Annual Report & Accounts 2005
VT Group plc
VT House
Grange Drive, Hedge End
Southampton SO30 2DQ
T: +44 (0)23 8083 9001
F: +44 (0)23 8083 9002
E: vtgroup@vtplc.com
w: www.vtplc.com
Annual Report & Accounts 2005
www.vtplc.com
VT Group plc Annual Report & Accounts 2005 VT Group plc Annual Report & Accounts 2005
VT Group plc is a leading Support
Services and Shipbuilding company,
trusted by its customers to provide 
world class solutions through motivated
and committed staff worldwide
VT Support Services
VT Group’s Support Services business
consists of four divisions: Defence, US
Defense, Communications and Education
and Skills. Activities include technical
services, logistics and training for all three
armed services in the UK and for armed
forces around the world, critical
communication and broadcast services,
services to the education sector in the UK,
careers guidance and vocational training. 
VT Shipbuilding
VT Group’s Shipbuilding operations
comprise warships and marine products,
including small craft. VT is a leading exporter
of warships and an established prime
contractor for the design and construction 
of vessels ranging from frigates, corvettes
and offshore patrol vessels to pilot boats
and rigid inflatables. Specialist equipment 
for the marine, offshore and aerospace
industries is also manufactured.
Contents
01 Financial highlights 
02 Chairman’s statement
04 Chief executive’s review
06 Support Services
12 Shipbuilding
16 Human resources 
17 Group business development
18 Financial review
20 Corporate social responsibility
26 Board of directors
28 Report of the directors
29 Corporate governance
32 Remuneration report
38 Statement of directors’ responsibilities
39 Report of the independent auditors
40 Consolidated profit & loss account
41 Balance sheets
42 Consolidated cash flow statement
Reconciliation of net cash flow to 
movement in net debt
43 Consolidated statement of total
recognised gains and losses
Reconciliations of movements in
shareholders’ funds
44 Notes to the financial statements
64 Five year summary
65 Principal locations VT Group plc Annual Report & Accounts 2005 01
Financial highlights
Dividend per share
05
04
p 4.0 5.0 6.0 7.0 8.0 9.0
9.0
8.4 03
7.8 02
7.3 01
Cash flow from operating activities 
(before exceptionals)
05
04
£m 0 20406080 100
84
45
57
03
53
02
5
01
Earnings per share pre goodwill 
and exceptional items
05
04
p 4.0 8.0 12.0 16.0 20.0 24.0
20.8
18.1
03 16.6
02 15.1
01 14.7
Profit before tax, goodwill and exceptionals
05
04
£m 25 30 35 40 45 50
52.0
46.2
03 41.5
02 37.5
01 35.4
Turnover
05
04
£m 200 300 400 500 600 700
744
671
03 565
02 479
01 379
Order book
05
04
£m 500 1,000 1,500 2,000 2,500 3,000
2,695
2,414
03 2,031
02 1,551
01  1,117
9.75
2005 2004
£m £m %
Turnover 744 671 11
Profit before taxation, goodwill & exceptionals 52.0 46.2 13
Profit before taxation 42.9 26.3 63
Net cash excluding PFI 15.7 19.3 (19)
Dividend per share 9.75p 9.0p 8 I am pleased to report on another successful year with
turnover and profit up by 11% and 13% respectively. 
This demonstrates our commitment to achieving 
continued success and increasing shareholder value.
Chairman’s statement
Martin Jay Chairman
2004/5 was another strong year for VT Group
with turnover increasing by 11% to £744m
(2004: £671m). Profit before tax and the
amortisation of goodwill and exceptional items
improved by 13% to £52.0m (2004: £46.2m)
with the corresponding earnings per share also
improving by 15% to 20.8p (2004: 18.1p).
This performance has enabled the board to
recommend a final dividend of 7.00 pence
giving a total dividend for the year of 9.75 pence
per share, an increase of 8% over last year.
The group has a high visibility of earnings and
finished the year strongly with an order book
valued at £2.7bn (2004: £2.4bn). During the
year the most notable orders were to manage
the Royal New Zealand Navy’s dockyard in
Auckland (£100m), to build, operate and
maintain the South Wales Fire Brigade Training
Centre (£70m) and to construct an Offshore
Patrol Vessel (OPV) (Helicopter) for the Royal
Navy (initial value of £30m).
Our Support Services business continues to
perform well, growing both organically and
through acquisition. We completed two
acquisitions in the year, in the Education 
and Skills sector and in the US Defense 
sector, both of which fit with our strategy in
these areas. 
Our Shipbuilding business has had a strong
year with productivity at our new Portsmouth
facility up by over 20% compared with the
Woolston shipyard. This business has now
turned a corner in terms of performance and
the outlook is positive as we embark on one of
the largest planned UK warship building
programmes for many years.
During the year Terry Madden stepped down as
a director following the sale of certain trade and
assets of VT Engine Controls Limited. Terry had
been with the group since 1988 and we wish
him much success in the future. 
This will be my last chairman’s statement due 
to my imminent retirement from the board.
Having been with the group since 1989, I am
proud to have served first as chief executive
and then as chairman with a company that
continues to achieve such success and which
has an enviable reputation for both quality and
service. This can only be a mark of the
commitment and dedication of the people that
have worked and continue to work within VT.
I am delighted to be handing over the reins as
chairman to Michael Jeffries on July 5th 2005.
Michael was previously employed as chief
executive officer of WS Atkins plc from 1995 
to 2001 and was chairman from 2001 to 2005.
He is currently chairman of Wembley National
Stadium Limited and Wyless plc and a 
non-executive director of De La Rue plc.
Michael’s strong track record in building
successful Support Services businesses will, 
I am sure, prove extremely valuable to VT. 
I leave the group well placed and in a strong
position to take advantage of market
opportunities in the longer term.
Martin Jay Chairman
02 VT Group plc Annual Report & Accounts 2005 Number of  
employees
2005
1989
2005
1989
2005
1989
11,000
2,000
Turnover  
£m
744
93
Pre tax profit  
£m
52
10
“I am proud to have served first as chief executive and 
then as chairman with a company that continues to
achieve such success and which has an enviable
reputation for both quality and service.”
VT Group plc Annual Report & Accounts 2005 03 Our Vision 
“To be Recognised as the Number One
International Government Services Group”
The ‘Number One’ in our vision relates to the
quality and reputation that we strive for, as well
as the size of organisation we aspire to be in
future years. This builds on our existing
reputation for quality of service, project
management and customer focus.
We already have significant International reach
with operations across the globe within our
communications, shipbuilding, ship support,
aerospace and education and skills
businesses. To be truly international we will
continue to pursue opportunities overseas, 
with a specific focus on Europe and the 
United States.
Government Services embraces all forms of
services to governments, government bodies
and agencies. This does not prohibit VT Group
from addressing commercial markets outside 
of government but only if those markets 
are relevant to the business that we are 
already delivering.
04 VT Group plc Annual Report & Accounts 2005
The group continues to perform well as we take
further steps to meet our strategic objectives. 
The outlook for both our Support Services and
Shipbuilding businesses is encouraging as the
group moves forward into another promising year. 
Chief executive’s review
Paul Lester Chief Executive
Strategy
Over the past three years we have pursued a
consistent strategy:
• To win a major share of UK defence projects
• To grow our US business to over $500m
per annum
• To grow our Education and Skills business
to over £150m per annum
• To develop alliances with other defence
companies
We have made substantial progress in all 
areas of our strategy in 2004/05. Profits and
earnings have continued to grow in excess 
of 10% per annum. We have been named
preferred bidder (as part of the AirTanker
consortium) on the largest UK PFI project, 
the Future Strategic Tanker Aircraft (FSTA) and,
through strong organic growth and acquisitions,
both our US Defense and Education and Skills
businesses have increased in size by 57% and
22% respectively.
We anticipate that the UK Support Services
defence market will start to flatten after the 
next four to five years. With this in mind, VT 
will continue to expand in the US Defense 
and UK Education and Skills sectors.
Shipbuilding has substantial growth
opportunities both in the domestic and
international markets for at least the next ten
years. However, we continue to believe that
alleviating the peaks and troughs which have
traditionally beset the industry would benefit
both the UK Shipbuilding industry and its
customers. VT is taking a leading role in this
process.
Our Vision and Values
As the group has grown and diversified in
recent years, we continue to work on bringing
the various parts of the business together and
ensure we all have a common understanding of
VT Group’s objectives. The vision has been
developed through a number of workshops,
involving management from across the group.
Our vision now clearly outlines our aspirations
and gives both our internal and external
stakeholders an understanding of what we, as
a group, want to be. Underpinning this vision is
our set of core values which define the way we
operate as an organisation.  VT Group plc Annual Report & Accounts 2005 05
Our Values
Passionate about People
We believe that the quality of our people directly
contributes to business success and we must
demonstrate our commitment to them by
enabling them to release their full potential and
achieve their goals. We will do this by:
• Valuing contribution and teamwork
• Effective communication
• Empowering people
• Demonstrating commitment to personal
development
• Sharing the success
Performance Driven
As the business grows we must ensure that 
we continue to deliver excellence to both our
internal and external customers and that our
employees are focused on performance.  
We will do this by:
• Adopting a ‘can do – will do’ approach
• Being results focused – understanding 
and working towards individual and 
shared targets
• Encouraging and demonstrating 
innovation and creativity
• Demonstrating integrity
• Delivering the requirements
Partnering with Customers and Suppliers
VT is recognised by many customers as a
trusted and reliable partner that can deliver the
specified requirement on time and to budget.
We will continue to do this and develop that
recognition with suppliers by: 
• Developing and maintaining 
positive relationships 
• Listening to and understanding the 
needs of customers and suppliers
• Encouraging openness and honesty
• Promoting teamwork
• Sharing the success
Many companies develop vision and values
statements but fail to make them happen.  
With commitment from senior management 
and involvement by all employees across the
group, we will ensure our vision and values ‘live’
within the group in the long term.
Management 
The group has doubled its size over the past
four years. This has meant we have needed 
to strengthen our management. In the past
twelve months, Jo Robbins, Human Resources
Director, and Matthew Jowett, General
Counsel, have joined the Group Executive
Committee. They have had substantial
experience in working within larger companies
which will greatly benefit VT.
I would like to express my appreciation for the
committed contribution made by Martin Jay
over the past sixteen years, the last three as
chairman. Under Martin’s leadership VT has
been transformed from a Shipbuilding to a
leading Support Services group.
I look forward to continuing to grow the group
successfully with Mike Jeffries whose wealth of
experience in the Support Services sector will
add a new dimension to VT.
Paul Lester Chief Executive
“Our Vision To be Recognised as the
Number One International Government
Services Group”
Copyright DESO, Ministry of Defence
Michael Jeffries and Paul Lester
Left to right: Paul Lester, Lord Bach, Sir David Wright, Bill Rommell 06 VT Group plc Annual Report & Accounts 2005
We continue to achieve high quality and stable growth
within our Support Services business and this year
has seen the successful completion of a number of
significant contract wins and acquisitions.
Support Services
Simon Tarrant Managing Director,
Support Services
Support Services
In Support Services operating profits before
goodwill amortisation and exceptional items
were £46.0m (2004: £41.8m) on turnover of
£591.2m (2004: £514.1m).
The contract wins achieved and acquisitions
completed in the year underpin our strategy of
growing our Education and Skills and US
Defense businesses and build on the solid
base of our defence activity both in the UK 
and overseas.
During the year we have also undertaken
restructuring exercises within a number of 
our Support Services businesses to ensure 
that operational structures reflect the activities 
of our businesses and the evolving needs of 
our customers.
VT Defence
VT provides technical services, logistics and
training for all three Armed Services in the 
UK and around the world. Activities include
facilities management, operation and
maintenance of assets, provision of 
specialist manpower and supply chain
management. Defence support services
remains our largest market, accounting for
38% of sales during the year.
VT Naval Support is now providing a full
integrated logistic support service to the RN 
for all three River Class OPVs, the fishery
protection vessels built by VT Shipbuilding.  
The contracts are performing well with
availability of service in excess of 97% for all
vessels. This exceeds the contracted days
specified by the customer. A similar service will
commence in 2006 for the OPV(H), following
the award of the contract in early 2005 to VT for
both the construction and support. This ship will
be owned by VT and provided for the RN with
VT remunerated on the basis of its availability. 
During the year, VT successfully extended its
aircraft support contract with the Royal Air Force
of Oman. The extension, for a further 5 years,
means VT will have successfully supported the
Royal Air Force of Oman for over 45 years.
The AirTanker consortium comprising VT, 
EADS, Thales, Rolls Royce, and Cobham was
appointed preferred bidder on the FSTA project
in March 2005. This project is valued at 
£13 billion over 27 years. It will provide a
comprehensive in-flight refuelling and transport
capability for the Royal Air Force. VT, a 10%
shareholder in the consortium, is also
responsible for the provision of a range of
supporting services which are expected to 
be worth approximately £150 million in the
early years of the programme. This includes 
the construction of the main operating hangars 
at RAF Brize Norton where the aircraft will be
based.  It is anticipated that financial close on
the project will be achieved within the next 
18 months.
VT Defence is currently bidding for the UK
Military Flying Training System (UKMFTS) in a
Joint Venture with Lockheed Martin, known as
Ascent. The MoD is seeking proposals for a
Training System Partner to be responsible for
the design, implementation, integration and
ongoing development of a replacement flying
training system. The contract award is expected
to be made in January 2007 with the 25-year
programme commencing in April 2007.
2005 2004
£m £m
Turnover 591.2 514.1
Operating Profit* 46.0 41.8
Order Book 2,410 2,063
* before goodwill and exceptional items VT Group plc Annual Report & Accounts 2005 07
This PFI programme, valued by the MoD at
£13bn will modernise air refuelling and air
transport services for the RAF . Having
become a full shareholding member of the
AirTanker consortium in July 2004, we will be
the support services provider and will deliver
the operating facility at RAF Brize Norton,
facilities management, technical services and
general back office support. 
AirTanker consortium
named preferred bidder
on the Future Strategic
Tanker Aircraft
programme
The £70m contract, signed in August 2004, 
to build, operate and maintain a new fire
training centre in South Wales strengthens
our position as a leading UK provider of 
fire fighting training services. As with our
similar contract with the Somerset, Avon and
Gloucestershire brigade, the contract is for a
25-year period. Building has commenced and
construction is on programme for completion
in September 2005.
VT expands its fire
fighting training activities
with a contract in 
South Wales
In July 2004 we signed a contract to manage
New Zealand’s naval dockyard in Devonport,
near Auckland. We are now carrying out the
role through our joint venture VT Fitzroy
Limited, undertaking the maintenance and
repair of the Navy’s ships and commercial
vessels. The initial contract is worth over
£100m for a period of ten years, with an
option of a further five.
VT wins contract to run
Royal New Zealand
Navy’s main dockyard Support Services
The Defence Training Rationalisation (DTR)
project gained new momentum with the issue
of an Invitation to Negotiate (ITN) in November
2004. The £3 billion project seeks a long-term
partner to assist the MoD in the modernisation
of specialist training across the three Services.
VT is one of three equal shareholders in MC3, a
consortium of VT, BAE Systems and Carillion.
This project is of major significance to VT due
to our presence, both as VT Group and
through our joint venture Flagship Training
Limited (Flagship), at a number of MoD training
establishments and our involvement in training
support and delivery. An ITN response to the
customer is currently scheduled for
September 2005.
VT commenced operation of the Severn Park
Fire and Rescue Training Centre in April 2003
under a 25 year PFI Partnering Agreement 
with Somerset, Avon and Gloucestershire Fire
Authorities. The centre provides some of the
most modern fire training facilities in the country
and has successfully completed its second
year of operation, which saw in excess of
14,000 student days delivered. 
Following contract award in August 2004 we
are currently building a Fire Training Centre in
Cardiff under a 25 year PFI contract with South
Wales Fire Authority. VT is responsible for
designing, building, maintaining, operating 
and funding the Training Centre and will deliver
around 11,500 student days of training per
annum in partnership with the South Wales 
Fire & Rescue Service.
Fleet Support Limited (FSL), our 50% joint
venture, has built on its ship repair and
maintenance foundations and now delivers a
wider range of services, including integrated
ship support, facilities management,
engineering services and logistics support. 
A number of high profile major projects were
completed during the year. HMS Nottingham,
the Type 42 Destroyer damaged on rocks off
Australia in 2002, was returned to the fleet in
July 2004 and Regele Ferdinand, the first of 
the two Type 22 Frigates for Romania was
delivered in December 2004. FSL’s ship
engineering programme for 2005/6 will be
dominated by the HMS Richmond refit, 
a contract won in January 2005, Type 42
destroyer decommissioning and the completion
of the final Romanian Type 22 Frigate. The long
term contract to operate the Portsmouth Naval
Base performed well in 2004/5. 
It has been another strong year for Flagship, 
the Royal Navy’s training partner and our other
principal 50% joint venture. A number of key
contracts were secured including a £20m
extension to an existing contract to design and
deliver training courses for the crews of the new
Astute Class submarines and a £40m contract
to extend the scope of services provided for
the Royal Navy. In addition the joint venture 
won a contract to train 1,000 Network Rail
Engineering Modern Apprentices over the 
next 5 years.
With Flagship bidding for further opportunities
with the Royal Navy and on a tri-service basis
through the DTR project, sustained further
growth is anticipated.
VT Education and Skills
Our Education and Skills business provides a
wide range of supporting services to schools,
LEAs and Central Government. VT is the largest
provider of careers guidance and related
services to young people and adults and the
second largest private sector provider of
vocational work based training in the UK.
On 1 April 2004 we launched VT Four S, 
a unique partnership with Surrey County
Council to deliver school and Local Education
Authority support services in Surrey and across
the UK. The business has grown in its first year,
winning new work including an important
strategic consultancy for the Isle of Wight and 
a contract to deliver training to Higher Level
Teaching Assistants in the South East.
08 VT Group plc Annual Report & Accounts 2005
FSL repaired 
HMS Nottingham
following an incident off
the coast of Australia VT Group plc Annual Report & Accounts 2005 09
In October 2004 we strengthened our position
as one of the UK’s leading providers of
guidance services for young people and
adults with the acquisition of Guidance
Enterprises Group through a 50/50 joint
venture with Enterprise plc. As an established
player in the provision of careers advisory and
youth support services, this acquisition will
further grow our business in supplying
guidance for young people and provide a
presence in the North of England.
Acquisition expands 
VT’s guidance services
to the North of England
VT Plus Training, one of the UK’s leading
companies in providing vocational training, 
is currently managing the development of a
new group of hopefuls taking part in The
Hoxton Apprenticeship Scheme in London. 
The scheme, a unique restaurant venture,
provides job opportunities for unemployed
people in the local community by training
them as chefs and front of house staff.
VT Plus Training 
helps new group of
catering hopefuls
VT Communications has provided a vital link
enabling communities across Afghanistan to
receive radio programming produced live
from Kabul. As part of USAID’s rebuilding
efforts in the country, Internews is charged
with developing indigenous radio in
Afghanistan. VT Communications devised an
innovative distribution solution providing 
radio programming to 35 FM/MW networked
stations in addition to a countrywide
shortwave service.
VT Communications
deliver critical news
programming into
Afghanistan for
Internews Support Services
10 VT Group plc Annual Report & Accounts 2005
Launch of VT Four S, 
a unique partnership with
Surrey County Council
Within our careers guidance business, we 
are pleased to report that several contracts
have been secured, most recently against
competitive tender in Milton Keynes,
Oxfordshire and Buckinghamshire. 
However, the year began with the loss of 
two Connexions contracts as these were 
taken in-house by the customer.
In October 2004 we acquired Guidance
Enterprises Group, for a consideration of
£2.5m, with a turnover of £15 million and a
strong position in Yorkshire and in London. 
We were also successful during the year in
winning a set of adult guidance contracts worth 
£5 million from the Learning and Skills Council,
more than any other contractor.
VT Plus Training continues to perform strongly 
in the fast growing vocational training field.
Revenue has grown in the year by 15% and
has included some ground-breaking training of
support staff for the NHS and a new contract
for 500 learners in Wales.
During the year we launched Learning21
(Learning for the 21st century), our consortium
with Costain plc to address the significant
Building Schools for the Future programme 
on which the Government intends to spend
over £15 billion during the next 15 years. 
This programme is designed to refurbish or
rebuild every secondary school in England. 
VT Communications
VT Communications is a leading provider 
of critical communications services to
customers in the broadcast, defence, 
space, emergency services and security
sectors worldwide. 
Our international broadcast business is
benefiting from the technological challenges
affecting broadcasters with the advent of
digitalisation. New broadcast work has been
won with NHK (Radio Japan), Radio China 
and the US government, operating in the
Middle East. 
Our communications contract with the Defence
Procurement Agency, the £200m Defence High
Frequency Communications Service contract, 
is progressing well against the capability
enhancement programme and we are
exceeding the service levels set down in 
the original contract. 
Additional contracts have been won with 
the Swedish navy as we take our Very Low
Frequency (VLF) and Low Frequency (LF)
expertise to new customers outside of the UK.
We also won a £12m contract to operate and
maintain the power generation facilities for 
the military garrison in the Falklands Islands. 
This takes our total personnel in the Falklands
to over 60 servicing four different contracts. VT Group plc Annual Report & Accounts 2005 11
In March of this year, we strengthened our
capability in the US with the acquisition of 
The Cube Corporation. Their principal business
is facilities management for various government
agencies such as the US Department of
Defense and other Federal Government
customers including NASA, the Department 
of Labor and the Department of Agriculture. 
This is an important step in growing our US
business and adds an additional 1,000
employees to our workforce. 
Washington-based
acquisition strengthens
VT’s US Defense business
US Defense
VT Griffin provides a complete range of base
operations and facilities management activities
primarily for the US Department of Defense.
Operating across the US, VT Griffin is contracted
to the US Airforce, US Navy and US Army.
The highlights of the year have been the
acquisition of The Cube Corporation; the full
consolidation of the JA Jones contracts into 
the VT portfolio; the continued generation of
additional work as a result of the support
needed for US military activities in South 
West Asia; and the further refinement of our
overall strategy for the growth of the US
Defense business. 
The performance of the contracts acquired from
JA Jones has been above our expectations.
The most significant contract acquired was 
the base operations support services contract
for the US Navy at King’s Bay, Georgia.
This contract includes award fee provisions.
The actual awards made by the Navy have
been exceptionally high with the Navy noting
explicitly their satisfaction at the seamless
transition following the takeover by VT. 
The performance of our overall contract portfolio
has again been boosted by the additional level
of work needed to support the US military
overseas, particularly in Iraq. We were also
pleased to win an important logistics contract
with the US Army at Fort Huachuca, Arizona,
towards the end of the year as well as the 
Base Augmentation and Support Services
(BASS) contract at Fort McCoy, Wisconsin, 
a strategically important win which positions 
us well for further support work in the Army’s
‘power projection platform’ network of bases
used for overseas deployment. 
The outlook for the base operations support
market continues to be strong. Moreover there
will be further expansion of this market from
outsourcing driven by the Federal Government’s
need to find more efficient means of supporting
the military mission. 2005 will also see the
announcement of the next round of Base
Realignment and Closure proposals. 
We believe that these programmes will offer
more opportunities for the commercial sector 
to provide services to the Federal Government.
Our business development team is now well
positioned to take advantage of the highly
attractive opportunities in the base operations
market place.
Submarine departs
Kings Bay Georgia
VT wins logistics
contract with the US
Army at Fort Huachuca,
Arizona 12 VT Group plc Annual Report & Accounts 2005
We are exceeding our planned efficiency gains 
in our new facility and shipbuilding has substantial
growth opportunities both in the domestic and
international markets.
Shipbuilding
Peter McIntosh Managing Director,
Shipbuilding
In Shipbuilding operating profits before goodwill
amortisation were £10.3m (2004: £7.4m) on
turnover of £152.5m (2004: £156.5m).
Our new facility at Portsmouth is operating
extremely well and we have now completed 
the reorganising and restructuring process 
that began some eighteen months ago. 
This has involved the introduction of a senior
management development programme, better
targeting of our sales activity and improving
efficiencies within the production process. 
Overall, our objective is to match our world
class facilities with the required improvement 
in our business culture and, having been
through a challenging transitional phase, 
we believe we are starting to see
improvements, both in terms of our
management and employee performance.
Efficiency gains have been achieved through
the investment made in the new facility and we
have successfully concluded revised working
practices enabling 7 day, 24 hour working
when required. This will enable us to
accommodate bigger programmes using 
the additional capacity we now have, an
encouraging trend when looking forward to 
our strong prospects for both UK and export.
Progress on the Type 45 Class destroyers has
been significant in the year with the major
blocks of the first of class, HMS Daring, being
delivered in June. Ship 2 is over 50% complete
and Ship 3 is well advanced in production with
Ship 4 due to start towards the end of this year.
We welcome the Government’s commitment
given last year to additional Type 45s for the
Royal Navy, bringing the total to eight ships,
and we expect to have a substantial role in their
construction.
Our Portsmouth facility will also benefit from 
the construction of a new 80m Offshore Patrol
Vessel (Helicopter) (OPV(H)) that will replace the
Royal Navy’s two existing Castle Class OPVs
and will carry out the role of Falkland Islands
Patrol Vessel. This provides the opportunity to
build a first complete ship in our new facility and
enables us to retain ‘whole ship’ skills. The new
OPV(H) will be built to a similar design as the
three River Class, which were built in our
Woolston facility, but in a shorter timescale and
at a lower cost to the customer.
Despite the challenges of delivery on Mirabella V,
we were pleased to offer our assistance when
she received extensive damage to her keel in
late summer 2004. Although the repairs were
technically demanding, the work was
completed successfully.  
Work on the Super Vita Fast Attack Craft for
the Hellenic Navy has progressed slowly
towards acceptance phase for the first three
vessels with the first and second vessels
undertaking weapons trials and final defect
clearance. The third vessel is anticipated to
complete before the end of the year. Work on
ships 4 and 5 is well underway with delivery
on target in 2007. We remain optimistic about
the requirement for extra vessels of this class
by the Hellenic Navy.
Progress on the Aircraft Carrier project 
(CVF) has been well publicised. We remain
committed to playing a major role and
continue to discuss significant workshare with
our industrial partners. The improved capacity
at Portsmouth means we are in a good
position to play a major production role in this
project. The CVF project is almost certainly
going to shape the industry moving forward
and therefore has received and will continue to
receive significant senior management time 
and attention.
2005 2004
£m £m
Turnover 152.5 156.5
Operating Profit* 10.3 7.4
Order Book 285 351
* before goodwill and exceptional items VT Group plc Annual Report & Accounts 2005 13 VT Group plc Annual Report & Accounts 2005 13
In February 2005 we were awarded a 
contract by the Ministry of Defence for 
the construction of a new 80m OPV(H) that
will replace the Royal Navy’s two existing
Castle Class OPVs and will carry out the 
role of Falkland Islands Patrol Vessel. 
The programme is expected to be worth an
initial total of around £30m.
VT secures contract 
for new Offshore 
Patrol Vessel
Production officially commenced on HMS
Diamond, the third of the Royal Navy’s new
Type 45 destroyers, at VT Shipbuilding’s
facilities in February. We have made
impressive progress on this project, to build
the bow section, funnels and masts for each
of the six Type 45 ships so far ordered. 
This progress reflects the advantages of our
£50m state-of-the-art shipbuilding facilities.
Latest Type 45 start
underlines VT capability
In the summer of 2004 we launched the first
vessel to be built in Portsmouth Naval Base
for 37 years. The 90m barge was the first
vessel to be built at our new facility in
Portsmouth and will be used to transport
sections of the Type 45 destroyer, which are
being constructed at VT, for assembly in
Scotland.
VT barge returns
shipbuilding to
Portsmouth Naval Base Shipbuilding
There has been a marked increase in the
enquiries we are receiving from overseas
customers for UK builds. This is in contrast to
the increase we had previously experienced in
the requirement for indigenous construction
using technology transfer. 
The demand for coastal protection and Search
and Rescue capability, in the wake of the Gulf
War, Caribbean hurricanes and Tsunami
disaster, have all led to this trend. These
regions are now looking for a low cost solution
and VT has invested in product development
to suit this demand. Prospects remain positive
in the Middle East and Caribbean. In particular,
OPVs based on the River Class have received
a tremendous amount of export interest.  
Our largest export prospect remains the UK
build of three OPVs for the Royal Navy of
Oman. During the year, the number of
competitors has been reduced and we
anticipate the competition to conclude at the
end of this year.
We continue to enhance our reputation for
consistent reliable project management and 
are committed to delivering programmes to
budget and on time. Customer and supplier
relationships are very much the focus within 
the management development initiative and it
remains our priority to work together to provide
the best solutions and results.  
Marine Products has been restructured this
year to combine the four main brands of 
VT Halmatic, Composite Technology 
Centre (CTC), VT Naiad Marine (VT Naiad) and
VT Maritime Dynamics Inc. (VT MDI) together
with the numerous sub brands. Marketing is
now focused on the four main brands.  
Projects this year included delivery by VT
Halmatic of a new ferry for the route linking
Portsmouth and Gosport, composite covers 
for British Nuclear Fuels and their German and
Canadian counterparts and numerous projects
for the UK MoD and Royal National Lifeboat
Institution. Important progress has also been
achieved on partnering agreements with
companies in both the Middle East and the 
US which will enable us to further capitalise on
business already undertaken in these areas. 
VT MDI’s stabilisation systems for Norwegian
air cushion supported patrol boats and fast
Rigid Inflatable Boats in the US are both
significant orders. VT Naiad’s newly unified
stabiliser range is selling in the traditional US
and European markets as well as New
Zealand, Australia, Taiwan, China and Russia.
The markets for both commercial and leisure
equipment have been quiet. However, we
have continued to win a large market share
and with product and market development 
we expect this gradually to increase further.
Two important ride control orders at VT MDI
this year for the Lockheed Martin Littoral
Combat Ship and a new multi-hull vessel
under build in the Far East carry good work
into this financial year.
The Marine Products businesses are oriented
to a high volume of mostly individual and small
orders and the personnel and structures are
arranged accordingly. We intend to continue to
develop the people who will provide technical
excellence, initiative, service and value for
money which are key to maximising the
potential of the division.
Following consolidation of its business, 
VT TSS achieved growth in turnover through 
its re-focused approach to the navigation 
and sensor markets. Strategic initiatives 
were undertaken to maintain growth in the
future and the current activity in the oil and 
gas industry is helping to support this 
growth profile.
VT won the contract 
to refit boats for the
RNLI
14 VT Group plc Annual Report & Accounts 2005 VT Group plc Annual Report & Accounts 2005 15
VT Halmatic has recently delivered an initial
order for seven new training boats to the UK’s 
Sea Cadet organisation. Run by volunteers,
the Sea Cadets is a nationwide youth
organisation, concentrating on waterborne
activities, which is open to young people
aged 10 to 18 years of age. The new vessels
are extremely manoeuvrable and provide the
stability needed for Naval training.
Sea Cadets receive 
new training boats
Specialist marine motion stabilisation experts
VT Maritime Dynamics (MDI) are to provide
systems for a cutting edge ship project.
MDI, working in conjunction with Italian
partners Fincantieri, has been selected to
provide the Ride Control Systems for the new
Littoral Combat Ship which could be the
forerunner of a fleet of such ships for the 
US Navy. MDI is part of the Lockheed Martin
team building the initial 115m ship at the
Marinette Marine shipyard in Wisconsin.
MDI will provide the transom-mounted
interceptors and the overall control system.
Motion control
specialists step 
into the future
In December 2004, VT Halmatic secured a
contract to manufacture the Royal Navy’s
next generation of naval seaboats. The new
Pacific 24 is based on a highly proven hull
form that offers exceptional seakeeping and
load carrying ability. The boats have come a
long way from the Pacific 22 MkI which first
entered service in 1982.
VT Halmatic to
manufacture the Royal
Navy’s next generation 
of seaboat
VT Group plc Annual Report & Accounts 2005 15 This year has seen the introduction of the
group’s vision and values. These were
launched at the Management Conference in
March, and over the next year volunteer ‘value
champions’ from across all business units will
run workshops to embed the vision and
values throughout the organisation. Employees
will have the opportunity to debate and
personalise the values. They will also define
the key behaviours that are required to
support them.
The HR Function is the business guardian of
our value ‘passionate about people’ and we
strongly believe that by focusing on people,
we will enable the group to meet and exceed
business goals.
The group’s HR strategy will seek to foster a
coaching culture where leaders focus on
performance. In particular the function will
focus on four key HR requirements:
• Organisational Competence – ensuring that
the business has the right people in the right
place to meet tomorrow’s needs
• Total Reward – designing our reward and
recognition systems to support our drive for
performance excellence
16 VT Group plc Annual Report & Accounts 2005
We believe that the quality of our people directly
contributes to business success and we must
demonstrate our commitment to them.
Jo Robbins
Human Resource Director
Human resources
• Management Development – delivering
skills, capability and knowledge training
against individual learning plans
• Talent and Succession Planning Management
– identifying new potential both internally and
externally, putting in place clear succession
planning processes to ensure high calibre
employees can fulfil their potential.
The development of individuals is one of the
key requirements. The group held its annual
training awards ceremony in the spring,
recognising the efforts VT employees from
across all business units worldwide have
made in furthering their skills and knowledge.
Employees and their families were present to
see the awards presented and to enjoy a gala
dinner arranged to recognise and thank all
individuals for the support they give the
business.
Skills training is essential for our
competitiveness. The Shipbuilding Learning
Centre continues to be a central part of our
training facility and we are encouraging more
employees and their managers to benefit from
it. Our apprenticeship schemes continue to be
in high demand and the group is committed to
continuing these programmes into the future.
We have introduced a UK wide flexible
benefits scheme this year, and whilst still in its
early stages, we are pleased that a substantial
number of employees are participating in the
government-sponsored scheme to buy a
home computer via payroll deduction, 
enabling the purchase of a PC at a lower 
cost than would normally be available.
Employees may also trade holidays and take
advantage of group negotiated discounts in
insurance and childcare.
We have formalised our group-wide graduate
recruitment and training programme and this
will be expanded in the coming year. We look
forward to welcoming our new graduates in
September.
Dame Tanni Grey Thompson VT Group plc Annual Report & Accounts 2005 17
We have made substantial progress in all areas of our
strategy in 2004/5 and the development of the group
will continue in line with this strategy and our vision.
Simon Withey
Group Business Development Director
The central group business development team
provides support to the operating units on a
range of key business development activities
including strategy development, acquisitions,
major bids, marketing and communications. 
Our strategic planning process is driven by an
internal focus group of senior management,
each bringing their aspirations, objectives and
knowledge of their sectors to the discussions.
This group generates the vision, agrees the
priorities and pulls together the various strands
of VT’s strategy.  
Major bid (PPP/PFI) support includes financial,
commercial and bid management expertise
deployed to work with bid teams across the
group. In terms of governance, a rigorous major
bid process, including reviews, risk management
and strategic development is managed centrally.
Our acquisition activity is focused on the 
areas for growth identified within our strategy. 
Our team works closely with the operating units
on identifying targets, assessing their strategic
relevance, due diligence and post completion
integration. This is an area in which VT has
been particularly active in recent years and we
expect that trend to continue.
As the group has grown and diversified, so we
have put greater efforts into communicating 
to our employees and encouraging them to
communicate with each other across the
business. Regular meetings involving senior
management take place throughout the 
year where the group’s performance, 
targets, strategy and vision are presented 
and discussed.
Externally, we continue to ensure that the
corporate identity is being strengthened 
through a consistent and recognisable brand.
Our website was re-launched last year to reflect
better our business, capabilities and structure.
The vision and values will help to underpin our
brand by helping to identify what VT stands for
and our aspirations.  
Our customers are key to the future success 
of our business and, as such, we are keen to
co-ordinate and manage our relationships with
them. Customer surveys and feedback are vital
to this process and we are undertaking an
extensive exercise in this area.
Group business development 2005 was another year of progress
with turnover and profits growing in
line with our expectations.
Financial review
Chris Cundy Finance Director
Profit and Loss Account
Total group turnover increased by 11% to
£744m. Support Services grew by 15% 
to £591.2m and now represents 79% of
group turnover.
Reported pre-tax profit before goodwill
amortisation and exceptional items was
£52.0m, a growth of 13%.
Exceptional costs in the prior year relate to
claims following the company’s previous
Insurance carrier for employer liability claims
entering a Scheme of Arrangement.
The tax charge for the year was £14.9m 
(2004: £9.3m) representing an effective 
tax rate, pre-goodwill, of 29% (2004: 26%).
Earnings per share before goodwill
amortisation and exceptional items was 20.8p
(2004: 18.1p) an increase of 14.9%.
The proposed final dividend of 7p per share
gives a cumulative dividend for 2005 of 9.75p,
up 8.3% on 2004.
Cashflow
Operating cashflow, before exceptional 
items, was £45.3m (2004: £84.0m), which
converts 104% of group operating profit, 
pre-exceptional items and goodwill, into cash. 
The emphasis on cash generation 
continues with initiatives to improve our
processes. Our procurement process
has been streamlined with the introduction 
of our FASTtrack initiative, making it easier 
for our suppliers to work with us and 
improving service to customers.
Working capital management courses 
have been held to continue our investment
in our people. 
Net debt at 31 March 2005 was £56.1m
(2004: £59m).  
This can be analysed between recourse
and non-recourse debt, to fund PFI projects, 
as follows:
2005 2004
£M £M
Cash 29.3 43.5
Bank loans 
and overdrafts (10.2) (11.4)
Loan notes and 
deferred consideration (3.4) (12.8)
15.7 19.3
Non-recourse debt 
on PFI projects (71.8) (78.3)
(56.1) (59.0)
Non-recourse debt is excluded from the
group’s banking facility covenants but is
presented as a liability in the group’s 
balance sheet.
Private Finance Initiatives
VT Group’s PFI portfolio consists of eight projects,
six of which are now in their operational phase.
In 2005 PFI contributed £32.2m to turnover and
£1.7m to profit before tax.
18 VT Group plc Annual Report & Accounts 2005
2005 2004
£m £m
Turnover 744.0 670.7
Operating Profit* 56.3 49.2
Order Book 2,695 2,414
* before goodwill and exceptional items Funding for the projects is via long-term loans,
for which there is no recourse to VT Group.
• The offshore patrol vessels and fire training
schools are contracted through entities
wholly owned by  VT Group. Non-recourse
loans of £71.8m to fund assets are included
in short (£6.6m) and long term (£65.2m)
creditors in the balance sheet.
• In addition VT Group holds minority stakes in
two special purpose vehicles. Our share of
these vehicles’ non-recourse debt was
£10m at March 2005. This is included as a
liability within investments in joint ventures on
our balance sheet.
Treasury policies
The group’s tax and treasury function is
responsible for managing the group’s
exposure to finance risks.
The group treasury function operates in line
with policies set by the board. The primary
objectives are to:
• Manage interest rate and foreign currency
exposure
• Provide cash management
• Ensure the availability of facilities to finance
new investment, working capital and
guarantees.
The board has a conservative policy towards
the investment of cash. Treasury instruments
are used only to reduce risk. Speculation is
not permitted.
The group has bank facilities that can either
be drawn as borrowings or to support
performance bonds and advance payment
guarantees. At March 2005 the group has
undrawn committed bank credit facilities 
of £165m.
Pensions
VT Group has three pension schemes
accounted for as defined benefit schemes.
FRS17 Retirement Benefits was issued in
November 2000 to replace SSAP 24 for
accounting periods ending on or after 22 June
2003. In July 2002 the Accounting Standards
Board delayed the introduction of FRS 17 until
2005, following an announcement by the
International Accounting Standards Board that
it would also issue a new standard.
For 2005 we have continued to apply the
transitional rules and disclosures. FRS 17
requires the market value of assets and
liabilities for defined benefit schemes to be
calculated and included in the balance sheet.
At 31 March 2005 we estimate that there was
a net deficit of £35.9m after deferred tax in
relation to the defined benefit schemes and an
asset base of approximately £249m, whilst the
Minimum Funding Rate (MFR) funding level
was around 110%.
VT Group plc Annual Report & Accounts 2005 19 20 VT Group plc Annual Report & Accounts 2005
Corporate social responsibility
Employees
Our employees, who now number some
11,000 worldwide, including our joint
ventures, remain our most important asset
and during the year, there have been
several significant developments intended
to recognise further their very valuable
contribution. These include the introduction
of a flexible benefits package and the
restructuring of contributions to the final
salary pension scheme to permit it to
remain open for employees who are already
members. All employees have access to
the externally managed confidential
assistance helpline.  
VT is fast-growing and developing and it 
is vital that our employees feel they are an
integral part of this changing landscape.
We have developed and published our
vision for the group and actively sought the
involvement of the workforce at all levels.
Looking back a few years, as the group
developed from its shipbuilding and
defence-orientated base, it became
apparent that some employees in the
growing ‘non-defence’ areas of the
business were uneasy at being associated
with a company with defence origins. 
To address this employee concern, whilst it
was clearly not possible to change this core
business, a number of important steps
were taken to address the balance. 
These included changing the company
name, introducing a new corporate image
and detaching the group head office 
from the shipbuilding operations. Strenuous
efforts continue to be made to promote the
VT image, amongst other things as a focus
of loyalty for all employees. 
Communication with employees at all levels
continues to be extremely important. In
addition to the enhanced group publication,
VTi, local communications groups and
feedback are actively promoted at all levels.
The group is committed to developing and
maintaining an environment where diversity
and equality are valued and promoted. 
This policy benefits the business as it helps
deliver a wide range of skills and experience
across the organisation. This year we are
introducing HR information technology
software to enable improved monitoring 
and reporting of diversity and equality at 
the centre. The group’s policy and practice
is to encourage the recruitment and
subsequent training, development and
promotion of disabled people on the 
basis of their aptitude and abilities and 
the retention and re-training of employees
who become disabled.
The group devotes a significant amount of
time and resource to employee training and
retraining and this year has spent £2,233,000
(2004: £3,063,000 which includes the cost of
training in respect of the move to Portsmouth)
in this regard. This excludes the cost of 
on-the-job training which, whilst substantial,
is impractical to quantify. The annual training
awards evening, which recognises those
who have made significant developments in
this area, has become a major event. 
Environment
We recognise that many of our activities
have the potential to enable us to enhance
and protect the environment in which we
live and work. Whilst the chief executive 
has ultimate responsibility, it is for individual
business units to implement the relevant
processes on a local basis. We remain
committed to a process of continuous
review and improvement to minimise any
adverse impact our activities may have on
the environment. We currently operate 
the following initiatives within the
Shipbuilding division:
• All lighting has been replaced by more
efficient high frequency fluorescent units
A similar system at head office is additionally
operated by movement sensors;
• A waste transfer station has been
established which is available for use by
all VT units in the area. This facilitates the
sorting of waste for onward recycling and
currently covers metals, paper, card, glass,
mobile phones and toner cartridges. In all,
some 14% of all waste is now recycled,
double that previously, and all monetary
proceeds are donated to charity.
Initiatives elsewhere include:
• A green travel policy which is in use
widely across the group. Employees are
asked to share travel where possible.
Minibuses and taxis are used to transport
employees in order to reduce fuel
consumption and exhaust emissions 
and also to ease traffic congestion 
at peak times;
VT Group is working diligently to secure its place as a good
corporate citizen. We continue to review and enhance our
performance in the key areas of employment, ethics, the
environment and relationships with stakeholder groups 
and the communities in which we work. Our annual training awards celebrate
achievements both at work and in 
the community.
Training award scheme
VT Group plc Annual Report & Accounts 2005 21
To underline our commitment with young
people in business, we are involved with 
the Duke of Edinburgh Award Scheme  and
we currently sponsor the Year in Industry
contribution to the Business Award 2005
which is open to all placed gap year students
and undergraduates. It is a national scheme
which currently has some 500 industry
subscribers and provides students with the
opportunity to make a significant contribution
to the host company’s business.  
Duke of Edinburgh 
Award Scheme
A further launch of the UK and US sharesave
schemes during the year was well supported
and there are, in addition, proposals to
activate the All Employee Share Option Plan,
now known as the Share Incentive Plan.
Share Incentive Plan 22 VT Group plc Annual Report & Accounts 2005
Corporate social responsibility
• VT Halmatic fund and work with
manufacturers to improve the use of
composites in the construction of road
trailers which reduces weight and
therefore fuel consumption.
Ethics
The group aims to conduct its business 
in an ethical manner and to honour its
commitments to its suppliers, contractors
and customers.
The group complies fully with the latest
statutory and other regulatory requirements
on agents and business ethics, both in the
UK and the US.
There is published on the intranet an
internal code of ethics with which all
employees are required to comply. 
Gifts must be declared and expensive 
gifts declined.
The group operates a whistleblowers’ line
with direct access to the audit committee
on financial matters and to the chief executive
on all other matters. All employees have
been made aware of this facility.
No donations are made to political
organisations.
Stakeholders
We maintain regular contact with our major
institutional shareholders and take careful
account of views expressed by them.
We also continue to engage with our 
major suppliers to understand and, 
where appropriate, to encourage their
priorities on ethical and environmentally
friendly sourcing of materials.The group’s
policy, in relation to all of its suppliers, 
is to settle the terms of payment when
negotiating the detail of the transaction and
then to make payment in accordance with
those terms provided VT is satisfied that the
supplier has provided the goods or services
in accordance with the agreed terms and
conditions. The group’s policy, unless
otherwise agreed, is to pay all its suppliers
within 45 days of the end of the month in
which it receives the goods or services. 
The number of days’ purchases (creditor
days) outstanding for payment by the group
at the year end was 44 (2004: 35).
Involvement with the community
It is of considerable importance to VT that
its employees and businesses engage
wherever practicable with the local
communities in which they operate.
In April 2005, VT Group joined Business in
the Community. This association of over
750 member companies is committed to
improving its positive impact on society.
During the year we will nominate our
executives to join its ‘Seeing is believing’
programmes run by the community and we
aim to develop and publish a Corporate
Responsibility Policy.
There is a central group charity committee
made up of employees representative of the
main areas of the group. This committee
meets regularly throughout the year and 
distributes corporate funds to charities 
with preference given to those local to the
group’s principal places of business and
which relate to education, health, community
and the arts. During the year the group
contributed a total of £86,000 (2004:
£77,000) to charitable organisations which
included four specifically targeted larger
donations to beneficiaries selected by the
committee. The total figure also included
£25,000 given to the Tsunami appeal 
to match a similar amount raised by
employees throughout the group in the UK
during the first two weeks of January 2005:
separately, in the US a total of $25,000 was
raised for the same cause.
It is important to the group that its
businesses and employees engage with
the community in which they operate. All boilers use gas instead of oil as the
primary fuel: this reduces carbon dioxide
emissions by some 25%. We have registered
with the government-sponsored Carbon
Trading Scheme which requires a continuous
reduction of 15% failing which a substantial
penalty is levied. The scheme, introduced 
by the European Union, is a ‘cap and trade’
system for energy intensive sectors.  Under
this, we are given an allowance of permitted
emissions: any part of the allowance not
utilised can be traded with a less successful
operator. There is thus a financial driver to
achieve the reduced emission levels.  
The overall scheme forms part of the
commitment by European Governments 
to meet the reduced CO2 emission levels 
set by the Kyoto Agreement.
VT Shipbuilding joins
Carbon Trading Scheme
During the year the marketing team provided
assistance to the Cathedral Church of 
St Thomas, Portsmouth, in producing a
brochure to launch the Cathedral appeal fund.
VT assists St. Thomas’
Cathedral, Portsmouth
appeal brochure
VT Group plc Annual Report & Accounts 2005 23
A totally recyclable boat being built by VT
Halmatic. This is made of polyethylene which,
at the end of the boat’s useful life, can be
melted down and reused. The material also
has the benefit of being more durable than
similar materials more traditionally used in
boat construction.
VT Halmatic recyclable
boats
Picture supplied by “The News”
Very Reverend David Brindley
Dean of Portsmouth Corporate social responsibility
The year has seen a comprehensive
revision of health and safety and the
adoption of a comprehensive set 
of requirements and expectations.
24 VT Group plc Annual Report & Accounts 2005
In addition to monetary gifts, the group 
also sponsors or encourages employees to
become involved in a variety of beneficial
activities, including:
• VT Communications organises tours of the
BBC whilst VT Shipbuilding on average
hosts one school visit per week to its
Portsmouth operation;
• VT Halmatic is currently hosting an
apprentice and offering support and
guidance in the construction of a new
hovercraft for Solent Search and Rescue.
There are many instances throughout the
group of individual employees who work
tirelessly to make a contribution to their 
local communities and we support and
encourage their activities wherever possible. 
• An employee of VT Griffin Services, Inc.
has contributed to a number of charitable
and community based projects and has
enlisted the help of her colleagues at the
King’s Bay Naval Base in Georgia where
she works, including a ‘Back to School’
programme which supports children at a
local refuge for abused families. 
• Employees from business units in 
south Hampshire take an active role 
• in promoting the upskilling of the local
workforce by sitting on the San Diego
Committee in Southampton. 
• Employees sit on various Economic
Development panels and local authority
sponsored committees which investigate
local area investment and development.
Health and Safety
The year has seen a comprehensive 
review of health and safety carried out 
with the assistance of independent
consultants. This has led to the adoption 
of a comprehensive set of health and safety
requirements and expectations and an
ongoing review of our operating
procedures, tailored where appropriate 
to the business unit. We have developed
the Safety, Health and Environment forum,
chaired by the HR director and comprising
the health and safety managers of business
units together with representatives from 
the group and external consultants.  
Its aims are to enhance VT’s ability to
comply with its obligatory reporting and
governance requirements, to enable the
group to achieve respect for its collective
approach to, and performance in, health
and safety, from its stakeholders, peers 
and the wider community and to enable 
the sharing of best practice and lessons
learned around the group, thereby
facilitating continuous improvement. 
The outcome of the review will see the
implementation of a new group policy
detailing business requirements and
expectations designed by a senior external
consultant working with the group. He will
remain until a replacement senior and
experienced practitioner is appointed, 
who will report directly to the chief executive.
Safety training continues across the
business units at all levels and the board
have held a training session on their
responsibilities. Emphasis is being placed
on the responsibility of all staff, regardless
of status, for their own safety and that of all
fellow employees, customers, contractors
and visitors. Occupational health is a key
part of our approach and we are increasing
our resources in this area, particularly within
Shipbuilding, addressing its associated
hazards, including noise, vibration and
manual handling.  
Regular reports on health and safety are
made to the board. The chief executive is
the nominated director responsible for
health and safety. VT Group plc Annual Report & Accounts 2005 25
Supporting the Jubilee Sailing Trust, 
a charity based locally but with national
coverage, which promotes integration
between able-bodied and physically disabled
people by offering people of mixed abilities
the opportunity to be part of the crew and
sail as equals on board a magnificent tall
ship. This year, we are specifically sponsoring
a number of places on the re-creation of 
the voyage by HM Schooner Pickle from 
Cape Trafalgar to Falmouth to mark the 
bi-centenary of the Battle of Trafalgar.
Jubilee Sailing Trust
In September 2004, our VT Young Graduate
Award Scheme was launched by Ivan Lewis
MP , then Parliamentary Under Secretary of
State for Skills and Vocational Education. 
This scheme is a partnership between VT
Shipbuilding and Sholing Technology College
for girls in Southampton which gives young
women the opportunity to embark on a two
year course to supplement their education in
science and technology. VT’s involvement
includes assisting pupils with technical
projects, educational visits and representation
on the school’s board of governors. 
The VT Young Graduate
Award Scheme
Pete Vickery from VT Communications serves
his local community in Bude, Cornwall though
membership of the local life saving club. 
Pete has been a member of the club virtually
since its formation in 1953 and has served as
its president. He continues to work tirelessly
for the club and even takes holiday from 
work to carry out club duties. His efforts were
rewarded at the recent VT Training Awards
evening when he won the Achievement in 
the Community prize. 
Achievement in the
Community Prize Martin Jay CBE 
ø
Non-executive Chairman, 
age 65
Joined the group and the
board as chief executive in
1989 from GEC, where he
was a member of the UK
Board of Management 
and the group managing
director of GEC Electronic
Components. He became
chairman in July 2002. 
He was appointed a non-
executive director of
Invensys plc in January
2003 and non-executive
chairman in July 2003. 
He retires from the board 
on 5 July 2005.
Paul Lester 
ø
Chief executive, 
age 55
Became chief executive of
VT Group in July 2002
having been a non-executive
board member since 1998.
Previously he was group
managing director of Balfour
Beatty plc. A graduate
mechanical engineer, he 
has held a number of board
or senior management
positions in engineering and
support services companies
in both the UK and the US.
He is also currently a 
non executive director of 
Civica plc and of High
Integrity Solutions Limited.
Chris Cundy 
Finance Director, 
age 44
Joined from KPMG in 1993
as group accountant, was
appointed to his current 
position in 1997 and
subsequently became 
a board member in 1999.
Peter McIntosh
Managing Director
Shipbuilding, 
age 46
Joined VT in 1992. 
After several years in
shipbuilding he moved to
Fleet Support Limited where
he became managing
director in 1999. He
became Managing Director
of Shipbuilding 
and joined the board in
September 2003.
Simon Tarrant
Managing Director, 
Support Services, 
age 52
Joined the group as a
graduate trainee in 1975 and
has held various positions
within the group. He was
appointed to the board in
1999. He is a non-executive
director of the British
Services Association and
Farnborough Aerospace
Consortium Ltd.
Board of directors
* Member of Remuneration Committee
† Member of Audit Committee
ø Member of Nomination Committee
# Independent
26 VT Group plc Annual Report & Accounts 2005 Michael Jeffries
#
Non- Executive
Director,
age 60
Previously chief executive
officer of WS Atkins plc
from 1995 to 2001 and
chairman from 2001 to
2005. Currently chairman
of Wembley National
Stadium Limited and
Wyless plc and a non-
executive director of De
La Rue plc. Appointed
as a non-executive
director in May 2005, it
is intended that he will
become chairman
following the retirement
of Martin Jay on 5 July
2005.
Admiral The Lord
Boyce *
ø#
Non-Executive, 
age 62
After a long and
distinguished career 
in the Royal Navy,
culminating in his
appointment as First
Sea Lord in 1998, 
Lord Boyce was
subsequently appointed
Chief of Defence Staff
in 2001. He retired from
the latter  role  in May
2003 and was
appointed Lord Warden
of the Cinque Ports in
July 2004. He is a 
non-executive director
of W S Atkins plc and
he was appointed to
the VT Group board in
July 2004.
David Thorpe *
†#
Non-Executive
Director, 
age 55
In April 2003, Mr
Thorpe retired as
President of EDS
Europe having been
with that organisation
since 1994 and prior to
that he held roles in the
IT sector. He is non-
executive chairman of
Tunstall Ltd., a non-
executive director of
Isoft plc and the
Innovation Group plc. 
He is also chairman of
the Racecourse
Association and on the
Board of the British
Horse Racing Board. 
He was appointed to
the VT Group board in 
January 2003.
David Barclay 
†ø#
Non-Executive
Director, 
age 51
Vice Chairman of
Dresdner Kleinwort
Wasserstein until March
2005 and a former
corporate finance
adviser to the group
since flotation in 1988.
He was appointed to
the board in May 2003.
Baroness 
Blackstone *
ø#
Non-Executive
Director, age 62
Baroness Blackstone
joined the board of VT in
January 2004. After a
distinguished academic
career culminating in her
appointment as Master
of Birkbeck College,
London (1987-97),
Baroness Blackstone
served in the Labour
Government
successively as Minister
of State for Education
and Employment (1997-
2001) and Minister of
State for the Arts (2001-
2003). She has now
retired from active
politics and has returned
to the higher education
sector as Vice
Chancellor of the
University of Greenwich.
Andrew Given *
†#
Non-Executive
Director, 
age 57
Retired as Deputy Chief
Executive of Logica plc
in December 2002
having previously been
its finance director since
1990. Prior to that he
held roles in the
telecommunications
industry. He is also a 
non-executive director
of Spectris plc and
Spirent plc. He was
appointed to the 
VT Group board in
September 2002.
Group Information
Secretary
Matthew Jowett
Registered Office
VT House  Grange Drive  
Hedge End  Southampton  
SO30 2DQ
Registered Number
1915771
VT Group plc Annual Report & Accounts 2005 27
Auditors
KPMG Audit Plc  
Dukes Keep  
Marsh Lane  
Southampton 
SO14 3EX
Registrars
Capita Registrars  
The Registry  
34 Beckenham Road 
Beckenham  Kent 
BR3 4TU
Tel: 0870 162 3100 28 VT Group plc Annual Report & Accounts 2005
Report of the directors
for the year ended 31 March 2005
The directors present their annual report and the audited financial
statements for the year ended 31 March 2005.
Principal activities
The principal activities of the company are:
• Support Services – provision of facilities management and training
services to Government and Industry
• Shipbuilding – designing and building ships and the supply of
electronic control systems
Developments affecting the group during the year and its prospects
for the future are evaluated in the Chairman’s Statement and in the
Chief Executive’s and Operational and Financial Reviews on pages
4 to 19.
Results and dividends
The group profit for the year available to ordinary shareholders after
tax amounted to £26,826,000 (2004 : £15,586,000).
The directors recommend the payment of a final dividend of 7.00p
(2004 : 6.43p) per ordinary share, amounting to £12,133,000
(2004 : £11,054,000) which together with the interim dividend of
2.75p (2004 : 2.57p) makes a total of 9.75p or £16,887,000
(2004 : 9.0p or £15,471,000) for the year.
If approved, the final dividend will be paid on 10 August 2005 to
ordinary shareholders on the register at the close of business on
24 June 2005.
Research and development
The group continued to maintain its levels of research and
development relating to composite materials, shipbuilding,
electronic control systems and engineering products.
Directors
The names of the current directors together with brief biographical
details are shown on pages 26 and 27.
Sir Jock Slater and Mr R W Taylor retired from the board on 
28 July 2004 and Mr T J Madden retired from the board on 
9 August 2004. On 5 July 2005, Mr M Jay will retire as chairman
and a director on the completion of his three year term of office.
Lord Boyce was appointed a director at the Annual General
Meeting on 28 July 2004. Mr M Jeffries was appointed to the
board on 16 May 2005 and is due to become chairman following
the retirement of Mr Jay on 5 July 2005. In accordance with the
articles of association he now retires and, being eligible, offers
himself for re-appointment.
Mr C J Cundy and Mr D Thorpe retire by rotation and, being
eligible, offer themselves for re-appointment.
Mr Cundy has a rolling service contract under which the period of
notice to be given by the company is twelve months. Mr Thorpe
has a letter of appointment to the AGM in 2006 with no notice
period. Mr Jeffries has a service contract for a three year period but
which may be terminated by either party on six months’ notice.
Directors’ interests in the shares of the company are disclosed in
the remuneration report on pages 32 to 37.
Acquisitions and disposals
On 9 August 2004 certain business and assets of VT Engine
Controls Limited were sold to AT Engine Controls Limited 
(a company connected with Mr T J Madden who had previously
been a director of VT Group plc) for a total consideration of
approximately £2.5 million (see note 31 to the financial statements),
subject to adjustment.
On 31 March 2005, the group acquired all the outstanding stock 
in The Cube Corporation, Inc., for a consideration of US $25.5
million, subject to adjustment. The business will be integrated with
that of VT Griffin Services, Inc. in the US.
Fixed assets
In the opinion of the directors, the market value of the group’s
properties at 31 March 2005 is not significantly different from the
book value shown in the financial statements.
Substantial interests in shares
Details of substantial holdings in the issued ordinary share capital of
the company notified as at 16 May 2005 were:
Number of % of 
shares Total
Fidelity International Limited 15,590,293 9.00
Newton Investment Management 12,939,921 7.47
Deutsche Asset Management 9,082,473 5.24
Credit Suisse Asset Management 8,521,972 4.92
Standard Life 7,429,299 4.28
Barclays Global Investors 6,259,117 3.61
F & C Asset Management 6,240,801 3.60
Legal & General Investment Management 6,218,811 3.59
Merrill Lynch Investment Managers 6,211,853 3.58
Corporate Social Responsibility
Certain statutory information on employment, charitable and 
political donations and health, safety and environmental matters is
contained in a separate corporate social responsibility report on
pages 20 to 25.
Corporate governance
The corporate governance statement is set out on pages 29 to 31.
Annual General Meeting
The Annual General Meeting of the company will be held on 
27 July 2005. Details of the resolutions to be proposed, together
with appropriate explanations, are set out in the separate Notice of
Annual General Meeting enclosed with this report. Special business
includes authority to allot shares, the disapplication of pre-emption
rights under section 89 of the Companies Act 1985 and authority
to create a Deferred Annual Bonus Scheme (‘DABS’).
Auditors
KPMG Audit Plc have indicated their willingness to continue in
office and a resolution for their re-appointment as auditors of the
company will be proposed at the forthcoming Annual General
Meeting.
By order of the board
M P Jowett
Secretary
16 May 2005 VT Group plc Annual Report & Accounts 2005 29
Corporate governance
The directors consider that with the exception of Code provision
A.3.2 as set out below, the board has complied with all the
provisions of good governance set out in the Combined Code
issued in July 2003.
Directors
With advice and assistance from Spencer Stuart (an executive
selection consultant), Lord Boyce was proposed for election at the
Annual General Meeting in 2004. More recently, following the
announcement in October 2004 that Martin Jay would be stepping
down as chairman, Spencer Stuart and the Nomination committee
(excluding Martin Jay) were each extensively involved in the
process which resulted in the appointment of Michael Jeffries as a
non-executive director in the expectation that he would assume the
chairmanship from Mr Jay when the latter retires in July 2005.
Baroness Blackstone, Mr Given, Mr Jeffries and Mr Thorpe are
considered to be independent. The board has specifically
considered the situation of each of Mr Barclay and Lord Boyce and
has determined in each case that they are independent for the
purposes of the Combined Code. Mr Barclay is considered to be
independent as he is no longer an employee of Dresdner Kleinwort
Wasserstein, and has not provided advice to VT since becoming 
a director. No advisory fees have been paid to DKW since
December 2001. Sir Jock Slater was considered independent
during his appointment.
During the initial part of the financial period, the board was not
compliant with Combined Code requirement A.3.2 that 50% 
of its members should be independent non-executive directors.
However, following the retirement of Mr R W Taylor and Mr T J
Madden and the determination by the board that both Mr D M
Barclay and Lord Boyce are independent, since early September
2004 the board has been compliant in this regard.
Following the retirement of Martin Jay, the board will comprise five
independent non-executive directors sitting alongside the chairman
and four executive directors which the board considers to be a
satisfactory balance. Each director, including the chief executive,
submits for re-appointment at least once every three years.
Copies of the executive directors’ service contracts and the non-
executive directors’ letters of appointment are available for
inspection at the registered office.
The board
The board has full board meetings at least seven times a year,
spread across the full calendar year: in addition, there is a separate
annual meeting to discuss the strategic plan. The directors believe
that these meetings make the board well-placed to exercise
adequate control over the group and to remain fully up-to-date on
the group’s activities. There is a clear distinction between the role 
of the non-executive chairman in running the board, and the chief 
executive in running the business: the latter is obliged to comply
with a practical schedule (reviewed at least annually) of matters
requiring board approval before implementation: this schedule is
published on the group’s website. The agenda for each regular
board meeting includes substantial reports on all aspects of the
group’s business and ad hoc reports are circulated if decisions are
required between meetings. Before the commencement of each
regular board meeting, the chairman meets with the non-executive
directors alone.
Mr A F Given has been designated as senior independent director.
The attendance of directors at board and committee meetings
throughout the year was as follows:
Director Board Audit Remuneration Nomination
Mr M Jay 7 (7) 6 (6)
Mr D M Barclay 6 (7) 3 (4) 2 (2)
Baroness Blackstone 7 (7) 7 (7) 6 (6)
Lord Boyce 4 (5) 3 (4) 3 (4)
(from: 28.07.04)
Mr C J Cundy 7 (7)
Mr A F Given 6 (7) 4 (4) 6 (7)
Mr P J Lester 7 (7) 6 (6)
Mr T J Madden 2 (2)
(to: 09.08.04)
Mr P J McIntosh 7 (7)
Sir Jock Slater 1 (2) 1 (1) 1 (2) 1 (1)
(to: 28.07.04)
Mr S E Tarrant 7 (7)
Mr R W Taylor 2 (2)
(to: 28.07.04)
Mr D A Thorpe 7 (7) 4 (4) 7 (7)
Figures in brackets show the maximum number of meetings which
could have been attended
All newly appointed directors are provided with a structured
induction programme which includes meetings both internally and
externally with those principally involved with the business.
Arrangements are made for ongoing director training.
The company maintains appropriate directors’ and officers’
insurance cover.
All directors have access to the advice and services of the
company secretary and are able to take independent professional
advice at the company’s expense. 30 VT Group plc Annual Report & Accounts 2005
Corporate governance continued
Evaluation
During the year, the board has established and implemented
suitable procedures for evaluating and appraising each of its
members annually. Separately from the board and committee
meetings, the senior independent director consults and meets 
with the other directors as a group (without the chairman present) 
to review the performance of the chairman; the executive 
directors as a group meet to review the performance of each 
of the non-executive directors; and the non-executive directors
meet as a group to review the performance of the executive
directors. Appropriate appraisal and feedback is then 
undertaken on an individual basis.
The board has also reviewed its performance acting as a unit 
but has not yet arranged for a review to be undertaken by 
an external body.
Relations with shareholders
The company adopts a pro-active approach to its major institutional
shareholders, both current and prospective. Regular visits are made
to institutions’ offices and there are frequent reciprocal visits to the
company’s premises, especially at Southampton and Portsmouth.
Comment and opinion from shareholders and their representatives
is regularly fed back to directors. The chairman visits major
shareholders during the year and the senior independent director is
available to attend meetings as required.
As a result of the company’s evolution and as a consequence of
various acquisitions, many private shareholders are also
employees: the board is committed to increasing the number of
employees who are also shareholders. The Annual General Meeting
this year will again be held in Southampton: this is convenient for a
significant number of our employee shareholders and they are
actively encouraged to attend. However, all shareholders are of
course equally welcome since this provides an excellent
opportunity to meet with the directors.
The results of the votes on all resolutions put to the AGM will be
published on the company’s website, together with details of proxy
votes cast for each resolution, whether or not a poll is demanded.
Board committees
The board has the following standing committees: each has its own
terms of reference which are available on the group website.
Audit committee
Members during the year were: Mr A F Given (chairman), Mr D M
Barclay, Sir Jock Slater (retired 28 July 2004) and Mr D A Thorpe.
The finance director, internal audit manager and a representative of
the external auditors attend by invitation. Mr Given is identified as
the non-executive director with recent relevant financial experience.
The committee has set parameters so that the independence of
external auditors is not prejudiced when undertaking non audit
work. Depending on the nature of the proposed work, it is either
prohibited or requires the prior approval of the committee or the
finance director, as appropriate. The committee meets not less than
twice a year, and will meet the auditors at least once a year without
the executive directors. It may request information from any
employee and can seek outside professional advice if it deems
necessary. All non-audit services with fees in excess of £100,000
are subject to competitive bid and approval by the committee.
Remuneration committee
The committee is comprised exclusively of non-executive directors.
Members are: Mr D A Thorpe (Chairman), Baroness Blackstone,
Lord Boyce (appointed 2 September 2004), Mr A F Given and 
Sir Jock Slater (retired 28 July 2004). The chairman, the chief
executive and the group HR director also attend the committee by
invitation, when appropriate, during the year. Committee members
have no personal interest, other than as shareholders, in the
matters decided by the committee.
Nomination committee
Members are: Mr M Jay (chairman), Baroness Blackstone, Mr D M
Barclay (appointed 16 December 2004), Lord Boyce (appointed 
2 September 2004), Mr P J Lester and Sir Jock Slater (retired 
28 July 2004). All director appointments are considered before
formal approval by the board and the committee aims to maintain a
proper balance between executive and non-executive directors:
this includes a formal annual review of board structure and
succession planning. During the year, the committee has been
particularly involved in the search for and selection of a new
chairman: at all such times, Mr M Jay has not taken part in its
proceedings and the process has been led by Mr A F Given or, in
his absence abroad, by Mr D M Barclay. The services of Spencer
Stuart have been used extensively in this process.
Before concluding arrangements with any preferred candidate for
appointment to the board, the committee satisfies itself that their
other commitments are not such that these would adversely affect
their ability to devote adequate time to the position.
The current commitments of Mr M Jeffries outside the VT Group
are as chairman of Wembley National Stadium Limited and of
Wyless Plc and as a non-executive director of De la Rue Plc. 
Mr Jay’s commitments outside the group are identified on page 26.
The committee has also discussed succession planning in 
some depth.
The chairman of each committee will be available at the AGM to
respond to questions about his particular committee and a
synopsis of questions to them, together with responses, will be
posted on the group website.
The company secretary is secretary to each committee. VT Group plc Annual Report & Accounts 2005 31
Corporate governance continued
Internal controls
Following the publication of guidance for directors “Internal Control:
Guidance for Directors on the Combined Code” (the Turnbull
guidance), the board confirms that the group has established
processes and procedures for identifying, evaluating and managing
the significant risks faced by the group. The processes have been
embedded into the fabric of the group and have been in place for the
year under review and up to the date of approval of the annual report
and financial statements and accords with the Turnbull guidance. The
processes and procedures are regularly reviewed by the board.
The board is ultimately responsible for the group’s system of
internal controls and for reviewing its effectiveness. The role of
management is to implement board policies on risk and control.
The system of internal controls is designed to manage rather than
eliminate the risk of failure of the achievement of business
objectives. In pursuing these objectives, internal controls can only
provide reasonable and not absolute assurance against material
misstatement or loss.
A process of control self-assessment and hierarchical reporting has
been established which provides for a documented and auditable
trail of accountability. These procedures are relevant across all
group operations: they provide for successive assurances to be
given at increasingly higher levels of management and, finally, to the
board. This process is facilitated by internal audit, which also
provides a degree of assurance as to the operation and validity of
the system of internal controls. Internal audit ensure that corrective
action is taken to rectify any weaknesses.
The processes used by the board to review the effectiveness of the
system of internal controls include the following:
• annual budgets are prepared for each operating business and
compared with monthly management reporting, which focuses
on actual performance against these budgets;
• management reports, internal and external audit reports on the
system of internal controls and any material control weaknesses
that are identified;
• discussions with management including discussions on the
actions taken on problem areas identified by board members or
in the internal/external audit reports;
• policies and procedures for such matters as delegation of
authorities, capital expenditure and treasury management as well
as regular updates;
• review of the adequacy of the level of experienced and
professional staff throughout the business and the expertise of
individual staff members so that they are capable of carrying out
their individual delegated responsibilities;
• review of major tenders which are specifically approved by the
board and contract performance which is regularly reviewed and
compared against estimates drawn up at the time of original
tender; and
• review of the external and internal audit work plans.
The group’s management operates a risk management process,
which identifies the key risks facing each business. The process 
is based on each business unit producing a risk register which
identifies the potential key risks to the individual business unit, the
impact should they occur and the action being taken to sufficiently
manage those risks. Internal audit independently review the risk
identification procedures and control process implemented by
management, and report to the Audit committee on a quarterly
basis. The Audit committee review the assurance procedures,
ensuring that an appropriate mix of techniques is used to obtain the
level of assurances required by the board. The Audit committee
chairman presents their findings to the board on a six monthly basis
or earlier as appropriate.
Going concern
After making enquiries, the directors have a reasonable expectation
that the group has adequate resources to continue in operational
existence for the foreseeable future. For this reason they continue
to adopt the going concern basis in preparing the financial
statements. 32 VT Group plc Annual Report & Accounts 2005
Remuneration report
Year ended 31 March 2005
In accordance with the Combined Code, the remuneration of the executive directors is determined by the Remuneration committee on
behalf of the board.
Details of the composition of the committee during the year are contained in the Corporate governance report on pages 29 to 31.
Directors’ service agreements
With effect from 1 July 2004 all executive directors’ service contracts have been subject to 12 months’ notice of termination from the
company.
Non-executive directors are normally appointed for a three year term which is extendible at the board’s discretion. All appointees are
subject to regular re-appointment by shareholders.
Directors’ contracts
Executive directors Date of contract Notice period
P J Lester 14 May 2002 12 months 
C J Cundy 5 Jan 2004 12 months
T J Madden* 24 Oct 1997 –
P J McIntosh 22 Oct 2003 12 months
S E Tarrant 19 May 2003 12 months
R W Taylor# 3 April 1991 –
Date of letter Period of 
Non-executive directors of appointment appointment Notice period
M Jay 29 May 2003 To 5 July 2005 12 months
D M Barclay 30 May 2003 To AGM 2006 none
Baroness Blackstone 23 Jan 2004 To AGM 2007 1 month
Lord Boyce 23 July 2004 To AGM 2007 1 month
A F Given 14 Aug 2002 To AGM 2005 none
Sir Jock Slater# 16 July 1999 ––
D A Thorpe 31 Jan 2003 To AGM 2006 none
* Resigned 9 August 2004.# Retired 28 July 2004
Non executive directors’ remuneration
The remuneration for non-executive directors is set by the full board on the recommendation of the executive directors. Remuneration
comprises an annual fee plus an additional fee for the chairman of each of the audit and remuneration committees and for the senior
independent non-executive director. Non-executive directors are not eligible to participate in any of the company’s bonus or share option
schemes.
Remuneration policy
The company’s policy continues to provide for each of its executive directors a remuneration package which is adequate to attract, retain
and motivate individuals of the appropriate calibre, whilst at the same time not paying more than is necessary for this purpose.
Executive directors’ remuneration
The following comprised the principal elements of executive directors’ remuneration for the period under review:
• base salary
• benefits, including pension, company car and fuel, healthcare and private telephone costs
• annual short term performance related bonus
• long term incentive plan (“LTIP”)
• share options VT Group plc Annual Report & Accounts 2005 33
Remuneration report continued
Year ended 31 March 2005
During the year a comprehensive review of executive directors’ Remuneration has been undertaken by the Remuneration committee with
the assistance of the Monks Partnership on the instructions of the Remuneration committee. In addition, the Monks Partnership have
provided advice on remuneration for employees.
The short term bonus has been awarded annually by the Remuneration committee and relates to the achievement of certain profit and
cash targets set by that committee. The maximum bonus payable has been 50% of base salary.
With effect from 1 April 2005, subject to shareholder approval, the executive directors will participate in a Deferred Annual Bonus Scheme
(“DABS”). This scheme will replace the existing annual short-term performance related bonus. The maximum payment achievable under
these new arrangements will be 75% of base salary. Providing that the annual targets for profit and cash are met, and the strategic
objectives for all executive directors are achieved, 40% of any bonus payment will be deferred for a period of three years and placed, as
shares, in a trust. Individual executive directors may also elect to defer a further 35% of bonus under the same arrangement. At the end of
the three year period, matching shares will be awarded dependent upon earnings per share targets having been consistently achieved
over the whole period. The maximum matching will be 3:1.
Under the LTIP, each year shares may be awarded to executive directors and to other selected senior executives equal in value up to 50%
of base salary. The shares are held in trust and released after three years pro rata to achievement of the performance target, which is at
least the median of the comparator group. The performance criterion is the Total Shareholder Return (“TSR”) of the comparator group
which currently comprises the members of the FTSE 250 (but excluding Investment Trusts) but for future years the Remuneration
committee has the discretion at the point of allocation additionally to relate the TSR to the Defence sector or the Support Services sector.
Relative movements in TSR are shown in the graph below. Shares vest fully if the company’s performance equals or exceeds the upper
quartile of the comparator group but there is no vesting if performance is below the median. Each time executive directors are awarded
shares under the LTIP they are entitled to invest up to 5% of base salary to purchase additional shares in the company provided that the
cash cost does not exceed the amount they received in their most recent DABS award. These additional shares are held in the trust for at
least three years and they are then matched on a 1:1 basis with further shares.
Share option plans
The company operates two share option plans (a UK Inland Revenue approved plan and an unapproved plan) under which executive
directors and other executives are eligible to participate at the discretion of the Remuneration committee. Options are granted at market
value, determined immediately before the grant. Annual awards do not normally exceed one times base salary.
Options under the company’s schemes can normally be exercised only on the achievement of an objective performance condition set by
the Remuneration committee and linked to the underlying performance of the company. The performance condition currently applying is
real growth in earnings per share (excluding goodwill amortisation and exceptional items) of at least 3% per annum over three consecutive
years. There will be no retesting.
Performance graph
As the company is a constituent of the FTSE 250, the FTSE 250 index provides an appropriate indication of market movements against
which to benchmark the company’s performance. The chart below shows the company’s TSR performance against the FTSE 250 index
less Investment Trusts over the five years ended 31 March 2005.
––– VT Group – Total Return Index
––– FTSE Mid 250 – Total Return Index
0
20
40
60
80
100
120
160
140
180
2000 2001 2002 2003 2004 2005 34 VT Group plc Annual Report & Accounts 2005
Remuneration report continued
Year ended 31 March 2005
The auditors are required to report on the information contained in the following section of this report.
Directors’ emoluments
Salary remuneration table
The various elements of remuneration (excluding employer pension contributions) received by each director were as follows:
Salary & fees Benefits Annual bonus Other Total
Current directors 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
Executive £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
P J Lester 375 352 23 22 187 151 - - 585 525
C J Cundy 212 201 13 11 106 86 - - 331 298
P J McIntosh (from 4/9/03) 166 86 4 4 83 37 - - 253 127
S E Tarrant 181 166 18 15 91 71 - - 290 252
Subtotal 934 805 58 52 467 345 - - 1459 1202
Non-executive
M Jay 133 127 - 1 - - - - 133 128
D Barclay 28 22 - - - - - - 28 22
Baroness Blackstone (from 27/1/04) 29 5 - - - - - - 29 5
Lord Boyce (from 28/7/04) 20 - - - - - - - 20 -
A F Given 37 29 - - - - - - 37 29
D A Thorpe 32 27 - - - - - - 32 27
Subtotal 279 210 - 1 - - - - 279 211
Former directors
Executive
A Bunney (to 4/9/03) - 58 - 5 - 21 - - - 84
G W Cameron (to 23/1/04) - 122 - 2 - - - - - 124
T J Madden (to 9/8/04) 58 156 4 14 29 67 - - 91 237
R W Taylor (to 28/7/04) 54 159 5 13 27 68 86 - 172 240
Subtotal 112 495 9 34 56 156 86 - 263 685
Non-executive
Sir Jock Slater (to 28/7/04) 9 23 - - - - - - 9 23
Lord Wakeham (to 8/7/03) - 12 - - - - - - - 12
Sub total 9 35 - - - - - - 9 35
TOTAL 1334 1545 67 87 523 501 86 - 2010 2133
“Other” represents an agreed payment to Mr R W Taylor on his early retirement.
“Benefits” include provision of company car and fuel, healthcare and personal telephone costs, all of which are taxable. 
The highest paid director was Mr P J Lester. 
Pension benefits 
Executive directors are members of the group’s contributory pension scheme which entitles them to a pension on retirement of two-thirds of
pensionable salary after twenty years’ service: details of accrued benefits are set out below. The normal retirement age for directors is age 60.
Mr P J Lester and Mr C J Cundy are subject to the Inland Revenue pensions cap, and, in each case a Funded Unapproved Retirement
Benefits Scheme has been established to which they pay the same rate of contribution (subject to Inland Revenue limits) as for the main
scheme. The FURB is a defined contribution scheme. The company contributions to these schemes during the year were £89,430 
(2004: £87,914) for Mr Lester and £42,120 (2004: £39,878) for Mr Cundy. VT Group plc Annual Report & Accounts 2005 35
Pension benefits
Director Total accrued pension Change in accrued Transfer value of  Transfer value of Increase in transfer 
at 1 April 2005 (£) benefits (£) accrued pension as accrued pension as value less member
at 1 April 2004 (£) at 31 March 2005 (£) contributions (£)
P J Lester 9,350 3,575 76,221 135,269 52,928
C J Cundy 28,577 3,270 181,562 247,787 53,499
T J Madden 90,245 3,158 1,168,437 1,763,625 592,054
P J McIntosh 42,248 3,790 307,215 407,082 93,747
S E Tarrant 93,747 11,034 888,862 1,182,680 282,943
R W Taylor 109,476 7,791 1,722,434 1,969,824 244,985
i) The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the year, or leaving service if earlier.
ii) The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11.
iii) Members of the Scheme have the option to pay Additional Voluntary Contributions; neither the contributions nor the resulting benefits are included in the above table. 
iv) Mr T J Madden retired from The Shipbuilding Industries Pension Scheme (SIPS) on 9 August 2004. The pension figure given at the year end is the pre-commuted pension
at his date of retirement.
v) Mr R W Taylor retired from SIPS on 28 July 2004. The pension figure given at the year end is the pre-commuted pension at his date of retirement.
vi) No allowance is made in the transfer value of accrued pension figures for Guaranteed Minimum Pensions or for the value of any refund of member’s contributions.
The impact of this is not expected to be significant.
vii) The assumptions adopted for transfer values for the VT section of SIPS were amended during this year. The transfer values as at 1 April 2005 have been calculated on 
the revised assumptions.
viii) The accrued amount excludes contributions made to the Funded Unapproved Retirement Benefits Schemes for Mr Lester and Mr Cundy.
Directors’ interests in shares
Ordinary shares At 1 April 2004 At 31 March 2005
Beneficial Non-beneficial Beneficial Non-beneficial
D M Barclay 10,000 – 10,000 –
Baroness Blackstone –– ––
Lord Boyce* –– 1,200 –
C J Cundy 18,545 – 24,970 –
A F Given 3,000 – 3,000 –
M Jay 50,050 – 52,962 –
P J Lester 43,710 – 53,710 –
T J Madden 16,505 – 16,505* –
P J McIntosh 3,285 – 6,066 –
Sir Jock Slater 5,000 – 5,000* –
S E Tarrant 14,725 – 12,750 –
R W Taylor 16,660 – 16,660* –
D A Thorpe –– 5,000 –
*At date of appointment, resignation or retirement, as appropriate
During the year none of the directors had an interest in the share capital of any of the company’s subsidiaries. There have been no
changes in the above holdings between 31 March and 16 May 2005. 
Mr M Jeffries held 50,000 shares in the Company on 16 May 2005, the date of his appointment.
Remuneration report continued
Year ended 31 March 2005 36 VT Group plc Annual Report & Accounts 2005
Remuneration report continued
Year ended 31 March 2005
Share options
The following figures relate to participation in the group’s executive share option schemes. The middle market value of the company’s
ordinary shares on 31 March 2005 was 311.5p and the range during the year was 252p to 331.5p 
Number of options
At 1.4.2004 Granted Exercised At 31.3.2005 Exercise Gain on Date from Expiry date
or date of during the and sold or date of price exercise which 
appointment year during year resignation/ (pence) price exercisable
retirement (pence)
P J Lester 250,000* –– 250,000 260 – 05.07.05 04.07.12
12,195+ –– 12,195 246 – 08.07.06 07.07.13
264,227* –– 264,227 246 – 08.07.06 07.07.13
C J Cundy 15,000* –– 15,000 171.6 – 28.05.01 27.05.08
15,000* –– 15,000 160.2 – 23.11.01 22.11.08
90,277* –– 90,277 216 – 18.12.05 17.12.12
T J Madden
†
– –––––– –
P J McIntosh 10,000* –– 10,000 171.6 – 28.05.01 27.05.08
12,396+ –– 12,396 242 – 14.11.06 13.11.13
49,587* –– 49,587 242 – 14.11.06 13.11.13
25,000* – 25,000 – 160.2 157.8 ––
S E Tarrant 12,500* –– 12,500 160.2 – 23.11.01 22.11.08
74,074* –– 74,074 216 – 18.12.05 17.12.12
R W Taylor
†
– –––––– –
* The Vosper Thornycroft Executive Share Option Plan 1996
+ The Vosper Thornycroft Approved Share Option Plan 1999
† Retired from the board during the year
On 8 July 2003, Mr S E Tarrant exercised options on 10,000 shares, which he sold, making a gain of 90p per share.
Mr P J McIntosh has an interest in the company’s sharesave schemes, with a holding of 290 options at 258.4p granted on 01.09.02
under a 3 year contract.
In September 2004 Mr C J Cundy exercised 1,225 Sharesave options at 166.2p granted on 01.09.99.  VT Group plc Annual Report & Accounts 2005 37
Remuneration report continued
Year ended 31 March 2005
Long Term Incentive Plan
This table sets out the shares provisionally allocated under the long term incentive plan.
Retained & Share Value of
Allocated matching price on Earliest shares on
Date of Retained Matching shares shares date of date for date of
allocation Allocated # shares* shares released released release release allocation +
M Jay 20.11.01 25,430 4,195 4,195 – 8,390 295.5p 20.11.04 312.6p
P J Lester 05.07.02 37,500 5,710 5,710 ––– 05.07.05 216.0p
22.07.03 71,729 ––––– 22.07.06 237.0p
16.06.04 69,288 ––––– 16.06.07 267.0p
C J Cundy 20.11.01 13,435 2,215 2,215 – 4,430 295.5p 20.11.04 312.6p
23.05.02 13,980 2,305 2,305 ––– 23.05.05 300.4p
22.07.03 41,139 ––––– 22.07.06 237.0p
16.06.04 39,325 3,893 3,893 ––– 16.06.07 267.0p
T J Madden
†
20.11.01 12,475 2,055 2,055 – 4,110 295.5p 20.11.04 312.6p
23.05.02 12,980 ––––– 23.05.05 300.4p
P J McIntosh 01.12.03 33,185 3,285 3,285 ––– 01.12.06 226.0p
16.06.04 28,089 2,781 2,781 ––– 16.06.07 267.0p
S E Tarrant 20.11.01 11,995 1,975 1,975 – 3,950 295.5p 20.11.04 312.6p
23.05.02 12,480 ––––– 23.05.05 300.4p
22.07.03 33,755 ––––– 22.07.06 237.0p
16.06.04 32,771 ––––– 16.06.07 267.0p
R W Taylor
†
20.11.01 13,915 2,295 2,295 – 4,590 295.5p 20.11.04 312.6p
23.05.02 14,480 2,385 2,385 ––– 23.05.05 300.4p
# This represents the maximum allocation, subject to the achievement of the performance target.
* The purchase of the retained shares has been funded by subscription from the individual directors and the share numbers are included in the table on page 35.
+ This figure is used to calculate the number of shares originally allocated.
† Retired from the board during the year
By order of the board 
D A Thorpe 
Chairman of the Remuneration committee 38 VT Group plc Annual Report & Accounts 2005
Statement of directors’ responsibilities
Company law requires the directors to prepare financial statements
for each financial year which give a true and fair view of the state of
affairs of the company and group and of the profit or loss for that
period. In preparing those financial statements, the directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group will continue
in business.
The directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the company and which will enable them to ensure that
the financial statements comply with the Companies Act 1985.
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. VT Group plc Annual Report & Accounts 2005 39
Report of the independent auditors
Year ended 31 March 2005
We have audited the financial statements on pages 40 to 63.
We have also audited the information in the directors’ remuneration
report that is described as having been audited.
This report is made solely to the company’s members, as a body, 
in accordance with section 235 of the Companies Act 1985.  
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as 
a body, for our audit work, for this report, or for the opinions we
have formed. 
Respective responsibilities of directors and auditors
The directors are responsible for preparing the annual report and 
the directors’ remuneration report. As described on page 38, this
includes responsibility for preparing the financial statements in
accordance with applicable United Kingdom law and accounting
standards. Our responsibilities, as independent auditors, are
established in the United Kingdom by statute, the Auditing 
Practices Board, the Listing Rules of the Financial Services 
Authority and by our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements
give a true and fair view and whether the financial statements and
the part of the directors’ remuneration report to be audited have
been properly prepared in accordance with the Companies Act
1985.  We also report to you if, in our opinion, the directors’ report
is not consistent with the financial statements, if the company has
not kept proper accounting records, if we have not received all 
the information and explanations we require for our audit, or if
information specified by law regarding directors’ remuneration 
and transactions with the group is not disclosed.
We review whether the corporate governance statement on pages
29 to 31 reflects the company’s compliance with the nine provisions
of the 2003 FRC code specified for our review by the Listing Rules,
and we report if it does not. We are not required to consider
whether the board’s statements on internal control cover all risks
and controls, or form an opinion on the effectiveness of the group’s
corporate governance procedures or its risk and control procedures.
We read the other information contained in the annual report,
including the corporate governance statement and the unaudited
part of the directors’ remuneration report, and consider whether 
it is consistent with the audited financial statements. We consider
the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the 
financial statements.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards
issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements and the part of the
directors’ remuneration report to be audited. It also includes an
assessment of the significant estimates and judgements made by
the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the group's
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable
assurance that the financial statements and the part of the 
directors’ remuneration report to be audited are free from material
misstatement, whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of
the directors’ remuneration report to be audited.
Opinion
In our opinion –
•  the financial statements give a true and fair view of the state of
affairs of the company and the group as at 31 March 2005 and
of the profit of the group for the year then ended; and 
•  the financial statements and the part of the directors’
remuneration report to be audited have been properly prepared 
in accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants Southampton
Registered Auditor 16 May 2005 40 VT Group plc Annual Report & Accounts 2005
Consolidated profit and loss account
For the year ended 31 March 2005
2005
Before 2005
amortisation Amortisation 2005 2004
of goodwill of goodwill Total Total
Notes £000 £000 £000 £000
Turnover: Group and share of joint ventures 2,3 743,722 – 743,722 670,679
Less: share of joint ventures’ turnover (141,649) – (141,649) (129,589)
Group turnover 602,073 – 602,073 541,090
Cost of sales 4,12 (494,340) (9,079) (503,419) (474,148)
Gross profit 107,733 (9,079) 98,654 66,942
Administrative expenses (64,255) – (64,255) (54,637)
Group operating profit 43,478 (9,079) 34,399 12,305
Share of operating profit in joint ventures 12,813 – 12,813 12,142
Total operating profit: group and share of joint ventures 3 56,291 (9,079) 47,212 24,447
Profit on disposal of subsidiary undertakings (group) 4 ––– 4,250
Profit on disposal of tangible fixed assets (group) 4 ––– 685
Profit on ordinary activities before interest 56,291 (9,079) 47,212 29,382
Net interest (payable)/receivable – group 5 (5,299) – (5,299) (3,767)
– joint ventures 5 973 – 973 711
(4,326) – (4,326) (3,056)
Profit on ordinary activities before tax 7 51,965 (9,079) 42,886 26,326
Tax on profit on ordinary activities – group 8 (10,886) (5,393)
– joint ventures 8 (4,039) (3,908)
(14,925) (9,301)
Profit on ordinary activities after tax 27,961 17,025
Equity minority interest (1,135) (1,439)
Profit for the financial year 26,826 15,586
Dividends 10 (16,887) (15,471)
Retained profit for the group 
and its share of joint ventures 22 9,939 115
Earnings per share 11
Basic – before amortisation of goodwill and exceptional items 20.82p 18.13p
Basic – before amortisation of goodwill 20.82p 14.78p
Basic 15.56p 9.09p
Diluted 15.42p 9.03p
All results arise from continuing operations.
No note of historical cost profits required by FRS3 has been presented since reported profits do not materially differ from historical 
cost profits.
In 2004 cost of sales included £15,000,000 of operating exceptionals and £9,774,000 of goodwill amortisation. VT Group plc Annual Report & Accounts 2005 41
Balance sheets
At 31 March 2005
Group Company
Restated Restated
2005 2004 2005 2004
Notes £000 £000 £000 £000
Fixed assets
Intangible assets
Goodwill 12 155,478 158,834 – –
Tangible assets 13 188,193 192,185 – –
Investments in subsidiary undertakings – – 41,500 41,500
Investments in joint ventures
Share of gross assets  62,592 57,116 – –
Share of gross liabilities (52,060) (47,697) – –
14 10,532 9,419 41,500 41,500
354,203 360,438 41,500 41,500
Current assets
Stocks 15 21,446 17,758 – –
Debtors – due within one year 16 124,117 115,025 98,958 34,233
Debtors – due after one year 16 13,450 16,768 – –
137,567 131,793 98,958 34,233
Cash at bank and in hand 29,285 43,508 20,063 1,672
188,298 193,059 119,021 35,905
Creditors –
amounts falling due within one year 17 (253,164) (255,744) (97,432) (15,593)
Net current (liabilities)/assets (64,866) (62,685) 21,589 20,312
Total assets less current liabilities 289,337 297,753 63,089 61,812
Creditors –
amounts falling due after more than one year 18 (74,201) (86,028) – –
Provisions for liabilities and charges 20 (58,663) (65,338) – –
Net assets 156,473 146,387 63,089 61,812
Capital and reserves
Called up share capital 21 8,657 8,597 8,657 8,597
Share premium account 22 28,070 25,220 28,070 25,220
Revaluation reserve 22 – – 10,257 10,257
Profit and loss account 22 116,265 108,684 16,105 17,738
Equity shareholders’ funds 152,992 142,501 63,089 61,812
Equity minority interest 3,481 3,886 – –
156,473 146,387 63,089 61,812
These financial statements were approved by the board of directors on 16 May 2005 and were signed on its behalf by:
C J Cundy
Director 42 VT Group plc Annual Report & Accounts 2005
Consolidated cash flow statement
For the year ended 31 March 2005
2005 2004
Notes £000 £000
Cash flow from operating activities 24 45,286 84,018
Dividends received from joint ventures 8,860 8,349
Returns on investments and servicing of finance 25 (6,073) (6,917)
Taxation (3,807) (4,543)
Capital expenditure and financial investment 25 (14,435) (45,358)
Acquisitions and disposals 25 (17,502) (9,933)
Equity dividends paid (15,808) (14,691)
Cash (outflow)/inflow before use of liquid resources and financing (3,479) 10,925
Management of liquid resources 25 (1,549) 16,086
Financing 25 (10,744) 3,128
(Decrease)/increase in cash in year (15,772) 30,139
Reconciliation of net cash flow to movement in net debt
For the year ended 31 March 2005
2005 2004
Notes £000 £000
(Decrease)/increase in cash in year 27 (15,772) 30,139
Cash outflow/(inflow) from increase/(decrease) in liquid resources 27 1,549 (16,086)
Movement in cash balances (14,223) 14,053
Cash outflow from decrease in debt 27 12,933 6,720
Change in net debt resulting from cash flows (1,290) 20,773
Reduction in deferred consideration 27 4,210 -
Translation differences 27 (10) 1,153
Movement in net debt in the year 2,910 21,926
Net debt at 1 April (58,994) (80,920)
Net debt at 31 March 27 (56,084) (58,994) VT Group plc Annual Report & Accounts 2005 43
Consolidated statement of total recognised gains and losses
For the year ended 31 March 2005
2005 2004
£000 £000
Profit for the financial year 26,826 15,586
Currency translation difference on foreign currency net investments (after tax) (391) (1,508)
Total recognised gains and losses relating to the financial year 26,435 14,078
Reconciliation of movements in shareholders’ funds
For the year ended 31 March 2005
Restated
2005 2004
Group £000 £000
Profit for the financial year 26,826 15,586
Dividends (16,887) (15,471)
Retained profit for the year 9,939 115
Other recognised gains and losses relating to the year (net) (391) (1,508)
Movement on employee share ownership trust (2,020) (918)
Disposal of own shares 53 160
New share capital subscribed 2,910 1,892
Net addition in/(reduction to) shareholders’ funds 10,491 (259)
Opening shareholders’ funds 142,501 142,760
Closing shareholders’ funds 152,992 142,501
2005 2004
Company £000 £000
Profit for the financial year 15,201 16,311
Dividends (16,887) (15,471)
Retained (loss)/profit for the year (1,686) 840
New share capital subscribed 2,910 1,892
Disposal of own shares 53 160
Net addition to shareholders’ funds 1,277 2,892
Opening shareholders’ funds 61,812 58,920
Closing shareholders’ funds 63,089 61,812
Opening shareholders’ funds have been restated in accordance with UITF 38 “Accounting for ESOP Trusts” (see note 14). 44 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements
(Forming part of the financial statements)
1 Accounting policies
i Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards under the historical cost convention,
modified to include the revaluation of certain fixed asset investments.
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
group’s financial statements, other than the group have adopted UITF 38 “Accounting for ESOP Trusts” and netted off investments in
own shares against the profit and loss account reserve, hence prior period retained earnings and investments have been restated.
ii Basis of consolidation
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 
31 March 2005. Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of
subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of
acquisition or up to the date of disposal.
A joint venture is an undertaking in which the group has a long-term interest and over which it exercises joint control. The group’s
share of profits less losses of joint ventures is included in the consolidated profit and loss account and its interest in their net assets,
other than goodwill, is included in investments in the consolidated balance sheet.
Under section 230(4) of the Companies Act 1985 the company is exempt from the requirement to present its own profit and loss
account.
iii Turnover
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the group and the turnover can be readily
measured. The following specific recognition criteria must also be met before turnover is recognised:
Sale of Goods
Turnover is recognised when the group obtains the right to consideration in exchange for its performance, which is usually when
title passes.
Rendering of Services
Turnover from services rendered is recognised in proportion to the stage of completion of the transaction at the balance sheet date.
Long term Contracts
Turnover is recognised when, and to the extent that the group obtains the right to consideration. This is derived from an assessment 
of the fair value of the work performed to the reporting date as a proportion of the total fair value of the contract.
iv Goodwill
Purchased goodwill arising on consolidation in respect of acquisitions before 1 April 1998, when Financial Reporting Standard 10:
Goodwill and Intangible Assets was adopted, was written off to reserves in the year of acquisition. Goodwill previously eliminated
against reserves has not been reinstated on implementation of FRS 10.
Positive goodwill arising on consolidation in respect of acquisitions after 1 April 1998 is capitalised, classified as an asset on the
balance sheet and amortised on a straight line basis over its useful economic life up to a presumed maximum of twenty years.
It is reviewed for impairment at the end of the first full financial year following the acquisition and in other subsequent periods if events
or changes in circumstances indicate that the carrying value may not be recoverable.
If a subsidiary undertaking or business is subsequently sold or closed, any goodwill arising on acquisition that was written off directly to
reserves or that has not been amortised through the profit and loss account is taken into account in determining the profit or loss on
sale or closure.
v Fixed assets and depreciation
Depreciation is provided on tangible fixed assets, other than freehold land and assets in course of construction, at rates calculated to
write off the cost less residual value of each asset on a straight line basis over the expected useful life as follows: VT Group plc Annual Report & Accounts 2005 45
Notes to the financial statements continued
(Forming part of the financial statements)
1 Accounting policies continued
Freehold and long leasehold buildings 30 to 50 years
Leasehold land and short leasehold buildings unexpired period of lease
Computers 3 years
Office furniture and equipment 5 years
Motor vehicles 4 years
Plant and machinery 5 to 10 years
Heavy equipment 20 to 33 years
Interest costs relating to specific project financing are capitalised up to the date of completion of the project.
vi Employee share schemes
The following trusts own shares in VT Group plc:
(a) The Vosper Thornycroft Employees Share Ownership Trust which is a discretionary trust for the benefit of executives and directors
holding shares to satisfy the group’s liabilities to employees and directors for the long term incentive plan. Dividends on these
shares have been waived during the period that they are within the trust except for those relating to shares held as Retained
Shares under the terms of the trust which are paid to the beneficiaries on a timely basis. The net cost to the group of these shares
(apart from the Retained Shares) is charged to the profit and loss account over the period to which they relate.
(b) The Vosper Thornycroft Holdings plc Qualifying Employee Share Ownership Trust which is a discretionary trust for the benefit of
employees holding from time to time shares to satisfy the group’s liabilities under its Savings related Share Option Scheme and
Sharesave Scheme 1998. The dividends on these shares are waived during the period they are within the trust. The shares were
initially purchased with a loan from the group which has been progressively repaid as options are exercised.
vii Stocks
Stocks are valued at the lower of cost and net realisable value. For work in progress and finished goods, cost is taken as production
cost, which includes an appropriate proportion of attributable overheads.
viii Long term contracts
The amount of profit attributable to the stage of completion of a long term contract is recognised when the outcome of the contract
can be foreseen with reasonable certainty. Turnover for such contracts is stated at cost appropriate to their stage of completion plus
attributable profits, less amounts recognised in previous years. Provision is made for any losses as soon as they are foreseen.
Contracts work in progress is stated at costs incurred, less those transferred to the profit and loss account, after deducting
foreseeable losses and payments on account not matched with turnover.
Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account.
ix Pension costs
The group operates a number of contributory pension schemes, both defined benefit and money purchase, and accounts for pension
costs in accordance with the requirements of SSAP24.
The assets of the schemes are held separately from those of the group. Contributions are charged to the profit and loss account so
as to spread the cost of pensions over the service lives of pensionable employees.
The group has adopted the transitional disclosure requirements of FRS 17.
x Research and development
Expenditure on research is charged to the profit and loss account in the year in which it is incurred. Expenditure on development work
is charged to the specific contract to which it relates and is carried in work in progress. 46 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
1 Accounting policies continued
xi Deferred taxation
Deferred taxation is recognised, without discounting, in respect of all timing differences between the treatment of certain items for
taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by
FRS 19.
xii Leased assets
Operating lease rentals/receivables are charged/credited to the profit and loss account on a straight line basis, over the period of the
lease.
xiii Foreign currencies
Transactions denominated in foreign currencies are recorded in local currency at the rate of exchange ruling on the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the year end exchange 
rates or at the rate at which they are hedged if appropriate.
Exchange gains and losses arising on foreign currency borrowings used to finance subsidiary undertakings are taken to reserves to 
the extent that they can be offset against the exchange differences arising on the equity investment. Assets and liabilities of foreign
subsidiary undertakings are translated on consolidation into sterling at the rate of exchange ruling at the balance sheet date and the
results are translated using the average exchange rates for the period. These consolidation differences on exchange are taken to
reserves. All other exchange differences are dealt with in the profit and loss account. 
xiv Financial instruments
The group uses derivative financial instruments to hedge its exposure to fluctuations in foreign exchange rates. Immediately a
contractual requirement is known the group enters into a forward contract to eliminate any exposure that may arise on future
transactions denominated in foreign currencies. Contract profits or losses taken to the profit and loss account are assessed using
these forward contract rates. Changes in the ‘fair value’ of these instruments have no affect on the profit and loss account and are
therefore not recognised in the financial statements.
xv Accounting for PFI contracts
The group considers the accounting treatment of PFI assets on a contract by contract basis and determines whether the risks and
rewards associated with the assets are retained or passed to the purchaser.
If the risks and rewards of ownership are retained by the group the assets are allocated to fixed assets, otherwise a financial asset for
the fair value of future income is allocated to debtors in accordance with the relevant accounting standards.
It is group policy to expense all bid costs until preferred bidder status has been achieved.
xvi Liquid resources
For the purposes of the cash flow statement, liquid resources are defined as current asset investments and short term deposits. VT Group plc Annual Report & Accounts 2005 47
Notes to the financial statements continued
(Forming part of the financial statements)
2 Analysis of turnover
By destination: Joint 2005 Joint 2004
Group ventures Total Group ventures Total
£000 £000 £000 £000 £000 £000
United Kingdom 322,881 135,327 458,208 291,782 127,500 419,282
North America 148,187 5,392 153,579 120,537 236 120,773
Africa and Asia 42,415 – 42,415 36,326 49 36,375
Rest of Europe 67,475 22 67,497 66,214 1,804 68,018
Other 21,115 908 22,023 26,231 – 26,231
602,073 141,649 743,722 541,090 129,589 670,679
Turnover and profits principally arise from activities and net assets within the United Kingdom, other than turnover and profit from the
USA which is £145,380,000 and £2,026,000 respectively.
3 Analysis of business segments
Support services Shipbuilding Group
2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000
Turnover
Group 449,558 384,553 152,515 156,537 602,073 541,090
Share of joint ventures 141,649 129,589 – – 141,649 129,589
591,207 514,142 152,515 156,537 743,722 670,679
Operating profit
Group before exceptional costs and 
goodwill amortisation 33,139 29,666 10,339 7,413 43,478 37,079
Exceptional costs – – – (15,000) – (15,000)
Share of joint ventures 12,813 12,142 – – 12,813 12,142
45,952 41,808 10,339 (7,587) 56,291 34,221
Goodwill amortisation (8,558) (8,738) (521) (1,036) (9,079) (9,774)
37,394 33,070 9,818 (8,623) 47,212 24,447
Profit on disposal of subsidiary undertakings – 4,250
Profit on disposal of tangible fixed assets – 685
47,212 29,382
Net interest payable (4,326) (3,056)
Profit before taxation 42,886 26,326
Net assets
Segment net assets 31,737 19,899 114,204 117,069 145,941 136,968
Group share of the net assets of 
joint ventures 10,532 9,419 – – 10,532 9,419
Total net assets 42,269 29,318 114,204 117,069 156,473 146,387
Support services includes all activities connected with facilities management, training and education and the equipping and/or
supporting of company designed warships. Shipbuilding includes all activities in respect of designing and/or building ships, the design
and supply of electronic control systems, steering gear, stabilisers, bow thrusters, water jets, ride control equipment and the
manufacture of engineering products. 48 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
4 Exceptional items
The 2004 exceptional items were made up of £15,000,000 (included within cost of sales) of potential liabilities following a previous
group insurance carrier, Chester Street, entering a Scheme of Arrangement, £685,000 of profit relating to the disposal of surplus
properties, and £4,250,000 of profit relating to the disposal of non core businesses.
5 Net interest payable
2005 2004
£000 £000
Interest receivable
Group bank interest 1,353 5,223
Joint ventures 973 711
2,326 5,934
Interest payable
Group – loan notes (175) (355)
Group – on recourse debt (1,587) (5,374)
Group – on non recourse debt (5,018) (5,205)
Less – interest capitalised 128 1,944
(6,652) (8,990)
Net interest payable (4,326) (3,056)
6 Staff numbers and costs
The average number of persons employed by the group (including directors) during the year was as follows:
Number of employees
Restated
2005 2004
Management 489 544
Administration 653 576
Sales 105 87
Manufacturing and operations 7,113 6,756
8,360 7,963
The aggregate payroll costs of those persons were as follows:
2005 2004
£000 £000
Wages and salaries 194,768 183,030
Social security costs 15,976 15,451
Other pension costs (see note 30) 8,783 8,805
219,527 207,286
Staff numbers have been restated to correct the staff numbers reported in 2004 in respect of corporate acquisitions in that year.
Directors’ emoluments are disclosed in the Remuneration report. VT Group plc Annual Report & Accounts 2005 49
Notes to the financial statements continued
(Forming part of the financial statements)
7 Profit on ordinary activities before taxation
2005 2004
£000 £000
Profit on ordinary activities before taxation is stated after charging/(crediting):
Depreciation of tangible fixed assets 18,861 14,267
Profit on disposal of fixed assets (30) (711)
Amortisation of goodwill 9,079 9,774
Auditors’ remuneration – audit services
Group 374 321
Company 24 14
Other fees paid to the auditors and their associates for non audit services 
to the company and its UK subsidiary undertakings:
Group 141 160
Company – 44
Exchange differences 1,226 (727)
Operating lease rentals payable – land and buildings 3,432 2,416
Operating lease rentals payable – plant and machinery 3,381 3,082
Operating lease rentals receivable – plant and machinery (10,394) (6,637)
Research and development expenditure not recovered by specific contracts 833 1,148
Other fees paid to auditors represents support and advice relating to corporate tax, indirect tax, employee remuneration planning 
and valuations.
8 Tax on profit on ordinary activities
2005 2004
£000 £000
United Kingdom corporation tax 8,484 (1,000)
Overseas taxation 1,580 483
Joint ventures 4,039 3,908
Adjustments in respect of prior years – United Kingdom (1,122) 820
Total current tax 12,981 4,211
Deferred taxation – origination and reversal of timing differences 1,685 6,673
Adjustment in respect of prior years 259 (1,583)
Total deferred tax 1,944 5,090
Taxation charge 14,925 9,301 50 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
8 Tax on profit on ordinary activities continued
The current tax charge for the year is higher (2004: lower) than the standard rate of corporation tax in the UK (30%).
The differences are explained below:
2005 2004
£000 £000
Profit on ordinary activities before tax 42,886 26,326
Profit on ordinary activities multiplied by the standard rate of corporation tax in 
the UK of 30% (2004: 30%) 12,866 7,898
Effects of:
Goodwill amortisation not deductible for tax purposes 2,724 2,908
Non taxable profit on disposal of capital assets (316) (1,356)
Other disallowable items 91 330
Timing differences
– interest capitalised but immediately deductible for tax (38) (462)
– capital allowances in excess of depreciation (1,921) (5,375)
– other 269 (849)
– pension 5 13
Differences on overseas tax 423 284
Adjustments to tax charge in respect of prior years (1,122) 820
Current tax charge 12,981 4,211
Tax on exceptional items:
In 2004 a tax credit of £4,500,000 was recorded on the Chester Street provision of £15,000,000 created in the year.  
There was no significant tax attributable to the disposals of businesses or properties.
9 Profit for the financial year
The profit dealt with in the financial statements of VT Group plc is £15,201,000 (2004: £16,311,000).
10 Dividends
2005 2004
£000 £000
Interim paid of 2.75p (2004: 2.6p) per ordinary share 4,754 4,417
Final proposed of 7.0p (2004: 6.4p) per ordinary share 12,133 11,054
Total dividend of 9.75p (2004: 9.0p) per ordinary share 16,887 15,471
11 Earnings per share
Basic earnings per share are calculated on earnings of £26,826,000 (2004: £15,586,000) and 172,422,181 (2004: 171,536,368)
issued ordinary shares, being the weighted average number in issue during the year.  
The diluted earnings per share are calculated on earnings of £26,826,000 (2004: £15,586,000) and 173,950,755 
(2004: 172,565,057) ordinary shares, calculated as follows:
2005 2004
Basic weighted average number of shares 172,422,181 171,536,368
Dilutive potential ordinary shares
Employee share options 1,528,574 1,028,689
173,950,755 172,565,057 VT Group plc Annual Report & Accounts 2005 51
Notes to the financial statements continued
(Forming part of the financial statements)
12 Intangible fixed assets
Group £000
Goodwill
Cost
At beginning of year 196,757
Additions  (see note 26) 12,677
Adjustments to prior year acquisitions (6,954)
At end of year 202,480
Amortisation
At beginning of year 37,923
Charge for year 9,079
At end of year 47,002
Net book value at 31 March 2005 155,478
Net book value at 31 March 2004 158,834
Goodwill is amortised on a straight line basis over its presumed economic life up to a presumed maximum of twenty years.
Adjustments to prior year acquisitions relate to:
– reductions in deferred consideration on VT Plus Training plc, RTK Marine and VT Griffin Services Inc.
– amendments to fair value of VT Four S and JA Jones
13 Tangible fixed assets
Land and buildings
Plant and Assets in course
Freeholds Leaseholds machinery of construction Total
Group £000 £000 £000 £000 £000
Cost
At beginning of year 13,442 61,912 154,355 6,445 236,154
Exchange adjustment – (25) (117) - (142)
Additions 3,140 2,124 8,303 2,044 15,611
Transfers –– 8,376 (8,376) –
Disposals – (376) (2,724) – (3,100)
At end of year 16,582 63,635 168,193 113 248,523
Depreciation
At beginning of year 3,713 2,888 37,368 – 43,969
Exchange adjustment – (5) (95) – (100)
Charge 168 3,437 15,256 – 18,861
Disposals – (58) (2,342) – (2,400)
At end of year 3,881 6,262 50,187 – 60,330
Net book value at 31 March 2005 12,701 57,373 118,006 113 188,193
Net book value at 31 March 2004 9,729 59,024 116,987 6,445 192,185
The gross book value of:
– tangible fixed assets includes £6,981,000  (2004: £6,853,000) of capitalised interest
– plant and machinery held for use in operating leases was £74,279,000 (2004: £65,901,000)
and the related cumulative depreciation was £10,569,000 (2004: £4,272,000) 52 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
14 Fixed asset investments
Group
Group investments in joint ventures Share of
At retained At
1.4.2004 results 31.3.2005
£000 £000 £000
Shares in joint ventures 1,283 – 1,283
Share of retained profits 8,136 1,113 9,249
Share of net assets 9,419 1,113 10,532
The aggregate cost of investments at 31 March 2005  was £1,451,000 (2004: £1,451,000) of which provisions previously written off to
profit and loss were £168,000 (2004: £168,000).
Included within gross assets of joint ventures are fixed assets of £2,177,000 (2004: £3,385,000) and current assets of £60,415,000
(2004: £53,731,000).
Included within gross liabilities of joint ventures are current liabilities of £52,060,000 (2004: £46,594,000) and long term liabilities of 
£nil (2004: £1,103,000).
Group and Company
Investment in own shares
The group have adopted UITF 38 “Accounting for ESOP Trusts” and netted off investment in own shares against the profit and loss
account, hence prior period retained earnings and investments have been restated by £505,000.
Investment in own shares represents 170,197 (2004: 191,910) shares in VT Group plc held by the Employee Share Ownership Trust
(0.1% of current allotted share capital).  The market value of shares held by the Trust at 31 March 2005 was £539,524 (2004 :
£502,804).
Sharesave schemes
In accordance with UITF 17 “Employee Share Schemes” the group has taken advantage of the exemptions therein in respect of
accounting for discounts arising on the grant of options in the group’s Inland Revenue Sharesave schemes.
2005 2004
Company £000 £000
Shares in subsidiary undertakings at cost or directors’ valuation 41,500 41,500
The cost of investment in subsidiary undertakings according to historical cost accounting rules is £24,100,000 (2004: £24,100,000),
with the revaluation relating to Vosper Thornycroft (UK) Ltd at the date of flotation 17 March 1988.
Details of principal subsidiary and joint venture undertakings are disclosed in note 32.
15 Stocks
2005 2004
Group £000 £000
Raw materials and consumables 7,175 8,728
Work in progress 10,878 5,979
Finished goods 3,393 3,051
21,446 17,758 VT Group plc Annual Report & Accounts 2005 53
Notes to the financial statements continued
(Forming part of the financial statements)
16 Debtors
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Amounts falling due within one year
Amounts recoverable on contracts 13,563 17,754 – –
Trade debtors 70,234 66,622 – –
Amounts owed by subsidiary undertakings – – 98,138 33,808
Amounts owed by joint ventures 991 971 – –
Corporation tax recoverable 6,165 10,995 – –
Other debtors 17,433 6,062 790 296
Prepayments and accrued income 14,825 12,497 – 80
Recoverable taxation 906 124 30 49
124,117 115,025 98,958 34,233
Amounts falling due after more than one year
Amounts recoverable on contracts 950 4,268 – –
Other debtors 7,500 7,500 – –
Prepayments 5,000 5,000 – –
13,450 16,768 – –
17 Creditors – amounts falling due within one year
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Guaranteed loan notes 3,389 4,635 2,474 3,037
Bank loans (note 18) 7,773 7,697 – –
Payments received on account 103,567 119,798 – –
Trade creditors 39,235 29,822 – –
Amounts owed to subsidiary undertakings – – 81,364 –
Amounts owed to joint venture undertakings 10,944 10,477 – –
Corporation tax – – 1,372 1,426
Social security costs 3,020 3,852 – 33
Other taxes 4,509 4,588 – –
Other creditors 16,723 13,809 48 43
Accruals and deferred income 51,871 50,012 41 –
Proposed dividends 12,133 11,054 12,133 11,054
253,164 255,744 97,432 15,593 54 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
18 Creditors – amounts falling due after more than one year
2005 2004
Group £000 £000
Guaranteed loan notes – 100
Bank loans 72,391 80,175
Other creditors 1,810 5,753
74,201 86,028
Financial liabilities are due:
Other Other
Bank Bank financial financial
loans loans liabilities liabilities
2005 2004 2005 2004
£000 £000 £000 £000
– in one year or less 7,773 7,697 13,389 18,777
– in more than one year but not more than two years 13,575 7,775 – 3,868
– in more than two years but not more than five years 47,543 27,177 – 175
– in more than five years 11,273 45,223 1,810 1,810
80,164 87,872 15,199 24,630
Other financial liabilities includes a £10,000,000 (2004: £10,000,000) loan from the joint venture undertaking, Flagship Training Ltd.
All bank loans are secured, details of the security involved are as follows:
a) A non-recourse loan of £15,270,000 is secured on the assets relating to the Fire Fighting Units PFI contract. 
The secured assets have a net book value of £13,183,000 and are within Short Leaseholds and Plant and Machinery.
b) A non-recourse loan of £56,522,000 is secured on three Offshore Patrol Vessels and a Fire Training Facility in Avonmouth.
The secured assets have a net book value of £63,444,000 and are within Long Leaseholds and Plant and Machinery.
c) The other loans are secured by cross guarantees from the principal operating subsidiaries.
19 Financial instruments
a) Interest rate risk profile of financial liabilities
The interest rate risk profile of the group’s financial liabilities at 31 March 2005, after taking account of the interest rate swaps used to
manage the interest and currency profile was:
Floating rate Fixed rate Financial liabilities
financial financial on which no
liabilities liabilities interest is paid Total
Currency £000 £000 £000 £000
Sterling 13,389 73,602 – 86,991
Dollars 8,008 364 – 8,372
At 31 March 2005 21,397 73,966 – 95,363
Sterling 14,735 80,128 1,650 96,513
Dollars 9,110 444 6,435 15,989
At 31 March 2004 23,845 80,572 8,085 112,502 VT Group plc Annual Report & Accounts 2005 55
Notes to the financial statements continued
(Forming part of the financial statements)
19 Financial instruments continued
Fixed rate Interest free
Weighted average
Weighted average period for which Weighted average
interest rate rate is fixed period until maturity
Currency % Years Years
Sterling 6.4 6.1 –
Dollars 6.0 4.4 –
At 31 March 2005 6.4 6.1 –
Sterling 6.4 7.0 0.5
Dollars 6.0 5.4 0.8
At 31 March 2004 6.4 7.0 0.8
The floating rate liabilities comprise bank borrowings and loan notes bearing interest rates based upon LIBOR.
b) Interest rate risk of financial assets
The group held the following financial assets:
2005 2004
Currency £000 £000
Sterling 12,822 22,618
Euros 6,413 18,779
Other 10,050 2,111
29,285 43,508
All the group’s financial assets are held at floating rates. The floating rate assets include monies deposited on money markets for periods
varying from overnight to three months.
c) Currency exposure
The group’s policy is, where practicable, to hedge all exposures on monetary assets and liabilities.
d) Fair value of financial instruments
The fair value of fixed rate financial liabilities is £1,842,400 (2004: £785,000) lower than carrying value due to interest rate swaps.
Foreign currency cash balances are held to satisfy future liabilities on contracts and are payable in that currency. Any differences
between the book value and fair value of cash assets is as a result of some foreign currency balances being converted at 
contract rates. 
e) Undrawn bank facilities
The group has the following undrawn committed bank facilities available to it:
2005 2004
£000 £000
Expiring within one year 111,900 94,700
Expiring after more than one year 53,900 62,300
These facilities represent bonds, guarantees, letters of credit and forward contracts.  Forward contracts expire within one year and total
£32,000,000 (2004: £34,600,000). 56 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
19 Financial instruments continued
f) Hedges
The table below shows the extent to which the group has off-balance sheet (unrecognised) gains and losses in respect of hedges at
the beginning and end of the year.
Total net
Gains Losses gain/(loss)
£000 £000 £000
Unrecognised gains and losses on hedges at 1 April 2004 9 (1,309) (1,300)
Gains and losses arising in previous years that were recognised in 2004/05 (8) 909 901
Gains and losses arising before 1 April 2004 that were not recognised in 2004/05 1 (400) (399)
Gains and losses arising in 2004/05 that were not recognised in 2004/05 5 (269) (264)
Unrecognised gains and losses on hedges at 31 March 2005 6 (669) (663)
Of which:
Gains and losses expected to be recognised in:
2005/06 6 (265) (259)
2006/07 – (404) (404)
Short term debtors and creditors have been excluded from disclosure in this note.
20 Provisions for liabilities and charges
Contract and Chester Reorganisation
warranty Street and Deferred
provisions provision redundancy taxation Total
Group £000 £000 £000 £000 £000
At 1 April 2004 29,761 13,538 2,916 19,123 65,338
Exchange differences (33) – 2 7 (24)
Created during the year 11,079 – 846 1,874 13,799
Unused amounts reversed (1,995) – (196) – (2,191)
Acquired ––– (115) (115)
Utilised (14,569)(1,519)(2,126)70(18,144)
At 31 March 2005 24,243 12,019 1,442 20,959 58,663
Deferred taxation liability is analysed as follows: 
2005 2004
£000 £000
Accelerated capital allowances 16,369 12,206
Other timing differences 4,590 6,917
20,959 19,123
Full provision has been made for deferred taxation, except as otherwise required by FRS 19.
Contract and warranty provisions
Provisions are made when contracts are put to sales to cover expected warranty claims. Provisions are based on an assessment of
future claims with reference to past experience. Such costs are generally incurred within one to five years post delivery.
Reorganisation and redundancy
Provisions are made to cover costs to be incurred in respect of committed programmes.
Chester Street Provision
Provision has been made for potential liabilities following a previous group insurance carrier entering a Scheme of Arrangement 
(see note 4). VT Group plc Annual Report & Accounts 2005 57
Notes to the financial statements continued
(Forming part of the financial statements)
21 Share capital
2005 2004
£000 £000
Authorised – 200,000,000 ordinary shares of 5p each
(2004: 200,000,000 ordinary shares of 5p each) 10,000 10,000
Allotted, called up and fully paid 173,138,068 ordinary shares of 5p each
(2004: 171,941,798 ordinary shares of 5p each) 8,657 8,597
The following movements in share options took place during the year:
Number of options
Granted Exercised Lapsed Outstanding Price range (p) Normally exercisable to 
A – 331,155 21,670 533,905 116.3-201.6 23.05.09
B 38,917 201,664 175,716 2,181,849 156.3-299.0 21.11.14
C 10,152 35,440 22,595 1,071,128 239.6-299.0 21.11.14
D 985,789 623,780 533,941 3,399,191 144.8-258.6 01.02.10
A Vosper Thornycroft Executive Share Option Scheme
B Vosper Thornycroft Executive Share Option Plan 1996
C Vosper Thornycroft Approved Share Option Plan 1999
D Vosper Thornycroft Savings related Share Option Scheme and Vosper Thornycroft Sharesave Scheme 1998
22 Reserves
Share premium Profit & loss
account account Total
Group £000 £000 £000
At beginning of year 25,220 109,189 134,409
Investment in own shares – (505) (505)
As restated 25,220 108,684 133,904
Retained profit for the year – 9,939 9,939
Movement on employee share ownership trust – (2,020) (2,020)
Disposal of own shares – 53 53
Premium on issue of shares 2,850 – 2,850
Currency translation differences on foreign currency net investments – (391) (391)
At end of year 28,070 116,265 144,335
The amount of cumulative goodwill resulting from acquisitions which has been written off to reserves prior to implementation of FRS 10
is £9,112,000 (2004: £9,112,000).  
Share premium Revaluation Profit & loss
account reserve account Total
Company £000 £000 £000 £000
At beginning of year 25,220 10,257 18,243 53,720
Investment in own shares –– (505) (505)
As restated 25,220 10,257 17,738 53,215
Retained loss for the year –– (1,686) (1,686)
Disposal of own shares –– 53 53
Premium on issue of shares 2,850 –– 2,850
At end of year 28,070 10,257 16,105 54,432
Opening shareholders’ funds have been restated in accordance with UITF 38 “Accounting for ESOP Trusts” (see note 14). 58 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
23 Capital commitments
Group Company
2005 2004 2005 2004
£000 £000 £000 £000
Contracted but not provided for 762 1,078 – –
24 Reconciliation of operating profit to operating cash flows
2005 2004
£000 £000
Group operating profit 34,399 12,305
Goodwill amortisation 9,079 9,774
Depreciation charge 18,861 14,267
Profit on sale of fixed assets (30) (26)
(Decrease)/increase in provisions (8,484) 23,842
(Increase)/decrease in stocks (3,728) 377
Decrease in debtors 1,381 7,559
(Decrease)/increase in creditors (6,192) 15,920
Net cash flow from operating activities 45,286 84,018
The movement on provisions includes £1,519,000 in respect of the exceptional Chester Street provision created in the prior year.
25 Analysis of cash flows for headings netted in the cash flow statement
2005 2004
£000 £000 £000
Return on investments and servicing of finance
Interest received 1,221 5,233
Interest paid (6,634) (10,875)
Dividends paid to minority shareholders in subsidiary companies (660) (1,275)
Net cash outflow for returns on investments and servicing of finance (6,073) (6,917)
Capital expenditure and financial investment
Purchase of tangible fixed assets (15,164) (53,491)
Sale of tangible fixed assets 729 7,973
Investment in own shares – 160
Net cash outflow for capital expenditure and financial investment (14,435) (45,358)
Acquisitions and disposals
Repayment of loan notes in respect of prior year acquisitions (1,246) (7,956)
Purchase of subsidiary undertakings and joint ventures (note 26) (17,891) (12,848)
Net cash assumed with subsidiaries 1,152 640
Sale of subsidiary undertakings 483 10,231
Net cash outflow for acquisitions and disposals (17,502) (9,933)
Management of liquid resources
Movements in long term deposits (1,549) 16,086
Financing
Issue of ordinary share capital 943 1,892
Debt due in less than one year (10,425) (7,764)
Debt due in more than one year (1,262) 9,000
Net cash (outflow)/inflow from financing (10,744) 3,128 VT Group plc Annual Report & Accounts 2005 59
Notes to the financial statements continued
(Forming part of the financial statements)
26 Purchase of subsidiary undertakings and joint ventures
2005 2004
£000 £000
Net assets acquired (book and fair values):
Tangible fixed assets 820 2,320
Stocks and work in progress 2,671 –
Debtors 10,986 13,647
Deferred tax 115 –
Cash at bank and in hand 1,152 640
Creditors (11,284) (12,986)
4,460 3,621
Goodwill 12,677 9,227
Total cash consideration current year acquisition 17,137 12,848
Costs relating to prior year acquisitions 754 –
Total cash consideration 17,891 12,848
The table shows the details of acquisitions made during the year, being The Cube Corporation, Inc. (acquired 31 March 2005) and
Guidance Enterprise Group Limited (acquired 20 October 2004).
Results of the Guidance Enterprise Group are £5,984,000 in turnover, £4,530,000 in cost of sales and £1,012,000 in administrative
expenses; giving a profit of £442,000 before accounting for £672,000 of restructuring costs in the year which will benefit the future
performance of the business.
At the year end the goodwill is provisional, and will be updated in the 12 month period following acquisition.
27 Analysis of debt
At Exchange At
1.4.2004 Cash flow Non cash movement 31.3.2005
£000 £000 £000 £000 £000
Cash at bank and in hand 40,985 (15,772) –– 25,213
Cash on deposit 2,523 1,549 –– 4,072
43,508 (14,223) –– 29,285
Debt due within one year (16,474) 11,671 (6,355) (10) (11,168)
Debt due after more than one year (86,028) 1,262 10,565 – (74,201)
(58,994) (1,290) 4,210 (10) (56,084)
Non cash movement relates to reduction in deferred consideration (see note 12).
28 Operating leases
At the end of the financial year the group had commitments under operating leases to make annual payments as follows:
Other
Land and operating 2005 2004
buildings leases Total Total
£000 £000 £000 £000
Expiring:
Within one year 703 198 901 657
In the second to fifth years inclusive 1,590 3,490 5,080 2,269
After more than five years 2,381 33 2,414 3,538
4,674 3,721 8,395 6,464 60 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
29 Contingent liabilities
In the ordinary course of business, group companies from time to time enter into contracts which can account for a substantial part of
the consolidated turnover.
In connection with these contracts, particularly with overseas customers, group companies are required to undertake significant
obligations in relation to the performance and financing of the contracts.
In the opinion of the directors no further provision is required in respect of these obligations.
30 Pension arrangements
The group has continued to account for pensions in accordance with Statement of Standard Accounting Practice 24 ‘Accounting for
Pension Costs’ and the disclosures in (a) below are those required under the standard. The transitional disclosures in (b) below are
required under the new accounting standard Financial Reporting Standard 17 ‘Accounting for Retirement Benefits’.
a) SSAP 24 Disclosure
The group operates three funded defined benefit schemes and several money purchase schemes. The majority of employees are
members of one of these arrangements.
The group participates in the Shipbuilding Industries Pension Scheme (SIPS). This scheme is administered by independent trustees
and the funds are separate from the group’s finances. The scheme is of the defined benefits type and actuarial valuations are
undertaken every three years. The rates at which the group contributes to the scheme have been determined in accordance with the
advice of independent qualified actuaries. The latest valuation of the scheme, of which most employees are members, was at 1 April
2004 using the projected unit method. The principal assumption in this valuation was that investment returns would be 2% higher than
the rate of annual pay increases. The market value of the assets was £202 million, and the actuarial value of the assets was sufficient
to cover 94% of the benefits accruing to members after allowing for expected future pay increases. The deficit revealed by the actuarial
valuation is being eliminated by an increase in employer and employee contributions, and by changes to the early retirement provision
introduced in a prior year.
The superannuation arrangements of the LAWDC pension scheme, is a centralised defined benefit scheme for certain employees, with
the assets held in separate trustee-administered funds. The scheme is subject to triennial valuation by professionally qualified and
independent actuaries. The last formal valuation was carried out at 31 March 2003, using the projected unit credit method in which the
actuarial liability makes allowance for projected earnings. The principal assumption in this valuation was that investment returns would
be 2% higher than the rate of annual pay increases. The market value of the scheme’s assets was £7,160,000, and the actuarial value
of those assets represented 79% of the liability for benefits after allowing for expected future increases in earnings.
VT Four S participates in the Local Government Pension Scheme (LGPS), a  centralised defined benefit scheme for certain employees,
with the assets held in separate trustee-administered funds. The last formal valuation was carried out at 31 March 2004, using the
projected unit credit method in which the actuarial liability makes allowances for projected earnings. The principal assumption in this
valuation was that investment returns would be 1.9% higher than the rate of annual pay increases. The market value of the scheme’s
assets was £1,105,555 and the actuarial value of those assets represented 68% of the liability for benefits after allowing for expected
future increases in earnings.
b) FRS 17 Disclosure
The latest scheme valuations have been updated by the actuaries on an FRS 17 basis as at 31 March 2005. The major assumptions
used in these valuations were:
SIPS LAWDC VT Four S
1 April 2004 31 March 2003 31 March 2004
2005 2004 2003 2005 2004 2003 2005
Rate of increase in salaries 4.00% 4.00% 4.00% 4.00% 4.00% 3.50% 4.40%
Rate of increase in pension payments 2.65% 2.65% 2.50% 2.65% 2.65% 2.50% 2.90%
Discount rate 5.50% 5.50% 5.50% 5.50% 5.50% 5.50% 5.40%
Inflation assumption 2.75% 2.75% 2.50% 2.75% 2.75% 2.50% 2.90%
Long term return on equities 8.00% 8.00% 8.50% 8.00% 8.00% 8.50% 7.70%
Long term return on fixed interest gilts 5.30% 4.75% 4.50% 5.30% 4.75% 4.50% 4.80%
The assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial assumptions which, due to
the timescale covered, may not necessarily be borne out in practice. VT Group plc Annual Report & Accounts 2005 61
Notes to the financial statements continued
(Forming part of the financial statements)
30 Pension arrangements continued
The fair value of the scheme assets, which are not intended to be realised in the short term and may be subject to significant changes
before they are realised, and the present value of the scheme liabilities, which are derived from cash flow projections over long periods
and thus inherently uncertain, were:
Value at 31 March 2005
2004 2003
SIPS LAWDC VT Four S Total Total Total
£000 £000 £000 £000 £000 £000
Equities 199,541 11,188 11,645 222,374 193,136 148,019
Fixed interest gilts 21,269 1,202 4,357 26,828 18,784 16,447
Market value of assets 220,810 12,390 16,002 249,202 211,920 164,466
Value of liabilities (265,492) (16,506) (18,473) (300,471) (281,577) (246,490)
Deficit (44,682) (4,116) (2,471) (51,269) (69,657) (82,024)
Related deferred tax asset 13,405 1,235 741 15,381 20,897 24,607
Net pension liability (31,277) (2,881) (1,730) (35,888) (48,760) (57,417)
The amount of this net pension liability would be included in the group’s profit and loss reserve.
An analysis of the amount which would have been charged to operating profit is as follows:
2005 2004
£000 £000
Current service cost 14,170 14,695
Impact of settlements and curtailments (1,907) –
Total operating charge 12,263 14,695
An analysis of the amount which would have been credited to other financing income is as follows:
2005 2004
£000 £000
Expected return on pension scheme assets 17,096 13,379
Interest on pension scheme liabilities (16,416) (13,887)
Net return 680 (508)
An analysis of the amount which would have been recognised in the statement of total recognised gains and losses (STRGL) is as
follows:
2005 2004
£000 £000
Actual return less expected return on pension scheme assets 11,317 30,800
Experience gains and losses arising on pension scheme liabilities 10,786 (5,270)
Changes in assumptions underlying the present value of the scheme liabilities 3,883 (4,219)
Actuarial gain recognised in STRGL 25,986 21,311 62 VT Group plc Annual Report & Accounts 2005
Notes to the financial statements continued
(Forming part of the financial statements)
30 Pension arrangements continued
An analysis of the movement in deficit during the year to 31 March 2005 would have been as follows:
2005 2004
£000 £000
Deficit in scheme at beginning of the year (69,657) (82,024)
Movement in year:
Acquired through purchase of VT Four S Limited (2,422) –
Current service cost (14,170) (14,695)
Contributions 6,407 6,259
Other financing income/(costs) 680 (508)
Impact of settlements and curtailments 1,907 –
Actuarial gain 25,986 21,311
Deficit in scheme at end of the year (51,269) (69,657)
A history of experience gains and losses at 31 March 2005 would have been as follows:
2005 2004 2003
£000 £000 £000
Difference between the expected and actual return on scheme assets:
Amount 11,317 30,800 (63,028)
Percentage of scheme assets 4.5% 14.5% (38.3%)
Experience gains and losses on scheme liabilities:
Amount 10,786 (5,270) (1,266)
Percentage of present value of scheme liabilities 3.6% (1.9%) (0.5%)
Total amount recognised in statement of total recognised gains and losses:
Amount 25,986 21,311 (88,080)
Percentage of present value of scheme liabilities 8.6% 7.6% (35.7%)
31 Related party transactions
During the year the group has entered into transactions, in the ordinary course of business, with other related parties. 
Transactions entered into, and trading balances outstanding at 31 March 2005, are as follows:
Sales to Purchases from Amounts owed Amounts owed
related party related party by related party to related party
£000 £000 £000 £000
Related party
Flagship Training Limited
2005 4,620 2,992 356 10,415
2004 4,564 2,170 420 10,460
Fleet Support Limited
2005 3,246 1,999 635 529
2004 1,829 1,052 551 17
University of Wales, Bangor
2005 545 43 114 894
2004 1,240 104 89 –
Flagship Training Limited
The group has a 50% (2004: 50%) interest in Flagship Training Limited.
Fleet Support Limited
The group has a 50% (2004: 50%) interest in Fleet Support Limited.
University of Wales, Bangor
The University of Wales, Bangor, holds a 50% stake in the VT controlled company, VT Ocean Sciences Limited. The majority of the
turnover of this company is to the related party, University of Wales, Bangor. In addition to the amounts shown above the University 
of Wales, Bangor has provided a fixed rate interest loan of £1,810,000 (2004: £1,810,000); during the year interest of £118,000 
(2004: £132,000) was charged.
Sale of VT Engine Controls trade and assets
In line with the Group’s policy of dispensing of non-core businesses, the part sale of VT Engine Controls Limited trade and assets 
was completed in August 2004. This disposal was to a company related to Terry Madden, a former board director, for a total 
consideration of approximately £2.5m comprising of £0.5m initial cash proceeds and the balance in deferred consideration.
All dealings with related parties are conducted on an arm’s length basis. VT Group plc Annual Report & Accounts 2005 63
Notes to the financial statements continued
(Forming part of the financial statements)
32 Principal subsidiary and joint venture undertakings
The following is a list of the group’s principal subsidiary and joint venture undertakings. All holdings are of ordinary shares or common
stock and are 100% unless otherwise stated. A full list of the group companies will be included in the company’s annual return.
Name Activity Country of 
incorporation 
and operation
Airwork Limited Support Services for overseas airforces England
Careers Enterprise Limited*(50%) Provision of careers services in the counties of Buckinghamshire, 
Kent and the City of London England
Flagship Training Limited*† (50%) Worldwide provision of naval training services to HM armed forces 
and other establishments England
Fleet Support Limited*† (50%) Support services for the Royal Navy Fleet at Portsmouth England
Saudi Vosper Thornycroft Company Limited*† Maintenance, repair, training and operation of military/civilian
(49%) ships and related training Saudi Arabia
Surrey Careers Services Limited* (75%) Provision of careers services in the county of Surrey England
The Cube Corporation, Inc.* Support services for the US Government USA
Vosper Thornycroft (Malaysia) Sdn. Bhd.* Representative company Malaysia
Vosper Thornycroft (UK) Limited Shipbuilding, and design and manufacture of engineering products England
Vosper-ManTech Limited* (60%) Provision of engineering services to GCHQ England
VT Aerospace Limited* Support services for the Royal Air Force England
VT Career Progressions Limited* Provision of software for careers services England
VT Careers Management Limited* Holding company England
VT Education and Skills Limited* Provision of education services England
VT Fire Services Limited* Special projects operating company England
VT Fire Training (Avonmouth) Limited* Special projects operating company England
VT Fitzroy Limited* (70%) Support services for the Royal New Zealand Navy New Zealand
VT Four S Limited*(80.1%) Provision of school support services in the county of Surrey England
VT Griffin Services, Inc.* Support services for the US armed forces USA
VT Group International Limited Holding company England
VT Group Services Limited* Support services for VT Group England
VT Halmatic Limited* Design and manufacture of small boats England
VT Hellas Marine Consultants SA* Provision of shipbuilding management services England
VT Integrated Services Limited* Provision of manpower, training and support services England
VT Investments Limited Group investment holding company England
VT Leaseco Limited* Special projects company England
VT Marine Products Limited* Design and supply of stabilisers, steering gear and bow thrusters England
VT Maritime Affairs Limited* Special projects operating company England
VT Maritime Dynamics, Inc.* Design and supply of electronic maritime ride control systems USA
VT Merlin Communications Limited* Provision of worldwide communications England
VT Naiad Holland BV* Design and supply of stabilisers and bow thrusters for yachts Holland
VT Naiad, Inc.* Design and supply of stabilisers and bow ride control systems USA
VT Ocean Sciences Limited* (50%) Special projects operating company England
VT Plus Training Plc* Provision of training services England
VT Property Services Limited* Special projects operating company England
VT Shipbuilding Holdings Limited Holding company England
VT Shipbuilding International Limited* Shipbuilding England
VT Shipbuilding Limited* Shipbuilding England
VT Southern Careers Limited* Provision of careers services in the counties of Hampshire England
and the Isle of Wight
VT Support Services Limited* Holding company England
VT TSS Limited* Design, manufacture and distribution of marine survey 
instruments and the provision of related services England
VT US, Inc.* Holding company USA
VT West Sussex Careers Limited* (80%) Provision of careers services in the county of West Sussex England
Westminster Education Consultants Limited* Provision of schools inspection services England
* Investment held by a subsidiary company
† Joint venture undertaking 64 VT Group plc Annual Report & Accounts 2005
Five year summary
2005 2004 2003 2002 2001
£000 £000 £000 £000 £000
Turnover 743,722 670,679 564,639 478,953 378,523
Operating profit before goodwill amortisation 
and exceptional items 43,478 37,079 34,940 28,780 24,049
Operating profit from joint ventures 12,813 12,142 8,125 6,062 4,863
Net interest (payable)/receivable (4,326) (3,056) (1,518) 2,743 6,496
Profit on ordinary activities before exceptional
items, tax and goodwill amortisation 51,965 46,165 41,547 37,585 35,408
Exceptional costs – (15,000) (14,424) (750) –
Property services and sale of businesses – 4,935 4,000 – 916
Profit on ordinary activities before tax and
goodwill amortisation 51,965 36,100 31,123 36,835 36,324
Goodwill amortisation (9,079) (9,774) (19,475) (5,397) (2,599)
Profit on ordinary activities before tax 42,886 26,326 11,648 31,438 33,725
Taxation (14,925) (9,301) (8,109) (10,713) (10,929)
Profit on ordinary activities after tax 27,961 17,025 3,539 20,725 22,796
Minority interest (1,135) (1,439) (797) (1,402) (996)
Profit for the financial year 26,826 15,586 2,742 19,323 21,800
Fixed assets
Goodwill 155,478 158,834 159,381 174,414 53,845
Tangible assets 188,193 192,185 157,699 105,654 47,944
Investments 10,532 9,419 8,823 5,740 4,464
Cash balance 29,285 43,508 29,455 70,991 115,518
Other current assets 159,013 149,551 143,412 129,066 81,574
Current liabilities (253,164) (255,744) (228,325) (242,386) (123,858)
Long term liabilities (74,201) (86,028) (88,625) (64,538) (17,868)
Provisions for liabilities and charges (58,663) (65,338) (35,338) (23,156) (21,086)
Minority interest (3,481) (3,886) (3,722) (4,061) (3,335)
Equity shareholders’ funds 152,992 142,501 142,760 151,724 137,198
Earnings per share – pre goodwill amortisation 
and exceptional items 20.82p 18.1p 16.6p 15.1p 14.7p
Earnings per share – pre goodwill amortisation 20.82p 14.8p 13.0p 14.8p 14.7p
Earnings per share – post goodwill amortisation 15.56p 9.1p 1.6p 11.5p 13.2p
Earnings per share – diluted post goodwill
amortisation 15.42p 9.0p 1.6p 11.4p 13.0p
Dividend per share 9.75p 9.0p 8.4p 7.8p 7.3p VT Group plc Annual Report & Accounts 2005 65
Principal Locations
Head Office
VT Group
VT House
Grange Drive, Hedge End
Southampton SO30 2DQ
T: (023) 8083 9001
F: (023) 8083 9002
E: vtgroup@vtplc.com
W: www.vtplc.com
Shipbuilding
VT Shipbuilding
Fleet Way
Portsmouth PO1 3AQ
T: (023) 9285 7200
F: (023) 9285 7400
E:shipsales@vosperthornycroft.com
W: www.vtplc.com/shipbuilding
VT Halmatic 
Portchester Shipyard, Hamilton Road
Portsmouth PO6 4QB
T: (023) 9253 9600
F: (023) 9253 9601
E: enquiries@halmatic.com
W: www.vtplc.com/halmatic
VT Marine Products
Hamilton Road, Cosham
Portsmouth PO6 4PX
T: (023) 9253 9750
F: (023) 9253 9764
E: vtmpinfo@vtplc.com 
W: www.vtplc.com/marine
VT Hellas
3 Strategiou Tombra Str
Aghia Paraskevi
153 42 Athens Greece
T: + 30 210 55 35 127
F: + 30 210 55 35 177
VT Maritime Dynamics 
21001 Great Mills Road, Lexington Park
Maryland 20653 USA
T: + 1 (301) 863 5499
F: + 1 (301) 863 0254
E: sales@maritimedynamics.com
VT Naiad Marine
Head Office
50 Parrott Drive, Shelton
Connecticut 06484 USA
T: 00 1 (203) 929 6355
F: 00 1 (203) 929 3594
E: sales@naiad.com
W: www.naiad.com
VT Naiad Marine 
Broward Business Park
3700 Hacienda Bvd. Suite I
Fort Lauderdale, Florida 33314 USA
T: + 1 (954) 797 7566
F: +1 (954) 791 0827
E: sales@nmfl.com
VT Naiad Marine
Dudoklaan 3a, 6411 RP Heerlen
The Netherlands
T: +31 (0) 45 544 7100
F: +31 (0) 45 574 2345
E: info@vtnmh.nl
Support Services
VT Integrated Services
Bournemouth International Airport
Christchurch, Dorset BH23 6BS
T: (01202) 365200
F: (01202) 573692
W: www.vtplc.com/vtis
VT Bordon
Bldg 81, SEME, Budds Lane
Bordon, Hampshire GU35 0JE
Telephone: (01420) 485509
F: (01420) 485522
W: www.vtplc.com/bordon
VT Arborfield
Hazebrouck Barracks, Arborfield
Reading RG2 9NJ
T: (0118) 976 2202
F: (0118) 976 2208
W: www.vtplc.com/arborfield
VT Aerospace
Bournemouth International Airport 
Bournemouth BH23 6BS
T: (01202) 365200
F: (01202) 573692
E: info@vtae.co.uk
W: www.vtplc.com/aerospace
VT Communications 
20 Lincoln’s Inn Fields
London WC2A 3ES
T: (020) 7969 0000
F: (020) 7396 6221
E: vtcommunications@vtplc.com
W: www.vtplc.com/communications
VT Griffin Services
5755 Dupree Drive, NW,  Suite 220
Atlanta, Georgia 30327-4352 USA
Telephone: + 1 (770) 952 1479
Fax: + 1 (770) 859 0410
E: info@griffinserv.com
W: www.griffinserv.com
VT Education and Skills
Sutton House, Weyside Park
Catteshall Lane, Godalming
Surrey GU7 1XJ
T: (01483) 413200
F: (01483) 413201
E:vtes@vtplc.com
W: www.vtplc.com/educationandskills
VT Careers Management
Sutton House, Weyside Park
Catteshall Lane, Godalming
Surrey GU7 1XJ
T: (01483) 413200
F: (01483) 413201
E:vtes@vtplc.com
W: www.vtplc.com/careersmanagement
VT Plus Training
Sutton House, Weyside Park
Catteshall Lane, Godalming
Surrey GU7 1XJ
T: (01483) 413200
F: (01483) 413201
E:vtes@vtplc.com
W: www.vtplc.com/plustraining
VT Four S
Head Office & Development Centre
Baytree Avenue, Kingston Road
Leatherhead KT22 4UE
T: (01372) 834444
F: (01372) 834000
E: info@fours.co.uk
W: www.fours.co.uk
Fleet Support Limited
Postal Point 100, Building 2/166
HM Naval Base, Portsmouth PO1 3NJ
T: (023) 9272 2669
F: (023) 9272 2179
E: enquiries@fleet-support.co.uk
W: www.fleet-support.co.uk
Flagship Training Limited
Shore House, Compass Road
North Harbour, Portsmouth PO6 4PR
T: (023) 9233 9000
F: (023) 9233 9001
E: marketing@flagshiptraining.co.uk
W: www.flagshiptraining.co.uk Annual Report & Accounts 2005
VT Group plc
VT House
Grange Drive, Hedge End
Southampton SO30 2DQ
T: +44 (0)23 8083 9001
F: +44 (0)23 8083 9002
E: vtgroup@vtplc.com
w: www.vtplc.com
Annual Report & Accounts 2005
www.vtplc.com
VT Group plc Annual Report & Accounts 2005