Find out more about KCOM Group and view this brochure!

3. The KCOM Group is a leading provider
of communications services to consumer
and business markets across the UK.
Our goal is to become an acknowledged leader
in the markets we serve and an automatic
partner of choice for individual consumers and
organisations in those markets.
We aim to help our customers exploit
communications and associated technologies
to improve the performance of their
businesses and organisations and to enhance
their personal communications experience.

5. Welcome
to the KCOM Group – a leading provider
of communications services to consumers
and organisations across the UK.
Our business was founded over 100 years ago and has grown and developed
both organically and by acquisition. Today, we are stronger than ever. As a
national business, our Group is organised to serve its two principal markets and
operates through four distinct customer-facing brands.
The aim of this brochure is to introduce you to what we do and to illustrate the
value that we bring to our customers. You will see that, whether for consumers at
home, small businesses or major organisations, we have the expertise, knowledge
and resources to deliver a communications solution that is perfect for you.
Our aim is to establish leadership in the markets we serve by continuing to build
our reputation for service excellence and by exploiting our ‘best-in-class’
partnerships. Our plans for the future are ambitious, but achievable. We hope
that you will join us on our journey, as we continue to deliver excellence now and
in the future.
Bill Halbert, Executive Chairman

6. Our Group
We want to enable our customers
to exploit the communications
revolution to enhance their personal
communications experience and to
help businesses and organisations
improve their performance.
What we do
The KCOM Group is a leading provider of communications
services to both consumer and business markets across
the UK.
The Group is organised to serve
Our customers
We are passionate about serving our customers – they are
its two principal markets
at the centre of everything we do. We seek to understand
their needs, match our capabilities and those of our
partners to their requirements and to deliver on our
promises better than the competition.
Our goal
Our goal is to become an acknowledged leader in the
markets we serve and an automatic partner of choice for
individual consumers and organisations in those markets.
Our strategy
In recent years the strategy of our Group has been driven
by the changing communications needs of our customers.
As a result, we are successfully creating a trusted and
profitable communication services business.
By structuring our organisation around the markets we
serve, we aim to deliver a high-quality customer experience,
a key ingredient in the creation of long term, sustainable
relationships.

7. Our strategic relationships
Our strategic relationships demonstrate our commitment to
focusing on the core activities that help us to deliver the
value added services our customers expect.
Consumers and
businesses in the BT and Phoenix IT
Hull and East
Yorkshire region Our strategic relationship with BT gives us extended market
reach and new services. By combining the footprint of
Small businesses and KCOM’s national network with BT’s, we are able to offer
consumers nationally unparalleled network reach and develop new competitive
propositions and services throughout the UK.
The relationship means that BT undertakes the
management of our network and provides KCOM Group
with access to BT’s network across the UK. Going forward,
we will be able to offer our customers complete access to a
Telecommunications and set of differentiated Next Generation Network products and
services based around BT’s 21st Century Network
internet-based services programme.
Our partnership with Phoenix gives us access to industry
leading field service engineering and maintenance services,
an integral and essential component of our propositions.
UK based
businesses and
public sector
organisations
Tailored communications
solutions to support
business goals

8. Proud to be
part of local life
KC is proud to provide Our aims:
a range of telecommunications and G To grow KC revenues through
broadband services to businesses and new products and services,
including bundled propositions
consumers throughout Hull and East and the roll out of a minimum
Yorkshire. It is the only telecoms provider in broadband speed of 2Mbps to
all customers
the UK to offer inclusive local calls in all its
telephone packages and is one of the G To achieve targeted geographic
expansion
founding UK providers of broadband internet.
KC is consistently at the forefront of G To establish a revitalised brand
communications to deliver the best quality experience
customer experience. G To champion the Digital Agenda
in the regeneration of Hull and
East Yorkshire and to shape the
future of broadband services
Our customers:
KC has delivered a number of industry ‘firsts’ for
its customers. These include Britain’s best-value
telephone calls packages, the UK’s first
weekday off-peak broadband
service, free local directory
enquiries and one of the
fastest broadband services in
the country. According to
independent tests by

9. ‘We don’t
have to worry about
how much we’re
downloading anymore, which
is fantastic. It is important
people have a choice of
packages to meet their
needs. Karoo Internet has
always been very quick’
Lee Jenkinson
Karoo Customer, Hull
broadband benchmarking company Epitiro,
Karoo, KC’s broadband service, consistently offers
the fastest speeds of any UK broadband provider.
KC Business recently launched KC Cloud, a range
of services for businesses which deliver hosted
Microsoft applications via a broadband
connection. KC also delivers the fastest response
and highest fix rate performance for local
businesses in the country and is the UK’s largest
wholesale directory enquiries (DQ) provider.
The business has committed to a multi-million
pound upgrade to the core network infrastructure
in Hull and its surrounding areas to provide a
platform for the launch of new products and
services.
KC is committed to delivering on its corporate
and social responsibilities to help break the
barriers to an inclusive society. We have a
programme of activities designed to raise the
aspirations of young people in the region. Using
our skills and technology, we believe we have the
opportunity to make a real difference to the local
community.
Further information:
To find out more about KC and its
activities, go to:
www.k-c.co.uk

10. Eclipse Internet provides a
range of Internet-based
services to small and
medium sized business and
discerning consumers across
the UK.Through the delivery
of exceptional service and
innovative technical
solutions, Eclipse Internet
offers a communications
one-stop-shop that gives
businesses the freedom to
grow and develop their own
organisation.

11. Aiming to become the number 1
ISP for small business
History: Our customers:
Eclipse was formed 15 years ago in 1995 by Our focus is on small to medium sized small business marketplace. We constantly look
entrepreneur Mark Lang. Positioned as a businesses and discerning consumers looking for for ways to innovate our service so that we are
specialist ISP delivering innovative, technical exceptional service. We aim to exceed adding more and more value to our target
products and services, the business went from customers’ expectations and to equip smaller market. Recent innovations range from giving
strength to strength. It joined the KCOM Group organisations with the communications customers more diagnostic tools so they can fix
in 2005 and has built a successful reputation as resources they need to grow their own business. their faults themselves to pro-active service
the leading ISP for small businesses across the monitoring that enables us to see a problem
We provide a range of broadband services before a customer does.
UK. including hosted e-mail, anti-spam/anti-virus
e-mail protection, domain registration, and The Group’s agreement with BT gives us
Our aspirations: managed server hosting as well as our extensive national network reach and enables
super-fast fibre broadband which delivers us to deliver leading-edge, technological
G To become the number one download speeds of up to 40Mbps and upload internet and hosting solutions to our growing
speeds of up to 10Mbps – five times faster than customer base.
ISP for small businesses existing standards. This enables businesses
to benefit from increased connection speeds
G and services including VPN, video conferencing
Further information:
To differentiate our brand in the
and VoIP. To find out more about Eclipse and its
market by delivering an industry
leading customer experience Our single UK based call centre promises activities, go to:
business customers an answer to a technical
G To have a team so good at what
support call in less than 60 seconds. Our fault www.eclipse.net.uk
rate is the lowest in the industry when
we do, we win industry awards compared to BT industry average reports across
every year the last 12 months. We fix more than 70% of
our faults when a customer calls us, at that first
point of contact. As a result, we are increasingly
recognised as a leading ISP provider to the
‘Eclipse’s
flexibility and
excellent customer service
give small business start-ups
like mine a chance to
really compete in our
own market’
Jeremy Lennard
Managing Director
JS3 Recruitment

12. Time
to create
tomorrow
R
Kcom is dedicated to helping
customers realise their
ambitions by taking care of
their critical communications
so they are free to plan, think
and progress.

13. We aim to lead the market
in the management of
critical communications
Our goals: G To transform our internal
operational processes and
G To lead the market in the systems, in order to drive
delivery of Managed efficiencies
Communications Services
G To become a business renowned
G To achieve significant revenue for uniting, energising and
and margin growth by inspiring
introducing compelling
communications-based Our customers:
propositions and services to the Our focus is on multi-site private and public
market that exploit fully our sector organisations that have complex
networking requirements but often lack the
relationship with BT, our internal resources to meet their increasingly
managed services capability and complex communications needs.
our expertise in specific customer The outsourcing of our network to BT gives us
sectors extensive network reach in the UK, access to
new customers and allows us to focus on the
G
experience we deliver to our customers.
To differentiate ourselves in the
market by delivering an industry Kcom also has a well-established reseller
channel providing solutions to partners that
leading customer experience allow them to increase their revenues and grow
their businesses.
Further information:
To find out more about Kcom
and its activities, go to:
www.kcom.com
‘They took the
task beyond a quick fix
and gave truly insightful
thought-leadership guidance
on where we could take the
systems capabilities in the
future. They’ve helped make
our growth possible.’
Simon Townley
Head of Infrastructure
Hermes

14. Facilitating business growth through
Smart421 specialises in systems integration and History:
managed services of business-critical systems for Smart421 was founded in 1999 and joined the
KCOM Group in September 2006.
large organisations with complex IT
requirements. Through taking an agile, specialist Our ambitions:
G To continue building long-term,
approach to technology, Smart421 is able to
successful partnerships with
deliver intelligent business technology solutions leading UK organisations
more reliably than offshore outsourcing
G Continual development of new
companies and more cost-effectively than larger
propositions that enable our
IT consultancies. clients to remain innovative and
Its expert approach means that it can help competitive
organisations to align information technology
G To deliver exceptional customer
to business strategy, ultimately releasing
service and the same or better
internal resources to enable companies to return on investment than the
compete, plan and grow. global IT consultancies
Customers:
Smart421 provides flexible, responsive
and cost-effective IT solutions that
facilitate the delivery of business
results. We provide specialist
communications packages, from
architecture and design consultancy,
through to the delivery of business
integration services, data management
and managed services.

15. ‘Smart421
are one of our most
trusted partners. They
consistently deliver on
time and to budget, and
their people are flexible,
reliable and committed to
our business’
Group IT Manager, ONE
technology
Smart421 technology specialists provide clients
with the market intelligence and technological
knowledge to enable their business to remain
flexible and one-step-ahead. Smart421’s ever-
evolving propositions enable clients to stay
ahead of the technology curve to exploit new
trends and innovations, increasing their
competitive edge.
Smart421 primarily serves the Financial Times
UK 500 list of large enterprise companies and
public sector organisations across the UK and
Europe, delivering added value solutions to their
complex IT requirements.
Further information:
To find out more about Smart421
and its activities, go to:
www.smart421.com

16. CSR

17. The KCOM Group recognises the importance of
approaching its responsibilities for corporate
social responsibility in a co-ordinated and
committed fashion.
Consultation with partners and employees Our ISO 14001 compliant Environmental
has allowed us to develop a corporate social Management System continues to ensure we
responsibility programme that is focused on manage our environmental responsibilities
four key areas: effectively, and our Environmental Plan ensures
clear objectives are set.
G Our work in the community This year has also seen a much greater focus on
G
the Carbon Reduction Commitment (CRC) and
Our commitment to our work has taken place in a number of areas to
workplace ensure we have a full programme in place to
capture the data required to meet our
G Our environmental policy obligations under the CRC.
The Group has also signed up to the 10:10
G Our ethical policy initiative. This is a project aimed at uniting
every sector of British society to achieve a 10
per cent cut in the UK’s carbon emissions in
Our work in the community: 2010.
Involvement in the local community is of
paramount importance to the KCOM Group. Our Our workplace:
consumer-facing brands are committed to
supporting their local area and we actively We recognise that our employees are vital to
encourage involvement in a variety of activities the success of the Group and this principle
including competitions and sponsored events. guides our decision making on how we
approach the management of people. Last
Our KC brand has an active community year, we were delighted to achieve re-
programme and has committed financial and accreditation of the Investors in People award,
human resource to three main community an award which recognises business success
partners for the next two years: Hull & Humber through its people.
KC Cares, Cat Zero and Hull Children’s
University. Recognising and celebrating the achievements
of employees is an important part of our
Annually, across the Group, we adopt a national workplace ethos and we have a variety of
charity and organise a series of events and recognition schemes in place. We encourage our
activities to raise funds. Our Group Charity of employees to participate in the success of the
the Year is always selected through an Group through share ownership. Our award
employee voting system and for this financial winning SIP scheme has entered its fourth year
year (2010/11), we will be working with the with over 60 per cent of the Group’s employees
Stroke Association. We aim to raise in excess of owning shares in the business.
£45,000.
Our ethical policy:
Our environmental policy:
We have an Ethics and Anti-Fraud Policy
We are committed to achieving a real and confirming our commitment to a culture of
sustainable positive impact on the broader openness, trust and integrity and to treat
community in which we live and work. We employees fairly and with respect. It confirms
believe that it is essential that both as a firm our commitment to protect employees,
and as individuals we should operate in an partners, suppliers, customers and shareholders
environmentally conscious manner. Our from illegal or damaging actions by individuals.
objective is to minimise the impact of our The Policy also sets out the Group’s zero
business activity on the environment, wherever tolerance approach to fraud.
possible. This includes ensuring that our
suppliers do likewise and that we persuade our
clients to consider environmental matters
wherever possible.

18. Financial statements
Consolidated income statement
For the year ended 31 March 2010
2010 2009
£’000 £’000
Continuing operations
Revenue 412,800 472,439
Operating expenses (386,250) (571,688)
Group operating profit/(loss) 26,550 (99,249)
Analysed as:
Group EBITDA before exceptional items 69,795 65,141
Exceptional items – impairment of goodwill – (106,890)
Exceptional items – other (10,205) (22,380)
Depreciation of property, plant and equipment (20,074) (20,331)
Amortisation of intangible assets (12,966) (14,789)
Finance costs (7,368) (12,304)
Finance income - 197
Share of (loss)/profit of associates (12) 11
Profit/(loss) before taxation 19,170 (111,345)
Taxation (1,477) 4,863
Profit/(loss) for the year 17,693 (106, 482)
Profit/(loss) for the year attributable to equity holders of the Company 17,693 (106,482)
Earnings/(loss) per share from continuing operations
Basic 13.47p (20.70p)
Diluted 3.38p (20.70p)
Consolidated statement of comprehensive income
For the year ended 31 March 2010
2010 2009
£’000 £’000
Profit/(loss) for the year 17,693 (106,482)
Other comprehensive income
Cash flow hedges 920 (6,568)
Actuarial gains/(losses) on retirement benefit obligation 5,620 (53,550)
Tax on items taken directly to equity (1,832) 14,957
Total comprehensive income/(loss) for the year attributable to equity holders 22,401 (151,643)

19. Balance sheets
As at 31 March 2010
Consolidated Parent Company
2010 2009 2010 2009
£’000 £’000 £’000 £’000
Non-current assets
Goodwill 85,272 86,410 - -
Intangible assets 10,547 20,502 - -
Property, plant and equipment 124,057 131,009 - -
Investments 1,054 1,049 234,215 234,215
Deferred tax assets 56,115 59,424 14,104 17,078
Amounts owed from subsidiary undertakings - - 260,267 237,239
277,045 298,394 508,586 488,532
Current assets
Inventories 3,608 4,117 - -
Trade and other receivables 76,927 86,469 232 512
Cash and cash equivalents 13,890 17,508 - -
94,425 108,094 232 512
Total assets 371,470 406,488 508,818 489,044
Current liabilities
Trade and other payables (144,678) (136,944) - -
Non-current liabilities
Bank loans (129,458) (174,195) - -
Retirement benefit obligation (50,373) (60,993) (50,373) (60,993)
Long term provisions and other payables (11,204) (13,737) - -
Total liabilities (335,713) (385,869) (50,373) (60,993)
Net assets 35,757 20,619 458,445 428,051
Capital and reserves attributable to equity
holders of the company
Share capital 51,660 51,660 51,660 51,660
Share premium account 353,231 353,231 353,231 353,231
Hedging and translation reserve (6,351) (7,271) - -
Retained earnings (362,783) (377,001) 53,554 23,160
Total equity 35,757 20,619 458,445 428,051

20. www.kcomplc.com