14771 14072008 proof 7
phoenix it group plc
technology house hunsbury hill avenue
northampton nn4 8qs
t 44 0 1604 769000
f 44 0 1604 764323
wwwphoenixitgroupcom
phoenix it group plc
annual report and accounts
for the year ended 31 march 2008
intelligent infrastructure
wwwphoenixitgroupcom
phoenix it group plc annual report and accounts for the year ended 31 march 2008
wwwphoenixitgroupcom
stock exchange code pnx
intelligent infrastructure
14771phoenixcover 6pplayout 2  16708  1157  page 1 14771 14072008 proof 7
phoenix it group plc
technology house hunsbury hill avenue
northampton nn4 8qs
t 44 0 1604 769000
f 44 0 1604 764323
wwwphoenixitgroupcom
phoenix it group plc
annual report and accounts
for the year ended 31 march 2008
intelligent infrastructure
wwwphoenixitgroupcom
phoenix it group plc annual report and accounts for the year ended 31 march 2008
wwwphoenixitgroupcom
stock exchange code pnx
intelligent infrastructure
14771phoenixcover 6pplayout 2  16708  1157  page 1 14771 14072008 proof 7
phoenix it group companies
provide managed it infrastructure
support services including systems
management communications
remote telephone support
hightouch field services project
and consultancy services
business continuity and business
availability services
financial highlights and operational highlights 01
overview of operations 02
chairman’s statement 10
chief executive‘s review 11
financial review 14
board of directors 18
directors’ report 20
corporate governance 23
corporate social responsibility 26
audit committee report 27
directors’ remuneration report 28
independent auditors’ report on the group financial statements 31
consolidated statement of income 32
consolidated statement of recognised income and expenses 33
consolidated balance sheet 34
consolidated cash flow statement 35
notes to the consolidated financial statements 36
independent auditors’ report on the company financial statements 68
company balance sheet 69
notes to the company financial statements 70
five year summary 75
notice of annual general meeting 76
advisers and financial calendar inside back cover
all of our businesses have longterm
revenue visibility a good cash flow
and operate in market niches with
excellent growth prospects often
driven by regulatory change
contents
revenues
821
to £2308m
2007 £1267m
profit from
operations
2
454
to £330m
2007 £227m
free cash flow
262
to £297m
2007 £236m
1
profit before tax
3
202
to £256m
2007 £213m
4
profit from
operations
131
to £234m
2007 £207m
profit before tax
£155m
2007 £193m
diluted earnings
per share
146p
2007 222p
diluted earnings
per share
5
241p
2007 244p
highlights
financial highlights
phoenix it group plc
registered in england 3476115
registered office
technology house
hunsbury hill avenue
northampton
nn4 8qs
financial advisers  stockbrokers
ubs limited
1 finsbury avenue
london
ec2m 2pp
auditor
deloitte  touche llp
hill house
1 little new street
london
ec4a 3tr
registrars
equiniti
aspect house
spencer road
lancing
west sussex
bn99 6da
principal bankers
royal bank of scotland
152 silbury boulevard
milton keynes
mk9 1lt
solicitors
eversheds llp
115 colmore row
birmingham
b3 3al
financial public relations
financial dynamics
holborn gate
26 southampton buildings
london
wc2a 1pb
remuneration consultants
new bridge street consultants llp
20 little britain
london
ec1a 7dh
advisers
annual general meeting 14 august 2008
ex dividend date 10 september 2008
record date for dividend 12 september 2008
dividend payment date 1 october 2008
this document has been produced on coated paper using 50 recovered pulp waste and 50 elemental chlorinefree pulp from managed and
certified sustainable forests
financial calendar
1 see page 16
2 before nonrecurring items and amortisation of acquired
intangibles
3 nonrecurring items and amortisation of acquired
intangibles
4 profit before tax £220m 2007 £193m plus amortisation
of acquired intangibles £36m 2007 £20m
5 adjusted for nonrecurring items and amortisation of
acquired intangibles
14771phoenixcover 6pplayout 2  16708  1157  page 2 14771 14072008 proof 7
phoenix it group companies
provide managed it infrastructure
support services including systems
management communications
remote telephone support
hightouch field services project
and consultancy services
business continuity and business
availability services
financial highlights and operational highlights 01
overview of operations 02
chairman’s statement 10
chief executive‘s review 11
financial review 14
board of directors 18
directors’ report 20
corporate governance 23
corporate social responsibility 26
audit committee report 27
directors’ remuneration report 28
independent auditors’ report on the group financial statements 31
consolidated statement of income 32
consolidated statement of recognised income and expenses 33
consolidated balance sheet 34
consolidated cash flow statement 35
notes to the consolidated financial statements 36
independent auditors’ report on the company financial statements 68
company balance sheet 69
notes to the company financial statements 70
five year summary 75
notice of annual general meeting 76
advisers and financial calendar inside back cover
all of our businesses have longterm
revenue visibility a good cash flow
and operate in market niches with
excellent growth prospects often
driven by regulatory change
contents
revenues
821
to £2308m
2007 £1267m
profit from
operations
2
454
to £330m
2007 £227m
free cash flow
262
to £297m
2007 £236m
1
profit before tax
3
202
to £256m
2007 £213m
4
profit from
operations
131
to £234m
2007 £207m
profit before tax
£155m
2007 £193m
diluted earnings
per share
146p
2007 222p
diluted earnings
per share
5
241p
2007 244p
highlights
financial highlights
phoenix it group plc
registered in england 3476115
registered office
technology house
hunsbury hill avenue
northampton
nn4 8qs
financial advisers  stockbrokers
ubs limited
1 finsbury avenue
london
ec2m 2pp
auditor
deloitte  touche llp
hill house
1 little new street
london
ec4a 3tr
registrars
equiniti
aspect house
spencer road
lancing
west sussex
bn99 6da
principal bankers
royal bank of scotland
152 silbury boulevard
milton keynes
mk9 1lt
solicitors
eversheds llp
115 colmore row
birmingham
b3 3al
financial public relations
financial dynamics
holborn gate
26 southampton buildings
london
wc2a 1pb
remuneration consultants
new bridge street consultants llp
20 little britain
london
ec1a 7dh
advisers
annual general meeting 14 august 2008
ex dividend date 10 september 2008
record date for dividend 12 september 2008
dividend payment date 1 october 2008
this document has been produced on coated paper using 50 recovered pulp waste and 50 elemental chlorinefree pulp from managed and
certified sustainable forests
financial calendar
1 see page 16
2 before nonrecurring items and amortisation of acquired
intangibles
3 nonrecurring items and amortisation of acquired
intangibles
4 profit before tax £220m 2007 £193m plus amortisation
of acquired intangibles £36m 2007 £20m
5 adjusted for nonrecurring items and amortisation of
acquired intangibles
14771phoenixcover 6pplayout 2  16708  1157  page 2 14771 14072008 proof 7
01
250
200
150
100
50
0
cash generated by
operations before
nonrecurring cash
flows
£495m
2007 £310m
representing 168 of profit
from operations before non
recurring items 2007 150
1
order book
626
to £3115m
2007 £1915m
proposed final
dividend per share
150
to 365p
interim dividend of 183p
giving a total dividend for the
year to 31 march 2008 of
548p per share 2007 4764p
operational highlights
•
phoenix it services
•
icm continuous business
•
servo
uk gaap 2004
ifrs 2008
ifrs 2007
ifrs 2006
ifrs 2005
uk gaap 2005
phoenix it group growth
£’000
revenue
profit from operations
before goodwill
amortisation amortisation
of acqired intangibles and
nonrecurring cost

acquired control of icm computer group plc ‘icm’ on 29 may 2007

the integration programme with existing businesses is well under way
progressing on schedule and due to complete autumn 2008

new structure with three substantial customer facing divisions
provides scalable business and opportunities to operate more
efficiently and improve group margins
— partner phoenix it services
— business continuity icm continuous business
— midmarket servo

integration synergy savings of £17m achieved in the current year and
anticipate total synergies of £55m in the year to 31 march 2009

significant new contract wins annual contract values increased
high conversion and renewal rates in all divisions

buoyant pipeline of new sales opportunities in all our markets
14771phoenixlayout 4  17708  1316  page 1 our new business model
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
02
phoenix it group plc
147 14771 14072008 proof 7
following the acquisition of icm we conducted a strategic review with input from the
management of all group companies this process not only enabled us to engage with
and retain the best talent residing within the enlarged group it was also motivating
accelerated positive team building and allowed us to adopt ‘best practice’ in our
business model going forward
partner
business continuity
business continuity
managed availability
managed availability
established businesses — pre2008 new group structure
partner
business continuity
midmarket
14771phoenixlayout 4  15708  1115  page 2 03
•
phoenix it services
•
icm continuous business
•
servo
14771 14072008 proof 7
 split of turnover for each division
45 partner
18 business continuity
37 midmarket
247
service support
800
skilled engineers
phoenix divisions
comprehensive national coverage
1 phoenix it group headquarters — northampton
2 phoenix it services headquarters — northampton
3 phoenix it services — brackmills northampton
4 phoenix it services — high wycombe
5 servo headquarters — birstall leeds 
6 servo — new broad street london
7 servo — darley dale matlock
8 servo — holmewood chesterfield
9 icm continuous business headquarters — aston birmingham
10 icm continuous business — scotland central hamilton
1 1 icm continuous business — north west manchester
12 icm continuous business — leeds 
13 icm continuous business — west yorkshire wakefield
14 icm continuous business — east midlands nottingham
15 icm continuous business — east anglia newmarket
16 icm continuous business — northampton
17 icm continuous business — london essex romford
18 icm continuous business — london north west uxbridge
19 icm continuous business — london city north old street
20 icm continuous business — london city wapping
21 icm continuous business — london kent sevenoaks
22 icm continuous business — london south west farnborough
23 icm continuous business — south west bristol
24 operations shared services — brackmills northampton
25 operations shared services — high wycombe
26 operations shared services — birstall leeds 
27 corporate services — northampton 
28 corporate services — darley dale matlock
1 2 3 16 24 27
9 15
10
23
5 12 26
7 28
6 17 18 19 20 21 22
8
11
14
13
4 25
14771phoenixlayout 4  15708  1115  page 3 our services include
desktop services — from initial site survey and deployment of new
technology to ongoing management and environmentally
compliant disposal
service desk — our call handling system provides vital help and
advice from technical experts and is focused on delivering “first
call fix” incident resolution and a comprehensive cost effective
and flexible support service
network services — supporting a diverse range of lanwan data
voice and video technologies our success is based on high levels of
technical skill solid manufacturer relationships and exceptional
parts and logistics infrastructure
remote management — a complete offsite monitoring
maintenance and administration solution for servers networks and
desktops that enables us to deliver a comprehensive and flexible
service with significant cost benefits
project services — provides consultancy and technical support for
networking systems and software projects with experience and
expertise in managing and executing a diverse range of complex
high value and often high profile projects on time within budget to
the agreed quality and with the minimum of disruption
enterprise server services — a comprehensive costeffective and
bespoke service offering management maintenance and support
to enterprise level servers including hp9000 and superdomes
phoenix is certified to bsen iso90012000 and is one of only a
handful of organisations in the world who are registered to the new
bs150002002 it service management standard
wwwphoenixitgroupcom
phoenix it services has a clear market
position of providing it support through a
‘partnership’ channel in which we engage as a
subcontractor managed service provider or
outsourcing partner
phoenix currently provides managed it
services to 70 of the companies in the ftse
100 through our partners
after nearly 30 years of operating in this
dynamic field phoenix people have
accumulated expertise and knowledge which is
devoted to building longterm relationships and
getting the job done — on time and on budget —
for their customers
our processes and systems are ultraflexible
and designed to work exclusively with our
partners to ensure a seamless integration with
their business
divisional contribution to group turnover
45
our businesses
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
04
phoenix it group plc
1477 14771 14072008 proof 7
14771phoenixlayout 4  15708  1115  page 4 phoenix it services and sun have developed a strong
partnership which delivers significant value to both parties by
working together at a strategic level phoenix is able to deliver
service tailored to support sun’s overall go to market
propositions at an operational level through the sun business
unit phoenix provides invaluable insight into approaches to
maximising efficiencies from the service delivery model which
supports sun in driving incremental value to their customers
service first and foremost
consistently excellent service delivery has helped to cement
the partnership and underpins sun’s decision to continue to
work with phoenix in their managed services customer base 
contract renewal
in october 2007 phoenix it services successfully renewed
the contract to deliver a fully managed service solution to
sun for a further 3 years the contract comprises a
combination of 100 onsite engineers and call despatch
functions in addition phoenix continues to support sun in
a number of key multi vendor support contracts
developing “partnership”
phoenix provides  key elements of sun’s managed services
through a dedicated sun business unit enabling a bespoke
operational model through the continued growth in
phoenix it group both sun and phoenix have extended
the service streams they collaborate on including
providing managed hosting services to sun as part of a
major educational programme
case study
sun microsystems
05
•
phoenix it services
•
icm continuous business
•
servo 
14771 14072008 proof 7
14771phoenixlayout 4  15708  1115  page 5 our ‘flagship’ farnborough facility began operating in 2007 with
stateoftheart technology and provides 1450 office and dealing
room recovery positions and a suite of services including a self
contained datacentre and contingency hosting
farnborough augments our established recovery centres in 
the city romford sevenoaks uxbridge and wapping to meet the
strong demand driven by regulatory forces from 
london’s financial institutions for outoftown backup and
contingency facilities
our hq in aston birmingham is probably the most 
advanced facility in the midlands offering unrivalled access to
business continuity in one of the uk’s most thriving business
growth areas
upgrades and ongoing site maintenance to all other recovery
centres has ensured that they are always of the highest quality to
meet the diverse needs of our 2000 customers
flexibility adaptability and delivering superior customer service are
our core beliefs practised by everyone in our 200strong dedicated
workforce
our customers advise us and assist us in developing 
future growth strategies through their involvement in our regular
customer surveys and attendance at user group discussion
meetings 
wwwicmcomputercouk
icm is the new force in business continuity
15 strategically positioned regional centres
supported by 11 mobile units now provide
genuine national coverage with more than
7500 recovery positions
our businesses
continued
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
06
phoenix it group plc
1477 14771 14072008 proof 7
divisional contribution to group turnover
18
14771phoenixlayout 4  15708  1115  page 6 throughout the test icm provided a seamless solution stuart
dunsmore “i can safely say that my expectations were
surpassed the staff at icm were outstanding — their
professionalism and customer care were exemplary from start
to finish and the test ran like clockwork the whole experience
really reinforced our impressions here at commerzbank that
should we have an invocation we are in more than capable
hands”
the facilities at icm’s disaster recovery centres have also
impressed commerzbank with further evidence of icm’s
knowledge of client needs and attention to detail apparent in the
quality of sites icm offers  stuart dunsmore “for commerzbank
icm’s business continuity sites epitomise exactly what we would
need in the event of an invocation the layouts resources
locations and general look and feel were perfect for us  
the future together
the two companies have now worked successfully together for 7
months and the relationship saw commerzbank recently winning
the crisis strategy of the year award at the 2008 cir business
continuity industry awards for stuart his first impression of icm
has been borne out
the need for business continuity provision has never been more
acute in the financial services sector  for commerzbank icm has
met that need head on providing the highest level of provision to
ensure the bank has exactly the level and type of cover it needs
regular testing and close liaison ensure changing needs are met
and that both the bank and icm know exactly how any invocation
would work for stuart dunsmore the benefits of this relationship
are clear — “knowing that we are in expert hands gives us the
reassurance that we are looking for from our business 
continuity partner ”
case study
commerzbank
security for financial services
business continuity provision is essential to any business but in
the financial services industry it’s in a league of its own with
international money markets moving at the speed of light and
billions of pounds being traded every second the threat to both
the profits and reputation of a bank should it be unable to
communicate to the market is critical 
commerzbank is the second largest bank in germany the bank
has two offices in the city of london with the majority of staff
housed in one densely inhabited building over 9 floors posing a
definite logistical consideration for the business continuity team
when considering a business continuity partner  stuart
dunsmore head of business continuity at commerzbank
consulted a number of potential providers the breadth and
depth of icm’s offering its experience and its approach to
customer service all ticked important boxes for him “i needed a
provider who could offer firstclass service and provide us with
110 dedication to our continuity needs” commented stuart
“icm offered the outstanding levels of provision and the
essential human touch that we were looking for ”
words into practice
when commerzbank undertook its first business continuity
test the quality of service icm offered became apparent  “for a
financial services firm these tests are crucial” commented
stuart “we are obligated by bodies such as the financial
services authority to ensure we have watertight plans in place
to minimise any business interruption from an incident —
whether it’s a power outage or a terrorist attack — so the
pressure was on icm to deliver ”  
07
•
phoenix it services
•
icm continuous business
•
servo 
14771 14072008 proof 7
14771phoenixlayout 4  15708  1115  page 7 1477
our businesses
continued
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
08
phoenix it group plc
14771 14072008 proof 7
servo’s passion to deliver ‘benefits’ to a customer’s business provides
a significant competitive differentiator in a marketplace in which
competitors seem to focus on offering product and service ‘features’
past performance in delivering business benefits to customers has
helped establish servo’s market reputation as a ‘specialist’ provider
of it infrastructure services and has enhanced customer loyalty and
relationship longevity  
servo’s primary target is that midmarket customer  operating under
constraints to stay lean who does not have the staff numbers or
expertise to provide informed decisions on the management and
development of it support
servo adopts a consultative approach to the marketplace enabling
us to engage in depth with our primary target customer group whilst
secondary targets include larger enterprise customers who wish to
augment their own it knowledge and skills with servo’s consultancy
services and those wanting full management control of their it
resource and only want to take products and services of their choice
from servo’s extensive and competitively priced ‘menu’
servo maintains accreditations from all major it software hardware
and network majors and prides itself on keeping all technical
engineering sales and consultancy staff at the leading edge of
industry developments
integration of the two businesses enhances servo’s competitiveness
by providing greater scale operating efficiencies geographical
coverage and sales knowledge to leverage future opportunities
within vertical channels of expertise eg local government retail
education professional services financial services  
wwwservocouk
the enlarged servo company is well positioned
to provide the uk midmarket with the breadth
and depth of industry knowledge technical
skills and services to design deliver and
manage a customer’s it infrastructure
although offering a comprehensive range of it
infrastructure products and services above all
else servo strives to work with customers to
deliver tangible benefits by focusing and
aligning their it resources to drive revenue
improve efficiencies reduce costs manage
business information and manage risk
divisional contribution to group turnover
37
14771phoenixlayout 4  15708  1115  page 8 reliability flexibility and a 
comprehensive service offering
in 2004 ramsay carried out a review of their service provision
and whilst they had embarked on a paneuropean outsourcing
agreement with a company based in sweden ramsay health
care uk ultimately wanted to keep their service provision
requirements within the uk
the following year  due to the ever increasing requirements of
medical care in the uk hospital infrastructure a growing user
database and the need for support in the management of their
patient administration systems ramsay entered into
discussions to outsource their user helpdesk and the hosting
and management of their datacentre
ramsay needed a provider who could be flexible in its service
delivery and provide a ‘one stop shop’ for all their service
requirements in this new phase of their it development
all ramsay’s project infrastructure requirements were fulfilled
by servo with a nationwide network of service centres
datacentres and engineering resources and with a proven track
record in service delivery of which ramsay already had
experience the choice was easy to make
mutual benefits from lasting relationships
servo now provides datacentre hosting and managed services
user helpdesk and oncall breakfix technical consultancy and
deskside support to the entire network of ramsay health care
uk’s hospitals as well as its head office and continues to be
ramsay’s chosen hardware maintenance service provider 
ramsay has a strong position in the uk market for public health
care with considerable potential for further expansion and
servo’s solutions have the flexibility to adapt with ramsay’s
business needs as they grow and change
case study
ramsay health care uk
servicing private health care
ramsay health care uk is a leading provider of independent
health care with over 30 sites including acute hospitals private
patients units independent sector treatment centres
neurological rehabilitation centres and mobile imaging services
ramsay provides a comprehensive range of specialised and
efficient clinical specialties from orthopaedics and general
surgery to cardiac surgery and oncology
recognised by all major medical insurers ramsay offers fast
convenient effective and high quality treatment for all patients
whether medically insured selfpay or from the increasing
number referred by the nhs
servo  has a longstanding relationship with ramsay health
care uk as their hardware maintenance service provider 
having delivered support for intel servers desktop and legacy
systems since the company’s inception in the uk in 1999
09
•
phoenix it services
•
icm continuous business
•
servo 
14771 14072008 proof 7
14771phoenixlayout 4  15708  1115  page 9 1477
chairman’s statement
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
10
phoenix it group plc
14771 14072008 proof 7
review of the year
i am pleased to report that phoenix it group plc has delivered good
results in 2008 against a backdrop of significant change during the
year  following the group’s largest acquisition to date that of icm
computer group plc in may 2007  an integration review and
planning exercise was undertaken and the resulting integration
programme is nearing completion as a result the group is well
placed in each of the markets that it serves and enters the new
financial year in a strong position
results
group revenues increased by 821 to £2308m 2007 £1267m
and operating profit before nonrecurring items and amortisation
of acquired intangibles increased by 454 to £330m 2007
£227m profit from operations after amortisation of acquired
intangibles increased by 131 to £234m 2007 £207m the
group has continued to be highly cash generative during the year
with the free cash flow increasing by 262 to £297m 2007
£236m
1
dividend
the board recommends a proposed final dividend of 365p 2007
second interim dividend of 317 4p which if approved at the annual
general meeting will be paid on 1 october 2008 combined with
the interim dividend of 183p paid in january 2008 this makes a
total dividend per share of 548p 2007 4764p an increase of 15 
board changes 
during the year we announced that nick robinson stepped down as
chief executive officer and became nonexecutive deputy
chairman from 1 january 2008 nick joined the business in its
earliest years and has been instrumental in its successful growth
and development he remains a substantial shareholder and i am
very glad that the group will continue to benefit from his
involvement on the board
i became executive chairman on 22 november 2007 after serving
as nonexecutive chairman since 21 october 2004 it is currently
expected that i will remain in this role until 31 december 2008
when i will revert to nonexecutive chairman
jeremy stafford who has served as chief operating officer since
24 april 2007  became chief executive from 31 march 2008
employees
we are fortunate to have a strong team of talented and
hardworking people in the group who have delivered the successful
performance achieved in the year and i thank them all on behalf of
the board and the shareholders i am also pleased to formally
welcome the management and staff of icm to phoenix it group
annual general meeting
the annual general meeting will be held at the group’s registered
office technology house hunsbury hill avenue northampton on
thursday 14 august at 1030 am 
summary
the integration phase is nearing completion and the group is
confident that the new structure will not only deliver the
anticipated synergy cost savings in the next financial year but also
provide a platform for growth for each of the business units
peter bertram
chairman
14 may 2008
1
see page 16
“the group is well placed in each 
of the markets that it serves and
enters the new financial year in a 
strong position”
peter bertram chairman
14771phoenixlayout 4  15708  1115  page 10 11
•
phoenix it services
•
icm continuous business
•
servo 
14771 14072008 proof 7
overview
the past year has seen phoenix it group move to a new level
following the acquisition of icm at the end of may 2007 and the
acquisition of servo which completed in november 2006 during
the year  we began the process of integrating these recently
acquired companies together with other group companies into
larger  more competitive business units focused on discrete market
sectors we have also worked on introducing a new operating
model that leverages the benefits of scale of the enlarged group
this integration process is currently being implemented and will be
materially complete by the autumn of 2008 
we have also had a successful year financially for the year ended
31 march 2008 group profit before tax before nonrecurring items
and amortisation of acquired intangibles grew by 202 to
£256m
1
2007 £213m on group revenues of £2308m 2007
£1267m an increase of 821 
success factors in this growth and operational performance have
included a focus on servicing the needs of our customers
operational precision introduction of new and innovative services
and tight cost controls that help us quote for new business more
accurately and keenly 
the markets the group serves
with effect from 1 april 2008 the group moved from five operating
units to three customer facing divisions — icm continuous business
business continuity phoenix it services partner services and
servo midmarket — supported by shared operations and
corporate services 
structural overview and the integration process
following the icm acquisition the group has undertaken a
thorough integration review and planning exercise and the
resulting integration programme is in the process of being
executed 
 icm continuous business business continuity
the business continuity division comprising network disaster
recovery ‘ndr’ and the business continuity business of icm
will be branded icm continuous business the two businesses
coming together create a powerful force in the uk business
continuity market with 15 purpose built centres over 7 500
recovery positions extensive mobile and it recovery capabilities
and over 2100 customers the customer bases of the two
businesses are complementary with icm having greater high
end market penetration compared to ndr’s midmarket
strength this element of the integration plan will be
substantially complete by the end of june 2008
 phoenix it services partner services
phoenix it services continues to focus on delivering a wide
range of it support services to typically large end users through
partners 
 servo midmarket 
servo and icm’s managed availability services business are
being merged resulting in a significant operation enjoying
increased scale benefits focused on providing it solutions and
services to a large midmarket customer base from 1 april
2008 this division has been branded servo this element of the
integration is under way and it is envisaged that it will be
substantially complete by the end of autumn 2008
 the group is also in the process of establishing a centralised
operational shared services unit which will undertake
activities for example logistics on behalf of the three
operating divisions to maximise operational efficiencies
existing activities are being progressively transferred from the
individual business units to the shared services centre this is
expected to be substantially complete by the end of autumn
2008 
the integration process is delivering a number of cost synergies for
the enlarged group including
 a reduction in the number of sites from which the business
continuity division will provide services two sites in high
wycombe are in the process of being closed and the contracts
will be transferred to other recovery centres the two sites in
bristol have been combined and the darlaston west midlands
facility is in the process of being combined with the ndr head
office in aston birmingham
 greater operating efficiencies derived from the creation of
larger units throughout the uk which will have a greater
density of coverage and 
 increased procurement and productivity gains arising from
the combination of the group’s respective logistics operations
and support functions 
during the year the group incurred a total of £64m of non
recurring items of which £43m has been a cash expense £55m of
the nonrecurring items incurred during the year relate to the
integration project and it is anticipated that a further £46m will be
incurred during the next 12 months the project has yielded cost
synergies of £17m during the year and it is anticipated that further
cost synergies of £55m will be achieved in the financial year to
march 2009 
icm continuous business business continuity
the icm continuous business division serves the business
continuity and disaster recovery market and for the year ended 
31 march 2008 combined revenues were £420m 2007 £188m
with an operating profit of £89m 2007 £49m the business
continuity business of icm has been part of the group for 10
months of this financial year 
chief executive’s review
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the merging of icm and ndr creates a critical mass business
providing a national network of business recovery centres that are
well placed in relation to our target customer groups with each
centre equipped to meet the needs of our customers the quality of
our proposition and service offering has been recognised at the
recent business continuity annual awards ceremony which was
held on 8 may 2008 where we received a number of awards
including service provider of the year 
acquired in 2005 ndr provides business continuity and disaster
recovery services targeting predominantly small and medium sized
enterprise ‘sme’ customers the company has built a strong
reputation in this sector which it services effectively with
consultancy services real time data backup office and mobile
facilities and support in the case of disaster or major business
interruption there has been continued investment in infrastructure
to create additional work area and data centre capacity at the
existing ndr aston and uxbridge facilities 
the business continuity business of icm provides services to a wide
range of customers and in june 2007 acquired a lease on a
100000 sq ft facility in farnborough hampshire and has
subsequently signed two major contracts for the facility as
previously announced with values of £84m over 7 years and
£120m over 3 years
combining the icm and ndr customer bases has given us
extensive penetration of the large enterprise and sme sectors
providing us with a solid platform for growth and the knowledge
and expertise to accelerate business progress
phoenix it services partner services
our partner services business targets large enterprise scale
customers through it services companies ‘partners‘ against a
market background of increased competition and commoditisation
our revenues exceeded £100m 2007 £915m for the first time
representing double digit growth year on year  and delivered £17 8m
2007 £17 6m of operating profit operating margins for the year
were 17 2 2007 192 and management believe the division’s
margin is broadly sustainable at this level due to increased
economies of scale low cost of sale and operational innovation 
the performance of this division and in particular the decline in the
operating margin reflects the material contribution of a large high
margin contract in the prior year  this contract did not contribute
materially in the financial year under review the underlying
business has progressed significantly and is now well positioned for
the future the move away from reliance on a small number of very
large contracts is both reflective of changes in the market and a
determination to create a more stable and predictable base for this
business
we performed well in all sectors in which our partner business
competes our system support business exhibited annual growth of
12 managed services grew by 22 projects by 23 and network
services by 9 giving overall growth of 126 
our engagement with established partners has also progressed
well during the year  service quality has remained high and we
continue to meet overall customer service sla’s 
we measure ongoing cost performance in all phases of service
delivery in order to find ways to improve efficiencies and protect
margins cost is only one element of competition differentiating
our offer is another and considerable effort has been devoted to
creating innovative new services with good results for example
we have introduced onestream an integrated remote monitoring
system similarly we have developed a web based password reset
tool to enable users to reset their own passwords securely after a
successful pilot we aim to scaleup the product in preparation for
wider distribution 
established in 1979 phoenix has grown
consistently with a reputation for high
quality service levels
1979 march 2004
phoenix shares were admitted to the
official list
november 2004
the phoenix journey
phoenix acquired trend — an
independent network services provider
in the united kingdom
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“we are confident that we have the
right strategy and structure in place
for the enlarged group to deliver value
to our customers and to achieve
sustainable profitable growth”
jeremy stafford chief executive
our small french operation which delivers services to it industry
partners continued to grow by replicating the proven uk partner
model the french operation continues to be profitable 
servo midmarket
the servo division comprises the servo business which was
acquired by the group in november 2006 and icm managed
availability services for 10 months combined revenues for the
year ended 31 march 2008 were £859m 2007 £164m and
operating profit was £90m 2007 £17m 
the servo division provides customers with a complementary and
extended range of services together with improved geographical
coverage 
the servo business saw improving performance quarter on quarter
and posted a very strong end to the year  reflecting both an
improvement in servo’s business mix and healthy new business
generation 
icm managed availability services has a strong technical capability
and this has thrived within the business development culture of the
group icm has been developing its hosting capabilities and has
3000 m
2
of hosting space which is nearly all sold as a result of
strong market demand a further 1000 m
2
of data centre space is
under construction for 20089 with an anticipated commission
date of august 2008
strategy 
we are confident that we have the right group strategy in place to
deliver value to our customers and to achieve sustainable
profitable growth each of our three operating divisions benefits
directly from being part of the wider group leveraging our shared
operation and corporate services capability as well as opportunities
to crosssell between divisions and to sell a wider portfolio of
services to individual customers in addition as we plan for the
longer term growth of the group we have established a strong
modular structure which can be expanded with the addition of
service lines and further acquisitions as appropriate 
the board believes that a continuing focus on the uk will maximise
the performance of the group for the foreseeable future 
outlook
this has been a transformational year for the group in which we
have made very good progress with the integration of icm as well
as delivering a strong set of results we are confident that we have
the right strategy and structure in place for the enlarged group to
deliver value to our customers and to achieve sustainable profitable
growth 
we have achieved good momentum into the current financial year
and in spite of continuing macro economic uncertainties we
remain positive about the outlook for the current year and beyond 
jeremy stafford
chief executive
14 may 2008
1
profit before tax £220m 2007 £193m plus amortisation of
acquired intangibles £36m 2007 £20m
phoenix acquired network disaster
recovery ndr — one of the uk‘s
leading providers of business continuity
and disaster recovery solutions for
customers seeking to protect their
business critical systems
april 2005
phoenix acquired servo — a leading
independent provider of a wide range of
it support services and associated
products predominantly to small and
medium size enterprises sme’s in both
the private and public sectors
throughout the uk
november 2006
phoenix acquired icm computer group
limited enhancing our scale and
capability in both business continuity
and it support services to sme’s
may 2007
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summary of results
the 2008 results represent another positive year for the group
taking into account the icm acquisition revenues profit before tax
and cash generation were all at record levels the results were
achieved in an environment of significant change for the group
following the acquisition of icm during the year  the acquisition of
servo in the latter part of the previous year  and the subsequent
transition from five principal uk operating companies to three
customer facing divisions the integration activity is progressing to
plan and will position the group for further organic and acquisition
led growth
the acquisition of icm computer group plc was completed at the
end of may 2007 for a cash consideration of £654m including
acquisition costs of £36m and the issue of 14047 184 shares in
phoenix it group plc accordingly ten months results from the icm
business are included in these financial statements in the ten
months to 31 march 2008 icm contributed total revenues of
£682m and profit from operations of £69m the icm business
continuity division generated revenues of £214m and profit from
operations of £29m and the icm managed availability services
division generated £468m and profit from operations of £40m
the icm order book at 31 march 2008 was £97 4m with £650m
attributable to the business continuity division and £324m to the
managed availability services division
revenue and profits 
revenues increased by 821 to £2308m 2007 £1267m 
group profit from operations before nonrecurring items and
amortisation of acquired intangibles increased by 454 to £330m
2007 £227m group operating profit margin before non
recurring items and amortisation of acquired intangibles has
decreased to 143 2007 17 9 this reduction in group
operating profit margin is primarily due to the operating margins of
the midmarket businesses of servo and icm which include a
significant proportion of product resale being lower than those of
the partner and business continuity businesses 
as a result of a combination of continuing organic growth and the
effect of the acquired businesses profit before tax nonrecurring
items and amortisation of acquired intangibles increased by 202
to £256m 2007 £213m
1
nonrecurring items are those significant non–recurring items
which are separately disclosed by virtue of their size or incidence to
enable a full understanding of the group’s operating performance
transactions which have given rise to nonrecurring items are
principally integration related charges of £60m 2007 £nil and
costs in relation to arrangement of the group’s new bank facilities
at the time of the acquisition of icm of £04m 2007 £nil a full
analysis of the nonrecurring items is set out in note 7  the group’s
integration and reorganisation programme is progressing
according to plan and was well underway at the year end and
consequently the further costs associated with the plan in the next
financial year will be at a lower level than incurred to date the
project has yielded cost synergies of £17m during the year  profit
from operations after nonrecurring items and amortisation of
acquired intangibles increased by 131 to £234m 2007 £207m
in accordance with the requirements of ifrs 3 ‘business
combinations’ customer relationships and the brand name have
been recognised on the acquisition of icm as acquired intangible
assets a valuation of £187m has been attributed to these resulting
in an additional amortisation charge in the period of £16m
profit before tax decreased in the year by 194 to £155m 2007
£193m as a result of the nonrecurring items and increases in both
amortisation and interest charges investment income and finance
costs are discussed below
icm continuous business business continuity
the business continuity division which comprises ndr and the
business continuity division of icm had total revenues for the year
of £420m 2007 £188m an increase of 1230 the order book
increased by 2540 to £931m 2007 £263m profit from
operations although impacted by the acquisition of the
farnborough facility which made an anticipated start up loss of
£01m was strong at £89m 2007 £49m giving an operating
profit margin of 211 2007 262 the reduction in the margins
reflects the lower utilisation rates of the icm business continuity
facilities compared to those of ndr
ndr in isolation increased its revenues by 96 to £206m 2007
£188m profit from operations by 188 to £59m 2007 £49m
and order book by 66 to £281m 2007 £263m the operating
profit margin increased to 284 2007 262
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•
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phoenix it services partner services
the partner services division phoenix it services limited and
phoenix it services sa has achieved a resumption of revenue
growth in the year with revenues increasing by 124 to £1029m
2007 £915m the order book at the year end was £1719m 2007
£1546m an increase of 112 on the prior year and gives a strong
platform for growth going into the new financial year  divisional
operating profit increased by £02m to £17 8m 2007 £17 6m and
the operating profit margin although still strong has decreased to
17 2 2007 192 as a result of the continuing commoditisation
of certain service lines and the ongoing effect of a significant
reduction in what was the division’s largest contract excluding the
effect of the reduction in this contract underlying operating
margins increased to 167 2007 165 
servo midmarket
the midmarket division comprises servo computer services
limited which was acquired by the group in november 2006 and
icm managed availability services limited which was acquired at
the end of may 2007  this division reported revenues of £859m
2007 £164m an increase of 4254 including the full year effect
of servo and the acquisition of icm the total order book for the
division increased by 3387 to £465m 2007 £106m with an
increase in servo computer services limited’s order book of 332
to £141m 2007 £106m
divisional operating profit including the full year effect of servo
and the icm acquisition increased by 4249 to £90m 
2007 £17m
investment income and finance costs
during the year the group arranged new banking facilities with
royal bank of scotland plc replacing the existing facilities
comprising 2 and 5 year term loans totalling £1000m a five year
£300m revolving credit facility and a £100m overdraft facility the
group entered into a three year interest rate swap on 
28 september 2007 at an interest rate of 578 plus applicable
margin against the amortising balance of the principal term loan
giving interest rate certainty over £800m £518m and £420m 
of the group’s bank debt in the three years ending 
30 september 2010 
primarily as a result of the cash element of the icm consideration
group borrowings including finance leases increased to £1030m
2007 £27 7m and as a result the group’s interest charges on
borrowings and overdrafts increased to £67m 2007 £13m and
other finance costs including the writeoff of unamortised loan
costs and loan break costs following the arrangement of new bank
facilities — £05m increased to £21m 2007 £04m the group
places surplus cash on deposit as appropriate in order to maximise
the shortterm return on cash balances which generated
investment income of £02m in the year 2007 £02m
taxation
a full analysis of the tax charge for the year is set out in note 12
the group’s effective tax rate in 2008 was 306 2007 287
balance sheet
the significant changes to the group balance sheet arise as a result
of the acquisition of icm a full analysis of the book and provisional
fair values of the identifiable assets and liabilities acquired is given
in note 35
as a result of the fitout costs following the acquisition of a lease on
a 100000 sq ft flagship business continuity centre in farnborough
in june 2007  together with further investment in datacentre
facilities and capital expenditure arising from the integration
programme the group’s capital expenditure during the year was
exceptionally high at £214m 2007 £44m it is pleasing to report
that the additional business continuity and datacentre capacity is
operating in line with expectations and is expected to achieve
profitability in the year to 31 march 2009 with significant unutilised
capacity remaining to drive further growth in profit from this site
whilst the nature of business continuity and the group’s data
centre activities are significantly more capital intensive than the
other areas of activity additional capital expenditure is only
incurred with clear visibility of the demand for the services that the
group can then provide 
cash flow
strong control is exercised over the group’s working capital and the
conversion of profit into cash consequently the group continued
to be highly cash generative cash generated by operations was up
457 to £453m 2007 £310m cash generated by operations
before nonrecurring cash flows were £495m 2007 £310m
representing 168 of profit from operations before nonrecurring
items 2007 150 the free cash flow for the year increased by
262 to £297m 2007 £236m 
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1477 14771 14072008 proof 7
shareholders’ returns
earnings per share
adjusted diluted earnings per share excluding nonrecurring items
and amortisation of acquired intangible assets were 241p 2007
244p
2
diluted earnings per share were 146p 2007 222p a
decrease of 342 primarily due to the nonrecurring items
incurred in the year  comparable basic earnings per share were
150p 2007 230p 
dividend
the board has declared a proposed final dividend of 365p per share
to be paid on 1 october 2008 to shareholders on the register at 
12 september 2008 this gives a total dividend for the year of 548p
per share including the interim dividend of 183p paid to
shareholders on 30 january 2008 compared to 4764p for 2007 
giving an increase of 150 the total dividend for the year is
covered 27 times by basic earnings per share and shareholders’
funds at the end of the financial year were £1203m 2007 £564m
principal risks and uncertainties
as a result of the contracted revenues in the order book the group
has a high degree of forward visibility of its revenues over the next
twelve months nonetheless there are a number of potential risks
and uncertainties which could have a material impact on the
group’s performance over the current financial year and which
could cause the group’s actual results to materially deviate from
expected and historical results
integration risk
the ongoing integration of icm and reorganisation of the group
into three customer facing divisions supported by shared
operations and corporate services is expected to yield material
annual cost savings and operational efficiencies execution of the
plan is now well underway and the group has good visibility of the
remaining actions and activities the synergies that will be delivered
and the oneoff costs arising however  an activity of this scale may
cause short term disruption to the group to mitigate this risk the
integration activity has been thoroughly planned external advisers
have been used where appropriate and the group parallelruns
activities to test the effectiveness of the new processes the
resulting plans are being executed in series and are being tested at
each stage to ensure that any disruption to the group’s customers
is either eliminated or minimised
acquisition risk
since november 2004 the group has made three successful
acquisitions however  acquisitions can involve risks that may have
a material impact on the group the group mitigates this risk by
undertaking thorough due diligence and where practical by
contractual representations warranties and indemnities
competitor risk
the it services industry is highly competitive several competitors
including in some cases phoenix’s partners have longer operating
histories higher brand recognition greater financial technical
2008 2007
£’000 £’000
profit from operations before amortisation of acquired intangibles 27 029 22695
depreciation 10797 4104
profitloss on disposal of property plant and equipment 73 39
impairment on property 471 —
equity settled share plans 905 814
working capital changes 6026 3404
income taxes paid 6432 1449
net interest paid 8994 6053
free cash flow 29729 23554 
net capital expenditure 21344 4404
net dividends 3281 2600
acquisitions 64609 26468
borrowings of business acquired 16398 —
loan arrangement fees movement 335 15
issue of share capital 207 342
cash flow before exchange rate movement 75361 9561
exchange rate movement 98 7
net borrowings at beginning of period 27 7 40 18172
net borrowings at end of period 103003 27 7 40
cash generated by operations note 36 45253 31049
cash impact of integration costs 4267 —
cash generated by operations before nonrecurring cash flows 49520 31049
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“taking into account the icm
acquisition revenues profit before 
tax and cash generation were all 
at record levels”
david simpson chief financial officer
marketing personnel and other resources than the group the
group’s competitors have and other potential competitors may have
well established relationships with current and potential partners of
the group as a result these competitors may be able to respond
more quickly to new or emerging technology and changes in partner
requirements or to devote greater resources to the development
promotion and sale of their services than the group in addition the
group may experience increased competition from low cost
outsourcing centres including offshore centres and new or existing
niche market participants whose costs particularly for labour and for
service desks may be lower  increased competition could lead to the
loss of market share loss of material contracts renegotiation of
price levels or a general reduction in revenues of the group
macro economic risk
whilst the group has not seen any downturn in activity the recent
tightening of credit and increases in market interest rates could lead
to a slowing of growth in the uk economy however  while there is a
risk of macro economic factors and particularly the so called ‘credit
crunch’ affecting direct sales activities this risk is mitigated by the
high proportion of long term contracted annuity business
treasury policies and objectives
the group operates within policies and guidelines approved by 
the board 
it is the board’s preference to manage market risks without the use
of derivatives but they will be used where necessary and
appropriate to reduce the levels of volatility to both income and
equity the use of derivatives is strictly controlled and they are not
permitted to be used for speculative or trading purposes
the group’s main treasury risks relate to the availability of funds to
meet its future requirements at the year end the group had
undrawn committed borrowing facilities of £362m the group’s
policy with respect to facilities is to ensure that these are sufficient
to cover the expected needs of the group having reflected the
inherent uncertainty of projections and forecasts
key performance indicators
the group regards its profit and cash generation as the most
appropriate measures of its financial performance
revenues
the group’s aim is to increase revenues each year through a
combination of price and volume growth organic expansion and
acquisitions for the year ended 31 march 2008 group revenues
increased by 821 to £2308m 2007 £1267m organic growth
excluding the effect of acquisitions contributed 68
operating margin
this represents the group’s profit from operations before non
recurring items and amortisation of acquired intangibles divided by
group revenues for the year ended 31 march 2008 group
operating profit margin was 143 a reduction on the prior year
margin which was 17 9 this reduction was primarily due to the
lower operating profit margins of the servo midmarket division
compared to the rest of the group
profitability
our main profitability kpis are profit from operations before non
recurring items and amortisation of acquired intangibles and
adjusted diluted earnings per share these measures increased in
the year by 454 and reduced by 12 respectively to £330m and
241p 2007 £227m and 244p
cash generated from operations
strong control is exercised over the group’s working capital and
conversion of profit into cash for the year ended 31 march 2008
cash generated from operations was up 457 to £453m 2007
£310m cash generated by operations before nonrecurring cash
flows were £495m 2007 £310m representing 1684 of profit
from operations before nonrecurring items 2007 1502
non financial kpis
order book
the order book grew significantly in the year to £3115m 2007
£1915m an increase of 626 the likeforlike order book
excluding the effect of the icm acquisition also increased to £2140m
2007 £1915m an increase of 118 of the total £3115m 532 is
expected to be recognised in revenues in the next financial year 
contract renewal rates
the contract renewal rates by value for each operating division
improved on last year  icm continuous business business
continuity division renewal rate was 89 2007 88 the
phoenix it services partner services division renewal rate was
86 2007 57 and the servo midmarket renewal rate was
92 2007 82
david simpson
chief financial officer
14 may 2008
1
profit before tax £220m 2007 £193m plus amortisation of
acquired intangibles £36m 2007 £20m
2
see note 13
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peter bertram age 54
executive chairman
peter became executive chairman on 22 november 2007 after
serving as nonexecutive chairman since 21 october 2004 peter
was chief executive of azlan group plc from 1998 until its takeover
in 2003 and was previously the nonexecutive chairman of
attentiv systems group plc he is chairman of alphameric plc and
a nonexecutive director of anite group plc and microgen plc 
he is a fellow of the institute of chartered accountants in england
and wales
jeremy stafford age 45
chief executive
jeremy was appointed as chief executive officer on 31 march 2008
after serving as chief operating officer since 24 april 2007  prior to
joining he was the nonstatutory managing director of
government services for british telecommunications plc between
1991 and 2005 he held a number of senior positions within the bt
group and between 1985 and 1991 jeremy was employed by
british airways plc and corporate positioning services
peter bertram jeremy stafford david simpson
david simpson age 47
chief financial officer
david joined phoenix in november 2001 as group financial
controller and has held his current position since april 2006 prior
to joining phoenix he was a divisional finance director for qinetiq
plc between 1990 and 2000 he held a number of senior financial
positions at misys plc he is a member of the institute of chartered
accountants in england and wales
14771phoenixlayout 4  15708  1115  page 18 19
nick robinson age 48
nonexecutive deputy chairman
nick became nonindependent nonexecutive deputy chairman on
1 january 2008 after serving as chief executive officer of phoenix
since december 1997  nick was previously sales director of phoenix
then phoenix computers limited when he bought into the
business in 1993 before joining phoenix nick spent six years at
digital computer services limited as sales director 
john sussens age 62
nonexecutive director
john joined phoenix as a nonexecutive director on 21 october
2004 until he retired on 31 may 2004 john had been an executive
director of misys plc since july 1989 and group managing director
since 1998 prior to joining misys plc john was managing director
of jcb manufacturing he is a nonexecutive director of cookson
group plc admiral group plc and anglo  overseas trust plc and
was previously a nonexecutive director of chubb plc now 
chubb limited 
brian sellwood age 60
nonexecutive director
brian joined phoenix as a nonexecutive director on 1 april 2006
after a career of over 30 years with ibm where he held a variety of
senior positions and was instrumental in establishing ibm’s global
services business in europe
•
phoenix it services
•
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•
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14771 14072008 proof 7
nick robinson john sussens brian sellwood
•
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•
icm continuous business
•
servo
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phoenix it group plc
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the directors present their report together with the audited
financial statements for the group and the company for the year
ended 31 march 2008
principal activity and review of the business
the group’s principal activity is the provision of information
technology and business continuity services a review of the
group’s performance and future prospects is provided in the chief
executive’s review and the financial review
principal risks and uncertainties
the group’s operations expose it to a variety of financial and other
risks a review of which is provided in the financial review and note
19 to the consolidated financial statements
dividends
the directors propose a final dividend of 365p per ordinary share
which subject to approval at the annual general meeting will be
paid on 1 october 2008 to shareholders on the register at 
12 september 2008 the shares will go ex dividend on 10 september
2008 the final dividend together with the interim dividend of 183p
per ordinary share paid in january 2008 makes a total dividend
per ordinary share of 548p 2007 4764p an increase of 15 
capital structure
details of the authorised and issued share capital together with
details of the movements in the company’s issued share capital
during the year are shown in note 30 the company has one class
of ordinary shares which carry no right to fixed income each share
carries the right to one vote at the general meetings of the
company
there are no specific restrictions on the size of a holding nor on
the transfer of shares which are both governed by the articles of
association and prevailing legislation the directors are not aware
of any agreements between holders of the company’s shares that
may result in restrictions on the transfer of securities or on 
voting rights
details of employees’ share schemes are set out in note 39 shares
held by the employee benefit trust do not attract any payment of
dividends nor do they have any voting rights attached to them
no person has any special rights of control over the company’s
share capital and all issued shares are fully paid
the directors have authority to allot the company’s unissued
ordinary shares within the meaning of section 80 companies act
1985 up to an aggregate nominal amount of £200908 being
approximately onethird of the company’s issued share capital at 
18 may 2007 and the power to disapply preemption rights in
respect of the allotment of shares under section 95 companies
act 1985 up to an aggregate nominal value of £30136
representing 5 of the company’s issued share capital at 18 may
2007 in addition the directors have authority on behalf of the
company to make market purchases of up to 3013624 ordinary
shares of the company representing 5 of the company’s issued
share capital at 18 may 2007 these authorities were conferred by
approval of separate resolutions at the company’s last agm and
are due to expire at the end of the forthcoming agm separate
resolutions to renew these authorities will be proposed at the agm
on 14 august 2008 details of these resolutions are set out in the
notice of agm which is shown on page 76 
directors
the following directors served during the year and up to the date
of this report unless otherwise stated
peter bertram
chairman
jeremy stafford
chief executive 
david simpson
chief financial officer
nick robinson
nonexecutive deputy chairman
john sussens
nonexecutive director
brian sellwood
nonexecutive director
biographies of the directors are set out on pages 18 and 19 details
of the directors’ remuneration interests in the shares of the
company and their share options are given in the remuneration
committee report on pages 28 to 30 john sussens and brian
sellwood have letters of appointment for an initial term of three
years unless terminated by either party on three months’ notice
copies of their letters of appointment are available on request
nick robinson and peter bertram offer themselves for re
appointment to the board at the forthcoming annual general
meeting and the directors recommend their reappointment on the
grounds of the considerable experience and knowledge of the it
services market that both bring to the company
directors’ indemnities
the company has made qualifying third party indemnity provisions
for the benefit of its directors
substantial shareholders
as at 14 may 2008 the company had been notified that the
following shareholders had an interest of 3 or more in the issued
ordinary share capital of the company
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ordinary shares  of issued 
of 1p each share capital
aberforth partners llp 8291283 1106
axa investment management 7 542910 1006
artemis 4686127 625
n robinson 465417 4 621
f  c asset management 4600107 613
legal  general group plc 2992904 399
employment policy and investment
as a progressive service organisation employees at every level are
critical to the company and its future management and
professional and technical expertise are the group’s major assets
investment in developing and retaining such skills is ongoing and
well established and is supported by extensive use of inhouse and
external training programmes
the board recognises the value of effective communication and
consultation with all employees and informing them of the progress
and policies of the group this is achieved through formal and
informal meetings briefing groups and internal newsletters
it is the group’s policy to encourage the recruitment training and
development of disabled persons on the basis of their aptitude and
ability and the retention and retraining of employees who become
disabled
consistent with the group’s human resources policies the board
encourages staff to identify with the financial success of the
business through the opportunity to acquire ordinary shares staff
can participate in the financial prosperity of the group through
share ownership employee incentive arrangements include a
performance share plan share option schemes and share
incentive plan
payments to suppliers
the group’s operating companies determine terms and conditions
of payment for the supply of capital and revenue items by
agreement with suppliers payment is then made on these terms
subject to the terms and conditions being met by the suppliers as
at 31 march 2008 trade creditors of the group were equivalent to
56 days 2007 41 days and in the company 59 days 2007 nil
charitable donations
the total amount of charitable donations made during the year was
£31994 2007 £26084 there were no political donations
going concern
the directors have considered detailed profit and cash flow
forecasts and have a reasonable expectation that the group has
adequate resources to continue as an operational business for the
foreseeable future the financial statements have therefore been
prepared on a going concern basis
auditors
an ordinary resolution to reappoint deloitte  touche llp as
auditors of the company is to be submitted to the forthcoming
annual general meeting
statement of directors’ responsibilities
the directors are responsible for preparing the annual report
directors remuneration report and the financial statements in
accordance with applicable law and regulations
company law requires the directors to prepare financial statements
for each financial year  under that law the directors have elected to
prepare the group financial statements under international
financial reporting standards ifrss as adopted by the european
union and the parent company financial statements under united
kingdom generally accepted accounting practice united kingdom
accounting standards and applicable law the financial statements
are also required by law to be properly prepared in accordance with
the companies act 1985 
international accounting standard 1 requires that ifrs financial
statements present fairly for each financial year the companys
financial position financial performance and cash flows this
requires the faithful representation of the effects of transactions
other events and conditions in accordance with the definitions and
recognition criteria for assets liabilities income and expenses set
out in the international accounting standards boards framework
for the preparation and presentation of financial statements in
virtually all circumstances a fair presentation will be achieved by
compliance with all applicable ifrss however  directors are also
required to
 properly select and apply accounting policies
 present information including accounting policies in a manner
that provides relevant reliable comparable and understandable
information
 provide additional disclosures when compliance with the specific
requirements in ifrss are insufficient to enable users to
understand the impact of particular transactions other events
and conditions on the entitys financial position and financial
performance and
 make an assessment of the companys ability to continue as a
going concern
the parent company financial statements are required by law to
give a true and fair view of the state of affairs of the company in
preparing these financial statements the directors are required to
 select suitable accounting policies and then apply them
consistently
 make judgments and estimates that are reasonable and
prudent
14771phoenixlayout 4  15708  1115  page 21 directors’ report
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 state whether applicable uk accounting standards have been
followed subject to any material departures disclosed and
explained in the financial statements
 prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business
the directors are responsible for keeping proper accounting
records that disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that
the parent company financial statements comply with the
companies act 1985 they are also responsible for safeguarding
the assets of the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of
the corporate and financial information included on the companys
website legislation in the united kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions
each of the persons who is a director at the date of approval of this
report confirms that
1 so far as the director is aware there is no relevant audit
information of which the company’s auditors are unaware and
2the director has taken all the steps that he ought to have taken
as a director in order to make himself aware of any relevant
audit information and to establish that the company’s auditors
are aware of that information
this confirmation is given and should be interpreted in accordance
with the provisions of s234za of the companies act 1985
annual general meeting
the notice of the annual general meeting to be held on 14 august
2008 together with explanatory notes is sent to shareholders
with this annual report the special business of the meeting
includes the following resolutions
authority to allot shares resolution 7
the directors are seeking authority under section 80 of the
companies act 1985 ‘the act’ to allot shares up to an aggregate
nominal value of £249965 this amount represents approximately
onethird of the total ordinary share capital as at 14 may 2008 the
authority will be in substitution for the previous authority taken at last
year’s annual general meeting and will expire on the earlier of the
conclusion of the next annual general meeting or 14 november 2009
the directors have no present intention to make any such issue of
shares other than in respect of shares that may be issued pursuant
to the company’s share option schemes but consider it is desirable
for them to be given this opportunity by shareholders
as at 14 may 2008 the company held no treasury shares
disapplication of preemptive rights resolution 8
the directors are seeking authority from shareholders to allot
ordinary shares for cash other than on a preemptive basis as
required by section 89 of the act in limited circumstances the
directors recommend that section 89 of the act should not apply
to any allotment of shares in connection with a rights issue open
offer or other preemptive offer in favour of ordinary shareholders
in accordance with normal practice in the uk nor to an issue for
cash of shares up to an aggregate nominal value of £37 495 which
is equivalent to 5 of the company’s issued share capital as at 
14 may 2008 the authority sought will expire on the earlier 
of the conclusion of the next annual general meeting or 
14 november 2009
authority to make market purchases of shares resolution 9
the directors are seeking authority to make market purchases
pursuant to section 166 of the act of shares up to 37 49478 ordinary
shares which is equivalent to 5 of the company’s issued share
capital as at 14 may 2008 on such terms and in such manner as the
directors may determine provided that the amount paid for each
share exclusive of expenses will not be more than 5 above the
average middle market quotation for ordinary shares as derived from
the daily official list of the london stock exchange plc for the five
business days before the date on which the contract for the purchase
is made and in any event not less than 1p per ordinary share the
authority sought will expire on the earlier of the conclusion of the
next annual general meeting or 14 november 2009
the directors have no present intention to make any such market
purchases but consider it is desirable for them to be given this
opportunity by shareholders the authority will only be exercised if
to do so would result in an increase in earnings per share and is in
the best interests of shareholders generally
as at 14 may 2008 there was a total of 2236536 options to
subscribe for equity shares in the company outstanding
representing 30 of the company’s issued share capital if the full
authority sought by this resolution is used this number of
outstanding options would represent 28 of the company’s issued
share capital
the board of the company recommends that ordinary
shareholders vote in favour of the resolutions to be proposed at
the annual general meeting and is of the opinion that they are in
the best interests of security holders as a whole
by order of the board
w t martin
company secretary
14 may 2008
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corporate governance
14771 14072008 proof 7
the combined code on corporate governance issued in june
2006 contains only a limited number of modifications to the
combined code 2003 following the financial services authority’s
fsa adoption of the combined code 2006 and the release of
the fsa’s amended listing rules in october 2006 the combined
code 2006 ‘the combined code’ takes effect for reporting
periods commencing on or after 1 november 2006 the application
of the principles of the code in the composition and operation of
the board the remuneration of the directors relations with
shareholders and procedures for financial reporting and internal
control are described below
statement of compliance
the directors consider that throughout the year ended 31 march
2008 the company has complied with the principles set out in
section 1 of the combined code with the exception of provision a21
as described below
the board of directors
the group is controlled by a board of directors which meets
regularly and currently comprises three executive and three non
executive directors the nonexecutive directors are nick robinson
who is deputy chairman john sussens who is the senior
independent director and brian sellwood the latter two are
considered by the board to be independent of management and
free from any business or other relationship which could materially
interfere with the exercise of their independent judgement nick
robinson previously the chief executive is considered to be non
independent the nonexecutive directors regularly meet
independently of management
in november 2007  nick robinson resigned as chief executive
peter bertram assumed the role of executive chairman becoming
involved in the day to day running of the business in conjunction
with the senior management team the board accepted temporary
noncompliance with provision a21 of the combined code to the
extent that the chairman has acted in an executive capacity as
being in the overall interests of the group jeremy stafford was
appointed chief executive on 31 march 2008 however  peter
bertram will remain executive chairman until 31 december 2008
when he will relinquish his executive responsibilities and revert to
his role as nonexecutive chairman
the board intend to appoint another independent nonexecutive
director to ensure appropriate balance 
the chairman’s other main commitments are disclosed on page 18
the chairman is responsible for leadership of the board ensuring
its effectiveness and setting its agenda
in advance of each meeting the directors are provided with or
have full and timely access to information in relation to the matters
to be discussed
at board meetings the directors receive presentations from the
senior executives on the implementation of the company’s
strategies and the board receives regular updates on changes to
the business legislative and regulatory environments
the board is responsible to shareholders for the proper
management of the group and for its system of corporate
governance it receives information on a monthly basis to enable it
to review trading performance forecasts and strategy and it has a
schedule of matters specifically reserved for its decision the most
significant of these are 
 changes to the structure size and composition of the board
 consideration of the independence of nonexecutive directors
 review of management structure and senior management
responsibilities
 with the assistance of the remuneration committee approval
of remuneration policies across the group
 approval of strategic plans profit plans and budgets and any
material changes to them
 oversight of the group’s operations ensuring competent and
prudent management sound planning an adequate system of
internal control and adequate accounting and other records
 final approval of annual accounts and accounting policies 
 approval of the dividend policy
 approval of the acquisition or disposal of subsidiaries and major
investments and capital projects
 delegation of the board’s powers and authorities including the
division of responsibilities between the chairman and the chief
executive and other executive directors and
 receiving reports on the views of the company’s shareholders
operational management of the group is delegated to the chief
executive and the chief financial officer 
the board receives a regular flow of information to enable it to
discharge its duties including a monthly report detailing current
and forecasted trading results and treasury positions it also
receives regular updates on shareholders’ views as part of the
monthly report and more formal briefings on shareholders’ views
are given to the board following the presentation of the company’s
interim and annual results board papers are generally distributed
not less than five days in advance of the relevant meeting to allow
the directors fully to prepare for meetings and minutes of
committee meetings are circulated the board is kept fully
informed of developments within the company’s businesses
through regular presentations by divisional management induction
programmes for newlyappointed directors are devised to ensure
that directors spend time with divisional management and can visit
operational sites 
14771phoenixlayout 4  15708  1115  page 23 corporate governance
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phoenix it group plc
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procedures exist to allow the directors to seek independent legal
advice in respect of their duties at the company’s expense where
the circumstances are appropriate all directors have access to the
company secretary who is a qualified solicitor 
all directors are required to submit themselves for reelection at
regular intervals and at least every three years
during the year  the board undertook an evaluation of its
performance and that of its committees detailed questionnaires
were used for the performance evaluation process the board
concluded that overall the board and its committees operated
effectively the performance of each of the directors was evaluated
while the senior independent director evaluated the performance
of the chairman the board considered that the evaluation process
was satisfactory and that the use of an external third party to assist
in such evaluation was not necessary
committees of the board
the following formally constituted committees deal with specific
aspects of the group’s affairs in accordance with their written
terms of reference which have been reviewed in the light of the
combined code and are available on request and on the group’s
website the company secretary also acts as secretary to each
committee
the audit committee’s purpose is to assist the board in the
discharge of its responsibilities for financial reporting and
corporate control and to provide a forum for reporting by the
external auditors the committee chaired by brian sellwood who
the board consider to have recent and relevant financial
experience comprises the independent nonexecutive directors
and meets at least three times a year 
a report on its activities is given on page 27 
the remuneration committee which is chaired by john sussens
and comprises the independent nonexecutive directors meets at
least twice a year and additionally as required it is responsible for
reviewing remuneration arrangements for members of the board
and all senior reports of the chief executive and chief financial
officer  for providing general guidance on aspects of remuneration
policy throughout the group and for the group’s share incentive
plans new bridge street consultants have been appointed by the
group to assist and advise the remuneration committee in the
performance of its duties new bridge street consultants do not
provide any other service to the group and are independent of the
group’s auditors
a report on its activities is given on pages 28 to 30
the nominations committee is chaired by john sussens and
comprises the nonexecutive directors the committee is
responsible for effective succession planning and proposes
candidates to the board having regard to the balance and
structure of the board the committee determines the terms of
reference of new appointments and uses external advisers to
identify suitable candidates the process is for the committee to
interview each candidate with a view to preparing a shortlist for the
board for further interviews to take place as appropriate and for
the chairman to consult with the chief executive and any external
advisors before any appointment is made 
attendance at meetings
the number of board meetings and committee meetings attended by each director in the year to 31 march 2008 was as follows
audit remuneration nomination
board committee committee committee
held attended held attended held attended held attended
chairman
p bertram 11 11 32 5 32 1
executive directors
j stafford 11 11
d simpson 11 11
nonexecutive directors
n robinson† 11 10 21
j sussens 11 11 32 5 52 2
b sellwood 11 11 33 5 5 2 2
 peter bertram became executive chairman on 22 november 2007 and accordingly stepped down from the three board committees 
† nick robinson became nonexecutive deputy chairman on 22 november 2007 and accordingly joined the nomination committee 
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internal control
the board is responsible for establishing and maintaining the
group’s system of internal control internal control systems are
designed to meet the particular needs of the group and the risks to
which it is exposed by their nature however  internal control
systems are designed to manage rather than eliminate the risk of
failure to achieve business objectives and can provide only
reasonable and not absolute assurance against material mis
statement or loss
key elements of the internal control system are described below
these have all been in place throughout the year and up to the
date of this report and are considered and monitored regularly by
the board and once during the year
 on going procedures to identify evaluate and manage
significant risks faced by the business in accordance with the
guidance of the turnbull committee on internal controls and
procedures to monitor the control systems in place to reduce
these risks to an acceptable level
 clearly defined management structure and delegation of
authority to committees of the board and the executive
directors
 clearly documented internal procedures set out in the group’s
iso 9001 accredited quality manual
 high recruitment standards and formal career development and
training to ensure the integrity and competence of staff
 regular and comprehensive information provided to
management covering financial performance and key
performance indicators including nonfinancial measures
 a detailed budgeting process covering budgets for the coming
year which are approved by the board
 procedures for the approval of capital expenditure investments
and acquisitions
 monthly monitoring and reforecasting of results against budget
with major variances followed up and management action taken
where appropriate
 regular internal audits of key processes and procedures under
the group’s iso 9001 accredited quality assurance process and
 formal consideration of progress made against significant
business risks at monthly operating board meetings with
quarterly briefings to the board
the board with the assistance of the audit committee is
responsible for reviewing the effectiveness of the group’s systems
of internal control during the year  the board has reviewed the
effectiveness of the systems of internal control and risk
management based on a review of significant risks identified and
the results of quality and other reports from management
following the review the board concluded that the systems were
satisfactory and in accordance with the turnbull guidance the
board seeks to ensure that steps continue to be taken to try to
embed internal control and risk management further into the
operations of the group’s business and to deal with any areas of
improvement which come to its attention 
whistleblowing the group’s whistleblowing policy allows
employees in confidence to raise concerns about possible
improprieties including in financial reporting other operational
matters or inappropriate personal behaviour in the workplace 
the internal audit function is described in the audit committee
report
auditor independence
the company has a formal policy designed to ensure that the
auditor’s independence is not compromised by its undertaking
inappropriate nonaudit work all significant nonaudit work
commissioned from the external auditor requires the audit
committee’s formal approval the external auditor is only selected
to undertake nonaudit work where the nature of the advice makes
it more timely and costeffective to select advisers who already
have a good understanding of the group
the audit committee has undertaken a review of the nature and
amount of nonaudit work undertaken by the external auditor to
satisfy itself that there is no effect on its independence the split
between audit and nonaudit fees is shown in note 8 to the
consolidated financial statements
going concern
the directors are satisfied that the group has adequate resources
to continue in operational existence for the foreseeable future a
period of not less than twelve months from the date of this report
for this reason they continue to adopt the going concern basis in
preparing the financial statements
14771phoenixlayout 4  15708  1115  page 25 corporate governance
continued
corporate social responsibility
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communication with shareholders
the company values the views of shareholders and recognises
their interests in the group’s strategy and performance it holds
briefings with institutional fund managers analysts and other
investors primarily following the announcement of interim and
preliminary results as well as at other times during the year as may
be appropriate the company’s programme of investor relations
activities is designed to ensure that the investing community
receives a balanced and consistent view of the group’s
performance all shareholders are welcome to attend the annual
general meeting at which the board of directors will be available to
answer questions from shareholders
provision d11 of the combined code requires the senior non
executive director to meet with major shareholders during the
year  this requirement has been undertaken by the chairman who
has met with a range of major shareholders to discuss governance
and strategy the senior nonexecutive director has been available
for all such meetings if requested the views of major shareholders
are communicated to the board as a whole by the chairman in
addition the board receives reports from the company’s broker
twice a year that communicate feedback from major shareholders
the board also reviews analyst coverage of the company every
month
approved by the board and signed on its behalf
w t martin
company secretary
14 may 2008
the board of directors recognises the importance of high
standards of corporate social responsibility considers the social
environmental and ethical implications of the group’s activities and
seeks continually to improve the policies and practices in place to
meet its responsibilities in all such matters
health and safety
the group strives to provide and maintain a safe environment for
all employees customers and visitors to its premises and to comply
with relevant health and safety legislation in addition the group
aims to protect the health of employees with suitable specific work
based strategies seeking to minimise the risk of injury from group
activity and ensuring that systems are in place to address health
and safety matters the group also encourages the involvement of
employees and aims for continual improvement in health and
safety matters through a formal structure with a reporting and
review process
employees
the welfare and safety of employees is a key priority and the group
actively encourages staff involvement in the development of the
group’s business activities employees are treated with fairness and
respect and are encouraged and supported in the development of
their careers and the group continues to share its success with
them
the environment
the group recognises that it is part of a wider community of
employees shareholders customers suppliers and others and
recognises that group companies have a responsibility to act in a
way that respects the environment the group seeks to encourage
staff to act in an environmentally responsible manner  particularly
in the development of recycling and energy conservation policies to
ensure that finite resources are not depleted
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audit committee report
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role of the audit committee
the audit committee is a subcommittee of the board whose
responsibilities include
 reviewing the interim and full year financial statements and
results announcements of the company and any other formal
announcement relating to the group’s financial performance
and recommending them to the board for approval
 reviewing the group’s systems for internal financial control and
risk management
 the internal audit function internal audit which was
established during the year
 considering the appointment of the external auditor overseeing
the process for its selection and making recommendations to
the board in relation to its appointment reappointment or
removal
 monitoring and reviewing the effectiveness and independence
of the external auditor  agreeing the nature and scope of its
audit its remuneration and considering its reports on the
group’s financial statements and systems of internal financial
control and risk management 
 reviewing and implementing the policy on using the auditor’s
services for nonaudit advice and
 monitoring and reviewing the ‘whistleblowing’ policy
composition of the audit committee
the audit committee comprises the independent nonexecutive
directors biographical details of the independent directors are set
out on page 19 and their remuneration is set out on page 30 the
chairman of the audit committee is brian sellwood the
committee invites others including the company’s external auditor
and the chief financial officer  to attend as appropriate 
at least once each year representatives of the company’s external
auditor meet the audit committee without any executive directors
present
main activities of the audit committee
during the year  the audit committee has met three times the
committee reviewed the halfyear interim results and presentation
of results to investors and received reports from the external
auditor on its review and subsequently met in february to receive a
presentation by the external auditor setting out its audit approach
and procedures including matters relating to scope auditor
independence and audit fees
the audit committee keeps under review the relationship with the
external auditor including
 the qualification expertise and resources of the external
auditor  the effectiveness of the audit process including the
external auditor quality control procedures
 the independence and objectivity of the external auditor taking
into account relevant uk professional and regulatory
requirements and the relationship with the audit firm as a
whole including the provision of nonaudit services and
 reviewing and implementing the policy on audit fees and fees
for other nonaudit services
internal audit function
the audit committee is required to assist the board to fulfil its
responsibilities relating to the adequacy of the resourcing and
plans of the internal audit department to fulfil these duties the
committee reviewed
 internal audit’s terms of reference reporting lines and access to
the audit committee and all members of the board 
 internal audit’s plans and its achievement of the planned
activity
 the results of key audits and other significant findings the
adequacy of management’s response and the timeliness of
resolution
 the statistics on staff numbers qualifications and experience
and timeliness of reporting and
 the level and nature of nonaudit activity performed by internal
audit
brian sellwood
chairman audit committee
14 may 2008
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information not subject to audit
the remuneration committee
the remuneration committee is chaired by john sussens and
comprises all the independent nonexecutive directors peter
bertram resigned from the committee on his appointment as
executive chairman in november 2007  
the committee determines the remuneration packages of the
executive directors and their senior direct reports and makes
recommendations thereon to the board within agreed terms of
reference
the remuneration committee has appointed executive
remuneration consultants new bridge street consultants and has
consulted new bridge street in relation to assessing comparability
to the it services marketplace and in particular the remuneration
policies of the group’s peer companies 
remuneration policy
the policy of the group on directors’ remuneration is to provide
competitive marketbased packages which reward group and
individual performance and align the interests of directors and
shareholders remuneration packages comprise a basic salary
annual performance related bonus pensions and other benefits
and where appropriate participation in the share incentive plans
set out below salaries and bonuses are reviewed annually and any
other changes effected from 1 april 
it is company policy that executive director service contract notice
periods should not normally exceed 12 months any compensation
payment made as a result of an executive director leaving the
company’s employment is subject to remuneration committee
approval taking account of the terms of their contract and the
reasons for termination other than as contractually necessary
severance payments are usually limited to payment of unworked
contractual notice comprised of base salary and a cash equivalent
value for fixed benefits including pension contributions in
circumstances where a breach of the company’s policies results in
dismissal either a reduced payment or no payment may be made
depending on the situation an executive director may have an
entitlement or the remuneration committee may exercise its
discretion to allow an exercise of outstanding share option 
awards or longterm incentive grants subject to the rules of the
relevant plan 
the group introduced a number of share incentive schemes on
flotation of which all members of staff including the executive
directors are potential beneficiaries these include an employee
share option scheme a performance share plan psp for senior
managers and an allemployee share incentive plan sip since
flotation no further awards have been granted under the group’s
preflotation share schemes
the board determines the remuneration of the chairman and the
other nonexecutive directors directors are not involved in
decisions about their own remuneration
individual components of remuneration packages and service
contracts are discussed below
basic salary
basic salary for each executive director is based on externally
benchmarked market data for comparable companies operating in
it services experience and achievement of objectives in addition
to basic salary the executive directors receive certain benefits
such as a company car or equivalent allowance and private
medical insurance
the salaries of the executive directors who served during the year
are given on page 30 david simpson and jeremy stafford have
service agreements subject to a 12 month notice period and include
the right for the company to make a payment in lieu of salary and
benefits for any unexpired period of notice peter bertram and 
nick robinson have a 6 month notice period in their contracts and
john sussens and brian sellwood have 3 month notice periods
performance related bonuses
for executive directors amounts available for bonuses are agreed
by the remuneration committee
jeremy stafford had a guaranteed bonus for the year ended
31 march 2008 of £250000 first year only 
david simpson had a bonus for the year ended 31 march 2008
of £94000 
the maximum potential bonus levels for the year ending 31 march
2009 are capped at 100 of basic salary for jeremy stafford and
75 for david simpson peter bertram does not qualify for a bonus
for the year ending 31 march 2009 due to the temporary nature of
his role as an executive director 
pension arrangements
the executive directors are also entitled to receive personal
pension contributions of 20 of basic salary for david simpson
and jeremy stafford
share incentives
the group’s policy is to award share incentives to executive
directors in order to align their interests with those of the
company’s shareholders the executive directors have participated
in the performance share plan during the financial year  the
performance conditions were selected after consulting
independent share incentive advisers
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•
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•
servo 
14771 14072008 proof 7
performance share plan
during the year  the company granted awards over 860607 shares
under the psp jeremy stafford was granted awards over 121080
shares and david simpson was granted 55351
the awards will vest fully if the group’s average annual earnings
per share growth over the three years from grant measured by
reference to eps in the year immediately prior to grant exceeds
20 per annum if the average annual growth is 5 per annum
the award will vest as to 20 of the maximum if average annual
earnings per share grow between 5 and 20 then the award will
vest on a progressive scale the award will not vest at all if average
earnings per share growth is less than 5 per annum
share incentive plan sip
under the share incentive plan employees are able to buy shares
by deduction of up to £1500 from their pretax salary in each tax
year or  if less 10 of salary
performance graph
the following graph shows phoenix’s total shareholder return
performance compared to the ftse small cap index of which
phoenix is a constituent the graph covers the period from the date
of flotation to 31 march 2008 and the values show the share price
growth plus reinvested dividends from a hypothetical £100 holding
of ordinary shares in phoenix and in the index at the start of the
period
the following sections have been subject to audit
directors’ shareholdings
directors had the following beneficial and family interests in the issued share capital of the company as at 31 march 2008 there have
been no changes between the end of the financial year and the date of this report other than as indicated
2008 2007
ordinary shares ordinary shares
at 31 march of 1p each of 1p each
peter bertram 20000 10000
nick robinson 4654174 6163265
john sussens 8500 8500
david simpson 19261 —
brian sellwood 4932 —
jeremy stafford 10000 —
210
190
170
150
130
110
90
total shareholder return 
from listing date to 31 march 2008
phoenix ftse  small cap
16nov04
16jan05
16mar05
16may05
16july05
16sept05
16nov05
16jan06
16mar06
16may06
16july06
16sept06
16nov06
16jan07
16mar07
16may07
16july07
16sept07
16nov07
16jan08
16mar08
14771phoenixlayout 4  15708  1116  page 29 directors’ remuneration report
continued
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phoenix it group plc
1477 14771 14072008 proof 7
remuneration
the remuneration of the directors for the year to 31 march is comprised as follows
2008 2008 2008 2008 2008 2007 2008
gain on
share total excl total excl
salaryfees bonus benefits options pension pension pension
year ended 31 march £’000 £’000 £’000 £’000 £’000 £’000 £’000
nick robinson 229 —8 590 827 383 65
peter bertram 164 — 13 — 177 100 6
john sussens 40 ——— 40 40 —
brian sellwood 32 ——— 32 32 —
david simpson 222 94 25 103 444 218 44
jeremy stafford 234 250 29 — 513 — 47
totals 921 344 75 693 2033 773 162
directors’ interests in share options
the group has a number of share option schemes whereby directors and staff are able to subscribe for ordinary shares in the company
the interests of the directors in options to subscribe for ordinary shares were as follows there have been no changes between the end of
the financial year and the date of this report
lapsed options
options held granted exercised surrendered held at per earliest
at 1 april during during during 31 march exercise formance exercise expiry 
director 2007 year year the year 2008 price conditions date date
nick robinson 190909 — 190909 — — nil p i 122007 122014
nick robinson 191606 —— — 191606 nil p ii 052008 052015
nick robinson 184211 —— — 184211 nil p iii 052009 052016
david simpson 32727 — 32727 — — nil p i 122007 122014
david simpson 32847 —— — 32847 nil p ii 052008 052015
david simpson 61404 —— — 61404 nil p iii 052009 052016
david simpson — 55351 —— 55351 nil p iv 082010 082017
david simpson 25000 —— — 25000 200 p v 092007 082011
jeremy stafford — 121080 —— 121080 nil p iv 082010 082017
performance conditions
i award granted under psp the market value at the date of grant was 275p
ii award granted under psp the market value at the date of grant was 27 4p
iii award granted under psp the market value at the date of grant was 285p
iv award granted under psp the market value at the date of grant was 401p
v in common with all options granted by the company prior to its flotation these options had no performance conditions attached
the psp awards are subject to achieving a performance condition related to average annual growth in earnings per share over a three
year period of between 5 and 20 per annum this results in an award of between 20 and 100 with performance between these
points being on a progressive scale
during the year to 31 march 2008 the company’s share price varied between 22325p and 47125p and ended the year at 289p
approved by the board and signed on its behalf by
john sussens
chairman remuneration committee
14 may 2008
14771phoenixlayout 4  15708  1116  page 30 31
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independent auditors’ report on the group financial statements
14771 14072008 proof 7
we have audited the group financial statements of phoenix it
group plc for the year ended 31 march 2008 which comprise the
consolidated statement of income the consolidated statement of
recognised income and expense the consolidated balance sheet
the consolidated cash flow statement and the related notes 1 to 40
these group 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
we have reported separately on the individual company financial
statements of phoenix it group plc for the year ended 31 march
2008 
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
auditors’ 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 annual report the
directors remuneration report and the group financial
statements in accordance with applicable law and international
financial reporting standards ifrss as adopted by the european
union are set out in the statement of directors’ responsibilities
our responsibility is to audit the group financial statements in
accordance with relevant legal and regulatory requirements and
international standards on auditing uk and ireland
we report to you our opinion as to whether the group financial
statements give a true and fair view whether the group financial
statements have been properly prepared in accordance with the
companies act 1985 and article 4 of the ias regulation and
whether the part of the directors’ remuneration report described
as having been audited has been properly prepared in accordance
with the companies act 1985 we also report to you whether in our
opinion the information given in the directors report is consistent
with the group financial statements
in addition we report to you if in our opinion 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 corporate governance statement reflects
the companys 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
or its risk and control procedures
we read the other information contained in the annual report as
described in the contents section and consider whether it is
consistent with the audited group financial statements we
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the group
financial statements our responsibilities do not extend to any
further information outside the annual report
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 group financial
statements and the part of the directors’ remuneration report to
be audited it also includes an assessment of the significant
estimates and judgments made by the directors in the preparation
of the group financial statements and of whether the accounting
policies are appropriate to the groups 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 group financial statements and the part of the
directors’ remuneration report to be 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 group financial statements and
the part of the directors’ remuneration report to be audited
opinion
in our opinion
 the group financial statements give a true and fair view in
accordance with ifrss as adopted by the european union of the
state of the groups affairs as at 31 march 2008 and of its profit
for the year then ended
 the group financial statements have been properly prepared in
accordance with the companies act 1985 and article 4 of the
ias regulation 
 the part of the directors’ remuneration report described as
having been audited has been properly prepared in accordance
with the companies act 1985 and
 the information given in the directors’ report is consistent with
the group financial statements
separate opinion in relation to ifrss
as explained in note 3 to the group financial statements the group
in addition to complying with its legal obligation to comply with
ifrss as adopted by the european union has also complied with the
ifrss as issued by the international accounting standards board
in our opinion the group financial statements give a true and fair
view in accordance with ifrss of the state of the group’s affairs as
at 31 march 2008 and of its profit for the year then ended
deloitte  touche llp
chartered accountants and registered auditors 
london united kingdom
14 may 2008
14771phoenixlayout 4  15708  1116  page 31 consolidated statement of income
for the year ended 31 march 2008
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phoenix it group plc
1477 14771 14072008 proof 7
2008 2007
non
before recurring
nonrecurring items
items note 7 total total
note £’000 £’000 £’000 £’000
continuing operations
revenue 5 230803 — 230803 126712
cost of sales 68170 1099 69269 25690
gross profit 162633 1099 161534 101022
distribution costs 106975 1724 108699 65876
administrative expenses 26260 3149 29409 14430
profit from operations before amortisation of acquired intangibles 33001 5972 27029 22695
amortisation of acquired intangibles 16 3603 — 3603 1979
profit from operations 8 29398 5972 23426 20716
investment income 5 11 897 — 897 270
finance costs 11 8337 446 8783 1704
profit before tax 21958 6418 15540 19282
tax 12 6678 1925 4753 5538
profit for the period 34 15280 4493 10787 137 44
earnings per share
basic 13 213p 150p 230p
diluted 13 206p 146p 222p
14771phoenixlayout 4  15708  1116  page 32 33
consolidated statement of recognised income and expense
for the year ended 31 march 2008
14771 14072008 proof 7
2008 2007
note £’000 £’000
exchange differences on translation of foreign operations 98 7
losses taken to equity in respect of cash flow hedges 18 952 —
purchase of shares by employee benefit trust 3 —
actuarial gains on defined benefit pension schemes 10 592 —
tax on items taken directly to equity 101 —
net expense recognised directly in equity 164 7
profit for the period 34 10787 137 44
total recognised income and expense for the period 10623 13737
14771phoenixlayout 4  15708  1116  page 33 consolidated balance sheet
as at 31 march 2008
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34
phoenix it group plc
1477 14771 14072008 proof 7
2008 2007
note £’000 £’000
noncurrent assets
goodwill 15 174648 84090
intangible assets 16 22151 7 090
property plant and equipment 17 71513 13777
other receivables 23 5059 —
273371 104957
current assets
inventories 22 11087 6391
trade and other receivables 23 57880 32934
cash and cash equivalents 24 12254 5023
81221 44348
noncurrent assets held for sale 20 4498 —
85719 44348
total assets 359090 149305
current liabilities
trade and other payables 26 51227 29110
current tax liabilities 2522 3339
obligations under finance leases and hire purchase contracts 27 4189 1937
bank loans 25 13961 7 000
provisions 28 208 47
deferred revenue 51470 24946
123577 66379
net current liabilities 37858 22031
noncurrent liabilities
obligations under finance leases and hire purchase contracts 27 8835 3909
bank loans 25 88272 19917
provisions 28 4400 1409
deferred tax liabilities 29 10798 825
derivative financial instruments 18 952 —
deferred revenue 860 423
retirement benefit obligations 10 1079 —
115196 26483
total liabilities 238773 92862
net assets 120317 56443
equity
share capital 30 750 602
share premium account 31 37370 37 144
merger reserve 32 57453 2239
other reserves 33 988 1468
retained earnings 34 23756 14990
total equity 120317 56443
the financial statements were approved by the board of directors and authorised for issue on 14 may 2008 they were signed on its
behalf by
david simpson
chief financial officer
14771phoenixlayout 4  15708  1116  page 34 35
consolidated cash flow statement
for the year ended 31 march 2008
2008 2007
note £’000 £’000
net cash from operating activities 36 29827 23547
investing activities
purchases of property plant and equipment 21422 4437
proceeds on disposal of property plant and equipment 78 33
acquisition of subsidiary undertaking
— cash consideration 61772 28000
— costs of acquisition 3608 648
— cash and cash equivalents acquired 771 2180
net cash used in investing activities 85953 30872
financing activities
dividends paid 34 3281 2600
repayments of borrowings 53170 4000
increase in net obligations under finance leases and hire purchase contracts 5762 846
new bank loans raised 113842 15000
purchase of shares by employee benefit trust 3 —
issue of share capital 207 342
net cash from financing activities 63357 9588
net increase in cash and cash equivalents 7231 2263
cash and cash equivalents at beginning of period 5023 2760
cash and cash equivalents at end of period 12254 5023
14771 14072008 proof 7
14771phoenixlayout 4  15708  1116  page 35 notes to the consolidated financial statements
for the year ended 31 march 2008
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phoenix it group plc
1477 14771 14072008 proof 7
1 general information
phoenix it group plc is a company incorporated in the united kingdom under the companies act 1985 the address of the registered
office is given on the inside back cover  the nature of the group’s operations and its principal activities are set out in note 6 and in the
chief executive’s review and financial review on pages 11 to 17 
these financial statements are presented in pounds sterling because that is the currency of the primary economic environment in
which the group operates foreign operations are included in accordance with the policies set out in note 3
2 adoption of new and revised standards
in the current year  the group has adopted ifrs 7 financial instruments disclosures which is effective for annual reporting periods
beginning on or after 1 january 2007  and the related amendment to ias 1 presentation of financial statements the impact of the
adoption of ifrs 7 and the changes to ias 1 has been to expand the disclosures provided in these financial statements regarding the
group’s financial instruments and management of capital see note 19
the following interpretations issued by the international financial reporting interpretation committee ifric are effective for the
first time in the current financial year and have been adopted by the group with no significant impact on its consolidated results or
financial position
 ifric 8 — scope of ifrs 2 effective for annual periods beginning on or after 1 may 2006
 ifric 9 — reassessment of embedded derivatives effective for annual periods beginning on or after 1 june 2006
 ifric 10 — interim financial reporting and impairment effective for annual periods beginning on or after 1 november 2006
 ifric 11 — ifrs 2 group and treasury share transactions effective for annual periods beginning on or after 1 march 2007
in addition the group has elected to adopt ias 23 revised borrowing costs in advance of its effective date for accounting periods
beginning on or after 1 january 2009 the principal change to the standard which was to eliminate the previously available option to
expense all borrowing costs as incurred has meant that the group has capitalised £102000 of borrowing costs in accordance with
the policies set out in note 3 that would have previously been expensed through the income statement during the year 
at the date of authorisation of these financial statements the following standards and interpretations which have not been applied in
these financial statements were in issue but not yet effective
 ifrs 8 — operating segments effective for annual periods beginning on or after 1 january 2009
 amendment to ifrs 2 — sharebased payments effective for annual periods beginning on or after 1 january 2009
 amendment to ifrs 3 — business combinations effective for annual periods beginning on or after 1 july 2009
 amendment to ias 1 — presentation of financial statements effective for annual periods beginning on or after 1 january 2009
 amendment to ias 27 — consolidated and separate financial statements effective for annual periods beginning on or after 
1 july 2009
 amendment to ias 28 — investments in associates effective for annual accounting periods beginning on or after 1 july 2009
 amendment to ias 31 — interests in joint ventures effective for annual accounting periods beginning on or after 1 july 2009
 amendment to ias 32 — financial instruments presentation effective for annual accounting periods beginning on or after 
1 january 2009
 ifric 12 — service concession agreements effective for annual accounting periods beginning on or after 1 january 2008
 ifric 13 — customer loyalty programmes effective for annual accounting periods beginning on or after 1 july 2008
 ifric 14 — ias 19 — the limit on a defined benefit asset minimum funding requirements and their interaction effective for
annual periods beginning on or after 1 january 2008
the amendment to ifrs 3 will have the effect of expensing all future acquisition costs to the income statement rather than
capitalising them the directors anticipate that the adoption of the remainder of these standards and interpretations in future
periods will have no material impact on the financial statements of the group except for additional disclosures required relating to
ifrs 8 and ias 1
14771phoenixlayout 4  15708  1116  page 36 37
14771 14072008 proof 7
3 significant accounting policies
basis of accounting
the financial statements have been prepared in accordance with international financial reporting standards ifrss the financial
statements have also been prepared in accordance with ifrss adopted by the european union and therefore the group financial
statements comply with article 4 of the eu ias regulation
the financial statements have been prepared on the historical cost basis except where stated below the principal accounting policies
adopted are set out below
basis of consolidation
the consolidated financial statements incorporate the financial statements of the company and entities controlled by the company
its subsidiaries made up to 31 march each year  control is achieved where the company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its activities
on acquisition the assets including identifiable intangible assets excluding goodwill and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition any excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill the results of subsidiaries acquired or disposed of during the year are
included from the effective date of acquisition or up to the effective date of disposal as appropriate
all intragroup transactions balances income and expenses are eliminated on consolidation
discontinued operations and assets held for sale
cashflows and operations that relate to a major component of the business or geographical region that has been sold or is classified
as held for sale are shown separately from continuing operations
assets and businesses classified as held for sale are measured at the lower of carrying value and fair value less costs to sell no
depreciation is charged on assets and businesses classified as held for sale
assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use this condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in
its present condition management must be committed to the sale which should be expected to qualify for recognition as a completed
sale within one year from the date of classification
goodwill
goodwill arising on consolidation represents the excess of the cost of acquisition over the group’s interest in the fair value of the
identifiable assets and liabilities of a subsidiary at the date of acquisition
goodwill is recognised as an asset and reviewed for impairment at least annually with cash generating units assessed by segment see
note 15 any impairment is recognised immediately in profit for the period and is not subsequently reversed
on disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal
goodwill arising on acquisitions before the date of transition to ifrs as adopted by the european union has been retained at the
previous uk gaap amounts subject to being tested for impairment at that date goodwill written off to reserves under uk gaap in
the year ended 31 march 1999 and earlier periods has not been reinstated and is not included in determining any subsequent profit or
loss on disposal 
revenue recognition
revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and
services provided in the normal course of business net of discounts vat and other salesrelated taxes
sales of goods are recognised when goods are delivered and title has passed other revenues apart from those falling under
maintenance contracts shown below are recorded as earned or as the services are performed after provision for estimated
customer credits
interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s
net carrying amount
dividend income from investments is recognised when the shareholders’ rights to receive payment have been established 
14771phoenixlayout 4  15708  1116  page 37 notes to the consolidated financial statements
for the year ended 31 march 2008
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38
phoenix it group plc
1477 14771 14072008 proof 7
3 significant accounting policies continued
maintenance contracts
for fixedfee maintenance contracts the revenue arising is spread evenly over the term of the contract costs incurred under these
contracts are charged to the income statement as they arise
leasing
assets held under finance leases and hire purchase contracts are recognised as assets of the group at their fair value or  if lower  at
the present value of the minimum lease payments each determined at the inception of the lease the corresponding liability to the
lessor is included in the balance sheet as a finance lease obligation lease payments are apportioned between finance charges and
reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability finance charges
are charged directly against income
rentals payable under operating leases are charged to income on a straightline basis over the term of the relevant lease
benefits received and receivable as an incentive to enter into an operating lease are also spread on a straightline basis over the lease
term and discounted where material
foreign currencies 
transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the
transactions at each balance sheet date monetary assets and liabilities that are denominated in foreign currencies are retranslated
at the rates prevailing on the balance sheet date nonmonetary assets and liabilities carried at fair value that are denominated in
foreign currencies are translated at the rate prevailing at the date when the fair value was determined gains and losses arising on
retranslation are included in net profit or loss for the period
on consolidation the assets and liabilities of the group’s overseas operations are translated at exchange rates prevailing on the
balance sheet date income and expense items are translated at the average exchange rates for the period exchange differences
arising if any are classified as equity and transferred to the group’s profit and loss reserve such translation differences will be
recognised as income or as expenses in the period in which the operation is disposed of
borrowing costs
borrowing costs directly attributable to the acquisition construction or production of qualifying assets which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale are added to the cost of those assets until
such time as the assets are substantially ready for their intended use or sale
all other borrowing costs are recognised in the income statement in the period in which they are incurred
retirement benefit costs 
defined contribution pension schemes
the principal subsidiary undertakings contribute to a number of group personal pension plans in respect of certain employees these
plans are defined contribution plans and the annual charge to the income statement is the contributions payable in the year 
differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in
the balance sheet
defined benefit pension scheme
the group operates a defined benefit funded pension scheme
the costs of providing pensions under the defined benefit funded pension scheme are estimated on the basis of independent
actuarial advice with full actuarial valuations carried out on a triennial basis and updated at each balance sheet date
the operating and finance costs of the scheme are recognised separately within the statement of income actuarial gains and losses
are recognised in full in the period in which they occur and are presented in the statement of recognised income and expense 
the retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as
adjusted for unrecognised past service costs and as reduced by the fair value of scheme assets
14771phoenixlayout 4  15708  1116  page 38 39
14771 14072008 proof 7
3 significant accounting policies continued
shortterm employee benefits
the cost of shortterm accumulating balances is charged to the income statement over the period during which the entitlement is
earned at an average pay rate plus social security costs differences between the entitlement earned and the entitlement actually
paid is shown as either accruals or prepayments in the balance sheet
taxation
the tax currently payable is based on taxable profit for the year  taxable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible the group’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date
deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the
balance sheet liability method deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the
initial recognition other than in a business combination of other assets and liabilities in a transaction that affects neither the tax
profit nor the accounting profit
deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries except where the group
is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future
the carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised
deferred tax is charged or credited in the income statement except when it relates to items charged or credited directly to equity in
which case the deferred tax is also dealt with in equity
investments
investments are included at cost less provisions for impairment
property plant and equipment 
land and buildings fixtures and equipment are stated at cost less accumulated depreciation and recognised impairment
depreciation is charged so as to write off the cost of assets other than freehold land over their estimated useful lives using the
straightline method on the following bases
freehold buildings 50 years
leasehold property period of lease
fixtures and equipment 2 to 5 years
motor vehicles 4 years
assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or  where
shorter  over the term of the relevant lease
the gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in income
intangible assets
intangible assets are measured initially at fair value and are amortised on a systematic basis over their estimated useful lives on the
following bases
value of trade name 15 years
customer contracts and relationships 6 to 10 years
14771phoenixlayout 4  15708  1116  page 39 notes to the consolidated financial statements
for the year ended 31 march 2008
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40
phoenix it group plc
1477 14771 14072008 proof 7
3 significant accounting policies continued
impairment policy
at each balance sheet date the group reviews the carrying amounts of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss if any such indication exists the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss if any where the asset does not generate cash flows that are
independent from other assets the group estimates the recoverable amount of the cashgenerating unit to which the asset belongs
an intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset
may be impaired
recoverable amount is the higher of fair value less costs to sell and value in use in assessing value in use the estimated future cash
flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted
if the recoverable amount of an asset or cashgenerating unit is estimated to be less than its carrying amount the carrying amount
of the asset cashgenerating unit is reduced to its recoverable amount an impairment loss is immediately recognised as an expense
where an impairment loss subsequently reverses the carrying amount of the asset cashgenerating unit is increased to the revised
estimate of its recoverable amount but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset cashgenerating unit in prior years a reversal of an
impairment loss is immediately recognised as income
research and development
all expenditure on research and development activities is recognised as an expense in the period in which it is incurred
inventories
inventories are stated at the lower of cost and net realisable value
service stocks other than consumable stocks are systematically amortised over four years so as to reduce their value to nil at the
end of the period consumable stocks are expensed as they are purchased
financial instruments
financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes a party to the
contractual provisions of the instrument
financial assets
trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts estimated irrecoverable amounts are based on the ageing of the receivable balances and historical
experience individual trade receivables are written off when management deems them not to be collectable
cash and cash equivalents comprise cash on hand and demand deposits and other shortterm highly liquid investments that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value 
financial liabilities and equity
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into
trade payables are noninterest bearing and are stated at their nominal value
borrowings are recorded at the proceeds received net of direct issue costs finance charges including premiums payable on
settlement or redemption and direct issue costs are accounted for on an accrual basis to the income statement using the effective
interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which
they arise
14771phoenixlayout 4  15708  1116  page 40 41
14771 14072008 proof 7
3 significant accounting policies continued
equity instruments are any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities
equity instruments issued by the company are recorded at the proceeds received net of direct issue costs 
derivative financial instruments and hedge accounting
the group uses derivative financial instruments such as interest rate swaps to hedge risks associated with interest rate fluctuations
such derivative financial instruments are stated at fair value the fair values of interest rate swaps are determined by reference to
market rates for similar instruments
in order to qualify for hedge accounting the group is required to document from inception the relationship between the item being
hedged and the hedging instrument the group is also required to document and demonstrate an assessment of the relationship
between the hedged item and the hedging instrument which shows that the hedge will be highly effective on an ongoing basis this
effectiveness testing is performed at each period end to ensure that the hedge remains highly effective
hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised or no longer qualifies for
hedge accounting at that time any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until
the highly probable forecast transaction occurs if a hedged transaction is no longer expected to occur  the net cumulative gain or loss
recognised in equity is transferred to the consolidated statement of income for the period
cash flow hedges 
changes in the effective portion of the fair value of derivative financial instruments that are designated as hedges of future cash
flows are recognised directly in equity and the ineffective portion is recognised immediately in the statement of income where
relevant if the cash flow hedge of a firm commitment or forecast transaction results in the recognition of a nonfinancial asset or
liability then at the time it is recognised the associated gains or losses on the derivative that had previously been recognised in
equity are included in the initial measurement for hedges that result in the recognition of a financial asset or liability amounts
deferred in equity are recognised in the statement of income in the same period in which the hedged item affects net profit or loss
provisions
provisions relate to the obligation to reinstate certain properties to their former condition at the end of their leases provisions are
measured at management’s best estimate of the expenditure required to settle the obligation at the balance sheet date and are
discounted to present value where the effect is material
nonrecurring items
nonrecurring items are items of income or expenditure that in management’s judgement should be disclosed separately on the
basis that they are material either by their nature or their size such items are included within the income statement caption to which
they relate and are separately disclosed either in the notes to the accounts to the consolidated financial statements or on the face of
the consolidated income statement
sharebased payments
the group has applied the requirements of ifrs 2 sharebased payments in accordance with the transitional provisions ifrs 2 has
been applied to all grants of equity instruments after 7 november 2002 that were unvested as of 1 january 2005
the group issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are measured at
fair value at the date of grant the fair value determined at the grant date of the equitysettled sharebased payments is expensed on
a straightline basis over the vesting period based on the group’s estimate of options that will eventually vest
fair value is measured by use of a blackscholes model the expected life used in the model has been adjusted based on
management’s best estimate for the effects of nontransferability exercise restrictions and behavioural considerations 
shares purchased through the employee benefit trust ebt are held at cost and are deducted from shareholders equity the right to
a dividend on these shares has been waived 
14771phoenixlayout 4  15708  1116  page 41 notes to the consolidated financial statements
for the year ended 31 march 2008
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42
phoenix it group plc
1477 14771 14072008 proof 7
4 critical accounting judgements and key sources of estimation uncertainty
the preparation of the financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses
during the reporting period actual results could differ from these estimates information about such judgements and estimation is
contained in the accounting policies or the notes to the accounts and the key areas are summarised below
areas of judgement that have the most significant effect on the amounts recognised in the financial statements are
nonrecurring items
nonrecurring items are items of income or expenditure that in management’s judgement should be disclosed separately on the
basis that they are material either by their nature or their size to an understanding of the group’s financial performance and
significantly distort the comparability of financial performance between periods items of income or expense that are considered by
management for designation as nonrecurring items include such items as significant restructuring impairments of noncurrent
assets integration of acquired businesses and gains and losses on disposals of noncurrent assets details of nonrecurring items are
included in note 7 
assets held for sale
assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through
continuing use this condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in
its present condition management must be committed to the sale which should be expected to qualify for recognition as a completed
sale within one year from the date of classification in making this judgement impairment losses of £471000 have been reflected in
the income statement as nonrecurring items details of the losses are disclosed in note 17 
valuation of intangible assets and useful life
the group has made assumptions in relation to the potential future cash flows to be determined from separable intangible assets
acquired as part of business combinations this assessment involves assumptions relating to potential future revenues appropriate
discount rates and the useful life of such assets these assumptions impact the income statement over the useful life of the intangible
asset these assumptions are discussed further below 
key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are
retirement benefits
the group operates a defined benefit pension scheme which has been accounted for in accordance with ias 19 — employee benefits
application of ias 19 requires the exercise of judgement in relation to various assumptions including future pay rises in excess of
inflation employer and pensioner demographics and the future expected returns on assets phoenix it group determines the
assumptions to be adopted in discussion with its actuaries and believes these assumptions to be in line with uk practice generally but
the application of different assumptions could have a significant effect on the amounts reflected in the financial statements further
details can be found in note 10
impairment of goodwill and intangible assets
determining whether goodwill and intangible assets have been impaired requires an estimation of the value in use of the cash
generating units to which they have been allocated the value in use calculation requires the entity to estimate the future cash flows
expected to arise from the cashgenerating unit and a suitable discount rate in order to calculate present value details of the carrying
amount of goodwill and intangible assets are shown in notes 15 and 16 respectively
sharebased payments
in valuing the sharebased payments realised in the group’s accounts the company has used the black–scholes calculation model
which makes various assumptions on factors outside the group’s control such as share price volatility and riskfree interest rates
details of the options and assumptions used in deriving the sharebased payments are disclosed in note 39
dilapidation provisions
dilapidation provisions have been derived on the basis of the most recent assessment of likely cost many of these obligations will not
arise for a number of years and the costs are difficult to predict accurately in making these assessments the group has sought the
aid of independent experts where appropriate the total provisions are disclosed in note 28
14771phoenixlayout 4  15708  1116  page 42 43
14771 14072008 proof 7
5 revenue
an analysis of the group’s revenue is as follows
2008 2007
£’000 £’000
existing operations 162628 126712
acquisition in year — icm 68175 —
230803 126712
investment income 897 270
231700 126982
6 segmental reporting
following the acquisition of icm computer group plc the board has determined that the primary segmental reporting format is by
business line based on the group’s management and internal reporting structure the group’s operations are based entirely in the
uk and considered to be one geographical segment
principal activities are as follows
partner services business provision of information technology services networking support and infrastructure services
business continuity provision of business continuity and it disaster recovery services
sme it services provision of information technology services and systems
segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis
corporate costs relate to central group costs including finance legal and employee costs that are not directly attributable to the
operating segments  
inter segment sales are charged at prevailing market prices
partner 
services business sme it
business continuity services corporate total
year ended 31 march 2008 £’000 £’000 £’000 £’000 £’000
revenue 102918 41999 85886 — 230803
profit from operations before amortisation of acquired
intangibles and nonrecurring items 17 7 46 8850 8950 2545 33001
amortisation of intangibles 3603
nonrecurring items 5972
profit from operations 23426
capital expenditure on segment assets 1346 18484 197 4 — 21804
depreciation and amortisation in period 968 9255 4177 — 14400
impairment losses recognised in period — 471 —— 471
balance sheet
segment assets 37 621 96637 50154 30 184442
unallocated assets 174648
total assets 359090
segment liabilities 35203 67 515 31981 1226 135925
unallocated liabilities 102848
total liabilities 238773
14771phoenixlayout 4  15708  1116  page 43 notes to the consolidated financial statements
for the year ended 31 march 2008
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44
phoenix it group plc
1477 14771 14072008 proof 7
6 segmental reporting continued
partner 
services business sme it
business continuity services corporate total
year ended 31 march 2007 £’000 £’000 £’000 £’000 £’000
revenue 91529 18836 16347 — 126712
profit from operations before amortisation of acquired
intangibles and nonrecurring items 17 558 4942 1705 1510 22695
amortisation of intangibles 1979
nonrecurring items —
profit from operations 20716
capital expenditure on segment assets 467 3941 29 — 4437
depreciation and amortisation in period 1122 4588 373 — 6083
balance sheet
segment assets 28192 22299 12235 2484 65210
unallocated assets 84095
total assets 149305
segment liabilities 30817 23178 10888 2769 67 652
unallocated liabilities 25210
total liabilities 92862
the analysis of total assets and liabilities excludes interbusiness balances unallocated total assets comprise goodwill arising on
consolidation derivative financial assets and other consolidation adjustments unallocated total liabilities comprise bank loans and
overdrafts taxation and derivative financial liabilities
7 nonrecurring items
2008 2007
£’000 £’000
costs of reorganisation of newly acquired subsidiaries 5501 —
writeoff of unamortised loan costs and loan break costs following arrangement of new bank facilities 446 —
impairment loss on property reclassified as held for sale notes 17 and 20 471 —
6418 —
the funding of the acquisition of icm computer group note 35 during the period necessitated a renegotiation of the group’s
borrowing facilities
14771phoenixlayout 4  15708  1116  page 44 45
14771 14072008 proof 7
8 profit from operations
profit from operations has been arrived at after charging
2008 2007
£’000 £’000
depreciation of property plant and equipment 10797 4104
impairment of property plant and equipment 471 —
amortisation of acquired intangibles 3603 1979
amortisation of inventories 4221 3007
cost of inventories recognised as expense 856 818
research and development expenditure 102 81
auditors’ remuneration for audit services see below 248 146
auditors’ remuneration for nonaudit services see below 71 46
amounts payable to deloitte  touche llp and their associates by the company and its subsidiary undertakings in respect of non
audit services which have not been charged to the profit and loss account were £100000 2007 £507 000 
2008 2007
£’000  £’000 
audit services
recurring — statutory audit 248 59 146 21
248 59 146 21
tax services
compliance and advisory services 52 12 46 7
other services
acquisition of subsidiary 100 24 507 72
other 19 5 ——
119 29 507 72
419 100 699 100
9 staff costs
2008 2007
£’000 £’000
their aggregate remuneration comprised
wages and salaries 80050 49317
social security costs 9219 5897
other pension costs see note 10 2074 1011
91343 56225
the average monthly number of employees including directors was
number number
distribution staff 2185 1416
administration staff 158 95
directors 6 5
2349 1516
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of
the categories specified in ias 24 related party disclosures further information about the remuneration of individual directors is
provided in the audited part of the directors’ remuneration report on pages 28 to 30
2008 2007
£’000 £’000
shortterm employee benefits 2033 773
postemployment benefits 162 91
sharebased payments 536 636
2731 1500
14771phoenixlayout 4  15708  1116  page 45 notes to the consolidated financial statements
for the year ended 31 march 2008
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46
phoenix it group plc
1477 14771 14072008 proof 7
10 retirement benefit schemes
defined contribution scheme
the group operates a defined contribution retirement benefit scheme the assets of this scheme are held separately from those of
the group
pension costs for defined contribution schemes are as follows
2008 2007
£’000 £’000
defined contribution scheme 1655 1011
defined benefit scheme
this is the first year the group has operated a defined benefit scheme for certain of its employees following the acquisition of icm
under the scheme the employees are entitled to retirement benefits varying between 125 and 167 of final salary multiplied by
number of years of pensionable service on attainment of a retirement age of 65 no other post retirement benefits are provided
the scheme is a funded scheme
the most recent full actuarial valuation of the scheme’s defined benefit obligation was carried out at 6 april 2006 and updated to
31 march 2008 by a qualified independent actuary for ias 19 purposes the projected unit method was used in all valuations and
assets were taken into account using market values
the major assumptions used by the actuary were
2008

discount rate 640
expected return on equities bonds and cash 680
expected rate of salary increases 425
future pension increases 330
inflation 360
mortality tables used pxa92yobmc
the current life expectancies in years underlying the value of the accrued liabilities for pension plan are
2008
male female
member currently age 65 219 247
member currently age 40 232 260
amounts recognised in income in respect of the defined benefit scheme are as follows
2008
£’000
current service cost 419
interest cost 687
expected return on scheme assets 638
468
the current service cost for the period has been included in staff costs actuarial gains of £592000 have been reported in the
consolidated statement of recognised income and expense
the amount included in the balance sheet arising from the group’s obligations in respect of its defined benefit retirement benefit
scheme is as follows
2008
£’000
present value of defined benefit obligations 13182
fair value of scheme assets 12103
deficit in scheme and liability recognised in the balance sheet 1079
14771phoenixlayout 4  15708  1116  page 46 47
14771 14072008 proof 7
10 retirement benefit schemes continued
movements in the present value of defined benefit obligations were as follows
2008
£’000
on acquisition of icm during the period note 35 13365
current service cost 419
interest cost 687
benefits paid 87
members’ contributions 352
actuarial gains on obligation 1554
at 31 march 2008 13182
movements in the fair value of scheme assets were as follows
2008
£’000
on acquisition of icm during the period note 35 10524
expected return on scheme assets 638
contributions by employer 1638
members’ contributions 352
benefits paid 87
actuarial losses on scheme assets 962
at 31 march 2008 12103
the fair value of the scheme assets at the balance sheet date is analysed as follows
2008
£’000
equities 7342
bonds 4732
cash 29
12103
the scheme assets do not include any of the group’s own financial instruments nor any property occupied by or other assets used
by the group
the expected rate of return on the equities was determined by reference to long term historic out performance of this asset class
over bonds so a view was taken that it was appropriate to take a future return rate on equities of 7 5 pa the investment return
in relation to these assets is variable and as such they are considered riskier investments this results in ‘the equity risk premium’
which is included in the yield on the equity investment and compensates investors for the additional risk of holding this type of
investment there is significant uncertainty about the expected size of this risk premium and this risk is managed by holding assets
which are less risky in nature but have a corresponding lower return
the expected rate of return on bonds was determined by taking a blend between the gross redemption yields on corporate and
governments bonds which was the two types of bonds held within the scheme at 31 march 2008 resulting in a return rate on
bonds of 570 the risk of default on these assets is small 
the expected rate of return on cash was determined by reference to the level of bank base rate of 525 pa
the overall expected rate of return is calculated by weighting the individual rates in accordance with how the plan assets are
invested
the actual return on scheme assets was a loss of £368000
14771phoenixlayout 4  15708  1116  page 47 notes to the consolidated financial statements
for the year ended 31 march 2008
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48
phoenix it group plc
1477 14771 14072008 proof 7
10 retirement benefit schemes continued
the history of the scheme for the current period is as follows
2008
£’000
present value of defined benefit obligation 13182
fair value of scheme assets 12103
deficit 1079
experience adjustments on scheme liabilities —
percentage of scheme liabilities 0
experience adjustments on scheme assets 962
percentage of scheme assets 795
the estimated amounts of contributions expected to be paid to the scheme during the current financial year is £1413600 which
includes payments to eliminate the pension deficit of £669600 and the employers ordinary contribution rate has increased to 89
of pensionable salaries the group has agreed with the trustees that it will aim to eliminate the deficit over the next three years by
means of contributions of £669600 per annum paid monthly
the sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below
impact on scheme 
assumption change in assumption liabilities £’000
discount rate increase by 05 decrease by 398
rate of salary growth increase by 025 increase by 1423
mortality improved life expectancy by using lower cohort instead of medium cohort increase by 1511
mortality improved life expectancy by using lower cohort with 1 floor instead of increase by 1846
medium cohort
11 finance costs and investment income
2008 2007
£’000 £’000
finance costs
interest on bank overdrafts and loans 6731 1339
interest on obligations under finance leases and hire purchase contracts 475 300
amortisation of loan issue costs 334 34
other interest 212 31
interest cost on defined benefit scheme 687 —
nonrecurring finance costs 446 —
total interest expense 8885 1704
less amounts included in the cost of qualifying assets 102 —
8783 1704
investment income
expected return on defined benefit pension scheme assets 638 —
interest on bank deposits 235 200
other interest 24 70
897 270
net finance costs 7886 1434
borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are calculated by
applying a capitalisation rate of 7 621 to expenditure on such assets
14771phoenixlayout 4  15708  1116  page 48 49
14771 14072008 proof 7
12 taxation
the tax charge on profit from operations for the year was as follows
2008 2007
£’000 £’000
current tax
uk corporation tax 4992 6175
adjustment in respect of prior periods 107 527
foreign tax 145 125
5030 5773
deferred tax note 29
current year 265 94
adjustment in respect of prior periods 487 141
impact of change in united kingdom tax rate 55 —
4753 5538
corporation tax is calculated at 30 of the estimated assessable profit for the year  based on future government legislation the
corporation tax will be calculated at 28 of assessable profit from 1 april 2008
taxation for jurisdictions other than the uk is calculated at the rates prevailing in the respective jurisdictions
the charge for the year can be reconciled to the profit per the income statement as follows
2008 2007
£’000  £’000 
profit before tax 15540 19282
tax at the uk corporation tax rate of 30 4662 300 5785 300
effects of
expenses that are not deductible in determining taxable profit 791 51 378 20
tax adjustments relating to share options 94 06 10 00
adjustments in respect of prior periods 594 38 668 35
impact of change in united kingdom tax rate 55 04 ——
different tax rates of subsidiaries operating in other jurisdictions 43 03 33 02
tax expense and effective tax rate for the year 4753 306 5538 287
in addition to the amount charged to the income statement deferred tax of £94000 2007 credit of £10000 and current tax of
£134000 2007 credit of £82000 relating to share option charges has been debited and credited directly to equity respectively
a deferred tax credit of £267 000 2007 £nil and £166000 charge has been posted to equity regarding the hedging liability and the
actuarial gains on the pension obligation respectively
14771phoenixlayout 4  15708  1116  page 49 notes to the consolidated financial statements
for the year ended 31 march 2008
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50
phoenix it group plc
1477 14771 14072008 proof 7
13 earnings per share
2008 2007
adjusted earnings per share excluding amortisation of acquired intangibles and nonrecurring items
basic 248p 253p
diluted 241p 244p
the calculation of the basic and diluted earnings per share is based on the following data
earnings
2008 2007
£’000 £’000
earnings for the purposes of basic earnings per share and diluted earnings per share being
net profit attributable to equity holders of the parent 10787 137 44
amortisation of acquired intangibles 3603 1979
nonrecurring items 6418 —
tax on amortisation of acquired intangibles and nonrecurring items 3006 594
earnings for the purposes of adjusted earnings per share being net profit attributable to equity
holders of the parent excluding amortisation of acquired intangibles and nonrecurring items 17802 15129
number of shares
2008 2007
’000 ’000
weighted average number of ordinary shares for the purposes of basic earnings per share 71792 59806
effect of dilutive potential ordinary shares
share options 2219 2144
weighted average number of ordinary shares for the purposes of diluted earnings per share 74011 61950
14 dividends
2008 2007
£’000 £’000
amounts recognised as distributions to shareholders in the year
second interim dividend for the year ended 31 march 2007 of 317 4p 2006 nil per share 1913 —
final dividend for the year ended 31 march 2007 of nil 2006 276p per share — 1642
interim dividend for the year ended 31 march 2008 of 183p 2007 159p per share 1368 958
3281 2600
proposed final dividend for the year ended 31 march 2008 of 365p 2007 nil per share 2737 —
second interim dividend for the year ended 31 march 2008 of nil 2007 317 4p per share — 1913
the proposed final dividend was recommended by the board on 14 may 2008 and will be paid on 1 october 2008 it has not been
included as a liability in these financial statements
14771phoenixlayout 4  15708  1116  page 50 51
14771 14072008 proof 7
15 goodwill
£’000
cost and carrying amount
at 1 april 2006 57 820
additions 26270
at 1 april 2007 84090
additions 90558
at 31 march 2008 174648
goodwill acquired in a business combination is allocated at acquisition to the cashgenerating units cgus that are expected to
benefit from that business combination before recognition of impairment losses the carrying amount of goodwill has been
allocated as follows
2008 2007
£’000 £’000
partner services business 21745 217 45
business continuity 82804 36075
sme it services 70099 26270
174648 84090
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired
the recoverable amounts of the cgus are determined from value in use calculations these have been calculated based on
projections that incorporate the group’s best estimates of future cash flows growth rates discount rates and expected changes to
selling prices and operating costs prepared from internal forecasts for the next three years extrapolated into the future using a
225 growth rate cash flow projections have been discounted to reflect the time value of money using a pretax discount rate of
13 for sme it services and 10 for partner services business and business continuity the discount rate used reflects
management’s view on the differing risk profiles of the cgus
16 intangible assets
£’000
cost
at 1 april 2006 9013
additions 2054
at 1 april 2007 11067
additions 18664
at 31 march 2008 29731
accumulated amortisation
at 1 april 2006 1998
charge for the year 1979
at 1 april 2007 3977
charge for the year 3603
at 31 march 2008 7580
net book value
at 31 march 2008 22151
at 31 march 2007 7 090
intangible assets arose on the acquisition of ndr holdings limited servo computer services limited and icm computer group
plc and relate to the valuation of the brand name and the acquired customer relationships expected to endure beyond the
minimum contracted order terms
14771phoenixlayout 4  15708  1116  page 51 notes to the consolidated financial statements
for the year ended 31 march 2008
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52
phoenix it group plc
1477 14771 14072008 proof 7
17 property plant and equipment
short fixtures
freehold leasehold and motor
property properties equipment vehicles total
£’000 £’000 £’000 £’000 £’000
cost
at 1 april 2006 1407 2573 15643 389 20012
acquired with subsidiary undertaking 963 26 121 78 1188
additions — 635 3556 246 4437
disposals —— 1950 175 2125
at 1 april 2007 2370 3234 17 370 538 23512
acquired with subsidiary undertaking note 35 27 870 2289 20618 926 51703
additions 263 2232 19204 105 21804
reclassified as held for sale 5031 ——— 5031
disposals —— 3268 — 3268
at 31 march 2008 25472 7755 53924 1569 88720
accumulated depreciation
at 1 april 2006 194 481 6902 108 7 685
charge for the year 32 396 3590 86 4104
disposals —— 1948 106 2054
at 1 april 2007 226 877 8544 88 9735
charge for the year 326 998 8908 565 10797
impairment loss 471 ——— 471
reclassified as held for sale 533 ——— 533
disposals —— 3263 — 3263
at 31 march 2008 490 1875 14189 653 17207
net book value
at 31 march 2008 24982 5880 39735 916 71513
at 31 march 2007 2144 2357 8826 450 13777
the impairment loss on freehold property relates to properties reclassified as held for sale in the current year and reflects the
difference between their carrying value and fair value in the market the impairment loss of £471000 is recognised in cost of sales
on the consolidated statement of income
included in the above is land at cost of £5767 000 2007 £508000 which is not depreciated
the net book value of fixed assets includes £13488000 2007 £5470000 in respect of assets held under finance leases and hire
purchase contracts
at 31 march 2008 the group had entered into contractual commitments for the redevelopment of property amounting to
£1960000 2007 £nil
18 derivative financial instruments
on 28 september 2007  the group entered into an interest rate swap to hedge risks associated with interest rate fluctuations on
variable rate borrowings the main terms of the interest rate swap are disclosed in note 19 there were no derivative financial
instruments in the year ended 31 march 2007 
2008
liability
fair value notional
£’000 £’000
cash flow hedges
interest rate swaps 952 80000
the derivative financial instrument matures on 30 september 2010
14771phoenixlayout 4  15708  1116  page 52 53
14771 14072008 proof 7
19 financial risk management
the group’s activities expose it to a variety of financial risks market risk including currency risk and interest rate risk credit risk
and liquidity risk
funding and treasury risk management is carried out under a framework of policies and guidelines approved by the board the
board is responsible for regular review and monitoring of treasury activity and for approval of specific transactions the authority
of which may be delegated the group accounting function provides regular update reports of treasury activity to the board of
directors
the group does not enter into or trade financial instruments including derivative financial instruments for speculative purposes
capital risk management
the group seeks to match long term assets with long term funding and short term assets with short term funding 
equity retained profits and long term fixed interest debt are used primarily to finance intangible assets and fixed assets short
term borrowings are required primarily to finance current assets
the group capitalisation policy seeks to maintain a strong credit rating and an appropriate funding structure whilst safeguarding
group ability to continue as a going concern
market risk
a foreign exchange risk
the group publishes its consolidated financial statements in sterling but also conducts some business in foreign currencies mainly
the us dollar and euro as a result it is subject to foreign exchange currency risk due to exchange rate movements which will
affect the group’s transaction costs and the translation of the results and underlying net assets of its foreign operation
the group manages these currency exposures by maintaining where possible a broadly equivalent revenue and expense stream
in the relevant currency the board periodically reviews the net risk and implements strategies as appropriate due to the relative
stability of the foreign currencies in which the group deal and the size of the foreign exchange transactions the group does not
hedge the foreign exchange risk as the potential exposure is considered not to be material to the group’s results
the carrying amounts of the group’s foreign currency denominated monetary assets and liabilities at the reporting date are as
follows
assets liabilities
2008 2007 2008 2007
£’000 £’000 £’000 £’000
us dollar 339 167 76 62
euro 2381 1631 1623 1077
norwegian kroner 135 108 — —
2855 1906 1699 1139
b interest rate risk
the group is exposed to interest rate risk as entities in the group borrow funds at both fixed and floating interest rates the risk is
managed by the group by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of interest
rate swap contracts these practices serve to reduce the volatility of the group’s reported financial performance
all borrowings before interest rate swaps are at variable rates the table below sets out the carrying amount of borrowings that
are exposed to interest rate risk after taking into account interest rate swaps
2008 2007
£’000 £’000
fixed interest rate borrowings note 25 80000 —
floating interest rate borrowings note 25 23342 26917
total borrowings 103342 26917
the contractual maturity of these borrowings can be found in the relevant notes shown above
14771phoenixlayout 4  15708  1116  page 53 notes to the consolidated financial statements
for the year ended 31 march 2008
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54
phoenix it group plc
1477 14771 14072008 proof 7
19 financial risk management continued
on 28 september 2007  the group entered into an interest rate swap to hedge risks associated with interest rate fluctuations on
the variable rate £80m term loan note 18 which matures on 30 september 2010 the interest rate swap settles on a quarterly
basis the rate was fixed at 578 based on three months libor the group will settle the difference between the fixed and
floating interest rate on a net basis the interest swap has been designated as a cash flow hedge in order to reduce the group’s
cash flow exposure resulting from the variable interest rate on the term loan the interest rate swaps and the interest payments on
the loan occur simultaneously and the amount deferred in equity is recognised in profit or loss over the period that the floating
rate interest payments on debt impact profit or loss
the quantitative disclosures relating to derivative financial instruments can be found in note 18
credit risk
credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group
the group monitors its credit exposures to its counterparties via their credit rating where applicable or through other publicly
available financial information and its own trading records
the group does not have any significant credit risk exposure to any single counterparty or group of counterparties having similar
characteristics the group defines counterparties as having similar characteristics if they are connected entities concentration of
credit risk with respect to trade receivables is limited due to the group’s customer base being large and unrelated the credit risk
on liquid funds and derivative financial instruments is limited because the counterparties are banks with high creditrating
assigned by international credit rating agencies
the carrying amounts of financial assets recorded in the financial statements which is net of impairment losses represents the
group’s maximum exposure to credit risk
liquidity risk
the group manages its liquidity requirements by maintaining adequate reserves banking facilities and reserve borrowing facilities
by continuously monitoring forecast and actual cash flows all borrowing is agreed and monitored by the board of directors the
group’s undrawn committed borrowing facilities are shown in note 25 the group has a policy of pooling group cash flows in order
to maximise the return on surplus cash and also utilise cash within the group surplus cash is placed on shortterm deposits
the following is an analysis of the contractual undiscounted cash flows payable under financial liabilities and derivative financial
instruments as at the balance sheet date the table includes both interest and principal cash flows
due between due between due in
due within one and two and over three
one year two years three years years total
nonderivative financial liabilities
bank loans 14342 13000 16000 60000 103342
finance lease liabilities 4850 3673 3086 2907 14516
other non interestbearing liabilities 33689 68 —— 33757
derivative financial instruments
net settled interest rate swaps 244 570 195 — 1009
total as at 31 march 2008 53125 17311 19281 62907 152624
nonderivative financial liabilities
bank loans 7 000 7 000 7 000 6000 27 000
finance lease liabilities 2199 1818 1272 1135 6424
other non interestbearing liabilities 22631 100 —— 22731
derivative financial instruments
net settled interest rate swaps —— — — —
total as at 31 march 2007 31830 8918 8272 7 135 56155
floating rate interest has been estimated using a future interest rate curve as at 31 march the cash flow movements on the
interest rate swap are expected to affect the statement of income in the same period in which they occur  
14771phoenixlayout 4  15708  1116  page 54 55
14771 14072008 proof 7
19 financial risk management continued
sensitivity analysis
financial instruments affected by market risk include borrowings deposits and derivative financial instruments  the following
analysis required by ifrs 7  is intended to illustrate the sensitivity to changes in market variables being uk interest rates and the
us dollar and euro to sterling exchange rate on the group’s financial instruments
the analysis excludes the impact of movements in market variables on the carrying value of pension and other postretirement
benefits obligations provisions and on the nonfinancial assets and liabilities of the overseas subsidiary
the sensitivity analysis has been prepared on the basis that the amount of net debt the ratio of fixed to floating interest rates of
the debt and the derivative portfolio and the proportion of financial instruments in foreign currencies are all constant and on the
basis of the hedge designations in place at 31 march 2008 and 31 march 2007  respectively  as a consequence this sensitivity
analysis relates to the positions at those dates and is not representative of the years then ended as all of these varied
the following table shows the illustrative effect on the income statement and items that are recognised directly in equity that
would result from reasonably possible movements in changes in the uk interest rates and in the us dollar and euro to sterling
exchange rate before the effects of tax
2008 2007
income income
statement equity statement equity
—£’000 —£’000 —£’000 —£’000
uk interest rates — 050 103 — 100 —
us dollar exchange rate — 10 34 — 17 —
euro exchange rate — 10 49 24 24 19
20 noncurrent assets held for sale
assets held for sale of £4498000 2007 £nil consist of properties held in the business continuity segment £4084000 and the
sme it services segment £414000 sale of these assets is expected to occur in the next financial year ended 31 march 2009
21 subsidiaries
a list of the significant subsidiaries included within the group accounts including the name country of incorporation and
proportion of ownership interest is given in note 4 to the individual company financial statements on page 71
22 inventories
2008 2007
£’000 £’000
service stocks 11087 6391
14771phoenixlayout 4  15708  1116  page 55 notes to the consolidated financial statements
for the year ended 31 march 2008
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56
phoenix it group plc
1477 14771 14072008 proof 7
23 trade and other receivables
trade and other receivables at the balance sheet date comprise
2008 2007
£’000 £’000
included within noncurrent assets
prepayments and accrued income 5059 —
included within current assets
trade debtors 47671 23451
other debtors 241 232
prepayments and accrued income 9968 9251
57880 32934
the group’s trade receivables are stated after allowances for bad and doubtful debts based on management’s assessment of
creditworthiness an analysis of which is as follows
2008 2007
£’000 £’000
balance at the beginning of the period 134 75
amounts written off as uncollectible 453 95
amounts reversed during the year 319 36
balance at the end of the period 268 134
as at 31 march 2008 trade receivables of £248m 2007 £275m were past due but not impaired the ageing of these trade
receivables from due date is as follows
2008 2007
£’000 £’000
under 30 days 1647 2139
30–60 days 362 348
60–90 days 120 78
90–120 days 314 55
over 120 days 38 125
total 2481 27 45
concentration of credit risk with respect to trade receivables are limited due to the group’s customer base being large and
unrelated due to this the directors believe there is no further credit risk provision required in excess of the allowance for bad and
doubtful debts
the directors consider that the carrying amount of trade and other receivables approximates their fair value due to their short
maturities
14771phoenixlayout 4  15708  1116  page 56 57
14771 14072008 proof 7
24 cash and cash equivalents
2008 2007
£’000 £’000
cash and cash equivalents 12254 5023
cash and cash equivalents comprise cash held by the group and shortterm bank deposits with an original maturity of three
months or less the carrying amount of these assets approximates their fair value 
net cash and cash equivalents are held in the following currencies those held in currencies other than sterling have been
converted into sterling at yearend exchange rates
2008 2007
£’000 £’000
sterling 11288 4505
euro 492 243
us dollar 339 167
norwegian krone 135 108
12254 5023
25 bank loans
the following table analyses bank borrowings excluding bank overdrafts 
2008 2007
£’000 £’000
current
bank loans 13961 7 000
noncurrent
bank loans 88272 19917
total borrowings 102233 26917
total borrowings are repayable as follows
2008 2007
£’000 £’000
within one year 13961 7 000
in more than one year but not more than two years 12681 7 000
in more than two years but not more than five years 75591 12917
102233 26917
all bank borrowings are denominated in sterling
the funding of the acquisition of icm computer group during the period necessitated a renegotiation of the group’s borrowing
facilities
the group entered into the new facilities on 28 march 2007 which were drawn down on 12 june 2007 
i a loan of £80m repayments commence in september 2008 and will continue until march 2012 the company and certain
subsidiaries as guarantor have entered into a composite guarantee in favour of royal bank of scotland on account of the
company and certain subsidiaries as principal the loan carries an interest rate of 1262 above libor the hedging terms
relating to the loan are discussed in note 19
ii a loan of £3342m the loan is due for repayment in full in march 2009 the company and certain subsidiaries as guarantor
have entered into a composite guarantee in favour of royal bank of scotland on account of the company and certain
subsidiaries as principal the loan carries an interest rate of 1262 above libor
14771phoenixlayout 4  15708  1116  page 57 notes to the consolidated financial statements
for the year ended 31 march 2008
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58
phoenix it group plc
1477 14771 14072008 proof 7
25 bank loans continued
iii a revolving credit facility of £20m the facility is due for repayment in full in march 2012 the company and certain
subsidiaries as guarantor have entered into a composite guarantee in favour of royal bank of scotland on account of the
company and certain subsidiaries as principal the loan carries an interest rate of 1262 above libor
the loans that existed as at 31 march 2007 were repaid in full on the 12 june 2007 in advance of their due date the total
repayment amounted to £27 0m with loan break costs incurred of £01m
the directors estimate the fair value of the group’s bank borrowings to be equivalent to its book value at 31 march 2008 the
group had available £36158m 2007 £20m of undrawn committed borrowing facilities
26 trade and other payables
trade and other payables principally comprise the following amounts 
2008 2007
£’000 £’000
trade creditors 19276 10967
other creditors 9814 1197
social security and other taxes 10202 6379
accruals 11935 10567
51227 29110
as at 31 march 2008 trade creditors of the group were equivalent to 56 days 2007 41 days
the directors consider that the carrying amount of trade payables approximates their fair value
27 obligations under finance leases and hire purchase contracts
present value of
minimum lease minimum lease
payments payments
2008 2007 2008 2007
£’000 £’000 £’000 £’000
amounts payable under finance leases and hire purchase contracts
within one year 4850 2205 4189 1937
in the second to fifth years inclusive 9666 4219 8835 3909
14516 6424 13024 5846
less future finance charges 1492 578
present value of lease obligations 13024 5846
less amounts due for settlement within 12 months 4189 1937
amounts due for settlement after 12 months 8835 3909
it is the group’s policy to lease certain of its fixtures fittings and equipment under finance leases and hire purchase contracts the
average term is 5 years interest rates are fixed at the contract date all leases are on a fixed repayment basis and no
arrangements have been entered into for contingent rental payments 
all lease and hire purchase obligations are denominated in sterling
there is no material difference between the minimum lease payments and the present value of the minimum lease payments
the fair value of the group’s lease and hire purchase obligations approximates their carrying amount
the group’s obligations under finance leases and hire purchase contracts are secured by the lessors’ charges over the leased
assets
14771phoenixlayout 4  15708  1116  page 58 59
14771 14072008 proof 7
28 provisions
2008 2007
£’000 £’000
balance at the start of the period 1456 1237
additional provision in the year 1022 247
utilisation of provision 30 496
adjustment to fair values of subsidiary undertaking note 35 2160 468
balance at the end of the period 4608 1456
included in current liabilities 208 47
included in noncurrent liabilities 4400 1409
4608 1456
the provision relates to the obligation to reinstate certain properties to their former condition at the end of their leases which end
between 2008 and 2017 
29 deferred tax
the following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current
and prior year 
accelerated share rolled retirement 
intangible tax option over benefit
hedging assets depreciation costs provisions gains obligations total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
at 1 april 2006 — 2104 105 37 4 502 —— 1123
acquisition of subsidiary — 616 96 — 595 22 — 53
charge to income — 593 422 251 209 22 — 235
charge to equity —— — 10 —— — 10
at 1 april 2007 — 2127 221 635 888 —— 825
acquisition of subsidiary note 35 — 5226 7 000 — 1227 — 7 42 10257
charge to income — 1009 15 27 525 — 27 4 222
charge to equity 267 —— 94 —— 166 7
change to rate of tax — 142 15 42 60 —— 55
at 31 march 2008 267 6202 7221 526 1530 — 302 10798
at the balance sheet date the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries
for which deferred tax liabilities have not been recognised was £65410856 2007 £31836630 no liability has been recognised
in respect of these differences because the group is in a position to control the timing of the reversal of the temporary differences
and it is probable that such differences will not reverse in the foreseeable future
14771phoenixlayout 4  15708  1116  page 59 notes to the consolidated financial statements
for the year ended 31 march 2008
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60
phoenix it group plc
1477 14771 14072008 proof 7
30 share capital
authorised allotted and fully paid
number £’000 number £’000
ordinary shares of 1p each
at 1 april 2006 100000000 1000 59341032 593
exercise of share options —— 220850 2
new shares issued on acquisition —— 708103 7
at 1 april 2007 100000000 1000 60269985 602
exercise of share options —— 410636 4
shares transferred to the employee benefit trust —— 261750 3
new shares issued on acquisition —— 14047 184 141
at 31 march 2008 100000000 1000 74989555 750
during the year  options were exercised on 410636 ordinary shares at prices varying from 1p to 200p and that number of shares
was issued for a total gross consideration of £229678 comprising £225572 of share premium and £4106 of capital 
a total of 261750 ordinary shares are held by the employee benefit trust 2007 nil for which the right to receive dividends has
been waived
the company has one class of ordinary share capital which carries no right to fixed income
31 share premium account
£’000
at 1 april 2006 36800
premium on issue of shares 344
at 1 april 2007 37144
premium on issue of shares 226
at 31 march 2008 37370
32 merger reserve 
£’000
at 1 april 2006 —
premium on issue of shares 2243
share issue costs 4
at 1 april 2007 2239
premium on issue of shares 55240
share issue costs 26
at 31 march 2008 57453
14771phoenixlayout 4  15708  1116  page 60 61
14771 14072008 proof 7
33 other reserves
total 
hedging employee translation shares to other
reserve benefit trust reserve be issued reserves
£’000 £’000 £’000 £’000 £’000
at 1 april 2006 —— 6 655 661
exchange difference arising on the restatement of
net assets of overseas subsidiaries —— 7 — 7
ifrs 2 share option expense —— — 814 814
at 1 april 2007 —— 1 1469 1468
exchange difference arising on the restatement of
net assets of overseas subsidiaries —— 98 — 98
ifrs 2 share option expense —— — 905 905
transfer to retained earnings on exercise of share options—— — 794 794
shares transferred to the employee benefit trust — 3 —— 3
loss recognised on cash flow hedges 686 —— — 686
at 31 march 2008 686 3 97 1580 988
other reserves are shown net of taxation as appropriate
the hedging reserve represents hedging gains and losses recognised on the effective portion of cash flow hedges the cumulative
deferred gain or loss on the hedge is recognised in profit or loss when the hedged transaction impacts the profit or loss or is
included as a basis adjustment to the nonfinancial hedged item consistent with the applicable accounting policy
34 retained earnings
£’000
at 1 april 2006 3754
sharebased payment transaction deferred tax reserve 10
sharebased payment transaction corporation tax reserve 82
retained profit for the year 137 44
dividends 2600
at 1 april 2007 14990
sharebased payment transaction deferred tax reserve 94
sharebased payment transaction corporation tax reserve 134
movement on pension deficit 592
deferred tax on pension reserve 166
exercise of ifrs 2 options 794
retained profit for the year 10787
dividends 3281
at 31 march 2008 23756
14771phoenixlayout 4  15708  1116  page 61 notes to the consolidated financial statements
for the year ended 31 march 2008
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62
phoenix it group plc
1477 14771 14072008 proof 7
35 acquisition of subsidiary undertaking
on 29 may 2007 the group acquired control of icm computer group plc icm the group acquired 100 of the share capital of
icm for a cash consideration of £61772000 and the issue of 14047 184 shares in phoenix it group plc  the fair value of the equity
instruments issued as consideration was the market value on the date of acquisition  the costs of acquisition amounted to
£3608000  icm is the parent company of a group of companies involved in the provision of it services and equipment  this
transaction has been accounted for by the purchase method of accounting
the following table sets out the book values of the identifiable assets and liabilities acquired and their provisional fair values to 
the group 
fair value
book value revaluation to group
£’000 £’000 £’000
fixed assets
property plant and equipment 44008 7 695 51703
goodwill 13024 13024 —
intangible asset arising on acquisition — 18664 18664
current assets
inventories 4634 961 3673
trade and other receivables 14967 54 14913
current tax assets 692 692 —
cash and cash equivalents 771 — 771
total assets 78096 11628 89724
liabilities
bank loans 15753 — 15753
trade and other payables 11508 551 12059
provisions — 2160 2160
current tax liabilities — 550 550
deferred tax liabilities 599 9658 10257
retirement benefit obligations — 2841 2841
deferred revenue 15901 — 15901
total liabilities 43761 15760 59521
net assets 34335 4132 30203
goodwill 90558
120761
satisfied by
cash 61772
shares 55381
cash — costs of acquisition 3608
120761
details of the provisional fair value adjustments to the book values of the acquired identifiable assets and liabilities are as follows
a tangible fixed assets were revalued in order to reflect their fair value to the group
b intangible assets arising on the acquisition relate to the valuation of the acquired customer relationships expected to endure
beyond the minimum contracted order terms and the brand name the intangible asset valuation has been derived using the
estimated net present value of the net future after tax cash flows which are expected to arise from the customer relationships
and the brand name
c stock was adjusted to reflect the valuation on the date of acquisition
14771phoenixlayout 4  15708  1116  page 62 63
14771 14072008 proof 7
35 acquisition of subsidiary undertaking continued
d trade debtors were reduced by £54000 to take account of post acquisition credit notes raised and invoices raised
e other debtors were adjusted to take into account balances arising as a result of the exercise of employee share options
f other creditors were adjusted to take account of additional liabilities on the date of acquisition
g provisions comprise dilapidation provisions of £2160000
h corporation tax was adjusted to take account of the charge for the eleven months to the date of acquisition
i deferred tax assets were revalued to take account of the deferred tax liability that arises from the other fair value adjustments
and freehold property
j the goodwill recognised of £906m is attributable to the value of the established workforce and infrastructure the future
growth potential particularly in the business continuity and disaster recovery market and the anticipated synergies arising
from the acquisition
icm contributed £68175000 revenue and £6938000 to the group’s profit from operations before amortisation of acquired
intangibles and nonrecurring items for the period between the date of acquisition and 31 march 2008
if the acquisition of icm had been on the first day of the financial period the contribution to the group revenues for the period
would have been £81272000 and the contribution to the group’s profit from operations before amortisation of acquired
intangibles and nonrecurring items attributable to equity holders of the parent would have been £8444000 
36 notes to the cash flow statement
2008 2007
£’000 £’000
profit from operations 23426 20716
adjustments for
depreciation of property plant and equipment 10797 4104
impairment of property 471 —
profitloss on disposal of property plant and equipment 73 39
amortisation of acquired intangibles 3603 1979
share option costs 905 814
exchange difference 98 7
operating cash flows before movements in working capital 39227 27 645
increasedecrease in stocks 1023 27 4
increase in receivables 15092 3733
increase in payables 11080 5699
increase in deferred income 11061 1164
cash generated by operations 45253 31049
income taxes paid 6432 6053
interest received 259 270
interest paid 9253 1719
net cash from operating activities 29827 23547
additions to fixtures and equipment during the year amounting to £8824515 2007 £2805406 were financed by new finance
leases
14771phoenixlayout 4  15708  1116  page 63 notes to the consolidated financial statements
for the year ended 31 march 2008
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64
phoenix it group plc
1477 14771 14072008 proof 7
37 reconciliation of net borrowings
2008 2007
£’000 £’000
increase in cash and cash equivalents during the period 7231 2263
movement in borrowings 66096 11831
borrowings of business acquired 16398 —
movement in net borrowings during the period 75263 9568
net borrowings brought forward 27740 18172
net borrowings carried forward 103003 27 7 40
cash and cash equivalents 12254 5023
other current borrowings 18150 8937
noncurrent borrowings 97107 23826
net borrowings carried forward 103003 27 7 40
38 operating lease arrangements
the group as lessee
2008 2007
£’000 £’000
minimum lease payments under operating leases recognised in income for the year 3229 3050
at the balance sheet date the group had outstanding commitments for future minimum lease payments under noncancellable
operating leases which fall due as follows
2008 2007
£’000 £’000
within one year 7395 2911
in the second to fifth years inclusive 22356 5790
after five years 16825 3011
46576 11712
operating lease payments represent rentals payable by the group for land and buildings fixtures and fittings equipment and motor
vehicles
14771phoenixlayout 4  15708  1116  page 64 65
14771 14072008 proof 7
39 sharebased payments
equitysettled share option plans
the company has operated the following equitysettled share option plans during the period
employee share plan esp
enterprise management incentive plan emi
performance share plan psp
post flotation no further awards will be made under the esp or the emi plan
the general terms and conditions of each plan are as follows
esp emi psp
exercise price agreed market price of the all grants under the emi plan all awards made under the psp 
company’s shares at date of grant were made at prices higher than have a nil exercise price the 
the agreed market price of the number of options granted to 
company’s shares at the date of eligible group employees is 
grant the grant prices reflected determined as a proportion of 
the grant prices of option rights base salary using the average of 
under the esp waived by option the middle market quotes for the 
holders prior to the adoption of company’s shares for the three 
the emi plan days immediately prior to grant 
vesting period generally three years from the vesting of all emi plan options three years from the date of grant 
date of grant was conditional upon the flotation 
of the company consequently 
all the emi plan options vested 
in november 2004
lapse date generally options granted under all emi plan options automatically psp options lapse if they remain 
the esp automatically lapse if they lapse if they remain unexercised unexercised after a period of 
remain unexercised after a period after a period of 10 years from 10 years from the date of grant 
of seven years from the date of grant the date of grant furthermore furthermore options are 
furthermore generally options options are forfeited if the option forfeited if the option holder 
granted under the esp are holder ceases to be a group ceases to be a group employee 
forfeited if the option holder employee before exercising before exercising the option 
ceases to be a group employee the option 
before exercising the option
performance none none the psp awards are subject to 
conditions achieving a performance 
condition related to average
annual growth in either eps or 
profit growth over a threeyear 
period of between 5 and 20 
per annum this results in 
between 20 and 100 of the 
options granted vesting 
performance between these 
points is on a progressive scale
14771phoenixlayout 4  15708  1116  page 65 notes to the consolidated financial statements
for the year ended 31 march 2008
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66
phoenix it group plc
1477 14771 14072008 proof 7
39 sharebased payments continued
esp 2008 2007
weighted weighted
average average
exercise exercise
options price options price 
balance at the start of the period 303500 165p 604500 170p
granted during the period —— ——
exercised during the period 155500 139p 170000 178p
expired during the period 15500 151p 131000 172p
outstanding at the end of the period 132500 197p 303500 165p
exercisable at the end of the period 132500 197p 106000 130p
emi 2008 2007
weighted weighted
average average
exercise exercise
options price options price 
balance at the start of the period 143000 78p 194350 81p
granted during the period —— ——
exercised during the period 16500 69p 50850 87p
expired during the period 1000 96p 500 96p
outstanding at the end of the period 125500 80p 143000 78p
exercisable at the end of the period 125500 80p 143000 78p
psp 2008 2007
weighted weighted
average average
exercise exercise
options price options price 
balance at the start of the period 1817655 — 1241623 —
granted during the period 860607 — 681279 —
exercised during the period 251727 — ——
expired during the period 204724 — 105247 —
outstanding at the end of the period 2221811 — 1817 655 —
exercisable at the end of the period 248659 — ——
the weighted average share price at the date of exercise for share options exercised during the period was
esp 394p
emi 389p
psp 291p
the inputs into the black–scholes model are as follows
psp4 psp5
weighted average share price £401 £403
weighted average exercise price nil nil
expected volatility 30 30
expected life 4 years 4 years
weighted average riskfree rate 531 503
weighted average dividend yield 119 119
expected volatility was determined by calculating the historical volatility of the group’s share price over the previous six months
and by comparison with comparable companies due to the limited data available for the group the expected life used in the
model has been adjusted based on management’s best estimate for the effects of nontransferability exercise restrictions and
behavioural considerations
14771phoenixlayout 4  15708  1116  page 66 67
14771 14072008 proof 7
39 sharebased payments continued
other sharebased plans
the company introduced a share incentive plan on flotation all employees were entitled to apply for free shares up to a value of
£1250 depending on their period of service the company issued 259558 shares in connection with this award
in addition employees are able to buy shares by deduction from their pretax salary under the current sip legislation this is
restricted to a maximum of £1500 in each tax year or  if less 10 of salary
the group recognised total expenses of £1009000 relating to equitysettled sharebased payment transactions in 2008 2007
£835000
40 related party transactions
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and are
disclosed in note 16 to the individual company financial statements transactions with directors are disclosed in the remuneration
report
14771phoenixlayout 4  15708  1116  page 67 independent auditors’ report on the company financial statements
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68
phoenix it group plc
1477 14771 14072008 proof 7
we have audited the parent company financial statements of
phoenix it group plc for the year ended 31 march 2008 which
comprise the balance sheet and the related notes 1 to 16 these
parent company financial statements have been prepared under
the accounting policies set out therein
we have reported separately on the group financial statements of
phoenix it group plc for the year ended 31 march 2008 and on 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 annual report and
the parent company financial statements in accordance with
applicable law and united kingdom accounting standards united
kingdom generally accepted accounting practice are set out in
the statement of directors’ responsibilities
our responsibility is to audit the parent company financial
statements in accordance with relevant legal and regulatory
requirements and international standards on auditing uk 
and ireland
we report to you our opinion as to whether the parent company
financial statements give a true and fair view and whether the
parent company financial statements have been properly prepared
in accordance with the companies act 1985 we also report to you
whether in our opinion the directors’ report is consistent with the
parent company financial statements
in addition we report to you if in our opinion the company has not
kept proper accounting records if we have not received all the
information and explanations we require for our audit or if
information specified by law regarding directors’ remuneration and
other transactions is not disclosed
we read the other information contained in the annual report as
described in the contents section and consider whether it is
consistent with the audited parent company financial statements
we consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the
parent company financial statements our responsibilities do not
extend to any further information outside the annual report
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 parent company
financial statements it also includes an assessment of the
significant estimates and judgments made by the directors in the
preparation of the parent company financial statements and of
whether the accounting policies are appropriate to the 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 parent company financial statements are free
from material misstatement whether caused by fraud or other
irregularity or error  in forming our opinion we also evaluated the
overall adequacy of the presentation of information in the parent
company financial statements
opinion
in our opinion
 the parent company financial statements give a true and fair
view in accordance with united kingdom generally accepted
accounting practice of the state of the company’s affairs as at
31 march 2008
 the parent company financial statements have been properly
prepared in accordance with the companies act 1985 and
 the information given in the directors’ report is consistent with
the parent company financial statements
deloitte  touche llp
chartered accountants and registered auditors 
london
united kingdom
14 may 2008
14771phoenixlayout 4  15708  1116  page 68 69
company balance sheet
as at 31 march 2008
14771 14072008 proof 7
2008 2007
note £’000 £’000
fixed assets
investments 4 230629 109868
current assets
debtors 5 25425 12424
creditors amounts falling due in one year 6 55377 43491
net current liabilities 29952 31067
total assets less current liabilities 200677 78801
creditors amounts falling due after more than one year 7 89224 19917
net assets 111453 58884
capital and reserves
share capital 8 750 602
share premium account 9 37370 37144
merger reserves 10 57453 2239
other reserves 11 955 —
shares to be issued reserve 12 1580 1365
profit and loss account 13 15255 17 534
shareholders’ funds 14 111453 58884
the financial statements were approved by the board of directors and authorised for issue on 14 may 2008 they were signed on its
behalf by
david simpson
chief financial officer
14771phoenixlayout 4  15708  1116  page 69 notes to the company financial statements
for the year ended 31 march 2008
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phoenix it group plc
1477 14771 14072008 proof 7
1 accounting policies
accounting convention
the financial statements are prepared under the historical cost convention and have been prepared in accordance with the
applicable united kingdom accounting standards as permitted by the companies act 1985 the company has not presented its
own profit and loss account
the principal accounting policies adopted are set out below they have all been applied consistently throughout the year and the
preceding year 
foreign currencies
assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date
transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction exchange
differences are taken into account in arriving at the operating result 
group undertakings
investments are included in the balance sheet at cost less any provision for permanent diminution in value
financial liabilities and equity
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into
an equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities
bank borrowings
interestbearing bank loans are recorded at the proceeds received less any direct issue costs finance charges and direct issue
costs are accounted for on an accruals basis in profit and loss using the effective interest method and are added to the carrying
amount of the instrument to the extent that they are not settled in the period in which they arise
sharebased payments
the company has applied the requirements of frs 20 ‘sharebased payments’ in accordance with the transitional provisions 
frs 20 has been applied to all grants of equity instruments after 7 november 2002 that were unvested as of 1 january 2005
the company issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are
measured at fair value at the date of grant the fair value is expensed on a straightline basis over the vesting period based on the
estimate of shares that will eventually vest
derivative financial instruments and hedge accounting
the company uses derivative financial instruments to reduce exposure to interest rate movements the company does not hold or
issue derivative financial instruments for speculative purposes
for an interest rate swap to be treated as a hedge the instrument must be related to actual assets or liabilities or a probable
commitment and must change the nature of the interest rate by converting variable rate to fixed rate or vica versa interest
differentials under these swaps are recognised by adjusting new interest payable over the period of the contracts
if an instrument ceases to be a hedge for example because the underlying hedged position is eliminated the instrument is marked
to market and any resulting profit or loss recognised at that time 
2 staff costs
the directors were the only employees during the period and they received all of their remuneration as disclosed in the directors’
remuneration report on page 30 from phoenix it services limited
3 profit of parent company
as permitted by section 230 of the companies act 1985 the profit and loss account of the parent company is not presented as
part of these accounts the parent company’s profit after tax for the financial year amounted to £1002000 2007 £7 330000
14771phoenixlayout 4  15708  1116  page 70 71
14771 14072008 proof 7
4 investments
shares in loans to
group group
undertakings undertakings total
£’000 £’000 £’000
cost 
at 1 april 2007 88868 22000 110868
additions 120761 — 120761
at 31 march 2008 209629 22000 231629
accumulated impairment
at 1 april 2007 and 31 march 2008 1000 — 1000
net book value
at 31 march 2008 208629 22000 230629
at 31 march 2007 87 868 22000 109868
difficult trading conditions in france continued as a result the directors have reviewed the carrying value of the company’s
investments and retained the provision for impairment of £1000000
at 31 march 2008 the company held directly or indirectly 100 of the allotted share capital of the following principal undertakings
which are all included in the consolidation
name of subsidiary country of registration class of share capital held nature of business
phoenix it services limited england and wales ordinary provision of information 
technology services
phoenix it services sa france ordinary provision of information 
technology services
trend network services england and wales ordinary provision of information 
technology networking support 
and infrastructure services
network disaster recovery limited england and wales ordinary provision of business continuity 
and it disaster recovery services
servo computer services limited england and wales ordinary provision of information 
technology services and systems
criffel micro business systems limited scotland ordinary provision of information 
technology services and systems
icm computer group limited england and wales ordinary provision of business continuity 
and information technology 
services and systems
5 debtors amounts falling due within one year
2008 2007
£’000 £’000
amounts owed by group undertakings note 16 25395 9940
prepayments 30 2484
25425 12424
14771phoenixlayout 4  15708  1116  page 71 notes to the company financial statements
for the year ended 31 march 2008
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72
phoenix it group plc
1477 14771 14072008 proof 7
6 creditors amounts falling due within one year
2008 2007
£’000 £’000
amounts owed to group undertakings note 16 40190 33723
trade creditors 84 —
other tax and social security 17 —
accruals 1125 2768
bank loans 13961 7 000
55377 43491
as at 31 march 2008 trade creditors of the group were equivalent to 59 days 2007 nil days
7 creditors amounts falling due after more than one year
2008 2007
£’000 £’000
bank loans 88272 19917
hedging liability 952 —
89224 19917
the borrowings are repayable as follows
in more than one year but not more than two years 12681 7 000
in more than two years but not more than five years 75591 12917
88272 19917
the derivative financial instrument matures on 30 september 2010
8 share capital
authorised allotted and fully paid
number £’000 number £’000
ordinary shares of 1p each
at 1 april 2007 100000000 1000 60269985 602
exercise of share options —— 410636 4
shares transferred to the employee benefit trust —— 261750 3
new shares issued on acquisition —— 14047 184 141
at 31 march 2008 100000000 1000 74989555 750
9 share premium account
£’000
at 1 april 2007 37144
premium on issue of shares 226
at 31 march 2008 37370
14771phoenixlayout 4  15708  1116  page 72 73
14771 14072008 proof 7
10 merger reserves
£’000
at 1 april 2007 2239
premium on issue of shares 55240
share issue costs 26
at 31 march 2008 57453
11 other reserves
hedging ebt
reserve reserve total
£’000 £’000 £’000
at 1 april 2007 ———
decrease in value 952 3 955
at 31 march 2008 952 3 955
12 shares to be issued reserve
£’000
at 1 april 2007 1365
frs 20 share option expense 905
transfer to retained earnings on exercise of share options 690
at 31 march 2008 1580
13 profit and loss account
£’000
at 1 april 2006 12804
retained profit for the year 7 330
dividends 2600
at 1 april 2007 17 534
retained profit for the year 1002
dividends 3281
at 31 march 2008 15255
14 reconciliation of movements in shareholders’ funds
2008 2007
£’000 £’000
at 1 april 2007 58884 50679
profit for the financial year 1002 7 330
dividends 3281 2600
56605 55409
loss recognised on cash flow hedges 952 —
shares transferred to the employee benefit trust 3 —
frs 20 share option expense 215 883
share capital issue 148 9
premium on issue of shares 55466 2587
share issue costs 26 4
closing shareholders’ funds 111453 58884
14771phoenixlayout 4  15708  1116  page 73 notes to the company financial statements
for the year ended 31 march 2008
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74
phoenix it group plc
1477 14771 14072008 proof 7
15 sharebased payments
details of share options granted by group companies to employees and that remain outstanding over the company’s shares are
set out in note 39 to the phoenix it group plc consolidated financial statements on pages 65 to 67  the company recognised total
expenses of £89360 relating to equitysettled sharebased payment transactions in 2008 2007 £nil
16 related party transactions
transactions between the company and its subsidiaries which are related parties have been eliminated on consolidation and 
are below
amounts amounts
owed owed
by related to related
parties parties 
£’000 £’000
phoenix it services limited — 20981
phoenix it services sa — 645
trend network services — 343
phoenix systems management limited — 2875
phoenix computer group limited — 3288
phoenix it services europe limited — 1000
phoenix international holdings limited 64 —
network disaster recovery limited — 4108
icm computer group limited 15455 —
ndr holdings limited 9876 —
servo computer services limited — 6950
at 31 march 2008 25395 40190
the transactions with related parties include the receipt of dividends from subsidiaries totalling £12m and loans as above both
payable by the company to subsidiaries and repayable to the company by subsidiaries which carry no interest and are repayable
on demand the amounts outstanding are unsecured and will be settled in cash no guarantees have been given or received no
provisions have been made for doubtful debts in respect of the amounts owed by related parties
14771phoenixlayout 4  15708  1116  page 74 75
five year summary
for the year ended 31 march 2008
14771 14072008 proof 7
ifrs ifrs ifrs ifrs uk gaap uk gaap
2008 2007 2006 2005 2005 2004
£’000 £’000 £’000 £’000 £’000 £’000
results
revenue 230803 126712 108919 88331 88331 58311
profit from operations excluding goodwill
amortisation amortisation of acquired
intangibles and nonrecurring items 33001 22695 21401 15009 15056 10818
goodwill amortisation — ——— 1061 —
amortisation of acquired intangibles 3603 1979 1998 ———
nonrecurring items 5972 —— 1979 1979 —
profit from operations 23426 20716 19403 13030 12016 10818
net interest payable 7886 1434 1454 1946 1946 1501
profit before tax 15540 19282 17 949 11084 10070 9317
key statistics
earnings per ordinary share 150p 230p 213p 157p 136p 155p
diluted earnings per ordinary share 146p 222p 208p 154p 133p 150p
adjusted earnings per ordinary share 248p 253p 237p 189p 187p 155p
 adjusted earnings per ordinary share excludes the effect of goodwill amortisation amortisation of acquired intangibles and non
recurring items
the amounts disclosed for 2004 and earlier periods are stated on the basis of uk gaap because it is not practicable to restate
amounts for periods prior to the date of transition to ifrs 
14771phoenixlayout 4  15708  1116  page 75 1477
notice of annual general meeting
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
76
phoenix it group plc
14771 14072008 proof 7
notice is hereby given that the annual general meeting of phoenix it group plc will be held at technology house hunsbury hill
avenue northampton northamptonshire nn4 8qs on wednesday 14 august 2008 at 1030 am for the following purposes
ordinary business 
1 to receive and adopt the accounts for the year ended 31 march 2008 together with the reports of the directors and of the auditor
thereon
2 to declare a final dividend of 365p per ordinary share for the year ended 31 march 2008 to be paid on 1 october 2008 to
shareholders on the register at the close of business on 12 september 2008 
3 a to reappoint deloitte  touche llp as auditor to the company to hold office until the conclusion of the next general meeting at 
which accounts are laid before the company
b to authorise the directors to determine the remuneration of the auditor of the company 
4 to reelect as a director peter bertram who retires by rotation in accordance with article 80 of the company’s articles of association
5 to reelect as a director nick robinson who retires by rotation in accordance with article 80 of the company’s articles of association 
6 to approve the directors’ remuneration report for the year ended 31 march 2008 
to transact any other ordinary business of the company
special business
as special business to consider and if thought fit pass the following resolutions which will be proposed as to resolution 7 as an ordinary
resolution and as to resolutions 8 and 9 as special resolutions
7  that subject to and in accordance with article 92 of the articles of association of the company the directors be generally and
unconditionally authorised in accordance with section 80 of the companies act 1985 in substitution for any existing authority to allot
relevant securities to exercise all the powers of the company to allot relevant securities within the meaning of section 80 of the
companies act 1985 up to a maximum nominal amount of £249965 being approximately onethird of the company’s issued share
capital as at 14 may 2008 provided that such authority shall expire on the conclusion of the annual general meeting of the company
to be held in 2009 or 14 november 2009 whichever is earlier  but so that the company may before such expiry make an offer or
agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant
securities in pursuance of such offer or agreement as if the authority conferred by this resolution had not expired 
8 that subject to the passing of resolution 7 as set out in the notice of this meeting and in accordance with article 92 of the articles of
association of the company the directors be empowered pursuant to section 95 of the companies act 1985 to allot equity securities
as defined in section 94 of the companies act 1985 for cash pursuant to the general authority conferred by resolution 7 as set out in
the notice of this meeting as if section 891 of the companies act 1985 did not apply to such allotment provided that this power shall
be limited to allotments of equity securities 
a in connection with or pursuant to an offer by way of rights open offer or other preemptive offer to the holders of shares in the
company and other persons entitled to participate therein in proportion as nearly as practicable to their respective holdings
subject to such exclusions or other arrangements as the directors may consider necessary or expedient to deal with fractional
entitlements or legal or practical problems under the laws of any territory or the regulations or requirements of any regulatory
authority or any stock exchange in any territory 
botherwise than pursuant to subparagraph a above up to an aggregate nominal amount of £37 495 
and such power shall expire on the conclusion of the annual general meeting of the company to be held in 2009 or on 14 november
2009 whichever is earlier  but so that the company may before such expiry make an offer or agreement which would or might require
equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement
as if the power conferred by this resolution had not expired
14771phoenixlayout 4  15708  1116  page 76 77
14771 14072008 proof 7
9 that the company be generally and unconditionally authorised pursuant to article 6 of the articles of association of the company
and pursuant to section 166 of the companies act 1985 to make market purchases as defined in section 163 of the companies act
1985 of up to 37 49478 ordinary shares of 1p each in the capital of the company being approximately five per cent of the company’s
issued share capital as at 14 may 2008 on such terms and in such manner as the directors of the company may from time to time
determine provided that
a the amount paid for each share exclusive of expenses shall not be more than five per cent above the average of the middle market
quotation for ordinary shares as derived from the daily official list of london stock exchange plc for the five business days before
the date on which the contract for the purchase is made and in any event not less than 1p per ordinary share and 
bthe authority herein contained shall expire at the conclusion of the annual general meeting of the company to be held in 2009 or
on 14 november 2009 whichever is earlier  provided that the company may before such expiry make a contract to purchase its
own shares which would or might be executed wholly or partly after such expiry and the company may make a purchase of its own
shares in pursuance of such contract as if the authority conferred by this resolution had not expired
dated 14 may 2008 
registered office by order of the board
technology house w t martin
hunsbury hill avenue company secretary
northampton
northamptonshire
nn4 8qs
14771phoenixlayout 4  15708  1116  page 77 1477
notice of annual general meeting
continued
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78
phoenix it group plc
14771 14072008 proof 7
notes
1 any member entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies who need not be a
member of the company to attend and to vote instead of the member  completion and return of a form of proxy will not preclude a
member from attending and voting at the meeting in person should he subsequently decide to do so
2 the right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been
nominated to receive communications from the company in accordance with section 146 of the companies act 2006 ‘nominated
persons’ nominated persons may have a right under an agreement with the registered shareholder who holds the shares on their
behalf to be appointed or to have someone else appointed as a proxy alternatively if nominated persons do not have such a right or
do not wish to exercise it they may have a right under such an agreement to give instructions to the person holding the shares as to
the exercise of voting rights
3 in order to be valid any form of proxy and power of attorney or other authority under which it is signed or a notarially certified or
office copy of such power or authority must reach the company’s registrars equiniti limited aspect house spencer road lancing
bn99 6da not less than 48 hours excluding any part of a day which is a nonworking day before the time of the meeting or of any
adjournment of the meeting 
4 as permitted by regulation 41 of the uncertificated securities regulations 2001 shareholders who hold shares in uncertificated form
must be entered on the company’s share register at 600 pm on 12 august 2008 in order to be entitled to attend and vote at the
annual general meeting such shareholders may only cast votes in respect of shares held at such time changes to entries on the
relevant register after that time shall be disregarded in determining the rights of any person to attend or vote at the meeting
5 copies of the service contracts and letters of appointment of each of the directors will be available for inspection at the registered
office of the company during usual business hours on any weekday saturdays and public holidays excluded and at the place of the
annual general meeting from at least 15 minutes prior to and until the conclusion of the annual general meeting
6 biographical details of each director who is being proposed for reappointment or reelection by shareholders including their
membership of board committees are set out on pages 18 to 19 and page 24 of the 2008 annual report and accounts
7  the total number of ordinary shares in issue as at 11 july 2008 the last practicable day before printing this document was 75140634
ordinary shares and the total level of voting rights was 75140634
8 in order to facilitate voting by corporate representatives at the meeting arrangements will be put in place at the meeting so that i if a
corporate shareholder has appointed the chairman of the meeting as its corporate representative with instructions to vote on a poll in
accordance with the directions of all of the other corporate representatives for that shareholder at the meeting then on a poll those
corporate representatives will give voting directions to the chairman and the chairman will vote or withhold a vote as corporate
representative in accordance with those directions and ii if more than one corporate representative for the same corporate
shareholder attends the meeting but the corporate shareholder has not appointed the chairman of the meeting as its corporate
representative a designated corporate representative will be nominated from those corporate representatives who attend who will
vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative 
corporate shareholders are referred to the guidance issued by the institute of chartered secretaries and administrators on proxies
and corporate representatives — wwwicsaorguk — for further details of this procedure the guidance includes a sample form of
representation letter if the chairman is being appointed as described in i above a letter in this form would be acceptable to the
company and its registrars
14771phoenixlayout 4  15708  1116  page 78 79
shareholder notes
14771 14072008 proof 7
14771phoenixlayout 4  15708  1116  page 79 shareholder notes
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80
phoenix it group plc
14771 14072008 proof 7
14771phoenixlayout 4  15708  1116  page 80 14771 14072008 proof 7
phoenix it group companies
provide managed it infrastructure
support services including systems
management communications
remote telephone support
hightouch field services project
and consultancy services
business continuity and business
availability services
financial highlights and operational highlights 01
overview of operations 02
chairman’s statement 10
chief executive‘s review 11
financial review 14
board of directors 18
directors’ report 20
corporate governance 23
corporate social responsibility 26
audit committee report 27
directors’ remuneration report 28
independent auditors’ report on the group financial statements 31
consolidated statement of income 32
consolidated statement of recognised income and expenses 33
consolidated balance sheet 34
consolidated cash flow statement 35
notes to the consolidated financial statements 36
independent auditors’ report on the company financial statements 68
company balance sheet 69
notes to the company financial statements 70
five year summary 75
notice of annual general meeting 76
advisers and financial calendar inside back cover
all of our businesses have longterm
revenue visibility a good cash flow
and operate in market niches with
excellent growth prospects often
driven by regulatory change
contents
revenues
821
to £2308m
2007 £1267m
profit from
operations
2
454
to £330m
2007 £227m
free cash flow
262
to £297m
2007 £236m
1
profit before tax
3
202
to £256m
2007 £213m
4
profit from
operations
131
to £234m
2007 £207m
profit before tax
£155m
2007 £193m
diluted earnings
per share
146p
2007 222p
diluted earnings
per share
5
241p
2007 244p
highlights
financial highlights
phoenix it group plc
registered in england 3476115
registered office
technology house
hunsbury hill avenue
northampton
nn4 8qs
financial advisers  stockbrokers
ubs limited
1 finsbury avenue
london
ec2m 2pp
auditor
deloitte  touche llp
hill house
1 little new street
london
ec4a 3tr
registrars
equiniti
aspect house
spencer road
lancing
west sussex
bn99 6da
principal bankers
royal bank of scotland
152 silbury boulevard
milton keynes
mk9 1lt
solicitors
eversheds llp
115 colmore row
birmingham
b3 3al
financial public relations
financial dynamics
holborn gate
26 southampton buildings
london
wc2a 1pb
remuneration consultants
new bridge street consultants llp
20 little britain
london
ec1a 7dh
advisers
annual general meeting 14 august 2008
ex dividend date 10 september 2008
record date for dividend 12 september 2008
dividend payment date 1 october 2008
this document has been produced on coated paper using 50 recovered pulp waste and 50 elemental chlorinefree pulp from managed and
certified sustainable forests
financial calendar
1 see page 16
2 before nonrecurring items and amortisation of acquired
intangibles
3 nonrecurring items and amortisation of acquired
intangibles
4 profit before tax £220m 2007 £193m plus amortisation
of acquired intangibles £36m 2007 £20m
5 adjusted for nonrecurring items and amortisation of
acquired intangibles
14771phoenixcover 6pplayout 2  16708  1157  page 2 14771 14072008 proof 7
phoenix it group plc
technology house hunsbury hill avenue
northampton nn4 8qs
t 44 0 1604 769000
f 44 0 1604 764323
wwwphoenixitgroupcom
phoenix it group plc
annual report and accounts
for the year ended 31 march 2008
intelligent infrastructure
wwwphoenixitgroupcom
phoenix it group plc annual report and accounts for the year ended 31 march 2008
wwwphoenixitgroupcom
stock exchange code pnx
intelligent infrastructure
14771phoenixcover 6pplayout 2  16708  1157  page 1


Summary:
 11
•
phoenix it services
•
icm continuous business
•
servo 
14771 14072008 proof 7
overview
the past year has seen phoenix it group move to a new level
following the acquisition of icm at the end of may 2007 and the
acquisition of servo which completed in november 2006 during
the year  we began the process of integrating these recently
acquired companies together with other group companies into
larger  more competitive business units focused on discrete market
sectors we have also worked on introducing a new operating
model that leverages the benefits of scale of the enlarged group
this integration process is currently being implemented and will be
materially complete by the autumn of 2008 
we have also had a successful year financially for the year ended
31 march 2008 group profit before tax before nonrecurring items
and amortisation of acquired intangibles grew by 202 to
£256m
1
2007 £213m on group revenues of £2308m 2007
£1267m an increase of 821 
success factors in this growth and operational performance have
included a focus on servicing the needs of our customers
operational precision introduction of new and innovative services
and tight cost controls that help us quote for new business more
accurately and keenly 
the markets the group serves
with effect from 1 april 2008 the group moved from five operating
units to three customer facing divisions — icm continuous business
business continuity phoenix it services partner services and
servo midmarket — supported by shared operations and
corporate services 
structural overview and the integration process
following the icm acquisition the group has undertaken a
thorough integration review and planning exercise and the
resulting integration programme is in the process of being
executed 
 icm continuous business business continuity
the business continuity division comprising network disaster
recovery ‘ndr’ and the business continuity business of icm
will be branded icm continuous business the two businesses
coming together create a powerful force in the uk business
continuity market with 15 purpose built centres over 7 500
recovery positions extensive mobile and it recovery capabilities
and over 2100 customers the customer bases of the two
businesses are complementary with icm having greater high
end market penetration compared to ndr’s midmarket
strength this element of the integration plan will be
substantially complete by the end of june 2008
 phoenix it services partner services
phoenix it services continues to focus on delivering a wide
range of it support services to typically large end users through
partners 
 servo midmarket 
servo and icm’s managed availability services business are
being merged resulting in a significant operation enjoying
increased scale benefits focused on providing it solutions and
services to a large midmarket customer base from 1 april
2008 this division has been branded servo this element of the
integration is under way and it is envisaged that it will be
substantially complete by the end of autumn 2008
 the group is also in the process of establishing a centralised
operational shared services unit which will undertake
activities for example logistics on behalf of the three
operating divisions to maximise operational efficiencies
existing activities are being progressively transferred from the
individual business units to the shared services centre this is
expected to be substantially complete by the end of autumn
2008 
the integration process is delivering a number of cost synergies for
the enlarged group including
 a reduction in the number of sites from which the business
continuity division will provide services two sites in high
wycombe are in the process of being closed and the contracts
will be transferred to other recovery centres the two sites in
bristol have been combined and the darlaston west midlands
facility is in the process of being combined with the ndr head
office in aston birmingham
 greater operating efficiencies derived from the creation of
larger units throughout the uk which will have a greater
density of coverage and 
 increased procurement and productivity gains arising from
the combination of the group’s respective logistics operations
and support functions 
during the year the group incurred a total of £64m of non
recurring items of which £43m has been a cash expense £55m of
the nonrecurring items incurred during the year relate to the
integration project and it is anticipated that a further £46m will be
incurred during the next 12 months the project has yielded cost
synergies of £17m during the year and it is anticipated that further
cost synergies of £55m will be achieved in the financial year to
march 2009 
icm continuous business business continuity
the icm continuous business division serves the business
continuity and disaster recovery market and for the year ended 
31 march 2008 combined revenues were £420m 2007 £188m
with an operating profit of £89m 2007 £49m the business
continuity business of icm has been part of the group for 10
months of this financial year 
chief executive’s review
14771phoenixlayout 4  15708  1115  page 11 chief executive’s review
continued
annual report and accounts 2008 stock exchange code pnx wwwphoenixitgroupcom
12
phoenix it group plc
1477 14771 14072008 proof 7
the merging of icm and ndr creates a critical mass business
providing a national network of business recovery centres that are
well placed in relation to our target customer groups with each
centre equipped to meet the needs of our customers the quality of
our proposition and service offering has been recognised at the
recent business continuity annual awards ceremony which was
held on 8 may 2008 where we received a number of awards
including service provider of the year 
acquired in 2005 ndr provides business continuity and disaster
recovery services targeting predominantly small and medium sized
enterprise ‘sme’ customers the company has built a strong
reputation in this sector which it services effectively with
consultancy services real time data backup office and mobile
facilities and support in the case of disaster or major business
interruption there has been continued investment in infrastructure
to create additional work area and data centre capacity at the
existing ndr aston and uxbridge facilities 
the business continuity business of icm provides services to a wide
range of customers and in june 2007 acquired a lease on a
100000 sq ft facility in farnborough hampshire and has
subsequently signed two major contracts for the facility as
previously announced with values of £84m over 7 years and
£120m over 3 years
combining the icm and ndr customer bases has given us
extensive penetration of the large enterprise and sme sectors
providing us with a solid platform for growth and the knowledge
and expertise to accelerate business progress
phoenix it services partner services
our partner services business targets large enterprise scale
customers through it services companies ‘partners‘ against a
market background of increased competition and commoditisation
our revenues exceeded £100m 2007 £915m for the first time
representing double digit growth year on year  and delivered £17 8m
2007 £17 6m of operating profit operating margins for the year
were 17 2 2007 192 and management believe the division’s
margin is broadly sustainable at this level due to increased
economies of scale low cost of sale and operational innovation 
the performance of this division and in particular the decline in the
operating margin reflects the material contribution of a large high
margin contract in the prior year  this contract did not contribute
materially in the financial year under review the underlying
business has progressed significantly and is now well positioned for
the future the move away from reliance on a small number of very
large contracts is both reflective of changes in the market and a
determination to create a more stable and predictable base for this
business
we performed well in all sectors in which our partner business
competes our system support business exhibited annual growth of
12 managed services grew by 22 projects by 23 and network
services by 9 giving overall growth of 126 
our engagement with established partners has also progressed
well during the year  service quality has remained high and we
continue to meet overall customer service sla’s 
we measure ongoing cost performance in all phases of service
delivery in order to find ways to improve efficiencies and protect
margins cost is only one element of competition differentiating
our offer is another and considerable effort has been devoted to
creating innovative new services with good results for example
we have introduced onestream an integrated remote monitoring
system similarly we have developed a web based password reset
tool to enable users to reset their own passwords securely after a
successful pilot we aim to scaleup the product in preparation for
wider distribution 
established in 1979 phoenix has grown
consistently with a reputation for high
quality service levels
1979 march 2004
phoenix shares were admitted to the
official list
november 2004
the phoenix journey
phoenix acquired trend — an
independent network services provider
in the united kingdom
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•
phoenix it services
•
icm continuous business
•
servo 
14771 14072008 proof 7
“we are confident that we have the
right strategy and structure in place
for the enlarged group to deliver value
to our customers and to achieve
sustainable profitable growth”
jeremy stafford chief executive
our small french operation which delivers services to it industry
partners continued to grow by replicating the proven uk partner
model the french operation continues to be profitable 
servo midmarket
the servo division comprises the servo business which was
acquired by the group in november 2006 and icm managed
availability services for 10 months combined revenues for the
year ended 31 march 2008 were £859m 2007 £164m and
operating profit was £90m 2007 £17m 
the servo division provides customers with a complementary and
extended range of services together with improved geographical
coverage 
the servo business saw improving performance quarter on quarter
and posted a very strong end to the year  reflecting both an
improvement in servo’s business mix and healthy new business
generation 
icm managed availability services has a strong technical capability
and this has thrived within the business development culture of the
group icm has been developing its hosting capabilities and has
3000 m
2
of hosting space which is nearly all sold as a result of
strong market demand a further 1000 m
2
of data centre space is
under construction for 20089 with an anticipated commission
date of august 2008
strategy 
we are confident that we have the right group strategy in place to
deliver value to our customers and to achieve sustainable
profitable growth each of our three operating divisions benefits
directly from being part of the wider group leveraging our shared
operation and corporate services capability as well as opportunities
to crosssell between divisions and to sell a wider portfolio of
services to individual customers in addition as we plan for the
longer term growth of the group we have established a strong
modular structure which can be expanded with the addition of
service lines and further acquisitions as appropriate 
the board believes that a continuing focus on the uk will maximise
the performance of the group for the foreseeable future 
outlook
this has been a transformational year for the group in which we
have made very good progress with the integration of icm as well
as delivering a strong set of results we are confident that we have
the right strategy and structure in place for the enlarged group to
deliver value to our customers and to achieve sustainable profitable
growth 
we have achieved good momentum into the current financial year
and in spite of continuing macro economic uncertainties we
remain positive about the outlook for the current year and beyond 
jeremy stafford
chief executive
14 may 2008
1
profit before tax £220m 2007 £193m plus amortisation of
acquired intangibles £36m 2007 £20m
phoenix acquired network disaster
recovery ndr — one of the uk‘s
leading providers of business continuity
and disaster recovery solutions for
customers seeking to protect their
business critical systems
april 2005
phoenix acquired servo — a leading
independent provider of a wide range of
it support services and associated
products predominantly to small and
medium size enterprises sme’s in both
the private and public sectors
throughout the uk
november 2006
phoenix acquired icm computer group
limited enhancing our scale and
capability in both business continuity
and it support services to sme’s
may 2007
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