a global leader 
in the provision of 
technology solutions 
for the paytv and 
broadband industries
pace plc 
annual report and accounts  
for the year ended 31 december 2014
pace plc annual report and accounts 2014 transform
maintain
widen out
the board is confident that through aurora potential additional 
acquisitions and the ongoing delivery of our strategic plan 
pace will continue to strengthen its position as a marketleading 
technology solutions provider for the paytv and broadband 
industries and deliver further value to its shareholders
read our financial review 
on page 20
read more 
wwwpacecomir
read about our strategy 
on page 8
read our chief executive 
officer’s review on page 7
revenue m
26200
61
adjusted ebita
1
 m
2411
245
operating margin
2
 
92
14ppt
2014 26200
2013 24692
2012 24034
2014 2411
2013 1936
2012 1581
2014 92
2013 78
2012 66
profit before tax m
1757
343
2014 1757
2013 1308
2012 801 pace plc annual report and accounts 2014 01
strategic report  highlights
pace’s solutions empower cable telco and 
satellite operators to simply and costeffectively 
innovate at the speed they want in the way 
they want for their subscribers pace has built 
up its experience and expertise over 30 years 
and this is recognised by a customer base 
of over 200 operators around the globe
financial highlights 
 r increased operating profit through topline growth due to aurora 
acquisition improved revenue mix supply chain efficiency and 
increased operational efficiency
 r third year of strong cash flow generation 2040m free cash flow 
846 of adjusted ebita and sustainable cash flow model in place
operational highlights
 r good first year for aurora networks – strong trading performance and 
integration complete with expected synergies delivered ahead of plan
 r continued strong progress against strategic plan
 r 9 operating margin target achieved one year ahead of plan
 r significant progress has been made in improving the efficiency 
and effectiveness of the business
 r reconfirmed as the market leader in paytv hardware global 
number one in settop boxes media servers and advanced 
telco gateways
 r built on the momentum of 2013 with a number of key wins across 
all areas of our software and services offerings and a strong 
focus on product and customer project delivery for major 
launches with key customers
strategic report
01 highlights
02 at a glance
04 our business model
06 chairman’s statement
07 chief executive officer’s review
08 our strategy
10 markets
12 business performance
16 key performance indicators
18 risk management and principal risks
20 financial review
23 corporate responsibility
governance
26 board of directors
28 framework of corporate governance
31 audit  risk committee report
34 nomination committee report
35  r e m u ne r a t i on c ommit t e e r e por t
44 directors’ report
financial statements
47 independent auditor’s report
50 consolidated income statement
51  consolidated statement of comprehensive income
52 consolidated balance sheet
53 company balance sheet
54  statements of changes in shareholders’ equity
55  consolidated statement of cash flows
56 company statement of cash flows
57 notes
ibc  sha r e h o l d e r i n f or ma t i on
adjusted basic eps
3
 c
636
436
2014 636
2013 443
2012 351
full year proposed dividend 
per ordinary share c
700
275
2014 700
2013 549
2012 450
free cash flow
4
 m
2040
24
2014 2040
2013 2090
2012 1827
1  operating profit before exceptional costs and amortisation of other intangibles
2   adjusted ebita as a percentage of revenue is expressed as operating margin
3   adjusted basic eps is based on earnings before the posttax value of exceptional 
costs and amortisation of other intangibles
4   free cash flow is calculated as cash flow before proceeds from issue of shares dividends 
acquisition cash flows and debt repaymentdrawdown
financial review pages 20 to 22
business performance pages 12 to 15
profit after tax m
1480
531
2014 1480
2013 967
2012 584 pace plc annual report and accounts 2014 02
strategic report  at a glance
empowering innovation and growth 
for the paytv and broadband industries
pace is headquartered in saltaire uk 
with major offices in the us france 
brazil india australia and south africa 
and smaller offices close to our customers 
in all markets we serve
countries with offices
14
number of employees
2000
total stbs deployed
140m
new products launched in 2014
40
   
devices managed
34m
total optical nodes deployed
250k
 north america  16356m 62
 latin america 3732m 41
 europe 2912m 101
 rest of world 3200m 299
 settop boxes and media servers 20035m 12
 residential gateways 2397m 362
 software and services 1122m 14
 networks 2646m na
 pace americas  15616m 71
 pace international  7938m 01
 pace networks 2646m na
revenue 
by region
revenue by 
business unit
624
142
112
122
revenue 
by products
765
91
43
101
596
303
101
pace creates worldleading technologies products and services for the paytv and broadband industries 
leveraging our complete portfolio of media servers settop boxes gateways sophisticated software 
optical transport and access network solutions and highly specialised services support pace’s solutions 
empower customers to simply and costeffectively deliver and evolve digital services at the speed they 
want and in the way they want enabling them to build their success pace’s 30 years of leadership 
experience and expertise is recognised by a customer base including over 200 of the world’s leading 
paytv and broadband operators that spans the globe pace plc annual report and accounts 2014 03
our customers include
our portfolio
pace has an extensive portfolio of products and solutions that meet 
the diverse and demanding needs of paytv and broadband operators 
around the world
 r our eco service management and elements software platforms 
and supporting services are used by major operators across the 
globe to deliver secure and manage advanced services to millions 
of consumers
 r through our acquisition of aurora networks pace is now a leading 
developer and manufacturer of advanced nextgeneration optical 
transport and access network solutions for broadband networks 
enabling operators to costeffectively support their consumers’ 
constant demand for ever increasing bandwidth
 r within customer premise equipment pace is the global number 
one in media servers settop boxes stbs and advanced 
telco gateways
our customers
pace’s global customer base includes over 200 of the world’s leading 
operators in cable satellite telco iptv and terrestrial markets
 r serving 8 of the world’s top 10 paytv operators
 r serving the 1 satellite cable and telco operators in the usa
 r serving 8 of the top 10 paytv operators in latin america
solutions paytv broadband ott whole home apps service management
settop box
media server
gateway
superior hardware
service management
simplify service management 
eco service management 
manage assist selfservice
monitor dispatch  inquire 
eco
customer care 
next generation
call centre
operator customer premises
service delivery and content protection 
software that puts operators in control
elements software platform
service delivery platform userinterface framework 
settop box software gateway software conditional access and drm
networks 
deﬁning the network evolution
optical transport
solutions
access network
solutions
services consulting systems integration hosting
financial statements governance strategic report pace plc annual report and accounts 2014 04
strategic report  our business model
delivering value through 
a robust business model
1
  profitable and sustainable  
target markets
• pace has an unmatched customer base of bluechip 
paytv and broadband service providers
• these service providers play a key role in creating aggregating 
and managing complex services which are sold direct to consumers 
with whom they have strong multiyear relationships this is a proven 
sustainable highly profitable and cashgenerative business model
• due to high levels of competition and evolving consumer demands 
service providers are increasing investments to deliver the best user 
experiences to their consumers over the best networks that can 
be effectively managed and supported
• this in turn creates a large sustainable and profitable target market 
for pace to address
pace delivers value through a highly efficient 
profitable and sustainable business model based 
upon our core strengths and supported by our 
longterm strategy
what we do
pace’s principal activities are the development design and distribution 
of technologies products and services for managed subscription 
television telephony and broadband services and the provision of 
engineering design and software applications to its customers the group 
also provides related support services including consulting systems 
integration and customer care centres
how we do it
the combination of our global scale decentralised and customerfocused 
structure broad product portfolio technological innovation and efficient 
operating model differentiate pace from its peer group
1 
profitable and sustainable  
target markets
we deliver into
through
underpinned by
shareholder value
creating
5 
 efficient operating model financial 
discipline and strong cash flow
customer focused  
gotomarket 
structure
2 
 innovative market 
leading product and 
services portfolio
3 
industrialised global 
delivery model
4  pace plc annual report and accounts 2014 05
4
  in du s t r i a l is e d g lo b a l  
delivery model
• global workforce and scale – c900 employees 
engaged in rd and operations located 
across 6 continents with significant presence 
in uk usa france brazil india australia 
and south africa
• highly experienced workforce specialising 
in paytv and broadband technologies
• engineering close to customer with core 
engineering centres with scale and expertise
• consistent and replicable delivery model 
with continuous improvement embedded 
to reduce timetomarket improve efficiency 
and enable fast and effective integration 
of acquisitions
• robust efficient and scalable global 
supply chain
• outsourced manufacturing overseen by 
rigorous pace governance and quality control
3
  i n n o v ativ e m a r k et  l e a d i ng 
product and services portfolio
• comprehensive portfolio of technologies 
products and services that have been 
designed to enable operators to evolve 
and lead in competitive and fast moving 
broadcast and broadband markets
• product roadmaps developed 
in partnerships with customers
• focused advanced development 
enables pace to lead the market in step 
change technologies
• specialised engineering teams who are 
focused on research and development
• strong gotomarket and development 
relationships with key silicon technology 
conditional access middleware 
and other technology partners
• proven track record of acquiring and 
integrating new products and technologies 
to increase the breadth and relevance 
of our product and services portfolio
2
  c us t o m er f o c use d  
gotomarket structure
• pace goes to market through strategic 
business units sbus – these are 
standalone units that contain product 
management sales engineering and 
operations teams
• the customer account teams cats 
within the sbus are located close to the 
customer and are focused on the delivery 
of products and services to a particular 
market segment or region
• the sbus are supported by a lean corporate 
structure which provides governance and 
shared services that are required by all sbus
5
  efficient operating model  
financial discipline and strong cash flow
• effective decentralised gotomarket model leveraging group scale best practices and shared services enables bestinsector cost to serve 
overheads as a percentage of revenue
• low capital intensity model with robust discipline on capital investment
• focused cash management and optimal working capital model tightly aligned to the profile of trading enable sustainable strong cash flow 
generation of 7080 of adjusted ebita
• conservatively geared balance sheet with a track record of rapid deleveraging
financial statements governance strategic report pace plc annual report and accounts 2014 06
strategic report  chairman’s statement
dear shareholder
2014 has been a year of execution and expansion 
the business has made good progress on its 
strategic plan delivered strong financial results 
and through both organic developments and the 
acquisition and integration of aurora networks 
has created a platform for further growth
in the year the group achieved a 245 
increase in adjusted ebita due to topline 
growth through the aurora networks acquisition 
improved revenue mix supply chain efficiency 
and increased operational efficiency the group 
delivered a third consecutive year of strong 
free cash flow and has delivered nearly 600m 
cumulative free cash flow in that time this 
sustainable strong free cash flow model gives 
the company the confidence and flexibility to 
identify and invest in both organic and acquisitive 
opportunities which will deliver longterm value 
to our customers and our shareholders
in november 2011 the company laid out a 
clear strategic plan that aimed to develop a 
distinctive scalable and profitable technology 
solutions provider to paytv and broadband 
industries by growing a broader platform 
across hardware software and services in the 
last three years we have continued to evolve 
and deliver against this plan
the acquisition of aurora networks represented 
an important evolution in the strategic plan 
enabling pace to widen out into network 
infrastructure and build deeper more embedded 
relationships with our customers the now fully 
integrated networks business unit has had a 
great first year and we are confident that it will 
make further progress in 2015 and beyond
the target of the strategic plan was to achieve 
a 9 operating margin within a 4 to 5 year 
horizon with a 92 operating margin in 
2014 i am delighted to announce that pace 
has achieved this target a year ahead of plan 
however this is only the start of the journey 
and there is significant opportunity for further 
improvement in the business
during this time the paytv and broadband 
markets have also evolved significantly our 
customers continue to respond to both the 
demands of their consumers and the various 
disruptive threats by creating increasingly 
innovative and engaging new services building 
better and faster networks whilst delivering an 
alwayson alwayssupported managed service 
pace has been and will continue to be strongly 
positioned to capitalise on these increased 
investments over the next 3 to 5 years
by continuing to execute against our strategic 
plan and capitalising on the significant market 
opportunity pace will not only strengthen its 
position as a marketleading technology solutions 
provider for the paytv and broadband industries 
but also become a “great technology company”
the strong performance in 2014 and the 
trajectory of the business give the board 
confidence to continue building on the progressive 
dividend policy that was introduced in 2009 
therefore the board is recommending a final 
dividend of 475 cents per share giving a full 
year dividend of 700 cents per share a 275 
increase on 2013 the dividend reflects the 
robust ongoing cash generation of the business
board changes
mike inglis was reappointed as a nonexecutive 
director on 13 march 2014 roddy murray 
resigned from his role as chief financial officer 
and executive director on 27 july 2014 
mark shuttleworth was appointed as chief 
financial officer and joined the board 
on 12 january 2015
if you have any comments on my letter or 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 allanleightonpacecom
yours sincerely
allan leighton
chairman
3 march 2015
summary
 r 2014 has been a year of execution and 
expansion pace has delivered strong 
financial results and created a platform 
for further growth
 r the acquisition of aurora networks inc 
represented an important evolution 
in the strategic plan
 r pace has been and will continue to 
be strongly positioned to capitalise 
on operators’ increased investments 
over the next 3 to 5 years
 r pace will not only strengthen its position 
as a marketleading technology solutions 
provider for the paytv and broadband 
industries but also become a “great 
technology company”
allan leighton
chairman
good progress has been made in the last 3 years 
however this is only the start of the journey and 
there is significant opportunity for further 
improvement in the business pace plc annual report and accounts 2014 07
strategic report  chief executive officer’s review
key highlights of the year
pace is continuing to become a more 
profitable cashgenerative business with 
a broader spread of products and customers and 
a better mix of revenue revenue in 2014 increased 
by 61 26200m vs 24692m in 2013 
operating margin in the period increased from 
7 8 to 92 reflecting strong contribution from 
the aurora networks acquisition networks 
better revenue mix improving supply chain 
effectiveness and lower underlying operating 
costs on an underlying basis excluding 
networks profitability increased operating 
margin 82 vs 78 in 2013 despite lower 
revenue 23554m vs 24692m in 2013 
the cash flow performance of pace remains 
strong with 2040m of free cash flow generated 
in the period 846 of adjusted ebita
strategic plan
the strategic review undertaken in 2011 
highlighted that pace operates in sustainable and 
profitable markets where we have differentiated 
capabilities however the group must continue 
to execute on its three primary objectives to take 
advantage of the opportunities for improving 
both the level and quality of its earnings we 
remain focused on these objectives and have 
made good progress both in delivering strong 
results in 2014 and creating a platform for 
further improvement in 2015 and beyond
in addition to the various organic developments 
pace has undertaken over the past two years 
the acquisition of networks is a key step in the 
evolution of pace and enhances our strategy to 
grow a broader platform across hardware 
software and services
summary
  increased revenue
 262bn
   61 growth due to aurora and strong 
demand for stbs and media servers
  increased profitability 
 92
   midterm operating margin 
achieved a year ahead of plan
  strong cash flow generation 
 204m
   free cash flow 846 of adjusted ebita 
and sustainable cash flow model in place
mike pulli
chief executive officer
2014 a year of execution 
and expansion
2014 has been a year of execution and expansion for pace 
we have delivered a strong set of financial results made good 
progress on our strategic plan and created a platform for further 
improvement in 2015 and beyond
strategy pages 8 to 9
transform
maintain
widen out
financial statements governance strategic report pace plc annual report and accounts 2014 08
strategic report  our strategy
transform
maintain
widen out
continue to 
transform 
core economics
significant progress has been made in 
improving the efficiency and effectiveness 
of the business as the major initiatives 
which commenced in 2012 continue to 
deliver tangible benefits a costfocused 
discipline and high level of accountability 
is now ingrained across pace and has 
been implemented in the newly acquired 
networks business 
r underlying operating costs
5
 excluding the 
networks sbu and the capitalisation and 
amortisation of development expenditure 
reduced by 193m 74 in 2014 due to 
further efficiency programmes across the 
business whilst reducing underlying operating 
expenses pace has continued to invest 
further in software and services and 
other growth opportunities 
r application of pace efficiency and 
effectiveness principles to the networks 
business enabled targeted cost and working 
capital synergies to be achieved ahead 
of plan
in november 2011 the company laid out a clear strategic plan that aimed to develop a 
distinctive scalable and profitable technology solutions provider to paytv and broadband 
industries by growing a broader platform across hardware software and services we have 
continued to evolve and deliver against this plan within which there are three key objectives
our strategy
transform
maintain
widen out
maintain paytv 
hardware leadership
pace was reconfirmed as the market 
leader in paytv hardware global number 
one in settop boxes
6
 media servers
7
 
and advanced telco gateways
8

r record paytv consumer premise equipment 
cpe revenue in h2 2014 only partially offset 
a weaker h1 2014 resulting in a 48 revenue 
decline to 22432m 2013 26 growth
r stb and media server revenues were up 12 
to 20035m in 2014 2013 19796m 
driven largely by high demand in h2 2014 
following a number of major launches 
across all regions
r the move to media servers and whole 
home solutions is continuing at speed 
across the globe with over 27 of pace’s 
shipments in the stb and media server 
widening out
pace has built on the momentum of 2013 
with wins across all areas of our software 
and services offerings and good progress 
on product and customer project launches
r pace achieved a 2311 increase 
2013 54 increase in noncpe revenue 
to 3768m 2013 1138m due to the 
acquisition of networks
r revenues in the networks strategic 
business unit sbu have been strong 
reflecting cable operators’ need for increased 
bandwidth and pace networks’ product set 
being an efficient way to upgrade network 
infrastructure networks delivered a strong 
performance in 2014 and further progress 
is expected in 2015
transform
maintain
widen out pace plc annual report and accounts 2014 09
r cash generation was strong throughout 
the year free cash flow was 2040m 
2013 2090m due to further realignment 
of working capital and focused cash 
management since the completion of 
the acquisition of networks for a headline 
consideration of 310m on 6 january 2014 
pro forma debt of 2792m net debt has 
been reduced by 1861m 667 to achieve 
a net debt of 931m at 31 december 2014 
net cash at 31 december 2013 330m
the various components of the transform core 
economics stream of the strategic plan are 
now well embedded across the company and 
are delivering significant financial and 
operational benefits however the company 
believes significant opportunities remain for 
further improvement and will pursue areas 
of inefficiency and will relentlessly strive to 
continually improve operating effectiveness 
across all areas of the business
5  see note 31 for a reconciliation of underlying 
operating costs
category being media servers and related 
client devices in the year pace announced 
media server wins and deployments with a 
number of customers including bein sports 
comcast foxtel and liberty global we 
have a strong media server pipeline and 
anticipate increased demand across the 
globe in 2015 and beyond
r demand for traditional stbs remains 
strong in the year pace achieved next 
generation hardware wins at a number of 
longstanding tier one customers including 
att net brazil oi sky italia tata sky 
and zon optimus
r gateway revenues were down 362 to 
2397m in 2014 2013 3758m due to 
reduced demand for legacy products in 
h1 2014 however the launch of a number 
of new products enabled a 1109 increase 
in revenue in h2 2014 compared to h1 2014 
wins were achieved with customers including 
att gvt and a number of independent 
operating companies iocs in north 
america in addition pace launched 
a range of docsis 30 cable gateways 
in the north american market our first 
development in this growing market 
the company believes the overall 
market demand remains strong for high 
performance residential gateways from 
service providers to effectively deliver high 
quality double and tripleplay services
6  by volume 2013 – ihs settop box market 
monitor q1q2 2014
7  by volume 2013 – ihs settop box market 
monitor q1q2 2014
8  by value 2013 – infonetics4q13bbcpe 
subsmktfcst
r software and services revenues were 
down 14 to 1122m 2013 1138m as 
an increase in revenue from elements and 
eco software products and the customer 
care business were offset by declines in 
legacy software contracts
r the pace elements software platform 
continues to gain traction as part of 
an advanced integrated solution with 
a number of wins for deployment in 2015 
and the launch of the whole home iq3 
solution at foxtel pace’s first integrated 
solution with a tier one service provider 
the elements software platform including 
titanium conditional access is currently 
being used by over 93m subscribers 
2013 69m a 348 increase in the last 
twelve months in addition to shipping over 
5m reference design kit rdk compliant 
devices pace’s role at the forefront of 
the rdk initiative was reaffirmed with the 
announcement that the elements software 
platform now has full rdk compatibility
r the eco service management platform 
is now managing over 340m devices 
2013 298m a 141 increase in the last 
twelve months new wins include foxtel 
frontier communications and logic 
communications these wins build on 
a strong global customer footprint that 
includes att bskyb telmex and telstra
financial statements governance strategic report pace plc annual report and accounts 2014 10
strategic report  markets
market 
dynamics
the markets which pace serve continue 
to remain strong global digital paytv 
revenue and subscribers are at record 
levels and a compound annual growth 
rate cagr of 6 for revenue and 7
9 
for subscribers is expected between 2014 
and 2018 underlying the strength of the 
paytv market are a number of key 
dynamics both from an operator 
and consumer perspective
 r operator consolidation the rate of paytv 
and telecoms operator consolidation over 
the past 12 months both rumoured and 
realised is unprecedented these significant 
investments into the paytv space reflect 
the strength of and confidence in the paytv 
model and are likely to continue to reshape 
the industry landscape for many years to come 
each of the transactions have specific strategic 
rationale but a number of general strategic 
aims have been publicly stated these include 
greater scale benefiting programming 
costs and service and technology innovation 
provision of a broader offer of services and 
enabling the larger combined entities to 
compete more effectively in an increasingly 
crowded and competitive marketplace 
these enlarged service providers will aim to 
offer better more innovative and engaging 
services to their customers supported by the 
very best technology with higher expectations 
and demands on their technology vendors that 
only the largest most innovative and diversified 
companies such as pace can provide
 r subscriber growth beyond 
mature markets in emerging markets 
digital paytv subscriber growth is still 
strong with over 10 subscriber cagr 
predicted from 2014 to 2018
9
 this growth 
is driven by a number of factors such as 
demographic transition introduction of paytv 
into greenfield markets analogue to digital 
transition changing market regulation and 
increasing consumer demand for highquality 
video entertainment with our deep inmarket 
coverage and capability a global scale and 
broad portfolio of products and services 
including integrated solutions pace hardware 
software and conditional access designed 
for emerging market service providers pace is 
well placed to support service providers in 
these markets during this growth period
 r whole home and media servers 
becoming the norm the technology 
refresh cycle to media servers continues 
at pace across the industry with over 5m 
devices shipped globally in 2013 and the 
total size of the market predicted to grow 
234 from 2014 to 2018 cagr to over 
46bn
9
 a media server combines the 
functionality of the stb and the gateway 
augmenting traditional broadcast with 
ipenabled services and enabling video 
content to be distributed around the 
home a key component of the move 
to “tv everywhere” the media server 
product segment is evolving to become the 
main hub of the home enabling any data 
connectivity video voice broadband home 
automation etc around the home with both 
operatorprovided and consumerpurchased 
devices pace has been widely acknowledged 
as a clear market leader in the media server 
segment having shipped over 7 million 
media servers and over 7 million thin client 
devices over the last three years with wins 
and deployments for more than 15 service 
providers around the world 
9 ihs television intelligence service 2015
global digital paytv market revenue 
cagr from 2014 to 2018
6
global digital paytv market subscriber 
growth cagr from 2014 to 2018
7
10
subscriber growth in emerging markets
14m
media servers and thin client devices 
shipped by pace around the world in 
the past 3 years across more than 
15 service providers
operator consolidation 
–an opportunity for pace pace plc annual report and accounts 2014 11
 r rapidly evolving advanced user 
experiences as communications and 
entertainment services converge and 
we move to an alwaysconnected world 
increasingly technologyaware consumers 
are demanding ever more advanced and 
rapidly evolving user experiences from their 
service providers tv everywhere ultra 
high definition uhd and great inhome 
wireless connectivity are three examples 
of advanced user experiences that are 
resulting in technology change and faster 
refresh cycles with tv everywhere service 
providers are marrying the best of the over 
the top ott experiences with the great 
content and support model of the traditional 
broadcast offering enabling consumers to 
watch what they want to watch whenever 
and wherever they want to watch it the 
expected emergence of uhd video over 
60 million uhd televisions predicted to be 
shipped in 2018 24 of total shipments
9
 
brings not only a far greater picture resolution 
but a wider range of colours and faster refresh 
of picture resulting in a far more immersive 
experience than high definition consumers 
now expect to be able to access all their 
services at any time on their inhome wireless 
network to enable this service providers 
are rolling out advanced residential gateways 
with next generation wireless network 
technologies such as wifi 80211ac that 
give greater coverage and increased bandwidth 
to the consumer with a strong track record 
as a technology innovator for the paytv 
industry pace is at the forefront of supporting 
service providers to develop and deliver 
these rapidly evolving user experiences 
to their consumers
 r bandwidth bandwidth and more 
bandwidth with increasing numbers 
of connectable devices growing usage 
of “video everywhere” and other data 
intensive applications such as wifi offload 
consumer demand for highspeed data 
is increasing at a significant rate 
global internet traffic is predicted to reach 
14 gigabytes gb per capita by 2018 up 
from 5 gb per capita in 2013
10
 to respond 
to this demand and compete in highly 
competitive markets service providers need 
to upgrade their network capacity in a quick 
effective and cost efficient manner aurora 
one of the largest suppliers of optical 
transport and access network solutions 
enables service providers to costefficiently 
increase network capacity whilst minimising 
disruption to customers saving on power 
space and operating expenses and leveraging 
existing network investments
 r supporting the increasingly complex 
connected home as service providers 
deliver more services to consumers and 
the number of connected devices in the 
home proliferates the connected home 
continues to become increasingly more 
complex with the emergence of the 
“internet of things” it is estimated that in 
2020 the average broadbandconnected 
home will have over 50 connected devices
11
 
as this complexity increases the need for 
the service providers to be able to effectively 
and costefficiently support the consumer 
becomes greater through our eco service 
management platform and next generation 
customer care centres pace manages over 
34 million devices and handles 6 million 
calls per annum on behalf of over 20 
service providers across the world 
these dynamics are driving increased investment 
by service providers to deliver the best networks 
the best user experiences and the best service 
experience they can to their end users as one 
of the leading providers of technology solutions 
to the paytv industry with a bluechip customer 
base strong global footprint broad portfolio of 
products and services the board believes that 
pace is strongly positioned to capitalise on these 
major industry dynamics over the next 35 years
34m
devices managed by pace
10 cisco
®
 visual networking index vni 2014
11 oecd 2013
demand for highspeed data growing 
at a significant rate
180
growth to 14gb per capita 
from 2013 to 2018
6m
calls handled per annum by pace 
on behalf of our customers
financial statements governance strategic report pace plc annual report and accounts 2014 12
strategic report  business performance
product performance
pace provides a broad portfolio of products and solutions to customers across the markets that 
we serve this portfolio is divided into 4 product categories stb and media servers gateways 
software and services and networks with the revenue split as follows
product revenue split
2014 2013
m m
stb and media servers 20035 19796
gateways 2397 3758
software and services 1122 1138
networks 2646 —
total 26200 24692
regional performance
pace has a broad global footprint within which individual markets are at varying stages of development 
overall these markets have remained strong during the year with paytv continuing to show varying 
levels of subscriber and average revenue per user arpu growth despite perceived disruptive 
threats from new overthetop ott market entrants and economic uncertainty in emerging 
markets on a global basis digital paytv subscribers are expected to grow at 7 compound 
annual growth rate cagr between 2014 and 2018
12
 
regional revenue split
2014 2013
m m
north america 16356 15405
latin america 3732 3584
europe 2912 3239
rest of world 3200 2464
total 26200 24692
business 
performance
stb and media servers m
20035
12
gateways m
2397
362
12 ihs television intelligence service 2014
2014 20035
2013 19796
2012 18260
2014 2397
2013 3758
2012 4694 pace plc annual report and accounts 2014 13
aurora networks – 12 months in
the acquisition of aurora networks inc 
was announced on 23 october 2013 
and completed on 6 january 2014 
aurora networks is a leading developer and 
manufacturer of advanced nextgeneration 
optical transport and access network 
solutions for broadband networks that 
support the convergence of video data 
and voice applications a leading presence 
in these solutions that are increasingly 
important for cable operators as they 
continue to fulfil consumers’ constant demand 
for ever increasing bandwidth ensures the 
acquisition has further strengthened pace’s 
relationships with its customers
aurora networks has strengthened 
our offering and footprint
 r positions pace to enable operators 
to costeffectively support their 
consumers’ constant demand 
for ever increasing bandwidth
 r highly profitable and growing business 
with bluechip customer base and 
marketleading positions serving over 
200 customers in 50 countries including 
all of the top 10 cable operators in the us
 r strong highly experienced 
management team
 r creates deeper and more embedded 
relationships with key customers
 r crosssell opportunity across 
customer footprints
 r further widens pace out beyond paytv 
customer premise equipment cpe
aurora networks has progressed 
beyond expectations in the first 
12 months
 r integration – the integration of aurora 
into pace was completed ahead of plan 
by the end of h1 2014 following which 
significant progress has been made in 
ramping up the supply chain to meet the 
growing customer demand aurora is 
now a fully integrated sbu within pace 
“pace networks” with its own focused 
sales and engineering teams whilst 
leveraging the scale and expertise of the 
wider group’s shared services the 
targeted endstate runrate synergies of 
8m per annum were achieved in 2014 
a year ahead of plan whilst further 
investing in supporting customers 
and new product development
 r trading – networks has had a very 
strong first year as part of pace trading 
has been above expectations with revenue 
of 2646m due to strong underlying 
customer demand which is expected to 
continue into 2015 networks delivered 
an adjusted ebita contribution of 47 4m 
an operating margin of 179
 r innovation – networks has a track 
record of innovation and this has continued 
in 2014 with a number of new product 
and technology launches
 r docsis 31 compatibility across the 
networks product range – supporting 
the next generation of hybrid fibre 
coaxial hfc access technologies
 r fifth generation universal digital 
return solution – the industry’s only 
upgradeable digital return solution 
and a key component to supporting 
the transition to docsis 31
 r uniphy converged services 
platform – high performance 
aggregation solution for advanced 
services across high speed fibre 
and coaxial networks
 r distributed broadband access 
architecture dbaa – pace’s 
distributed iterative and modular 
approach to enabling greater network 
capacity that leverages operators 
existing infrastructure investments
software and services m
1122
14
networks m
2646
2014 was the first year 
of pace ownership
2014 1122
2013 1138
2012 1080
financial statements governance strategic report pace plc annual report and accounts 2014 14
strategic report  business performance continued
serving diverse markets 
around the world
north america
north america is the largest most advanced 
and most profitable market for digital paytv 
and broadband technology in the world with 
over 112 million paytv subscribers and close 
to 104 million fixed broadband connections
13
 
given the already high penetration levels we 
believe the digital paytv market in north america 
will remain flat in terms of the number of 
subscribers for the foreseeable future with gross 
subscriber acquisition being offset by customer 
churn between the various paytv offerings 
however average revenue per user arpu 
will continue to grow on an annual basis as 
service providers deliver an increased range of 
revenuegenerating services to their customers
pace is the only vendor to all of the largest 
operators in each of the cable satellite and 
telco markets serving comcast directv and 
att respectively in each case pace supplies 
their most advanced inhome technology in 
addition pace also serves a large number of 
other cable and telco operators in both the 
usa and canada
total revenues in north america increased by 
62 to 16356m in 2014 2013 15405m 
driven largely by new launches with major 
customers in h2 2014 and strong demand 
for aurora products this confirmed pace’s 
continued position of technological leadership 
in our sector and we remain confident about 
the longterm strength of the market for our 
products in north america
latin america latam
the latam market is a large diverse and 
fastgrowing market within which pace serves 
satellite cable iptv and hybrid operators 
across the region with brazil and mexico 
the key markets
the overall market has expanded significantly 
over the last few years and continues to display 
strong digital subscriber growth with 6 growth 
predicted from 2014 to 2018
14
 this growth is 
led by a number of factors including greenfield 
markets deregulation in brazil the 2016 olympics 
in brazil and a number of growing paytv operators 
in the region demand for paytv is strong at all 
levels of technology standard definition sd 
continues to support analogue to digital transition 
high definition hd and highend personal 
video recorders pvrs to meet growing 
consumer expectations and pace deployed 
media servers with operators in the region 
during 2014
revenue in latam increased by 41 to 
3732m 2013 3584m pace continues to 
have a diverse business in latam providing 
products to eight of the ten largest paytv 
providers in the region and has made good 
progress in widening out the solutions delivered 
to this market the company is strategically 
well positioned with key customers in the 
region and remains confident that strong 
revenues and profitability will continue
north american revenue m
16356
62
13 and 14 ihs television intelligence service 2014
latin american revenue m
3732
41
european revenue m
2912
101
rest of world revenue m
3200
299
2014 16356
2013 15405
2012 13176
2014 3732
2013 3584
2012 3744
2014 2912
2013 3239
2012 4024
2014 3200
2013 2464
2012 3090 pace plc annual report and accounts 2014 15
europe
europe remains a fragmented and highly 
customer specific territory for pace revenues 
in europe were down by 101 to 2912m 
2013 3239m primarily due to a reduced 
win rate of new products in prior years which 
adversely affected revenue up to h1 2014 
sales performance has improved and key wins 
in new and existing customers delivered a 487 
growth in h2 2014 compared to h1 2014 
singledigit digital subscriber growth is 
predicted in the underlying european paytv 
market
15
 we expect significant growth in the 
media server segment of the market as operators 
in europe follow the innovation of north american 
operators and in 2014 pace shipped media 
servers to two european operators liberty 
global and get
in addition the group is seeing increasing 
demand from operators for integrated solutions 
incorporating pace hardware and software 
assets that can be quickly deployed and that 
enable the operator to innovate and differentiate 
in highly competitive markets pace is focused 
on developing opportunities in this area of the 
market and has a number of projects underway
rest of world
rest of world covers a diverse range of markets 
which are developing at different rates the highly 
developed markets in australia new zealand and 
south east asia the “fastfollowing” markets in 
the middle east and africa and the fastgrowing 
indian market revenues in rest of world are 
up 299 to 3200m 2013 2464m this 
increase was due to strong demand for recently 
launched products in h2 2013 and 2014
the company remains confident that 
these markets will provide significant growth 
opportunities both at the high end of the market 
with hd pvr and media server products and 
also as the uptake of paytv and digitisation 
continues in emerging greenfield markets allowing 
pace to increase its footprint with new customers 
through software and integrated solutions
mike pulli
chief executive officer
3 march 2015
pace has a broad global 
footprint within which individual 
markets are at varying stages 
of development through its 
regional focus and structure 
pace can sell deliver and 
support the solutions its 
customers need in all regions 
of the world
15 ihs television intelligence service 2014
financial statements governance strategic report pace plc annual report and accounts 2014 16
strategic report  key performance indicators
the board of directors track a number of kpis 
to measure assess and improve the progress the 
business is making against the strategic plan objectives
definition
adjusted ebita as a percentage 
of revenue
performance
increase driven by topline growth 
due to aurora networks acquisition 
improved revenue mix supply chain 
efficiency and increased operational 
efficiency midterm target of 9 
achieved a year ahead of plan
strategic strand
overall
strategic strand
overall
strategic strand
continue to transform 
core economics
strategic strand
continue to transform 
core economics
definition
adjusted basic eps is based 
on earnings before the posttax 
value of exceptional costs and 
amortisation of other intangibles
performance
strong performance driven by 
34 increase in profit before tax 
and reduced group tax rate
definition
underlying operating costs 
including networks sbu as a 
percentage of revenue
performance
increase due to inclusion of 
aurora networks overheads 
underlying cost to serve 
excluding aurora networks 
reduced to 97
definition
free cash flow as a percentage 
of adjusted ebita
performance
reduction due to lower level of 
cash inflows from working capital 
as cash conversion transitions to 
a more normalised rate of 70–80 
of adjusted ebita
we have defined our key performance indicators kpis to align our 
performance and accountability to our strategy these kpis will be  
the key measures of success and cover our strategic priorities
operating margin 
92
eps growth 
436
cost to serve 
111
cash conversion 
846
2014 92
2013 78
2012 66
2014 436
2013 262
2012 182
2014 111
2013 103
2012 114
2014 846
2013 1080
2012 1156 pace plc annual report and accounts 2014 17
strategic strand
continue to transform 
core economics
strategic strand
maintain and build on our position 
as world leader in paytv hardware
strategic strand
widen out into software networks 
services and integrated solutions
definition
net debt as a ratio 
of group ebitda
performance
increase due to the acquisition of 
aurora networks on 6 january 2014 
net debt to ebitda ratio as at 
30 june 2013 of 073x
definition
revenue growth across consumer 
premise equipment hardware 
categories inc stb media 
servers gateways
performance
record revenue in h2 2014 only 
partially offset a weaker h1 2014
definition
revenue growth of all nonconsumer 
premise equipment categories 
inc software and services 
and networks
performance
increase due to the aurora 
networks acquisition
 continue to transform core economics
 maintain and build on our position as world leader in paytv hardware
 widen out into software networks services and integrated solutions
net debt to ebitda x
034x
cpe hardware revenue growth 
48
noncpe revenue growth 
2311
2014 034x
2013 00x
2012 09x
2014 48
2013 26
2012 39
2014 2311
2013 54
2012 76
strategy on pages 8 to 9
financial statements governance strategic report pace plc annual report and accounts 2014 18
strategic report  risk management and principal risks
robust risk 
management processes
the group operates a system of internal control and risk 
management in order to provide assurance that it is 
managing risk whilst achieving its business objectives
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 
but can provide only reasonable not 
absolute assurance against material 
misstatement or loss 
no system can fully eliminate risk and 
therefore the understanding of operational 
risk is central to the management process 
within pace the longterm success of the 
group depends on the continual review 
assessment and control of the key business 
risks it faces to enable shareholders to 
appreciate what the business considers are 
the main operational risks they are briefly 
outlined below
1 2 
3 4 
identify risk evaluate risk
mitigate risk monitor risk
risk potential impact mitigations
change
since
prior year
strategic risks
customers and markets
revenue concentration from a small number 
of large customers
customer orders are typically short to midterm 
commitments with no longterm guarantee
volatile revenue 
trends
procedures are in place to monitor 
the financial and operating strength 
of customers
suppliers
the group works on long lead times 
for component supply and manufacture
concentration on a small number 
of manufacturing partners
lack of flexibility
loss of product 
availability
procedures are in place to monitor 
the financial and operating strength 
of suppliers
the group uses dual or multisource 
suppliers where possible to mitigate 
the risk pace plc annual report and accounts 2014 19
risk potential impact mitigations
change
since
prior year
financial risks
royalty claims
the group’s products incorporate 
thirdparty technology
inadvertent actions may expose the group 
to the risk of infringing thirdparty intellectual 
property rights
cash outflow
reputational damage
the audit  risk committee and 
board receive a semiannual report 
from the general counsel regarding 
royalty claims under negotiation 
all material claims are monitored 
by outside legal counsel
currency risks
the group operates globally and is exposed 
to foreign exchange risks on both revenue 
and costs
adverse impact 
on the income 
statement
the group’s treasury policy is to 
progressively hedge cash flows when 
they are sufficiently certain and to 
seek price variations through 
contractual mechanisms
other risks
innovation
the product development process can take 
over twelve months
research and development effort may not be 
appropriately targeted on the correct areas
risk has increased in current year due 
to acquisition of aurora networks
loss of technology 
andor market 
advantage
engineering teams split into 
specialist areas
sbu teams closely aligned to customer 
requirements and product roadmaps
product liability claims
the group is exposed to the risk of product 
liability claims made by customers or affected 
third parties
cash outflow
reputational damage
the group has in place quality 
control and other operational 
procedures to mitigate this risk
natural disasters
appropriateness of business continuity plans loss of ability to 
service customer 
demand
business continuity management 
programmes exist internally and 
at manufacturing partners
it environment
major system failure information security breach 
and inadequate information systems
loss of ability to service 
customer demand
cash outflow
it general and application controls
annual internal audit testing 
external penetration testing
in addition the audit  risk committee considers other strategic and financial risks which are relevant to the group these are shown on page 33
audit  risk committee on pages 31 to 33
financial statements governance strategic report pace plc annual report and accounts 2014 20
strategic report  financial review
the financial position of pace improved 
significantly in 2014 this improvement is 
reflected in the 61 increase in revenue to 
26200m a 245 increase in adjusted 
ebita to 2411m and a 667 reduction in 
net debt since the acquisition of aurora
pace has become a more profitable company 
with its operating margin increasing from 78 
to 92 in addition free cash flow has remained 
strong at 2040m 846 of adjusted ebita 
due to the continued benefits of robust cash 
management and working capital inflows 
as a result of the strong cash flow the net debt 
has been reduced by 1861m 667 since 
the completion of the acquisition of aurora 
networks on 6 january 2014
group revenue of 26200m 2013 24692m 
increased by 61 driven by the networks 
business and strong demand for stbs and 
media servers partly offset by lower revenue 
from gateways and flat revenue from software 
and services underlying revenue excluding 
networks decreased by 46 to 23554m 
2013 24692m in the year 47 of revenue 
was generated by the top 3 customers 
2013 57
gross profit of 5325m 2013 4482m is up 
188 gross margin percentage in 2014 was 
203 an increase of 21ppt on 2013 reflecting 
the higher margin contribution from networks
operating costs preexceptional charges and 
amortisation of other intangibles increased by 
368m 145 to 2914m 2013 2546m 
reflecting the inclusion of the networks cost 
base further progress has been made in 
improving operating efficiency across the 
company during the year both in the core 
pace business and pace networks
the ias 38 net credit capitalisation minus 
amortisation of development costs was 208m 
reflecting an intense period of development 
activity ahead of product launches throughout 
the year and the first year of capitalisation 
of networks product development inline 
with ias 38 standards
summary
 r pace has become a more profitable 
company with its operating margin 
increasing from 78 to 92
 r free cash flow generation has 
been strong in 2014 at 2040m 
846 of adjusted ebita
 r the full year proposed dividend 
increased 275 to 700 cents per share 
2013 549 cents per share – reflecting 
the board’s confidence in the outlook 
for the company and its improving 
financial position
the financial position of pace 
improved significantly in 2014
2014 2013
m m
revenue 26200 24692
gross profit 5325 4482
gross margin  203 182
adjusted operating costs 2914 2546
adjusted ebitda
16
 2701 2186
adjusted ebita 2411 1936
operating margin 92 78
exceptional costs 73 122
amortisation of other intangibles 529 426
net finance expense 52 80
profit before tax 1757 1308
tax charge 277 341
profit after tax 1480 967
 preexceptional costs and amortisation of other intangibles
group trading results
16 operating profit before exceptional costs amortisation of other intangibles and depreciation
mark shuttleworth
chief financial officer pace plc annual report and accounts 2014 21
adjusted ebita was 2411m 2013 1936m 
an operating margin of 92 against 78 in 
2013 organic adjusted ebita was 1937m 
with operating margin increasing 04ppt to 82
exceptional costs of 73m 2013 122m 
relate to aurora networks inc acquisition 
costs 58m and restructuring costs across 
the business 15m
amortisation of other intangibles primarily 
reflecting the charge for intangible assets 
related to acquisitions made in 2010 and 2014 
was 529m 2013 426m the increase was 
due to the aurora networks acquisition
segmental analysis
the group operates through sbus 
pace americas pace international and 
pace networks are deemed by the board 
to represent operating segments under 
ifrs 8 with revenues and ebita shown 
in the table below
movements in revenue are described below 
although not wholly consistent revenues 
from stb and media servers gateways 
and software and services in north america 
belong primarily to the americas sbu in europe 
and rest of world belong largely to the 
international sbu and in latin america belong 
to both the americas and international sbus 
all revenue from network products belong to 
the networks sbu which is the new operating 
segment for the aurora networks acquisition
pace americas’ revenue decreased by 
1186m 7 1 in 2014 with a strong h2 2014 
only partially offsetting a weaker h1 2014 
operating margin increased to 96 2013 91 
the performance of pace international improved 
as revenue increased 06 and operating 
margin increased to 111 2013 105 
pace networks had a strong first year with 
revenue of 2646m and an operating margin 
of 179
other amounts include unallocated central 
costs that are not classified as reportable 
segments under ifrs 8 the loss in other 
primarily corporate costs increased by 69 
to 448m 2013 loss of 419m
finance costs
net financing costs of 52m 2013 80m 
reflect the improved terms of the new 
borrowing facilities despite an increase 
in average net debt during the period 
finance costs include 16m 2013 21m 
for amortisation of facility arrangement and 
associated fees
profit before tax
profit before tax was 1757m 2013 1308m 
an increase of 449m 343 on 2013 
taxation
the tax charge of 277m 2013 charge 341m 
results from the full year effective tax rate of 158 
2013 261 the rate reduction reflects a mix 
of expected recurring items including lower 
corporate tax rates in the uk and the impact 
of the aurora acquisition and nonrecurring 
items based on the current expected regional 
mix of trading the effective rate for 2015 is 
expected to be in the range of 19 to 21 
the cash cost of corporate tax was 115m 
2013 238m
audit committee on pages 31 to 33
financial statements on pages 47 to 88
2013
2014 m
m restated
17

revenue
pace americas 15616 16802
pace international 7938 7890
pace networks 2646 —
other — —
total revenue 26200 24692
adjusted ebita
pace americas 1502 1527
pace international 883 828
pace networks 474 —
other 448 419
total adjusted ebita 2411 1936
segmental analysis
17  the restatement reflects the restructuring of certain activities in the period as such some items previously 
classified as “other” are now split between the americas and international sbu
financial statements governance strategic report pace plc annual report and accounts 2014 22
strategic report  financial review continued
profit after tax
profit after tax was 1480m 2013 967m 
an increase of 513m 531 on 2013 
earnings per share
basic earnings per share eps was 47 4 cents 
2013 312 cents an increase of 519 adjusted 
basic eps which removes the tax affected 
impact of the exceptional costs and amortisation 
of other intangibles to reflect underlying 
performance was 636 cents 2013 443 cents 
an increase of 436
balance sheet
intangible development expenditure assets 
increased by 206m 2013 81m increase 
due to an increased number of development 
projects and the first year of capitalisation of 
networks product development in line with 
ias 38 standards
tangible fixed assets increased in the period 
primarily due to the inclusion of aurora 69m 
capital expenditure of 260m 2013 216m 
was offset by the depreciation charge of 290m 
2013 250m the 260m capital expenditure 
reflected an increase of 44m from 2013 due 
to the inclusion of networks and is in line with 
the expected ongoing level for the company
working capital
in the period following the acquisition of aurora 
networks the pro forma working capital increased 
by 165m 131 to 1425m as the increase 
in core pace due to the phasing of revenue in 
the year offset the reduction in aurora
inventory increased by 112m 7 1 to 1680m 
during the period reflecting the inclusion of 
aurora inventory average stock turn in the 
period was 82 times against 84 times in 2013
debtor days increased by 6 days to 66 days at 
december 2014 reflecting a change in sales mix
creditor days at 31 december 2014 remained 
at 90 days consistent with at 31 december 2013
debt
in the period following the acquisition of 
aurora the pro forma net debt reduced by 
1861m 667 from 2792m to 931m 
during the year two scheduled facility 
repayment instalments were paid of 155m 
each in june and december 2014 
a key target for the group is to reduce the 
balance sheet leverage calculated as net debt 
divided by adjusted ebitda
18
 over the preceding 
12 months at 31 december 2014 the net debt
last twelve months ltm adjusted ebitda 
ratio was 034x well within the 2x net debt 
to ebitda ratio target set as an appropriate 
and efficient capital structure for pace
liquidity and cash flows
a key performance measure for the group is free 
cash flow which was 2040m 2013 2090m 
and represented 846 of adjusted ebita 
2013 1080 cash outflows from interest 
payable net of interest received were 36m 
2013 59m cash spent on exceptional 
costs was 80m 2013 104m
the board is confident that the group will 
continue to be strongly cash flow positive in 
2015 and that the group’s committed bank 
facilities are more than sufficient to meet its 
short to mediumterm funding needs
foreign currency
in the period approximately 817 of the 
group’s revenues were denominated in 
us dollar 2013 812 109 in brazilian 
real 2013 107 43 in euro 2013 77 
25 south african rand 2013 0 
04 in sterling 2013 04 and 
02 in australian dollar 2013 0
the impact of nonusd revenues costs and 
overheads continues to be addressed through 
pace’s foreign exchange hedging strategy
critical accounting policies
the directors consider that the group has the 
following critical accounting policies as they 
require the use of estimates and are subjective 
in their nature
 r impairment
 r royalty and warranty provisions
 r intangible assets – capitalised 
development costs
 r acquisition accounting
dividend
the board has recommended a final dividend 
of 475 cents per share 2013 366 cents per 
share the full year proposed dividend increases 
275 to 700 cents per share 2013 549 cents 
per share the increase reflects the board’s 
confidence in the outlook for the company its 
improving financial position and is in line with 
the progressive dividend policy introduced 
in 2009
dividends will be paid in sterling equivalent 
to 3093 pence per share this is based on an 
exchange rate of £  15358 being the closing 
rate applicable on 2 march 2015 the date on 
which the board resolved to recommend the 
final dividend the proposed dividend will be 
payable on 3 july 2015 to shareholders on 
the register on 5 june 2015
mark shuttleworth
chief financial officer
3 march 2015
18  operating profit before exceptional costs amortisation of other intangibles and depreciation pace plc annual report and accounts 2014 23
strategic report  corporate responsibility
methodology
the company prepares the annual responsible business report and in 2014 independent 
review and assurance with regards to the content of the report was provided by rhead group 
in accordance with the principles set out in aa1000 accountability principles standard 2008 
the report covers the following areas environment products facilities supply chain community 
and people
responsible business report wwwpacecom
greenhouse gases mandatory reporting
the company has used the ghg protocol corporate accounting and reporting standard 
revised edition and emission factors from uk government’s ghg conversion factors for 
company reporting 2014 
the company has reported on the scope 1 and scope 2 emission sources required under 
the companies act 2006 strategic report and directors’ reports regulations 2013 
these sources fall within our consolidated financial statement
performance highlights
 r we have reduced average power 
consumption by more than 50 from 
1805 kwhyr 2007 to 8857 kwhyr 2014 
achieving our longterm objective
 r average co
2
 emissions per stb have 
reduced to 47 47 kg co
2
 2014 from 47 99 kg 
co
2
 2013
 r the average weight of materials within a pace 
stb has reduced for the fifth successive year 
to 1436 kgstb 2014 from 1499 kg
stb 2013
 r again for the fifth successive year the average 
weight of packaging cardboard and polythene 
used per stb has also been reduced to 
0405kg 2014 from 0409kg 2013
 r in 2014 we can report a 39 reduction 
in total product energy consumption and 
corresponding co
2
 emissions down to 923 
2013 96087
 r pace docsis
®
 30 cable gateway achieves 
world’s first energy star
®
 10 certification 
 r pace has further improved its overall score 
in the carbon disclosure project cdp by 3 
to 94 2013 91
 r we have established a provisional baseline 
for energy consumption and co
2
 emissions 
associated with our home gateway hg 
products something we hope to learn and 
build upon so that we continually improve our 
environmental performance just as we have 
with our stb product range over the years
 r water consumption across the group 
has reduced by 466 to 34009m
3
 
2013 35669m
3

as we continue to extend our portfolio of products 
and services we are also keeping our environmental 
and social impacts firmly to a minimum
results 
the table below reports the total greenhouse gas emissions by emission type 
global ghg emissions
emissions from
tonnes of co 2 e period
 1 january 2014 –
 31 december 2014
tonnes of co 2 e period 
1 january 2013 – 
31 december 2013
scope 1 combustion of fuel and operation 
of facilities 654 683
scope 2 electricity heat steam and cooling 
purchased for own use 7417 6669
company’s chosen intensity measurement
1  emissions reported above normalised 
to per tonne of product
0339 tonnes co
2

 tonne product
0216 tonnes co
2
 
tonne product
2  emissions reported above normalised 
to annual turnover
308 tonnes co
2

annual turnover
2978 tonnes co
2

annual turnover
3  emissions reported above normalised 
to product settop box
0418 kg co
2
product
 settop box
0368 kg co
2
product 
settop box
  scope 2 emissions increase as a result of the aurora networks acquisition
the pace responsible business report is available online at  
wwwpacecomuniversalresponsiblebusiness
financial statements governance strategic report pace plc annual report and accounts 2014 24
strategic report  corporate responsibility continued
objectives and targets 
during the year the company set its own responsible business targets and achieved the following outcomes against its chosen measures
focus area target status
environment 
product  
performance
drive product energy efficiency improvement
 r all applicable products designed in 2014 to exceed a score of 80 during pace’s 
design for environment dfe programme seek to reduce product emissions by 2 
 r gateways networked products
 r develop dfe scorecard for gateway networked products and include in pace’s dfe 
 r establish a baseline power figure for gateway standby
 r all applicable pace products to adhere to network standby regulation
achieved 1 
reduction
achieved
achieved
achieved
environment 
site operations
drive co
2
 performance improvement
 r rebase line overall co
2
 performance in light of recent acquisitions
 r achieve a 2 reduction in co
2
 scope 1 and 2 compared to 2013 by december 2015 
achieved
ongoing
environment 
management 
system footprint
increase pace’s ems footprint to include key operations
 r integrate recent acquisition of aurora into pace’s environmental management system 
 r increase pace’s environmental management system footprint to include pace brazil 
and pace americas san jose operations target iso 14001 certification in 2014
 r maintain iso 14001 in current certified pace sites – ensuring no major nonconformances 
ongoing
not achieved 
achieved
supply chain 
performance 
assessment
assess and prioritise our supply base sustainability performance
 r develop a strategy that targets improvement in key risk supply vendors 
based on the output of the supplybased assessment conducted by ecovadis 
achieved
employees 
employee 
involvement
 r focus on understanding our data and metrics in order to make informed decisions 
 r collect and report on key metrics eg internal promotions vs external hires looking 
at our diversity data in relation to the communities we operate in with a focus on gender
 r develop an action plan to promote the career development of women in the workplace 
and engineering
 r continue to take actions as a result of our engagement survey feedback and our focus 
on internal communications 
ongoing
 
achieved 
achieved
community 
community 
engagement
 r continue community programmes focused on education
 r develop a more robust framework for community activities including accurate reporting 
volunteering and leadership accountability
achieved 
ongoing pace plc annual report and accounts 2014 25
environment
the company has maintained certification 
to the international management standard 
iso 14001 at its saltaire boca raton 
bangalore paris tempe and san antonio 
sites and the group environmental policy 
has been applied to all pace sites worldwide
the company is a signatory to the european 
code of conduct on energy efficiency of digital 
tv service systems eu code of conduct energy 
star program requirements for stbs and meps 
minimum energy performance standard pace 
is committed to ensuring that all products are 
designed to minimise energy consumption 
through its “design for environment” programme
supply chain
the company has continued its work with its 
suppliers in 2014 through the electronic industry 
citizenship coalition eicc and also implemented 
a programme to ensure fullscale adoption of the 
eicc code of practice throughout its supply chain
the company has continued its work with 
ecovadis to ensure complete evaluation 
transparency and drive continuous 
improvement of its supply chain’s csr 
performance culminating in a new set 
of supply chain objectives and targets
charitable and community support
the group has an established charitable 
donations committee comprising employees 
based at the group’s premises in the uk and 
the usa the committee considers all requests 
for charitable and community project assistance 
from employees 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 the uk france india and the usa 
as well as the charitable and community 
initiatives of group employees
during the year requests for assistance 
satisfying the above criteria received financial 
support amounting to 117766 in total
the participation of employees of the group in 
community and charitable activities outside work 
hours has been encouraged by the provision of 
funds to match individual sponsorship raised
pace has continued as sponsor of the ahead 
partnership’s education strand of business 
engagement in the uk’s west yorkshire region 
this threeyear commitment has enabled the 
ahead partnership to develop and roll out their 
“make the grade” business education partnership 
model in west yorkshire
in addition pace has partnered with teach 
first to support the science technology 
engineering and maths stem teachers in 
yorkshire and the humber pace will fund the 
provision of personal development coaches to 
teach first participants in their second year of 
teaching teach first recruits trains and supports 
teachers working in schools in low income 
communities to raise the achievement aspirations 
and access to opportunity of children from low 
socioeconomic backgrounds 
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 
highquality employees the group continues 
to invest in a range of internal and external 
initiatives to promote employee development
employees are kept informed of matters affecting 
them as employees and factors affecting the 
performance of the group through regular 
employee meetingsbriefings and regular 
written news briefings are distributed 
electronically
diversity and inclusion
the group welcomes applications for employment 
from all sectors of the community and promotes 
equality of opportunity in employment regardless 
of age gender sexual orientation disability or 
ethnic origin it is the group’s policy that training 
career development and promotion opportunities 
should be available to all employees in the 
event that an employee becomes disabled 
the group makes reasonable adjustments 
where any aspect of premises or working 
practices puts such a disabled employee 
at a substantial disadvantage compared 
with a nondisabled employee
we believe that diversity is an essential part 
of how we do business and we meet the needs 
of our global customer base we operate in 
18 countries employing c2100 people and 
working with customers and suppliers from 
a broad range of backgrounds and cultures
the charts above show the gender split 
at different levels within the group as at 
31 december 2014
health and safety
each sbu in the group has an established 
health and safety committee made up of health 
and safety representatives the designated 
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 uk government’s 
“health work wellbeing” hww initiative 
which has been adopted and implemented 
by the company
part of the hww incorporates return to work 
programmes and the group’s operations in 
saltaire pace west and pace east france 
brazil and india have adopted similar policies 
each division incorporates where appropriate 
their ergonomic risk assessments
pace west undertakes earthquake training 
and pace east undertakes hurricane training 
all of these initiatives are backed up by appropriate 
risk assessments “toolbox talks” short 
presentations on specific aspects of health and 
safety are also published on the group’s intranet 
and shared between different parts of the group
human rights
the group does not have a specific human 
rights policy at present but does apply human 
rights considerations to the way it does business 
for example through our practices in relation 
to equal pay the right to form and join trade 
unions and our health and safety supplier 
and anticorruption policies the group will 
continue to review whether a specific human 
rights policy is needed in the future over 
and above our existing policies
  pace west is represented by the 2wire businesses 
and pace east is predominantly our office 
in boca raton florida
 female directors  2
 male directors 4
 female senior managers  12
 male senior managers 81
 female employees  441
 male employees 1538
board 
diversity
senior 
management 
diversity
total 
workforce 
diversity
333
871
129
223
777 667
financial statements governance strategic report pace plc annual report and accounts 2014 26
governance  board of directors
an expert team 
with strong leadership
2014 has been a year of 
execution and expansion
a audit  risk committee
r remuneration committee
n nomination committee
 chairman
 member
1 2
5
7
3
4
6
1 allan leighton
chairman
allan was appointed a nonexecutive director in 
may 2011 and became chairman on 21 june 2011 
he is currently nonexecutive chair of the 
cooperative group nonexecutive director 
and chairman of entertainment one limited 
chairman of office retail group limited and 
matalan and a nonexecutive director 
of bighams limited
previously he has held a wide range of public and 
private company roles including president and 
ceo of pandora as ceo at asda chairman of 
royal mail and lastminutecom and nonexecutive 
director of british sky broadcasting plc 
dyson limited and scottish power plc
he is patron of breast cancer care and has an 
honorary degree from cranfield university and an 
honorary fellowship at the university of lancaster
r n pace plc annual report and accounts 2014 27
6 amanda mesler
nonexecutive director
amanda was appointed a nonexecutive director 
in september 2012 she is a us citizen and is 
also a nonexecutive director of ensygnia 
a technology startup 
previously she was the ceo of business 
consulting and an executive committee member 
of logica plc prior to joining logica amanda 
was a corporate officer and vp of strategy and 
organisation design for fortune 100 sysco 
prior to this amanda was a senior partner 
at bearing point consulting formerly kpmg 
consulting working out of houston where she 
led a client portfolio including many leading oil 
companies and spent time as the global leader 
for energy for eds her early career was with ge 
as the asia pacific market manager
7  mike inglis
nonexecutive director
mike was reappointed a nonexecutive director in 
march 2014 mike was a nonexecutive director of 
pace plc from july 2008 until the annual general 
meeting in 2013 when he stepped down from the 
board in order to participate in the clipper round 
the world yacht race
currently a nonexecutive director of advanced 
micro devices inc mike was formerly chief 
commercial officer of arm holdings until the end 
of march 2013 having previously been evp 
processor division and 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
2 mike pulli 
chief executive officer
mike was appointed chief executive officer on 
14 december 2011 after nearly eight years as 
president of pace americas in his role as ceo 
mike is responsible for leading pace’s global 
strategy as president of pace americas mike 
was responsible for the company’s businesses 
in the usa canada and latin america latam 
mike was previously a nonexecutive director 
of itron nasdaqitri having been appointed in 
january 2014 and resigning 31 december 2014
prior to joining pace in 2004 mike was ceo of 
broadcasting company digital latin america dla 
previously mike spent eight years at motorola in 
various senior management positions including 
vice president of international operations and 
served in a variety of financial positions at 
alliedsignal inc mike holds a bachelor’s degree 
in accounting from rider university and an mba 
from farleigh dickinson university
3 mark shuttleworth
chief financial officer
mark shuttleworth was appointed as 
chief financial officer and joined the board 
on 12 january 2015
most recently mark served as the cfo of emirates 
integrated telecommunication company pjsc 
known as “du” duuh he joined du in 2005 and 
was responsible for managing the financial and 
business investment strategy of the startup 
operator leading the 660m ipo of the business 
on the dubai financial markets and building the 
business to a market capitalisation of 8bn and 
revenues of 3bn
prior to du mark was cfo of qatar telecom 
“qtel” now “ooredoo” ordsyh from 2003 to 
2005 mark has also served as group finance 
director of european telecom plc group finance 
director at ora telecom ltd and held a number 
of senior finance roles at sensormatic electronics 
corporation inc
mark qualified as a chartered accountant with 
lubbock fine and later worked at price waterhouse 
as a senior manager in corporate restructuring
4 patricia chapman‑pincher
nonexecutive director
pat was appointed a nonexecutive director 
in february 2005 and was senior independent 
director between may 2006 and november 2014
she has over 36 years’ experience in the 
communications industry from senior roles in 
multinational internet and telecoms companies 
to participating in technology company startups 
a founding partner and chairman of the cavell 
group which specialises in operational consultancy 
ip and wireless technologies she is also chairman 
of penzias ltd a board adviser to the british 
standards institute and a ceo mentor with 
merryck and co pat is also a trustee of finding 
rhythms a charity that works with music in prisons
5 john grant 
nonexecutive director
john was appointed a nonexecutive director in 
august 2008 and became senior independent 
director on 1 november 2014 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 a nonexecutive director of melrose plc 
mhp sa and touch bionics ltd he is also 
chairman of the british racing drivers’ club ltd 
r a n
r a n
r a n
r n a
financial statements governance pace plc annual report and accounts 2014 28
governance  framework of corporate governance
the board 
the pace plc board is accountable to the 
company’s shareholders for standards of 
governance across the group’s businesses 
certain strategic decisionmaking powers 
and authorities of the company are reserved 
as matters for the board whilst daytoday 
operational decisions are managed by the 
chief executive officer the principal matters 
reserved for the board are set out below
 r setting the overall strategic direction 
and oversight of the management of 
the company
 r recommending or declaring dividends
 r approval of the company consolidated 
financial statements
 r approval of major corporate transactions 
and commitments
 r succession planning and appointments to the 
board and senior management remuneration 
 r review of the group’s overall corporate 
governance arrangements including 
systems of internal controls and risk 
management and
 r approval of the delegation of authority to 
the chief executive officer and the terms 
of reference of all committees of the board
where appropriate matters are delegated 
to a committee which will consider them 
in accordance with its terms of reference
details of each committee’s terms 
of reference are available on the pace 
website at wwwpacecom
the board of directors currently comprises 
two executive and five 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 26 and 27  the chairman allan leighton 
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 
mike pulli are to 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 other than 
the chairman are deemed by the board to be 
independent and the chairman was deemed 
independent on his appointment as required by 
the uk corporate governance code in addition 
the board has designated john grant as the 
senior independent director all directors have 
access to the advice and services of the general 
counsel and company secretary and are able 
to take independent professional advice at the 
company’s expense in the furtherance of their 
duties if necessary the code can be accessed 
at httpswwwfrcorgukcorporateukcgcodecfm
each of the directors submit themselves for 
reelection on an annual basis 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 normally meets at least eight times 
each year it reviews the strategic direction of 
the group and meets with other senior executives 
and employees within the group as required 
during the year the chairman holds meetings 
with the nonexecutive directors without the 
executive directors being present on a regular 
basis 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 this is generally concluded by 
written feedback in standardised form from 
each director to the chairman or the senior 
independent director in the case of appraisal 
of the chairman the board considers appointing 
an independent facilitator for the evaluation 
process at least once every three years and 
resolved to do so in 2014 however this process 
was deferred to 2015 to allow the appointment 
of a new cfo to take effect ahead of the 
evaluation process in addition the members 
meet with senior employees below executive 
level on a regular basis in the uk and overseas 
to receive feedback over lunch dinner 
or in informal meetings
the pace plc board is accountable to the 
company’s shareholders for standards of 
governance across the group’s businesses
board and committee meetings attendance
audit  risk remuneration nomination
board committee committee committee
total meetings 8 4 3 1
allan leighton 7 — 3 1
mike pulli 8 — — —
roddy murray 4 — — —
john grant 8 4 3 1
mike inglis 6 3 1 1
pat chapmanpincher 8 4 3 1
amanda mesler 8 4 3 1
 resigned 27 july 2014
 appointed 13 march 2014 and has attended all meetings since appointment  pace plc annual report and accounts 2014 29
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
the audit  risk committee is comprised 
of independent designated nonexecutive 
directors pat chapmanpincher mike inglis 
amanda mesler and john grant who is the 
chairman of the committee john grant was 
previously group finance director of a listed 
business and is considered by the board 
to have the necessary recent and relevant 
financial experience for his role as chairman 
details of the role and of the primary 
responsibilities of the audit  risk committee 
are explained on pages 31 to 33
the executive committee is chaired 
by mike pulli 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 two 
executive directors together with the senior 
executives shown in the table above
the remuneration committee is comprised 
of allan leighton and independent designated 
nonexecutive directors john grant amanda 
mesler pat chapmanpincher and mike inglis 
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 
and wider executive team including making 
recommendations regarding the grant of share 
incentive awards 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 
where directors do hold other external positions 
these are not considered to have any impact 
on their duties for the group 
the nomination committee is comprised of 
nonexecutive directors pat chapmanpincher 
john grant mike inglis and amanda mesler and 
is chaired by allan leighton its principal purpose 
is to consider and make recommendations to 
the board regarding the appointment of new 
directors the nomination committee meets 
at least once a year or as required 
executive committee
the executive committee comprises the two executive directors 
together with the following two senior executives who are deemed 
to be persons discharging managerial responsibility under 
the uk listing rules
 r mike pulli chief executive officer
 r mark shuttleworth chief financial officer
 r tim o’loughlin president pace americas
 r anthony dixon general counsel and company secretary
in addition the following senior executives attend meetings 
of the executive committee on a regular basis
 r phil baldock senior vice president operations 
 r jon cobb president software  services
 r bruce gurek chief strategy officer
 r jim henderson president pace international
 r jane johnston group human resources director
 r roberto salermo senior vice president latin america sales
 r guy sucharczuk president networks
financial statements governance pace plc annual report and accounts 2014 30
governance  framework of corporate governance continued
directors’ remuneration
the remuneration committee reviews 
the performance of the executive directors 
other members of the executive committee 
and wider executive team as a prelude to 
recommending their annual remuneration 
bonus awards and longterm share incentive 
awards 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 as a result of a takeover bid
the 2014 remuneration report of the directors 
to shareholders is set out on pages 35 to 43
code compliance
as referred to on page 43 the company 
granted an appointment share award to allan 
leighton on his appointment as nonexecutive 
chairman in 2011 and this partially vested during 
2014 and will fully vest in 2015 as noted earlier 
the evaluation of the board by an external third 
party did not take place and was postponed to 
2015 save in respect of these matters the 
directors believe that the company has complied 
throughout the year with the uk corporate 
governance code 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 controls and that there is an ongoing 
process for identifying evaluating and managing 
the significant risks faced by the company 
relations with shareholders
the company has a welldeveloped investor 
relations programme led by the chief executive 
officer and chief financial officer and managed 
by the senior vice president of investor relations 
and strategy through this programme the 
company maintains regular contact with major 
shareholders to communicate clearly the group’s 
objectives and monitors movements 
in significant shareholdings 
investor roadshows are now held each year 
in the usa as well as in the uk and formal 
investor presentations are made twice a year 
to groups of investment fund managers 
the opportunity for shareholders to meet the 
chairman or senior independent director 
separately from the executive directors 
is available on request
all financial and trading announcements are 
published immediately on the company’s 
website including copies of the presentations 
made to analysts and investors 
all shareholders are welcome to participate at 
the company’s annual general meeting when 
all the directors will normally be available to 
answer questions the results of the annual 
general meeting resolutions including details 
of votes castwithheld are published on the 
company’s website
annual general meeting
the annual general meeting of the company 
will be held on 23 april 2015 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 pace plc annual report and accounts 2014 31
governance  audit  risk committee report
dear shareholder
i am pleased to introduce this report of pace’s 
audit  risk committee for the year ended 
31 december 2014 this reflects the provisions 
of the 2012 uk corporate governance code the 
code now in effect regarding narrative reporting
the committee’s duties are described later in this 
report and reflect the code’s recommendations 
more broadly the committee sees its role as 
being to ensure the integrity of the group’s 
financial reporting and the robustness of its 
internal controls and risk management processes
in relation to the integrity of financial reporting 
we adopt prudent accounting policies and 
practices with areas of judgement being 
subject to specific review by the committee 
we work closely with the company’s external 
auditors to agree areas of risk of potential 
misstatement and to make sure these are 
addressed as part of the audit process
while the ultimate responsibility for reviewing 
and approving the annual report and accounts 
remains with the board the board requires that 
the committee report to the board on whether 
it considers the annual report and accounts 
taken as a whole to be fair balanced and 
understandable and to provide the information 
necessary for shareholders to assess the 
company’s performance business model 
and strategy
risk management at pace is a board 
responsibility but the audit  risk committee 
is tasked by the board with ensuring the risk 
management process is fit for purpose our 
systems of internal control are designed to 
focus resource on the principal risks to the 
business which are summarised within the 
strategic report we have a welldeveloped 
budget process with regular forecast updates 
and board reviews of performance
during the year the committee was assisted 
by the previous chief financial officer and from 
28 july 2014 the acting chief financial officer 
belinda ellis the vice president of group 
finance and in particular the internal auditors 
bdo llp i have also met separately with 
the company’s auditors during which meetings 
i have discussed their views on the strength and 
depth of financial reporting and internal control 
processes operating within the group 
set out in the following pages is the committee’s 
report on its activities during the year including 
a description of how the committee dealt with 
those areas of financial reporting that require 
particularly careful review and judgement 
none of these areas has proved critical in 
preparing the group’s financial statements 
this year
with respect to the financial statements the 
financial reporting council frc reviewed 
our 2013 annual report  accounts under 
their duty to review periodically those of all uk 
listed companies the audit  risk committee 
is currently finalising the review with the frc 
and the 2014 annual report  accounts has 
been updated where necessary
i hope you will find this report helpful in 
understanding the work of the committee 
yours sincerely
john grant
chairman of the audit  risk committee
audit  risk committee report
john grant
chairman of the audit  risk committee
financial statements governance pace plc annual report and accounts 2014 32
governance  audit  risk committee report continued
internal audit
the company’s vice president of group finance 
who has direct access to the audit  risk 
committee primarily through the chairman 
of the committee oversees an internal audit 
function including a risk assurance manager 
and incorporating external qualified 
auditing professionals
the audit  risk committee reviews annually 
the arrangements for internal audit and during 
the year the committee reappointed bdo llp 
bdo to act as internal auditors performing 
an agreed programme of internal audits in 
collaboration with the company’s vice president 
of group finance and senior management 
bdo attended and presented their reports to 
each of the audit  risk committee meetings 
during the year
the committee has amongst other things 
considered the quality of reporting to the 
committee and impartiality of the internal auditors 
and has concluded that the effectiveness of 
internal audit during the year was satisfactory
external audit
our auditors kpmg audit plc instigated an 
orderly wind down of their business during 
the year the board decided to put kpmg llp 
forward to be appointed as auditors and a 
resolution concerning their appointment is being 
put to the forthcoming agm of the company
the audit  risk committee has satisfied itself 
that the external auditors kpmg llp kpmg 
acted independently of the group previous 
appointments of kpmg and the extent of other 
work undertaken by it were considered inter 
alia in this regard
it is the committee’s opinion confirmed in 
discussions with kpmg that there were no 
limitations imposed by management on kpmg 
whilst performing their duties during the 
review period
the committee in consultation with the 
group’s executive management agreed 
to the terms of the kpmg engagement letter 
audit plan and budgeted audit fees for the 
2014 financial year
a formal framework governs the process 
through which the group’s auditors are 
considered to render nonaudit services 
the committee has approved a policy in 
relation to the provision of nonaudit services 
by the external auditors and the nature and 
extent of nonaudit services that the external 
auditors could provide within the scope 
of the policy during the year
details of the external auditors’ total fees paid 
to kpmg during the year are set out in note 4 
to the financial statements nonaudit fees of 
133000 2013 100000 were paid to kpmg 
in respect of the year ended 31 december 2014
external audit appointment
the committee reviews and makes 
recommendations with regard to the 
reappointment of the external auditors 
in making these recommendations the 
committee considers auditor effectiveness 
and independence partner rotation and any 
other factors which may impact the external 
auditor’s reappointment 
the external auditors are required to rotate 
the audit partner every five years the most 
recent change occurred in the year ended 
31 december 2012 and therefore partner rotation 
is due in the year ending 31 december 2017 
the current external auditors kpmg llp 
formerly kpmg audit plc were first appointed 
in 1996 and the external audit has not been 
formally tendered since then 
having completed the activities outlined 
the committee remains confident that the 
effectiveness and independence of the external 
auditors is not impaired in any way there are 
no contractual restrictions on the choice 
of external auditor
role and key responsibilities
the terms of reference of the committee 
are reviewed annually and are available on 
the company’s website wwwpacecom
the committee’s main responsibilities involve
 r monitoring the integrity of the financial 
statements of the company and formal 
announcements relating to the company’s 
financial performance and reviewing any 
significant financial reporting 
judgements contained therein
 r reviewing the company’s internal 
financial and operational control 
and risk management systems
 r monitoring the effectiveness of the 
company’s internal audit function 
and reviewing its material findings
 r reviewing accounting policies 
accounting treatments and disclosures 
in the strategic report and financial 
statements ensuring that shareholders 
may understand strategic aims and 
risks of the business of the group and 
that the annual report and accounts 
taken as a whole is fair balanced 
and understandable
 r overseeing the company’s relationship 
with its external auditors including making 
recommendations as to frequency 
of tendering for audit services the 
appointment or reappointment of the 
external auditors reviewing their terms 
of engagement and monitoring their 
independence and ensuring that policy 
surrounding their engagement to provide 
nonaudit services is appropriately applied 
 r monitoring fraud reports and reviewing 
the effectiveness of the company’s 
whistleblowing procedures and
 r reporting to the board on how it 
has discharged its responsibilities pace plc annual report and accounts 2014 33
the complyorexplain provision relating to audit 
tendering in the uk corporate governance 
code has effectively now been superseded by 
the uk competition commission’s final report 
and recent developments in europe pace has 
been advised that new european legislation 
is likely to require mandatory rotation of audit 
firms every ten years extendable in certain 
circumstances to twenty years kpmg has 
been pace’s auditor since listing in 1996 and 
the transitional rules that the eu has proposed 
are expected to require an initial change of audit 
firms no later than 2023 until this uncertainty is 
resolved the committee will continue to consider 
annually whether to conduct an audit tender 
for audit quality or independence reasons
activities of the committee
the main activities of the committee during 
the year are set out below
financial reporting
the committee reviewed and considered the 
following areas in respect of financial reporting 
and the preparation of the interim and annual 
financial statements
 r the appropriateness of accounting 
policies used
 r compliance with external and internal 
financial reporting standards and policies
 r significant judgements made
 r disclosures and presentations and
 r whether the annual report and accounts 
are fair balanced and understandable
in carrying this out the committee considered 
the work and recommendations of the group 
finance team in addition the committee 
received reports from the external auditors 
setting out their view on the accounting 
treatments and judgements included in the 
financial statements the external auditors’ 
reports are based on a full audit of the annual 
financial statements and a highlevel review 
of the interim financial statements
with the support of the external auditor 
the committee assessed whether suitable 
accounting policies had been adopted whether 
management had made appropriate estimates 
and judgements and whether the disclosures 
were fair and balanced
the significant judgements considered by the 
committee in areas where there was potential 
risk of material misstatement were
 r royalty provisions these are considered 
a significant area of judgement due to the 
complexity of the claims made against the 
group and the range of possible outcomes 
of each claim the committee and the 
board receive a semiannual report from the 
general counsel regarding royalties under 
negotiation as referred to in note 20 to the 
financial statements
 r capitalised development costs project 
development costs are capitalised and 
subsequently amortised over their useful 
economic life the committee considered 
the basis for selecting such costs as relevant 
development costs and the process for 
identifying the useful life the committee 
also reviews a summary of the larger 
projects by carrying value to understand 
how the costs capitalised are covered by 
future forecast margin the committee 
has concluded that the processes for 
capitalising development costs are robust 
and that the balance is recoverable
 r acquisition accounting as part of the 
accounting for the acquisition of aurora 
networks inc the committee considered 
the purchase price allocation exercise and 
the basis for fair value adjustments the 
committee considered that the balances 
were fairly stated 
 r other areas of judgement reviewed by the 
committee but where it was concluded that 
there was not a risk of material misstatement 
included revenue recognition warranty 
provisions classification of items as exceptional 
potential impairments of goodwill intangible 
and other fixed assets and treatment of tax 
assets and liabilities
internal controls and risk management
the committee reviews the framework of 
internal controls and the processes by which 
the group’s control environment is evaluated 
in this regard the committee received reports 
from internal audit on the operation of and 
issue arising from the group’s internal controls 
and procedures external audit has also provided 
input and observations on the internal control 
environment and on any specific control issues 
that occurred during the year 
the committee also reviewed compliance 
activities in relation to internal audit reports 
submitted to the committee in prior years 
and received a report on the status of 
recommendations and actions outstanding 
the committee reviews the group’s risk 
management framework in order to ensure it is 
appropriate and operating effectively in doing 
so the committee received reports from the 
vice president of group finance covering 
 r the effectiveness of the risk management 
processes and their adoption across the 
group and
 r a summary of the top risks to the group 
controls identified to mitigate these risks 
and actions planned to reduce risks 
where considered necessary
as part of its agenda the committee allowed 
time for indepth reviews of particular risk areas 
during the year the risk areas considered included 
business continuity management it strategy 
governance and supply chain management
financial statements governance pace plc annual report and accounts 2014 34
governance  nomination committee report
committee meetings
the committee meet at least once per year 
usually in conjunction with board meetings 
activities of the committee
during the year the nomination committee 
dealt with a number of matters including the 
recruitment of new cfo mark shuttleworth 
to the board and succession planning of key 
executive and nonexecutive director roles
pace and the committee value the aims and 
objectives of the davies report on women 
on boards and support and apply the group 
diversity policy set out on page 25 there is 
currently 29 female representation at board 
level no formal measurable objective has been 
set for female representation at board level
the committee is sensitive to the need 
for the nonexecutive directors to remain 
independent from management in order to 
exercise independent oversight and effectively 
challenge management as necessary 
the committee continually assesses the 
independence of the nonexecutive directors 
and has determined that all the nonexecutive 
directors are independent none of them serve 
as directors of any companies or affiliates in 
which any other director is a director however 
more importantly each of the nonexecutive 
directors is prepared to question and challenge 
management to request more information and 
to ask the difficult question they insist on robust 
responses both within the boardroom and 
sometimes between board meetings 
we value the input we receive from our 
longer serving directors given their deep 
understanding of the group we are however 
focused on planning for the future to build a 
balanced board with the skills and experience 
fit to face the challenges that lie ahead the 
committee recognises that in due course 
longer serving directors will step down and 
therefore it will continue to search for other 
suitable nonexecutive directors whose 
experience will align with the company’s 
strategic objectives
cfo recruitment process
the committee appointed the zygos 
partnership a london based global executive 
international search firm and a signatory to 
the voluntary code of conduct for executive 
search firms in board appointments zygos 
has no other connection to the company
the group hr director also assisted the 
committee in the process with their help the 
committee developed a company job and 
person profile and approved a long list followed 
by a short list of candidates this was followed 
by an interview process by both zygos and 
pace directors and executives alongside rigorous 
reference checking
the board announced the appointment 
of mark shuttleworth as cfo on the 
recommendation of the committee on 
18 november 2014 and the appointment 
took effect on 12 january 2015
committee responsibilities
the committee is responsible for a number 
of matters relating to the composition of the 
board and its committees in particular it is 
responsible for
 r reviewing the structure of the board
 r evaluating the balance of skills 
knowledge experience and diversity 
of the board
 r advising the board on any areas 
where further recruitment may 
be appropriate and
 r succession planning for key executives 
at board level and below
where necessary and appropriate 
recruitment consultants are used to assist 
the committee in delivering its objectives 
and responsibilities the committee leads 
the process for the identification and selection 
of new directors and makes recommendations 
to the board in respect of such appointments 
the committee also makes recommendations 
to the board on membership of its 
committees the committee terms of 
reference can be found on the pace 
website wwwpacecom
nomination committee report pace plc annual report and accounts 2014 35
governance  remuneration committee report
dear shareholder
i am pleased to present to you our 2014 
remuneration report my first report as 
chairman of the remuneration committee 
following my appointment on 1 november 2014 
and the first report since shareholders adopted 
the directors’ remuneration policy policy 
at the 2014 agm
full details of the policy are available on the 
company’s website at wwwpacecom and 
the policy table summarising the key aspects 
of the policy are incorporated in pages 41 to 43 
of this annual report there follows the 2014 
annual report on remuneration on pages 36 
to 40 giving details of remuneration earned 
in the 2014 financial year this report will be 
subject to an advisory vote by shareholders 
at the forthcoming agm
in the rest of this statement i summarise the 
committee’s main activities during the year 
more details can be found in the annual 
report on pages 36 to 40
during 2014 the committee has considered 
the remuneration packages of the executive 
directors and confirmed that in its opinion 
these remain appropriate aligning with our 
strategy and shareholders’ interests in performing 
this review the committee considered the three 
key elements of the strategic plan namely to 
transform core economics maintain paytv 
hardware leadership and widen out in software 
networks services and integrated solutions 
in order to align the incentive performance 
measures with this strategy and the key 
performance indicators most relevant to pace’s 
business we determined that the most 
appropriate measures remained adjusted 
ebita eps and cash management metrics 
this is supported by individual objectives to 
drive the correct balance of behaviours and 
focus on the current business priorities
no increases in directors’ salaries were awarded 
in the year the third successive year of 0 
increase in directors’ salaries our remuneration 
policy recognises that pace is an international 
business with a major portion of its customers 
and employees including the chief executive 
officer based in the usa which is also a 
factor considered by the committee 
the rules of the company’s performance 
share plan psp and deferred share bonus 
plan dsb for the 2014 award cycle provided 
for performance outcomes to be adjusted 
in circumstances of financial misstatement 
misconduct or inaccuracies in underlying 
information or assumptions clawback 
for psp awards granted in 2014 the committee 
chose cumulative adjusted eps as the sole 
performance target and the baseline target 
was adjusted to take account of the aurora 
networks acquisition the committee reviewed 
the vesting of the psp and option awards 
granted in 2011 and concluded that no psp 
or option awards would vest in 2014 
the other main work of the committee 
centred around the resignation of roddy murray 
in july 2014 and the remuneration package 
to be offered to a new cfo the remuneration 
package offered in order to attract and recruit 
the new cfo was consistent with the policy 
and the market for ftse 250 finance executives 
and subject to individual negotiation upon selection 
as announced in november 2014 the new cfo 
mark shuttleworth joined pace on 12 january 
2015 his remuneration is broadly similar to the 
previous cfo save that the salary has been set 
at £340000 per annum the committee expects 
to award mark shuttleworth share awards 
under the company’s share plans in 2015 
up to 2 times salary
looking ahead to 2015 and beyond the 
committee intends to continue to measure 
achievement of incentive performance targets 
by reference to adjusted ebita eps and cash 
management metrics supported by relevant 
individual objectives we also intend to make 
psp awards utilising the increased level approved 
at last year’s agm albeit on a selective basis 
as the committee deems appropriate
we believe that our remuneration framework 
and the policy continue to result in a fair reward 
for performance and the chosen measures of 
performance provide a tangible incentive to 
deliver our core business strategy
mike inglis
chairman of the remuneration committee
mike inglis
chairman of the remuneration committee
i am pleased to present to you our 
2014 directors’ remuneration report
financial statements governance pace plc annual report and accounts 2014 36
governance  remuneration committee report continued
annual report on remuneration
this report gives details of remuneration earned by directors in 2014
single total figure of remuneration for each director – audited
bonus
performance
measured longterm
for 2014 incentives
termination even if receivable
salaryfees benefits pension payments deferred in year total
000 000 000 000 000 000 000
mike pulli 2014 750 18 139 — 1124 9377 11408
2013 750 18 10 — 1677 16 2471
roddy murray 2014 337 15 46 — — — 398
2013 508 25 76 — 880 — 1489
allan leighton 2014 267 — — — — 2037 2304
2013 253 — — — — — 253
pat chapmanpincher 2014 82 — — — — — 82
2013 78 — — — — — 78
john grant 2014 85 — — — — — 85
2013 78 — — — — — 78
mike inglis 2014 59 — — — — — 59
2013 16 — — — — — 16
amanda mesler 2014 71 — — — — — 71
2013 65 — — — — — 65
total 2014 1651 33 185 — 1124 11414 14407
2013 1748 43 86 — 2557 16 4450
 remuneration referable only to the period of the financial year up to resignation from the board
 remuneration referable in the financial period from appointment to the board 
the committee 
the committee determines the company’s 
policy on the remuneration of executive 
directors the members of the executive 
committee and the wider executive team 
the committee determines their individual 
remuneration packages
the members of the committee in 2014 were 
mike inglis appointed 13 march 2014 chairman 
from 1 november 2014 pat chapmanpincher 
chairman to 1 november 2014 allan leighton 
john grant and amanda mesler the composition 
of the committee is in accordance with the uk 
corporate governance code the committee’s 
terms of reference are on the company’s website
during the year mike pulli and the group director 
of hr jane johnston were invited to attend 
meetings of the committee to provide advice 
to enable it to take informed decisions 
no director was present when their own 
remuneration was being discussed kepler 
associates retained by the committee 
assisted in relation to remuneration matters 
they provided no other services to the company 
pinsent masons llp legal adviser to the 
company has provided advice on compliance 
with the legislation and regulations pace plc annual report and accounts 2014 37
notes to the single total figure table – audited
 r taxable benefits comprised of car allowance 
plus medical insurance for roddy murray
 r mike pulli is entitled to pension contribution
cash allowance of 185 of salary pension in 
2013 was suspended to adjust contributions to 
reflect an overpayment of contributions in 2012
 r bonus for mike pulli was 150 of base salary 
and comprised a normal bonus award 
of 518000 of which one third will be deferred 
into pace shares for a period of two years 
in addition he received an enhanced bonus 
award of 607020 which is deferred into 
pace shares for a period of three years subject 
to continued employment conditions 
 r bonus for mike pulli was calculated 
by reference to group adjusted 
ebita generated above the minimum 
target threshold of 232 million and the 
committee’s assessment of the executive 
director’s achievement of personal objectives 
including the following integration of the 
aurora networks business and achievement 
of synergies cash and debt management 
and launch of five new key customer products
 r longterm incentives receivable in year 
 r mike pulli – had the following longterm 
incentives receivable in the year which will 
vest in march 2015 1395275 share options 
granted under the 2005 unapproved 
share option plan on 14 december 2011 
at an option price of 6975p and 523519 
performance share plan nilcost share 
awards made 14 march 2012 with a share 
price applicable on grant of 9000p the 
amounts receivable are included in the 
single figure of remuneration for 2014 since 
the performance period for these share 
awards concluded in 2014 a us sharesave 
option granted in 2013 vested during the 
year with a share option price of 153p 
share options granted in april 2011 under 
the 2005 unapproved share option plan 
and psp awards made under the 
performance share plan due to vest 
in the year did not meet the minimum 
required performance targets and 
lapsed in the year
 r allan leighton – the chairman’s 
appointment share award matching 
share awards made 31 may 2011 vested 
on 31 may 2014 sufficient shares of 
162134 were sold to pay the related tax 
liabilities on 4 june 2014 at a share price 
of 36105 the remaining 176676 shares 
are subject to share retention conditions 
until at least the fifth anniversary of 
appointment date 31 may 2011
 r nonexecutive directors’ fees were reviewed 
during the year with base fees increasing 
from £42000 to £44000 and the increment 
for chairing the remuneration committee and 
audit  risk committee was increased from 
£8000 to £10000 with effect from 1 august 
2014 there was no change in fees for 
the chairman
 r gbp to us dollar exchange rate used to 
calculate remuneration paid in gbp 2014 
06068 2013 06397
statement of implementation 
of remuneration policy in 2015
2015 the directors’ remuneration will be in line 
with the policy
2015 bonus the bonus targets for executive 
directors have been set by reference to a range 
of group adjusted ebita and personal 
performance outcomes above 2015 expectations 
at the start of the year targets for executive 
directors to earn a potential enhanced bonus 
share award have been set by reference to 
exceptional performance in all our metrics 
of cash management adjusted ebita and 
personal performance target outcomes above 
current 2015 expectations at the start of the year
2015 psp the performance targets for the psp 
awards to be made to the executive directors 
will be set by reference to adjusted cumulative 
eps growth over a three year period with minimum 
25 vesting at 6 per annum cumulative growth 
and 100 vesting above 12 per annum 
cumulative growth awards on this basis are 
expected to be made to executive directors 
in 2015 and will not exceed two times salary
clawback and performance adjustment 
the annual bonus has for some years been 
subject to adjustment if cash management 
targets are not met for 2014 and subsequent 
bonus deferred bonus and psp awards pace 
has now introduced additional clawback and 
performance adjustment in circumstances 
of misconduct restatement of accounts 
or a mistake in calculating the payout
statement of voting at the 2014 annual 
general meeting
the voting on the directors’ remuneration 
report at the 2014 agm was as follows
shares
fordiscretionary 8731 156163148
against 1269 22706447
withheld 51284027
relative importance of spend on pay
the following table shows the relative 
importance of spend on pay by reference to 
distribution by way of dividend and expenditure on 
research and development which is considered 
appropriate for a technology company the 
values have been extracted from the information 
in the financial statements for each year
relative spend on pay
overall expenditure on group pay 
 
overall spend on pay to directors 
 
distribution by way of dividend  
to shareholders 
expenditure on rd 
 
200m 150m 100m 50m 0m 2013  2014
financial statements governance pace plc annual report and accounts 2014 38
governance  remuneration committee report continued
six year ceo total emoluments
annual
variable element
 of maximum pspshare options
single total figure including deferred vesting outcome
financial year ceo of remuneration element  of maximum
2014 mike pulli 11408035 6667 100
2013 mike pulli 2470632 9938 0
2012 mike pulli 3040179 10000 0
2011 mike pulli 79116 4619 100
2011 neil gaydon 1043130 000 100
2010 neil gaydon 1980900 6000 100
2009 neil gaydon 5495034 10000 100
 prorata from date of appointment 14 december 2011
it is inherent in the methodology for calculating the single figure of remuneration that for a particular year it includes amounts that the executive did 
not actually receive in that year due to deferral or due to retaining options after the date they first became exercisable in december 201 1 mike pulli replaced 
neil gaydon as ceo it would be misleading to show the full year’s total remuneration for each so time prorating has been applied
percentage change in the remuneration of the chief executive compared with the remuneration of employees
taxable taxable
salary salary salary  bonus bonus bonus  benefits benefits  change
2013 2014 change 2013 2014 change 2013 2014 in benefits
ceo 750000 750000 000 1673000 1124020 3281 18000 18000 0
group 62690 71035 1331 7491 5158 3114 3669 5588 5230
the ceo’s salary bonus and taxable benefits are compared against the average across the group
statement of directors’ shareholdings and share interests – audited
the committee operates individual shareholding target requirements for executive directors 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 newly vested sharebased incentives made after 2009 
until the target shareholding level is reached the target shareholding is 100 of the executive’s annual salary up to 50 of shares earned but held 
under the company’s deferred share bonus plan are deemed to count towards the ownership target each executive is required to achieve target 
ownership level within a period of five years mike pulli has achieved the required minimum shareholding 
nonexecutive directors are encouraged to build up a meaningful shareholding allan leighton purchased a significant individual shareholding 
on appointment details of the appointment share awards made to him in 2011 as a oneoff exception to policy have been disclosed in these 
accounts and in the 2011 2012 and 2013 accounts
tsr performance graph
the ftse allshare electronic  electrical 
equipment index was selected as the most 
appropriate benchmark index against which 
to compare the company’s performance 
having regard to the principal activities 
of the group
 pace plc   ftse all share electronic  electrical equipment
dec 08 dec 09 dec 10 dec 11 dec 12 dec 13 dec 14
500p
400p
300p
200p
100p
0p
annual report on remuneration continued pace plc annual report and accounts 2014 39
executive directors’ share ownership guidelines – audited
shareholding  of salary
requirement deferred total held under
 of shares performance bonus interest shareholding
salaryvalue owned
1
shares
2
shares
3
in shares value
4
requirement 
mike pulli 100750000 611317 1822889 228164 2662370 14676380 1957
mark shuttleworth 100560000 — — — — — —
1 shares owned outright and by connected persons
2 share options where performance conditions had been met at 1 january 2015
3  share awards representing deferred bonus outcome for 2011 2012 and 2013 subject to continued employment conditions but not additional performance 
conditions 50 of dsb award shares only 
4 the valuation was calculated by multiplying the total interest in shares by the average share price over the three months prior to 1 january 2015
directors interests’ in pace plc shares – audited
unvested vested but share
vested share unexercised options
shares performance performance deferred options share vested during
owned
1
shares
2
shares
3
bonus
4
awards
5
options
6
2014
7
mike pulli 611317 329625 523519 456328 1893 1822889 183822
mark shuttleworth — — — — — — —
allan leighton 346081 — — — 600000 — 338810
pat chapmanpincher 15551 — — — — — —
john grant 65000 — — — — — —
amanda mesler — — — — — — —
mike inglis 25344 — — — — — —
1 shares owned outright and by connected persons
2  share awards where performance conditions had 
not been met as at 31 december 2014
• shares awarded to mike pulli under the 
performance share plan
•  218439 share awards vest on 21 march 
2016 subject to minimum performance 
conditions being met and
•  110826 share awards vest on 14 april 2017 
subject to minimum performance conditions 
being met
• share awards are subject to performance 
conditions based on cumulative three year 
adjusted pbt targets for the group for awards 
made in 2011 share awards made in 2012 and 
2013 are subject to three year targets based on 
cumulative adjusted ebita for the group and 
share awards made in 2014 are subject to 
cumulative adjusted eps growth over three years
3  share awards where performance conditions 
had been met as at 31 december 2014
• shares awarded to mike pulli under the 
performance share plan
•  523519 share awards vest on 14 march 2015 
subject to minimum performance conditions 
being met
4  share awards representing 100 of deferred 
bonus outcome for 2011 2012 2013 and 2014 
and subject to continued employment conditions 
but no additional performance conditions 
5  share optionsawards where performance conditions 
had not been met as at 31 december 2014
• shares granted to mike pulli under the us 
sharesave plan
•  1893 share options vest on 8 june 2015 
  allan leighton appointment share award made 
31 may 2011 as referred to in the remuneration 
policy – nonexecutive directors
  share options granted under the 2005 approved 
and unapproved share option plans are subject 
to performance conditions based on cumulative 
adjusted eps growth of 4 above inflation per 
annum for 25 to vest cumulative growth of 15 
above inflation is required for 100 to vest 
6  share options where performance conditions 
had been met at 1 january 2015 
• options granted to mike pulli under the 2005 
unapproved share option plan
•  177 614 share options vested on 24 june 2011 
with an expiry date of 24 june 2018 and an 
exercise price of 855p and
•  250000 share options vested on 11 march 2012 
with an expiry date of 11 march 2019 and 
an exercise price of 750p 
• shares granted to mike pulli under the 2005 
unapproved share option plan
•  1395275 share options granted 15 december 
2011 vest on publication of the results on 
3 march 2015 with an expiry date of 15 december 
2021 and an exercise price of 6975p
7  182098 deferred share bonus share awards made 
in 2012 vested on 28 february 2014 and were 
released on 4 march 2014  
1724 us sharesave share options vested on 
2 june 2014 and were exercised on 2 june 2014  
338810 allan leighton appointment award shares 
vested on 31 may 2014
financial statements governance pace plc annual report and accounts 2014 40
governance  remuneration committee report continued
annual report on remuneration continued
awards during 2014 – audited
the tables below show details of the awards to each director during the year
performance shares
 of face
number of value that
shares over market price would vest
which awards at date at threshold
date of grant granted of grant face value performance vesting date
mike pulli 14042014 110826 40470p £44851282 25 14042017
roddy murray 14042014 79240 40470p £32068428 25 14042017
mike pulli received performance share plan 
share awards on 14 april 2014 in the form of 
a nilcost contingent share award the award 
was based on 100 of base salary
roddy murray received performance share plan 
share awards on 14 april 2014 in the form of a 
nilcost share option the award was based on 
100 of base salary the award lapsed on date 
of resignation from the board
under normal circumstances the options will 
not become exercisable until the performance 
conditions are determined after the end of the 
three year performance period
the level of vesting is dependent on the 
achievement of the following performance 
conditions by reference to an adjusted base 
year eps of 4720p which was further 
adjusted for the anticipated earnings 
of aurora networks inc which was acquired 
on 6 january 2014
the awards are also subject to clawback
cumulative adjusted eps growth 
over three years
 of total award
shares vesting
12 per annum or more 100 
6 per annum 25
less than 6 per annum nil
deferred share awards – audited
number
of shares
over which
awards market price
 date of grant granted at date of grant face value vesting date
mike pulli 14042014 39216 45590p £17878574 31032016
 14042014 105290 45590p £48001711 31032017
 144506 £65880285 
roddy murray 14042014 24372 45590p £11111195 31032016
14042014 43870 45590p £20000333 31032017
68242 £31111528
mike pulli received deferred share bonus plan 
awards on 14 april 2014 in the form of a nilcost 
contingent share awards 
roddy murray received deferred share bonus 
plan awards on 14 april 2014 in the form of a 
nilcost share option the awards lapsed on 
date of his resignation from the board
the awards were based on the average three 
day midmarket price of an ordinary share in the 
company at close of business from 5 march 2014 
to 7 march 2014 being the three trading dates 
following the company results announcement 
the awards in each case are subject to continuing 
employment conditions and clawback but no 
attached performance conditions
under normal circumstances the awards will 
not become exercisable until the end of the two 
year vesting period in respect of 2013 the 
committee awarded an enhanced bonus to 
mike pulli taking his overall annual bonus up to 
just below the maximum level of 224 of salary 
and enhanced bonus to roddy murray taking 
his overall annual bonus up to 173 of salary 
which award lapsed on his resignation from 
the board the enhanced bonus award is 
deferred into shares for a longer deferred 
period of three years
savingsrelated share options – audited
number of
shares over market price
which option at date of
date of grant granted grant face value exercise period
mike pulli 24042014 1893 33830p £640402 08062015 to 04092015 pace plc annual report and accounts 2014 41
the following remuneration policy table was approved by shareholders at the annual general meeting held on 24 april 2014 
and will remain in place for three years until 25 april 2017
future policy table – executive directors
element
purpose and 
link to strategy operation opportunity
performance measures 
and period
base salary set to reflect 
expected contribution 
to delivering the 
company’s strategy 
salaries are set in the 
context of overall pay
it is the intention of 
the remuneration 
committee to set 
base salaries at a 
competitive level after 
considering those 
paid by comparable 
companies 
recognising the 
market value of the 
executive’s role skill 
responsibilities 
performance 
and experience
reviewed annually with any change 
effective from 1 january
when setting salary the committee 
takes into account the level of 
increase for employees more 
generally market data business 
performance external economic 
factors the complexity of the 
business and the role cost and 
the directors’ experience 
and performance
the committee’s policy in relation 
to salary is
 r up to median salary on 
appointment depending on the 
experience and background of 
the new executive director
 r on promotion up to the median 
salary for the new role and
 r otherwise pay increases are 
set by reference to inflation 
and other pay rises generally 
for employees
the policy maximum is for the 
percentage increase in executive 
directors’ salaries not to exceed 
10 in any year but this is subject 
to an overriding discretion in 
exceptional circumstances 
salary levels and increases will 
be determined with reference 
to market practices and rates 
in the relevant location 
there are no 
performance 
conditions although 
individual performance 
is considered when 
reviewing salaries
benefits to provide 
reasonable market 
competitive benefits
the committee provides a range of 
benefits to executives in line with the 
pace policy these comprise a fully 
expensed car plus fuel or an equivalent 
cash allowance private medical 
insurance permanent health insurance 
and life insurance and may include 
relocation assistance and other benefits 
customarily provided in the relevant 
location where applicable
no more generous than the 
equivalent benefits to those 
provided in 2014 but recognising 
the cash costvalue of providing 
such benefits can vary significantly 
according to the age health and 
location of the individual
none
pension marketcompetitive 
retirement provision 
recruitment and 
retention of high 
calibre executives 
and also supports 
succession planning
a cash allowance is paid in lieu 
of pension contributions with the 
committee’s approval an executive 
director may at their discretion redirect 
all or part of this allowance into any 
defined contribution pension 
arrangement in their home country 
including 401k plans in the usa 
up to 25 of annual basic salary na
financial statements governance pace plc annual report and accounts 2014 42
element
purpose and 
link to strategy operation opportunity
performance measures 
and period
relocation to facilitate the 
recruitment and 
relocation of 
executive directors
where it is in pace’s interests to 
request that executives work in a 
different country or region then it 
may pay relocation and provide 
benefits and allowances to 
compensate the individual for the 
additional costs involved
the committee has no prescribed 
maximum level for the value of 
relocation payments as these can 
vary significantly based on the 
countries and individual 
circumstances involved the 
committee will agree relocation 
payments on a case by case basis
na
annual bonus to incentivise and 
reward performance 
against annual 
financial strategic 
and operational 
goals which are 
consistent with the 
medium to longterm 
strategic needs 
of pace
the award of annual bonus under the 
plan is determined following the year 
end by the committee based on 
performance against the targets 
set at the beginning of the year and 
the committee’s assessment of 
achievement of personal objectives
a minimum of onethird of any bonus 
outcome is payable in pace shares 
and all of any enhanced bonus 
award is payable in pace shares and 
automatically deferred for a minimum 
period of two years under the group 
deferred share bonus plan
the committee retains the power 
to reduce the bonus otherwise 
payable by up to 50 based on its 
assessment of the management of 
pace’s cash position during the year 
the committee has reserved the 
power to seek clawback of the 
deferred element of bonuses 
in certain circumstances
normal maximum 150 of salary
exceptional maximum 225 
of salary
in line with expectations 75 
of salary
threshold 25 of salary
the policy is for 
corporate objectives 
to be linked to key 
drivers of value 
creation which may 
include ebita eps 
adjusted eps 
or other operational 
measures in addition 
the scale of annual 
bonus will depend 
on achievement of 
individual personal 
objectives aligned 
to the objectives of 
the group that year
longterm 
incentives
to incentivise 
longterm value 
creation aligning the 
interests of executives 
and shareholders 
through the delivery of 
awards in shares the 
selected performance 
targets support the 
longterm strategy of 
pace and aid retention 
of executive directors
the committee can make annual 
sharebased awards to executive 
directors under the pace performance 
share plan these can take the form of 
nilcost options or conditional awards
clawback provisions are included 
in the plan rules and provide the 
committee with the power to adjust 
unvested andor unexercised awards 
in certain circumstances
awards can be settled through 
marketpurchased shares treasury 
shares or new issue shares
normal maximum 100 of salary
exceptional maximum subject 
to shareholder approval 200 
of salary
as a percentage of maximum 
opportunity the following amounts 
are payable for the corresponding 
levels of performance as a 
percentage of the award
minimum 25
maximum 100
other points on the vesting 
schedule may be determined at 
the committee’s discretion when 
the performance targets are set
the policy is 
for corporate financial 
targets to be set 
measured over a 
minimum of three 
financial years and 
linked to the key drivers 
of value creation 
which may include 
ebita adjusted 
eps or other 
operational 
measures
governance  remuneration committee report continued
future policy table – executive directors continued pace plc annual report and accounts 2014 43
element
purpose and 
link to strategy operation opportunity
performance measures 
and period
sharesave 
and us 
sharesave
to encourage 
wider share 
ownership amongst 
the employees and 
align the interests of 
pace employees with 
those of shareholders 
in addition to provide 
a tax efficient 
investment vehicle 
for employees
a savingsrelated share option plan 
which is open to the majority of the 
group’s uk employees including the 
ukbased executive directors
under the plan grants of share 
options can be made to all 
participants at a discount of 20 
below the market price
in the usa a contributory plan is 
offered with broadly comparable 
awards qualifying for us tax benefits
participation limits are by 
reference to those set by 
the relevant tax authorities 
from time to time
none
historic 
commitments
to avoid reneging on 
previous agreements
where commitments have been 
given prior to the 2015 agm as a 
matter of policy pace will honour 
those commitments in accordance 
with their terms 
dependent on circumstances dependent on 
circumstances
future policy table – nonexecutive directors
element purpose and link to strategy operation annual opportunity
base fees to attract and retain high calibre 
individuals by offering market 
competitive fees reflecting the time 
commitment and experience that 
is required
fees are reviewed annually and 
considered against companies of a similar 
size and complexity
when setting fees factors considered 
include market data business performance 
external economic factors the skills required 
time requirements and cost additional 
fees are paid to committee chairmen 
fee levels from 1 january 2014 are
chairman £162000 and
nonexecutive directors £42000
additional fees for acting as 
committee chairman £8000
subject to review in july 2014
historic 
commitments
chairman’s appointment share 
award made in 2011 was a oneoff 
exception to the policy that nonexecutive 
directors do not participate in pace’s 
incentive plans it is the company’s 
policy to honour preexisting 
commitments in accordance 
with their terms
personal investment of £200000 matched 
by a twoforone share award vesting on 
31 may 2014 338810 shares
share price linked award vesting at latest 
on 31 may 2015 600000 shares 25 vesting 
at a share price of 145 pence with full vesting 
at 190 pence and retention conditions until 
earliest 31 may 2016 as disclosed more fully 
in the annual reports for 2011 to 2013
oneoff historic award on 
appointment of chairman
future policy table – executive directors continued
financial statements governance pace plc annual report and accounts 2014 44
governance  directors’ report
the directors present their report together with 
the audited consolidated financial statements 
for the year ended 31 december 2014
principal activities
the group’s principal activities are the 
development design and distribution of 
technologies products and services for 
managed subscription television telephone 
and broadband services and the provision of 
engineering design and software applications 
to its customers the group also provides 
related support services including systems 
integration and customer care centres 
strategic report
the companies act 2006 requires us to 
present a fair review of the business during the 
year to 31 december 2014 and of the position 
of the group at the end of the financial year 
along with a description of the principal risks 
and uncertainties faced
the strategic report can be found 
on pages 1 to 25
corporate governance statement
the disclosure and transparency rules 
require certain information to be included 
in a corporate governance statement in the 
directors’ report information that fulfils the 
requirements of the corporate governance 
statement can be found in the corporate 
governance report on pages 28 to 30 and 
is incorporated into this directors’ report 
by reference
disclaimer
the purpose of this annual report and accounts 
is to provide information to the members of the 
company the annual report and accounts have 
been prepared for and only for the members of 
the company as a body and no other persons 
the company its directors and employees 
agents or advisers do not accept or assume 
responsibility to any other person to whom this 
document is shown or into whose hands it 
may come and any such responsibility or 
liability is expressly disclaimed 
the annual report and accounts contain 
certain forwardlooking statements with 
respect to the operations performance 
and financial condition of the group by their 
nature these statements involve uncertainty 
since future events and circumstances can 
cause results and developments to differ 
materially from those anticipated the 
forwardlooking statements reflect knowledge 
and information available at the date of preparation 
of this annual report and accounts and the 
company undertakes no obligation to update 
these forwardlooking statements nothing in 
this annual report and accounts should be 
construed as a profit forecast
financial results 
the consolidated income statement for the 
year is set out on page 50 and the results are 
summarised in the financial review on pages 
20 to 22 the profit before tax was 1757 million 
2013 1308 million and the profit before tax 
interest exceptional items and amortisation 
of other intangibles was 2411 million 
2013 1936 million
dividend
the directors recommend the payment of a 
final dividend of 475 cents per ordinary share 
2013 366 cents to be paid on 3 july 2015 to 
shareholders on the register at the close of 
business on 5 june 2015 an interim dividend 
of 225 cents per ordinary share was paid 
during the year 2013 183 cents 
dividends will be paid in sterling equivalent to 
3093 pence per ordinary share this is based 
on an exchange rate of £15358 being the 
rate applicable on 2 march 2015
going concern
the following statement has been included 
in accordance with the listing rules based 
on normal business planning and control 
procedures the directors have a reasonable 
expectation that the company and the group 
have adequate resources including committed 
finance facilities to continue in operational 
existence for the foreseeable future for this 
reason the directors continue to adopt the 
going concern basis in preparing the accounts
share capital
details of the company’s share capital including 
changes for the year the rights attaching to 
the ordinary shares and restrictions on their 
transfer are contained in note 21 and are 
incorporated in this report by reference
political donations
no political donations were made in the year
directors’ report pace plc annual report and accounts 2014 45
directors
the names of the current directors of the company 
are shown on pages 26 to 27  all those listed 
held office throughout the year except for mike 
inglis who was appointed 13 march 2014 and 
mark shuttleworth who joined the company 
on 12 january 2015 during the year roddy 
murray resigned 27 july 2014 also held office 
as a director
all the directors will retire at the forthcoming 
annual general meeting of the company and 
offer themselves for reelection the board has 
determined that all of the directors continue to 
make a very effective contribution to the board 
and demonstrate a high level of commitment 
details of the executive directors’ service contracts 
and the nonexecutive directors’ letters of 
appointment are disclosed in the remuneration 
policy no director had a significant contract 
other than a service contract or contract for 
services with any member of the group at any 
time during the year further details relating 
to the appointment removal and powers of 
directors are contained in note 21 and are 
incorporated in this report by reference 
as at the date of this report indemnities which 
are qualifying third party indemnity provisions 
under the companies act 2006 are in place 
under which the company has agreed to 
indemnify the directors of the company and 
the former directors of the company who held 
office during the year to the extent permitted 
by law and by the company’s articles of 
association in respect of all liabilities incurred 
in connection with the performance of their 
duties as a director of the company or its 
subsidiaries copies of these indemnities 
are available for review at the company’s 
registered office
information provided by the company pursuant 
to the disclosure and transparency rules is 
publicly available via the regulatory information 
services and on our website wwwpacecom
the consent of the board is required in the 
event that an executive director wishes to 
accept an external appointment it has been 
the practice of the company to permit a director 
to retain nonexecutive fees arising from any 
such appointment mike pulli received fees 
of 167374 in cash and equity in the year 
as a nonexecutive director of itron inc
authority to purchase own shares
at the annual general meeting in 2014 the 
company was authorised by shareholders to 
purchase up to 47107953 of its own ordinary 
shares representing 15 of it issued share 
capital as at march 2014 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 2015 and a resolution to renew it 
will be proposed at that meeting
greenhouse gas emissions
all disclosures concerning the group’s 
greenhouse gas emissions as required to be 
disclosed under the companies act 2006 
strategic report and directors’ report 
regulations 2013 are contained in the 
corporate responsibility report forming part 
of the strategic report on pages 23 to 25
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
significant shareholdings
the company has been notified in accordance with the disclosure and transparency rules of the following interests of 3 or more in its ordinary 
share capital as at 31 december 2014
 of issued
number of shares share capital
prudential plc group of companies 31033554 985
old mutual 18877494 599
david hood and related family trusts 16117559 512
blackrock inc 15776866 501
schroders plc 14276376 453
norges bank 12450919 395
save for the above the company has not been notified as at 31 december 2014 of any material interest of 3 or more or any nonmaterial 
interest exceeding 10 of the issued share capital of the company
financial statements governance pace plc annual report and accounts 2014 46
governance  directors’ report continued
statement of directors’ responsibilities 
continued
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 
 r select suitable accounting policies and 
then apply them consistently 
 r make judgements and estimates that 
are reasonable and prudent 
 r state whether they have been prepared 
in accordance with ifrss as adopted 
by the eu and 
 r prepare the financial statements on the 
going concern basis unless it is inappropriate 
to presume that the group and the parent 
company will continue in business 
the directors are responsible for keeping 
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 
strategic report 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 
responsibility statement of the 
directors in respect of the annual 
financial report
we confirm that to the best of our knowledge
 r the financial statements prepared in 
accordance with the applicable set of 
accounting standards give a true and 
fair view of the assets liabilities financial 
position and profit or loss of the company 
and the undertakings included in the 
consolidation taken as a whole and
 r the strategic report includes a fair review 
of the development and performance of 
the business and the position of the issuer 
and the undertakings included in the 
consolidation taken as a whole together 
with a description of the principal risks 
and uncertainties that they face
each of the persons who is a director as 
at the date of this report confirms that
 r so far as the director is aware there is 
no relevant audit information of which the 
company’s auditors are unaware and
 r the director has taken all the steps that he 
or she ought to have taken as a director in 
order to make himselfherself aware of any 
relevant audit information and to establish 
that the company’s auditors are aware 
of that information
we consider the annual report and accounts 
taken as a whole is fair balanced and 
understandable and provides the information 
necessary for shareholders to assess the 
group’s position and performance business 
model and strategy
by order of the board
anthony dixon
company secretary
3 march 2015 pace plc annual report and accounts 2014 47
opinions and conclusions arising from our audit
1 our opinion on the financial statements is unmodified 
we have audited the financial statements of pace plc for the year ended 31 december 2014 set out on pages 50 to 88 in our opinion 
 r the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 december 2014 
and of the group’s profit for the year then ended 
 r the financial statements have been properly prepared in accordance with international financial reporting standards as adopted 
by the european union ifrss as adopted by the eu 
 r the parent company financial statements have been properly prepared in accordance with ifrss as adopted by the eu and as applied 
in accordance with the provisions of the companies act 2006 and
 r the financial statements have been prepared in accordance with the requirements of the companies act 2006 and as regards the group 
financial statements article 4 of the ias regulation 
2 our assessment of risks of material misstatement
in arriving at our audit opinion above on the financial statements the risks of material misstatement that had the greatest effect on our audit were as follows
revenue recognition 26200m
refer to page 33 audit committee report page 60 accounting policy and pages 64 to 65 financial disclosures
 r the risk – on occasion the group contracts to sell hardware software and services within a single arrangement accounting for these 
arrangements can be complex as the total contract value is allocated to each identified component on a relative fair value basis and recognised 
as revenue as the related goods or services are delivered the identification of components and the allocation and recognition of revenue 
relating to components is a key area of judgement for our audit
 r our response – our audit procedures included testing authorisation controls relating to the identification and approval of significant contracts 
the identification of components within those contracts the allocation of revenue to components and the recognition of revenue for those components 
we read significant new contracts entered into during the year to understand the contractual terms and to make our own assessment of the 
components identified by the group we assessed allocation of revenue for significant new contracts on a relative fair value basis to identified 
components of contracts through corroboration of contractual milestones agreement on a sample basis of costs incurred to date and analysis 
of revenue and margins as part of our assessment of amounts recognised as revenue in the period we recalculated the deferred revenue 
balance at the balance sheet date 
royalty under negotiation provisions 499m
refer to page 33 audit committee report page 62 accounting policy and page 80 financial disclosures
 r the risk – the group’s products incorporate third party technology due to the complexity of intellectual property rights arrangements the 
group is exposed to the risk of infringement of third party rights potential claims can be submitted many years after a product has been 
deployed and extensive negotiation is commonplace determining whether to recognise a provision and the amount of the provision to be 
recognised requires the group to make judgements and estimates that are inherently subjective
 r our response – having discussed the significant claims with the group’s inhouse patent expert and legal team our audit procedures included 
considering the extent to which the directors’ estimates take into account a balanced assessment of the latest available information on the ongoing 
claims at the balance sheet date and the accuracy and reliability of the sources of that information for the most significant claims we also make 
enquiries of the group’s external legal advisors we read correspondence between the group and individual claimants we read information 
published by claimants such as press releases highlighting their successes against other parties as part of our assessment of the strength of 
the claimant’s case we considered the group’s historical experience in assessing the level of provision required by comparing actual outcomes 
from previous claims to provisions made we have also considered the adequacy of the group’s disclosures in respect of royalty provisions
capitalised development costs 850m
refer to page 33 audit committee report page 59 accounting policy and pages 69 and 70 financial disclosures
 r the risk – the group conducts a significant level of development activity the group has to apply judgement in identifying projects meeting the 
criteria for capitalisation under the requirements of accounting standards and to capture accurate time and costs information for those projects 
there is a risk that capitalisation occurs on projects that do not meet the criteria that incorrect amounts are allocated to projects or that projects 
are not as successful as initially anticipated leading to overcapitalisation and the need for impairment
 r our response – our audit procedures included testing controls over the authorisation of new development projects and the monthly monitoring 
of ongoing development projects we agreed costs assigned to a sample of larger value projects to time recorded or to invoices and considered 
the reasonableness of labour rates used as part of our assessment of the benefits expected to be generated for the group from these projects 
which is a key factor in determining whether capitalisation is appropriate we considered the group’s project margin forecasts we assessed the 
appropriateness of key inputs such as the value and timing of sales by reference to our knowledge of the group’s business our experience of 
the industry and consideration of publicly available information such as press releases we have also considered the adequacy of the group’s 
disclosures in respect of development costs
financial statements  independent auditor’s report
independent auditor’s report
to the members of pace plc only
financial statements pace plc annual report and accounts 2014 48
opinions and conclusions arising from our audit continued
2 our assessment of risks of material misstatement continued
business combinations goodwill additions of 1417m other intangible additions of 1380m
refer to page 33 audit committee report page 58 accounting policy and page 88 financial disclosures
 r the risk – the group acquired aurora networks during the current financial year the acquired intangible assets of technology and customer 
relationships are valued using discounted cash flows methods in applying the methodologies the group makes a number of key assumptions 
and estimates relating to each class of intangible asset including growth and attrition rates discount rates and product life cycles the identification 
and valuation of acquired intangibles requires judgement and is sensitive to the assumptions used
 amounts not allocated to acquired assets including acquired intangible assets are allocated to goodwill goodwill is not amortised and affects 
the income statement only on a future impairment we considered the estimation of the fair value of aurora networks’ inventories to be a significant 
audit risk due to the inherent judgement involved in estimating the fair value their materiality and ageing 
 r our response – our audit procedures included but were not limited to an assessment of the competency of the external experts used by 
the group to value significant acquired intangibles we used our own valuation specialists to challenge and corroborate using our experience 
market data and information from similar transactions the process for identifying intangible assets and to consider the methodology and 
assumptions used to determine the present value of cashflow projections 
with respect to the valuation of inventories we critically assessed the methodology used by the group to calculate the fair value adjustment 
our testing included physical stocktake attendances recalculation of ageing reports and sample testing of inventories to post acquisition date 
sales invoices
3 our application of materiality and an overview of the scope of our audit
the materiality for the group financial statements as a whole was set at 105m determined with reference to a benchmark of group profit before 
taxation of 1757m of which it represents 6
we report to the audit committee any corrected or uncorrected identified misstatements exceeding 05m in addition to other identified 
misstatements that warranted reporting on qualitative grounds
of the group’s 26 reporting components we subjected 6 to audits for group reporting purposes the components within the scope of our work 
accounted for the following percentages of the group’s results
number of components group revenue  group profit before tax  group total assets 
audits for group reporting purposes 6 94 96 97
remaining components 20 6 4 3
total 26 100 100 100
the remaining components none of which individually represented more than 2 of group revenue group profit before tax or total group assets were 
subject to analysis at an aggregated group level to reexamine our assessment that there were no significant risks of material misstatement within these
the group audit team instructed component auditors as to the significant areas to be covered including the relevant risks detailed above and the 
information to be reported back the group audit team approved the component materialities which ranged from 40m to 100m having regard 
to the mix of size and risk profile of the group across the components the work on 4 of the 6 was performed by component auditors and the rest 
by the group audit team the group audit team visited 2 component locations in the uk and the usa including to assess the audit risk and strategy 
physical meetings video conferences or conference calls were also held with all component auditors that were not physically visited at these visits 
and meetings the findings reported to the group audit team were discussed in more detail and any further work required by the group audit team 
was then performed by the component auditor
financial statements  independent auditor’s report continued
independent auditor’s report
to the members of pace plc only continued pace plc annual report and accounts 2014 49
4 our opinion on other matters prescribed by the companies act 2006 is unmodified 
in our opinion 
 r the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the companies act 2006 and 
 r the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared 
is consistent with the financial statements and 
 r information given in the corporate governance statement set out on pages 28 to 30 with respect to internal control and risk management 
systems in relation to financial reporting processes and about share capital structures is consistent with the financial statements 
5 we have nothing to report in respect of the matters on which we are required to report by exception 
under isas uk and ireland we are required to report to you if based on the knowledge we acquired during our audit we have identified other 
information in the annual report that contains a material inconsistency with either that knowledge or the financial statements a material 
misstatement of fact or that is otherwise misleading 
in particular we are required to report to you if 
 r we have identified material inconsistencies between the knowledge we acquired during our audit and the directors’ statement that they consider 
that the annual report and financial statements taken as a whole is fair balanced and understandable and provides the information necessary 
for shareholders to assess the group’s performance business model and strategy or
 r the audit and risk committee report does not appropriately address matters communicated by us to the audit committee
under the companies act 2006 we are required to report to you if in our opinion 
 r adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from 
branches not visited by us or 
 r the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the 
accounting records and returns or 
 r certain disclosures of directors’ remuneration specified by law are not made or 
 r we have not received all the information and explanations we require for our audit or 
 r a corporate governance statement has not been prepared by the company
under the listing rules we are required to review 
 r the directors’ statement set out on page 44 in relation to going concern and
 r the part of the corporate governance statement on page 30 relating to the company’s compliance with the ten provisions 
of the 2012 uk corporate governance code specified for our review
we have nothing to report in respect of the above responsibilities
scope and responsibilities
as explained more fully in the directors’ responsibilities statement set out on pages 45 and 46 the directors are responsible for the preparation 
of the financial statements and for being satisfied that they give a true and fair view a description of the scope of an audit of financial statements 
is provided on the financial reporting council’s website at wwwfrcorgukauditscopeukprivate this report is made solely to the company’s 
members as a body and is subject to important explanations and disclaimers regarding our responsibilities published on our website at 
wwwkpmgcomukauditscopeukco2014a which are incorporated into this report as if set out in full and should be read to provide an 
understanding of the purpose of this report the work we have undertaken and the basis of our opinions
mike barradell senior statutory auditor 
for and on behalf of kpmg llp statutory auditor 
chartered accountants 
1 the embankment
neville street
leeds
ls1 4dw
3 march 2015
financial statements pace plc annual report and accounts 2014 50
2014 2013
notes m m
revenue 3 26200 24692
cost of sales 20875 20210
gross profit 5325 4482
administrative expenses
 research and development expenditure 4 837 870
 amortisation of development expenditure 11 454 456
 other administrative expenses
  before exceptional costs 4 1623 1220
  exceptional costs 5 73 122
 amortisation of other intangibles 11 529 426
total administrative expenses 3516 3094
operating profit 1809 1388
finance income – interest receivable 6 25 18
finance expenses – interest payable 6 77 98
profit before tax 1757 1308
tax charge 8 277 341
profit for the year 1480 967
profit attributable to
equity holders of the company 1480 967
earnings per ordinary share
basic earnings per ordinary share cents 9 474 312
diluted earnings per ordinary share cents 9 456 298
financial statements  consolidated income statement
consolidated income statement
for the year ended 31 december 2014 pace plc annual report and accounts 2014 51
2014 2013
m m
profit for the year 1480 967
other comprehensive income
items that are or may be subsequently reclassified to profit and loss
exchange differences on translation of foreign operations 197 48
net change in fair value of cash flow hedges transferred to profit or loss gross of tax 23 27
deferred tax adjustment on above 04 07
effective portion of changes in fair value of cash flow hedges gross of tax 27 47
deferred tax adjustment on above 04 12
other comprehensive income for the year net of tax 155 33
total comprehensive income for the year 1325 934
attributable to
equity holders of the company 1325 934
financial statements  consolidated statement of comprehensive income
consolidated statement of comprehensive income
for the year ended 31 december 2014
financial statements pace plc annual report and accounts 2014 52
2014 2013
notes m m
assets
noncurrent assets
property plant and equipment 12 632 600
intangible assets – goodwill 11 4711 3426
intangible assets – other intangibles 11 2082 1231
intangible assets – development expenditure 11 850 644
deferred tax assets 14 312 212
total noncurrent assets 8587 6113
current assets
inventories 15 1680 1568
trade and other receivables 16 9091 4687
cash and cash equivalents 18 1821 330
current tax assets 43 13
total current assets 12635 6598
total assets 21222 12711
equity
issued capital 21 291 290
share premium 22 851 837
merger reserve 23 1099 1099
hedging reserve 40 02
translation reserve 23 793 596
retained earnings 24 5183 3842
total equity 6671 5470
liabilities
noncurrent liabilities
deferred tax liabilities 14 897 563
provisions 20 1006 603
borrowings 18 2378 —
total noncurrent liabilities 4281 1166
current liabilities
trade and other payables 17 9346 5671
current tax liabilities 235 85
provisions 20 315 319
borrowings 18 374 —
total current liabilities 10270 6075
total liabilities 14551 7241
total equity and liabilities 21222 12711
these financial statements were approved by the board of directors on 3 march 2015 and were signed on its behalf by
michael pulli  mark shuttleworth
chief executive officer chief financial officer
financial statements  consolidated balance sheet
consolidated balance sheet
at 31 december 2014 pace plc annual report and accounts 2014 53
2014 2013
notes m m
assets
noncurrent assets
property plant and equipment 12 322 348
intangible assets – other intangibles 11 87 109
intangible assets – development expenditure 11 716 578
investments in group and other companies 13 7587 4486
loans to group companies 13 3256 3115
deferred tax assets 14 29 38
total noncurrent assets 11997 8674
current assets
inventories 15 325 209
trade and other receivables 16 6126 3496
cash and cash equivalents 1315 110
total current assets 7766 3815
total assets 19763 12489
equity
issued capital 21 291 290
share premium 22 851 837
merger reserve 23 1099 1099
hedging reserve 27 07
translation reserve 23 525 525
retained earnings 24 3035 2949
total equity 4778 4657
liabilities
noncurrent liabilities
deferred tax liabilities 14 119 96
provisions 20 637 393
borrowings 18 2378 —
total noncurrent liabilities 3134 489
current liabilities
trade and other payables 17 11236 7047
current tax liabilities 99 64
provisions 20 142 232
borrowings 18 374 —
total current liabilities 11851 7343
total liabilities 14985 7832
total equity and liabilities 19763 12489
these financial statements were approved by the board of directors on 3 march 2015 and were signed on its behalf by
michael pulli  mark shuttleworth
chief executive officer chief financial officer
pace plc
registered number 01672847
financial statements  company balance sheet
company balance sheet
at 31 december 2014
financial statements pace plc annual report and accounts 2014 54
share share merger hedging translation retained total
capital premium reserve reserve reserve earnings equity
group m m m m m m m
balance at january 2013 287 790 1099 17 548 2990 4601
profit for the year — — — — — 967 967
other comprehensive income — — — 15 48 — 33
total comprehensive income for the year — — — 15 48 967 934
transactions with owners
 dividends to equity shareholders — — — — — 156 156
 employee share incentive charges — — — — — 41 41
 issue of shares 03 47 — — — — 50
balance at december 2013 290 837 1099 02 596 3842 5470
profit for the year — — — — — 1480 1480
other comprehensive income — — — 42 197 — 155
total comprehensive income for the year — — — 42 197 1480 1325
transactions with owners
 dividends to equity shareholders — — — — — 187 187
 employee share incentive charges — — — — — 65 65
 issue of shares 01 14 — — — — 15
 purchase of own shares by employee benefit trust — — — — — 17 17
balance at december 2014 291 851 1099 40 793 5183 6671
share share merger hedging translation retained total
capital premium reserve reserve reserve earnings equity
company m m m m m m m
balance at january 2013 287 790 1099 07 525 2456 4100
profit for the year — — — — — 608 608
other comprehensive income — — — 14 — — 14
total comprehensive income for the year — — — 14 — 608 622
transactions with owners
 dividends to equity shareholders — — — — — 156 156
 employee share incentive charges — — — — — 41 41
 issue of shares 03 47 — — — — 50
balance at december 2013 290 837 1099 07 525 2949 4657
profit for the year — — — — — 225 225
other comprehensive income — — — 20 — 20
total comprehensive income for the year — — — 20 — 225 245
transactions with owners
 dividends to equity shareholders — — — — — 187 187
 employee share incentive charges — — — — — 65 65
 issue of shares 01 14 — — — — 15
 purchase of own shares by employee benefit trust — — — — — 17 17
balance at december 2014 291 851 1099 27 525 3035 4778
financial statements  statements of changes in shareholders’ equity
statements of changes in shareholders’ equity
for the year ended 31 december 2014 pace plc annual report and accounts 2014 55
2014 2013
m m
cash flows from operating activities
profit before tax 1757 1308
adjustments for
 sharebased payments charge 65 41
 depreciation of property plant and equipment 290 250
 amortisation of development expenditure 454 456
 amortisation of other intangible assets 529 426
 loss on sale of property plant and equipment 01 02
 net finance expense 52 80
 movement in trade and other receivables 3834 855
 movement in trade and other payables 3292 672
 movement in inventories 317 242
 movement in provisions 07 144
cash generated from operations 2916 3132
interest paid 61 77
tax paid 115 238
net cash generated from operating activities 2740 2817
cash flows from investing activities
acquisition of subsidiaries net of cash acquired 2953 —
purchase of property plant and equipment 260 216
development expenditure 662 529
interest received 25 18
net cash used in investing activities 3850 727
cash flows from financing activities
proceeds from external borrowings 3100 —
repayment of external borrowings 310 2401
proceeds from issue of share capital 15 50
dividend paid 187 156
purchase of own shares by employee benefit trust 17 — 
net cash generated fromused in financing activities 2601 2507
net change in cash and cash equivalents 1491 417
cash and cash equivalents at the start of the year 330 747
cash and cash equivalents at the end of the year 1821 330
financial statements  consolidated statement of cash flows
consolidated statement of cash flows
for the year ended 31 december 2014
financial statements pace plc annual report and accounts 2014 56
2014 2013
m m
cash flows from operating activities
profit before tax 342 764
adjustments for
 sharebased payments charge 65 41
 depreciation of property plant and equipment 155 141
 amortisation of development expenditure 449 385
 amortisation of other intangible assets 22 —
 net finance incomeexpense 06 19
 movement in trade and other receivables 2780 2456
 movement in trade and other payables 4161 1249
 movement in inventories 116 146
 movement in provisions 154 189
cash generated from operations 2446 2892
interest paid 59 66
tax paid 47 18
net cash generated from operating activities 2340 2808
cash flows from investing activities
acquisition of subsidiaries net of cash acquired 3101 —
purchase of property plant and equipment 129 153
purchase of intangible noncurrent assets — 109
development expenditure 587 444
interest received 81 68
net cash used in investing activities 3736 638
cash flows from financing activities
proceeds from external borrowings 3100 —
repayment of external borrowings 310 2401
proceeds from issue of share capital 15 50
dividend paid 187 156
purchase of own shares by employee benefit trust 17 — 
net cash generated fromused in financing activities 2601 2507
net change in cash and cash equivalents 1205 337
cash and cash equivalents at the start of the year 110 447
cash and cash equivalents at the end of the year 1315 110
financial statements  company statement of cash flows
company statement of cash flows
for the year ended 31 december 2014 pace plc annual report and accounts 2014 57
1 basis of preparation and business environment
the following accounting policies have been applied consistently in dealing with items that are considered material in relation to the financial statements
basis of preparation
the financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention 
as modified by the revaluation of derivative instruments
international financial reporting standards
the group’s financial statements have been prepared in accordance with international financial reporting standards ifrs as endorsed by the 
european union and international financial reporting interpretations committee ifric interpretations and with those parts of the companies act 2006 
applicable to companies reporting under ifrs 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 the result of the company for the year is shown 
in note 25
financial year end
the current year’s financial statements are for the year ended 31 december 2014 and the previous year’s financial statements are for the year 
ended 31 december 2013
going concern
the group has borrowing facilities in place until january 2019 at 31 december 2014 these are in the form of a 310 million term loan which 
is subject to repayment through instalments every six months plus a final payment and a 150 million revolving credit facility these facilities 
are subject to financial performance covenants which the group currently complies with
the group has prepared a financial and working capital forecast based upon trading assumptions and other shortterm and mediumterm plans 
the group has sensitised these plans for a number of potential scenarios including working capital management and revenue reduction and has 
concluded that the group will continue to meet its financial performance covenants and will have adequate working capital available to continue 
in operational existence for the foreseeable future
basis of consolidation
the group financial statements consolidate those of the company and of its subsidiary undertakings note 13 drawn up to 31 december 2014 
subsidiaries are entities that the company has power over exposure or rights to variable returns and an ability to use its power to affect those returns 
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
functional and presentational currency
items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment 
in which the entity operates the functional currency the consolidated financial statements are presented in us dollars which is the company’s 
functional and presentational currency
the us dollarpound sterling exchange rate at 31 december 2014 was 156 2013 164
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 57 to 63 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
warranty provisions
pace provides product warranties for its products 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 are adjusted accordingly in the light of actual performance
financial statements  notes
notes
financial statements pace plc annual report and accounts 2014 58
1 basis of preparation and business environment continued
significant judgements key assumptions and estimation uncertainty continued
royalty provisions
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
provisions for royalty claims are recognised when it is considered more likely than not that an outflow of economic resources will be required to settle 
a claim that has resulted from the sale of a product allegedly using technology of a patent owner and the amount of the outflow can be reliably measured 
the directors have made provision for the potential royalty payable based on the latest information available which represents the best estimate of 
the expenditure required to settle the present obligation 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
impairment reviews
as is required by international accounting standards the group carries out impairment reviews of its nonfinancial assets on an annual basis 
or when indicators of impairment exist such reviews involve assessing the value in use of an asset or cashgenerating unit cgu by reference 
to its estimated future cash flows discounted to their present value the judgements in relation to impairment reviews relate to the assumptions 
applied in calculating the value in use and the future performance expectations 
intangible assets – capitalised development costs
the group business includes a significant element of research and development activity under accounting standards principally ias 38 
‘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
acquisition accounting
as part of the accounting for business combinations it is necessary to perform a purchase price allocation exercise to identify appropriate 
categories of intangible assets that have been purchased such an exercise involves judgement with regard to the types of assets identified the 
value of those assets and the useful economic lives applied with regard to amortisation rates the amounts recognised are calculated by reference 
to management forecasts and assumed discount rates obsolescence curves and attrition rates 
for significant acquisitions whilst the directors use appropriate qualified independent valuation advisors to assist in the purchase price allocation 
work the exercise inherently requires significant judgement and estimation to be taken 
2 accounting policies
business combinations
subsidiaries are entities that the company has power over exposure or rights to variable returns and an ability to use its power to affect those 
returns the acquisition date is the date on which control is transferred to the acquirer judgement is applied in determining the acquisition date 
and determining whether control is transferred from one party to another
goodwill
goodwill that arises upon the acquisition of subsidiaries is included in intangible assets
initial measurement
the group measures goodwill as the fair value of the consideration transferred including the recognised amount of any noncontrolling interest in 
the acquiree less the net recognised amount generally fair value of the identifiable assets acquired and liabilities assumed all measured as of the 
acquisition date consideration transferred includes the fair values of the assets transferred liabilities incurred by the group to the previous owners 
of the acquiree and equity interests issued by the group consideration transferred also includes the fair value of any contingent consideration and 
sharebased payment awards of the acquiree that are replaced mandatorily in the business combination if a business combination results in the 
termination of preexisting relationships between the group and the acquiree then the lower of the termination amount as contained in the 
agreement and the value of the offmarket element is deducted from the consideration transferred and recognised in other expenses
a contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from 
a past event and its fair value can be measured reliably
the group measures any noncontrolling interest at its proportionate interest in the identifiable net assets of the acquiree transaction costs 
that the group incurs in connection with a business combination such as finder’s fees legal fees due diligence fees and other professional 
and consulting fees are expensed as incurred
financial statements  notes
notes
continued pace plc annual report and accounts 2014 59
2 accounting policies continued
goodwill continued
subsequent measurement
goodwill is measured at cost less accumulated impairment losses in respect of equity accounted investees the carrying amount of goodwill 
is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset including goodwill 
that forms part of the carrying amount of the equity accounted investee
as permitted by ifrs 1 ‘firsttime adoption of ifrs’ 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
amortisation of other intangibles is done on a straightline basis over the estimated useful economic lives of the particular asset categories 
as follows
customer contracts and relationships three to ten years
technology and patents  one to ten years
other    three years
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 six and thirty 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 within the administrative expenses category
impairment charges
the carrying amounts of the group’s nonfinancial assets other than inventories and deferred tax assets are reviewed at each reporting date to 
determine whether there is any indication of impairment if any such indication exists then the asset’s recoverable amount is estimated for goodwill 
and intangible assets that have indefinite useful lives or that are not yet available for use the recoverable amount is estimated each year at the same time 
an impairment loss is recognised if the carrying amount of an asset or its related cgu exceeds its estimated recoverable amount
the recoverable amount of an asset or cgu is the greater of its value in use and its fair value less costs to sell in assessing value in use the estimated 
future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of 
money and the risks specific to the asset or cgu for the purpose of impairment testing cgus to which goodwill has been allocated are aggregated 
so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes 
goodwill acquired in a business combination is allocated to groups of cgus that are expected to benefit from the synergies of the combination
the group’s corporate assets do not generate separate cash inflows and are utilised by more than one cgu corporate assets are allocated to 
cgus on a reasonable and consistent basis and tested for impairment as part of the testing of the cgu to which the corporate asset is allocated 
impairment losses are recognised in profit or loss any impairment losses recognised in respect of cgus are allocated first to reduce the carrying 
amount of any goodwill allocated to the cgu and then to reduce the carrying amounts of the assets in the cgu on a prorata basis
an impairment loss in respect of goodwill is not reversed in respect of other assets impairment losses recognised in prior periods are assessed 
at each reporting date for any indications that the loss has decreased or no longer exists an impairment loss is reversed if 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 amount does 
not exceed the carrying amount that would have been determined net of depreciation or amortisation if no impairment loss had been recognised
financial statements pace plc annual report and accounts 2014 60
2 accounting policies continued
exceptional items
items that are significant by virtue of their size or nature and that 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 restructuring and profits and losses made on 
the disposal of properties are included within the appropriate consolidated income statement category albeit analysed as a separate line within 
that category and 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 hisher agent the group does not recognise 
revenue before delivery has occurred the risks and rewards of ownership have been transferred to the customer the amount of revenue can be 
measured reliably and collection of the related receivable is reasonably assured the determination of whether the amount of revenue can be 
measured reliably or whether receivables are collectible is inherently judgemental
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 and any future obligations remaining
finance income and finance costs
finance income comprises interest income on funds invested and dividend income interest income is recognised as it accrues in profit or loss 
using the effective interest method finance costs comprise interest expense on borrowings and impairment losses recognised on financial assets 
borrowing costs that are not directly attributable to the acquisition construction or production of a qualifying asset are recognised in profit or loss 
using the effective interest method foreign currency gains and losses are reported on a net basis
government grants
grants in respect of specific research and development projects are credited to research and development costs within the income statement 
or against the capitalised development expenditure as appropriate to match to the project’s related expenditure
cash and cash equivalents
cash and cash equivalents comprise cash balances and call deposits the company considers all highly liquid investments with original maturity 
dates of three months or less to be cash equivalents bank overdrafts that are repayable on demand and form an integral part of the group’s cash 
management system are included as a component of cash and cash equivalents for the purpose of the statement of cash flows
allowance for doubtful debts
trade receivables are assessed individually for impairment or collectively where the receivables are not individually significant where necessary 
provisions for doubtful debts are recorded in the income statement 
inventory
inventory is stated at the lower of cost and net realisable value cost is determined on a firstinfirstout basis and includes appropriate transport and 
handling costs but excludes royalties due only on ultimate sale where necessary provision is made for obsolete slowmoving and defective inventory
financial statements  notes
notes
continued pace plc annual report and accounts 2014 61
2 accounting policies continued
property plant and equipment
the cost of items of property plant and equipment is its purchase cost together with any incidental costs of acquisition
depreciation is calculated so as to write off on a straightline basis over the expected useful economic lives of the asset concerned the cost of 
property plant and equipment less any estimated residual values which are adjusted if appropriate at each balance sheet date the principal 
economic lives used for this purpose are
long leasehold properties period of lease
short leasehold properties period of lease
plant and machinery one to ten years
motor vehicles  four years
provision is made against the carrying value of items of property plant and equipment where an impairment in value is deemed to have occurred
leased assets
leases in terms of which the group assumes substantially all the risks and rewards of ownership are classified as finance leases assets held 
under finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their expected useful lives the interest 
element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to the income statement over 
the period of the lease
all other leases are regarded as operating leases and the payments made under them are charged to the income statement on a straightline basis 
over the lease term
foreign currency
transactions in foreign currencies are translated to the respective functional currencies of group entities at the foreign exchange rate ruling at the 
date of the transaction monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional 
currency at the foreign exchange rate ruling at that date foreign exchange differences arising on translation are recognised in the income statement 
nonmonetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the 
date of the transaction nonmonetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the 
functional currency at foreign exchange rates ruling at the dates the fair value was determined
the assets and liabilities of foreign operations including goodwill and fair value adjustments arising on consolidation are translated to the group’s 
presentational currency at foreign exchange rates ruling at the balance sheet date the revenues and expenses of foreign operations are translated 
at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions exchange differences 
arising from this translation of foreign operations are taken directly to the translation reserve when a foreign operation is disposed of such that 
control is lost the cumulative amount in the translation reserve is reclassified to the income statement as part of the gain or loss 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 the directors have determined that the instruments qualify for cash flow hedge accounting
derivative financial instruments are classified as cash flow 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
financial statements pace plc annual report and accounts 2014 62
2 accounting policies continued
trade receivables
trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less provision 
for impairment a provision for impairment of trade receivables is established when there is objective evidence that the group will not be able 
to collect all amounts due according to the original terms of the receivable 
trade payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
taxes
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the tax rates that have 
been enacted or substantively enacted by the balance sheet date
deferred tax is provided using the balance sheet liability method providing where relevant for temporary differences between the carrying amounts 
of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes deferred tax is measured using the tax rates 
that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the asset is realised or the liability settled 
a net deferred tax asset is recognised only when it is probable that sufficient taxable profits will be available in the foreseeable future from which 
the reversal of the temporary differences can be deducted
sharebased payments
the grant date fair value of sharebased payment awards granted to employees is recognised as an employee expense with a corresponding 
increase in equity over the period that the employees unconditionally become entitled to the awards the amount recognised as an expense is 
adjusted to reflect the number of awards for which the related service and nonmarket vesting conditions are expected to be met such that the 
amount ultimately recognised as an expense is based on the number of awards that meet the related service and nonmarket performance conditions 
at the vesting date for sharebased payment awards with nonvesting conditions the grant date fair value of the sharebased payment is measured 
to reflect such conditions and there is no trueup for differences between expected and actual outcomes
the fair value of the amount payable to employees in respect of share appreciation rights which are settled in cash is recognised as an expense 
with a corresponding increase in liabilities over the period that the employees unconditionally become entitled to payment the liability is remeasured 
at each reporting date and at settlement date any changes in the fair value of the liability are recognised as personnel expenses in profit or loss
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
interestbearing borrowings
interestbearing borrowings are recognised initially at fair value less attributable transaction costs subsequent to initial recognition interestbearing 
borrowings are stated at amortised cost using the effective interest method less any impairment losses
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 approved 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 royalty provision
provisions for royalty claims are recognised when it is considered more likely than not that an outflow of economic resources will be required to settle 
a claim that has resulted from the sale of a product allegedly using technology of a patent owner and the amount of the outflow can be reliably 
measured the directors have made provision for the potential royalty payable based on the latest information available which represents the best 
estimate of the expenditure required to settle the present obligation
financial statements  notes
notes
continued pace plc annual report and accounts 2014 63
2 accounting policies continued
provisions continued
b warranty provision
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 are 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
contingent liabilities
a contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence 
of one or more uncertain future events beyond the control of the group or a present obligation that is not recognised because it is not probable that 
an outflow of resources will be required to settle the obligation a contingent liability also arises in where there is a liability that cannot be recognised 
because it cannot be measured reliably the group does not recognise a contingent liability but discloses its existence in the financial statements
changes in accounting policy and disclosures
a new and amended standards adopted by the group
the group has adopted the following new standards and amendments for the first time unless otherwise stated they have not had a material 
impact on the financial statements
 r ifrs 10 consolidated financial statements and ias 27 2011 separate financial statements
 r ifrs 11 joint arrangements and amendments to ias 28 2008 investments in associates and joint ventures 
 r ifrs 12 disclosure of interests in other entities 
 r amendments to ias 32 ‘offsetting financial assets and financial liabilities’ 
 r investment entities amendments to ifrs 10 ifrs 12 and ias 27
 r transition guidance amendments to ifrs 10 ifrs 11 and ifrs 12
b new standards amendments and interpretations issued but not effective for the financial year beginning 1 january 2014 and not early adopted
the following adopted ifrss have been issued but have not been applied by the group in these financial statements their adoption is not expected 
to have a material effect on the financial statements unless otherwise indicated
 r annual improvement cycles 20102012 and 20112013 mandatory for year ending 31 december 2015
 r ifrs 14 regulatory deferral accounts mandatory for year ending 31 december 2016
 r amendments to ifrs 11 accounting for acquisitions of interests in joint operations mandatory for year ending 31 december 2016
 r amendments to ias 16 and ias 38 clarification of acceptable methods of depreciation mandatory for year ending 31 december 2016
 r amendments to ias 16 and ias 41 bearer plants mandatory for year ending 31 december 2016
 r amendments to ias 27 equity method in separate financial statements mandatory for year ending 31 december 2016
 r amendments to ifrs 10 and ias 28 sale or contribution of assets mandatory for year ending 31 december 2016
 r annual improvement cycles 20122014 mandatory for year ending 31 december 2016
 r ifrs 15 revenue from contracts with customers mandatory for year ending 31 december 2017 this standard may affect the accounting for 
certain contracts and will impose greater disclosure requirements on all companies the group is currently considering the impact of this standard
 r ifrs 9 financial instruments mandatory for year ending 31 december 2018 this standard will determine a new framework for the measurement 
of financial instruments the group is currently considering the impact of this standard
financial statements pace plc annual report and accounts 2014 64
3 segmental analysis
in accordance with ifrs 8 ‘operating segments’ the chief operating decisionmaker codm has been identified as the board of directors which 
reviews internal monthly management reports budget and forecast information to evaluate the performance of the business and make decisions
the group determines operating segments on the basis of sbu areas being the basis on which the group manages its worldwide interests
during the period the group created a new sbu named pace networks which contains the aurora networks inc business acquired in 2014 
in addition certain other activities were restructured and split out across the pace international and pace americas sbus
the group has the following operating segments which are also reportable segments for the purpose of ifrs 8
 r pace americas
 r pace international and
 r pace networks
other amounts include unallocated central costs that are not classified as reportable segments under ifrs 8
performance is measured based on segmental adjusted ebita as included in the internal management information which is reviewed by the codm 
adjusted ebita 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 
revenues disclosed below materially represent revenues to external customers and pricing is determined on an arm’s length basis there are no 
material intersegment transactions
the tables below present the segmental information on the revised basis with prior periods amended to conform to the current period presentation
pace pace pace
americas international networks other total
year ended 31 december 2014 m m m m m
segmental income statement
revenue 15616 7938 2646 — 26200
adjusted ebita 1502 883 474 448 2411
exceptional costs 73
amortisation of other intangibles 529
net interest payable 52
tax charge 277
profit for the year 1480
pace pace pace
year ended 31 december 2013 americas international networks other total
restated m m m m m
segmental income statement
revenue 16802 7890 — — 24692
adjusted ebita 1527 828 — 419 1936
exceptional costs 122
amortisation of other intangibles 426
net interest payable 80
tax charge 341
profit for the year 967
financial statements  notes
notes
continued pace plc annual report and accounts 2014 65
3 segmental analysis continued
major customers
in 2014 the group has three customers which individually account for more than 10 of the group’s total revenue being 24 13 and 10 in the 
prior year the group also had three customers which accounted for 24 17 and 16 of the group’s total revenue all of the revenue from these 
customers is within the pace americas and pace networks reporting segments in 2014 and within the pace americas reporting segment in 2013
geographical analysis
in presenting information on the basis of geographical segments segment revenue is based on the geographical location of customers
2014 2013
revenue by destination m m
europe 2912 3239
north america 16356 15405
– of which usa 15366 15244
latin america 3732 3584
– of which brazil 2878 2778
rest of world 3200 2464
26200 24692
segment assets are based on the geographical location of the assets the split of noncurrent assets by location is as follows
2014 2013
noncurrent assets m m
uk 1249 1365
europe – all france 1171 1275
latin america 53 27
north america – all usa 5583 3218
rest of world 219 16
8275 5901
noncurrent assets relate to property plant and equipment and intangible assets and as required under ifrs 8 exclude deferred tax assets 
financial instruments and postemployment benefit assets
the group has four main revenue streams being settop boxes stb and media servers gateways software and services and networks 
these revenue streams arise in each operating segment and are not defined by geographical locations 
the following table provides an analysis of the group’s revenue streams according to those classifications
2014 2013
m m
settop boxes and media servers 20035 19796
gateways 2397 3758
software and services 1122 1138
networks 2646 —
26200 24692
financial statements pace plc annual report and accounts 2014 66
4 expenses and auditors’ remuneration
2014 2013
m m
auditors’ remuneration
audit of these financial statements 04 04
amounts receivable by the company’s auditors and its associates in respect of
audit of financial statements of subsidiaries of the company 03 02
taxation compliance services 01 —
other assurance services 01 01
depreciation of plant property and equipment
owned 290 250
other operating lease rentals
land and buildings 87 82
loss on disposal of plant property and equipment 01 02
net foreign exchange losses recognised within operating profit 62 42
research and development expenditure recognised as an expense 837 870
5 exceptional costs
2014 2013
m m
acquisition and integration costs 58 69
restructuring and reorganisation costs 15 42
aborted acquisition costs — 11
directors’ loss of office — —
73 122
acquisition costs in 2014 and 2013 relate to integration costs and professional service fees in respect of the acquisition of aurora networks inc 
on 6 january 2014 restructuring and reorganisation costs in 2014 and 2013 relate to different restructuring programmes within the group and represent 
the costs of redundancy and restructuring aborted acquisition costs in 2013 relate to professional service fees in respect of aborted acquisitions 
6 finance incomecosts
2014 2013
m m
finance income – interest on bank deposits 25 18
finance costs
bank borrowings 73 89
other finance costs 04 09
77 98
financial statements  notes
notes
continued pace plc annual report and accounts 2014 67
7 staff numbers and costs
the average numbers of persons including directors employed by the group during the year analysed by category were as follows
group 2014 2013
research and development 907 896
administration 148 221
sales and marketing 67 42
manufacturing and operations 892 892
2014 2051
the total number of persons including directors employed by the group at 31 december 2014 was 2078 2013 1947 
the aggregate payroll costs of these persons were as follows
2014 2013
group m m
wages and salaries 1438 1160
social security costs 175 176
other pension costs 58 46
sharebased payments note 27 65 41
1736 1423
remuneration of directors
the remuneration share options and pension entitlements of the directors are disclosed in the remuneration report on pages 35 to 43
8 taxation
2014 2013
m m
current tax charge
charge for the year 319 297
adjustment in respect of prior years 41 27
total current tax charge 278 324
deferred tax chargecredit
origination and reversal of timing differences in the current year note 14 19 27
impact of change in tax rate — 10
adjustment in respect of prior years 18 —
total deferred tax chargecredit 01 17
total tax charge 277 341
financial statements pace plc annual report and accounts 2014 68
8 taxation continued
reconciliation of effective tax rate to uk statutory rate of 215 2013 2325
2014 2013
m m
profit before tax 1757 1308
tax using uk statutory tax rate at 215 2013 2325 378 304
effects of
permanent adjustments 01 —
expenses not deductible for tax purposes — 53
controlled foreign companies uk tax charge 08 —
adjustment to timing differences 150 —
research and development tax credit 39 19
overseas current year tax not at 215 2013 2325 68 70
losses not recognised for current or deferred tax 36 56
impact of change in tax rate — 10
adjustments to tax charge in respect of previous years 23 27
total tax charge 277 341
9 earnings per ordinary share
2014 2013
basic earnings per ordinary share 474c 312c
diluted earnings per ordinary share 456c 298c
adjusted basic earnings per ordinary share 636c 443c
adjusted diluted earnings per ordinary share 612c 422c
the calculation of basic earnings per share is based on a profit after tax of 1480 million 2013 967 million divided by the weighted average 
number of ordinary shares in issue of 312334970 2013 309740316 excluding shares held by the employee benefit trust
2014 2013
number of shares
weighted average number of ordinary shares in issue during the year 312334970 309740316
dilutive effect of options outstanding 12139887 15296522
diluted weighted average number of ordinary shares in issue during the year 324474857 325036838
diluted earnings per ordinary share varies from basic earnings per ordinary share due to the effect of the notional exercise of outstanding share options 
the diluted weighted average number of ordinary shares in issue during the year is calculated using the treasury stock method which accounts for the 
fact that not all options are wholly dilutive further details of the outstanding share options held at the end of the year can be found in note 27 
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 posttax the earnings amount is calculated as follows
2014 2013
m m
profit after tax 1480 967
amortisation of other intangibles 529 426
tax effect of above 84 111
exceptional costs 73 122
tax effect of above 12 32
adjusted profit after tax 1986 1372
the group’s effective tax rate of 158 2013 261 has been used to calculate the tax effect of adjusted items 
financial statements  notes
notes
continued pace plc annual report and accounts 2014 69
10 dividend per ordinary share 
2014 2013
per share m per share m
2013 final paid 4 july 2014 366c 117 306c 95
2014 interim paid 6 december 2014 225c 70 183c 61
591c 187 489c 156
in addition the directors are proposing a final dividend for 2014 of 475 cents per ordinary share which amounts to 149 million 2013 114 million 
based on the ordinary shares as at the yearend this will be payable on 3 july 2015 to shareholders on the register at 5 june 2015 subject to approval 
by shareholders at the forthcoming annual general meeting and has not been included as a liability in these financial statements 
11 intangible assets 
customer
contracts technology
development and and other
goodwill expenditure relationships patents other intangibles
group m m m m m m
cost
at 31 december 2012 3379 2669 1643 1318 109 3070
exchange adjustments 47 05 — — — —
additions — 529 — — — —
at 31 december 2013 3426 3203 1643 1318 109 3070
exchange adjustments 132 02 — — — —
acquisitions 1417 — 300 1080 — 1380
additions — 662 — — — — 
disposals — 2189 — — — —
at 31 december 2014 4711 1678 1943 2398 109 4450
amortisation
at 31 december 2012 — 2106 609 733 66 1408
exchange adjustments — 03 02 03 — 05
provided in the year — 456 198 217 11 426
at 31 december 2013 — 2559 809 953 77 1839
exchange adjustments — 04 — — — —
provided in the year — 454 149 379 01 529
disposals — 2189 — — — —
at 31 december 2014 — 828 958 1332 78 2368
net book value at 31 december 2013 3426 644 834 365 32 1231
net book value at 31 december 2014 4711 850 985 1066 31 2082
goodwill
all goodwill has arisen from business combinations and relates to the following acquisitions
 r xcom multimedia communications sa now pace europe sas in february 2001
 r the stb and connectivity solutions business of royal philips electronics pace france in april 2008
 r bewan systems sa bewan in april 2010
 r 2wire inc 2wire in october 2010
 r latens systems limited latens in november 2010 and 
 r aurora networks inc in january 2014
financial statements pace plc annual report and accounts 2014 70
11 intangible assets continued
goodwill continued
the carrying amount of goodwill is allocated across strategic business units which are groups of cashgenerating units cgus as follows
 r 1387 million within pace international 2013 1531 million 
 r 1907 million within pace americas 2013 1895 million and
 r 1417 million within pace networks 2013 na
these cgus are independent sources of income streams and represent the lowest level within the group at which the associated goodwill is 
monitored for management purposes the group tests goodwill annually for impairment or more frequently if there are indications that goodwill 
might be impaired
the recoverable amount of cgus is determined from value in use calculations these calculations use cash flow projections based on the following 
year’s budget and the group’s three year plan these forecasts have been approved by the board and have an appropriate longterm growth rate 
of 1 2013 1 applied to them
to prepare value in use calculations the cash flow forecasts are discounted back to present value using an appropriate marketbased discount 
rate the pretax discount rate used to calculate the value in use was 104 2013 134
the key assumptions in the value in use calculations are those regarding discount rates sales growth rates and expected changes to selling prices 
and direct costs sales growth selling prices and direct costs are built up within the budget and three year plan on a product by product basis 
utilising the knowledge and expertise of operational staff the anticipated launch dates for new products the achievable prices and direct costs 
to be incurred are therefore highly judgemental the directors estimate discount rates using pretax rates that reflect current market assessments 
of the time value of money for the group
the directors have reviewed the recoverable amounts of the cgus and have also considered the following reasonable changes in the assumptions
 r movements in the pretax discount rate of up to an additional 10 and
 r reductions in cash flows of up to 10 million per annum
the directors consider that there is sufficient headroom within the value in use calculations at 31 december 2014
other intangibles
other intangibles relate to trademarks and licence agreements customer contracts and relationships recognised as part of the acquisition 
of pace france 2wire bewan latens and aurora networks inc
development other intangibles –
expenditure technology
company m m
cost
at 31 december 2012 2064 —
additions 444 109
at 31 december 2013 2508 109
additions 587 —
disposals 1685 —
at 31 december 2014 1410 109
amortisation
at 31 december 2012 1545 —
provided in the year 385 —
at 31 december 2013 1930 —
provided in the year 449 22
disposals 1685 —
at 31 december 2014 694 22
net book value at 31 december 2013 578 109
net book value at 31 december 2014 716 87
financial statements  notes
notes
continued pace plc annual report and accounts 2014 71
12 property plant and equipment
short leasehold plant machinery and
land and buildings motor vehicles total
group m m m
cost
at 31 december 2012 384 1400 1784
exchange adjustments 02 01 01
additions 14 202 216
disposals 04 19 23
at 31 december 2013 396 1582 1978
exchange adjustments 02 26 28
acquisitions 24 225 249
additions 11 249 260
disposals 02 01 03
at 31 december 2014 427 2029 2456
depreciation
at 31 december 2012 203 953 1156
exchange adjustments 02 05 07
provided in the year 54 196 250
disposals 04 17 21
at 31 december 2013 251 1127 1378
exchange adjustments — 22 22
acquisitions 17 163 180
provided in the year 54 236 290
disposals 01 01 02
at 31 december 2014 321 1503 1824
net book value at 31 december 2013 145 455 600
net book value at 31 december 2014 106 526 632
financial statements pace plc annual report and accounts 2014 72
12 property plant and equipment continued
short leasehold plant machinery
land and buildings and motor vehicles total
company m m m
cost
at 31 december 2012 253 747 1000
additions 11 142 153
disposals — 07 07
at 31 december 2013 264 882 1146
additions — 129 129
disposals — — —
at 31 december 2014 264 1011 1275
depreciation
at 31 december 2012 164 499 663
provided in the year 34 107 141
disposals — 06 06
at 31 december 2013 198 600 798
provided in the year 30 125 155
disposals — — —
at 31 december 2014 228 725 953
net book value at 31 december 2013 66 282 348
net book value at 31 december 2014 36 286 322
13 investments in and loans to group and other companies
shares in
intragroup group
loans undertakings
company m m
cost
at 31 december 2012 1834 4486
additions 1500 —
transfer to current assets 128 —
at 31 december 2013 3206 4486
additions 141 3101
at 31 december 2014 3347 7587
impairment
at 31 december 2012 31 december 2013 and 31 december 2014 91 —
net book value at 31 december 2013 3115 4486
net book value at 31 december 2014 3256 7587
during the year the company made a 2450 million investment in pace international luxembourg sarl and a 651 million investment 
in pace americas holdings inc
during the prior year the company issued a 1500 million loan to pace americas holdings inc to contribute to their investment in pace americas inc
financial statements  notes
notes
continued pace plc annual report and accounts 2014 73
13 investments in and loans to group and other companies continued
at 31 december 2014 the company had a beneficial interest in the equity of the following subsidiary undertakings
directly 
nature of owned by percentage country of
operations note a holding incorporation
pace advanced consumer electronics limited dormant 1 100 uk
pace asia pacific limited trading 1 100 hong kong
pace distribution gmbh dormant 1 100 germany
pace distribution overseas limited holding company 1 100 uk
pace micro technology limited trading 1 100 uk
pace australia pty limited support 1 100 australia
pace americas limited support 4 100 uk
pace americas holdings inc holding 1 100 usa
pace americas investments llc holding 9 100 usa
pace americas llc trading 11 100 usa
pace usa llc support 10 100 usa
pace europe sas support 4 100 france
pace micro technology gmbh support 1 100 germany
pace micro technology india private limited support 1 100 india
pace overseas distribution limited trading 4 100 uk
pace france sas trading 1 100 france
pace belgium nv dormant 3 100 belgium
pace asia home networks sdn bhd support 3 100 malaysia
pace software  services limited dormant 1 100 uk
pace brasil – industria electronica e comercio ltda trading 14 100 brazil
pace iberia sl trading 3 100 spain
stb anchor mexicana sa de cv trading 13 100 mexico
pace china operations support 2 100 china
pace operations south africa propriety limited trading 6 100 south africa
latens systems limited trading 1 100 uk
latens services limited trading 8 100 uk
latens systems llc trading 8 100 usa
latens systems india private limited support 8 100 india
latens systems israel limited support 8 100 israel
2wire inc trading 11 100 usa
2wire asia pacific limited dormant 7 100 hong kong
2wire bc limited support 7 100 canada
2wire international limited dormant 7 100 uk
kenati technologies inc holding 7 100 usa
2wire singapore pte limited support 7 100 singapore
2wire development center private limited support 12 100 india
pace netherlands nv dormant 1 100 holland
pace east trading limited support 1 100 uk
pace international finance limited trading 3 100 uk
pace international luxembourg sarl holding company 1 100 luxembourg
aurora networks inc trading 9 100 usa
aurora networks international llc trading 5 100 usa
aurora networks holdings cayman dormant 5 100 cayman islands
aurora networks canada inc trading 5 100 canada
design tecs inc support 5 100 usa
financial statements pace plc annual report and accounts 2014 74
13 investments in and loans to group and other companies continued
note a
directly owned by
1 pace plc 6 pace overseas distribution limited 11 pace americas investments llc
2 pace asia pacific limited 7 2wire inc 12 kenati technologies inc
3 pace france sas 8 latens systems limited 13 pace usa inc 98 pace france sas 2
4 pace distribution overseas limited 9 pace americas holdings inc 14 pace international finance limited
5 aurora networks inc 10 pace americas llc
each of the subsidiary undertakings listed above has been consolidated in the group’s financial statements
each of the subsidiary undertakings listed above has a financial year end of 31 december with the exception of pace micro technology india 
private limited latens systems india private limited and 2wire development center private limited 31 march
the class of share capital held is ordinary with the exception of pace distribution overseas limited where there is preference share capital 
in addition to ordinary share capital
14 deferred tax assetsliabilities
the movements in deferred tax assets and liabilities during the year are shown below
property shortterm
plant and trading timing
equipment losses intangibles differences total
group m m m m m
recognised assetsliabilities
at 31 december 2012 12 299 688 48 329
creditedcharged to income statement 19 157 139 20 17
creditedcharged to statement of comprehensive income — — — 05 05
at 31 december 2013 07 142 549 63 351
creditedcharged to income statement 23 47 180 109 01
acquisition — — 483 256 227
creditedcharged to statement of comprehensive income — — — 08 08
at 31 december 2014 30 95 852 202 585
shown as deferred tax assets — 95 — 217 312
shown as deferred tax liabilities 30 — 852 15 897
property shortterm
plant and trading timing
equipment losses intangibles differences total
company m m m m m
recognised assetsliabilities
at 31 december 2012 27 — 106 23 56
creditedcharged to income statement 21 — 10 14 03
creditedcharged to statement of comprehensive income — — — 05 05
at 31 december 2013 06 — 96 32 58
creditedcharged to income statement 22 — 07 03 26
creditedcharged to statement of comprehensive income — — — 06 06 
at 31 december 2014 16 — 103 29 90
shown as deferred tax assets — — — 29 29
shown as deferred tax liabilities 16 — 103 — 119
no deferred tax asset has been recognised on unused tax losses outside the uk of 87 million 2013 86 million as it is not considered 
probable that sufficient taxable profit will be available against which the tax losses can be utilised
the uk finance bill 2013 which includes the reduction in the uk corporation tax rate to 21 with effect from 1 april 2014 and to 20 from 1 april 2015 
was substantively enacted on 2 july 2013 as a result uk deferred tax has been calculated on the rates substantively enacted at the balance sheet date
financial statements  notes
notes
continued pace plc annual report and accounts 2014 75
15 inventories 
group company
2014 2013 2014 2013
m m m m
raw materials and consumable stores 383 179 106 57
finished goods 1297 1389 219 152
1680 1568 325 209
the total amount of inventory written down which was recognised as an expense in the period was 53 million 2013 23 million
16 trade and other receivables
group company
2014 2013 2014 2013
m m m m
trade receivables 8432 4227 1948 1132
amounts owed by subsidiary undertakings — — 3817 2132
other receivables 570 369 330 194
prepayments and accrued income 89 91 31 38
9091 4687 6126 3496
17 trade and other payables
group company
2014 2013 2014 2013
m m m m
trade payables 8254 4734 6584 4068
amounts payable to subsidiary undertakings — — 4123 2459
social security and other taxes 32 29 15 10
other payables 191 150 101 74
accruals and deferred revenue 869 758 413 436
9346 5671 11236 7047
18 interestbearing loans and borrowings
the group’s interestbearing loans and borrowings are measured at amortised cost for more information about the group’s exposure to interest 
rate foreign currency and liquidity risk see note 19 
the company has a facility underwritten by hsbc rbs and jp morgan incorporating lloyds santander wells fargo silicon valley bank 
and cic  fifth third in a syndicated deal
the main facilities at 31 december 2014 which are all denominated in us dollars consist of a 310 million term loan facility together 
with a 150 million revolving credit facility
the facilities have a termination date of 6 january 2019 amortisation of the original 310 million term loan commenced on 6 january 2014 and two 
155 million repayments were made during the year further repayments are to be made every six months until 6 january 2019 when a final bullet 
repayment of 775 million is due to be made 
interest is payable on the facilities at libor plus a specified margin the margin is subject to a ratchet linked to overall leverage conditions of the group
facility arrangement and associated fees of 54 million were capitalised and are being amortised over the life of the facilities and included within 
the overall interest costs
there are certain financial covenants with regard to the facilities these are principally linked to interest cover and net leverage
in addition to the main facilities a bilateral bonding facility with rbs was also entered into and covers bank guarantees principally in respect 
of duty and deferment requirements for 77 million 2013 90 million
financial statements pace plc annual report and accounts 2014 76
18 interestbearing loans and borrowings continued
the carrying value of the yearend borrowings position is as follows
2014 2013
group and company m m
noncurrent liabilities
bank term loans 2378 —
current liabilities
bank term loans 374 —
bank revolving credit facility — —
374 —
the face value of the borrowings was 2378 million 2013 nil in respect of the bank term loans within noncurrent liabilities 374 million 2013 nil 
in respect of the bank term loans within current liabilities and nil 2013 nil in respect of the bank revolving credit facility
the difference between the face value amounts and the amounts in the previous table is 24 million 2013 nil in noncurrent liabilities and 
14 million 2013 nil in current liabilities which represented facility arrangement fees and accrued interest costs
reconciliation of net cash flow to movement in net debt
2014 2013
m m
cash and cash equivalents at end of year 1821 330
current borrowings 374 —
noncurrent borrowings 2378 —
closing net debt 931 330
19 derivatives and other financial instruments
shortterm debtors and creditors that meet the definition of a financial asset or liability respectively have been excluded from all the following 
analysis other than the currency risk exposures 
this note provides information about the contractual terms of the group and company’s interestbearing loans and borrowings
a interest rate risk profile of cashbank overdrafts
floating rate interest free total
currency m m m
at 31 december 2014
sterling 79 10 69
us dollar 1527 181 1346
euro 24 10 34
other 113 199 312
total 1311 380 931
at 31 december 2013
sterling 75 02 73
us dollar 260 310 50
euro 17 28 45
other 111 51 162
total 57 387 330
the interest rates on sterling us dollar euro and other floating rate financial assets are linked to the relevant bank base rates
financial statements  notes
notes
continued pace plc annual report and accounts 2014 77
19 derivatives and other financial instruments continued
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
sterling us dollar euro other total
m m m m m
functional currency of group operation
at 31 december 2014
sterling — 19 17 — 36
us dollar 80 — 283 200 563
euro — 14 — 01 13
other 01 17 — — 18
total 81 50 300 199 630
at 31 december 2013
sterling — 25 11 — 36
us dollar 35 — 158 151 344
euro — 34 — — 34
other 04 21 — — 17
total 39 30 169 151 329
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 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 twelve months
outstanding currency derivatives
sell buy principal average
currency currency amount rate maturity
at 31 december 2014 us dollar gbp 321m 062 jan15 – dec15
euro us dollar 601m 132 jan15 – jun15
us dollar sa rand 66m 009 jan15
at 31 december 2013 us dollar gbp 286m 064 jan 14 – mar 14
euro us dollar 983m 135 jan 14 – oct 14
us dollar euro 138m 072 jan 14
sa rand us dollar 38m 010 jan 14 – feb 14
the group’s derivatives contracts qualify for hedge accounting and have a fair value at the balance sheet date of 44 million 2013 05 million
d credit risk
the group’s credit risk is primarily attributable to its trade debtors credit risk is managed by monitoring the aggregate amount and duration 
of exposure to any one customer depending upon their credit rating the group does not require collateral in respect of financial assets 
there were no significant impairments in the periods under review
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
2014 2013
carrying amount m m
trade receivables 8432 4227
cash and cash equivalents 1821 330
forward exchange contracts used for hedging
assets 53 22
10306 4579
financial statements pace plc annual report and accounts 2014 78
19 derivatives and other financial instruments continued
d credit risk continued
the maximum exposure to credit risk for receivables at the reporting date by geographic region was
2014 2013
carrying amount m m
domestic 1953 1219
eurozone countries 158 97
united states 5302 2277
other regions 1019 634
8432 4227
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 trade receivables at 31 december 2014 91 were within terms 2013 92 of the balance 5 were less than 30 days past due with the 
remaining amounts over 30 days due 2013 5 less than 30 days past due there were no material bad debt provisions deemed necessary 
against such balances in the current or preceding years
e liquidity risk
the group manages liquidity risk by maintaining adequate cash balances and banking facilities continuously monitoring forecast and actual cash 
flows and matching the maturity profiles of financial assets and liabilities
the following are the contractual maturities of financial liabilities including estimated interest payments and excluding the impact of netting arrangements
carrying contractual 6 months 6–12 1–2 2–3 3–4 4–5
amount cash flows or less months years years years years
m m m m m m m m
at 31 december 2014
nonderivative financial liabilities
trade and other payables within one year 9346 9346 9346 — — — — —
external borrowings 2752 2790 194 194 465 542 620 775
derivative financial liabilities
forward exchange contracts used for hedging
outflow — 984 905 79 — — — —
inflow 44 1028 950 78 — — — —
total 12142 12092 9495 195 465 542 620 775
at 31 december 2013
nonderivative financial liabilities
trade and other payables within one year 5671 5671 5671 — — — — —
external borrowings — — — — — — — —
derivative financial liabilities
forward exchange contracts used for hedging
outflow — 1451 952 499 — — — —
inflow 05 1454 960 494 — — — —
total 5676 5668 5663 05 — — — —
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 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 shortterm fluctuations on the group’s earnings the directors 
consider that a change of 100 basis points in interest rates during a twelve month period would have a 26 million impact on cash flows 2013 nil 
the group’s key foreign exchange exposures are in respect of the euro and sterling a 1 strengthening in the us dollar against these would have 
an adverse impact of nil 2013 10 million on the profit reported in the year ended 31 december 2014 and an adverse impact of 06m 
2013 58 million on equity
financial statements  notes
notes
continued pace plc annual report and accounts 2014 79
19 derivatives and other financial instruments continued
g capital management
capital risk management
the group and company manage their capital being the net assets base to ensure their ability to continue as a going concern and to maintain 
an optimal capital structure to reduce the cost of capital the capital structure of the group and company comprises equity attributable to equity 
holders of pace plc consisting of issued ordinary share capital reserves and retained earnings as disclosed in notes 21 22 and 24 and cash 
and cash equivalents and borrowings as disclosed in note 18
the group and company maintain or adjust their capital structure through the payment of dividends to shareholders through the progressive 
dividend policy introduced in 2009 issue of new shares and buyback of existing shares and issuing new borrowings or repaying existing borrowings
note 21 to the financial statements provide details regarding the company’s share capital and movements in the period there were no breaches 
of any requirements with regard to any relevant conditions imposed by either the ukla or the company’s articles of association during the periods 
under review
details of the company’s facilities are given in note 18 the facilities have been subject to certain financial performance covenants there have 
been no breaches of these covenants in the period under review
h fair value
fair value versus carrying amounts
the following table shows the carrying amounts and fair values of financial assets and financial liabilities including their levels in the fair value hierarchy 
carrying amount fair value
fair value other
– hedging loans and financial
instrument receivables liabilities total level 1 level 2 level 3
m m m m m m m
at 31 december 2014
financial assets measured at fair value
forward exchange contracts used for hedging 53 — — 53 — 53 — 
financial assets not measured at fair value
trade receivables — 8432 — 8432 — — — 
cash and cash equivalents — 1821 — 1821 — — — 
financial liabilities measured at fair value
forward exchange contracts used for hedging 09 — — 09 — 09 —
financial liabilities not measured at fair value
borrowings — 2752 — 2752 — — — 
trade payables — — 8254 8254 — — — 
44 7501 8254 709 — 44 —
at 31 december 2013
financial assets measured at fair value
forward exchange contracts used for hedging 05 — — 05 — 05 —
financial assets not measured at fair value
trade receivables — 4227 — 4227 — — —
cash and cash equivalents — 330 — 330 — — —
financial liabilities not measured at fair value
borrowings — — — — — — —
trade payables — — 4734 4734 — — — 
05 4557 4734 172 — 05 —
financial statements pace plc annual report and accounts 2014 80
19 derivatives and other financial instruments continued
h fair value continued
fair value hierarchy
the group’s financial instruments namely forward exchange contracts have been determined to represent level 2 instruments characterised by 
the existence of quoted prices unadjusted in active markets for identical assets or liabilities fair values are calculated by reference to valuations 
provided by financial institutions
i exchange rates
the following significant exchange rates applied during the year
average rate spot rate
2014 2013 2014 2013
euro 133 133 123 137
sterling 165 156 156 164
20 provisions
royalties
under negotiation warranties other total
group m m m m
at 31 december 2012 275 400 97 772
charge for the year 98 247 144 489
utilised 14 249 105 368
transfer — 01 — 01
exchange adjustments 10 02 16 28
at 31 december 2013 369 401 152 922
acquisitions — 47 359 406
charge for the year 157 345 64 566
utilised 71 152 338 561
transfer 47 35 — 12
unused amounts reversed — — 07 07
exchange adjustments 03 11 03 17
at 31 december 2014 499 595 227 1321
due within one year — 217 98 315
due after one year 499 378 129 1006
royalties
under negotiation warranties other total
company m m m m
at 31 december 2012 179 219 40 438
charge for the year 78 151 104 333
utilised 12 90 43 145
exchange adjustments 06 07 — 01 
at 31 december 2013 251 273 101 625
charge for the year 102 265 11 378
utilised 70 131 68 269
transfer 47 02 — 45
at 31 december 2014 330 405 44 779
due within one year — 142 — 142
due after one year 330 263 44 637
financial statements  notes
notes
continued pace plc annual report and accounts 2014 81
20 provisions continued
royalties under negotiation
provisions for royalty claims are recognised when it is considered more likely than not that an outflow of economic resources will be required to settle 
a claim that has resulted from the sale of a product allegedly using technology of a patent owner and the amount of the outflow can be reliably measured 
the directors have made provision for the potential royalty payable based on the latest information available which represents the best estimate of 
the expenditure required to settle the present obligation 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
other provisions
other provisions mainly relate to retirement and exceptional restructuring provisions within the group along with professional fees to be incurred 
in relation to the aurora acquisition and certain other provisions
warranty provisions
pace provides warranties for its products 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 are 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 five years of the balance sheet date
21 share capital
2014 2013
number m number m
allocated called up and fully paid
ordinary shares of 5 pence each 315067925 291 313942223 290
the ordinary share capital of pace plc is designated in sterling
during the year the company also allotted ordinary shares as follows
nominal value consideration
number 000 000
employee share option plan 620 pence 12902 1 13
employee share option plan 1280 pence 204827 17 432
employee share option plan 1920 pence 468 — 1
employee share option plan 1970 pence 203934 17 662
employee share option plan 855 pence 127261 10 179
employee share option plan 510 pence 80000 7 67
employee share option plan 5875 pence 75000 6 73
employee share option plan 750 pence 62500 5 77
employee share option plan 9775 pence 20000 2 32
employee performance option plan 50 pence 338810 28 —
1125702 93 1536
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 articles of association of the company may be amended by special resolution of the company’s shareholders
financial statements pace plc annual report and accounts 2014 82
21 share capital continued
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 certified 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 23 april 2015 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
there are no significant agreements to which the company is a party that may take effect alter or terminate upon a change of controls following 
a takeover bid other than in relation to i employee share plans and ii the company’s borrowings which would become repayable on a takeover 
being completed
the company’s articles of association provide that i all directors must stand for election at the first annual general meeting after having been appointed 
to the board and ii at each annual general meeting onethird of the directors who are subject to retirement by rotation must retire from office and 
may seek reelection the articles set out the procedure for determining the identity of the directors to retire at a particular annual general meeting
shares in the company are held in the pace plc employee benefit trust the 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 trust in respect of which the beneficial 
interest has not vested in any beneficiary provided that they are satisfied that to do so is in the beneficiaries’ interests the trustees have waived 
their right to vote in respect of any such shares held above 5
own shares held
at 31 december 2014 the pace plc employee benefit trust held 2229868 2013 2692189 shares in the company which cost 89 million 
2013 103 million these shares are held to satisfy options granted to employees
the amounts arising on settlement of share options from the employee share trust represent cash receipts from the exercise of relevant share options
details of the share options longterm incentive plans ltips and share awards agreed to be satisfied by the pace plc employee benefit trust 
are shown in note 27
22 share premium account
group and company m
at 31 december 2013 837
premium on allotments 14
at 31 december 2014 851
the shares allotted during the year are listed in note 21
23 merger and translation reserve
merger reserve
group and company m
at 31 december 2013 and 31 december 2014 1099
the merger reserve was created upon the acquisition of the stb and connectivity solutions business of royal philips electronics
translation reserve
group company
m m
at 31 december 2013 596 525
exchange differences on translating foreign operations 197 —
at 31 december 2014 793 525
the translation reserve represents the accumulated exchange differences arising from the impact of translation of subsidiaries with a functional 
currency other than us dollars
financial statements  notes
notes
continued pace plc annual report and accounts 2014 83
24 retained earnings
group m
at 31 december 2013 3842
profit for the year 1480
dividends to equity shareholders 187
employee share incentive charges 65
movement in employee share trusts 17
at 31 december 2014 5183
company m
at 31 december 2013 2949
profit for the year 225
dividends to equity shareholders 187
employee share incentive charges 65
movement in employee share trusts 17
at 31 december 2014 3035
25 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 225 million 2013 profit after tax of 608 million
26 capital commitments
2014 2013
m m
contracted but not provided for 18 07
27 employee benefits
pension plans
the group contributes to several defined contribution group personal pension plans which all uk executive directors and employees are entitled to join 
the total expense relating to these plans in the current year was 58 million 2013 46 million at 31 december 2014 contributions of nil 
2013 nil were outstanding
share based payments
the group operates various equitysettled share option schemes for certain employees which can be separated into two distinct categories
i share option plans
ii longterm incentive plans ltips and share awards
share option plans relate to sharesave schemes which have various exercise prices and are open to all employees 
ltips and share awards have been issued as part of the annual bonus scheme for senior managers and key employees and have different terms 
and conditions most notably a nil exercise price
the equitysettled share option schemes outstanding can be summarised as follows
number of ordinary shares subject to option
options agreed to be satisfied 
by the pace employee benefit trust
2014 2013 2014 2013
share option plans 4682008 6754903 1750829 3567404
ltips and share awards 9622154 10971458 9622154 10971458
total dilutive share awards 14304162 17726361 11372983 14538862
contingent share awards 600000 938810 — —
total share awards 14904162 18665171 11372983 14538862
financial statements pace plc annual report and accounts 2014 84
27 employee benefits continued
share based payments continued
total dilutive share awards differs from the dilutive weighted average number of shares in issue because although all of the performance share awards 
are dilutive only a proportion of the share options are dilutive based on their respective exercise price and the average share price for the period
the following tables reconcile the number of share awards outstanding and the weighted average exercise price waep for all share plans
share option plans ltips and share awards total
2014 number waep number waep number
outstanding at 1 january 2014 6754903 1564c 10971458 — 17726361
granted during the year 761548 5703c 3766760 — 4528308
exercised during the year 786892 1954c 814916 — 1601808
forfeited during the year 2047551 1994c 4301148 — 6348699
outstanding at 31 december 2014 4682008 2001c 9622154 — 14304162
exercisable at 31 december 2014 629276 1199c 27070 — 656346
share option plans ltips and share awards total
2013 number waep number waep number
outstanding at 1 january 2013 12725189 1711c 12939859 — 25665048
granted during the year 481326 3108c 3533720 — 4015046
exercised during the year 4205363 1472c 1605107 — 5810470
forfeited during the year 2246249 3002c 3897014 — 6143263
outstanding at 31 december 2013 6754903 1564c 10971458 — 17726361
exercisable at 31 december 2013 1018297 1226c 394437 — 1412734
of the share options exercised during the year none were issued by the pace plc employee benefit trust 2013 118000
share option plans – company
the company has granted options which are subsisting including directors’ options and contingent share awards in respect of the following 
presently unissued ordinary shares of 5 pence each
price per share
number of ordinary shares subject to option exercise period pence
1116474 1 june 2015 to 30 november 2015 620
199354 1 june 2016 to 30 november 2016 1920
75000 2 october 2009 to 1 october 2016 5875
216776 24 june 2011 to 23 june 2018 855
337500 11 march 2013 to 10 march 2019 750
324043 1 june 2017 to 30 november 2017 3560
419813 8 june 2015 to 4 september 2015 3380
50000 19 june 2016 to 18 june 2022 9175
24999 19 june 2015 to 18 june 2022 9175
100000 26 july 2015 to 25 july 2022 1355
55554 11 october 2015 to 10 october 2022 1600
11666 11 march 2016 to 10 march 2023 2294
2931179 
600000 31 may 2014 – contingent share award 50
3531179 
financial statements  notes
notes
continued pace plc annual report and accounts 2014 85
27 employee benefits continued
share option plans – employee benefits trust 
the pace employee benefits trust has agreed to satisfy options granted to employees including directors’ options over ordinary shares of 5 pence 
each as follows
price per share
number or ordinary shares subject to option exercise period pence
1650829 3 march 2015 to 15 december 2021 698
100000 14 march 2015 to 13 march 2022 910
1750829 
outstanding share options were as follows
weighted average
remaining
number at contractual life weighted average
range of exercise prices pence 31 december 2014 months exercise price
5875 pence – 75 pence 3179803 7864 111c
855 pence – 9175 pence 391775 6229 145c
1355 pence – 197 pence 366574 9697 281c
338 pence – 356 pence 743856 1130 570c
4682008 8417 200c
the weighted average exercise price of options granted in the period was 5703 cents 2013 3108 cents
the weighted average fair value at the measurement date of options granted in the year was 776 cents 2013 420 cents
the weighted average exercise price at the date of exercise for options exercised in the year was 1954 cents 2013 1472 cents
the weighted average share price during the year was 5928 cents 2013 4313 cents 
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 table below shows the assumptions 
used within the blackscholes model for share options that have been granted in the current and prior periods expectations of early exercise 
are incorporated into the model where appropriate
2014 2013
average share price cents 5610c 4320c
weighted average exercise price cents 5703c 3108c
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 sharebased payments is 65 million 2013 41 million which is comprised entirely of equity settled transactions
financial statements pace plc annual report and accounts 2014 86
financial statements  notes
27 employee benefits continued
ltips and share awards
the pace plc employee benefit trust has agreed to satisfy ltips and share awards made to employees under the international performance 
share plan performance share plan and deferred share bonus and share award plans as follows
number or ordinary shares subject to option exercise period
16400 26 february 2012 to 25 february 2020
7157 28 february 2013 to 27 february 2021
3513 29 february 2014 to 28 february 2022
3302266 14 march 2015 to 14 march 2022
22745 26 july 2015 to 25 july 2022
544710 21 march 2016 to 20 march 2023
1238602 21 march 2016 to 21 march 2023
338292 29 march 2015 to 21 march 2023
571989 29 march 2016 to 21 march 2023
9229 1 may 2015 to 21 march 2023
75000 1 may 2016 to 21 march 2023
189635 31 march 2016 to 14 april 2024
395530 31 march 2017 to 14 april 2024
1495000 14 april 2017 to 13 april 2024
366915 14 april 2017 to 13 april 2024
1023171 23 june 2017 to 22 june 2024
2000 26 june 2017 to 25 june 2017
20000 11 august 2017 to 10 august 2024 
9622154
the fair value of the psps and deferred bonus schemes is calculated by reference to the market price at the date of award the weighted average 
market share price for those awards made during the year was 693 2013 350
28 leasing commitments 
total amounts payable under noncancellable operating lease rentals are as follows
group company
2014 2013 2014 2013
m m m m
land and buildings
within one year 87 92 10 11
between two and five years 184 199 01 11
in five years or more 53 34 — —
324 325 11 22
notes
continued pace plc annual report and accounts 2014 87
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 consists of payments by the company for distribution engineering and 
administrative support services provided by pace americas inc pace france 2wire inc and pace micro technology india private limited 
total transactions of 13709 million were made in the year 2013 13963 million
the amounts due to and from these subsidiaries are shown within notes 16 and 17
transactions with key management personnel 
key management of the group is through the directors of the company the main transactions with these individuals are disclosed in the 
directors’ remuneration report on pages 35 to 43
of the sharebased payments charge of 65 million 2013 41 million made in the period 17 6 2013 298 relates to options granted to the directors
30 free cash flow and cash investment in acquisitions
2014 2013
m m
free cash flow
cash generated from operations 2916 3132
tax paid 115 238
purchase of property plant and equipment 260 216
development expenditure 662 529
net interest paid 36 59
other acquisition related cash flows 197 —
free cash flow 2040 2090
the acquisition related cash flows relate to nonrecurring and nonoperating cash flows associated with the aurora acquisition
2014 2013
m m
cash investment in acquisitions in the year
acquisition of subsidiaries net of cash acquired 2953 —
cash investment in acquisitions in the year 2953 —
31 reconciliation of underlying operating costs
2014 2013
m m
total administrative expenses 3516 3094
add back
 exceptional costs 73 122
 amortisation of other intangibles 529 426
 ias 38 credit  charge
  capitalisation 662 529
  amortisation 454 456
 aurora networks 696 —
underlying operating costs excluding aurora 2426 2619
financial statements pace plc annual report and accounts 2014 88
financial statements  notes
32 business combinations
on 6 january 2014 the group acquired 100 of the share capital of aurora networks inc a group of companies leading the development and 
manufacture of advanced nextgeneration optical transport and access network solutions for broadband networks that support the convergence 
of video data and voice applications for a cash consideration of 3235 million prior to the acquisition the group had no interest in the acquiree 
and an explanation of the rationale for the acquisition is set out in the 2013 annual report and accounts
in the period from the acquisition date to 31 december 2014 aurora networks inc contributed revenue of 2646 million and adjusted ebita 
of 474 million if the acquisition had occurred on 1 january 2014 the consolidated results would not be materially different 
details of the net assets acquired and goodwill are as follows
m
purchase consideration
headline consideration 3100
cash paid for tax benefits 130
working capital adjustment and other consideration 05
total cash consideration 3235
fair value of assets acquired see below 1818
goodwill 1417
other intangible assets
current and next generation technology 1080
customer relationships 300
1380
there was no contingent consideration as part of the acquisition
goodwill relates to the assembled workforce and expected synergies with the wider pace group 
the assets and liabilities arising from the acquisition are as follows
fair value
 book value adjustment fair value
m m m
property plant and equipment 69 — 69
other intangible assets — 1380 1380
deferred tax assets 197 75 272
inventories 629 200 429
trade and other receivables 557 — 557
cash and cash equivalents 326 — 326
deferred tax liabilities 16 483 499
trade and other payables 310 — 310
provisions 406 — 406
net assets acquired 1046 772 1818
inventories of 629 million at 6 january 2014 have been reduced by 200 million as a fair value adjustment was made within the measurement 
period to write down inventories to their recoverable amount
33 contingencies
currently there are claims against the group in which it is asserted that certain of the group’s products infringe third party patents claims for which 
a probable cash outflow has been determined have been provided based on the directors’ best estimate note 20 within the claims portfolio 
there are claims for which it is believed that the probability of a cash outflow is remote the directors believe that a cash outflow in relation to the 
remaining claims is more than remote but not probable this element of the portfolio includes claims where the counterparty has not submitted a 
monetary claim for damages claims that have only recently been received and claims that have not provided the group with sufficient information 
to determine if pace products are involved as a result it is not yet possible to reliably estimate the financial impact on the group any claim received 
by the group is subject to thorough scrutiny the group will vigorously negotiate and defend any claims involving pace products and based on its 
experience the amounts at which such claims are ultimately settled is unlikely to be material
34 post balance sheet events 
there are no significant or disclosable post balance sheet events
notes
continued five year record
year year year year year
ended ended ended ended ended
31 december 31 december 31 december 31 december 31 december
2014 2013 2012 2011 2010
m m m m m
revenue 26200 24692 24034 23093 20629
profit before tax 1757 1308 801 547 1102
adjusted ebita 2411 1936 1581 1414 1606
profit after tax 1480 967 584 388 773
basic eps 474c 312c 194c 132c 264c
basic adjusted eps 636c 443c 351c 297c 371c
total equity 6671 5470 4601 4071 3759
directors
all of victoria road saltaire bd18 3lf england
allan leighton  nonexecutive chairman
mike pulli   chief executive officer
mark shuttleworth  chief financial officer
patricia chapmanpincher nonexecutive director
john grant  nonexecutive director
amanda mesler  nonexecutive director
mike inglis  nonexecutive director
company secretary
anthony dixon
registered and head office
victoria road 
saltaire bd18 3lf 
england
registered number
01672847
auditors
kpmg llp
1 the embankment 
neville street 
leeds ls1 4dw
registrars
capita asset services
the registry 
34 beckenham road 
beckenham 
kent br3 4tu
stockbrokers
jefferies hoare govett
vintners place 
68 upper thames street 
london ec4v 3bj
jp morgan cazenove
25 bank street 
canary wharf 
london e14 5jp
shareholder information
annual general meeting 
the company’s annual general meeting will be held on 23 april 2015 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 asset services the registry 34 beckenham road beckenham kent br3 4tu or by telephone on 0871 664 0300 they also provide 
a range of online shareholder information services at wwwpacesharescom 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 could mean 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 if you would like any multiple 
accounts combined into one account please contact capita asset services 
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
shareholder information pace plc
victoria road 
saltaire 
bd18 3lf
tel 44 01274 532000 
fax 44 01274 532010
wwwpacecom
pace plc annual report and accounts 2014


Summary:
 pace plc annual report and accounts 2014 02
strategic report  at a glance
empowering innovation and growth 
for the paytv and broadband industries
pace is headquartered in saltaire uk 
with major offices in the us france 
brazil india australia and south africa 
and smaller offices close to our customers 
in all markets we serve
countries with offices
14
number of employees
2000
total stbs deployed
140m
new products launched in 2014
40
   
devices managed
34m
total optical nodes deployed
250k
 north america  16356m 62
 latin america 3732m 41
 europe 2912m 101
 rest of world 3200m 299
 settop boxes and media servers 20035m 12
 residential gateways 2397m 362
 software and services 1122m 14
 networks 2646m na
 pace americas  15616m 71
 pace international  7938m 01
 pace networks 2646m na
revenue 
by region
revenue by 
business unit
624
142
112
122
revenue 
by products
765
91
43
101
596
303
101
pace creates worldleading technologies products and services for the paytv and broadband industries 
leveraging our complete portfolio of media servers settop boxes gateways sophisticated software 
optical transport and access network solutions and highly specialised services support pace’s solutions 
empower customers to simply and costeffectively deliver and evolve digital services at the speed they 
want and in the way they want enabling them to build their success pace’s 30 years of leadership 
experience and expertise is recognised by a customer base including over 200 of the world’s leading 
paytv and broadband operators that spans the globe pace plc annual report and accounts 2014 03
our customers include
our portfolio
pace has an extensive portfolio of products and solutions that meet 
the diverse and demanding needs of paytv and broadband operators 
around the world
 r our eco service management and elements software platforms 
and supporting services are used by major operators across the 
globe to deliver secure and manage advanced services to millions 
of consumers
 r through our acquisition of aurora networks pace is now a leading 
developer and manufacturer of advanced nextgeneration optical 
transport and access network solutions for broadband networks 
enabling operators to costeffectively support their consumers’ 
constant demand for ever increasing bandwidth
 r within customer premise equipment pace is the global number 
one in media servers settop boxes stbs and advanced 
telco gateways
our customers
pace’s global customer base includes over 200 of the world’s leading 
operators in cable satellite telco iptv and terrestrial markets
 r serving 8 of the world’s top 10 paytv operators
 r serving the 1 satellite cable and telco operators in the usa
 r serving 8 of the top 10 paytv operators in latin america
solutions paytv broadband ott whole home apps service management
settop box
media server
gateway
superior hardware
service management
simplify service management 
eco service management 
manage assist selfservice
monitor dispatch  inquire 
eco
customer care 
next generation
call centre
operator customer premises
service delivery and content protection 
software that puts operators in control
elements software platform
service delivery platform userinterface framework 
settop box software gateway software conditional access and drm
networks 
deﬁning the network evolution
optical transport
solutions
access network
solutions
services consulting systems integration hosting
financial statements governance strategic report