pace plc annual report and accounts 2012
a world leader in digital 
and broadband technologies pace is a leading global developer of 
technology and products for paytv 
and broadcast service providers
overview
01 highlights
02 segments products and services
03 strategy
04 chairman’s statement
05 chief executive ofﬁcer’s review
09 chief financial ofﬁcer’s review
governance
12 board of directors
14 report of the directors
23 directors’ remuneration report
31 statement of directors’ responsibilities
32 independent auditors’ report
financial statements
34 consolidated income statement
35 consolidated statement of comprehensive income
36 consolidated balance sheet
37 company balance sheet
38 statements of changes in shareholders’ equity
39 consolidated statement of cash flows
40 company statement of cash flows
41 notes
76 directors secretary and advisers
77 five year record and shareholder information
pace is the world’s largest settop 
box and advanced residential 
gateway supplier through our work 
with over 160 of the world’s leading 
managed service operators annual report and accounts 2012 pace plc 01
overview
highlights 
financial highlights
24034m
revenue 
41 2011 23093m
158 1m
adjusted ebita
1
 
118  2011 1414m
66
return on sales
2
 
05ppt 2011 61
1063m
operating proﬁt 
preexceptionals
240  2011 857m
80 1m
proﬁt before tax 
464  2011 547m
35 1c
adjusted
3
 basic eps 
182  2011 297c
450c
full year proposed dividend 
per ordinary share
200  2011 375c
1827m
free cash ﬂow 
1745m  2011 82m
global revenue
north america
1318m
237
europe
402m
–121
latin america
37 4m
–202
rest of world
309m
–27
1  operating proﬁt before exceptional costs and amortisation of other intangibles
2   adjusted ebita as a per cent of sales is expressed as return on sales
3   adjusted eps is based on earnings before the posttax value of exceptional costs and amortisation of other intangibles annual report and accounts 2012 pace plc 02
overview
pace operates through strategic business units sbus of which pace americas and pace 
international are the primary business units
pace has a broad portfolio of technologies products and services that have been designed to enable 
operators to lead in the competitive and fastmoving broadcast and broadband markets
pace was reconﬁrmed as the market leader in paytv hardware and global number one in 
settop boxes
1
 and residential gateways
2

pace americas
1 442m
68
pace international
954m
01
other
8m
411
stb and media server
1826m
29
gateways
469m
83
software  services
108m
76
segments products and services
1  by volume 2011 ims research the world market for digital settop boxes  idtvs – 2012 edition
2 by value 2011 infonetics broadband cpe and subscribers report 2q2012 annual report and accounts 2012 pace plc 03
overview
strategy
pace serves paytv and telco operators globally
pace’s strategic objectives
pace’s strategic review concluded that
 — pace’s paytv customers have robust businesses but need to innovate to maintain their position 
in an increasingly competitive market
 — pace has the products and capabilities to meet our customers’ needs for innovation
 — through delivering these products pace will change the shape of our business and improve 
the quality of our earnings
 — pace has a clear implementation plan to deliver our strategic objectives and which targets up to 9 
operating proﬁt margin in the medium term
grow a broader platform across hardware software and services
threeyear strategic intent
fiveyear strategic intent
1 
transform core 
economics
2 
 build on our position 
as world leader in 
paytv hardware 3 
widen out into 
software services 
and integrated solutions
signiﬁcantly improve 
efﬁciency of our core 
business through
 — opex efﬁciency improvement
 — cost of goods sold improvement
 — balance sheet and working 
capital improvement
build on our position 
as a world leading paytv 
hardware company across
 — settop box solutions
 — media server solutions
 — gateway solutions
widen out into software 
services and integrated 
solutions focusing on
 — next generation content security
 — integrated solutions
 — proactive customer care
 — build on software and service platforms to become 
a leading provider of user experience and customer 
management solutions
 — leverage leadingedge position across hardware 
and software to drive next wave of innovation annual report and accounts 2012 pace plc 04
overview
chairman’s statement
dear shareholder
following a challenging 2011 2012 has been a good year for pace 
we have stabilised the business made very good progress on 
our strategic plan and delivered strong ﬁnancial results in doing 
so we have created the platform for pace to become a “great 
technology company”
at the start of 2012 the group laid out a clear plan and i am 
pleased to say that it has delivered on all aspects of this plan 
under mike pulli and the new executive management team’s 
leadership many of whom have come from within pace we have 
a new sense of accountability across the business underpinned 
by robust management processes and systems and a strong 
ﬁnancial discipline
the group has delivered improved operating proﬁts through both 
topline growth and a focus on operating efﬁciency which has 
enabled pace to signiﬁcantly reduce net debt reducing risk in 
the business and increasing our strategic ﬂexibility
the strong operational performance in 2012 and the momentum 
we take into 2013 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 306 cents 
per share giving a full year dividend of 450 cents per share 
a 200 increase on 2011 the dividend reﬂects the improved 
cash generation of the business and pace will look to continue 
to pay a progressive dividend off this new rebased level
“ 2012 has been a good year for pace 
we have stabilised the business made 
very good progress on our strategic plan 
and delivered strong ﬁnancial results”
the group remains relentlessly focused on the execution of 
its primary objectives as outlined in the strategic review we 
communicated to the market in november 2011 they are
 — transform core economics improve our operating 
performance and leverage scale
 — paytv hardware leadership build on our position as a 
world leading settop box residential gateway and media 
server company and
 — widen out in software services and integrated solutions 
accelerate “widening out” by pursuing opportunities to provide 
software and services assets for current and new customers
pace’s core strengths are its engineering excellence 
complemented by strong customer focus and delivery capabilities 
this is demonstrated through our market leadership position 
in the development and largescale deployment of advanced 
technologies such as media servers by major north american 
operators such as directv and comcast and software and 
services wins at tier one operators across the world an area 
we continue to signiﬁcantly invest in
we have only just started on the delivery of our longterm plans 
and still have a huge amount to do nevertheless we remain 
conﬁdent that the continued successful execution of the strategic 
plan will enable pace to achieve an operating margin target 
of around 9 in the next two to three years as well as increase 
proﬁts generated by software services and integrated solutions 
this translates to enhanced quality of earnings and signiﬁcant 
incremental shareholder value
if you have any comments on my statement 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
5 march 2013 annual report and accounts 2012 pace plc 05
overview
chief executive ofﬁcer’s review
“ we have delivered a strong set of 
ﬁnancial results made good progress 
on our strategic plan and laid the 
foundation for continued improvement 
in operating performance over the next 
few years”
the strategic review we undertook in 2011 highlighted that we 
operate in sustainable and proﬁtable markets where we have 
differentiated capabilities however the group must execute on 
its three primary objectives to take advantage of the opportunities 
for improving both the level and quality of its earnings the group 
is focused on these objectives and has made good progress 
both in delivering strong results in 2012 and paving the way 
for improvement in 2013 and beyond
this progress is reﬂected in 2012 revenues of 24034 million 
up 41 on 2011 and adjusted ebita of 1581 million equivalent 
to 66 of revenues up 05ppt on 2011 prior to the impact 
of hard disk drive hdd supply disruption pace delivered 
an adjusted ebita margin of 73 up 09ppt on 2011
strategic plan
transform core economics
focus on operating efﬁciency has delivered sustainable savings 
in the year and pace is well underway in the transformation of its 
supply chain that will deliver tangible beneﬁts in 2013 and beyond
 — operating expenses preias 38 adjustments reduced by 
330 million 106 in 2012 this was achieved through the 
scaling down of corporate resources and a reorganisation of 
the americas and international business units whilst continuing 
to invest in the growth areas of software and services as such 
research and development expenditure as a percentage of 
underlying administrative spend increased by 24ppts to 57 0 
2011 546 a trend we intend to continue
summary
 the group focused on its strategic 
objectives and has made good progress 
both in delivering strong results in 2012 
and paving the way for improvement 
in 2013 and beyond
 the focus on operating efﬁciency through 
our transform core economics strategy has 
delivered sustainable savings
 pace has remained at the forefront 
of technological change with advanced 
media server hardware supplied into 
key customers
 good progress has been made in growing 
our software and services revenue 
with important wins underpinning further 
growth in 2013 annual report and accounts 2012 pace plc 06
overview
continued
chief executive ofﬁcer’s review
strategic plan continued
transform core economics continued
 — the disruption to hdd supply resulting from ﬂooding in 
thailand was a major challenge in 2012 however through 
keen operational focus and working closely with suppliers 
and customers the impact of this issue was contained 
within the ﬁrst half of the year with an adverse impact of 
768 million to revenue and 231 million to operating proﬁt 
well below initial expectations 
 — signiﬁcant progress has been made in the rationalisation and 
transformation of our supply chain in h2 2012 we selected 
two core electronics manufacturing services ems partners 
and aim to consolidate our manufacturing footprint around 
these by the end of h1 2013
 — we continue to make progress in the improvement and 
reduction of our approved vendor list avl optimised 
component selection has ensured that new platforms utilise 
fewer component stock keeping units skus and leveraging 
our ems partner relationships has enabled pace to reduce 
the number of vendors it buys from by over 12
 — inventory controls have been strengthened inventory is now 
tightly aligned to conﬁrmed future revenues and the mix of 
stock is improved with component stock reduced and faster 
turning ﬁnished goods increased during the year stock 
turns improved by 192 from 2011
 — cash generation was strong throughout the year free cash 
ﬂow was 1827 million 2011 82 million reﬂecting lower 
capital expenditure and realignment of working capital this 
has enabled pace to signiﬁcantly reduce its net debt which 
is now less than 1 x net debtadjusted ebitda
1

paytv hardware leadership
pace was reconﬁrmed as the market leader in paytv hardware 
global number one in settop boxes
2 
and residential gateways
3
 
and has maintained its position at the forefront of technological 
development with the launch and deployment of media server 
platforms at directv and comcast a number of media server 
wins across the world and continued demand for our core 
settop box stb and gateway platforms
 — stb and media server revenues were up 29 to 
18260 million in 2012 driven largely by the high demand 
for media servers in h2 for both directv’s genie™ advanced 
wholehome hd dvr and the xg1 for comcast’s new x1 
service we expect this technology trend to continue into 
2013 and we recently announced the approval for production 
of directv’s next generation hr44 genie™ media server 
and c41 mini genie™ client device
 — the move to media servers and whole home solutions is 
starting to move beyond north america and pace has achieved 
a number of key wins in europe asiapaciﬁc and latin america 
that will be deployed in 2013 and 2014 including foxtel telenet 
and get tv in norway
 — building on our global partnership with tivo that was 
announced in h1 2012 pace has been undertaking ﬁeld 
trials with an integrated solution consisting of tivo software 
and pace stbs and gateways and is actively pursuing 
signiﬁcant worldwide opportunities during 2013
 — gateways revenues were up 83 to 4694 million in 2012 
key wins in the year included mts the fourth largest telco 
in canada
widen out in software services and integrated solutions
we have achieved a number of key wins and deployments across 
all areas of our software and services offerings and have a strong 
pipeline into next year revenues in this area increased 76 to 
1080 million in 2012 and we expect further growth in 2013 
 — the pace elements software platform continues to gain 
signiﬁcant traction as part of an advanced integrated solution 
with a number of wins including sky new zealand and foxtel
 — pace elements is also a key part of our integrated solutions 
for emerging markets we have a number of operators 
deployed with this solution pace hardware software and 
latens conditional access system in india and have an 
encouraging pipeline in southern asia central eastern 
europe and cis
 — the pace cms software that was obtained through the 
2wire acquisition has been rebranded as the eco service 
management suite to reﬂect the evolving offering and 
simplify the marketing message during the year there 
were a number of signiﬁcant wins including bskyb telstra 
australia’s leading telecommunications and information 
services company and on brasil our ﬁrst eco win in 
the key market of brazil the eco platform is currently 
supporting our customers to manage nearly 25 million 
devices across the world
 — the latens softwarebased conditional access and digital 
rights management drm business made good headway 
with a 680 growth in the number of subscribers the product 
is deployed to on both pace and other vendors’ stb hardware
1 adjusted ebitda is adjusted ebita after adding back depreciation
2  by volume 2011 ims research the world market for digital settop boxes  idtvs – 2012 edition
3 by value 2011 infonetics broadband cpe and subscribers report 2q2012 annual report and accounts 2012 pace plc 07
business performance
pace’s markets have remained resilient during the year 
with paytv continuing to show growth despite difﬁcult global 
economic conditions and perceived disruptive threats from new 
overthetop ott market entrants overall in the markets in 
which pace operates digital paytv subscribers are expected 
to grow at c6 compound annual growth rate cagr 
between 2012 and 2016
4
 
a major development this year has been the emergence of 
the media server product as the market evolves to a more 
sophisticated digital device in the home pace is uniquely placed 
to support this technology upgrade cycle 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” this product category will evolve to become 
the main hub of the home enabling any data connectivity 
video broadband home automation etc around the home 
with both operatorprovided and consumerpurchased devices 
pace was recently identiﬁed as a market leader in this product 
category by industry analysts ihs screen digest a position 
which is forecast to continue to at least 2016
5

north america
north america is the largest most advanced and most proﬁtable 
market for digital paytv and broadband technology in the world 
with over 110 million paytv subscribers and close to 120 million 
broadband connections
6
 we believe the digital paytv market 
in north america will continue to see low singledigit annual 
growth in subscribers for the foreseeable future
pace is the only vendor to 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 tier two cable and telco operators in both 
the usa and canada
total revenues in north america increased by 237 to 
13176 million in 2012 2011 10651 million driven largely by 
strong demand from directv and comcast for media server 
products in h2 these 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
gateway revenues increased by 145 to 4487 million reﬂecting 
the continuing demand for high performance residential gateways 
from telcos and internet service providers isps to effectively 
deliver high quality tripleplay services
software and services revenues in north america increased by 7 2 
to 839 million this revenue is primarily comprised of customer care 
eco service management software and professional services
latin america
the latin america latam market is a large diverse and fast 
growing market within which pace serves satellite cable 
iptv and hybrid operators across the region with brazil 
mexico and argentina the key markets
the overall market has expanded signiﬁcantly over the last few 
years and continues to display strong subscriber growth with a 
predicted 16 cagr from 2012 to 2016
7
 this growth is led by 
a number of factors including greenﬁeld markets deregulation 
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 to support analogue to digital transition high 
deﬁnition hd continues to grow to meet growing consumer 
expectations and operators are starting to develop highend 
personal video recorders pvrs and media servers for roll out 
in 2013 and beyond
pace achieved a doubledigit increase in proﬁts in latam despite 
revenues being down by 202 to 37 44 million 201 1 4690 million 
pace reduced supply of low end “zapper” stbs with a resultant 
loss of revenue but has beneﬁted from focusing on highend 
products and integrated hardware and software solutions
pace’s business in latam continues to diversify pace is now 
providing product to eight of the ten largest paytv providers in 
the region and is making good progress in the sale and delivery 
of integrated solutions comprising pace hardware and software 
as well as gateways and next generation media server products 
the company remains conﬁdent that latam offers strong revenues 
and proﬁtability and is strategically well positioned in key markets 
and customers in the region
europe
europe remains a fragmented and highly customerspeciﬁc 
territory for pace revenues in europe were down by 121 
to 4024 million 2011 4577 million hdd supply disruption 
had an impact in this region but the decrease was mainly due 
to a reduced win rate of new products in 2011 which has adversely 
affected revenue in 2012 sales performance is improving and 
we have achieved key wins in new and existing customers
singledigit growth is predicted in the underlying european market
8
 
however we expect signiﬁcant growth in the media server area 
of the market as operators in europe follow the innovation of 
north american operators pace has been awarded the media 
server business for both telenet the largest cable operator in 
belgium partowned by liberty global and get tv in norway
4 6 ihs television intelligence service 2013 
5 ihs screen digest multimedia home gateways the future of the digital home 2013
7 8 ihs television intelligence service 2013 annual report and accounts 2012 pace plc 08
continued
overview
chief executive ofﬁcer’s review
business performance continued
europe continued
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 “fast following” 
markets in middle east and africa and the fast growing indian 
market revenues in rest of world are down 27 to 3090 million 
2011 3175 million this decrease was primarily due to hdd 
supply disruption in h1 as a number of operators delayed large 
marketing campaigns due to the higher input prices of the supply 
constrained components 
australia and new zealand are traditionally strong markets for 
pace in h1 2012 the company launched its ﬁrst advanced 
integrated solution with sky new zealand in h2 2012 foxtel 
the largest paytv operator in australia selected a pace 
solution consisting of pace elements software and pace media 
server hardware to deliver their next generation subscription 
tv service the integrated whole home solution will enable 
foxtel’s subscribers to consume discover and manage their 
viewing experience on any screen and from any location
india is a key growth market for pace as the country experiences 
large paytv subscriber growth and the transition from analogue 
to digital progresses in the cable sector during the year pace 
secured deals with a number of operators for its integrated solution 
for cable which combines stb hardware elements software 
platform and latens conditional access system
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
board changes
on 6 september 2012 we welcomed amanda mesler to the board 
as a new nonexecutive director
mike inglis will be retiring from his role as a nonexecutive director 
on the board at the annual general meeting on 24 april 2013
2013 outlook
pace has made considerable progress in 2012 but there remains 
further opportunity in 2013 to develop and improve the performance 
of the company we have a strong management team that is 
working well together and have a relentless focus on the execution 
of the strategic plan 
the paytv market that the company serves remains resilient 
and the demand for our products and services continues to 
be encouraging next generation media server products are 
performing strongly in the us market where technology upgrade 
is driving revenue growth in 2013 we will start to roll out these 
products to other operators in north america and other regions 
in addition as the group continues to develop its software 
services and integrated solutions offerings we are seeing increased 
opportunities for these assets in all markets that pace serves
going into 2013 the group has a clear plan and good line 
of sight to making further progress
mike pulli
chief executive ofﬁcer
5 march 2013 annual report and accounts 2012 pace plc 09
chief financial ofﬁcer’s review
overview
“ signiﬁcant progress has been 
made and the ﬁnancial position 
of the company is much improved 
this progress is reﬂected in the 41 
increase in revenue to 24034 million 
an 118 increase in adjusted ebita 
to 1581 million and a substantial 
reduction in net debt”
summary
 proﬁt after tax increased 505 to 
584 million 2011 388 million through 
both top line growth and improved 
operating efﬁciencies
 free cash ﬂow generation has been 
very strong in 2012 at 1827 million and 
contributed to a 492 reduction in net 
debt which reduced in the year by 492 
to 1633 million
 the board has recommended a ﬁnal dividend 
of 306 cents per share 2011 250 cents 
per share giving a total dividend for the 
year of 450 cents per share 2011 375 
cents per share an increase of 200 in 
line with the progressive dividend policy 
introduced in 2009
proﬁtability challenges experienced in 2011 have been 
addressed through selfhelp initiatives driven by our transform 
core economics strategy a tight focus on operating efﬁciency 
delivered sustainable savings in the year and actions are well 
underway in the transformation of our supply chain which 
will deliver tangible beneﬁts in 2013 and beyond
free cash ﬂow generation has been very strong in 2012 at 
1827 million 1156 of adjusted ebita which includes the 
beneﬁt of robust management and realignment of working 
capital which reduced by 390 to 1111 million as a result 
of the strong cash ﬂow net debt reduced in the year by 492 
to 1633 million at 31 december 2012
group trading results
fy 2012 fy 2011
m m
revenue 24034 23093
gross proﬁt 4330 4433
gross margin  180 192
administrative expenses 2749 3019
adjusted ebita 1581 1414
operating margin 66 61
exceptional costs 125 127
amortisation of other intangibles 518 557
net ﬁnance expense 137 183
proﬁt before tax 801 547
tax charge 217 159
proﬁt after tax 584 388
gross margin  prehdd 184 193
operating margin prehdd 73 64
 preexceptional costs and amortisation of other intangibles
group revenue of 24034 million 2011 23093 million 
increased by 41 driven by strong demand for next generation 
media server product in the second half of the year revenue 
growth was achieved despite a 768 million impact of hdd 
supply disruption 2011 363 million impact annual report and accounts 2012 pace plc 10
overview
continued
chief financial ofﬁcer’s review
group trading results continued
gross proﬁt of 4330 million 2011 4433 million is down 23 
hdd supply disruption impacted gross proﬁt and adjusted ebita 
by 231 million in 2012 2011 89 million gross margin 
percentage during the period prior to hdd supply disruption 
was 184 an underlying decrease of 09ppt on 2011 reﬂecting 
a change in revenue mix towards products for our largest 
customers in h2 2012
administrative expenses preexceptional costs and amortisation of 
other intangibles decreased by 27 0 million 89 to 2749 million 
2011 3019 million the underlying decrease excluding the 
impact of ias 38 accounting adjustments is a decrease of 
330 million 106 to 2780 million 2011 3110 million 
considerable progress has been made in improving operating 
efﬁciency across the company during the year the cost saving 
reﬂects a scaling down of corporate resources and a reorganisation 
of the americas and international business units research 
and development expenditure as a percentage of underlying 
administrative spend increased by 24ppts to 57 0 2011 546 
as resource was focused on development areas
adjusted ebita was 1581 million 2011 1414 million 
an operating margin of 66 against 61 in 2011
exceptional costs of 125 million 2011 127 million relate to the 
change of directors 14 million restructuring costs in the americas 
and international strategic business units sbus and corporate 
7 6 million and the aborted proposal to acquire the motorola 
home business from google 35 million
amortisation of other intangibles primarily reﬂecting the annual 
charge for intangible assets acquired in 2010 was 518 million 
2011 557 million
segmental analysis
the group operates through sbus pace americas and pace 
international are deemed by the board to represent operating 
segments under ifrs 8 with revenues and ebita as follows
restated
fy 2012 fy 2011
m m
revenue
pace americas 14419 13506
pace international 9536 9531
other 79 56
total revenue 24034 23093
adjusted ebita
pace americas 1440 157 9
pace international 723 603
other 582 768
total adjusted ebita 1581 1414
movements in revenue are described in the chief executive 
ofﬁcer’s review on pages 5 to 8 although not wholly 
consistent revenues in north america belong primarily to the 
americas sbu revenues in europe and rest of world belong 
largely to the international sbu and revenues in latam belong 
to both the americas and international sbus
the performance of pace international improved with ﬂat revenue 
despite disruption to the hdd supply chain in h1 and operating 
margin improved from 63 to 76 pace americas’ revenue 
increased by 913 million 68 in 2012 reﬂecting strong demand 
for next generation media server products and operating margin 
declined from 117 to 100
other amounts include central and unallocated costs and other 
immaterial sbus which are operating segments that are allowed 
to be aggregated under ifrs 8
the reduction in other loss of 186 million 242 relates 
primarily to cost savings realised through corporate restructuring
finance costs
net ﬁnancing costs of 137 million 2011 183 million reﬂect 
a reduction in average net debt during the period
proﬁt before tax
proﬁt before tax was 801 million 2011 547 million 
an increase of 254 million 464 on 2011
taxation
the tax charge of 217 million 2011 159 million results from 
the full year effective tax rate of 271 2011 291
the rate reduction reﬂects lower corporate taxes in the uk
proﬁt after tax
proﬁt after tax was 584 million 2011 388 million an increase 
of 196 million 505 on 2011
earnings per share
basic earnings per share eps was 194 cents 2011 132 cents 
an increase of 470 adjusted basic eps which removes the 
tax effected impact of exceptional costs and amortisation of 
other intangibles to reﬂect underlying performance is 351 cents 
2011 297 cents an increase of 182
balance sheet
intangible development expenditure assets increased by 
24 million 2011 93 million due to continued investment 
in product development
tangible ﬁxed assets increased in the period as capital 
expenditure of 226 million was offset by the depreciation 
charge of 210 million and disposal of assets and exchange 
adjustments totalling 18 million the 226 million capital 
expenditure reﬂected a reduction of 189 million from 2011 
and is a more normal level for the company 
a ﬁnal payment of 157 million was made in 2012 as deferred 
consideration for latens annual report and accounts 2012 pace plc 11
working capital
net working capital was reduced by 710 million 390 in the 
period as commercial terms with suppliers were realigned to 
match pace’s working capital cycle inventory control processes 
strengthened and a more focused approach was taken to cash 
collection from our customers
inventory increased by 321 million 214 to 1821 million 
during 2012 however the mix of stock has signiﬁcantly improved 
with component stock reduced and faster turning ﬁnished goods 
increased increased inventory is required to meet strong 
anticipated revenue in the ﬁrst quarter of 2013 average stock 
turn in the year was 87 times against 73 times in 2011
debtor days were reduced by eight days to 53 days at 
31 december 2012 this contributed c68 million to the full 
year cash ﬂow overall debtor balances increased reﬂecting 
the increased level of trade in q4 2012 compared to q4 2011
creditor days were increased from 73 days to 83 days at 
31 december 2012 contributing a oneoff beneﬁt to cash ﬂow 
of c58 million
debt
net debt of 1633 million 31 december 2011 3217 million 
reduced by 1584 million 492 in 2012 during the year two 
scheduled facility repayment instalments were paid of 37 5 million 
each in june and december 2012 the remaining facility continues 
to be repaid through payments of 375 million every six months 
with a ﬁnal payment of 750 million due on 31 march 2014
a key target for the group is to reduce the balance sheet 
leverage calculated as net debt divided by adjusted ebitda 
over the preceding twelve months at 31 december 2012 
this was 09 times a substantial improvement from the 
position at 31 december 2011 
liquidity and cash ﬂows
a key performance measure for the group is free cash ﬂow which 
was 1827 million 2011 82 million and represented 1020 of 
adjusted ebitda 2011 48 cash outﬂows from interest payable 
net of interest received were 111 million 2011 136 million 
cash invested in acquisitions in the form of deferred consideration 
paid was 157 million 2011 64 million cash spent on 
exceptional costs was 179 million 2011 143 million
the board is conﬁdent that the company will continue to be 
strongly cash ﬂow positive in 2013 and that the company’s 
committed bank facilities are more than sufﬁcient to meet its 
short to mediumterm funding needs
foreign currency
in the period approximately 76 of the group’s revenues were 
denominated in usd 10 in euros 13 in brazilian real and 
1 in sterling 
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
 — revenue recognition
 —impairment
 —taxation
 — provisions
 — intangible assets and
 — hedge accounting
details of accounting policies and estimates can be found 
within the notes to the financial statements
dividend
the board has recommended a ﬁnal dividend of 306 cents per 
share 2011 250 cents per share an increase of 224 in line 
with the progressive dividend policy introduced in 2009 the full 
year proposed dividend increases 200 to 450 cents per share 
2011 375 cents per share the increase reﬂects the board’s 
conﬁdence in the outlook for the company and its improving 
ﬁnancial position pace will look to continue to pay a progressive 
dividend off this new rebased level
dividends will be paid in sterling equivalent to 2029 pence per 
share this is based on an exchange rate of £  1508 being 
the closing rate applicable on 4 march 2013 the date on which 
the board resolved to recommend the ﬁnal dividend the 
proposed dividend will be payable on 5 july 2013 to 
shareholders on the register on 7 june 2013
roddy murray
chief financial ofﬁcer
5 march 2013 annual report and accounts 2012 pace plc 12
governance
board of directors
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 
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 
allan leighton 
chairman
allan was appointed a nonexecutive director in may 2011 
and became chairman on 21 june 2011 he is currently 
chairman of matalan pandora as ofﬁce retail group limited 
and music magpiecouk and nonexecutive director of 
bighams limited previously he has held a wide range of public 
and private company roles including ceo at asda chairman 
of royal mail and lastminutecom and nonexecutive director 
of british sky broadcasting plc dyson applications 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
roddy murray
chief financial ofﬁcer
roddy was appointed an executive director on 25 february 2012 
and became chief financial ofﬁcer on 6 march 2012 roddy was 
previously cfo of the bss group plc and cfo of moss bros 
group plc prior to that he held a number of ﬁnancial roles in 
mackays stores united distillers and british airways he qualiﬁed 
as a chartered accountant at the scottish institute before joining 
price waterhouse he holds a bachelor’s degree in administration 
from dundee university annual report and accounts 2012 pace plc 13
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 
bearingpoint consulting formerly kpmg consulting working in 
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 asiapaciﬁc 
market manager
pat chapmanpincher
nonexecutive director
pat was appointed a nonexecutive director in february 2005 
and became senior independent director in may 2006 she has 
over 35 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 a board adviser 
to the british standards institute and a ceo mentor with 
merryck and co
mike inglis
nonexecutive director
mike was appointed a nonexecutive director in july 2008 
he is currently 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 and 
a member of the chartered institute of marketing
john grant
nonexecutive director
john was appointed a nonexecutive director in august 2008 
john spent his executive career in a variety of senior international 
roles within the automotive industry and other engineering 
businesses he was chief executive of ascot plc between 1997 
and 2000 prior to that he was group finance director of 
lucas industries plc subsequently lucas varity plc between 
1992 and 1996 he previously held a number of senior positions 
within ford motor company in europe and the usa john is a 
nonexecutive director of melrose plc mhp sa and wolfson 
microelectronics plc annual report and accounts 2012 pace plc 14
governance
report of the directors
the directors present their report to shareholders on pages 14 
to 22 together with the audited financial statements for the year 
ended 31 december 2012 year prior ﬁnancial period year 
ended 31 december 2011
principal activities
the group’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 systems integration and customer 
care centres
business and ﬁnancial results
the information that fulﬁls the requirements of the business 
review and management report including a review of the group’s 
activities developments and the ﬁnancial results for the year and 
the key ﬁnancial performance indicators relevant to the business 
of the company principally revenue gross margin  adjusted 
ebita proﬁt before tax operating margin free cash ﬂow stock 
turns debtor days and net debt can be found in the chief 
executive ofﬁcer’s review and the chief financial ofﬁcer’s 
review on pages 5 to 11 the aforementioned information is 
incorporated in this report by reference there is no information 
which falls to be disclosed pursuant to section 417 5 of the 
companies act 2006 other than as noted in the risks and 
uncertainties section below
risks and uncertainties
the following are the key risks and uncertainties relevant to the 
business of the group
customers and markets
orders placed by the group’s paytv and telecoms customers 
are typically large oneoff orders for delivery over a number of 
months with supplemental orders for additional volumes as the 
eventual deployment of the stb or gateways can be unpredictable 
revenues can be volatile the difﬁculty in predicting the group’s 
business ﬂow and its risks can be exacerbated by a number of 
other factors including for example the development process 
for an advanced stb which can take over twelve months 
the group works on long lead times eg four months or more 
for component supply and manufacture typical of the industry 
in the usa market in particular customers’ ﬁrm order lead times 
may be less than the component lead times there are third party 
delivery risks for example difﬁculties in the delivery of components 
or software code and the ﬁnal order for manufacture and ﬁrm 
contractual commitment is usually dependent on product 
approvals and acceptance both from the operator and sometimes 
from third parties the group is also exposed to the industry wide 
inherent risk of supply chain failure the group has put in place 
summary
 the group is controlled through the 
board of directors which comprises two 
executive and ﬁve nonexecutive directors
 the directors recommend the payment 
of a ﬁnal dividend of 306 cents per 
ordinary share giving a total dividend of 
450 cents per share for the full year
 substantial ongoing programme of research 
and development of new products spending 
1586 million in the year
“ the group’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 
stb and gateway customers” annual report and accounts 2012 pace plc 15
risks and uncertainties continued
customers and markets continued
procedures to monitor the ﬁnancial and operating strength 
of key suppliers in addition it utilises dual or multi source 
suppliers where possible to mitigate this risk
product liability claims
in common with many companies in the industry the group is 
exposed to the risk of product liability claims made by customers 
or affected third parties should the group’s products not fulﬁl 
the terms of the contracts under which they are sold the group 
has in place quality control and other operational procedures 
to mitigate this risk
credit risk
the finance function of the group obtains reports from 
third party sources in respect of the credit worthiness of key 
customers and suppliers and sets individual credit limits as 
appropriate the company previously maintained a credit 
insurance policy which provided cover over certain debtors 
where it is was considered economically viable subject to 
excesses the company reviewed this policy in february 2013 
and determined that the insurance coverage was no longer 
economically viable based on the availability of such insurance 
the amount of excess required and ﬁnancial cost of the premium 
exposure to credit risk is monitored on an ongoing basis by 
the finance function credit limits for each customer are set 
based on an evaluation of ﬁnancial strength the company’s 
customers are by and large proﬁtable and cash positive no bad 
debt of any signiﬁcance has been incurred in the last ﬁve years 
deposit investments are generally undertaken only in liquid 
securities and with counterparties that have appropriate 
credit ratings
royalties
the group’s products incorporate third party technology 
usually under licence inadvertent actions may expose the 
group to the risk of infringing third party intellectual property 
rights potential claims can be submitted many years after 
a product has been deployed
regulatory
the group is subject to a broad range of laws regulations and 
standards and remains exposed to changes in the regulatory 
environment including potential modiﬁcations to import duty 
regimes and legislation relevant to the group’s products and 
services it is pace’s policy to require that all its subsidiaries 
comply with applicable laws regulations and standards
currency risks
the standard “industry currency” is the us dollar with the majority 
of components and manufacturing capacity purchased in this 
currency however due to part of the group’s revenues being 
in sterling and euros the group is exposed to the risk of foreign 
currency movements to manage this risk the group’s treasury 
policy is progressively to cover cash ﬂows when these are 
sufﬁciently certain and to seek price variations through contractual 
mechanisms where signiﬁcant currency movements occur
financial results
the consolidated income statement for the year is set out on 
page 34 the proﬁt before tax was 801 million 2011 547 million 
and the proﬁt before tax interest exceptional items and amortisation 
of other intangibles was 1581 million 2011 1414 million
dividend
the directors recommend the payment of a ﬁnal dividend 
of 306 cents per ordinary share 2011 250 cents to be paid 
on 5 july 2013 to shareholders on the register at the close 
of business on 7 june 2013 an interim dividend of 144 cents 
per ordinary share was paid during the year 2011 125 cents
dividends will be paid in sterling equivalent to 2029 pence per 
ordinary share this is based on an exchange rate of £  1508 
being the rate applicable on 4 march 2013 
share capital
details of the company’s share capital including changes for the 
year and the rights attaching to the ordinary shares are contained 
in note 21 and are incorporated in this report by reference
signiﬁcant shareholdings
the company has been notiﬁed of the following signiﬁcant shareholdings as at 4 march 2013
number  of issued
of shares share capital
prudential plc group of companies 47751869 1534
schroders plc 30843371 991
norges bank 20827865 672
david hood and related family trusts 16117539 520
blackrock inc 15643678 503
henderson investment management 14931083 480
capital research and management company 13689478 442
multiﬂight ltd 10000000 322
 owned and controlled by david hood annual report and accounts 2012 pace plc 16
governance
continued
report of the directors
directors
the names of the current directors of the company are shown 
on pages 12 and 13 other than as described on pages 12 and 13 
in respect of roddy murray and amanda mesler all those listed 
held ofﬁce throughout the year
during the year stuart hall retired 6 march 2012 and 
david mckinney retired 6 january 2012 also held ofﬁce 
as directors
all the directors will retire at the forthcoming annual general 
meeting of the company and other than mike inglis 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 
amanda mesler having been appointed by the board subsequent 
to the last annual general meeting will hold ofﬁce until the 
forthcoming annual general meeting and will then offer herself 
for election at that meeting mike inglis will retire at the annual 
general meeting but will not offer himself for reelection since 
he will be participating in a round the world sailing race later this 
year details of the executive directors’ service contracts and the 
nonexecutive directors’ letters of appointment are disclosed 
in the remuneration report on pages 25 and 26
payment to suppliers
it is the policy of the group to agree terms and conditions for its 
business transactions with suppliers which are varied from time 
to time payment is made in accordance with those terms subject 
to the other terms and conditions being met by the supplier 
the group does not follow any code or standard on payment 
practice creditor days at the end of the period for the group 
were 83 days 31 december 2011 73 days
research and development
the directors regard it as fundamental to the future success 
of the group to engage in a substantial ongoing programme 
of research and development of new products spending 
1586 million in the year 2011 1697 million and charging 
1554 million 2011 1606 million to the income statement 
during the year following the treatment under ias 38
donations
during the period the group donated 145784 2011 150746 
to charitable causes no political donations were made further 
details of the charitable and communityrelated activities of the 
group are given on pages 20 and 21
corporate governance
as referred to on page 25 the company granted an 
appointment share award to allan leighton on his appointment 
as nonexecutive chairman save in respect of this appointment 
share award the directors believe that the company has 
complied throughout the period 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 control and that there is an ongoing process 
for identifying evaluating and managing the signiﬁcant risks 
faced by the company
board of directors
the group is controlled through the board of directors which 
comprises 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 12 
and 13 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 independent on his appointment as required by the uk 
corporate governance code in addition the board has 
designated pat chapmanpincher 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 historically 
directors have submitted themselves for reelection at least once 
every three years and now each of them 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 has a formal schedule of matters speciﬁcally 
reserved to it and normally meets at least eight times each year 
it is responsible for overall group strategy acquisition and 
divestment policy approval of major capital expenditure projects 
and consideration of signiﬁcant ﬁnancing matters it reviews 
the strategic direction of the group and meets with other 
senior executives 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 will consider appointing an independent 
facilitator for the evaluation process at least once every three years annual report and accounts 2012 pace plc 17
board committees
the board has established the following committees each 
of which has written terms of reference specifying its authority 
and duties and copies of which are publicly available on the 
company’s website wwwpacecom
the audit  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 page 18 
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 the two executive 
directors together with the following senior executives
 — anthony dixon general counsel and company secretary
 — jill ezard director of human resources
 — shane mccarthy president pace international
 — tim o’loughlin president pace americas
the remuneration committee is comprised of allan leighton 
and independent designated nonexecutive directors john grant 
mike inglis amanda mesler and pat chapmanpincher who is 
the chairman of the committee the committee is responsible 
for setting the remuneration of the executive directors and 
other members of the executive committee including making 
recommendations regarding the grant of share 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
the nominations 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 nominations 
committee meets at least once a year or as required 
external search consultants were appointed by the committee 
in connection with the appointment of roddy murray and 
amanda mesler
directors’ remuneration
the remuneration committee reviews the performance of 
the executive directors and other members of the executive 
committee as a prelude to recommending their annual 
remuneration bonus awards and 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 remuneration report of the directors to shareholders is 
set out on pages 23 to 30 and includes the remuneration policy 
of the company and details of directors’ incentive payments 
and the related performance criteria
authority to purchase own shares
at the annual general meeting in 2012 the company was 
authorised by shareholders to purchase up to 45774165 of 
its own ordinary shares representing 15 of its issued share 
capital as at march 2012 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 2013 and a resolution to renew it will be 
proposed at that meeting
board and committee meetings attendance
audit  risk remuneration nominations
board committee committee committee
total meetings 8 3 3 1
allan leighton 8 — 3 1
mike pulli 8 — — —
roddy murray 7 — — —
john grant 8 3 3 1
mike inglis 8 3 3 1
pat chapmanpincher 8 3 3 1
amanda mesler 3 1 — —
  appointed february 2012 and attended all meetings since appointment
  appointed september 2012 and attended all meetings since appointment annual report and accounts 2012 pace plc 18
governance
accountability and audit
a detailed review of the performance of the group’s business 
is contained in the chief executive ofﬁcer’s review and the 
chief financial ofﬁcer’s review these statements together 
with the chairman’s statement and the report of the directors 
are intended to present a balanced assessment of the group’s 
position and prospects the directors’ responsibility for the 
financial statements is described on page 31 and the 
responsibilities of the auditors are described on page 32
audit  risk committee
during the year the committee undertook the annual review of 
its terms of reference the review focused primarily on extending 
the committee’s role in relation to the areas of the uk corporate 
governance code revised in 2012 and applicable to the current 
ﬁnancial year following this review the terms of reference were 
revised in relation to review of audit services tenders and review 
of the ﬁnancial reports and statements 
the audit  risk committee is responsible for
 — 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
 — reviewing the company’s internal ﬁnancial and operational 
control and risk management systems
 — monitoring the effectiveness of the company’s internal audit 
function and reviewing its material ﬁndings
 — reviewing accounting policies accounting treatments 
and disclosures in the financial statements to ensure clarity 
and completeness such that shareholders may understand 
strategic aims and risks of the business of the group
 — 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 and
 — reviewing the effectiveness of the company’s 
whistleblowing procedures
internal audit
the company’s head of risk assurance damien wilkinson 
who has direct access to the audit  risk committee primarily 
through the chairman of the committee manages an internal 
audit function provided by 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 
head of risk assurance 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
the audit  risk committee has satisﬁed itself that the external 
auditors kpmg audit plc kpmg acted independently of the 
group previous appointments of kpmg and the extent of other 
work undertaken by it were considered interalia in this regard
it is the audit  risk committee’s opinion that there were no 
limitations imposed by management on kpmg whilst performing 
their duties during the review period
the audit  risk 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 
2012 ﬁnancial year
a formal framework governs the process through which the 
group’s auditors are considered to render nonaudit services 
the audit  risk 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 ﬁnancial year
internal controls
overall responsibility for the group’s system of internal control 
rests with the board the board has delegated certain of its 
powers to the audit  risk committee to review the effectiveness 
of the systems of control and to receive reports from the auditors 
internal and external and from the management relating to the 
interim and annual accounts and the control systems in use 
throughout the group
during the year and up to the date of this report the board 
carried out reviews of the effectiveness of the group’s internal 
controls the reviews were undertaken in accordance with the 
financial reporting council’s guidance under the following 
headings and were aimed at clearly identifying the systems 
already in place and the action plans necessary to improve 
areas of control weakness
the control environment
subject to those powers and limits of authority reserved by 
the board and to the group policies and guidelines they have 
established the conduct of the business of the group is delegated 
within a clearly deﬁned organisational structure and approved 
level of authority the board has also adopted a code of business 
ethics which has been incorporated into the employee handbook 
issued to all employees
continued
report of the directors annual report and accounts 2012 pace plc 19
risk assessment
the directors and senior managers are responsible for identifying 
and monitoring sources of potential business risk and ﬁnancial 
risk and for taking such preventative and protective actions 
as they consider necessary to manage such risks effectively 
during the year a risk assessment review of the group’s business 
has been conducted by the head of risk assurance and bdo 
acting as internal auditors in conjunction with members of the 
executive committee the board has received and considered 
this review as part of an annual risk and control assessment
the group’s systems are designed to identify and manage 
rather than eliminate signiﬁcant business risks including the 
risk of failure to achieve business objectives but can provide 
only reasonable not absolute assurance against material 
misstatement or loss business risks are identiﬁed evaluated 
and managed through functional line management reporting to 
divisional meetings executive committee meetings and board 
meetings as appropriate each member of the executive 
committee is required to highlight and report on any signiﬁcant 
business risks identiﬁed within their sphere of responsibility
the key business risks associated with the timely completion 
of longterm development projects and ongoing business 
risks including alleged infringement of third party intellectual 
property rights and supply chain interruption are managed by 
crossfunctional teams of senior employees business continuity 
plans addressing physical risks to the group’s development 
sites and maintenance of it services are maintained the group 
has adopted customer account teams cats grouped within 
sbus so as to focus the business on customer needs the senior 
managers within the cats also monitor the ﬁnancial and business 
risks including competitor risks associated with the delivery 
of agreed plans reviewing such matters at business review 
meetings held on a regular basis and attended by members 
of the executive committee 
financial control and information systems
the group’s strategic direction is reviewed regularly by the 
board and plans budgets and performance targets are reviewed 
and approved at least annually directors receive monthly 
summaries of ﬁnancial results which compare actual performance 
with targets together with detailed management reports that 
identify the reasons for variances and the progress achieved 
business planning documents are revised on a regular basis 
in line with actual and expected performance a review of the 
consolidated financial statements is completed by the centralised 
group finance function to ensure that the ﬁnancial position 
and results of the group are appropriately reﬂected in the 
consolidated accounts
“ the group’s strategic direction 
is reviewed regularly by the 
board and plans budgets 
and performance targets are 
reviewed and approved 
at least annually” annual report and accounts 2012 pace plc 20
governance
continued
report of the directors
control procedures
financial control procedures have been developed for all of 
the main business functions and in relation to the company’s 
ﬁnancial reporting process and the group’s process for the 
preparation of consolidated accounts and have been documented 
in a procedures manual authorisation limits for purchases and 
capital expenditure are speciﬁed and procedures are in place 
for minimising exposure to potential weaknesses in the receipt 
handling and despatch of goods the group’s main premises 
have received accreditation for bsi iso 9001 2000
monitoring systems
monitoring of the internal control systems is carried out by 
the head of risk assurance in conjunction with the internal 
auditors bdo
although no system of internal ﬁnancial control can provide 
absolute assurance against material misstatement or loss 
the group’s systems are designed to provide the directors 
with reasonable assurance that transactions are authorised 
and completely and accurately recorded that assets are 
safeguarded and that material errors irregularities and actions 
contrary to group policies and directions are either prevented 
or promptly discovered
going concern
the group has borrowing facilities in place until march 2014 
at 5 march 2013 these are in the form of a 150 million term loan 
which is subject to repayment through instalments of 37 5 million 
each due every six months plus a ﬁnal payment of 75 million and 
a 150 million revolver credit facility these facilities are subject 
to ﬁnancial performance covenants which the group currently 
complies with
the board’s assessment of the group and company’s ability to 
continue as a going concern has taken into account the effect 
of the current economic climate current market position and 
the level of borrowings in the year the principal risks that the 
group is challenged with have been set out in the risks and 
uncertainties section of this report along with how the directors 
intend to mitigate those risks
the board has prepared a ﬁnancial and working capital 
forecast that is based upon trading assumptions and other 
mediumterm plans 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
corporate social responsibility
employment policies
the directors recognise the importance of the group’s employees 
to its success and future development and are committed to 
providing an environment that will attract motivate and reward 
high quality employees the group continues to invest in a range of 
internal and external initiatives to promote employee development
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 distributed electronically
the group welcomes applications for employment from all 
sectors of the community and promotes equality of opportunity 
in employment regardless of age sex sexual orientation disability 
or ethnic origin it is the group’s policy that training career 
development and promotion opportunities should be available 
to all employees in the event that an employee becomes 
disabled the group makes reasonable adjustments where 
any aspect of premises or working practices puts such a 
disabled employee at a substantial disadvantage compared 
with a nondisabled employee
health and safety
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 americas west 
and americas east france brazil and india have adopted 
similar policies each division incorporates where appropriate 
their ergonomic risk assessments the group’s businesses in 
india the uk americas west and americas east provide 
training for first aid fire evacuation and fire wardens 
americas west undertakes earthquake training and americas 
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
the number of workplace accidents during the year for saltaire 
was 6 outside the uk there were 16 accidents in the americas 
west and americas east operations 3 in france 6 in brazil 
and none in india none of these accidents was regarded as 
serious by the relevant local health and safety committee 
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 annual report and accounts 2012 pace plc 21
corporate social responsibility continued
charitable and community support continued
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 145784 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 lead sponsor of the ahead partnership’s 
education strand of business engagement in the uk’s west 
yorkshire region this has enabled the ahead partnership to 
develop and roll out their make the grade business education 
partnership model in the west yorkshire region and during 
the year pace adopted a threeyear sponsorship commitment 
in this regard 
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
responsible business
during the year the company set environmental targets and achieved the following outcomes in respect of its chosen measures 
of environmental impact
start date end date objective target status
jan12 dec12 management system performance maintain iso 14001 in current certiﬁed 
pace sites – ensuring zero major 
nonconformances mncs
target achieved – 
0 mncs
jan12 dec12 improve overall performance ftse cdp index drive to increase 
performance by 5
target achieved – 
79
jan12 dec13 reduce the carbon emissions 
associated with pace facilities
rebaseline overall co
2
e performance
reduce by 5 by december 2013
ontarget
new baseline 
established
jan12 dec12 reduce the environmental impact 
of pace products
90 of the hardware design of pace stbs 
to comply with or exceed current energy 
performance standards
target achieved
all stbs designed in 2012 to exceed 
a score of 80 in the dfe programme
target achieved – 
85
5 reduction in average co
2
  
stb emissions
2 reduction 
achieved
jan12 dec12 achieve iso 14001 accreditation across 
newly acquired businesses
pace’s iso 14001 footprint to include pace 
west san jose and pace brazil manaus
ongoing – pace 
brazil h1 2013
the company has maintained certiﬁcation to the international management standard iso 14001 at its saltaire boca raton 
bangalore paris tempe and san antonio sites 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 programme 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
full details are available on httpwwwpacecomuniversalresponsiblebusiness annual report and accounts 2012 pace plc 22
governance
corporate social responsibility continued
supply chain
pace is a member of the electronic industry citizen coalition 
eicc and applies the eicc code of conduct in its business 
a programme of assessment and auditing is maintained at 
the regular business review meetings held with the group’s 
principal suppliers 
auditors
kpmg held ofﬁce as auditors during the year the audit  
risk committee reviews the independence and objectivity of 
the auditors considering whether taken as a whole the various 
relationships if any between the group and the auditors impair 
or appear to impair the auditors’ judgement or independence 
the committee was satisﬁed throughout the year that the 
objectivity and independence of kpmg was not in any way 
impaired by either the nature of the nonaudit related services 
undertaken during the year the level of the nonaudit fees 
charged or any other fact or circumstances
having considered the results of the committee’s work 
the board is recommending the reappointment of kpmg 
as auditors a resolution for the reappointment of kpmg 
will be proposed at the forthcoming annual general meeting
each of the directors who held ofﬁce at the date of approval of 
this report of the directors conﬁrms that so far as they are aware 
there is no relevant audit information of which the company’s 
auditors are unaware and the directors have each taken all 
the steps that they ought to have taken as a director to make 
themselves aware of any relevant audit information and to 
establish that the company’s auditors are aware of that information
relations with shareholders
the board has continued to establish and maintain relationships 
with institutional shareholders and communicates with investors 
through the group’s website wwwpacecom a programme 
of meetings with institutional shareholders is in place at which 
institutional shareholders are offered the opportunity to meet 
with nonexecutive directors and analyst presentations are made 
following announcement of the interim and annual results 
shareholders are welcome to participate at the annual general 
meeting at which the board will be available for questions
annual general meeting
the annual general meeting of the company will be held 
on 24 april 2013 at the ofﬁces of the company at salts mill 
victoria road saltaire west yorkshire bd18 3lf full details 
of the business to be transacted at the meeting will be set 
out in the notice of annual general meeting
responsibility statement of the directors
a statement of the responsibilities of the directors is contained 
on page 31 the directors whose names appear on pages 12 
and 13 conﬁrm that to the best of their knowledge
 — the financial statements prepared in accordance with the 
applicable set of accounting standards give a true and fair 
view of the assets liabilities ﬁnancial position and proﬁt or 
loss of the company and the undertakings included in the 
consolidation taken as a whole and 
 — the report of the directors includes a fair review of the 
development and performance of the business and the 
position of the company and the undertakings included 
in the consolidation taken as a whole together with the 
description of the principal risks and uncertainties that 
they face 
by order of the board
anthony j dixon
company secretary
5 march 2013
continued
report of the directors annual report and accounts 2012 pace plc 23
directors’ remuneration report
governance
the directors present their report to shareholders on pages 23 
to 30 regarding remuneration matters in respect of the year 
ended 31 december 2012
remuneration committee
the remuneration committee the committee is responsible 
for setting the individual remuneration of the executive directors 
and other members of the executive committee within the 
framework of the remuneration policy described below which 
is set by the board
the directors who were members of the committee during the 
year were pat chapmanpincher chairman of the committee 
allan leighton john grant and mike inglis amanda mesler 
was appointed to the committee in january 2013 for guidance 
the committee makes use of surveys of executive pay and 
knowledge of market rates the ceo and director of hr also 
attended remuneration committee meetings during the year 
by invitation and provided advice to the committee to enable it 
to reach informed decisions no director was present when their 
remuneration was being discussed the committee was assisted 
in its consideration of remuneration matters by kepler associates 
who were appointed by the committee kepler associates 
provided no other services to the group in the year pinsent 
masons llp legal advisers to the company also advised the 
committee regarding certain equity incentive related issues
remuneration policy
the board believes that the remuneration packages of the 
executive directors should encourage them to drive longterm 
shareholder value the market particularly in the us is very 
competitive for high quality talent when setting remuneration 
to attract and retain talent the board takes account of the external 
market and group and individual performance it is our intention 
to reward success the policy is for a signiﬁcant proportion 
of executive directors’ total remuneration to be capable of being 
earned from variable performancebased incentives through 
annual bonuses and sharebased incentives the objective of this 
policy is to provide rewards and incentives for success more 
than half of an executive director’s potential remuneration is 
variable and can only be earned by good corporate performance
the board’s policy in relation to nonexecutive directors continues 
to be to pay fees that are competitive with the fees paid by 
comparable quoted companies nonexecutive directors’ fees 
are determined by the board as a whole within the limits set out 
in the company’s articles of association nonexecutive directors 
are not eligible for performance bonuses or pension contributions 
and do not participate in the equity incentive plans save in respect 
of allan leighton’s appointment share award which was a 
oneoff exception to the policy nonexecutive remuneration 
is reviewed annually
summary
 the board believes that the remuneration 
packages of the executive directors 
should encourage them to drive longterm 
shareholder value
“ the remuneration committee 
the committee is responsible for 
setting the individual remuneration 
of the executive directors and 
other members of the executive 
committee within the framework 
of the remuneration policy 
which is set by the board” annual report and accounts 2012 pace plc 24
governance
continued
directors’ remuneration report
salary
basic salary for each executive director is determined by the 
committee taking into account the performance of the individual 
and information from independent sources on external market 
salary levels for comparable jobs with a view to salaries being 
set around the median to upper quartile level for comparable 
companies in setting senior executives’ salaries the committee 
also takes into account pay and employment conditions in the 
group as a whole salary is generally reviewed at the commencement 
of each ﬁnancial year although there was a review for all employees 
and increases applied across the group there were no increases 
in salaries of the executive directors for 2013 the salary of 
mike pulli was ﬁxed at 750000 per annum upon his appointment 
as ceo in december 2011 and the salary of roddy murray 
was ﬁxed at £325000 us dollar amount 514898 upon his 
appointment in february 2012 these are their current salaries
performance bonus
the company established a nonpensionable performancerelated 
bonus plan for the executive directors and other key members 
of management for the year which was based on the successful 
achievement of corporate and individual objectives the corporate 
objectives were linked to the key drivers of value creation for 
shareholders and the key measure therefore was the proﬁtability 
of the group for the full ﬁnancial year achievement of the 2012 
bonus was dependent on the group’s ebita before certain 
exceptional items exceeding 146 million with the capacity to earn 
additional bonus increments upon achievement of higher proﬁt 
targets up to a ceiling of 187 million in addition a number of 
individual personal objectives were set for each director and 
manager which were aligned with the objectives of the group 
for the year the maximum normal bonus achievable by the 
executive directors in the event that all corporate and individual 
targets were met was 150 of basic annual salary with onethird 
of any bonus outcome achieved being deferred into shares in the 
company for a period of two years under the group deferred 
share bonus plan the committee retained a discretion to 
reduce the bonus otherwise payable by up to 50 based on 
their assessment of the management of the company’s cash 
position during the year
in respect of the 2012 ﬁnancial year the committee reviewed 
the executive bonus structure with its remuneration advisers 
the committee and the board believed that it in view of the 
situation of the company at the beginning of 2012 and the 
new management team there should be a higher incentive for 
performance that signiﬁcantly improved the operating performance 
of the company the outcome of this review was a revised bonus 
structure which allowed the committee to enhance normal 
bonus outcomes achieved under the group ebita targets 
and individual objectives described above up to the maximum 
of 225 of salary but only if a positive bonus outcome is ﬁrst 
achieved under the normal group ebita target and individual 
objectives potential maximum bonus outcomes are capped 
at 225 of base salary and onethird of all bonus outcomes 
achieved up to 150 of base salary deferred into shares for 
two years with deferral also applying on these terms to any 
bonus outcomes achieved between 150 and 225 of base 
salary in respect of 2012 the committee awarded an enhanced 
bonus to mike pulli taking his overall annual bonus up to the 
maximum level of 225 of salary and an enhanced bonus of 
100000 shares representing approximately 71 of salary to 
roddy murray based on the cash management performance of 
the business and net debt reduction during the year each of 
these enhanced bonus awards is deferred into shares for a 
longer deferred period of three years 
this outline structure for annual bonus and award of deferred 
shares has been maintained in respect of the 2013 ﬁnancial year 
with individual limits based on multiples of salary also maintained
beneﬁts in kind
each ukbased executive director is entitled to beneﬁts such 
as the provision of a fully expensed company car plus fuel 
or cash alternative private medical insurance permanent 
health insurance life insurance and where applicable relocation 
assistance mike pulli has equivalent beneﬁts to the extent 
consistent with us labour market practice
pension contributions
in the year ended 31 december 2012 contributions were paid 
into the executive directors’ pension plans at rates determined 
by the board contributions have continued to be paid during 
the current year at the rate of 15 of each ukbased executive 
director’s basic salary the group does not operate any deﬁned 
beneﬁt plans
performance share plans
following the approval of shareholders at the 2009 agm a new 
performance share plan psp was introduced with all group 
employees including executive directors eligible to participate 
the maximum award is 100 of salary under the psp  employees 
receive a conditional right to receive shares for no cost which 
will normally vest after three years subject to continued 
employment and the achievement of stretching performance 
conditions where granted in the form of nilcost options 
they may be exercised up until the tenth anniversary of grant 
subject to the rules of the psp
psp awards granted in and prior to 2011 will vest subject 
to the achievement of threeyear targets based on cumulative 
proﬁt before tax pbt for the group as set out in note 3 to the 
directors’ share options table on page 29 psp awards made in 
2009 vested in full during 2012 but psp awards made in 2010 
failed to reach minimum vesting criteria and 0 vested during 
the year awards made to employees including executive directors 
were based on threeyear group adjusted ebita the cumulative 
group adjusted ebita targets that apply to the awards made in 
2012 are set out in note 3 to the directors’ share options table on 
page 29
cumulative ebita targets are again proposed for 2013 awards 
with cumulative ebita being measured over the three ﬁnancial 
years 2013–2015 for these purposes ebita and previous pbt  annual report and accounts 2012 pace plc 25
performance share plans continued
targets will be adjusted to exclude the amortisation of other 
intangibles exceptional items and other items that the 
committee determines to be appropriate to ensure it reﬂects 
underlying longterm performance the use of ebita targets for 
2013 psp awards was considered to be appropriate as it aligns 
the focus of pace senior executives on a key measure of ﬁnancial 
performance which is easily understood highly visible internally 
and externally and which is regularly monitored and reported
following the general meeting of the company held on 
18 october 2010 shareholders approved the adoption of a new 
performance share plan the international performance share 
plan ipsp the ipsp follows closely the terms of the psp 
however executive directors may not participate
share option plans
at present the executive directors may participate in two share 
option plans
 — a standard hmrc approved allemployee sharesave plan or an 
equivalent sharesave plan available for us employees and 
 — the company’s 2005 discretionary share option plans 
hmrc approved and unapproved plans 
in 2012 executive directors were granted sharesave options 
and roddy murray also received option grants under the 2005 
discretionary share option plans details of the performance 
conditions applying to all outstanding share options held by the 
executive directors including options granted in 2012 are set out 
in the footnotes to the directors’ share options table on page 29
the maximum award of options to any employee pursuant to the 
hmrc approved plan is £30000 the maximum award of options 
under the unapproved plan to any employee in each year is 200 
of salary or in exceptional circumstances as determined by the 
committee 400 of salary option awards are targeted at the 
company’s most senior executives and are based on a ﬁxed number 
of options subject always to the discretion of the committee to 
utilise other award criteria in exceptional circumstances option 
awards vest subject to real eps growth as noted on page 29 
the committee believes eps targets to be appropriate to enhance 
alignment of the senior executives with shareholder interests 
whilst still maintaining focus on proﬁtability
share award contracts
as part of the terms on which allan leighton was appointed he 
agreed to purchase 310000 of pace shares and the company 
agreed to match this personal investment on a twoforone basis 
that will vest on the third anniversary of his appointment which 
occurred on 31 may 2011 an additional award of 600000 
pace shares was made at the same time and will vest dependent 
on share price performance over a fouryear period 25 of this 
award will vest at a share price of 145 pence with full vesting at 
190 pence both awards are subject to the shares being retained 
until at least the ﬁfth anniversary of appointment the awards will 
normally lapse on cessation of the ofﬁce within three years on a 
change of control the awards will vest with vesting of the share 
price related awards dependent on share price performance vesting 
may also occur on certain other corporate events the maximum 
number of shares awarded under this arrangement is 938810 shares 
the committee recognises that such awards are unusual as 
discussed with shareholders in advance of the appointment and 
following last year’s directors’ remuneration report the decision 
reﬂected allan’s willingness to make a signiﬁcant personal investment 
in the company and the need to secure his unique experience at 
a time when the business was facing a number of challenges the 
committee considers the award is aligned with shareholder interests 
in that it is linked to share price performance and the options and 
awards made to executive directors are made by reference to 
different performance criteria ebita and eps eliminating in 
the view of the committee any potential conﬂict of interest 
in march 2010 the remuneration committee agreed to make 
an individual award of contingent shares the “2010 share award” 
to mike pulli at a time when he was not a director of pace plc 
equivalent to 1 x annual salary 171480 ordinary shares 
vesting of the 2010 share award was dependent on achievement 
of budget by pace americas in each of 2010 and 2011 ﬁnancial 
years vesting was achieved in full on 15 march 2012 and 
particulars of this award are contained in the table on page 27
minimum shareholding
the committee operates individual shareholding target 
requirements for members of the executive committee 
including 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 approximately 100 of the executive’s annual salary and 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 achieved the required 
minimum shareholding during the year
service contracts
company policy is that executive directors’ notice periods 
should not exceed one year each of the executive directors has 
a service contract with the company each of these agreements 
is terminable by the company on twelve months’ prior written 
notice or by the relevant director on not less than six months’ prior 
written notice at the option of the company each agreement 
may be terminated forthwith subject to the company paying 
a sum equivalent to twelve months’ salary beneﬁts and 
pension contributions 
it is the company’s policy to honour its obligations with regard 
to directors’ service agreements and where the employment of 
a director is terminated in accordance with the aforementioned 
contractual process the company will pay the sum speciﬁed in 
the relevant service agreement as payable or otherwise pay fair 
and reasonable compensation annual report and accounts 2012 pace plc 26
governance
continued
directors’ remuneration report
service contracts continued
the service agreement of mike pulli with pace americas inc 
became effective on 13 november 2003 was amended on 
26 october 2004 and was most recently amended by decision 
of the committee to reﬂect his appointment as ceo and new 
terms as outlined previously but varied to reﬂect usa practice 
and custom on 14 december 2011 the service agreement 
of roddy murray became effective on 23 february 2012 
save for the notice periods referred to in the previous paragraph 
these contracts have no unexpired term
each of the nonexecutive directors is appointed under a letter 
of appointment which is terminable at any time by the company 
without contractual notice where notice is not given termination is 
generally subject to payment of an amount equal to three months’ 
directors’ fees each of the directors and certain ofﬁcers of 
subsidiaries of the company has a letter of indemnity issued 
by the company which provides an indemnity in respect 
of liabilities incurred in the course of their ofﬁce to the extent 
permitted by the company’s articles of association and the 
provisions of the companies act
copies of the service contracts of the executive directors and 
the letters of appointment of the nonexecutive directors together 
with the share award contracts and letters of indemnity referred 
to above are available for inspection during normal business 
hours saturdays sundays and public holidays excepted 
at the registered ofﬁce of the company
the company maintains directors’ and ofﬁcers’ liability insurance 
in respect of senior employees and ofﬁcers of the group including 
the directors the consent of the board is required in the event that 
an executive director wishes to accept an external appointment 
it has been the practice of the company to permit a director to 
retain nonexecutive fees arising from any such appointment 
but during the year none of the current executive directors held 
such external appointments
the auditors are required to report on the information disclosed 
below and on pages 26 to 30
directors’ remuneration
total directors’ remuneration in respect of qualifying services 
for the year ended 31 december 2012 was as follows
2012 2011
000 000
fees 504 532
salaries beneﬁtsinkind 
and termination payments 2448 2792
performancerelated bonuses 960 24
pension contributions 416 219
4328 3567
the remuneration of individual directors in respect of qualifying 
services for the year ended 31 december 2012 is set out in the 
table below
salaries 
fees and total pension
beneﬁts performance termination remuneration contributions
in kind bonus payment 2012 2011 2012 2011
000 000 000 000 000 000 000
executive directors
mike pulli 768 617 — 1385 59 233 5
david mckinney 10 — 522 532 512 76 73
stuart hall 98 — 616 714 527 45 59
roddy murray 434 343 — 777 — 62 —
1310 960 1138 3408 1098 416 137
nonexecutive directors
allan leighton 257 — — 257 146 — —
pat chapmanpincher 79 — — 79 77 — —
john grant 79 — — 79 77 — —
mike inglis 67 — — 67 65 — —
amanda mesler 22 — — 22 — — —
1814 960 1138 3912 1463 416 137
 remuneration referable only to the period of the ﬁnancial year from date of appointment or up to retirement from the board
  figures relate to the cash element of the annual performancerelated bonus the following additional amounts were approved under the terms of the annual performancerelated 
bonus plan but will be deferred into shares of the company for a period of two years under the terms of the group deferred share bonus plan and normally subject to forfeiture if the 
director leaves the company during the period mike pulli 308471 and roddy murray 176713 
  an enhanced bonus has been approved and will be deferred into shares of the company for a period of three years under the terms of the group deferred share bonus plan 
mike pulli 762187 and roddy murray 100000 shares annual report and accounts 2012 pace plc 27
directors’ interests in shares and share options
the interests of directors holding ofﬁce at the year end and those of their immediate families in the ordinary share capital 
of the company at 31 december 2012 and at the beginning of the year are set out below
31 december 2012 shares 1 january 2012 shares
under under
non option non option
beneﬁcial beneﬁcial award beneﬁcial beneﬁcial award
allan leighton 169405 — 938810 169405 — 938810
mike pulli 438702 — 3474895 109028 — 3270138
roddy murray 100000 — 1087600 —— —
pat chapmanpincher 15551—— 15551 — —
john grant 65000 — — 65000 — —
mike inglis 25344 — — 25344 — —
amanda mesler ——— —— —
there were no changes in the directors’ interests in the ordinary share capital of the company between 31 december 2012 
and 4 march 2013
directors’ share options
details of the options andor contingent awards over the ordinary shares of 5 pence each in the company held by the directors 
who held ofﬁce during the year were as follows
at 31 number of optionsawards at 31 vesting period
december december exercise
notes 2011 granted exercised lapsed 2012 price from to
mike pulli
2010 share award 171480 — 171480 — — 00p 150312 150312
2005 unapproved plan 2 177614 — — — 177614 855p 240611 230618
2005 unapproved plan 2 250000——— 250000 750p 110312 100319
2005 unapproved plan 2 250000——— 250000 1767p 080313 07 0320
2005 unapproved plan 2 250000——— 250000 1535p 040414 030421
2005 unapproved plan 2 1395275 — — — 1395275 6975p 151214 141221
deferred share bonus 214350 — 214350 — — 00p 260212 260212
deferred share bonus 120474 — — — 120474 00p 280213 280213
deferred share bonus — 182098 — — 182098 00p 280214 280214
performance share plan 3117898 —117898 — — 00p 050512 050512
performance share plan 3 139654 — — — 139654 00p 080313 080313
performance share plan 3 181061 — — — 181061 00p 040414 040414
performance share plan 3 — 523519 — — 523519 00p 140315 140315
us sharesave plan 2332 — — 2332 — 1360p 040612 070912
us sharesave plan — 5200 — — 5200 580p 030613 060913 annual report and accounts 2012 pace plc 28
governance
directors’ share options continued
at 31 number of options at 31 vesting period
december december
notes 2011 granted exercised lapsed 2012 price from to
roddy murray
2005 approved plan 2 — 32967 — — 32967 910p 140315 130322
2005 approved plan 2 — 681318 — — 681318 910p 140315 130322
performance share plan 3 — 358799 — — 358799 00p 140315 130322
sharesave plan — 14516 — — 14516 620p 010615 301115
david mckinney
2005 approved plan 16977 — — 5659 11318 1767p 080313 070320
2005 unapproved plan 2 280701 — — — 280701 855p 240611 230618
2005 unapproved plan 2 350000 — — — 350000 750p 110312 100319
2005 unapproved plan 2 333023 — — 111008 222015 1767p 080313 070320
2005 unapproved plan 2 350000 — — 233334 116666 1535p 040414 030421
deferred share bonus 195192 — — — 195192 00p 260212 250220
deferred share bonus 93528 — — — 93528 00p 280213 270221
performance share plan 3 141176 — — 15687 125489 00p 050512 050512
performance share plan 3 169491 — — 65941 103577 00p 080313 070320
performance share plan 3 203182 — — 152387 50795 00p 040414 030421
sharesave plan 3771 — — 3771 — 1540p 011013 310314
stuart hall
2005 approved plan 1 40955 — — — 40955 733p 030410 020417
2005 unapproved plan 1 505120 — — — 505120 733p 030410 020417
2005 unapproved plan 2 298245 — — — 298245 855p 240611 230618
2005 unapproved plan 2 350000 — — — 350000 750p 110312 100319
2005 unapproved plan 2 350000 — — 97223 252777 1767p 080313 070320
2005 unapproved plan 2 350000 — — 213889 136111 1535p 040414 030421
deferred share bonus 206036 — — — 206036 00p 260212 250220
deferred share bonus 96753 — — — 96753 00p 280213 270221
performance share plan 3 150000 — — — 150000 00p 050512 050512
performance share plan 3 175336 — — 58446 116890 00p 080313 07 0320
performance share plan 3 209362 — — 209632 — 00p 040414 030421
sharesave plan 7050 — — — 7050 1280p 010614 301114
allan leighton
share price award 4 — 600000 — — 600000 50p 310514 310515
matching award — 338810 — — 338810 50p 310514 310514
  in the case of david mckinney and stuart hall information given as at date of cessation of employment 6 january 2012 and 6 march 2012 respectively the remuneration committee 
will not normally allow acceleration of vesting and awards remain dependent on performance conditions under the terms of the termination agreements share awards were 
prorated to the date of termination and accordingly a proportion lapsed
on 16 march 2012 mike pulli had 171480 shares released to him under the 2010 share award and 214350 shares released 
to him under the deferred share bonus plan and retained a total of 244703 shares after selling sufﬁcient shares to discharge 
his tax obligations the share price at this date was 9104p giving a total gain of 572975 on 8 may 2012 mike pulli also had 
117898 shares released to him under the performance share plan and retained 81653 shares after selling sufﬁcient shares 
to discharge his tax obligations the share price at this date was 80p giving a gain of 153852
continued
directors’ remuneration report annual report and accounts 2012 pace plc 29
notes performance conditions
1  options subject to performance conditions based on growth in the pretax proﬁts of the group pbt over a period of three 
ﬁnancial years with 25 of options vesting at 107 million pbt in the third ﬁnancial year and 100 of options vesting at 
267 million pbt in the third ﬁnancial year with vesting on a sliding scale between these two target thresholds 
2  options granted in fy 2008 are subject to performance conditions based on cumulative growth in eps requiring a minimum 
growth in eps of 4 per annum above inﬂation over a threeyear period at which level there is 25 vesting cumulative growth 
of 8 per annum above inﬂation is required for 100 vesting options granted in fy 2009 fy 2010 fy 2011 and fy 2012 are 
subject to performance conditions based on similar cumulative eps growth but with increased eps growth required for maximum 
vesting from rpi  8 to rpi  15 per annum in order to assess whether the performance conditions have been met the 
committee will utilise the earnings ﬁgures derived from the audited financial statements of the group adjusted to exclude 
exceptional or other items that the committee determines appropriate to ensure they reﬂect underlying longterm performance 
3  psp awards will vest subject to the achievement of threeyear targets based on cumulative pbt for the group prior to 2012 and awards 
granted thereafter will vest subject to achievement of threeyear targets based on cumulative adjusted ebita for the group
cumulative pbt over three years
 of total award
2010 awards 2011 awards shares vesting
442 million 682 million 100
between 395 million and 442 million between 519 million and 682 million between 25 and 100 pro rata
395 million 519 million 25
less than 395 million less than 519 million nil
cumulative adjusted ebita over three years
 of total award
2012 awards shares vesting
502 million 100 
between 502 million and 466 million between 25 and 100 pro rata
466 million 25
less that 466 million nil
4   the allan leighton appointment share award shares which vest dependent on share price vest as to 25 on achievement 
of the threshold price of £145 with full vesting at £190 and straightline vesting in between
  the midmarket price of shares in the company on 31 december 2012 was 18840 pence the lowest and highest closing 
midmarket prices of shares in the company during the year were 6825 pence and 195 pence respectively annual report and accounts 2012 pace plc 30
governance
continued
directors’ remuneration report
employee beneﬁt trust
the company has established the pace plc employee beneﬁt trust which is capable of acquiring shares in the company in the 
market and using them for the purposes of satisfying new awards granted under the company’s share option plans the deferred 
share bonus plan and the performance share plans 
performance graph
set out below is a performance graph showing the total shareholder return of the company for the ﬁve ﬁnancial years ended 
31 december 2012 compared to the total shareholder return of the ftse allshare electronic  electrical equipment sector index 
which is considered by the board to be an appropriate benchmark index against which to compare the company’s performance 
having regard to the principal activities of the group
300
250
200
150
100
50
0
jan 08 jul 08 jan 09 jul 09 jan 10 jul 10 jan 11 jul 11 jan 12 jul 12 jan 13
pace plc
ftse allshare electronic  electrical equipment
by order of the board
anthony j dixon
company secretary
5 march 2013 annual report and accounts 2012 pace plc 31
statement of directors’ responsibilities
governance
the directors are responsible for preparing the annual report 
and accounts and the group and company financial statements 
in accordance with applicable law and regulations
company law requires the directors to prepare group and 
company financial statements for each ﬁnancial year under that 
law they are required to prepare the group financial statements 
in accordance with ifrs as adopted by the eu and applicable law 
and have elected to prepare the company financial statements 
on the same basis 
under company law the directors must not approve the 
financial statements unless they are satisﬁed that they give 
a true and fair view of the state of affairs of the group and the 
company and of their proﬁt or loss for that period in preparing 
each of the group and company financial statements the 
directors are required to
 — select suitable accounting policies and then apply 
them consistently
 — make judgements and accounting estimates that 
are reasonable and prudent
 — state whether they have been prepared in accordance 
with ifrs as adopted by the eu and
 — prepare the financial statements on the going concern 
basis unless it is inappropriate to presume that the group 
and company will continue in business
the directors are responsible for keeping adequate accounting 
records that are sufﬁcient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time 
the ﬁnancial position of the company and the group and enable 
them to ensure that the financial statements and the directors’ 
remuneration report comply with the companies act 2006 
they have general responsibility for taking such steps as are 
reasonably open to them to safeguard the assets of the group 
and to prevent and detect fraud and other irregularities 
under applicable law and regulations the directors are 
also responsible for preparing a directors’ report directors’ 
remuneration report and corporate governance statement 
that complies with that law and those regulations 
the directors are responsible for the maintenance and 
integrity of the corporate and ﬁnancial information included 
on the company’s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions annual report and accounts 2012 pace plc 32
governance
to the members of pace plc
independent auditors’ report
we have audited the financial statements of pace plc for the 
year ended 31 december 2012 set out on pages 34 to 75
the ﬁnancial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting 
standards ifrss as adopted by the eu and as regards the 
parent company financial statements as applied in accordance 
with the provisions of the companies act 2006
this report is made solely to the company’s members as a body 
in accordance with chapter 3 of part 16 of the companies act 2006 
our audit work has been undertaken so that we might state to 
the company’s members those matters we are required to state 
to them in an auditor’s report and for no other purpose to the 
fullest extent permitted by law we do not accept or assume 
responsibility to anyone other than the company and the 
company’s members as a body for our audit work for this 
report or for the opinions we have formed
respective responsibilities of directors 
and auditor
as explained more fully in the directors’ responsibilities 
statement set out on page 31 the directors are responsible 
for the preparation of the financial statements and for being 
satisﬁed that they give a true and fair view our responsibility 
is to audit and express an opinion on the financial statements 
in accordance with applicable law and international standards 
on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s apb’s ethical 
standards for auditors
scope of the audit of the financial statements
a description of the scope of an audit of financial statements 
is provided on the financial reporting council’s website 
at wwwfrcorgukauditscopeukprivate
opinion on financial statements
in our opinion
 — 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 2012 and of the group’s proﬁt for the 
year then ended
 — the group financial statements have been properly 
prepared in accordance with ifrss as adopted by the eu 
 — 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 
 — 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
opinion on other matters prescribed by the 
companies act 2006
in our opinion
 — the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance with 
the companies act 2006 and
 — the information given in the directors’ report for the ﬁnancial 
year for which the financial statements are prepared is 
consistent with the financial statements
matters on which we are required to report 
by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report 
to you if in our opinion
 — adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have not 
been received from branches not visited by us or
 — the parent company financial statements and the part 
of the directors’ remuneration report to be audited are not 
in agreement with the accounting records and returns or
 — certain disclosures of directors’ remuneration speciﬁed 
by law are not made or
 — we have not received all the information and explanations 
we require for our audit 
under the listing rules we are required to review
 — the directors’ statement set out on page 20 in relation 
to going concern
 — the part of the corporate governance statement in the 
report of the directors relating to the company’s compliance 
with the nine provisions of the uk corporate governance 
code speciﬁed for our review and
 — certain elements of the report to shareholders by the board 
on directors’ remuneration 
mike barradell senior statutory auditor
for and on behalf of kpmg audit plc statutory auditor 
chartered accountants 
1 the embankment 
neville street 
leeds
ls1 4dw
5 march 2013 annual report and accounts 2012 pace plc 33
financial statements
34 consolidated income statement
35 consolidated statement of comprehensive income
36 consolidated balance sheet
37 company balance sheet
38 statements of changes in shareholders’ equity
39 consolidated statement of cash flows
40 company statement of cash flows
41 notes
76 directors secretary and advisers
77 five year record and shareholder information financial statements
annual report and accounts 2012 pace plc 34
for the year ended 31 december 2012
2012 2011
notes m m
revenue 3 24034 23093
cost of sales 19704 18660
gross proﬁt 4330 4433
administrative expenses
 research and development expenditure 4 1554 1606
 other administrative expenses
  before exceptional costs 4 1195 1413
  exceptional costs 5 125 127
 amortisation of intangibles 11 518 557
total administrative expenses 3392 3703
operating proﬁt 938 730
finance income – interest receivable 6 05 02
finance expenses – interest payable 6 142 185
proﬁt before tax 801 547
tax charge 8 217 159
proﬁt for the year 584 388
proﬁt attributable to
equity holders of the company 584 388
earnings per ordinary share
basic earnings per ordinary share cents 9 194 132
diluted earnings per ordinary share cents 9 185 125
consolidated income statement annual report and accounts 2012 pace plc 35
financial statements
for the year ended 31 december 2012
consolidated statement of comprehensive income
2012 2011
 m m
proﬁt for the year 584 388
other comprehensive income
exchange differences on translating foreign operations 27 81
net change in fair value of cash ﬂow hedges transferred to proﬁt or loss gross of tax 112 150
deferred tax adjustment on above 30 40
effective portion of changes in fair value of cash ﬂow hedges gross of tax 49 81
deferred tax adjustment on above 13 22
other comprehensive income for the year net of tax 73 30
total comprehensive income for the year 511 358
attributable to
equity holders of the company 511 358 financial statements
annual report and accounts 2012 pace plc 36
at 31 december 2012
 2012 2011
notes m m
assets
noncurrent assets
property plant and equipment 12 628 630
intangible assets – goodwill 11 3379 3356
intangible assets – other intangibles 11 1662 2180
intangible assets – development expenditure 11 563 539
deferred tax assets 14 374 672
total noncurrent assets 6606 7377
current assets
inventories 15 1821 1500
trade and other receivables 16 5587 4023
cash and cash equivalents 18 747 487
current tax assets 120 46
total current assets 8275 6056
total assets 14881 13433
equity
issued capital 21 287 283
share premium 22 790 731
merger reserve 23 1099 1099
hedging reserve 17 29
translation reserve 548 521
retained earnings 24 2990 2450
total equity 4601 4071
liabilities
noncurrent liabilities
deferred tax liabilities 14 703 957
provisions 20 515 416
borrowings 18 747 147 3
total noncurrent liabilities 1965 2846
current liabilities
trade and other payables 17 6318 3735
current tax liabilities 107 96
provisions 20 257 454
borrowings 18 1633 2231
total current liabilities 8315 6516
total liabilities 10280 9362
total equity and liabilities 14881 13433
these financial statements were approved by the board of directors on 5 march 2013 and were signed on its behalf by
michael pulli  roddy murray
chief executive ofﬁcer chief financial ofﬁcer 
consolidated balance sheet annual report and accounts 2012 pace plc 37
financial statements
at 31 december 2012
company balance sheet
2012 2011
notes m m
assets
noncurrent assets
property plant and equipment 12 337 295
intangible assets – development expenditure 11 519 359
investments in group and other companies 13 4486 4486
loans to group companies 13 1743 1906
deferred tax assets 14 50 22
total noncurrent assets 7135 7068
current assets
inventories 15 354 493
trade and other receivables 16 5969 4367
cash and cash equivalents 447 138
current tax assets 99 20
total current assets 6869 5018
total assets 14004 12086
equity
issued capital 21 287 283
share premium 22 790 731
merger reserve 23 1099 1099
hedging reserve 07 28
translation reserve 525 525
retained earnings 24 2456 2358
total equity 4100 3974
liabilities
noncurrent liabilities
deferred tax liabilities 14 106 58
provisions 20 317 232
borrowings 18 747 147 3
total noncurrent liabilities 1170 1763
current liabilities
trade and other payables 17 6954 3851
current tax liabilities 26 17
provisions 20 121 250
borrowings 18 1633 2231
total current liabilities 8734 6349
total liabilities 9904 8112
total equity and liabilities 14004 12086
these financial statements were approved by the board of directors on 5 march 2013 and were signed on its behalf by
michael pulli  roddy murray
chief executive ofﬁcer chief financial ofﬁcer
pace plc
registered number 01672847 financial statements
annual report and accounts 2012 pace plc 38
for the year ended 31 december 2012
share share merger hedging translation retained total
capital premium reserve reserve reserve earnings equity
group mmmmmm m
balance at january 2011 282 726 1099 22 440 2114 3759
proﬁt for the year ————— 388 388
other comprehensive income — — — 51 81 — 30
total comprehensive income for the year — — — 51 81 388 358
transactions with owners
 deferred tax on share options ————— 29 29
 dividends to equity shareholders ————— 101 101
 employee share incentive charges ————— 78 78
 issue of shares 01 05 ———— 06
balance at december 2011 283 731 1099 29 521 2450 4071
proﬁt for the year ————— 584 584
other comprehensive income — — — 46 27 — 73
total comprehensive income for the year — — — 46 27 584 511
transactions with owners
 dividends to equity shareholders — — — — — 123 123
 employee share incentive charges — — — — — 79 79
 issue of shares 04 59 — — — — 63
balance at december 2012 287 790 1099 17 548 2990 4601
share share merger hedging translation retained total
capital premium reserve reserve reserve earnings equity
company mmmmmm m
balance at january 2011 282 726 1099 53 503 1337 2888
proﬁt for the year — — — — — 1073 107 3
other comprehensive income — — — 81 22 — 59
total comprehensive income for the year — — — 81 22 1073 1132
transactions with owners
 deferred tax on share options — — — — — 29 29
 dividends to equity shareholders — — — — — 101 101
 employee share incentive charges — — — — — 78 78
 issue of shares 01 05 ———— 06
balance at december 2011 283 731 1099 28 525 2358 3974
proﬁt for the year — — — — — 142 142
other comprehensive income — — — 35 — — 35
total comprehensive income for the year — — — 35 — 142 107
transactions with owners
 dividends to equity shareholders — — — — — 123 123
 employee share incentive charges — — — — — 79 79
 issue of shares 04 59 — — — — 63
balance at december 2012 287 790 1099 07 525 2456 4100
statements of changes in shareholders’ equity annual report and accounts 2012 pace plc 39
financial statements
for the year ended 31 december 2012
consolidated statement of cash flows
2012 2011
 m m
cash ﬂows from operating activities
proﬁt before tax 801 547
adjustments for
sharebased payments charge 79 78
depreciation of property plant and equipment 210 290
amortisation of development expenditure 543 47 9
amortisation of other intangibles 518 557
loss on sale of property plant and equipment — 16
net ﬁnance expense 137 183
movement in trade and other receivables 1623 303
movement in trade and other payables 2585 1702
movement in inventories 330 722
movement in provisions 56 27
cash generated from operations 2976 1500
interest paid 116 138
tax paid 238 297
net cash generated from operating activities 2622 1065
cash ﬂows from investing activities
acquisition of subsidiaries net of cash acquired 157 64
purchase of property plant and equipment 226 415
development expenditure 574 570
interest received 05 02
net cash used in investing activities 952 1047
cash ﬂows from ﬁnancing activities
repayment of longterm debt 1350 750
proceeds from issue of share capital 63 06
dividend paid 123 101
net cash used in ﬁnancing activities 1410 845
net change in cash and cash equivalents 260 827
cash and cash equivalents at the start of the year 487 1314
cash and cash equivalents at the end of the year 747 487 financial statements
annual report and accounts 2012 pace plc 40
for the year ended 31 december 2012
2012 2011
 m m
cash ﬂows from operating activities
proﬁt before tax 100 1140
adjustments for
sharebased payments charge 79 78
depreciation of property plant and equipment 116 108
loss on sale of property plant and equipment — 01
amortisation of development expenditure 433 274
net ﬁnance expense 63 91
movement in trade and other receivables 1668 415
movement in trade and other payables 3231 818
movement in inventories 136 157
movement in provisions 109 48
cash generated from operations 2599 1890
interest paid 37 119
tax paid 09 164
net cash generated from operating activities 2553 1607
cash ﬂows from investing activities
acquisition of subsidiaries net of cash acquired 157 977
purchase of property plant and equipment 158 158
development expenditure 521 342
interest received 02 75
net cash used in investing activities 834 1402
cash ﬂows from ﬁnancing activities
repayment of longterm debt 1350 750
proceeds from issue of share capital 63 06
dividend paid 123 101
net cash used in ﬁnancing activities 1410 845
net change in cash and cash equivalents 309 640
cash and cash equivalents at the start of the year 138 778
cash and cash equivalents at the end of the year 447 138
company statement of cash flows annual report and accounts 2012 pace plc 41
financial statements
notes
1 basis of preparation and business environment
the following accounting policies have been applied consistently in dealing with items which are considered material in relation 
to the financial statements
basis of preparation
the financial statements have been prepared in accordance with applicable accounting standards and under the historical cost 
convention as modiﬁed by the revaluation of derivative instruments
international financial reporting standards
the group’s financial statements have been prepared in accordance with international financial reporting standards ifrs as 
endorsed by the european union and international financial reporting interpretations committee ifric interpretations and with 
those parts of the companies act 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 2012 and the previous year’s financial statements 
are for the year ended 31 december 2011
basis of consolidation
the group financial statements consolidate those of the company and of its subsidiary undertakings note 13 drawn up to 
31 december 2012 subsidiaries are entities controlled by the company control exists when the company has the power directly 
or indirectly to govern the ﬁnancial and operating policies of an entity so as to obtain beneﬁts from its activities in assessing control 
potential voting rights that presently are exercisable or convertible are taken into account intragroup transactions including sales 
proﬁts receivables and payables have been eliminated on the group consolidation investments in subsidiaries are carried at cost 
less any impairment loss in the financial statements of the company
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 2012 was 162 2011 155
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 42 to 47 
judgements and assumptions have been required by management in applying the group’s accounting policies in many areas 
actual results may differ from the estimates calculated using these judgements and assumptions key areas of estimation 
uncertainty and critical accounting judgements are as follows
warranties
pace provides product warranties for its 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 adjusted accordingly in the light of actual performance
royalties
pace’s products incorporate third party technology usually under licence inadvertent actions may expose pace to the risk of infringing 
third party intellectual property rights potential claims can still be submitted many years after a product has been deployed 
any such claims are always vigorously defended
a provision for royalties is recognised where the owners of patents covering technology allegedly used by the group have indicated 
claims for royalties relating to the group’s use including past usage of that technology having taken legal advice the board 
considers that there are defences available that should mitigate the amounts being sought the group will vigorously negotiate 
or defend all claims but in the absence of agreement the amounts provided may prove to be different from the amounts at which 
the potential liabilities are ﬁnally settled the provision is based on the latest information available financial statements
annual report and accounts 2012 pace plc 42
continued
notes
1 basis of preparation and business environment continued
signiﬁcant judgements key assumptions and estimation uncertainty continued
operating segments
operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker 
the chief operating decisionmaker who is responsible for allocating resources and assessing performance of the operating 
segments has been identiﬁed as the board of directors the board of directors has determined that based on its current internal 
reporting framework and management structure it has two reportable segments 
such determination is necessarily judgemental in its nature and has been determined for the preparation of the financial 
statements the level of disclosure of segmental and other information is determined by such assessment further details of the 
considerations made and the resulting disclosures are provided in note 3 to the financial statements
intangible assets
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 
going concern
the group has borrowing facilities in place until march 2014 at 31 december 2012 these are in the form of a 150 million term loan 
which is subject to repayment through instalments of 375 million each due every six months plus a ﬁnal payment of 75 million 
and a 150 million revolver 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
2 accounting policies
business combinations
control is the power to govern the ﬁnancial and operating policies of an entity so as to obtain beneﬁts from its activities in assessing 
control the group takes into consideration potential voting rights that currently are exercisable 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 annual report and accounts 2012 pace plc 43
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–ten years
technology and patents  one–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 in research and development 
expenditure 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 cashgenerating unit 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 pro rata basis financial statements
annual report and accounts 2012 pace plc 44
continued
notes
2 accounting policies continued
impairment charges continued
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
exceptional items
items which are signiﬁcant by virtue of their size or nature and which are considered nonrecurring are classiﬁed as exceptional 
operating items such items which include for instance the costs of opening or closing premises costs of signiﬁcant 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 his agent
revenue in respect of services rendered including engineering consultancy and support and software services is recognised 
over the period over which they are performed in relation to the level of work undertaken project milestones achieved and any 
future obligations remaining
when a single sales transaction requires the delivery of more than one product or service multiple components the revenue 
recognition criteria are applied to the separately identiﬁable components a component is considered to be separately identiﬁable 
if the product or service delivered has standalone value to that customer and the fair value associated with the product or service 
can be measured reliably the amount recognised as revenue for each component is the fair value of the element in relation to the 
fair value of the arrangement as a whole this requires a degree of management judgement and the fair value allocations are by their 
nature best estimates the timing and amount of revenue recognition can vary depending on what assessments have been made 
where there is no separate selling price of an element management determines fair value based on equivalent available products
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
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  annual report and accounts 2012 pace plc 45
2 accounting policies continued
inventory
inventory is stated at the lower of cost and net realisable value cost is determined on a ﬁrstinﬁrstout basis and includes 
appropriate transport and handling costs but excludes royalties due only on ultimate sale where necessary provision is made 
for obsolete slowmoving and defective inventory
property plant and equipment
the cost of items of property plant and equipment is its purchase cost together with any incidental costs of acquisition
depreciation is calculated so as to write off on a straightline basis over the expected useful economic lives of the asset 
concerned the cost of property plant and equipment less any estimated residual values which are adjusted if appropriate 
at each balance sheet date the principal economic lives used for this purpose are
long leasehold properties period of lease
short leasehold properties period of lease
plant and machinery one–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 financial statements
annual report and accounts 2012 pace plc 46
continued
notes
2 accounting policies continued
derivative ﬁnancial instruments continued
derivatives are reviewed quarterly for effectiveness where a derivative ﬁnancial instrument is designated as a hedge of the variability 
in cash ﬂows of a recognised asset or liability or highly probable forecast transaction the effective part of any gain or loss on the 
movement in fair value of the derivative ﬁnancial instrument is recognised directly in equity
the gain or loss on any ineffective part of the hedge is immediately recognised in the income statement within ﬁnance incomecosts 
if a hedge of a forecast transaction subsequently results in the recognition of a ﬁnancial asset or liability the associated cumulative 
gains or losses that were recognised directly in equity are reclassiﬁed into the income statement when the transaction occurs
taxes
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using 
the tax rates that have been enacted or substantively enacted by the balance sheet date
deferred tax is provided using the balance sheet liability method providing where relevant for temporary differences between 
the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes 
deferred tax is measured using the tax rates that have been enacted or substantively enacted by the balance sheet date 
and are expected to apply when the asset is realised or the liability settled 
a net deferred tax asset is recognised only when it is probable that sufﬁcient taxable proﬁts will be available in the foreseeable 
future from which the reversal of the temporary differences can be deducted
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 annual report and accounts 2012 pace plc 47
2 accounting policies continued
provisions
a provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a result of a past 
event and it is probable that an outﬂow of economic beneﬁts will be required to settle the obligation
a royalties
a provision for royalties is recognised where the owners of patents covering technology allegedly used by the group have indicated 
claims for royalties relating to the group’s use including past usage of that technology the provision is based on the latest 
information available 
b warranties
a provision for warranties is recognised when the underlying products or services are sold the provision is based on historical 
warranty data and a weighting of all possible outcomes against their associated probabilities the level of warranty provision 
required is reviewed on a product by product basis and provisions adjusted accordingly in the light of actual performance
c restructuring
a provision for restructuring is recognised when the group has approved a detailed and formal restructuring plan and the restructuring 
has either commenced or has been announced publicly provisions are not recognised for future operating losses
d onerous contracts
a provision for onerous contracts is recognised when the expected beneﬁts to be derived by the group from a contract are lower 
than the unavoidable cost of meeting its obligations under the contract
e deferred consideration
a provision is recognised for deferred consideration relating to acquisitions based on the expected fair value of the outﬂow
changes in accounting policy and disclosures
a new and amended standards adopted by the group
there are no new ifrss or ifric interpretations that are effective for the ﬁrst time for the ﬁnancial year beginning on or after 
1 january 2012 that would be expected to have a material impact on the group
b  new standards amendments and interpretations issued but not effective for the ﬁnancial year beginning 1 january 2012 
and not early adopted
ias 1 ‘presentation of items of other comprehensive income’ requires an entity to present the items of other comprehensive 
income that may be recycled to proﬁt or loss in the future if certain conditions are met separately from those that would never 
be recycled to proﬁt or loss the group is yet to assess ias 1’s full impact and intends to adopt ias 1 no later than the accounting 
period beginning on or after 1 july 2012 subject to endorsement by the eu
ias 19 ‘employee beneﬁts’ was amended in june 2011 the amendment does not impact the group
ifrs 10 ‘consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining 
factor in whether an entity should be included within the consolidated financial statements of the parent company the group 
is yet to assess ifrs 10’s full impact and intends to adopt ifrs 10 no later than the accounting period beginning on or after 
1 january 2014 subject to endorsement by the eu
ifrs 12 ‘disclosures of interests in other entities’ includes the disclosure requirements for all forms of interest in other entities 
including joint arrangements associates special purpose vehicles and other off balance sheet vehicles the group is yet to assess 
ifrs 12’s full impact and intends to adopt ifrs 12 no later than the accounting period beginning on or after 1 january 2014 
subject to endorsement by the eu
ifrs 13 ‘fair value measurement’ aims to improve consistency and reduce complexity by providing a precise deﬁnition of fair 
value and a single source of fair value measurement and disclosure requirements for use across ifrs the group is yet to assess 
ifrs 13’s full impact and intends to adopt ifrs 13 no later than the accounting period beginning on or after 1 january 2013 
subject to endorsement by the eu
there are no other ifrs or ifric interpretations that are not yet effective that would be expected to have a material impact 
on the group financial statements
annual report and accounts 2012 pace plc 48
continued
notes
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 year the group consolidated pace europe pace enterprise and certain other immaterial operating segments into a new 
sbu named pace international this was done in order to reﬂect the management structure of those operating segments which 
changed in the year
the group has the following reportable segments
 — pace americas
 — pace international and
 —other
other include central and unallocated costs and other immaterial sbus which are operating segments that are allowed to be 
aggregated under ifrs 8
reconciliations between pace americas pace international and the geographical revenue disclosure given are not possible 
due to the different revenue streams which sit under each reportable segment 
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 where appropriate pricing is determined 
on an arm’s length basis there are no material intersegment transactions 
the tables below present segmental information on the revised basis with prior periods amended to conform to the current 
period presentation
pace pace
americas international other total
year ended 31 december 2012 m m m m
segmental income statement
revenue 14419 9536 79 24034
adjusted ebita 1440 723 582 1581
exceptional items 125
amortisation of other intangibles 518
interest 137
tax 217
proﬁt for the year 584
pace pace
americas international other total
year ended 31 december 2011 restated m m m m
segmental income statement
revenue 13506 9531 56 23093
adjusted ebita 1579 603 768 1414
exceptional items 127
amortisation of other intangibles 557
interest 183
tax 159
proﬁt for the year 388 annual report and accounts 2012 pace plc 49
3 segmental analysis continued
major customers
transactions with the group’s three 2011 two largest customers represented 49 2011 27 of the group’s total revenues 
and are disclosed within the pace americas reporting segment
geographical analysis
in presenting information on the basis of geographical segments segment revenue is based on the geographical location of customers
2012 2011
revenue by destination m m
europe 4024 4577
north america 13176 10651
latin america 3744 4690
rest of world 3090 3175
24034 23093
segment assets are based on the geographical location of the assets the split of noncurrent assets by location is as follows
2012 2011
noncurrent assets m m
uk 1344 657
europe 1247 1839
latin america 35 54
north america 3598 4126
rest of world 08 29
6232 6705
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 three main revenue streams being settop boxes  media servers gateways and software  services 
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
2012 2011
m m
settop boxes  media servers 18260 17754
gateways 4694 4335
software  services 1080 1004
24034 23093 financial statements
annual report and accounts 2012 pace plc 50
continued
notes
4 expenses and auditors’ remuneration
2012 2011
m m
fees payable to the company’s auditors for the audit of
company’s annual financial statements 04 06
fees payable to the company’s auditors and its associates for other services 
to the group
audit of financial statements of subsidiaries of the company 02 02
other services relating to taxation 01 02
services relating to corporate ﬁnance — —
other services pursuant to interim reporting legislation 01 01
other services — 02
depreciation of plant property and equipment
owned 210 290
other operating lease rentals
land and buildings 81 97
loss on disposal of plant property and equipment — 16
net foreign exchange losses recognised within operating proﬁt 19 07
research and development expenditure recognised as an expense 1554 1606
5 exceptional items
2012 2011
m m
restructuring and reorganisation costs 76 111
directors’ loss of ofﬁce 14 16
aborted acquisition costs 35 —
125 127
restructuring and reorganisation costs in 2012 and 2011 relate to different restructuring programmes within the group and represent 
the costs of redundancy and associated professional fees aborted acquisition costs relate to professional services fees in respect 
of the aborted acquisition of the motorola home business 
6 finance incomecosts
2012 2011
m m
finance income – interest on bank deposits 05 02
finance costs
bank borrowings 107 167
other ﬁnance costs 35 18
142 185 annual report and accounts 2012 pace plc 51
7 staff numbers and costs
the average number of persons including directors employed by the group during the year analysed by category were as follows
restated
group 2012 2011
research and development 1001 1113
administration 245 245
sales and marketing 64 80
manufacturing and operations 667 664
1977 2102
the 2011 comparative has been restated to include the impact of acquisitions at december 2010 the previously stated 
december 2010 total did not include these amounts which lowered the 2011 average number of employees
the total number of persons including directors employed by the group at 31 december 2012 was 1864 2011 2089 
the aggregate payroll costs of these persons were as follows
2012 2011
group m m
wages and salaries 1225 137 7
social security costs 181 231
other pension costs 59 52
sharebased payments see note 27 79 78
redundancy costs — 27
1544 1765
remuneration of directors
the remuneration share options and pension entitlements of the directors are disclosed in the remuneration report 
on pages 23 to 30
8 taxation
2012 2011
m m
current tax charge
charge for the year 210 288
adjustment in respect of prior years 37 13
total current tax charge 173 275
deferred tax chargecredit
origination and reversal of timing differences in the current year note 14 — 90
impact of change in tax rate 03 11
adjustment in respect of prior years 47 15
total deferred tax chargecredit 44 116
total tax charge 217 159 financial statements
annual report and accounts 2012 pace plc 52
continued
notes
8 taxation continued
reconciliation of effective tax rate to uk statutory rate of 245 2011 265
2012 2011
m m
proﬁt before tax 801 547
tax using uk statutory tax rate at 245 2011 265 196 145
effects of
expenses not deductible for tax purposes 117 36
research and development tax credit 63 26
overseas tax not at 245 2011 265 34 43
losses not recognised for current or deferred tax 06 —
impact of change in tax rate 03 11
adjustments to tax charge in respect of previous years 10 28
total tax charge 217 159
a change in the uk corporation tax rate from 26 to 24 was substantively enacted on 17 july 2012 and is effective from 
1 april 2012 a further reduction from 24 to 23 was substantively enacted under the same legislation and will be effective 
from 1 april 2013 the relevant deferred tax balances have therefore been remeasured 
a reduction to the corporation tax rate has been announced and is expected to be enacted subsequently to reduce the rate 
by 2 per annum to 21 effective 1 april 2014 this change had not been substantively enacted at the balance sheet date and 
therefore is not recognised in these financial statements
9 earnings per ordinary share
2012 2011
basic earnings per ordinary share 194c 132c
diluted earnings per ordinary share 185c 125c
adjusted basic earnings per ordinary share 351c 297c
adjusted diluted earnings per ordinary share 334c 281c
the calculation of basic earnings per share is based on a proﬁt after tax of 584 million 2011 388 million divided by the 
weighted average number of ordinary shares in issue of 300344669 2011 294189977 excluding shares held by the employee 
beneﬁt trust
2012 2011
number of shares million
weighted average number of ordinary shares in issue during the year 3003 2942
dilutive effect of options outstanding 151 168
diluted weighted average number of ordinary shares in issue during the year 3154 3110
diluted earnings per ordinary share varies from basic earnings per ordinary share due to the effect of the notional exercise of 
outstanding share options annual report and accounts 2012 pace plc 53
9 earnings per ordinary share continued
to better reﬂect underlying performance adjusted earnings per share is also calculated adjusting proﬁt after tax to remove 
amortisation of other intangibles and exceptional items post tax the earnings amount is calculated as follows
2012 2011
m m
proﬁt after tax 584 388
amortisation charge 518 557
tax effect of above 140 162
exceptional items 125 127
tax effect of above 34 37
adjusted proﬁt after tax 1053 873
the group’s effective tax rate of 271 2011 291 has been used to calculate the tax effect of adjusted items 
10 dividend per ordinary share 
 2012 2011
per share m per share m
2011 final paid 4 july 2012 250c 75 225c 66
2012 interim paid 7 december 2012 144c 48 125c 35
394c 123 350c 101
in addition the directors are proposing a ﬁnal dividend for 2012 of 306 cents per ordinary share this will be payable on 5 july 2013 
to shareholders on the register at 7 june 2013 subject to approval by shareholders at the forthcoming annual general meeting 
and has not been included as a liability in these financial statements financial statements
annual report and accounts 2012 pace plc 54
continued
notes
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 2010 3356 1638 1643 1318 109 3070
additions — 570 — — — —
retirement of assets — 109 — — — —
at 31 december 2011 3356 2099 1643 1318 109 3070
exchange adjustments 23 04 — — — —
additions — 574 — — — —
at 31 december 2012 3379 2669 1643 1318 109 3070
amortisation
at 31 december 2010 — 1192 183 144 06 333
exchange adjustments — 02 — — — —
provided in the year — 479 210 306 41 557
retirement of assets — 109 — — — —
at 31 december 2011 — 1560 393 450 47 890
exchange adjustments — 03 — — — —
provided in the year — 543 216 283 19 518
at 31 december 2012 — 2106 609 733 66 1408
net book value at 31 december 2011 3356 539 1250 868 62 2180
net book value at 31 december 2012 3379 563 1034 585 43 1662
goodwill
all goodwill has arisen from business combinations and relates to the following acquisitions
 — xcom multimedia communications sa now pace europe sas in february 2001
 — the stb and connectivity solutions business of royal philips electronics pace france in april 2008
 — bewan systems sa bewan in april 2010
 — 2wire inc 2wire in october 2010 and
 — latens systems limited latens in november 2010
the carrying amount of goodwill is allocated across cashgenerating units cgus as follows
 — 1210 million within pace international
 — 1912 million within pace americas and
 — 257 million within latens  annual report and accounts 2012 pace plc 55
11 intangible assets continued
goodwill continued
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 3 year plan these forecasts have been approved by the board and have an appropriate 
longterm growth rate of 1 2011 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 1014 2011 955 
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 3 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
 — movements in the pretax discount rate of up to an additional 10 and
 — 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 2012 
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 and latens
development
expenditure
company m
cost
at 31 december 2010 1228
additions 342
retirement of assets 99 
at 31 december 2011 1471
additions 521 
transfer 72
at 31 december 2012 2064
amortisation
at 31 december 2010 937
provided in the year 274
retirement of assets 99
at 31 december 2011 1112
provided in the year 433
at 31 december 2012 1545
net book value at 31 december 2011 359
net book value at 31 december 2012 519 financial statements
annual report and accounts 2012 pace plc 56
continued
notes
12 property plant and equipment
long leasehold short leasehold plant machinery and
buildings land and buildings motor vehicles total
group m m m m
cost
at 31 december 2010 06 260 1053 1319
exchange adjustments — — 11 11
additions — 130 285 415
disposals 06 24 116 146
at 31 december 2011 — 366 1211 1577
exchange adjustments — 04 08 12
additions — 22 204 226
disposals — — 07 07
at 31 december 2012 — 384 1400 1784
depreciation
at 31 december 2010 02 114 676 792
exchange adjustments — — 05 05
provided in the year — 61 229 290
disposals 02 14 114 130
at 31 december 2011 — 161 786 947
exchange adjustments — 02 04 06
provided in the year — 40 170 210
disposals — — 07 07
at 31 december 2012 — 203 953 1156
net book value at 31 december 2011 — 205 425 630
net book value at 31 december 2012 — 181 447 628
during the year an exercise was completed to align the useful economic lives of certain asset classes across the group these asset 
classes have now been extended from a previous useful economic life of 1 to 3 years depending on the asset class to a revised 
useful economic life of 2 to 5 years the directors believe that this change better reﬂects the manner in which these assets will be 
used by the business 
the effect of this change has been a reduction in the current year depreciation charge in comparison to prior periods the depreciation 
charge in each period going forward will be lower as a result but the effect on future periods has not been disclosed due the number 
of assets involved and the range of remaining useful economic lives annual report and accounts 2012 pace plc 57
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 2010 194 495 689
additions 39 119 158
disposals —03 03
at 31 december 2011 233 611 844
additions 20 138 158
disposals —02 02
at 31 december 2012 253 747 1000
depreciation
at 31 december 2010 101 342 443
provided in the year 32 76 108
disposals —02 02
at 31 december 2011 133 416 549
provided in the year 31 85 116
disposals —02 02
at 31 december 2012 164 499 663
net book value at 31 december 2011 100 195 295
net book value at 31 december 2012 89 248 337 financial statements
annual report and accounts 2012 pace plc 58
continued
notes
13 investments in and loans to group and other companies
shares in
intragroup group
loans undertakings
company m m
cost
at 31 december 2010 2956 3545
conversion of intragroup loans to shares 941 941
repayment 18 —
at 31 december 2011 1997 4486
transfer to current assets 163 —
at 31 december 2012 1834 4486
impairment
at 31 december 2010 984 —
reversal of impairment 893 —
at 31 december 2011 and 31 december 2012 91 —
net book value at 31 december 2011 1906 4486
net book value at 31 december 2012 1743 4486
during the prior year the company converted 941 million of debt owed by pace distribution overseas limited into additional 
equity in that entity an impairment of 893 million which had previously been charged against the loan through the income 
statement was reversed as the conversion meant that the impairment was no longer required annual report and accounts 2012 pace plc 59
13 investments in and loans to group and other companies continued
at 31 december 2012 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 support 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 hk limited dormant 1 100 hong kong
pace australia pty limited support 1 100 australia
pace americas limited holding company 4 100 uk
pace americas inc trading 5 100 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 usa inc trading 10 100 usa
pace belgium nv dormant 3 100 belgium
pace asia home networks sdn bhd support 3 100 malaysia
pace software  services limited trading 3 100 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 support 6 100 south africa
pace americas holdings inc holding 1 100 usa
pace americas investments llc holding 9 100 usa
latens systems limited trading 1 100 uk
latens systems canada limited support 8 100 canada
latens services limited trading 8 100 uk
latens systems llc trading 8 100 usa
latens systems india private limited support 8 100 india
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
latens systems israel limited support 8 100 israel
pace netherlands nv support 1 100 holland financial statements
annual report and accounts 2012 pace plc 60
continued
notes
13 investments in and loans to group and other companies continued
note a
directly owned by
1 pace plc 8 latens systems limited
2 pace asia paciﬁc limited 9 pace americas holdings inc
3 pace france sas 10 pace americas inc
4 pace distribution overseas limited 11 pace americas investments llc
5 pace americas limited 12 kenati technologies inc
6 pace overseas distribution limited 13 pace usa inc 98 pace france sas 2
7 2wire inc 14 pace france sas 9999998 pace distribution overseas limited 000002
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 2010 02 456 1154 310 386
creditedcharged to income statement 09 75 212 12 116
creditedcharged to other comprehensive income — — — 15 15
at 31 december 2011 07 381 942 283 285
creditedcharged to income statement 19 82 254 235 44
at 31 december 2012 12 299 688 48 329
shown as deferred tax assets 27 299 — 48 374
shown as deferred tax liabilities 15 — 688 — 703 annual report and accounts 2012 pace plc 61
14 deferred tax assetsliabilities continued
property shortterm
plant and trading timing
equipment losses intangibles differences total
company m m m m m
recognised assetsliabilities
at 31 december 2010 02 — 54 32 20
creditedcharged to income statement 06 — 04 03 01
creditedcharged to other comprehensive income — — — 15 15
at 31 december 2011 08 — 58 14 36
creditedcharged to income statement 19 — 48 09 20
at 31 december 2012 27 — 106 23 56
shown as deferred tax assets 27 — — 23 50
shown as deferred tax liabilities — — 106 — 106
no deferred tax asset has been recognised on unused tax losses outside the uk of 33 million 2011 35 million as it is not 
considered probable that sufﬁcient taxable proﬁt will be available against which the tax losses can be utilised
15 inventories 
group company
2012 2011 2012 2011
m m m m
raw materials and consumable stores 228 389 80 262
finished goods 1593 1111 274 231
1821 1500 354 493
16 trade and other receivables
group company
2012 2011 2012 2011
m m m m
trade receivables 5141 3698 1154 972
amounts owed by subsidiary undertakings — — 4538 3274
other receivables 352 228 232 70
prepayments and accrued income 94 97 45 51
5587 4023 5969 4367 financial statements
annual report and accounts 2012 pace plc 62
continued
notes
17 trade and other payables
group company
2012 2011 2012 2011
m m m m
trade payables 5473 2879 4752 1947
amounts payable to subsidiary 
undertakings — — 1778 177 0
social security and other taxes 24 39 06 15
other payables 164 244 62 04
accruals 657 573 356 115
6318 3735 6954 3851
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 rbs and hsbc incorporating lloyds tsb barclays santander and yorkshire bank 
in a syndicated deal
the main facilities at 31 december 2012 which are all denominated in us dollars consist of a 150 million term loan facility 
together with a 150 million revolving credit facility
the facilities have a termination date of 31 march 2014 amortisation of the original 300 million term loan commenced on 20 june 2011 
with repayments of 375 million made every six months until 20 december 2013 a ﬁnal repayment of 75 million is due to be 
made on 31 march 2014
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 9 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 155000
the carrying value of the yearend borrowings position is as follows
2012 2011
group and company m m
noncurrent liabilities
bank term loans 747 147 3
current liabilities
bank term loans 732 731
bank revolving credit facility 901 1500
1633 2231
the face value of the borrowings was 75 million 2011 150 million in respect of the bank term loans within noncurrent liabilities 
75 million 2011 75 million in respect of the bank term loans within current liabilities and 901 million 2011 150 million in respect 
of the bank revolving credit facility annual report and accounts 2012 pace plc 63
18 interestbearing loans and borrowings continued
the difference between the face value amounts and the amounts in the previous table is 03 million 2011 27 million in noncurrent 
liabilities and 18 million 2011 19 million in current liabilities which represents facility arrangement fees and accrued interest costs
reconciliation of net cash ﬂow to movement in net debt
2012 2011
m m
cash and cash equivalents at end of year 747 487
current borrowings 1633 2231
noncurrent borrowings 747 1473
closing net debt 1633 3217
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 
for more information about the group and company’s exposure to interest rate risk credit risk and foreign currency risk 
see page 15 of the report of the directors
a interest rate risk proﬁle of cashbank overdrafts
floating rate interest free total
currency m m m
at 31 december 2012
sterling 239 74 313
us dollar 2729 457 2272
euro 71 40 111
other 119 96 215
total 2300 667 1633
at 31 december 2011
sterling 21 04 17
us dollar 3720 227 3493
euro 152 163 11
other 212 36 248
total 3639 422 3217
the interest rates on sterling us dollar euro and other ﬂoating rate ﬁnancial assets are linked to the relevant bank base rates financial statements
annual report and accounts 2012 pace plc 64
continued
notes
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 2012
sterling —12 28 — 40
us dollar 296 — 358 12 666
euro 03 139 — 01 143
other 10 84 01 — 75
total 303 211 385 11 488
at 31 december 2011
sterling —03 14 01 16
us dollar 59 — 323 03 261
euro 28 334 — 01 307
other —49 — — 49
total 31 380 337 05 79
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 2012 us dollar gbp 204m 063 mar 13 – aug 13
euro us dollar 999m 129 jan 13 – dec 13
us dollar euro 39m 076 jan 13
at 31 december 2011 us dollar gbp 1019m 064 jan 12 – dec 12
euro us dollar 1055m 135 jan 12 – nov 12
the group’s derivatives contracts qualify for hedge accounting and have a fair value at the balance sheet date of 13 million 
2011 45 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 annual report and accounts 2012 pace plc 65
19 derivatives and other ﬁnancial instruments continued
d credit risk continued
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
2012 2011
carrying amount m m
trade receivables 5141 3698
cash and cash equivalents 747 487
forward exchange contracts used for hedging
assets 04 48
5892 4233
the maximum exposure to credit risk for receivables at the reporting date by geographic region was
2012 2011
carrying amount m m
domestic 1216 949
eurozone countries 240 240
united states 2932 1951
other regions 753 558
5141 3698
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 2012 92 were within terms 2011 94 of the balance 7 were less than 30 days past 
due with the remaining amounts over 30 days due 2011 4 less than 30 days past due there were no material bad debts 
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 financial statements
annual report and accounts 2012 pace plc 66
continued
notes
19 derivatives and other ﬁnancial instruments continued
e liquidity risk continued
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
amount cash ﬂows or less months years years years
m m m m m m m
at 31 december 2012
nonderivative ﬁnancial liabilities
trade and other payables within one year 6318 6318 6318 — — — —
external borrowings 2380 2478 403 399 1676 — —
derivative ﬁnancial liabilities
forward exchange contracts used for hedging
outﬂow 13 1241 827 414 — — —
inﬂow — 1228 817 411 — — —
total 8685 8809 6731 402 1676 — —
at 31 december 2011
nonderivative ﬁnancial liabilities
trade and other payables within one year 3735 3735 3735 — — — —
external borrowings 3704 3936 426 420 825 2265 —
deferred consideration 157 157 157 — — — —
derivative ﬁnancial liabilities
forward exchange contracts used for hedging
outﬂow — 2074 1288 786 — — —
inﬂow 45 2119 1313 806 — — —
total 7641 7783 4293 400 825 2265 —
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 twelvemonth period would have a 08 million 
impact on cash ﬂows 2011 09 million
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 02 million 2011 09 million on the proﬁt reported in the year ended 31 december 2012 
and an adverse impact of 47 million 2011 44 million on equity  annual report and accounts 2012 pace plc 67
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 issue of new 
shares and buyback of existing shares and issuing new borrowings or repaying existing borrowings
note 21 to the financial statements provides details regarding the company’s share capital and movements in the period 
there were no breaches of any requirements with regard to any relevant conditions imposed by either the ukla or the company’s 
articles of association during the periods under review
details of the company’s facilities are given in note 18 such facilities are 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 directors have considered the fair values of ﬁnancial assets and liabilities and have determined that these are not materially 
different from the carrying amounts shown in the group balance sheet
fair value hierarchy
the group’s ﬁnancial instruments namely forward exchange contracts have been determined to represent level 2 instruments 
characterised by the existence of quoted prices unadjusted in active markets for identical assets or liabilities 
i exchange rates
the following signiﬁcant exchange rates applied during the year
average rate spot rate
2012 2011 2012 2011
euro 128 139 132 131
sterling 158 161 162 155 financial statements
annual report and accounts 2012 pace plc 68
continued
notes
20 provisions
royalties
under negotiation warranties other total
group m m m m
at 31 december 2010 150 451 267 868
net charge for the year 81 147 119 347
utilised 29 247 85 361
transfer 06 — 01 07
exchange adjustments — 07 02 09
at 31 december 2011 208 358 304 870
net charge for the year 85 210 52 347
utilised 24 189 263 476
transfer — 16 — 16
exchange adjustments 06 05 04 15
at 31 december 2012 275 400 97 772
due within one year — 189 68 257
due after one year 275 211 29 515
royalties
under negotiation warranties other total
company m m m m
at 31 december 2010 134 248 155 537
net charge for the year 36 116 — 152
utilised 29 180 — 209
exchange adjustments — — 02 02
at 31 december 2011 141 184 157 482
net charge for the year 56 132 40 228
utilised 18 92 157 267
transfer — 05 — 05 
at 31 december 2012 179 219 40 438
due within one year — 81 40 121
due after one year 179 138 — 317
royalties under negotiation
the owners of patents covering technology allegedly used by the group have indicated claims for royalties relating to the group’s 
use including past usage of that technology negotiations over these liabilities continue for long periods of time the directors have 
made provision for the potential royalties payable based on the latest information available having taken legal advice the board 
considers that there are defences available that should mitigate the amounts being sought the group will vigorously negotiate 
or defend all claims but in the absence of agreement the amounts provided may prove to be different from the amounts at which 
the potential liabilities are ﬁnally settled
given the nature of the claims it is not possible to be more speciﬁc with regard to the timing of outﬂows annual report and accounts 2012 pace plc 69
20 provisions continued
royalties under negotiation continued
the directors consider that to disclose the amounts unused following the negotiation of royalty claims during the year would be 
seriously prejudicial to other royalty claims under negotiation in litigation or dispute accordingly the directors have aggregated 
amounts released unused with additional provisions made in order to arrive at the net charge for the year shown on page 68
other provisions
other provisions mainly relate to retirement and exceptional restructuring provisions within the group along with certain other provisions
warranties
pace provides product warranties for its stbs and gateways from the point of sale and a provision for warranties is recognised 
when the underlying products are sold the provision is based on historical warranty data principally historical failure rates and 
related cost of repair information and a weighting of all possible outcomes against their associated probabilities the level of warranty 
provision required is reviewed on a product by product basis and provisions adjusted accordingly in the light of actual performance
although it is difﬁcult to make accurate predictions of potential failure rates or the possibility of an epidemic failure as a warranty 
estimate must be calculated at the outset of product shipment before ﬁeld deployment data is available these estimates improve 
during the lifetime of the product in the ﬁeld
the directors consider that to disclose the amounts unused following the settlement of warranty claims during the year would be 
seriously prejudicial to other claims under negotiation accordingly the directors have aggregated amounts released unused with 
additional provisions made in order to arrive at the net charge for the year shown on page 68
it is expected that the expenditure with regard to warranties will be incurred within ﬁve years of the balance sheet date
21 share capital
2012 2011
number m number m
authorised
ordinary shares of 5 pence each 500000000 388 500000000 388
allocated called up and fully paid
ordinary shares of 5 pence each 309842308 287 305046066 283
the ordinary share capital of pace plc is designated in sterling financial statements
annual report and accounts 2012 pace plc 70
continued
notes
21 share capital continued
during the year the company also allotted ordinary shares as follows
nominal value consideration
number 000 000
employee share option plan 670 pence 425896 36 485
employee share option plan 740 pence 701365 60 882
employee share option plan 1280 pence 6251 1 14
employee share option plan 1540 pence 780 — 2
employee share option plan 1720 pence 846 — 1
employee share option plan 1575 pence 140000 12 159
employee share option plan 855 pence 1773736 151 2578
employee share option plan 510 pence 60000 5 52
employee share option plan 5875 pence 98999 8 99
employee share option plan 750 pence 803818 68 1024
employee share option plan 7325 pence 546075 46 680
employee share option plan 470 pence 182560 16 146
employee share option plan 1356 pence 55916 5 129
4796242 408 6251
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
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 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 24 april 2013 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 annual report and accounts 2012 pace plc 71
21 share capital continued
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
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
131992 1 june 2013 to 30 november 2013 1540
264121 1 june 2014 to 30 november 2014 1280
1322884 1 june 2015 to 30 november 2015 620
598295 3 june 2013 to 6 september 2013 580
20000 26 august 2004 to 25 august 2013 510
303000 2 october 2009 to 1 october 2016 5875
50000 19 february 2010 to 18 february 2017 695
120000 1 november 2010 to 31 october 2017 9775
687334 24 june 2011 to 23 june 2018 855
565497 24 june 2011 to 23 june 2013 855
154233 24 june 2012 to 23 june 2014 855
86675 24 june 2012 to 23 june 2018 855
200000 18 december 2012 to 17 december 2018 47 0
201519 11 march 2013 to 10 march 2019 750
993159 11 march 2012 to 10 march 2019 750
501882 30 july 2012 to 29 july 2019 19925
1767795 8 march 2013 to 7 march 2020 1767
176735 8 march 2014 to 7 march 2020 1767
150000 14 april 2013 to 13 april 2020 1968
91346 7 september 2013 to 6 september 2020 2080
90000 17 march 2014 to 16 march 2021 1658
100000 23 april 2015 to 22 april 2022 705
50000 19 june 2015 to 18 june 2022 9175
50000 19 june 2016 to 18 june 2022 9175
100000 26 july 2015 to 25 july 2022 1355
100000 11 october 2015 to 10 october 2022 1600
338810 31 may 2014 – contingent share award 50
600000 31 may 2014 – contingent share award 50
9815277 
the pace plc employee beneﬁts trust has granted options over existing shares to satisfy certain options details of these 
additional options are shown in note 24 financial statements
annual report and accounts 2012 pace plc 72
continued
notes
22 share premium account
group and company m
at 31 december 2011 731
premium on allotments 59
at 31 december 2012 790
the shares allotted during the year are listed in note 21
23 merger reserve
group and company m
at 31 december 2011 and 31 december 2012 1099
the merger reserve was created upon the acquisition of the stb and connectivity solutions business of royal philips electronics
24 retained earnings
group m
at 31 december 2011 2450
retained proﬁt for the year 584
dividends to equity shareholders 123
employee share incentive charges 79
at 31 december 2012 2990
company m
at 31 december 2011 2358
retained proﬁt for the year 142
dividends to equity shareholders 123
employee share incentive charges 79
at 31 december 2012 2456
own shares held
at 31 december 2012 the pace plc employee beneﬁt trust held 4414363 2011 9744470 shares in the company which cost 
122 million 2011 160 million these shares are held to satisfy options granted to employees
the amounts arising on settlement of share options from the employee share trust represents cash receipts from the exercise 
of relevant share options annual report and accounts 2012 pace plc 73
24 retained earnings continued
own shares held continued
the pace plc employee beneﬁt trust has granted options and contingent share awards 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
164988 26 august 2004 to 25 august 2013 510
105000 17 august 2005 to 16 august 2014 510
38829 2 october 2009 to 1 october 2016 588
962290 4 april 2014 to 3 april 2021 1535
1763330 14 march 2014 to 13 march 2021 698
814285 14 march 2015 to 13 march 2022 910
3848722 
the pace plc employee beneﬁt trust holds the following shares to satisfy the international performance share plan performance 
share plan deferred share bonus and share award plans operated by the company
number or ordinary shares subject to option exercise period
332410 26 february 2012 to 25 february 2020
2446115 8 march 2013 to 7 march 2020
56126 7 september 2013 to 6 september 2020
3110603 4 april 2014 to 3 april 2021
635765 18 march 2012 to 17 march 2014
1032609 28 february 2013 to 27 february 2021
456004 29 february 2014 to 28 february 2022
4847482 14 march 2015 to 14 march 2022
22745 26 july 2015 to 25 july 2022
12939859 
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 142 million 
2011 proﬁt after tax of 1073 million
26 capital commitments
2012 2011
group and company m m
contracted but not provided for 11 20 financial statements
annual report and accounts 2012 pace plc 74
continued
notes
27 employee beneﬁts
pension plans
the group contributes to several deﬁned contribution group personal pension plans which all executive directors and 
employees are entitled to join the total expense relating to these plans in the current year was 59 million 2011 52 million 
at 31 december 2012 contributions of nil 2011 nil were outstanding
sharebased payments 
details of the company’s share option plans are included in notes 21 and 24 and the directors’ remuneration report the number 
and weighted average exercise price of share options is as follows
weighted weighted
average average
exercise number exercise number
price of options price of options
2012 2012 2011 2011
outstanding at the beginning of the period 1656c 18203949 1762c 16240965
granted during the period 1217c 3194644 187 1c 5629830
forfeited during the period 2059c 3747162 2714c 3073283
exercised during the period 1206c 4926242 1216c 593563
outstanding at the end of the period 1711c 12725189 1656c 18203949
exercisable at the end of the period 1466c 4090597 1198c 5874980
of the share options exercised during the year 130000 were issued by the pace plc employee beneﬁt trust 2011 nil
outstanding options were as follows
weighted average
remaining
 number at contractual life weighted average
range of exercise prices pence 31 december 2012 months exercise price
47 pence – 75 pence 5861004 91 107c
855 pence – 9775 pence 2528024 82 144c
128 pence – 208 pence 4336161 58 278c
12725189 78 172c
the weighted average exercise price of options granted in the period was 1217 cents 2011 1871 cents
the weighted average fair value at the measurement date of options granted in the year was 571 cents 2011 723 cents
the weighted average exercise price at the date of exercise for options exercised in the year was 1206 cents 2011 1216 cents
the weighted average share price during the year was 2028 cents 2011 2914 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 following table 
gives the assumptions applied to the options granted in the respective periods shown expectations of early exercise are 
incorporated into the model where appropriate
2012 2011
average share price cents 2023c 1919c
weighted average exercise price cents 1720c 1656c
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 79 million 2011 78 million which is comprised entirely of equity settled transactions  annual report and accounts 2012 pace plc 75
28 leasing commitments 
total amounts payable under noncancellable operating lease rentals are as follows
group company
2012 2011 2012 2011
m m m m
land and buildings
within one year 86 92 11 12
between two and ﬁve years 235 241 23 48
in ﬁve years of more 62 96 — —
383 429 34 60
29 related parties
identity of related parties 
the group has a related party relationship with its subsidiaries and with its directors
transactions with subsidiaries 
the main transactions between the company and its subsidiaries consist mainly of payments by the company for distribution 
engineering and administrative support services provided by pace americas inc pace france and pace micro technology india 
private limited total transactions of 12246 million were made in the year 2011 7595 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 executive directors of the company the main transactions with these individuals 
are disclosed in the directors’ remuneration report on pages 23 to 30 
of the sharebased payments charge of 79 million 2011 78 million made in the period 19 2011 42 relates to options 
granted to the executive directors
30 free cash ﬂow and cash investment in acquisitions
2012 2011
m m
free cash ﬂow
cash generated from operations 2976 1500
tax paid 238 297
purchase of property plant and equipment 226 415
development expenditure 574 570
net interest paid 111 136
free cash ﬂow 1827 82
2012 2011
m m
cash investment in acquisitions in the year
acquisition of subsidiaries net of cash acquired 157 64
cash investment in acquisitions in the year 157 64
31 post balance sheet events 
there are no signiﬁcant or disclosable post balance sheet events  financial statements
annual report and accounts 2012 pace plc 76
directors secretary and advisers
directors
all of victoria road saltaire bd18 3lf england
allan leighton  nonexecutive chairman
mike pulli   chief executive ofﬁcer
roddy murray  chief financial ofﬁcer
patricia chapmanpincher nonexecutive director
john grant  nonexecutive director
mike inglis  nonexecutive director
amanda mesler  nonexecutive director
company secretary
anthony dixon
registered and head office
victoria road 
saltaire bd18 3lf 
england
registered number
01672847
auditors
kpmg audit plc
1 the embankment 
neville street 
leeds ls1 4dw
registrars
capita registrars ltd
the registry
134 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 annual report and accounts 2012 pace plc 77
financial statements
five year record
year year year year year
ended ended ended ended ended
31 31 31 31 31
december december december december december
2012 2011 2010 2009 2008
m m m m m
revenue 24034 23093 20629 17796 13717
proﬁt before tax 801 547 1102 1098 254
adjusted ebita 1581 1414 1606 1200 537
proﬁt after tax 584 388 773 808 204
basic eps 194c 132c 264c 278c 74c
basic adjusted eps 351c 297c 371c 303c 144c
total equity 4601 4071 3759 3159 2648
shareholder information
annual general meeting 
the company’s annual general meeting will be held on 24 april 2013 at the company’s head ofﬁce victoria road saltaire 
west yorkshire bd18 3lf 
capita registrars
enquiries regarding shareholdings change of address or other particulars should be directed in the ﬁrst instance to the 
company’s registrars capita registrars ltd the registry 134 beckenham road beckenham kent br3 4tu or by telephone 
on 0871 664 0300 they also provide a range of online shareholder information services at wwwcapitashareportalcom where 
shareholders can check their holdings and ﬁnd practical help on transferring shares or updating their details
multiple accounts on the shareholder register 
if you have received two or more copies of this document this means that there is more than one account in your name on the 
shareholder register this may be caused by either your name or address appearing on each account in a slightly different way 
for security reasons the registrars will not amalgamate the accounts without your consent if you would like any multiple 
accounts combined into one account please write to capita registrars at the address given above 
unsolicited mail 
the company is obliged by law to make its share register available upon request to the public and to other organisations which may 
use it as a mailing list resulting in shareholders receiving unsolicited mail shareholders wishing to limit the receipt of such mail 
should write to the mailing preference service dma house 70 margaret street london w1w 8ss or call 44 0 20 7291 3310 
for an application form or visit wwwmpsonlineorguk 
pace website
shareholders are encouraged to visit our website wwwpacecom which has a wealth of information about the company
five year record and shareholder information pace plc
victoria road 
saltaire 
bd18 3lf
tel 44 01274 532000 
fax 44 01274 532010
wwwpacecom pace plc annual report and accounts 2012


Summary:
 annual report and accounts 2012 pace plc 05
overview
chief executive ofﬁcer’s review
“ we have delivered a strong set of 
ﬁnancial results made good progress 
on our strategic plan and laid the 
foundation for continued improvement 
in operating performance over the next 
few years”
the strategic review we undertook in 2011 highlighted that we 
operate in sustainable and proﬁtable markets where we have 
differentiated capabilities however the group must execute on 
its three primary objectives to take advantage of the opportunities 
for improving both the level and quality of its earnings the group 
is focused on these objectives and has made good progress 
both in delivering strong results in 2012 and paving the way 
for improvement in 2013 and beyond
this progress is reﬂected in 2012 revenues of 24034 million 
up 41 on 2011 and adjusted ebita of 1581 million equivalent 
to 66 of revenues up 05ppt on 2011 prior to the impact 
of hard disk drive hdd supply disruption pace delivered 
an adjusted ebita margin of 73 up 09ppt on 2011
strategic plan
transform core economics
focus on operating efﬁciency has delivered sustainable savings 
in the year and pace is well underway in the transformation of its 
supply chain that will deliver tangible beneﬁts in 2013 and beyond
 — operating expenses preias 38 adjustments reduced by 
330 million 106 in 2012 this was achieved through the 
scaling down of corporate resources and a reorganisation of 
the americas and international business units whilst continuing 
to invest in the growth areas of software and services as such 
research and development expenditure as a percentage of 
underlying administrative spend increased by 24ppts to 57 0 
2011 546 a trend we intend to continue
summary
 the group focused on its strategic 
objectives and has made good progress 
both in delivering strong results in 2012 
and paving the way for improvement 
in 2013 and beyond
 the focus on operating efﬁciency through 
our transform core economics strategy has 
delivered sustainable savings
 pace has remained at the forefront 
of technological change with advanced 
media server hardware supplied into 
key customers
 good progress has been made in growing 
our software and services revenue 
with important wins underpinning further 
growth in 2013 annual report and accounts 2012 pace plc 06
overview
continued
chief executive ofﬁcer’s review
strategic plan continued
transform core economics continued
 — the disruption to hdd supply resulting from ﬂooding in 
thailand was a major challenge in 2012 however through 
keen operational focus and working closely with suppliers 
and customers the impact of this issue was contained 
within the ﬁrst half of the year with an adverse impact of 
768 million to revenue and 231 million to operating proﬁt 
well below initial expectations 
 — signiﬁcant progress has been made in the rationalisation and 
transformation of our supply chain in h2 2012 we selected 
two core electronics manufacturing services ems partners 
and aim to consolidate our manufacturing footprint around 
these by the end of h1 2013
 — we continue to make progress in the improvement and 
reduction of our approved vendor list avl optimised 
component selection has ensured that new platforms utilise 
fewer component stock keeping units skus and leveraging 
our ems partner relationships has enabled pace to reduce 
the number of vendors it buys from by over 12
 — inventory controls have been strengthened inventory is now 
tightly aligned to conﬁrmed future revenues and the mix of 
stock is improved with component stock reduced and faster 
turning ﬁnished goods increased during the year stock 
turns improved by 192 from 2011
 — cash generation was strong throughout the year free cash 
ﬂow was 1827 million 2011 82 million reﬂecting lower 
capital expenditure and realignment of working capital this 
has enabled pace to signiﬁcantly reduce its net debt which 
is now less than 1 x net debtadjusted ebitda
1

paytv hardware leadership
pace was reconﬁrmed as the market leader in paytv hardware 
global number one in settop boxes
2 
and residential gateways
3
 
and has maintained its position at the forefront of technological 
development with the launch and deployment of media server 
platforms at directv and comcast a number of media server 
wins across the world and continued demand for our core 
settop box stb and gateway platforms
 — stb and media server revenues were up 29 to 
18260 million in 2012 driven largely by the high demand 
for media servers in h2 for both directv’s genie™ advanced 
wholehome hd dvr and the xg1 for comcast’s new x1 
service we expect this technology trend to continue into 
2013 and we recently announced the approval for production 
of directv’s next generation hr44 genie™ media server 
and c41 mini genie™ client device
 — the move to media servers and whole home solutions is 
starting to move beyond north america and pace has achieved 
a number of key wins in europe asiapaciﬁc and latin america 
that will be deployed in 2013 and 2014 including foxtel telenet 
and get tv in norway
 — building on our global partnership with tivo that was 
announced in h1 2012 pace has been undertaking ﬁeld 
trials with an integrated solution consisting of tivo software 
and pace stbs and gateways and is actively pursuing 
signiﬁcant worldwide opportunities during 2013
 — gateways revenues were up 83 to 4694 million in 2012 
key wins in the year included mts the fourth largest telco 
in canada
widen out in software services and integrated solutions
we have achieved a number of key wins and deployments across 
all areas of our software and services offerings and have a strong 
pipeline into next year revenues in this area increased 76 to 
1080 million in 2012 and we expect further growth in 2013 
 — the pace elements software platform continues to gain 
signiﬁcant traction as part of an advanced integrated solution 
with a number of wins including sky new zealand and foxtel
 — pace elements is also a key part of our integrated solutions 
for emerging markets we have a number of operators 
deployed with this solution pace hardware software and 
latens conditional access system in india and have an 
encouraging pipeline in southern asia central eastern 
europe and cis
 — the pace cms software that was obtained through the 
2wire acquisition has been rebranded as the eco service 
management suite to reﬂect the evolving offering and 
simplify the marketing message during the year there 
were a number of signiﬁcant wins including bskyb telstra 
australia’s leading telecommunications and information 
services company and on brasil our ﬁrst eco win in 
the key market of brazil the eco platform is currently 
supporting our customers to manage nearly 25 million 
devices across the world
 — the latens softwarebased conditional access and digital 
rights management drm business made good headway 
with a 680 growth in the number of subscribers the product 
is deployed to on both pace and other vendors’ stb hardware
1 adjusted ebitda is adjusted ebita after adding back depreciation
2  by volume 2011 ims research the world market for digital settop boxes  idtvs – 2012 edition
3 by value 2011 infonetics broadband cpe and subscribers report 2q2012 annual report and accounts 2012 pace plc 07
business performance
pace’s markets have remained resilient during the year 
with paytv continuing to show growth despite difﬁcult global 
economic conditions and perceived disruptive threats from new 
overthetop ott market entrants overall in the markets in 
which pace operates digital paytv subscribers are expected 
to grow at c6 compound annual growth rate cagr 
between 2012 and 2016
4
 
a major development this year has been the emergence of 
the media server product as the market evolves to a more 
sophisticated digital device in the home pace is uniquely placed 
to support this technology upgrade cycle 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” this product category will evolve to become 
the main hub of the home enabling any data connectivity 
video broadband home automation etc around the home 
with both operatorprovided and consumerpurchased devices 
pace was recently identiﬁed as a market leader in this product 
category by industry analysts ihs screen digest a position 
which is forecast to continue to at least 2016
5

north america
north america is the largest most advanced and most proﬁtable 
market for digital paytv and broadband technology in the world 
with over 110 million paytv subscribers and close to 120 million 
broadband connections
6
 we believe the digital paytv market 
in north america will continue to see low singledigit annual 
growth in subscribers for the foreseeable future
pace is the only vendor to 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 tier two cable and telco operators in both 
the usa and canada
total revenues in north america increased by 237 to 
13176 million in 2012 2011 10651 million driven largely by 
strong demand from directv and comcast for media server 
products in h2 these 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
gateway revenues increased by 145 to 4487 million reﬂecting 
the continuing demand for high performance residential gateways 
from telcos and internet service providers isps to effectively 
deliver high quality tripleplay services
software and services revenues in north america increased by 7 2 
to 839 million this revenue is primarily comprised of customer care 
eco service management software and professional services
latin america
the latin america latam market is a large diverse and fast 
growing market within which pace serves satellite cable 
iptv and hybrid operators across the region with brazil 
mexico and argentina the key markets
the overall market has expanded signiﬁcantly over the last few 
years and continues to display strong subscriber growth with a 
predicted 16 cagr from 2012 to 2016
7
 this growth is led by 
a number of factors including greenﬁeld markets deregulation 
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 to support analogue to digital transition high 
deﬁnition hd continues to grow to meet growing consumer 
expectations and operators are starting to develop highend 
personal video recorders pvrs and media servers for roll out 
in 2013 and beyond
pace achieved a doubledigit increase in proﬁts in latam despite 
revenues being down by 202 to 37 44 million 201 1 4690 million 
pace reduced supply of low end “zapper” stbs with a resultant 
loss of revenue but has beneﬁted from focusing on highend 
products and integrated hardware and software solutions
pace’s business in latam continues to diversify pace is now 
providing product to eight of the ten largest paytv providers in 
the region and is making good progress in the sale and delivery 
of integrated solutions comprising pace hardware and software 
as well as gateways and next generation media server products 
the company remains conﬁdent that latam offers strong revenues 
and proﬁtability and is strategically well positioned in key markets 
and customers in the region
europe
europe remains a fragmented and highly customerspeciﬁc 
territory for pace revenues in europe were down by 121 
to 4024 million 2011 4577 million hdd supply disruption 
had an impact in this region but the decrease was mainly due 
to a reduced win rate of new products in 2011 which has adversely 
affected revenue in 2012 sales performance is improving and 
we have achieved key wins in new and existing customers
singledigit growth is predicted in the underlying european market
8
 
however we expect signiﬁcant growth in the media server area 
of the market as operators in europe follow the innovation of 
north american operators pace has been awarded the media 
server business for both telenet the largest cable operator in 
belgium partowned by liberty global and get tv in norway
4 6 ihs television intelligence service 2013 
5 ihs screen digest multimedia home gateways the future of the digital home 2013
7 8 ihs television intelligence service 2013 annual report and accounts 2012 pace plc 08
continued
overview
chief executive ofﬁcer’s review
business performance continued
europe continued
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 “fast following” 
markets in middle east and africa and the fast growing indian 
market revenues in rest of world are down 27 to 3090 million 
2011 3175 million this decrease was primarily due to hdd 
supply disruption in h1 as a number of operators delayed large 
marketing campaigns due to the higher input prices of the supply 
constrained components 
australia and new zealand are traditionally strong markets for 
pace in h1 2012 the company launched its ﬁrst advanced 
integrated solution with sky new zealand in h2 2012 foxtel 
the largest paytv operator in australia selected a pace 
solution consisting of pace elements software and pace media 
server hardware to deliver their next generation subscription 
tv service the integrated whole home solution will enable 
foxtel’s subscribers to consume discover and manage their 
viewing experience on any screen and from any location
india is a key growth market for pace as the country experiences 
large paytv subscriber growth and the transition from analogue 
to digital progresses in the cable sector during the year pace 
secured deals with a number of operators for its integrated solution 
for cable which combines stb hardware elements software 
platform and latens conditional access system
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
board changes
on 6 september 2012 we welcomed amanda mesler to the board 
as a new nonexecutive director
mike inglis will be retiring from his role as a nonexecutive director 
on the board at the annual general meeting on 24 april 2013
2013 outlook
pace has made considerable progress in 2012 but there remains 
further opportunity in 2013 to develop and improve the performance 
of the company we have a strong management team that is 
working well together and have a relentless focus on the execution 
of the strategic plan 
the paytv market that the company serves remains resilient 
and the demand for our products and services continues to 
be encouraging next generation media server products are 
performing strongly in the us market where technology upgrade 
is driving revenue growth in 2013 we will start to roll out these 
products to other operators in north america and other regions 
in addition as the group continues to develop its software 
services and integrated solutions offerings we are seeing increased 
opportunities for these assets in all markets that pace serves
going into 2013 the group has a clear plan and good line 
of sight to making further progress
mike pulli
chief executive ofﬁcer
5 march 2013