’08
pace plc 
annual report 
 accounts 02 highlights
03 letter from the chairman
04 chief executive officer’s 
review
07 chief financial officer’s 
review
09 report of the directors
20 remuneration report
29 statement of directors’ 
responsibilities
30 independent auditors’ 
report
33 financial statements
39 notes to the financial 
statements
65 directors secretary 
and advisers
66 five year record and 
shareholder information
report
contents
pace plc
report  accounts 01 • record revenues of £7455m 7 mths ended 31 dec 2007 £2499m
• group profit before tax amortisation of other intangibles and 
exceptional items increased significantly to £285m 7 mths ended
31 dec 2007 £154m profit before tax was £138m seven months
ended 31 december 2007 £154m 
• organic growth saw revenues increase to £4526m and
profit before tax amortisation of other intangibles and 
exceptional items to £201m 
• pace france delivered a strong contribution with revenues 
of £2929m and profit before tax amortisation of other 
intangibles and exceptional items of £84m for the period 
21 april to 31 december 2008 
• strong balance sheet with net cash of £377m 7 mths ended 31 dec
2007 net borrowings £121m and new banking facilities 
• gross margin 181 7 mths ended 31 dec 2007 203 
reflecting the increased diversification of the enlarged group 
product mix
• basic earnings per share of 40p 7 mths ended 31 dec 2007 63p
with adjusted earnings per share of 78p
• exceptional charges of £110m including £2m costs relating to the
successful pace france integration which will deliver future 
ongoing savings
• initiation of dividend with fullyear dividend of 06p recommended
pace is the leading independent 
developer of digital tv technologies 
for the paytv industry
operating 
highlights
financial
highlights
pace plc
report  accounts 02
• record operating performance
• volume shipments increased substantially to 131m settop
boxes seven months ended 31 december 2007 24m 
including nearly 6 million from pace france
• increased market share through the pace france acquisition 
and organic growth becoming a top three global player  
• a series of high profile products launched 
• over 20 new hdpvr products for markets worldwide 
unmatched by any competitor
• a digital to analogue converter dta for the us cable 
market ahead of all major competitors
• winner of a 2008 queen’s award for international trade when management set out their strategy for 2008 they promised to deliver on a number of milestones and 
i am very happy to report that they have delivered all these and more
in 2008 despite the extraordinary macro economic environment pace achieved excellent growth and met all
of the management team’s targets with record revenues and shipments a significant increase in profits and
a strong cash position with no debt last time i reported i outlined a margin target of 20 for 2008 with the
business achieving just over 18 due to a more diversified product mix going forwards we intend to use ‘return
on sales’ as the measure of overall performance as we believe we have achieved the cost consciousness across
the organisation expected from a pure margin target 
during the year pace acquired the royal philips electronics settop box business and executed a swift efficient
integration plan that delivered profitability even sooner than we expected for the financial year 2008 we have
reported the headline results of two businesses separately so shareholders can see how the pace france
business has performed as well as the original pace business going forwards you will see us report pace
group as one entity
pace’s success during 2008 was recognised by the business world the company was awarded the queen’s
award for international trade was yorkshire exporter of the year and regional winner of the international
trade awards 
one of the economic challenges for many companies in 2008 particularly in the electronics sector has been
very volatile currency exchange rates the dollar strengthened dramatically as did the euro the management
team dealt quickly and efficiently with this issue when it arose in the fourth quarter and implemented a series
of measures including an enhanced hedging policy it is a measure of the new group’s agility that it coped so
quickly and well with this challenge
the board welcomed two new nonexecutive directors mike inglis and john grant mike is executive vice
president and general manager of the processor division of arm holdings and john has held senior financial
roles in the automotive industry and other engineering businesses i would like to take this opportunity to
thank rob fleming and marten fraser who both stood down from the board during 2008 rob was a pace
founder and has made an immense contribution to the business over many years
the board is pleased to have seen the performance of pace this year and our belief in the management team
the fundamentals of the business and the opportunities for growth give us great confidence for 2009 and
beyond your board is therefore delighted to be recommending the initiation of an annual dividend with a 
fullyear dividend of 06p per share proposed
if you have comments on any aspect of this letter or indeed any part of the annual report i would be delighted
to hear from you either by writing to me at pace or by email at mikemctighepacecom
yours sincerely
mike mctighe
chairman
3 march 2009
mike mctighe
letter from 
the chairman
i am delighted to be reporting back to you after a year 
of great progress at pace in which we have seen this
business become a true world leader in digital tv
pace plc
report  accounts 03 pace plc 
report  accounts 04
in 2008 we shaped our business for global leader
ship with pace ending the year a much stronger
business with twice the geographic reach and scale
delivering excellent results
our vision is to deliver ‘great products to our
customers every time’ and become a renowned
leader in creating the technologies and products that
enable digital tv we have said that we will establish
pace at the heart of entertainment convergence in
the digital tv household delivering on the enormous
global demand for high definition and pvr products
as well as solutions that deliver digital tv into hard 
to reach places such as apartment blocks and hotels
we have promised that all of our work will be
underpinned by strong environmental design values 
pace works primarily with paytv operators organi
sations that own entertainment content consumers
want to watch these paytv operators have driven
every major change in how we watch tv as they
compete to win subscribers and increase their
revenue generating opportunities which for many is
now based on the concept of tripleplay the paytv
market has the highest barriers to entry and
demands specialist skills over the past 25 years pace
has built the knowhow and relationships to succeed
in this highly competitive environment in the last
three years following a major structural and strategic
review we have delivered uninterrupted growth in
profits consistently exceeding market expectations 
strategy delivery
our strategy has two key themes around industry
leadership and convergence in the digital home
paytv offers excellent value home entertainment 
and it is delivered by operators that understand the
consumer desire for high quality yet easy to use
content and services the settop box makes this
possible in the home we are now experiencing the
positive output from our leadership strategy as paytv
operators work with pace to seek out new services
that will allow them to retain and expand their
subscriber base and revenues 
this theme and market focus plays to pace’s
strengths in digital tv engineering and our ability to
launch new products ahead of the competition 
we demonstrated our leadership in 2008 when we
delivered over 20 high definition pvr designs for
paytv operators around the world and were first 
to market with a revolutionary lowcost digital to
analogue converter for us cable none of our compet
itors could match these achievements 
in april 2008 we acquired the settop box business 
of royal philips electronics and immediately renamed
the business pace france we rapidly integrated the
new business operations teams and customers into
the pace group and we were very pleased to gene
rate profits ahead of our original plan this result
demonstrated the extent to which the pace busi
ness methodology is scalable and it showed the
effectiveness of our systems and processes which
have successfully transformed both our core business
and pace france it is also thanks to the commitment
of our teams around the world to create the new pace
business pace is now a global top three company 
in our sector and we have more paytv operator
customers and a wider product reach than any of our
major competitors 
trading performance
the pace group including pace france continued to
win new customers and expand market share with
existing operators this has enabled us to grow while
maintaining a balance of revenues from a wide range
of paytv operators across all geographic markets
reducing risk and dependencies with the business
in 2008 we achieved record revenues of £7455m and
delivered a significant increase in our profit before 
tax exceptional items and amortisation of other
intangibles at £285m we have now delivered seven
periods of uninterrupted profit growth in making this
happen we shipped a record number of settop boxes
131m our highest ever annual total that we were
able to double the size of our business revenues and
shipments during 2008 has shown how we have
created a resilient business customers are at the
heart of our business and we have created a model
that enables us to respond with the flexibility and
speed they demand whilst being able to grow and
acquire with minimum disruption
chief executive
officer’s review
neil gaydon pace plc
report  accounts 05
our results are also an indicator of the import
ance consumers place on high quality home
entertainment particularly when they are facing
unprecedented economic times and are being forced
to make difficult decisions on discretionary spend for
many the most popular entertainment spend is tv as
few alternatives offer the same value for money 
the resilience of our business is further exemplified
by the strength of our balance sheet we have no debt
we are running the business from our own cash and
will do so going forwards after closing the year with a
positive net cash balance of over £37m we are also
seeing the benefits of the acquisition in terms of the
added scale and associated cost savings which we
will continue to drive
despite this backdrop of increased interest in home
entertainment pace is not completely immune to
wider economic developments and along side the rest
of the electronics industry we have contended with
issues around foreign exchange since the majority of
our components are bought in us dollars with many
finished products being sold in other currencies our
existing hedging policy protected us for most of 2008
and a new hedging programme will enable us to
manage volatility during 2009
going forwards we are introducing return on sales
ros as a new performance indicator after
concentrating on gross margin for the last few years
now as our product mix changes as we target high
and lowend opportunities and start to rollout
infrastructure products from our networks group
margin is no longer the best overall measure of
success refocusing our business around ros is
helping establish a new mindset as we take pace to
the next level 
market insight
our strategy recognises it is the paytv industry
rather than the free to air market that has
consistently driven the landmark changes in how we
watch tv operators have the content the protection
distribution customer relationships and the brand
they understand how to deliver an entertainment
service to the consumer paytv was born during the
transition from four channels to multichannel tv and
operators were first to introduce programme guides
interactive services pvr and invest in the delivery of
high definition tv each new innovation large or small
demands a new settop box development at a speed
and rate of change that cannot be delivered through
the tv 
we have built our leadership position by having the
right products to fuel the digital tv revolution and are
now a global top three settop box business we are
primarily focused on paytv and by 2012 revenues in
this market are forecast to reach 182bn in an overall
market for digital tv that will see annual settop box
shipments reach 200 million units per year 
growth during this period will be characterised 
by waves of digital upgrades as more countries 
move to digital through paytv operator launches 
and government mandated analogue switch off
programmes pace will capitalise by working with
paytv operators and in targeted retail markets on
pvr and high definition products as well as digital
converter devices that accelerate digital transition
and free up operator bandwidth for expanding high
definition services a great example of this is the
digitaltoanalogue converter dta that we launched
last year for comcast in the us advancements in 
flat screen technology have created a significant
embedded base of homes that now require a settop
box to access the majority of hd content 
each paytv product we create is unique designed for
the specific requirements of an operator’s services
and network it takes between 12 and 18 months from
project initiation to product delivery and most designs
are updated within 18 months to incorporate new
features technology upgrades and costdown design
improvements in addition we play an important role
managing our settop boxes postdeployment for
example making ‘over the air’ software upgrades due
to our ownership of the product’s source code
consequently our customer relationships are typically
close and longterm 
these opportunities within the context of a conser
vative and measured view of the market and the
economy do when combined with our marketposi
tion and diversified bluechip customer base give
management increasing confidence in the medium to
longterm potential for the business to outperform 
environmental leadership
in 2008 we established our goal to be the world leader
in low environmental impact settop boxes and set a
standard for our industry 
product development is where we have the greatest
impact on the environment the growing demand for
our products which increasingly include more
advanced and power hungry applications has made
this an essential part of our strategy we are targeting
three key areas where settop box products have the
highest impact power consumption packaging and
hazardous substances we are addressing all three in
chief executive 
officer’s review
continued pace plc 
report  accounts 06
our ‘design for environment’ criteria now being used
on all new product developments we are working
with our partners and customers to minimise energy
demands through innovative product design so
together we can significantly reduce the amount of
power consumed worldwide
digital convergence
five years ago the technology debate in the industry
was centred on the “fight for the living room” the set
top box won against competition from the tv games
consoles and the pc today the battle is for control of
the inhome entertainment network and the settop
box is ideally positioned to win this battle as it 
won the last 
therefore our second strategy theme is to put pace
at the heart of convergence in the digital home
enabling our customers to deliver whole home
networking strategies in the tripleplay convergence
model it is relatively easy to move data and voice
around the home but very few companies have the
technological capability to add networked encrypted
tv to create a whole home solution we are working
on wired and wireless solutions that will combine the
best of pvr and high definition and enable consumers
to watch their favourite content wherever they are in
the home our technology teams are at the forefront
of this work and will continue to create opportunities
for pace
as with any other innovation in this market digital
convergence will be led by the paytv operator and 
its delivery into the home will evolve through the 
settop box not all homes will demand this level 
of sophistication but the market will create new
opportunities for pace alongside the mass market for
pvr and high definition products and the inevitable
introduction of 3d paytv
in the immediate shortterm we are working with
customers on what have been termed ‘hybrid’ boxes
to combine the benefits of delivery technology such
as satellite with broadband ip there has been much
discussion on how broadband will overtake broadcast
but the economics for broadband mass market tv 
is still some way away hybrid products combine the
worlds of broadcast and broadband delivering an
even richer service to consumers last year we 
were delighted to work with canal on le cube
europe’s first satelliteip hybrid settop box to use
the ethernet port for vod services 
pace’s multidweller™ which opens up a new market
for pace in the infrastructure sector for higher 
value higher margin equipment is now moving into
commercial deployment with its first operator
customer the product makes it possible for paytv
and other entertainment operators to sell their
convergent triple play services in places such as
apartment blocks and hotels that are today diffi
cult and expensive to access in europe alone over 
50 of households are in multidwelling units 
pace engineers have been working on multidweller™
for over three years and this product includes our 
own silicon design to date we have taken a cautious
approach to the potential impact this new line of
business may have but as commercial deployments
are closer our confidence in the product and its
market is growing 
as ceo of pace i have had the pleasure of working in
this amazing industry for over 15 years and have
heard commentators and potential technology
competitors predict the demise of the settop box
common theories have been that the settop box will
be built into the tv or that disruptive technologies
such as broadband will make the settop box
redundant this hasn’t happened and won’t happen
because the settop box is the most effective platform
for innovation making it possible for consumers to
benefit from developments in technology via an
accessible and easy to use device for the operator a
box is the most convenient fast and flexible plat
form for the provision of a paytv service finally and
most importantly the settop box contains the security
to protect operator content in the home its most
valuable asset 
outlook
as we enter 2009 pace is in a strong position to
capture new opportunities in the global shift to digital
tv we have seen little impact on demand for our
products but we do continue to take a prudent and
cautious view of the market in particular monitoring
trends for any impact of the global economic climate
however due to new business wins customary 
good order visibility foreign exchange management
and global operational synergies we are now able 
to significantly raise expectations for pace’s 2009
performance and pay a dividend
neil gaydon
chief executive officer
3 march 2009 in 2008 we delivered an excellent set of results during
a complex reporting period
our financial statements were transformed through
the successful acquisition of pace france and we
achieved new records in the level of our revenues and
shipments with strong profit contribution from the
organic pace business and pace france
trading and results
our overall 2008 results include eight and half
months of pace france reporting with the prior
period comparisons for the previous seven month
reporting period as we moved our reporting yearend
we achieved record growth in revenues and ship
ments of £7455m and 131m settop boxes respect
ively and significantly increased profit before tax
exceptional items and amortisation of other
intangibles to £285m seven months ended 31
december 2007 £154m profit before tax was
£138m seven months ended 31 december 2007
£154m amortisation of other intangibles was £37m
seven months ended 31 december 2007 £nil
organic revenues increased to £4526m and profit
before tax amortisation of other intangibles and
exceptionals to £201m with pace france contrib
uting revenues of £2929m and profit before tax
amortization of other intangibles and exceptional
items of £84m for the period 21 april to 31 december
2008 
following the pace france acquisition we now
operate from three main geographic bases uk
france and the americas each team has continued to
win new customers and expand market share with
many of their existing paytv operator customers
enabling us to maintain a balance of revenues 
from a wide range of customers around the world
geographically we delivered 47m settop boxes into
the emea region seven months ended 31 december
2007 13m 11m into apac seven months ended 31
december 2007 02m and 73m into the americas
seven months ended 31 december 2007 09m
as anticipated our gross margin moved to 181 
from 203 due to a changing mix of high and low
specification products where average selling prices
moved from £102 to £57 and includes some impact
from products acquired through pace france we
are now setting return on sales ros targets for
overall company performance as this measure
reflects the benefit of volume impact rather than just
margin and all new product launches must pass an
internally defined ros benchmark before moving 
into development
the interest charge was £07m seven months ended
31 december 2007 £05m reflecting a net borrow
ings position during part of the period a tax charge 
of £28m seven months ended 31 december 2007 
tax charge £09m relates to overseas tax charges of
£29m and a deferred tax credit of £01m from 2009
onwards we expect the tax charge to return to a 
more normal tax rate retained profit for the period
was £111m seven months ended 31 december 2007
£144m
pace france
we acquired pace france from royal philips
electronics on 21 april 2008 for a consideration of
£656m the team made excellent progress in the
integration programme and this business became
profitable within three months ahead of schedule we
are now experiencing the expected additional benefits
of the acquisition through scale of the new business
and associated cost savings which we will cont
inue to build on a series of operational efficiencies 
has been delivered helping to bring together the 
two businesses to function efficiently and save
significant costs for the whole group these include
consolidating the supply chain which has reduced
management complexity and increased economies 
of scale the volume of components we purchase 
has brought its own immediate impact in terms of 
price and negotiation and in addition the diversity of
components between the two businesses has been
reduced to drive further purchasing economies of
scale and reduce bill of material maintenance
foreign exchange
following the pace france acquisition by currency
our revenues were broadly equal in us and euros
chief financial
officer’s review
stuart hall
pace plc
report  accounts 07 pace plc 
report  accounts 08
with other currencies accounting for 40 the
majority of the group’s costs are dollar denominated
reflecting electronics component purchasing which
has traditionally been us denominated in q4 2008
we experienced significant volatility in foreign exch
ange rates which whilst having minimal impact in
2008 did impact the outlook at that time for 2009 we
reacted quickly to minimise this issue enhancing the
group’s foreign exchange policy and derisking its
foreign exchange exposure through a review of costs
projects and expenditure as well as working with the
value chain to better align the balance of exposure
between purchases and sales in different currencies
as a result around three quarters of expected 2009
revenues are now hedged and managed to match
foreign exchange exposures
overheads 
overheads which include pace france and excluding
the impact of ias38 amortisation of other intangi
bles and exceptionals were £1051m seven months
ended 31 december 2007 £372m rd spend
before capitalisation of development expenditure in
line with ias38 was £596m seven months ended 
31 december 2007 £215m as we continued to invest
in higher specification products such as hd pvr and
new technologies and incorporated the overhead 
base from pace france an amortisation charge in
relation to capitalised development expenditure of
£09m seven months ended 31 december 2007
credit £22m is reflected in the income statement
exceptionals 
there was an exceptional charge of £110m which
includes the previously advised £2m cost of the pace
france integration programme a £42m cost for the
planned closure of an existing pace office in grenoble
and for costs due to synergies identified in the newly
enlarged pace business these exceptional costs will
deliver future ongoing savings 
cash flow balance sheet and banking
the group finished the period with a net cash posi
tion of £377m 31 december 2007 net borrowings
£121m we secured a new £35m revolving credit
facility with the royal bank of scotland 
the balance sheet at 31 december 2008 reflects 
the impact of the assets and liabilities relating to 
the acquisition of pace france the main working
capital items acquired at 21 april 2008 consisted of
inventories of £94m trade and other receivables 
of £616m and trade and other payables of £717m 
dividend 
following this strong performance the board is
delighted to announce the initiation of a dividend the
first such payment to shareholders of a full year
dividend of 06p per share going forward the board
intends to pursue a progressive dividend policy paying
in the region of a one third two thirds split between
interim and final dividends
basis of preparation
the principal risks and uncertainties facing the
group including those referred to in note 1 to these
financial statements have not changed from those
set out in the 2007 annual report and accounts
in 2008 we closed the year having generated a net
cash inflow of £50m and we have a globally diversified
customer base which has improved our quality of
earnings both factors enhance our position as we
work through 2009 at the same time we will continue
to keep a close watch on our markets and suppliers
for signs of any macro economic impact on our 2009
deliverables as we continue our work as one of the
worlds leading developers of digital settop box
technology
stuart hall
chief financial officer
3 march 2009 pace plc
report  accounts 09
principal activities
the group’s principal activities are the development design and distribution of digital receivers and receiver
decoders for the reception of digital television and the receptiontransmission of interactive services telephony
and highspeed data the group also provides engineering design support services and software applications
to its settop box customers each of these services may be delivered over satellite cable terrestrial and ip
network transmission systems
business and financial results
the information that fulfils the requirements of the business review and management report including a
review of the group’s activities developments and the financial results for the year and the key financial
performance indicators relevant to the business of the company principally revenue gross margin  profit
before tax and cash can be found in the chief executive officer’s review and the chief financial officer’s
review on pages 4 to 8 the aforementioned information is incorporated in this report by reference there is
no information which falls to be disclosed pursuant to s 417 5 c of the companies act 2006
risks and uncertainties
the following are the key risks and uncertainties  relevant to the business of the group
customers and markets
orders placed by the group’s paytv customers are typically large oneoff orders for delivery over a number of
months with supplemental orders for additional volumes as the eventual deployment of the settop boxes can
be unpredictable revenues can be volatile the difficulty in predicting the group’s business flow and its risks
can be exacerbated by a number of other factors including for example the development process for an
advanced settop box which can take over 12 months the group works on long lead times eg four months or
more for component supply and manufacture typical of the industry in the us market in particular customers’
firm order lead times may be less than the component lead times there are third party delivery risks for
example difficulties in the delivery of components or software code and the final go ahead for manufacture and
firm contractual commitments is usually dependent on product approvals and acceptance both from the
operator and sometimes from third parties the group is also exposed to the industry wide inherent risk of
supply chain failure the group has put in place procedures to monitor the financial and operating strength of
key suppliers in addition it utilises dual or multi source where appropriate to mitigate this risk
product liability claims
in common with many companies in the industry the group is exposed to the risk of product liability claims
made by customers or affected third parties should the group’s products not fulfil the terms of the contracts
under which they are sold the group has in place quality control and other operational procedures to mitigate
this risk
credit risk
the central finance function of the group obtains reports from third party sources in respect of the credit
worthiness of key customers and suppliers and sets individual credit limits as appropriate a credit insurance
policy is maintained which provides cover over certain debtors subject to excesses and the exposure to credit
risk is monitored on an ongoing basis deposit investments are generally undertaken only in liquid securities
and with counterparties that have appropriate credit ratings
the directors present their report to shareholders on pages 9 to 19 together
with the audited financial statements for the year “year” ended 31 decem
ber 2008 prior financial period 7 months ended 31 december 2007
report of
the directors pace plc 
report  accounts 10
royalties
the group’s products incorporate third party technology usually under licence inadvertent actions may expose
the group to the risk of infringing third party intellectual property rights potential claims can be submitted
many years after a product has been deployed
regulatory
the group remains exposed to changes in the regulatory environment including potential modifications to
import duty regimes and legislation relevant to the group’s products
currency risks
the standard ‘industry currency’ is the us dollar with the majority of components and manufacturing capacity
purchased in this currency however due to part of the group’s revenues being in sterling and euros the
group is exposed to the risk of foreign currency movements to manage this risk the group’s treasury policy
is progressively to cover cash flows when these are sufficiently certain and to seek price variations through
contractual mechanisms where significant currency movements occur
interest rate risk
the group’s policy is to review regularly the terms of its available short term borrowing facilities and available
cash balances and it manages its borrowing commitments accordingly the group does not currently take out
any interest rate swaps
financial results
the consolidated income statement for the year is set out on page 32 the profit before tax was £138m 
7 months ended 31 december 2007 £154m and the profit before tax exceptional items and amortisation of
other intangibles was £285 million 7 months ended 31 december 2007 £154 million
dividend
the directors recommend the payment of a final dividend of 06p per ordinary share 7 months ended 31
december 2007 nil to be paid on 3 july 2009 to shareholders on the register at the close of business on 5 june
2009 no interim dividend was paid during the year
share capital
changes in the company’s share capital during the year are set out in note 19 to the financial statements
significant shareholdings 
the company has been notified of the following significant shareholdings as at 2 march 2009
number  of issued
of shares share capital
koninklijke philips electronics nv 50701049 1696
david hood and related family trusts 44486957 1488
gartmore investment management 24788595 829
ubs ag 15000410 502
barclays investors 11736882 393
pace micro technology employee benefit trust 11615707 388
legal  general group plc 11483528 384 pace plc
report  accounts 11
directors 
the names of the current directors of the company are shown below other than as described all those listed
held office throughout the period
mike mctighe
mike was appointed a nonexecutive director in june 2001 and became chairman on 1 may 2006 he is currently
chairman of volex group plc a member of the board of ofcom and chairman of a number of private equity
backed companies previously he was chairman  ceo of carrier1 international sa and before that executive
director  chief executive global operations of cable  wireless plc prior to these experiences mike spent
5 years with philips 5 years with motorola and 10 years with ge
neil gaydon
neil was appointed chief executive officer in april 2006 he was appointed to the board in june 2002 as
worldwide sales and marketing director he has been with the company since 1995 and as president pace
americas spearheaded the development of the company’s us business between 1999 and december 2003
prior to this he was regional sales director emea and head of new business development and product
marketing for the company he is a board member of bradford city of film
pat chapmanpincher 
pat was appointed a nonexecutive director in february 2005 and became senior independent director in may
2006 she has over 30 years’ experience in the communications industry from senior roles in multinational
internet and telecoms companies to participating in technology company startups a founding partner of the
cavell group which specialises in operational consultancy ip and wireless technologies she is a nonexecutive
director of stepstone asa omniplug ltd a nonexecutive director of friends of the earth and of groundwork
east london pat is also a member of the advisory board of bradford school of management 
john grant
john was appointed a nonexecutive director on 1 august 2008 john has spent his executive career in a variety
of senior international roles within the automotive industry and other engineering businesses in 2000 john led
a successful management buyout of four specialist engineering businesses from ascot plc to form hasgo
group ltd and peter stubs ltd prior to that he was chief executive of ascot plc between 1997 and 2000 
john also worked as group finance director for lucas industries plc subsequently lucas varity plc between
1992 and 1996 and held a number of senior positions within ford motor company in europe and the usa john
is nonexecutive chairman of hasgo group limited and torotrak plc and nonexecutive director of melrose
plc mhp sa and royal automobile club ltd
stuart hall
stuart was appointed chief financial officer and joined the board in april 2007 before joining the company he
was group finance director of iqe plc and prior to that finance director of energis squared limited and
director of performance management for energis goup plc he has also been finance director at wbf ltd part
of the adare printing group plc carnography plc and race electronics he qualified as a chartered accountant
with bdo binder hamlyn
mike inglis
mike was appointed a nonexecutive director on 25 july 2008 he is currently evp and general manager of the
processor division of arm holdings having previously been evp sales and marketing before joining arm he
worked in management consultancy with at kearney and held a number of senior operational and marketing
positions at motorola he previously worked in semiconductor sales marketing design and consultancy with
texas instruments fairchild and bis macintosh and gained his initial industrial experience with gec
telecommunications he is a chartered engineer and a member of the chartered institute of marketing
david mckinney
david was appointed chief operating officer in april 2006 and joined the board in october 2006 he has been
with the company since november 2005 joining as director of engineering and operations with responsibility
directors’
report
continued pace plc 
report  accounts 12
for operations engineering test and quality strategy previously david held a number of senior management
and operational roles in technology and telecoms companies including motorola and philips
during the year the following persons also held office as directors  robert fleming  retired 30 september
2008 marten fraser retired 31 december 2008
stuart hall and david mckinney will retire by rotation at the annual general meeting of the company and offer
themselves for reelection john grant and mike inglis having been appointed by the board subsequent to
the date of the last annual general meeting will hold office until the forthcoming annual general meeting
and will then offer themselves for election at that meeting details of the executive directors’ service contracts
and the nonexecutive directors’ letters of appointment are disclosed on pages 23 and 24
payment to suppliers 
it is the policy of the group to agree terms and conditions for its business transactions with suppliers which
are varied from time to time payment is made in accordance with those terms subject to the other terms and
conditions being met by the supplier the group does not follow any code or standard on payment practice
creditor days at the end of the period for the group were 63 days 31 december 2007 64 days and for the
company were 63 days 31 december 2007 64 days
research and development
the directors regard it as fundamental to the future success of the group to engage in a substantial ongoing
programme of research and development of new products spending £596 million in the year 7 months ended
31 december 2007 £215m and charging £605 million 7 months ended 31 december 2007 £193m to the
income statement during the year following the treatment under ias38
donations 
during the period the group donated £40000 7 months ended 31 december 2007 £25000 to charitable
causes no political donations were made further details of the charitable and communityrelated activities
of the group are given on page 16 
corporate governance 
the directors believe that save in respect of the performance evaluation of the board and its committees as
indicated below the company has complied throughout the period with the combined code on corporate
governance as revised and adopted by the financial reporting council the board confirms that it has
established the necessary procedures designed to maintain a sound system of internal control and that there
is an ongoing process for identifying evaluating and managing the significant risks faced by the company
board of directors 
the group is controlled through the board of directors which comprises three executive and four non
executive directors who bring a wide range of skills and experience to the board biographical details of all
directors are to be found on pages 11 and 12 the chairman mike mctighe is mainly responsible for the
running of the board ensuring together with the company secretary that it receives timely and clear
information appropriate to enable it to discharge its duties the responsibilities of the chief executive officer
neil gaydon focus on running the group’s business and implementing group strategy the chief executive
officer is assisted in managing the business on a daytoday basis by the executive committee as further
described below all the nonexecutive directors are deemed by the board to be independent in addition the
board has designated pat chapmanpincher as the senior independent director  all directors have access to
the advice and services of the company secretary and are able to take independent professional advice at the
company’s expense in the furtherance of their duties if necessary all directors in accordance with the
combined code submit themselves for reelection at least once every three years new directors receive a
programme of tailored induction on joining the board and all directors are offered the opportunity to continually
update their skills and knowledge by attending external training events  pace plc
report  accounts 13
the board has a formal schedule of matters specifically reserved to it and normally meets at least nine times
each year it is responsible for overall group strategy acquisition and divestment policy approval of major
capital expenditure projects and consideration of significant financing matters it reviews the strategic direction
of the group and conducts formal strategy reviews together with other senior executives within the group at
least once a year  the chairman holds meetings with the nonexecutive directors without the executive directors
being present at least twice during the year 
it is the policy of the board to undertake a formal review and evaluation of its performance including the
performance of its committees and individual directors on an annual basis this is conducted by written
feedback in standardised form from each director to the chairman or the senior independent director in the
case of appraisal of the chairman
board committees
the board has established the following committees each of which has written terms of reference specifying
its authority and duties and copies of which are publicly available on the company’s website wwwpacecom 
the audit committee is comprised of independent designated nonexecutive directors pat chapmanpincher
and john grant who is the chairman of the committee marten fraser served on and was chairman of the
committee before resigning in december 2008 the committee has primary responsibility for making
recommendations on the appointment reappointment or removal of the auditors and receives and reviews
reports from management and from the auditors relating to the interim and annual accounts and the control
systems in use throughout the group meetings are held by the committee with the auditors without executive
management being present at least once a year and the committee reviews arrangements by which staff may
in confidence raise concerns about possible improprieties including review of the group whistleblowing policy 
the executive committee is chaired by neil gaydon as chief executive officer  the committee generally meets
once a month and ensures that the strategy plans and policies previously agreed or delegated by the board are
implemented
the executive committee comprises the three executive directors together with the following senior executives
anthony dixon general counsel 
jill ezard director of human resources 
mathias hautefort president pace france
helen kettleborough director of corporate communications 
michael pulli president pace americas 
richard slee president pace uk
the remuneration committee is comprised of mike mctighe and independent designated nonexecutive
directors john grant and pat chapmanpincher who is the chairman of the committee marten fraser served
on the committee before resigning in december 2008 the committee is responsible for setting the
remuneration of the executive directors and other members of the executive committee including making
recommendations regarding the grant of share options the members of the committee have no personal
interest other than as shareholders in the matters to be decided no potential conflicts of interest arising from
crossdirectorships and no daytoday involvement in the running of the business 
the nominations committee is comprised of nonexecutive directors pat chapmanpincher john grant and
mike inglis together with chief executive officer neil gaydon and is chaired by mike mctighe its purpose is
to consider and make recommendations to the board regarding the appointment of new directors
directors’
report
continued pace plc 
report  accounts 14
board and committee meetings attendance
board audit remuneration nominations
committee committee committee
total meetings 94 5 1
pat chapmanpincher 94 5 1
robert fleming 6  1
marten fraser 94 4 1
neil gaydon 9  1
john grant 31 1 
stuart hall 8                             
mike inglis 3  
david mckinney 8  
mike mctighe 7 4 1
director appointed during the year
directors’ remuneration 
the remuneration committee reviews the performance of the executive directors and other members of the
executive committee as a prelude to recommending their annual remuneration bonus awards and award of
share options to the board for final determination the final determinations are made by the board as a whole
but no director plays a part in any discussions concerning their own remuneration
the remuneration report of the directors to shareholders is set out on pages 20 to 28 and includes the
remuneration policy of the company and details of directors’ incentive payments and the related performance
criteria
authority to purchase own shares 
at the annual general meeting in 2008 the company was authorised by shareholders to purchase up to
23371758 of its own ordinary shares representing 10 per cent of its issued share capital as at february 2008
the company did not utilise this authority during the year  the authority for the company to purchase its own
shares expires at the conclusion of the annual general meeting in 2009 and a resolution to renew it will be
proposed at that meeting
accountability and audit 
a detailed review of the performance of the group’s business is contained in the chief executive officer’s
review and the chief financial officer’s review these statements together with the letter from the chairman
and the report of the directors are intended to present a balanced assessment of the group’s position and
prospects the directors’ responsibility for the financial statements is described on page 29 and the
responsibilities of the auditors are described on page 30
internal controls 
overall responsibility for the group’s system of internal control rests with the board of directors the board
has delegated certain of its powers to the audit committee to review the effectiveness of the systems of control
and to receive reports from the auditors and from the management relating to the interim and annual accounts
and the control systems in use throughout the group 
during the year and up to the date of this report the board carried out reviews of the effectiveness of the
group’s internal controls the reviews were undertaken in accordance with the financial reporting council’s
guidance under the following headings and were aimed at clearly identifying the systems already in place and
the action plans necessary to improve areas of control weakness  pace plc
report  accounts 15
the control environment subject to those powers and limits of authority reserved by the board and to the
group policies and guidelines they have established the conduct of the business of the group is delegated
within a clearly defined organisational structure and approved level of authority the board has also adopted a
code of business ethics which has been incorporated into the employee handbook issued to all employees 
risk assessment the directors and senior managers are responsible for identifying and monitoring sources
of potential business risk and financial risk and for taking such preventative and protective actions as they
consider necessary to manage such risks effectively during the year a risk assessment review of the group’s
business has been conducted in conjunction with the executive committee the board has received and
considered this review as part of an annual risk and control assessment 
the group’s systems are designed to identify and manage rather than eliminate significant business risks
including the risk of failure to achieve business objectives and can only provide reasonable not absolute
assurance against material misstatement or loss business risks are identified evaluated and managed through
functional line management reporting to divisional meetings executive committee meetings and board
meetings as appropriate each member of the executive committee is required to highlight and report on any
significant business risks identified within their sphere of responsibility 
the key business risks associated with the timely completion of longterm development projects and ongoing
business risks including alleged infringement of third party intellectual property rights are managed by cross
functional teams of senior employees business continuity plans addressing physical risks to the group’s
development sites are reviewed and updated at least annually the group has adopted customer account teams
cats so as to focus the business on customer needs the senior managers within the cats also monitor
the financial and business risks including competitor risks associated with the delivery of agreed plans
reviewing such matters at business review meetings held on a regular basis and attended by members of the
executive committee
financial control and information systems the group’s strategic direction is reviewed regularly by the board
and plans budgets and performance targets are reviewed and approved at least annually directors receive
monthly summaries of financial results which compare actual performance with targets together with detailed
management reports that identify the reasons for variances and the progress achieved business planning
documents are revised on a regular basis in line with actual and expected performance
control procedures financial control procedures have been developed for all of the main business functions
and have been documented in a procedures manual authorisation limits for purchases and capital expenditure
are specified and procedures are in place for minimising exposure to potential weaknesses in the 
receipt handling and despatch of goods the group’s main premises have received accreditation for bsi iso
9001 2000 
monitoring systems monitoring of the internal control systems is carried out by the centralised group 
finance function
the audit committee considers annually whether there is a need to appoint a dedicated internal auditor and
during the year determined that having regard to the size of the group and the control and monitoring systems
referred to above there was no current business requirement for such an appointment in respect of 2009 the
committee has recommended that the group implements a series of internal audits utilising external
consultant resources
although no system of internal financial control can provide absolute assurance against material misstatement
or loss the group’s systems are designed to provide the directors with reasonable assurance that transactions
are authorised and completely and accurately recorded that assets are safeguarded and that material errors
irregularities and actions contrary to group policies and directions are either prevented or promptly discovered 
going concern 
the directors having taken account of the group’s available bank facilities and cash resources and having
reviewed the group’s budget and forecasts for the period to 31 march 2010 consider that the group has
adequate resources to continue in operational existence for the foreseeable future accordingly they continue
to adopt the going concern basis in preparing the financial statements
directors’
report
continued pace plc 
report  accounts 16
corporate social responsibility 
employment policies 
the directors recognise the importance of the group’s employees to its success and future development and
are committed to providing an environment that will attract motivate and reward high quality employees the
group continues to invest in a range of internal and external initiatives to promote employee development
this commitment has been acknowledged by investors in people iip recognition 
employees are kept informed of matters affecting them as employees and factors affecting the performance
of the group through monthly employee meetingsbriefings and a company newsletter “pacesetter” in the
uk meetings of the employee partnership an elected forum for the discussion of work related issues are held
with members of the executive committee at least four times per year 
the group welcomes applications for employment from all sectors of the community and is striving to promote
equality of opportunity in employment regardless of age sex sexual orientation disability or ethnic origin it
is the group’s policy that training career development and promotion opportunities should be available to all
employees in the event that an employee becomes disabled the group makes reasonable adjustments where
any aspect of premises or working practices puts such a disabled employee at a substantial disadvantage
compared with a nondisabled employee 
health and safety 
the group has an established health and safety committee made up of health and safety representatives the
health and safety officer and other persons with expert knowledge who review health and safety issues relevant
to the groups business other safetyrelated committees also conduct periodic reviews of specific work
practices these actions complement the health and safety executives working well together initiatives
adopted and implemented by the company 
in the uk the health and safety adviser continues to carry on ergonomic risk assessments and developing
ergonomic strategies whilst safety representatives and fire wardens conduct site inspections these activities
along with others contribute to the further advancement of local workplace health and safety awareness and
improvement generic and detailed risk assessments chemical assessments and safe systems of work
guidance are maintained for the benefit of employees on the companys intranet site 
the importance of ongoing health and safety awareness training for managers and safety representatives is
recognised as part of this process a number of health and safety toolbox talks have been designed to
replace the iosh managing safely courses previously provided
the number of uk workplace accidents during the year was 15 and as in previous years none of these were
reportable under riddor a report concerning health and safety aspects of the groups business and copies
of specific group safety policy documents can be obtained from the company secretary 
charitable and community support 
the group has an established charitable donations committee comprising employees based at the groups
premises in the uk the usa and france the committee which meets once a month considers all requests
for charitable and community project assistance within a financial budget and criteria approved by the board
on an annual basis 
the groups support through the committee is focused on the local geographical area of paces premises in
saltaire paris and boca raton in florida as well as the charitable and community initiatives of group
employees the corporate charity policy focus is to support local charities of benefit to the local area and
people living close to each group site 
during the year 126 requests for support were considered by the committee 108 of these satisfying the criteria
and receiving financial support amounting to £40000 the participation of employees of the group in
community and charitable activities outside work hours has been encouraged by the provision of funds to
match individual sponsorship raised pace plc
report  accounts 17
environmental management 
the company has maintained certification to the international management standard iso 14001 at its saltaire
and florida sites and the group environmental policy has been applied to all pace sites worldwide 
the company is a signatory to the european code of conduct on energy efficiency of digital tv service systems
eu code of conduct energy star program requirements for settop boxes and meps minimum energy
performance standard pace is committed to ensure that products are designed to minimise energy
consumption 
the company continues to monitor its environmental activitiesimpacts details of which are available from the
company secretary or the company’s website
this year saw the company develop an executive driven strategy to improve its environmental performance 
the strategy focuses on three core areas site operations product and supply chain environmental
improvements
pace is also targeting the three key areas where its products have the highest environmental impact these are
1 power consumption – the hardware design of every pace product from this point onwards will comply with
or exceed the eu code of conduct energystar and meps guidelines  in regions where no guidelines exist
pace will apply the closest guidelines to these areas pace will work with its key partners to drive compliance
across all aspects of the final product including software
2 packaging – all materials used in the packaging of pace products will be 100 recyclable pace is setting
a minimum standard of 50 of all materials used in packaging to be sourced from recycled materials
3 hazardous substances – pace is going beyond current legislation with its own extensive ‘restricted
substances’ list pace will phase out these additional potentially hazardous substances from all future
products going forwards 
directors’
report
continued pace plc 
report  accounts 18
during the year the company set environmental targets and achieved the following outcomes in respect of its
chosen measures of environmental impact
activityimpact objective target status comment
pace environmental
strategy
develop a supply chain
based strategy for
environmental performance
improvement
engage all of our
priority suppliers by
dec 2008
ongoing roll out in 2009
settop box stb
power
consumption
develop ‘design for
environment’ criteria for
inclusion in the product
creation process
developed and
implemented
by march 2008
complete design for
environment
incorporated in the
pace product
creation process
pcp
stb environmental
impact
minimise stb energy
consumption
design and develop 
a low
environmental
impact lei stb
by dec 2008
complete demonstrated at
ibc’08
reduction of 
stb power
consumption
minimise power
consumption of the stb to
align with eu code of
conduct
75 of products
destined for eu
market eu code of
conduct compliant
ongoing results will be
published in 2009
electricity use minimise site energy use
wherever technically and
commercially practical
introduce individual
lab electrical
consumption
mechanism by
march 2008
complete individual lab
mechanisms in
place and access
available to all pace
employees
volunteer activity improve local environment conduct one
volunteer activity
complete completed in
association with
forest of bradford 
employee
awareness
increase employee
awareness
implement an
awareness
programme focusing
on individual
employee energy
consumption by july
2008
complete engagement
activity complete
it equipment reduce the it server
equipment energy
consumption
implement a server
virtualisation
strategy with a view
to reducing it power
consumption by
june’08
complete servers in place
the company commissioned its eighth independent environmental report prepared by consultants atkins plc a copy of the group’s
environmental policy statement and the environmental report for the year can be obtained from the company secretary and is available on
the company’s website wwwpacecom pace plc
report  accounts 19
auditors 
kpmg audit plc held office as auditors during the year  a resolution for the reappointment of kpmg audit plc
will be proposed at the forthcoming annual general meeting 
the audit committee reviews the independence and objectivity of the auditors considering whether taken as
a whole the various relationships if any between the group and the auditors impairs or appears to impair
the auditors’ judgement or independence
each of the directors who held office at the date of approval of this report of the directors confirms that so far
as they are aware there is no relevant audit information of which the company’s auditors are unaware and the
directors have each taken all the steps that they ought to have taken as a director to make themselves aware
of any relevant audit information and to establish that the company’s auditors are aware of that information 
relations with shareholders 
the board has continued to establish and maintain relationships with institutional shareholders and
communicates with investors through the group’s web site wwwpacecom a programme of meetings with
institutional shareholders is in place at which institutional shareholders are offered the opportunity to meet
with nonexecutive directors and analyst presentations are made following announcement of the interim and
annual results shareholders are welcome to participate at the annual general meeting at which the board will
be available for questions 
annual general meeting 
the annual general meeting of the company will be held on 22 april 2009 at the offices of the company at
salts mill victoria road saltaire west yorkshire bd18 3lf full details of the business to be transacted at the
meeting will be set out in the notice of annual general meeting
responsibility statement of the directors
the directors whose names appear on pages 11 and 12 confirm that to the best of their knowledge
• the financial statements prepared in accordance with the applicable set of accounting standards give a true
and fair view of the assets liabilities financial position and profit or loss of the company and the
undertakings included in the consolidation taken as a whole and
• the report of the directors includes a fair review of the development and performance of the business and
the position of the company and the undertakings included in the consolidation taken as a whole together
with the description of the principal risks and uncertainties that they face
by order of the board 
anthony j dixon 
company secretary
3 march 2009
directors’
report
continued pace plc 
report  accounts 20
the directors present their report to shareholders on pages 20 to 28 regarding remuneration matters in respect
of the year ended 31 december 2008 
remuneration committee 
the remuneration committee the committee is responsible for setting the individual remuneration of the
executive directors and other members of the executive committee within the framework of the remuneration
policy described below which is set by the board 
the directors who were members of the committee at any time during the year ending 31 december 2008 were
pat chapmanpincher chairman of the committee marten fraser who resigned on 31 december 2008
mike mctighe and john grant who was appointed in august 2008 for guidance the committee makes use
of surveys of executive pay and knowledge of market rates the ceo and director of hr also attended
remuneration committee meetings during the year by invitation and provided advice to the committee to
enable it to reach informed decisions no director was present when their remuneration was being discussed
the committee was assisted in its consideration of remuneration matters by new bridge street consultants
who were sole remuneration advisors prior to september 2008 and kepler associates who were appointed as
sole remuneration advisers in september 2008 kepler associates assisted the committee in its 2008 review
of the company’s executive remuneration policy and consultation with significant shareholders new bridge
street consultants and kepler associates provided no other services to the group in the year  pinsent masons
legal advisers to the company also advised the committee regarding certain share option related issues 
remuneration policy 
the board believes that it is necessary to ensure that the remuneration packages of the executive directors
remain competitive in order to attract retain and motivate executive directors and senior managers of a 
high calibre and to reward them for performance the policy is for a significant proportion of executive 
directors’ total remuneration to be capable of being earned from variable performancebased incentives
through annual bonuses and share based incentives the objective of this policy is to provide rewards and
incentives that reflect corporate and individual performance and align management’s objectives directly with
those of the shareholders around half of an executive director’s remuneration is  variable and is linked to 
corporate performance 
the board’s policy in relation to nonexecutive directors continues to be to pay fees that are competitive with
the fees paid by comparable quoted companies nonexecutive directors’ fees are determined by the board as
a whole within the limits set out in the company’s articles of association nonexecutive directors are not
eligible for performance bonuses or pension contributions and do not participate in the share option schemes
nonexecutive remuneration is generally reviewed annually and such a review took place in october 2008
salary 
basic salary for each executive director is determined by the committee taking into account the performance
of the individual and information from independent sources on external market salary levels for comparable
jobs with a view to salaries being set around the median level for comparable companies in setting senior
executives’ salaries the committee also takes into account pay and employment conditions in the group as a
whole salary is generally reviewed around the time of commencement of each financial year and such a review
took place in january 2008 the committee sought advice from remuneration consultants with regard to the
salary review and took into account the enlarged size of the group following the acquisition of the philips 
settop box and connectivity solutions business a further review of salary took place in january 2009 and as
a result 2009 salaries of members of the executive committee including executive directors have been frozen
at 2008 levels
directors’
remuneration report pace plc
report  accounts 21
performance bonus 
the company established a nonpensionable performancerelated bonus plan for the executive directors and
other key members of management for the year ended 31 december 2008 which was based on the successful
achievement of corporate and individual objectives the corporate objectives were linked to the the key drivers
of value creation for shareholders and the key measure therefore was the profitability of the group for the full
financial year achievement of the 2008 bonus was dependent on the group’s pretax profits before certain
exceptional items exceeding £17 million with the capacity to earn additional bonus increments upon
achievement of higher profit targets up to a ceiling of £25 million in addition a number of individual personal
objectives were set for each director and manager which were aligned with the objectives of the group for the
year the maximum bonus achievable by the executive directors in the event that all corporate and individual
targets were met was 150 of basic annual salary with one third of any bonus earned being deferred into
shares in the company for a period of two years under the group deferred share bonus plan the committee
having regard to the performance during the period determined to award maximum bonus to each of the
executive directors under the 2008 annual performance bonus
in addition during 2008 an additional oneoff performance related bonus scheme for approximately 50
executives and managers including the executive directors but excluding neil gaydon was introduced to reward
achievement of objectives linked to the integration of the philips settop box and connectivity solutions business
the maximum individual bonus opportunity awarded under this special integration bonus scheme was £25000
in respect of the 2009 financial year the committee has reviewed the executive bonus structure with its
remuneration advisers and whilst it proposes that the annual bonus will continue to be based primarily on the
achievement of group pbt the committee will retain discretion to reduce the bonus otherwise payable to
executive directors by up to 20 based on their assessment of the executive directors’ management of the
company’s cash position during 2009 one third of any earned bonus will continue to be deferred into pace
shares under the group deferred share bonus plan
in addition whilst the normal ceiling for such bonus payments remains at 150 of annual salary the committee
intends subject to consultation with major shareholders to allow members of the executive committee
including executive directors to have the opportunity to earn an “exceptional” bonus of up to 100 of annual
salary at the discretion of the committee payable only in the event of exceptional group and individual
performance which has secured the delivery of very significant benefit to shareholders the committee intends
that such exceptional bonus would be earned only for performance significantly in excess of that already
rewarded through the annual bonus and would normally expect the exceptional bonus or a proportion there
of to be earned no more than once every three to five years any such exceptional bonus would be paid in its
entirety in shares deferred for two years under the group deferred share bonus plan and normally be subject
to forfeiture if the executive leaves the group
performance share plan
as a result of the review of remuneration referred to above the committee is proposing to introduce a new
performance share plan “psp” with all group employees including executive directors eligible to participate
the introduction of the psp is subject to the approval of shareholders at the 2009 annual general meeting on
22 april 2009 and material details of the terms of the psp will be contained in a circular to shareholders
accompanying the notice of agm
benefits in kind 
each executive director is entitled to benefits such as the provision of a fully expensed company car plus fuel
or cash alternative private medical insurance permanent health insurance life insurance and where
applicable relocation assistance
pension contributions 
in the year ending 31 december 2008 contributions were paid into the executive directors’ pension schemes
at rates determined by the board contributions have continued to be paid during the current year at the rate
of 15 of each director’s basic salary the group does not operate any defined benefit schemes 
directors’
remuneration report
continued pace plc 
report  accounts 22
share option plans 
the board believes that share ownership encourages employees to contribute further towards improvements
in the group’s performance to this end the following share option plans have been established by 
the company 
a regular savings plan the “sharesave plan” which is open to executive directors and employees of the group
and under which options granted at an initial discount of up to 20 against the quoted market price are
normally exercisable on completion of a threeyear saye contract 
an hmrc approved discretionary plan the “approved pan” under which all employees including fulltime
directors of the company or any subsidiary who do not have and have not had within the previous twelve
months a material interest in the company are eligible to participate participation is at the discretion of the
board acting in accordance with the recommendations of the committee under the approved plan options
are granted at the prevailing quoted market price and may usually be exercised between three and ten years
from the date of the grant the maximum award of options to any employee pursuant to the approved plan is
£30000 the company adopted its first approved plan in 1996 and a new approved plan at the agm in
september 2005 
an unapproved discretionary plan “unapproved plan” which is similar to the approved plan although certain
rules of the approved plan are not included eg the exclusion of employees who have a material interest in the
company the company adopted its first unapproved plan in 1996 and a new unapproved plan at the agm in
september 2005 the maximum award of options under the unapproved plan to any employee in each year is
200 of salary or in exceptional circumstances as determined by the committee 400 of salary
a discretionary unapproved scheme 2000 “2000 unapproved scheme” which was discontinued in august
2005 under the 2000 unapproved scheme options were granted at the prevailing quoted market price and
become exercisable “vest” as to 25 each anniversary after the grant over a fouryear period under this
scheme basic options were granted up to a limit such that unvested options may not exceed four times annual
remuneration for a category of up to 55 key employees there was the ability to award options “super options”
above the limit for basic options although the 2000 unapproved scheme has been discontinued outstanding
options previously granted survive until exercise or lapse
in granting options under the approved plans and the unapproved plans the board may include objective
performance targets or other conditions as it thinks fit and has included such performance conditions based
on growth in earnings per share eps of 1518 above the retail prices index “rpi” over a threeyear period
in all grants under the 1996 approved plan and 1996 unapproved plan prior to 2005 under the 2000
unapproved scheme performance conditions of 6 per annum and 20 per annum compound above rpi
were applied to the grant of basic options and super options respectively thereunder initial performance
targets for the 2005 approved and 2005 unapproved plans set in 2005 required a minimum growth in eps of
a compound 3 per annum above growth in inflation over a three year period at which level there is 25
vesting compound growth of 6 per annum above inflation is required for 100 vesting with vesting on a
sliding scale between these two target thresholds
in setting targets for option grants during 2006 the committee was mindful of the need for targets to reflect
a return to profitability and significant improvements in earnings accordingly during the financial year ending
2 june 2007 all options granted were subject to performance conditions based on growth in the pretax profits
of the group “pbt” over a period of three financial years with 25 of options vesting at £69 million pbt in
the third financial year and 100 of options vesting at £172 million pbt in the third financial year with vesting
on a sliding scale between these two target thresholds these target thresholds were approved after
adjustment by decision of the committee having taken external advice to take account of the shortened
financial year ending 31 december 2007 during the 7month period ending 31 december 2007 the committee
continued to adopt performance conditions based on pbt and options granted to employees during the period
were subject to conditions such that 25 of options will vest at £20 million pbt in the third financial year and
100 of options vesting at £30 million pbt in the third financial year ending 31 december 2009
during the year ending 31 december 2008 the committee adopted performance conditions based on
cumulative growth in eps requiring a minimum growth in eps of  4 per annum above inflation over a three pace plc
report  accounts 23
year period at which level there is 25 vesting cumulative growth of 8 per annum above inflation is required
for 100 vesting the committee believes eps to be appropriate to help enhance alignment of the senior
executive with shareholder interests whilst still maintaining focus on profitability across the senior management
team the committee considered these targets to be stretching for the company reflecting its stage of growth
at the time of the award these options remain exercisable only after 3 years from the date of grant in order
to assess whether the performance conditions have been met the committee will utilise the earnings figures
derived from the audited financial statements of the group 
as a result of the proposed introduction of the performance share plan as the company’s primary longterm
incentive it is intended that option awards in 2009 and in subsequent years will be targeted at the company’s
most senior executives and be based on a fixed number of options rather than value related to an individual’s
performance and contribution furthermore the committee proposes to adopt a similar approach regarding
the setting of cumulative eps performance targets as in 2008 but proposes increasing the eps growth required
for maximum vesting from rpi 8 to rpi 15 per annum
a separate share option plan has been established for the benefit of the group’s us employees such plan
operates within the overall limit on issue of new shares of 10 of the company’s issued share capital 
applicable to all the group’s employee share schemes the pace americas sharesave plan is based on the
pace sharesave plan rules and is designed to satisfy the us internal revenue service requirements for such
savingforshares plans 
minimum shareholding
following the review of the group’s remuneration policies completed in february 2009 the committee has
introduced individual shareholding target requirements for members of the executive committee in the region
of 1 x salary with a requirement subject to a discretion of the committee for such executives to retain a portion
of any net awards ie after tax and exercise cost of new vested sharebased incentives until the target
shareholding level is reached
service contracts 
company policy is that in normal circumstances executive directors’ notice periods should not exceed one year 
each of the executive directors has a service contract with the company each of these agreements is
terminable by the company on twelve months’ prior written notice or by the relevant director on not less than
six months’ prior written notice at the option of the company each agreement may be terminated forthwith
subject to the company paying a sum equivalent to 12 months’ salary benefits and pension contributions the
remuneration committee considers that compensation payments on termination of employment should
depend on individual circumstances 
it is the company’s policy to honour its obligations with regard to directors’ service agreements and where the
employment of a director is terminated in accordance with the aforementioned contractual process the
company will pay the sum specified in the relevant service agreement as payable or otherwise pay fair and
reasonable compensation 
the service agreement of neil gaydon was entered into on 4 may 2006 and was amended on 16 april 2007 and
21 january 2008 the service agreement of david mckinney was entered into on 14 november 2005 and was
subsequently amended on 7 december 2006 1 june 2007 and 21 january 2008 the service agreement of
stuart hall became effective on 2 april 2007 and was subsequently amended on 21 january 2008 save for the
notice periods referred to in the above paragraph these contracts have no unexpired term 
each of the nonexecutive directors is appointed under a letter of appointment which is terminable at any time
by the company without contractual notice each of the directors has a letter of indemnity issued by the
company which provides an indemnity in respect of liabilities incurred in the course of their office to the extent
permitted by the company’s articles of association and the provisions of the companies acts 
copies of the service contracts of the executive directors and the letters of appointment of the nonexecutive
directors together with the letters of indemnity referred to above are available for inspection during normal
business hours saturdays sundays and bank holidays excepted at the registered office of the company 
directors’
remuneration report
continued pace plc 
report  accounts 24
the company maintains directors’ and officers’ liability insurance in respect of senior employees including
the directors the consent of the board is required in the event that an executive director wishes to accept an
external appointment it has been the practice of the company to permit a director to retain nonexecutive
fees arising from any such appointment but during the year none of the current executive directors held such
external appointments
the auditors are required to report on the information disclosed below and on pages 25 to 27
directors’ remuneration
total directors’ remuneration in respect of qualifying services for the year ended 31 december 2008 was 
as follows
12 m 7 m 
31 dec 31 dec
2008 2007
£000 £000
fees 237 116
salaries benefits in kind and termination payments 918 487
performancerelated bonuses 935 710
pension contributions 119 62
2209 1375 pace plc
report  accounts 25
the remuneration of individual directors in respect of qualifying services for the year ended 31 december 2008
is set out in the table below
salaries performance benefits total pension
and fees bonus in kind remuneration contributions
 12m 7 m 12m 7m
31 dec 31 dec 31 dec 31 dec
2008 2007 2008 2007
executive directors £000 £000 £000 £000 £000 £000 £000
neil gaydon 404 400 – 804 525 50 28
david mckinney 240 265 – 505 302 34 16
stuart hall 252 270 – 522 370 35 18
896 935 – 1831 1197 119 62
nonexecutive directors
mike mctighe 106 – – 106 58 – –
pat chapmanpincher 38 – – 38 20 – –
robert fleming 28 – 22 50 18 – –
marten fraser 38 – – 38 20 – – 
john grant 13 – – 13 – – – 
mike inglis 14 – – 14 – – – 
1133 935 22 2090 1313 119 62
 7 months to december 2007 reflecting the shortened financial year as pace moved to a december financial
year end from a may year end in 2007
 remuneration referable only to the financial year since appointment to the board or up to date of retirement
from the board robert fleming retired from the board on 30 september 2008 mike inglis joined the board on
25 july 2008 and john grant joined on 1 august 2008
 figures relate to the cash element of annual performance related bonus plus payment under the one
off integration bonus the following additional amounts were awarded to executive directors under the terms
of the annual performance related bonus plan but will be deferred into shares in the company for a period of
two years under the terms of the group deferred share bonus plan neil gaydon £200000 david mckinney
£120000 and stuart hall £127500
directors’
remuneration report
continued pace plc 
report  accounts 26
directors’ interests in shares and share options
the interests of directors holding office at the yearend and those of their immediate families in the ordinary
share capital of the company at 31 december 2008 and at the beginning of the period are set out below
31 december 2008 shares 1 january 2008 shares
non under non under
beneficialbeneficial option beneficialbeneficial option
pat chapmanpincher 15000 – – –– –
john grant –– – –– –
mike inglis 20000 – – –– –
marten fraser 40000 – – 20000 – –
neil gaydon 41684 – 2335257 41684 – 1983652
stuart hall 12739 – 855844 12739 – 557599 
david mckinney 15000 – 1058008 15000 – 777307
mike mctighe 75000 – – 75000 – – 
there were no changes in the directors’ interests in the ordinary share capital of the company between 31
december 2008 and 2 march 2009 pace plc
report  accounts 27
directors’
remuneration report
continued
director share options
details of the options over the ordinary shares of 5p each in the company held by the directors who held office
during the period were as follows
at number of options at exercise 
31 dec 31 dec exercise period
2007 granted exercised lapsed 2008 price from to
neil gaydon
approved plan         3498 – – – 3498 8575p 170703 160710
1996 unapproved 
plan 75000 – ––750002000p070702060709
1996 unapproved 
plan 250000 – – – 250000 7425p 020808 010815
2000 unapproved 
scheme      20000 – – – 20000 510p 170805 160814
2000 super option 123245 – – 123245 – 200p 210104 200113
2005 unapproved 
plan 600000 – – – 600000 635p 180409 170416
2005 unapproved 
plan 902127 – – – 902127 5875p 021009 011016
2005 unapproved
plan – 467836 – – 467836 855p 021009 011016
sharesave plan          9782 – – – 9782 4600p 011209 300510
sharesave plan          – 7014 – – 7014 6700p 011011 300312
david mckinney
2005 approved 
plan         47430 – – – 47430 6325p 220109 210116
2005 unapproved 
plan 202570 – – – 202570 6325p 220109 210116
2005 unapproved 
plan 510638 – – – 510638 5875p 021009 011016
2005 unapproved 
plan – 280701 – – 280701 855p 021009 011016
sharesave plan 12521 – – – 12521 4600p 011209 300510
sharesave plan          4148 – – – 4148 8200p 011010 310311
stuart hall
2005 approved 
plan         40955 – – – 40955 7325p 020410 010417
2005 unapproved 
plan 505120 – – – 505120 7325p 020410 010417
2005 unapproved 
plan – 298245 – – 298245 855p 021009 011016
sharesave plan          11524 – – – 11524 8200p 011010 310311
the midmarket price of shares in the company on 31 december 2008 was 5475p the lowest and highest
closing midmarket prices of shares in the company during the year were 3450p and 9750p respectively 
information concerning the performance conditions attached to the above options is contained on page 22 pace plc 
report  accounts 28
employee trusts 
the company has established the pace micro technology plc employee benefits trust which is capable of
acquiring shares in the company in the market and using them for the purposes of satisfying new awards
granted under the company’s share option plans the deferred share bonus plan and the proposed psp
during the year the trust acquired 77 million shares in the company at a cost of £32 million
performance graph 
set out below is a performance graph showing the total shareholder return of the company for the five financial
years ended 31 december 2008 compared to the total shareholder return of the ftse electronics and electrical
equipment sector index which is considered by the board to be an appropriate benchmark index against which
to compare the company’s performance having regard to the principal activities of the group
by order of the board 
anthony j dixon 
company secretary
3 march 2009
0
20
40
60
80
100
120
140
160
180
2003 2004 2005 2006 2007 2008
pace ftse electronics  electrical equipment pace plc
report  accounts 29
statement of
directors’ responsibilities
statement of directors’ responsibilities
the directors are responsible for preparing the directors’ report and the group and parent company financial
statements in accordance with applicable law and regulations 
company law requires the directors to prepare group and parent company financial statements for each
financial year under that law they are required to prepare the group financial statements in accordance with
ifrss as adopted by the eu and applicable laws and have elected to prepare the parent company financial
statements on the same basis 
the group and parent company financial statements are required by law and ifrss as adopted by the eu to
present fairly the financial position of the group and the parent company and the performance for the financial
year the companies act 1985 provides in relation to such financial statements that references in the relevant
part of that act to financial statements giving a true and fair view are references to their achieving a fair
presentation 
in preparing each of the group and parent company financial statements the directors are required to 
• select suitable accounting policies and then apply them consistently 
• make judgements and estimates that are reasonable and prudent 
• state whether they have been prepared in accordance with ifrss as adopted by the eu and 
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
group and the parent company will continue in business 
the directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at
any time the financial position of the parent company and enable them to ensure that its financial statements
comply with the companies act 1985 they have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities 
under applicable law and regulations the directors are also responsible for preparing a directors’ report
directors’ remuneration report and corporate governance statement that comply with that law and those
regulations 
a copy of the accounts of the company is posted on the pace plc website wwwpacecom 
the directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website legislation in the uk governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions pace plc 
report  accounts 30
independent
auditors’ report
independent auditors’ report to the members of pace  plc
we have audited the group and parent company financial statements the ‘‘financial statements’’ of pace plc
for the year ended 31 december 2008 which comprise the consolidated income statement the consolidated
and parent company balance sheets the consolidated and parent company cash flow statements the
consolidated and parent company statements of changes in shareholders’ equity and the related notes these
financial statements have been prepared under the accounting policies set out therein we have also audited
the information in the directors’ remuneration report that is described as having been audited 
this report is made solely to the company’s members as a body in accordance with section 235 of the
companies act 1985 our audit work has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose to the fullest
extent permitted by law we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body for our audit work for this report or for the opinions we have formed 
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the report and accounts the directors’ remuneration report and
the financial statements in accordance with applicable law and international financial reporting standards
ifrss as adopted by the eu are set out in the statement of directors’ responsibilities on page 29 
our responsibility is to audit the financial statements and the part of the directors’ remuneration report to be
audited in accordance with relevant legal and regulatory requirements and international standards on auditing
uk and ireland 
we report to you our opinion as to whether the financial statements give a true and fair view and whether the
financial statements and the part of the directors’ remuneration report to be audited have been properly
prepared in accordance with the companies act 1985 and as regards the group financial statements article 4
of the ias regulation we also report to you whether in our opinion the information given in the directors’ report
is consistent with the financial statements the information given in the directors’ report includes that specific
information presented in the chief executive officer’s review and chief financial officer’s review that is cross
referred from the business review and financial results section of the directors’ report
in addition we report to you if in our opinion the company has not kept proper accounting records if we have
not received all the information and explanations we require for our audit or if information specified by law
regarding directors’ remuneration and other transactions is not disclosed 
we review whether the corporate governance statement reflects the company’s compliance with the nine
provisions of the 2006 combined code specified for our review by the listing rules of the financial services
authority and we report if it does not we are not required to consider whether the board’s statements on
internal control cover all risks and controls or form an opinion on the effectiveness of the group’s corporate
governance procedures and its risk and control procedures
we read the other information contained in the report and accounts and consider whether it is consistent with
the audited financial statements we consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial statements our responsibilities do not
extend to any other information pace plc
report  accounts 31
independent
auditors’ report
continued
basis of audit opinion  
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the
auditing practices board an audit includes examination on a test basis of evidence relevant to the amounts
and disclosures in the financial statements it also includes an assessment of the significant estimates 
and judgments made by the directors in the preparation of the financial statements and of whether the
accounting policies are appropriate to the group’s and company’s circumstances consistently applied and
adequately disclosed 
we planned and performed our audit so as to obtain all the information and explanations which we 
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial statements and the part of the director’s remuneration report to 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 financial statements and the part of the director’s
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 eu of
the state of the group’s affairs as at 31 december 2008 and of its profit for the year then ended  
• the parent company financial statements give a true and fair view in accordance with ifrss as adopted by
the eu as applied in accordance with the provisions of the companies act 1985 of the state of the parent
company’s affairs as at 31 december 2008  
• the financial statements and the part of the director’s remuneration report to be audited have been
properly prepared in accordance with the companies act 1985 and as regards the group financial
statements article 4 of the ias regulation and
• the information given in the report of the directors is consistent with the financial statements 
kpmg audit plc
chartered accountants
registered auditors
3 march 2009 pace plc 
report  accounts 00
33 financial statements
39 notes to the financial 
statements
65 directors secretary 
and advisers
66 five year record and 
shareholder information
financial statements
contents
pace plc 
report  accounts 32 consolidated income statement
for the year ended 31 december 2008
pace plc
report  accounts 33
year ended 7 months ended
31 december 31 december
2008 2007
note £000 £000
revenue 3 745475 249875
cost of sales 610268 199040
gross profit 135207 50835
administrative expenses
research and development expenditure 60480 19293
other administrative expenses
before exceptional costs 45553 15656
exceptional costs 10962 
amortisation of other intangibles 3715 
total administrative expenses 120710 34949
operating profit 14497 15886
financial income – interest receivable 6 202 53
financial expenses – interest payable 6 871 589 
profit before tax 13828 15350
tax charge 8 2774 935
profit after tax 11054 14415
attributable to
equity holders of the company 11054 14415
basic earnings per ordinary share 9 40p 63p
diluted earnings per ordinary share 9 39p 61p consolidated balance sheet
at 31 december 2008
pace plc
report  accounts 34
31 dec 2008 31 dec 2007
note £000 £000
assets
non current assets
property plant and equipment 10 14702 8621
intangible assets – goodwill 10 76337 9436
intangible assets – other intangibles 22744 
intangible assets – development expenditure 10 26490 15882
available for sale financial assets 11 349 349
deferred tax assets 12 7119 5059
total non current assets 147741 39347
current assets
inventories 13 57229 28668
trade and other receivables 14 231009 102382
cash and cash equivalents 37717 
current tax assets 204 
total current assets 326159 131050
total assets 473900 170397
equity
issued capital 19 14949 11684
share premium 20 37023 36885
merger reserve 21 55490 
hedging reserve 3783 
translation reserve 13005 425
retained earnings 22 27245 18608
total equity 143929 67602
liabilities
non current liabilities
deferred tax liabilities 12 15733 
provisions 18 17566 12487
total non current liabilities 33299 12487
current liabilities
trade and other payables 15 278718 72625
current tax liabilities  460
interest bearing loans and borrowings 16  12094
provisions 18 17954 5129
total current liabilities 296672 90308
total liabilities 329971 102795
total equity and liabilities 473900 170397
these financial statements were approved by the board of directors on 3 march 2009 and were signed on its behalf by
neil gaydon chief executive officer
stuart hall chief financial officer company balance sheet
at 31 december 2008
pace plc
report  accounts 35
31 dec 2008 31 dec 2007
note £000 £000
assets
non current assets
property plant and equipment 10 8268 7335
intangible assets – development expenditure 10 14982 15882
investments in group and other companies 11 74649 9749
deferred tax assets 12 4016 5059
total non current assets 101915 38025
current assets
inventories 13 8005 28668
trade and other receivables 14 187985 102052
cash and cash equivalents 15799 
total current assets 211789 130720
total assets 313704 168745
equity
issued capital 19 14949 11684
share premium 20 37023 36885
merger reserve 21 55490 
hedging reserve 4086 
retained earnings 22 20858 13964
total equity 124234 62533
liabilities
non current liabilities
provisions 18 8811 12487
total non current liabilities 8811 12487
current liabilities
trade and other payables 15 173732 74976
current tax liabilities 7 474
interest bearing loans and borrowings 16  13146
provisions 18 6934 5129
total current liabilities 180659 93725
total liabilities 189470 106212
total equity and liabilities 313704 168745
these financial statements were approved by the board of directors on 3 march 2009 and were signed on its behalf by
neil gaydon chief executive officer
stuart hall chief financial officer consolidated statement of changes in shareholders’ equity
pace plc
report  accounts 36
share share merger hedging translation retained total
capital premium reserve reserve reserve earnings equity
group £000 £000 £000 £000 £000 £000 £000
balance at 2 june 2007 11659 36751   227 2300 50937
profit for the period      14415 14415
currency translation adjustments     198  198
total income and expense for the period     198 14415 14613
deferred tax adjustments      606 606
employee share incentive charges      570 570
movement in employee share trusts      717 717
issue of shares 25 134     159
balance at 31 december 2007 11684 36885   425 18608 67602
profit for the period      11054 11054
net change in fair value of cash flow
hedges transferred to profit or loss
net of tax    588   588
effective portion of changes in fair value
of cash flow hedges net of tax    3195   3195
currency translation adjustments     12580  12580
total income and expense for the period    3783 12580 11054 19851
deferred tax adjustments      606 606
employee share incentive charges      1011 1011
movement in employee share trusts      2822 2822
issue of shares 3265 138 55490    58893
balance at 31 december 2008 14949 37023 55490 3783 13005 27245 143929
company
balance at 2 june 2007 11659 36751    2401 46009
profit for the period      14472 14472
deferred tax adjustments      606 606
employee share incentive charges      570 570
movement in employee share trusts      717 717
issue of shares 25 134     159
balance at 31 december 2007 11684 36885    13964 62533
profit for the period      9311 9311
net change in fair value of cash flow
hedges transferred to profit or loss
net of tax    577   577
effective portion of changes in fair value
of cash flow hedges net of tax    4663   4663
employee share incentive charges      1011 1011
movement in employee share trusts      2822 2822
issue of shares 3265 138 55490    58893
deferred tax adjustments      606 606
balance at 31 december 2008 14949 37023 55490 4086  20858 124234 consolidated cash flow statement
for the year ended 31 december 2008
pace plc
report  accounts 37
year 7 months
ended ended
31 dec 2008 31 dec 2007
£000 £000
cash flows from operating activities
profit before tax 13828 15350
adjustments for
share based payments charge 1011 570
depreciation of property plant and equipment 4504 2483
amortisation and impairment of development expenditure 21895 9958
amortisation of other intangibles 3715 
loss on sale of property plant and equipment  136
net financial charges 669 536
movement in trade and other receivables 67810 49874
movement in trade and other payables 124572 12828
movement in inventories 19188 3400
movement in provisions 4098 3551
cash generated fromused in operations 87294 7862
interest paid 993 468
tax paid 3584 242
net cash generatedused in from operating activities 82717 8572
cash flows from investing activities
acquisition of subsidiary net of cash acquired 3134 
purchase of property plant and equipment 6584 4258
development expenditure 20995 12170
interest received 200 53
net cash used in investing activities 30513 16375
cash flows from financing activities
proceeds from issue of share capital 376 159
proceeds from exercise of employee share options 407 717
repayment of loans  159
purchase of own shares by employee benefit trust 3229 
net cash generated from financing activities 2446 717
net change in cash and cash equivalents 49758 24230
cash and cash equivalents at start of period 12094 12049
effect of exchange rate fluctuations on cash held 53 87
cash and cash equivalents at end of period 37717 12094 company cash flow statement
for the year ended 31 december 2008
pace plc
report  accounts 38
year 7 months
ended ended
31 dec 2008 31 dec 2007
£000 £000
cash flows from operating activities
profit before tax 8689 15032
adjustments for
share based payments charge 1011 570
depreciation of property plant and equipment 3883 2217
amortisation of development expenditure 21895 9958
loss on sale of property plant and equipment 12 96
net financial income 669 534
movement in trade and other receivables 85933 49907
movement in trade and other payables 92177 12612
movement in inventories 20663 3400
movement in provisions 1871 3551
cash generatedused in from operations 61195 8737
interest paid 953 468
tax paid 44 
net cash generated fromused in operating activities 60198 9205
cash flows from investing activities
acquisition of subsidiary net of cash acquired 3134 
purchase of property plant and equipment 4816 3979
development expenditure 20995 12170
interest received 143 56
net cash used in investing activities 28802 16093
cash flows from financing activities
proceeds from issue of share capital 376 159
proceeds from exercise of employee share options 407 717
purchase of own shares by employee benefit trust 3229 
net cash generated from financing activities 2446 876
net change in cash and cash equivalents 28950 24442
cash and cash equivalents at start of period 13146 11275
effect of exchange rate fluctuations on cash held 5 21
cash and cash equivalents at end of period 15799 13146 notes
pace plc
report  accounts 39
1 basis of preparation and business environment
the following accounting policies have been applied consistently in dealing with items which are considered material in
relation to the financial statements
basis of preparation
the financial statements have been prepared in accordance with applicable accounting standards and under the historical
cost convention as modified by the revaluation of derivative instruments
international financial reporting standards
the group’s financial statements have been prepared in accordance with international financial reporting standards “ifrs”
as endorsed by the european union and international financial reporting interpretations committee “ifric” interpretations
and with those parts of the companies act 1985 applicable to companies reporting under ifrs the company’s financial
statements have been prepared on the same basis and as permitted by section 2303 of the companies act 1985 no income
statement is presented for the company
financial year end
the current year’s financial statements are for the year ended 31 december 2008 and the previous year’s financial statements
are for the 7 months ended 31 december 2007 reflecting a change in the company’s accounting reference date from 31 may
basis of consolidation
the group financial statements consolidate those of the company and of its subsidiary undertakings note 11 drawn up to
31 december 2008 the results of subsidiaries acquired in the period are included in the income statement from the date they
are acquired on acquisition all of the subsidiaries’ assets and liabilities that exist at the date of acquisition are recorded at
their fair values reflecting their condition at that date subsidiaries are entities controlled by the company control exists
when the company has the power directly or indirectly to govern the financial and operating policies of an entity so as to
obtain benefits from its activities in assessing control potential voting rights that presently are exercisable or convertible are
taken into account intragroup transactions including sales profits receivables and payables have been eliminated on the
group consolidation investments in subsidiaries are carried at cost less any impairment loss in the financial statements of
the company
significant judgements key assumptions and estimation uncertainty
the group’s main accounting policies affecting its results of operations and financial condition are set out on pages 40 to 43
judgements and assumptions have been required by management in applying the group’s accounting policies in many areas
actual results may differ from the estimates calculated using these judgements and assumptions key areas of estimation
uncertainty and critical accounting judgements are as follows
warranties
pace provides product warranties for its settop boxes although it is difficult to make accurate predictions of potential failure
rates or the possibility of an epidemic failure as a warranty estimate must be calculated at the outset of a product before
field deployment data is available these estimates improve during the lifetime of the product in the field
a provision for warranties is recognised when the underlying products are sold the provision is based on historical warranty
data and a weighting of all possible outcomes against their associated probabilities the level of warranty provision required
is reviewed on a product by product basis and provisions adjusted accordingly in the light of actual performance
royalties
pace’s products incorporate third party technology usually under licence inadvertent actions may expose pace to the risk
of infringing third party intellectual property rights potential claims can still be submitted many years after a product has
been deployed any such claims are always vigorously defended
a provision for royalties is recognised where the owners of patents covering technology allegedly used by the group have
indicated claims for royalties relating to the group’s use including past usage of that technology having taken legal advice
the board considers that there are defences available that should mitigate the amounts being sought the group will
vigorously negotiate or defend all claims but in the absence of agreement the amounts provided may prove to be different
from the amounts at which the potential liabilities are finally settled the provision is based on the latest information available pace plc
report  accounts 40
eu import duty classification
pace along with other set top box manufacturers and broadcasters has continued to monitor the reinterpretation by
european union customs authorities of customs regulations that could result in the extension of import duties to interactive
settop boxes with a hard drive manufactured outside but imported into the eu  on 7th may 2008 the nomenclature
committee of the european commission issued an explanatory note “en” 05902007 to the combined nomenclature setting
out their view that settop boxes with a hard drive should be classified under customs tariff heading 8521 90 00 and so
subject to a 139 ad valorem duty on importation to the european union  as a consequence pace is potentially exposed to
a retrospective customs duty liability in respect of such settop boxes it has imported
having previously obtained binding tariff information “bti” rulings from hmrc which provide protection in respect of much
of the potential period of retrospective application of duty on relevant products and having taken legal advice management’s
opinion is that the retrospective application of the explanatory note would not be supportable in law  accordingly pace is in
common with other affected importers appealing any retrospective assessment made and will defend its position on this
matter
an assessment has been received from hmrc in an amount of £77m representing import duty relating to imports prior to
7 may 2008 having taken advice management’s best estimate is that no material outflow of economic benefit would be
required to discharge this obligation  as such at 31 december 2008 any potential liability should be considered contingent
writ issued against company
a writ has been issued against the company by a former customer relating to the supply of settop boxes in 20002001 the
amount claimed is 72m the directors believe that they have good defences to the claim and that in the absence of any
liability no provision has been made in addition on 15 july 2007 pace filed a counter claim for circa 10m against this former
customer and a related third party
going concern
the group has put in place new borrowing facilities to december 2011 to a maximum of £35m these facilities are subject
to financial performance covenants
the board has prepared a working capital forecast based upon assumptions as to trading and the realisation of inventory
and the matters above as well as building in the other circumstances noted in the business environment section within the
directors’ report the board has also modelled a number of alternative business scenarios based upon these the board has
concluded that the group has adequate working capital will meet the financial performance covenants and that therefore it
is appropriate to use the going concern basis of preparation for this financial information
2 accounting policies
goodwill
all business combinations are accounted for by applying the purchase method goodwill represents the excess of the fair value
of the consideration paid on acquisition of a business over the fair value of the assets including any intangible assets identified
and liabilities and contingent liabilities acquired goodwill is not amortised but is measured at cost less impairment losses
in determining the fair value of consideration the fair value of equity issued is the market value of equity at the date of
completion and the fair value of contingent consideration is based upon the extent to which the directors believe performance
conditions will be met and thus whether any further consideration will be payable
as permitted by ifrs 1 goodwill arising on acquisitions before 29 may 2004 date of transition to adopted ifrs has been
frozen at the uk gaap amounts subject to being tested for impairment annually the group performs its annual impairment
review at the cashgenerating unit level
other intangibles
other intangible assets that are acquired by the group which have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses
research and development expenditure
all ongoing research expenditure is expensed in the period in which it is incurred where a product is technically feasible
production and sales are intended a market exists and sufficient resources are available to complete the project development
costs are capitalised and subsequently amortised on a straightline basis over the estimated useful life of the product
concerned from commercial launch the expenditure capitalised includes the cost of materials direct labour and an
appropriate proportion of overheads where these conditions are not met development expenditure is recognised as an
expense in the period in which it is incurred capitalised development expenditure is stated at cost less accumulated
amortisation and impairment losses the estimated useful lives for development expenditure are estimated to be in a range
of between 6 and 18 months notes
continued
pace plc
report  accounts 41
capitalised development expenditure is not treated as a realised loss for the purpose of determining the company’s
distributable profits as the costs meet the conditions required to be treated as an asset in accordance with ias 38
the amortisation of capitalised development expenditure is charged to the income statement in research and development
expenditure within administrative expenses category 
impairment charges
the company considers at each reporting date whether there is any indication that noncurrent assets are impaired if there
is such an indication the company carries out an impairment test by measuring an asset’s recoverable amount which is the
higher of its fair value less costs to sell and its value in use effectively the expected cash to be generated from using the asset
in the business if the recoverable amount is less than the carrying amount an impairment loss is recognised and the asset
is written down to its recoverable amount
an impairment loss in respect of goodwill is not reversed
in respect of other assets an impairment loss is reversed when there is an indication that the impairment loss may no longer
exist and there has been a change in the estimates used to determine the recoverable amount 
an impairment loss is reversed only to the extent that the asset’s carrying value does not exceed the amount that would have
been determined net of depreciation or amortisation if no impairment loss had been recognised
exceptional items
items which are significant by virtue of their size or nature and which are considered nonrecurring are classified as
exceptional operating items such items which include for instance the costs of opening or closing premises costs of
significant restructurings and profits and losses made on the disposal of properties are included within the appropriate
consolidated income statement category but are highlighted separately in the notes to the financial statements exceptional
operating items are excluded from the profit measures used by the board to monitor underlying performance
revenue recognition
revenue comprises the value of sales of goods and services to third party customers occurring in the period stated exclusive
of value added tax and net of trade discounts and rebates
revenue on the sale of goods is recognised when substantially all of the risks and rewards in the product have passed to the
customer and substantially all of the group’s work is completed which is usually upon delivery to the customer or his agent
revenue in respect of services rendered including engineering consultancy and support and software services is recognised
over the period over which they are performed in relation to the level of work undertaken project milestones achieved and
any future obligations remaining
the company does not enter into contracts that cover both the provision of hardware and services in combination
government grants
grants in respect of specific research and development projects are credited to research and development costs within the
income statement or against the capitalised development expenditure as appropriate to match to the project’s related
expenditure
cash and cash equivalents
cash and cash equivalents comprise cash balances and call deposits the company considers all highly liquid investments
with original maturity dates of three months or less to be cash equivalents bank overdrafts that are repayable on demand
and form an integral part of the group’s cash management system are included as a component of cash and cash equivalents
for the purpose of the statement of cash flows
allowance for doubtful debts
trade receivables are assessed individually for impairment or collectively where the receivables are not individually significant
where necessary provisions for doubtful debts are recorded in the income statement 
inventory
inventory is stated at the lower of cost and net realisable value cost is determined on a firstinfirstout basis and includes
appropriate transport and handling costs but excludes royalties due only on ultimate sale where necessary provision is
made for obolete slowmoving and defective inventory pace plc
report  accounts 42
property plant and equipment
the cost of items of property plant and equipment is its purchase cost together with any incidental costs of acquisition 
depreciation is calculated so as to write off on a straightline basis over the expected useful economic lives of the asset
concerned the cost of property plant and equipment less any estimated residual values which are adjusted if appropriate
at each balance sheet date the principal economic lives used for this purpose are
• long leasehold properties period of lease
• short leasehold properties period of lease
• plant and machinery one to ten years
• motor vehicles four years 
provision is made against the carrying value of items of property plant and equipment where an impairment in value is
deemed to have occurred 
leased assets
leases in terms of which the group assumes substantially all the risks and rewards of ownership are classified as finance
leases assets held under finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated
over their expected useful lives the interest element of leasing payments represents a constant proportion of the capital
balance outstanding and is charged to the income statement over the period of the lease
all other leases are regarded as operating leases and the payments made under them are charged to the income statement
on a straightline basis over the lease term
currency translation
transactions in foreign currencies are translated at the exchange rate ruling at the date of transaction monetary assets and
liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date
exchange differences of a trading nature are dealt with in the income statement the assets and liabilities of foreign
operations including goodwill and fair value adjustments arising on consolidation are translated at foreign exchange rates
ruling at the balance sheet date the revenues and expenses of foreign operations are translated at an average rate
approximate to the foreign exchange rate ruling at the date of the transactions 
exchange differences from the above are taken directly to the translation reserve they are released to the income statement
on disposal
derivative financial instruments
the group uses derivative financial instruments usually forward foreign exchange contracts to hedge its exposure to foreign
exchange risks arising from operational financing and investment activities in accordance with its treasury policy the group
does not hold or issue derivative financial instruments for trading purposes 
following enhancements in the group’s hedging policy and changes in the group’s currency profiles following the acquisition
of pace france see note 29 the directors have determined that the instruments qualify for cash flow hedge accounting
derivative financial instruments are classified as cashflow hedges when they hedge the group’s exposure to variability in cash
flows that are either attributable to a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction
derivatives are reviewed quarterly for effectiveness where a derivative financial instrument is designated as a hedge of the
variability in cash flows of a recognised asset or liability or highly probable forecast transaction the effective part of any gain
or loss on the movement in fair value of the derivative financial instrument is recognised directly in equity
the gain or loss on any ineffective part of the hedge is immediately recognised in the income statement within finance
incomecosts if a hedge of a forecast transaction subsequently results in the recognition of a financial asset or liability the
associated cumulative gains or losses that were recognised directly in equity are reclassified into the income statement when
the transaction occurs
taxes
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the
tax rates that have been enacted or substantively enacted by the balance sheet date
deferred tax is provided using the balance sheet liability method providing where relevant for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes
deferred tax is measured using the tax rates that have been enacted or substantively enacted by the balance sheet date and
are expected to apply when the asset is realised or the liability settled 
a net deferred tax asset is recognised only when it is probable that sufficient taxable profits will be available in the foreseeable
future from which the reversal of the temporary differences can be deducted  notes
continued
pace plc
report  accounts 43
sharebased payments
the company issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are
measured by the company and the group at fair value at the date of grant fair value is measured by use of the blackscholes
pricing model 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 company’s estimate of the number of shares that will eventually vest
the value of the charge is adjusted in the income statement of the company and the group over the remainder of the vesting
period to reflect expected and actual levels of option vesting with the corresponding adjustment made in equity
the company has applied the exemption available under ifrs 2 to apply its provisions only to those options granted after 7
november 2002 and which were outstanding at 1 january 2005
employee share ownership plans
the material assets liabilities income and costs of the pace micro technology plc employee benefits trust are treated as
being those of the company until such time as the company’s own shares vest unconditionally with employees the
consideration paid for the shares is deducted in arriving at equity
employee benefits
obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement
as incurred the group has no defined benefit arrangements in place
available for sale financial assets
available for sale financial assets are stated at the lower of the carrying amount and fair value less costs to sell if their
carrying amount is recovered principally through a sale transaction rather than through continuing use
finance income
finance income relates to interest income which is accrued on a time basis by reference to the principal outstanding and
at the effective interest rate applicable
equity instruments
equity instruments issued by the company are recorded at the proceeds received net of direct issue costs 
dividends payable
distributions to equity holders are disclosed as a component of the movement in shareholders’ equity a liability is recorded
for a final dividend when the dividend is declared by the company’s shareholders and for an interim dividend when the
dividend is paid
provisions
a provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a
past event and it is probable that an outflow of economic benefits will be required to settle the obligation
a royalties
a provision for royalties is recognised where the owners of patents covering technology allegedly used by the group
have indicated claims for royalties relating to the group’s use including past usage of that technology the provision
is based on the latest information available 
b warranties
a provision for warranties is recognised when the underlying products or services are sold the provision is based
on historical warranty data and a weighting of all possible outcomes against their associated probabilities the level
of warranty provision required is reviewed on a product by product basis and provisions adjusted accordingly in the
light of actual performance
c restructuring
a provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan
and the restructuring has either commenced or has been announced publicly provisions are not recognised for
future operating losses pace plc
report  accounts 44
d onerous contracts
a provision for onerous contracts is recognised when the expected benefits to be derived by the group from a contract
are lower than the unavoidable cost of meeting its obligations under the contract
accounting standards issued but not adopted
no impact is expected upon the result or net assets of the group or company from any standards that are available for early
adoption but have not been early adopted
3 segmental analysis
the group’s principal activities are the development design and distribution of digital receivers and receiver decoders for
the reception of digital television and the receptiontransmission of interactive services telephony and high speed data “set
top boxes” the group also provides engineering design software applications and support services to multiple service
operators broadcasters telecommunications companies and retail markets worldwide each of these services may be
delivered over satellite cable terrestrial and ip network transmission systems
the directors have undertaken a review of the group’s business risks and consider that the continuing operations represent
one product offering with similar risks and rewards and should be reported as a single business segment in line with the
group’s internal reporting framework
the geographical analysis of revenue which arises from the sale of goods and the provision of software hardware and other
consultancy services to third party customers is as follows
12 months 7 months
ended ended
31 dec 2008 31 dec 2007
revenue by destination £000 £000
united kingdom 110251 48451
continental europe 239109 41107
far east and australasia 81883 15586
north america 264114 144731
rest of the world 50118 
745475 249875
4 expenses and auditors’ remuneration
12 months 7 months
ended ended
31 dec 2008 31 dec 2007
£000 £000
fees payable to the company’s auditors for the audit of
company’s annual accounts 155 130
fees payable to the company’s auditors and its associates for other services to the group
audit of the company’s subsidiaries financial statements pursuant to legislation 106 8
other services pursuant to interim reporting legislation 40 20
other services relating to taxation 43 28
services relating to corporate finance 372 
services relating to information technology 45 
other services 21 
depreciation of plant property and equipment
owned 4504 2483
other operating lease rental
land and buildings 3605 808
motor vehicles 6 15
loss on disposal of plant property and equipment  136
net foreign exchange gains recognised within operating profitloss 1718 198 notes
continued
pace plc
report  accounts 45
5 exceptional items
12 months 7 months
ended ended
31 dec 2008 31 dec 2007
£000 £000
restructuring and reorganisation costs 8946 
integration costs 2016 
10962 
the restructuring and reorganisation costs relate to a restructuring programme within the group and represent incremental
costs to the business in relation to employee costs which either have been incurred or will be incurred in the next twelve
months the integration costs relate to the integration of the acquired set top box business of royal philips electronics
6 finance incomecosts
12 months 7 months
ended ended
31 dec 2008 31 dec 2007
£000 £000
finance income  interest on bank deposits 202 53
finance costs 871 589
7 staff numbers and costs
the average number of persons including directors employed by the group and company during the year analysed by
category were as follows
group company
year 7 months year 7 months
ended ended ended ended
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
research and development 531 411 293 294
administration 133 129 82 99
sales and marketing 25 22 18 19
manufacturing and operations 73 29 40 24
762 591 433 436 pace plc
report  accounts 46
7 staff numbers and costs continued
the aggregate payroll costs of these persons were as follows
group company
year 7 months year 7 months
ended ended ended ended
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
£000 £000 £000 £000
wages and salaries 32573 12974 17747 9729
social security costs 8073 1666 2271 1357
other pension costs 1412 580 1005 565
share based payments see note 25 1011 570 1011 570
redundancy costs 8023 99 175 99
51092 15889 22209 12320
remuneration of directors
the remuneration share options and pension entitlements of the directors are disclosed in the remuneration report on
pages 21 to 26
8 tax charge
year 7 months
ended ended
31 dec 2008 31 dec 2007
the tax charge is based on the profit for the year and comprises £000 £000
current tax
adjustments in respect of previous periods 
overseas tax charge 2921 420
total current tax charge 2921 420
deferred tax
origination and reversal of timing differences note 12 1097 1367
adjustment in respect of previous periods 950 1169
effect of change in tax rate  317
total deferred tax creditcharge 147 515
tax charge in consolidated income statement 2774 935 notes
continued
pace plc
report  accounts 47
8 tax charge continued
reconciliation of effective tax rate
year 7 months
ended ended
31 dec 2008 31 dec 2007
£000 £000
profit before tax 13828 15350
tax using domestic corporation tax rate at 28 2007 30 3872 4605
effects of
expenses not deductible for tax purposes 1614 391
effect of abolition of industrial building allowances 371 
brought forward unrecognised tax losses recognised in the period 3142 2256
research and development tax credit 1523 547
overseas tax not at 30 398 105
effect of tax relief on exercise of share options 296 511
effect of change in tax rate 62 317
adjustments to tax charge in respect of previous periods 950 1169
total tax charge 2774 935
9 earnings per ordinary share
basic and diluted earnings per share
the calculation of basic earnings per share is based on a profit after tax of £11054000 7 months ended 31 december 2007
£14415000 divided by the weighted average number of ordinary shares in issue of 274757069 7 months ended 31 december
2007 229141578 excluding shares held by the employee benefits trust
year 7 months
ended ended
31 dec 2008 31 dec 2007
number of shares m m
weighted average number of ordinary shares in issue during the year 2748 2291
dilutive effect of options outstanding 30 55
diluted weighted average number of ordinary shares in issue during the year 2778 2346
diluted earnings per ordinary share varies from basic earnings per ordinary share due to the effect of the notional exercise
of outstanding share options
to better reflect underlying performance adjusted earnings per share is shown below this measure makes adjustments to
statutory profit after tax to remove the impact of the amortisation of intangibles relating to the acquistion in the period
£2451000 after tax and the exceptional charges in the period £7892640 after tax
adjusted basic earnings per ordinary share 78p
adjusted diluted earnings per ordinary share 77p pace plc
report  accounts 48
10 intangible assets and property plant and equipment
otherdevelopment long short plant total
goodwill intangibles expenditure leasehold leasehold machinery property
buildings land and and motor plant and
buildings vehicles equipment
group £000 £000 £000 £000 £000 £000 £000
cost
at 2 june 2007 9436  23087 616 4811 20803 26230
exchange adjustments    31 2 46 75
additions   12170  2014 2683 4697
retirement of assets   4198 
disposals    234 211 1252 1697
at 31 december 2007 9436  31059 413 6612 22280 29305
exchange adjustments 13339 4819 1899 124 265 4272 4661
additions   20995  1907 4677 6584
acquisitions 53562 21640 9609   14280 14280
retirement of assets   3721 
disposals      664 664
at 31 december 2008 76337 26459 59841 537 8784 44845 54166
amortisationdepreciation
at 2 june 2007   9417 286 3909 15527 19722
exchange adjustments    16 1 25 40
provided in the period   7811 12 269 2202 2483
retirement of assets   4198 
impairment  2147 
disposals    195 143 1223 1561
at 31 december 2007   15177 119 4034 16531 20684
exchange adjustments    37 105 2730 2872
provided in the year  3715 15185   12068 12068
acquisitions    17 664 3823 4504
retirement of assets   3721 
impairment  6710 
disposals      664 664
at 31 december 2008  3715 33351 173 4803 34488 39464
net book amount at
2 june 2007 9436  13670 330 902 5276 6508
net book amount at 
31 december 2007 9436  15882 294 2578 5749 8621
net book amount at
31 december 2008 76337 22744 26490 364 3981 10357 14702
other intangibles
other intangibles relate to balances relating to trademarks  and licence agreements customer contracts and relationships
recognised as part of the acquisition of the pace france business see note 29
all the goodwill at 31 december 2007 related to knowhow acquired with the purchase of xcom multimedia communications
sa in february 2001 these assets are used as an integral part of the development of products which to date have been sold
mainly into pace continental european markets accordingly for impairment testing purposes the goodwill has been allocated
to a cash generating unit comprising the group’s continental european business notes
continued
pace plc
report  accounts 49
10 intangible assets and property plant and equipment continued
goodwill additions in the year relates to expected synergies future revenue streams and knowhow acquired with the
purchase of pace france in april 2008 the directors also consider that this business is an integral part of the development
of products which will in future be sold into pace continental european markets accordingly for impairment testing
purposes the goodwill has also been allocated to a cash generating unit comprising the group’s continental european
business
the recoverable amount of the above unit including the goodwill is based upon a value in use calculation and is higher than
the carrying value of the assets and goodwill allocated to this unit the calculations use cashflow projections based on
actual operating results budgets and 3 year forecasts reflecting known purchase orders sales contracts and the net result
from planned product launches therefore the key assumptions are a growth rate of 1 on sales and 2 on overheads which
has been used to extrapolate results a discount rate of 12 has been used
intangible assets property plant and equipment
short total
leasehold property
development and plant and motor plant and
expenditure buildings machinery vehicles equipment
company £000 £000 £000 £000 £000
cost
at 2 june 2007 23087 4469 16667 30 21166
additions 12170 2007 2403 8 4418
disposals 4198 210 1250  1460
at 31 december 2007 31059 6266 17820 38 24124
additions 20995 710 4100 6 4816
disposals 3721  623  623
at 31 december 2008 48333 6976 21297 44 28317
amortisationdepreciation
at 2 june 2007 9417 3596 12311 30 15937
provided in the period 7811 265 1951 1 2217
retirement of assets 4198    
impairment 2147    
disposals  143 1222  1365
at 31 december 2007 15177 3718 13040 31 16789
provided in the year 15185 656 3224 3 3883
retirement of assets 3721    
impairment 6710    
disposals   623  623
at 31 december 2008 33351 4374 15641 34 20049
net book amount at 2 june 2007 13670 873 4356  5229
net book amount at 31 december 2007 15882 2548 4780 7 7335
net book amount at 31 december 2008 14982 2602 5656 10 8268 pace plc
report  accounts 50
11 investments in group and other companies
available for
sale financial
assets
group £000
cost at 2 june 2007 31 december 2007 and 31 december 2008 1479
provision at 2 june 2007 31 december 2007 and 31 december 2008 1130
net book value at 2 june 2007 31 december 2007 and 31 december 2008 349
intra shares available for
group in group sale financial
loans undertakings assets total
company £000 £000 £000 £000
cost at 2 june 2007 and 31 december 2007 65945 6038 899 72882
additions in the year  64900  64900
cost at 31 december 2008 65945 70938 899 137782
provision at 2 june 2007 and 31 december 2007 62583  550 63133
net book value at 2 june 2007 and 31 december 2007 3362 6038 349 9749
net book value at 31 december 2008 3362 70938 349 74649 notes
continued
pace plc
report  accounts 51
11 investments in group and other companies continued
at 31 december 2008 the company had a beneficial interest in the equity of the following subsidiary undertakings
nature of percentage country of class of share
operations holding incorporation capital held
eurl new com immobilier holding company 100 france ordinary
pace advanced consumer electronics limited dormant 100 uk ordinary
pace asia pacific limited administrative
development support 100 hong kong ordinary
pace distribution gmbh dormant 100 germany ordinary
pace distribution overseas limited holding company 100 uk ordinary
preference
pace micro technology hk limited holding company 100 hong kong ordinary
pace micro technology australia pty limited administrative
development support 100 australia ordinary
pace americas limited administrative
development support 100 uk ordinary
pace americas inc trading 100 usa ordinary
pace micro technology asia pacific limited dormant 100 hong kong ordinary
sci les 9 tilleuls property company 100 france ordinary
pace europe sas administrative
development support 100 france ordinary
pace micro technology gmbh administrative
development support 100 germany ordinary
pace micro technology india private ltd development support 100 india ordinary
pace overseas distribution limited trading 100 uk ordinary
pace france sas trading 100 france ordinary
pace usa inc trading 100 usa ordinary
pace belgium nv  trading 100 belgium ordinary
pace asia home networks sdn bhd  trading 100 malaysia ordinary
pace networks limited  trading 100 uk ordinary
pace brasil – industria electronica e comercio ltda  trading 100 brazil ordinary
pace iberia sl  trading 100 spain ordinary
stb anchor mexicana sa de cv  trading 100 mexico ordinary
pace china operations  administrative 100 china ordinary
 denotes company owned by pace micro technology hk limited
 denotes company owned by pace europe sas
 denotes company owned by pace distribution overseas limited
 denotes company owned by pace americas limited
 denotes company owned by pace france sas
 denotes company owned by pace asia pacific limited
each of the subsidiary undertakings listed above has been consolidated in the group’s financial statements pace plc
report  accounts 52
12 deferred tax assets
deferred tax assets have been recognised in respect of differences between accounting and tax carrying values and trading
losses where it is probable that these assets will be recovered 
the movements in deferred tax assets and liabilities during the year are shown below
short term
property plant trading timing foreign
 equipment losses intangibles differences exchange total
group £000 £000 £000 £000 £000 £000
recognised assetliabilities 
at 31 december 2007 2539 4154 2717 1083  5059
arising on acquisition   11910   11910
creditedcharged to
income statement 1220 829 1106 458  2697
creditedcharged to
equityreserves    606 1540 934
at 31 december 2008 1319 3325 15733 935 1540 8614
shown as deferred
tax assets 1319 3325  935 1540 7119
shown as deferred
tax liabilities   15733   15733
short term
property plant trading timing foreign
 equipment losses intangibles differences exchange total
company £000 £000 £000 £000 £000 £000
recognised asset 
at 31 december 2007 2539 4154 2717 1083  5059
creditedcharged to
income statement 1220 829 488 416  1977
creditedcharged to
equityreserves    606 1540 934
at 31 december 2008 1319 3325 2229 61 1540 4016
there are no unrecognised deferred tax assets at the period end in respect of unutilised trading losses
13 inventories
group company
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
£000 £000 £000 £000
raw materials and consumable stores 3686 3589 2306 3589
finished goods 53543 25079 5699 25079
57229 28668 8005 28668 notes
continued
pace plc
report  accounts 53
14 trade and other receivables
group company
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
£000 £000 £000 £000
trade receivables 225192 99508 154171 99475
amounts owed by subsidiary undertakings   32142 
other receivables 3772 1651  1563
prepayments and accrued income 2045 1223 1672 1014
231009 102382 187985 102052
15 trade and other payables
group company
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
£000 £000 £000 £000
trade payables 231632 59620 156300 59435
amounts owed to subsidiary undertakings    4231
social security and other taxes 943 586 613 437
other payables 234 853 1161 481
accruals 45909 11566 15658 10392
278718 72625 173732 74976
16 interest bearing loans and borrowings
group company
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
£000 £000 £000 £000
borrowings consist mainly of bank loans
and overdrafts falling due
within one year  12094  13146
banking facilities of £35 million are available until december 2011 and consist of a revolving credit facility secured by a fixed
and floating charge over the assets of pace plc and its subsidiary undertakings pace plc
report  accounts 54
17 derivatives and other financial instruments
short term debtors and creditors that meet the definition of a financial asset or liability respectively have been excluded from
all the following analysis other than the currency risk exposures 
this note provides information about the contractual terms of the group and company’s interest bearing loans and borrowings
note 16 for more information about the group and company’s exposure to interest rate credit risk and foreign currency
risk see pages 9 and 10 of the report of the directors
a interest rate risk profile of cashbank overdrafts
floating rate interest free total
currency £000 £000 £000
at 31 december 2008
sterling 15717 9 15726
us dollar 10279 1 10280
euro 4402 1 4403
other 7308  7308
total 37706 11 37717
at 31 december 2007
sterling 3344 3 3347
us dollar 7791  7791
euro 8068 97 7971
other 321  321
total 12194 100 12094
the interest rates on sterling us dollar euro and other floating rate financial assets are linked to the relevant bank base
rates
b currency exposures
the table below shows the group’s currency exposures that give rise to the net currency gains and losses recognised in the
income statement such exposures comprise the monetary assets and monetary liabilities of the group which are not
denominated in the operating or functional currency of the operating unit involved
net foreign currency monetary assetsliabilities
functional currency of £stl us dollar euro other total
group operation £000 £000 £000 £000 £000
at 31 december 2008
sterling 102555 7542 137 94876
euro 3543 44928  271 48742
other    
total 3543 147483 7542 134 143618
at 31 december 2007
sterling 2229 15897 74 18200
total 2229 15897 74 18200
c gains and losses on currency derivatives
the majority of the group’s production costs are denominated in us dollars the group endeavours to obtain as much of its
income as possible in us dollars but a significant proportion of income is currently received in sterling or euros the group’s
policy is to hedge forward progressively against movements in the value of foreign currencies in respect of cash receipts and
payments expected from transactions over the next 12 months notes
continued
pace plc
report  accounts 55
17 derivatives and other financial instruments continued
outstanding currency derivatives
sell buy principal average
currency currency amount rate maturity
at 31 december 2008 euro us dollar 1987m 139 jan 09dec 09
at 31 december 2007 euro us dollar 648m 140 jan 08apr 08
the group’s derivatives contracts qualify for hedge accounting and have a fair value at the balance sheet date of £50m
31 december 2007 £17m
d credit risk
the group’s credit risk is primarily attributable to its trade debtors credit risk is managed by monitoring the aggregate
amount and duration of exposure to any one customer depending upon their credit rating the group does not require
collateral in respect of financial assets there were no significant impairments in the periods under review
the credit risk on liquid funds is limited because counterparties are banks with high credit ratings at each balance sheet
date there was no significant concentration of credit risk
of the trade receivables at 31 december 2008 93 was within terms 31 december 2007 85 the balance was less than
30 days past due 31 december 2007 15
e liquidity risk
cash resources are largely and normally generated through operations short term flexibility is achieved by the asset based
lending facilities in place note 16
f sensitivity analysis
in managing interest rate and currency risks the group aims to reduce the impact of short term fluctuations on the group’s
earnings over the long term permanent changes in foreign exchange and interest rates would have an impact on consoli
dated earnings the directors consider that a change of 100 basis points in interest rates at any period end would not have
a material impact on cash flows
the group’s key foreign exchange exposures are in respect of the euro and us dollar a 1 strengthening in sterling against
these would have a favourable impact of £1355000 on the profit reported in the year ended 31 december 2008 seven month
period ended 31 december 2007 £401000 and an adverse impact of £925000 on equity seven month period ended 31
december 2007 £10000
g capital management
in line with the disclosure requirements of ias 1 presentation of financial statements the company regards its capital as
being the issued share capital together with its asset based lending facilities used to manage short term working capital 
requirements
note 19 to the financial statements provides details regarding the company’s share capital and movements in the period
there were no breaches of any requirements with regard to any relevant conditions imposed by either the ukla or the 
company’s articles of association during the periods under review
details of the company’s working capital facilities are given in note 16 such facilities are subject to certain financial 
performance covenants there have been no breaches of these covenants in the period under review pace plc
report  accounts 56
18 provisions
royalties
under 
negotiation warranties other total
£000 £000 £000 £000
group
at 31 december 2007 9208 8408  17616
acquisitions  9783 1438 11221
net charge for the year 206 13903 3456 17565
utilised 603 13139  13742
exchange adjustments  2493 367 2860
at 31 december 2008 8811 21448 5261 35520
due within one year  12693 5261 17954
due after one year 8811 8755  17566
royalties
under 
negotiation warranties total
£000 £000 £000
company
at 31 december 2007 9208 8408 17616
net charge for the year 206 7433 7639
utilised 603 8907 9510
at 31 december 2008 8811 6934 15745
due within one year  6934 6934
due after one year 8811  8811
royalties under negotiation
the owners of patents covering technology allegedly used by the group have indicated claims for royalties relating to the
group’s use including past usage of that technology negotiations over these liabilities continue for long periods of time the
directors have made provision for the potential royalties payable based on the latest information available having taken legal
advice the board considers that there are defences available that should mitigate the amounts being sought the group will
vigorously negotiate or defend all claims but in the absence of agreement the amounts provided may prove to be different
from the amounts at which the potential liabilities are finally settled
given the nature of the claims it is not possible to be more specific with regard to the timing of outflows
the directors consider that to disclose the amounts unused following the negotiation of royalty claims during the year would
be seriously prejudicial to other royalty claims under negotiation in litigation or dispute accordingly the directors have
aggregated amounts released unused with additional provisions made in order to arrive at the net charge for the year shown
above
other provisions
other provisions relate to onerous leases and restructuring provisions in relation to the restructuring of the pace europe
business
warranties
pace provides product warranties for its settop boxes from the point of sale and a provision for warranties is recognised when
the underlying products are sold the provision is based on historical warranty data principally historical failure rates and
related cost of repair information and a weighting of all possible outcomes against their associated probabilities the level
of warranty provision required is reviewed on a product by product basis and provisions adjusted accordingly in the light of
actual performance
although it is difficult to make accurate predictions of potential failure rates or the possibility of an epidemic failure as a
warranty estimate must be calculated at the outset of product shipment before field deployment data is available these
estimates improve during the lifetime of the product in the field
it is expected that the expenditure with regard to warranties will be incurred within three years of the balance sheet date notes
continued
pace plc
report  accounts 57
19 share capital
31 december 2008 31 december 2007  
number £000 number £000
authorised
ordinary shares of 5p each 300000000 15000 300000000 15000
allotted called up and fully paid
ordinary shares of 5p each 298970953 14949 233682856 11684
on 21 april 2008 the company alloted 64481049 ordinary shares at their market value at the date as part of its consideration
for the purchase of the settop box and connectivity solutions business of royal philips electronics “pace france” the
shares had a nominal value of £3224052 and a total market value of £58517000
during the year the company also allotted ordinary shares as follows
nominal
value consideration
number £000 £000
employee share option scheme 32 pence 314417 16 100
employee share option scheme 48 pence 33770 2 16
employee share option scheme 595 pence 218994 11 130
employee share option scheme 49 pence 4928  2
employee share option scheme 46 pence 3097  1
employee share option scheme 1575 pence 20000 1 3
employee share option scheme 58 pence 211842 10 123
807048 40 375 pace plc
report  accounts 58
19 share capital continued
the company has granted options which are subsisting including directors’ options in respect of the following presently
unissued ordinary shares of 5p each
number of ordinary price per share
shares subject to option exercise period pence
89370 1 october 2008 to 31 march 2009 595
336857 1 april 2009 to 30 september 2009 490
894831 1 december 2009 to 30 may 2010 460
532812 1 october 2010 to 31 march 2011 820
841121 1 october 201 to 31 march 2012 670
206470 11 may 2009 to  7 august 2009 730
175000 7 july 2002 to 6 july 2009 2000
231935 11 january 2003 to 10 january 2010 5995
68169 17 july 2003 to 16 july 2010 8575
13137 29 january 2004 to 28 january 2011 6100
105000 24 july 2005 to 23 july 2011 3750
144623 24 july 2004 to 23 july 2011 3750
22337 18 january 2005 to 17 january 2012 3570
231250 22 october 2003 to 21 october 2012 1575
60000 26 august 2004 to 25 august 2013 510
100000 3 february 2005 to 2 february 2014 750
25000 17 august 2008 to 16 august 2014 510
115000 17 august 2005 to 16 august 2014 510
250000 23 january 2009 to 22 january 2016 6325
425000 2 august 2008 to 1 august 2015 7425
2891513 2 october 2009 to 1 october 2016 5875
75000 28 november 2009 to 27 november 2016 6125
50000 19 february 2010 to 18 february 2017 695
75000 16 march 2010 to 15 march 2017 665
588746 1 november 2012 to 31 october 2017 9775
1988424 24 june 2011 to 23 june 2013 855
1605889 24 june 2011 to 23 june 2018 855
715581 24 june 2012 to 23 june 2014 855
227354 24 june 2012 to 23 june 2014 855
300000 18 december 2012 to 17 december 2018 470
82560 18 december 2011 to 17 december 2018 470
13468279
the pace micro technology plc employee benefits trust has granted options over existing shares to satisfy certain options
details of these additional options are shown in note 25 notes
continued
pace plc
report  accounts 59
20 share premium account
group and company £000
at 31 december 2007 36885
premium on allotments 138
at 31 december 2008 37023
the shares allotted during the year are listed in note 19
21 merger reserve
group and company £000
at 31 december 2007 
acquisition 55490
at 31 december 2008 55490
the merger reserve was created upon the acquisition of the settop box and connectivity solutions business of royal philips
electronics note 29
22 retained earnings
group £000
at 31 december 2007 18608
retained profit for the year 11054
deferred tax adjustments 606
employee share incentive charges 1011
purchase of own shares 2822
at 31 december 2008 27245
company £000
at 31 december 2007 13964
retained profit for the year 9311
deferred tax adjustments 606
employee share incentive charges 1011
purchase of own shares 2822
at 31 december 2008 20858
own shares held
the following amounts have been deducted from the retained reserves of the group and company
at 31 december 2008 the pace micro technology plc employee benefits held 11615707 31 december 2007 4535955
shares in the company which cost £21442225  31 december 2007 £18996738 these shares are held to satisfy options
granted to employees
the amounts arising on settlement of share options from the employee share trusts represents cash receipts from the
exercise of relevant share options pace plc
report  accounts 60
22 retained earnings continued
the pace micro technology plc employee benefits trust has granted options to employees including directors’ options over
ordinary shares of 5p each as follows
number of ordinary price per share
shares subject to option exercise period pence
360919 26 january 2002 to 25 january 2009 845
172500 7 july 2002 to 6 july 2009 2000
11098 17 july 2001 to 16 july 2010 8575
106343 29 january 2002 to 28 january 2011 6100
545037 26 august 2004 to 25 august 2013 510
357500 17 august 2005 to 16 august 2014 510
625000 2 august 2008 to 16 august 2015 7425
600000 18 april 2009 to 17 april 2016 635
2557237 2 october 2009 to 1 october 2016 5875
546075 3 april 2010 to 2 april 2017 7325
5881709
23 profit for the year
the parent company has taken advantage of section 230 of the companies act 1985 and has not included its own income
statement in these financial statements the group profit includes a parent company profit after tax of £9311000 seven
months ended 31 december 2007 profit after tax of £14472000
24 capital commitments
group and company
31 dec 2008 31 dec 2007
£000 £000
contracted but not provided for 1713 1058 notes
continued
pace plc
report  accounts 61
25 employee benefits
pension plans
the group contributes to several defined contribution group personal pension plans which all executive directors and
employees are entitled to join the total expenses relating to these plans in the current year was £1412000 seven months
ended 31 december 2007 £580000 at 31 december 2008 contributions of £nil 31 december 2007 £nil were outstanding
share based payments 
details of the company’s share option schemes are included in notes 19 and 22 and the remuneration report the number
and weighted average exercise price of share options is as follows
average weighted average weighted
exercise number exercise number
price of options price of options
31 dec 2008 31 dec 2008 31 dec 2007 31 dec 2007 
outstanding at the beginning of the period 917p 16478998 91p 18492508 
granted during the period 80p 6031377 89p 1335787
forfeited during the period 128p 1733588 140p 1454189
exercised during the period 54p 1456799 45p 1895108
outstanding at the end of the period 876 19319988 917p 16478998
exercisable at the end of the period 149p 3939381 168p 3836317
outstanding options were as follows
weighted
average weighted
remaining average
number contractual exercise
range of exercise prices pence at 31 dec 2008 life months price
1575p to 49p 1845498 39 43p
51p to 75p 10434323 81 62p
78p to 9775p 5990025 106 86p
200p to 375p 619460 17 276p
5995p to 8575p 430682 17 650p
19319988 81
the weighted average exercise price of options granted in the period was 80p year ended 31 december 2007 89p
the weighted average fair value at the measurement date of options granted in the year was 37p year ended 31 december
2007 37p
the weighted average exercise price at the date of exercise for options exercised in the year was 54p year ended 31 december
2007 45p
the fair value of services received in return for share options granted are measured by reference to the fair value of share
options granted the estimate of the fair value of the services received is measured based on a blackscholes model the
following table gives the assumptions applied to the options granted in the respective periods shown expectations of early
exercise are incorporated into the model where appropriate pace plc
report  accounts 62
25 employee benefits continued
31 dec 2008 31 dec 2007
average share price pence 785 970
weighted average exercise price pence 876 917
expected volatility  50 50
option life years 10 10
dividend yield  14 14
risk free interest rate  50 50
the expected volatility is based on the historic volatility calculated based on the weighted average remaining life of the share
options adjusted for any expected changes to future volatility due to publicly available information
the charge for share based payments in respect of share options is £1011000  seven months ended 31 december 2007
£570000 which is comprised entirely of equity settled transactions 
26 leasing commitments
total amounts payable under noncancellable operating lease rentals are as follows
group company
31 dec 2008 31 dec 2007 31 dec 2008 31 dec 2007
£000 £000 £000 £000
land and buildings
within one year 5524 1097 756 812
between two and five years 9840 3306 2776 2774
in five years or more 2082 2712 2082 2712
17446 7115 5614 6298
other
within one year  4  4
between two and five years    
 4  4
17446 7119 5614 6302
27 contingencies
a writ has been issued against the company by a former customer relating to the supply of settop boxes in 20002001 the
amount claimed is circa 72m the directors believe that they have good defences to the claim and that in the absence of
any liability no provision has been made in addition on 15 july 2007 pace filed a counter claim for circa 10m against this
former customer and a related third party
eu import duty classification
pace along with other set top box manufacturers and broadcasters has continued to monitor the reinterpretation by
european union customs authorities of customs regulations that could result in the extension of import duties to interactive
settop boxes with hard drives manufactured outside but imported into the eu  on 7th may 2008 the nomenclature
committee of the european commission issued an explanatory note “en” 05902007 to the combined nomenclature setting
out their view that settop boxes with a hard drive should be classified under customs tariff heading 8521 90 00 and so
subject to a 139 ad valorem duty on importation to the european union  as a consequence pace is potentially exposed to
a retrospective customs duty liability in respect of such settop boxes it has imported
having previously obtained binding tariff information “bti” rulings from hmrc which provide protection in respect of much
of the potential period of retrospective application of duty on relevant products and having taken legal advice management’s
opinion is that the retrospective application of the explanatory note would not be supportable in law  accordingly pace is in
common with other affected importers appealing any retrospective assessment made and will defend its position on 
this matter
as of the date of this announcement an assessment has been received from hmrc in an amount of £77m representing
import duty relating to imports prior to 7 may 2008  having taken advice management’s best estimate is that no material
outflow of economic benefit would be required to discharge this obligation  as such at 31 december 2008 any potential
liability should be considered contingent notes
continued
pace plc
report  accounts 63
28 related parties
identity of related parties 
the group has a related party relationship with its subsidiaries and with its directors
transactions with subsidiaries 
the main transactions between the company and its subsidiaries consist mainly of payments by the company for distribution
engineering and administrative support services provided by pace americas inc pace europe sas and pace micro technology
india private ltd  total transactions of £2151m were made in the year 
the amounts due to and from these subsidiaries are shown within notes 14 and 15 
transactions with key management personnel 
key management of the group is through the executive directors of the company the main transactions with these individuals
are disclosed in the remuneration report on pages 21 to 26 
of the share option charge of £1011000 made in the period 33 relates to options granted to the executive directors 
29 acquisition in the period
the acquired business in the year relates to the settop box and connectivity solutions business of royal philips electronics
“pace france”  pace france employs approximately 335 staff predominantly based in france and is a leading designer and
supplier of a range of digital tv products including satellite cable terrestrial and iptv settop box products  a 100 interest
was purchased on 21st april 2008
the consideration payable is made up of
£000
shares issued 64481049 at market value 58517
deferred and contingent consideration 3937
acquisition fees 3134
acquisition consideration payable 65588
the acquisition has been accounted for using the purchase method as required by ifrs 3 
the integration exercise has concentrated to date on maximising the profitability and operating efficiency of pace france 
the acquisition date fair value of net assetsliabilities acquired and goodwill and intangible assets arising was as follows
fair value
of net assets
book value fair value liabilities
prior to acquisition adjustments acquired
£000 £000 £000
intangible fixed assets – development expenditure 16450 6841 9609
intangible fixed assets  other  21640 21640
tangible fixed assets 2212  2212
deferred tax liability 5758 3733 9491
current assets 70964  70964
current liabilities 70516 1171 71687
noncurrent liabilities 9658 1563 11221
total net assets acquired 3694 8332 12026
goodwill recognised 53562
total investment cost 65588
the fair value adjustments include an adjustment to capitalised development expenditure to align accounting methodologies
and the establishment of provision for onerous lease and warranty costs pace plc
report  accounts 64
29 acquisition in the period continued
the other intangible assets consist of balances relating to trademarks and licence agreements and customer contracts and
relationships
goodwill recognised on acquisition is attributable to the skills and talent of the acquired business workforce and the
synergies expected to be achieved from integrating the business into the existing business
from the date of acquisition 21 april 2008 to 31 december 2008 the contribution of pace france to the group results was
as follows
£000
revenue 292909
profit before tax amortisation and exceptional items 8400
proforma results for the group for the year ended 31 december 2008 on the basis that the acquisition had been made at
the beginning of the period are as follows
£000
revenue 865020
profit before tax amortisation and exceptional items 27077
the above figures do not include the amortisation of the separately identified intangibles which consists of a £3715000
charge in the period to 31 december 2008 the intangible assets are being amortised over various periods ranging from one
year to five years
30 post balance sheet events 
there are no significant or disclosable post balance sheet events pace plc
report  accounts 65
directors company secretary
all of victoria road  saltaire  bd18 3lf  england anthony john dixon
robert michael mctighe nonexecutive chairman
neil gaydon chief executive officer
stuart andrew hall chief financial officer
david alyn mckinney chief operating officer
patricia chapmanpincher nonexecutive director
john grant nonexecutive director
michael inglis nonexecutive director
financial advisers auditors registrars stockbrokers
nm rothschild  sons ltd kpmg audit plc capita registrars ltd rbs hoare govett limited
1 park row 1 the embankment northern house 250 bishopsgate
leeds neville street woodsome park london
ls1 5nr leeds fenay bridge ec2m 4aa
ls1 4dw huddersfield
hd8 0la
directors secretary and advisers
registered and head office
victoria road
saltaire
bd18 3lf
england
registered number 1672847 pace plc
report  accounts 66
year 7 months year year year
ended ended ended ended ended
31 dec 31 dec 2 june 3 june 4 june
2008 2007 2007 2006 2005
£000 £000 £000 £000 £000
revenue 745475 249875 386513 178095 253326
profitloss before tax 13828 15350 4925 27450 8963
profitloss before exceptional items
amortisation and tax 28505 15350 6133 15562 9108
profitloss after tax 11054 14415 6766 28784 13680
diluted epslps 39p 61p 30p 130p 62p
diluted epslps before exceptional 
items and goodwill amortisation 78p 61p 30p 76p 61p
total equity attributable to equity   
holders of the parent excluding
goodwill 67592 58166 41501 33031 60316
shareholder information 
annual general meeting
the company’s annual general meeting will be held at 12 noon on 22 april 2009 at the company’s head office victoria road
saltaire west yorkshire bd18 3lf 
capita registrars
enquiries regarding shareholdings change of address or other particulars should be directed in the first instance 
to the company’s registrars capita registrars northern house woodsome park fenay bridge huddersfield hd8 0la 
or by telephone on 0870 162 3131 they also provide a range of online shareholder information services at
wwwcapitashareportalcom where shareholders can check their holdings and find practical help on transferring 
shares or updating their details 
multiple accounts on the shareholder register
if you have received two or more copies of this document this means that there is more than one account in your name on
the shareholder register  this may be caused by either your name or address appearing on each account in a slightly different
way for security reasons the registrars will not amalgamate the accounts without your consent if you would like any
multiple accounts combined into one account please write to capita registrars at the address given above 
unsolicited mail
the company is obliged by law to make its share register available upon request to the public and to other organisations
which may use it as a mailing list resulting in shareholders receiving unsolicited mail shareholders wishing to limit the
receipt of such mail should write to the mailing preference service dma house 70 margaret street london w1w 8ss or
call 44 0 20 7291 3310 for an application form or visit wwwmpsonlineorguk 
pace website
shareholders are encouraged to visit our website wwwpacecom which has a wealth of information about the company
five year record and shareholder information pace plc victoria road saltaire bd18 3lf uk
tel 44 0 1274 532000 fax 44 0 1274 532010
mktra08de


Summary:
 pace plc 
report  accounts 04
in 2008 we shaped our business for global leader
ship with pace ending the year a much stronger
business with twice the geographic reach and scale
delivering excellent results
our vision is to deliver ‘great products to our
customers every time’ and become a renowned
leader in creating the technologies and products that
enable digital tv we have said that we will establish
pace at the heart of entertainment convergence in
the digital tv household delivering on the enormous
global demand for high definition and pvr products
as well as solutions that deliver digital tv into hard 
to reach places such as apartment blocks and hotels
we have promised that all of our work will be
underpinned by strong environmental design values 
pace works primarily with paytv operators organi
sations that own entertainment content consumers
want to watch these paytv operators have driven
every major change in how we watch tv as they
compete to win subscribers and increase their
revenue generating opportunities which for many is
now based on the concept of tripleplay the paytv
market has the highest barriers to entry and
demands specialist skills over the past 25 years pace
has built the knowhow and relationships to succeed
in this highly competitive environment in the last
three years following a major structural and strategic
review we have delivered uninterrupted growth in
profits consistently exceeding market expectations 
strategy delivery
our strategy has two key themes around industry
leadership and convergence in the digital home
paytv offers excellent value home entertainment 
and it is delivered by operators that understand the
consumer desire for high quality yet easy to use
content and services the settop box makes this
possible in the home we are now experiencing the
positive output from our leadership strategy as paytv
operators work with pace to seek out new services
that will allow them to retain and expand their
subscriber base and revenues 
this theme and market focus plays to pace’s
strengths in digital tv engineering and our ability to
launch new products ahead of the competition 
we demonstrated our leadership in 2008 when we
delivered over 20 high definition pvr designs for
paytv operators around the world and were first 
to market with a revolutionary lowcost digital to
analogue converter for us cable none of our compet
itors could match these achievements 
in april 2008 we acquired the settop box business 
of royal philips electronics and immediately renamed
the business pace france we rapidly integrated the
new business operations teams and customers into
the pace group and we were very pleased to gene
rate profits ahead of our original plan this result
demonstrated the extent to which the pace busi
ness methodology is scalable and it showed the
effectiveness of our systems and processes which
have successfully transformed both our core business
and pace france it is also thanks to the commitment
of our teams around the world to create the new pace
business pace is now a global top three company 
in our sector and we have more paytv operator
customers and a wider product reach than any of our
major competitors 
trading performance
the pace group including pace france continued to
win new customers and expand market share with
existing operators this has enabled us to grow while
maintaining a balance of revenues from a wide range
of paytv operators across all geographic markets
reducing risk and dependencies with the business
in 2008 we achieved record revenues of £7455m and
delivered a significant increase in our profit before 
tax exceptional items and amortisation of other
intangibles at £285m we have now delivered seven
periods of uninterrupted profit growth in making this
happen we shipped a record number of settop boxes
131m our highest ever annual total that we were
able to double the size of our business revenues and
shipments during 2008 has shown how we have
created a resilient business customers are at the
heart of our business and we have created a model
that enables us to respond with the flexibility and
speed they demand whilst being able to grow and
acquire with minimum disruption
chief executive
officer’s review
neil gaydon pace plc
report  accounts 05
our results are also an indicator of the import
ance consumers place on high quality home
entertainment particularly when they are facing
unprecedented economic times and are being forced
to make difficult decisions on discretionary spend for
many the most popular entertainment spend is tv as
few alternatives offer the same value for money 
the resilience of our business is further exemplified
by the strength of our balance sheet we have no debt
we are running the business from our own cash and
will do so going forwards after closing the year with a
positive net cash balance of over £37m we are also
seeing the benefits of the acquisition in terms of the
added scale and associated cost savings which we
will continue to drive
despite this backdrop of increased interest in home
entertainment pace is not completely immune to
wider economic developments and along side the rest
of the electronics industry we have contended with
issues around foreign exchange since the majority of
our components are bought in us dollars with many
finished products being sold in other currencies our
existing hedging policy protected us for most of 2008
and a new hedging programme will enable us to
manage volatility during 2009
going forwards we are introducing return on sales
ros as a new performance indicator after
concentrating on gross margin for the last few years
now as our product mix changes as we target high
and lowend opportunities and start to rollout
infrastructure products from our networks group
margin is no longer the best overall measure of
success refocusing our business around ros is
helping establish a new mindset as we take pace to
the next level 
market insight
our strategy recognises it is the paytv industry
rather than the free to air market that has
consistently driven the landmark changes in how we
watch tv operators have the content the protection
distribution customer relationships and the brand
they understand how to deliver an entertainment
service to the consumer paytv was born during the
transition from four channels to multichannel tv and
operators were first to introduce programme guides
interactive services pvr and invest in the delivery of
high definition tv each new innovation large or small
demands a new settop box development at a speed
and rate of change that cannot be delivered through
the tv 
we have built our leadership position by having the
right products to fuel the digital tv revolution and are
now a global top three settop box business we are
primarily focused on paytv and by 2012 revenues in
this market are forecast to reach 182bn in an overall
market for digital tv that will see annual settop box
shipments reach 200 million units per year 
growth during this period will be characterised 
by waves of digital upgrades as more countries 
move to digital through paytv operator launches 
and government mandated analogue switch off
programmes pace will capitalise by working with
paytv operators and in targeted retail markets on
pvr and high definition products as well as digital
converter devices that accelerate digital transition
and free up operator bandwidth for expanding high
definition services a great example of this is the
digitaltoanalogue converter dta that we launched
last year for comcast in the us advancements in 
flat screen technology have created a significant
embedded base of homes that now require a settop
box to access the majority of hd content 
each paytv product we create is unique designed for
the specific requirements of an operator’s services
and network it takes between 12 and 18 months from
project initiation to product delivery and most designs
are updated within 18 months to incorporate new
features technology upgrades and costdown design
improvements in addition we play an important role
managing our settop boxes postdeployment for
example making ‘over the air’ software upgrades due
to our ownership of the product’s source code
consequently our customer relationships are typically
close and longterm 
these opportunities within the context of a conser
vative and measured view of the market and the
economy do when combined with our marketposi
tion and diversified bluechip customer base give
management increasing confidence in the medium to
longterm potential for the business to outperform 
environmental leadership
in 2008 we established our goal to be the world leader
in low environmental impact settop boxes and set a
standard for our industry 
product development is where we have the greatest
impact on the environment the growing demand for
our products which increasingly include more
advanced and power hungry applications has made
this an essential part of our strategy we are targeting
three key areas where settop box products have the
highest impact power consumption packaging and
hazardous substances we are addressing all three in
chief executive 
officer’s review
continued pace plc 
report  accounts 06
our ‘design for environment’ criteria now being used
on all new product developments we are working
with our partners and customers to minimise energy
demands through innovative product design so
together we can significantly reduce the amount of
power consumed worldwide
digital convergence
five years ago the technology debate in the industry
was centred on the “fight for the living room” the set
top box won against competition from the tv games
consoles and the pc today the battle is for control of
the inhome entertainment network and the settop
box is ideally positioned to win this battle as it 
won the last 
therefore our second strategy theme is to put pace
at the heart of convergence in the digital home
enabling our customers to deliver whole home
networking strategies in the tripleplay convergence
model it is relatively easy to move data and voice
around the home but very few companies have the
technological capability to add networked encrypted
tv to create a whole home solution we are working
on wired and wireless solutions that will combine the
best of pvr and high definition and enable consumers
to watch their favourite content wherever they are in
the home our technology teams are at the forefront
of this work and will continue to create opportunities
for pace
as with any other innovation in this market digital
convergence will be led by the paytv operator and 
its delivery into the home will evolve through the 
settop box not all homes will demand this level 
of sophistication but the market will create new
opportunities for pace alongside the mass market for
pvr and high definition products and the inevitable
introduction of 3d paytv
in the immediate shortterm we are working with
customers on what have been termed ‘hybrid’ boxes
to combine the benefits of delivery technology such
as satellite with broadband ip there has been much
discussion on how broadband will overtake broadcast
but the economics for broadband mass market tv 
is still some way away hybrid products combine the
worlds of broadcast and broadband delivering an
even richer service to consumers last year we 
were delighted to work with canal on le cube
europe’s first satelliteip hybrid settop box to use
the ethernet port for vod services 
pace’s multidweller™ which opens up a new market
for pace in the infrastructure sector for higher 
value higher margin equipment is now moving into
commercial deployment with its first operator
customer the product makes it possible for paytv
and other entertainment operators to sell their
convergent triple play services in places such as
apartment blocks and hotels that are today diffi
cult and expensive to access in europe alone over 
50 of households are in multidwelling units 
pace engineers have been working on multidweller™
for over three years and this product includes our 
own silicon design to date we have taken a cautious
approach to the potential impact this new line of
business may have but as commercial deployments
are closer our confidence in the product and its
market is growing 
as ceo of pace i have had the pleasure of working in
this amazing industry for over 15 years and have
heard commentators and potential technology
competitors predict the demise of the settop box
common theories have been that the settop box will
be built into the tv or that disruptive technologies
such as broadband will make the settop box
redundant this hasn’t happened and won’t happen
because the settop box is the most effective platform
for innovation making it possible for consumers to
benefit from developments in technology via an
accessible and easy to use device for the operator a
box is the most convenient fast and flexible plat
form for the provision of a paytv service finally and
most importantly the settop box contains the security
to protect operator content in the home its most
valuable asset 
outlook
as we enter 2009 pace is in a strong position to
capture new opportunities in the global shift to digital
tv we have seen little impact on demand for our
products but we do continue to take a prudent and
cautious view of the market in particular monitoring
trends for any impact of the global economic climate
however due to new business wins customary 
good order visibility foreign exchange management
and global operational synergies we are now able 
to significantly raise expectations for pace’s 2009
performance and pay a dividend
neil gaydon
chief executive officer
3 march 2009