annual report and accounts 2009
grow
integrate
acquire spirit el is a fully integrated business communications group 
which enables its customers to take advantage of the opportunities 
created by rapidly changing telecoms markets as the migration 
to internet protocol ip based services accelerates
the group is a consolidator of the highly fragmented uk telecoms 
reseller market and is building a substantial customer base and scale 
through selective acquisitions we are organised into two divisions 
spirit el t echnologies which focuses on networking and ip products  
and services and spirit el business which provides services directly  
to our business customers
l
network services mobile ip communications wholesale voice managed services ip networking
l
introduction  contents
01 financial highlights
02 chairman’ s statement
04 chief executive’ s review
10 board of directors
11 report of the directors
15 directors’ remuneration report
18 independent auditor’ s report
19 consolidated income statement
20  consolidated statement of changes 
 in shareholders’ equity
21 consolidated balance sheet
22 consolidated statement of cash flows
23 notes to the consolidated 
 financial statements
52 company balance sheet
53 notes to the company 
 financial statements
62 notice of annual general meeting
64 company information and advisers
revenue £000
13649
16674
19718
07 08 09
18
ebitda £000
861
938
1514
07
08 09
6 1
gross proﬁt £000
2036
6415
7631
07 08 09
19
customers no
715
1525
2337
07 08 09
53
01
financial highlights i am pleased to report on a further year  
of growth and development at spirit el  
the company has made significant  
progress despite an increasingly tough 
operating environment which has seen several 
competitors fall by the wayside 
spirit el made its sixth acquisition during  
the year to 30 april 2009 acquiring and fully 
integrating ed communications “edc”  
into the spirit el business division the group 
is now a well established fully integrated 
business communications provider during the 
year the company has proven the value of its 
integrated offering to the enlarged customer 
base by successfully crossselling its 
expanded range of products and services 
these results include full year contributions 
from all six acquisitions with the exception  
of edc which is included for the eight months 
since acquisition 
results
as a result of both acquisitive and organic 
growth – including initial sales from over  
£7 million of crossselling contract wins signed 
during the year – revenues are up markedly  
by 18 to £197 million 2008 £167 million 
most significantly underlying ebitda defined 
as operating profit after adding back charges 
for depreciation amortisation sharebased 
payments and exceptional costs increased  
by 61 to £15 million 2008 £09 million  
the results and in particular the impressive 
growth in earnings demonstrate ongoing 
success in the execution of the company’ s 
“acquire integrate grow” strategy  
the economies of selectively bolting on 
acquired assets are now evident
“during the year the company has proven the 
value of its integrated offering to the enlarged 
customer base by successfully crossselling its 
expanded range of products and services”
02
lord st john of bletso chairman
chairman’ s statement the previously reported decline in profitability 
from the t echnologies division continues  
to adversely impact group profits however 
this decline combined with rapid growth in  
the business division has reduced our 
exposure to riskier and more volatile wholesale 
markets 52 of overall group revenues in 
2009 result from the business division’ s higher 
quality contracted b2b revenues compared 
to 40 in 2008 this trend has continued 
since the year end
dividend 
spirit el is still pursuing its acquisition integration 
and growth strategy and is continuing to  
invest funds into the business the directors 
are therefore not recommending the payment 
of a dividend for the year to 30 april 2009
proposed debt conversion 
since the year end we have agreed a further 
planned restructuring of the indebtedness  
to penta capital partners “penta” in our 
balance sheet the terms of which will be 
communicated to shareholders in a circular 
that also convenes a shareholder meeting to 
approve the transaction the proposals include 
penta converting up to £69 million of debt into 
equity at a price of 06p per ordinary share 
the directors consider that the proposals will 
significantly strengthen the balance sheet and 
better position the company to raise capital for 
acquisitions this is an important step for the 
group and we value penta’ s support through 
their proposed debt for equity conversion
outlook
whilst the business division has continued  
to perform in line with expectations trading 
remains challenging for the t echnologies 
division and we do not foresee a significant 
turnaround in its core wholesale markets 
however the t echnologies division continues 
to add significant value through managing  
our ipbased infrastructure on which several  
of the business division’ s product solutions  
are based
the group now benefits from much higher 
levels of earnings visibility due to the  
business division’ s emphasis on contracted 
and recurring revenues from smes and larger 
corporate customers this combined with  
a wide range of businesscritical products  
and services means spirit el is well positioned 
to weather the ongoing economic storm 
through a combination of further earnings 
enhancing acquisitions for the business 
division and organic growth driven by the 
crossselling of an integrated product portfolio 
we expect to continue to increase revenue  
and earnings for the benefit of all shareholders
lord st john of bletso
chairman 
30 september 2009
“through a combination of further earnings 
enhancing acquisitions we expect to continue  
to increase revenue and earnings for the  
benefit of all shareholders”
03 “we operate in a dynamic sector and the board 
believes that we now stand at a particularly 
exciting point in the company’ s development”
spirit el has matured considerably in the year 
under review our sixth acquisition further 
enhances our reputation as a leading 
consolidator of the telecoms reseller sector 
and together with our success in crosssales 
demonstrates our ability to deliver organic  
and acquisitive growth as a management 
team we are constantly reviewing acquisition 
opportunities that can grow earnings  
enhance the product set and provide more 
crossselling opportunities we operate in  
a dynamic sector and the board believes that 
we now stand at a particularly exciting point in 
the company’ s development the accelerating 
migration to converged communications  
is a driving force behind increased levels of 
corporate activity in the sector convergence  
is also changing customer behaviour with 
more businesses insisting that their supplier 
offers the full range of fixed mobile voice  
and data services for those companies that 
have capital to deploy for acquisitions and  
an integrated product range to sell to business 
customers these are exciting times
financial highlights
the year to 30 april 2009 represents  
a full year’ s contribution from all of spirit el’ s 
acquisitions to date apart from edc this  
is reflected in significantly improved financial 
results despite one of the most challenging 
trading environments seen for many years 
particularly in the t echnologies division’ s 
wholesale markets performance was improved 
in each of the following key financial metrics
our acquisition strategy involves buying quality 
businesses with attractive customer bases integrating 
them swiftly and driving forward the resulting synergy 
benefits of cost savings and new sales opportunities
acquire
04
alastair mills chief executive
chief executive’ s review –  revenue up 18 to £197 million  
2008 £167 million
–  gross profit up 19 to £76 million  
2008 £64 million
–  underlying ebitda up 61 to £15 million 
2008 £09 million
the 18 increase in group revenue is pleasing 
given the difficult economic conditions but 
even more so is the 53 growth in business 
division revenues largely offsetting a 5 
decline in the lower margin wholesale services 
from the t echnologies division the increasing 
contribution from our business division 
represents a significant change in the group’ s 
earnings profile the majority of the business 
division’ s revenues are generated from 
longterm contracts of up to seven years 
providing a greater level of earnings visibility  
to the group as a whole 
the 61 increase in underlying ebitda 
demonstrates the success of our “acquire 
integrate grow” model 
 in particular we are able to convert significant 
elements of gross profit directly into ebitda 
by bolting acquisitions quickly and efficiently 
onto our already established operations and 
existing cost base by effective profiling of 
newlyacquired customers we then identify 
and pursue crosssale opportunities
the loss before taxation for the year was 
£17million 2008 £40million loss after 
deducting noncash finance charges of 
£08million 2008 £31million the noncash 
finance charges relate to ifrs costs on 
modification and conversion of indebtedness 
to penta
since the year end we have agreed a 
proposed balance sheet restructuring with 
penta converting up to £69 million of debt into 
equity at a price of 06p per ordinary share 
this follows on from a similar £26 million debt 
to equity conversion by penta in may 2008 
the directors believe that the proposed 
conversion of penta debt will benefit spirit el  
in a number of ways the company will have a 
much stronger balance sheet unencumbered 
by £69 million of penta indebtedness and at 
the conversion price the proposed conversion 
will significantly increase the market 
capitalisation of the company in addition  
the company will not be liable for the £550000  
annual interest cost which is due to accrue 
from may 2010 with a stronger balance sheet 
spirit el will be better positioned to raise capital 
and continue its recent successful acquisitive 
strategy focusing on earnings enhancing 
transactions penta’ s support for spirit el is 
invaluable and we thank them for their 
continued faith in our business model and 
management team 
we also continue to benefit from the support 
of clydesdale bank during the year under 
review we secured an extension to our loan 
facility to fund the acquisition of ed 
communications and at the year end we had 
a total facility of £34million with the bank in 
may 2009 the group’ s facilities were increased 
to £45million repayable over five years 
strategy
despite the ongoing consolidation in our 
sector the uk telecommunications market 
remains highly fragmented this alongside  
the accelerating demand from customers  
for converged ipbased services provides  
the opportunity for us to further execute  
the group’ s “acquire integrate grow” strategy  
our strategy is to grow shareholder value 
through selective earnings enhancing 
acquisitions followed by consistent organic 
growth being driven by crossselling our 
integrated product portfolio
 operating profit after adding back charges for depreciation 
amortisation sharebased payments and exceptional costs
05 spirit el continues to pursue selective 
acquisitions as we look to build a business  
with the operational scale and the broad 
product offering that business and corporate 
consumers increasingly demand having 
completed six acquisitions led by the same 
management team not only are we clear  
on the type of businesses that we are looking 
for in terms of quickly adding value to the 
group but we are also experienced in the 
critical phase of integration which commences  
well in advance of completion of the deal  
all acquisitions now follow the same integration 
framework which was developed internally  
to meet our corporate objectives the process 
is led by a senior member of the management 
team and helps ensure that we maximise  
both cost and revenue synergy opportunities 
whilst minimising disruption to the group  
and the newlyacquired business
we expect to continue to target growth 
through earnings enhancing acquisitions and 
following the proposed restructure of our 
balance sheet we expect to be well positioned 
to raise new capital to deploy in the acquisition 
of new customers and products in order  
to enhance earnings 
 in recent months we have been particularly 
encouraged by our successes in crosssales 
of our growing product range to existing 
customers during the 12 month period to 
april 2009 we secured crosssales contracts 
valued at more than £7 million this is 
contracted and recurring revenue and delivers 
a new level of earnings visibility to the group 
during the year we profiled our expanded 
customer base and estimated that our existing 
customers are spending a total of over  
£80 million on telecoms services that spirit el 
could potentially provide from our current 
product portfolio although rapidly growing 
our penetration of this spend is currently less 
than 15 which illustrates the upside 
opportunity which we intend to exploit by 
deploying our successful crossselling strategy 
the quick and efficient integration of our acquisitions  
is key to the rapid delivery of their earnings potential 
and the successful crossselling of our broadening 
product offering into existing and new customers  
we have demonstrated our ability to speedily integrate 
new businesses into the spirit el business 
infrastructure creating cost savings and generating 
new crossselling opportunities
integrate
06
alastair mills chief executive
chief executive’ s review continued acquisitions
spirit el continued its recent series of 
acquisitions this year with the purchase of ed 
communications which added approximately 
700 business customers who were rapidly 
integrated into our networks line of business 
this acquisition provides a typical example  
of how the group is now able to bolt on a 
customer base efficiently and then enhance  
its contribution through cost synergies and 
crossselling the total consideration for  
this company will total £14 million including 
earn out
the full year contribution from mobile business 
wn1 acquired in april 2008 proved even 
more successful than we had hoped and this 
line of business continues to deliver strong 
organic growth wn1 is highly profitable and  
by adding a range of mobile voice and data 
services the transaction completed our 
integrated product portfolio since the year 
end converged voice and data mobile 
solutions have grown to over one third of our 
total mobile sales not only are we delighted 
with the earnings contribution from wn1 now 
integrated as spirit el mobile but the mobility 
offering is a differentiator in comparison to 
many competitors who are limited to a fixed 
line offering 
during the year we looked closely at a number 
of acquisition opportunities including several 
larger companies we believe we have 
demonstrated our ability to grow shareholder 
value from the selective addition of bolt on 
acquisitions and we continue to actively 
pursue opportunities which deliver shortterm 
earnings enhancement benefits and crosssell 
opportunities 
operations
spirit el’ s customer base now numbers some 
2300 separate accounts for business and 
public sector companies and organisations 
greater customer numbers result in increased 
crossselling opportunities and although we 
focus on larger customers more than many  
of our competitors the size of the base is an 
obvious yet important key performance 
indicator for the business division the current 
customer base is 53 larger than at april 
2008 and 227 above 2007 levels 
our customers are served by our two 
complementary divisions spirit el business 
and spirit el t echnologies – working alongside 
and supporting each other the business 
division has three lines of business ip 
communications networks and mobile 
spirit el ip communications provides an 
advanced range of ip networking services  
to business customers alongside traditional 
structured cabling equipment and 
maintenance services spirit el networks offers 
fixed line services including calls lines and 
broadband spirit el mobile provides mobile 
voice and data services including blackberry 
and other converged voice and data services
spirit el has achieved the highest o2 
accreditation and is one of just a few o2 
centre of excellence coe partners in the uk  
the o2 centre of excellence is an industry 
leading programme which continues to set 
demanding qualifying criteria including 
exceptional customer service and commitment 
to the business sector 
spirit el is also a member of the blackberry 
alliance spirit el provides the blackberry® 
solution allowing users to stay connected  
with wireless access to email corporate data 
phone web and organiser features with  
a blackberry solution you can enhance the 
productivity of your organisation by pushing 
data out to where it’ s needed most – your 
mobile workforce
spirit el has a longstanding relationship  
with mitel one of the world’ s leading providers  
of ip based communications solutions for 
business customers after a continued period 
of investment in training and support on  
both sides spirit el has achieved the highest 
accreditation possible – premier partner  
using a mitel 3600 platform spirit el also  
rolled out two of the uk’ s largest hosted voip 
contracts for regent inns and youngs we are 
also an accredited mitel hospitality specialist
07 spirit el has experienced rapid growth in revenues 
earnings and customer numbers among our 
expanding customer base are a number of diverse  
blue chip companies with whom we have longstanding 
relationships our organic growth strategy includes 
selling more products into each of our customers
grow
whilst ensuring our team delivers an 
exceptional level of customer service during 
the year we have focused on cost control  
and despite the edc acquisition and the 
associated addition of 700 new customers 
staff numbers have only risen to 109 at the 
year end 2008 104 we continue to offer 
nationwide engineering coverage to our 
customers along with 247365 support  
we have also been able to reduce our cost 
base through the utilisation of our own 
technological expertise in the remote 
management of customer sites over 70  
of customer faults reported to our ip 
communications service team are now  
fixed remotely from our operations centres  
in london and wigan with no employee  
visit to the customer’ s site being required 
a key aspect of our business division is  
its ability to act as a one stop shop for 
business customers by providing a fully 
integrated product offering whilst we remain 
cautious on heavy investment in the research 
and development of new technology our 
strategic partnerships with leading vendors 
such as o2 and mitel enable us to remain  
well positioned to capitalise on the rapidly  
changing telecoms market 
of particular note is the continued growth  
of our hosted voip offering where extensions 
sold and supported grew by 86 over the 
year major contract wins included hosted 
voip  as part of a managed services contract 
across young  co brewery’ s estate and 
spirit el’ s success was recognised when we 
won the voip solution of the year award in 
october 2008 at the national comms 
business awards spirit el also won a number 
of other industry awards over the past year 
and continues to build on the excellent 
relationships that we have forged with industry 
leading partners including 02 blackberry and 
mitel our newly acquired mobile business also 
achieved 02 centre of excellence status in 
august 2008 
t o support integration of acquisitions and 
ensure we maximise the crosssell opportunity 
for all acquired customer bases we 
implemented a groupwide crm facility during 
the year following several notable crossselling 
wins in early 2009 we achieved our largest 
crosssale to date in may 2009 a 30 month 
network services deal with a global hotel group 
that is expected to generate up to £4 million  
in revenue over the contract term the deal 
involved spirit el replacing bt  who still has  
an estimated 50 total market share as 
supplier the contract win provides evidence  
of our ability to service major corporates  
as well as our 2300 sme customers and  
also illustrates clearly the steps we are taking  
to maximise the significant crosssell 
opportunities we are identifying 
awards
national business  
awards 2008 
spirit el named finalists
channel networks 
awards 2009 
spirit el and alastair mills 
named finalists
international  
directories awards 
virgin mobile directory 
enquiry service  
provided by spirit el  
wins best newcomer 
voip solution  
of the y ear award 
spirit el wins 
wigan business  
awards 2008 
spirit el and alastair mills 
named finalists
channel entrepreneur  
of the y ear award 
spirit el wins 
enterprise convergence 
solution award 2009 
spirit el wins
08
alastair mills chief executive
chief executive’ s review continued summary and outlook
the year to 30 april 2009 was a year of 
significant progress for spirit el we delivered 
strong revenue growth and an even greater 
uplift in underlying ebitda we also continued 
to gain widespread recognition for the quality 
of our ipbased services and the innovation  
we have demonstrated in the delivery of 
converged communications services 
our strategy of targeted acquisitions  
which bring immediate earnings enhancement 
and ongoing crosssell opportunities has seen 
revenue and profits rise substantially in the 
past year as we start to benefit from full 
contributions from acquisitions we have a 
highly scalable model where we can bolt  
on new earnings enhancing assets whilst 
maintaining the delivery of consistent  
organic growth
whilst we have felt the challenges of a severe 
economic downturn and more specifically an 
ongoing declining profitability in the wholesale 
markets the contribution from our rapidly 
growing business division is very encouraging 
we have demonstrated our ability to enhance 
earnings through acquisitions followed up by 
significant crossselling successes from our 
range of converged products and services  
into both new and existing customer bases 
although we are not immune to the impact  
of a recessionary economic environment  
our product set is naturally defensive and our 
downside exposure is mitigated we are 
witnessing a renewed and growing interest  
in cost savings that are prompting new  
sales opportunities our ability to add value  
to our customers through innovative and cost 
effective solutions gives us confidence about 
our prospects through the economic downturn
spirit el has an experienced and energised 
management team and a highly skilled  
and committed staff who have together 
proved their ability to execute strategy  
the foundations are in place to deliver ongoing 
value to shareholders and i look forward to  
the coming year with confidence
alastair mills
chief executive 
30 september 2009
 operating profit after adding back charges for depreciation 
amortisation sharebased payments and exceptional costs
09 4 steven maine 57  
nonexecutive deputy chairman
steven has extensive experience in the 
telecommunications and media sectors 
having served as chief executive officer  
of kingston communications plc between 
1997 and 2003 and having previously held 
senior positions in the satellite and video 
communications businesses of bt plc 
currently chief executive of solaris mobile  
a paneuropean satellitebased mobile  
tv venture 
5 steven scott 44  
nonexecutive director
steve is a chartered accountant having 
trained with arthur andersen after graduating 
from the university of glasgow he is a 
founding director of penta capital a venture 
capital fund manager that has invested  
in spirit el prior to establishing penta he was  
a director in the royal bank of scotland’ s 
private equity division
6 anthony vose 54  
nonexecutive director
anthony founded ashland t elephones  
in 1989 and oversaw its successful growth  
into a leading provider of telephony systems 
with a particular focus on the hospitality  
sector ashland group was acquired by 
spirit el in march 2007
1 lord st john of bletso 52  
nonexecutive chairman
anthony st john qualified as an attorney in 
south africa since 1985 he has worked as a 
stockbroker in the city and currently consults 
to merrill lynch he served as managing 
director at globix a managed services 
webhosting business from 1998–2002  
and consults to several it companies
2 alastair mills 36  
chief executive
alastair joined spirit el in 2004 as managing 
director of expo communications now part of 
the t echnologies division alastair joined from 
t elewest communications having previously 
worked in consultancy and corporate finance 
for kpmg he has been ceo since 2005 
when he commenced the restructure of the 
group including five recent acquisitions in 
2008 alastair was a finalist in the ernst  
young entrepreneur of the year award 
3 ronnie smith 45  
chief financial officer
ronnie qualified as a chartered accountant  
in 1988 with arthur young now ernst  young 
following graduation from the university of 
glasgow ronnie has held senior finance  
roles in a number of listed and private equity 
backed uk and us businesses including 
sigma aldrich inc icn biomedicals inc  
the ritchie group plc and the rope 
company group limited
3
2
1
6
4
5
10
board of directors  
 
 
 
11 
report of the directors 
 
spiritel plc  
annual report and accounts 2009 
the directors submit their report and financial statements for the year ended 30 april 2009  
results and dividends 
the group loss for the year after taxation amounted to £934000 2008 loss £3758000 after exceptional costs of £663000  
2008 £620000  
the directors do not recommend the payment of a dividend 2008 £nil 
principal activities and review of business 
the principal activity is the provision of telecommunication services 
spiritel is a business communications group which is taking advantage of the opportunities created by rapidly changing telecoms markets  
in the uk as the migration to internet protocol ip based services accelerates the group is a consolidator of the highly fragmented uk 
telecoms reseller market and is building a substantial customer base and scale through selective earningsenhancing acquisitions the group  
is organised into two divisions spiritel technologies – focused on our infrastructure and ip products and services – and spiritel business 
which provides our fully integrated range of voice and data services directly to our business customers 
spiritel offers a broad range of voice and data communications products and services to a customer base of small and medium sized 
enterprises and an increasing number of larger national and international organisations we are a recognised leader in the provision of new  
but proven voice over ip voip solutions that are firmly based on the oldfashioned service values which run throughout the group 
the chairman’s statement and chief executive’s review on pages 2 to 9 provide further information about the group’s principal activities  
the business and financial performance during the year 
due to the embryonic stage of development the directors do not consider it appropriate to provide information on key performance indicators 
key risks 
economic downturn 
the success of the business may be affected by any downturn in the general economic environment in particular this could influence the 
availability of bank finance and the cost of that finance customers’ willingness and ability to invest in capital goods customer settlement 
patterns and the incidence of bad debts 
in response to this risk senior management aim to keep abreast of economic conditions effective relationships are established with the 
group’s bankers and other debt providers and there are regular reviews of customers’ credit worthiness and debt levels  
product obsolescence 
telecommunications is a fast moving market sector and the pace of technological change is rapid as a result products may become obsolete 
following the development and introduction of new technology 
the company maintains partnerships with those of its potential suppliers which it believes will keep it to the forefront of product development  
on a sustained basis and regularly monitors trends in technological advancement so as to anticipate and plan for future changes 
regulatory change 
governmental agencies in particular ofcom may seek to implement or amend regulations which could affect product pricing or the nature and 
scope of activities of major industry players such as bt such action could affect the group’s profitability either directly or indirectly 
currently governmental regulation only affects the technologies division and a limited number of products within the networks line of business 
the directors constantly monitor regulatory change so as to mitigate this risk 
future prospects 
future prospects are outlined in the chairman’s statement and ceo review at pages 2 to 9 
post balance sheet events 
post balance sheet events are disclosed in note 29 to the financial statements 
political and charitable contributions 
no political contributions were made during the year 2008 £nil charitable contributions made during the year amounted to £8000  
2008 £6000   
 12 
report of the directors continued 
 
spiritel plc  
annual report and accounts 2009 
directors and their interests 
the directors in office and their interests in the ordinary shares of the company are shown below none of the directors has had any beneficial 
interest in the redeemable preference shares at any time each director served throughout the year unless otherwise indicated 
 
note 
number  
30 april 
2009 
number 
30 april
2008 
lord st john of bletso  1823333 823333
a r mills  1490000 1390000
r w smith  625000 625000
d anahory resigned 4 august 2009  5625000 625000
s maine  500000 –
s scott 1 313819845 39413799
a j vose  45703600 45703600
notes 
1 s scott’s interest is nonbeneficial as a director of the manager of the penta funds 
employees 
the group aims for fair reward and recognition for all employees  
the group has continued its practice of keeping employees informed of matters affecting them as employees and the financial and economic 
factors affecting the performance of the group 
applications for employment by disabled persons are given full and fair consideration for all vacancies in accordance with their particular 
aptitudes and abilities 
in the event of employees becoming disabled every effort is given to retrain them in order that their employment with the group may continue 
it is the policy of the group that training career development and promotion opportunities should be available to all employees 
financial risk management objectives and policies 
the group uses various financial instruments which include cash bank and other loan facilities and items such as trade debtors and trade 
creditors that arise directly from its operations the main purpose of these financial instruments is to raise finance for the group’s operations 
the main risks arising from the group’s financial instruments are liquidity risk interest rate risk and credit risk the directors review and agree 
policies for managing each of these risks and they are summarised below these policies have remained unchanged from previous years  
liquidity risk 
the group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely 
and profitably the group finances its investment in tangible fixed assets primarily through cash balances 
interest rate risk 
the group finances its operations through a combination of cash balances and loans the group manages its exposure to interest rate 
fluctuations by entering into fixed rate agreements with the lender where possible and with the majority of its loans by value has secured a 
waiver of interest by agreeing with the lender fixed redemption premium terms and conversion rights into ordinary shares of the company 
similar arrangements have been secured in relation to the outstanding preference shares 
credit risk 
the group’s principal financial assets are cash and trade debtors the principal credit risk arises from trade debtors the directors manage 
credit risk by setting limits for customers based on a combination of payment history and third party credit references credit limits debtor 
ageing and collection history are reviewed by the finance department on a regular basis 
currency risk 
the group has limited exposure to translation and transaction foreign exchange risk    
 13 
 
 
spiritel plc  
annual report and accounts 2009 
supplier payment policy 
the group’s policy in relation to all its suppliers is to settle the terms of payment when agreeing the terms of the transaction and to abide  
by those terms provided that it is satisfied that the supplier has provided the goods or services in accordance with the agreed terms and 
conditions the group does not follow any specific code or statement of payment practice the number of days’ billings from suppliers 
outstanding at 30 april 2009 was 27 days 2008 39 days 
corporate governance 
the directors are committed to maintaining high standards of corporate governance although as an aim listed company the company is  
not required to comply with the provisions of the combined code the board recognises the importance of and is committed to ensuring  
that effective corporate governance procedures relevant to smaller listed companies are in place 
the board 
the board consists of a nonexecutive chairman two executive directors and three nonexecutive directors and meets approximately every 
four to six weeks throughout the year 
the board reviews the performance of the company and its subsidiaries through the use of management accounts and other regular reports 
and information presented to it by the executive team a formal schedule of matters specifically reserved to it for decision is in place including 
overall strategy acquisition and divestment policy approval of major capital expenditure projects and general and risk management policies 
to enable the board to discharge its duties all directors have full access to all relevant information and to the advice and services of the 
company secretary in addition there is a procedure in place for directors to take independent professional advice in the furtherance of their 
duties if necessary at the company’s expense 
the board has established the following committees to which it has delegated specific responsibilities 
the nominations committee 
the nominations committee consisting of the chairman and two nonexecutive directors is responsible for reviewing the size structure and 
composition of the board succession planning and identifying and monitoring candidates for all board vacancies appointments to the board 
of directors are made by the board of directors the nonexecutive directors currently serving on the committee are lord st john of bletso 
steven maine and steven scott 
the remuneration committee 
the composition and activities of the remuneration committee are described in the directors’ remuneration report on pages 15 to 17 
the audit committee 
the audit committee which comprises the chairman and two nonexecutive directors meets on a sixmonthly basis the committee 
considers all aspects of the group’s system of internal control and reviews the interim and annual financial statements before submission to the 
board for approval the committee has unrestricted access to the group’s auditor and ensures that auditor objectivity and independence has 
not been compromised it will also recommend the appointment of and review the fees of the external auditor the committee does not believe 
an internal audit function can be justified for the group at the current time the nonexecutive directors currently serving on the committee are 
lord st john of bletso steven scott and steven maine 
relations with shareholders 
communications with shareholders are given high priority the company encourages the participation of both institutional and private  
investors there is a regular dialogue with shareholders and potential shareholders including presentations after the company’s preliminary 
announcement of its year end results the board also uses the annual general meeting to communicate with investors and maintains an  
uptodate record of news releases and other information of interest to shareholders on its web site at wwwspiritelplccom 
going concern 
the current economic conditions create uncertainty over the level of demand for the group’s services and the availability of bank finance in the 
foreseeable future the group currently meets its daytoday working capital requirements through bank facilities which comprise term loan 
overdraft and invoice discounting facilities these facilities were renewed in may 2009 july 2009 and march 2009 respectively there are no 
matters which have been drawn to the directors’ attention to suggest that the continued provision of these facilities may not be forthcoming on 
acceptable terms in addition to these bank facilities the group is also funded by various loan instruments from penta capital as disclosed in 
note 20 the group has received confirmation from penta that they do not intend to seek repayment of these facilities until 31 october 2010 at 
the earliest however as disclosed in note 29 to the financial statements the outstanding penta loans will become convertible into equity share 
capital subject to approval from the takeover panel and the group’s shareholders at the forthcoming egm 
the directors have prepared forecasts and projections for the group which take account of reasonably possible changes in trading 
performance and show that the group should be able to operate within the level of its current facilities and comply with all financial covenants 
on this basis the directors have a reasonable expectation that the group and company have 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   
 14 
report of the directors continued 
 
spiritel plc  
annual report and accounts 2009 
major shareholdings 
at 30 september 2009 the following had shareholdings of 3 or more of the ordinary share capital of the company 
shareholder 
 of total 
penta capital partners limited 4999
a j vose 728
ind holdings limited 430
statement of directors’ responsibilities 
the directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations 
company law requires the directors to prepare financial statements for each financial year under that law the directors have elected to prepare 
group financial statements in accordance with international financial reporting standards as adopted by the european union ifrs and 
financial statements for the parent company in accordance with united kingdom generally accepted accounting practice uk gaap  
the financial statements are required by law to give a true and fair view of the state of affairs of the group and company and of the profit or loss 
of the group for that period in preparing these financial statements the directors are required to 
– select suitable accounting policies and then apply them consistently 
– make judgements and estimates that are reasonable and prudent 
– state whether applicable international financial reporting standards as adopted by the european union have been followed for the 
preparation of the group financial statements and uk gaap for the preparation of the parent company financial statements subject to  
any material departures disclosed and explained in the financial statements and 
– prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue  
in business 
the directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position 
of the group and the company and enable them to ensure that the financial statements comply with the companies act 2006 they are also 
responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and  
other irregularities  
in so far as each of the directors is aware 
– there is no relevant audit information of which the group’s auditor is unaware and 
– the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish 
that the auditor is aware of that information 
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s web site 
legislation in the united kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other 
jurisdictions 
auditors 
grant thornton uk llp have expressed willingness to continue in office in accordance with section 4894 of the companies act 2006  
a resolution to reappoint grant thornton uk llp will be proposed at the annual general meeting to be held on 30 october 2009 
signed on behalf of the board 
r w smith 
chief financial officer 
30 september 2009   
 
 
 
15 
directors’ remuneration report 
 
spiritel plc  
annual report and accounts 2009 
general information 
the remuneration committee is made up solely of nonexecutive directors none of them has any personal financial interest in the matters to 
be decided other than as shareholders or holders of options over ordinary shares potential conflicts of interest arising from crossdirectorships 
nor any daytoday involvement in running the business the names of the directors who have served on the remuneration committee during 
the year are as follows 
lord st john of bletso 
s scott 
s maine 
the committee’s role is to review the performance of the executive directors and to set the scale and structure of their remuneration paying 
due regard to the interests of shareholders as a whole and the performance of the group specifically the remuneration committee agrees  
the principal terms of their service contracts including salaries and other benefits such as bonuses and share options and other terms and 
conditions of employment 
general policy 
the committee’s executive remuneration policy is designed to attract retain and motivate individuals to ensure the success of the group 
relative to other uk businesses of similar size and complexity external comparisons look at comparable roles in similar organisations in terms 
of size market sector and business complexity remuneration packages are designed to reward directors and executive group members 
fairly for their contributions whilst remaining within the range of benefits offered by similar companies in the sector the remuneration 
committee seeks to structure total benefits packages which align the interests of shareholders and senior executives executive remuneration 
will continue to be the subject of regular review in accordance with this policy 
bonus schemes 
the group operates discretionary bonus schemes for certain senior managers and other employees individual payments made under the 
schemes are partially dependent on the achievement of financial targets and also on the achievement of predetermined individual objectives 
the group also tailors bonus arrangements for certain directors and staff members so as to provide incentivisation for the achievement of  
on target earnings commensurate with comparable roles within the industry sector the executive directors and certain senior managers  
also participate in a longterm incentive plan details of which are given on page 17 
policy on service contracts 
the directors all have service contracts which require between one and six months’ notice of termination  
executive directors’ service contracts provide for remuneration in the form of salary bonus and other customary benefits such as permanent 
health insurance and life assurance as appropriate the company also facilitates contributions to personal pension schemes for directors 
wishing to take part of their benefits in that form 
directors’ service contracts 
details of the directors’ service contracts are as follows 
name 
commencement of service initial period notice period 
lord st john of bletso 28 july 2004 36 months 1 month
a r mills 20 july 2005 none 6 months
r w smith 23 may 2007 none 3 months
s maine 5 april 2006 36 months 1 month
s scott 28 july 2004 36 months 1 month
a j vose 27 july 2007 none 1 month
 
   
 16 
directors’ remuneration report continued 
 
spiritel plc  
annual report and accounts 2009 
directors’ emoluments  
the following table sets out details of the emoluments paid during the year to each director the following information forms part of the audited 
financial statements 
name 
note 
salary 
and fees 
£000 
benefits 
in kind 
£000 
bonus  
£000 
 total  
year ended  
30 april  
2009  
£000 
total 
year ended 
30 april 
2008 
£000 
lord st john of bletso 1 33 – –  33 33
a r mills  143 1 25  169 245
d anahory  118 1 –  119 63
r w smith  118 2 16  136 182
s maine 2 32 – –  32 32
s scott 3 28 – –  28 28
a j vose  12 – –  12 47
  484 4 41  529 630
notes 
1 of the fees of lord st john of bletso £14000 was payable to tudor consultancy services limited and £12000 was payable to newquay 
professional limited 
2 the fees of s maine were payable to sm  partners 
3  the fees of s scott were payable to penta capital partners limited 
    
 17 
 
 
spiritel plc  
annual report and accounts 2009 
directors’ share options 
the following table sets out details of options over ordinary shares of the company which have been granted to each director 
 
1 may  
2008 forfeited granted 
30 april  
2009 
exercise  
price in pence exercise period 
option agreement   
r w smith 1666667 1666667 – – 300 january 2008 – january 2017
a r mills 32941177 32941177 – – 2125 may 2008 – may 2017
spiritel share option 
scheme   
a r mills 3571428 3571428 – – 700 august 2008 – august 2015
lord st john of bletso 1333333 1333333 – – 300 january 2008 – january 2017
lord st john of bletso – – 4000000 4000000 125 may 2009 – may 2018
s maine 1333333 1333333 – – 300 january 2008 – january 2017
s maine – – 4000000 4000000 125 may 2009 – may 2018
emi share option 
agreement   
a r mills 2000000 2000000 – – 500 july 2007 – july 2016
a r mills 3333333 3333333 – – 300 january 2008 – january 2017
longterm incentive plan 
on 22 august 2008 the company introduced a longterm incentive plan for the executive directors and certain senior managers the “plan” 
upon demanding levels of shareholder value being realised the participants in the plan will be entitled to receive an amount equal to a 
maximum of 16 of the aggregate of the issued equity and convertible equity value the participants agreed to the cancellation of all of  
their existing share option arrangements upon introduction of the plan 
nonexecutive directors 
the remuneration of the nonexecutive directors is determined by the executive directors and the deputy chairman within the limits set out  
in the company’s articles of association 
lord st john of bletso 
chairman of the remuneration committee 
30 september 2009 
   
 
 18 
independent auditor’s report to the members of spiritel plc 
 
 
spiritel plc  
annual report and accounts 2009 
we have audited the group and parent company financial statements of spiritel plc for the year ended 30 april 2009 which comprise the 
consolidated income statement the consolidated statement of changes in equity the consolidated balance sheet the consolidated statement 
of cash flows the parent company balance sheet and notes 1 to 29 of the consolidated financial statements and notes 1 to17 of the parent 
company financial statements the financial reporting framework that has been applied in the preparation of the group financial statements is 
applicable law and international financial reporting standards ifrss as adopted by the european union the financial reporting framework 
that has been applied in the preparation of the parent company financial statements is applicable law and united kingdom accounting 
standards united kingdom generally accepted accounting practice 
this report is made solely to the company’s members as a body in accordance with sections 495 and 496 of the companies act 2006  
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in  
an auditor’s report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone  
other than the company and the company’s members as a body for our audit work for this report or for the opinions we have formed 
respective responsibilities of directors and auditors 
as explained more fully in the statement of directors’ responsibilities set out on page 14 the directors are responsible for the preparation  
of the financial statements and for being satisfied that they give a true and fair view our responsibility is to audit the financial statements in 
accordance with applicable law and international standards on auditing uk and ireland those standards require us to comply with the 
auditing practices board’s apb’s ethical standards for auditors 
scope of the audit of the financial statements 
a description of the scope of an audit of financial statements is provided on the apbs web site at wwwfrcorgukapbscopeuknp 
opinion on financial statements 
in our opinion 
– the financial statements give a true and fair view of the state of the groups and of the parent companys affairs as at 30 april 2009 and  
of the groups loss for the year then ended  
– the group financial statements have been properly prepared in accordance with ifrs as adopted by the european union 
– the parent company financial statements have been properly prepared in accordance with united kingdom generally accepted accounting 
practice and 
– the financial statements have been prepared in accordance with the requirements of the companies act 2006 
opinion on other matter prescribed by the companies act 2006 
in our opinion the information given in the report of the directors for the financial year for which the financial statements are prepared is 
consistent with the financial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our opinion 
– adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from 
branches not visited by us or 
– the parent company financial statements are not in agreement with the accounting records and returns or 
– certain disclosures of directors’ remuneration specified by law are not made or 
– we have not received all the information and explanations we require for our audit 
kevin engel 
senior statutory auditor 
for and on behalf of grant thornton uk llp 
statutory auditor chartered accountants 
manchester 
30 september 2009   
 
 19 
consolidated income statement 
spiritel plc  
annual report and accounts 2009 
year ended 30 april 2009 
 note 
2009
£000 
2008
£000 
continuing operations  
revenue 3 19718 16674
cost of sales   12087 10259
gross profit   7631 6415
administrative expenses  8280 7261
  
underlying ebitda  1514 938
depreciation  212 180
sharebased payments  204 190
exceptional costs 5 663 620
amortisation of other intangible assets  1084 794
operating loss 3 4 649 846
  
operating loss 3 4 649 846
finance income 7 – 5
finance costs 8 1059 3206
loss before taxation  1708 4047
tax credit 9 774 289
loss for the financial year  934 3758
  
loss per share in pence  
basic and diluted 10 016 119
the notes on pages 23 to 51 are an integral part of these consolidated financial statements    
 20 
consolidated statement of changes in shareholders’ equity 
spiritel plc  
annual report and accounts 2009 
 
share capital
£000 
share premium
£000 
reverse 
acquisition 
reserve 
£000 
other 
reserves 
£000 
retained  
losses 
£000 
total
£000 
balance at 1 may 2007 3162 4550 5763 97 6107 4061
loss and total recognised loss for the financial year –––– 3758 3758
credit for equitysettled sharebased payments  – – – 190 – 190
equity component of compound financial instruments  – – – 333 – 333
transfer between reserves – – – 55 55 –
balance at 30 april 2008 3162 4550 5763 565 9810 7296
loss and total recognised loss for the financial year –––– 934 934
credit for equitysettled sharebased payments  – – – 204 – 204
issue of share capital net of expenses 3114 385 – – – 3499
modification and conversion of financial instruments – 
equity component  – – – 1545 – 1545
transfer between reserves – – – 349 349 –
balance at 30 april 2009 6276 4935 5763 1965 10395 2982
the notes on pages 23 to 51 are an integral part of these consolidated financial statements    
 
 21 
consolidated balance sheet 
spiritel plc  
annual report and accounts 2009 
as at 30 april 2009 
 note 
2009
£000 
2008
£000 
assets  
noncurrent assets  
goodwill 11 5695 5292
other intangible assets 12 4484 4392
property plant and equipment  13 696 438
  10875 10122
current assets  
inventories  16 384 353
trade and other receivables 17 2493 2151
cash and cash equivalents  18 – 1058
  2877 3562
total assets   13752 13684
 
current liabilities  
trade and other payables 19 4471 4595
borrowings 20 1536 457
obligations under finance leases  21 61 84
current tax payable  36 442
  6104 5578
noncurrent liabilities  
trade and other payables  19 116 432
borrowings  20 9468 13603
obligations under finance leases 21 – 55
deferred tax liabilities  22 1046 1312
  10630 15402
total liabilities   16734 20980
net liabilities  2982 7296
 
equity attributable to equity holders of the parent  
capital and reserves   
share capital   6276 3162
share premium  4935 4550
reverse acquisition reserve  5763 5763
other reserves   1965 565
retained losses  10395 9810
total equity   2982 7296
the notes on pages 23 to 51 are an integral part of these consolidated financial statements 
these financial statements were approved by the board of directors on 30 september 2009 and signed on its behalf by 
a r mills   r w smith  
chief executive officer chief financial officer    
 22 
consolidated statement of cash flows 
spiritel plc  
annual report and accounts 2009 
year ended 30 april 2009 
 note 
2009 
£000 
2008
£000 
cash flows from operating activities    
loss before taxation   1708 4047
adjustments for    
net finance costs  1059 3201
depreciation and amortisation  1296 974
impairment of tangible fixed assets   – 64
impairment of intangible fixed assets  113 –
impairment of goodwill  199 –
increasedecrease in inventory   31 63
increase in receivables   146 17
decreaseincrease in payables   1168 617
equitysettled sharebased payments   204 190
interest paid  230 135
cash used infrom operating activities  412 910
income taxes paid  259 –
net cash used infrom operating activities  671 910
 
cash flows from investing activities    
acquisition of subsidiaries net of cash acquired  15 797 998
payment of deferred and contingent consideration  382 1227
purchase of property plant and equipment   470 229
net cash used in investing activities  1649 2454
 
cash flows from financing activities    
net proceeds from issue of share capital   333 –
proceeds from borrowings net  480 2347
payment of finance lease liabilities  78 67
net cash from financing activities  735 2280
 
net decreaseincrease in cash and equivalents  1585 736
cash and equivalents at beginning of year   1058 322
cash and equivalents at end of year  18 527 1058
the notes on pages 23 to 51 are an integral part of these consolidated financial statements  
 
 23 
notes to the consolidated financial statements 
spiritel plc  
annual report and accounts 2009 
1 basis of preparation 
these financial statements have been prepared in accordance with international financial reporting standards ifrs as adopted by the 
european union eu and interpretations issued by the international financial reporting interpretations committee ifric 
these financial statements have been prepared under the historical cost convention except for the revaluation of certain financial instruments 
the accounting policies have been applied consistently throughout the group for the purposes of the preparation of these consolidated  
financial statements 
standards and interpretations not yet applied 
the following new standards and interpretations which are yet to become mandatory have not been applied in the group’s 2009 
consolidated financial statements 
standard or interpretation applicable 
ifric 13 customer loyalty programmes 1 july 2008 
ifric 15 agreements for the construction of real estate 1 january 2009 
ifric 16 hedges of a net investment in a foreign operation 1 october 2008 
ifric 17 distribution of noncash assets to owners 1 july 2009 
ifric 18 transfers of assets from customers 1 july 2009 
ias 1 presentation of financial statements revised 2007 1 january 2009 
ias 23 borrowing costs revised 2007 1 january 2009 
ias 27 consolidated and separate financial statements revised 2008 1 july 2009 
ias 32 amended financial instruments presentation and ias 1 presentation of financial statements 2009 1 january 2009 
ias 39 amended financial instrument and measurement – eligible hedged items 1 july 2009 
ifrs 1 amended first time adoption of ifrs and ias 27 consolidated and separate financial statements – 
cost of investment in a subsidiary jointly controlled entity or associate 
1 january 2009 
ifrs 2 amended sharebased payment – vesting conditions and cancellation 1 january 2009 
ifrs 2 amended group cashsettled sharebased payment transactions 1 january 2010 
ifrs 3 business combinations revised 2008 1 july 2009 
ifrs 7 amended financial instruments disclosures – improving disclosures 1 january 2009 
ifrs 8 operating segments 1 january 2009 
applicable to accounting periods beginning on or after the following dates 
the directors consider that the adoption of these standards and interpretations in future periods will have no material financial impact  
on the consolidated financial statements other than the revised approach to accounting for business combinations under ifrs 3 “business 
combinations revised 2008”  
in addition further disclosures will be required on operating segments when ifrs8 comes into effect and changes will be required to the 
presentation of the financial statements when ias1 comes into effect  
general information 
spiritel plc is a company incorporated in the uk under the companies act 1985 the address and registered office is 18 king william street 
london ec4n 7bp the nature of the group’s operations and its principal activities are set out in the directors’ report   
 24 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
2 accounting policies 
the accounting policies adopted in relation to ifrs are set out below there have been no changes to these accounting policies during the 
current financial year  
significant accounting judgements and sources of estimation uncertainty 
in applying the group’s accounting policies management makes certain judgements and estimates estimates focus on areas such as the 
carrying values and estimated lives of noncurrent assets 
the accounting policy descriptions include descriptions of areas where judgement is exercised and in consequence might have a significant  
risk of causing material adjustment within the next financial year in this regard the key areas are impairment of goodwill revenue recognition 
intangible assets valuation of financial liabilities and share based compensation  
impairment of goodwill 
determining whether goodwill is impaired requires an estimation of the value in use of the cashgenerating units to which goodwill has been 
allocated the “value in use” calculation requires management to estimate the future cash flows expected to arise from the cashgenerating  
unit and a suitable discount rate in order to calculate present value see note 11 
the carrying value of goodwill at the balance sheet date was £5695000 2008 £5292000 
revenue recognition 
in making their judgement management has considered the detailed criteria for the recognition of revenue from the sale of goods as outlined  
in ias 18 “revenue” and in particular where the group has transferred to the customer the significant risks and rewards of ownership of the 
goods and whether the group has fulfilled its contractual obligations management is satisfied that recognition of all such revenue in the current 
year is appropriate 
intangible assets 
in establishing the initial values of intangible assets separately identified on acquisition as required by ifrs 3 “business combinations” 
management has estimated the future cash flows attributable to assets acquired and their estimated useful economic lives and applied  
a suitable weighted average cost of capital to calculate present values 
the carrying value of intangible assets at the balance sheet date was £4484000 2008 £4392000 
sharebased compensation 
the assumptions on the expected life of share options volatility of share price risk free yield to maturity and expected dividend yield on shares 
are used in the fair value calculation of the group’s share options outstanding at the balance sheet date see note 27 
financial instruments 
the valuation of embedded derivatives contained within the group’s borrowings is performed using option modelling techniques and requires 
assumptions to be made including expected life of options volatility of share prices risk free yield to maturity and expected dividend yields  
on shares 
basis of consolidation 
the consolidated financial statements incorporate the financial statements of the company and all of its subsidiary undertakings together  
with the group’s share of the net assets and results of joint ventures the financial statements of all group companies are adjusted where 
necessary to ensure the use of consistent accounting policies the results of companies acquired or disposed of are included in the group 
income statement from or up to the date that control passes respectively  
acquisitions are accounted for under the acquisition method the acquisition of spiritel technologies during 2005 has been accounted for 
under the reverse acquisition method on the basis that the substance of the business combination was that spiritel technologies limited 
acquired spiritel plc by a reverse acquisition  
for business combinations completed prior to the date of transition to ifrs 1 may 2006 the group has elected not to apply ifrs 3  
“business combinations” retrospectively  
accordingly the classification of the combination acquisition reverse acquisition or merger remains unchanged from that used under  
uk gaap assets and liabilities are recognised at date of transition if they would be recognised under ifrs and are measured using  
their uk gaap carrying amount immediately postacquisition as deemed cost under ifrs unless ifrs requires fair value measurement 
deferred tax and minority interest are adjusted for the impact of any consequential adjustments after taking advantage of the  
transitional provisions  
the transitional provisions used for past business combinations apply equally to past acquisitions of interests in associated and joint ventures    
 25 
 
 
spiritel plc  
annual report and accounts 2009 
2 accounting policies continued 
revenue  
revenue is recognised to the extent that it is probable that the economic benefit will flow to the group and can be reliably measured  
the following specific recognition criteria must also be met before revenue is recognised  
managed services  
revenue from managed services is recognised in the month in which the services are provided services provided in the year but not billed  
are accrued within receivables as accrued income  
call termination  
revenue from call termination is recognised in the month in which it occurs call termination services provided in the year but not billed  
are recognised within receivables as accrued income  
networks services 
revenue from telephony network services is recognised in the month in which the services are provided calls made in the year but not billed 
are recognised within receivables as accrued income  
ip communications 
ip communications revenues comprise the sale of goods including installation and the provision of maintenance and hosting services 
revenue from the sale of goods including installation is recognised when the significant risks and benefits of ownership of the product have 
transferred to the buyer which may be upon shipment or completion of the installation as determined by the contract terms revenue from 
maintenance and hosting contracts and other fixed term service agreements is recognised evenly over the period of the contract with revenue 
for the unexpired period of the contract being recognised as deferred income 
mobile 
mobile revenue comprises connection commissions received from mobile network operators and a share of the network operators’ ongoing 
revenue connection commissions are recognised when the customer is connected to the mobile network after providing for expected future 
rebates ongoing revenue share based on end user call volumes is recognised in the period in which it is earned  
goodwill 
goodwill representing the excess of the cost of acquisition over the fair value of the group’s share of the identifiable net assets acquired is 
capitalised and reviewed annually for impairment goodwill is carried at cost less accumulated impairment losses any excess of the acquirer’s 
interest in the net fair value of the acquiree’s identifiable assets and liabilities and contingent liabilities in comparison to cost is recognised 
immediately after acquisition in the income statement 
goodwill written off to reserves prior to the date of transition to ifrs remains in reserves there is no reinstatement of goodwill that was 
amortised prior to transition to ifrs goodwill previously written off to reserves is not written back to profit and loss on subsequent disposal 
property plant and equipment 
property plant and equipment are included at cost less accumulated depreciation and any provision for impairment depreciation is provided 
on these assets on a straightline basis to write off their historical cost less estimated residual value over their estimated useful economic lives 
as follows 
leasehold improvements  – over the period of the lease 
office and computer equipment – 10 to 33 straight line 
plant and equipment  – 20 to 33 straight line 
motor vehicles   – 33 straight line 
intangible assets  
in accordance with ifrs 3 – “business combinations” an intangible asset acquired in a business combination is deemed to have a cost to  
the group of its fair value at the date of acquisition the fair value of the intangible asset reflects the market expectations about the probability 
that the future economic benefits embodied in the asset will flow to the group 
acquisitions during the current and prior financial years have resulted in the following categories of intangible assets being identified 
customer relationships 
marketing assistance 
customer order backlog 
trade names     
 26 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
2 accounting policies continued 
amortisation 
the estimated useful lives of intangible assets are as follows  
customer relationships  – 6 years 
third party marketing assistance – 3 years 
customer order backlog  – over the period that the orders will be invoiced    
trade names   – 1 or 2 years 
impairment testing of goodwill other intangible assets and property plant and equipment  
for the purposes of assessing impairment assets are grouped at the lowest levels for which there are separately identifiable cash flows  
cashgenerating units as a result some assets are tested individually for impairment and some are tested at cashgenerating unit level 
goodwill is allocated to those cashgenerating units that are expected to benefit from synergies of the related business combination and 
represent the lowest level within the group at which management monitors the related cash flows 
goodwill other individual assets or cashgenerating units that include goodwill and other intangible assets with an indefinite useful life are tested 
for impairment at least annually all other individual assets or cashgenerating units are tested for impairment whenever events or changes in 
circumstances indicate that the carrying amount may not be recoverable 
an impairment loss is recognised for the amount by which the asset’s or cashgenerating unit’s carrying amount exceeds its recoverable 
amount the recoverable amount is the higher of fair value reflecting market conditions less costs to sell and value in use based on an internal 
discounted cash flow evaluation impairment losses recognised for cashgenerating units to which goodwill has been allocated are credited 
initially to the carrying amount of goodwill any remaining impairment loss is charged pro rata to the other assets in the cashgenerating unit 
with the exception of goodwill all assets are subsequently reassessed for indications that an impairment loss previously recognised may no 
longer exist 
leased assets 
finance leases and hire purchase agreements 
where the group enters into a lease that transfers substantially all the risks and rewards of ownership of an asset to the lessee the lease is 
treated as a finance lease the asset is recorded in the balance sheet as property plant and equipment at the present value of the minimum 
lease payments and is depreciated over the shorter of the lease term and the asset’s useful economic life future instalments under such 
leases net of finance charges are included in creditors rentals payable are apportioned between the finance element which is charged to  
the income statement at a constant rate of charge on the balance of capital repayments outstanding and the capital element which reduces 
the outstanding obligation 
operating lease agreements 
leases where substantially all of the risks and rewards of ownership are not transferred to the group are treated as operating leases  
rentals under operating leases are charged against profits on a straightline basis over the period of the lease 
inventories 
inventories are stated at the lower of cost and net realisable value after provisions are made in respect of obsolete and slow moving items  
net realisable value is the estimated selling price less all further costs to complete and all costs to be incurred in marketing selling and 
distribution cost is assigned on a firstin firstout basis 
current tax 
the current tax charge is based on the profit or loss for the year and is measured at the amounts expected to be paid based on the tax  
rates and laws substantively enacted by the balance sheet date current and deferred tax is recognised in the income statement for the  
period except to the extent that it is attributable to a gain or loss that is or has been recognised directly in the statement of total recognised 
gains and losses   
 27 
 
 
spiritel plc  
annual report and accounts 2009 
2 accounting policies continued 
deferred tax 
deferred tax is recognised on all temporary differences where the transactions or events that give the group an obligation to pay more tax  
in the future or a right to pay less tax in the future have occurred by the balance sheet date 
deferred tax liabilities are provided in full with no discounting deferred tax assets are recognised to the extent that it is probable that the 
underlying deductible temporary differences will be able to be offset against future taxable income deferred tax assets and liabilities are 
calculated at tax rates that are expected to apply to their respective period of realisation provided that they are enacted or substantively 
enacted by the balance sheet date 
deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction  
is a business combination or affects tax or accounting profit deferred tax on temporary differences associated with shares in subsidiaries and 
joint ventures is not provided if reversal of these temporary differences can be controlled by the group and it is probable that reversal will not 
occur in the foreseeable future 
cash and cash equivalents 
for the purposes of the consolidated statement of cash flows cash and cash equivalents comprises cash in hand and deposits repayable  
on demand less overdrafts payable on demand 
foreign currency 
transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction monetary assets and liabilities in 
foreign currencies are translated at the rate of exchange ruling at the balance sheet date any exchange differences arising on the settlement of 
monetary items or on translating monetary items at rates different from those at which they were initially recorded are recognised in the income 
statement in the period in which they arise 
contributions to pension schemes 
the group contributes to the personal pension schemes of certain directors and employees the pension costs are charged against operating 
profit in the relevant accounting period 
exceptional items 
exceptional items are material items which individually or if a similar type in aggregate need to be disclosed by virtue of their size or incidence 
in order to understand the group’s financial performance 
financial instruments 
financial assets are recognised when the group becomes a party to the contractual provisions of the instrument financial liabilities are 
obligations to pay cash or other financial assets and are recognised when the group becomes a party to the contractual provisions of the 
instrument financial liabilities categorised as at fair value through profit or loss are recorded initially at fair value and all transaction costs  
are recognised immediately in the income statement all other financial liabilities are recorded initially at fair value net of direct issue costs 
financial liabilities categorised as at fair value through profit or loss are remeasured at each reporting date at fair value with changes in fair 
value being recognised in the income statement a financial liability is classified as held for trading if it is a derivative that is not designated and 
effective as a hedging instrument 
all other financial liabilities are recorded at amortised cost using the effective interest method with interestrelated charges recognised as an 
expense in finance cost in the income statement finance charges including premiums payable on settlement or redemption and direct issue 
costs are charged to the income statement on an accruals basis using the effective interest method and are added to the carrying amount of 
the instrument to the extent that they are not settled in the period in which they arise   
 28 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
2 accounting policies continued 
classification as equity or financial liability 
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into 
a financial liability exists where there is a contractual obligation to deliver cash or another financial asset to another entity or to exchange 
financial assets or financial liabilities under potentially unfavourable conditions in addition contracts which result in the entity delivering a  
variable number of its own equity instruments are financial liabilities shares containing such obligations are classified as financial liabilities 
finance costs and gains or losses relating to financial liabilities are included in the income statement the carrying amount of the liability  
is increased by the finance cost and reduced by payments made in respect of that liability 
finance costs are calculated so as to produce a constant rate of charge on the outstanding liability 
an equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities  
dividends and distributions relating to equity instruments are debited directly to reserves 
compound instruments 
compound instruments comprise both a liability and an equity component the elements of a compound instrument are classified in 
accordance with their contractual provisions at the date of issue the liability component is recorded at fair value which is estimated using  
the prevailing market interest rate for a similar debt instrument without the equity feature thereafter the liability component is accounted for  
as a financial liability in accordance with the accounting policy set out above 
the residual is the equity component which is accounted for as an equity instrument 
embedded derivatives 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts and the host contracts are not measured at their fair value with changes  
in fair value recognised in profit or loss 
where there have been significant modifications to the terms of existing financial liabilities these are accounted for as an extinguishment of  
the original financial liability and the recognition of a new financial liability the gainloss arising on the modification is included in the income 
statement and is calculated as the fair value of the new financial liability compared to the fair value of the original financial liability immediately 
prior to the modification where equity instruments have been issued as part of the modification the issue of the equity is accounted for as  
a transaction with equity holders and no gainloss is recognised in that respect 
equity 
equity comprises the following 
– share capital represents the nominal value of equity shares 
– share premium represents the excess over nominal value of the fair value of consideration received for equity shares net of expenses of the 
share issue 
– other reserves represent equitysettled sharebased employee remuneration until such share options are exercised and the equity 
component of financial instruments 
– reverse acquisition reserve represents the amount recognised in respect of the reverse acquisition accounting treatment of the acquisition  
of spiritel plc by spiritel technologies limited formerly expo communications limited in 2005 
government grants 
government grants in respect of capital expenditure are held in liabilities and released to the income statement to match against the 
depreciation on the related assets   
 29 
 
 
spiritel plc  
annual report and accounts 2009 
2 accounting policies continued 
sharebased payments 
equitysettled sharebased payment 
the group issues equitysettled benefits to certain directors and employees all sharebased payment arrangements granted after 7 july 2005 
that had not vested prior to 1 may 2006 are recognised in the financial statements where employees are rewarded using sharebased 
payments the fair values of employees’ services are determined indirectly by reference to the fair value of the instrument granted to the 
employee this fair value is appraised at the grant date and excludes the impact of nonmarket vesting conditions all equitysettled share
based payments are ultimately recognised as an expense in the profit and loss account with a corresponding credit to other reserves 
if vesting periods or other nonmarket vesting conditions apply the expense is allocated over the vesting period based on the best available 
estimate of the number of share options expected to vest estimates are revised subsequently if there is any indication that the number of  
share options expected to vest differs from previous estimates any cumulative adjustment prior to vesting is recognised in the current period 
no adjustment is made to any expense recognised in prior periods if share options that have vested are not exercised 
upon exercise of share options the proceeds received net of attributed transaction costs are credited to share capital and where appropriate 
additional paid in capital 
cashsettled sharebased payment 
for cashsettled sharebased payments the goods and services received and the liability incurred are measured at the fair value of the liability 
and allocated as an expense over the vesting period the liability is then remeasured until settlement with changes being recognised in the 
income statement  
3 revenue and segmental information  
spiritel plc has two operating business units business and technologies there is also a central division that supplies back office functions  
and executive management to support the group’s operations the business units deliver independent products and services although spiritel 
technologies provides support to spiritel business through its network architecture and capabilities all segments are located in the united 
kingdom 
spiritel technologies  
spiritel technologies provides call termination services on a limited number of niche routes to many of the uk’s major carriers it also provides 
managed services to spiritel business and third parties using its ip infrastructure including its three network operation centres five points of 
presence and several tier 1 voice and data carrier interconnects 
spiritel business 
spiritel business operates three lines of business namely ip communications network services and mobile the business unit is 
headquartered in wigan but provides national engineering coverage and customer support on a 247 basis 
spiritel ip communications 
spiritel ip communications provides a range of voice and data services to business customers including hosted voip and wifi traditional 
telephony equipment maintenance and structured cabling spiritel ip communications was formed with the acquisition of ashland group 
limited in march 2007 and expanded by the subsequent acquisition of tdotcom limited in october 2007 spiritel ip communications supplies 
all business sizes including large corporates and has particular expertise in the hospitality sector the business also holds the highest level of 
mitel accreditation 
spiritel networks 
spiritel networks provides fixed line telephony services including inbound and outbound calls line rental and broadband to business users 
spiritel networks was formed following the acquisition of networks direct uk limited in october 2006 spiritel networks also includes 
spiritel callplan which resells a broad telephony portfolio on behalf of telstra europe limited spiritel networks london limited formerly  
ed communications limited became part of spiritel networks on 4 august 2008 see note 15 
spiritel mobile 
spiritel mobile was formed in april 2008 with the acquisition of wn1 limited spiritel mobile is an accredited tmobile and 02 partner that 
provides mobile voice and data including blackberry services to business users   
 30 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
3 revenue and segmental information continued 
year ended 30 april 2009 
 
spiritel
technologies
£000 
spiritel 
business 
£000  
other 
central costs 
£000  
total
£000 
continuing operations      
revenue 9403 10315  –  19718
     
underlying ebitda  1103 1799  1388  1514
depreciation 46 160  6  212
sharebased payments – –  204  204
exceptional administrative expenses note 5 28 568  67  663
amortisation of other intangible assets – 1084  –  1084
operating profitloss 1029 13  1665  649
     
operating profitloss 1029 13  1665  649
net finance costs     1059
loss before taxation     1708
tax credit     774
loss for the financial year     934
assets and liabilities     
total assets 1483 5718  6551  13752
total liabilities 2738 3099  10897  16734
net assetsliabilities 1255 2619  4346  2982
other segmental information     
property plant and equipment     
– additions during the year 18 438  14  470
– depreciation 46 160  6  212
other intangible assets     
– acquired on business combinations – 1289  –  1289
– impairment included in exceptional administrative expenses – 113  –  113
– amortisation  – 1084  –  1084
goodwill     
– impairment included in exceptional administrative expenses – 199  –  199
– acquired on business combinations – 506  –  506
   
 31 
 
 
spiritel plc  
annual report and accounts 2009 
3 revenue and segmental information continued 
year ended 30 april 2008 
 
spiritel 
technologies 
£000 
spiritel 
business 
£000 
other
central costs
£000 
total
£000 
continuing operations    
revenue 9930 6744 – 16674
   
underlying ebitda 1024 1125 1211 938
depreciation 128 48 4 180
sharebased payments – – 190 190
exceptional administrative expenses note 5 104 305 211 620
amortisation and impairment of goodwill and intangible assets – 794 – 794
operating profitloss 792 22 1616 846
   
operating profitloss 792 22 1616 846
net finance costs   3201
loss before taxation   4047
tax credit   289
loss for the financial year   3758
assets and liabilities   
total assets 944  5461 7279 13684
total liabilities 3146 3530 14304 20980
net assetsliabilities 2202 1931 7025 7296
other segmental information   
property plant and equipment   
– additions during the year 45 170 14 229
– acquired on business combinations – 45 – 45
– depreciation 128 48 4 180
– impairment included in exceptional administrative expenses 64 – – 64
other intangible assets   
– acquired on business combinations – 1607 – 1607
– amortisation  – 794 – 794
goodwill   
– acquired on business combinations – 2935 – 2935
   
 32 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
3 revenue and segmental information continued 
analysis of the group’s revenue by geographical market by destination is as follows 
 
2009 
£000 
2008
£000 
united kingdom 19692 16561
europe 21 113
united states 5 –
 19718 16674
4 operating loss 
operating loss is stated after charging 
 
2009 
£000 
 2008
£000 
charges in respect of equitysettled sharebased payments 204 190
depreciation  
– owned assets 154 150
– assets held under finance leases 58 30
auditor’s remuneration  
as auditor of the parent company and group consolidated financial statements 42 20
other services  
– audit of subsidiary company financial statements 38 37
– review of group’s interim results 4 3
– other services 3 10
operating lease costs  
– land and buildings  171 143
– other  – 19
amortisation of other intangible assets 1084 794
exceptional administrative expenses note 5  663 620
5  exceptional administrative expenses 
exceptional expenses included within administrative expenses are summarised below 
 note 
2009 
£000 
 2008
£000 
reorganisation and restructuring costs i 289 432
aborted acquisition costs  – 124
impairment charges – property plant and equipment  – 64
impairment charges – goodwill  see note 11  199 –
impairment charges – other intangible assets see note 12  113 –
bad debts written off  62 –
total exceptional administrative expenses  663 620
notes 
i  reorganisation and restructuring costs include the costs of integration of the acquired businesses   
 33 
 
 
spiritel plc  
annual report and accounts 2009 
6 staff costs 
the average number of employees in the group during the financial year amounted to  
 
2009
number 
 2008
number 
administrative and operational staff 104 82
management 3 2
 107 84
the aggregate staff costs for the year including directors were as follows  
 
2009
000 
2008
£000 
wages and salaries 3433 2992
social security costs 396 305
share based payments 204 190
 4033 3487
the total number of employees including directors at 30 april 2009 was 109 2008 104 
wages and salaries include the following amounts in respect of performance related bonuses inclusive of national insurance and sharebased 
payments charged to the income statement 
 
2009
£000 
2008
£000 
performance related bonuses 308 327
equitysettled sharebased payment schemes 204 190
 512 517
directors’ remuneration 
remuneration in respect of the directors was as follows 
 
2009
£000 
2008
£000 
emoluments and benefits in kind 529 617
compensation for loss of office – 13
 529 630
remuneration in respect of the highest paid director was £169000 2008 £245000 further details of directors’ remuneration are given in the 
directors’ remuneration report on pages 15 to 17 
7 finance income  
 
2009
£000 
2008
£000 
bank interest receivable – 5
   
 34 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
8 finance costs  
 
2009 
£000 
2008
£000 
interest payable on bank loans and overdrafts 273 125
interest on finance leases 8 7
interest paid on director’s loan – 8
interest on penta loans – 1204
unwinding of discount on deferred and contingent consideration 181 –
loss arising on modification and conversion of convertible preference shares 1026 2521
change in fair value of embedded derivatives 429 659
 1059 3206
9 taxation  
a tax on loss on ordinary activities  
tax charged in the income statement 
 
2009 
£000 
 2008
£000 
current tax  
charge for current year – 30
adjustment in respect of prior years 147 90
total current tax credit  147 60
deferred tax  
credit for current year 273 229
adjustment in respect of prior years 354 –
total deferred tax credit 627 229
total tax credit in income statement 774 289
b reconciliation of the total tax credit  
the tax credit in the income statement for the year is the standard rate of corporation tax in the uk of 28 2008 298 the differences are 
reconciled below  
 
2009 
£000 
2008
£000 
loss on ordinary activities before taxation  1708 4047
accounting loss multiplied by uk standard rate of corporation tax of 28 2008 298 478 1205
deferred tax temporary differences  – 38
expenses not deductible for tax purposes 353 630
tax losses 148 414
adjustment in respect of prior years  501 90
total tax credit 774 289
   
 35 
 
 
spiritel plc  
annual report and accounts 2009 
10 loss per share 
the calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number  
of shares in issue during the period the share options are not dilutive and therefore diluted earnings per share has not been presented  
the loss and weighted average number of shares used in the calculation are set out below  
continuing and total operations 2009 2008 
loss after tax attributable to ordinary shareholders £000 934 3758
weighted average number of shares 578661793 316233646
loss per share pence 016 119
11 goodwill 
 £000 
cost  
at 1 may 2007 2626
additions 2935
at 30 april 2008 5561
additions 506
other adjustments  96
at 30 april 2009 6163
accumulated impairment 
at 1 may 2007 269
impairment charge –
at 30 april 2008 269
impairment charge 199
at 30 april 2009 468
net book amount 
at 30 april 2009 5695
at 30 april 2008 5292
the addition to purchased goodwill in the current financial year relates to the acquisitions of ed communications limited see note 15 
the other adjustment to goodwill relates to i fair value adjustments to the book value of liabilities acquired on the acquisition of wn1 limited  
of £145000 to account for unrecorded liabilities and ii a completion accounts reduction to the consideration of £49000   
 36 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
11 goodwill continued 
goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value  
may be impaired goodwill was allocated for impairment testing purposes to cash generating units cgus based on the following  
acquired businesses 
– spiritel mobile 
– spiritel ip communications 
– spiritel networks  
these cgus and specifically the separable acquisitions inherent in each cgu represent the lowest level within the group at which goodwill 
was monitored by management for internal reporting purposes and the level that represented the smallest identifiable group of assets which 
generated largely independent cash inflows 
the recoverable amount of all the cgus was based on a value in use calculation using cash flow projections based on the 2010 forecast  
which was approved by the board and extrapolated for a further 6 – 15 years by a growth rate applicable to each unit the projections are 
based on the following revenue growth rates up to and including year five  
– spiritel mobile   7 
– spiritel ip communications 6 
– spiritel ip networks  5 
cost growth was projected at levels below sales growth as the directors anticipate that the cgus will be able to increase revenues without 
corresponding increases in costs a discount rate of 10 was applied to these projections based on the directors’ assessment of the 
weighted average cost of capital for the company 
based on this impairment review the directors have made an impairment charge of £199000 against spiritel callplan limited which is included 
with the spiritel networks cgu 
with the exception of spiritel callplan as disclosed above the discounted cash flow projections exceed the carrying value of each cgu  
and therefore there has been no other impairment of goodwill during the financial year sensitivity analysis has indicated that no reasonably 
foreseeable change in the key assumptions used in the impairment calculations would result in any impairment charge being recorded in the 
consolidated financial statements 
the carrying amount of goodwill is split as follows 
 
2009 
£000 
2008
£000 
spiritel mobile 1461 1365
spiritel ip communications 2716 2716
spiritel networks 1518 1211
 5695 5292
   
 37 
 
 
spiritel plc  
annual report and accounts 2009 
12 other intangible assets  
 
customer 
relationships 
£000 
marketing 
assistance 
£000 
customer  
order backlog 
£000 
trade names
£000 
total
£000 
cost    
at 1 may 2007 3496 222 57 52 3827
additions 1607– – –1607
at 30 april 2008 5103 222 57 52 5434
additions see note 15 1289 – – – 1289
at 30 april 2009 6392 222 57 52 6723
amortisation   
at 1 may 2007 185 43 7 13 248
charge for year 647 65 43 39 794
at 30 april 2008 832 108 50 52 1042
charge for year 1012 65 7 – 1084
impairment charge 64 49 – – 113
at 30 april 2009 1908 222 57 52 2239
net book amount   
at 30 april 2009 4484 – – – 4484
at 30 april 2008 4271 114 7 – 4392
as part of the impairment review performed during the year as disclosed in note 11 the directors have also made an impairment charge of 
£113000 against the intangible assets attributed to spiritel callplan limited 
the remaining amortisation period of the customer relationships as at 30 april 2009 is between three and six years    
 38 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
13 property plant and equipment  
 
leasehold
improvements
£000 
office and
computer
equipment
£000 
motor 
vehicles 
£000 
plant and 
equipment 
£000 
total
£000 
cost    
at 1 may 2007 29 2014 1 – 2044
additions 11218– – 229
acquisitions –243 – 45
at 30 april 2008 40 2234 44 – 2318
additions 103225– 142 470
at 30 april 2009 143 2459 44 142 2788
depreciation   
at 1 may 2007 24 1612 – – 1636
charge for the year 6 173 1 – 180
impairment charge – 64 – – 64
at 30 april 2008 30 1849 1 – 1880
charge for the year 17 149 21 25 212
at 30 april 2009 47 1998 22 25 2092
net book amount   
at 30 april 2009 96 461 22 117 696
at 30 april 2008 10 385 43 – 438
included within office and computer equipment are assets held under hire purchase agreements with a net book value of £170000  
2008 £139000 depreciation charged on those assets during the year amounted to £58000 2008 £30000 
14 investments  
the group holds a 50 interest in myphone uk limited a joint venture undertaking at 30 april 2009 the group’s share of the losses of the 
joint venture exceeded its interest in the company and therefore in accordance with ias 28 the group has not recognised these losses on the 
basis that the group has not incurred obligations on behalf of the joint venture at 30 april 2009 the group’s share of the accumulated losses 
of the joint venture undertaking was £47000 2008 £47000   
 39 
 
 
spiritel plc  
annual report and accounts 2009 
15 business combinations 
on 4 august 2008 spiritel plc acquired 100 of the issued share capital of ed communications limited a company based in the uk  
the total cost includes the components stated below the purchase price was settled in cash  
 £000 
purchase price  800
contingent consideration under earn out agreement payable in cash discounted 90
deferred consideration payable in cash discounted 426
due diligence fees  36
other professional fees  54
 1406
a maximum of £1700000 of consideration may become payable depending on the level of gross profit achieved by the business during july 
2009 in the opinion of the directors the likely amount of contingent consideration payable is £100000 
the assessment of the fair values of the assets and liabilities of ed communications limited for each class of the acquiree’s assets and liabilities 
recognised at the acquisition date are as follows 
 
book value  
£000 
fair value 
adjustments
£000 
fair value to the 
group
£000 
intangible fixed assets identified – 1289 1289
property plant and equipment 97 97 –
trade and other receivables 196 – 196
cash and cash equivalents 44 – 44
total assets 337 1192 1529
trade payables 53 – 53
other taxes  40 – 40
other payables  175 – 175
deferred tax – 361 361
total liabilities 268 361 629
net assets acquired 69 831 900
goodwill arising on the acquisition  506
consideration  1406
 
satisfied by   
cash  890
deferred and contingent consideration to be settled in cash discounted  516
  1406
goodwill on the acquisition of ed communications limited is largely attributable to the crossselling opportunities 
during the period from the date of acquisition to 30 april 2009 ed communications limited generated revenue of £1121000 and an 
operating profit of £287000 due to the lack of ifrs specific data for ed communications limited prior to its acquisition the proforma revenue 
and profit of the group had this acquisition taken place on 1 may 2008 have not been disclosed as they cannot be reliably determined 
reconciliation to the consolidated statement of cash flows 
cash consideration 890
cash and cash equivalents acquired 44
refund of wn1 limited consideration – completion accounts adjustments note 11 49
net cash flow arising on acquisitions 797
   
 40 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
16 inventories 
 
2009 
£000 
2008
£000 
finished goods for resale 384 353
during the financial year the group’s writedown of inventories amounted to £58000 2008 £nil  
the value of inventory consumed in cost of sales during the year amounted to £2148000 2008 £1153000 
17 trade and other receivables  
 
2009 
£000 
2008
£000 
trade debtors 1121 1062
amounts owed by related parties note 28 10 64
other debtors 242 438
prepayments and accrued income 1120 587
 2493 2151
all the above fall due within one year 
all trade and other receivables have been reviewed for indicators of impairment and a provision of £129000 2008 £212000 has been 
recorded accordingly 
movements of the group provision for impairment of receivables are as follows 
 
2009 
£000 
2008
£000 
at 1 may 212 158
amounts written off 172 58
on acquisitions – 17
amounts provided during year 89 95
at 30 april 129 212
the age of receivables past due but not impaired is as follows 
 
2009 
£000 
2008
£000 
up to 30 days overdue 131 191
over 30 days and up to 60 days overdue 50 52
over 60 days and up to 90 days overdue 15 18
over 90 days overdue 25 16
 221 277
   
 41 
 
 
spiritel plc  
annual report and accounts 2009 
18 cash and cash equivalents 
 
2009
£000 
2008
£000 
cash at bank and in hand – 1058
the total cash and cash equivalents as disclosed in the cash flow statement is as follows 
 
2009
£000 
2008
£000 
cash at bank and in hand – 1058
bank overdraft 527 –
 527 1058
19 trade and other payables  
 
2009
£000 
2008
£000 
amounts falling due within one year 
trade payables  1983 1793
amounts owed to related parties note 28 14 89
other taxes and social security payable 467 244
accruals and deferred income 1086 1588
other payables  140 731
deferred and contingent consideration  781 150
 4471 4595
amounts falling due after one year 
deferred and contingent consideration 116 432
20 borrowings 
 
2009
£000 
2008
£000 
borrowing at amortised cost 
bank loans 2326 1747
bank overdraft 527 –
director’s loan – 100
loan notes – other 300 248
loan notes – penta 770 770
other loans – penta 5122 5566
redeemable preference shares note 23  1959 5629
 11004 14060
total borrowings 
amounts due for settlement within 12 months 1536 457
amounts due for settlement after 12 months 9468 13603
   
 42 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
20 borrowings continued 
bank loans 
bank loans comprise a term loan from clydesdale bank plc of £2527500 2008 £1912500 deferred arrangement fees of £201000  
2008 £165000 have been netted against the amount disclosed above 
under a loan agreement dated 27 july 2007 clydesdale bank plc provided a term loan of £750000 as at 30 april 2009 the amount 
outstanding was £562500 comprising 15 quarterly payments of £37500 with the final payment due on 31 december 2012 
under a loan agreement dated 2 april 2008 clydesdale bank plc provided a term loan of £1200000 as at 30 april 2009 the amount 
outstanding was £960000 comprising 16 quarterly payments of £60000 with the final payment due on 31 march 2013 
under a loan agreement dated 4 august 2008 clydesdale bank plc provided a term loan facility of £1900000 of which £1100000 has  
been drawn down at 30 april 2009 with the balance to be drawn to pay amounts due as deferred consideration and earnout on acquisitions 
as at 30 april the amount outstanding was £1005000 and the undrawn amount is £800000 this loan is repayable in 20 instalments of 
£95000 with one instalment having been paid at 30 april 2009 the final payment date will depend on the final amount drawn but will be  
no later than 30 november 2013  
the group also has a £250000 overdraft facility repayable on demand and an invoicing discounting facility of £650000 the loans and 
overdraft carry interest charged at approximately 275 above the clydesdale bank base rate 
all clydesdale bank plc facilities are secured by debentures over the assets of the group 
other loans 
other loan notes comprise an interest free loan note of £300000 issued to the vendors of wn1 limited repayable on 1 may 2009 
penta loans loan notes and redeemable preference shares the “penta facilities” 
modification and conversion during the year 
at 1 may 2008 the company had outstanding loans and loan notes in favour of penta amounting to £5566000 and £770000 respectively 
these loans carried the right of conversion into the companys ordinary shares under terms which meet the definition of equity and hence were 
classified as compound financial instruments  
in addition at 1 may 2008 the company had £4100000 of outstanding redeemable preference shares together with an accrued redemption 
premium of £1025000 these shares together with the redemption premium also carried the right of conversion into the companys ordinary 
shares as follows 
– the first £1m of nominal value together with a redemption premium of £250000 were convertible at 2p per ordinary share and 
– the remaining £31m of nominal value together with the associated redemption premium of £775000 were convertible at the lower of  
a a 10 discount to the prevailing market price and b the latest subscription price for ordinary shares in both cases subject to a 
minimum price of 3p per ordinary share 
the £1m preference shares were classified as a compound financial instrument since the conversion terms on the £31m preference shares 
meet the definition of a financial liability this instrument was classified as a host debt with an embedded derivative the fair value of the 
embedded derivative at 1 may 2008 was £504000 
on 22 may 2008 the shareholders of the company at an extraordinary general meeting egm approved a modification to the terms of the 
outstanding penta facilities the modified terms were that penta could convert 2611467 preference shares at a price of 11p per ordinary 
share immediately on egm approval the initial conversion and that the remaining penta facilities could be converted into ordinary shares at 
the higher of a 15p per ordinary share and b the latest subscription price for ordinary shares subject to a restriction that pentas holding  
of the companys ordinary shares cannot exceed 4999 since these terms meet the definition of a financial liability all the outstanding penta 
facilities subsequent to modification have been classified as a host debt with an embedded derivative 
on 22 october 2008 penta converted a further 555000 preference shares into ordinary shares at 15p per ordinary share  
a reconciliation of the movements on the carrying value of the loans and loan notes together “debt” and the preference shares during the year 
is as follows 
 
debt 
£000 
preference 
shares 
£000 
total
£000 
carrying value at 1 may 2008 6336 5629 11965
accrued interest waived on modification 444 – 444
change in fair value of embedded derivative premodification – 429 429
change in fair value of embedded derivative on modification – 75 75
preference shares converted during the year – 3166 3166
carrying value at 30 april 2009 5892 1959 7851
   
 43 
 
 
spiritel plc  
annual report and accounts 2009 
20 borrowings continued 
the modification and conversion of the penta facilities has resulted in the following chargecredit to the income statement and equity  
other reserves 
 
income 
statement
£000 
other reserve
£000 
accrued interest waived on modification 444 –
change in fair value of embedded derivative on modification 75 –
charge on initial conversion see note i below 1554 1554
difference between fair value of shares issued on conversion and carrying value of debt converted 9 9
loss arising on modification and conversion of preference shares  1026 1545
change in fair value of embedded derivative premodification 429 –
total charged to income statementcredited to equity 597 1545
 
notes 
i this charge is based on the fair value of the incremental number of shares issued on conversion compared to the number of shares which 
would have been issued under the previous conversion terms 
management has applied certain judgements and estimates in arriving at the fair value of the embedded derivative under the modified terms  
of conversion both at the date of modification and as at 30 april 2009 taking into account the restriction on pentas ability to convert the 
outstanding debt since penta hold the maximum 4999 of the companys ordinary shares the current share price of the company and the 
price at which penta are able to convert the outstanding debt management has concluded that the fair value of the embedded derivative is £nil 
both at the date of modification and at 30 april 2009  
at 30 april 2009 
the penta loans comprise secured facilities of £5122000 2008 £5566000 from penta fund 1 limited partnership which are repayable  
on demand  
the penta loan notes of £770000 2008 £770000 are secured interest free and are repayable at any time at the company’s option  
the terms of the redeemable preference shares are as follows 
– redeemable at any time at the option of the company 
– do not entitle the holders to any dividend but whilst they are in issue the holders of ordinary 1p shares will not be entitled to receive any 
dividends or other distributions 
– on a return of capital redeemable preference shareholders will be repaid the nominal capital paid up on the redeemable preference  
shares together with an amount equal to the amount of any redemption fee then outstanding in priority to any repayment to the  
ordinary shareholders 
– holders of redeemable preference shares have the right to receive notice of all general meetings but only to attend speak and vote if a 
resolution is proposed inter alia for the winding up or reduction of capital of the company or varying their rights or privileges as holders  
of redeemable preference shares or certain other matters to be proposed by the company 
the conversion terms of the penta loans loan notes and redeemable preference shares are detailed above 
the company’s articles of association include various provisions to allow for reclassification or subdivision in order to facilitate the  
conversion process 
the penta facilities are secured by secondranking debentures over certain assets of the group   
 44 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
21 obligations under finance leases 
 
2009 
£000 
2008
£000 
amounts payable under finance leases  
within one year 72 94
in the second to fifth years inclusive  – 63
 72 157
less future finance charges 11 18
 61 139
disclosed as  
current liabilities 61 84
noncurrent liabilities – 55
 61 139
the fair value of the group’s lease obligations approximates to their carrying value 
the group’s obligations under finance leases are secured by the lessors’ rights over the leased assets disclosed in note 13 
22 deferred taxation 
 
2009 
£000 
2008
£000 
liability at 1 may 1312 1091
acquisitions 361 450
credit for the year 627 229
liability as at 30 april noncurrent 1046 1312
the rate at which deferred tax is expected to unwind is 28 2008 28 and this rate has been used to calculate the deferred tax assets  
and liabilities 
the deferred tax liability comprises the following 
 
as at 
1 may 2008
£000 
credited 
to income 
£000 
acquisitions  
see note 15 
£000 
as at 
30 april 2009
£000 
intangible assets 1230 335 361 1256
trade losses 102 283 – 181
capital allowances exceeding depreciation 20 9 – 29
 1312 627 361 1046
 
 
as at 
1 may 2007
£000 
credited 
charged 
to income 
£000 
acquisitions  
£000 
as at 
30 april 2008
£000 
intangible assets 1074 294 450 1230
trade losses – 102 – 102
capital allowances exceeding depreciation 17 37 – 20
 1091 229 450 1312
deferred tax assets have been recognised in respect of temporary differences to the extent that it is probable that these assets will be 
recovered in addition to the above the group has a potential deferred tax asset which has not been recognised in the financial statements  
of £2354000 2008 £1773000 in respect of tax losses   
 45 
 
 
spiritel plc  
annual report and accounts 2009 
23 share capital 
the ordinary share capital of the company consists only of shares of par value of 1p each all ordinary shares are equally eligible to receive 
dividends and represent one vote at the shareholder meetings of the company 
the preference share capital of the company consists only of redeemable preference shares with a par value of £1 each the preference 
shares are convertible together with a redemption premium of £1025000 into ordinary shares at a price which is the higher of i 15p  
and ii the price at which the last subscribers for ordinary shares had subscribed 
the authorised share capital of the company was increased by the creation of 500000000 new ordinary 1p shares as a result of a resolution 
passed by the shareholders at an extraordinary general meeting held on 22 may 2008 
ordinary shares 
 
2009
number 
2009 
£000 
2008
number 
2008
£000 
authorised  
ordinary shares of 1p each 2000000000 20000 1500000000 15000
allotted called up and fully paid  
shares classified as equity  
ordinary shares of 1p each  627639692 6276 316233646 3162
the company has issued and allotted ordinary 1p shares “shares” during the year as follows  
– on 22 may 2008 penta fund 1 limited partnership and penta fund 1 sp limited partnership converted an aggregate of 2611467 
preference shares at 11p per share into 237406046 shares following the approval by the company’s shareholders in an extraordinary 
general meeting of the grant by the panel on takeovers and mergers of a waiver in favour of the penta funds of any obligation on them  
to make a mandatory offer for the company in the event that they implement conversion rights attaching to loan instruments held by them 
which could result in them holding up to an aggregate of 4999 of the company’s issued ordinary share capital 
– on 16 october 2008 37000000 shares at 1p per share to raise net proceeds of £370000 
– on 20 october 2008 37000000 shares to the penta funds at 15p per share to convert an aggregate of 555000 preference shares 
preference shares 
the terms of the preference shares give to the holder penta capital rights of conversion to ordinary shares as described above in accordance 
with ias 32 the preference shares are considered to be a host debt with an embedded derivative the carrying value of the preference shares  
in the financial statements is analysed below 
 
2009
number 
2008
number 
authorised 
redeemable preference shares of £1 each 933533 4100000
allotted called up and fully paid 
shares classified as financial liabilities 
redeemable preference shares of £1 each 933533 4100000
the changes in the number of issued preference shares during the year are as explained under the heading ordinary shares above  
   
2009
£000 
2008
£000 
principal 934 4100
redemption premium 1025 1025
fair value of embedded derivative and other modification adjustments – 837
 1959 5962
presented as 
debt 1959 5629
equity other reserves – 333
 1959 5962  
 46 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
24 financial instruments 
241 capital management policies and procedures 
the group manages its capital with the objective of ensuring that entities within the group will be able to continue as going concerns while 
seeking to improve the return to stakeholders through the management of the debt and equity balance 
as a result of the significant level of loans and other financial instruments outstanding in favour of the penta funds the continuing cooperation 
and support of penta is critical to the flexibility and scope with which the group is able to manage its capital 
during september 2009 the company reached an agreement with the penta funds subject to shareholder approval at an egm for the 
amendment of conversion rights over all indebtedness see note 29 – post balance sheet events for fuller details  
in may 2009 the company secured new and increased facilities with clydesdale bank plc the directors expect the group will comply with all 
financial covenants required by these facilities 
the directors consider that the borrowings payable to penta do not represent debt for the purposes of calculating gearing and so no gearing 
ratios have been disclosed 
242 significant accounting policies 
details of the significant accounting policies and methods adopted including the criteria for recognition the basis of measurement and the 
basis on which income and expenses are recognised in respect of each class of financial asset financial liability and equity instrument are 
disclosed in note 2 to the financial statements 
243 categories of financial instruments 
the ias 39 categories of financial asset included in the balance sheet and the headings in which they are included are as follows 
 
2009 
£000 
2008
£000 
loans and other receivables  cash and cash equivalents – 1058
loans and other receivables  other 1373 1564
 1373 2622
the carrying amount reflected above represents the group’s maximum exposure to credit risk  
the ias 39 categories of financial liabilities included in the balance sheet and the headings in which they are included are as follows 
 
2009 
£000 
2008
£000 
amortised cost 13700 17757
fair value through profit and loss – 504
 13700 18261
244 interest rate and liquidity risk management 
the group is exposed to interest rate risk as it borrows funds at both fixed and variable rates details of borrowings are provided in note 20  
to these financial statements 
the following tables detail the group’s remaining contractual maturity for its financial liabilities the tables have been drawn up on the 
undiscounted cash flows of financial liabilities based upon the earliest date on which the group can be required to pay which may differ  
from the carrying value of the liabilities at the balance sheet date the tables include both interest and principal cash flows   
 47 
 
 
spiritel plc  
annual report and accounts 2009 
24 financial instruments continued 
244 interest rate and liquidity risk management continued 
at 30 april 2009 the group’s liabilities have contractual maturities which are summarised below 
 
within  
6 months 
£000  
6 to 12 months
£000 
1 to 5 years
£000 
trade payables 1983  – –
amounts owed to related parties 14  – –
accruals and deferred income 986  100 –
deferred and contingent consideration 820  – 150
bank loans 385  385 1757
bank overdraft 527  – –
loan notes – penta –  – 770
other loans – penta –  – 5122
redeemable preference shares note 23  –  – 1959
loan notes – other 300  – –
finance leases 36  36 –
 5051  521 9758
this compares to the maturity of the group’s financial liabilities in the previous reporting period as follows 
 
within  
6 months 
£000 
6 to 12 months
£000 
1 to 5 years
£000 
trade payables 1421 372 –
amounts owed to related parties 89 – –
accruals and deferred income 1476 112 –
deferred and contingent consideration 150 – 550
bank loans 178 179 1390
directors’ loan 100 – –
loan notes – penta – – 770
other loans – penta – – 5566
redeemable preference shares note 23  – – 5125
loan notes – other – – 300
finance leases 47 47 63
 3461 710 13764
the directors do not consider that any of the penta loan notes the penta loans or the redeemable preference shares together “the penta 
borrowings” will result in any cash outflows but they will be converted into ordinary shares of the company no interest arises on any  
of the penta borrowings hence no cash flows have been included in the above maturity analysis in respect of the penta borrowings   
 48 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
24 financial instruments continued 
245 interest rate sensitivity analysis 
the group’s variable rate borrowings at 30 april 2009 were £2527500 2008 £1912500  
the sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and nonderivative instruments  
at the balance sheet date for floating rate liabilities the analysis is prepared assuming the amount of liability outstanding at the balance sheet 
date was outstanding for the whole of the year 
if interest rates had been 50 basis points higherlower and all other variables remained constant the impact on the group’s loss for the year 
ended 30 april 2009 would be £13000 2008 £9000 
246 foreign currency risk management 
the group does not have any foreign currency denominated trade receivables or payables and is therefore not subject to any significant  
level of foreign exchange rate risk 
247 credit risk management 
credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the group the principal 
credit risk arises from the group’s trade receivables the trade receivables balance included 2 2008 4 customers who represented more  
than 5 of the total balance in order to manage to credit risk the directors set limits for customers based upon a combination of payment 
history third party credit references and an independent rating agency the group’s exposure and the credit rating of its counterparties are 
continuously monitored  
ongoing evaluation is performed on the financial condition of the accounts receivable 
248 fair value of financial instruments 
the fair value of financial assets and liabilities are determined as follows 
– the fair value of financial assets and liabilities excluding derivative instruments is determined in accordance with generally accepted  
pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes  
for similar instruments 
– the fair value of optional derivative instruments is calculated using option pricing models 
the fair value of the group’s financial assets and liabilities are not materially different from the amount at which they are recorded in the  
financial statements  
25 leasing commitments  
at 30 april 2009 the group had commitments under noncancellable operating leases as set out below 
 
2009 
£000 
2008
£000 
land and buildings   
within one year 205 175
between two and five years 519 727
 724 902
other assets  
within one year 87 20
between two and five years 52 13
 139 33
 863 935
26 capital commitments 
outstanding capital commitments at 30 april 2009 were £nil 2008 £nil   
 49 
 
 
spiritel plc  
annual report and accounts 2009 
27 sharebased payments 
equity settled sharebased payments 
the group’s equitysettled sharebased payments comprise the grant of nilcost options granted under the group’s share option scheme 
emi share option scheme and individual share option agreements details of the share options subject to equitysettled sharebased 
payments are set out below in accordance with ifrs 2 the group has recognised an expense to the income statement for the year ended  
30 april 2008 representing the fair value of outstanding equitysettled sharebased payment awards to employees which have not vested  
as at 1 may 2006 
those fair values will be charged to the income statement over the relevant vesting period adjusted to reflect actual and expected vesting levels 
the group has calculated the fair market value of the nilcost options as being based on the market value of a company share at the date of 
grant adjusted to reflect the fact that an employee is not entitled to receive dividends over the relevant holding period 
the estimated fair values of options which fall under the ifrs 2 accounting charge and inputs used in the blackscholes model to calculate 
those fair values are as follows 
date of grant 
number  
granted 
share price on 
grant date  
pence 
exercise
price
pence 
fair value
on grant date
pence 
vesting
period
years 
expected life 
years 
lapse rate 
 
risk free rate
 volatility 
30 aug 05 1190476 688 700 474 1 4667 22 450 8766
30 aug 05 1190476 688 700 474 2 4667 45 450 8766
30 aug 05 1190476 688 700 474 3 4667 70 450 8766
28 nov 05 100000 688 725 4284 0 4417 0 450 7890
21 jul 06 4900000 320 500 1450 1 375 20 450 7449
21 jul 06 4900000 320 500 1450 2 375 40 450 7449
31 jan 07 5926666 238 300 113 1 325 18 525 7364
31 jan 07 5926666 238 300 113 2 325 18 525 7364
9 may 07 9411765 213 213 106 1 2975 0 525 7036
9 may 07 23529412 213 213 106 2 2975 0 525 7036
3 apr 08 14000000 070 125 0380 1 300 20 525 10520
3 apr 08 14000000 070 125 0380 2 300 40 525 10520
7 may 08 4000000 119 125 0798 1 300 20 500 10873
7 may 08 4000000 119 125 0798 2 300 40 500 10873
1 jun 08 600000 120 125 0805 1 300 20 500 10846
1 jun 08 600000 120 125 0805 2 300 40 500 10846
23 sep 08 600000 125 125 0854 1 300 20 500 10970
23 sep 08 600000 125 125 0854 2 300 40 500 10970
1 nov 08 400000 095 125 0541 1 300 20 450 9719
1 nov 08 400000 095 125 0541 2 300 40 450 9719
1 dec 08 2000000 090 125 0483 1 300 20 450 9328
1 dec 08 2000000 090 125 0483 2 300 40 450 9328
   
 50 
notes to the consolidated financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
27 sharebased payments continued 
expected dividend yield 
the expected dividend yield used in the model is nil 
expected volatility 
the volatility of the company’s share price on each grant was calculated as the average of annualised standard deviation of daily continuously 
compounded returns on the company’s stock calculated one year back from the date of the grant where applicable 
risk free rate 
the risk free rate is the bank of england base lending rate on the date of grant 
expected life 
the expected life used in the model is the average expected period to exercise and has been adjusted based on management’s best estimate 
for the effects of nontransferability exercise restrictions and behavioural considerations 
the following is a summary of the company’s share options in issue during the financial year 
 2009 2009 2008 2008 
 
number 
of shares 
under option 
weighted 
average  
exercise price  
pence 
number  
of shares  
under option 
weighted 
average
exercise price 
pence 
outstanding at 1 may 2008 82317015 237 35999645 408
granted during the year 15200000 125 61274510 173
forfeited during the year 51912605 289 8816665 354
lapsed during the year 1200000 125 6140475 427
outstanding at 30 april 2009 44404410 142 82317015 237
exercisable at 30 april 2009 15804410 172 11135365 430
cash settled sharebased payments 
there has been no charge to the income statement during the year in respect of the long term incentive plan as the fair value of the liability  
at 30 april 2009 is considered to be £nil 
28 related party transactions 
other related party transactions 
the company’s related parties include its directors and companies controlled by or associated with its directors as disclosed below 
transactions with directors and related parties in respect of their services as directors are disclosed in the directors’ remuneration report  
on pages 15 to 17 
other related party transactions during the year were as follows 
1 penta capital partners limited through its managed funds penta fund 1 limited partnership and penta fund 1 sp limited partnership  
the “penta funds” is the holder of 4999 of the company’s issued ordinary 1p shares and all of the company’s issued redeemable 
preference shares steven scott a director of the company is also a director of penta capital partners limited during the year the penta 
funds converted preference shares into ordinary shares in the company as detailed in note 23 loan notes all of which are outstanding to 
the penta funds are described in note 20 penta fund 1 limited partnership held options over 100000 ordinary shares of the company  
at an exercise price of 725p per ordinary 1p share as at 30 april 2009 fees paid to penta capital partners limited in respect of steven 
scott’s services as a director of the company are detailed in the directors’ remuneration report on pages 15 to 17 at 30 april 2009 the 
outstanding balance within creditors in respect of these fees was £14000 2008 £89000 the prior year balance includes outstanding 
amounts in respect of loan arrangement fees due to penta capital partners limited 
2 the company had outstanding at 30 april 2009 a rent deposit of £10000 2008 £64000 with anthony j vose properties an enterprise  
of which a j vose a director of the company is the proprietor the company also waived a rent deposit of £40000 held by anthony  
vose in exchange for the repayment of prepaid rents rents paid to anthony j vose properties during the year amounted to £100000 
2008 £59000 during the year the company repaid an unsecured loan of £100000 from a j vose interest of £nil was charged on the 
loan during the financial year 2008 £8000    
 51 
 
 
spiritel plc  
annual report and accounts 2009 
28 related party transactions continued 
transactions with key management personnel 
key management personnel remuneration includes the following expenses 
 
2009
£000 
2008
£000 
shortterm employee benefits 
salaries bonuses and commissions 107 171
social security costs 12 16
 119 187
sharebased payments – 3
 119 190
29 post balance sheet events 
during september 2009 the company entered into an agreement with penta capital llp the manager of the penta funds for the 
modification of the conversion terms attaching to the penta loans loan notes and redeemable preference shares the agreement is conditional 
upon the following 
– the granting of a waiver by the panel on takeovers and mergers of the requirement under rule 9 of the city code on takeovers and 
mergers that would otherwise arise on penta fund 1 limited partnership and penta fund 1 sp limited partnership the “penta funds”  
to make a general offer to shareholders of the company as a result of the allotment of new ordinary shares to the penta funds which  
would take the aggregate holding of the penta funds to greater than 50 of the issued ordinary share capital 
– a review of the conversion terms by the company’s nominated adviser and confirmation that the directors consider the terms of conversion 
are fair and reasonable so far as the spiritel shareholders are concerned 
– approval of the waiver and modification of the conversion terms by the ordinary shareholders at an extraordinary general meeting 
subject to shareholder approval at an extraordinary general meeting  
– all of the current rights to convert the company’s indebtedness to the penta funds into ordinary shares will lapse immediately 
– all of the current rights to interest on the company’s indebtedness to the penta funds will lapse immediately 
– the penta funds will immediately convert up to £685 million of the company’s indebtedness into ordinary shares of the company at the 
price of 06p per ordinary share so that following this conversion the penta funds aggregate holding will represent up to 823 of the 
company’s issued ordinary share capital 
   
 52 
company balance sheet 
 
spiritel plc  
annual report and accounts 2009 
as at 30 april 2009 
 
note 
2009 
£000 
2008
£000 
fixed assets   
tangible assets 5 21 14
investments  6 12662 19683
  12683 19697
current assets   
debtors  7 2174 2328
  2174 2328
creditors amounts falling due within one year 8 5880 3941
net current liabilities  3706 1613
total assets less current liabilities  8977 18084
creditors amounts falling due after more than one year 9 9585 14693
net liabilitiesassets  608 3391
   
capital and reserves   
called up share capital 10 6276 3162
share premium 11 4935 4550
other reserves 11 1965 565
profit and loss account  11 13784 4886
shareholders’ deficitfunds 13 608 3391
these financial statements were approved by the board of directors on 30 september 2009 and signed on its behalf by 
a r mills   r w smith 
chief executive officer chief financial officer 
 
 
 
the notes on pages 53 to 61 are an integral part of these financial statements  
 53 
notes to the company financial statements 
 
spiritel plc  
annual report and accounts 2009 
1 accounting policies 
basis of preparation 
the financial statements have been prepared under the historical cost convention and in accordance with applicable united kingdom  
accounting standards 
sharebased payments 
equitysettled sharebased payment  
the company issues equitysettled benefits to certain directors and employees all sharebased payment arrangements granted after  
7 july 2005 that had not vested prior to 1 may 2006 are recognised in the financial statements where employees are rewarded using  
sharebased payments the fair values of employees’ services are determined indirectly by reference to the fair value of the instrument granted  
to the employee this fair value is appraised at the grant date and excludes the impact of nonmarket vesting conditions all equitysettled  
sharebased payments are ultimately recognised as an expense in the profit and loss account with a corresponding credit to other reserves 
if vesting periods or other nonmarket vesting conditions apply the expense is allocated over the vesting period based on the best available 
estimate of the number of share options expected to vest estimates are revised subsequently if there is any indication that the number of  
share options expected to vest differs from previous estimates any cumulative adjustment prior to vesting is recognised in the current period  
no adjustment is made to any expense recognised in prior periods if share options that have vested are not exercised 
upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital and where appropriate 
additional paid in capital 
tangible fixed assets and depreciation 
tangible fixed assets are included at cost less accumulated depreciation and any provision for impairment depreciation is provided on tangible 
fixed assets excluding land on a straight line basis to write off their historical cost less estimated residual value over their estimated useful 
economic lives as follows 
leasehold improvements  – over the period of the lease 
office and computer equipment – 10 or 33 straight line 
investments 
investments are included at cost less provisions for impairment 
leased assets 
finance leases and hire purchase agreements 
where the company enters into a lease that transfers substantially all the risks and rewards of ownership of an asset to the lessee the lease  
is treated as a finance lease the asset is recorded in the balance sheet as a tangible fixed asset at the present value of the minimum lease 
payments and is depreciated over the shorter of the lease term and the asset’s useful economic life future instalments under such leases  
net of finance charges are included in creditors rentals payable are apportioned between the finance element which is charged to the profit 
and loss account at a constant rate of charge on the balance of capital repayments outstanding and the capital element which reduces the 
outstanding obligation 
operating lease agreements 
leases where substantially all of the risks and rewards of ownership are not transferred to the company are treated as operating leases  
rentals under operating leases are charged against profits on a straightline basis over the period of the lease   
 54 
notes to the company financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
1  accounting policies continued 
current tax 
the current tax charge is based on the profit or loss for the year and is measured at the amounts expected to be paid based on the tax rates 
and laws substantively enacted by the balance sheet date current and deferred tax is recognised in the profit and loss account for the period 
except to the extent that it is attributable to a gain or loss that is or has been recognised directly in the statement of total recognised gains and 
losses 
deferred tax 
deferred tax is recognised on all timing differences where the transactions or events that give the company an obligation to pay more tax in  
the future or a right to pay less tax in the future have occurred by the balance sheet date deferred tax assets are recognised when it is more 
likely than not that they will be recovered deferred tax is measured on an undiscounted basis using rates of tax that have been enacted or 
substantially enacted by the balance sheet date 
foreign currency 
transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction monetary assets and liabilities in 
foreign currencies are translated at the rate of exchange ruling at the balance sheet date all exchange differences are dealt with through the 
profit and loss account 
contributions to pension schemes 
the company contributes to the personal pension schemes of certain directors and employees the pension costs are charged against 
operating profit in the relevant accounting period  
financial instruments 
financial assets are recognised when the company becomes a party to the contractual provisions of the instrument financial liabilities are 
obligations to pay cash or other financial assets and are recognised when the company becomes a party to the contractual provisions of the 
instrument financial liabilities categorised as at fair value through profit or loss are recorded initially at fair value and all transaction costs are 
recognised immediately in the profit and loss account all other financial liabilities are recorded initially at fair value net of direct issue costs 
financial liabilities categorised as at fair value through profit or loss are remeasured at each reporting date at fair value with changes in fair value 
being recognised in the profit and loss account all other financial liabilities are recorded at amortised cost using the effective interest method 
with interestrelated charges recognised as an expense in finance cost in the profit and loss account finance charges including premiums 
payable on settlement or redemption and direct issue costs are charged to the profit and loss account on an accruals basis using the effective 
interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise 
classification as equity or financial liability 
financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into 
a financial liability exists where there is a contractual obligation to deliver cash or another financial asset to another entity or to exchange financial 
assets or financial liabilities under potentially unfavourable conditions in addition contracts which result in the entity delivering a variable number 
of its own equity instruments are financial liabilities shares containing such obligations are classified as financial liabilities 
finance costs and gains or losses relating to financial liabilities are included in the profit and loss account the carrying amount of the liability is 
increased by the finance cost and reduced by payments made in respect of that liability  
finance costs are calculated so as to produce a constant rate of charge on the outstanding liability  
an equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities  
dividends and distributions relating to equity instruments are debited directly to reserves 
compound instruments 
compound instruments comprise both a liability and an equity component the elements of a compound instrument are classified in 
accordance with their contractual provisions at the date of issue the liability component is recorded at fair value which is estimated using  
the prevailing market interest rate for a similar debt instrument without the equity feature thereafter the liability component is accounted for  
as a financial liability in accordance with the accounting policy set out above 
the residual is the equity component which is accounted for as an equity instrument 
embedded derivatives 
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and 
characteristics are not closely related to those of the host contracts embedded derivatives are recorded initially at fair value net of issue costs   
 55 
 
 
spiritel plc  
annual report and accounts 2009 
2  employees 
the average number of employees of the company including directors was made up as follows 
 
2009
number 
 2008
number 
administration 7 5
management 3 2
 10 7
 
 
2009
£000 
2008
£000 
staff costs including directors amounted to 
wages and salaries 629 546
social security costs 78 59
sharebased payments 204 150
 911 755
the total number of employees including directors at 30 april 2009 was 10 2008 8 
3 directors’ remuneration 
remuneration in respect of the directors was as follows 
 
2009
£000 
 2008
£000 
emoluments and benefits in kind 529 617
compensation for loss of office – 13
 529 630
remuneration in respect of the highest paid director was £169000 2008 £245000 further details of directors’ remuneration are given in the 
directors’ remuneration report on pages 15 to 17 
4 loss attributable to the company 
the loss for the financial year of the company was £9247000 2008 £4532000 
in accordance with section 408 of the companies act 2006 the company is exempt from the requirements to present its own profit and  
loss account   
 56 
notes to the company financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
5 tangible fixed assets 
 
leasehold 
improvements 
£000 
office and 
computer 
equipment 
£000 
total 
£000 
cost   
at 1 may 2008 11 9 20
additions 8 5 13
at 30 april 2009 19 14 33
depreciation   
at 1 may 2008 1 5 6
charge for the year 3 3 6
at 30 april 2009 4 8 12
net book amount at 30 april 2009 15 6 21
net book amount at 30 april 2008 10 4 14
6 fixed asset investments  
 
subsidiary
undertakings
£000 
cost  
at 1 may 2008 19800
additions 1406
other adjustments 49
at 30 april 2009 21157
amounts written off 
at 1 may 2008 117
amounts written off during the year 8378
at 30 april 2009 8495
net book amount at 30 april 2009 12662
net book amount at 30 april 2008 19683
the additions in the year relate principally to the purchase of the whole of the issued share capital of ed communications limited £1406000 
immediately following its acquisition the name of ed communications limited was changed to spiritel networks london limited further 
detail concerning this acquisition is given in note 15 to the consolidated financial statements 
the other adjustment to investment relates to a refund of purchase consideration in respect of wn1 limited following agreement of the 
completion accounts 
amounts written off during the year comprises £7820000 in respect of spiritel technologies limited and £558000 in respect of spiritel 
callplan limited as a result of an impairment review by management of the carrying value of the investments in the company’s subsidiaries   
 57 
 
 
spiritel plc  
annual report and accounts 2009 
6 fixed asset investments continued 
at 30 april 2009 the company had interests in the following subsidiary companies all of which are registered in england and wales to avoid  
a disclosure of excessive length dormant subsidiaries have been excluded 
name of subsidiary trading activity 
class of share
capital held 
holding
 
spiritel technologies limited provision of telecommunication services ordinary100
spiritel managed services limited provision of telecommunication services ordinary 100
expo communications limited intermediate holding company ordinary 100
spiritel ip communications limited  provision of telecommunications services ordinary 100
spiritel ip communications london limited provision of telecommunication services ordinary 100
spiritel networks limited provision of telecommunication services ordinary100
spiritel networks london limited provision of telecommunication services ordinary 100
spiritel callplan limited provision of telecommunication services ordinary100
spiritel mobile limited provision of telecommunication services ordinary100
the holding in spiritel ip communications limited is indirect through expo communications limited an intermediate holding company 
7 debtors 
 
2009
£000 
2008
£000 
amounts owed by subsidiary undertakings 2071 2157
other debtors – 57
prepayments and accrued income 103 114
 2174 2328
all the above fall due within one year 
8 creditors amounts falling due within one year 
 
2009
£000 
2008
£000 
bank loans see note 9 708 357
overdrafts see note 9 34 135
director’s loan – 100
other loans  300 –
trade creditors 56 409
amounts owed to subsidiary undertakings 3888 2372
accruals and deferred income 103 405
deferred and contingent consideration  781 150
other creditors 10 13
 5880 3941
   
 58 
notes to the company financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
9 creditors amounts falling due after more than one year 
 
2009 
£000 
2008
£000 
loan notes – penta 770 770
loan notes – other – 248
other loans – penta 5122 5566
redeemable preference shares 1959 6287
bank loans 1618 1390
deferred and contingent consideration 116 432
 9585 14693
the terms of all the borrowings noted above are detailed in note 20 to the consolidated financial statements 
the bank loans bear interest at 275 above the clydesdale bank base rate 
the bank loans and overdrafts are secured by debentures over all of the assets and undertaking of the company and its subsidiaries supported 
by cross guarantees between the company and those subsidiaries the company participates with its subsidiaries in a group overdraft facility 
of up to £250000 of which £nil was available to the group and undrawn at 30 april 2009 2008 £84000 the company has no other 
undrawn committed borrowing facilities available to it at 30 april 2009 2008 £nil 
the penta loans and loan notes carry the right of conversion into the company’s ordinary shares and have been classified as a host debt with 
an embedded derivative in accordance with frs 25 the carrying value of the host debt at 30 april 2009 is £5892000 and the value of the 
embedded derivative is £nil 
the treatment of the redeemable preference shares is detailed in note 10 to the company financial statements the creditors falling due after 
more than one year are repayable as follows 
 
2009 
£000 
2008
£000 
between one and two years  
– debt component of redeemable preference shares 1959 6287
– other loans penta 5122 5566
– loan notes 770 1018
– bank loans 709 357
– deferred and contingent consideration 116 432
 8676 13660
between two and five years  
– bank loans 909 1033
 9585 14693
   
 59 
 
 
spiritel plc  
annual report and accounts 2009 
10 share capital 
the ordinary share capital of the company consists only of shares of par value of 1p each all ordinary shares are equally eligible to receive 
dividends and represent one vote at the shareholder meetings of the company 
the preference share capital of the company consists only of redeemable preference shares with a par value of £1 each the preference shares 
are convertible together with a redemption premium of £1025000 into ordinary shares at a price which is the higher of i 15p and ii the price 
at which the last subscribers for ordinary shares had subscribed 
ordinary shares 
 
2009
number 
2009 
£000 
2008
number 
2008
£000 
authorised  
ordinary shares of 1p each 2000000000 20000 1500000000 15000
allotted called up and fully paid  
shares classified as equity  
ordinary shares of 1p each  627639692 6276 316233646 3162
the authorised share capital of the company was increased by the creation of 500000000 new ordinary shares as a result of a resolution 
passed by the shareholders at an extraordinary general meeting held on 22 may 2008 
the company issued and allotted ordinary 1p shares “shares” during the year as follows 
– on 22 may 2008 penta fund 1 limited partnership and penta fund 1 sp limited partnership converted an aggregate of 2611467 
preference shares at 11p per share into 237406046 shares following the approval by the company’s shareholders in an extraordinary 
general meeting of the grant by the panel on takeovers and mergers of a waiver in favour of the penta funds of any obligation on them  
to make a mandatory offer for the company in the event that they implement conversion rights attaching to loan instruments held by them 
which could result in them holding up to an aggregate of 4999 of the company’s issued ordinary share capital 
– on 16 october 2008 37000000 shares to a group of private investors directors and employees in order to raise net proceeds  
of £370000 
– on 20 october 2008 37000000 shares to the penta funds at 15p per share to convert an aggregate of 555000 preference shares 
preference shares 
the terms of the preference shares give to the holder penta capital rights of conversion to ordinary shares as described above in accordance 
with frs 25 the preference shares are considered to be a host debt with an embedded derivative the carrying value of the preference shares  
in the financial statements is analysed below 
 
2009
number 
2008
number 
authorised 
redeemable preference shares of £1 each 933533 4100000
allotted called up and fully paid 
shares classified as financial liabilities  
redeemable preference shares of £1 each 933533 4100000
 
 
2009
£000 
2008
£000 
principal 934 4100
redemption premium 1025 1025
embedded derivative and other modification adjustments – 1495
 1959 6620
presented as 
debt 1959 6287
equity other reserves – 333
 1959 6620  
 60 
notes to the company financial statements continued 
 
spiritel plc  
annual report and accounts 2009 
11 reserves 
company  
share premium 
£000 
other 
reserves 
£000 
profit and
loss account
£000 
at 1 may 2008 4550 565 4886
retained loss for the year – – 9247
issue of share capital net of expenses 385 – –
credit for equitysettled sharebased payments – 204 –
modification and conversion of financial instruments – equity component – 1545 –
transfer between reserves – 349 349
at 30 april 2009 4935 1965 13784
12  sharebased payments 
information regarding equity settled and cash settled sharebased payments is provided in note 27 to the consolidated financial statements 
13  reconciliation of movements in shareholders’ deficitfunds 
 
2009 
£000 
2008
£000 
retained loss for the financial year 9247 4532
credit for equity settled sharebased payments 204 190
modification and conversion of financial instruments – equity component 1545 333
issue of share capital net of expenses 3499 –
net decrease in shareholders’ deficitfunds 3999 4009
opening shareholders’ funds 3391 7400
closing shareholders’ deficitfunds 608 3391
14 capital commitments 
there were outstanding capital commitments of £nil at 30 april 2009 2008 £nil 
15 leasing commitments 
 
2009 
£000 
2008
£000 
annual commitments under noncancellable operating leases are as follows  
leases of land and buildings expiring   
between two and five years 105 105
   
 61 
 
 
spiritel plc  
annual report and accounts 2009 
16 transactions with related parties 
other related party transactions 
the company’s related parties include its directors and companies controlled by or associated with its directors as disclosed below 
transactions with directors and related parties in respect of their services as directors are disclosed in the directors’ remuneration report  
on pages 15 to 17 
other related party transactions during the year were as follows 
penta capital partners limited through its managed funds penta fund 1 limited partnership and penta fund 1 sp limited partnership  
the “penta funds” is the holder of 4999 of the company’s issued ordinary 1p shares and all of the company’s issued redeemable 
preference shares steven scott a director of the company is also a director of penta capital partners limited during the year the penta 
funds converted preference shares into ordinary shares in the company as detailed in note 11 loan notes all of which are outstanding to  
the penta funds are described in note 9 penta fund 1 limited partnership held options over 100000 ordinary shares of the company at  
an exercise price of 725p per ordinary 1p share as at 30 april 2009 fees paid to penta capital partners limited in respect of steven scott’s 
services as a director of the company are detailed in the directors’ remuneration report on pages 15 to 17 at 30 april 2009 the outstanding 
balance within creditors in respect of these fees was £14000 2008 £89000 the prior year balance includes outstanding amounts in respect 
of loan arrangement fees due to penta capital partners limited 
17 post balance sheet events 
during september 2009 the company entered into an agreement with penta capital llp the manager of the penta funds for the modification 
of the conversion terms attaching to the penta loans loan notes and redeemable preference shares the agreement is conditional upon  
the following 
– the granting of a waiver by the panel on takeovers and mergers of the requirement under rule 9 of the city code on takeovers and 
mergers that would otherwise arise on penta fund 1 limited partnership and penta fund 1 sp limited partnership the “penta funds”  
to make a general offer to shareholders of the company as a result of the allotment of new ordinary shares to the penta funds which  
would take the aggregate holding of the penta funds to greater than 50 of the issued ordinary share capital 
– a review of the conversion terms by the company’s nominated adviser and confirmation that the directors consider the terms of conversion 
are fair and reasonable so far as the spiritel shareholders are concerned 
– approval of the waiver and modification of the conversion terms by the ordinary shareholders at an extraordinary general meeting 
subject to shareholder approval at an extraordinary general meeting 
– all of the current rights to convert the company’s indebtedness to the penta funds into ordinary shares will lapse immediately 
– all of the current rights to interest on the company’s indebtedness to the penta funds will lapse immediately 
– the penta funds will also immediately convert up to £685 million of the company’s indebtedness into ordinary shares of the company at  
the price of 06p per ordinary share so that following this conversion the penta funds aggregate holding will represent up to 823 of the 
company’s issued ordinary share capital   
 62 
notice of annual general meeting  
 
spiritel plc  
annual report and accounts 2009 
notice is hereby given that an annual general meeting of the shareholders of the company will be held at the offices  
of hammonds llp 7 devonshire square london ec2m 4yh at 1030 am on 30 october 2009 for the following purposes 
ordinary business 
1 to receive the directors’ report and accounts for the year ended 30 april 2009 and the auditors’ report thereon 
2 to reappoint as a director ronnie smith who retires in accordance with article 88 of the articles of association 
3 to reappoint as a director lord st john of bletso who retires in accordance with article 88 of the articles of association 
4 to reappoint grant thornton uk llp of 4 hardman square spinningfields manchester m3 3eb as the auditors of the company  
and to authorise the directors to fix their remuneration and 
ordinary resolutions 
5 the authorised share capital of the company be and is hereby increased from £49100000 to £74100000 by the creation of 2500000000 
new ordinary shares of 1p each each ranking pari passu in all respects with the existing ordinary shares of 1p each in the capital of the 
company and having the rights and being subject to the restrictions set out in the company’s articles of association 
it is expected that at the time that resolution 5 is to be proposed the company’s authorised share capital will be £49100000 the share capital 
having been increased pursuant to resolutions to be proposed at the company’s general meeting proposed to be held on 30 october 2009  
the “egm” if the resolution to increase share capital is not passed at the egm the authority proposed to be taken pursuant to this resolution  
is to increase the share capital of the company from £24100000 to £74100000 by the creation of 5000000000 new ordinary shares of  
1p each each ranking pari passu in all respects with the existing ordinary shares of 1p each in the capital of the company and having rights  
and being subject to the resolutions set out in the company’s articles of association 
6 the directors of spiritel plc be and they are hereby generally and unconditionally authorised for the purpose of section 551 of the companies 
act 2006 the “2006 act” to exercise all or any of the powers of the company to allot relevant securities as defined below up to the nominal 
amount of £250000 
the authorities conferred by this resolution shall expire at the conclusion of the next annual general meeting of the company unless  
previously renewed revoked or varied by the company in general meeting provided that the company may before such expiry make an  
offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors of the company may  
allot relevant securities in pursuance of such offer or agreement notwithstanding that the authority conferred hereby has expired 
in this resolution the expression “relevant securities” means 
– shares in the company other than shares allotted pursuant to 
– an employee share scheme as defined by section 1166 of the 2006 act 
– a right to subscribe for shares in the company where the grant of the right itself constituted a relevant security or 
– a right to convert securities into shares in the company where the grant of the right itself constituted a relevant security 
– any right to subscribe for or to convert any security into shares in the company other than rights to subscribe for or convert any security 
allotted pursuant to an employee share scheme as defined by section 1166 of the 2006 act references to the allotment of relevant 
securities in the resolution include the grant of such rights 
if the resolutions to reorganise the share capital are not passed at the egm the authority proposed to be taken pursuant to this resolution is  
to be £25000000 
special business 
special resolutions 
7 the directors of spiritel plc be and they are hereby empowered pursuant to section 570 of the 2006 act to allot equity securities as defined 
in section 560 of the 2006 act wholly for cash pursuant to the authority conferred by resolution 6 above as if section 5611 of the 2006 act 
did not apply to any such allotment provided that this power shall be limited to 
i the allotment of equity securities in connection with a rights issue open offer or other offer in favour of the holders of ordinary shares in  
the company on the register of members at such record dates as the directors may determine and other persons entitled to participate 
therein where the equity securities respectively attributable to the interests of the ordinary shareholders are proportionate as nearly as  
may be practicable to the respective numbers of ordinary shares in the company held or deemed to be held by them on any such record 
dates which shall include the allotment of equity securities to any underwriter in respect of such issue or offer subject to such exclusions 
or other arrangements as the directors may deem necessary or expedient to deal with fractional entitlements or any legal or practical 
problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange or by virtue of 
shares being represented by depositary receipts or any other matter whatever and 
ii the allotment of equity securities otherwise than pursuant to paragraph i above to any person or persons up to an aggregate nominal 
amount of £250000   
 
 63 
 
spiritel plc  
annual report and accounts 2009 
spiritel plc  
annual report and accounts 2009 
the authorities conferred by this resolution shall expire at the conclusion of the next annual general meeting of the company unless previously 
renewed revoked or varied by the company in general meeting save that the company may before such expiry make an offer or agreement 
which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of any 
such offer or agreement notwithstanding that the power conferred hereby has expired and this power applies in relation to a sale of shares 
which is an allotment of equity securities by virtue of section 5602b of the 2006 act as if in the first paragraph of this resolution the words 
“pursuant to the authority conferred by resolution 6 above” were omitted 
if the resolutions to reorganise share capital and to allot new shares are not passed at the egm the authority proposed to be taken pursuant  
to this resolution other than on a rights issue or other preemptive issue of shares is to be £25000000 
8 the company’s articles of association be amended by the deletion in article 511 of the words “and any other general meeting at which  
it is proposed to pass a special resolution or save as provided by the statutes a resolution of which special notice has been given to  
the company” 
 
by order of the board 
 
 
a a booth 
company secretary 
registered office 18 king william street london ec4n 7bp 
30 september 2009 
notes 
1 a shareholder is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and speak and vote at the annual general meeting a shareholder may appoint 
more than one proxy in relation to the annual general meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder  
a member wishing to appoint more than one proxy should photocopy the proxy card and indicate on each copy the name of the proxy he appoints and the number of shares in respect of 
which that proxy is appointed   if you submit more than one valid proxy appointment in relation to the same shares the appointment received last before the latest time for receipt of proxies 
will take precedence 
2 the appointment of a proxy must be in writing in any usual or common form or in any other form which the directors may approve and i in the case of an individual must either be signed 
by the appointor or his attorney and ii in the case of a corporation must be either given under its common seal or be signed on its behalf by an attorney or a duly authorised officer of the 
corporation any signature on or authentication of such appointment need not be witnessed where an appointment of a proxy is signed on behalf of the appointor by an attorney the power 
of attorney or a copy thereof certified notarially or in some other way approved by the directors must failing previous registration with the company be submitted to the company failing 
which the appointment may be treated as invalid 
3 a form of proxy is enclosed with this annual report and accounts the appointment of a proxy will not prevent a shareholder from subsequently attending and voting at the annual 
general meeting in person 
4 to be effective the instrument appointing a proxy and any power of attorney or other authority under which it is executed or a duly certified copy of any such power of authority must 
either be a sent to the company’s registrars neville registrars of 18 laurel lane halesowen west midlands b63 3da so as to arrive no later than 600 pm on 28 october 2009 or  
if the annual general meeting is adjourned 48 hours before the time fixed for the adjourned annual general meeting or b lodged using the crest proxy voting service – see note 7 below 
5 holders of ordinary shares are entitled to attend and vote at general meetings of the company the total number of issued ordinary shares in the company on 30 september 2009  
which is the latest practicable date before the publication of this notice is 617639692 on a vote by show of hands every member who is present shall have one vote on a poll vote  
every member who is present in person or by proxy shall have one vote for every ordinary share of which he is the holder 
6 entitlement to attend and vote at the meeting and the number of votes which may be cast at the meeting will be determined by reference to the company’s register of members at  
1030 am on 28 october 2009 or if the meeting is adjourned 48 hours before the time fixed for the adjourned meeting as the case may be in each case changes to the register  
of members after such time will be disregarded 
7 in order for a proxy appointment or instruction made by means of crest to be valid the appropriate crest message a “crest proxy instruction” must be properly authenticated  
in accordance with euroclear’s applications and must contain the information required for such instructions as described in the crest manual the message regardless of whether it 
constitutes the appointment of a proxy the revocation of a proxy appointment or an amendment to the instruction given to a previously appointed proxy must in order to be valid be 
transmitted so as to be received by the issuer’s agent id 7ra11 by the latest times for receipt of proxy appointments specified in note 4 above for this purpose the time of receipt  
will be taken to be the time as determined by the timestamp applied to the message by the crest applications host from which the issuer’s agent is able to retrieve the message by 
enquiry to crest in the manner prescribed by crest after this time any change of instructions to a proxy appointed through crest should be communicated to him by other means 
8 crest members and where applicable their crest sponsors or voting service providers should note that euroclear does not make available special procedures in crest for any 
particular messages normal system timings and limitations will therefore apply in relation to the input of crest proxy instructions it is the responsibility of the crest member concerned  
to take or if the crest member is a crest personal member or sponsored member or has appointed a voting service provider to procure that his crest proxy or voting service  
provider takes such action as shall be necessary to ensure that a message is transmitted by means of the crest system by any particular time in this connection crest members  
and where applicable their crest sponsors or voting service providers are referred in particular to those sections of the crest manual concerning practical limitations of the crest 
system and timings 
9 the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of the uncertificated securities regulations 2001 
10 in the case of joint holders where more than one of the joint holders purports to appoint a proxy only the appointment submitted by the most senior holder will be accepted  
seniority is determined by the order in which the names of the joint holders appear in spiritels register of members in respect of the joint holding the firstnamed being the most senior   
 64 
company information and advisers 
spiritel plc  
annual report and accounts 2009 
secretary and registered office 
a a booth 
18 king william street 
london ec4n 7bp 
registered number 
5035921 
nominated advisers and brokers 
jm finn capital markets limited 
4 coleman street 
london 
ec2r 5ta 
bankers 
clydesdale bank plc 
30 st vincent place 
glasgow g1 2hl 
solicitors 
hammonds llp 
2 park lane 
leeds ls3 1es 
 
auditors 
grant thornton uk llp 
4 hardman square 
spinningfields 
manchester m3 3eb 
public relations advisers 
tavistock communications limited 
131 finsbury pavement 
london ec2a 1nt 
registrars 
neville registrars limited 
neville house 
18 laurel lane 
halesowen b63 3da 
  design and production by radley yeldar
wwwrycom annual report and accounts 2009
spirit el plc 
18 king william street 
london ec4n 7bp 
t 44 020 7160 0100 
f 44 020 7929 5469 
wwwspiritelplccom


Summary:
 “we operate in a dynamic sector and the board 
believes that we now stand at a particularly 
exciting point in the company’ s development”
spirit el has matured considerably in the year 
under review our sixth acquisition further 
enhances our reputation as a leading 
consolidator of the telecoms reseller sector 
and together with our success in crosssales 
demonstrates our ability to deliver organic  
and acquisitive growth as a management 
team we are constantly reviewing acquisition 
opportunities that can grow earnings  
enhance the product set and provide more 
crossselling opportunities we operate in  
a dynamic sector and the board believes that 
we now stand at a particularly exciting point in 
the company’ s development the accelerating 
migration to converged communications  
is a driving force behind increased levels of 
corporate activity in the sector convergence  
is also changing customer behaviour with 
more businesses insisting that their supplier 
offers the full range of fixed mobile voice  
and data services for those companies that 
have capital to deploy for acquisitions and  
an integrated product range to sell to business 
customers these are exciting times
financial highlights
the year to 30 april 2009 represents  
a full year’ s contribution from all of spirit el’ s 
acquisitions to date apart from edc this  
is reflected in significantly improved financial 
results despite one of the most challenging 
trading environments seen for many years 
particularly in the t echnologies division’ s 
wholesale markets performance was improved 
in each of the following key financial metrics
our acquisition strategy involves buying quality 
businesses with attractive customer bases integrating 
them swiftly and driving forward the resulting synergy 
benefits of cost savings and new sales opportunities
acquire
04
alastair mills chief executive
chief executive’ s review –  revenue up 18 to £197 million  
2008 £167 million
–  gross profit up 19 to £76 million  
2008 £64 million
–  underlying ebitda up 61 to £15 million 
2008 £09 million
the 18 increase in group revenue is pleasing 
given the difficult economic conditions but 
even more so is the 53 growth in business 
division revenues largely offsetting a 5 
decline in the lower margin wholesale services 
from the t echnologies division the increasing 
contribution from our business division 
represents a significant change in the group’ s 
earnings profile the majority of the business 
division’ s revenues are generated from 
longterm contracts of up to seven years 
providing a greater level of earnings visibility  
to the group as a whole 
the 61 increase in underlying ebitda 
demonstrates the success of our “acquire 
integrate grow” model 
 in particular we are able to convert significant 
elements of gross profit directly into ebitda 
by bolting acquisitions quickly and efficiently 
onto our already established operations and 
existing cost base by effective profiling of 
newlyacquired customers we then identify 
and pursue crosssale opportunities
the loss before taxation for the year was 
£17million 2008 £40million loss after 
deducting noncash finance charges of 
£08million 2008 £31million the noncash 
finance charges relate to ifrs costs on 
modification and conversion of indebtedness 
to penta
since the year end we have agreed a 
proposed balance sheet restructuring with 
penta converting up to £69 million of debt into 
equity at a price of 06p per ordinary share 
this follows on from a similar £26 million debt 
to equity conversion by penta in may 2008 
the directors believe that the proposed 
conversion of penta debt will benefit spirit el  
in a number of ways the company will have a 
much stronger balance sheet unencumbered 
by £69 million of penta indebtedness and at 
the conversion price the proposed conversion 
will significantly increase the market 
capitalisation of the company in addition  
the company will not be liable for the £550000  
annual interest cost which is due to accrue 
from may 2010 with a stronger balance sheet 
spirit el will be better positioned to raise capital 
and continue its recent successful acquisitive 
strategy focusing on earnings enhancing 
transactions penta’ s support for spirit el is 
invaluable and we thank them for their 
continued faith in our business model and 
management team 
we also continue to benefit from the support 
of clydesdale bank during the year under 
review we secured an extension to our loan 
facility to fund the acquisition of ed 
communications and at the year end we had 
a total facility of £34million with the bank in 
may 2009 the group’ s facilities were increased 
to £45million repayable over five years 
strategy
despite the ongoing consolidation in our 
sector the uk telecommunications market 
remains highly fragmented this alongside  
the accelerating demand from customers  
for converged ipbased services provides  
the opportunity for us to further execute  
the group’ s “acquire integrate grow” strategy  
our strategy is to grow shareholder value 
through selective earnings enhancing 
acquisitions followed by consistent organic 
growth being driven by crossselling our 
integrated product portfolio
 operating profit after adding back charges for depreciation 
amortisation sharebased payments and exceptional costs
05 spirit el continues to pursue selective 
acquisitions as we look to build a business  
with the operational scale and the broad 
product offering that business and corporate 
consumers increasingly demand having 
completed six acquisitions led by the same 
management team not only are we clear  
on the type of businesses that we are looking 
for in terms of quickly adding value to the 
group but we are also experienced in the 
critical phase of integration which commences  
well in advance of completion of the deal  
all acquisitions now follow the same integration 
framework which was developed internally  
to meet our corporate objectives the process 
is led by a senior member of the management 
team and helps ensure that we maximise  
both cost and revenue synergy opportunities 
whilst minimising disruption to the group  
and the newlyacquired business
we expect to continue to target growth 
through earnings enhancing acquisitions and 
following the proposed restructure of our 
balance sheet we expect to be well positioned 
to raise new capital to deploy in the acquisition 
of new customers and products in order  
to enhance earnings 
 in recent months we have been particularly 
encouraged by our successes in crosssales 
of our growing product range to existing 
customers during the 12 month period to 
april 2009 we secured crosssales contracts 
valued at more than £7 million this is 
contracted and recurring revenue and delivers 
a new level of earnings visibility to the group 
during the year we profiled our expanded 
customer base and estimated that our existing 
customers are spending a total of over  
£80 million on telecoms services that spirit el 
could potentially provide from our current 
product portfolio although rapidly growing 
our penetration of this spend is currently less 
than 15 which illustrates the upside 
opportunity which we intend to exploit by 
deploying our successful crossselling strategy 
the quick and efficient integration of our acquisitions  
is key to the rapid delivery of their earnings potential 
and the successful crossselling of our broadening 
product offering into existing and new customers  
we have demonstrated our ability to speedily integrate 
new businesses into the spirit el business 
infrastructure creating cost savings and generating 
new crossselling opportunities
integrate
06
alastair mills chief executive
chief executive’ s review continued acquisitions
spirit el continued its recent series of 
acquisitions this year with the purchase of ed 
communications which added approximately 
700 business customers who were rapidly 
integrated into our networks line of business 
this acquisition provides a typical example  
of how the group is now able to bolt on a 
customer base efficiently and then enhance  
its contribution through cost synergies and 
crossselling the total consideration for  
this company will total £14 million including 
earn out
the full year contribution from mobile business 
wn1 acquired in april 2008 proved even 
more successful than we had hoped and this 
line of business continues to deliver strong 
organic growth wn1 is highly profitable and  
by adding a range of mobile voice and data 
services the transaction completed our 
integrated product portfolio since the year 
end converged voice and data mobile 
solutions have grown to over one third of our 
total mobile sales not only are we delighted 
with the earnings contribution from wn1 now 
integrated as spirit el mobile but the mobility 
offering is a differentiator in comparison to 
many competitors who are limited to a fixed 
line offering 
during the year we looked closely at a number 
of acquisition opportunities including several 
larger companies we believe we have 
demonstrated our ability to grow shareholder 
value from the selective addition of bolt on 
acquisitions and we continue to actively 
pursue opportunities which deliver shortterm 
earnings enhancement benefits and crosssell 
opportunities 
operations
spirit el’ s customer base now numbers some 
2300 separate accounts for business and 
public sector companies and organisations 
greater customer numbers result in increased 
crossselling opportunities and although we 
focus on larger customers more than many  
of our competitors the size of the base is an 
obvious yet important key performance 
indicator for the business division the current 
customer base is 53 larger than at april 
2008 and 227 above 2007 levels 
our customers are served by our two 
complementary divisions spirit el business 
and spirit el t echnologies – working alongside 
and supporting each other the business 
division has three lines of business ip 
communications networks and mobile 
spirit el ip communications provides an 
advanced range of ip networking services  
to business customers alongside traditional 
structured cabling equipment and 
maintenance services spirit el networks offers 
fixed line services including calls lines and 
broadband spirit el mobile provides mobile 
voice and data services including blackberry 
and other converged voice and data services
spirit el has achieved the highest o2 
accreditation and is one of just a few o2 
centre of excellence coe partners in the uk  
the o2 centre of excellence is an industry 
leading programme which continues to set 
demanding qualifying criteria including 
exceptional customer service and commitment 
to the business sector 
spirit el is also a member of the blackberry 
alliance spirit el provides the blackberry® 
solution allowing users to stay connected  
with wireless access to email corporate data 
phone web and organiser features with  
a blackberry solution you can enhance the 
productivity of your organisation by pushing 
data out to where it’ s needed most – your 
mobile workforce
spirit el has a longstanding relationship  
with mitel one of the world’ s leading providers  
of ip based communications solutions for 
business customers after a continued period 
of investment in training and support on  
both sides spirit el has achieved the highest 
accreditation possible – premier partner  
using a mitel 3600 platform spirit el also  
rolled out two of the uk’ s largest hosted voip 
contracts for regent inns and youngs we are 
also an accredited mitel hospitality specialist
07 spirit el has experienced rapid growth in revenues 
earnings and customer numbers among our 
expanding customer base are a number of diverse  
blue chip companies with whom we have longstanding 
relationships our organic growth strategy includes 
selling more products into each of our customers
grow
whilst ensuring our team delivers an 
exceptional level of customer service during 
the year we have focused on cost control  
and despite the edc acquisition and the 
associated addition of 700 new customers 
staff numbers have only risen to 109 at the 
year end 2008 104 we continue to offer 
nationwide engineering coverage to our 
customers along with 247365 support  
we have also been able to reduce our cost 
base through the utilisation of our own 
technological expertise in the remote 
management of customer sites over 70  
of customer faults reported to our ip 
communications service team are now  
fixed remotely from our operations centres  
in london and wigan with no employee  
visit to the customer’ s site being required 
a key aspect of our business division is  
its ability to act as a one stop shop for 
business customers by providing a fully 
integrated product offering whilst we remain 
cautious on heavy investment in the research 
and development of new technology our 
strategic partnerships with leading vendors 
such as o2 and mitel enable us to remain  
well positioned to capitalise on the rapidly  
changing telecoms market 
of particular note is the continued growth  
of our hosted voip offering where extensions 
sold and supported grew by 86 over the 
year major contract wins included hosted 
voip  as part of a managed services contract 
across young  co brewery’ s estate and 
spirit el’ s success was recognised when we 
won the voip solution of the year award in 
october 2008 at the national comms 
business awards spirit el also won a number 
of other industry awards over the past year 
and continues to build on the excellent 
relationships that we have forged with industry 
leading partners including 02 blackberry and 
mitel our newly acquired mobile business also 
achieved 02 centre of excellence status in 
august 2008 
t o support integration of acquisitions and 
ensure we maximise the crosssell opportunity 
for all acquired customer bases we 
implemented a groupwide crm facility during 
the year following several notable crossselling 
wins in early 2009 we achieved our largest 
crosssale to date in may 2009 a 30 month 
network services deal with a global hotel group 
that is expected to generate up to £4 million  
in revenue over the contract term the deal 
involved spirit el replacing bt  who still has  
an estimated 50 total market share as 
supplier the contract win provides evidence  
of our ability to service major corporates  
as well as our 2300 sme customers and  
also illustrates clearly the steps we are taking  
to maximise the significant crosssell 
opportunities we are identifying 
awards
national business  
awards 2008 
spirit el named finalists
channel networks 
awards 2009 
spirit el and alastair mills 
named finalists
international  
directories awards 
virgin mobile directory 
enquiry service  
provided by spirit el  
wins best newcomer 
voip solution  
of the y ear award 
spirit el wins 
wigan business  
awards 2008 
spirit el and alastair mills 
named finalists
channel entrepreneur  
of the y ear award 
spirit el wins 
enterprise convergence 
solution award 2009 
spirit el wins
08
alastair mills chief executive
chief executive’ s review continued summary and outlook
the year to 30 april 2009 was a year of 
significant progress for spirit el we delivered 
strong revenue growth and an even greater 
uplift in underlying ebitda we also continued 
to gain widespread recognition for the quality 
of our ipbased services and the innovation  
we have demonstrated in the delivery of 
converged communications services 
our strategy of targeted acquisitions  
which bring immediate earnings enhancement 
and ongoing crosssell opportunities has seen 
revenue and profits rise substantially in the 
past year as we start to benefit from full 
contributions from acquisitions we have a 
highly scalable model where we can bolt  
on new earnings enhancing assets whilst 
maintaining the delivery of consistent  
organic growth
whilst we have felt the challenges of a severe 
economic downturn and more specifically an 
ongoing declining profitability in the wholesale 
markets the contribution from our rapidly 
growing business division is very encouraging 
we have demonstrated our ability to enhance 
earnings through acquisitions followed up by 
significant crossselling successes from our 
range of converged products and services  
into both new and existing customer bases 
although we are not immune to the impact  
of a recessionary economic environment  
our product set is naturally defensive and our 
downside exposure is mitigated we are 
witnessing a renewed and growing interest  
in cost savings that are prompting new  
sales opportunities our ability to add value  
to our customers through innovative and cost 
effective solutions gives us confidence about 
our prospects through the economic downturn
spirit el has an experienced and energised 
management team and a highly skilled  
and committed staff who have together 
proved their ability to execute strategy  
the foundations are in place to deliver ongoing 
value to shareholders and i look forward to  
the coming year with confidence
alastair mills
chief executive 
30 september 2009
 operating profit after adding back charges for depreciation 
amortisation sharebased payments and exceptional costs
09