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Report & Accounts
2007 (Jun-Dec)
Operating Highlights
m Exceptional performance during the period, in line with increased expectations
m Solid underlying business trends, platform for growth now embedded
m Good balance of business across the Group and broadened product range
m Volume shipments of 2.4m set-top boxes (year ended 2 June 2007: 3.9m)
Financial Highlights
m Revenues of £249.9m (year ended 2 June 2007: £386.5m)
m Gross margin improvement to 20.3% (year ended 2 June 2007: 15.9%)
m Profit before tax £15.4m (year ended 2 June 2007: £4.9m)
m Earnings per share of 6.1p (year ended 2 June 2007: 3.0p)
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Highlights 1
Letter from the Chairman 3
Chief Executive Officer’s Review 4 
Chief Financial Officer’s Review 7
Report of the Directors 9
Remuneration Report 20
Statement of Directors’ Responsibilities 27
Independent Auditors’ Report 28
Financial Statements 31
Notes to the Financial Statements 37
Directors, Secretary and Advisers 60
Five Year Record and Shareholder Information 61
Contents
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 3 I am delighted to be able to give you a
further update on Pace’s performance,
such a short time since I last wrote to you.  
As you will have seen from the Company’s announcements, Pace has now moved to a December financial year
end.  This means that from now on Pace’s full year results will be published in the first calendar quarter and its
half year interim results will be published in the third.  This Annual Report focuses on the last seven months,
from June 2007 to the end of December 2007, reflecting the shortened financial year as we move to our new
reporting cycle.
It has been a pleasure to see the team at Pace deepen the Company’s position as the leading digital TV
technology company and take greater advantage of the revenue opportunities available in the set-top box
market.  Pace has achieved this by developing its business with new and existing customers, delivering
profitable products on time, increasing market share in important areas such as high definition and PVR as well
as investing in the right technologies for future growth.  Consequently I am delighted to see the exceptional
results your Company has achieved in this shortened financial year, which met our increased expectations.   
In my last report I talked of our goal of achieving sustainable 20% gross margins for 2008.  Through the
management’s new business operating model and hard work throughout the entire Group, we are already able
to report a gross margin of 20.3%.  
As we continue to focus on the strength of our balance sheet, the Board has decided not to recommend a
dividend payment.  We will continue to monitor this position.
At the end of 2007 we announced our conditional agreement to acquire the set-top box and connectivity
solutions business of Royal Philips Electronics.  We believe that this acquisition, if approved, will create more
opportunities to grow Pace’s business, better serve customers and provide increased scale.  More information
will be provided on publication of the Prospectus and Circular, which we expect to publish in early March. 
Good progress has been made and when I last spoke to you I said that there remained a great deal of work to
do to build a strong and resilient long-term business.  Since then I am very pleased to report that Neil Gaydon
and his team are continuing to deliver and their hard work is building a stable, mature platform for future
results.  The Board has confidence in this platform for long-term business growth and creation of shareholder
value. 
If you have comments on any aspect of this letter or indeed, any part of the Annual Report, I would be delighted
to hear from you either by writing to me at Pace or by email at mike.mctighe@pacemicro.com.
Yours sincerely
Mike McTighe
Chairman
29 January 2008
Letter from the Chairman
3
Report & Accounts
2007 (Jun-Dec)
Mike McTighe
Chairman
29 January 2008
REP&ACCOUNTS_Jan08:QXP  22/2/08  11:45  Page 4 4
Chief Executive Officer’s Review
d Overview
At the end of a year where we celebrated our 25th anniversary, I am pleased to report an outstanding period
for our business, in which we delivered against our objectives and the strategy programme.
Since I last shared progress with you there have been significant developments at Pace.  We have strengthened
our position as the leading digital TV technology company, with customer wins, new product launches and
increased market share.  Financial performance has improved, customer satisfaction is growing and we are
showing significant improvements against our Company’s critical success factors of being On Margin, On Time
and On Quality.
During the last seven months Pace teams have worked on over 30 projects for our payTV customers around the
world.  We have worked hard to develop and strengthen our position at heart of digital TV through advanced
set-top box products and new technologies that meet the needs of our customers.  At the end of the calendar
year 2007 we also announced our intention to acquire the set-top box and connectivity solutions business of
Royal Philips Electronics.  
Trading Performance
We delivered a strong performance during this period, meeting our increased expectations, due to the actions
put in place to improve business efficiencies along with exceptional performance in North America. 
Product margins, execution and quality all improved and we increased profitability to £15.4m (year ended 2
June 2007: £4.9m) on revenues of £249.9m (year ended 2 June 2007: £386.5m).  These revenues have remained
well balanced between our markets in North America (58% of total) and those in Europe and Australasia (42%).
In terms of volumes, Europe and Australasia were higher than North America.  Overall during the seven month
period we shipped 2.4m set-top boxes with average selling prices rising from £100 to £102, due to demand for
higher specification products such as standard and high definition personal video recorders.  We have been
able to meet this demand as well as win new business due to our ongoing early investment in new technology. 
Outlook
I am pleased with the results we have achieved and the depth of quality in our organisation that is enabling us
to deliver a solid, sustainable platform for growth, which is now embedded across the Group. 
Demand for our products and services is being driven by increasing competition between payTV providers, new
entrants, new content delivery systems in addition to analogue switch-off in many markets.  These
fundamental trends are expected to continue for the foreseeable future.  For example, operators are seeking to
drive up their average revenue per user (ARPU) and satisfy their customers’ demands with payTV solutions that
are both innovative and easy to use.  The competitive landscape is generating market excitement that is
stimulating consumer demand and further market development.  
Market surveys point to standard definition (SD), high definition (HD) and personal video recording (PVR)
continuing to grow.  We have been successful in leading the market for HD and PVR products, but this is still a
very new market and penetration levels, in the majority of regions, remain low.  In fact, leading analysts expect
that by the end of 2007 only 4% (just over 2 million) of the digital set-top boxes shipped in EMEA (Europe, Middle
East and Africa) will be HD.  During the same period it is expected that over 16 million new HD-ready TV panels
will have been shipped .  This is an area of opportunity we will continue to work hard to succeed in.
While the market remains difficult to predict and our performance is largely predicated on the performance of
our customers, we are confident that we are investing in the right products and technologies to meet the
demands of our growing customer base and are on track to meet our expectations for the 2008 financial year.
Neil Gaydon
Chief Executive Officer
29 January 2008
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 5 5
Report & Accounts
2007 (Jun-Dec)
d Taking a closer look
Pace continues to deliver
I am delighted to report that we continue to deliver the Pace vision of Great products to our customers every
time, for both our internal and external customers, doing so with excellence and enthusiasm.  Our portfolio of
payTV customers is the best in the world and we now have the optimum structure to deliver on their needs for
leading products.  We provide a full range of services from strategic advice as to the technology decisions our
customers need to make, through to the development and delivery of customised set-top box solutions that in
turn we integrate for each operator’s unique system and network.  Of course our relationship does not stop
there as our products, once installed, are software upgradeable, and therefore we provide long term customer
support; with many relationships going back over twenty years.
Pace has a world leading team of engineers dedicated to developing digital TV technology.  Over 60% of our
employees are engineers where we employ specialists and experts in software, hardware and systems
integration.  Our emphasis on innovation means that today Pace has been granted over 100 patents, with over
200 applications pending.  Our creative approach and the developments we have pioneered in digital TV
technology enables us to diversify with first to market profitable products that put us at the heart of the
fascinating interconnected and interoperable media universe.  
We treat our ability to innovate and lead in this way with the same emphasis and care that we treat our focus on
delivering products to our customers. Our focus on these two areas means that we can deliver with excellence
today while planning for the future of Pace, the digital TV market and our customer requirements.
Pace at the heart of Digital TV
The set-top box embodies a digital TV service within the home and is a highly complex electronic device.  That
complexity demands in-depth customer relationships and close partnerships with third party technology and
silicon providers if our products are to deliver the services our customers demand and to the quality they expect.
Pace is at the heart of making this happen; we are the hub in the value chain.  We have the widest range of
industry partnerships from conditional access providers to software application developers, ensuring we
deliver the best set-top box products for our customers.  
Our customer centric organisational structure, built around core technology requirements of our customers, has
enabled us to make important steps forward in our industry position, improving the effectiveness of these
business critical relationships.  We aim to be one of the world’s leading digital set-top box companies by
continuing to win business with the world’s leading payTV operators, growing relationships with our existing
customers, winning new customers and developing world leading technological products ahead of our
competition. 
Geographical performance
Our approach is driving performance improvements across all of our markets.  In North America, the world’s
largest market for digital television technology, we performed strongly shipping 0.9m set-top boxes in the seven
month period (year ended 2 June 2007: 1.2m). We have strengthened our US cable market position by investing
early in next generation products and have been quick to market with our new OCAP-ready CableCARD™ range
that meets new US regulatory requirements for separable security in cable set-top boxes.  Orders for our
CableCARD products are increasing, while demand for satellite products remained strong. 
We also delivered a strong performance in EMEA and APAC markets, achieving a level of shipments into the
EMEA region of 1.3m set-top boxes (year ended 2 June 2007: 2.2m), and shipments into the APAC region of 0.2m
(year ended 2 June 2007: 0.4m).  Demand for our HD PVR grew. Digiturk recently launched its HD PVR service
using Pace set-top boxes, which is the first implementation of our new Irdeto conditional access / OpenTV
middleware platform.  As anticipated this platform is enabling us to win new customers and in September we
announced, Multichoice in South Africa.  Multichoice is typical of the customers we work with: the leading payTV
operator in a region with rights to the best content, strong engineering and a customer base receptive to the
latest developments in digital TV technology.  Most recently it was announced that we will supply Viasat for their
HD PVR launch in the Nordic countries.  A Pace team has been working on this product to create the specific,
customised HD PVR the customer requires for its service.  Each operator set-top box we create requires a unique
product development and one which also creates a good return on investment.
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 6 6
These new business wins have extended Pace’s customer-base of leading payTV operators that includes BSkyB,
Sky Italia, and UPC in EMEA.  In Australia and New Zealand Pace has continued to ship products to Foxtel, Optus
and Sky New Zealand.   
d New Developments and diversification
Pace’s Retail Product Range
Pace is at the centre of the digital TV market, with a very experienced understanding of the needs of both
operators and consumers.  For the last 10 years our focus has been on strengthening and developing our
relationships with operators, to provide outstanding set-top boxes and network products that access payTV.
Pace is now preparing to bring to market a product range that allows "pay-as-you-go" business models where
consumers can mix some subscription channels with on-demand movies and free content.  Consumers will be
able to purchase this product range direct through their retailer.  This is another example of Pace’s commitment
to innovate where there is a clear market need for a solution. 
Networks 
At the International Broadcasting Convention in September 2007, we announced the launch of Pace Networks,
a new business unit that will open new markets for us further up the chain in the delivery of digital content by
utilising our skills in TV, DVB, DOCSIS and IP technologies.  This business will use a different business model and
route to market to those employed in our set-top box business to reach both existing customers and customers
in new and different markets.  
The first Networks product is Pace MultiDweller™, which we have been developing for the last couple of years
and enables operators to deliver a full suite of interactive digital services to customers in multi-dwelling units
(MDUs), including digital video, broadband and telephony.  Today over 50% of Europe’s population live in MDUs.
MultiDweller is a very cost effective and easy to install method of converting existing distribution networks
within MDUs into high-speed triple-play bi-directional networks, without the need for any modification or
additional cabling.  We will not only provide the consumer premise equipment, but will licence the set-top box
technology to enable third party set-top box manufacturers to communicate with MultiDweller.  We are already
working with our first customer and I am excited about the possibilities and opportunities Networks could open
up for us.
New Pace with broader and deeper reach
Our intention to acquire the Philips STB and CS Business, announced on 19th December 2007, carries the aim of
creating a leading centre of excellence in the set-top box industry.  Pace and Philips have a shared heritage in
the set-top box market of over 20 years each and there is a strong complimentary and strategic fit from
customer, product, geographic, culture and scale perspectives.  
The transaction would result in the acquisition of two key business units from Royal Philips Electronics.  These
assets are the Set-top Box and Connectivity Solutions Units, with the latter developing products that include
advanced residential gateways for home networking and internet connectivity.  We believe there is potential for
substantial benefits and growth by applying our proven operating model and structure to the Philips business.
Our approach has delivered a material improvement in our operating and financial performance, as can be seen
from the 2007 results.
To conclude, I am pleased to report a confident view of progress for the next year with opportunities for growth
in existing and new markets.
Neil Gaydon
Chief Executive Officer
29 January 2008
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 7 Our customer focus and new business
operating model has delivered improved
results with strong underlying performance
trends, in particular gross margin
improvement. 
We have established a strong platform for growth by concentrating on profitable business as well as investing
in new technologies.  To help achieve our goals we have deepened financial knowledge throughout the
organisation, empowering our people to make better informed business decisions.  This is beginning to deliver
strong results as we continue in our development as a world class technology company.
Trading in the period
In the seven month period we shipped 2.4m set-top boxes (year ended 2 June 2007: 3.9m) with revenues of
£249.9m (year ended 2 June 2007: £386.5m).  Average selling prices rose from £100 to £102, reflecting the
growing demand for higher specification products such as HD PVR, a demand we have been able to meet due
to our ongoing early investment in new technology.  
Gross margin of 20.3% shows a significant improvement from the previous year (year ended 2 June 2007: 15.9%)
through thorough and close management of the business.  
Overheads
Overheads, excluding the impact of IAS38, were £37.2m (year ended 2 June 2007: £55.7m, excluding
restructuring costs).  R&D spend before capitalisation of development expenditure in line with IAS38 was
£21.5m (year ended 2 June 2007: £31.3m) as Pace continued to invest in higher specification products such as
HD PVR and new technologies. The IAS38 adjustment was a net credit of £2.2m (year ended 2 June 2007: net
credit £2.4m) principally as a result of the investment in MultiDweller and retail products that are scheduled to
be launched during 2008.
At the year-end our total headcount was 583 (2 June 2007: 599), which includes 406 people in engineering (2
June 2007: 390), but excludes the 125 outsourced engineers working in our Pace India office in Bangalore that
are subcontracted from Tata Elxsi (2 June 2007: 118).
Profit before tax and profit for the period
Profit before tax was £15.4m (year ended 2 June 2007: £4.9m).  The interest charge was £0.5m (year ended 2
June 2007: £2.2m) the reduced level of charges reflecting higher levels of cash held during the period. 
Profit for the period was £14.4m (year ended 2 June 2007: £6.8m).
Taxation
At 31 December 2007 the Group has a deferred tax asset of £5.1m representing UK tax losses of c£18m.  A tax
charge of £0.9m (year ended 2 June 2007: credit £1.8m) reflects overseas tax charges of £0.4m and deferred tax
movements of £0.5m (relating to change in UK Corporation tax rate from 30% to 28%) and recognition of losses.  
Chief Financial Officer’s Review
7
Report & Accounts
2007 (Jun-Dec)
Stuart Hall
Chief Financial Officer
29 January 2008
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 8 We will start to incur a normal UK tax charge, and will start to pay UK tax again, once available tax losses are
utilised. In addition to the UK, where all of the commercial risk in our product strategy is taken, we have a tax
exposure to US, French and other overseas jurisdictions.
Cash flow and banking facilities
The net working capital position at 31 December 2007 was £58.4m (2 June 2007: £30.5m).  This change was due
to an inventory increase of £3.4m (in line with normal working capital requirements), debtor increase of £49.8m
and creditor increase of £13.3m.  Debtors increased due to the exceptional sales performance and debtor days
increased to 52 days (year ended 2 June 2007: 46 days) due to customer mix.  Creditor days of 64 days remained
in line with the prior year of 65 days.
Due to the increase in the level of working capital at the period end, the Group finished the period with a net
borrowings position of £12.1m (2 June 2007: net cash £11.9m).  
d Balance Sheet
Non current assets
Property, plant and equipment levels show an increase from £6.5m to £8.6m principally due to the investment
in refurbishing and upgrading our headquarters. 
Intangible assets represent capitalised development expenditure as required under IAS38 and have increased
from £13.7m to £15.9m due to our investments in MultiDweller and retail products.
Current assets and current liabilities
As noted above the net working capital position has changed in the period due to higher revenues.
Provisions within one year relate entirely to the appropriate element of warranty provisions held.
Non-current liabilities
Non-current liabilities represent royalties and warranty provisions, both of which have increased in line with the
levels of business.
Foreign exchange
While a significant proportion of income has been received in the period in US dollars from sales into the US,
there remains much income that is received in Sterling or Euros. The majority of our production costs are
designated in US dollars. We have a policy of hedging progressively against movements in the value of foreign
currencies, in respect of specific cash receipts and payments expected over the next 6 months. 
Year-end rates used in the accounts are $1.99:£1 (2 June 2007: $1.98:£1) and €1.39:£1 (2 June 2007: €1.46:£1).
Basis of preparation
Note 1 to the Financial Statements contains the significant accounting judgements, key assumptions and
estimation uncertainties used in preparing the accounts.
Looking ahead 2008 will be the first full year of our new reporting cycle, where the year will close on 31
December.  This will enable us to more closely align our business reporting cycle with those of our principal
customers and suppliers, which will benefit us in the future.
Stuart Hall
Chief Financial Officer
29 January 2008
8
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 9 The directors present their report to
shareholders on pages 9 to 19 together with
the audited financial statements for the 7
month period (“period”) ended 31 December
2007 (prior year 52 weeks ended 2 June 2007).
d Principal Activities
The Group’s principal activities are the development, design and distribution of digital receivers and receiver
decoders for the reception of digital television and the reception/transmission of interactive services, telephony
and high-speed data. The Group also provides engineering design, support services and software applications
to its set-top box customers. Each of these services may be delivered over satellite, cable, terrestrial and IP
network transmission systems.
d Business Review and Financial Results
The information that fulfils the requirements of the Business Review and Management Report, including a
review of the Group’s activities, developments and the financial results for the period, including the key financial
performance indicators relevant to the business of the Company (principally revenue, gross margin %, profit
before tax and cash), can be found on pages 4 to 6 of the Chief Executive Officer’s Review and the Chief Financial
Officer’s Review on pages 7 and 8.  The aforementioned information is incorporated in this report by reference.
Risks and Uncertanties
The following are the key risks and uncertainties  relevant to the business of the Group:
Customers and Markets
Orders placed by the Company’s payTV customers are typically large one-off orders for delivery over a
number of months with supplemental orders for additional volumes.  As the eventual rate of deployment
of the set-top boxes can be unpredictable, revenues can be volatile.  The difficulty in predicting the
Company’s business flow and its risks can be exacerbated by a number of other factors including, for
example, the development process for an advanced set-top box, which can take over 12 months.  The
Group works on long lead times (eg four months or more) for component supply and manufacture, typical
of the Industry.  In the US market, in particular, customers’ firm order lead times may be less than the
component lead times.  There are third party delivery risks, for example, difficulties in the delivery of
components or software code, and the final go ahead for manufacture and firm contractual commitments
are usually dependent on product approvals and acceptance both from the operator and sometimes from
third parties.
Product Liability Claims
In common with many companies in the Industry, the Group is exposed to the risk of product liability claims
made by customers or affected third parties, should the Group’s products not fulfil the terms of the
contracts under which they are sold. The Group has in place quality control and other operational
procedures to mitigate this risk.
Report of the Directors
9
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 10 Credit Risk
The central Finance function of the Group obtains reports from third party sources in respect of the credit
worthiness of key customers and suppliers and sets individual credit limits as appropriate. A credit
insurance policy is maintained, which provides cover over certain debtors, subject to excesses, and the
exposure to credit risk is monitored on an ongoing basis.  Deposit investments are generally undertaken
only in liquid securities and with counterparties that have credit ratings equal to or better than the Group.
Liquidity Risk
The Group policy with respect to liquidity risk is to maintain a sufficient level of undrawn committed
borrowing facilities to meet any unforeseen obligations or liabilities. Short term cash balances, together
with undrawn committed credit facilities enable the Group to manage its credit risk.
Royalties
The Company’s products incorporate third party technology, usually under licence.  Inadvertent actions
may expose the Company to the risk of infringing third party intellectual property rights.  Potential claims
can be submitted many years after a product has been deployed.
Regulatory
Like all other businesses, the Group remains exposed to changes in the regulatory environment, including
potential modifications in import duty regimes, discussions on which have been and continue to be held.
Currency Risks
The Group’s functional currency is Sterling. The standard ‘industry currency’ is the US dollar, with the
majority of components and manufacturing capacity purchased in this currency. As a result, due to part of
the Group’s sales being in Sterling and Euros (the sale prices of which will be fixed for months in advance)
the Group remains exposed to the risk of foreign currency movements. To manage this risk, the Group’s
treasury policy is progressively to cover cash flows when these are sufficiently certain and to seek a greater
percentage of US dollar sales to provide a commercial hedge against currency exposures.
Interest Rate Risk
The Group’s policy is to review regularly the terms of its available short term borrowing facilities and to
assess individually and manage each long-term borrowing commitment accordingly. The Group does not
currently take out any interest rate swaps.
Financial Results
The consolidated income statement for the 7 months ended 31 December 2007 is set out on page 31. The
profit before tax was £15.4 million (52 weeks ended 2 June 2007: £4.9 million).
d Dividend
No interim dividend was paid during the period. The directors do not recommend the payment of a final
dividend (52 weeks ended 2 June 2007: nil).
d Share Capital
Changes in the Company’s share capital during the 7 months ended 31 December 2007 are set out in note 19 to
the financial statements.
10
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 11 d Significant Shareholdings
The Company has been notified of the following significant shareholdings as at 29 January 2008.
Number % of issued
of shares share capital
David Hood and related family trusts 44,486,957 19.03 
Gartmore Investment Management 24,774,480 10.60
Legal & General Investment Management Limited 11,884,876 5.08
Barclays Investors 11,736,882 5.02
Robert Fleming and related family trusts 8,880,178 3.80
d Directors
The names of the current directors of the Company are shown below.  All those listed held office throughout the
period.
Mike McTighe 
Mike, aged 54, was appointed a Non-executive Director in June 2001 and became Chairman on 1 May 2006. He
is currently Chairman of a number of private equity-backed companies and, in addition, is a member of the
board of OFCOM, a Director of London Metal Exchange Holdings Ltd and a non-executive Director of Alliance &
Leicester plc. Mike also advises a number of private equity partnerships. Previously he was Chairman & CEO of
Carrier1 International SA, and before that Executive Director & Chief Executive, Global Operations of Cable &
Wireless plc. Prior to these experiences, Mike spent 5 years with Philips of the Netherlands, 5 years with
Motorola, and 10 years with GE.
Neil Gaydon
Neil, aged 47, was appointed Chief Executive Officer in April 2006. He was appointed to the Board in June 2002
as Worldwide Sales and Marketing Director. He has been with the Company since 1995 and as President, Pace
Americas spearheaded the development of the Company’s US business between 1999 and December 2003.
Prior to this he was Regional Sales Director EMEA and head of New Business Development and Product
Marketing for the Company. He is a board member of Bradford City of Film.
Pat Chapman-Pincher
Pat, aged 60, was appointed a Non-executive Director in February 2005 and became Senior Independent
Director in May 2006. She has over 30 years’ experience in the communications industry from senior roles in
multinational Internet and telecoms companies to participating in technology company start-ups. A founding
partner of the Cavell Group, which specialises in operational consultancy, IP and wireless technologies, she is
also Chairman of Rapid Mobile Ltd, a non-executive director of Stepstone ASA and a non-executive director of
Friends of the Earth. 
11
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 12 Rob Fleming 
Rob, aged 51, joined the Company in 1983 and became Operations Director in 1984, with responsibility for
production and distribution. With effect from February 1999 he assumed responsibility for the Engineering
function within the Group and became a Non-executive Director of the Company in May 2001. He is Chief
Executive of The Franklyn Group Limited, a care property group, and a board member of Bradford U.R.C.
Marten Fraser 
Marten, aged 61, was appointed a Non-executive Director in February 2005. A Chartered Accountant, he was
previously senior partner at PricewaterhouseCoopers, Nottingham, where he worked in the Audit and Business
Advisory Services Department, and prior to this he was the partner in charge of the East Midlands practice of
Price Waterhouse.
Stuart Hall
Stuart, aged 40, was appointed Chief Financial Officer and joined the Board on 2 April 2007. Before joining the
Company he was Group Finance Director of IQE plc and prior to that Finance Director of Energis Squared Limited
and Director of Performance Management for Energis Goup plc. He has also been Finance Director at WBF Ltd,
part of the Adare Printing Group plc, Carnography plc and Race Electronics. He qualified as a Chartered
Accountant with BDO Binder Hamlyn.
David McKinney
David, aged 46, was appointed Chief Operating Officer in April 2006 and joined the Board on 24 October 2006.
He has been with the Company since November 2005, joining as Director of Engineering and Operations with
responsibility for operations, engineering, test and quality strategy. Previously David spent ten years in the
semiconductor industry including NEC Semiconductors and Digital Equipment Corporation, before moving to
and spending over ten years in the telecommunications sector including Motorola and Royal Philips Electronics,
where he held senior executive and operational management roles.
Neil Gaydon and Rob Fleming will retire by rotation at the Annual General Meeting of the Company and offer
themselves for re-election. Details of the executive directors’ service contracts and the non-executive directors’
letters of appointment are disclosed on pages 22 and 23.
d Payment to Suppliers
It is the policy of the Group to agree terms and conditions for its business transactions with suppliers, which are
varied from time to time. Payment is made in accordance with those terms, subject to the other terms and
conditions being met by the supplier. The Group does not follow any code or standard on payment practice.
Creditor days at the end of the period for the Group were 64 days (52 weeks ended 2 June 2007: 65 days) and
for the Company were 64 days (52 weeks ended 2 June 2007: 65 days).
d Research and Development
The directors regard it as fundamental to the future success of the Group to engage in a substantial ongoing
programme of research and development of new products, spending £21.5 million in the period (52 weeks
ended 2 June 2007: £31.3m) and charging £19.3 million (52 weeks ended 2 June 2007: £28.9m) to the income
statement during the year following the treatment under IAS38.
d Donations
During the period the Group donated £25,000 (52 weeks ended 2 June 2007: £40,800) to charitable causes. No
political donations were made. Further details of the charitable and community-related activities of the Group
are given on page 17. 
12
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 13 Corporate Governance
The directors believe that, save in respect of the performance evaluation of the Board and its committees as
indicated below, the Company has complied throughout the period with the Combined Code on Corporate
Governance dated June 2006, as revised and adopted by the Financial Reporting Council. The Board confirms
that it has established the necessary procedures designed to maintain a sound system of internal control and
that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the
Company.
d Board of Directors
The Group is controlled through the Board of Directors, which comprises three executive and four non-executive
directors who bring a wide range of skills and experience to the Board. Biographical details of all directors are
to be found on pages 11 and 12. The Chairman, Mike McTighe, is mainly responsible for the running of the Board
ensuring, together with the Company Secretary, that it receives timely and clear information appropriate to
enable it to discharge its duties. The responsibilities of the Chief Executive Officer, Neil Gaydon, focus on running
the Group’s business and implementing Group strategy. The Chief Executive Officer is assisted in managing the
business on a day-to-day basis by the Executive Committee as further described below. All the non-executive
directors are deemed by the Board to be independent apart from Rob Fleming who was previously an executive
director of the Company. In addition, the Board has designated Pat Chapman-Pincher as the Senior Independent
Director. All directors have access to the advice and services of the Company Secretary and are able to take
independent professional advice at the Company’s expense in the furtherance of their duties, if necessary. All
directors, in accordance with the Combined Code, submit themselves for re-election at least once every three
years. New directors receive a programme of tailored induction on joining the Board and all directors are offered
the opportunity to continually update their skills and knowledge by attending external training events. 
The Board has a formal schedule of matters specifically reserved to it and normally meets monthly. It is
responsible for overall Group strategy, acquisition and divestment policy, approval of major capital expenditure
projects and consideration of significant financing matters. It reviews the strategic direction of the Group and
conducts formal strategy reviews together with other senior executives within the Group at least once a year.
The Chairman holds meetings with the non-executive directors without the executive directors being present at
least twice during the year. 
It is the policy of the Board to undertake a formal review and evaluation of its performance including the
performance of its committees and individual directors on an annual basis. This is conducted by written
feedback in standardised form from each director to the Chairman or the Senior Independent Director in the case
of appraisal of the Chairman.  The Board did not undertake such a review and evaluation during the 7-month
period ended 31 December 2007 since such an exercise had been conducted in May 2007 during the previous
financial year.  A formal review and evaluation will be conducted in the year ending 31 December 2008.
The Board has established the following committees, each of which has written terms of reference specifying
its authority and duties and copies of which are publicly available on the Company’s website:
www.pacemicro.com. 
The Audit Committee is comprised of independent designated non-executive directors, Pat Chapman-Pincher
and Marten Fraser, who is the Chairman of the Committee. The Committee has primary responsibility for making
recommendations on the appointment, reappointment or removal of the auditors and receives and reviews
reports from management and from the auditors relating to the interim and annual accounts and the control
systems in use throughout the Group. Meetings are held by the Committee with the auditors without executive
management being present at least once a year and the Committee reviews arrangements by which staff may,
in confidence, raise concerns about possible improprieties, including review of the Group whistleblowing policy. 
The Executive Committee is chaired by Neil Gaydon as Chief Executive Officer. The Committee generally meets
once a month and ensures that the strategy, plans and policies previously agreed or delegated by the Board are
implemented.
13
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 14 The Executive Committee comprises the three executive directors together with the following senior executives:
Anthony Dixon General Counsel 
Jill Ezard Director of Human Resources 
David Gillies Director of Technology 
Helen Kettleborough Director of Corporate Communications 
Michael Pulli President, Pace Americas 
Richard Slee President, EMEA & APAC
The Remuneration Committee is comprised of Mike McTighe and independent designated non-executive
directors Marten Fraser and Pat Chapman-Pincher, who is the Chairman of the Committee. The Committee is
responsible for setting the remuneration of the executive directors and other members of the Executive
Committee including making recommendations regarding the grant of share options. The members of the
Committee have no personal interest, other than as shareholders, in the matters to be decided, no potential
conflicts of interest arising from cross-directorships and no day-to-day involvement in the running of the
business. 
The Nominations Committee is comprised of non-executive directors Pat Chapman-Pincher, Marten Fraser and
Rob Fleming, together with Chief Executive Officer, Neil Gaydon, and is chaired by Mike McTighe. Its purpose is
to consider and make recommendations to the Board regarding the appointment of new directors.
d Board and Committee Meetings Attendance
Board Audit Remuneration Nominations
Committee Committee Committee
Total Meetings 6 2 1 0
Pat Chapman-Pincher 6 2 1 0
Robert Fleming 6 - - 0
Marten Fraser 6 2 1 0
Neil Gaydon 6 - - 0
Stuart Hall 5 - - -
David McKinney 6 - - -
Mike McTighe 6 - 0 0
d Directors’ Remuneration
The Remuneration Committee reviews the performance of the executive directors and other members of the
Executive Committee as a prelude to recommending their annual remuneration, bonus awards and award of
share options to the Board for final determination. The final determinations are made by the Board as a whole
but no director plays a part in any discussions concerning their own remuneration.
The Remuneration Report of the Directors to shareholders is set out on pages 20 to 26 and includes the
remuneration policy of the Company and details of directors’ incentive payments and the related performance
criteria.
14
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 15 d Authority to Purchase Own Shares
At the Annual General Meeting in 2007 the Company was authorised by shareholders to purchase up to
23,320,653 of its own ordinary shares, representing 10 per cent of its issued share capital as at 18 October 2007.
The Company did not utilise this authority during the year. The authority for the Company to purchase its own
shares expires at the conclusion of the Annual General Meeting in 2008 and a resolution to renew it will be
proposed at that meeting.
d Accountability and Audit
A detailed review of the performance of the Group’s business is contained in the Chief Executive Officer’s Review
and the Chief Financial Officer’s Review. These statements, together with the Letter from the Chairman and the
Report of the Directors, are intended to present a balanced assessment of the Group’s position and prospects.
The directors’ responsibility for the financial statements is described on page 27 and the responsibilities of the
auditors are described on pages 28 and 29.
d Internal Controls
Overall responsibility for the Group’s system of internal control rests with the Board of Directors. The Board has
delegated certain of its powers to the Audit Committee to review the effectiveness of the systems of control and
to receive reports from the auditors and from the management relating to the interim and annual accounts and
the control systems in use throughout the Group.
During the period and up to the date of this report, the Board carried out a review of the effectiveness of the
Group’s internal controls. The reviews were undertaken in accordance with the Financial Reporting Council’s
guidance under the following headings and were aimed at clearly identifying the systems already in place and
the action plans necessary to improve areas of control weakness. 
The control environment. Subject to those powers and limits of authority reserved by the Board, and to the
Group policies and guidelines they have established, the conduct of the business of the Group is delegated
within a clearly defined organisational structure and approved level of authority. The Board has also adopted a
Code of Business Ethics, which has been incorporated into the Employee Handbook issued to all employees. 
Risk assessment. The directors and senior managers are responsible for identifying and monitoring sources of
potential business risk and financial risk, and for taking such preventative and protective actions as they
consider necessary to manage such risks effectively. During the year a risk assessment review of the Group’s
business has been conducted in conjunction with the Executive Committee. The Board has received and
considered this review as part of an annual risk and control assessment. 
The Group’s systems are designed to identify and manage rather than eliminate significant business risks,
including the risk of failure to achieve business objectives and can only provide reasonable not absolute
assurance against material misstatement or loss. Business risks are identified, evaluated and managed through
functional line management reporting to divisional meetings, Executive Committee meetings and Board
meetings as appropriate. Each member of the Executive Committee is required to highlight and report on any
significant business risks identified within their sphere of responsibility. 
The key business risks associated with the timely completion of long-term development projects and on-going
business risks, including alleged infringement of third party intellectual property rights, are managed by cross-
functional teams of senior employees. Business continuity plans addressing physical risks to the Group’s
development sites are reviewed and updated at least annually.  The Group has adopted Customer Account
Teams so as to focus the business on customer needs.
Financial control and information systems. The Group’s strategic direction is reviewed regularly by the Board
and plans, budgets and performance targets are reviewed and approved at least annually. Directors receive
monthly summaries of financial results which compare actual performance with targets, together with detailed
management reports that identify the reasons for variances and the progress achieved. Business planning
documents are revised on a regular basis in line with actual and expected performance.
15
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 16 Control procedures. Financial control procedures have been developed for all of the main business functions
and have been documented in a procedures manual. Authorisation limits for purchases and capital expenditure
are specified and procedures are in place for minimising exposure to potential weaknesses in the receipt,
handling and despatch of goods. All the Group’s main sites have received accreditation for BSI ISO 9001: 2000. 
Monitoring systems. Monitoring of the internal control systems is carried out by the centralised Group Finance
Function.
The Audit Committee considers annually whether there is a need to appoint a dedicated internal auditor and has
determined that, having regard to the size of the Group and the control and monitoring systems referred to
above, there is no current business requirement for such an appointment. 
Although no system of internal financial control can provide absolute assurance against material misstatement
or loss, the Group’s systems are designed to provide the directors with reasonable assurance that transactions
are authorised and completely and accurately recorded, that assets are safeguarded and that material errors,
irregularities and actions contrary to Group policies and directions are either prevented or promptly discovered. 
d Going Concern
The directors, having taken account of the Group’s available bank facilities and having reviewed the Group’s
budget and forecasts for the period to 31 January 2009, consider that the Group has adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the financial statements.
Corporate Social Responsibility
d Employment Policies
The Directors recognise the importance of the Group’s employees to its success and future development and
are committed to providing an environment that will attract, motivate and reward high quality employees. The
Group continues to invest in a range of internal and external initiatives to promote employee development. This
commitment has been acknowledged by Investors in People (IIP) recognition. 
Employees are kept informed of matters affecting them as employees and factors affecting the performance of
the Group through monthly employee meetings/briefings across all the Group’s main sites and a Company
newsletter, “Pacesetter”. In the UK, meetings of the Employee Partnership, an elected forum for the discussion
of work related issues, are held with members of the Executive Committee at least four times per year. 
The Group welcomes applications for employment from all sectors of the community and is striving to promote
equality of opportunity in employment regardless of age, sex, sexual orientation, disability or ethnic origin. It is
the Group’s policy that training, career development and promotion opportunities should be available to all
employees. In the event that an employee becomes disabled, the Group makes reasonable adjustments where
any aspect of premises or working practices puts such a disabled employee at a substantial disadvantage
compared with a non-disabled employee. 
d Health and Safety
The Group has an established Health and Safety Committee made up of health and safety representatives, the
health and safety officer and other persons with expert knowledge who review health and safety issues
relevant to the Group’s business. Other safety-related committees also conduct periodic reviews of specific work
practices. These actions complement the Health and Safety Executive’s “Working Well Together” initiatives
adopted and implemented by the Company. 
The health and safety officer continues to carry on ergonomic risk assessments and developing ergonomic
strategies whilst safety representatives conduct site inspections. These activities along with others contribute
to the further advancement of local workplace health and safety awareness and improvement. Generic and
detailed risk assessments, chemical assessments and safe systems of work guidance are maintained for the
benefit of employees on the Company’s Intranet site. 
16
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 17 The importance of ongoing health and safety awareness training for managers and safety representatives is
recognised. As part of this process a number of health and safety “tool-box talks” have been designed to replace
the IOSH Managing Safely courses previously provided.
The number of UK workplace accidents during the 7-month period ended 31 December 2007 was 5 and, as in
previous years, none of these were reportable under RIDDOR. A report concerning health and safety aspects of
the Group’s business and copies of specific Group safety policy documents can be obtained from the Company
Secretary. 
d Charitable and Community Support
The Group has an established Charitable Donations Committee comprising employees based at the Group’s
premises in the UK, the USA and France. The committee, which meets once a month, considers all requests for
charitable and community project assistance within a financial budget and criteria approved by the Board on
an annual basis. 
The Group’s support through the committee is focused on the local geographical area of Pace’s premises in
Saltaire, Grenoble and Boca Raton in Florida, as well as the charitable and community initiatives of Group
employees. The corporate charity policy focus is to support local charities of benefit to the local area and people
living close to each Group site. 
During the period 69 requests for support were considered by the committee, 62 of these satisfying the criteria
and receiving financial support amounting to £25,000. The participation of employees of the Group in
community and charitable activities outside work hours has been encouraged by the provision of funds to
match individual sponsorship raised.
Further details of the charitable and community donations made during the year and criteria for awards made
by the Charitable Donations Committee can be obtained from the Company Secretary.
d Environmental Management
The Company has maintained certification to the international management standard ISO 14001 at its Saltaire,
Grenoble and Florida sites and the Group Environmental Policy has been applied to all Pace sites worldwide. The
Company is a signatory to the European Code of Conduct on Energy Efficiency of Digital TV Service Systems (EU
Code of Conduct) and is committed to ensure that products are designed to minimise energy consumption. 
The Company continues to monitor its environmental activities/impacts, details of which are available from the
Company Secretary, or the Company’s website: http://www.pacemicro.com
The Company has adopted procedures for compliance with new environmental legislation including
regulations implemented pursuant to the Waste from Electrical and Electronic Equipment (WEEE) directive. The
Company’s business is also compliant with the Restriction of Hazardous Substances (RoHS) directive. 
During the period the Company developed an executive driven strategy to improve its environmental
performance. The strategy focuses on three core areas: Site Operations, Product and Supply Chain
environmental improvements. Rollout of the strategy will commence in the first quarter of 2008. 
17
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  13:30  Page 18 During the period the Company set environmental objectives and achieved the following outcomes:
ACTIVITY/IMPACT OBJECTIVE ACHIEVED IN NOT 
PROGRESS ACHIEVED
Environmental Management System (EMS)
1. Pace Environmental strategy Develop executive driven 
 environmental strategy
Premises, Energy, Air Emissions & Resource Consumption
2. Reduction of STB 75% of products destined for 
power consumption EU market EU Code of  Conduct compliant
3. Electricity Use 2% Reduction
 Stakeholder Groups
4. Volunteer activity Conduct at least one 
 Volunteer activity
5. Employee Awareness Increase employee awareness 
of environmental issues relevant  to Pace business
6. Reporting Develop the annual reporting 
ensuring it adheres to the 
 FTSE4GOOD (GHG protocol) 
reporting criteria.
The Company commissioned its seventh independent Environmental Report prepared by consultants, Trucost
plc. A copy of the Group’s Environmental Policy Statement and the Environmental Report for the period can be
obtained from the Company Secretary and is available on the Company’s website www.pacemicro.com. 
d Auditors
KPMG Audit Plc held office as auditors during the period. A resolution for the re-appointment of KPMG Audit Plc
will be proposed at the forthcoming Annual General Meeting. 
The Audit Committee reviews the independence and objectivity of the auditors, considering whether, taken as
a whole, the various relationships (if any) between the Group and the auditors impairs, or appears to impair, the
auditors’ judgement or independence.
Each of the directors who held office at the date of approval of this Report of the Directors confirms that, so far
as they are aware, there is no relevant audit information of which the Company’s auditors are unaware; and the
directors have each taken all the steps that they ought to have taken as a director to make themselves aware of
any relevant audit information and to establish that the Company’s auditors are aware of that information. 
d Relations with Shareholders
The Board has continued to establish and maintain relationships with institutional shareholders and
communicates with investors through the Group’s web site (www.pacemicro.com). A programme of meetings
with institutional shareholders is in place (at which institutional shareholders are offered the opportunity to
meet with non-executive directors) and analyst presentations are made following announcement of the interim
and annual results. Shareholders are welcome to participate at the Annual General Meeting at which the Board
will be available for questions. 
18
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 19 d Annual General Meeting
The Annual General Meeting of the Company will be held on 23 April 2008 at the offices of the Company at Salts
Mill, Victoria Road, Saltaire, West Yorkshire, BD18 3LF. Full details of the business to be transacted at the meeting
will be set out in the Notice of Annual General Meeting. 
d Responsibility Statement of the Directors in 
respect of the Annual Financial Report
The directors named below each confirm that to the best of their knowledge:
m the financial statements, prepared in accordance with the applicable set of accounting 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
m the Report of the Directors 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 the description of the principal risks and uncertainties that they face.
Robert Michael McTighe Non-executive Chairman
Neil Gaydon Chief Executive Officer
Stuart Andrew Hall Chief Financial Officer
David Alyn McKinney Chief Operating Officer
Patricia Chapman-Pincher Non-executive Director
Robert Arthur Fleming Non-executive Director
Marten Charles Fraser Non-executive Director
By order of the Board 
Anthony J Dixon 
Company Secretary
29 January 2008
19
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 20 The directors present their report to shareholders on pages 20 and 26 regarding remuneration matters in
respect of the 7 month period ended 31 December 2007. 
d Remuneration Committee
The Remuneration Committee (the Committee) is responsible for setting the individual remuneration of the
executive directors and other members of the Executive Committee within the framework of the remuneration
policy described below, which is set by the Board. 
The Directors who were members of the Committee at any time during the period ending 31 December 2007
were Pat Chapman-Pincher (Chairman of the Committee), Marten Fraser and Mike McTighe (who was appointed
in July 2007). For guidance, the Committee makes use of surveys of executive pay and knowledge of market
rates. The Committee was assisted in its consideration of remuneration matters by New Bridge Street
Consultants, who gave advice regarding directors’ and senior executive remuneration during the year. New
Bridge Street Consultants provided no other services to the Group in the year. Pinsent Masons, legal advisers to
the Company, also advised the Committee regarding certain share option related issues. 
d Remuneration Policy
The Board believes that it is necessary to ensure that the remuneration packages of the executive directors
remain competitive in order to attract, retain and motivate executive directors and senior managers of a high
calibre and to reward them for performance. The policy is for a significant proportion of executive directors’ total
remuneration to be capable of being earned from variable, performance-based incentives, through annual
bonuses and share options. The objective of this policy is to provide rewards and incentives that reflect
corporate and individual performance and align management’s objectives with those of shareholders. 
The Board’s policy in relation to non-executive directors continues to be to pay fees that are competitive with
the fees paid by comparable quoted companies. Non-executive directors’ fees are determined by the Board as
a whole within the limits set out in the Company’s Articles of Association. Non-executive directors are not eligible
for performance bonuses or pension contributions and do not participate in the share option schemes.  Non-
executive remuneration is generally reviewed annually and such a review took place in October 2007.
d Salary
Basic salary for each executive director is determined by the Committee, taking into account the performance of
the individual and information from independent sources on the rates of salary for comparable jobs with a view
to salaries being set around the median level for comparable companies. In setting senior executives’ salaries,
the Committee also takes into account pay and employment conditions in the Group as a whole. Salary is
generally reviewed around the time of commencement of each financial year and such a review took place in
January 2008. The Committee sought advice from remuneration consultants with regard to such review. 
d Performance Bonus
The Company established a non-pensionable performance-related bonus scheme for the executive directors
and other key members of management for the 7 months ended 31 December 2007, which was based on the
successful achievement of corporate and individual objectives. The corporate objectives were linked to the
interests of shareholders and the key measure therefore was the profitability of the Group for the full financial
year. Achievement of the bonus was dependent on the Group’s pre-tax profits (before certain exceptional items)
exceeding £4 million with the capacity to earn additional bonus increments upon achievement of higher profit
targets up to an initial ceiling of £12 million. In addition, a number of individual personal objectives were set for
each director and manager, which were aligned with the objectives of the Group for the year. The maximum
Directors’ Remuneration Report
20
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 21 bonus achievable by the executive directors in the event that all corporate and individual targets were met was
100% of basic annual salary notwithstanding that the bonus was referable to a seven month financial period.
The Committee, having regard to the exceptional performance during the period, determined to award
maximum bonus to each of the executive directors.
In respect of the current financial year the Committee has conducted a review of incentive provision for executive
directors and senior executives with assistance from New Bridge Street Consultants. As a result it is proposed to
introduce a new performance related bonus scheme. It is envisaged that the new bonus scheme will still have
performance measures linked to profitability of the Group for the full financial year. These performance
measures for the 2008 financial year will be disclosed in the 2008 Diectors’ Remuneration Report. The ceiling for
such bonus payments will be raised to 150% of annual salary and one third of any bonus will be payable in
deferred forfeitable shares purchased in the market. These will normally vest after a further two years.
Subject to shareholder approval for, and completion of, the proposed acquisition of the Set-Top Box and
Connectivity Solutions business of Royal Philips, the Committee is also minded to put in place a special
integration bonus element for certain senior executives and managers (including the executive directors) who
are directly involved in the integration of this business within the Group. If implemented, this bonus element
would only be earned on the achievement of margin improvements and other relevant targets both within the
new business and the enlarged Group as a whole. The maximum payable under this special integration bonus
to any individual employee would be 50% of annual salary.
d Benefits in Kind
Each executive director is entitled to benefits such as the provision of a fully expensed company car plus fuel (or
cash alternative), private medical insurance, permanent health insurance , life insurance and where applicable
relocation assistance.
d Pension Contributions
In the 7 months ending 31 December 2007, contributions were paid into the executive directors’ pension
schemes at rates determined by the Board. Contributions have continued to be paid during the current year at
the rate of 15% of each director’s basic salary. The Group does not operate any defined benefit schemes. 
d Share Option Schemes
The Board believes that share ownership encourages employees to contribute further towards improvements
in the Group’s performance. To this end, the following share option schemes have been established by the
Company. 
A regular savings scheme (the “Sharesave Scheme”), which is open to executive directors and employees of the
Group and under which options, granted at an initial discount of up to 20% against the quoted market price, are
normally exercisable on completion of a three-year SAYE contract. 
An HMRC Approved Discretionary Scheme (the “Approved Scheme”) under which all employees, including full-
time directors of the Company or any subsidiary, who do not have and have not had within the previous twelve
months a material interest in the Company, are eligible to participate. Participation is at the discretion of the
Board, acting in accordance with the recommendations of the Committee. Under the Approved Scheme, options
are granted at the prevailing quoted market price and may usually be exercised between three and ten years
from the date of the grant.  At any one time the maximum award of options to any employee pursuant to the
Approved Scheme is £30,000.  The Company adopted its first Approved Scheme in 1996 and a new Approved
Scheme at the AGM in September 2005. 
An Unapproved Discretionary Scheme (“Unapproved Scheme”), which is similar to the Approved Scheme, with
options usually being exercisable within three and ten years from the date of grant, although certain rules of
the Approved Scheme are not included e.g. the exclusion of employees who have a material interest in the
Company. The Company adopted its first Unapproved Scheme in 1996 and a new Unapproved Scheme at the
AGM in September 2005.  The maximum award of options under the Unapproved Scheme to any employee in
each year is 200% of salary or in exceptional circumstances as determined by the Committee 400% of salary.
21
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 22 A Discretionary Unapproved Scheme 2000 (“2000 Unapproved Scheme”) which was discontinued in August
2005. Under the 2000 Unapproved Scheme options were granted at the prevailing quoted market price and
become exercisable (“vest”) as to 25% each anniversary after the grant over a four-year period. Under this
scheme Basic Options were granted up to a limit such that unvested options may not exceed four times annual
remuneration. For a category of up to 55 key employees there was the ability to award options (“Super Options”)
above the limit for Basic Options. Although the 2000 Unapproved Scheme has been discontinued outstanding
options previously granted survive until exercise or lapse.
In granting options under the Approved Schemes and the Unapproved Schemes, the Board may include
objective performance targets or other conditions as it thinks fit and has included such performance conditions
based on growth in earnings per share (EPS) of 15-18% above the Retail Prices Index (“RPI”) over a three-year
period in all grants under the 1996 Approved Scheme and 1996 Unapproved Scheme prior to 2005. Under the
2000 Unapproved Scheme performance conditions of 6% per annum and 20% per annum compound above RPI
were applied to the grant of Basic Options and Super Options respectively thereunder. Initial performance
targets for the 2005 Approved and 2005 Unapproved Schemes set in 2005 required a minimum growth in EPS
of a compound 3% per annum above growth in inflation over a three year period at which level there is 25%
vesting. Compound growth of 6% per annum above inflation is required for 100% vesting, with vesting on a
sliding scale between these two target thresholds.
In setting targets for option grants during 2006, the Committee was mindful of the need for targets to reflect a
return to profitability and significant improvements in earnings. Accordingly, during the previous financial year
ending 2 June 2007 all options granted were subject to performance conditions based on growth in the pre-tax
profits of the Group (“PBT”) over a period of three financial years with 25% of options vesting at £6.9 million PBT
in the third financial year and 100% of options vesting at £17.2 million PBT in the third financial year, with vesting
on a sliding scale between these two target thresholds. These target thresholds were approved after
adjustment by decision of the Committee (having taken external advice) to take account of the shortened
financial year ending 31 December 2007.  During the 7-month period ending 31 December 2007, the Committee
continued to adopt performance conditions based on PBT and options granted to employees during the period
were subject to conditions such that 25% of options will vest at £20 million PBT in the third financial year and
100% of options vesting at £30 million PBT in the third financial year ending 31 December 2009.  During the
period no discretionary options were granted to the executive directors.
These options are normally exercisable only after 3 years from the date of grant. In order to assess whether the
performance conditions have been met, the Committee will utilise the earnings figures derived from the audited
financial statements of the Group and in the event that there is alteration of the financial years relevant to the
options, the Committee has discretion to make appropriate adjustment to the performance conditions.  
In respect of any options to be granted during the current financial year, the Committee proposes to adopt a
similar approach regarding the setting of performance targets but will have regard to the target growth in
earnings of the Group over the subsequent three financial years in order to ensure that targets are sufficiently
stretching.
In addition, a separate share option plan has been established for the benefit of the Group’s US employees. Such
plan operates within the overall limit on issue of new shares of 10% of the Company’s issued share capital
applicable to all the Group’s employee share schemes. The Pace Americas Sharesave Plan is based on the
Sharesave Scheme rules and is designed to satisfy the US Internal Revenue Service requirements for such
saving-for-shares plans. 
d Service Contracts
Company policy is that in normal circumstances executive directors’ notice periods should not exceed one year.
Each of the executive directors has a service contract with the Company. Each of these agreements is terminable
by the Company on twelve months’ prior written notice or by the relevant director on not less than six months’
prior written notice at the option of the Company, each agreement may be terminated forthwith subject to the
Company paying a sum equivalent to 12 months’ salary, benefits and pension contributions. The Remuneration
Committee considers that compensation payments on termination of employment should depend on
individual circumstances. 
22
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 23 It is the Company’s policy to honour its obligations with regard to directors’ service agreements and where the
employment of a director is terminated in accordance with the aforementioned contractual process the
Company will pay the sum specified in the relevant service agreement as payable or otherwise pay fair and
reasonable compensation. 
The service agreement of Neil Gaydon was entered into on 4 May 2006 and was amended on 16 April 2007 and
21 January 2008. The service agreement of David McKinney was entered into on 14 November 2005 and was
subsequently amended on 7 December 2006, 1 June 2007 and 21 January 2008. The service agreement of Stuart
Hall became effective on 2 April 2007 and was subsequently amended on 21 January 2008. Save for the notice
periods referred to in the above paragraph, these contracts have no unexpired term. 
Each of the non-executive directors is appointed under a letter of appointment which is terminable at any time
by the Company without contractual notice. Each of the directors has a letter of indemnity issued by the
Company which provides an indemnity in respect of liabilities incurred in the course of their office to the extent
permitted by the Company’s Articles of Association and the provisions of section 309B of the Companies 
Act 1985. 
Copies of the service contracts of the executive directors and the letters of appointment of the non-executive
directors, together with the letters of indemnity referred to above, are available for inspection during normal
business hours (Saturdays, Sundays and Bank Holidays excepted) at the registered office of the Company. 
The Company maintains directors’ and officers’ liability insurance in respect of senior employees including the
directors. The consent of the Board is required in the event that an executive director wishes to accept an
external appointment. It has been the practice of the Company to permit a director to retain non-executive fees
arising from any such appointment but during the year none of the current executive directors held such
external appointments.
The auditors are required to report on the information disclosed on pages 24 and 25.
23
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 24 d Directors’ Remuneration
Total directors’ remuneration in respect of qualifying services for the 7 months ended 31 December 2007 was
as follows:
7 months 12 months
31 Dec 2 Jun
2007 2007
£000 £000
Fees 116 203
Salaries, benefits in kind and termination payments 487 706
Performance-related bonuses 710 426
Pension contributions 62 76
1,375 1,41 1
The remuneration of individual directors in respect of qualifying services for 7 months ended 31 December 2007
is set out in the table below:
Salaries Performance Benefits Total Pension
and fees bonus in kind remuneration contributions
7months 12 months 7months 12months
31 Dec 2 Jun 31 Dec 2 Jun
2007 2007 2007 2007
Executive Directors £000 £000 £000 £000 £000 £000 £000
Neil Gaydon 200 325 – 525 569 28 41
David McKinney 117 185 – 302 189 16 16
Stuart Hall 125 200 45 370 61 18 5
442 710 45 1,197 819 62 62
Non-executive Directors
Mike McTighe 58 – – 58 100 – –
Pat Chapman-Pincher 20 – – 20 33 – –
Robert Fleming 18 – – 18 37 – –
Marten Fraser 20 – – 20 33 – – 
558 710 45 1,313 1,022* 62 62*
*Figures for the financial year ended 2 June 2007 exclude remuneration of £313,000 and pension contributions
of £14,000 for former director David Brocksom.
d Directors’ Interests in Shares and Share Options 
The interests of directors holding office at the year-end, and those of their immediate families, in the ordinary
share capital of the Company at 31 December 2007 and at the beginning of the period are set out below:
31 December 2007 2 June 2007
Shares Shares 
Non Under Non Under
Beneficial Beneficial option Beneficial Beneficial option
Pat Chapman-Pincher – – – – – –
Robert Fleming 8,850,990 29,188 – 8,850,990 29,188 –
Marten Fraser 20,000 – – 20,000 – –
Neil Gaydon 41,684 – 1,983,652 41,684 – 2,424,638
Stuart Hall 12,739 – 557,599 12,739 – 546,075 
David McKinney 15,000 – 777,307 15,000 – 773,159
Mike McTighe 75,000 – – 75,000 – –
There were no changes in the directors’ interests in the ordinary share capital of the Company between 31
December 2007 and 29 January 2008.
24
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 25 d Share Options
Details of the options over the ordinary shares of 5p each in the Company held by the directors who held office
during the period were as follows:
At AtExercise 
3 June Number of options 31 Dec Exercise Period
2007 Granted Exercised Lapsed 2007 Price From To
Neil Gaydon
Approved Scheme 3,498 – – – 3,498 857.5p 1 7 .07.03 16.07. 10
1996 Unapproved Scheme 75,000 – 75,000 – – 64.0p 24.09.01 23.09.08
1996 Unapproved Scheme 75,000 – – – 75,000 200.0p 07.07.02 06.07.09
1996 Unapproved Scheme 250,000 – – – 250,000 74.25p 02.08.08 01.08.15
2000 Unapproved Scheme 7,023 – 7,023 – – 20.0p 21.01.04 20.01.13
2000 Unapproved Scheme 80,000 – 60,000 – 20,000 51.0p 17.08.05 16.08.14
2000 Unapproved Scheme 422,208 – 298,963 – 123,245 20.0p 21.01.04 20.01.13
2005 Unapproved Scheme 600,000 – – – 600,000 63.5p 18.04.09 17.04.16
2005 Unapproved Scheme 902,127 – – – 902,127 58.75p 02. 10.09 01. 10. 16
Sharesave Scheme 9,782 – – – 9,782 46.00p 01.12.09 30.05.10
David McKinney
2005 Approved Scheme 47,430 – – – 47,430 63.25p 22.01.09 21.01.16
2005 Unapproved Scheme 202,570 – – – 202,570 63.25p 22.01.09 21.01.16
2005 Unapproved Scheme 510,638 – – – 510,638 58.75p 02. 10.09 01. 10. 16
Sharesave Scheme 12,521 – – – 12,521 46.00p 01.12.09 30.05.10
Sharesave Scheme – 4,148 – – 4,148 82.00p 01.10.10 31.03.11
Stuart Hall
2005 Approved Scheme 40,955 – – – 40,955 73.25p 02.04.10 01.04.17
2005 Unapproved Scheme 505,120 – – – 505,120 73.25p 02.04.10 01.04.17
Sharesave Scheme – 1 1,524 – – 11,524 82.00p 01.10.10 31.03.11
On 8 August 2007 Neil Gaydon exercised and sold options over 440,986 shares under the 1996 Unapproved
Scheme and the 2000 Unapproved Scheme. The share price at this date was 108p, giving a gain of £336,467. 
The mid-market price of shares in the Company on 17 December 2007 (the last dealing day before the financial
year end and prior to the suspension of trading in the Company’s shares as a result of the  Company’s
announcement of the proposed acquisition of the set top box and connectivity solutions business of Royal
Philips) was 91.25p. The lowest and highest closing mid-market prices of shares in the Company during the
period were 82.50p and 130.50p respectively. 
Information concerning the performance conditions attached to the above options is contained on pages 21
and 22. 
d Employee Trusts
The Company has established the Pace Micro Technology plc Employee Benefits Trust, which is capable of
acquiring shares in the Company in the market and using them for the purposes of satisfying share options
granted under the Company’s Share Option Schemes. No shares were acquired by the Trust during the year. 
25
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 26 d Performance Graph
Set out below is a performance graph showing the total shareholder return of the Company for the five financial
years ended 31 December 2007 compared to the total shareholder return of the FTSE Electronics and Electrical
Equipment sector index which is considered by the Board to be an appropriate benchmark index against which
to compare the Company’s performance having regard to the principal activities of the Group. 
By order of the Board 
Anthony J Dixon 
Company Secretary 
29 January 2008  
0
100
200
300
400
500
600
2002 2003 2004 2005 2006 2007
Pace FTSE Electronics & Electrical Equipment
26
REP&ACCOUNTS_Jan08:QXP  20/2/08  17:10  Page 27 d Statement of directors’ responsibilities in respect of the Report of
the Directors and the financial statements 
The directors are responsible for preparing the Report of the Directors and the financial statements in
accordance with applicable law and regulations.  
Company law requires the directors to prepare group and parent company financial statements for each
financial year. Under that law they have elected to prepare both the group and the parent company financial
statements in accordance with IFRSs as adopted by the EU and applicable laws.  
The group and parent company financial statements are required by law and IFRSs as adopted by the EU to
present fairly the financial position of the group and the parent company and the performance for that period;
the Companies Act 1985 provides in relation to such financial statements that references in the relevant part of
that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.  
In preparing each of the group and parent company financial statements, the directors are required to:  
b select suitable accounting policies and then apply them consistently;  
b make judgments and estimates that are reasonable and prudent;  
b state whether they have been prepared in accordance with IFRSs as adopted by the EU; and  
b prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the group and the parent company will continue in business.   
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at
any time the financial position of the parent company and enable them to ensure that its financial statements
comply with the Companies Act 1985.  They have a general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible for preparing a directors’ report,
directors’ remuneration report and corporate governance statement that comply with that law and those
regulations.  
A copy of the accounts of the Company is posted on the Pace Micro Technology plc website
(www.pacemicro.com). 
27
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 28 d Independent auditors’ report to the 
members of Pace Micro Technology plc
We have audited the group and parent company financial statements (the ‘‘financial statements’’) of Pace Micro
Technology plc for the 7 months ended 31 December 2007 which comprise the Consolidated Income Statement,
the Consolidated and parent company Balance Sheets, the Consolidated and parent company Cash Flow
Statements, the Consolidated and parent company Statements of Changes in Shareholders’ Equity and the
related notes.  These financial statements have been prepared under the accounting policies set out therein. We
have also audited the information in the Directors’ Remuneration Report that is described as having been
audited.   
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the
Companies Act 1985.  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 auditors  
The directors’ responsibilities for preparing the Report and Accounts, the Directors’ Remuneration Report and
the financial statements in accordance with applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the EU are set out in the Statement of Directors’ Responsibilities on page 27.  
Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report to be
audited in accordance with relevant legal and regulatory requirements and International Standards on Auditing
(UK and Ireland).  
We report to you our opinion as to whether the financial statements give a true and fair view and whether the
financial statements and the part of the Directors’ Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985 and, as regards the group financial statements, Article 4
of the IAS Regulation.  We also report to you whether in our opinion the information given in the Directors’
Report is consistent with the financial statements. The information given in the Directors’ Report includes that
specific information presented in the Chief Executive Officer’s Review and Chief Financial Officer’s Review that is
cross referred from the Business Review and Financial Results section of the Directors’ Report.
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have
not received all the information and explanations we require for our audit, or if information specified by law
regarding directors’ remuneration and other transactions is not disclosed.  
We review whether the Coporate Governance Statement reflects the Company’s compliance with the nine
provisions of the 2006 Combined Code specified for our review by the Listing Rules of the Financial Services
Authority, and we report if it does not. We are not required to consider whether the board’s statements on
internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate
governance procedures and its risk and control procedures.
We read the other information contained in the Report and Accounts and consider whether it is consistent with
the audited financial statements. We consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial statements. Our responsilities do not
extend to any other information.
28
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 29 Basis of audit opinion  
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board.  An audit includes examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements.  It also includes an assessment of the significant estimates and
judgments made by the directors in the preparation of the financial statements, and of whether the accounting
policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately
disclosed.  
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial
statements and the part of the Director’s Remuneration Report to audited are free from material misstatement,
whether caused by fraud or other irregularity or error.  In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements and the part of the Director’s
Remuneration Report to audited.  
Opinion  
In our opinion:  
b the group financial statements give a true and fair view, in accordance with IFRSs as adopted by the
EU, of the state of the group’s affairs as at 31 December 2007 and of its profit for the 7 months then
ended;  
b the parent company financial statements give a true and fair view, in accordance with IFRSs as
adopted by the EU as applied in accordance with the provisions of the Companies Act 1985, of the
state of the parent company’s affairs as at 31 December 2007;  
b the financial statements and the part of the Director’s Remuneration Report to be audited have been
properly prepared in accordance with the Companies Act 1985; and as regards the group financial
statements, Article 4 of the IAS Regulation; and
b the information given in the Report of the Directors is consistent with the financial statements.  
KPMG Audit Plc 
Chartered Accountants 
Registered Auditor
29 January 2008
29
Report & Accounts
2007 (Jun-Dec)
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 30 Contents
31 Financial Statements
37 Notes to the Financial Statements
60 Directors, Secretary and Advisers
61 Five Year Record and Shareholder Information
30
REP&ACCOUNTS_Jan08:QXP  19/2/08  14:18  Page 31 31
d Consolidated Income Statement
For the 7 months ended 31 December 2007
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
Note £000 £000
Revenue 3 249,875 386,513
Cost of sales (199,040) (324,865)
Gross profit 50,835 61,648
Administrative expenses:
Research and Development expenditure (19,293) (28,949)
Other administrative expenses:
Before exceptional items (15,656) (24,379)
Exceptional items 5 - (1,208)
Total Administrative expenses (34,949) (54,536)
Operating profit 15,886 7,1 1 2
Finance income 6 53 138
Finance expenses 6 (589) (2,325) 
Profit before tax 15,350 4,925
Tax (charge)/credit 8 (935) 1,841
Profit after tax 14,415 6,766
Attributable to:
Equity holders of the Company 14,415 6,766
Basic earnings per ordinary share 9 6.3p 3.0p
Diluted earnings per ordinary share 9 6.1p 3.0p
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  15/2/08  15:32  Page 2 32
d Consolidated Balance Sheet
At 31 December 2007
31 Dec 2007 2 June 2007
Note £000 £000
Assets
Non Current Assets
Property, plant and equipment 10 8,621 6,508
Intangible assets – goodwill 10 9,436 9,436
Intangible assets – development expenditure 10 15,882 13,670
Available for sale financial assets 11 349 349
Deferred tax assets 12 5,059 4,968
Total Non Current Assets 39,347 34,931
Current Assets
Inventories 13 28,668 25,268
Trade and other receivables 14 102,382 52,563
Cash and cash equivalents - 12,049
Total Current Assets 131,050 89,880
Total Assets 170,397 124,811
Equity
Issued capital 19 11,684 11,659
Share premium 20    36,885 36,751
Translation reserve 425 227
Retained earnings 21 18,608 2,300
Total Equity 67,602 50,937
Liabilities
Non Current Liabilities
Interest bearing loans and borrowings 16 - 99
Provisions 18 12,487 9,646
Total Non Current Liabilities 12,487 9,745
Current Liabilities
Trade and other payables 15 72,625 59,368
Current tax liabilities 460 282
Interest bearing loans and borrowings 16 12,094 60
Provisions 18 5,129 4,419
Total Current Liabilities 90,308 64,129
Total Liabilities 102,795 73,874
Total Equity and Liabilities 170,397 124,811
These financial statements were approved by the Board of Directors on 29 January 2008 and were signed on its behalf by:
Neil Gaydon Chief Executive Officer
Stuart Hall Chief Financial Officer
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  15/2/08  15:32  Page 3 33
d Company Balance Sheet
At 31 December 2007
31 Dec 2007 2 June 2007
Note £000 £000
Assets
Non Current Assets
Property, plant and equipment 10 7,335 5,229
Intangible assets – development expenditure 10 15,882 13,670
Investments in group and other companies 11 9,749 9,749
Deferred tax assets 12 5,059 4,968
Total Non Current Assets 38,025 33,6 16
Current Assets
Inventories 13 28,668 25,268
Trade and other receivables 14 102,052 52,099
Cash and cash equivalents       - 11,275
Total Current Assets 130,720 88,642
Total Assets 168,745 122,258
Equity
Issued capital 19 11,684 11,659
Share premium 20 36,885 36,751
Retained earnings 21 13,964 (2,401)
Total Equity 62,533 46,009
Liabilities
Non Current Liabilities
Provisions 18 12,487 9,646
Total Non Current Liabilities 12,487 9,646
Current Liabilities
Trade and other payables 15 74,976 61,820
Current tax liabilities 474 364
Interest bearing loans and borrowings 16 13,146 –
Provisions 18 5,129 4,419
Total Current Liabilities 93,725 66,603
Total Liabilities 106,212 76,249
Total Equity and Liabilities 168,745 122,258
These financial statements were approved by the Board of Directors on 29 January 2008 and were signed on its behalf by:
Neil Gaydon Chief Executive Officer
Stuart Hall Chief Financial Officer
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  15/2/08  15:32  Page 4 34
d Consolidated Statement of Changes in Shareholders’ Equity
Group Share ShareTranslation Retained Total 
capital premium reserve earnings equity
£000 £000 £000 £000 £000
Balance at 3 June 2006 11,576 36,246 240 (5,595) 42,467
Profit for the period – – – 6,766 6,766
Currency translation adjustments – – (13) – (13)
Total income and expense for the period – – (13) 6,766 6,753
Employee share incentive charges – – –        684 684
Movement in employee share trusts – – – 445 445
Issue of shares 83 505 – – 588
Balance at 2 June 2007 11,659 36,751 227 2,300 50,937
Profit for the period – – – 14,415 14,415
Currency translation adjustments – – 198 – 198
Total income and expense for the period – – 198 14,415 14,613
Deferred tax adjustments – – – 606 606
Employee share incentive charges – – – 570 570
Movement in employee share trusts – – – 717 717
Issue of shares 25 134 – – 159
Balance at 31 December 2007 11,684 36,885 425 18,608 67,602
Company
Balance at 3 June 2006 11,576 36,246 – (10,240) 37,582
Profit for the period (Total income and expense) – – – 6,710 6,710
Employee share incentive charges – – – 684 684
Movement in employee share trusts – – – 445 445
Issue of shares 83 505 – – 588
Balance at 2 June 2007 11,659 36,751 – (2,401) 46,009
Profit for the period (Total income and expense) – – – 14,472 14,472
Deferred tax adjustments – – – 606 606
Employee share incentive charges – – – 570 570
Movement in employee share trusts – – – 717 717
Issue of shares 25 134 – – 159
Balance at 31 December 2007 11,684 36,885 – 13,964 62,533  
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  19/2/08  14:07  Page 5 35
d Consolidated Cash Flow Statement
For the 7 months ended 31 December 2007
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
£000 £000
Cash flows from operating activities
Profit before tax 15,350 4,925
Adjustments for:
Share based payments charge 570 684
Depreciation of property, plant and equipment 2,483 4,277
Amortisation and impairment of development expenditure 9,958 14, 172
Loss on sale of property, plant and equipment 136 90
Net financial charge 536 2,187
Movement in trade and other receivables (49,874) (9,966)
Movement in trade and other payables 12,828 13,794
Movement in inventories (3,400) 9,524
Movement in provisions 3,551 (826)
Cash (used in)/generated from operations (7,862) 38,861
Interest paid (468) (2,361)
Tax paid (242) (124)
Net cash (used in)/generated from operating activities (8,572) 36,376
Cash flows from investing activities
Purchase of property, plant and equipment (4,258) (3,256)
Development expenditure (12,170) (16,556)
Interest received 53 138
Net cash used in investing activities (16,375) (19,674)
Cash flows from financing activities
Proceeds from issue of share capital 159 588
Proceeds from exercise of employee share options using shares held in trust 717 445
Repayment of loans (159) (55)
Net cash generated from financing activities 717 978
Net change in cash and cash equivalents (24,230) 17,680
Cash and cash equivalents at start of period 12,049 (5,880)
Effect of exchange rate fluctuations on cash held 87 249
Cash and cash equivalents at end of period (12,094) 12,049
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  19/2/08  14:07  Page 6 36
d Company Cash Flow Statement
For the 7 months ended 31 December 2007
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
£000 £000
Cash flows from operating activities
Profit before tax 15,032 4,629
Adjustments for:
Share based payments charge 570 684
Depreciation of property, plant and equipment 2,217 3,795
Amortisation of development expenditure 9,958 14, 172
Loss on sale of property, plant and equipment 96 78
Net financial income 534 2,169
Movement in trade and other receivables (49,907) 1,239
Movement in trade and other payables 12,612 18,597
Movement in inventories (3,400) (6,108)
Movement in provisions 3,551 (826)
Cash (used in)/generated from operations (8,737) 38,429
Interest paid (468) (2,361)
Tax paid – –
Net cash (used in)/generated from operating activities (9,205) 36,068
Cash flows from investing activities
Purchase of property, plant and equipment (3,979) (2,754)
Development expenditure (12,170) (16,556)
Interest received 56 136
Net cash used in investing activities (16,093) (19, 174)
Cash flows from financing activities
Proceeds from issue of share capital 159 588
Proceeds from exercise of employee share options using shares held in trust 717 445
Net cash generated from financing activities 876 1,033
Net change in cash and cash equivalents (24,442) 17 ,927
Cash and cash equivalents at start of period 11,275 (6,897)
Effect of exchange rate fluctuations on cash held 21 245
Cash and cash equivalents at end of period (13,146) 11,275
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  19/2/08  14:07  Page 7 37
d Notes
1 BASIS OF PREPARATION
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
financial statements.
BASIS OF PREPARATION
The financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention as
modified by the revaluation of derivative instruments.
Significant judgements, key assumptions and estimation uncertainty
The Group’s main accounting policies affecting its results of operations and financial condition are set out on pages 37 to 40. Judgements and
assumptions have been required by management in applying the Group’s accounting policies in many areas. Actual results may differ from
the estimates calculated using these judgements and assumptions. Key sources of estimation uncertainty and critical accounting judgements
are as follows:
Warranties
Pace provides product warranties for its set-top boxes. Although it is difficult to make accurate predictions of potential failure rates or the
possibility of an epidemic failure, as a warranty estimate must be calculated at the outset of a product before field deployment data is available,
these estimates improve during the lifetime of the product in the field.
A provision for warranties is recognised when the underlying products are sold. The provision is based on historical warranty data and a
weighting of all possible outcomes against their associated probabilities. The level of warranty provision required is reviewed on a product by
product basis and provisions adjusted accordingly in the light of actual performance.
Royalties
Pace’s products incorporate third party technology, usually under licence. Inadvertent actions may expose Pace to the risk of infringing third
party intellectual property rights. Potential claims can still be submitted many years after a product has been deployed. Any such claims are
always vigorously defended.
A provision for royalties is recognised where the owners of patents covering technology allegedly used by the Group have indicated claims for
royalties relating to the Group’s use (including past usage) of that technology. Having taken legal advice, the board considers that there are
defences available that should mitigate the amounts being sought. The Group will vigorously negotiate or defend all claims but, in the absence
of agreement, the amounts provided may prove to be different from the amounts at which the potential liabilities are finally settled. The
provision is based on the latest information available.
EU Import duty classification
Pace, along with other set top box manufacturers and broadcasters, continues to monitor the potential re-interpretation by European Union
customs authorities of customs regulations that could result in the extension of import duties to interactive set-top boxes manufactured
outside, but imported into, the EU. No final decision has been made so it remains impossible to quantify any potential impact. However, Pace
has analysed its options against the range of possible outcomes and has plans to manage these outcomes.
Writ Issued against Company
A writ has been issued against the Company by a former customer relating to the supply of set-top boxes in 2000/2001. The amount claimed
is $7.2m. The Directors believe that they have good defences to the claim and that, in the absence of any liability, no provision has been made.
In addition on 15 July 2007 Pace filed a counter claim for circa $10m against this former customer and a related third party.
Going concern
The Group has in place borrowing facilities to January 2010, based upon 85% of relevant trade debtors, as adjusted, up to a maximum of £35m.
These facilities are subject to financial performance covenants.
The Board has prepared a working capital forecast based upon assumptions as to trading and has concluded that the Group has adequate
working capital, will meet the financial performance covenants and that therefore it is appropriate to use the going concern basis of
preparation for these financial statements.
pace 2008:REP&ACCOUNTSTB_CHARTS_Jan08  19/2/08  14:07  Page 8 38
d Notes continued
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by
the European Union and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations and with those parts of the
Companies Act 1985 applicable to companies reporting under IFRS. The Company’s Financial statements have been prepared on the same
basis and as permitted by section 230(3) of the Companies Act 1985, no income statement is presented for the Company.
FINANCIAL YEAR END
The annual financial statements were previously drawn up to the Saturday nearest to 31 May.   The Pace Board resolved on 23 July 2007 to
change its accounting reference date from 31 May to 31 December.  Accordingly the current year’s financial statements are for the 7 months
ended 31 December 2007 and the previous year’s financial statements are for the 52 weeks ended 2 June 2007.
BASIS OF CONSOLIDATION
The Group financial statements consolidate those of the Company and of its subsidiary undertakings (note 1 1) drawn up to 31 December 2007.
The results of subsidiaries acquired in the period are included in the income statement from the date they are acquired. On acquisition, all of
the subsidiaries’ assets and liabilities that exist at the date of acquisition are recorded at their fair values reflecting their condition at that date.
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that
presently are exercisable or convertible are taken into account. Intra-group transactions, including sales, profits, receivables and payables,
have been eliminated on the Group consolidation. Investments in subsidiaries are carried at cost less any impairment loss in the financial
statements of the Company.
2 ACCOUNTING POLICIES
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
consolidated financial statements. In these financial statements the following Adopted IFRSs are effective for the first time:
m The adoption of IFRS 7 in relation to the disclosures on the significance of financial instruments for the entity’s financial position and
performance, and the nature and extent of risks arising from financial instruments to which the Group is exposed during the period and
at the reporting date, and how the entity manages those risks.
m Amendment to IAS 1 for Capital Disclosures.
The adoption of IFRS 7 Financial Instruments. Disclosures and amendment to IAS 1 for Capital Disclosures have not had a significant impact
except for additional disclosure requirements.
There are a number of new standards and interpretations issued but not yet effective which the Group has not applied in these financial
statements, including IFRS 8 Operating Segments. It is anticipated that the adoption of these standards and interpretations would not have
a significant impact on the financial statements of the Group.
GOODWILL
All business combinations are accounted for by applying the purchase method. Goodwill represents the excess of the fair value of the
consideration paid on acquisition of a business over the fair value of the assets, including any intangible assets identified and liabilities and
contingent liabilities acquired. Goodwill is not amortised but is measured at cost less impairment losses. In determining the fair value of
consideration, the fair value of equity issued is the market value of equity at the date of completion, and the fair value of contingent
consideration is based upon the extent to which the directors believe performance conditions will be met and thus whether any further
consideration will be payable.
As permitted by IFRS 1, goodwill arising on acquisitions before 29 May 2004 (date of transition to Adopted IFRS) has been frozen at the UK
GAAP amounts subject to being tested for impairment annually. The Group performs its annual impairment review at the cash-generating unit
level.
RESEARCH AND DEVELOPMENT EXPENDITURE
All on-going research expenditure is expensed in the period in which it is incurred. Where a product is technically feasible, production and sales
are intended, a market exists, and sufficient resources are available to complete the project, development costs are capitalised and
subsequently amortised on a straight-line basis over the estimated useful life of the product concerned from commercial launch. The
expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Where these conditions are
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d Notes continued
not met development expenditure is recognised as an expense in the period in which it is incurred. Capitalised development expenditure is stated at
cost less accumulated amortisation and impairment losses. The estimated useful lives for development expenditure are estimated to be in a range of
between 6 and 18 months.
Capitalised development expenditure is not treated as a realised loss for the purpose of determining the Company’s distributable profits as the costs
meet the conditions required to be treated as an asset in accordance with IAS 38.
The amortisation of capitalised development expenditure is charged to the Income Statement in research and development expenditure within
Administrative expenses category. 
IMPAIRMENT CHARGES
The Company considers at each reporting date whether there is any indication that non-current assets are impaired. If there is such an indication, the
Company carries out an impairment test by measuring an asset’s recoverable amount, which is the higher of its fair value less costs to sell and its value
in use (effectively the expected cash to be generated from using the asset in the business). If the recoverable amount is less than the carrying amount
an impairment loss is recognised, and the asset is written down to its recoverable amount.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, an impairment loss is reversed when there is an indication that the
impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying value does not exceed the amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
REVENUE RECOGNITION
Revenue comprises the value of sales of goods and services to third party customers occurring in the period, stated exclusive of value added tax and
net of trade discounts and rebates.
Revenue on the sale of goods is recognised when substantially all of the risks and rewards in the product have passed to the customer , and substantially
all of the Group’s work is completed which is usually upon delivery to the customer, or his agent.
Revenue in respect of services rendered, including engineering consultancy and support and software services, is recognised over the period over which
they are performed, in relation to the level of work undertaken, project milestones achieved and any future obligations remaining.
The Company does not enter into contracts that cover both the provision of hardware and services in combination.
GOVERNMENT GRANTS
Grants in respect of specific research and development projects are credited to research and development costs within the income statement or against
the capitalised development expenditure as appropriate to match to the project’s related expenditure.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances and call deposits. The Company considers all highly liquid investments with original maturity dates
of three months or less to be cash equivalents. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash
management system are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
ALLOWANCE FOR DOUBTFUL DEBTS
Trade receivables are assessed individually for impairment, or collectively where the receivables are not individually significant. Where necessary,
provisions for doubtful debts are recorded in the income statement. 
INVENTORY
Inventory is stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-out basis and includes appropriate transport and
handling costs but excludes royalties due only on ultimate sale. Where necessary, provision is made for obsolete, slow-moving and defective inventory.
PROPERTY, PLANT AND EQUIPMENT
The cost of items of property, plant and equipment is its purchase cost, together with any incidental costs of acquisition. 
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d Notes continued
Depreciation is calculated so as to write off, on a straight-line basis over the expected useful economic lives of the asset concerned, the cost of
property, plant and equipment, less any estimated residual values, which are adjusted, if appropriate, at each balance sheet date. The principal
economic lives used for this purpose are:
m Long Leasehold properties Period of lease 
m Short Leasehold properties Period of lease 
m Plant and machinery One to ten years 
m Motor vehicles Four years 
Provision is made against the carrying value of items of property, plant and equipment where an impairment in value is deemed to have occurred. 
LEASED ASSETS 
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Assets held under
finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their expected useful lives. The interest element
of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over the period
of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to the income statement on a straight-line basis
over the lease term.
CURRENCY TRANSLATION
Transactions in foreign currencies are translated at the exchange rate ruling at the date of transaction. Monetary assets and liabilities denominated
in foreign currencies are translated at the rates of exchange ruling at the balance sheet date.
Exchange differences of a trading nature are dealt with in the income statement. The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on consolidation are translated at foreign exchange rates ruling at the balance sheet date. The revenues and
expenses of foreign operations are translated at an average rate approximate to the foreign exchange rate ruling at the date of the transactions. 
Exchange differences from the above are taken directly to the translation reserve. They are released to the income statement on disposal.
DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses derivative financial instruments, usually forward foreign exchange contracts, to hedge its exposure to foreign exchange risks arising
from operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial
instruments for trading purposes. 
None of the Group’s derivative contracts qualify for hedge accounting and are valued (ie marked to market) at the balance sheet date and any
resulting profits or losses are taken to the income statement.
TAXES
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is provided using the balance sheet liability method, providing where relevant for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured using the
tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the asset is realised or the
liability settled. 
A net deferred tax asset is recognised only when it is probable that sufficient taxable profits will be available in the foreseeable future from which
the reversal of the temporary differences can be deducted.
SHARE-BASED PAYMENTS
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. Fair value is measured by use of the Black-Scholes pricing model. 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 Company’s estimate of the
number of shares that will eventually vest.
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d Notes continued
The value of the charge is adjusted in the income statement over the remainder of the vesting period to reflect expected and actual levels of
option vesting, with the corresponding adjustment made in equity.
The Company has applied the exemption available under IFRS 2, to apply its provisions only to those options granted after 7 November 2002
and which were outstanding at 1 January 2005.
EMPLOYEE SHARE OWNERSHIP PLANS
The material assets, liabilities, income and costs of the Pace Micro Technology plc Employee Benefits Trust and the Pace Micro Technology
QUEST are treated as being those of the Company. Until such time as the Company’s own shares vest unconditionally with employees, the
consideration paid for the shares is deducted in arriving at equity.
EMPLOYEE BENEFITS
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred. The
Group has no defined benefit arrangements in place.
AVAILABLE FOR SALE FINANCIAL ASSETS
Available for sale financial assets are stated at the lower of the carrying amount and fair value less costs to sell if their carrying amount is
recovered principally through a sale transaction rather than through continuing use.
INVESTMENT INCOME
Investment income relates to interest income, which is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable.
EQUITY INSTRUMENTS
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. 
DIVIDENDS PAYABLE
Distributions to equity holders are disclosed as a component of the movement in shareholders’ equity. A liability is recorded for a final dividend
when the dividend is declared by the Company’s shareholders, and, for an interim dividend, when the dividend is paid.
PROVISIONS
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it
is probable that an outflow of economic benefits will be required to settle the obligation.
(a) Royalties
A provision for royalties is recognised where the owners of patents covering technology allegedly used by the Group have indicated claims for
royalties relating to the Group’s use (including past usage) of that technology. The provision is based on the latest information available. 
(b) Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data
and a weighting of all possible outcomes against their associated probabilities. The level of warranty provision required is reviewed on a
product by product basis and provisions adjusted accordingly in the light of actual performance.
(c) Restructuring
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has
either commenced or has been announced publicly. Provisions are not recognised for future operating losses.
(d) Onerous contracts
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the
unavoidable cost of meeting its obligations under the contract.
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d Notes continued
3 SEGMENTAL ANALYSIS
The Group’s principal activities are the development, design and distribution of digital receivers and receiver decoders, for the reception of
digital television and the reception/transmission of interactive services, telephony and high speed data (“set-top boxes”). The Group also
provides engineering design, software applications and support services to Multiple Service Operators, broadcasters, telecommunications
companies and retail markets worldwide. Each of these services may be delivered over satellite, cable, terrestrial and IP network transmission
systems.
The Directors have undertaken a review of the Group’s continuing operations and its associated business risks and consider that the
continuing operations should be reported as a single business segment. The Directors consider that the continuing operations represent one
product offering with similar risks and rewards and should be reported as a single business segment in line with the Group’s internal reporting
framework.
The geographical analysis of revenue which arises from the sale of goods and the provision of software, hardware and other consultancy
services to third party customers is as follows:
Revenue by destination 7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
£000 £000
United Kingdom 48,451 69,487
Continental Europe 41,107 62,693
Far East and Australasia 15,586 30,888
North America 144,731 223,239
Rest of the World - 206
249,875 386,513
All revenue originates in the United Kingdom from continuing operations and there is no material inter-segment turnover. Predominantly all
profits, capital expenditure and assets arise or are held in the United Kingdom.
4 EXPENSES AND AUDITORS’ REMUNERATION
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
£000 £000
Fees payable to the Company’s auditors for the audit of:
Company’s annual accounts 130 155
Fees payable to the Company’s auditors and its associates for other services to the Group:
audit of the Company’s subsidiaries financial statements pursuant to legislation 8 8
other services relating to taxation 28 16
other services pursuant to interim reporting 20 40
services relating to corporate restructuring - 200
Depreciation of plant, property and equipment
owned 2,483 4,277
Other operating lease rental
land and buildings 808 1,247
motor vehicles 15 101
Loss on disposal of plant, property and equipment 136 90
Net foreign exchange gains recognised within operating profit/loss 198 439
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5 EXCEPTIONAL ITEMS
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
£000 £000
Restructuring and reorganisation costs – 1,208
The restructuring and reorganisation charges in the previous period related to a restructuring programme within the Group.
6 FINANCE INCOME/COSTS
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
£000 £000
Finance income - Interest on bank deposits 53 138
Borrowing costs:
Bank loans and overdrafts 589 1,463
Other – 862
Finance costs 589 2,325
7 STAFF NUMBERS AND COSTS
The average number of persons (including directors) employed by the Group and Company during the year, analysed by category were as follows:
Group Company
7 months 52 weeks 7 months 52 weeks
ended ended ended ended
31 Dec 2007 2 June 2007 31 Dec 2007 2 June 2007
£000 £000 £000 £000
Research and development 411 403 294 300
Administration 129 140 99 111
Sales and marketing 22 24 19 20
Manufacturing and operations 29 47 24 36
591 61 4 436 467
The aggregate payroll costs of these persons were as follows:
Wages and salaries 12,974 25,067 9,729 19, 177
Social security costs 1,666 2,190 1,357 1,878
Other pension costs 580 950 565 824
Share based payments (see note 24) 570 684 570 684
Redundancy costs 99 1, 163 99 1,048
15,889 30,054 12,320 23,61 1
Remuneration Of Directors
The remuneration, share options and pension entitlements of the directors are disclosed in the Remuneration Report on pages 20 to 26.
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d Notes continued
8 TAX (CHARGE)/CREDIT
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
The tax (charge)/credit is based on the profit for the period and comprises: £000 £000
Current tax:
Overseas tax charge (420) (240)
Total current tax charge (420) (240)
Deferred tax:
Origination and reversal of timing differences (note 12) (1,367) 2,081
Adjustment in respect of previous periods 1,169 -
Effect of change in tax rate (317) -
Total deferred tax (charge)/credit (515) 2,081
Tax (charge)/credit in Consolidated Income Statement (935) 1,841
Reconciliation of effective tax rate:
Profit before tax 15,350 4,925
Tax using domestic corporation tax rate at 30% (2 June 2007: 30%) (4,605) (1,478)
Effects of:
Expenses not deductible for tax purposes (391) (933)
Tax losses utilised in period – 2,235
Brought forward unrecognised tax losses recognised in the period 2,256 –
Research and development tax credit 547 940
Overseas tax not at 30% (105) (60)
Future tax relief on exercise of share options 511 –
Effect of change in tax rate (317) –
Adjustments to tax charge in respect of previous periods 1,169 1, 137
Total tax (charge)/credit (935) 1,841
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d Notes continued
9 EARNINGS PER ORDINARY SHARE
Basic and diluted earnings per share
The calculation of basic earnings per share is based on a profit for the period of £14,415,000  (year ended 2 June 2007: £6,766,000) divided by
the weighted average number of ordinary shares in issue of 229,141,578 (year ended 2 June 2007: 225,501,387), excluding shares held by the
Employee Benefits Trust.
7 months 52 weeks
ended ended
31 Dec 2007 2 June 2007
Number of shares m m
Weighted average number of ordinary shares in issue during the year 229.1 225.5
Dilutive effect of options outstanding 5.5 1.4
Diluted weighted average number of ordinary shares in issue during the year 234.6 226.9
Diluted earnings per ordinary share varies from basic earnings per ordinary share due to the effect of the notional exercise of outstanding
share options.
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d Notes continued
10 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT
GoodwillDevelopment Long Short Plant Motor Total 
Expenditure Leasehold Leasehold and vehicles property,
Buildings land and machinery plant and
Buildings equipment
Group £000 £000 £000 £000 £000 £000 £000
Cost
At 4 June 2006 9,436 15,990 616 4,789 18,181 30 23,616
Exchange adjustments – – – (21) (189) – (210)
Additions – 16,556 – 43 3,213 – 3,256
Retirement of Assets – (9,459) –––––
Disposals –––– (432) – (432)
At 2 June 2007 9,436 23,087 616 4,811 20,773 30 26,230
Exchange adjustments – – 31 (2) 46 – 75
Additions – 12,170 – 2,014 2,675 8 4,697
Retirement of Assets – (4,198) –––––
Disposals – – (234) (211) (1,252) – (1,697)
At 31 December 2007 9,436 31,059 413 6,612 22,242 38 29,305
Amortisation/depreciation
At 4 June 2006 – 4,704 265 3,687 11,963 30 15,945
Exchange adjustments – – – (20) (138) – (158)
Provided in the year – 12,470 21 242 4,014 – 4,277
Retirement of Assets – (9,459) –––––
Impairment –1,702–––––
Disposals –––– (342) – (342)
At 2 June 2007 – 9,417 286 3,909 15,497 30 19,722
Exchange adjustments – – 16 (1) 25 – 40
Provided in the period – 9,958 12 269 2,201 1 2,483
Retirement of Assets – (4,198) –––––
Disposals – – (195) (143) (1,223) – (1,561)
At 31 December 2007 – 15,177 119 4,034 16,500 31 20,684
Net book amount at 3 June 2006 9,436 11,286 351 1,102 6,218 – 7,671
Net book amount at 2 June 2007 9,436 13,670 330 902 5,276 – 6,508
Net book amount at 31 December 2007 9,436 15,882 294 2,578 5,742 7 8,621
Impairment tests for cash generating units containing goodwill
All the goodwill relates to intellectual property and know-how acquired with the purchase of Xcom Multimedia Communications SA in
February 2001. These intellectual property and know-how assets are used as an integral part of the development of products which, to date,
have been sold mainly into Pace’s Continental European markets. Accordingly, for impairment testing purposes to date the goodwill has been
allocated to a cash generating unit comprising the Group’s Continental European business. 
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d Notes continued
10 INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT continued
Impairment tests for cash generating units containing goodwill
The recoverable amount of the above unit including the goodwill is based upon value in use calculations and is higher than the carrying value
of the assets and goodwill allocated to this unit. The calculations use cash flow projections based on actual operating results, budget and a 3
year forecast, reflecting known purchase orders, sales contracts and estimates relating to the net result from planned products launches.
Thereafter, a growth rate of 1% on sales and 2% in overheads has been used to extrapolate results to cover 5 years in total. A discount rate of
12% has been used in discounting the projected cash flows.
Development expenditure for the Group and Company comprises a number of projects at varying levels of completion. Such expenditure will
be amortised from the date of commercial launch in line with the accounting policies set out in note 2. 
Retirements of development expenditure represent the deletions of the cost and related amortisation at the end of products commercial lives.
Property, plant
and equipment
Intangible assets
Short Total
leasehold property
Development and Plant and Motor plant and 
Expenditure buildings machinery vehicles equipment
Company £000 £000 £000 £000 £000
Cost
At 4 June 2006 15,990 4,441 14,349 30 18,820
Additions 16,556 28 2,726 – 2,754
Disposals (9,459) – (408) – (408)
At 2 June 2007 23,087 4,469 16,667 30 21,166
Additions 12,170 2,007 2,403 8 4,418
Disposals (4,198) (210) (1,250) - (1,460)
At 31 December 2007 31,059 6,266 17,820 38 24,124
Amortisation/depreciation
At 4 June 2006 4,704 3,369 9,073 30 12,472
Provided in the year 12,470 227 3,568 – 3,795
Retirement of Assets (9,459) ––––
Impairment 1,702––––
Disposals – – (330) – (330)
At 2 June 2007 9,417 3,596 12,311 30 15,937
Provided in the period 9,958 265 1,951 1 2,217
Retirement of Assets (4,198) ----
Disposals - (143) (1,222) - (1,365)
At 31 December 2007 15,177 3,718 13,040 31 16,789
Net book amount at 3 June 2006 11,286 1,072 5,276 – 6,348
Net book amount at 2 June 2007 13,670 873 4,356 – 5,229
Net book amount at 31 December 2007 15,882 2,548 4,780 7 7,335
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d Notes continued
11 INVESTMENTS IN GROUP AND OTHER COMPANIES
Available for
sale financial
assets
£000
Group
Cost at 4 June 2006 and 2 June 2007 and 31 December 2007 1,479
Provision at 4 June 2006, 2 June 2007 and 31 December 2007 (1,130)
Net book value at 3 June 2006, 2 June 2007 and 31 December 2007 349
Intra- Shares Available for
group in group sale financial
loans undertakings assets Total
£000 £000 £000 £000
Company
Cost at 4 June 2006 and 
2 June 2007 and 31 December 2007 65,945 6,038 899 72,882
Provision at 4 June 2006 and 
2 June 2007 and 31 December 2007 (62,583) – (550) (63,133)
Net book value at 3 June 2006, 
2 June 2007 and 31 December 2007 3,362 6,038 349 9,749
At 31 December 2007 the Company had a beneficial interest in the equity of the following subsidiary undertakings:
Nature of Percentage Country of Class of share
operations holding incorporation capital held
EURL New Com Immobilier** Holding Company 100% France Ordinary
Pace Advanced Consumer Electronics Limited Dormant 100% UK Ordinary
Pace Asia Pacific Limited*** Administrative/development support 100% Hong Kong Ordinary
Pace Distribution GmbH Dormant 100% Germany Ordinary
Pace Distribution (Overseas) Limited Holding Company 100% UK Ordinary/
Preference
Pace Micro Technology (HK) Limited Holding Company 100% Hong Kong Ordinary
Pace Micro Technology (Australia) Pty Limited                     Administrative/ 100% Australia Ordinary
development support
Pace Americas Limited*** Administrative 100% UK Ordinary
/development support
Pace Americas, Inc**** Trading 100% USA Ordinary
Pace Micro Technology (Asia Pacific) Limited* Dormant 100% Hong Kong Ordinary
SCI Les 9 Tilleuls** Property Company 100% France Ordinary
Pace Europe SAS*** Administrative/development support 100% France Ordinary
Pace Micro Technology GmbH Administrative/development support 100% Germany Ordinary
Pace Micro Technology (India) Private Ltd*** Development support 100% India Ordinary
Pace Overseas Distribution Limited*** Dormant 100% UK Ordinary
* Denotes company owned by Pace Micro Technology (HK) Limited
** Denotes company owned by Pace Europe SAS
*** Denotes company owned by Pace Distribution (Overseas) Limited
**** Denoted company owned by Pace Americas Limited
Each of the subsidiary undertakings listed above have been consolidated in the Group’s financial statements.
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d Notes continued
12 DEFERRED TAX ASSETS
Deferred tax assets have been recognised in respect of differences between accounting and tax carrying values and trading losses where it
is probable that these assets will be recovered. 
All of the deferred tax assets were available for offset against deferred tax liabilities. The movements in deferred tax assets and liabilities (prior
to the offsetting of balances within the same jurisdiction as permitted by IAS 12 Income Taxes) during the period are shown below:
Property, plant Trading Development Share
& equipment losses costs (IAS 38) Based Total
Payments
Group and Company £000 £000 £000 £000 £000
Recognised asset 
At 2 June 2007 (30%) 2,678 6,431 (4,141) – 4,968
Credited/(charged) to income statement 42 (1,981) 1,230 511 (198)
Credited to equity/reserves – – – 649 649
At 31 December 2007  (30%) 2,720 4,450 (2,911) 1,160 5,419
Effect of change in tax rate – taken to income statement (181) (296) 194 (34) (317)
Effect of change in tax rate – taken to equity/reserves – – – (43) (43)
At 31 December 2007 (28%) 2,539 4,154 (2,717) 1,083 5,059
There are no unrecognised deferred tax assets at the period end in respect of unutilised trading losses.
On 21 March 2007, the Chancellor announced that with effect from 1 April 2008 the standard rate of UK Corporation tax will reduce from 30
per cent to 28 per cent. This change has now been enacted. Based on the reduced Corporation tax rate of 28 per cent, the Group deferred
tax asset at 31 December 2007 has been recognised at 28 per cent as it is expected this will be the rate applicable on the reversal of the
timing differences above.
13 INVENTORIES
Group Company
31 Dec 2007 2 June 2007 31 Dec 2007 2 June 2007
£000 £000 £000 £000
Raw materials and consumable stores 3,589 7,290 3,589 7,290
Finished goods 25,079 17 ,978 25,079 17 ,978
28,668 25,268 28,668 25,268
The cost of inventory expensed to the income statement in the period was £197,902,000 (year ended 2 June 2007: £322,873,000)
14 TRADE AND OTHER RECEIVABLES
Group Company
31 Dec 2007 2 June 2007 31 Dec 2007 2 June 2007
£000 £000 £000 £000
Trade receivables 99,508 47 ,402 99,475 47 ,356
Other receivables 1,651 3,381 1,563 3,238
Prepayments and accrued income 1,223 1,780 1,014 1,505
102,382 52,563 102,052 52,099
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15 TRADE AND OTHER PAYABLES
Group Company
31 Dec 2007 2 June 2007 31 Dec 2007 2 June 2007
£000 £000 £000 £000
Trade payables 59,620 50,044 59,435 49,536
Amounts owed to subsidiary undertakings – – 4,231 4,311
Social security and other taxes 586 521 437 370
Other payables 853 528 483 186
Accruals 11,566 8,275 10,392 7,4 1 7
72,625 59,368 74,978 61,820
16 INTEREST BEARING LOANS AND BORROWINGS
Group Company
31 Dec 2007 2 June 2007 31 Dec 2007 2 June 2007
£000 £000 £000 £000
Borrowings consist mainly of bank loans
and overdrafts falling due:
Within one year (12,094) 60 (13,146) –
After one and within two years – 60 – –
After two and within three years – 39 – –
(12,094) 159 (13,146) –
The banking facilities of £35 million (2 June 2007: £35 million) are available until January 2010. The facility is based on a percentage
drawdown of appropriate trade receivables as adjusted and is secured by a fixed and floating charge over the assets of Pace Micro
Technology plc and its subsidiary undertakings.
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d Notes continued
17 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS
Short term debtors and creditors that meet the definition of a financial asset or liability respectively have been excluded from all the
following analysis, other than the currency risk exposures. 
This note provides information about the contractual terms of the Group and Company’s interest bearing loans and borrowings (note 16).
For more information about the Group and Company’s exposure to interest rate, credit risk and foreign currency risk, see pages 9 and 10 of
the Report of the Directors.
(a) Interest rate risk profile of cash/bank overdrafts
Floating rate Interest free Total
Currency £000 £000 £000
At 31 December 2007
Sterling 3,344 3 3,347
US Dollar (7,791) – (7,791)
Euro (8,068) 97 (7,971)
Other 321 - 321
Total (12,194) 100 (12,094)
At 2 June 2007:
Sterling 3,351 2 3,353
US Dollar 4,254 – 4,254
Euro 4,344 1 4,345
Other 97 – 97
Total 12,046 3 12,049
The interest rates on Sterling, US Dollar, Euro and other floating rate financial assets are linked to the relevant bank base rates.
(b) Interest rate risk profile of bank loans
Floating rate Interest free Total
Currency £000 £000 £000
At 31 December 2007:
Euro –––
–––
At 2 June 2007:
Euro 159 – 159
159 – 159
The interest rate on Euro floating rate financial liabilities is linked to the relevant bank base rate.
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d Notes continued
17 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS continued
(c) Currency exposures
The table below shows the Group’s currency exposures that give rise to the net currency gains and losses recognised in the income
statement. Such exposures comprise the monetary assets and monetary liabilities of the Group which are not denominated in the operating
or functional currency of the operating unit involved.
Net foreign currency monetary assets/(liabilities)
US Dollar Euro Other Total
Functional currency of group operation £000 £000 £000 £000
At 31 December 2007:
Sterling 2,229 15,897 74 18,200
Euro ----
Other ----
Total 2,229 15,897 74 18,200
At 2 June 2007:
Sterling (8,349) 11,635 (698) 2,588
Euro ––––
Other –(12) – (12)
Total (8,349) 11,623 (698) 2,576
(d) Gains and losses on currency derivatives
The majority of the Group’s production costs are denominated in US Dollars. The Group endeavours to obtain as much of its income as
possible in US Dollars but a significant proportion of income is currently received in Sterling or Euros. The Group’s policy is to hedge forward
progressively against movements in the value of foreign currencies, in respect of cash receipts and payments expected from transactions
over the next 6 months.
Outstanding currency derivatives:
Sell Buy Principal Average
Currency Currency Amount Rate Maturity
At 31 December 2007: Euro US Dollar $64.8m 1.40 Jan 08-Apr 08
At 2 June 2007: Euro US Dollar $63.7m 1.34 Jun 07-Feb 08
The Group’s derivatives contracts do not qualify for hedge accounting and are valued (ie marked to market) at the balance sheet date and
accordingly £1.7m (2 June 2007: £87,652) of losses have been taken to the income statement.
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d Notes continued
17 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS continued
(e) Credit risk
The Group’s credit risk is primarily attributable to its trade debtors. Credit risk is managed by monitoring the aggregate amount and
duration of exposure to any one customer depending upon their credit rating. The Group does not require collateral in respect of financial
assets. There were no significant impairments in the periods under review.
The credit risk on liquid funds is limited because counterparties are banks with high credit ratings. At each balance sheet date there was no
significant concentration of credit risk.
Of the trade receivables at 31 December 2007 85% was within terms (2 June 2007: 87%). The balance was less than 30 days past due (2 June
2007: 13%).
(f) Liquidity risk
Cash resources are largely and normally generated through operations. Short term flexibilty is achieved by the asset based lending facilities
in place (note 16).
(g) Sensitivity analysis
In managing interest rate and currency risks the Group aims to reduce the impact of short term fluctuations on the Group’s earnings. Over
the long term, permanent changes in foreign exchange and interest rates would have an impact on consolidated earnings. The Directors
consider that a change of 100 basis points in interest rates at any period end would not have a material impact on cash flows.
The Group’s key foreign exchange exposures are in respect of the Euro and US Dollar. A 1% strengthening in the Great British Pound against
these would have an adverse impact of £401,000 on the profit reported in seven month period ended 31 December 2007 (year ended 2 June
2007: £6,000).
There were no significant foreign currency exposures on equity from any foreign currency denominated asset or liabilities in either period
under review.
(h) Capital management
In line with the disclosure requirements of IAS 1, Presentation of Financial Statements, the Company regards its capital as being the issued
share capital together with its asset based lending facilities, used to manage short term working capital requirements.
Note 19 to the financial Statements provides details regarding the Company’s share capital and movements in the period. There were no
breaches of any requirements with regard to any relevant conditions imposed by either the UKLA or the Company’s Articles of Association
during the periods under review.
Details of the Company’s working capital facilities are given in Note 16. Such facilities are subject to certain financial performance covenants.
There have been no breaches of these covenants in the period under review.
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d Notes continued
18 PROVISIONS
Royalties
under 
negotiation Warranties Total
£000 £000 £000
Group and Company
At 2 June 2007 7,473 6,592 14,065
Net charge for the period 2,540 5,541 8,081
Utilised (805) (3,725) (4,530)
At 31 December 2007 9,208 8,408 17,616
Due within one year - 5,129 5,129
Due after one year 9,208 3,279 12,487
Royalties under negotiation
The owners of patents covering technology allegedly used by the Group have indicated claims for royalties relating to the Group’s use
(including past usage) of that technology. Negotiations over these liabilities continue for long periods of time. The directors have made
provision for the potential royalties payable based on the latest information available. Having taken legal advice, the Board considers that there
are defences available that should mitigate the amounts being sought. The Group will vigorously negotiate or defend all claims but, in the
absence of agreement, the amounts provided may prove to be different from the amounts at which the potential liabilities are finally settled.
Given the nature of the claims it is not possible to be more specific with regard to the timing of outflows.
Warranties
Pace provides product warranties for its set-top boxes from the point of sale and a provision for warranties is recognised when the underlying
products are sold. The provision is based on historical warranty data, principally historical failure rates and related cost of repair information,
and a weighting of all possible outcomes against their associated probabilities. The level of warranty provision required is reviewed on a
product by product basis and provisions adjusted accordingly in the light of actual performance.
Although it is difficult to make accurate predictions of potential failure rates or the possibility of an epidemic failure, as a warranty estimate
must be calculated at the outset of product shipment before field deployment data is available, these estimates improve during the lifetime of
the product in the field.
It is expected that the expenditure with regard to warranties will be incurred within three years of the balance sheet date.
19 SHARE CAPITAL
31 December 2007 2 June 2007
Number £000 Number £000
Authorised
Ordinary shares of 5p each 300,000,000 15,000 300,000,000 15,000
Allotted, called up and fully paid
Ordinary shares of 5p each 233,682,856 11,684 233,189,995 11,659
During the year, the Company allotted Ordinary shares as follows: Nominal
value Consideration
Number £000 £000
Employee share option scheme (32 pence)    3,474 - 1
Employee share option scheme  (56 pence)  104,296 5 58
Employee share option scheme (48 pence)  93,064 5 44
Employee share option scheme (59.5 pence)       554 - -
Employee share option scheme (49 pence)    1,252 - 1
Employee share option scheme (46 pence)       260 - -
Employee share option scheme (42.5 pence) 35,000 2 15
Employee share option scheme (15.75 pence) 254,961 13 40
492,861 25 159
The Company has granted options which are subsisting (including directors’ options) in respect of the following presently unissued ordinary
shares of 5p each.
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d Notes continued
19 SHARE CAPITAL continued
Number of ordinary Price per share
shares subject to option Exercise period pence
31,021 1 October 2007 to 31 March 2008 48.0
318,917 1 April 2008 to 30 September 2008 32.0
330,742 1 October 2008 to 31 March 2009 59.5
373,592 1 April 2009 to 30 September 2009 49.0
967,506 1 December 2009 to 30 May 2010 46.0
672,010 1 October 2010 to 31 March 2011 82.0
225,000 7 July 2002 to 6 July 2009 200.0
307,480 11 January 2003 to 10 January 2010 599.5
82,437 17 July 2003 to 16 July 2010 857.5
21,927 29 January 2004 to 28 January 2011 610.0
216,000 24 July 2005 to 23 July 2011 375.0
160,623 24 July 2004 to 23 July 2011 375.0
22,463 18 January 2005 to 17 January 2012 357.0
241,250 22 October 2003 to 21 October 2012 15.75
20,000 22 October 2005 to 21 October 2012 15.75
100,000 22 October 2006 to 21 October 2012 15.75
70,000 26 August 2004 to 25 August 2013 51.0
100,000 3 February 2005 to 2 February 2014 75.0
25,000 17 August 2008 to 16 August 2014 51.0
115,000 17 August 2005 to 16 August 2014 51.0
62,500 7 October 2007 to 6 October 2014 48.0
87,500 7 October 2005 to 6 October 2014 48.0
250,000 23 January 2009 to 22 January 2016 63.25
425,000 2 August 2008 to 1 August 2015 74.25
2,891,513 2 October 2009 to 1 October 2016 58.75
75,000 28 November 2009 to 27 November 2016 61.25
50,000 19 February 2010 to 18 February 2017 69.5
75,000 16 March 2010 to 15 March 2017 66.5
75,000 26 April 2010 to 25 April 2017 73.25
226,663 3 March 2008 to 30 May 2008 58.0
628,746 1 November 2010 to 31 October 2017 97.75
9,247,890
The Pace Micro Technology plc Employee Benefits Trust has granted options over existing shares  to satisfy certain options. Details of these
additional options are shown in note 21.
20 SHARE PREMIUM ACCOUNT
7 months Year
ended ended
31 Dec 2007 2 June 2007
Group and Company £000 £000
At begining of period 36,751 36,246
Premium on allotments 134 505
At end of period 36,885 36,751
The shares allotted during the period are listed in note 19.
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d Notes continued
21 RETAINED EARNINGS
7 months Year
ended ended
31 Dec 2007 2 June 2007
Group £000 £000
At begining of period 2,300 (5,595)
Retained profit for the period 14,415 6,766
Deferred tax adjustment 606 –
Employee share incentive charges 570 684
Settlement of share options from employee share trusts 717 445
At end of period 18,608 2,300
7 months Year
ended ended
31 Dec 2007 2 June 2007
Company £000 £000
At 2 June 2007 (2,401) (10,240)
Retained profit for the period 14,472 6,710
Deferred tax adjustment 606 –
Employee share incentive charges 570 684
Settlement of share options from employee share trusts 717 445
At 31 December 2007 13,964 (2,401)
Own shares held
The following amounts have been deducted from the retained reserves of the Group and Company.
At 31 December 2007 the Pace Micro Technology plc Employee Benefits held 4,535,955 (2 June 2007: 5,954,678) shares in the Company which
cost £18,996,738  (2 June 2007: £20,066,470). These shares are held to satisfy options granted to employees.
The amounts arising on settlement of share options from the employee share trusts represents cash receipts from the exercise of relevant
share options.
The Pace Micro Technology plc Employee Benefits Trust has granted options to employees (including directors’ options) over ordinary shares
of 5p each as follows:
Number of ordinary Price per share
shares subject to option Exercise period pence
375,000 24 September 2001 to 23 September 2008 64.0
360,919 26 January 2002 to 25 January 2009 84.5
202,900 7 July 2002 to 6 July 2009 200.0
25,090 17 July 2001 to 16 July 2010 857.5
114,903 29 January 2002 to 28 January 2011 610.0
123,245 21 January 2004 to 20 January 2013 20.0
622,022 26 August 2004 to 25 August 2013 51.0
426,250 17 August 2005 to 16 August 2014 51.0
775,000 2 August 2008 to 16 August 2015 74.25
600,000 18 April 2009 to 17 April 2016 63.5
3,059,704 2 October 2009 to 1 October 2016 58.75
546,075 3 April 2010 to 2 April 2017 73.25
7,231,108
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d Notes continued
22 PROFIT FOR THE PERIOD
The parent Company has taken advantage of Section 230 of the Companies Act 1985 and has not included its own income statement in these
financial statements. The Group profit includes a parent Company profit after tax of £14,472,000 (year ended 2 June 2007: profit after tax of
£6,710,000).
23 CAPITAL COMMITMENTS
Group and Company
31 Dec 2007 2 June 2007
£000 £000
Contracted but not provided for 1,058 996
24 EMPLOYEE BENEFITS
Pension plans 
The Group contributes to several defined contribution Group Personal Pension Plans, which all executive directors and employees are entitled
to join. The total expenses relating to these plans in the current period was £580,000 (year ended 2 June 2007: £950,000). At 31 December 2007
contributions of £Nil (2 June 2007: £Nil) were outstanding.
Share based payments 
Details of the Company’s share option schemes are included in notes 19 and 21 and the Remuneration Report. The number and weighted
average exercise price of share options is as follows:
Weighted Weighted
Average Number Average Number
Exercise of Exercise Of
Price Options Price Options
31 Dec 31 Dec 2 June 2 June
2007 2007 2007 2007
Outstanding at the beginning of the period 91p 18,492,508 134p 16,383,227
Granted during the period 89p 1,335,787 59p 9,029,834
Forfeited during the period 140p (1,454,189) 241p (3,852,208)
Exercised during the period 45p (1,895,108) 36p (3,068,345)
Outstanding at the end of the period 91.7p 16,478,998 91p 18,492,508
Exercisable at the end of the period 168p 3,836,317 153p 5,545,647
Outstanding options were as follows
Weighted
average Weighted
remaining average
Number contractual exercise
Range of exercise prices (pence) at 31 Dec 2007 life months price
14.5p to 20p 484,495 58 17p
32p to 49.5p 1,841,036 28 44p
51p to 75p 11,112,969 92 61p
78p to 97.75p 1,661,675 95 89p
190p to 200p 427,900 18 200p
357p to 375p 399,086 43 374p
599.5p to 610p 444,310 28 603p
857.5p to 945p 107,527 30 858p
16,478,998 79
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d Notes continued
24 EMPLOYEE BENEFITS continued
The weighted average exercise price of options granted in the period was 89p (year ended 31 December 2007: 59p).
The weighted average fair value at the measurement date of options granted in the period was 37p (year ended 31 December 2007: 22p).
The weighted average exercise price at the date of exercise for options exercised in the period was 45p (year ended 31 December 2007: 36p).
The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted.
The estimate of the fair value of the services received is measured based on a Black-Scholes model. The following table gives the
assumptions applied to the options granted in the respective periods shown. Expectations of early exercise are incorporated into the model,
where appropriate.
31 Dec 2 June
2007 2007
Average share price (pence) 97.0 60.0
Weighted average exercise price (pence) 91.7 91.0
Expected volatility (%) 50% 60%
Option life (years) 10 10
Dividend yield (%) 1.4% 1.4%
Risk free interest rate (%) 5.0% 5.0%
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of the share options),
adjusted for any expected changes to future volatility due to publicly available information.
The charge for share based payments in respect of share options is £ 570,000  (year ended 31 December 2007: £684,000) which is
comprised entirely of equity settled transactions. 
25 LEASING COMMITMENTS
Group Company
31 Dec 2007 2 June 2007 31 Dec 2007 2 June 2007
£000 £000 £000 £000
Land and buildings
Within one year 1,097 102 812 72
Between two and five years 3,306 1,039 2,774 94
In five years or more 2,712 5,688 2,712 5,688
7,115 6,829 6,298 5,854
Other
Within one year 4 10 4 10
Between two and five years - 42 - 42
4 52 4 52
7,119 6,881 6,302 5,906
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d Notes continued
26 CONDITIONAL ACQUISITION
The Company has entered into a conditional agreement to acquire the set-top box and connectivity solutions business (“the Philips STB and CS
Business”) of Royal Philips Electronics (“Philips”) (the “Acquisition”). The Philips STB and CS Business employs approximately 335 staff
predominantly based in France and is a leading designer and supplier of a range of digital TV products including satellite, cable, terrestrial and
IPTV set-top box products. 
The proposed transaction values the business at up to € 95.0 million (£68.0m). The consideration for the Acquisition will be satisfied by the
issue of 68.0m new Pace shares to Philips at completion and up to a further 1.9m new Pace shares on or shortly after completion together
with a further € 5m (£3.6m) in cash over 3 years from completion. At completion, Philips will hold approximately 22.5% per cent. of the
enlarged share capital of Pace, of which 17% is subject to a one year lock-in from the date of completion. There is also a cash adjustment
mechanism based on the net indebtedness and working capital position of the Philips STB and CS Business at completion. The agreement is
conditional upon, inter alia, the conclusion of the consultation procedure by the Philips STB and CS Business with its Works Council in relation
to the Acquisition, certain anti-trust approvals being obtained and Pace shareholders approving the Acquisition.
27  CONTINGENCIES
A writ has been issued against the Company by a former customer relating to the supply of set-top boxes in 2000/2001. The amount claimed
is circa $7.2m. The Directors believe that they have good defences to the claim and that, in the absence of any liability, no provision has been
made. In addition on 15 July 2007 Pace filed a counter claim for circa $10m against this former customer and a related third party.
28 RELATED PARTIES
Identity of related parties 
The Group has a related party relationship with its subsidiaries and with its Directors. 
Transactions with subsidiaries 
The main transaction between the Company and its subsidiaries consist mainly of payments by the Company for engineering and
administrative support services provided by Pace Americas Limited, Pace Europe SAS and Pace Micro Technology (India) Private Ltd . Total
recharges of £6.3m were made in the year. 
The amounts due to and from these subsidiaries are shown within notes 14 and 15. 
Transactions with key management personnel 
Key management of the Group is through the Directors of the Company. The main transactions with these individuals are disclosed in the
Remuneration Report on pages 21 to 26. 
Of the share option charge of £570,000 made in the period, 30% relates to options granted to the executive directors. 
29 POST BALANCE SHEET EVENTS 
There are no significant or disclosable post balance sheet events except as referred to in note 12 and note 26 to the financial statements.
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d Directors, Secretary and Advisers
DIRECTORS COMPANY SECRETARY
all of Victoria Road  Saltaire  BD18 3LF  England Anthony John Dixon
Robert Michael McTighe Non-executive Chairman REGISTERED AND HEAD OFFICE
Neil Gaydon Chief Executive Officer Victoria Road
Stuart Andrew Hall Chief Financial Officer Saltaire
David Alyn McKinney Chief Operating Officer BD18 3LF
Patricia Chapman-Pincher Non-executive Director England
Robert Arthur Fleming Non-executive Director Registered Number 1672847
Marten Charles Fraser Non-executive Director
FINANCIAL ADVISERS AUDITORS REGISTRARS STOCKBROKERS
NM Rothschild & Sons Ltd KPMG Audit Plc Capita Registrars Ltd Hoare Govett Limited
1 Park Row 1 The Embankment Northern House 250 Bishopsgate
Leeds Neville Street Woodsome Park London
LS1 5NR Leeds Fenay Bridge EC2M 4AA
LS1 4DW Huddersfield
HD8 0LA
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d Five Year Record and Shareholder Information
7 months Year Year Year Year
ended ended ended ended ended
31 Dec 2 June 3 June 4 June 30 May
2007 2007 2006 2005 2004
£000 £000 £000 £000 £000
Revenue 249,875 386,513 178,095 253,326 239,949
Profit/(loss) before tax** 15,346 4,925 (27,450) 8,963 3,880
Profit/(loss) before exceptional items and tax 15,346 6,133 (15,562) 9,108 5,380
Profit/(loss) after tax 14,785 6,766 (28,784) 13,680 8,066
Diluted EPS/(LPS) 6.1p 3.0p (13.0)p 6.2p 3.6p
Diluted EPS/(LPS) before exceptional items 
and goodwill amortisation* 6.1p 3.0p (7.6)p 6.1p 4.5p
Total equity attributable to equity holders of  
the parent excluding goodwill*/** 58,166 41,501 33,031 60,316 45,702
* The comparatives for financial year 2004 have been restated to reflect the impact of UITF38 Accounting for ESOP Trusts.
** The comparatives for 2005 (and net assets for 2004) are stated under Adopted International Financial Reporting Standards; all other
figures for 2004 are stated on a UK GAAP basis.
SHAREHOLDER INFORMATION 
ANNUAL GENERAL MEETING 
The Company’s Annual General Meeting will be held at 12 noon on 23rd April 2008, at the Company’s head office, Victoria Road, Saltaire, West
Yorkshire BD18 3LF. 
CAPITA REGISTRARS  
Enquiries regarding shareholdings, change of address or other particulars should be directed in the first instance to the Company’s Registrars,
Capita Registrars, Northern House, Woodsome Park, Fenay Bridge, Huddersfield, HD8 0LA, or by telephone on 0871 664 0300 (calls cost 10p a
minute plus network extras). They also provide a range of online shareholder information services at www.capitashareportal.com where
shareholders can check their holdings and find practical help on transferring shares or updating their details. 
MULTIPLE ACCOUNTS ON THE SHAREHOLDER REGISTER 
If you have received two or more copies of this document, this means that there is more than one account in your name on the shareholder
register. This may be caused by either your name or address appearing on each account in a slightly different way. For security reasons, the
Registrars will not amalgamate the accounts without your consent. If you would like any multiple accounts combined into one account, please
write to Capita Registrars at the address given above. 
UNSOLICITED MAIL 
The Company is obliged by law to make its share register available upon request to the public and to other organisations, which may use it as
a mailing list, resulting in shareholders receiving unsolicited mail. Shareholders wishing to limit the receipt of such mail should write to the
Mailing Preference Service, DMA House, 70 Margaret Street, London W1W 8SS, or call 020 7291 3310 for an application form or visit www.mps-
online.org.uk 
PACE WEBSITE 
Shareholders are encouraged to visit our website, www.pacemicro.com, which has a wealth of information about the Company.
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Report & Accounts
2007 (Jun-Dec)
Operating Highlights
m Exceptional performance during the period, in line with increased expectations
m Solid underlying business trends, platform for growth now embedded
m Good balance of business across the Group and broadened product range
m Volume shipments of 2.4m set-top boxes (year ended 2 June 2007: 3.9m)
Financial Highlights
m Revenues of £249.9m (year ended 2 June 2007: £386.5m)
m Gross margin improvement to 20.3% (year ended 2 June 2007: 15.9%)
m Profit before tax £15.4m (year ended 2 June 2007: £4.9m)
m Earnings per share of 6.1p (year ended 2 June 2007: 3.0p)
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