, than the Group. In addition, 
the Group may experience increased competition from low cost 
outsourcing centres, including offshore centres, and new or existing 
niche market participants whose costs may be lower. Increased 
competition could lead to the loss of market share, loss of material 
contracts, renegotiation of price levels or a general reduction in 
revenues of the Group. 
Customer risk
The Group’s large customer base is a strength, but could easily be 
eroded if service levels and value were not maintained. A broad spread 
of customers across several market sectors mitigates the risk of adverse 
conditions in any one sector and there are no clients upon which the 
Group is critically dependent. The high level of recurring revenues and 
repeat business are evidence of the Group’s success.
Loss of key locations
The Group’s business continuity business is reliant on a number of 
facilities in strategic locations around the UK, close to major business 
centres. The loss of access to a key site would present significant 
operational difficulties to the Group and could result in a material loss 
of contracts. The ‘primary’ sites, which are critical to our success, have 
been identified and provisions put in place to manage our continued 
access in line with business requirements.
Key performance indicators (‘KPIs’)
The Group uses a number of KPIs to monitor the performance of the 
business. The more important KPIs are set out below.
Profitability
The Group’s principal profitability KPIs are underlying profit from 
operations and underlying diluted earnings per share. Underlying 
profit from operations increased in the year by 4.6% to £36.0m (2010: 
£34.4m) while underlying diluted earnings per share have increased by 
5.5% to 30.6p (2010: 29.0p).
Operating margin
This represents the Group’s underlying profit from operations 
divided by Group revenues. For the year ended 31 March 2011, Group 
underlying operating profit margin decreased in comparison to the 
prior year prior year to 13.2% (2010: 14.0%).
Annual contract value
This represents the annualised value of the Group’s contracted 
revenue in place at any given time. Annual contract value decreased  
in the year by 1.9% to £199.8m (2010: £203.7m).  
Net debt (including finance leases)  
The Group monitors the net debt position in order to ensure it has 
sufficient facilities to support future growth. Net debt (including 
finance leases) reduced by £5.5m to £62.4m at 31 March 2011  
(2010: £67.9m). 
Steve Clutton
Group Finance Director
6 June 2011 10
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PETER BERTRAM aged 57
Executive Chairman 
Peter became Executive Chairman on 
22 November 2007 after serving as Non-
Executive Chairman since 21 October 
2004. Peter was Chief Executive of Azlan 
Group plc from 1998 until its takeover 
in 2003 and was previously the Non-
Executive Chairman of AttentiV Systems 
Group plc. He is also Chairman of Ten 
Alps plc, Timeweave plc and a Non-
Executive Director of Microgen plc. He 
is a fellow of the Institute of Chartered 
Accountants in England and Wales
NICK ROBINSON aged 51
Deputy Chairman and Chief 
Executive
Nick became Chief Executive on  
21 November 2008 having been Non-
Executive Deputy Chairman since  
1 January 2008 after serving as Chief 
Executive Officer of Phoenix since 
December 1997. Nick was previously 
Sales Director of Phoenix (then Phoenix 
Computers Limited) when he bought 
into the business in 1993. Before joining 
Phoenix, Nick spent six years at Digital 
Computer Services Limited, as Sales 
Director.
BRIAN SEllwOOD aged 63
Non-Executive Director 
Brian joined Phoenix as a Non-Executive 
Director on 1 April 2006 after working 
with IBM where he held a variety of 
senior positions and was instrumental 
in establishing IBM’s Global Services 
business in Europe. Brian is Chairman of 
the Audit Committee and is a member 
of the Remuneration and Nomination 
Committees. 
DAvID GARMAN aged 59
Non-Executive Director 
David joined Phoenix as a Non-Executive 
Director on 1 December 2008. David 
is the Senior Non-Executive Director 
of St Modwen Properties plc, a Non-
Executive Director of Kewill plc and a 
number of private companies. David 
was until October 2008 Group Chief 
Executive of TDG plc which he joined 
in 1999 from Associated British Foods 
plc where he was an Executive Director 
having previously held senior positions 
in a number of leading UK food 
companies. Between 2004 and 2011 he 
was the Senior Independent Director of 
Carillion plc. David is Chairman of 
the Remuneration Committee and a 
member of the Audit and Nomination 
Committees. 
DAvID wARNOCK aged 53
Non-Executive Director 
David joined Phoenix as a Non-Executive 
Director on 23 January 2009.  David co-
founded Aberforth Partners LLP and was 
a partner for 19 years until he retired 
from the firm in 2008, prior to which 
he was with Ivory & Sime plc for four 
years and before that with 3i Group plc 
for seven years. He is a Non-Executive 
Director of British Polythene Industries 
plc, Standard Life European Private 
Equity Trust plc, Troy Income & Growth 
Trust plc and a number of private 
companies.  David is a member of the 
Audit, Nomination and Remuneration 
Committees.
Board of Directors
STEvE CluTTON aged 50
Group Finance Director 
Steve joined Phoenix as Group Finance 
Director on 1 March 2011 from IG Group 
Holdings plc, where he was Group 
Finance Director for four years. He has 
extensive financial and commercial 
management experience, having served 
as Chief Financial Officer at the UK 
Retail Banking division of Barclays Bank, 
Interoute Telecommunications Limited 
and British Telecom’s international 
business. Steve has also held senior roles 
within corporate finance at BZW and 
BT and is a member of the Institute of 
Chartered Accountants in England and 
Wales.   Phoenix IT Group plc
Annual Report and Accounts 2011
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Corporate Governance
The Directors present their report together with the audited financial 
statements for the Group and the Company for the year ended  
31 March 2011.
Principal Activity and Review of the Business
The Group’s principal activity is the provision of information 
technology and business continuity services. A review of the Group’s 
performance and future prospects is provided in the Business Review.
Principal Risks and uncertainties
The Group’s operations expose it to a variety of financial and other 
risks, a review of which is provided in the Business Review and note 19 
to the consolidated financial statements.
Dividends
The Directors propose a final dividend of 7.00p per ordinary share 
which, subject to approval at the Annual General Meeting, will be paid 
on 3 August 2011, to Shareholders on the register at 17 June 2011. The 
shares will go ex-dividend on 15 June 2011. The final dividend together 
with the interim dividend of 3.50p per ordinary share paid in January 
2011 makes a total dividend per ordinary share of 10.50p (2010: 6.45p), 
an increase of 62.8%. 
Capital Structure
Details of the issued share capital, together with details of the 
movements in the Company’s issued share capital during the year are 
shown in note 30. The Company has one class of ordinary shares which 
carry no right to fixed income. Each share carries the right to one vote 
at the general meetings of the Company.
There are no specific restrictions on the size of a holding nor on the 
transfer of shares, which are both governed by the Company’s Articles 
of Association and prevailing legislation. The Directors are not aware 
of any agreements between holders of the Company’s shares that may 
result in restrictions on the transfer of securities or on voting rights.
Details of employee share schemes are set out in note 39. Shares held 
by the employee benefit trust do not attract any payment of dividends 
nor do they have any voting rights attached to them.
No person has any special rights of control over the Company’s share 
capital and all issued shares are fully paid.
The Directors have authority to allot the Company’s ordinary shares 
up to an aggregate nominal amount of £250,689 (being approximately 
one-third of the Company’s issued share capital at 4 June 2010) and 
the power to disapply pre-emption rights in respect of the allotment 
of shares up to an aggregate nominal value of £37,603 (representing 
5% of the Company’s issued share capital at 4 June 2010). In addition, 
the Directors have authority, on behalf of the Company, to make 
market purchases of up to 3,760,343 ordinary shares of the Company 
(representing 5% of the Company’s issued share capital at 4 June 
2010). These authorities were conferred by approval of separate 
resolutions at the Company’s last Annual General Meeting and are 
due to expire at the end of the forthcoming Annual General Meeting. 
Separate resolutions to renew these authorities, will be proposed at the 
Annual General Meeting on 28 July 2011. Details of these resolutions 
are set out in the notice of Annual General Meeting, which is shown on 
page 70 (resolutions 9, 10 and 11). 
Directors
The following Directors served during the year and up to the date of 
this report unless otherwise stated:
Peter Bertram
Executive Chairman
Nick Robinson
Deputy Chairman and Chief Executive 
Steve Clutton
Group Finance Director since 1 March 2011
Brian Sellwood
Non Executive Director 
David Garman 
Non Executive Director
David warnock 
Non Executive Director
Biographies of the Directors are set out on page 10. Details of the 
Directors’ remuneration, interests in the shares of the Company and 
their share options are given in the Directors Remuneration Report 
on pages 20 to 24. Brian Sellwood, David Garman and David Warnock 
have letters of appointment for an initial term of three years unless 
terminated by either party on three months’ notice. Copies of their 
letters of appointment are available on request. 
Nick Robinson and Peter Bertram retire by rotation and offer 
themselves for re-appointment to the Board at the forthcoming Annual 
General Meeting and also Steve Clutton who joined the Company on  
1 March 2011 offers himself for appointment to the Board at the Annual 
General Meeting. The Directors recommend their re-appointment on 
the grounds of the considerable experience and knowledge that each 
bring to the Company. 
Directors’ Indemnities
The Company has made qualifying third party indemnity provisions  
for the benefit of its Directors which remain in force at the date of  
this report.
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Substantial Shareholders
As at 6 June 2011 the Company had been notified that the following 
Shareholders had an interest of 3% or more in the issued ordinary 
share capital of the Company.
  Ordinary shares  % of issued 
  of 1p each share capital
Aberforth Partners LLP    7,599,737 10.10%    
AXA Investment Managers   7,505,979 9.98%    
F & C Asset Management   5,777,541 7.68%    
N Robinson   4,722,57 4 6.28%    
Legal & General Investment Management  4,493,957 5.97%    
Herald Investment Management Limited 3,971,898 5.28%    
Majedie Asset Management    3,950,897 5.25%  
Fidelity Investments Limited  3,705,383 4.92%
Employment Policy
As a progressive service organisation, employees at every level are 
critical to the Group and its future. Management and professional 
and technical expertise are the Group’s major assets. Investment in 
developing and retaining such skills is ongoing and well established, 
and is supported by use of in-house and external training programmes.
The Board recognises the value of effective communication and 
consultation with all employees and informing them of the progress 
and policies of the Group. This is achieved through formal and informal 
meetings, briefing groups and internal newsletters.
It is the Group’s policy to encourage the recruitment, training and 
development of disabled persons on the basis of their aptitude and ability, 
and the retention and retraining of employees who become disabled.
 
Consistent with the Group’s human resources policies, the Board 
encourages staff to identify with the financial success of the business 
through the opportunity to acquire ordinary shares in the capital of 
the Company. Staff can participate in the financial prosperity of the 
Group through share ownership. Employee incentive arrangements 
include a Performance Share Plan and Share Incentive Plan.
Payments to Suppliers
The Group’s operating companies determine terms and conditions of 
payment for the supply of capital and revenue items by agreement 
with suppliers. Payment is then made on these terms, subject to the 
terms and conditions being met by the suppliers. As at 31 March 2011, 
trade creditors of the Group were equivalent to 42 days (2010: 37 days) 
and in the Company 15 days (2010: 44 days).
Charitable Donations
The total amount of charitable donations made during the year was 
£17,218 (2010: £15,626). The Group has a policy that it does not make 
political donations to, or incur political expenditure on behalf of, 
political parties or political organisations. 
Going Concern
The Directors have considered detailed profit and cash flow forecasts 
and have a reasonable expectation that the Group has adequate 
resources to continue as an operational business for the foreseeable 
future. The financial statements have therefore been prepared on a 
going concern basis.
Auditors
An ordinary resolution to re-appoint Deloitte LLP as auditors of the 
Company is to be submitted to the forthcoming Annual General Meeting.
Each of the persons who is a Director at the date of approval of this 
annual report confirms that:
l so far as the Director is aware, there is no relevant audit information 
of which the Company’s auditors are unaware; and
l the Director has taken all the steps that he/she ought to have taken 
as a Director in order to make himself/herself aware of any relevant 
audit information and to establish that the Company’s auditors are 
aware of that information.
This confirmation is given and should be interpreted in accordance 
with the provisions of Section 418 of the Companies Act 2006. 
Annual General Meeting
The notice of the Annual General Meeting to be held on 28 July 
2011 (together with explanatory notes) is sent to Shareholders with 
this annual report. The special business of the meeting includes the 
following resolutions:
Authority to Allot Shares (Resolution 9)
The Directors are seeking authority under Section 551 of the 
Companies Act 2006 (‘the Act’) to allot shares up to an aggregate 
nominal value of £250,756. This amount represents approximately one 
third of the total ordinary share capital as at 6 June 2011. The authority 
will be in substitution for the previous authority taken at last year’s 
Annual General Meeting and will expire on the earlier of the conclusion 
of the next Annual General Meeting or 28 October 2012.
The Directors have no present intention to make any such issue of 
shares, other than in respect of shares that may be issued pursuant to 
the Company’s share option schemes, but consider it is desirable for 
them to be given this authority by Shareholders.
As at 6 June 2011, the Company held no treasury shares.
Disapplication of Pre-Emptive Rights (Resolution 10)
The Directors are seeking authority from Shareholders to allot ordinary 
shares for cash other than on a pre-emptive basis (as required 
by Section 561 of the Act) in limited circumstances. The Directors 
recommend that Section 561 of the Act should not apply to any 
allotment of shares in connection with a rights issue, open offer or 
other pre-emptive offer in favour of Shareholders in accordance with 
normal practice in the UK, nor to an issue for cash of shares up to an 
aggregate nominal value of £37,613 which is equivalent to 5% of the 
Company’s issued share capital as at 6 June 2011. The authority sought 
will expire on the earlier of the conclusion of the next Annual General 
Meeting or 28 October 2012.
Directors’ Report continued Phoenix IT Group plc
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Corporate Governance
Authority to make Market Purchases of Shares  
(Resolution 11)
The Directors are seeking authority to make market purchases, 
pursuant to section 701 of the Act, of shares up to 3,761,344 ordinary 
shares which is equivalent to 5% of the Company’s issued share capital 
as at 6 June 2011 on such terms and in such manner as the Directors 
may determine, provided that the amount paid for each share 
(exclusive of expenses) will not be more than 5% above the average 
middle market quotation for ordinary shares as derived from the Daily 
Official List of the London Stock Exchange plc for the five business days 
before the date on which the contract for the purchase is made and 
in any event not less than 1p per ordinary share. The authority sought 
will expire on the earlier of the conclusion of the next Annual General 
Meeting or 28 October 2012.
The Directors have no present intention to make any such market 
purchases but consider it is desirable for them to be given this 
opportunity by Shareholders. The authority will only be exercised if 
to do so would result in an increase in earnings per share and is in the 
best interests of Shareholders generally.
As at 6 June 2011 there were a total of 2,135,339 options to subscribe 
for equity shares in the Company outstanding, representing 2.8% of 
the Company’s issued share capital. If the full authority sought by this 
resolution is used, this number of outstanding options would represent 
2.7% of the Company’s issued share capital.
Notice of General Meetings (Resolution 12)
It is proposed that the Shareholders should approve the continued 
ability of the Company to hold general meetings (other than the 
Annual General Meeting) on 14 clear days notice in accordance with 
Section 307A of the Act. This provision increases the notice period for 
general meetings of a company to 21 days unless the company has 
approval from its Shareholders by resolution in general meeting to call 
such meetings on 14 days’ notice. 
The resolution is valid up to the next Annual General Meeting of the 
Company and so will need to be renewed annually.
The Board of the Company recommends that Shareholders vote 
in favour of the resolutions to be proposed at the Annual General 
Meeting and is of the opinion that they are in the best interests of 
security holders as a whole.
By order of the Board.
W T Martin
Company Secretary
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The Board is committed to the principles of corporate governance 
contained in the Combined Code on Corporate Governance issued by 
the Financial Reporting Council (the “Combined Code”) for which the 
board is accountable to shareholders. The Board has sought to comply 
with the main and supporting principles with due regard to the size 
and needs of the Company and with reference to best practice.
Statement of Compliance
Throughout the year ended 31 March 2011, the Company has been in 
compliance with the Combined Code provisions set out in Section 1 of 
the 2008 FRC Combined Code. 
Further explanation of how the Main Principles, including the 
composition and operation of the Board, the remuneration of the 
Directors, relations with shareholders and procedures for financial 
reporting and internal control, have been applied is set out below and 
in the Directors’ Remuneration report and Audit Committee report.
The Board of Directors
The Group is controlled by a Board of Directors which meets regularly 
and currently comprises three Executive Directors (including the 
Executive Chairman) and three Non-Executive Directors. The Non-
Executive Directors are Brian Sellwood who is the Senior Independent 
Director, David Garman and David Warnock. All the Non-Executive 
Directors are considered by the Board to be independent of 
management and free from any business or other relationship which 
could materially interfere with the exercise of their independent 
judgement. The Non-Executive Directors regularly meet independently 
of management.
The Chairman’s other main commitments are disclosed on page 10. 
The Chairman is responsible for leadership of the Board, ensuring its 
effectiveness and setting its agenda.
In advance of each meeting the Directors are provided with or have 
full and timely access to information in relation to the matters to be 
discussed.
At Board meetings, the Directors receive presentations from the senior 
executives on the implementation of the Company’s strategies and the 
Board receives regular updates on changes to the business, legislative 
and regulatory environments.
The Board is responsible to the shareholders for the proper 
management of the Group and for its system of corporate governance. 
It receives information on a monthly basis to enable it to review trading 
performance, forecasts and strategy and it has a schedule of matters 
specifically reserved for its decision. The most significant of these are: 
l changes to the structure, size and composition of the Board;
l consideration of the independence of Non Executive Directors;
l review of management structure and senior management 
responsibilities;
l with the assistance of the Remuneration Committee, approval of 
remuneration policies across the Group;
l approval of strategic plans, profit plans and budgets and any 
material changes to them;
l oversight of the Group’s operations ensuring competent and 
prudent management, sound planning, an adequate system of 
internal control and adequate accounting and other records;
l final approval of annual accounts and accounting policies; 
l approval of the dividend policy;
l approval of the acquisition or disposal of subsidiaries and major 
investments and capital projects;
l delegation of the Board’s powers and authorities, including the 
division of responsibilities between the Chairman and the Chief 
Executive and other Executive Directors; and
l receiving reports on the views of the Company’s shareholders.
Operational management of the Group is delegated to the Executive 
Chairman and the Chief Executive Officer.
The Board receives a regular flow of information to enable it to 
discharge its duties, including a monthly report detailing current 
and forecasted trading results and treasury positions. It also receives 
regular updates on shareholders’ views as part of the monthly report, 
and more formal briefings on shareholders’ views are given to the 
Board following the presentation of the Company’s interim and annual 
results. Board papers are generally distributed not less than five days in 
advance of the relevant meeting to allow the Directors fully to prepare 
for meetings, and minutes of committee meetings are circulated. The 
Board is kept fully informed of developments within the Company’s 
businesses through regular presentations by divisional management. 
Induction programmes for newly-appointed directors are devised to 
ensure that directors spend time with divisional management and can 
visit operational sites. 
Procedures exist to allow the Directors to seek independent legal 
advice in respect of their duties at the Company’s expense where 
the circumstances are appropriate. All Directors have access to the 
Company Secretary who is a qualified Solicitor.
All Directors are required to submit themselves for re-election at 
regular intervals and at least every three years.
During the year the Board undertook an evaluation of its performance 
and that of its Committees. The Board concluded that overall the Board 
and its committees operated effectively. The performance of each of 
the Directors was evaluated while the Senior Independent Director 
evaluated the performance of the Chairman. The Board considered 
that the evaluation process was satisfactory and that the use of an 
external third party to assist in such evaluation was not necessary.
Committees of the Board
The following formally constituted Committees deal with specific 
aspects of the Group’s affairs in accordance with their written terms 
of reference, which have been reviewed in the light of the Combined 
Code and are available on request and on the Group’s website. The 
Company Secretary also acts as secretary to each Committee.
The Audit Committee’s purpose is to assist the Board in the discharge 
of its responsibilities for financial reporting and corporate control 
and to provide a forum for reporting by the external auditors. The 
Committee, chaired by Brian Sellwood who the Board considers to have 
recent and relevant financial experience, comprises the independent 
Non-Executive Directors and meets at least three times a year.
A report on its activities is given on page 19.
Corporate Governance Phoenix IT Group plc
Annual Report and Accounts 2011
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Corporate Governance
The Remuneration Committee, which is chaired by David Garman 
and comprises the independent Non-Executive Directors, meets at 
least twice a year and additionally as required. It is responsible for 
reviewing remuneration arrangements for members of the Board, and 
all senior reports of the Chief Executive and Group Finance Director, 
for providing general guidance on aspects of remuneration policy 
throughout the Group and for the Group’s Share Incentive Plans.  
Aon Hewitt Limited have been appointed by the Group to assist and 
advise the Remuneration Committee in the performance of its duties. 
Aon Hewitt Limited do not provide any other service to the Group and 
are independent of the Group’s auditors.
A report on its activities is given on pages 20 and 24.
The Nominations Committee is chaired by Peter Bertram and 
comprises Brian Sellwood, David Garman and David Warnock. The 
Committee is responsible for effective succession planning and 
proposes candidates to the Board, having regard to the balance 
and structure of the Board. The Committee determines the terms of 
reference of new appointments and uses external advisers to identify 
suitable candidates. The process is for the Committee to interview 
each candidate with a view to preparing a shortlist for the Board, for 
further interviews to take place as appropriate and for the Chairman to 
consult with the Chief Executive and any external advisors before any 
appointment is made. 
Internal Control
The Board is responsible for establishing and maintaining the Group’s 
system of internal control. Internal control systems are designed 
to meet the particular needs of the Group and the risks to which it 
is exposed. By their nature, however, internal control systems are 
designed to manage rather than eliminate the risk of failure to achieve 
business objectives and can provide only reasonable and not absolute 
assurance against material mis-statement or loss.
Key elements of the internal control system are described below. These 
have all been in place throughout the year and up to the date of this 
report and are considered and monitored regularly by the Board (and 
once during the year):
l ongoing procedures to identify, evaluate and manage significant 
risks faced by the business in accordance with the guidance of 
the Turnbull Committee on Internal Controls and procedures to 
monitor the control systems in place to reduce these risks to an 
acceptable level;
l clearly defined management structure and delegation of authority 
to committees of the Board and the Executive Directors;
l clearly documented internal procedures set out in the Group’s ISO 
9001 accredited quality manual;
l high recruitment standards and formal career development and 
training to ensure the integrity and competence of staff;
l regular and comprehensive information provided to management, 
covering financial performance and key performance indicators, 
including non-financial measures;
l a detailed budgeting process covering budgets for the coming year 
which are approved by the Board;
l procedures for the approval of capital expenditure, investments 
and acquisitions;
l monthly monitoring and reforecasting of results against budget, 
with major variances followed up and management action taken 
where appropriate;
l regular internal audits of key processes and procedures under the 
Group’s ISO 9001 accredited quality assurance process; and
l formal consideration of progress made against significant business 
risks at monthly operating board meetings, with quarterly briefings 
to the Board.
The Board, with the assistance of the Audit Committee, is responsible 
for reviewing the effectiveness of the Group’s systems of internal 
control. During the year, the Board has reviewed the effectiveness 
of the systems of internal control and risk management based on 
a review of significant risks identified and the results of quality and 
other reports from management. Following the review the Board 
concluded that the systems were satisfactory and in accordance with 
the Turnbull guidance. The Board seeks to ensure that steps continue 
to be taken to embed internal control and risk management further 
into the operations of the Group’s business and to deal with any areas 
of improvement which come to its attention. 
Whistleblowing: The Group’s Whistleblowing Policy allows employees, 
in confidence, to raise concerns about possible improprieties including, 
in financial reporting, other operational matters or inappropriate 
personal behaviour in the workplace. 
Attendance at meetings
The number of Board meetings and Committee meetings attended by each Director in the year to 31 March 2011 was as follows:
 Board Audit Committee Remuneration Committee Nomination Committee
 Held Attended Held Attended Held Attended Held Attended
Chairman
P Bertram 11 11     2 2
Executive Directors
N Robinson  11 11
S Clutton
(1)
 2 2
Non Executive Directors
B Sellwood  11 11 4 4 4 4 2 2
D Garman  11 11 4 4 4 4 2 2
D Warnock  11 11 4 4 4 4 2 2
(1)
  S Clutton joined the Board on 1 March 2011.  16
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The Group’s Internal Audit function is described in the Audit 
Committee Report.
Auditor Independence
The Company has a formal policy designed to ensure that the auditors’ 
independence is not compromised by their undertaking inappropriate 
non-audit work. All significant non-audit work commissioned from the 
external auditors requires the Audit Committee’s formal approval. The 
external auditors are only selected to undertake non-audit work where 
the nature of the advice makes it more timely and cost effective to 
select advisers who already have a good understanding of the Group.
The Audit Committee has undertaken a review of the nature and 
amount of non-audit work undertaken by the external auditors 
to satisfy itself that there is no effect on their independence. The 
split between audit and non-audit fees is shown in note 8 to the 
consolidated financial statements.
Going Concern
The Directors are satisfied that the Group has adequate resources to 
continue in operational existence for the foreseeable future, a period 
of not less than twelve months from the date of this report. For this 
reason, they continue to adopt the going concern basis in preparing 
the financial statements.
Communication with Shareholders
The Company values the views of its shareholders and recognises their 
interests in the Group’s strategy and performance. It holds briefings 
with institutional fund managers, analysts and other investors, 
primarily following the announcement of interim and preliminary 
results, as well as at other times during the year as may be appropriate. 
The Company’s programme of investor relations activities is designed 
to ensure that the investing community receives a balanced and 
consistent view of the Group’s performance. All shareholders are 
welcome to attend the Annual General Meeting, at which the Board of 
Directors will be available to answer questions from shareholders.
Provision D.1.1 of the Combined Code requires the Senior Non-
Executive Director to meet with major Shareholders. During the year, 
this requirement has been undertaken by the Chairman, who has 
met with a range of major Shareholders to discuss governance and 
strategy. The Senior Non-Executive Director has been available for 
all such meetings if requested. The views of major shareholders are 
communicated to the Board as a whole by the Chairman. In addition, 
the Board receives reports from the Company’s broker twice a year 
that communicate feedback from major shareholders. The Board also 
reviews analyst coverage of the Company every month.
Approved by the Board and signed on its behalf.
W T Martin
Company Secretary
6 June 2011
Corporate Governance continued Phoenix IT Group plc
Annual Report and Accounts 2011
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Corporate Governance
The Board of Directors recognises the importance of high standards of 
corporate social responsibility, considers the social environmental and 
ethical implications of the Group’s activities and seeks continually to 
improve the policies and practices in place to meet its responsibilities in 
all such matters.
Health and Safety
The Group strives to provide and maintain a safe environment for all 
employees, customers and visitors to its premises and to comply with 
relevant health and safety legislation. In addition, the Group aims to 
protect the health of employees with suitable specific work-based 
strategies, seeking to minimise the risk of injury from Group activity 
and ensuring that systems are in place to address health and safety 
matters. The Group also encourages the involvement of employees 
and aims for continual improvement in health and safety matters 
through a formal structure with a reporting and review process.
Employees
The welfare and safety of employees is a key priority and the Group 
actively encourages staff involvement in the development of the 
Group’s business activities. Employees are treated with fairness and 
respect and are encouraged and supported in the development of 
their careers and the Group continues to share its success with them.
The Environment
The Group recognises that it is part of a wider community of 
employees, shareholders, customers, suppliers and others, and 
recognises that Group companies have a responsibility to act in a way 
that respects the environment. The Group seeks to encourage staff 
to act in an environmentally responsible manner, particularly in the 
development of recycling and energy conservation policies to ensure 
that finite resources are not depleted.
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The Directors are responsible for preparing the Annual 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 are required 
to prepare the Group financial statements in accordance with 
International Financial Reporting Standards (IFRSs) as adopted by the 
European Union and Article 4 of the IAS Regulation and have elected 
to prepare the Parent Company financial statements in accordance 
with United Kingdom Generally Accepted Accounting Practice (United 
Kingdom Accounting Standards and applicable law). Under company 
law the Directors must not approve the accounts unless they are 
satisfied that they give a true and fair view of the state of affairs of the 
Company and of the profit or loss of the Company for that period. 
In preparing the Group financial statements, International Accounting 
Standard 1 requires that Directors: 
l properly select and apply accounting policies;
l present information, including accounting policies, in a manner 
that provides relevant, reliable, comparable and understandable 
information; 
l provide additional disclosures when compliance with the specific 
requirements in IFRSs are insufficient to enable users to understand 
the impact of particular transactions, other events and conditions 
on the entity’s financial position and financial performance; and 
l make an assessment of the Group’s ability to continue as a going 
concern.
In preparing the Parent Company financial statements, the Directors 
are required to: 
l select suitable accounting policies and then apply them 
consistently; 
l make judgments and accounting estimates that are reasonable and 
prudent; 
l state whether applicable UK Accounting Standards have been 
followed, subject to any material departures disclosed and 
explained in the financial statements; and 
l prepare the financial statements on the going concern basis unless 
it is inappropriate to presume that the Company will continue in 
business.
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time the 
financial position of the Company and enable them to ensure that the 
financial statements comply with the Companies Act 2006. They are 
also responsible for safeguarding the assets of the Company and hence 
for taking reasonable steps for the prevention and detection of 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 United Kingdom governing the preparation 
and dissemination of financial statements may differ from legislation in 
other jurisdictions.
Responsibility statement 
We confirm that to the best of our knowledge:
l the financial statements, prepared in accordance with International 
Financial Reporting Standards, give a true and fair view of the 
assets, liabilities, financial position and profit or loss of the Company 
and the undertakings included in the consolidation taken as a 
whole; and
l the management report, which is incorporated into the Directors’ 
Report and the Business Review, includes a fair review of the 
development and performance of the business and the position of 
the Company and the undertakings included in the consolidation 
taken as a whole, together with a description of the principal risks 
and uncertainties that they face.
By order of the Board.
Peter Bertram
Chairman
6 June 2011
Directors’ Responsibilities Statement Phoenix IT Group plc
Annual Report and Accounts 2011
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Corporate Governance
Role of the Audit Committee
The Audit Committee is a sub-committee of the Board whose 
responsibilities include:
l Reviewing the integrity of the interim and full year financial 
statements of the Group and results announcements of the 
Company and any other formal announcement relating to the 
Group’s financial performance, reviewing significant financial 
reporting judgements contained therein, and recommending them 
to the Board for approval;
l Reviewing the Group’s systems for internal financial control and 
risk management;
l Monitoring and reviewing the effectiveness of the Group’s internal 
audit function; 
l Considering the appointment of the external auditors; overseeing 
the process for their selection; and making recommendations to 
the Board, for a resolution to be put to the shareholders for their 
approval in general meeting, in relation to their appointment, 
reappointment or removal and the approval of the remuneration 
and terms of engagement of the external auditors;
l Monitoring and reviewing the effectiveness, objectivity and 
independence of the external auditors taking into consideration 
relevant UK professional and regulatory requirements, agreeing 
the nature and scope of their audit process, and considering their 
reports on the Group’s financial statements and systems of internal 
financial control and risk management; 
l Developing and implementing the policy on using the auditors’ 
services for non-audit advice, taking into account relevant 
guidance regarding the provision of non-audit services by the 
external audit firm; and
l Monitoring and reviewing the Group’s ‘whistleblowing’ policy.
The Audit Committee is required to report its findings to the 
Board, identifying any matters on which it considers that action or 
improvement is needed, and make recommendations on the steps to 
be taken.
Composition of the Audit Committee
The Audit Committee comprises the independent Non-Executive 
Directors. Biographical details of the independent Directors are set out 
on page 10 and their remuneration is set out on page 24. The Chairman 
of the Audit Committee is Brian Sellwood. The Audit Committee 
invites others, including the Company’s external auditors to attend as 
appropriate. At least once each year representatives of the Company’s 
external auditors meet the Audit Committee without any Executive 
Directors present. 
The Board believes that the members of the Committee have sufficient 
skills, qualifications and experience to enable the Committee to 
discharge its duties, in accordance with the Terms of Reference. The 
Board is satisfied that at least one member of the Committee has 
relevant and recent financial experience. The Terms of Reference for 
the Committee are reviewed annually to ensure that they are in line 
with current best practice.
Main activities of the Audit Committee
During the year the Audit Committee has met four times. The Audit 
Committee reviewed the half-year interim results and presentation of 
results to investors and received reports from the external auditors on 
their review and subsequently met in March to receive a presentation 
by the external auditors setting out their audit approach and 
procedures, including matters relating to scope, auditor independence 
and audit fees.
The Audit Committee keeps under review the relationship with external 
auditors including:
l The qualification, expertise and resources of the external auditors, 
the effectiveness of the audit process including the external 
auditors’ quality control procedures;
l The independence and objectivity of the external auditors taking 
into account relevant UK professional and regulatory requirements 
and the relationship with the audit firm as a whole, including the 
provision of non-audit services; and
l Reviewing and implementing the policy on audit fees and fees for 
other non-audit services.
Internal Audit Function
The Audit Committee is required to assist the Board to fulfil its 
responsibilities relating to the adequacy of the resourcing and plans 
of the Internal Audit department. To fulfil these duties, the Audit 
Committee reviewed:
l Internal Audit’s terms of reference, reporting lines and access to the 
Audit Committee and all members of the Board; 
l Internal Audit’s plans and its achievement of the planned activity;
l The results of key audits and other significant findings, the 
adequacy of management’s response and the timeliness of 
resolution;
l The statistics on staff numbers, qualifications and experience and 
timeliness of reporting; and
l The level and nature of non-audit activity performed by Internal 
Audit.
Brian Sellwood
Chairman, Audit Committee
6 June 2011
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Compliance with Directors’ Remuneration Report 
Regulations
The Directors’ Remuneration Report has been prepared by the 
Remuneration Committee (the “Committee”) and approved by the 
Board. It has been prepared in accordance with the requirements 
set out in Schedule 8 to the Large and Medium-sized Companies and 
Groups (Accounts and Reports) Regulations 2008 (the “Regulations”) 
under the Companies Act 2006. This report also meets the relevant 
requirements of the Listing Rules of the Financial Services Authority, 
the Combined Code on Corporate Governance (the “Code”) and will, 
going forward, seek to comply with the 2010 UK Corporate Governance 
Code in so far as these relate to Directors’ remuneration. 
The Company has applied the Principles of Good Corporate 
Governance relating to the remuneration of its Directors and this 
report outlines how the Company has complied with the provisions of 
the Code as well as the guidelines issued by institutional shareholder 
bodies. The report has been audited to the extent required by the 
Regulations.
A resolution to approve the report will be proposed at the Annual 
General Meeting at which the financial statements will be approved.
Remuneration Committee
The Remuneration Committee members are appointed by the 
Board. Throughout the year David Garman has been Chairman of 
the Committee with Brian Sellwood and David Warnock serving 
as Committee members. It is considered that each member of the 
Committee has the relevant skills and experience to fulfil their role. For 
further details see the Directors biographies on page 10. 
The Board has delegated responsibility to the Committee for 
determining the framework and broad policy for the remuneration 
of the Executive Directors (including the Executive Chairman) and 
their senior direct reports as designated and makes recommendations 
thereon to the Board within agreed terms of reference. The terms of 
reference of the Remuneration Committee are available on request 
from the Company Secretary. 
The Remuneration Committee is able to obtain independent 
professional advice from remuneration and other consultants in order 
to carry out its duties. During the year Hewitt New Bridge Street (a 
brand of Aon Hewitt Limited) acted as the independent adviser to the 
Committee in the areas of executive remuneration and the monitoring 
of long-term incentive performance targets. Hewitt New Bridge Street 
are signatories to the Remuneration Consultants Group’s Code of 
Conduct which has been considered when drafting this report. The 
actuarial division of Aon Hewitt Limited also advised the Company 
during the year in relation to certain pension scheme matters.
Other Directors attend meetings when invited by the Committee and 
the Company Secretary acts as Secretary to the Committee. No Director 
plays a part in any discussion about his or her own remuneration.
Remuneration Policy
For the following year, the Group’s remuneration policy is designed 
to ensure that Executive Directors’ total remuneration is competitive 
and linked to both individual performance and business performance. 
In addition, the Group’s policy is to provide appropriate incentives to 
encourage enhanced performance and to reward contributions to the 
success of the Group in a fair and responsible manner. This will ensure 
the Company is able to attract, engage, motivate and retain the best 
available people to further the success of the business.
In order to achieve this, remuneration packages comprise a fixed 
element made up of basic salary, benefits in kind and pensions and 
a variable “at risk” element which reflects Group performance and 
individual achievement made up of annual performance related bonus 
(for some Executives) and participation in a long-term Performance 
Share Plan. The performance related elements form a significant 
proportion of the total Executive Directors’ remuneration packages.
The Committee is keen to ensure that risk is taken into account when 
setting the targets and when determining entitlements under variable 
incentive schemes. This is done by ensuring that targets, whilst 
stretching, are realistic, attainable, for the long-term benefit of the 
Company and achievable without taking inappropriate business risks.
Directors’ Remuneration Report Phoenix IT Group plc
Annual Report and Accounts 2011
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Corporate Governance
The Chairman of the Committee ensures that he is kept abreast of pay 
and conditions in the Group as a whole through regular interaction 
with the finance department. In determining the remuneration of 
Executive Directors and other senior executives, the Committee takes 
into account the general level of remuneration and pay awards to 
employees of the Group.
The Group’s remuneration policy in relation to Non-Executive Directors 
is to pay annual fees to reflect responsibilities and duties which are 
determined by the Executive Directors of the Board. Non-Executive 
Directors are not eligible for any short or long-term incentives or 
pension benefits.
Directors’ Contracts
It is the Group’s policy that Executive Directors’ service contract notice 
periods should not normally exceed 12 months. The Company may at 
its sole and absolute discretion pay salary and the value of contractual 
benefits in lieu of any unexpired period of notice and the Company 
would seek to apply the principles of mitigation following termination 
and it reserves the right to make any termination payments on a 
monthly basis. 
The details of the Directors’ service contracts are set out below.
 Contract  Notice period Notice period
 date by Company by Director
Executive Directors
Peter Bertram November 2007 6 months 6 months
Nick Robinson November 2008 12 months 12 months
Steve Clutton 
(a)
 March 2011 12 months 12 months
Non-Executive Directors
Brian Sellwood  April 2006 3 months 3 months
David Garman December 2008 3 months 3 months
David Warnock January 2009 3 months 3 months
(a) In the event that there is a change of control within six month of 1 March 2011 and the Company 
terminates Steve Clutton’s employment (other than for cause) within the subsequent six month 
period, the Company shall pay a minimum bonus of 50% of Steve Clutton’s annual salary 
following the termination date in lieu of any other bonus entitlement. 
Individual components of remuneration packages are discussed below.
Basic Salary 
Basic salaries are determined taking account of advice received from 
independent sources on the rates of salary for similar roles in selected 
groups of comparable companies and reflecting the individual’s 
experience and role within the business. The Committee’s policy is to 
pay salaries at around the market median level against other similar 
businesses.
Salaries are reviewed annually with changes effected from 1 April. The 
current base salaries of the Executive Directors are:
  Base salary from  Base salary from
  1 April 2010 1 April 2011
Peter Bertram  £250,000 £250,000
Nick Robinson  £275,000 £275,000
Steve Clutton   — £270,000
When determining Executive Director base salary increases, the 
Committee takes account of reward levels throughout the Group 
as well as the general market. In the year under review and for the 
second successive year, no salary increases were made for Executive 
Directors and there were no general salary increases for staff across the 
Group, other than for promotion. 
Only basic salary is pensionable.
Benefits in Kind 
Executive Directors receive certain benefits such as a company car (or 
equivalent allowance), life assurance and private medical insurance.
Pension Arrangements
The Executive Directors are entitled to receive personal pension 
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Annual Bonuses
None of the Executive Directors participated in the Group’s annual 
bonus scheme during the year to 31 March 2011. 
For the year ending 31 March 2012, only Steve Clutton will participate 
in the annual bonus scheme. 
The annual bonus performance targets are set and approved annually 
by the Remuneration Committee and are designed to be challenging 
and aligned to Company goals and objectives. For the forthcoming 
year Steve Clutton’s bonus will be determined by reference to 
stretching performance targets set in relation to underlying profit 
before tax (75%) and net debt (25%) and is set at a maximum of 100% 
of salary to be paid in cash.
Peter Bertram and Nick Robinson will not participate in the annual 
bonus scheme for the year ending 31 March 2012.
Performance Share Plan 
The Performance Share Plan (“PSP”) was approved by shareholders 
in 2004. Under the PSP, senior executives are eligible to receive 
awards which vest at nil cost to the executive three years after grant, 
subject to the satisfaction of performance conditions and continued 
employment. 
The Group’s policy is to award share incentives under the Performance 
Share Plan to Executive Directors and senior management in order 
to align their interests with those of the Group’s Shareholders. Peter 
Bertram, Nick Robinson and Steven Clutton received awards under the 
Performance Share Plan during the financial year. 
The plan rules allow for awards of up to 175% of salary p.a. to be 
made in any financial year (and 400% of salary p.a. in exceptional 
circumstances). The actual awards granted during the year ended  
31 March 2011 were over 73,000 shares (80% of salary) for Peter 
Bertram, 80,000 shares (80% of salary) for Nick Robinson and 339,807 
shares (300% of salary) for Steve Clutton. This above ‘normal’ limit 
award was necessary to secure Steve Clutton’s recruitment and 
to ensure that his interests were immediately and fully aligned to 
shareholders on joining. 
Awards made in 2010 will vest based on the Group’s total shareholder 
return (TSR) performance over a three-year performance period 
compared with the constituents of the FTSE All-Share index (excluding 
FTSE 100 companies and investment trusts) as at the date of grant and 
subject to the executive still being employed by the Group. At median, 
25% of the shares vest and at upper quartile, 100% of the shares vest. 
If the TSR is between median and upper quartile, then the award will 
vest on a straight line basis. None of the award will vest if the Group’s 
TSR performance is below the median of the TSR comparator group. 
In addition, awards will only vest if the Committee is satisfied that the 
underlying financial performance of the Group over the three-year 
performance period has been satisfactory. The monitoring of the 
Group’s performance against the TSR condition is performed by Hewitt 
New Bridge Street.
The Committee believes that TSR, a share-price based measure, is 
appropriate for the Company because it aligns management’s reward 
with returns to investors and, therefore, the condition will continue to 
apply to awards made in the year ended 31 March 2012.
Awards made in 2009 are subject to the same TSR conditions as awards 
made in 2010 as described above. For awards made in 2008 and earlier, 
these will vest fully if the Group’s average annual earnings per share 
growth over the three years from grant (measured by reference to 
EPS in the year immediately prior to grant) exceeds 20% per annum 
and the executive is still employed by the Group. If the average 
annual growth is 5% per annum, the award will vest as to 20% of the 
maximum. If average annual earnings per share grow between 5% 
and 20%, then the award will vest on a progressive scale. The award 
will not vest at all if the average earnings per share growth is less than 
5% per annum.
Directors’ Remuneration Report continued Phoenix IT Group plc
Annual Report and Accounts 2011
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Corporate Governance
Share Incentive Plan (SIP)
The Company operated a Share Incentive Plan in the year. Under the 
SIP, employees (including Executive Directors), are able to buy shares 
by deduction of up to £1,500 from their pre-tax salary in each tax year 
or, if less, 10% of salary.
Non-Executive Directors
The fees of Non-Executive Directors are reviewed by the Board 
excluding Non-Executive Directors. Non-Executive Directors only 
receive fees, and they do not participate in any bonus or share 
incentive schemes, enjoy any pension benefits or receive any other 
benefits.
Share Ownership Guidelines
Within a reasonable time of their appointment the Company expects 
Executive Directors to purchase and maintain such number of shares in 
the Company as is broadly equivalent in total value to their base salary. 
Dilution 
At the end of the financial year the total number of awards granted, 
less lapsed, over new issuable shares under the share schemes since 
listing was 3.8% of the issued share capital.
Performance Graph
The graph below shows Phoenix’s total shareholder return 
performance compared to the FTSE Small Cap and the FTSE All Share 
indices of which Phoenix is a constituent. The graph covers the period 
from the 31 March 2006 to 31 March 2011 and the values show the 
share price growth plus reinvested dividends from a hypothetical £100 
holding of Ordinary Shares in Phoenix and in the index at the start of 
the period.
The FTSE Small Cap Index has been selected as a comparator because 
the Group believes it is the most meaningful market index of which the 
Company is a member.
Directors’ Interests
Directors had the following beneficial and family interests in the issued 
share capital of the Company as at 31 March 2011. There have been 
no changes between the end of the financial year and the date of this 
report other than as indicated.
  2011 2010
  Ordinary Shares Ordinary Shares
  of 1p each of 1p each
Peter Bertram  20,000 20,000
Nick Robinson  4,722,574 4,722,574
Brian Sellwood   4,932 4,932
David Garman  20,000 20,000
David Warnock  100,000 100,000
This graph looks at the value, by 31 March 2011, of £100 invested in Phoenix 
IT Group on 31 March 2006 compared with the value of £100 invested in the 
FTSE Small Cap Index and FTSE ALL Share Index. The other points plotted 
are the values at intervening financial year-ends. 
Total Shareholder Return
31 March 06 31 March 07 31 March 08 31 March 09 31 March 10 31 March 11
140
120
100
80
60
40
20
0
Source: Datastream
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Audited Section
Directors’ Emoluments 
The remuneration of the Directors for the year to 31 March 2011 is comprised as follows:
   2011 2011 2011 2011 2011 2010
   Salary/fees Bonus Benefits Pensions
(4)
 Total Total
   £’000 £’000 £’000 £’000 £’000 £’000
Executive Directors
Peter Bertram
(1)
   250 — 32 50 332 330
Nick Robinson
(2)
   316 — 33 10 359 358
Steve Clutton
(3)
   23 — 2 4 29 —
Non-Executive Directors
Brian Sellwood   42 — — — 42 42
David Garman   42 — — — 42 42
David Warnock   37 — — — 37 37
(1)
  Peter Bertram is the Chairman of Ten Alps plc, Timeweave plc and a Non-Executive Director of Microgen plc, and retains the fees paid in respect of those positions. 
(2)
  From September 2010 Nick Robinson elected to have all of his pension entitlement as salary in lieu of pension contributions. Of the £316,000 salary reported in the table above, £275,000 is basic salary and 
£41,000 is salary taken in lieu of pension contributions. Share awards are based on basic salary.
(3)
  Steve Clutton joined the Board on 1 March 2011 as Group Finance Director. 
(4)
  Executive Directors receive pension contributions of 20% of salary. 
New Directors
Steve Clutton joined the Board on 1 March 2011 as Group Finance Director and will be standing for reappointment at the 2011 Annual General 
Meeting. The company is disclosing details of his remuneration so that shareholders can make an informed decision.
Steve Clutton is entitled to a basic salary of £270,000 per annum plus annual bonus and company car. In addition, he will be entitled to similar 
benefits as other Executive Directors as described on pages 21 and 22. 
Share Awards 
The interests of the Directors in awards over Ordinary Shares under the Performance Share Plan were as follows. There have been no changes 
between the end of the financial year and the date of this report.
  Earliest  Share price Awards held Granted Lapsed Awards held
 Grant exercise Expiry  at date of at 31 March  during  during at 31 March 
 date date date grant 2010 year the year 2011
Peter Bertram
 7 July 09 7 July 12 6 July 19 210p 118,000 — — 118,000
 7 June 10 7 June 13 6 June 20 275p — 73,000 — 73,000
     118,000 73,000 — 191,000
Nick Robinson
 7 July 09 7 July 12 6 July 19 210p 196,000 — — 196,000
 7 June 10 7 June 13 6 June 20 275p — 80,000 — 80,000
     196,000 80,000 — 276,000
Steve Clutton
 24 March 11 24 March 14 23 March 21 238p — 339,807 — 339,807
     — 339,807 — 339,807
The PSP awards detailed above are subject to a relative TSR performance condition.
The exercise price on all awards is nil p.
During the year to 31 March 2011, the Company’s share price varied between 189p and 290p and ended the year at 200p.
David Garman
Chairman, Remuneration Committee
6 June 2011
Directors’ Remuneration Report continued Phoenix IT Group plc
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Financial Statements
Independent Auditor’s Report to the Members of Phoenix IT Group plc
We have audited the financial statements of Phoenix IT Group plc for the 
year ended 31 March 2011 which comprise the Consolidated Statement 
of Income, the Consolidated Statement of Comprehensive Income, the 
Consolidated Balance Sheet, the Consolidated Cash Flow Statements, the 
Consolidated Statements of Changes in Equity and the related notes 1 
to 40. The financial reporting framework that has been applied in their 
preparation is applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, 
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
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. To 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 auditor
As explained more fully in the Directors’ Responsibilities Statement, 
the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view. 
Our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and International Standards 
on Auditing (UK and Ireland). Those standards require us to comply with 
the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to 
the group’s circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant accounting 
estimates made by the directors; and the overall presentation of 
the financial statements. In addition, we read all the financial and 
non-financial information in the annual report to identify material 
inconsistences with the audited financial statements. If we become 
aware of any apparent material misstatements or inconsistences we 
consider the implications for our report.
Opinion on financial statements
In our opinion:
l the financial statements give a true and fair view of the state of the 
group’s affairs as at 31 March 2011 and of the group’s profit for the 
year then ended;
l the group financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union; and
l the financial statements have been prepared in accordance with 
the requirements of the Companies Act 2006 and Article 4 of the IAS 
Regulation.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in note 3 to the group financial statements, the group 
in addition to complying with its legal obligation to apply IFRSs as 
adopted by the European Union, has also applied IFRSs as issued by the 
International Accounting Standards Board (IASB).
In our opinion the group financial statements comply with IFRSs as 
issued by the IASB.
Opinion on other matters prescribed by the Companies Act 
2006
In our opinion the information given in the Directors’ Report for the 
financial year for which the group financial statements are prepared is 
consistent with the group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in 
our opinion:
l certain disclosures of directors’ remuneration specified by law are 
not made; or
l we have not received all the information and explanations we 
require for our audit.
Under the Listing Rules we are required to review:
l the directors’ statement, contained within the Business Review, in 
relation to going concern; 
l the part of the Corporate Governance Statement relating to the 
company’s compliance with the nine provisions of the June 2008 
Combined Code specified for our review; and
l certain elements of the report to shareholders by the Board on 
directors’ remuneration.
Other Matter
We have reported separately on the parent company financial 
statements of Phoenix IT Group plc for the year ended 31 March 2011 
and on the information in the Directors’ Remuneration Report that is 
described as having been audited.
Anthony Morris (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor 
London
United Kingdom
6 June 2011 26
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Consolidated Statement of Income 
For the year ended 31 March 2011
     2011   2010
    Before Amortisation  Before Amortisation
    amortisation & non-recurring  amortisation & non-recurring
    & non-recurring items  & non-recurring items
    items (note 7) Total items (note 7) Total
   Note £m £m £m £m £m £m
Continuing operations
Revenue  5 271.6 – 271.6 245.8 – 245.8
Profit from operations before 
amortisation of intangibles  36.0 (3.3) 32.7 34.4 (1.2) 33.2
Amortisation of intangibles   16 – (3.1) (3.1) – (3.1) (3.1)
Profit from operations  8 36.0 (6.4) 29.6 34.4 (4.3) 30.1
Investment income  5,11 1.2 – 1.2 0.9 – 0.9
Finance costs  11 (5.2) (0.3) (5.5) (5.8) – (5.8)
Profit before tax   32.0 (6.7) 25.3 29.5 (4.3) 25.2
Tax  12 (8.3) 1.7 (6.6) (7.0) 1.0 (6.0)
Profit for the period   34 23.7 (5.0) 18.7 22.5 (3.3) 19.2
Earnings per share
Basic  13 31.6p  25.0p 30.0p  25.4p
Diluted  13 30.6p  24.2p 29.0p  24.6p Phoenix IT Group plc
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Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2011
        2011 2010
       Note £m £m
Gain taken to equity in respect of cash flow hedges    18 1.1 1.7
Actuarial gain/(loss) on defined benefit pension scheme    10 2.0 (5.0)
Tax on items taken directly to equity     12 (0.8) 0.9
Other comprehensive income for the period, net of tax     2.3 (2.4)
Profit for the period      34 18.7 19.2
Total comprehensive income for the period      21.0 16.8 28
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Consolidated Balance Sheet 
As at 31 March 2011
        2011 2010
       Note £m £m
Non-current assets
Goodwill      15 181.4 180.2
Intangible assets      16 15.8 18.1
Property, plant and equipment     17 65.9 62.1
        263.1 260.4
Current assets
Inventories      22 13.4 13.0
Trade and other receivables     23 56.5 54.1
Cash and cash equivalents      24 15.8 10.3
        85.7 77.4
Assets held for sale      20 2.7 2.2
        88.4 79.6
Total assets       351.5 340.0
Current liabilities
Trade and other payables      26 (47.3) (39.3)
Current tax liabilities       (4.0) (4.9)
Obligations under finance leases and hire purchase contracts    27 (4.9) (5.0)
Bank loans      25 – (15.7)
Provisions      28 (1.3) (0.8)
Derivative financial instruments     18 – (1.1)
Deferred revenue       (50.5) (55.7)
        (108.0) (122.5)
Net current liabilities       (19.6) (42.9)
Non-current liabilities
Obligations under finance leases and hire purchase contracts    27 (4.5) (7.6)
Bank loans      25 (68.8) (49.9)
Provisions      28 (5.2) (4.4)
Deferred tax liabilities      29 (4.4) (4.3)
Deferred revenue       (0.8) (0.7)
Other non-current liabilities      26 (5.8) (6.5)
Retirement benefit obligations     10 (0.7) (5.1)
        (90.2) (78.5)
Total liabilities       (198.2) (201.0)
Net assets       153.3 139.0
Equity
Share capital      30 0.8 0.8
Share premium account      31 37.5 37.5
Merger reserve      32 57.5 57.5
Other reserves      33 1.4 –
Retained earnings      34 56.1 43.2
Total equity       153.3 139.0
The financial statements were approved by the Board of Directors and authorised for issue on 6 June 2011. They were signed on its behalf by:
Steve Clutton
Group Finance Director Phoenix IT Group plc
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Financial Statements
Consolidated Statement of Changes in Equity 
For the year ended 31 March 2011
     Share
    Share premium Merger Other Retained Total
    capital account reserve reserves earnings equity 
   Note £m £m £m £m £m £m
At 1 April 2009   0.8 37.4 57.5 (1.3) 32.0 126.4
Profit for the period   – – – – 19.2 19.2
Gain recognised on cash flow hedge  – – – 1.7 – 1.7
Actuarial loss on defined benefit
pension scheme   – – – – (5.0) (5.0)
Tax on items taken directly to equity 12 – – – (0.5) 1.4 0.9
Total comprehensive income   – – – 1.2 15.6 16.8
Exercise of share options  31 – 0.1 – – – 0.1
Share option expense  39 – – – 0.4 – 0.4
Dividends  14 – – – – (4.7) (4.7)
Transfer to retained earnings on 
exercise of share options   – – – (0.3) 0.3 –
Total transactions with owners  – 0.1 – 0.1 (4.4) (4.2)
At 1 April 2010   0.8 37.5 57.5 – 43.2 139.0
Profit for the period   – – – – 18.7 18.7
Gain recognised on cash flow hedge  – – – 1.1 – 1.1
Actuarial gain on defined benefit 
pension scheme  10 – – – – 2.0 2.0
Tax on items taken directly to equity 12 – – – (0.3) (0.5) (0.8)
Total comprehensive income   – – – 0.8 20.2 21.0
Exercise of share options  31 – – – – – –
Share option expense  39 – – – 0.7 – 0.7
Dividends  14 – – – – (7.4) (7.4)
Transfer to retained earnings on 
exercise of share options   – – – (0.1) 0.1 –
Total transactions with owners  – – – 0.6 (7.3) (6.7)
At 31 March 2011   0.8 37.5 57.5 1.4 56.1 153.3 30
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Consolidated Cash Flow Statement 
For the year ended 31 March 2011
        2011 2010
       Note £m £m
Net cash from operating activities     36 28.8 33.1
Investing activities
Purchases of property, plant and equipment      (16.5) (5.4)
Proceeds on disposal of property, plant and equipment     0.1 0.4
Purchases of intangible assets      (0.3) (0.2)
Acquisition of subsidiary undertaking:
 – Cash consideration       – (2.2)
 – Costs of acquisition       – (0.2)
Net cash used in investing activities      (16.7) (7.6)
Financing activities
Dividends paid       (7.4) (4.7)
Repayments of borrowings       (66.0) (13.0)
New bank loans raised       70.0 –
Decrease in net obligations under finance leases and hire purchase contracts    (3.2) (3.4)
Net cash used in financing activities      (6.6) (21.1)
Net increase in cash and cash equivalents      5.5 4.4
Cash and cash equivalents at beginning of period     10.3 5.9
Cash and cash equivalents at end of period      15.8 10.3 Phoenix IT Group plc
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Financial Statements
Notes to the Consolidated Financial Statements
For the year ended 31 March 2011
1. GENERAl INFORMATION
Phoenix IT Group plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office  
is given on page 74. The nature of the Group’s operations and its principal activities are set out in note 6 and in the Business Review on  
pages 3 to 9.
These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the 
Group operates. 
2.  AdOPTION OF NEw ANd REvISEd STANdARdS 
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 March 2010.
The following new standards, amendments to standards or interpretations are mandatory for the first time for the year ending 31 March 
2011 but have no material impact on the Group’s financial statements:
l IFRS 2 ‘Share-based payment’ (amended) – amended to clarify the accounting treatment for group share based payment transactions. 
Effective for accounting periods beginning on or after 1 January 2010.
l IFRS 3 ‘Business combinations’ (revised) & IAS 27 ‘Consolidated and Separate Financial Statements’ (amended) – effective for 
accounting periods beginning on or after 1 July 2009. The revised standard introduces significant changes in the accounting for business 
combinations. It requires that all acquisition related costs are expensed in the period incurred rather than included in the cost of the 
investment, that changes to the contingent consideration following a business combination are shown in the statement of comprehensive 
income instead of adjusting goodwill and that changes to deferred tax assets relating to business combinations are only reflected within 
goodwill if they occur within the measurement period.
l IFRS 5 ‘Non-current assets held for sale and discontinued operations’ (amended) – amended to state that the required disclosures for 
non-current assets classified as held for sale or discontinued operations are specified in that standard (effective for accounting periods 
beginning on or after 1 January 2010). Also amended to clarify that assets and liabilities of a subsidiary should be classified as held for sale 
if the parent is committed to a plan involving loss of control of the subsidiary, regardless of whether the entity will retain a non-controlling 
interest after the sale (effective for accounting periods beginning on or after 1 July 2009).
l IFRS 8 ‘Operating segments’ (amended) – amended to state that segment information with respect to total assets is required only if  
such information is regularly reported to the chief operating decision maker. Effective for accounting periods beginning on or after  
1 January 2010.
l IAS 7 ‘Statement of cash flows’ (amended) – amended to state explicitly that only expenditures that result in the recognition of an asset 
can be classified as a cash flow from investing activities. Effective for accounting periods beginning on or after 1 January 2010.
l IAS 17 ‘Leases’ (amended) – the amendment clarifies the classification of leases of land and buildings. Effective for accounting periods 
beginning on or after 1 January 2010.
l IAS 32 ‘Financial instruments: presentation’ (amended) – amendment addressing accounting for rights issues. Effective for accounting 
periods beginning on or after 1 February 2010.
l IAS 36 ‘Impairment of assets’ (amended) – amendment to state the unit of accounting for goodwill impairment test. Effective for 
accounting periods beginning on or after 1 January 2010.
l IAS 38 ‘Intangible assets’ (amended) – the amendments clarify the description of valuation techniques commonly used by entities 
when measuring the fair value of intangible assets acquired in a business combination for which no active market exists. Effective for 
accounting periods beginning on or after 1 July 2009.
l IAS 39 ‘Financial instruments: recognition and measurement’ (amended) – amended for embedded derivatives when reclassifying 
financial instruments, effective for accounting periods beginning on or after 30 June 2009. Also amended to clarify how existing principles 
should be applied in respect of a one-sided risk in a hedged item and inflation in a financial hedged item. Effective for accounting periods 
beginning on or after 1 July 2009. 
l IFRIC 16 ‘Hedges of a net investment in a foreign operation’ (amended) – amendment to the restriction on the entity that can hold 
hedging instruments. Effective for accounting periods beginning on or after 1 July 2009.
l IFRIC 17 ‘Distributions of non-cash assets to owners’ – clarifies the accounting where assets other than cash are distributed to 
shareholders. Effective for accounting periods beginning on or after 1 July 2009.
l IFRIC 18 ‘Transfers of assets from customers’ – the interpretation clarifies the requirements of IFRS for agreements in which an entity 
receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a 
network or to provide the customer with ongoing access to a supply of goods or services. In some cases, the entity receives cash from a 
customer that must be used only to acquire or construct the items of property, plant and equipment in order to connect the customer 
to a network or provide the customer with ongoing access to a supply of goods or services. Effective for transfers of assets received on or 
after 1 July 2009. 32
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
2.  AdOPTION OF NEw ANd REvISEd STANdARdS continued
At the date of authorisation of these financial statements, certain new standards, interpretations and amendments to existing standards 
are not yet effective and have not been early adopted by the Group. Those which are considered relevant to the Group’s operations are as 
follows:
IFRS 3 Business Combinations (amended)
 Transition requirements for contingent consideration from a business combination that  
 occurred before the effective date of the revised IFRS 1 July 2010
 Measurement of non-controlling interests 1 July 2010
IFRS 7 Financial instruments: disclosures (amended)
 Clarification of disclosures  1 January 2011
 Amendments enhancing disclosures about transfers of financial assets 1 July 2011
IFRS 9 Financial Instruments: classification and measurement (amended)
 Simplifies the mixed measurement model and establishes primary measurement categories  
 for financial assets  1 January 2013
IAS 1 Presentation of financial statements (amended)
 Clarifies the presentation of items of other comprehensive income 1 January 2011
IAS 24 Related Party Disclosures (revised)
 Revised definition of related parties 1 January 2011
IAS 27 Consolidated and Separate Financial Statements (revised)
 Transition requirements for amendments arising as a result of IAS 27 1 July 2010
IAS 34 Interim Financial Reporting (amended)
 Significant events and transactions 1 January 2011
IFRIC 14 Prepayments of a minimum funding requirement (amended)
 Amendment removed unintended consequences arising from the treatment of
 prepayments when there is a minimum funding requirement 1 January 2011
The adoption of these standards is not expected to have a material impact on the reported results or financial statements.
3.  SIGNIFICANT ACCOuNTING POlICIES
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial 
statements have also been prepared in accordance with IFRSs adopted by the European Union and therefore the Group financial statements 
comply with Article 4 of the EU IAS Regulation.
The financial statements have been prepared on the historical cost basis except where stated below. The principal accounting policies 
adopted are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its 
subsidiaries) made up to 31 March each year. Control is achieved where the Company has the power to govern the financial and operating 
policies of an investee entity so as to obtain benefits from its activities.
On acquisition, the assets (including identifiable intangible assets, excluding goodwill) and liabilities and contingent liabilities of a subsidiary 
are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net 
assets acquired is recognised as goodwill. The results of subsidiaries acquired or disposed of during the year are included from the effective 
date of acquisition or up to the effective date of disposal, as appropriate.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to 
continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing 
the financial statements. Further detail is contained in the Business Review on page 8.
discontinued operations and assets held for sale
Cash-flows and operations that relate to a major component of the business or geographical region that has been sold or is classified as held 
for sale are shown separately from continuing operations. Phoenix IT Group plc
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Financial Statements
3.  SIGNIFICANT ACCOuNTING POlICIES continued
Assets and businesses classified as held for sale are measured at the lower of carrying value and fair value less costs to sell. No depreciation is 
charged on assets and businesses classified as held for sale.
Assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. 
This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. 
Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from 
the date of classification.
Where an asset held for sale has not sold within one year, the asset may remain classified as held for sale provided that the delay is caused by 
events or circumstances beyond the Group’s control and management are still committed to the sale and the above criteria are still met.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable 
assets and liabilities of a subsidiary at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment at least annually with cash generating units assessed by segment (see note 
15). Any impairment is recognised immediately in profit for the period and is not subsequently reversed.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Goodwill arising on acquisitions before the date of transition to IFRS as adopted by the European Union has been retained at the previous  
UK GAAP amounts subject to being tested for impairment at that date. Goodwill written off to reserves under UK GAAP in the year ended  
31 March 1999 and earlier periods has not been reinstated and is not included in determining any subsequent profit or loss on disposal. 
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services 
provided in the normal course of business, net of discounts, VAT and other sales-related taxes.
Product
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery  
of goods.
Maintenance contracts
For fixed-fee maintenance contracts the revenue arising is spread evenly over the term of the contract. Costs related to the delivery of 
services under these contracts are charged to the income statement as they arise (typically these contracts are annual and costs arise evenly 
over the contract term). An element of costs incurred in the initial set up, transition or transformation phase of the contract are deferred 
and recorded within current assets. These costs are then recognised in the income statement on a straight line basis over the remaining 
contractual term. These costs are directly attributable to specific contracts, relate to future activity, will generate future economic benefits 
and are assessed for recoverability on a regular basis.
Other contract revenues
Other contract revenues are recorded according to the stage of completion of the contract by reference to the value of work performed.
The amount by which revenue differs from payments on account is shown under receivables as accrued income, or under payables as 
deferred revenue, as appropriate.
Provision is made for all anticipated contract losses as soon as they are identified.
Where a contract contains several service elements, the individual elements are accounted for separately at fair value.
Interest income
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the 
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
Dividend income
Dividend income from investments is recognised when the Shareholders’ rights to receive payment have been established.  34
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
3.  SIGNIFICANT ACCOuNTING POlICIES continued
leasing
Assets held under finance leases and hire purchase contracts are recognised as assets of the Group at their fair value or, if lower, at the 
present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is 
included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the 
lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly 
against income.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
Foreign currencies 
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At 
each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing 
on the balance sheet date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated 
at the rate prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in net profit or 
loss for the period.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated at exchange rates prevailing on the balance 
sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are 
classified as equity and transferred to the Group’s profit and loss reserve. Such translation differences will be recognised as income or as 
expenses in the period in which the operation is disposed of.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take 
a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are 
substantially ready for their intended use or sale.
All other borrowing costs are recognised in the income statement in the period in which they are incurred.
Retirement benefit costs 
Defined contribution pension schemes
The principal subsidiary undertakings contribute to a number of Group personal pension plans in respect of certain employees. These plans 
are defined contribution plans and the annual charge to the income statement is the contributions payable in the year. Differences between 
contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.
Defined benefit pension scheme
The Group operates a defined benefit funded pension scheme, which is closed to future service accrual.
The costs of providing pensions under the defined benefit funded pension scheme are estimated on the basis of independent actuarial 
advice, with full actuarial valuations carried out on a triennial basis, and updated at each balance sheet date.
The operating and finance costs of the scheme are recognised separately within the statement of income. Actuarial gains and losses are 
recognised in full in the period in which they occur and are presented in the statement of recognised income and expense. 
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted 
for unrecognised past service costs, and as reduced by the fair value of scheme assets.
Short-term employee benefits
The cost of short-term accumulating balances is charged to the income statement over the period during which the entitlement is earned, 
at an average pay rate plus social security costs. Differences between the entitlement earned and the entitlement actually paid is shown as 
either accruals or prepayments in the balance sheet.
Taxation
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never 
taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by 
the balance sheet date. Phoenix IT Group plc
Annual Report and Accounts 2011
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3.  SIGNIFICANT ACCOuNTING POlICIES continued
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the 
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet 
liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised 
to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such 
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a 
business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the Group is able 
to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable 
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred 
tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the 
deferred tax is also dealt with in equity.
Investments
Investments are included at cost less provisions for impairment.
Property, plant and equipment 
Property, plant and equipment are stated at cost less accumulated depreciation and recognised impairment.
Depreciation is charged so as to write off the cost of assets, other than freehold land, over their estimated useful lives, using the straight-line 
method, on the following bases:
Freehold buildings  50 years
Leasehold property   Period of lease
Fixtures and equipment  2 to 5 years
Motor vehicles  4 years
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, over 
the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying 
amount of the asset and is recognised in income.
Intangible assets
Intangible assets are stated at cost less accumulated amortisation and any accumulated impairment losses.
Development costs
Expenditure incurred in the development of software products or enhancements, and their related intellectual property rights, is 
capitalised as an intangible asset only when the future economic benefits expected to arise are deemed probable and the costs can be 
reliably measured. Development costs not meeting these criteria, and all research costs, are expensed in the income statement as incurred. 
Capitalised development costs are amortised on a straight line basis over five years being their useful economic lives once the related 
software product or enhancement is available for use.
Other intangible assets
Intangible assets acquired through a business combination are initially measured at fair value and are amortised on a systematic basis over 
their estimated useful lives on the following bases:
Value of trade name  15 years
Customer contracts and relationships 5 to 10 years 36
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
3.  SIGNIFICANT ACCOuNTING POlICIES continued
Impairment policy
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any 
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated 
in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from 
other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an 
indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows 
are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and 
the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the 
asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is immediately recognised as an expense.
Where an impairment loss on assets, other than goodwill, subsequently reverses, the carrying amount of the asset (cash-generating unit) is 
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount 
that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of 
an impairment loss is immediately recognised as income.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Service stocks, other than consumable stocks, are systematically amortised over four years so as to reduce their value to nil at the end of the 
period. Consumable stocks are expensed as they are purchased.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual 
provisions of the instrument.
Financial assets
Trade receivables are recognised initially at fair value, which is usually the original invoiced amount and are subsequently measured at 
amortised cost using the effective interest method, less provision for impairment. A provision for impairment is established when there is 
evidence of a risk of non-payment, taking into account ageing, previous losses experienced and general economic conditions.
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily 
convertible to a known amount of cash and are subject to an insignificant risk of changes in value. 
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.
Trade payables are recognised initially at fair value, which is usually the original invoiced amount and are subsequently measured at 
amortised cost using the effective interest method.
Borrowings are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or 
redemption and direct issue costs, are accounted for on an accrual basis to the income statement using the effective interest method and are 
added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Equity instruments are any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity 
instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. 
Derivative financial instruments and hedge accounting
The Group uses derivative financial instruments such as interest rate swaps to hedge risks associated with interest rate fluctuations. Such 
derivative financial instruments are stated at fair value. The fair values of interest rate swaps are determined by reference to market rates for 
similar instruments. Phoenix IT Group plc
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Financial Statements
3.  SIGNIFICANT ACCOuNTING POlICIES continued
In order to qualify for hedge accounting, the Group is required to document from inception the relationship between the item being hedged 
and the hedging instrument. The Group is also required to document and demonstrate an assessment of the relationship between the 
hedged item and the hedging instrument, which shows that the hedge will be highly effective on an ongoing basis. This effectiveness testing 
is performed at each period end to ensure that the hedge remains highly effective.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge 
accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the highly 
probable forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in 
equity is transferred to the Consolidated Statement of Income for the period.
Cash flow hedges 
Changes in the effective portion of the fair value of derivative financial instruments that are designated as hedges of future cash flows are 
recognised directly in equity, and the ineffective portion is recognised immediately in the statement of income where relevant. If the cash 
flow hedge of a firm commitment or forecast transaction results in the recognition of a non-financial asset or liability, then, at the time 
it is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial 
measurement. For hedges that result in the recognition of a financial asset or liability, amounts deferred in equity are recognised in the 
statement of income in the same period in which the hedged item affects net profit or loss.
Provisions
Provisions relate to the obligation to reinstate certain properties to their former condition at the end of their leases. Provisions are measured 
at management’s best estimate of the expenditure required to settle the obligation at the balance sheet date and are discounted to present 
value where the effect is material.
Non-recurring items
Non-recurring items are items of income or expenditure that, in management’s judgement, should be disclosed separately on the basis that 
they are material, either by their nature or their size. Such items are included within the income statement caption to which they relate, and 
are separately disclosed either in the notes to the consolidated financial statements or on the face of the consolidated income statement.
Share-based payments
The Group has applied the requirements of IFRS 2 Share-based Payments. In accordance with the transitional provisions, IFRS 2 has been 
applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 January 2005.
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value 
at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line 
basis over the vesting period, based on the Group’s estimate of options that will eventually vest.
The fair value of the share-based payments (except for the total shareholder return scheme) is measured by the use of the Black–Scholes 
model. The fair value of the total shareholder return (TSR) share-based payment scheme is measured by the use of a Stochastic model. The 
expected life used in these models have been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise 
restrictions and behavioural considerations. 
Shares purchased through the employee benefit trust (EBT) are held at cost and are deducted from Shareholders equity. The right to a 
dividend on these shares has been waived.  38
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
4.  CRITICAl ACCOuNTING judGEMENTS ANd kEy SOuRCES OF ESTIMATION uNCERTAINTy
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of 
assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting 
period. Actual results could differ from these estimates. Information about such judgements and estimation is contained in the accounting 
policies or the notes to the accounts, and the key areas are summarised below.
Areas of judgement that have the most significant effect on the amounts recognised in the financial statements are:
Non-recurring items
Non-recurring items are items of income or expenditure that, in management’s judgement, should be disclosed separately on the basis that 
they are material, either by their nature or their size, to an understanding of the Group’s financial performance and significantly distort the 
comparability of financial performance between periods. Items of income or expense that are considered by management for designation as 
non-recurring items include such items as significant restructuring; impairments of assets; integration of acquired businesses; and gains and 
losses on disposals of non-current assets. Details of non-recurring items are included in note 7.
Assets held for sale
Assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. 
This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. 
Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from 
the date of classification, however an asset may remain in this categorisation for longer than one year if it remains unsold due to events or 
circumstances beyond the Group’s control. In making this judgement, impairment losses of £nil (2010: £1.2m) have been reflected in the 
income statement as non-recurring items. Details of the losses are disclosed in note 20.
Valuation of intangible assets and useful life
The Group has made assumptions in relation to the potential future cash flows to be determined from separable intangible assets acquired 
as part of business combinations. This assessment involves assumptions relating to potential future revenues, appropriate discount rates and 
the useful life of such assets. These assumptions impact the income statement over the useful life of the intangible asset. These assumptions 
are discussed further below. 
Key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and 
liabilities within the next financial year are:
Retirement benefits
The Group operates a defined benefit pension scheme which has been accounted for in accordance with IAS 19 – Employee Benefits. The 
scheme has been closed to future service accrual. Application of IAS 19 requires the exercise of judgement in relation to various assumptions 
including future pay rises in excess of inflation, employer and pensioner demographics and the future expected returns on assets. Phoenix 
IT Group determines the assumptions to be adopted in discussion with its actuaries, and believes these assumptions to be in line with UK 
practice generally, but the application of different assumptions could have a significant effect on the amounts reflected in the financial 
statements. Further details can be found in note 10.
Impairment of goodwill and intangible assets
Determining whether goodwill and intangible assets have been impaired requires an estimation of the value in use of the cash-generating 
units to which they have been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise 
from the cash-generating unit and a suitable discount rate in order to calculate present value. Details of the carrying amount of goodwill  
and intangible assets are shown in notes 15 and 16 respectively.
Share-based payments
In valuing the share-based payments recognised in the Group’s accounts, the Company has used the Black-Scholes calculation model and a 
Stochastic model, which makes various assumptions on factors outside the Group’s control, such as share price volatility and risk-free interest 
rates. Details of the options and assumptions used in deriving the share-based payments are disclosed in note 39.
Dilapidation provisions
Dilapidation provisions have been derived on the basis of the most recent assessment of likely cost. Many of these obligations will not arise for 
a number of years and the costs are difficult to predict accurately. In making these assessments, the Group has sought the aid of independent 
experts where appropriate. The total provisions are disclosed in note 28. Phoenix IT Group plc
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Financial Statements
5.  REvENuE
An analysis of the Group’s revenue is as follows:
        2011 2010
        £m £m
Revenue – continuing operations:
Product       34.7 31.4
Maintenance contracts       30.2 35.1
Other contract revenues      206.7 179.3
        271.6 245.8
Investment income        1.2 0.9
        272.8 246.7
6.  SEGMENTAl REPORTING
The Board has determined its operating segments by business line, based on the Group’s management and internal reporting structure. 
The Group’s operations are based entirely in the UK. The Group has no significant concentration of sales to a particular individual external 
customer.
Principal activities are as follows:
Business Continuity Provision of business continuity and IT disaster recovery services
Partner Services  Provision of information technology services, networking support and infrastructure services
Mid-market Services Provision of information technology services and systems
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Corporate costs 
relate to central Group costs, including finance, legal and employee costs that are not directly attributable to the operating segments. 
Inter segment turnover has been eliminated.
     Business Partner Mid-market
     Continuity Services Services Corporate Total
year ended 31 March 2011   £m £m £m £m £m
Revenue    55.5 117.9 98.2 – 271.6
Profit from operations before amortisation of 
intangibles and non-recurring items   14.4 16.7 8.3 (3.4) 36.0
Amortisation of intangibles       (3.1)
Non-recurring items        (3.3)
Profit from operations        29.6
Investment income        1.2
Finance costs including non-recurring item      (5.5)
Profit before tax        25.3
Capital expenditure on segment assets   11.2 2.3 4.3 – 17.8
Depreciation and amortisation in period   10.0 1.1 5.5 – 16.6
Balance sheet
Segment assets    138.3 70.8 126.6 – 335.7
Unallocated assets        15.8
Total assets        351.5
Segment liabilities    (56.0) (40.1) (24.9) 0.1 (120.9)
Unallocated liabilities        (77.3)
Total liabilities        (198.2) 40
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
6.  SEGMENTAl REPORTING continued
     Business Partner Mid-market
     Continuity Services Services Corporate Total
Year ended 31 March 2010    £m £m £m £m £m
Revenue    53.1 104.2 88.5 – 245.8
Profit from operations before amortisation of intangibles 
and non-recurring items   13.3 16.4 8.0 (3.3) 34.4
Amortisation of intangibles       (3.1)
Non-recurring items        (1.2)
Profit from operations        30.1
Investment income        0.9
Finance costs        (5.8)
Profit before tax        25.2
Capital expenditure on segment assets   4.5 0.8 2.2 – 7.5
Depreciation and amortisation in period   10.5 0.7 5.0 – 16.2
Impairment losses recognised in period   – – 1.2 – 1.2
Balance sheet
Segment assets    138.9 67.5 123.2 0.1 329.7
Unallocated assets        10.3
Total assets        340.0
Segment liabilities    (55.3) (38.0) (32.9) 1.0 (125.2)
Unallocated liabilities        (75.8)
Total liabilities        (201.0)
The analysis of total assets and liabilities excludes inter-segment balances. Unallocated assets comprise of cash and cash equivalents and 
unallocated liabilities comprise of bank loans and overdrafts, taxation and derivative financial liabilities.
7.  NON-RECuRRING ITEMS
         2011  2010
        £m £m
Impairment loss on property held for sale (note 20)     – (1.2)
Curtailment gain in defined benefit pension scheme (a)     0.4 –
Legal and professional fees incurred in relation to the closure of the defined benefit pension scheme (a)  (0.4) –
Write-off of unamortised loan costs following the arrangement of new bank facilities (b)   (0.3) –
Costs of reorganisation following the merger of two divisions (c)    (1.7) 
One-off compensation payment (d)      (1.6) 
        (3.6) (1.2)
Non-recurring items in the period ending 31 March 2011 comprise:
(a) During the year, the defined benefit pension plan was closed to future service accrual beyond 30 September 2010. This cessation of future 
service accrual resulted in an exceptional curtailment gain of £0.4m. Additionally, legal and professional fees of £0.4m were incurred in 
order to effect this change.
(b) On 20 August 2010 the Group successfully refinanced its debt facilities and repaid its existing facility in full in advance of its due date 
resulting in the write-off of unamortised loan costs of £0.3m.
(c)  From 1 April 2011 a single-user based organisation has been created by merging the ICM Continuous Business (Business Continuity) and 
Servo (Mid-market Services) Divisions. There were £1.7m of costs associated with the restructuring.
(d) £1.6m in respect of a one-off compensation payment made to a partner for not delivering an agreed upon service. Phoenix IT Group plc
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Financial Statements
8.  PROFIT FROM OPERATIONS
        2011 2010
        £m £m
Revenue       271.6 245.8
Raw materials and consumables      (8.0) (6.5)
Staff costs (note 9)       (104.5) (99.0)
Depreciation of property, plant and equipment     (13.5) (13.1)
Amortisation of intangibles      (3.1) (3.1)
Other operating charges       (112.9) (94.0)
        29.6 30.1
The analysis of Auditors’ remuneration is as follows:
        2011 2010
        £m £m
Fees payable to Deloitte LLP for the audit of the Company’s annual financial statements   – –
Fees payable to Deloitte LLP for other services to the Group:
 Audit of the Company’s subsidiaries pursuant to legislation    0.2 0.2
        0.2 0.2
Other services pursuant to legislation       –
Tax services        0.1 0.1
        0.1 0.1
        0.3 0.3
9.  STAFF COSTS
        2011 2010
        £m £m
Their aggregate remuneration comprised:
Wages and salaries       91.2 87.4
Social security costs       10.2 9.3
Other pension costs (note 10)      2.4 1.9
Share-based payments (note 39)      0.7 0.4
        104.5 99.0
The average monthly number of employees (including Directors) was:
        Number Number
Business Continuity       230 205
Partner Services       1,983 1,902
Mid-market Services       499 451
Central administration       16 16
        2,728 2,574
The remuneration of the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 
Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the audited part of the Directors’ 
Remuneration Report on page 24.
        2011 2010
        £m £m
directors
Short-term employee benefits      0.8 1.0
Post-employment benefits      0.1 0.1
        0.9 1.1 42
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
10. RETIREMENT BENEFIT SChEMES
defined contribution scheme
The Group operates a defined contribution retirement benefit scheme. The assets of this scheme are held separately from those of the Group.
Pension costs for defined contribution schemes are as follows:
        2011 2010
        £m £m
Defined contribution scheme      2.1 1.7
defined benefit scheme
The Group has a defined benefit pension scheme for certain of its employees. During the period to 31 March 2011 the defined benefit pension 
scheme was closed to future service accrual with an effective date of 30 September 2010. Members of the scheme have been invited to make 
contributions into the defined contribution plan.
Under the scheme the employees are entitled to retirement benefits varying between 1.25% and 1.67% of final salary, multiplied by number 
of years of pensionable service, on attainment of a retirement age of 65. No other post retirement benefits are provided. The scheme is a 
funded scheme.
The most recent full actuarial valuation of the scheme’s defined benefit obligation was carried out at 6 April 2009 and updated to 31 March 
2011 by a qualified independent actuary for IAS 19 purposes. The projected unit method was used in all valuations and assets were taken into 
account using market values.
The major assumptions used by the actuary were:
        2011 2010
        % %
Discount rate       5.55 5.50
Expected return on equities, bonds and cash     6.41 6.54
Expected rate of salary increases      4.30 4.45
Future pension increases      3.35 3.45
Inflation (RPI)       3.65 3.80
Inflation (CPI)       3.15 –
Mortality tables used       PCxA00(yOB) PCxA00(YOB)
        Males 0.8l C Males 0.8LC
        Females 0.6l C Females 0.6L C
In July 2010 the Government announced a proposal to replace the Retail Price Index (RPI) with the Consumer Price Index (CPI) on the basis 
that CPI is a more appropriate measure of the change in cost of living for pensioners than RPI. The proposal implied that private sector 
pension schemes should be indexed in the same way as public sector pension schemes. On 17 February 2011 the House of Commons 
approved the move from RPI to CPI index linking for public sector pensions. Following a review of the scheme rules and in consultation with 
the trustees, the Group has moved to CPI as the measure for inflation in increasing deferred pensions prior to retirement, which has reduced 
its defined benefit liability by £1.2m.
In calculating the defined benefit obligation under IAS19 the actuary has assumed that equalisation of retirement benefits between men 
and women was effective from 1997. This assumption has been challenged by the trustees of the scheme who believe that the effective date 
of equalisation may be 2005. The Group has not yet been able to agree a definitive position with the trustees of the scheme and it may be 
necessary for the Group to seek direction from the courts to resolve this issue. Taking into account the legal advice received by the Group, 
this possible change has not been reflected in the IAS19 assumptions used at 31 March 2011. If such a change in assumptions were to be made 
the effect would be an increase in the present value of the defined benefit obligation as at 31 March 2011 of approximately £1.8m – £2.2m.
The current life expectancies post retirement (in years) underlying the value of the accrued liabilities for defined benefit pension scheme are:
 2011 2010
      Male Female Male Female
Member currently age 65    23.0 24.5 22.8 24.4
Member currently age 40    25.4 26.8 25.3 26.7
  Phoenix IT Group plc
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Financial Statements
10. RETIREMENT BENEFIT SChEMES continued
Amounts recognised in income in respect of the defined benefit scheme are as follows:
        2011 2010
        £m £m
Current service cost       0.3 0.3
Interest cost       1.2 0.9
Effect of curtailment       (0.4) –
Expected return on scheme assets      (1.2) (0.8)
        (0.1) 0.4
The current service cost for the period has been included in staff costs. Actuarial gains of £2.0m (2010: losses of £5.0m) have been reported in 
the consolidated statement of comprehensive income.
During the year, the defined benefit pension plan was closed to future service accrual beyond 30 September 2010. This cessation of future 
service accrual resulted in an exceptional curtailment gain of £0.4m which has been included within non-recurring items (note 7). 
The amount included in the balance sheet arising from the Group’s obligations in respect of its defined benefit scheme is as follows:
        2011 2010
        £m £m
Present value of defined benefit obligations     20.7 22.0
Fair value of scheme assets      (20.0) (16.9)
Deficit in scheme and liability recognised in the balance sheet     0.7 5.1
Movements in the present value of defined benefit obligations were as follows:
         2011
         £m
At 1 April 2010        22.0
Current service cost        1.2
Interest cost        0.3
Benefits paid        (0.6)
Members’ contributions       0.2
Curtailment gain        (0.4)
Actuarial losses on defined benefit obligation      (2.0)
At 31 March 2011        20.7
Movements in the fair value of scheme assets were as follows:
         2011
         £m
At 1 April 2010        16.9
Expected return on scheme assets       1.2
Contributions by employer       2.3
Members’ contributions       0.2
Benefits paid        (0.6)
Actuarial gains on scheme assets       –
At 31 March 2011        20.0
The fair value of the scheme assets at the balance sheet date is analysed as follows:
        2011 2010
        £m £m
Equities       12.2 10.5
Bonds       7.8 6.4
        20.0 16.9
The scheme assets do not include any of the Group’s own financial instruments, nor any property occupied or other assets used by  
the Group. 44
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
10. RETIREMENT BENEFIT SChEMES continued
The expected rate of return on the equities was determined by reference to long term historic out performance of this asset class over 
bonds so a view was taken that it was appropriate to take a future return rate on equities of 7.35% (2010: 7.50%) p.a. The investment return 
in relation to these assets is variable and as such they are considered riskier investments. This results in ‘the equity risk premium’ which is 
included in the yield on the equity investment and compensates investors for the additional risk of holding this type of investment. There is 
significant uncertainty about the expected size of this risk premium and this risk is managed by holding assets which are less risky in nature 
but have a corresponding lower return.
The expected rate of return on bonds was determined by taking a blend between the gross redemption yields on corporate and government 
bonds, which were the two types of bonds held within the scheme at 31 March 2011, resulting in a return rate on bonds of 4.95% (2010: 
5.00%). The risk of default on these assets is considered to be small. 
The expected rate of return on cash was determined by reference to the level of bank base rate of 0.50% (2010: 0.50%) p.a.
The overall expected rate of return is calculated by weighting the individual rates in accordance with how the plan assets are invested.
The actual return on scheme assets was a gain of £1.2m (2010: £4.0m).
The history of the Group’s defined benefit arrangement is as follows:
      2011 2010 2009 2008
      £m £m £m £m
Present value of defined benefit obligation    20.7 22.0 12.6 13.2
Fair value of scheme assets    (20.0) (16.9) (11.5) (12.1)
Deficit     0.7 5.1 1.1 1.1
Experience adjustments on scheme liabilities   – (0.1) – –
Percentage of scheme liabilities    0.0% 0.6% 0.0% 0.0%
Experience adjustments on scheme assets    – 3.2 (3.0) (1.0)
Percentage of scheme assets    0.0% 19.2% 25.9% 7.9%
Following the last triennial actuarial review in April 2009, the Group agreed with the trustees that it will aim to eliminate the deficit over a 
three year period. The Group expects to contribute £1.5m to the defined benefit pension scheme in the next financial year.
The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below:
   Impact on 
   scheme liabilities 
Assumption Change in assumption  £m
Discount rate Decrease by 0.5ppts  Increase by 2.6
Inflation Increase by 0.25ppts   Increase by 1.0
Mortality Improved life expectancy by using 100% of long cohort Increase by 0.6
11.  FINANCE COSTS ANd INvESTMENT INCOME
        2011 2010
        £m £m
Finance costs:
Interest on bank overdrafts and loans      (2.8) (3.7)
Interest on obligations under finance leases and hire purchase contracts    (0.5) (0.7)
Amortisation of loan issue costs      (0.4) (0.3)
Other interest       (0.3) (0.3)
Interest cost on defined benefit scheme      (1.2) (0.9)
Non-recurring finance costs      (0.3) –
Total interest expense       5.5 (5.9)
Less: amounts included in the cost of qualifying assets     – 0.1
        (5.5) (5.8)
Investment income:
Expected return on defined benefit pension scheme assets     1.2 0.8
Interest on bank deposits      – 0.1
        1.2 0.9
Net finance costs       (4.3) (4.9)
Borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are calculated by applying 
a capitalisation rate of 4.684% (2010: 5.430%) to expenditure on such assets. Phoenix IT Group plc
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Financial Statements
12.  TAxATION
The tax charge on profit from operations for the year was as follows:
        2011 2010
        £m £m
Current tax:
UK corporation tax       8.0 8.4
Adjustment in respect of prior periods      (0.8) (1.0)
        7.2 7.4
Deferred tax (note 29):
Current year       (0.8) (1.1)
Adjustment in respect of prior periods      0.7 (0.3)
Change of rate       (0.5) —
        6.6 6.0
Corporation tax is calculated at 28% (2010: 28%) of the estimated assessable profit for the year. 
The charge for the year can be reconciled to the profit per the income statement as follows:
 2011 2010
      £m % £m %
Profit before tax     25.3  25.2
Tax at the UK corporation tax rate of 28%    7.1 28.0 7.0 28.0
Effects of:
Expenses that are not deductible in determining taxable profit  (0.1) (0.2) 0.5 2.2
Tax adjustments relating to share options    0.1 0.3 (0.2) (0.7)
Adjustments in respect of prior periods    (0.1) (0.5) (1.3) (5.4)
Change in tax rate     (0.4) (1.7)
Tax expense and effective tax rate for the year   6.6 25.9 6.0 24.1
The effective tax rate for the period was 25.9% (2010: 24.1%). The Finance Act 2010 was enacted in the year and included a reduction in 
the main rate of corporation tax from 28% to 27%, the Budget announcement on 23 March 2011 further reduced the corporation tax to 
26% with effect from 1 April 2011. This has reduced the deferred tax liability by £0.4m, represented by an increase in the income statement 
deferred tax credit of £0.5m and an increase in the reserves deferred tax charge of £0.1m. The impact on the effective tax rate is a reduction 
of 1.7%.
The Government has also indicated that it intends to enact further reductions in the corporation tax rate of 1% per annum, reducing the rate 
to 23% by 1 April 2014. This decrease had not been substantively enacted at the balance sheet date and therefore has not been reflected in 
the financial statements.
In addition to the amount charged to the income statement, the following amounts have been charged/(credited) directly to equity:
        2011 2010
        £m £m
Deferred tax (note 29):
Tax on actuarial losses       0.5 (1.4)
Tax on cash flow hedge      0.3 0.5
        0.8 (0.9) 46
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For the year ended 31 March 2011
13.  EARNINGS PER ShARE
        2011 2010
Underlying earnings per share excluding amortisation of intangibles and non-recurring items
 Basic       31.6p 30.0p
 Diluted       30.6p 29.0p
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
        2011 2010
        £m £m
Earnings for the purposes of basic earnings per share and diluted earnings per share being 
net profit attributable to equity holders of the parent     18.7 19.2
Amortisation of intangibles      3.1 3.1
Non-recurring items       3.6 1.2
Tax on amortisation of intangibles and non-recurring items    (1.7) (1.0)
Earnings for the purposes of underlying earnings per share being net profit attributable to equity 
holders of the parent excluding amortisation of intangibles and non-recurring items   23.7 22.5
Number of shares
        2011 2010
        m m
Weighted average number of Ordinary Shares for the purposes of basic earnings per share   75.2 75.2
Effect of dilutive potential Ordinary Shares:
Share options       2.4 2.4
Weighted average number of Ordinary Shares for the purposes of diluted earnings per share  77.6 77.6
14.  dIvIdENdS
        2011 2010
        £m £m
Amounts recognised as distributions to Shareholders in the year:
Interim dividend for the year ended 31 March 2010 of 2.15p (2009: 2.10p) per share   1.6 1.6
Final dividend for the year ended 31 March 2010 of 4.30p (2009: 4.20p) per share   3.2 3.1
Interim dividend for the year ended 31 March 2011 of 3.50p per share    2.6 –
        7.4 4.7
Proposed interim dividend for the year ended 31 March 2010 of 2.15p per share    – 1.6
Proposed final dividend for the year ended 31 March 2011 of 7.00p (2010: 4.30p) per share   5.3 3.6
The interim dividend was recommended by the Board on 25 November 2010 and was paid on 17 January 2011.
The proposed final dividend was recommended by the Board on 27 May 2011 and if approved will be paid on 3 August 2011. 
The proposed final dividend is subject to approval by Shareholders at the Annual General Meeting and accordingly has not been included as 
a liability in these financial statements. Phoenix IT Group plc
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Financial Statements
15.  GOOdwIll
         £m
Cost and carrying amount
At 1 April 2009        178.8
Additions arising from revisions to provisional fair values      1.4
At 1 April 2010        180.2
Additions (note 35)        1.2
At 31 March 2011        181.4
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGUs) that are expected to benefit  
from that business combination. Before recognition of impairment losses, the carrying amount of goodwill has been allocated as follows:
        2011 2010
        £m £m
Business Continuity       81.2 80.4
Partner Services       33.0 32.6
Mid-market Services       67.2 67.2
        181.4 180.2
Impairment
The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The 
recoverable amounts of the CGUs are determined from value in use calculations and from time to time the Group may also obtain 
independent appraisals of fair values to determine recoverable amounts.
The recoverable amounts of the CGUs are determined from value in use calculations based on the 3 year detailed financial budget approved 
by the Directors. The main assumptions within the budget operating cash flows include the Directors conservative estimates of revenue 
growth, future profitability and ongoing levels of working capital and capital expenditure to support growth. 
The key assumptions used in determining the value in use calculations are set out below and these assumptions have been revised in the 
year in light of the current economic environment which has resulted in more conservative estimates about the future. 
Cash flow projections
The Group prepares risk-adjusted cash flow forecasts derived from the most recent annual financial budgets approved by the Directors with 
an extrapolation of these cash flows beyond a 3 year horizon to perpetuity applying an assumed annual growth rate of 2.25%. 
Discount rate
The Directors have used discount rates ranging from 10-12% (2010: 10-12%) which represents the Group pre-tax weighted average cost of 
capital adjusted for the risk profiles of the individual CGUs.
Growth rates
Growth rates are determined with reference to current market conditions, external forecasts and historical trends for the Group’s key 
end markets. Cash flow growth rates are derived from the Directors latest estimates of forecast revenues taking into consideration past 
experience of operating margins achieved in the CGU. Historically, such forecasts have been reasonably accurate. To forecast beyond three 
years a long-term average growth rate of 2.25% has been used to calculate a terminal value. The Directors have made the judgement that 
this long-term growth rate does not exceed the long-term average growth rate for the industry. The terminal value represents the value of 
cash flows beyond the third year to perpetuity. In the short-term (up to 3 years) growth rates of between 0% and 23.7% have been used.
In assessing goodwill for impairment as at 31 March 2011, the Directors made use of the most recent detailed calculations of the recoverable 
amount of the Group’s CGUs, prepared at 31 March 2011. Those calculations resulted in recoverable amounts exceeding the carrying values 
for each of the Group’s three CGUs, despite the weaker markets currently being experienced. 
Sensitivity to changes in assumptions 
Whilst the Directors consider that their assumptions are realistic, it is possible that an impairment would be identified if any of the above key 
assumptions were changed significantly. The Group’s impairment review is sensitive to a change in the key assumptions used, most notably 
the discount rates. Based on the Group’s sensitivity analysis, an increase in the discount rate in any of the CGUs of 3.0% or a decrease in 
forecast cash flows of 27.2% (in isolation) would lead to an impairment.  48
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
15.  GOOdwIll continued
Using a discounted cash flow methodology necessarily involves making numerous estimates and assumptions regarding revenue growth, 
operating margins, tax rates, appropriate discount rates, capital expenditure levels and working capital requirements. These estimates will 
likely differ from future actual results of operations and cash flows, and it is possible that these differences could be material. In addition, 
judgements are applied by the Directors in determining the level of cash-generating unit identified for impairment testing and the criteria 
used to determine which assets should be aggregated. A difference in assumptions could affect whether an impairment is recorded and the 
extent of impairment loss. 
Changes in business activities or structure may also result in changes to the level of testing in future periods. Further, future events could 
cause the Group to conclude that impairment indicators exist and that the asset values associated with a given operation have become 
impaired. Any resulting impairment loss could have a material impact on the Group’s financial condition and results of operations. 
16.  INTANGIBlE ASSETS
       Customer Computer
       contracts & software
      Brand name relationships development Total
      £m £m £m £m
Cost
At 1 April 2009     11.6 18.2 – 29.8
Acquired with subsidiary undertaking (note 35)   – 2.2 – 2.2
Additions     – – 0.2 0.2
At 1 April 2010     11.6 20.4 0.2 32.2
Additions     – – 0.8 0.8
At 31 March 2011     11.6 20.4 1.0 33.0
Accumulated amortisation
At 1 April 2009     1.4 9.6 – 11.0
Charge for the year     0.8 2.3 – 3.1
At 1 April 2010     2.2 11.9 – 14.1
Charge for the year     0.8 2.3 – 3.1
At 31 March 2011     3.0 14.2 – 17.2
Net book value
At 31 March 2011     8.6 6.2 1.0 15.8
At 31 March 2010     9.4 8.5 0.2 18.1
Computer software development additions represent assets purchased from third parties. Phoenix IT Group plc
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17.  PROPERTy, PlANT ANd EquIPMENT
      Short Fixtures
     Freehold leasehold and Motor
     property properties equipment vehicles Total
     £m £m £m £m £m
Cost
At 1 April 2009    21.5 7.8 67.3 1.5 98.1
Reclassifications    – (2.2) 2.2 – –
Additions    0.1 0.3 6.9 – 7.3
Disposals    (0.2) – (0.5) (0.4) (1.1)
At 1 April 2010    21.4 5.9 75.9 1.1 104.3
Reclassifications    – (0.1) (0.3) 0.4 –
Reclassified as held for sale (note 20)   (0.7) – (0.2) – (0.9)
Additions    0.1 1.7 16.0 – 17.8
Disposals    – – (8.8) (0.9) (9.7)
At 31 March 2011    20.8 7.5 82.6 0.6 111.5
Accumulated depreciation
At 1 April 2009    1.2 2.3 25.4 1.0 29.9
Reclassifications    – 0.2 (0.2) – –
Charge for the year    0.4 0.7 11.8 0.2 13.1
Disposals    – – (0.4) (0.4) (0.8)
At 1 April 2010    1.6 3.2 36.6 0.8 42.2
Reclassifications    – – (0.3) 0.3 –
Reclassified as held for sale (note 20)   (0.2) – (0.2) – (0.4)
Charge for the year    0.4 0.7 12.2 0.2 13.5
Disposals    – – (8.8) (0.9) (9.7)
At 31 March 2011    1.8 3.9 39.5 0.4 45.6
Net book value
At 31 March 2011    19.0 3.6 43.1 0.2 65.9
At 31 March 2010    19.8 2.7 39.3 0.3 62.1
The current year reclassifications to cost and depreciation are to re-analyse construction in progress between asset classes when they are 
brought into use.
Included in the above is land at cost of £5.5m (2010: £5.8m) which is not depreciated. 
The net book value of fixed assets includes £10.9m (2010: £11.9m) in respect of assets held under finance leases and hire purchase contracts.
At 31 March 2011, the Group had entered into contractual capital commitments amounting to £0.5m (2010: £1.0m).
18.  dERIvATIvE FINANCIAl INSTRuMENTS
 2011 2010
 liability Liability
      Fair value Notional Fair value Notional
      £m £m £m £m
Cash flow hedges
Interest rate swaps     – – 1.1 42.0
The interest rate swap matured on 30 September 2010, there were no derivative financial instruments at 31 March 2011. 50
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
19.  FINANCIAl RISk MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and 
liquidity risk.
Funding and treasury risk management is carried out under a framework of policies and guidelines approved by the Board. The Board is 
responsible for regular review and monitoring of treasury activity and for approval of specific transactions, the authority of which may be 
delegated. The Group accounting function provides regular update reports of treasury activity to the Board of Directors. 
The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Capital risk management
The Group seeks to match long term assets with long term funding and short term assets with short term funding. 
Equity, retained profits and long term fixed interest debt are used primarily to finance intangible assets and fixed assets. Short term 
borrowings are required primarily to finance current assets.
The Group capitalisation policy seeks to maintain a strong credit rating and an appropriate funding structure whilst safeguarding Group 
ability to continue as a going concern.
Market risk
(a) Foreign exchange risk
The Group publishes its consolidated financial statements in sterling but also conducts some business in foreign currencies, mainly  
the US Dollar. As a result it is subject to foreign exchange currency risk due to exchange rate movements, which will affect the Group’s 
transaction costs. 
The Board periodically reviews the net exchange risk and implements strategies as appropriate. Due to the relative stability of the foreign 
currencies in which the Group deal and size of the foreign exchange transactions, the Group does not hedge the foreign exchange risk as the 
potential exposure is considered not to be material to the Group’s results.
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date are as follows:
 Assets liabilities
      2011 2010 2011 2010
      £m £m £m £m
US Dollar     1.8 0.5 0.9 0.2
Euro     – 0.1 0.1 0.1
Norwegian Kroner     0.2 0.1 – –
      2.0 0.7 1.0 0.3
(b) Interest rate risk
The Group’s policy aims to manage the interest cost of the Group within the constraints of its budget and its financial covenants. At the year 
end the Group’s borrowings were subject to a floating rate. The Group monitors movements in the swap market and since the year end the 
Group took out an interest rate swap to hedge risks associated with interest rate fluctuations on £30m of the rolling credit facility.
The table below sets out the carrying amount of borrowings that are exposed to interest rate risk:
        2011 2010
        £m £m
Fixed interest rate borrowings      – 42.0
Floating interest rate borrowings      70.0 24.0
Total borrowings       70.0 66.0
The contractual maturity of these borrowings can be found in note 25. Phoenix IT Group plc
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19.  FINANCIAl RISk MANAGEMENT continued
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group 
monitors its credit exposures to its counterparties via their credit rating, where applicable, or through other publicly available financial 
information and its own trading records.
The Group does not have any significant credit risk exposure to any single counterparty or group of counterparties having similar 
characteristics. The Group defines counterparties as having similar characteristics if they are connected entities. Concentration of credit risk 
with respect to trade receivables is limited due to the Group’s customer base being large and unrelated. The credit risk on liquid funds and 
derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit 
rating agencies.
The carrying amounts of financial assets recorded in the financial statements, which is net of impairment losses, represents the Group’s 
maximum exposure to credit risk.
Liquidity risk
The Group manages its liquidity requirements by maintaining adequate reserves, banking facilities and reserve borrowing facilities by 
continuously monitoring forecast and actual cash flows. All borrowing is agreed and monitored by the Board of Directors. The Group’s 
undrawn committed borrowing facilities are shown in note 25. The Group has a policy of pooling Group cash flows in order to maximise the 
return on surplus cash and also utilise cash within the Group. Surplus cash is placed on short-term deposits.
The following is an analysis of the contractual undiscounted cash flows payable under financial liabilities and derivative financial instruments 
as at the balance sheet date. The table includes both interest and principal cash flows:
      due between due between
     due within  one and two and due in over
     one year two years three years three years Total
     £m £m £m £m £m
Non derivative financial liabilities
Bank loans    – – – 70.0 70.0
Finance lease liabilities    5.2 3.0 1.3 0.5 10.0
Other non interest-bearing liabilities   39.6 – – – 39.6
     44.8 3.0 1.3 70.5 119.6
derivative financial instruments
Net settled interest rate swaps   – – – – –
Total as at 31 March 2011   44.8 3.0 1.3 70.5 119.6
Non derivative financial liabilities
Bank loans    16.0 16.0 34.0 – 66.0
Finance lease liabilities    5.4 4.7 2.3 1.0 13.4
Other non interest-bearing liabilities   30.1 – – – 30.1
     51.5 20.7 36.3 1.0 109.5
derivative financial instruments
Net settled interest rate swaps   1.1 – – – 1.1
Total as at 31 March 2010   52.6 20.7 36.3 1.0 110.6
Floating rate interest has been estimated using a future interest rate curve as at 31 March.  52
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
19.  FINANCIAl RISk MANAGEMENT continued
Sensitivity analysis
Financial instruments affected by market risk include borrowings, deposits and derivative financial instruments. The following analysis, 
required by IFRS 7, is intended to illustrate the sensitivity to changes in market variables, being UK interest rates and the US dollar to sterling 
exchange rate on the Group’s financial instruments.
The analysis excludes the impact of movements in market variables on the carrying value of pension and other post-retirement benefits 
obligations and provisions.
The sensitivity analysis has been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and 
the derivative portfolio and the proportion of financial instruments in foreign currencies are all constant.
The following table shows the illustrative effect on the income statement and items that are recognised directly in equity that would result 
from reasonably possible movements in changes in UK interest rates and in the US dollar to Sterling exchange rate, before the effects of tax.
 2011 2010
      Income   Income
      statement Equity statement Equity
      –/+ £m –/+ £m –/+ £m –/+ £m
UK interest rates +/–0.50ppts    0.4 – 0.1 –
US dollar exchange rate +/–10%    0.1 – – –
20.  ASSETS hEld FOR SAlE
Assets held for sale of £2.7m (2010: £2.2m) consist of properties held in the Mid-market Services Division.
An additional property within the Mid-market Division was added to the sale portfolio on 31 March 2011 with the sale expected to occur in 
the next financial year. The remainder of the assets were classed as held for sale at 31 March 2008 however due to market conditions outside 
of the Group’s control they remained unsold at 31 March 2011. Management are still committed to the sale of these assets, are actively 
marketing them at a price reasonable given the change in market conditions and anticipate the sale will occur in the next financial year 
ending 31 March 2012.
An impairment loss of £nil (2010: £1.2m) has been recognised in the year on properties held for sale and reflects the difference between their 
carrying value and their estimated fair value in the market less costs of sale. 
21.  SuBSIdIARIES
A list of the significant subsidiaries included within the Group accounts, including the name, country of incorporation and proportion of 
ownership interest, is given in note 4 to the individual Company financial statements on page 66.
22.  INvENTORIES
        2011 2010
        £m £m
Service stocks       13.4 13.0 Phoenix IT Group plc
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23. TRAdE ANd OThER RECEIv ABlES
Trade and other receivables at the balance sheet date comprise:
        2011 2010
        £m £m
Included within current assets:
Trade debtors       36.6 37.8
Other debtors       5.1 3.9
Prepayments and accrued income      14.8 12.4
        56.5 54.1
The Group’s trade receivables are stated after allowances for bad and doubtful debts based on managements’ assessment of 
creditworthiness, an analysis of which is as follows:
        2011 2010
        £m £m
Balance at the beginning of the period      0.4 0.8
Increase in provision        0.4 0.3
Amounts utilised        (0.3) (0.7)
Balance at the end of the period      0.5 0.4
As at 31 March 2011, trade receivables of £3.2m (2010: £2.7m) were past due but not impaired. The ageing of these trade receivables from 
due date is as follows:
        2011 2010
        £m £m
Under 30 days       2.3 1.6
30–60 days       0.3 0.9
60–90 days       0.3 0.2
90–120 days       0.1 –
Over 120 days       0.2 –
Total       3.2 2.7
Concentration of credit risk with respect to trade receivables is limited due to the Group’s customer base being large and unrelated. Due to 
this, the Directors believe there is no further credit risk provision required in excess of the allowance for bad and doubtful debts.
The Directors consider that the carrying amount of trade and other receivables approximates their fair value due to their short maturities.
24. CASh ANd CASh EquIv AlENTS
        2011 2010
        £m £m
Cash and cash equivalents      15.8 10.3
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. 
The carrying amount of these assets approximates their fair value. 
Net cash and cash equivalents are held in the following currencies; those held in currencies other than sterling have been converted into 
sterling at year-end exchange rates.
        2011 2010
        £m £m
Sterling       14.5 10.1
Euro       – 0.1
US Dollar       1.1 –
Norwegian Kroner       0.2 0.1
        15.8 10.3 54
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
25. BANk l OANS
The following table analyses bank borrowings, excluding bank overdrafts: 
        2011 2010
        £m £m
Current:
Bank loans       – 15.7
Non-current: 
Bank loans       68.8 49.9
Total borrowings       68.8 65.6
Total borrowings are repayable as follows:
        2011 2010
        £m £m
Within one year       – 15.7
In more than one year but not more than two years     – 15.8
In more than two years but not more than five years     68.8 34.1
        68.8 65.6
All bank borrowings are denominated in sterling and are stated net of unamortised issue costs.
On 20 August 2010 the Group successfully refinanced its debt facilities and entered into a £90.0m four-year syndicated rolling credit facility. 
The new facility is provided by Barclays Bank plc, HSBC Bank plc, The Royal Bank of Scotland plc and Yorkshire Bank. The facility is due for 
repayment in full in August 2014. Interest is charged at LIBOR plus margin, where the margin is dependent upon the Group’s covenants 
ranging from 2.00 to 3.00%. The Company and certain subsidiaries (as guarantor) have entered into a composite guarantee in favour of the 
syndicated lenders on account of the Company and certain subsidiaries (as principal).
The Directors estimate the fair value of the Group’s bank borrowings to be equivalent to its book value. At 31 March 2011, of the total 
committed borrowing facilities of £90.0m (2010: £86.0m), the Group had available £20.0m (2010: £20.0m) of undrawn facilities.
In addition the Group has an uncommitted overdraft facility of £10.0m which is renewable annually and was undrawn at 31 March 2011.
26. TRAdE ANd OThER PAyABlES
Trade and other payables principally comprise the following amounts: 
        2011 2010
        £m £m
Included within non-current liabilities:
Other creditors       5.8 6.5
Included within current liabilities:
Trade creditors       19.6 12.6
Other creditors       5.2 3.7
Social security and other taxes      7.9 8.8
Accruals       14.6 14.2
        47.3 39.3
As at 31 March 2011, trade creditors of the Group were equivalent to 42 days (2010: 37 days).
The Directors consider that the carrying amount of trade payables approximates their fair value. Phoenix IT Group plc
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27. OBlIGATIONS uNdER FINANCE lEASES ANd hIRE PuRChASE CONTRACTS
  Present value
 Minimum lease  of minimum
 payments lease payments
      2011 2010 2011 2010
      £m £m £m £m
Amounts payable under finance leases and hire purchase contracts:
Within one year     5.2 5.4 4.9 5.0
In the second to fifth years inclusive    4.8 8.0 4.5 7.6
      10.0 13.4 9.4 12.6
Less: future finance charges    (0.6) (0.8)
Present value of lease obligations    9.4 12.6
Less: amounts due for settlement within 12 months   (4.9) (5.0)
Amounts due for settlement after 12 months   4.5 7.6
It is the Group’s policy to lease certain of its fixtures, fittings and equipment under finance leases and hire purchase contracts. The average 
term is 5 years. Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered 
into for contingent rental payments. 
All lease and hire purchase obligations are denominated in sterling.
There is no material difference between the minimum lease payments and the present value of the minimum lease payments.
The fair value of the Group’s lease and hire purchase obligations approximates their carrying amount.
The Group’s obligations under finance leases and hire purchase contracts are secured by the lessors’ charges over the leased assets.
28. PROvISIONS
        2011 2010
        £m £m
Balance at the start of the period      5.2 4.6
Additional provision in the year      1.9 1.0
Utilisation of provision       (0.6) (0.4)
Balance at the end of the period      6.5 5.2
Included in current liabilities      1.3 0.8
Included in non-current liabilities      5.2 4.4
        6.5 5.2
The provision relates to the obligation to reinstate certain properties to their former condition at the end of their leases which end between 
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For the year ended 31 March 2011
29. dEFERREd TAx
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and  
prior year.
     Accelerated Share  Retirement
    Intangible tax option  benefit
   hedging assets depreciation costs Provisions obligations Total
   £m £m £m £m £m £m £m
At 1 April 2009  0.8 (5.2) (4.4) 0.1 1.4 0.3 (7.0)
Acquisition of subsidiary (note 35) – 0.4 – – – – 0.4
Charge to income  – 0.9 1.0 0.2 (0.4) (0.3) 1.4
Charge to equity  (0.5) – – – – 1.4 0.9
At 1 April 2010  0.3 (3.9) (3.4) 0.3 1.0 1.4 (4.3)
Charge to income  – 0.6 0.4 0.1 (0.2) (0.6) 0.3
Charge to equity  (0.3) – – – – (0.5) (0.8)
Effect of change in tax rate       
 – income statement  – 0.3 0.3 – (0.1) – 0.5
 – equity  – – – – – (0.1) (0.1)
At 31 March 2011  – (3.0) (2.7) 0.4 0.7 0.2 (4.4)
30. ShARE CAPITAl
 Authorised Allotted and fully paid
      Number £m Number £m
Ordinary shares of 1p each
At 1 April 2009     100,000,000 1.0 75,141,134 0.8
Exercise of share options    – – 41,199 –
Shares transferred to the employee benefit trust   – – 24,541 –
At 1 April 2010     100,000,000 1.0 75,206,874 0.8
Exercise of share options    – – 15,000 –
At 31 March 2011     100,000,000 1.0 75,221,874 0.8
During the year, options were exercised on 15,000 Ordinary Shares at prices varying from 96p to 200p and that number of shares was issued 
for a total gross consideration of £24,800 comprising £24,650 of share premium and £150 of capital. 
A total of 23,845 Ordinary Shares are held by the employee benefit trust (2010: 39,873), for which the right to receive dividends has been 
waived.
The Company has one class of ordinary share capital which carries no right to fixed income.
31. ShARE PREMIuM ACCOuNT
         £m
At 1 April 2009        37.4
Premium on issue of shares       0.1
At 1 April 2010 and 31 March 2011       37.5
32. MERGER RESERvE 
         £m
At 1 April 2009, 1 April 2010 and 31 March 2011      57.5
In accordance with section 612 of the Companies Act 2006, the premium on ordinary shares issued in relation to acquisitions is recorded as a 
merger reserve. The reserve is not distributable but can be used to make a bonus issue on fully paid shares or to make a transfer to the profit 
and loss reserve, an amount equal to the amount that has become realised, on either the disposal or write down of the related investment. Phoenix IT Group plc
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Financial Statements
33. OThER RESERvES
       hedging Shares to
       reserve be issued Total
       £m £m £m
At 1 April 2009      (2.0) 0.7 (1.3)
Share option expense      – 0.4 0.4
Transfer to retained earnings on exercise of share options    – (0.3) (0.3)
Loss recognised on cash flow hedges     1.2 – 1.2
At 1 April 2010      (0.8) 0.8 –
Share option expense      – 0.7 0.7
Transfer to retained earnings on exercise of share options    – (0.1) (0.1)
Gain recognised on cash flow hedges     0.8 – 0.8
At 31 March 2011      – 1.4 1.4
Other reserves are shown net of taxation, as appropriate.
Hedging reserve
The hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges. The cumulative deferred 
gain or loss on the hedge is recognised in profit or loss when the hedged transaction impacts the profit or loss, or is included as a basis 
adjustment to the non-financial hedged item, consistent with the applicable accounting policy.
Shares to be issued
Shares to be issued represents amounts expensed in the income statement in connection with awards made under the Group’s share option 
scheme less any exercises or lapses of such awards.
34. RETAINEd EARNINGS
         £m
At 1 April 2009        32.0
Movement on pension deficit       (5.0)
Deferred tax on pension reserve       1.4
Exercise of share options       0.3
Retained profit for the year       19.2
Dividends        (4.7)
At 1 April 2010        43.2
Movement on pension deficit       2.0
Deferred tax on pension reserve       (0.5)
Exercise of share options       0.1
Retained profit for the year       18.7
Dividends        (7.4)
At 31 March 2011        56.1 58
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
35. ACquISITION OF SuBSIdIAR y uNdERTAkING
Aghoco 1000 limited
On 26 February 2010 the Group acquired control of Aghoco 1000 Limited (Aghoco). As at 31 March 2010 the fair values assigned to the assets 
and liabilities acquired were provisional. A full review of the provisional fair values of the Group was performed by the first anniversary of the 
acquisition and adjusted as necessary. These adjustments are set out in the following table:
       Provisional  Revised
       fair value   fair value
       to Group Revaluation to Group
       £m £m £m
Fixed assets
Intangible asset arising on acquisition     0.9 – 0.9
Current assets
Inventories      0.5 (0.4) 0.1
Trade and other receivables     2.9 – 2.9
Deferred tax asset      0.4 – 0.4
Total assets      4.7 (0.4) 4.3
liabilities
Trade and other payables     (1.2) – (1.2)
Deferred revenue      (2.5) – (2.5)
Total liabilities      (3.7) – (3.7)
Net assets      1.0 (0.4) 0.6
Goodwill      0.9 0.4 1.3
       1.9 – 1.9
Satisfied by:
Cash      1.8 – 1.8
Cash – costs of acquisition     0.1 – 0.1
       1.9 – 1.9
The goodwill recognised of £1.3m is attributable to the value of the established workforce, the future growth potential and the anticipated 
synergies arising from the acquisition.
Office Shadow
On 23 December 2009 the Group acquired the trade and certain assets and liabilities of Office Shadow Limited. As at 31 March 2010 the fair 
values assigned to the assets and liabilities acquired were provisional. A full review of the provisional fair values of the Group was performed 
by the first anniversary of the acquisition and adjusted as necessary. These adjustments are set out in the following table:
 
       Provisional  Revised
       fair value  fair value
       to Group Revaluation to Group
       £m £m £m
Fixed assets
Intangible asset arising on acquisition     1.3 – 1.3
Total assets      1.3 – 1.3
liabilities
Trade and other payables      (0.1) – (0.1)
Deferred revenue      (1.2) (0.8) (2.0)
Total liabilities      (1.3) (0.8) (2.1)
Net liabilities      – (0.8) (0.8)
Goodwill      0.5 0.8 1.3
       0.5 – 0.5
Satisfied by:
Cash      0.4 – 0.4
Cash – costs of acquisition     0.1 – 0.1
       0.5 – 0.5
The goodwill recognised of £1.3m is attributable to the value of the established workforce and the future anticipated profitability of selling 
the acquired product into the markets the Group serves. Phoenix IT Group plc
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Financial Statements
36. NOTES TO ThE CASh Fl Ow STATEMENT
        2011 2010
        £m £m
Profit from operations       29.6 30.1
Adjustments for:
Depreciation of property, plant and equipment     13.5 13.1
Impairment of property      – 1.2
Profit on disposal of property, plant and equipment     (0.1) (0.1)
Amortisation of intangibles      3.1 3.1
Share option costs       0.7 0.4
Retirement benefit – difference between contribution and amounts charged   (2.4) (1.0)
Operating cash flows before movements in working capital    44.4 46.8
Increase in stocks       (0.7) (1.4)
(Increase)/decrease in receivables      (2.4) 4.5
Increase/(decrease) in payables      6.1 (4.9)
Decrease in deferred income      (5.9) (1.0)
Cash generated by operations      41.5 44.0
Income taxes paid       (8.1) (6.1)
Interest received       0.1 0.1
Interest paid       (4.7) (4.9)
Net cash from operating activities      28.8 33.1
Additions to fixtures and equipment during the year amounting to £1.3m (2010: £1.5m) were financed by new finance leases.
37. RECONCIlIATION OF NET BORROwINGS
        2011 2010
        £m £m
Increase in cash and cash equivalents during the period     5.5 4.4
Movement in borrowings      – 16.1
Movement in net borrowings during the period     5.5 20.5
Net borrowings brought forward      (67.9) (88.4)
Net borrowings carried forward      (62.4) (67.9)
Cash and cash equivalents      15.8 10.3
Other current borrowings      (4.9) (20.7)
Non-current borrowings      (73.3) (57.5)
Net borrowings carried forward      (62.4) (67.9)
38. OPERATING lEASE ARRANGEMENTS
The Group as lessee
        2011 2010
        £m £m
Minimum lease payments under operating leases recognised in income for the year   9.5 7.9
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating 
leases, which fall due as follows:
        2011 2010
        £m £m
Within one year       9.8 9.4
In the second to fifth years inclusive      25.7 26.9
After five years       6.9 11.3
        42.4 47.6
Operating lease payments represent rentals payable by the Group for land and buildings, fixtures and fittings, equipment and motor 
vehicles. 60
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
39. ShARE-BASEd PAyMENTS
Equity-settled share option plans
The Company has operated the following equity-settled share option plans during the period:
Employee Share Plan (ESP)
Enterprise Management Incentive Plan (EMI)
Performance Share Plan (PSP)
Post flotation, no further awards will be made under the ESP or the EMI plan.
The general terms and conditions of each plan are as follows:
 ESP EMI PSP
Exercise price: Agreed market price of the  All grants under the EMI plan All awards made under the PSP
 Company’s shares at date of grant. were made at prices higher than  have a nil exercise price. The 
  the agreed market price of the  number of options granted to 
  Company’s shares at the date of  eligible Group employees is 
  grant. The grant prices reflected  determined as a proportion of 
  the grant prices of option rights  base salary using the average of 
  under the ESP waived by option  the middle market quotes for the 
  holders prior to the adoption of  Company’s shares for the three 
  the EMI plan. days immediately prior to grant. 
Vesting period: Generally three years from the  Vesting of all EMI plan options Three years from the date of grant. 
 date of grant. was conditional upon the flotation 
  of the Company. Consequently, 
  all the EMI plan options vested 
  in November 2004.
Lapse date: Generally options granted under  All EMI plan options automatically  PSP options lapse if they remain 
 the ESP automatically lapse if they  lapse if they remain unexercised unexercised after a period of 
 remain unexercised after a period  after a period of ten years from ten years from the date of grant. 
 of seven years from the date of the date of grant. Furthermore, Futhermore, options are
 grant. Furthermore, generally options are forfeited if the option forfeited if the option holder
 options granted under the ESP holder ceases to be a Group ceases to be a Group employee
 are forfeited if the option holder  employee before exercising before exercising the option. 
 ceases to be a Group employee  the option.
 before exercising the option.
Performance None. None. i) Scheme 1: EPS
conditions:   The PSP awards are subject to achieving
   a performance condition related to average
   annual growth in either EPS or profit growth
   over a three-year period of between 5% and
   20% per annum. This results in between 20%
   and 100% of the options granted vesting. 
   Performance between these points is on a
   progressive scale.
   ii) Scheme 2: TSR
   The extent to which options vest depend on the  
   Group’s performance over the three-year period  
   following the award date. The PSP awards are  
   subject to the Group’s total shareholder return  
   (TSR) performance which will be measured  
   against the companies comprising the FTSE All  
   Share Index (excluding FTSE 100 Index and  
   investment trust companies). Phoenix IT Group plc
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Financial Statements
39. ShARE-BASEd PAyMENTS continued
ESP
 2011 2010
       weighted  Weighted
       average  average
       exercise  exercise
      Options price Options price
Balance at the start of the period    72,500 197p 107,500 197p
Exercised during the period    (10,000) 200p (35,000) 200p
Outstanding at the end of the period    62,500 194p 72,500 195p
Exercisable at the end of the period    62,500 194p 72,500 195p
EMI
 2011 2010
       weighted  Weighted
       average  average
       exercise  exercise
      Options price  Options price 
Balance at the start of the period    116,000 80p 118,000 81p
Exercised during the period    (5,000) 96p (2,000) 96p
Expired during the period    (1,000) 80p – –
Outstanding at the end of the period    110,000 80p 116,000 80p
Exercisable at the end of the period    110,000 80p 116,000 80p
PSP
 2011 2010
       weighted  Weighted
       average  average
       exercise  exercise
      Options price  Options price 
Balance at the start of the period    2,392,793 – 2,369,867 –
Granted during the period    970,307 – 1,068,000 –
Exercised during the period    (28,779) – (106,075) –
Forfeited during the period    (496,800) – (381,508) –
Expired during the period    (599,875) – (557,491) –
Outstanding at the end of the period    2,237,646 – 2,392,793 –
Exercisable at the end of the period    23,830 – 52,608 –
The weighted average share price at the date of exercise for share options exercised during the period was:
ESP 241p
EMI 245p
PSP 241p
The options outstanding at 31 March 2011 had a weighted average exercise price of 9p, and a weighted average remaining contractual life 
of eight years. In 2010, options were granted on 7 July 2009 and 30 September 2009. The aggregate of the estimated fair values of the options 
granted on those dates is £3.2m. In 2011 options were granted on 7 June 2010 and 24 March 2011. The aggregate of the estimated fair values 
of the options granted on those dates is £1.5m. 62
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Notes to the Consolidated Financial Statements continued
For the year ended 31 March 2011
39. ShARE-BASEd PAyMENTS continued
The weighted average fair value of the share options granted during the year was calculated using a stochastic model, with the following 
assumptions and inputs:
        2011 2010
Weighted average share price      £2.37 £2.11
Weighted average exercise price      Nil Nil
Expected volatility       45% 43%
Expected life       3 years 3 years
Weighted average risk-free rate      n/a n/a
Weighted average dividend yield      2.92% 2.99%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years and by 
comparison with comparable companies. 
Other share-based plans
The Company introduced a Share Incentive Plan on flotation. All employees were entitled to apply for free shares up to a value of £1,250 
depending on their period of service. The Company issued 259,558 shares in connection with this award.
In addition, employees are able to buy shares by deduction from their pre-tax salary. Under the current SIP legislation this is restricted to 
a maximum of £1,500 in each tax year or, if less, 10% of salary.
The Group recognised total expense of £0.7m relating to equity-settled share-based payment transactions in 2011 (2010: £0.4m).
40. RElATEd PARTy TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are disclosed 
in note 16 to the individual Company financial statements. Transactions with Directors who are the key management personnel are disclosed 
in the remuneration report. Phoenix IT Group plc
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Financial Statements
We have audited the parent company financial statements of Phoenix 
IT Group plc for the year ended 31 March 2011 which comprise the 
Balance Sheet and the related notes 1 to 16. The financial reporting 
framework that has been applied in their preparation is applicable 
law and United Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Policies).
This report is made solely to the company’s members, as a body, 
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
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. To 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 auditor
As explained more fully in the Directors’ Responsibilities Statement, the 
directors are responsible for the preparation of the parent company 
financial statements and for being satisfied that they give a true and 
fair view. Our responsibility is to audit and express an opinion on the 
parent company financial statements in accordance with applicable 
law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board’s 
Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to the 
parent company’s circumstances and have been consistently applied 
and adequately disclosed; the reasonableness of significant accounting 
estimates made by the directors; and the overall presentation of the 
financial statements. 
Opinion on financial statements
In our opinion the parent company financial statements:
l give a true and fair view of the state of the company’s affairs as at 
31 March 2011; 
l have been properly prepared in accordance with United Kingdom 
Generally Accepted Accounting Practice; and
l have been prepared in accordance with the requirements of the 
Companies Act 2006.
Opinion on other matters prescribed by the  
Companies Act 2006
In our opinion:
l the part of the Directors’ Remuneration Report to be audited has 
been properly prepared in accordance with the Companies Act 
2006; and
l the information given in the Directors’ Report for the financial year 
for which the financial statements are prepared is consistent with 
the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 
the Companies Act 2006 requires us to report to you, if in our opinion:
l adequate accounting records have not been kept by the parent 
company, or returns adequate for our audit have not been received 
from branches not visited by us; or
l the parent company financial statements and the part of the 
Directors’ Remuneration Report to be audited are not in agreement 
with the accounting records and returns; or
l certain disclosures of directors’ remuneration specified by law are 
not made; or
l we have not received all the information and explanations we 
require for our audit.
Other Matter
We have reported separately on the Group financial statements of 
Phoenix IT Group plc for the year ended 31 March 2011. 
Anthony Morris (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London
United Kingdom
6 June 2011
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Company Balance Sheet 
As at 31 March 2011
        2011 2010 
       Note £m £m
Fixed assets
Investments      4 183.3 180.7
Current assets
Debtors      5 44.6 28.8
Cash       0.2 0.3
        44.8 29.1
Creditors: Amounts falling due in one year     6 (39.6) (43.0)
Net current liabilities       5.2 (13.9)
Total assets less current liabilities      188.5 166.8
Creditors: Amounts falling due after more than one year    7 (68.8) (49.9)
Net assets       119.7 116.9
Capital and reserves
Share capital      8 0.8 0.8
Share premium account      9 37.5 37.5
Merger reserve      10 57.5 57.5
Hedging reserve      11 – (1.1)
Shares to be issued reserve      12 1.4 0.8
Profit and loss account      13 22.5 21.4
Shareholders’ funds      14 119.7 116.9
The financial statements of Phoenix IT Group plc (registered number 03476115) were approved by the Board of Directors and authorised for issue 
on 6 June 2011. They were signed on its behalf by:
Steve Clutton
Group Finance Director Phoenix IT Group plc
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Financial Statements
Notes to the Company Financial Statements
For the year ended 31 March 2011
1.  ACCOuNTING POlICIES
Basis of accounting
The financial statements are prepared under the historical cost convention and have been prepared in accordance with the applicable 
United Kingdom accounting standards. As permitted by the Companies Act 2006 the Company has not presented its own profit and loss 
account.
The Directors have presented the financial statements on a going concern basis which assumes that the Company and Group will have 
sufficient resources to meet liabilities as they fall due for at least the next 12 months.
In forming their view the Directors have considered the forecasts prepared and the facilities available from the Group’s bankers for a period 
in excess of 12 months from the date of these accounts. Based on these forecasts and after taking into consideration all relevant matters 
that should be taken into consideration, the Directors have concluded that it is appropriate to present the financial statements on a going 
concern basis.
The principal accounting policies adopted are set out below. They have all been applied consistently throughout the year and the  
preceding year.
Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions 
in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into 
account in arriving at the operating result. 
Taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the 
financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance 
sheet liability method. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which 
deductible temporary differences can be utilised. Such assets are not recognised if the temporary difference arises from goodwill or from the 
initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor 
the accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable 
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the asset is realised. Deferred tax is credited in the 
income statement, except when it relates to items credited directly to equity, in which case the deferred tax is also dealt with in equity.
Investments
Investments are included in the balance sheet at cost less any provision for permanent diminution in value.
Financial instruments
Financial assets and financial liabilities are recognised on the Company’s balance sheet when the Company becomes a party to the 
contractual provisions of the instrument.
Financial assets
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily 
convertible to a known amount of cash and are subject to an insignificant risk of changes in value. 
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity 
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Bank borrowings
Interest-bearing bank loans are recorded at the proceeds received, less any direct issue costs. Finance charges and direct issue costs are 
accounted for on an accruals basis in the profit and loss using the effective interest method and are added to the carrying amount of the 
instrument to the extent that they are not settled in the period in which they arise. 66
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Notes to the Company Financial Statements continued
For the year ended 31 March 2011
1.  ACCOuNTING POlICIES continued
Share-based payments
The Company has applied the requirements of FRS 20 ‘Share-based payments’. In accordance with the transitional provisions, FRS 20 has 
been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 January 2005.
The Company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair 
value at the date of grant. The fair value is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will 
eventually vest.
At each reporting date, estimates regarding the future probability of service, and non-market performance conditions being met are revised 
on a basis consistent with recent experience. Any resultant revisions of original estimates are recorded as an adjustment to the cost of 
investments in employing Group entities or in the income statement, as appropriate, and the share-based payments reserve.
derivative financial instruments and hedge accounting
The Company uses derivative financial instruments to reduce exposure to interest rate movements. The Company does not hold or issue 
derivative financial instruments for speculative purposes.
For an interest rate swap to be treated as a hedge, the instrument must be related to actual assets or liabilities or a probable commitment 
and must change the nature of the interest rate by converting variable rate to fixed rate or vice versa. Interest differentials under these 
swaps are recognised by adjusting new interest payable over the period of the contracts.
If an instrument ceases to be a hedge, for example because the underlying hedged position is eliminated, the instrument is marked to 
market and any resulting profit or loss recognised at that time. 
2.  STAFF COSTS
The Directors were the only employees during the period and they received all of their remuneration, as disclosed in the Directors’ 
Remuneration Report on page 24, from Phoenix IT Services Limited, a subsidiary entity.
3.  PROFIT OF PARENT COMPANy
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Parent Company is not presented as part of these 
accounts. The Parent Company’s profit after tax for the financial year amounted to £8.4m (2010: £5.8m).
4.  INvESTMENTS
         Total
         £m
Cost
At 1 April 2010        181.9
Additions in respect of share-based payments      2.6
At 31 March 2011        184.5
Accumulated impairment
At 1 April 2010 and 31 March 2011       1.2
Net book value
At 31 March 2011        183.3
At 31 March 2010        180.7
At 31 March 2011 the Company held directly or indirectly 100% of the allotted share capital of the following principal undertakings which are 
all included in the consolidation:
 Country of Class of share  
Name of subsidiary registration capital held Nature of business
Phoenix IT Services Limited England and Wales Ordinary Provision of information technology services
Trend Network Services England and Wales Ordinary Provision of information technology,  
   networking support 
   and infrastructure services
ICM Business Continuity Services Limited England and Wales Ordinary Provision of business continuity and  
   IT disaster recovery services
ICM Continuity Consulting Limited England and Wales Ordinary Software development and support
Servo Limited England and Wales Ordinary Provision of information technology  
   services and systems
Aghoco 1000 Limited England and Wales Ordinary Provision of information technology services Phoenix IT Group plc
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Financial Statements
5. dEBTORS: AMOuNTS FAllING duE wIThIN ONE yEAR
        2011 2010
        £m £m
Amounts owed by Group undertakings (note 16)     42.5 26.7
Prepayments       1.9 1.9
Deferred tax asset       0.2 0.2
        44.6 28.8
The deferred tax asset relates to accelerated capital allowances.
6. CREdITORS: AMOuNTS FAllING duE wIThIN ONE yEAR
        2011 2010
        £m £m
Amounts owed to Group undertakings (note 16)     37.8 25.3
Trade creditors       0.1 0.2
Accruals       1.7 0.7
Bank loans       – 15.7
Hedging liability       – 1.1
        39.6 43.0
7. CREdITORS: AMOuNTS FAllING duE AFTER MORE ThAN ONE yEAR
        2011 2010
        £m £m
Bank loans       68.8 49.9
The borrowings are repayable as follows:
In more than one year but not more than two years     – 15.8
In more than two years but not more than five years     68.8 34.1
        68.8 49.9
8. ShARE CAPITAl
 Authorised Allotted and fully paid
      Number £m Number £m
Ordinary shares of 1p each
At 1 April 2010     100,000,000 1.0 75,206,874 0.8
Exercise of share options    – – 15,000 –
At 31 March 2011     100,000,000 1.0 75,221,874 0.8
9.  ShARE PREMIuM ACCOuNT
         £m
At 1 April 2010 and 31 March 2011       37.5
10.  MERGER RESERvE
         £m
At 1 April 2010 and 31 March 2011       57.5
11. hEdGING RESERvE
         £m
At 1 April 2010        (1.1)
Gain recognised on cash flow hedge       1.1
At 31 March 2011        –
12. ShARES TO BE ISSuEd RESERvE
         £m
At 1 April 2010        0.8
Share option expense        0.7
Transfer to retained earnings on exercise of share options      (0.1)
At 31 March 2011        1.4 68
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Notes to the Company Financial Statements continued
For the year ended 31 March 2011
13.  PROFIT ANd l OSS ACCOuNT
         £m
At 1 April 2010        21.4
Retained profit for the year       8.4
Transfer from shares to be issued reserve on exercise of share options     0.1
Dividends        (7.4)
At 31 March 2011        22.5
14.  RECONCIlIATION OF MO vEMENTS IN ShAREhOldERS’ FuNdS
        2011 2010
        £m £m
Opening Shareholders’ funds      116.9 113.6
Profit for the financial year      8.4 5.8
Dividends       (7.4) (4.7)
        117.9 114.7
Gain recognised on cash flow hedge      1.1 1.7
Share option expense       0.7 0.4
Premium on issue of shares      – 0.1
Closing Shareholders’ funds      119.7 116.9
15.  ShARE-BASEd PAyMENTS
Details of share options granted by Group companies to employees, and that remain outstanding, over the Company’s shares are set out in 
note 39 to the Phoenix IT Group plc consolidated financial statements on pages 60 to 62. The Company recognised a charge of £0.3m to the 
profit and loss account relating to equity-settled share-based payment transactions in 2011 (2010: credit of £0.1m).
16.  RElATEd PARTy TRANSACTIONS
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are below.
        Amounts owed Amounts owed
        by related to related
        parties  parties 
        £m £m
Phoenix IT Services Limited      7.1 –
Trend Network Services      – (16.4)
Phoenix International Holdings Limited      – (0.6)
ICM Business Continuity Services Limited      – (20.8)
ICM Computer Group Limited      14.7 –
Servo Limited       20.7 –
At 31 March 2011       42.5 (37.8)
The transactions with related parties include the receipt of dividends from subsidiaries totalling £16.0m and loans, as above both payable 
by the Company to subsidiaries and repayable to the Company by subsidiaries, which carry no interest and are repayable on demand. The 
amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made 
for doubtful debts in respect of the amounts owed by related parties. Phoenix IT Group plc
Annual Report and Accounts 2011
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Financial Statements
Five Year Summary 
For the year ended 31 March 2011
     2011 2010 2009 2008 2007
     £m £m £m £m £m
Results
Revenue    271.6 245.8 253.2 230.8 126.7
Profit from operations excluding
amortisation of intangibles and non-recurring items  36.0 34.4 35.7 33.0 22.7
Amortisation of intangibles    (3.1) (3.1) (3.4) (3.6) (2.0)
Non-recurring items    (3.3) (1.2) (9.3) (6.0) –
Profit from operations    29.6 30.1 23.0 23.4 20.7
Net interest payable including non-recurring finance costs  (4.3) (4.9) (7.4) (7.9) (1.4)
Profit before tax     25.3 25.2 15.6 15.5 19.3
key statistics
Earnings per ordinary share   25.0p 25.4p 14.7p 15.0p 23.0p
Diluted earnings per ordinary share   24.2p 24.6p 14.2p 14.6p 22.2p
Adjusted earnings per ordinary share*   31.6p 30.0p 27.1p 24.8p 25.3p
Underlying diluted earning per ordinary share*   30.6p 29.0p 26.3p 24.1p 24.4p
*  Underlying earnings per ordinary share and underlying diluted earnings per ordinary share excludes the effect of amortisation of intangibles 
and non-recurring items. 70
20325.04 15/06/2011 Proof 5
Notice of Annual General Meeting
This document is important and requires your immediate attention. If you are in any doubt as to what action you should take, you 
should consult your stockbroker, bank manager, solicitor, accountant or other professional adviser. If you have sold or transferred all your 
shares in Phoenix IT Group plc, please pass this document and the accompanying form of proxy to the stockbroker, bank or other agent 
through whom you made the sale or transfer, for transmission to the purchaser or transferee.
NOTICE is hereby given that the ANNuAl GENERAl MEETING of Phoenix IT Group plc (the “Company”) will be held at Technology 
house, hunsbury hill Avenue, Northampton, Northamptonshire, NN4 8qS on Thursday 28 july 2011 at 10.30 a.m., for the following 
purposes. Resolutions 1 to 9 will be proposed as ordinary resolutions. Resolutions 10 to 12 will be proposed as special resolutions.
1.  To receive and adopt the accounts for the year ended 31 March 2011 together with the Directors’ Report, the Auditor’s Report and the 
auditable part of the Remuneration Report;
2. To declare a final dividend for the year ended 31 March 2011 of 7.0p per ordinary share, to be paid on 3 August 2011 to Shareholders on the 
register at the close of business on 17 June 2011;
3.  To reappoint Deloitte LLP as Auditors to the Company, to hold office until the conclusion of the next general meeting at which accounts are 
laid before the Company;
4.  To authorise the Directors to determine the remuneration of the Auditors of the Company; 
5.  To re-elect as a Director Peter Bertram who retires by rotation in accordance with Article 78 of the Company’s Articles of Association;
6.  To re-elect as a Director Nick Robinson who retires by rotation in accordance with Article 78 of the Company’s Articles of Association; 
7. To elect as a Director Steve Clutton who was appointed to the Board during the year; 
8.  To approve the Directors’ Remuneration Report for the year ended 31 March 2011;
9.  That the Directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (in substitution 
for any existing authority) to exercise all the powers of the Company to allot shares in the Company or to grant rights to subscribe for or to 
convert any security into shares in the Company (together, “Relevant Securities”) or otherwise deal with or dispose of Relevant Securities 
up to a maximum nominal amount of £250,756 (being approximately one-third of the Company’s issued share capital) provided that such 
authority shall expire on the conclusion of the Annual General Meeting of the Company to be held in 2012 or 28 October 2012, whichever is 
earlier, but so that the Company may before such expiry make an offer or agreement which would or might require relevant securities to be 
allotted after such expiry, and the Directors may allot relevant securities in pursuance of such offer or agreement as if the authority conferred 
by this resolution had not expired;
10.  That, subject to the passing of resolution 9 as set out in the notice of this meeting, the Directors be empowered pursuant to section 570 of the 
Companies Act 2006 to allot equity securities (as defined in section 560 of the Companies Act 2006) for cash pursuant to the general authority 
conferred by resolution 9 as set out in the notice of this meeting as if section 561(1) of the Companies Act 2006 did not apply to such allotment, 
provided that this power shall be limited to allotments of equity securities: 
(a) in connection with or pursuant to an offer by way of rights, open offer or other pre-emptive offer to the holders of shares in the Company 
and other persons entitled to participate therein in proportion (as nearly as practicable) to their respective holdings, subject to such 
exclusions or other arrangements as the Directors may consider necessary or expedient to deal with fractional entitlements or legal or 
practical problems under the laws of any territory or the regulations or requirements of any regulatory authority or any stock exchange 
in any territory; 
(b)  otherwise than pursuant to sub-paragraph (a) above, up to an aggregate nominal amount of £37,613, 
 and such power shall expire on the conclusion of the Annual General Meeting of the Company to be held in 2012 or on 28 October 2012, 
whichever is earlier, but so that the Company may before such expiry make an offer or agreement which would or might require equity 
securities to be allotted after such expiry, and the Directors may allot equity securities in pursuance of such offer or agreement as if the 
power conferred by this resolution had not expired;  Phoenix IT Group plc
Annual Report and Accounts 2011
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Company Information
11.  That the Company be generally and unconditionally authorised, pursuant to section 701 of the Companies Act 2006, to make market 
purchases (as defined in section 693(4) of the Companies Act 2006) of up to 3,761,344 ordinary shares of 1p each in the capital of the Company 
(being approximately five per cent of the Company’s issued share capital as at 3 June 2011) on such terms and in such manner as the 
Directors of the Company may from time to time determine, provided that:
(a) the amount paid for each share (exclusive of expenses) shall not be more than the higher of (1) five per cent above the average of the 
middle market quotation for the Company’s ordinary shares as derived from the Daily Official List of London Stock Exchange plc for the 
five business days before the date on which the contract for the purchase is made, and (2) an amount equal to the higher of the price of 
the last independent trade and the highest current independent bid as derived from the London Stock Exchange Trading system and in 
any event not less than 1p per ordinary share; and 
(b) the authority herein contained shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2012 or on 28 
October 2012, whichever is earlier, provided that the Company may, before such expiry, make a contract to purchase its own shares which 
would or might be executed wholly or partly after such expiry, and the Company may make a purchase of its own shares in pursuance of 
such contract as if the authority conferred by this resolution had not expired;
12.  That the Company be authorised, pursuant to section 307A of the Companies Act 2006, to call any General Meeting of the Company (other 
than the Annual General Meeting of the Company) by notice of at least 14 clear days provided that the authority of this Resolution shall expire 
on the conclusion of the Annual General Meeting of the Company to be held in 2012.
Dated: 6 June 2011 
Registered Office:  By Order of the Board.
Technology House William Martin
Hunsbury Hill Avenue Secretary
Northampton
Northamptonshire
NN4 8QS 72
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Notice of Annual General Meeting
Notes:
1.  Any member entitled to attend and vote at the Annual General Meeting is entitled to appoint one or more proxies (who need not be a 
member of the Company) to attend and, on a poll, to vote instead of the member. Completion and return of a form of proxy will not preclude 
a member from attending and voting at the meeting in person, should he subsequently decide to do so. A member can appoint more than 
one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attaching to different shares held by him. 
2.  Your proxy could be the Chairman, another Director of the Company or another person who has agreed to attend to represent you. Your 
proxy will vote as you instruct and must attend the meeting for your vote to be counted. Details of how to appoint the Chairman or another 
person as your proxy using the proxy form are set out in the notes to the proxy form.
3.  In order to be valid, any form of proxy and power of attorney or other authority under which it is signed, or a notarially certified or office 
copy of such power or authority, must reach the Company’s Registrars, Equiniti Ltd, Aspect House, Spencer Road, Lancing, BN99 6ZL not less 
than 48 hours before the time of the meeting or of any adjournment of the meeting. 
4.  To change your proxy instructions you may return a new proxy appointment using the methods set out above. Where you have appointed 
a proxy using the hard copy proxy form and would like to change the instructions using another hard copy proxy form, please contact 
the Company’s Registrars (See note 3). The deadline for receipt of proxy appointments (see above) also applies in relation to amended 
instructions. Any attempt to terminate or amend a proxy appointment received after the relevant deadline will be disregarded. Where two 
or more valid separate appointments of proxy are received in respect of the same share in respect of the same meeting, the one which is last 
sent shall be treated as replacing and revoking the other or others.
5.  CREST Shareholders who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by utilising 
the procedures described in the CREST Manual (available via www.euroclear.com/CREST). CREST Personal Shareholders or other CREST 
sponsored shareholders, and those CREST shareholders who have appointed a voting service provider(s), should refer to their CREST sponsor 
or voting service provider(s), who will be able to take the appropriate action on their behalf.
6.  In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) 
must be properly authenticated in accordance with Euroclear UK & Ireland’s specifications and must contain the information required for 
such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an 
amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the 
issuer’s agent (ID RA 19) by the latest time(s) for receipt of proxy appointments specified in the notice of meeting. For this purpose, the time of 
receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the 
issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
7.  The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities 
Regulations 2001.
8.  CREST Shareholders and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland does 
not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in 
relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is 
a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting 
service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any 
particular time. In this connection, CREST shareholders and, where applicable, their CREST sponsors or voting service providers are referred, in 
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
9.  As permitted by Regulation 41 of the Uncertificated Securities Regulations 2001, Shareholders who hold shares in uncertificated form must be 
entered on the Company’s share register at 6.00 pm on 26 July 2011 in order to be entitled to attend and vote at the Annual General Meeting. 
Such Shareholders may only cast votes in respect of shares held at such time. Changes to entries on the relevant register after that time shall 
be disregarded in determining the rights of any person to attend or vote at the meeting.
10.  The total number of ordinary shares of 1p in issue as at 6 June 2011, the last practicable day before printing this document was 75,226,874 
ordinary shares and the total level of voting rights was 75,226,874, none of which were attached to shares held in treasury by the Company.
11.  Shareholders satisfying the thresholds in section 527 of the Companies Act 2006 can require the Company to publish a statement on its 
website setting out any matter relating to: Phoenix IT Group plc
Annual Report and Accounts 2011
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Company Information
11.1 the audit of the Company’s accounts (including the Auditor’s Report and the conduct of the audit) that are to be laid before the meeting; 
or
11.2 any circumstances connected with an Auditor of the Company ceasing to hold office since the last Annual General Meeting, that the 
Shareholders propose to raise at the meeting.
 The Company cannot require the Shareholders requesting the publication to pay its expenses. Any statement placed on the website must also 
be sent to the Company’s Auditors no later than the time it makes its statement available on the website. The business which may be dealt 
with at the meeting includes any statement that the Company has been required to publish on its website.
12.  Copies of the Service Contracts of each of the Directors and the Articles of Association of the Company, will be available for inspection at the 
registered office of the Company during usual business hours on any weekday (Saturdays and public holidays excluded) from the date of this 
notice until the date of the Annual General Meeting and at the place of the Annual General Meeting from at least 15 minutes prior to and until 
the conclusion of the Annual General Meeting.
13.  Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to 
the business being dealt with at the meeting but no such answer need be given if: to do so would interfere unduly with the preparation for 
the meeting or involve the disclosure of confidential information; or the answer has already been given on a website in the form of an answer 
to a question; or it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
14.  A copy of this notice, and other information required by section 311A of the Companies Act 2006, can be found on the Company’s website, 
www.phoenixitgroup.com.
15.  You must not use any electronic address provided either in the notice of meeting or any related documents (including the form of proxy) to 
communicate with the Company for any purposes other than those expressly stated.
16.  A person who is not a member of the Company but has been nominated by a member of the Company (the ‘relevant member’) to enjoy 
information rights (the ’nominated person’) does not have a right to appoint any proxies under note 1 above. However, a nominated person 
may have a right under an agreement with the relevant member to be appointed or to have somebody else appointed as a proxy for the 
Meeting. If a nominated person does not have such a right or has such a right and does not wish to exercise it, he may have a right under an 
agreement with the relevant member to give instructions as to the exercise of voting rights. 74
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Advisers
Phoenix IT Group plc Financial advisers & stockbrokers  Principal bankers
Registered in England 03476115 Investec Investment Banking  Royal Bank of Scotland
 2 Gresham Street  152 Silbury Boulevard
Registered office London  Milton Keynes
Technology House EC2V 7QP  MK9 1LT
Hunsbury Hill Avenue
Northampton Numis Securities Limited  Solicitors
NN4 8QS The London Stock Exchange Building  Nabarro LLP
  10 Paternoster Square  Lacon House
 London  84 Theobalds Road
 EC4M 7LT  London
   WC1X 8RW
 Auditors
 Deloitte LLP Financial public relations
 2 New Street Square  Financial Dynamics Limited 
 London  Holborn Gate
 EC4A 3BZ 26  Southampton Buildings
   London
 Registrars  WC2A 1PB
 Equiniti Limited 
  Aspect House  Remuneration consultants
 Spencer Road  Aon Hewitt Limited 
 Lancing  6 More London Place 
 West Sussex London
 BN99 6DA  SE1 2DA 
Financial Calendar
Annual General Meeting 28 July 2011
Ex dividend date 15 June 2011
Record date for dividend 17 June 2011
Dividend payment date  3 August 2011 Phoenix IT Group plc
Annual Report and Accounts 2011
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Company Information
Shareholder Notes 76
20325.04 15/06/2011 Proof 5 20325.04 14/06/2011 Proof 4 20325.04 14/06/2011 Proof 4
Phoenix IT Group plc
Technology House, Hunsbury Hill Avenue, 
Northampton, NN4 8QS
t: +44 (0) 1604 769000
f: +44 (0) 1604 764323
www.phoenixitgroup.com
Phoenix IT Group plc
Annual Report and Accounts for 
the year ended 31 March 2011
making it possible
Phoenix IT Group plc  Annual Report and Accounts for the year ended 31 March 2011