a world leader in digital tv technologies
annual report  accounts 2009 foxtel multichoice sky new zealand
comcast
and 60 more
cable operators
throughout
north america
directv
sky mexico
sky central america
canal overseas
directv pan americana
cable visión
sky brazil
net brazil
digiturk
sky italia
portugal telecom
tv cabo
canal
numericable
telefonica
sogecable
upc
bt
bskyb
virgin media
canal digital multidweller
viasat
belgacom
m7
tv vlaanderen
upc
kdg
sky deutschland
upc central europe
cyfra
astro
north america
revenues
£4291m
europe
revenues
£4281m
south america
revenues
£1215m
rest of the world
revenues
£1548m
02   pace plc annual report
a world leader in digital 
tv technologies
pace develops and delivers technologies 
products and services for digital tv markets 
that enable entertainment and converged 
communication services inside outside and 
around the home and in difﬁcult to reach areas 
such as multidwelling buildings
in doing this pace aims to be the world’s best settop 
box company to supply world leading operators with 
innovative products and investing in technologies that 
will deliver growth and increased proﬁtability as the 
world continues its move to digital tv
15p
full year dividend 15p 
per share 2008 06p
193p
adjusted earnings per share 
193p 2008 78p
67
adjusted operating margin 
improved signiﬁcantly to 67 
2008 39
95
net cash £735m 
2008 £377m
52
revenues £11334m 
2008 £7455m
405
proﬁt before tax £699m 
2008 £138m
financial highlights
continued performance 
improvements
global customer base
680
580
480
380
280
180
80
20
120
220
£ million
50
40
30
20
10
0
10
20
£ million
revenues
pbt
h1 0506
h2 0506
h1 0607
h2 0607
h1 07
h1 08
h2 08
h1 09
h2 09
foxtel multichoice sky new zealand
comcast
and 60 more
cable operators
throughout
north america
directv
sky mexico
sky central america
canal overseas
directv pan americana
cable visión
sky brazil
net brazil
digiturk
sky italia
portugal telecom
tv cabo
canal
numericable
telefonica
sogecable
upc
bt
bskyb
virgin media
canal digital multidweller
viasat
belgacom
m7
tv vlaanderen
upc
kdg
sky deutschland
upc central europe
cyfra
astro
north america
revenues
£4291m
europe
revenues
£4281m
south america
revenues
£1215m
rest of the world
revenues
£1548m
02   pace plc annual report
a world leader in digital 
tv technologies
pace develops and delivers technologies 
products and services for digital tv markets 
that enable entertainment and converged 
communication services inside outside and 
around the home and in difﬁcult to reach areas 
such as multidwelling buildings
in doing this pace aims to be the world’s best settop 
box company to supply world leading operators with 
innovative products and investing in technologies that 
will deliver growth and increased proﬁtability as the 
world continues its move to digital tv
15p
full year dividend 15p 
per share 2008 06p
193p
adjusted earnings per share 
193p 2008 78p
67
adjusted operating margin 
improved signiﬁcantly to 67 
2008 39
95
net cash £735m 
2008 £377m
52
revenues £11334m 
2008 £7455m
405
proﬁt before tax £699m 
2008 £138m
financial highlights
continued performance 
improvements
global customer base
680
580
480
380
280
180
80
20
120
220
£ million
50
40
30
20
10
0
10
20
£ million
revenues
pbt
h1 0506
h2 0506
h1 0607
h2 0607
h1 07
h1 08
h2 08
h1 09
h2 09 in 2009 pace delivered exceptional growth and record results and is now number two 
settop box provider to the paytv industry globally  we consolidated our leadership 
position in the industry shipping more settop boxes to more customers and into more 
geographies than ever before we are now the most diverse settop box business by 
customer product and geography globally  our scale and product spread underpin our 
resilience and provide a powerful platform to deliver ongoing sustainable growth  
pace remains at the forefront of the biggest changes taking place in digital home 
entertainment  the quality of demand for and spend on digital home entertainment is 
growing  and we are ahead of the market in identifying and investing in new technologies 
to take advantage of this industry evolution  from 2010 high deﬁnition  will become 
more mainstream and our operator customers will continue to invest in hybrid tv and 
bandwidth hungry technologies such as 3d ultra high deﬁnition and whole home 
entertainment systems
neil gaydon chief executive ofﬁcer
“
”
our strategic aim is to be at the heart 
of convergence in digital tv creating a 
platform for our longterm growth
whole home and hybrid 
technologies are the cornerstone 
technologies for the converged 
digital tv home where the set
top box powers a complete 
entertainment network  in addition 
to leadership in high deﬁnition 
and pvr pace is at the forefront 
of hybrid technology  combining 
broadcast and broadband to 
enable delivery of video content
via the internet known as over
thetop services in the americas 
pace has commenced delivery 
of its industryﬁrst ‘whole home’ 
solution for cable operators 
connecting multiple high deﬁnition 
settop boxes within the home
the appetite for convergence 
presents new product opportunities 
as pace’s focus on innovation 
and strong customer relationships 
allows it to identify develop and 
commercialise product solutions 
ahead of the market
broadcast
broadband
connected
home
a managed paytv asset
tv  video services gateway contents
02 highlights
04 chairman’s letter
05 chief executive officer’s review
09 chief financial officer’s review
11 report of the directors
21 directors’ remuneration report
29 statement of directors’ responsibilities
30 independent auditors’ report
33 financial statements
40 notes to the financial statements
71 directors secretary and advisers
72 five year record and shareholder information
01    pace plc annual report pace plc annual report    04
chairman’s letter
this success reﬂects the capability and commitment of the 
entire pace team and highlights the strong fundamentals 
it has built  over the last three years pace has brought 
about transformational change delivering both organic and 
nonorganic growth  the group has built up a high quality 
and diverse set of customers and products we operate 
successfully across most major geographic markets this 
has translated into consistent proﬁtability
pace has proven itself capable of identifying investing 
in and delivering the new technologies needed by its 
operator customers to enable the delivery of tvled home 
entertainment  the technologies within our industry are 
evolving at an increasingly rapid rate creating new product 
and customer opportunities for the business  today this 
revolves around high deﬁnition personal video recording 
hybrid and whole home platforms and already for some this 
will soon start to include new 3d services  
we are able to maintain ongoing investment in new 
technology because of the work done to strengthen our 
ﬁnancial position this means that pace is at the forefront 
of change within the industry leading in converged home 
entertainment solutions and diversiﬁcation opportunities 
through our growing networks division at the same time 
we have optimised efﬁciency and taken advantage of our 
enlarged scale to ensure we fully deliver on our vision of 
‘great products to our customers every time’  in doing 
this pace has achieved a level of maturity in its operations 
that should give you conﬁdence in predictable future 
performance 
in recognition of our growth and longterm earnings 
potential the board introduced a progressive dividend policy 
in 2009  i am pleased that your board is recommending a 
ﬁnal dividend of 10p per share giving a full year dividend of 
15p per share 
our achievements were recognised through a number 
of awards including a queen’s award for enterprise 
in innovation and a number of awards recognising the 
importance of pace’s hr strategy in driving change and 
creating a great place to work from a ﬁnancial markets 
perspective we have become a member of the ftse 250 
and are a top ﬁve quoted company in the uk technology 
hardware sector by market capitalisation 
following major improvements in ﬁnancial performance over 
the past three years on behalf of the board i commend 
the management team and all our employees worldwide for 
their achievements and reemphasize our conﬁdence in their 
ability to take the group forward as we enter a comparatively 
more mature and predictable phase of our development
if you have any comments on my letter or indeed any  
part of the annual report i would be delighted to hear  
from you either by writing to me at pace or by email at  
mikemctighepacecom
yours sincerely 
mike mctighe 
chairman
2 march 2010
dear shareholder – in 2009 your company 
‘came of age’ capitalising on the potential 
created by your management team and the 
global market opportunity for pace’s digital  
tv technology
pace’s performance over the last 12 months represents 
a signiﬁcant achievement where the management team 
delivered record results ahead of all expectations  pace 
is now working at a new level having achieved over £1bn 
revenues and 67 return on sales 05    pace plc annual report
officer’s review
chief executive
2009 was a record year for pace when we consolidated 
our global position and became a top two industry leader 
through rigorous execution against our strategy derived 
from our strong company culture we quadrupled proﬁts 
grew revenues by 52 to £11bn and increased cash 
95 to over £73m we improved our return on  
sales to 67 so driving towards our  
8 medium term goal 
our ability to innovate together 
with an outstanding performance 
from our operations team enabled 
us to ship an impressive 172m 
products to a global customer base 
of over 100 paytv operators we 
established ourselves as a major 
player in the americas growing our 
overall north american business 
and making a strong entry into 
south america we became 
europe’s number one settop 
box supplier and a leader in high 
deﬁnition we completed the 
integration of the philips settop 
box business acquired in spring 
2008 renamed pace france 
which is now a fully operational and 
proﬁtable part of the group 
our strategic aim is to put pace at the heart of convergence within 
the digital tv home in addition to our high deﬁnition hd and pvr 
leadership we established pace at the forefront of the new hybrid 
product category in the americas we commenced deliveries of our 
ﬁrst ‘whole home’ solution for cable operators whole home and hybrid 
which combines broadcast and broadband content are cornerstone 
technologies for the converged digital tv home we will start to launch 
3d services with our customers during 2010 this is an exciting new tv 
viewing experience and we anticipate further product and technology 
developments so as to realise its full visual potential 
2009 was not just about consolidating 
our leadership position it was 
also about creating a platform for 
sustainable growth we have been 
developing our organisation systems 
and processes to further improve 
customer focus and enable faster 
product innovation while being more 
efﬁcient at the same time we have 
ﬁrmly established pace india as a low
cost centre of engineering excellence 
it is now delivering complete product 
designs and new technologies to all 
parts of the group
we are experiencing the biggest 
change to tv since it was invented 
with hd pvr on demand  services 
broadband whole home tv and now  pace plc annual report    06
we are already working with our customers 
and partners on the ‘nextgeneration’ of settop 
boxes and new technologies
through their paytv subscription or 
through freetoair services such as 
the uk’s recentlylaunched freeview 
hd service which will utilise our latest 
dvbt2 settop box development 
at the same time there will be a 
continued requirement for lowend 
adapter products in the americas and 
other markets that will support cable 
networks in a complete transition from 
analogue to digital 
pace has been instrumental in the 
current growth that the paytv industry 
is experiencing in digital related 
products we have been successful in 
targeting the world’s most successful 
paytv operators providing them 
with products to enable the market 
for digital by 2013 global paytv 
revenues are forecast to reach 14bn 
in an overall market for digital tv that 
will see annual settop box shipments 
at over 124 million units
we also continue our longterm 
commitment to minimise the 
environmental impact of our business 
operations and settop box products 
for example over the last three years 
total power consumption in our high 
deﬁnition pvrs has been reduced by 
over 70 
a trusted partner
many of our 100 customers 
consider pace their supplier of 
choice and technology partner 
because our customers operate in 
highly competitive entertainment 
and communications markets they 
turn to new technology to deliver 
differentiated and engaging services 
to attract and retain subscribers 
there are opportunities in all our 
markets in terms of new products 
and new customers this includes 
markets where we have been strong 
for a number of years in europe and 
north america but also in territories 
where we are less established such 
as south america and asia
the underlying theme in all our 
geographic markets is that demand 
for our products has grown in 
particular for hd this is an area 
where pace is an industry leader and 
in 2009 we were in the global top 
two for overall box shipments today 
only 4 of global households have 
so far made the switch to hd but 
researchers expect over 273m hd 
households by 2013 with over 10 
of global tv households subscribing 
to a hd service 
we are well placed to capitalise on 
the increasing requirement from 
paytv operators as hd becomes 
“the norm” we are delighted that our 
technology will be enabling millions 
worldwide to watch the 2010 football 
world cup in amazing quality either 
3d all of this is creating tremendous 
consumer demand for our products 
and services as well as creating new 
revenue streams for our customers 
global penetration for most of these 
amazing advancements is still only 
single digit so there is a great deal to 
play for over the past year we have 
also seen a shift for paytv from being 
a luxury to almost utility status as it is 
in the usa 
as part of our diversiﬁcation 
strategy we began deliveries of our 
multidweller
®
 product to two new 
customers each one using the 
product for very different applications 
we also recruited ﬁve new distributors 
to our networks approved partners 
programme in 2010 we will add 
customers and distributors to 
increase our routes to market grow 
volume shipments and expect to 
breakeven this will be followed by a 
major market push in 2011 bringing 
return on investment 07    pace plc annual report
chief executive 
officer’s review continued
a sustainable future
the group is at the heart of the 
biggest changes taking place in tv 
from high deﬁnition to converged 
home entertainment communications 
whole home networking to 
multidweller and 3d our success 
and that of our paytv customers 
despite the macro economic climate 
has demonstrated the value many 
consumers place on high quality 
home entertainment 
pace has strong relationships with 
all the leading technology partners 
in the digital ecosystem our people 
and products are empowering pay tv 
operators enabling them to deliver 
services over all digital platforms 
while at the same time allowing them 
to protect premium content 
today that premium content is 
high deﬁnition and will soon include 
increasingly bandwidth hungry 
technologies such as 3d ultra high 
deﬁnition and whole home services 
with pace’s technology the paytv 
operator has the network capability 
service proposition and business 
model to deliver these new services 
and ﬁnance the high quality content 
that makes tv such an engaging 
experience this is particularly true 
of event tv from shows such as 
xfactor and american idol to major 
sporting events such as the super 
bowl the football world cup and 
the champions league this content 
commands massive audiences – 
almost half of us homes tune into the 
super bowl ﬁnal – demanding and 
generating billions of dollars on which 
many media and sports industries 
depend 
pay television operators are moving 
quickly to take advantage of hybrid 
technology already many of our 
customers are moving towards hybrid 
platforms that combine broadcast and 
broadband delivery we have led the 
market in this ﬁeld with products such 
as le cube for france’s canal and 
vision for bt vision in the uk 
hybrid settop boxes are powerful 
devices that pay tv operators are 
currently using to add huge libraries 
of ondemand and catchup tv for 
their customers these boxes can 
be easily evolved to provide access 
to the open internet for ott services 
as well as interactive applications such 
as ‘widgets’ and the settop box 
unlike most other consumer electronic 
devices can be upgraded as they 
operate on a managed paytv network 
ensuring endusers are easily kept 
abreast of the rapidly changing content 
environment it is a proposition that 
becomes even more important as the 
core settop box becomes increasingly 
complex due to the convergence of 
home entertainment 
driving technology evolution
paytv operators have successfully used 
advances in broadcast and broadband 
technologies to deliver compelling 
services that engage consumers and 
deliver income growth for the industry 
the majority of consumers want 
products that are coupled to services 
this removes the customer care 
headaches of billing technical support 
and uncertainty around whether the 
technology in which they have invested 
will soon become obsolete 
as a result the quality demand for and 
spend on digital home entertainment 
is growing and pace continues to 
be at the forefront of this technology 
evolution our strategy to be at 
the heart of home entertainment 
convergence for the paytv industry will 
enable us to work with our customers 
on what we believe will be the next 
evolutionary shift in our industry
moreover we are already seeing the 
shift occur and pace has already 
demonstrated early leadership in 
product development consumers used 
to hd and pvr and now hybrid settop 
boxes will then want smart connected 
devices that give them the ﬂexibility to 
manage and view both professional as 
well as personal content anywhere in 
their home 
our strategy to be at the heart of home 
entertainment convergence for the paytv 
industry will enable us to work with our 
customers on what we believe will be the 
next evolutionary shift in our industry
page changed pace plc annual report    08
in october of last year pace 
released its ﬁrst whole home product 
hcs in the us it was released 
to industry acclaim and there has 
been signiﬁcant customer interest 
our expertise in home content 
sharing products has also put us 
in a fantastic position to capitalise 
on the convergence market going 
beyond tv content to the heart 
of entertainment in the home we 
are convinced that settop boxes 
particularly hybrid pvrs will establish 
a tvdriven home network it is a 
costeffective secure and ﬂexible 
device
our market is constantly changing 
and 3d now offers opportunities in 
the shortterm consumers investing 
in 3d tvs can get a taste of 3d 
with some of our existing boxes 
but this medium is for the longer 
term as consumers start seeing 
more of its amazing capabilities 
and full 3d becomes a requirement 
for paytv this will demand further 
developments in settop box 
technology 
by 2013 there will be an installed 
base of 35m 3d capable tv 
screens and we envisage that 
we will be supplying operators 
with 3d enabled products sooner 
rather than later many of our latest 
platforms are already ‘3dready’ 
and ultra hd which delivers 16x 
the picture quality of hd is around 
the corner these developments 
also reinforce broadcast technology 
as the predominant transmission 
medium for the coming years given 
the massive bandwidth required to 
deliver 3d over the internet
our ability to develop new markets 
has been demonstrated in our 
multidweller system the range of 
multidweller products is opening 
up the market for advanced digital 
services by enabling paytv and 
other operators to reach inaccessible 
subscribers including places such 
as apartment blocks hotels and 
conurbations that previously have not 
been attached to cable networks as 
planned 2009 saw initial commercial 
deployment of the division’s ﬂagship 
product and the announcement 
of the ﬁrst two customers canal 
digital and quadriga in 2010 we 
will be adding new customers and 
galvanising distribution routes
in summary
we are already working with our 
customers and partners on the ‘next
generation’ of settop boxes and new 
technologies these will continue 
to push the boundaries featuring 
advancements in whole home pvr 
support for more applications ott 
services and widgets better energy 
efﬁciency and of course 3d we are 
at the leading edge of technological 
change and have a clear strategy 
to be at the heart of convergence 
for digital tv that we continue to 
successfully execute against this 
capitalises on our many relationships 
with customers partners and 
suppliers as well as our technical 
excellence and ﬁnancial resources 
we now have the ability and capability 
to take advantage of the right market 
opportunities to further develop our 
business 
having delivered an outstanding 
performance in 2009 pace has 
entered 2010 in a strong operating 
and ﬁnancial position the pay tv 
market continues to be positive and 
there is good demand for the group’s 
products against this backdrop we 
expect a combination of solid volume 
growth and a modestly lower asp 
resulting from product mix to lead to 
mid single digit revenue growth for the 
year gross margins are expected to 
increase with a focus on operating 
cost and efﬁciency generating 
further improvements in operating 
margin we will also continue tight 
management of our supply chain 
as we manage a sectorwide risk of 
component shortages 
the group looks forward to another 
successful year building on our 
position as a leading global player in 
the digital paytv market
neil gaydon 
chief executive ofﬁcer
2 march 2010 09    pace plc annual report
our record growth is underpinned by robust 
ﬁnancial management a strong balance sheet 
and operational excellence
officer’s review
chief financial
from an operational view point we 
have actively managed this growth 
our efﬁcient operating structure 
allowed us to achieve maximum 
growth without a proportionate 
increase in overheads subsequent 
to the acquisition we developed 
scalable systems and improved key 
performance indicators these provide 
high quality and best practice ﬁnancial 
information to our business units 
which enable early issue identiﬁcation 
and rapid decision making at the 
same time to support our overall 
business transformation we have 
established an internal audit function 
assisted by external professional 
advisors and enhanced our tax 
treasury and cash management 
capabilities 
pace has good customer order 
visibility and the team worked well in 
the pace business grew dramatically in 2009 as we beneﬁtted 
from our market leading position particularly in the delivery of high 
deﬁnition products increased global scale and earlier than expected 
beneﬁts of business synergy programmes put in place following the 
philips’ settop box acquisition in 2008 pace france is now a fully 
operational and proﬁtable part of the group 
2009 to anticipate manage and plan 
for any problems within the supply 
chain using a range of operational 
tools available to the business this 
will stand us in good stead during 
2010 as we take into account the 
sectorwide risk of component 
shortages 
trading and results
we achieved record growth in 
revenues and shipments of £11bn 
and 172m settop boxes respectively 
we signiﬁcantly increased proﬁt 
before tax exceptional items and 
amortisation of other intangibles to 
£765m 2008 £285m proﬁt before 
tax was £699m 2008 £138m 
amortisation of other intangibles 
was £67m 2008 £37m and basic 
earnings per share were 177p 2008 
40p with adjusted earnings per 
share of 193p 2008 78p pace plc annual report    10
we continued to win new customers 
and expand market share with many 
of our existing customers enabling 
us to maintain a balance of revenues 
we delivered 62m settop boxes into 
europe 2008 47m 97m into the 
americas 2008 73m and 13m into 
the rest of the world 2008 11m 
the group adopted ifrs 8 
“operating segments” from 1 january 
2009 ifrs 8 requires operating 
segments to be identiﬁed on the basis 
of discrete ﬁnancial information about 
components of the group these 
segments are regularly reviewed 
by the pace board as the group’s 
chief operating decision maker 
codm to allocate resources and 
assess performance ifrs 8 has 
been applied to aggregate operating 
segments on the grounds of similar 
economic characteristics and the 
group has determined that it has one 
reportable segment this position will 
be monitored as the group develops
gross margin was 176 for the 
year versus 181 in 2008 there 
was a negative 05 impact on 
gross margin due to the oneoff 
foreign exchange cost as a result 
of our foreign exchange strategy 
announced in november 2008 that 
provided certainty to manage the 
business through 2009 gross margin 
progressively improved from h1 to h2 
172 to 179 as the beneﬁt of the 
group’s larger buying power started 
to take effect average selling prices 
which are a feature of product mix 
increased during the year from £57 to 
£66 with a h1 to h2 progression of 
£62 to £70 this development reﬂects 
the growing number of hd boxes in 
the second half after high volume dta 
shipments in the ﬁrst half
last year we introduced return 
on sales operating margin on a 
productbyproduct basis as a new 
performance measure – this reﬂects 
the beneﬁt of volume shipments and 
pricing on absolute proﬁtability rather 
than just gross margin which is not 
always directly linked with proﬁt 
the ros benchmark in place for 
each product has ensured that the 
full impact of all activities on overall 
proﬁtability is considered in 2009 our 
overall ros was 67 2008 39 
due to the growing global demand 
for our products and technologies 
coupled with our scale and strong 
operating performance the group is 
on track to achieve our 8 medium 
term target
the net interest credit was £02m 
2008 net interest charge £07m 
reﬂecting the positive cash balances 
held throughout the period a tax 
charge of £185m 2008 £28m 
relates to uk tax of £38m as 
remaining tax losses were used 
overseas tax charges of £137m 
and a deferred tax charge of £10m 
retained proﬁt for the period was 
£514m 2008 £111m an increase  
of 365 on 2008
foreign exchange
by currency our revenues are split 
61 in us 32 in euros with 
other currencies accounting for 7 
electronics component purchasing is 
typically us denominated which is 
reﬂected in the majority of the group’s 
costs using the balance within this 
currency proﬁle supplemented by 
an effective hedging strategy and 
treasury policy we have been able 
to minimise the impact of foreign 
currency ﬂuctuations on proﬁt  
before tax
overheads 
overheads excluding the impact 
of ias 38 and amortisation of other 
intangibles were £1265m 2008 
£1051m excluding exceptionals 
incorporated a full year of the 
overhead base from pace france 
rd spend before capitalisation of 
development expenditure in line with 
ias was £717m 2008 £596m 
as we continued to invest in higher 
speciﬁcation products such as hd 
pvr and new technologies an 
amortisation credit in relation to 
capitalised development expenditure 
of £28m 2008 charge £09m is 
reﬂected in the income statement
balance sheet 
there was a net inﬂow of cash into 
the business further strengthening 
our cash position and we ﬁnished 
the period with a net cash position 
of £735m 2008 £377m as a 
result we have been able to continue 
managing the business from our own 
cash and are in a strong position to 
consider potential acquisitions to 
broaden our capability in digital tv 
technologies we continue to have a 
standby £35m revolving credit facility 
with the royal bank of scotland 
the balance sheet also reﬂects our 
signiﬁcant business growth with net 
assets increasing 36 to £1963m 
31 december 2008 1439m and net 
working capital increasing to £362m 
31 december 2008 £95m capital 
expenditure increased to £129m 
31 december 2008 £66m  as 
we invested in improving our head 
ofﬁce facilities established new 
manufacturing lines to support new 
customer wins and installed industry 
leading reliability laboratories our 
investment in reliability is a strong 
point of competitive differentiation and 
over the medium term will support a 
reduction in the overall cost of life of 
our products in the ﬁeld 
dividend 
due to the positive net cash and 
strong business performance the 
board has recommended a ﬁnal 
dividend of 10p per share giving a 
full year dividend of 15p per share 
a progressive dividend policy was 
introduced in 2009 with the intention 
of paying in the region of a one third 
two thirds split between interim and 
ﬁnal dividends
basis of preparation
the principal risks and uncertainties 
facing the group including those 
referred to in note 1 to these ﬁnancial 
statements have not changed from 
those set out in the 2008 annual 
report and accounts except for 
inclusion of the impact of new 
accounting standards applicable  
in the period
outlook
pace is operating in a growing 
marketplace with excellent product 
and technology capabilities our 
customer base leads the paytv 
industry ensuring that pace is at the 
forefront of developments we have 
established strong fundamentals 
in the ﬁnancial management of the 
group and are well positioned to take 
advantage of ongoing future growth 
stuart hall 
chief financial ofﬁcer
2 march 2010 11    pace plc annual report
the directors
report of
principal activities
the group’s principal activities are the development design and distribution of digital receivers and receiver 
decoders for the reception of digital television and the receptiontransmission of interactive services telephony 
and highspeed data the group also provides engineering design support services and software applications to 
its settop box customers each of these services may be delivered over satellite cable terrestrial and ip network 
transmission systems
business and financial results
the information that fulﬁls the requirements of the business review and management report including a review 
of the group’s activities developments and the ﬁnancial results for the year and the key ﬁnancial performance 
indicators relevant to the business of the company principally revenue gross margin  proﬁt before tax return on 
sales and cash can be found in the chief executive ofﬁcer’s review and the chief financial ofﬁcer’s review on 
pages 5 to 10 the aforementioned information is incorporated in this report by reference there is no information 
which falls to be disclosed pursuant to s 417 5 c of the companies act 2006 other than as noted in the risks 
and uncertainties section below
risks and uncertainties
the following are the key risks and uncertainties relevant to the business of the group
customers and markets
orders placed by the group’s paytv customers are typically large oneoff orders for delivery over a number of 
months with supplemental orders for additional volumes as the eventual deployment of the settop boxes can 
be unpredictable revenues can be volatile the difﬁculty in predicting the group’s business ﬂow and its risks can 
be exacerbated by a number of other factors including for example the development process for an advanced 
settop box which can take over 12 months the group works on long lead times eg 4 months or more for 
component supply and manufacture typical of the industry in the us market in particular customers’ ﬁrm order 
lead times may be less than the component lead times there are third party delivery risks for example difﬁculties 
in the delivery of components or software code and the ﬁnal go ahead for manufacture and ﬁrm contractual 
commitments is usually dependent on product approvals and acceptance both from the operator and sometimes 
from third parties the group is also exposed to the industry wide inherent risk of supply chain failure the group 
has put in place procedures to monitor the ﬁnancial and operating strength of key suppliers in addition it utilises 
dual or multi source where appropriate to mitigate this risk
product liability claims
in common with many companies in the industry the group is exposed to the risk of product liability claims made 
by customers or affected third parties should the group’s products not fulﬁl the terms of the contracts under which 
they are sold the group has in place quality control and other operational procedures to mitigate this risk
credit risk
the central finance function of the group obtains reports from third party sources in respect of the credit 
worthiness of key customers and suppliers and sets individual credit limits as appropriate a credit insurance policy 
is maintained which provides cover over certain debtors subject to excesses and the exposure to credit risk is 
monitored on an ongoing basis deposit investments are generally undertaken only in liquid securities and with 
counterparties that have appropriate credit ratings 
the directors present their report to shareholders on pages 
11 to 20 together with the audited ﬁnancial statements for 
the year “year” ended 31 december 2009 prior ﬁnancial 
period year ended 31 december 2008  pace plc annual report    12
royalties
the group’s products incorporate third party technology usually under licence inadvertent actions may expose the 
group to the risk of infringing third party intellectual property rights potential claims can be submitted many years 
after a product has been deployed
regulatory
the group remains exposed to changes in the regulatory environment including potential modiﬁcations to import 
duty regimes and legislation relevant to the group’s products
currency risks
the standard ‘industry currency’ is the us dollar with the majority of components and manufacturing capacity 
purchased in this currency however due to part of the group’s revenues being in sterling and euros the group is 
exposed to the risk of foreign currency movements to manage this risk the group’s treasury policy is progressively 
to cover cash ﬂows when these are sufﬁciently certain and to seek price variations through contractual mechanisms 
where signiﬁcant currency movements occur
financial results
the consolidated income statement for the year is set out on page 33 the proﬁt before tax was £699m year 
ended 31 december 2008 £138m and the proﬁt before tax exceptional items and amortisation of other 
intangibles was £765 million year ended 31 december 2008 £285 million
dividend
the directors recommend the payment of a ﬁnal dividend of 10p per ordinary share year ended 31 december 
2008 06p to be paid on 2 july 2010 to shareholders on the register at the close of business on 4 june 2010 an 
interim dividend of 05p per ordinary share was paid during the year year ended 31 december 2008 nil
share capital
details of the company’s share capital including changes for the year and the rights attaching to the ordinary 
shares are contained in note 20 on pages 63 to 64 and are incorporated in this report by reference
significant shareholdings 
the company has been notiﬁed of the following signiﬁcant shareholdings as at 2 march 2010
      number     of issued  
      of shares  share capital 
david hood and related family trusts   34117539  1124 
prudential plc group of companies   20807071  685 
gartmore investment management   14931083  492 
pace plc employee beneﬁts trust   9712349  320 
legal  general group plc    9960795  328
directors 
the names of the current directors of the company are shown below all those listed held ofﬁce throughout  
the year
mike mctighe 
mike was appointed a nonexecutive director in june 2001 and became chairman on 1 may 2006 he is currently 
chairman of volex group plc a member of the board of ofcom and chairman of a number of private equity
backed companies previously he was chairman   ceo of carrier1 international sa and before that executive 
director  chief executive global operations of cable  wireless plc prior to these experiences mike spent 5 
years with philips 5 years with motorola and 10 years with ge 13    pace plc annual report
report of 
the directors continued
neil gaydon
neil was appointed chief executive ofﬁcer in april 2006 he was appointed to the board in june 2002 as 
worldwide sales and marketing director he has been with the company since 1995 and as president pace 
americas spearheaded the development of the company’s us business between 1999 and december 2003 prior 
to this he was regional sales director emea and head of new business development and product marketing for 
the company 
pat chapmanpincher 
pat was appointed a nonexecutive director in february 2005 and became senior independent director in may 
2006 she has over 30 years’ experience in the communications industry from senior roles in multinational internet 
and telecoms companies to participating in technology company startups a founding partner of the cavell group 
which specialises in operational consultancy ip and wireless technologies she is a nonexecutive director of 
stepstone asa omniplug ltd a nonexecutive director of friends of the earth and of groundwork east london 
pat is also a member of the advisory board of bradford school of management 
john grant
john was appointed a nonexecutive director on 1 august 2008 john spent his executive career in a variety of 
senior international roles within the automotive industry and other engineering businesses he was chief executive 
of ascot plc between 1997 and 2000 prior to that he was group finance director of lucas industries plc 
subsequently lucas varity plc between 1992 and 1996 he previously held a number of senior positions within 
ford motor company in europe and the usa john is nonexecutive chairman of torotrak plc gas turbine 
efﬁciency plc and surion energy ltd and nonexecutive director of melrose plc mhp sa and royal automobile 
club ltd
stuart hall
stuart was appointed chief financial ofﬁcer and joined the board in april 2007 before joining the company he 
was group finance director of iqe plc and prior to that finance director of energis squared limited and director 
of performance management for energis group plc he has also been finance director at wbf ltd part of the 
adare printing group plc carnography plc and race electronics he qualiﬁed as a chartered accountant with 
bdo binder hamlyn
mike inglis
mike was appointed a nonexecutive director in july 2008 he is currently evp and general manager of the 
processor division of arm holdings having previously been evp  sales and marketing before joining arm he 
worked in management consultancy with at kearney and held a number of senior operational and marketing 
positions at motorola he previously worked in semiconductor sales marketing design and consultancy with texas 
instruments fairchild and bis macintosh and gained his initial industrial experience with gec telecommunications 
he is a chartered engineer and a member of the chartered institute of marketing
david mckinney
david was appointed chief operating ofﬁcer in april 2006 and joined the board on 24 october 2006 he has been 
with the company since november 2005 joining as director of engineering and operations with responsibility for 
operations engineering test and quality strategy previously david spent ten years in the semiconductor industry 
including nec semiconductors and digital equipment corporation before moving to and spending over ten years 
in the telecommunications sector including motorola and royal philips electronics where he held senior executive 
and operational management roles david is a graduate of the royal society of chemistry and holds an mba
neil gaydon and pat chapmanpincher will retire by rotation at the annual general meeting of the company 
and offer themselves for reelection details of the executive directors’ service contracts and the nonexecutive 
directors’ letters of appointment are disclosed on page 25 pace plc annual report    14
payment to suppliers 
it is the policy of the group to agree terms and conditions for its business transactions with suppliers which 
are varied from time to time payment is made in accordance with those terms subject to the other terms and 
conditions being met by the supplier the group does not follow any code or standard on payment practice 
creditor days at the end of the period for the group were 71 days 31 december 2008 63 days and for the 
company were 71 days 31 december 2008 63 days
research and development
the directors regard it as fundamental to the future success of the group to engage in a substantial ongoing 
programme of research and development of new products spending £717 million in the year year ended 31 
december 2008 £596m and charging £688 million year ended 31 december 2008 £605m to the income 
statement during the year following the treatment under ias38
donations 
during the period the group donated £45000 year ended 31 december 2008 £40000 to charitable causes no 
political donations were made further details of the charitable and communityrelated activities of the group are 
given on page 18
corporate governance 
the directors believe that the company has complied throughout the period with the combined code on 
corporate governance as revised and adopted by the financial reporting council the board conﬁrms that it has 
established the necessary procedures designed to maintain a sound system of internal control and that there is an 
ongoing process for identifying evaluating and managing the signiﬁcant risks faced by the company
board of directors 
the group is controlled through the board of directors which comprises three executive and four nonexecutive 
directors who bring a wide range of skills and experience to the board biographical details of all directors are to 
be found on pages 12 and 13 the chairman mike mctighe is mainly responsible for the running of the board 
ensuring together with the company secretary that it receives timely and clear information appropriate to enable 
it to discharge its duties the responsibilities of the chief executive ofﬁcer neil gaydon focus on running the 
group’s business and implementing group strategy the chief executive ofﬁcer is assisted in managing the 
business on a daytoday basis by the executive committee as further described below all the nonexecutive 
directors are deemed by the board to be independent in addition the board has designated pat chapman
pincher as the senior independent director all directors have access to the advice and services of the company 
secretary and are able to take independent professional advice at the company’s expense in the furtherance of 
their duties if necessary all directors in accordance with the combined code submit themselves for reelection at 
least once every three years new directors receive a programme of tailored induction on joining the board and all 
directors are offered the opportunity to continually update their skills and knowledge by attending external training 
events the company has in place procedures to deal with directors’ conﬂicts of interest and the board is satisﬁed 
that these procedures operate effectively 
the board has a formal schedule of matters speciﬁcally reserved to it and normally meets at least nine times 
each year it is responsible for overall group strategy acquisition and divestment policy approval of major capital 
expenditure projects and consideration of signiﬁcant ﬁnancing matters it reviews the strategic direction of the 
group and conducts formal strategy reviews together with other senior executives within the group at least once a 
year the chairman holds meetings with the nonexecutive directors without the executive directors being present 
at least twice during the year 
it is the policy of the board to undertake a formal review and evaluation of its performance including the 
performance of its committees the chairman and individual directors on an annual basis during the year the 
board agreed that it would beneﬁt from its ﬁrst external board effectiveness review dr tracy long of boardroom 
review was appointed to act as an independent facilitator for the board evaluation process the evaluation 
process included onetoone interviews with each director and the company secretary board and committee 
meeting observation and review of relevant papers feedback from the review was provided in the form of a written 
report and presentation to the board which then discussed its ﬁndings  15    pace plc annual report
report of 
the directors continued
board committees
the board has established the following committees each of which has written terms of reference specifying its 
authority and duties and copies of which are publicly available on the company’s website wwwpacecom
the audit committee is comprised of independent designated nonexecutive directors pat chapmanpincher 
mike inglis and john grant who is the chairman of the committee mike inglis joined the committee in november 
2009 the committee has primary responsibility for making recommendations on the appointment reappointment 
or removal of the auditors and reviewing their independence it receives and reviews reports from management and 
from the auditors including internal auditors relating to the interim and annual accounts and the control systems in 
use throughout the group meetings are held by the committee with the auditors without executive management 
being present at least once a year and the committee reviews arrangements by which staff may in conﬁdence 
raise concerns about possible improprieties including review of the group whistleblowing policy 
the executive committee is chaired by neil gaydon as chief executive ofﬁcer the committee generally meets 
once a month and ensures that the strategy plans and policies previously agreed or delegated by the board are 
implemented
the executive committee comprises the three executive directors together with the following senior executives
anthony dixon  general counsel  
jill ezard  director of human resources  
mathias hautefort president pace france 
helen kettleborough director of communications  
michael pulli  president pace americas  
scott sheldon  chief strategy ofﬁcer 
richard slee  president pace uk
the remuneration committee is comprised of mike mctighe and independent designated nonexecutive directors 
john grant and pat chapmanpincher who is the chairman of the committee the committee is responsible 
for setting the remuneration of the executive directors and other members of the executive committee including 
making recommendations regarding the grant of share options the members of the committee have no personal 
interest other than as shareholders in the matters to be decided no potential conﬂicts of interest arising from 
crossdirectorships and no daytoday involvement in the running of the business 
the nominations committee is comprised of nonexecutive directors pat chapmanpincher john grant mike 
inglis and is chaired by mike mctighe its purpose is to consider and make recommendations to the board 
regarding the appointment of new directors 
board and committee meetings attendance
 board audit remuneration nominations 
  committee committee committee
total meetings 9 4 4 1 
pat chapmanpincher 9 4 4 1 
neil gaydon 8 – – – 
john grant 9 4 4 1 
stuart hall 8 – – –  
mike inglis 9 1 – – 
david mckinney 9 – – – 
mike mctighe 9 – 4 1
 director appointed to committee in november 2009 pace plc annual report    16
directors’ remuneration 
the remuneration committee reviews the performance of the executive directors and other members of the 
executive committee as a prelude to recommending their annual remuneration bonus awards and award of share 
options to the board the ﬁnal determinations are made by the board as a whole but no director plays a part in any 
discussions concerning their own remuneration there are no agreements between the company and its directors 
or employees providing for compensation for loss of ofﬁce or employment whether through resignation purported 
redundancy or otherwise that occurs because of a takeover bid
the remuneration report of the directors to shareholders is set out on pages 21 to 28 and includes the 
remuneration policy of the company and details of directors’ incentive payments and the related performance 
criteria
authority to purchase own shares 
at the annual general meeting in 2009 the company was authorised by shareholders to purchase up to 
44860000 of its own ordinary shares representing 1499 per cent of its issued share capital as at march 2009 
the company did not utilise this authority during the year the authority for the company to purchase its own 
shares expires at the conclusion of the annual general meeting in 2010 and a resolution to renew it will be 
proposed at that meeting
accountability and audit 
a detailed review of the performance of the group’s business is contained in the chief executive ofﬁcer’s review 
and the chief financial ofﬁcer’s review these statements together with the letter from the chairman and the 
report of the directors are intended to present a balanced assessment of the group’s position and prospects the 
directors’ responsibility for the ﬁnancial statements is described on page 29 and the responsibilities of the auditors 
are described on page 30
internal controls 
overall responsibility for the group’s system of internal control rests with the board the board has delegated 
certain of its powers to the audit committee to review the effectiveness of the systems of control and to receive 
reports from the auditors internal and external and from the management relating to the interim and annual 
accounts and the control systems in use throughout the group 
during the year and up to the date of this report the board carried out reviews of the effectiveness of the group’s 
internal controls 
the reviews were undertaken in accordance with the financial reporting council’s guidance under the following 
headings and were aimed at clearly identifying the systems already in place and the action plans necessary to 
improve areas of control weakness 
the control environment 
subject to those powers and limits of authority reserved by the board and to the group policies and guidelines 
they have established the conduct of the business of the group is delegated within a clearly deﬁned organisational 
structure and approved level of authority the board has also adopted a code of business ethics which has been 
incorporated into the employee handbook issued to all employees
risk assessment 
the directors and senior managers are responsible for identifying and monitoring sources of potential business risk 
and ﬁnancial risk and for taking such preventative and protective actions as they consider necessary to manage 
such risks effectively during the year a risk assessment review of the group’s business has been conducted in 
conjunction with the executive committee the board has received and considered this review as part of an annual 
risk and control assessment  17    pace plc annual report
report of 
the directors continued
the group’s systems are designed to identify and manage rather than eliminate signiﬁcant business risks including 
the risk of failure to achieve business objectives and can only provide reasonable not absolute assurance against 
material misstatement or loss business risks are identiﬁed evaluated and managed through functional line 
management reporting to divisional meetings executive committee meetings and board meetings as appropriate 
each member of the executive committee is required to highlight and report on any signiﬁcant business risks 
identiﬁed within their sphere of responsibility 
the key business risks associated with the timely completion of longterm development projects and on
going business risks including alleged infringement of third party intellectual property rights are managed by 
crossfunctional teams of senior employees business continuity plans addressing physical risks to the group’s 
development sites are reviewed and updated at least annually the group has adopted customer account teams 
grouped within strategic business units sbus so as to focus the business on customer needs the senior 
managers within the customer account teams also monitor the ﬁnancial and business risks including competitor 
risks associated with the delivery of agreed plans reviewing such matters at business review meetings held on a 
regular basis and attended by members of the executive committee
financial control and information systems
the group’s strategic direction is reviewed regularly by the board and plans budgets and performance targets are 
reviewed and approved at least annually directors receive monthly summaries of ﬁnancial results which compare 
actual performance with targets together with detailed management reports that identify the reasons for variances 
and the progress achieved business planning documents are revised on a regular basis in line with actual and 
expected performance
control procedures
financial control procedures have been developed for all of the main business functions and have been 
documented in a procedures manual authorisation limits for purchases and capital expenditure are speciﬁed and 
procedures are in place for minimising exposure to potential weaknesses in the receipt handling and despatch of 
goods the group’s main premises have received accreditation for bsi iso 9001 2000 
monitoring systems
monitoring of the internal control systems is carried out by the centralised group finance function
the audit committee considers annually whether there is a need to appoint a dedicated internal auditor and 
during the year the committee appointed bdo stoy hayward to act as internal auditors performing an agreed 
programme of internal audits in collaboration with the company’s head of risk assurance and management bdo 
stoy hayward attended and presented their reports to each of the committee meetings during the year
the audit committee also reviews external auditor objectivity and independence and has adopted a formal policy 
regarding the basis on which the auditors may be appointed to perform nonaudit services 
although no system of internal ﬁnancial control can provide absolute assurance against material misstatement 
or loss the group’s systems are designed to provide the directors with reasonable assurance that transactions 
are authorised and completely and accurately recorded that assets are safeguarded and that material errors 
irregularities and actions contrary to group policies and directions are either prevented or promptly discovered 
going concern 
the directors having taken account of the group’s available bank facilities and cash resources and having 
reviewed the group’s budget and forecasts for the period to 31 march 2011 consider that the group has adequate 
resources to continue in operational existence for the foreseeable future accordingly they continue to adopt the 
going concern basis in preparing the ﬁnancial statements  pace plc annual report    18
corporate social responsibility 
employment policies 
the directors recognise the importance of the group’s employees to its success and future development and 
are committed to providing an environment that will attract motivate and reward high quality employees the 
group continues to invest in a range of internal and external initiatives to promote employee development this 
commitment has been acknowledged by investors in people iip recognition 
employees are kept informed of matters affecting them as employees and factors affecting the performance of the 
group through monthly employee meetingsbrieﬁngs and a company newsletter “pacesetter” in the uk meetings 
of the employee partnership an elected forum for the discussion of work related issues are held with members of 
the executive committee at least four times per year 
the group welcomes applications for employment from all sectors of the community and is striving to promote 
equality of opportunity in employment regardless of age sex sexual orientation disability or ethnic origin it is the 
group’s policy that training career development and promotion opportunities should be available to all employees 
in the event that an employee becomes disabled the group makes reasonable adjustments where any aspect of 
premises or working practices puts such a disabled employee at a substantial disadvantage compared with a non
disabled employee 
health and safety 
the group has an established health and safety committee made up of health and safety representatives the 
health and safety ofﬁcer and other persons with expert knowledge who review health and safety issues relevant to 
the group’s business other safetyrelated committees also conduct periodic reviews of speciﬁc work practices 
these actions complement the health and safety executive’s “working well together” initiatives adopted and 
implemented by the company 
in the uk the health and safety adviser continues to carry on ergonomic risk assessments and developing 
ergonomic strategies whilst safety representatives and ﬁre wardens conduct site inspections these activities 
along with others contribute to the further advancement of local workplace health and safety awareness and 
improvement generic and detailed risk assessments chemical assessments and safe systems of work guidance 
are maintained for the beneﬁt of employees on the company’s intranet site
the importance of ongoing health and safety awareness training for managers and safety representatives is 
recognised as part of this process a number of health and safety “toolbox talks” have been designed to replace 
the iosh managing safely courses previously provided
the number of uk workplace accidents during the year was 13 and as in previous years none of these was 
reportable under riddor a report concerning health and safety aspects of the group’s business and copies of 
speciﬁc group safety policy documents can be obtained from the company secretary 
charitable and community support 
the group has an established charitable donations committee comprising employees based at the group’s 
premises in the uk the usa and france the committee which meets once a month considers all requests for 
charitable and community project assistance within a ﬁnancial budget and criteria approved by the board on an 
annual basis 
the group’s support through the committee is focused on the local geographical area of pace’s premises in 
saltaire paris bangalore and boca raton in florida as well as the charitable and community initiatives of group 
employees the corporate charity policy focus is to support local charities of beneﬁt to the local area and people 
living close to each group site 
during the year requests for support were considered by the committee 129 of these satisfying the criteria and 
receiving ﬁnancial support amounting to £45000 the participation of employees of the group in community 
and charitable activities outside work hours has been encouraged by the provision of funds to match individual 
sponsorship raised  19    pace plc annual report
report of 
the directors continued
environmental management 
during the year the company set environmental targets and achieved the following outcomes in respect of its 
chosen measures of environmental impact
activityimpactobjective target status comment
supply chain improve supply 
chain involvement
as part of the partner  supplier 
conference include environmental impact 
of supply chain – march 2009 develop 
and implement a mechanism to measure 
and improve supplier environmental 
performance by dec 2009
target achieved conference held in mar 
09 trial supply chain 
impact assessment 
complete
product reduce the   
environmental 
impact of our 
stbs
power consumption – the hardware 
design of every pace product will comply 
with or exceed the eu code of conduct 
energy star or meps guidelines in 
regions where no guidelines exist pace 
will apply the closest guidelines to 
these areas pace will work with its key 
partners to drive compliance across all 
aspects of the ﬁnal product including 
software
target achieved 100 of applicable 
projects are compliant 
with this target
product reduce the 
environmental 
impact of our 
stbs
packaging – all materials used in 
the packaging of pace products will 
be 100 recyclable pace is setting 
a minimum standard of 50 of all 
materials used in packaging to be 
sourced from recycled materials
ongoing 50 target exceeded
product reduce the 
environmental 
impact of our 
stbs
hazardous substances – pace is going 
beyond current legislation with its own 
extensive ‘restricted substances’ list 
pace will phase out these additional 
restricted substances from all future 
products going forwards
ongoing ytd 68 of suppliers 
are conﬁrmed compliant 
– others expected to be 
conﬁrmed by end q2 
2010
site operations reduce co2 
emissions
achieve a measurable reduction in co2 
from 2008 levels by jan 2010
not achieved scope of footprint 
has increased due to 
inclusion of pace france
site operations global certiﬁcation 
to iso 14001
achieve iso14001 certiﬁcation in pace 
india dec 2009 and pace france july 
2010
ongoing pace india certiﬁcation 
achieved
community improve local 
environment
conduct one volunteer activity per site 
by aug 2009
ongoing activity complete in pace 
americas others will be 
complete in 2010
awareness increase employee 
environmental 
awareness
implement an awareness programme 
focusing on individual employee energy 
consumption by july 2009
target achieved programme rolled out 
in june by the internal 
communications team
the company has maintained certiﬁcation to the international management standard iso 14001 at its saltaire and 
florida sites and for the ﬁrst time achieved certiﬁcation at the bangalore site group environmental policy has been 
applied to all pace sites worldwide 
the company is a signatory to the european code of conduct on energy efﬁciency of digital tv service 
systems eu code of conduct energy star program requirements for settop boxes and meps minimum 
energy performance standard pace is committed to ensure that all products are designed to minimise energy 
consumption through its ‘design for environment’ programme
the company continues to monitor the environmental impacts of all its activities details of which are available from 
the company secretary or the company’s website
p pace plc annual report    20
auditors 
kpmg audit plc held ofﬁce as auditors during the year a resolution for the reappointment of kpmg audit plc will 
be proposed at the forthcoming annual general meeting 
the audit committee reviews the independence and objectivity of the auditors considering whether taken as 
a whole the various relationships if any between the group and the auditors impair or appear to impair the 
auditors’ judgement or independence
each of the directors who held ofﬁce at the date of approval of this report of the directors conﬁrms that so far 
as they are aware there is no relevant audit information of which the company’s auditors are unaware and the 
directors have each taken all the steps that they ought to have taken as a director to make themselves aware of 
any relevant audit information and to establish that the company’s auditors are aware of that information 
relations with shareholders 
the board has continued to establish and maintain relationships with institutional shareholders and communicates 
with investors through the group’s web site wwwpacecom a programme of meetings with institutional 
shareholders is in place at which institutional shareholders are offered the opportunity to meet with nonexecutive 
directors and analyst presentations are made following announcement of the interim and annual results 
shareholders are welcome to participate at the annual general meeting at which the board will be available for 
questions 
annual general meeting 
the annual general meeting of the company will be held on 19 april 2010 at the ofﬁces of the company at salts 
mill victoria road saltaire west yorkshire bd18 3lf full details of the business to be transacted at the meeting 
will be set out in the notice of annual general meeting
responsibility statement of the directors
a statement of the responsibilities of the directors is contained on page 29 the directors whose names appear on 
pages 12 and 13 conﬁrm that to the best of their knowledge
 and fair view of the assets liabilities ﬁnancial position and proﬁt or loss of the company and the undertakings 
included in the consolidation taken as a whole and
 position of the company and the undertakings included in the consolidation taken as a whole together with the 
description of the principal risks and uncertainties that they face
by order of the board 
anthony j dixon  
company secretary
2 march 2010 21    pace plc annual report
the directors present their report to shareholders on pages 21 to 28 regarding remuneration matters in respect of 
the year ended 31 december 2009 
remuneration committee 
the remuneration committee the committee is responsible for setting the individual remuneration of the 
executive directors and other members of the executive committee within the framework of the remuneration 
policy described below which is set by the board 
the directors who were members of the committee during the year ending 31 december 2009 were pat 
chapmanpincher chairman of the committee mike mctighe and john grant for guidance the committee 
makes use of surveys of executive pay and knowledge of market rates the ceo and director of hr also attended 
remuneration committee meetings during the year by invitation and provided advice to the committee to enable 
it to reach informed decisions no director was present when their remuneration was being discussed the 
committee was assisted in its consideration of remuneration matters by kepler associates who were appointed as 
sole remuneration advisers in september 2008 kepler associates provided no other services to the group in the 
year pinsent masons legal advisers to the company also advised the committee regarding certain share option 
related issues 
remuneration policy 
the board believes that it is necessary to ensure that the remuneration packages of the executive directors remain 
competitive in order to attract retain and motivate executive directors and senior managers of a high calibre and 
to reward them for performance the policy is for a signiﬁcant proportion of executive directors’ total remuneration 
to be capable of being earned from variable performancebased incentives through annual bonuses and share 
based incentives the objective of this policy is to provide rewards and incentives that reﬂect corporate and 
individual performance and align management’s objectives directly with those of the shareholders more than half 
of an executive director’s remuneration is variable and is linked to corporate performance 
the board’s policy in relation to nonexecutive directors continues to be to pay fees that are competitive with the 
fees paid by comparable quoted companies nonexecutive directors’ fees are determined by the board as a 
whole within the limits set out in the company’s articles of association nonexecutive directors are not eligible for 
performance bonuses or pension contributions and do not participate in the share option plans nonexecutive 
remuneration is generally reviewed annually
salary 
basic salary for each executive director is determined by the committee taking into account the performance of 
the individual and information from independent sources on external market salary levels for comparable jobs with a 
view to salaries being set around the median level for comparable companies in setting senior executives’ salaries 
the committee also takes into account pay and employment conditions in the group as a whole salary is generally 
reviewed around the time of commencement of each ﬁnancial year such a review took place in january 2009 and 
as a result 2009 salaries of members of the executive committee including executive directors were frozen at 
2008 levels the committee sought advice from remuneration consultants with regard to the salary review which 
took place in january 2010 and took into account the signiﬁcantly increased turnover and international scale of the 
group as a result of this review the annual salaries of the executive directors for 2010 were revised as follows neil 
gaydon £460000 stuart hall £300000 david mckinney £290000 
performance bonus 
the company established a nonpensionable performancerelated bonus plan for the executive directors and 
other key members of management for the year ended 31 december 2009 which was based on the successful 
achievement of corporate and individual objectives the corporate objectives were linked to the key drivers of 
remuneration report
directors’ pace plc annual report    22
value creation for shareholders and the key measure therefore was the proﬁtability of the group for the full ﬁnancial 
year achievement of the 2009 bonus was dependent on the group’s pretax proﬁts before certain exceptional 
items exceeding £25 million with the capacity to earn additional bonus increments upon achievement of higher 
proﬁt targets up to a ceiling of £38 million in addition a number of individual personal objectives were set for 
each director and manager which were aligned with the objectives of the group for the year the maximum bonus 
achievable by the executive directors in the event that all corporate and individual targets were met was 150 of 
basic annual salary with one third of any bonus earned being deferred into shares in the company for a period 
of two years under the group deferred share bonus plan the committee retained a discretion to reduce the 
bonus otherwise payable by up to 20 based on their assessment of the management of the company’s cash 
position during the year the committee having regard to the performance during the period determined to award 
maximum bonus to each of the executive directors under the 2009 annual performance bonus
in addition whilst the normal ceiling for such bonus payments remains at 150 of annual salary as announced in 
the 2008 remuneration report the committee offered members of the executive committee including executive 
directors the opportunity to earn an “exceptional” bonus of up to 100 of annual salary at the discretion of the 
committee payable only in the event of exceptional group and individual performance which has secured the 
delivery of very signiﬁcant beneﬁt to shareholders the committee intended that such exceptional bonus would 
be earned only for performance signiﬁcantly in excess of that already rewarded through the annual bonus the 
committee determined to award such an exceptional bonus to each member of the executive committee as 
reward to reﬂect the ﬁnancial performance of the company during 2009 which was signiﬁcantly in excess of 
the maximum annual bonus target referred to above in the case of the executive directors each will receive 
an exceptional bonus equivalent to 100 of annual salary this exceptional bonus will be paid in its entirety in 
shares deferred for 2 years under the group deferred share bonus plan and normally be subject to forfeiture if the 
executive leaves the group during this period
in respect of the 2010 ﬁnancial year the committee has reviewed the executive bonus structure with its 
remuneration advisers and whilst it proposes that the annual bonus will continue to be based primarily on the 
achievement of group pbt the committee will retain discretion to reduce the bonus otherwise payable to 
executive directors by up to 20 based on their assessment of the executive directors’ management of the 
company’s cash position during 2010 one third of any earned bonus will continue to be deferred into pace shares 
under the group deferred share bonus plan
benefits in kind 
each executive director is entitled to beneﬁts such as the provision of a fully expensed company car plus fuel 
or cash alternative private medical insurance permanent health insurance life insurance and where applicable 
relocation assistance
pension contributions 
in the year ending 31 december 2009 contributions were paid into the executive directors’ pension schemes at 
rates determined by the board contributions have continued to be paid during the current year at the rate of 15 
of each director’s basic salary the group does not operate any deﬁned beneﬁt schemes 
performance share plan
following the approval of shareholders at the 2009 agm a new performance share plan “psp” was introduced 
with all group employees including executive directors eligible to participate under the psp  employees receive 
a conditional right to receive shares for no cost which will normally vest after 3 years subject to continued 
employment and the achievement of stretching performance conditions  23    pace plc annual report
directors’ 
remuneration report continued
psp awards will vest subject to the achievement of 3year targets based on cumulative proﬁt before tax “pbt” 
for the group during the year awards made to all employees across the group including executive directors were 
based on 3year group pbt the cumulative group pbt targets that apply to the awards made in 2009 are  
as follows
cumulative pbt over 3 years  of total award shares vesting
£145 million 
between £85 million and £145 million 
£85 million 
less than £85 million
100 
between 25 and 100 pro rata 
25 
nil
the company’s policy is that psp awards will be satisﬁed using shares purchased in the market via the company’s 
employees’ share trust during the year the executive directors received psp awards over shares worth 100 of 
their basic salary
cumulative pbt targets are proposed for 2010 also but with a revised target range of £255 million 25 vesting 
and £285 million 100 vesting 
share option plans 
the board believes that share ownership encourages employees to contribute further towards improvements in the 
group’s performance to this end the following share option plans have been established by the company 
a regular savings plan the “sharesave plan” which is open to executive directors and employees of the group 
and under which options granted at an initial discount of up to 20 against the quoted market price are normally 
exercisable on completion of a threeyear saye contract
an hmrc approved discretionary plan the “approved pan” under which all employees including fulltime 
directors of the company or any subsidiary who do not have and have not had within the previous twelve months 
a material interest in the company are eligible to participate participation is at the discretion of the board acting 
in accordance with the recommendations of the committee under the approved plan options are granted at the 
prevailing quoted market price and may usually be exercised between three and ten years from the date of the 
grant the maximum award of options to any employee pursuant to the approved plan is £30000 the company 
adopted its ﬁrst approved plan in 1996 and a new approved plan at the agm in september 2005
an unapproved discretionary plan “unapproved plan” which is similar to the approved plan although certain 
rules of the approved plan are not included eg the exclusion of employees who have a material interest in the 
company the company adopted its ﬁrst unapproved plan in 1996 and a new unapproved plan at the agm in 
september 2005 the maximum award of options under the unapproved plan to any employee in each year is 
200 of salary or in exceptional circumstances as determined by the committee 400 of salary
a discretionary unapproved scheme 2000 “2000 unapproved scheme” which was discontinued in august 2005 
under the 2000 unapproved scheme options were granted at the prevailing quoted market price and became 
exercisable “vest” as to 25 each anniversary after the grant over a fouryear period under this scheme options 
were granted up to a limit such that unvested options may not exceed four times annual remuneration although 
the 2000 unapproved scheme has been discontinued outstanding options previously granted survive until exercise 
or lapse
in granting options under the approved plans and the unapproved plans the board may include objective 
performance targets or other conditions as it thinks ﬁt and has included such performance conditions based on 
growth in earnings per share eps of 1518 above the retail prices index “rpi” over a threeyear period in all 
grants under the 1996 approved plan and 1996 unapproved plan prior to 2005 under the 2000 unapproved 
age changed pace plc annual report    24
scheme performance conditions of 6 per annum compound above rpi were applied to the grant of options 
thereunder initial performance targets for the 2005 approved and 2005 unapproved plans set in 2005 required a 
minimum growth in eps of a compound 3 per annum above growth in inﬂation over a three year period at which 
level there is 25 vesting compound growth of 6 per annum above inﬂation is required for 100 vesting with 
vesting on a sliding scale between these two target thresholds
in setting targets for option grants during 2006 the committee was mindful of the need for targets to reﬂect a 
return to proﬁtability and signiﬁcant improvements in earnings accordingly during the ﬁnancial year ending 2 june 
2007 all options granted were subject to performance conditions based on growth in the pretax proﬁts of the 
group “pbt” over a period of three ﬁnancial years with 25 of options vesting at £69 million pbt in the third 
ﬁnancial year and 100 of options vesting at £172 million pbt in the third ﬁnancial year with vesting on a sliding 
scale between these two target thresholds these target thresholds were approved after adjustment by decision of 
the committee having taken external advice to take account of the shortened ﬁnancial year ending 31 december 
2007 during the 7month period ending 31 december 2007 the committee continued to adopt performance 
conditions based on pbt and options granted to employees during the period were subject to conditions such that 
25 of options would vest at £20 million pbt in the third ﬁnancial year and 100 of options vesting at £30 million 
pbt in the third ﬁnancial year ending 31 december 2009
during the year ending 31 december 2008 the committee adopted performance conditions based on cumulative 
growth in eps requiring a minimum growth in eps of  4 per annum above inﬂation over a threeyear period at 
which level there is 25 vesting cumulative growth of 8 per annum above inﬂation is required for 100 vesting 
during the year ending 31 december 2009 the committee adopted similar performance conditions for option 
grants but increased the eps growth required for maximum vesting from rpi  8 to rpi  15 per annum as 
a result of its remuneration review concluded in 2009 the committee believes eps to be appropriate to help 
enhance alignment of the senior executive with shareholder interests whilst still maintaining focus on proﬁtability 
across the senior management team the committee considered these targets to be stretching for the company 
reﬂecting its stage of growth at the time of the award these options remain exercisable only after 3 years from the 
date of grant in order to assess whether the performance conditions have been met the committee will utilise 
the earnings ﬁgures derived from the audited ﬁnancial statements of the group adjusted to exclude exceptional or 
other items that the committee determines appropriate to ensure they reﬂect underlying long term performance 
as a result of the introduction of the performance share plan as the company’s primary longterm incentive option 
awards in 2010 and in subsequent years will be targeted at the company’s most senior executives and be based 
on a ﬁxed number of options rather than value related to an individual’s performance and contribution subject 
always to the discretion of the committee to utilise other award criteria in exceptional circumstances furthermore 
the committee proposes to adopt a similar approach regarding the setting of cumulative eps performance targets 
as in 2009 and these will remain unchanged for option grants in 2010
a separate share option plan has been established for the beneﬁt of the group’s us employees such plan 
operates within the overall limit on issue of new shares of 10 of the company’s issued share capital applicable to 
all the group’s employee share schemes the pace americas sharesave plan is based on the pace sharesave plan 
rules and is designed to satisfy the us internal revenue service requirements for such savingforshares plans 
minimum shareholding
following the review of the group’s remuneration policies completed in february 2009 the committee introduced 
individual shareholding target requirements for members of the executive committee including executive directors 
in the region of 1 x salary with a requirement subject to a discretion of the committee for such executives to retain 
a portion of any net awards ie after tax and exercise cost of new vested sharebased incentives until the target 
shareholding level is reached 25    pace plc annual report
directors’ 
remuneration report continued
service contracts 
company policy is that in normal circumstances executive directors’ notice periods should not exceed 1 year 
each of the executive directors has a service contract with the company each of these agreements is terminable 
by the company on 12 months’ prior written notice or by the relevant director on not less than 6 months’ prior 
written notice at the option of the company each agreement may be terminated forthwith subject to the company 
paying a sum equivalent to 12 months’ salary beneﬁts and pension contributions the remuneration committee 
considers that compensation payments on termination of employment should depend on individual circumstances 
it is the company’s policy to honour its obligations with regard to directors’ service agreements and where the 
employment of a director is terminated in accordance with the aforementioned contractual process the company 
will pay the sum speciﬁed in the relevant service agreement as payable or otherwise pay fair and reasonable 
compensation 
the service agreement of neil gaydon was entered into on 4 may 2006 and was amended on 16 april 2007 21 
january 2008 and 25 january 2010 the service agreement of david mckinney was entered into on 14 november 
2005 and was subsequently amended on 7 december 2006 1 june 2007 21 january 2008 and 25 january 
2010 the service agreement of stuart hall became effective on 2 april 2007 and was subsequently amended 
on 21 january 2008 and 25 january 2010 save for the notice periods referred to in the above paragraph these 
contracts have no unexpired term 
each of the nonexecutive directors is appointed under a letter of appointment which is terminable at any time by 
the company without contractual notice each of the directors has a letter of indemnity issued by the company 
which provides an indemnity in respect of liabilities incurred in the course of their ofﬁce to the extent permitted by 
the company’s articles of association and the provisions of the companies acts 
copies of the service contracts of the executive directors and the letters of appointment of the nonexecutive 
directors together with the letters of indemnity referred to above are available for inspection during normal 
business hours saturdays sundays and bank holidays excepted at the registered ofﬁce of the company 
the company maintains directors’ and ofﬁcers’ liability insurance in respect of senior employees and ofﬁcers of the 
group including the directors the consent of the board is required in the event that an executive director wishes 
to accept an external appointment it has been the practice of the company to permit a director to retain non
executive fees arising from any such appointment but during the year none of the current executive directors held 
such external appointments
the auditors are required to report on the information disclosed below and on pages 26 to 27
directors’ remuneration
total directors’ remuneration in respect of qualifying services for the year ended 31 december 2009 was as 
follows 
 31 dec 31 dec 
 2009 2008 
 £000 £000
fees 234 237 
salaries beneﬁts in kind and termination payments 943 918 
performancerelated bonuses 890 935 
pension contributions 188 119
 2255 2209 
page changed pace plc annual report    26
the remuneration of individual directors in respect of qualifying services for the year ended 31 december 2009 is 
set out in the table below
 salaries performance beneﬁts  total  pension 
 and fees bonus in kind    remuneration         contributions 
    31 dec 31 dec 31 dec 31 dec 
    2009 2008 2009 2008
executive directors £000 £000 £000 £000 £000 £000 £000 
neil gaydon 418 400 – 818 804 114 50 
david mckinney 255 240 – 495 505 36 34 
stuart hall 270 250 – 520 522 38 35
 943 890 – 1833 1831 188 119
nonexecutive directors
mike mctighe 125  – – 125 106 – – 
pat chapmanpincher 38  – – 38 38 – – 
john grant 38 – – 38 13 – –  
mike inglis 33  – – 33 14 – – 
 1177 890 – 2067 2002 188 119
 figures relate to the cash element of annual performance related bonus the following additional amounts were 
awarded to executive directors under the terms of the annual performance related bonus plan and exceptional 
bonus discretion respectively but will be deferred into shares in the company for a period of two years under 
the terms of the group deferred share bonus plan and normally be subject to forfeiture if the director leaves the 
company during this period neil gaydon annual bonus £200000 exceptional award £400000 david mckinney 
annual bonus £120000 exceptional award £240000 and stuart hall annual bonus £125000 exceptional award 
£250000
figures for the year ended 31 december 2008 exclude remuneration of £50000 for robert fleming and £38000 
for marten fraser both of who retired from the board in 2008 
directors’ interests in shares and share options
the interests of directors holding ofﬁce at the yearend and those of their immediate families in the ordinary share 
capital of the company at 31 december 2009 and at the beginning of the period are set out below
  31 december 2009 shares   1 january 2009 shares
  non  under  non under 
    beneﬁcial beneﬁcial  option beneﬁcial beneﬁcial option
pat chapmanpincher  15000 – – 15000 –  – 
john grant – – – – – – 
mike inglis 20000 – – 20000 – – 
neil gaydon 51466 – 1323551 41684 – 2335257 
stuart hall 12739 – 1511016 12739 – 855844  
david mckinney 38159 – 922069 15000  – 1058008 
mike mctighe 50000 – – 75000  –  – 
there were no changes in the directors’ interests in the ordinary share capital of the company between  
31 december 2009 and 1 march 2010  27    pace plc annual report
directors’ 
remuneration report continued
director share options
details of the options andor contingent awards over the ordinary shares of 5p each in the company held by the 
directors who held ofﬁce during the year were as follows
 at                    number of options  at  vesting  
 31 dec                31 dec  exercise period 
 2008 granted exercised lapsed 2009 price from to
neil gaydon
approved plan 3498 – – 3498 – 8575p 170703 160710 
1996 unapproved plan  75000 – – 75000 – 2000p 070702 060709 
1996 unapproved plan 250000 – 250000 – – 7425p 020808 010815 
2000 unapproved scheme 20000 – – – 20000 510p 170805 160814 
2005 unapproved plan 600000 – 600000 – –  635p 180409 170416 
2005 unapproved plan 902127 – 902127 – – 5875p 021009 011016 
2005 unapproved plan 467836 – – – 467836 855p 240611 230618 
2005 unapproved plan – 350000 – – 350000 750p 110312 100319 
deferred share bonus – 243407 – – 243407 00p 270211 260811 
performance share plan – 235294 – – 235294 00p 050512 040519
sharesave plan 9782 – 9782 – – 4600p 011209 300510 
sharesave plan 7014  – – 7014 6700p 011011 300312
david mckinney
2005 approved plan 47430 – 47430 – – 6325p 220109 210116 
2005 unapproved plan 202570 – 202570 – – 6325p 220109 210116 
2005 unapproved plan 510638 – 510638 – – 5875p 021009 011016 
2005 unapproved plan 280701 – – – 280701 855p 240611 230618 
2005 unapproved plan – 350000 – – 350000 750p 110312 100319 
deferred share bonus – 146044 – – 146044 00p 270211 260811 
performance share plan – 141176 – – 141176 00p 050512 040519 
sharesave plan 12521 – 12521 – – 4600p 011209 300510 
sharesave plan 4148 – – – 4148 8200p 011010 310311
stuart hall
2005 approved plan 40955  – – – 40955 7325p 020410 010417 
2005 unapproved plan 505120 – – – 505120 7325p 020410 010417 
2005 unapproved plan 298245 – – – 298245 855p 240611 230618 
2005 unapproved plan –  350000 – – 350000 750p 110312 100319 
deferred share bonus  – 155172  – – 155172 00p 270211 260811 
performance share plan – 150000 – – 150000 00p 050512 040519 
sharesave plan 11524 – – – 11524 8200p 011010 310311
the remuneration committee of the board has agreed to vary this option to give stuart hall the opportunity to exercise this option from 14 
march 2010 the performance condition attached to this option has been met in full
page changed pace plc annual report    28
the midmarket price of shares in the company on 31 december 2009 was 209p the lowest and highest closing 
midmarket prices of shares in the company during the year were 41p and 241p respectively
information concerning the performance conditions attached to the above options is contained on page 23 and 24
employee trusts 
the company has established the pace plc employee beneﬁts trust which is capable of acquiring shares in the 
company in the market and using them for the purposes of satisfying new awards granted under the company’s 
share option plans the deferred share bonus plan and the psp  during the year the trust acquired 2 million 
shares in the company at a cost of £4 million
performance graph 
set out below is a performance graph showing the total shareholder return of the company for the 5 ﬁnancial 
years ended 31 december 2009 compared to the total shareholder return of the ftse electronics and electrical 
equipment sector index which is considered by the board to be an appropriate benchmark index against which to 
compare the company’s performance having regard to the principal activities of the group
by order of the board 
anthony j dixon  
company secretary
2 march 2010
0
100
200
300
400
500
600
2004 2005 2006 2007 2008 2009
pace ftse electronics  electrical equipment 29    pace plc annual report
statement of directors’ responsibilities
the directors are responsible for preparing the annual report and the group and parent company ﬁnancial 
statements in accordance with applicable law and regulations
company law requires the directors to prepare group and parent company ﬁnancial statements for each ﬁnancial 
year under that law they are required to prepare the group ﬁnancial statements in accordance with ifrss as 
adopted by the eu and applicable law and have elected to prepare the parent company ﬁnancial statements on the 
same basis
under company law the directors must not approve the ﬁnancial statements unless they are satisﬁed that they give 
a true and fair view of the state of affairs of the group and parent company and of their proﬁt or loss for that period 
in preparing each of the group and parent company ﬁnancial statements the directors are required to
 the directors are responsible for keeping adequate accounting records that are sufﬁcient to show and explain 
the parent company’s transactions and disclose with reasonable accuracy at any time the ﬁnancial position of the 
parent company and enable them to ensure that its ﬁnancial statements comply with the companies act 2006 
they have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of 
the group and to prevent and detect fraud and other irregularities
under applicable law and regulations the directors are also responsible for preparing a directors’ report directors’ 
remuneration report and corporate governance statement that complies with that law and those regulations
the directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included 
on the company’s website legislation in the uk governing the preparation and dissemination of ﬁnancial 
statements may differ from legislation in other jurisdictions
directors’ responsibilities
statement of pace plc annual report    30
independent auditors’ report to the members of pace  plc
we have audited the ﬁnancial statements of pace plc for the year ended 31 december 2009 set out on pages 
33 to 70 the ﬁnancial reporting framework that has been applied in their preparation is applicable law and 
international financial reporting standards ifrss as adopted by the eu and as regards the parent company 
ﬁnancial statements as applied in accordance with the provisions of the companies act 2006
this report is made solely to the company’s members as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken so that we might state to the company’s members 
those matters we are required to state to them in an auditors’ report and for no other purpose to the fullest extent 
permitted by law we do not accept or assume responsibility to anyone other than the company and the company’s 
members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement set out on page 29 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 apb’s website at wwwfrcorguk
apbscopeukp 
opinion on ﬁnancial statements
in our opinion
 at 31 december 2009 and of the group’s proﬁt for the year then ended
 the eu and as applied in accordance with the provisions of the companies act 2006 and
 and as regards the group ﬁnancial statements article 4 of the ias regulation
opinion on other matters prescribed by the companies act 2006
in our opinion
 companies act 2006
 prepared is consistent with the ﬁnancial statements
auditors’ report
independent 31    pace plc annual report
independent
auditors’ report continued
matters on which we are required to report by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report to you if in our opinion
 not been received from branches not visited by us or
 not in agreement with the accounting records and returns or
 under the listing rules we are required to review
 of the june 2008 combined code speciﬁed for our review
chris hearld senior statutory auditor 
for and on behalf of kpmg audit plc statutory auditor 
chartered accountants 
1 the embankment 
neville street 
leeds 
ls1 4dw
2 march 2010
page changed contents
financial statements
33 financial statements
40 notes to the financial statements
71 directors secretary and advisers
72 five year record and shareholder information
page changed
pace plc annual report    32 consolidated income statement
for the year ended 31 december 2009
  year ended year ended
  31 december 31 december
  2009 2008
 note £000 £000
revenue 3 1133442 745475
cost of sales  933965   610268
gross proﬁt  199477 135207
administrative expenses   
research and development expenditure  68832   60480
other administrative expenses
    before exceptional costs  54830    45553
    exceptional costs 5  10962                      
amortisation of other intangibles 11 6667  3715
total administrative expenses  130329    120710
other operating income  508 
operating proﬁt   69656 14497
financial income – interest receivable 6 337 202
financial expenses – interest payable 6 134  871
proﬁt before tax  69859 13828
 
tax charge 8 18473 2774
proﬁt after tax  51386  11054
attributable to
equity holders of the company  51386 11054
earnings per ordinary share
basic 9 177p 40p
diluted earnings 9 172p 39p 
33    pace plc annual report   year ended year ended
  31 december 31 december
  2009 2008
  £000 £000
proﬁt for the period  51386 11054
other comprehensive income   
exchange differences on translating foreign operations  9487 12580
net change in fair value of cash ﬂow hedges transferred to 
proﬁt or loss gross of tax  12551 828
deferred tax adjustment on above  3718 240
effective portion of changes in fair value of cash ﬂow hedges gross of tax  19645 4495
deferred tax adjustment on above  5307 1300
other comprehensive income for the period net of tax  3982 8797
total comprehensive income for the period  47404    19851
total comprehensive income attributable to
equity holders of the company  47404 19851
consolidated statement of comprehensive income
for the year ended 31 december 2009
pace plc annual report    34 consolidated balance sheet
at 31 december 2009
  31 dec 2009            31 dec 2008
 note £000 £000
assets
non current assets 
property plant and equipment 11 19550 14702
intangible assets – goodwill 11 70360 76337
intangible assets – other intangibles 11 14017 22744
intangible assets – development expenditure 11 28738 26490
available for sale ﬁnancial assets 12  349
deferred tax assets 13 6431 7119
total non current assets  139096 147741
current assets
inventories 14 87046 57229
trade and other receivables 15 211736 231009
cash and cash equivalents  73509 37717
current tax assets  2621 204
total current assets  374912 326159
total assets  514008 473900
equity
issued capital 20 15179 14949
share premium 21 39444 37023
merger reserve 22 55490 55490
hedging reserve   1722 3783
translation reserve  3518 13005
retained earnings 23 80995 27245
total equity  196348 143929
liabilities
non current liabilities
other payables  2232 
deferred tax liabilities 13 14653 15733
provisions 19 19340 17566
total non current liabilities  36225 33299
current liabilities
trade and other payables 16 262584 278718
current tax liabilities  4338 
provisions 19 14513 17954
total current liabilities  281435 296672
total liabilities  317660 329971
total equity and liabilities  514008 473900
these ﬁnancial statements were approved by the board of directors on 2 march 2010 and were signed on its behalf by
neil gaydon chief executive ofﬁcer
stuart hall chief financial ofﬁcer
35    pace plc annual report   31 dec 2009 31 dec 2008
 note £000 £000
assets
non current assets
property plant and equipment 11 12305 8268
intangible assets – development expenditure 11 16581 14982
investments in group and other companies 12 74300 74649
deferred tax assets 13 3221 4016
total non current assets  106407 101915
current assets
inventories 14 21482 8005
trade and other receivables 15 200039 187985
cash and cash equivalents  26409 15799
current tax assets  2621 
total current assets  250551 211789
total assets  356958 313704
equity
issued capital 20 15179 14949
share premium 21 39444 37023
merger reserve 22 55490 55490
hedging reserve  124 4086
retained earnings 23 53481 20858
total equity  163718 124234
liabilities
non current liabilities
provisions 19 14004 8811
other payables  2232 
deferred tax liabilities  3523 
total non current liabilities  19759 8811
current liabilities
trade and other payables 16 166669 173732
current tax liabilities    7
provisions 19 6812 6934
total current liabilities  173481 180659
total liabilities  193240 189470
total equity and liabilities  356958 313704
these ﬁnancial statements were approved by the board of directors on 2 march 2010 and were signed on its behalf by
neil gaydon chief executive ofﬁcer
stuart hall chief financial ofﬁcer
company balance sheet
at 31 december 2009
pace plc annual report    36  share share merger hedging translation retained total
 capital premium reserve reserve reserve earnings equity
group £000 £000 £000 £000 £000 £000 £000
balance at 31 december 2007 11684 36885    425 18608 67602
total comprehensive income for the period    3783 12580 11054 19851
deferred tax on share options      606 606
employee share incentive charges      1011 1011
movement in employee share trusts      2822 2822
issue of shares 3265 138 55490    58893
balance at 31 december 2008 14949 37023 55490 3783 13005 27245 143929
total comprehensive income for the period    5505 9487 51386 47404
deferred tax on share options      1845 1845
income tax on share options      2881 2881
dividends to equity shareholders      3206 3206
employee share incentive charges      2536 2536
movement in employee share trusts      1692 1692
issue of shares 230 2421     2651
balance at 31 december 2009 15179 39444 55490 1722 3518 80995 196348
company
balance at 31 december 2007 11684 36885    13964 62533
total comprehensive income for the period    4086  9311 5225
deferred tax on share options      606 606
employee share incentive charges          1011 1011
movement in employee share trusts      2822 2822
issue of shares 3265 138 55490    58893
balance at 31 december 2008 14949 37023 55490 4086  20858 124234
total comprehensive income for the period    4210  30259 34469
deferred tax on share options      1845 1845
income tax on share options      2881 2881
dividends to equity shareholders      3206 3206
employee share incentive charges      2536 2536
movement in employee share trusts      1692 1692
issue of shares 230 2421     2651
balance at 31 december 2009 15179 39444 55490  124   53481 163718
consolidated statement of changes in shareholders’ equity 
37    pace plc annual report  year year
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
cash ﬂows from operating activities
proﬁt before tax 69859 13828
adjustments for
share based payments charge 2536 1011
depreciation of property plant and equipment 7607 4504
amortisation and impairment of development expenditure 39529 21895
amortisation of other intangibles 6667 3715
proﬁt on sale of property plant and equipment 600 
net ﬁnancial incomecharges 203 669
movement in trade and other receivables  21295 67810
movement in trade and other payables 12984 124572
movement in inventories 28792 19188
movement in provisions 1268 4098
cash generated from operations 103646 87294
interest paid 134 993
tax paid 12439 3584
net cash generated from operating activities 91073 82717
cash ﬂows from investing activities
acquisition of subsidiary net of cash acquired   3134
purchase of property plant and equipment 12416 6584
proceeds from disposal of property plant  equipment 949 
development expenditure 42370 20995
interest received 337 200
net cash used in investing activities  53500 30513
cash ﬂows from ﬁnancing activities
proceeds from issue of share capital 2651 376
dividends paid 3206 
proceeds from exercise of employee share options 2354 407
purchase of own shares by employee beneﬁt trust 4046 3229
net cash used in ﬁnancing activities 2247 2446
net change in cash and cash equivalents 35326 49758
cash and cash equivalents at start of period 37717 12094
effect of exchange rate ﬂuctuations on cash held 466 53
cash and cash equivalents at end of period 73509 37717
consolidated statement of cash flows
for the year ended 31 december 2009
pace plc annual report    38  year year
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
cash ﬂows from operating activities
proﬁt before tax 37263 8689
adjustments for   
share based payments charge 2536 1011
depreciation of property plant and equipment 4146 3883
amortisation and impairment of development expenditure 25117 21895
loss on sale of property plant and equipment  12
net ﬁnancial incomecharges 1198 669
movement in trade and other receivables  8226 85933
movement in trade and other payables 1514 92177
movement in inventories 13256 20663
movement in provisions  5285 1871
cash generated from operations 50153 61195
interest paid 466 953
tax paid 3562 44
net cash generated from operating activities 46125 60198
cash ﬂows from investing activities
acquisition of subsidiary net of cash acquired  3134
purchase of property plant and equipment 8211 4816
development expenditure 26721 20995
interest received 1664 143
net cash used in investing activities  33268 28802
cash ﬂows from ﬁnancing activities
proceeds from issue of share capital 2651 376
dividends paid 3206 
proceeds from exercise of employee share options 2354 407
purchase of own shares by employee beneﬁt trust 4046 3229
net cash used in ﬁnancing activities 2247 2446
net change in cash and cash equivalents 10610 28950
cash and cash equivalents at start of period 15799 13146
effect of exchange rate ﬂuctuations on cash held  5
cash and cash equivalents at end of period 26409 15799
company statement of cash flows
for the year ended 31 december 2009
39    pace plc annual report 1  basis of preparation and business environment
the following accounting policies have been applied consistently in dealing with items which are considered material in relation to 
the ﬁnancial statements
basis of preparation
the ﬁnancial statements have been prepared in accordance with applicable accounting standards and under the historical cost 
convention as modiﬁed by the revaluation of derivative instruments
international financial reporting standards
the group’s ﬁnancial statements have been prepared in accordance with international financial reporting standards “ifrs” as 
endorsed by the european union the company’s ﬁnancial statements have been prepared on the same basis and as permitted by 
section 408 of the companies act 2006 no income statement is presented for the company
financial year end
the current year’s ﬁnancial statements are for the year ended 31 december 2009 and the previous year’s ﬁnancial statements are 
for the year ended 31 december 2008
basis of consolidation
the group ﬁnancial statements consolidate those of the company and of its subsidiary undertakings note 12 drawn up to 31 
december 2009 the results of subsidiaries acquired in the period are included in the income statement from the date they are 
acquired on acquisition all of the subsidiaries’ assets and liabilities that exist at the date of acquisition are recorded at their fair 
values reﬂecting their condition at that date subsidiaries are entities controlled by the company control exists when the company 
has the power directly or indirectly to govern the ﬁnancial and operating policies of an entity so as to obtain beneﬁts from its 
activities in assessing control potential voting rights that presently are exercisable or convertible are taken into account intragroup 
transactions including sales proﬁts receivables and payables have been eliminated on the group consolidation investments in 
subsidiaries are carried at cost less any impairment loss in the ﬁnancial statements of the company
signiﬁcant judgements key assumptions and estimation uncertainty
the group’s main accounting policies affecting its results of operations and ﬁnancial condition are set out on pages 40 to 45 
judgements and assumptions have been required by management in applying the group’s accounting policies in many areas 
actual results may differ from the estimates calculated using these judgements and assumptions key areas of estimation 
uncertainty and critical accounting judgements are as follows
warranties
pace provides product warranties for its settop boxes although it is difﬁcult to make accurate predictions of potential failure rates 
or the possibility of an epidemic failure as a warranty estimate must be calculated at the outset of a product before ﬁeld deployment 
data is available these estimates improve during the lifetime of the product in the ﬁeld
a provision for warranties is recognised when the underlying products are sold the provision is based on historical warranty data 
and a weighting of all possible outcomes against their associated probabilities the level of warranty provision required is reviewed 
on a product by product basis and provisions adjusted accordingly in the light of actual performance
royalties
pace’s products incorporate third party technology usually under licence inadvertent actions may expose pace to the risk of 
infringing third party intellectual property rights potential claims can still be submitted many years after a product has been 
deployed any such claims are always vigorously defended
a provision for royalties is recognised where the owners of patents covering technology allegedly used by the group have indicated 
claims for royalties relating to the group’s use including past usage of that technology having taken legal advice the board 
considers that there are defences available that should mitigate the amounts being sought the group will vigorously negotiate or 
defend all claims but in the absence of agreement the amounts provided may prove to be different from the amounts at which the 
potential liabilities are ﬁnally settled the provision is based on the latest information available
operating segments
following the introduction of ifrs 8 operating segments effective for accounting periods beginning on or after 1 january 2009 the 
group has determined that based on its internal reporting framework and management structure that it has only one reportable 
segment such determination is necessarily judgmental in its nature and has been determined by management in preparing the 
ﬁnancial statements the level of disclosure of segmental and other information is determined by such assessment  
further details of the considerations made and the resulting disclosures are provided in note 3 to the ﬁnancial statements
notes
pace plc annual report    40 intangible assets 
the group’s business includes a signiﬁcant element of research and development activity under accounting standards principally 
ias38 intangible assets there is a requirement to capitalise and amortise development spend to match costs to expected beneﬁts 
from projects deemed to be commercially viable the application of this policy involves the ongoing consideration by management 
of the forecasted economic beneﬁt from such projects compared to the level of capitalised costs together with the selection of 
amortisation periods appropriate to the life of the associated revenues from the product 
such considerations made by management are a key judgement in preparation of the ﬁnancial statements
eu import duty classiﬁcation
pace along with other set top box manufacturers and broadcasters has continued to monitor the reinterpretation by european 
union customs authorities of customs regulations that could result in the extension of import duties to interactive settop boxes 
with a hard drive manufactured outside but imported into the eu on 7th may 2008 the nomenclature committee of the european 
commission issued an explanatory note “en” 05902007 to the combined nomenclature setting out their view that settop boxes 
with a hard drive should be classiﬁed under customs tariff heading 8521 90 00 and so subject to a 139 ad valorem duty on 
importation to the european union
as a consequence pace is potentially exposed to a retrospective customs duty liability in respect of such settop boxes it has imported
having previously obtained binding tariff information “bti” rulings from hmrc which provide protection in respect of much of the 
potential period of retrospective application of duty on relevant products and having taken legal advice management’s opinion is 
that the retrospective application of the explanatory note would not be supportable in law accordingly pace is in common with 
other affected importers appealing any retrospective assessment made and will defend its position on this matter
an assessment has been received from hmrc in an amount of £77m representing import duty relating to imports prior to 7 may 
2008 having taken advice management’s best estimate is that no material outﬂow of economic beneﬁt would be required to 
discharge this obligation as such at 31 december 2009 any potential liability should be considered contingent a bank guarantee 
is held whilst the appeal continues
writ issued against company
a writ has been issued against the company by a former customer relating to the supply of settop boxes in 20002001 the 
amount claimed is 72m the directors believe that they have good defences to the claim and that in the absence of any liability 
no provision has been made in addition on 15 july 2007 pace ﬁled a counter claim for circa 10m against this former customer 
and a related third party
going concern
the group has borrowing facilities to a maximum of £35m in place until december 2011 these facilities are subject to ﬁnancial 
performance covenants
the board has prepared a working capital forecast based upon assumptions as to trading and the matters above as well as 
building in the other circumstances noted in the business environment section within the directors’ report and the availability 
of cash reserves based upon this analysis the board has concluded that the group has adequate working capital will meet 
the ﬁnancial performance covenants and futher it is appropriate to use the going concern basis of preparation for this ﬁnancial 
information
2  accounting policies
goodwill
all business combinations are accounted for by applying the purchase method goodwill represents the excess of the fair value of 
the consideration paid on acquisition of a business over the fair value of the assets including any intangible assets identiﬁed and 
liabilities and contingent liabilities acquired goodwill is not amortised but is measured at cost less impairment losses in determining 
the fair value of consideration the fair value of equity issued is the market value of equity at the date of completion and the fair 
value of contingent consideration is based upon the extent to which the directors believe performance conditions will be met and 
thus whether any further consideration will be payable
as permitted by ifrs 1 goodwill arising on acquisitions before 29 may 2004 date of transition to adopted ifrs has been frozen 
at the uk gaap amounts subject to being tested for impairment annually the group performs its annual impairment review at the 
cashgenerating unit level
other intangibles
other intangible assets that are acquired by the group which have ﬁnite useful lives are measured at cost less accumulated 
amortisation and accumulated impairment losses the useful economic life is estimated based upon a determination of ongoing 
notes
continued
41    pace plc annual report ﬁnancial beneﬁts with reference as appropriate to contractual terms assessed life of customer relationships or trademarks
research and development expenditure
all ongoing research expenditure is expensed in the period in which it is incurred where a product is technically feasible 
production and sales are intended a market exists and sufﬁcient resources are available to complete the project development 
costs are capitalised and subsequently amortised on a straightline basis over the estimated useful life of the product concerned 
from commercial launch the expenditure capitalised includes the cost of materials direct labour and an appropriate proportion 
of overheads where these conditions are not met development expenditure is recognised as an expense in the period in which 
it is incurred capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses the 
estimated useful lives for development expenditure are estimated to be in a range of between 6 and 18 months
capitalised development expenditure is not treated as a realised loss for the purpose of determining the company’s distributable 
proﬁts as the costs meet the conditions required to be treated as an asset in accordance with ias 38
the amortisation of capitalised development expenditure is charged to the income statement in research and development 
expenditure within administrative expenses category 
impairment charges
the company considers at each reporting date whether there is any indication that noncurrent assets are impaired if there is such 
an indication the company carries out an impairment test by measuring an asset’s recoverable amount which is the higher of its 
fair value less costs to sell and its value in use effectively the expected cash to be generated from using the asset in the business 
if the recoverable amount is less than the carrying amount an impairment loss is recognised and the asset is written down to its 
recoverable amount an impairment loss in respect of goodwill is not reversed
in respect of other assets an impairment loss is reversed when there is an indication that the impairment loss may no longer exist 
and there has been a change in the estimates used to determine the recoverable amount 
an impairment loss is reversed only to the extent that the asset’s carrying value does not exceed the amount that would have been 
determined net of depreciation or amortisation if no impairment loss had been recognised
exceptional items
items which are signiﬁcant by virtue of their size or nature and which are considered nonrecurring are classiﬁed as exceptional 
operating items such items which include for instance the costs of opening or closing premises costs of signiﬁcant restructurings 
and proﬁts and losses made on the disposal of properties are included within the appropriate consolidated income statement 
category but are highlighted separately in the notes to the ﬁnancial statements exceptional operating items are excluded from the 
proﬁt measures used by the board to monitor underlying performance
revenue recognition
revenue comprises the value of sales of goods and services to third party customers occurring in the period stated exclusive of 
value added tax and net of trade discounts and rebates
revenue on the sale of goods is recognised when substantially all of the risks and rewards in the product have passed to the 
customer and substantially all of the group’s work is completed which is usually upon delivery to the customer or his agent
revenue in respect of services rendered including engineering consultancy and support and software services is recognised over 
the period over which they are performed in relation to the level of work undertaken project milestones achieved and any future 
obligations remaining
the company does not enter into contracts that cover both the provision of hardware and services in combination
government grants
grants in respect of speciﬁc research and development projects are credited to research and development costs within the income 
statement or against the capitalised development expenditure as appropriate to match to the project’s related expenditure
cash and cash equivalents
cash and cash equivalents comprise cash balances and call deposits the company considers all highly liquid investments with 
original maturity dates of three months or less to be cash equivalents bank overdrafts that are repayable on demand and form an 
integral part of the group’s cash management system are included as a component of cash and cash equivalents for the purpose of 
the statement of cash ﬂows
allowance for doubtful debts
trade receivables are assessed individually for impairment or collectively where the receivables are not individually signiﬁcant where 
necessary provisions for doubtful debts are recorded in the income statement 
notes
continued
pace plc annual report    42 inventory
inventory is stated at the lower of cost and net realisable value cost is determined on a ﬁrstinﬁrstout basis and includes 
appropriate transport and handling costs but excludes royalties due only on ultimate sale where necessary provision is made for 
obsolete slowmoving and defective inventory
property plant and equipment
the cost of items of property plant and equipment is its purchase cost together with any incidental costs of acquisition 
depreciation is calculated so as to write off on a straightline basis over the expected useful economic lives of the asset concerned 
the cost of property plant and equipment less any estimated residual values which are adjusted if appropriate at each balance 
sheet date the principal economic lives used for this purpose are
 provision is made against the carrying value of items of property plant and equipment where an impairment in value is deemed to 
have occurred 
leased assets
leases in terms of which the group assumes substantially all the risks and rewards of ownership are classiﬁed as ﬁnance leases 
assets held under ﬁnance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their 
expected useful lives the interest element of leasing payments represents a constant proportion of the capital balance outstanding 
and is charged to the income statement over the period of the lease
all other leases are regarded as operating leases and the payments made under them are charged to the income statement on a 
straightline basis over the lease term
currency translation
transactions in foreign currencies are translated at the exchange rate ruling at the date of transaction monetary assets and liabilities 
denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date
the assets and liabilities of foreign operations including goodwill and fair value adjustments arising on consolidation are translated 
at foreign exchange rates ruling at the balance sheet date the revenues and expenses of foreign operations are translated at an 
average rate approximate to the foreign exchange rate ruling at the date of the transactions 
exchange differences from the above are taken directly to the translation reserve they are released to the income statement on disposal
derivative financial instruments
the group uses derivative ﬁnancial instruments usually forward foreign exchange contracts to hedge its exposure to foreign 
exchange risks arising from operational ﬁnancing and investment activities in accordance with its treasury policy the group does 
not hold or issue derivative ﬁnancial instruments for trading purposes 
following enhancements in the group’s hedging policy and changes in the group’s currency proﬁles following the acquisition of 
pace france in 2008 the directors have determined that the instruments qualify for cash ﬂow hedge accounting
derivative ﬁnancial instruments are classiﬁed as cashﬂow hedges when they hedge the group’s exposure to variability in cash ﬂows 
that are either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction
derivatives are reviewed quarterly for effectiveness where a derivative ﬁnancial instrument is designated as a hedge of the variability 
in cash ﬂows of a recognised asset or liability or highly probable forecast transaction the effective part of any gain or loss on the 
movement in fair value of the derivative ﬁnancial instrument is recognised directly in equity
the gain or loss on any ineffective part of the hedge is immediately recognised in the income statement within ﬁnance incomecosts 
if a hedge of a forecast transaction subsequently results in the recognition of a ﬁnancial asset or liability the associated cumulative 
gains or losses that were recognised directly in equity are reclassiﬁed into the income statement when the transaction occurs
taxes
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the tax 
rates that have been enacted or substantively enacted by the balance sheet date
deferred tax is provided using the balance sheet liability method providing where relevant for temporary differences between the 
carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes deferred tax 
is measured using the tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to 
apply when the asset is realised or the liability settled 
notes
continued
43    pace plc annual report a net deferred tax asset is recognised only when it is probable that sufﬁcient taxable proﬁts will be available in the foreseeable future 
from which the reversal of the temporary differences can be deducted
sharebased payments
the company issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are 
measured by the company and the group at fair value at the date of grant fair value is measured by use of the blackscholes 
pricing model the fair value determined at the grant date of the equitysettled sharebased payments is expensed on a straightline 
basis over the vesting period based on the company’s estimate of the number of shares that will eventually vest
the value of the charge is adjusted in the income statement of the company and the group over the remainder of the vesting period 
to reﬂect expected and actual levels of option vesting with the corresponding adjustment made in equity
the company has applied the exemption available under ifrs 2 to apply its provisions only to those options granted after 7 
november 2002 and which were outstanding at 1 january 2005
employee share ownership plans
the material assets liabilities income and costs of the pace plc employee beneﬁts trust are treated as being those of the 
company until such time as the company’s own shares vest unconditionally with employees the consideration paid for the shares 
is deducted in arriving at equity
employee beneﬁts
obligations for contributions to deﬁned contribution pension plans are recognised as an expense in the income statement as 
incurred the group has no deﬁned beneﬁt arrangements in place
available for sale financial assets
available for sale ﬁnancial assets are stated at the lower of the carrying amount and fair value less costs to sell if their carrying 
amount is recovered principally through a sale transaction rather than through continuing use
finance income
finance income relates to interest income which is accrued on a time basis by reference to the principal outstanding and at the 
effective interest rate applicable
equity instruments
equity instruments issued by the company are recorded at the proceeds received net of direct issue costs 
dividends payable
distributions to equity holders are disclosed as a component of the movement in shareholders’ equity a liability is recorded for a 
ﬁnal dividend when the dividend is declared by the company’s shareholders and for an interim dividend when the dividend is paid
provisions
a provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past 
event and it is probable that an outﬂow of economic beneﬁts will be required to settle the obligation
a royalties
  a provision for royalties is recognised where the owners of patents covering technology allegedly used by the group have 
indicated claims for royalties relating to the group’s use including past usage of that technology the provision is based on the 
latest information available 
b warranties
  a provision for warranties is recognised when the underlying products or services are sold the provision is based on historical 
warranty data and a weighting of all possible outcomes against their associated probabilities the level of warranty provision 
required is reviewed on a product by product basis and provisions adjusted accordingly in the light of actual performance
c restructuring
  a provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan and the 
restructuring has either commenced or has been announced publicly provisions are not recognised for future operating losses
d onerous contracts
  a provision for onerous contracts is recognised when the expected beneﬁts to be derived by the group from a contract are 
lower than the unavoidable cost of meeting its obligations under the contract
notes
continued
pace plc annual report    44 change in accounting policy
determination and presentation of operating segments
as of 1 january 2009 the group determines and presents operating segments based on the information that internally is provided 
to the board of directors which is the group’s chief operating decision maker “codm” this change in accounting policy is due 
to the adoption of ifrs 8 operating segments previously operating segments were determined and presented in accordance with 
ias 14 segment reporting the new accounting policy in respect of operating segment disclosures is presented as follows
an operating segment is a component of the group that engages in business activities from which it may earn revenues and incur 
expenses including revenues and expenses that relate to transactions with any of the group’s other components an operating 
segment’s operating results are reviewed regularly by the codm to make decisions about resources to be allocated to the segment 
and assess its performance and for which discrete ﬁnancial information is available 
since the change in accounting policy only impacts presentation and disclosure aspects there is no impact on earnings per share
under both ifrs 8 operating segments and ias 14 segment reporting the group has determined that it only has one reportable 
segment ifrs 8 has been applied to aggregate operating segments on the grounds of similar economic characteristics this 
position will be monitored as the group develops
presentation of ﬁnancial statements
the group applies revised ias 1 presentation of financial statements 2007 which became effective as of 1 january 2009 as a 
result the group presents in the consolidated statement of changes in equity all owner changes in equity whereas all nonowner 
changes in equity are presented in the consolidated statement of comprehensive income this presentation has been applied in 
these ﬁnancial statements as of and for the year ended on 31 december 2009
comparative information has been represented so that it also is in conformity with the revised standard since the change in 
accounting policy only impacts presentation aspect there is no impact on earnings per share
new standards and interpretations not yet adopted
a number of new standards amendments to standards and interpretations have been issued but are not yet effective for the year 
ended 31 december 2009 and have not been applied in preparing these consolidated ﬁnancial statements none of these will have 
an effect on the consolidated ﬁnancial statements of the group except for eligible hedged items  amendment to ias 39 financial 
instruments recognition and measurement which clariﬁes the existing principles that determine whether speciﬁc risks or portions 
of cash ﬂows are eligible for designation in a hedging relationship the amendment which becomes mandatory for the group’s 
2010 consolidated ﬁnancial statements is not expected to have a signiﬁcant impact on the consolidated ﬁnancial statements
3  segmental analysis
the group’s principal activities are the development design and distribution of digital receivers and receiver decoders for the 
reception of digital television and the receptiontransmission of interactive services telephony and high speed data “settop 
boxes” the group also provides engineering design software applications and support services to multiple service operators 
broadcasters telecommunications companies and retail markets worldwide each of these services may be delivered over satellite 
cable terrestrial and ip network transmission systems
the group operates through a number of operating segments being groupings of “customer account teams” underpinned by the 
conditional access technology used in the settop box with the exception of the networks customer account team which is newly 
established and not currently material to the group each customer account team is involved in the design and distribution of set
top boxes to major paytv operators and retailers
consideration of ifrs 8 operating segments
following the introduction of the above accounting standard effective for accounting periods beginning on or after 1 january 2009 
the group has made the following considerations to arrive at the disclosure made in these ﬁnancial statements
ifrs 8 requires consideration of the chief operating decision maker “codm” within the group in line with group’s internal 
reporting framework and management structure the key strategic and operating decisions are made by the board of directors who 
review internal monthly management reports budget and forecast information as part of this accordingly the board of directors are 
deemed to be the codm
operating segments have then been identiﬁed based on the internal reporting information and management structures within the 
group from such information customer account teams are determined to represent operating segments given the existence of 
segment managers as deﬁned by ifrs 8 within the structures
following the identiﬁcation of operating segments the group has then assessed the similarity of the economic characteristics of 
the various operating segments given the similarity of the products and services and markets operated in within each customer 
account team excluding the networks customer account team referred to below it has been concluded that each operating 
segment has fundamentally the same economic characteristics given this the group has considered the overriding core principles 
of ifrs 8 and has determined that it is appropriate to aggregate the operating segments into one reportable segment for the 
purposes of disclosure in the ﬁnancial statements
notes
continued
45    pace plc annual report in the consideration of economic characteristics of the customer account teams the newly formed networks customer account 
team does represent a different product and markets from the other customer account teams at the current time such customer 
account team is not material to the group thereby not requiring separate disclosure under ifrs 8 but given the anticipated growth 
in this business it is expected that this will represent a separate reportable segment in the future 
this position will be monitored as the group develops 
reconciliations of reportable segment revenues proﬁt or loss assets and liabilities and other material items
information regarding the results of the reportable segment is included below performance is measured based on segment proﬁt before 
income tax as included in the internal management reports that are reviewed by the board of directors segment proﬁt is used to 
measure performance as management believes that such information is the most relevant in evaluating the results of certain segments 
relative to other entities that operate within these industries there are no material intersegment transactions however when they do 
occur pricing between segments is determined on an arm’s length basis revenues disclosed below materially represent revenues to 
external customers 
 12 months 12 month
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
revenues
total revenue for reportable segments 1142097 732458 
other non customer account team speciﬁc revenue 8860 6433
unallocated fx due to centralised treasury function 17515 6584
consolidated revenue 1133442 745475
proﬁt or loss
total proﬁt or loss for reportable segments 94669 36061
other non customer account team speciﬁc proﬁt or loss 2804 2104
unallocated amounts
other corporate expenses 21150 8991
exceptional items  10962
amortisation of intangibles 6667 3715
interest 203 669
consolidated proﬁt before tax 69859 13828
assets
total assets included in codm information for reportable segments 325127 313032
unallocated amounts
fixed assets 19550 14702
cash balances 73509 37717
tax balances 9052 7323
prepayments and accrued income 2393 2045
goodwill and other intangibles 84377 99081
consolidated total assets 514008 473900
liabilities
total liabilities included in codm information for reportable segments 262246 272065
unallocated amounts
tax balances 18991 15733
royalty provisions 10947 8811
other liabilities 25476 33362
consolidated total liabilities 317660 329971
reconciling items above mainly relate to amounts managed centrally by the head ofﬁce function rather than directly managed in 
each operating segment and include treasury foreign exchange and corporate matters taxation and other central assets
notes
continued
pace plc annual report    46 other material items 2009 reportable
 segment  consolidated
 totals adjustments totals
 £000 £000 £000
capital expenditure  12932 12932
depreciation 7607  7607
impairment of intangible assets 6826 349 7175
other material items 2008 reportable
 segment  consolidated
 totals adjustments totals
 £000 £000 £000
capital expenditure  6584 6584
depreciation 12068  12068
impairment of intangible assets 6710  6710
major customers
transactions with the group’s three largest customers represent 17 13 and 10 of the group’s total revenues
geographical analysis
in presenting information on the basis of geographical segments segment revenue is based on the geographical location of 
customers segment assets are based on the geographical location of the assets
 12 months 12 months
 ended ended
 31 dec 2009 31 dec 2008
revenue by destination £000 £000
united kingdom 84368 110251
europe 343765 239109
north america 429085 179302
latin america 121471 84812
rest of the world 154753 132001
 1133442 745475
the split of noncurrent assets by location is as follows
 12 months 12 months
 ended ended
 31 dec 2009 31 dec 2008
non current assets £000 £000
united kingdom 81483 81795
france 32843 35543
united states 16304 18020
rest of the world 2035 5264
   
 132665 140622
non current assets relate to property plant and equipment and intangible assets and as required under ifrs 8 exclude deferred  
tax assets
intangible assets have been treated as being located in the uk
notes
continued
47    pace plc annual report 4  expenses and auditors’ remuneration
 12 months 12 month
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
fees payable to the company’s auditors for the audit of
company’s annual accounts 190 155
fees payable to the company’s auditors and its associates for other services to the group
audit of the company’s subsidiaries’ ﬁnancial statements pursuant to legislation 96 106
other services pursuant to interim reporting legislation 30 40
other services relating to taxation 121 43
services relating to corporate ﬁnance  372
services relating to information technology   45
other services  3 21
depreciation of plant property and equipment
owned 7607 4504
other operating lease rentals
land and buildings 5900 3605
motor vehicles   6
proﬁt on disposal of plant property and equipment 600 
net foreign exchange losses gains recognised within operating proﬁt 9407 1718
5  exceptional items 
 12 months 12 months
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
restructuring and reorganisation costs  8946
integration costs  2016
  10962
the restructuring and reorganisation costs relate to a restructuring programme within the group and represent incremental costs 
to the business in relation to employee costs which either have been incurred or will be paid within the next twelve months the 
integration costs relate to the integration of the acquired set top box business of royal philips electronics
6  finance incomecosts
 12 months 12 months
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
finance income – interest on bank deposits 337 202
finance costs 134 871
notes
continued
pace plc annual report    48 7  staff numbers and costs
the average number of persons including directors employed by the group and company during the year analysed by category 
were as follows
 group company
 year  year year year
 ended ended ended ended
 31 dec 2009 31 dec 2008 31 dec 2009 31 dec 2008
research and development 700 531 302 293
administration 168 133 94 82
sales and marketing 23 25 13 18
manufacturing and operations 167 73 50 40
 1058 762  459 433
the aggregate payroll costs of these persons were as follows
  group company
 year year year year 
 ended ended ended ended
 31 dec 2009 31 dec 2008 31 dec 2009 31 dec 2008
 £000 £000 £000 £000
 
wages and salaries 43700 32573 19982 17747
social security costs 10929 8073 3165 2271
other pension costs 1397 1412 1233 1005
share based payments see note 26 2536 1011 2536 1011
redundancy costs 635 8023 635 175
 59197 51092 27551 22209
remuneration of directors
the remuneration share options and pension entitlements of the directors are disclosed in the directors’ remuneration report on 
pages 21 to 28
8  current and deferred income tax
 year year 
 ended ended
 31 dec 2009 31 dec 2008
the tax charge is based on the proﬁt for the year and comprises  £000 £000
current tax
uk tax charge 3782 
overseas tax charge 11275 2921
prior year adjustments  2405 
total current tax charge 17462 2921
deferred tax
origination and reversal of timing differences note 13 2731 1097
adjustment in respect of previous periods 1720 950
total deferred tax chargecredit 1011 147
tax charge  18473 2774
notes
continued
49    pace plc annual report reconciliation of effective tax rate year year
 ended ended
 31 dec 2009 31 dec 2008
 £000 £000
proﬁt before tax 69859 13828
tax using domestic corporation tax rate at 28 2008 28 19560 3872
effects of 
expenses not deductible for tax purposes 170 1614
effect of abolition of industrial building allowances  371
brought forward unrecognised tax losses recognised in the period  3142
research and development tax credit 2230 1523
overseas tax not at 28 57 398
losses arising in the period not recognised for deferred tax 345 
effect of tax relief on exercise of share options  296
effect of change in tax rate  62
adjustments to tax charge in respect of previous periods 685 950
total tax charge 18473 2774
9  earnings per ordinary share
basic earnings per ordinary share 177p 40p
diluted earnings per ordinary share 172p 39p
adjusted basic earnings per ordinary share 193p 78p
adjusted diluted earnings per ordinary share 187p 77p
the calculation of basic earnings per share is based on a proﬁt after tax of £51386000 2008 £11054000 divided by the 
weighted average number of ordinary shares in issue of 289925353 2008 274757069 excluding shares held by the pace plc 
employee beneﬁts trust
 year year
 ended ended 
 31 dec 2009 31 dec 2008
number of shares m m
weighted average number of ordinary shares in issue during the year 2899 2748
dilutive effect of options outstanding 95 30
diluted weighted average number of ordinary shares in issue during the year 2994 2778
diluted earnings per ordinary share varies from basic earnings per ordinary share due to the effect of the notional exercise of 
outstanding share options
to better reﬂect underlying performance adjusted earnings per share is also calculated adjusting proﬁt after tax to remove 
amortisation of other intangibles and exceptional items post tax
notes
continued
pace plc annual report    50 10  dividends per ordinary share
 31 dec 2009 31 dec 2008
 per share £000 per share £000
2008 final paid 3 july 2009 06 1736  
2009 interim paid 11 december 2009 05 1470  
 11 3206  
in addition the directors are proposing a ﬁnal dividend for 2009 of 10p per share this will be payable on 2 july 2010 to 
shareholders on the register at 4 june 2010 subject to approval by shareholders at the forthcoming annual general meeting and 
has not been included as a liability in these ﬁnancial statements
notes
continued
51    pace plc annual report 11   intangible assets and property plant and equipment
  other development long short plant total
 goodwill intangibles expenditure leasehold leasehold machinery property
    buildings land and and motor  plant and  
     buildings vehicles equipment
group £000 £000 £000 £000 £000 £000 £000
cost
at 31 december 2007 9436  31059 413 6612 22280 29305
exchange adjustments 13339 4819 1899 124 265 4272 4661
additions   20995  1907 4677 6584
acquisitions 53562 21640 9609   14280 14280
retirement of assets   3721    
disposals      664 664
at 31 december 2008 76337 26459 59841 537 8784 44845 54166
exchange adjustments 5977 2392 21 50 28 325 403
additions   42349  2654 10278 12932
retirement of assets   19721    
disposals    487  2510 2997
at 31 december 2009 70360 24067 82490  11410 52288 63698
amortisationdepreciation
at 31 december 2007   15177 119 4034 16531 20684
exchange adjustments    37 105 2730 2872
provided in the year  3715 15185   12068 12068
acquisitions    17 664 3823 4504
retirement of assets   3721    
impairment    6710    
disposals      664 664
at 31 december 2008  3715 33351 173 4803 34488 39464
exchange adjustments  332 651 16 33 254 303
provided in the year  6667 32645  902 6705 7607
retirement of assets   19721    
impairment    6826    
disposals    157  2463 2620
at 31 december 2009  10050 53752  5672 38476 44148
net book amount at
31 december 2007 9436  15882 294 2578 5749 8621
net book amount at  
31 december 2008 76337 22744 26490 364 3981 10357 14702
net book amount at  
31 december 2009 70360 14017 28738  5738 13812 19550
notes
continued
pace plc annual report    52 other intangibles
other intangibles relate to balances relating to trademarks and licence agreements customer contracts and relationships 
recognised as part of the acquisition of the pace france business
the goodwill at 31 december 2009 related to knowhow acquired with the purchase of xcom multimedia communications sa in 
february 2001 and the expected synergies future revenue streams and knowhow acquired with the purchase of pace france 
in april 2008 these assets are used as an integral part of the development of products which to date have been sold mainly by 
the nagra telcoms and retail customer account teams accordingly for the impairment testing purposes the goodwill has been 
allocated to a single cash generating unit which comprises these three customer account teams which approximate the legal 
entity structure
the recoverable amount of the above unit including the goodwill is based upon a value in use calculation and is higher than the 
carrying value of the assets and goodwill allocated to this unit the calculations use cashﬂow projections based on actual operating 
results budgets and 3 year forecasts reﬂecting known purchase orders sales contracts and the net result from planned product 
launches therefore the key assumptions are a growth rate of 1 2008 1 on sales and 2 2008 2 on overheads which has 
been used to extrapolate results a discount rate of 12 2008 12 has been used
 intangible assets property plant and equipment
  short   total
  leasehold   property
 development and  plant and motor plant and
 expenditure buildings machinery vehicles equipment
company £000 £000 £000 £000 £000
cost
at 31 december 2007 31059 6266 17820 38 24124
additions 20995 710 4100 6 4816
disposals 3721  623  623
at 31 december 2008 48333 6976 21297 44 28317
additions 26721 2398 5812 1 8211
disposals 10683  1227  1227
at 31 december 2009 64371 9374 25882 45 35301
amortisationdepreciation
at 31 december 2007 15177 3718 13040 31 16789
provided in the year 15185 656 3224 3 3883
retirement of assets 3721    
impairment 6710    
disposals   623  623
at 31 december 2008 33351 4374 15641 34 20049
provided in the year 19537 692 3451 3 4146
retirement of assets 10683    
impairment 5585    
disposals   1199  1199
at 31 december 2009 47790 5066 17893 37 22996
net book amount at 31 december 2007 15882 2548 4780 7 7335
net book amount at 31 december 2008 14982 2602 5656 10 8268
net book amount at 31 december 2009 16581 4308 7989 8 12305
notes
continued
53    pace plc annual report 12  investments in group and other companies
    available for
    sale ﬁnancial
    assets
group    £000
cost at 2 june 2007 31 december 2007 and 31 december 2008    1479
provision at 2 june 2007 31 december 2007 and 31 december 2008    1130
impairment in the year see below    349
provision at 31 december 2009    1479
net book value at 31 december 2007 and 31 december 2008    349
net book value at 31 december 2009    
 intra shares available for
 group in group sale ﬁnancial
 loans undertakings assets total
company £000 £000 £000 £000
cost at 2 june 2007 and 31 december 2007 65945 6038 899 72882
additions in the year  64900  64900
cost at 31 december 2008 65945 70938 899 137782
provision at 31 december 2007 and 31 december 2008 62583  550 63133
impairment in the year see below   349 349
provision at 31 december 2009 62583  899 63482
net book value at 31 december 2007 3362 6038 349 9749
net book value at 31 december 2008 3362 70938 349 74649
net book value at 31 december 2009 3362 70938  74300
the impairment in the year reﬂects a reassessment of the value attributable to a minor shareholding held by the company
notes
continued
pace plc annual report    54 at 31 december 2009 the company had a beneﬁcial interest in the equity of the following subsidiary undertakings
 nature of  percentage country of class of share
 operations  holding incorporation capital held
pace advanced consumer electronics limited dormant 100 uk ordinary
pace asia paciﬁc limited administrative
 development support 100 hong kong ordinary
pace distribution gmbh dormant 100 germany ordinary
pace distribution overseas limited holding company 100 uk ordinary
    preference
pace micro technology limited dormant 100 uk ordinary
pace hk limited holding company 100 hong kong ordinary
pace aus pty limited administrative
 development support 100 australia ordinary
pace americas limited administrative
 development support 100 uk ordinary
pace americas inc trading 100 usa ordinary
pace europe sas administrative
 development support 100 france ordinary
pace micro technology gmbh administrative
 development support 100 germany ordinary
pace micro technology india private ltd  development support 100 india ordinary
pace overseas distribution limited trading 100 uk ordinary
pace france sas trading 100 france ordinary
pace usa inc trading 100 usa ordinary
pace belgium nv  trading 100 belgium ordinary
pace asia home networks sdn bhd  trading 100 malaysia ordinary
pace networks limited  dormant 100 uk ordinary
pace brasil – industria electronica e comercio ltda  trading 100 brazil ordinary
pace iberia sl  trading 100 spain ordinary
stb anchor mexicana sa de cv  trading 100 mexico ordinary
pace china operations  administrative 100 china ordinary
pace operations south africa propriety limited administrative 100 south africa ordinary
 denotes company owned by pace micro technology hk limited
 denotes company owned by pace overseas distribution limited
 denotes company owned by pace distribution overseas limited
 denotes company owned by pace americas limited
 denotes company owned by pace france sas
 denotes company owned by pace asia paciﬁc limited
each of the subsidiary undertakings listed above has been consolidated in the group’s ﬁnancial statements
notes
continued
55    pace plc annual report 13  deferred income tax
deferred tax assets have been recognised in respect of differences between accounting and tax carrying values and trading losses 
where it is probable that these assets will be recovered 
the movements in deferred tax assets and liabilities during the year are shown below
    short term
 property plant trading  timing foreign
  equipment losses intangibles differences exchange total
group £000 £000 £000 £000 £000 £000
recognised assetliabilities 
at 31 december 2008 1319 3325 15733 935 1540 8614
creditedcharged to
income statement 308 3325 168 2252 538 1011
creditedcharged to
equityreserves    1845 1589 256
exchange differences   1248 101  1147
at 31 december 2009 1011  14653 4931 489 8222
shown as deferred
tax assets 1011   4931 489 6431
shown as deferred
tax liabilities   14653   14653
    short term 
 property plant trading  timing foreign 
  equipment losses intangibles differences exchange total
company £000 £000 £000 £000 £000 £000
recognised assetliabilities
at 31 december 2008 1319 3325 2229 61 1540 4016
creditedcharged to  
income statement 308 3325 1245 304  4574
creditedcharged to
equityreserves    1845 1589 256
at 31 december 2009 1011  3474 2210 49 302
there are no unrecognised deferred tax assets or liabilities at the period end
14  inventories
 group company
   31 dec 2009 31 dec 2008 31 dec 2009 31 dec 2008
   £000 £000 £000 £000
raw materials and consumable stores   15008 3686 11551 2306
finished goods   72038 53543 9931 5699
   87046 57229 21482 8005
notes
continued
pace plc annual report    56 15  trade and other receivables
 group company
 31 dec 2009 31 dec 2008 31 dec 2009 31 dec 2008
 £000 £000 £000 £000
trade receivables 205204 225192 195618 154171
amounts owed by subsidiary undertakings   1213 32142
other receivables 4139 3772 1718 
prepayments and accrued income 2393 2045 1490 1672
 211736 231009 200039 187985
16  trade and other payables
 group company
 31 dec 2009 31 dec 2008 31 dec 2009 31 dec 2008
 £000 £000 £000 £000
trade payables 216692 231632 141477 156300
social security and other taxes 2604 943 781 613
other payables 8124 234 6644 1161
accruals 35164 45909 17767 15658
 262584 278718 166669 173732
17  interest bearing loans and borrowings
there were no loans or borrowings in the group or company at 31 december 2009 31 december 2008 nil
banking facilities of £35 million are available until december 2011 and consist of a revolving credit facility secured by a ﬁxed and 
ﬂoating charge over the assets of pace plc and its subsidiary undertakings a bank guarantee within this facility is in place in an 
amount of £78m 2008 nil
notes
continued
57    pace plc annual report 18  derivatives and other financial instruments
this note provides information about the contractual terms of the group and company’s interest bearing loans and borrowings note 
17 for more information about the group and company’s exposure to interest rate credit risk and foreign currency risk see pages 
11 and 12 of the report of the directors
a interest rate risk proﬁle of cashbank overdrafts
 floating rate interest free  total
currency £000 £000 £000
at 31 december 2009
sterling 25882 14 25896
us dollar 359 28410 28769
euro 250 713 963
brazil  17253 17253
other  628 628
total 26491 47018 73509
at 31 december 2008
sterling 15717 9 15726
us dollar 10279 1 10280
euro 4402 1 4403
other 7308  7308
total 37706 11 37717
the interest rates on sterling us dollar euro and other ﬂoating rate ﬁnancial assets are linked to the relevant bank base rates
b currency exposures
the table below shows the group’s currency exposures that give rise to the net currency gains and losses recognised in the income 
statement such exposures comprise the monetary assets and monetary liabilities of the group which are not denominated in the 
operating or functional currency of the operating unit involved
  net foreign currency monetary assetsliabilities
functional currency of £stl us dollar euro other total
group operation £000 £000 £000 £000 £000
at 31 december 2009
sterling  97048 36777 99 60370
euro  11731  110 11841
other  267   267
total  109046 36777 209 72478
at 31 december 2008
sterling   102555 7542 137 94876
euro 3543 44928  271 48742
total 3543 147483 7542 134 143618
c gains and losses on currency derivatives
the majority of the group’s production costs are denominated in us dollars the group endeavours to obtain as much of its 
income as possible in us dollars but a signiﬁcant proportion of income is currently received in sterling or euros the group’s policy 
is to hedge forward progressively against movements in the value of foreign currencies in respect of cash receipts and payments 
expected from transactions over the next 12 months
notes
continued
pace plc annual report    58  company balance sheet
at 31 december 2008
notes
continued
outstanding currency derivatives
 sell buy principal average
 currency currency amount rate maturity
at 31 december 2009 euro us dollar 3835m 141 jan 10jun 11
 huf euro €15m 2789 mar 10 
 brl us dollar 151m 179 mar 10apr 10
at 31 december 2008 euro us dollar 1987m 139 jan 09dec 09
the group’s derivatives contracts qualify for hedge accounting and have a fair value at the balance sheet date of £38m  
2008 £50m
d credit risk
the group’s credit risk is primarily attributable to its trade receivables credit risk is managed by monitoring the aggregate amount 
and duration of exposure to any one customer depending upon their credit rating the group does not require collateral in respect 
of ﬁnancial assets there were no signiﬁcant impairments in the periods under review
credit risk
exposure to credit risk
the carrying amount of ﬁnancial assets represents the maximum credit exposure the maximum exposure to credit risk at the 
reporting date was
 carrying amount
 31 dec 2009 31 dec 2008
 £000 £000
trade receivables 205204 229511
cash and cash equivalents 73509 37717
forward exchange contracts used for hedging
assets 172 
 278885 267228
the maximum exposure to credit risk for receivables at the reporting date by geographic region was
 carrying amount
 31 dec 2009 31 dec 2008
 £000 £000
domestic 14126 17848
eurozone countries 79689 98464
united states 111374 112879
other regions 15 320
 205204 229511
the credit risk on liquid funds is limited because counterparties are banks with high credit ratings at each balance sheet date there 
was no signiﬁcant concentration of credit risk other than those customers with revenues in excess of 10 of the group’s total 
revenues as explained in note 3 of the ﬁnancial statements
of the trade receivables at 31 december 2009 95 was within payment terms 2008 93 the balance was less than 30 days 
past due 2008 100 there were no material bad debt provisions deemed necessary against such balances in the current or 
preceding years
59    pace plc annual report consolidated statement of changes in shareholders’ equity
at 31 december 2008
notes
continued
e liquidity risk
cash resources are largely and normally generated through operations short term ﬂexibility is achieved by the banking facilities in 
place note 17
liquidity risk
the following are the contractual maturities of ﬁnancial liabilities including estimated interest payments and excluding the impact of 
netting arrangements
 carrying contractual 6 months 612 12
 amount cash ﬂows or less months years
 £000 £000 £000 £000 
at 31 december 2009
nonderivative ﬁnancial liabilities
trade and other payables within one year 258851 258851 258851  
other payables due after one year 2232 2232   2232
derivative ﬁnancial liabilities  
forward exchange contracts used for hedging
outﬂow 3733 252943 121042 96926 34975
inﬂow  249210 115128 98116 35966
total 264816 264816 264765 1190 1241
at 31 december 2008
nonderivative ﬁnancial liabilities
trade and other payables within one year 273739 273739 273739  
derivative ﬁnancial liabilities  
forward exchange contracts used for hedging
outﬂow 4979 133877 63575 70302 
inﬂow  128898 66528 62370 
total 278718 278718 270786 7932 
it is not expected that the cash ﬂows included in the maturity analysis could occur signiﬁcantly earlier or at signiﬁcantly different 
amounts
the directors have considered the periods in which the cash ﬂows associated with the derivatives that are cash ﬂow hedges are 
expected to occur together with the timing of impact on proﬁt or loss and have determined that the timings are as disclosed in the 
above table
f sensitivity analysis
in managing interest rate and currency risks the group aims to reduce the impact of short term ﬂuctuations on the group’s 
earnings over the long term permanent changes in foreign exchange and interest rates would have an impact on consolidated 
earnings the directors consider that a change of 100 basis points in interest rates at any period end would not have a material 
impact on cash ﬂows
the group’s key foreign exchange exposures are in respect of the euro and us dollar a 5 strengthening in sterling against the 
euro and dollar would have an adverse impact of £35m on the proﬁt pre hedging reported in the year ended 31 december 2009 
and an adverse impact of £75m on equity a 5 weakening in sterling against the euro and dollar would have a favourable impact 
pre hedging of £50m on proﬁt reported in the year ended 31 december 2009 and a favourable impact of £85m on equity
g capital management
in line with the disclosure requirements of ias 1 presentation of financial statements the company regards its capital as being the 
issued share capital together with its banking facilities used to manage short term working capital requirements
note 20 to the financial statements provides details regarding the company’s share capital and movements in the period there 
were no breaches of any requirements with regard to any relevant conditions imposed by either the ukla or the company’s 
articles of association during the periods under review
pace plc annual report    60 company balance sheet
at 31 december 2008
notes
continued
details of the company’s working capital facilities are given in note 17 such facilities are subject to certain ﬁnancial performance 
covenants there have been no breaches of these covenants in the period under review
h fair values
fair values versus carrying amounts
the directors have considered the fair values of ﬁnancial assets and liabilities and have determined that these are not materially 
different from the carrying amounts shown in the group balance sheet
fair value hierarchy
the group’s ﬁnancial instruments namely forward exchange contracts have been determined to represent level 1 instruments 
characterised by the existence of quoted prices unadjusted in active markets for identical assets or liabilities
i exchange rates
the following signiﬁcant exchange rates applied during the year
 average rate spot rate
 2009 2008 2009 2008
euro 112 125 112 102
us dollar 157 184 161 145
19  provisions
 royalties   
 under  
 negotiation warranties other total
 £000 £000 £000 £000
group
at 31 december 2008 8811 21448 5261 35520
net charge for the year 2705 15796  18501
utilised 569 17324 1865 19758
exchange adjustments  410  410
at 31 december 2009 10947 19510 3396 33853
due within one year  11117 3396 14513
due after one year 10947 8393  19340
  royalties   
  under  
  negotiation warranties total
  £000 £000 £000
company
at 31 december 2008  8811 6934 15745
net charge for the year  2705 10980 13685
utilised  569 8045 8614
at 31 december 2009  10947 9869 20816
due within one year   6812 6812
due after one year  10947 3057 14004
royalties under negotiation
the owners of patents covering technology allegedly used by the group have indicated claims for royalties relating to the group’s 
use including past usage of that technology negotiations over these liabilities continue for long periods of time the directors have 
made provision for the potential royalties payable based on the latest information available having taken legal advice the board 
considers that there are defences available that should mitigate the amounts being sought the group will vigorously negotiate or 
defend all claims but in the absence of agreement the amounts provided may prove to be different from the amounts at which the 
potential liabilities are ﬁnally settled
61    pace plc annual report consolidated statement of changes in shareholders’ equity
at 31 december 2008
notes
continued
given the nature of the claims it is not possible to be more speciﬁc with regard to the timing of outﬂows
the directors consider that to disclose the amounts unused following the negotiation of royalty claims during the year would be 
seriously prejudicial to other royalty claims under negotiation in litigation or dispute accordingly the directors have aggregated 
amounts released unused with additional provisions made in order to arrive at the net charge for the year shown above
other provisions
other provisions relate to onerous leases and restructuring provisions in relation to the restructuring of the pace europe business
warranties
pace provides product warranties for its settop boxes from the point of sale and a provision for warranties is recognised when the 
underlying products are sold the provision is based on historical warranty data principally historical failure rates and related cost 
of repair information and a weighting of all possible outcomes against their associated probabilities the level of warranty provision 
required is reviewed on a product by product basis and provisions adjusted accordingly in the light of actual performance
although it is difﬁcult to make accurate predictions of potential failure rates or the possibility of an epidemic failure as a warranty 
estimate must be calculated at the outset of product shipment before ﬁeld deployment data is available these estimates improve 
during the lifetime of the product in the ﬁeld
it is expected that the expenditure with regard to warranties will be incurred within three years of the balance sheet date
pace plc annual report    62 company balance sheet
at 31 december 2008
20  share capital
31 december 2009                         31 december 2008 
 number £000 number £000
authorised
ordinary shares of 5p each  500000000 25000 300000000 15000 
allotted called up and fully paid
ordinary shares of 5p each  303573631  15179 298970953 14949
during the year the company also allotted ordinary shares as follows
    nominal 
    value consideration
   number £000 £000
employee share option scheme 595 pence   75319 4 45
employee share option scheme 490 pence   319761 16 157
employee share option scheme 460 pence   739274 37 341
employee share option scheme 670 pence   2640  2
employee share option scheme 820 pence   7613  6
employee share option scheme 480 pence   87500 4 42
employee share option scheme 1575 pence   76250 4 12
employee share option scheme 510 pence   114000 6 58
employee share option scheme 750 pence   100000 5 75 
employee share option scheme 7425 pence   425000 21 316
employee share option scheme 6325 pence   250000 13 158
employee share option scheme 5875 pence   2165450 108 1272
employee share option scheme 855 pence   1278  1
employee share option scheme 6125 pence   75000 4 46
employee share option scheme 730 pence   163334 8 119 
employee share option scheme 1500 pence   259  1
 
  4602678 230 2651 
there are no special rights or obligations attaching to the ordinary shares and there are no shares in the company with special 
rights with regard to control of the company
the company’s articles of association provide that the company may refuse to transfer shares in the following customary 
circumstances where the share is not a fully paid share where the company has a lien where the share transfer has not been duly 
stamped with the correct amount of stamp duty where the transfer is in favour of more than four joint transferees where the share 
is a certiﬁcated share and is not accompanied by the relevant share certiﬁcates and such other evidence as the board of directors 
may reasonably require to prove the title of the transferor or where the instrument of transfer is in respect of more than one class of 
share these restrictions are in addition to any which are applicable to all uk listed companies imposed by law or regulation
 
the notice of the annual general meeting speciﬁes deadlines for exercising voting rights and appointing a proxy or proxies to vote 
in relation to resolutions to be passed at the annual general meeting all proxy votes are counted and numbers for against or 
withheld in relation to each resolution are announced at the annual general meeting and published on the company’s website after 
the meeting
 
at the annual general meeting to be held on 19 april 2010 shareholders will be asked to renew the directors’ power to allot 
shares and buy back shares in the company and to renew the disapplication of preemption rights
 
the company is not aware of any agreements between shareholders which may result in restrictions on the transfer of securities 
andor on voting rights
 
shares in the company are held in the pace plc employee beneﬁts trust “trust” for the purpose of satisfying awards made under 
the company’s employees’ share plans the trustees of the trust may exercise the voting rights attaching to shares held in the 
notes
continued
63    pace plc annual report notes
continued
trust in respect of which the beneﬁcial interest has not vested in any beneﬁciary provided that they are satisﬁed that to do so is the 
beneﬁciaries’ interests the trustees have waived their right to vote in respect of any such shares held above 5
the company has granted options which are subsisting including directors’ options in respect of the following presently unissued 
ordinary shares of 5p each
number of ordinary  price per share
shares subject to option exercise period pence
123643 1 december 2009 to 30 may 2010 460
490178 1 october 2010 to 31 march 2011 820
789778 1 october 2011 to 31 march 2012 670
926336 1 october 2012 to 31 march 2013 740
105879 12 april 2010 to 10 july 2010 1500
239935 11 january 2003 to 10 january 2010 5995
63935 17 july 2003 to 16 july 2010 8575
13137 29 january 2004 to 28 january 2011 6100
24000 24 july 2005 to 23 july 2011 3750
137950 24 july 2004 to 23 july 2011 3750
20337 18 january 2005 to 17 january 2012 3570
155000 22 october 2003 to 21 october 2012 1575
36000 26 august 2004 to 25 august 2013 510
50000 17 august 2005 to 16 august 2014 510
564915 2 october 2009 to 1 october 2016 5875
50000 19 february 2010 to 18 february 2017 695
75000 16 march 2010 to 15 march 2017 665
508746 1 november 2012 to 31 october 2017 9775
2275635 24 june 2011 to 23 june 2013 855
1204999 24 june 2011 to 23 june 2018 855
591167 24 june 2012 to 23 june 2014 855
227354 24 june 2012 to 23 june 2018 855
300000 18 december 2012 to 17 december 2018 470
82560 18 december 2011 to 17 december 2018 470
265541 11 march 2013 to 10 march 2019 750
2317430 11 march 2012 to 10 march 2019 750
30000 23 april 2012 to 23 april 2019 1515
501882 30 july 2012 to 29 july 2019 19925
30000 17 december 2012 to 16 december 2019 19360
12171337
pace plc annual report    64 notes
continued
21  share premium account
group and company   £000
at 31 december 2008   37023
premium on allotments   2421
at 31 december 2009   39444
the shares allotted during the year are listed in note 20
22  merger reserve
group and company   £000
at 31 december 2008 and 31 december 2009   55490
the merger reserve was created upon the acquisition of the settop box and connectivity solutions business of royal philips electronics
23  retained earnings
group   £000
at 31 december 2008   27245
retained proﬁt for the year   51386
deferred tax adjustments   1845
dividends to equity shareholders   3206
income tax adjustments   2881
employee share incentive charges   2536
movement in employee share trusts    1692
at 31 december 2009   80995
company   £000
at 31 december 2008   20858
retained proﬁt for the year   30259
deferred tax adjustments   1845
dividends to equity shareholders   3206
income tax adjustments   2881
employee share incentive charges   2536
movement in employee share trusts   1692
at 31 december 2009   53481
own shares held
the following amounts have been deducted from the retained reserves of the group and company
at 31 december 2009 the pace plc employee beneﬁts trust held 9712349 2008 11615707 shares in the company which cost 
£7263503 2008 £21442225 these shares are held to satisfy options granted to employees
the amounts arising on settlement of share options from the employee share trusts represents cash receipts from the exercise of 
relevant share options
65    pace plc annual report notes
continued
the pace plc employee beneﬁts trust has granted options and shares to employees including directors’ options over ordinary 
shares of 5p each as follows
number of ordinary  price per share
shares subject to option exercise period pence
9571 17 july 2001 to 16 july 2010 8575
100343 29 january 2002 to 28 january 2011 6100
312587 26 august 2004 to 25 august 2013 510
200000 17 august 2005 to 16 august 2014 510
38829 2 october 2009 to 1 october 2016 5875
546075 3 april 2010 to 2 april 2017 7325
1491504 27 february 2011 to 27 august 2018  
279658 3 august 2012 to 2 august 2019 
2693341 5 may 2012 to 4 may 2019 
422199 18 may 2012 to 17 may 2019 
6094107  
24  profit for the year
the parent company has taken advantage of section 408 of the companies act 2006 and has not included its own income 
statement in these ﬁnancial statements the group proﬁt includes a parent company proﬁt after tax of £30259000 2008 proﬁt 
after tax of £9311000
25  capital commitments
 group and company
 31 dec 2009 31 dec 2008
 £000 £000
contracted but not provided for 3799 1713
pace plc annual report    66 notes
continued
26  employee benefits
pension plans 
the group contributes to several deﬁned contribution group personal pension plans which all executive directors and employees 
are entitled to join the total expenses relating to these plans in the current year was £1397000 2008 £1412000  
at 31 december 2009 contributions of £nil 2008 £nil were outstanding
share based payments 
details of the company’s share option plans are included in notes 20 and 23 and the remuneration report the number and 
weighted average exercise price of share options is as follows
 average weighted average weighted
 exercise number exercise number
 price of options price of options
 31 dec 2009 31 dec 2009 31 dec 2008 31 dec 2008 
outstanding at the beginning of the period 876p 19319988 917p 16478998
granted during the period 92p 4163647 80p 6031377
forfeited during the period 123p 1598874 128p 1733588
exercised during the period 59p 8506019 54p 1456799
outstanding at the end of the period 1029p 13378742 876p 19319988
exercisable at the end of the period 172p 2469369 149p 3939381
outstanding options were as follows
   weighted 
   average weighted
   remaining average
  number contractual exercise
range of exercise prices pence  at 31 dec 2009 life months price
1575p to 49p  661203 82 39p
51p to 75p  6172491 90 38p
78p to 9775p  5298079 112 86p
200p to 375p  820048 89 230p
5995p to 8575p  426921 17 647p
  13378742 70
the weighted average exercise price of options granted in the period was 92p 2008 80p
the weighted average fair value at the measurement date of options granted in the year was 15p 2008 37p
the weighted average exercise price at the date of exercise for options exercised in the year was 59p 2008 54p
the fair value of services received in return for share options granted are measured by reference to the fair value of share options 
granted the estimate of the fair value of the services received is measured based on a blackscholes model the following 
table gives the assumptions applied to the options granted in the respective periods shown expectations of early exercise are 
incorporated into the model where appropriate
67    pace plc annual report    31 dec 2009 31 dec 2008
average share price pence   1075 785
weighted average exercise price pence   1029 876
expected volatility    50 50
option life years   10 10
dividend yield    14 14
risk free interest rate    50 50
the expected volatility is based on the historic volatility calculated based on the weighted average remaining life of the share 
options adjusted for any expected changes to future volatility due to publicly available information
the charge for share based payments is £2536000  2008 £1011000 which is comprised entirely of equity settled transactions 
27  leasing commitments
total amounts payable under noncancellable operating lease rentals are as follows
 group company
 31 dec 2009 31 dec 2008 31 dec 2009 31 dec 2008
 £000 £000 £000 £000
land and buildings
within one year 3142 5524 717 756
between two and ﬁve years 10743 9840 2668 2776
in ﬁve years or more 6262 2082 1334 2082
 20147 17446 4719 5614
28  contingencies
a writ has been issued against the company by a former customer relating to the supply of settop boxes in 20002001 the 
amount claimed is circa 72m the directors believe that they have good defences to the claim and that in the absence of any 
liability no provision has been made in addition on 15 july 2007 pace ﬁled a counter claim for circa 10m against this former 
customer and a related third party
eu import duty classiﬁcation
pace along with other set top box manufacturers and broadcasters has continued to monitor the reinterpretation by european 
union customs authorities of customs regulations that could result in the extension of import duties to interactive settop boxes 
with hard drives manufactured outside but imported into the eu on 7th may 2008 the nomenclature committee of the european 
commission issued an explanatory note “en” 05902007 to the combined nomenclature setting out their view that settop 
boxes with a hard drive should be classiﬁed under customs tariff heading 8521 90 00 and so subject to a 139 ad valorem duty 
on importation to the european union as a consequence pace is potentially exposed to a retrospective customs duty liability in 
respect of such settop boxes it has imported
having previously obtained binding tariff information “bti” rulings from hmrc which provide protection in respect of much of 
the potential period of retrospective application of duty on relevant products and having taken legal advice management’s opinion 
is that the retrospective application of the explanatory note would not be supportable in law accordingly pace is in common with 
other affected importers appealing any retrospective assessment made and will defend its position on this matter
as of the date of this announcement an assessment has been received from hmrc in an amount of £77m representing import 
duty relating to imports prior to 7 may 2008 having taken advice management’s best estimate is that no material outﬂow of 
economic beneﬁt would be required to discharge this obligation as such at 31 december 2009 any potential liability should be 
considered contingent a bank guarantee is held whilst the appeal continues
notes
continued
pace plc annual report    68 notes
continued
29  related parties
identity of related parties 
the group has a related party relationship with its subsidiaries and with its directors
transactions with subsidiaries 
the main transactions between the company and its subsidiaries consist mainly of payments by the company for distribution 
engineering and administrative support services provided by pace americas inc pace europe sas and pace micro technology 
india private ltd total transactions of £3550m were made in the year 2008 £2151m 
the amounts due to and from these subsidiaries are shown within notes 15 and 16
transactions with key management personnel 
key management of the group is through the executive directors of the company the main transactions with these individuals are 
disclosed in the remuneration report on pages 21 to 26 
of the share based payments charge of £2536000 made in the period 42 relates to options granted to the executive directors 
30  acquisition in the prior period
the acquired business in the previous year relates to the settop box and connectivity solutions business of royal philips electronics 
“pace france” pace france employs approximately 335 staff predominantly based in france and is a leading designer and 
supplier of a range of digital tv products including satellite cable terrestrial and iptv settop box products a 100 interest was 
purchased on 21st april 2008
the consideration payable is made up of
   £000
shares issued 64481049 at market value   58517
deferred and contingent consideration   3937
acquisition fees   3134
acquisition consideration payable   65588
the acquisition has been accounted for using the purchase method as required by ifrs 3 
the integration exercise has concentrated to date on maximising the proﬁtability and operating efﬁciency of pace france 
the acquisition date fair value of net assetsliabilities acquired and goodwill and intangible assets arising was as follows
   fair value
   of net assets
 book value fair value  liabilities
 prior to acquisition adjustments acquired
 £000  £000 £000
intangible ﬁxed assets – development expenditure 16450 6841 9609
intangible ﬁxed assets – other  21640 21640
tangible ﬁxed assets 2212  2212
deferred tax liability 5758 3733 9491
current assets 70964  70964
current liabilities 70516 1171 71687
noncurrent liabilities 9658 1563 11221
total net assets acquired 3694 8332 12026
goodwill recognised   53562
total investment cost   65588
69    pace plc annual report consolidated statement of changes in shareholders’ equity
at 31 december 2008
the fair value adjustments include an adjustment to capitalised development expenditure to align accounting methodologies and the 
establishment of provision for onerous lease and warranty costs
the other intangible assets consist of balances relating to trademarks and licence agreements and customer contracts and 
relationships
goodwill recognised on acquisition is attributable to the skills and talent of the acquired business workforce and the synergies 
expected to be achieved from integrating the business into the existing business
from the date of acquisition 21 april 2008 to 31 december 2008 the contribution of pace france to the group results was 
as follows
  £000
revenue  292909
proﬁt before tax amortisation and exceptional items  8400
proforma results for the group for the year ended 31 december 2008 on the basis that the acquisition had been made at the 
beginning of the period are as follows
  £000
revenue  865020
proﬁt before tax amortisation and exceptional items  27077
the above ﬁgures do not include the amortisation of the separately identiﬁed intangibles which consists of a £3715000 charge in 
the period to 31 december 2008 the intangible assets are being amortised over various periods ranging from one year to ﬁve years
31  post balance sheet events 
there are no signiﬁcant or disclosable post balance sheet events
pace plc annual report    70 directors secretary and advisers
directors  company secretary
all of victoria road  saltaire  bd18 3lf  england anthony john dixon
robert michael mctighe nonexecutive chairman registered and head office
neil gaydon chief executive ofﬁcer victoria road
stuart andrew hall chief financial ofﬁcer saltaire bd18 3lf
david alyn mckinney chief operating ofﬁcer england
patricia chapmanpincher nonexecutive director registered number 1672847
john grant nonexecutive director
michael inglis nonexecutive director
financial advisers auditors registrars stockbrokers
nm rothschild  sons ltd kpmg audit plc capita registrars ltd rbs hoare govett limited
1 park row 1 the embankment northern house 250 bishopsgate
leeds neville street woodsome park london
ls1 5nr leeds fenay bridge ec2m 4aa
 ls1 4dw huddersﬁeld
  hd8 0la
   jp morgan cazenove
   20 moorgate
   london
   ec2r 6da
71    pace plc annual report pace plc annual report    04
chairman’s letter
this success reﬂects the capability and commitment of the 
entire pace team and highlights the strong fundamentals 
it has built  over the last three years pace has brought 
about transformational change delivering both organic and 
nonorganic growth  the group has built up a high quality 
and diverse set of customers and products we operate 
successfully across most major geographic markets this 
has translated into consistent proﬁtability
pace has proven itself capable of identifying investing 
in and delivering the new technologies needed by its 
operator customers to enable the delivery of tvled home 
entertainment  the technologies within our industry are 
evolving at an increasingly rapid rate creating new product 
and customer opportunities for the business  today this 
revolves around high deﬁnition personal video recording 
hybrid and whole home platforms and already for some this 
will soon start to include new 3d services
we are able to maintain ongoing investment in new 
technology because of the work done to strengthen our 
ﬁnancial position this means that pace is at the forefront 
of change within the industry leading in converged home 
entertainment solutions and diversiﬁcation opportunities 
through our growing networks division at the same time 
we have optimised efﬁciency and taken advantage of our 
enlarged scale to ensure we fully deliver on our vision of 
‘great products to our customers every time’  in doing 
this pace has achieved a level of maturity in its operations 
that should give you conﬁdence in predictable future 
performance
in recognition of our growth and longterm earnings 
potential the board introduced a progressive dividend policy 
in 2009  i am pleased that your board is recommending a 
ﬁnal dividend of 10p per share giving a full year dividend of 
15p per share 
our achievements were recognised through a number 
of awards including a queen’s award for enterprise 
in innovation and a number of awards recognising the 
importance of pace’s hr strategy in driving change and 
creating a great place to work from a ﬁnancial markets 
perspective we have become a member of the ftse 250 
and are a top ﬁve quoted company in the uk technology 
hardware sector by market capitalisation 
following major improvements in ﬁnancial performance over 
the past three years on behalf of the board i commend 
the management team and all our employees worldwide for 
their achievements and reemphasize our conﬁdence in their 
ability to take the group forward as we enter a comparatively 
more mature and predictable phase of our development
if you have any comments on my letter or indeed any 
part of the annual report i would be delighted to hear 
from you either by writing to me at pace or by email at 
mikemctighepacecom
yours sincerely
mike mctighe
chairman
2 march 2010
dear shareholder – in 2009 your company 
‘came of age’ capitalising on the potential 
created by your management team and the 
global market opportunity for pace’s digital 
tv technology
pace’s performance over the last 12 months represents 
a signiﬁcant achievement where the management team 
delivered record results ahead of all expectations  pace 
is now working at a new level having achieved over £1bn 
revenues and 67 return on sales
year year 7 months year year
ended ended ended ended ended
31 dec 31 dec 31 dec 2 june 3 june
2009 2008 2007 2007 2006
£000 £000 £000 £000 £000
revenue 1133442 745475 249875 386513 178095
proﬁtloss before tax 69859 13828 15350 4925 27450
proﬁtloss before exceptional items
amortisation and tax 76526 28505 15350 6133 15562
proﬁtloss after tax 51386 11054 14415 6766 28784
diluted epslps 172p 39p 61p 30p 130p
diluted epslps before exceptional 
items and goodwill amortisation 187p 77p 61p 30p 76p
total equity attributable to equity
holders of the parent excluding
goodwill 125988 67592 58166 41501 33031
shareholder information
annual general meeting 
the company’s annual general meeting will be held at 2 pm on 19 april 2010 at the company’s head ofﬁce victoria road 
saltaire west yorkshire bd18 3lf 
capita registrars
enquiries regarding shareholdings change of address or other particulars should be directed in the ﬁrst instance to the company’s 
registrars capita registrars northern house woodsome park fenay bridge huddersﬁeld hd8 0la or by telephone on 
0870 162 3131 they also provide a range of online shareholder information services at wwwcapitashareportalcom where 
shareholders can check their holdings and ﬁnd practical help on transferring shares or updating their details
multiple accounts on the shareholder register 
if you have received two or more copies of this document this means that there is more than one account in your name on the 
shareholder register this may be caused by either your name or address appearing on each account in a slightly different way for 
security reasons the registrars will not amalgamate the accounts without your consent if you would like any multiple accounts 
combined into one account please write to capita registrars at the address given above 
unsolicited mail 
the company is obliged by law to make its share register available upon request to the public and to other organisations which 
may use it as a mailing list resulting in shareholders receiving unsolicited mail shareholders wishing to limit the receipt of such mail 
should write to the mailing preference service dma house 70 margaret street london w1w 8ss or call 44 0 20 7291 3310 
for an application form or visit wwwmpsonlineorguk 
pace website
shareholders are encouraged to visit our website wwwpacecom which has a wealth of information about the company
five year record and shareholder information
pace plc annual report    72 


Summary:
 07    pace plc annual report
chief executive 
officer’s review continued
a sustainable future
the group is at the heart of the 
biggest changes taking place in tv 
from high deﬁnition to converged 
home entertainment communications 
whole home networking to 
multidweller and 3d our success 
and that of our paytv customers 
despite the macro economic climate 
has demonstrated the value many 
consumers place on high quality 
home entertainment 
pace has strong relationships with 
all the leading technology partners 
in the digital ecosystem our people 
and products are empowering pay tv 
operators enabling them to deliver 
services over all digital platforms 
while at the same time allowing them 
to protect premium content 
today that premium content is 
high deﬁnition and will soon include 
increasingly bandwidth hungry 
technologies such as 3d ultra high 
deﬁnition and whole home services 
with pace’s technology the paytv 
operator has the network capability 
service proposition and business 
model to deliver these new services 
and ﬁnance the high quality content 
that makes tv such an engaging 
experience this is particularly true 
of event tv from shows such as 
xfactor and american idol to major 
sporting events such as the super 
bowl the football world cup and 
the champions league this content 
commands massive audiences – 
almost half of us homes tune into the 
super bowl ﬁnal – demanding and 
generating billions of dollars on which 
many media and sports industries 
depend 
pay television operators are moving 
quickly to take advantage of hybrid 
technology already many of our 
customers are moving towards hybrid 
platforms that combine broadcast and 
broadband delivery we have led the 
market in this ﬁeld with products such 
as le cube for france’s canal and 
vision for bt vision in the uk 
hybrid settop boxes are powerful 
devices that pay tv operators are 
currently using to add huge libraries 
of ondemand and catchup tv for 
their customers these boxes can 
be easily evolved to provide access 
to the open internet for ott services 
as well as interactive applications such 
as ‘widgets’ and the settop box 
unlike most other consumer electronic 
devices can be upgraded as they 
operate on a managed paytv network 
ensuring endusers are easily kept 
abreast of the rapidly changing content 
environment it is a proposition that 
becomes even more important as the 
core settop box becomes increasingly 
complex due to the convergence of 
home entertainment 
driving technology evolution
paytv operators have successfully used 
advances in broadcast and broadband 
technologies to deliver compelling 
services that engage consumers and 
deliver income growth for the industry 
the majority of consumers want 
products that are coupled to services 
this removes the customer care 
headaches of billing technical support 
and uncertainty around whether the 
technology in which they have invested 
will soon become obsolete 
as a result the quality demand for and 
spend on digital home entertainment 
is growing and pace continues to 
be at the forefront of this technology 
evolution our strategy to be at 
the heart of home entertainment 
convergence for the paytv industry will 
enable us to work with our customers 
on what we believe will be the next 
evolutionary shift in our industry
moreover we are already seeing the 
shift occur and pace has already 
demonstrated early leadership in 
product development consumers used 
to hd and pvr and now hybrid settop 
boxes will then want smart connected 
devices that give them the ﬂexibility to 
manage and view both professional as 
well as personal content anywhere in 
their home 
our strategy to be at the heart of home 
entertainment convergence for the paytv 
industry will enable us to work with our 
customers on what we believe will be the 
next evolutionary shift in our industry
page changed pace plc annual report    08
in october of last year pace 
released its ﬁrst whole home product 
hcs in the us it was released 
to industry acclaim and there has 
been signiﬁcant customer interest 
our expertise in home content 
sharing products has also put us 
in a fantastic position to capitalise 
on the convergence market going 
beyond tv content to the heart 
of entertainment in the home we 
are convinced that settop boxes 
particularly hybrid pvrs will establish 
a tvdriven home network it is a 
costeffective secure and ﬂexible 
device
our market is constantly changing 
and 3d now offers opportunities in 
the shortterm consumers investing 
in 3d tvs can get a taste of 3d 
with some of our existing boxes 
but this medium is for the longer 
term as consumers start seeing 
more of its amazing capabilities 
and full 3d becomes a requirement 
for paytv this will demand further 
developments in settop box 
technology 
by 2013 there will be an installed 
base of 35m 3d capable tv 
screens and we envisage that 
we will be supplying operators 
with 3d enabled products sooner 
rather than later many of our latest 
platforms are already ‘3dready’ 
and ultra hd which delivers 16x 
the picture quality of hd is around 
the corner these developments 
also reinforce broadcast technology 
as the predominant transmission 
medium for the coming years given 
the massive bandwidth required to 
deliver 3d over the internet
our ability to develop new markets 
has been demonstrated in our 
multidweller system the range of 
multidweller products is opening 
up the market for advanced digital 
services by enabling paytv and 
other operators to reach inaccessible 
subscribers including places such 
as apartment blocks hotels and 
conurbations that previously have not 
been attached to cable networks as 
planned 2009 saw initial commercial 
deployment of the division’s ﬂagship 
product and the announcement 
of the ﬁrst two customers canal 
digital and quadriga in 2010 we 
will be adding new customers and 
galvanising distribution routes
in summary
we are already working with our 
customers and partners on the ‘next
generation’ of settop boxes and new 
technologies these will continue 
to push the boundaries featuring 
advancements in whole home pvr 
support for more applications ott 
services and widgets better energy 
efﬁciency and of course 3d we are 
at the leading edge of technological 
change and have a clear strategy 
to be at the heart of convergence 
for digital tv that we continue to 
successfully execute against this 
capitalises on our many relationships 
with customers partners and 
suppliers as well as our technical 
excellence and ﬁnancial resources 
we now have the ability and capability 
to take advantage of the right market 
opportunities to further develop our 
business 
having delivered an outstanding 
performance in 2009 pace has 
entered 2010 in a strong operating 
and ﬁnancial position the pay tv 
market continues to be positive and 
there is good demand for the group’s 
products against this backdrop we 
expect a combination of solid volume 
growth and a modestly lower asp 
resulting from product mix to lead to 
mid single digit revenue growth for the 
year gross margins are expected to 
increase with a focus on operating 
cost and efﬁciency generating 
further improvements in operating 
margin we will also continue tight 
management of our supply chain 
as we manage a sectorwide risk of 
component shortages 
the group looks forward to another 
successful year building on our 
position as a leading global player in 
the digital paytv market
neil gaydon 
chief executive ofﬁcer
2 march 2010 09    pace plc annual report
our record growth is underpinned by robust 
ﬁnancial management a strong balance sheet 
and operational excellence
officer’s review
chief financial
from an operational view point we 
have actively managed this growth 
our efﬁcient operating structure 
allowed us to achieve maximum 
growth without a proportionate 
increase in overheads subsequent 
to the acquisition we developed 
scalable systems and improved key 
performance indicators these provide 
high quality and best practice ﬁnancial 
information to our business units 
which enable early issue identiﬁcation 
and rapid decision making at the 
same time to support our overall 
business transformation we have 
established an internal audit function 
assisted by external professional 
advisors and enhanced our tax 
treasury and cash management 
capabilities 
pace has good customer order 
visibility and the team worked well in 
the pace business grew dramatically in 2009 as we beneﬁtted 
from our market leading position particularly in the delivery of high 
deﬁnition products increased global scale and earlier than expected 
beneﬁts of business synergy programmes put in place following the 
philips’ settop box acquisition in 2008 pace france is now a fully 
operational and proﬁtable part of the group 
2009 to anticipate manage and plan 
for any problems within the supply 
chain using a range of operational 
tools available to the business this 
will stand us in good stead during 
2010 as we take into account the 
sectorwide risk of component 
shortages 
trading and results
we achieved record growth in 
revenues and shipments of £11bn 
and 172m settop boxes respectively 
we signiﬁcantly increased proﬁt 
before tax exceptional items and 
amortisation of other intangibles to 
£765m 2008 £285m proﬁt before 
tax was £699m 2008 £138m 
amortisation of other intangibles 
was £67m 2008 £37m and basic 
earnings per share were 177p 2008 
40p with adjusted earnings per 
share of 193p 2008 78p pace plc annual report    10
we continued to win new customers 
and expand market share with many 
of our existing customers enabling 
us to maintain a balance of revenues 
we delivered 62m settop boxes into 
europe 2008 47m 97m into the 
americas 2008 73m and 13m into 
the rest of the world 2008 11m 
the group adopted ifrs 8 
“operating segments” from 1 january 
2009 ifrs 8 requires operating 
segments to be identiﬁed on the basis 
of discrete ﬁnancial information about 
components of the group these 
segments are regularly reviewed 
by the pace board as the group’s 
chief operating decision maker 
codm to allocate resources and 
assess performance ifrs 8 has 
been applied to aggregate operating 
segments on the grounds of similar 
economic characteristics and the 
group has determined that it has one 
reportable segment this position will 
be monitored as the group develops
gross margin was 176 for the 
year versus 181 in 2008 there 
was a negative 05 impact on 
gross margin due to the oneoff 
foreign exchange cost as a result 
of our foreign exchange strategy 
announced in november 2008 that 
provided certainty to manage the 
business through 2009 gross margin 
progressively improved from h1 to h2 
172 to 179 as the beneﬁt of the 
group’s larger buying power started 
to take effect average selling prices 
which are a feature of product mix 
increased during the year from £57 to 
£66 with a h1 to h2 progression of 
£62 to £70 this development reﬂects 
the growing number of hd boxes in 
the second half after high volume dta 
shipments in the ﬁrst half
last year we introduced return 
on sales operating margin on a 
productbyproduct basis as a new 
performance measure – this reﬂects 
the beneﬁt of volume shipments and 
pricing on absolute proﬁtability rather 
than just gross margin which is not 
always directly linked with proﬁt 
the ros benchmark in place for 
each product has ensured that the 
full impact of all activities on overall 
proﬁtability is considered in 2009 our 
overall ros was 67 2008 39 
due to the growing global demand 
for our products and technologies 
coupled with our scale and strong 
operating performance the group is 
on track to achieve our 8 medium 
term target
the net interest credit was £02m 
2008 net interest charge £07m 
reﬂecting the positive cash balances 
held throughout the period a tax 
charge of £185m 2008 £28m 
relates to uk tax of £38m as 
remaining tax losses were used 
overseas tax charges of £137m 
and a deferred tax charge of £10m 
retained proﬁt for the period was 
£514m 2008 £111m an increase  
of 365 on 2008
foreign exchange
by currency our revenues are split 
61 in us 32 in euros with 
other currencies accounting for 7 
electronics component purchasing is 
typically us denominated which is 
reﬂected in the majority of the group’s 
costs using the balance within this 
currency proﬁle supplemented by 
an effective hedging strategy and 
treasury policy we have been able 
to minimise the impact of foreign 
currency ﬂuctuations on proﬁt  
before tax
overheads 
overheads excluding the impact 
of ias 38 and amortisation of other 
intangibles were £1265m 2008 
£1051m excluding exceptionals 
incorporated a full year of the 
overhead base from pace france 
rd spend before capitalisation of 
development expenditure in line with 
ias was £717m 2008 £596m 
as we continued to invest in higher 
speciﬁcation products such as hd 
pvr and new technologies an 
amortisation credit in relation to 
capitalised development expenditure 
of £28m 2008 charge £09m is 
reﬂected in the income statement
balance sheet 
there was a net inﬂow of cash into 
the business further strengthening 
our cash position and we ﬁnished 
the period with a net cash position 
of £735m 2008 £377m as a 
result we have been able to continue 
managing the business from our own 
cash and are in a strong position to 
consider potential acquisitions to 
broaden our capability in digital tv 
technologies we continue to have a 
standby £35m revolving credit facility 
with the royal bank of scotland 
the balance sheet also reﬂects our 
signiﬁcant business growth with net 
assets increasing 36 to £1963m 
31 december 2008 1439m and net 
working capital increasing to £362m 
31 december 2008 £95m capital 
expenditure increased to £129m 
31 december 2008 £66m  as 
we invested in improving our head 
ofﬁce facilities established new 
manufacturing lines to support new 
customer wins and installed industry 
leading reliability laboratories our 
investment in reliability is a strong 
point of competitive differentiation and 
over the medium term will support a 
reduction in the overall cost of life of 
our products in the ﬁeld 
dividend 
due to the positive net cash and 
strong business performance the 
board has recommended a ﬁnal 
dividend of 10p per share giving a 
full year dividend of 15p per share 
a progressive dividend policy was 
introduced in 2009 with the intention 
of paying in the region of a one third 
two thirds split between interim and 
ﬁnal dividends
basis of preparation
the principal risks and uncertainties 
facing the group including those 
referred to in note 1 to these ﬁnancial 
statements have not changed from 
those set out in the 2008 annual 
report and accounts except for 
inclusion of the impact of new 
accounting standards applicable  
in the period
outlook
pace is operating in a growing 
marketplace with excellent product 
and technology capabilities our 
customer base leads the paytv 
industry ensuring that pace is at the 
forefront of developments we have 
established strong fundamentals 
in the ﬁnancial management of the 
group and are well positioned to take 
advantage of ongoing future growth 
stuart hall 
chief financial ofﬁcer
2 march 2010