www.vega-group.com
VEGA Group PLC
2 Falcon Way, Shire Park
Welwyn Garden City
Hertfordshire AL7 1TW
United Kingdom
Tel: +44 (0)1707 391999
Fax: +44 (0)1707 393909
360 Bristol Business Park 
Coldharbour Lane 
Bristol BS16 1EJ
United Kingdom
Tel: +44 (0)117 9880033
Fax: +44 (0)117 9880034
Delme Place
Cams Hall Estate
Fareham
Hampshire PO16 8UX
United Kingdom
Tel: +44 (0)1329 223838
Fax: +44 (0)1329 238319
VEGA IT GmbH
Hilpertstrasse 20 A
D-64295 Darmstadt 
Germany
Tel: +49 (0)6151 82570
Fax: +49 (0)6151 8257799
Robert-Bosch-Strasse 7
D-64293 Darmstadt
Germany 
Tel: +49 (0)6151 82570
Fax: +49 (0)6151 8257171
VEGA Group PLC Annual Report & Accounts 2006
vega group plc
VEGA Technologies SAS
West Park, 4 rue Paul Mesplé 
31100 Toulouse 
France
Tel: +33 (0)567 77 19 99
Fax: +33 (0)567 77 19 98
Independent programme 
and System assurance
Annual Report & Accounts 2006 VEGA is an independent consulting and 
technology company that specialises in 
Programme and System Assurance.
We apply consulting and technology solutions that enable 
clients to identify business value, manage risk and realise higher 
levels of success from their programmes and systems. 
With three decades of market domain experience, we have 
evolved a unique approach that assures client value is placed 
at the heart of business change and management, delivering 
exceptional levels of client results.
Contents
01	 Highlights
02	 Company 	 Overview
04	 Chairman’s 	 Statement
06	 Chief 	 Executive’s	 Review
08	 Operating 	 Review
16	 Financial 	 Review
18	 Board 	 of	 Directors
20	 	Shareholder	 Information	 	 and	 Financial	 Calendar
21	 Directors’ 	 Report
23	 Report 	 on	 Corporate	 Governance
26	 Directors’ 	 Remuneration	 Report
31	 	Statement	 of	 Directors’	 Responsibilities
32	 Independent 	 Auditor’s	 Report
33	 	Consolidated	 Income	 Statement
34	 Consolidated 	 Balance	 Sheet
35	 	Consolidated	 Cash	 Flow	 Statement
36	 	Consolidated	 Statement	 of	 Recognised	 	 Income	 and	 Expense
37	 Notes
About VEGA 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  Financial	 highlights
•  Third successive year of double digit growth in revenues and profits
• Revenue up 18% to £62.1m (2005: £52.6m)
 – UK up 19% to £40.0m
 – Germany up 13% to £17.0m
 – Rest of Europe up 34% to £5.1m
•  Operating profit up by more than 20% for fourth successive year
•  Adjusted* profit before tax up 21% to £4.5m (2005: £3.7m)
•  Reported profit before tax up 22% to £3.9m (2005: £3.2m)
•  Adjusted* diluted EPS up 30% to 17.3p (2005: 13.3p), 
including the impact of R&D tax credits
•  Proposed final dividend of 1.875p, giving a total for 
the year of 2.5p (2005: 2.0p), up 25%
• Net debt decreased to £1.6m (2005: £2.4m)
Operational	 highlights
•  Strong growth in both the Defence market (up 33%) and 
the Aerospace market (up 10%)
• Investment in growth but operating margins maintained
• £19.7m contract with Thales UK for Watchkeeper UAV System
•  Significant contract wins as prime contractor, including providing 
secure systems to the UK intelligence community and architectural 
modelling services to the UK Ministry of Defence
•  Appointment of senior executives to lead business development 
and drive forward the Consulting Group
•  Increased focus on Consulting and Technology and associated 
service lines
*before amortisation of acquired intangibles and exceptional items
Operating profit* up 20% to £4.8m  
(2005: £4.0m)
  
20
%
Revenue up 18% to £62.1m  
(2005: £52.6m)
		 1 8
%
Profit before tax* up 21% to £4.5m  
(2005: £3.7m)
  
21
%
Highlights Our service lines
Capability  
Acquisition
VEGA offers independent 
strategic advice and specialist 
services to define, procure 
and implement new capability; 
ensuring organisations invest 
for higher business value and 
lower integration risk. 
Company Overview
Human Performance 
Improvement
Our markets
Our geographic reach
Aerospace
Percentage	 of	 revenue
1  Capability Acquisition 33%
2  Human Performance Improvement  5%
3  Information Security 9%
4  Simulation and Technology Solutions  4%
5  Technology Support Services 22%
6  Science and Technology Research 7%
Percentage	 of	 revenue
1  Aerospace 5 %
2  Defence 43%
3  Government 6%
VEGA has offices and operations 
throughout Europe, with over 
200 clients worldwide. Our 
principal locations are in the UK, 
Germany, Holland and France, 
although many of our people are 
embedded in programmes at 
client sites.
Percentage	 of	 revenue
1  United Kingdom 65%
2  Germany 27%
3  Rest of Europe 8%
VEGA combines advanced 
learning practices, technology-
based training and performance 
support techniques to identify 
and bridge human capability 
gaps; ensuring organisational 
performance improvement.
Two of the primary drivers for the 
global aerospace community 
are the military and commercial 
exploitation of our skies and 
the scientific exploration of our 
solar system. Government and 
private organisations invest in 
aerospace to understand and 
protect our planet, to improve 
and secure our daily lives and to 
deliver stakeholder returns. This 
drives a worldwide industry in 
the development and application 
of scientific, commercial and 
military aerospace technology.
VEGA works with satellite 
and aircraft operators and 
aerospace manufacturers 
across the full mission lifecycle 
and multiple programme lines. 
We ensure that the research, 
development and operation of 
aerospace technology delivers 
against their mission goals.
1
2
3
4
6
5
1
2
3
1
2
3
Our clients
European Space Agency (ESA) • French National Space Agency (CNES) • Eumetsat • Inmarsat •  
EADS Astrium • Thales • Command Support Information Systems IPT • Defence Logistics Organisation •  
Defence Integration Authority • Lloyds TSB • Maritime Training Systems IPT • QinetiQ • Kraus Maffei  
Wegman • Government Communications Headquarters • Cabinet Office • Foreign & Commonwealth  
Office • NHS Modernisation Initiative • CESG • London Ambulance Service
2	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 Information
Security
Simulation & 
Technology Solutions
Technology Support 
Services
Science & Technology 
Research
Defence Government
Germany: Revenue up 13%  
to £17.0m 
  
1 3
%
UK: Revenue up 19%  
to £40.0m 
  
1 9
%
Rest of Europe: Revenue up 34%  
to £5.1m 
  
34
%
VEGA offers independent 
strategic advice and specialist 
technical services, based on 
highly accredited consultants 
and industry leading practices, 
to ensure the confidentiality, 
integrity and availability of 
information assets. 
VEGA uses advanced simulation 
and modelling techniques to  
verify and validate new systems  
in their operational context. We  
develop high integrity information  
and communication 
technology solutions where 
existing alternatives prove 
inadequate.
VEGA provides highly qualified 
individuals and specialist 
project teams to support the 
technology aspects of existing 
business operations and 
new programmes; enabling 
organisations to deliver the 
new, whilst protecting the old. 
VEGA offers multinational, 
multidisciplinary teams of 
highly qualified staff to support 
clients’ early phase science 
and technology research 
programmes; ensuring 
programmes and systems are 
conceived with downstream 
business value in mind.
Today’s armed forces need 
to be able to deploy rapidly, 
anywhere in the world, often 
as part of an international 
force. The focus on ‘homeland 
security’ no longer centres upon 
repelling invading forces with 
conventional weapons, but 
concentrates on acts of terror 
that can endanger life or disrupt 
national infrastructure. In both 
cases, effective information and 
communication systems are 
essential. The exploitation of 
technological advances allows 
light, responsive but powerful 
forces to be ‘network enabled’. 
VEGA works with defence 
agencies and armed forces 
to ensure that the acquisition, 
integration and deployment 
of network enabled capability, 
delivers the operational 
benefits for which it was 
intended.
The UK Government’s IT 
Strategy, ‘Transformational 
Government – Enabled by 
Technology’, sets out its vision 
for 21st century government. 
It is a vision that delivers 
government services for the 
convenience of the citizen or 
business and one that is enabled 
by a culture of shared services 
and IT professionalism. For 
this vision to become reality, 
the public sector is reliant on 
the successful integration 
of the latest information and 
communication technology, 
in a practical but secure 
environment.
VEGA works with government 
departments and agencies 
to ensure that transformation 
initiatives are conceived and 
implemented effectively; 
with the necessary levels of 
accessibility and security.
	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 3 Overview
VEGA has had another very successful year, delivering 
significant growth in both revenues and operating profits 
whilst continuing to invest in its future.
In line with the strategy outlined last year, the focus over 
the last 12 months has been on growing the Group in all its 
key geographies and this has been achieved, with VEGA 
now enjoying double digit growth across the UK, Germany, 
Holland and France. To support this and future growth, 
there has also been significant investment during the year 
in strengthening the sales team and processes across 
the Group and training senior management. However, 
operating margins have been maintained and Group 
operating profits have grown by more than 20% for the 
fourth consecutive year.
Two senior executives have been recruited during the year 
to lead the Group’s business development activities across 
its key markets. We have now also drawn a clear distinction 
between the Consulting and Technology elements of our 
business and the Board has recruited a Consulting Director to 
strengthen the management team in this rapidly growing part 
of the business. We are looking to make a similar appointment 
to lead the Technology side of the business.
Turnover for the year was up 18% compared with the 
previous year. Adjusted profit before tax* was up 21%. 
Reported profit before tax was up 22%.
In the UK, there has been strong growth within the Defence 
consulting arena, particularly in the areas of national 
security and network enabled capability. VEGA has had 
further success in winning major contracts in its role as 
prime contractor, including a £4m contract to build a 
secure information system for the UK intelligence 
community and a £4.6m contract to supply architectural 
modelling services to the UK Ministry of Defence. In 
Aerospace, growth has been achieved in the UK space 
business, with contract wins on Galileo and for EADS 
Astrium on the Skynet 5 programme, whilst on the military 
side, after a relatively quiet year to 30 April 2006, we 
have now signed a £19.7m contract with Thales UK to 
provide the training solution for the Watchkeeper UAV 
programme. In Government, in common with many others, 
we saw a fall in revenues from the health sector but this 
was compensated for by growth in services into central 
government and the emergency services.
In Germany, VEGA underlined its excellent relationship with 
the European Space Agency by winning, for the seventh 
consecutive time, a contract to supply operational support 
to the European Space Operations Centre (ESOC) in 
Darmstadt for up to a further five years. This contract is 
estimated to be worth €6.5m to VEGA in the calendar year 
to 31 December 2006 and we anticipate that the annual 
value should remain at a similar level during the lifetime of 
the contract. The Group has also won a contract worth 
potentially €2m over four years to provide ground segment 
support to ESOC.
In the Rest of Europe, the Group has extended its support 
to the European Space Research and Technology Centre  
in Holland and, significantly, has won its first contract  
for work at the French national space agency (CNES)  
in Toulouse, France.
Dividend
The Board is recommending a final dividend of 1.875p per 
share which, together with the interim dividend of 0.625p 
per share, brings the total dividends for the year to 2.5p  
per share, up 25% on the prior year. 
“	The	 Board	 is	 very	 pleased	 with	 the	 progress	 made	 in	 the	 last	 2	 months.	 In	 the	 year	 ahead,	 we	 will	 continue	 to	 implement	 our	 strategy	 for	 growth	 across	 our	 geographies	 and	 markets.”
Andy	 Roberts  Chairman
Chairman’s Statement
4	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
* Before amortisation of acquired intangibles and exceptional items. Board	 changes
On 28 June 2006 Brian Birkenhead joined the Board as 
Senior Non-Executive Director and Chairman of the Audit 
Committee, replacing Ken Lever who retired at the last 
Annual General Meeting.
Outlook
The Board is very pleased with the progress made in  
the last 12 months. In the year ahead, we will continue  
to implement our strategy for growth across our 
geographies and markets, building a strong management 
team to deliver improved performance from our existing 
businesses and looking for smart acquisitions to 
supplement organic growth. 
VEGA is well positioned to take further advantage of the 
potential in its current markets. Management is  keenly 
aware of changing government and institutional priorities 
and, by aligning VEGA along our service lines, we believe 
that we will be better placed to respond and indeed look  
to other market opportunities. We believe this will position 
us as a recognised market leader in our chosen fields.
Andy	 Roberts
Chairman
“ Defining, procuring and implementing 
new capability, for higher business 
value and lower integration risk.”
Overview
In today’s network-centric environment, organisations 
frequently seek to develop strategic capability through 
the acquisition of new technology. The procurement and 
deployment of new technology has, however, often been driven 
by available budget and functionality and not by ensuring 
business value or interoperability with existing systems. The 
opportunity to improve return on investment is leading many 
organisations to seek better ways of acquiring capability. 
 
 
Case study
“	VEGA	 enhances	 MoD	 decision-making	 across	 multiple	 procurement	 programmes.”
Like many organisations, the MoD needs to understand 
the impacts of its various procurement programmes on its 
people, processes and systems. More than this, it needs to be 
confident that the investments it makes will deliver the capability 
it sets out to achieve.
When confronted with an ever increasing number of systems 
and interactions, the MoD Integration Authority asked VEGA 
to help it to devise a means of capturing and visualising this 
expanding complexity in a meaningful way. Working with 
the Integration Authority, VEGA developed an advanced 
‘Architectural Framework Modelling’ (AFM) capability and 
software toolset. The resultant solution is currently supporting 
around 3,000 separate systems, in 300 related procurement 
programmes, with a total of over 300,000 nodes of interaction. 
Using AFM, the Integration Authority has been more able to 
identify, assess and manage risks, and to conduct requirements 
definition with more comprehensive trade-off and benefit 
analyses, before events occur. Overall, the MoD has improved 
its ability to make sound business decisions and to present a 
more confident road map for capability delivery.  
In March 2006, VEGA was awarded a £4.6m contract to 
provide ongoing Architectural Framework Modelling services  
to the Integration Authority and to enhance the software toolset.
Capability	 Acquisition
Service	 Line
	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 5 6	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 7
Summary
I am pleased to report another year of continued 
improvement for VEGA, with many client success stories 
in the year. I would also like to take this opportunity to 
highlight the contribution made by all our staff – both  
those on the client facing delivery side and those who 
provide the support backbone on which the business 
depends. They should all take considerable pride in their 
significant achievements.
Strategy	 delivered
There have been several key initiatives launched during the 
year as a result of the Strategic Review. 
One of the main thrusts was to achieve a more balanced 
business model where we would achieve greater parity 
between our services, markets and geographies. We 
determined that these would be managed locally but 
would be directed from the centre. I can report that 
we have now set up a structure which reflects these 
changes and we are now beginning to see the benefits 
of this flow through to the business.
To capitalise on their different operating characteristics, 
we set out to make a stronger distinction between the 
Consulting and Technology elements of our business. 
The initial focus has been on Consulting, where we have 
launched a distinct Business Consulting Group which 
will operate across the Company and be responsible for 
the development of the processes and tools to support 
higher level consulting engagements. In order to lead 
this initiative, we have recently appointed a Consulting 
Director. We will turn to building our Technology 
services during the first half of 2006/7, which will drive 
the development of VEGA intellectual property-based 
solutions. Once this is complete, there will be a clear 
distinction between what constitutes our Consulting  
and Technology offerings going forward. 
•
•
In the business development area, we have made 
two key senior management appointments to reflect 
our revised market definitions around Aerospace and 
Government & Defence, and to exploit the undoubted 
potential that partnerships represent for VEGA. In 
tandem, we have adopted a new account management 
approach to ensure that we are closer to our clients and 
are in a position to better cross-sell our other services. 
We have also made significant investments in our sales 
processes, in value based selling and in the back office 
which will underpin these changes. 
The marketing and re-positioning around ‘Independent 
Programme and System Assurance’ has begun to 
produce results. It is now gaining wider understanding 
and acceptance in the market and, as a result, VEGA 
is being identified as a leader within this arena. Several 
contract wins in the year are as a direct result of this 
approach being applied to the successful solution.  
As I wrote last year, the development of clear, 
understandable and marketable service offerings 
is crucial to our future success. The redefinition 
and investment in our key service lines has given 
considerable impetus to our marketing and sales efforts 
and is a vital component in the development of our 
balanced business model. 
Vision
Halfway through the year, I shared my personal vision for 
VEGA’s immediate future with my senior management 
colleagues. It is an expression of how I see the Company 
developing and positioning itself as a leading professional 
services business in consulting and technology. This vision 
was ratified by the Board and is now an important overlay 
to the Strategic Review, undertaken last year.
•
•
•
“	One	 of	 the	 main	 thrusts	 of	 the	 strategy	 was	 to	 achieve	 a	 more	 balanced	 business	 model	 where	 we	 would	 achieve	 greater	 parity	 between	 our	 services,	 markets	 and	 geographies.”
Phil	 Cartmell  Chief Executive
Chief Executive’s Review 6	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 7
There are four key themes to this vision. First, it plots 
the journey VEGA needs to take from an engineering 
capability-led business, through to a market-led business. 
Second, we have to build on our operational strengths by 
balancing them with the new focus on our services. Third, 
there is strong evidence in our markets, which has been 
substantiated by our own client research, that innovation 
will become increasingly important for VEGA, both in terms 
of our solutions and our commercial approaches. Fourth, 
I strongly believe VEGA must create an ongoing change 
environment to achieve our strategic goals.
Fundamental to this change agenda, will be the preservation 
of a careful balance between today’s core business and the 
exciting opportunities I see for VEGA over the next few years. 
We also need to develop a professional staff with the right 
blend of entrepreneurial, commercial and practical skills  
and experience.
I believe that the actions taken in the business as a result 
of our strategic review have delivered benefits this year 
and positioned us well to take advantage of new market 
opportunities. The new focus on our differing Consulting 
and Technology offerings, through the associated service 
lines, will provide the clarity needed to demonstrate the 
added value we can deliver to our clients. This gives me 
continued belief that we will achieve our goal of leadership 
in our chosen fields.
Phil	 Cartmell
Chief Executive
Human	 Performance	 Improvement
Service	 Line
“ Applying individual, team and collective 
learning solutions, to enhance 
organisational performance.”
Overview
An organisation’s performance is directly affected by the 
performance of both its systems and its people. When 
organisations undergo change, such as the introduction of 
new systems or processes, they risk gaps arising between 
the current human capabilities and those needed to derive 
business value from the change. Even where no change is 
being sought, gaps in staff knowledge, skills or attitude may 
restrict an organisation’s effectiveness and productivity. 
 
 
 
Case study
“	VEGA	 manages	 development	 of	 innovative	 UAV	 	 training	 system”
Intelligence, Surveillance, Target Acquisition and 
Reconnaissance (ISTAR) systems that employ Unmanned 
Aircraft Vehicles (UAVs) are an increasingly important 
component of modern defence activities, with their ability to 
provide continuous surveillance, without the need to deploy 
troops into sensitive areas or harmful situations. More than 
this, they are an essential element of UK armed forces’ drive for 
Network Enabled Capability (NEC), enhancing military capability 
through the better exploitation of information.
When the UK MoD initiated an £800m programme to procure 
its own ISTAR system (Watchkeeper), Thales UK asked 
VEGA to join its consortium as the partner responsible for the 
training solution. Working closely with Thales UK and the other 
consortium members, VEGA helped to prepare an innovative 
bid, which contributed to Thales UK being appointed as prime 
contractor in August 2005. 
Since then, VEGA has conducted the Watchkeeper Training 
Needs, Analysis and Risk Reduction Study. These assessed 
the detailed training requirements for UAV operators and 
maintainers and considered competing technical requirements 
to generate an optimum balance within the requirement set.
In July 2006, VEGA was awarded a £19.7m contract by 
Thales UK, to manage the development and delivery of the 
Watchkeeper training solution. 8	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 9
Once again, we can report good progress against our key 
strategic objectives, impressive financial performance and 
ongoing investment to ensure our success is sustainable.  
We have grown in all our markets and all our geographies 
in the period. Our ability to generate exceptional levels of 
client satisfaction and the innovation required to win new 
business, is all testament to the quality and professionalism 
of VEGA’s staff. I would like to thank them for their 
outstanding contribution.
Defence
Market	 dynamics
Despite the ongoing cost of front-line operations, causing a 
tightening of the available budgets for procurement across 
the MoD, the spending in the key strategic area of Network 
Enabled Capability has been largely unaffected. Indeed, we 
believe that in order to achieve the reductions in manpower 
of the armed forces, set out in the Defence White Paper 
‘Delivering Security in a Changing World’, and to effectively 
address the new global terrorist threat, we will see further 
shifts in funding toward the high technology areas where 
VEGA operates. 
In November last year, the UK Government published 
the MoD’s first Defence Industrial Strategy (DIS), which 
highlights the procurement priorities for the coming 
decades and sets out those areas of capability that will 
need to reside within the UK industrial base. We see a 
number of trends emerging from the DIS that will provide 
good market opportunities. Those of particular relevance 
to VEGA are the consulting and technology solutions 
necessary to support the following:
Secure and robust communication 
Automated information and knowledge sifting and sharing 
Human performance improvement 
System integration, interoperability and sustainability 
decision making
Unmanned Aircraft Vehicles (UAVs)
Another facet of the changing defence procurement 
landscape is the top level commitment to improving the 
Defence Procurement Agency’s performance in delivering 
equipment programmes and the associated capability, on 
time and within budget. This key government objective will 
manifest itself in greater emphasis on early phase lifecycle 
de-risking activities, such as increased use of technology 
demonstrators, programme interoperability modelling, 
risk assessments, capability trade-off analysis and more 
rigorous business case reviews. VEGA’s holistic approach, 
through its Programme and System Assurance framework 
of services, positions us well to assist the Agency in 
addressing these key challenges.
Furthermore, and as appears increasingly inevitable, the 
coming together of the Defence Procurement Agency 
and the Defence Logistics Organisation will lead to major 
structural and cultural transformation, which will require 
external support from companies such as VEGA.  
•
•
•
•
•
Alan	 Gaby  Chief Operating Officer
Operating Review
“	The	 high	 levels	 of	 repeat	 business	 and	 client	 satisfaction	 are	 testimony	 to	 the	 quality	 of	 VEGA’s	 services,	 and	 in	 turn	 directly	 reflects	 the	 quality	 of	 our	 staff.” 8	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 9
VEGA’s	 performance	 and	 positioning	 Acting as an independent trusted adviser, VEGA has 
secured further market share within the client-side 
consulting arena, during the period. The year saw a 
number of existing accounts extend their relationship 
with VEGA, with repeat orders being won on the back 
of very high levels of client satisfaction. We have also 
pushed the boundaries of innovation, both in terms of 
our service offerings and our commercial and financial 
approaches, enabling VEGA to differentiate its services 
from the competition and deliver significant, quantifiable 
value for our clients. Within the year, key accounts such 
as the Command Support and Information Systems 
(CSIS), Integrated Project Team (IPT) and the Defence 
Information Infrastructure (DII), IPT have placed significant 
further business with VEGA, for a range of Programme and 
System Assurance services. New business has also been 
generated, in a number of key areas, as set out below:
The UK intelligence market has been an important focus 
for VEGA, and the award of a £4m contract to provide 
a secure information system, announced in October 
2005, has confirmed VEGA as a significant player within 
this high growth area. The programme will provide UK 
defence intelligence staff with a highly secure portal, 
enabling improved interchange of information with 
friendly nations. Such is the inherent level of security and 
robustness of the system, that the application of this 
technology extends well beyond the scope of the initial 
contract award and further programmes of a similar 
nature are likely.
•
“ Independent strategic advice and 
specialist technical services to ensure 
the confidentiality, integrity and 
availability of information assets.”
Overview
Information is one of an organisation’s key assets. Ensuring the 
confidentiality, integrity and availability of information, regardless 
of how it is stored or used, is an essential factor in managing 
business risk. Like technology and business itself, the threats 
to information security are constantly adapting and evolving. 
Protecting business is an on-going challenge. 
 
 
 
Case study
“	VEGA	 advises	 UK	 Government	 on	 secure	 information	 gateway	 for	 the	 intelligence	 community.”
Like most enterprises, governments need to provide access 
to, and share information with, an increasing number of 
organisations in order to operate effectively. Achieving this, 
whilst protecting data from falling into the wrong hands or 
becoming compromised, is a constant challenge. Never more 
so than in the vital information exchanges between national and 
international intelligence communities.
When the UK Government wanted to improve the 
interconnectivity between UK national intelligence systems 
and those of its allies and coalition partners, it asked VEGA 
for information security advice. Working with intelligence 
community representatives, VEGA reviewed the existing 
security architectures, including hardware, software and 
procedural aspects, and proposed a technological refresh to 
meet current threats and UK policy requirements.
Having assessed the proposed secure gateway, in effect a very 
high grade firewall, the Government asked VEGA to prove the 
concept through the production of a technical demonstrator. 
Following this VEGA was invited to tender, alongside major IT 
system manufacturers, for the system production and delivery. 
In October 2005, VEGA was awarded a £4m contract  
to build the secure information gateway for the UK  
intelligence community. 
Information	 Security
Service	 Line  0	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  The announcement in March 2006, that the MoD 
had selected VEGA as its partner in developing its 
architectural modelling capability, underlines the pivotal 
role VEGA plays at the heart of Network Enabled 
Capability. The £4.6m contract over two years, will assist 
the MoD in improving its procurement and through-life 
cost decision making, by modelling the interaction and 
interoperability between multiple complex system and 
equipment programmes.
As part of our desire to foster innovation and 
demonstrate market leading behaviour, we have 
embarked on an initiative to assess the potential to 
utilise games technology as a learning experience. To 
this end, we have formed a partnership with Blitz Games 
(a leading UK games developer) and together have 
obtained a DTI grant in excess of £1m. We have already 
identified a number of areas of potential client interest 
within the Defence and Health sectors.
VEGA’s technology offering to the Defence market centres 
on Human Performance Improvement solutions, which 
combine commercial products with internally developed 
intellectual property. We create world-class synthetic 
environments within which pilots, navigators, maintenance 
technicians and the like, can conduct learning and mission 
rehearsal exercises in a comparatively safe, low cost and 
mobile environment. Our experience extends to leading 
edge techniques using Electronic Performance Support 
Systems (EPSS), web based applications and ‘Serious 
Gaming’ methods. 
•
•
Our relationship with the Royal Navy’s flagship learning 
programme – the Waterfront Learning Centres – was 
extended in the year when VEGA was selected to 
coordinate joint proposals from VEGA, Serco, Lockhead 
Martin Canada and Burridge Courseware, for future 
learning content. A number of key accounts with the 
Defence and Aerospace prime contractors such as Thales, 
AugustaWestland and CAE, were extended in the year, with 
additional work packages.
Aerospace
Market	 dynamics
In December 2005 the European Space Agency (ESA) 
Ministerial Council met in Berlin to determine the future 
programme commitments for European space. The Space 
sector has generated renewed interest from the European 
Commission, as a vehicle for delivering political policies 
and one which addresses issues directly affecting the daily 
lives of the European citizen. A number of key programmes 
were given ministerial approval to proceed and are now 
scheduled to roll out over the coming two decades. Most 
notably, the approval to proceed with a system for Global 
Monitoring for Environment and Security (GMES) and, in 
space exploration, a further mission to land equipment 
on Mars. Soon after the Berlin meeting, ESA signed the 
first contract with Galileo Industries for the new European 
satellite navigation programme (Galileo), concluding a near 
€1b commitment for the in-orbit validation phase. These 
are positive indications for VEGA, as we have long-standing 
involvement in these areas and will continue to track and 
develop opportunities as they arise. 
Operating Review continued
“	Our	 strong	 performance	 stands	 us	 in	 good	 stead	 to	 address	 the	 opportunities	 before	 us	 with	 confidence.”  0	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  On a global basis, the US has increased its commitment 
(and funding) to the Space sector; being driven by a desire 
to achieve a manned mission to Mars and, in the nearer 
term, assist in Homeland and Defence Security. Russia 
remains a world player, launching more spacecraft than any 
other nation, and both India and China are fast developing 
a complete range of space capabilities. Whilst VEGA’s 
primary focus will continue to be within the European 
geographic area, we have established good contacts with 
other national agencies and their supply chains, through a 
number of key projects and our multinational workforce.
The Commercial Space sector has been in decline since 
year 2000, although activities in the telecommunications 
sector have recently improved, which provides a more 
optimistic view of the future. Within the European spacecraft 
manufacturing industrial base, over-capacity remains 
and consolidation is inevitable. Both these factors should 
combine, in the medium-term, to create opportunities for 
specialist providers such as VEGA, particularly in relation to 
the exploitation of technologies and expertise developed as 
part of national Space programmes.
European national space agencies continue to develop 
domestic solutions, with France and Germany being the 
two highest spending European countries. Spain is also 
seeking to grow its contribution and involvement in both 
national and European space programmes. VEGA now  
has a presence in all three countries.
“ Verifying, validating and developing  
high integrity information and 
communications solutions.”
Overview
Before introducing new capability into today’s complex network-
centric organisations, it is essential to ensure that new systems 
and sub-components are both verified and validated. Not just 
from the perspective of their stand-alone performance, but  
also from the perspective of their impacts on the systems with 
which they will be integrated. Often this highlights gaps in the 
available technology, requiring new and innovative solutions.
 
 
 
Case study
“	VEGA	 develops	 innovative	 on-line	 ‘one-stop-shop’	 tool	 for	 Earth	 Observation	 Satellite	 data.”	 Earth Observation (EO) satellites are operated by many 
organisations around the globe, involving large numbers of 
imaging instruments and huge quantities of data produced. 
Whilst much of this data has been produced for scientific 
research, it is also of great potential value for commercial and 
environmental applications such as crop monitoring, pollution 
incidents, disaster relief, etc. 
When the European Space Agency (ESA) wanted to make its 
own EO data service available over the web, it was confronted 
by a huge volume and variety of data formats that inhibited 
seamless access. Working in collaboration with ESA, VEGA 
developed EOLI, a sophisticated on-line application which 
enables users to search catalogues of multi-mission, multi-
instrument data, through a simple graphical interface, in much 
the same way as online retailers have revolutionised book and 
music sales. 
Since then, ESA has made EOLI the standard tool for accessing 
all ESA’s Earth Observation data services, and the French 
National Space Agency (CNES), has selected EOLI as the  
basis for development of their systems to access all Pleiades 
mission services.
In January 2006, VEGA was contracted to develop the catalogue 
systems for CNES, in support of the Pleiades mission. 
Simulation	 and	 Technology	 Solutions
Service	 Line  2	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  3
VEGA’s	 performance	 and	 positioning		 Within the year, further investment has been made in  
the Aerospace business, building on the acquisition  
of Anite Systems GmbH in Germany – an acquisition that 
has been successfully integrated over the past 18 months. 
Investment has continued into our French business, which 
is now witnessing exceptional growth and has recently 
been awarded a key framework contract as joint prime with 
Atos-Origin. This contract will allow VEGA to bid for a range 
of opportunities from the French National Space Agency 
(CNES) over the coming five years. This follows closely on 
the heels of VEGA’s inaugural success with CNES, in being 
selected to provide two elements of the Pleiades mission 
image processing system.
Investment has also been evident, with the establishment 
of a dedicated sales force and team of account based 
relationship managers with increased client focus, under 
the leadership of a new Business Development Director for 
the Aerospace sector.
These investments are already delivering a return, as the 
revenue growth rates in the year for Germany, Holland and 
France were fuelled almost entirely from increased sales 
into the Space sector.
Within the Aerospace sector we are continuing to build 
on the excellent relationship we have with the various 
departments of the European Space Agency, but we are 
also seeking expansion through developing business 
with the national space agencies, of which CNES is a 
good example. We will also seek to address changing 
geographic dynamics – for example, we now have an 
established team of engineers operating in Spain.
Outside of the institutional market, we are extending 
relationships with commercial operators, manufacturers 
and applications developers – on this point, a successful 
project with EADS Astrium in the UK is providing new revenue 
streams, in support of the UK military Skynet 5 programme. 
We are also now looking to scale up the reusable elements 
of the technology we develop on behalf of our clients, and 
in so doing, we are creating repeatable solutions that will 
offer highly cost-effective and low risk approaches. The 
broad market interest in these ‘products’ has been an 
encouraging aspect within the year and should position  
us well for the future.   
Important new business we have reported on in the year 
includes:
In February of this year, Thales UK awarded VEGA a 
training needs analysis and risk reduction contract for 
£650k, to assess the Watchkeeper Unmanned Aircraft 
Vehicle training requirement. This award has led on 
to the recent announcement that VEGA secured the 
contract to provide the full training solution to the UK 
military, through Thales UK, at a contract price  of 
•
Operating Review continued
“	We	 have	 maintained	 investment	 in	 strategic	 initiatives	 in	 order	 to	 protect	 and	 build	 the	 long-term	 value	 we	 deliver	 to	 our	 clients,	 and	 to	 fuel	 VEGA’s	 future	 growth.”  2	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  3
£19.7m. As the aerial battle space dynamics shift more 
toward unmanned vehicles across the globe, VEGA is 
now ideally positioned to further extend its involvement 
in this growing area. This programme is also testament 
to our Programme and System Assurance approach 
and our ability to engage throughout the programme 
lifecycle, from early stage requirements analysis 
consulting, through to the technology-rich design, 
development and in-service support phases. 
Within the Galileo programme, VEGA has been selected 
to provide a verification and validation tool set. The initial 
phase of work is valued at slightly less than €1m and is 
expected to extend to a full contract worth in the region 
of €5-6m.
In July 2005, the Research and Technology centre  
of ESA in Noordwijk, Holland, awarded VEGA a  
two year, €5m extension, for a range of professional 
services, extending VEGA’s long-standing relationship 
with this client.
In October 2005, VEGA was awarded a three year 
support contract by the ESA Operations Centre in 
Darmstadt, Germany, thus extending the relationship  
to over 30 years’ support. The contract has an annual 
value in excess of €6m.
•
•
•
“ Specialist support for technology 
intensive new programmes and  
ongoing business operations.”
Overview
Governmental institutions and commercial organisations are 
frequently challenged to deliver technology intensive new 
programmes, whilst continuing to manage existing operations 
for the benefit of all stakeholders. To achieve this effectively, 
they are contracting out elements of their day-to-day operations 
and supplementing their teams, to deliver successful new 
programmes.   
 
 
 
Case study
“	VEGA	 extends	 support	 to	 global	 military	 satellite	 communications	 programme.”
Skynet is the UK’s military satellite communications 
programme, providing UK and NATO armed forces with secure 
communications across the globe. VEGA provides support to 
the current fleet of satellites in orbit and engineering expertise in 
preparation for the introduction of the new Skynet 5 system.
VEGA has provided continuous mission support to the 
programme since 1988, initially under a contract to the MoD. 
When the UK Government handed over responsibility for 
Skynet to a private company in 2003, in what was one of the 
first significant Private Finance Initiatives, VEGA was given a 
three year contract to provide technical support for the legacy 
Skynet 4 and NATO IV satellites. 
In June 2006 VEGA was awarded a £1.9m contract extension 
to continue this support for the next five years, including 
supporting the new generation Skynet 5 satellites, the first of 
which is due for launch in late 2006.
Technology	 Support	 Services
Service	 Line  4	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  5
Operating Review continued
In November 2005, the ESA Research Institute in 
Frascati, Italy awarded a €3.2m contract to VEGA for 
the provision of a ground based system that will receive, 
archive and manage Earth observation data as part of 
ESA’s Living Planet Programme.
In January 2006, VEGA was awarded a €2m contract 
from the ESA Operations Centre in Darmstadt to provide 
infrastructure support for a complete range of software 
applications, with the contract being constructed on 
the output-based ITIL method. A method which is now 
being more widely adopted in public sector contracting.
Government
There are two main drivers affecting the central government 
market as it relates to VEGA’s business. 
Firstly, at the macro level, the Gershon Review of Public 
Sector Efficiency identifies the potential of £20b of savings 
by 2007/8. Additionally, the transformational government 
IT Strategy addresses IT -enabled organisational change, 
seeking to improve effectiveness across the public sector. 
Both these reviews will drive Government departments to 
seek new ways of delivering their services, in order to realise 
efficiency and effectiveness benefits. In turn, departments 
will require trusted and independent external support in 
implementing new technology, re-engineering business 
processes and managing complex change programmes. 
These are all services that VEGA is able to provide.
•
•
Secondly, following the 7 July 2005 terrorist attacks and the 
changing threat to homeland security, further resources are 
being made available to the UK intelligence community.  We 
view this market sector as one that will continue to require 
treasury investment and will remain a priority for any future 
government in the medium term. The natural characteristics 
of this sector mean that there are significant barriers to new 
entrants and as such, VEGA is well positioned to develop the 
opportunities already presenting themselves.
In the year we reported on a number of successes, 
including VEGA’s selection to provide Information and 
Communication Technology (ICT) Consultancy Services 
to the UK Government in all service categories bid for 
under OGCbuying.solutions’ new Catalist framework (the 
successor to S-Cat). We also extended the range and 
size of client assignments on behalf of the intelligence 
community, providing confidence that VEGA’s penetration 
of this key market will continue.
Investing	 for	 growth
During the year we have recruited two senior executives 
to take up Business Development Director positions, John 
Auburn for the Aerospace market and Peter Armstrong for 
the combined Government and Defence markets, which 
we have brought together to exploit the synergies of the 
service offerings in these overlapping areas. Both John and 
Peter bring a wealth of business and domain experience 
to their respective roles. In addition, we have appointed Sir 
Peter Norriss as VEGA’s Senior Military Advisor. Sir Peter 
was previously military adviser to AMS (the BAE Systems 
subsidiary) and formerly held the position of Deputy Chief  
of Defence Procurement.
“	We	 have	 achieved	 good	 progress	 against	 our	 key	 strategic	 objectives	 and	 delivered	 growth	 in	 all	 our	 markets	 and	 geographies.”  4	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  5
We have also commenced two investment initiatives 
to better support the business development teams. 
We are rolling out a standardised Value Based Selling 
methodology, tool set and process map, which will 
ensure that value to the client is placed at the heart of our 
relationships, and will also provide the necessary rigour and 
vehicle to inculcate best practice into our sales approach. 
We are also in the process of finalising a suite of Client 
Relationship Management tools, which will assist us in 
managing our market intelligence repository and enhancing 
client satisfaction and retention.
Within the period, we also completed a leadership 
development programme for senior management.
Once again, I should like to take the opportunity to say 
thank you to all our staff for their ongoing sterling efforts.  
I very much look forward to future success, building on  
the progress made in recent years.
Alan Gaby
Chief Operating Officer
“ Multinational, multidisciplinary teams 
supporting all phases of science and 
technology research.”
Overview
Some public sector organisations need to operate at the limits 
of science and technology in order to deliver their mandate. 
This requires them to stimulate innovation and to lead 
research into new techniques and technologies that will yield 
important benefits for the future. These activities frequently 
cross technological and geopolitical boundaries, requiring 
international understanding and cooperation.
 
 
 
Case study
“	VEGA	 research	 at	 the	 forefront	 of	 space	 science	 	 and	 technology.”	 ESTEC is the research and technology centre for the European 
Space Agency (ESA), responsible for developing ESA’s 
space missions, testing satellites and incubating new space 
technology.
With space missions often taking fifteen years from concept 
to completion, ESTEC’s early phase research and technology 
development is critical to the downstream success of many 
missions. VEGA has been supporting ESTEC with in-depth 
science expertise for over thirteen years, providing highly 
experienced and specialist staff who work at the forefront 
of space science. Their novel work, such as instrument 
exploitation, laboratory detector research and ground breaking 
software development for the first European Virtual Observatory, 
is enabling ESA to further its programme of space exploration.
To date, VEGA has supported ESTEC on a wide range of 
missions including: looking into the origins of the universe 
with the space telescopes Herschel and Plank; examining the 
interactions between the solar wind and our upper atmosphere 
with the formation-flying Cluster satellites; and building three 
dimensional models of Earth weather patterns through the ADM 
Aeolus mission. 
In July 2005, VEGA was awarded a €5m frame contract to 
provide support to ESTEC for the next 3-5 years. 
Science	 and	 Technology	 Research
Service	 Line  6	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  7
Financial Review
VEGA has achieved its third successive year of growth, 
both in terms of revenues and operating profits.
Group revenue for the year was up 18% to £62.1m 
(2005: £52.6m) and operating profit* was up 20% to 
£4.8m (2005: £4.0m).
In the period, £0.4m was invested to support growth in the 
business and the implementation of corporate strategy. 
This included the cost of an external review of the sales 
processes, additional training for senior management, two 
new senior business development staff and development 
of the service lines. Group operating margins*, however, 
remained stable at 7.7% (2005: 7.6%).
Each of the Group’s geographies delivered double digit 
growth in revenues, and in the UK and Germany operating 
margins improved.
After a number of years of exceptionally strong cash 
generation, there was some absorption of cash into 
working capital during the year, reflecting growth in the 
business and a change in the way we contract with the UK 
Ministry of Defence which has extended slightly the time 
between delivery of a service and payment.
Review	 of	 operations
UK
At £40.0m (2005: £33.7m), total revenue in the UK was 
up 19% compared with last year. The main area of growth 
was in the Defence consulting business and total revenues 
in the Defence sector in the UK grew by 33%. Aerospace 
revenues declined by 2% in the UK in the period due  
to a number of projects completing. The associated  
resources have been redeployed onto Defence projects.  
In the Government sector revenues remained stable,  
with reductions in the health sector being countered 
by growth in other areas of central government and 
emergency services.
Operating margins in the UK increased to 6.8% 
(2005: 6.3%).
Germany
Revenues in Germany grew by 13% in the period to 
£17.0m, from £15.1m last year. This reflects increasing 
demand from existing customers in institutional space as 
well as new customer wins. Aerospace revenues grew 
by 12% and Defence revenues by 52%. The operating 
margin in Germany for the year was 8.1% compared 
with 7.6% last year.
“	Each	 of	 the	 Group’s	 geographies	 delivered	 double	 digit	 growth	 in	 revenues,	 and	 in	 the	 UK	 and	 Germany	 operating	 margins	 improved.”
Sue	 Bygrave  Group Finance Director
  Year	 ended Year ended 
  30	 April	 2006 30 April 2005 
Revenue by geography £m £m Growth Share
UK 40.0 33.7 19% 65%
Germany 7.0 15.1 13% 27%
Rest of Europe 5. 3.8 34% 8%
Total 62. 52.6 18% 100%  6	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  7
Rest	 of	 Europe
Rest of Europe comprises the Group’s operations in France 
and Holland. In total, these operations increased their 
revenues in the period by 34% to £5.1m, from £3.8m last 
year. The total operating margin declined from 18.4% to 
12.8%. In France, we have now established our operation in 
the heart of the French aerospace industry in Toulouse and 
have seen revenues more than double this year. Investment 
continues however, to support the continuing growth, 
and operating margins in this business are consequently 
still relatively low. The work in Holland is primarily with the 
European Space Technology Centre where revenues have 
also grown, despite some pressure on margins.
Exceptional	 items
During the year, £270,000 of exceptional staff termination 
costs were incurred. These related primarily to the 
restructuring of the sales teams.
Taxation
The adjusted group tax charge* of £0.7m (2005: £1.0m) 
resulted in an effective tax rate for the year of 21% 
(2005: 33%) and benefited from claims for research and 
development tax credits which reduced the tax charge 
by £0.6m.
Earnings	 per	 share
Adjusted diluted earnings per share* increased 30% to 
17.3p per share, including the impact of R&D tax credits 
(2005: 13.3p).
Cashflow	 and	 debt
Cash generated from operations in the year was £3.4m 
(2005: £4.2m), representing 70% of adjusted operating 
profit* (2005: 105%). This follows a number of years of very 
strong cash conversion. The absorption of cash into 
working capital this year reflects substantial growth in 
the Group’s revenues, particularly from the UK Ministry of 
Defence, where a change in the method of contracting has 
also resulted in a slight increase in the time between supply 
and payment.
Capital expenditure returned to more normal levels in the 
year after reduced levels of expenditure in the prior year.
Net debt at 30 April 2006 was £1.6m (2005: £2.4m).
Dividends
The Board is recommending a final dividend of 1.875p per 
share, making a total dividend for the year of 2.5p per share, 
an increase of 25% over the previous year. The dividend 
is covered seven times by adjusted earnings*. The final 
dividend, if approved at the Annual General Meeting, will be 
paid on 19 September 2006 to shareholders on the register 
on 18 August 2006.
International	 Financial	 Reporting	 Standards	 (IFRS)
The Group is required to report its results in accordance 
with IFRS from 1 May 2005 and these are the first set of full 
year Financial Statements prepared on that basis. The 2005 
financial year results, restated under IFRS, were published 
on 28 October 2005. Note 25 gives details of the main IFRS 
differences that affect VEGA’s transition year to 30 April 2005.
Sue	 Bygrave
Group Finance Director
* Before amortisation of acquired intangibles and exceptional items.
†
  Results for 2005 and 2006 are prepared under IFRS. 2003 and 2004 are 
prepared under UK GAAP .
2003 2004 2005 2006
35.6
44.1
52.6
62.1
Turnover
£m
2003 2004 2005 2006
2.0
2.9
4.0
4.8
Operating proﬁt*
†
£m
2003 2004 2005 2006
1.3
1.8
3.7
4.5
Proﬁt before tax*
†
£m  8	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  9
Phil	 Cartmell
Chief	 Executive	 Officer
Phil Cartmell (55) was appointed Chief Executive in May 
2001, having joined the Group in July 2000 as Divisional 
Director, Consulting. Prior to joining VEGA, he was Vice 
President Consulting EMEA at Baan Company and has 
held other senior positions with KPMG and Origin (UK).
Sue	 Bygrave
Group	 Finance	 Director	 Sue Bygrave (40) was appointed Group Finance Director 
in November 2004. Prior to joining VEGA, Sue was Group 
Finance Director of Mettoni Group plc and was previously 
Group Financial Controller and Company Secretary of 
DCS Group plc. Sue qualified as a chartered accountant 
with KPMG.
Alan	 Gaby
Chief	 Operating	 Officer
Alan Gaby (40) was appointed to the Board in August 
2001. Alan joined VEGA in 1998 in the role of Group 
Commercial Director. He became Director of Government 
& Defence in August 2001 and Chief Operating Officer 
in 2003. Prior to joining VEGA, Alan was Commercial 
Director at EDS Defence.
Board of Directors  8	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	  9
Andy	 Roberts
Non-Executive	 Chairman
Andy Roberts (54) became Chairman of VEGA in 
November 1997. He is also Chairman of Kewill Systems 
plc. Andy was formerly Chief Executive of Data Sciences 
Ltd and has previously held various senior management 
positions within ICL.
Brian	 Birkenhead
Non-Executive	 Director
Brian Birkenhead (64) was appointed as a Non-Executive 
Director of VEGA in June 2006. Brian is a Non-Executive 
Director of Cubitt Consulting Ltd, API Group plc and 
Caffyns plc. He was formerly a Non-Executive Director  
of ITnet plc.
Ian	 Williams
Non-Executive	 Director
Ian Williams (60) was appointed as a Non-Executive 
Director in July 2002. A former adviser to HM Government, 
Ian was Chairman of the European eCommerce 
Association. He was formerly Non-Executive Deputy 
Chairman of the Docklands Light Railway and an associate 
partner at Andersen Consulting. 20	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Shareholder Information and Financial Calendar
Share	 register
Capita Registrars maintain the register of members of the 
Company. If you have any questions about your personal 
holding of the Company’s shares, please contact:
Capita Registrars 
The Registry 
34 Beckenham Road 
Beckenham 
Kent BR3 4TU
Tel:  0870 162 3100 (for calls within the UK) 
 +44 (0)20 8639 2157 (for calls from overseas)
If you change your name or address or if details on the 
envelope enclosing this Report, including your post code, 
are incorrect or incomplete, please notify the Registrar  
in writing.
Daily	 share	 price	 listings
Financial Times – Software & Computer Services 
Daily Telegraph – Information Technology
Financial	 calendar
Annual General Meeting  7 September 2006 
Final Dividend Payable  19 September 2006
Expected announcement of results for the year  
ending 30 April 2007: 
Half year announcement   December 2006 
Full year preliminary announcement  July 2007
Shareholders’	 enquiries
If you have an enquiry about the Company’s business, or 
about something affecting you as a shareholder (other than 
queries which are dealt with by the Registrar), you should 
contact the Company Secretary by letter or by telephone at 
the Company’s registered office.
Company	 registered	 number
1393778
Registered	 office
2 Falcon Way 
Shire Park 
Welwyn Garden City 
Herts AL7 1TW
Tel: +44 (0)1707 391999 
Fax: +44 (0)1707 393909
Company	 Secretary
Ken Blyth
Website
www.vega-group.com
Company	 advisers
Auditor  Ernst & Young LLP
Bankers  Bank of Scotland
Solicitors  Nabarro Nathanson
Stockbrokers  Bridgewell Ltd 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 21 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 21
The directors present their Annual Report and the audited financial statements for the year ended 30 April 2006. 
Principal	 activity	 The principal activity of the Group during the year was that of Programme and System Assurance.
Business	 review	 A review of the Group’s business and an indication of likely future development is contained within the Chairman’s Statement 
and Chief Executive’s Review on pages 4 to 7 . Further details can be found in the Operating Review on pages 8 to 15 and in the 
Financial Review on pages 16 and 17 . 
Results	 and	 dividends	 The financial results of the Group are set out in the Consolidated Income Statement on page 33. 
The directors are recommending payment of a final dividend of 1.875p per ordinary share for the year ended 30 April 2006 
(2005: 1.5p) to be paid on 19 September 2006 to shareholders on the register on 18 August 2006. An interim dividend of 0.625p 
per ordinary share was paid on 9 March 2006, which makes a total of 2.5p per ordinary share for the year (2005: 2.0p). 
Dividends paid and recommended for the year will amount to £509,000 (2005: £407 ,000).
Changes	 in	 share	 capital
There have been no changes in the issued share capital of the Group during the year.
Going	 concern	 On the basis of current financial projections and facilities available, the directors consider 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. 
Directors	 and	 directors’	 interests	 The current members of the Board, together with their biographical details, are shown on pages 18 and 19. Andy Roberts was 
appointed in November 1997 and will have served nine years as Chairman in November this year. In accordance with the 
requirement of the Combined Code provision A.7 .2, he will retire at the forthcoming AGM and, being eligible, offers himself for 
re-appointment. Brian Birkenhead will also retire, having been appointed to the Board on 28 June 2006, and offers himself for 
re-appointment.
Details of directors’ interests in the ordinary shares of the Company and their remuneration, service contracts or letters of 
appointment are set out in the Directors’ Remuneration Report on pages 26 to 30. Except as disclosed in that Report, there 
were no other transactions between directors and the Company or its subsidiaries. 
Substantial	 interests	 The following share interests (of 3% or more) in the Company’s ordinary share capital have been notified to the Company as at  
6 July 2006:
     Number  Percentage 
     of ordinary  of issued 
     shares  share 
     of 5p each capital 
Prudential plc    3,255,000 15.99%
Hermes Investment Management     2,368,069 11.63%
Standard Life Investment Management     1,817,777 8.93%
Gartmore Investment Management    1,735,801 8.53%
Canada Life Group    746,667 3.67%
Payment	 of	 suppliers	 The Company agrees the terms and conditions under which business with suppliers is conducted. It abides by these payment 
terms, provided that it is satisfied that the supplier has provided the goods and services in accordance with the agreed terms 
and conditions. The number of days purchases outstanding at the year end, for the Company, was 49 days (2005: 31 days). 
Financial	 instruments
The Group’s financial risk management objectives and policies are discussed in note 23 to the accounts.
Directors’ Report 22	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 23
Employee	 involvement	 The Group organises staff communications both centrally and locally. The media used for centrally organised communications 
includes the Group intranet, in-house magazines, staff bulletins, presentations and copies of press releases. At a local level, 
regular staff meetings are held and notices are published containing information about matters of interest within the Group. 
Disabled	 people	 The policy of the Group is to offer the same opportunity to disabled people as to all others in respect of recruitment and career 
advancement, provided their disability does not prevent them from carrying out their required duties. Employees who become 
disabled will, wherever possible, be retained, rehabilitated and where necessary retrained. 
Environment	 The Group has an Environmental Policy which is designed to foster a positive attitude towards the environment and to raise  
the awareness of staff to good environmental practices. Whilst recognising that VEGA’s operations themselves have limited 
environmental impact, the Group has implemented an Environmental Management System. A number of initiatives including 
recycling schemes and light efficiency schemes have been introduced and we continue to closely monitor consumption and 
waste, reducing these where practicable. We aim to be within the benchmark figures issued by DEFRA. A fuller explanation  
of the policy and management system plus detailed results for the reporting period and objectives for next year are available  
on request. 
Charitable	 and	 political	 donations
During the year the Group made various donations, to charities supported by its staff, totalling £760 (2005: £700). 
It is the Group’s policy not to make donations to political parties and accordingly no political payments were made. However, we 
have a tradition of supporting our staff in the service of the community and have supported staff in a number of ways for civic 
duties, which we shall continue to do. 
Disclosure	 to	 auditor	 Having made enquiries of fellow directors and of the Company’s auditors, each of these directors confirms that:
to the best of each director’s knowledge and belief, there is no information relevant to the preparation of their report of 
which the Company’s auditors are unaware; and
each director has taken all the steps a director might reasonably be expected to have taken to be aware of relevant audit 
information and to establish that the Company’s auditors are aware of that information.
Auditor	 Ernst & Young LLP , the Group’s auditors, are willing to continue in office and a resolution for re-appointment will be proposed at 
the forthcoming AGM. 
Annual	 General	 Meeting
The notice of the Annual General Meeting to be held on 7 September 2006, together with explanatory notes, is enclosed with 
this report.
By order of the Board
Ken	 Blyth
Company Secretary
2 Falcon Way
Shire Park 
Welwyn Garden City
Herts. 
AL7 1TW 
6 July 2006
•
•
Directors’ Report continued 22	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 23
The Board is committed to high standards of corporate governance and supports the new Combined Code on Corporate 
Governance, published in July 2003 (the Code). The Board considers that, throughout the period under review (and 
subsequently up to the date of this report) it has complied with the provisions of the Code except for a temporary 
non-compliance against Code provisions A.3.2 and C.3.1, related to the balance of the Board and membership of Board 
Committees, caused by the period between the resignation of Ken Lever as non-executive director in September 2005 and the 
appointment of Brian Birkenhead in June 2006. 
The following report describes how the Company has applied the principles set out in the Code. It is also intended to explain  
the Company’s governance policies and to provide insight into how the Board and management run the business for the  
benefit of shareholders. 
The	 Board	 The Board, which meets formally on a monthly basis, comprises a non-executive chairman, two non-executive directors and 
three executive directors. For part of the year, following the resignation of Ken Lever, there was only one non-executive director 
and in this respect the Company did not comply with Code provision A.3.2. 
Biographies of the directors are set out on pages 18 and 19. Their individual Committee responsibilities during the year were: 
    Audit Remuneration Nominations 
   Board Committee Committee Committee
Andy Roberts Non-Executive Chairman  Chairman Member
1
 Member Chairman
Ken Lever
2
 Non-Executive Director  Member Chairman
2
 Member Member
Ian Williams Non-Executive Director Member Chairman
3
 Chairman Member
Phil Cartmell Chief Executive Member – – Member
Sue Bygrave Group Finance Director Member – – –
Alan Gaby Chief Operating Officer Member – – –
1
 
Andy Roberts was appointed to the Audit Committee on 30 November 2005.
2 Ken Lever resigned on 8 September 2005. 
3
 
Ian Williams was appointed Chairman of the Audit Committee on 30 November 2005.
Following his appointment on 28 June 2006 Brian Birkenhead became Chairman of the Audit Committee and also joined the 
Remuneration and Nominations Committees.
Meetings of the Audit Committee are held at least twice a year, the Nominations Committee and the Remuneration Committee 
meet as required. Details of the meetings held in the year and the attendance of individual directors are set out below: 
   Board Audit Remuneration Nominations
Andy Roberts Non-Executive Chairman 9/9 1/1 3/3 5/5
Ken Lever  Non-Executive Director 3/3 1/1 1/1 1/1
Ian Williams Non-Executive Director 9/9 2/2 3/3 5/5
Phil Cartmell Chief Executive 9/9 – – 5/5
Sue Bygrave Group Finance Director 9/9 – – –
Alan Gaby Chief Operating Officer 9/9 – – –
In addition to the scheduled meetings above there were a number of ad hoc meetings of the Board and Board Committees.
The Chairman and non-executive directors provide a wide range of skills and experience to the Group. They bring an 
independent judgement on issues of strategy, performance, risk and people, through their contribution at Board and 
Committee meetings. After careful consideration, the Board has again concluded that Andy Roberts (notwithstanding his role 
as Non-Executive Chairman) and Ian Williams were independent throughout the year. In arriving at this conclusion, the Board 
has applied the criteria set out in provision A.3.1 of the Code. 
Ian Williams has acted as Senior Independent Non-Executive Director and his responsibilities include providing a 
communication channel between the Chairman and the Non-Executive Directors and ensuring that the views of each non-
executive director are given due consideration. He is an additional contact point for shareholders if they have reason for concern 
which contact through the normal channels of Chairman, Chief Executive or Group Finance Director has failed to resolve or for 
which contact is inappropriate. From 28 June 2006 Brian Birkenhead has taken over the role of Senior Independent Director.
Report on Corporate Governance 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 25 24	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
All directors are subject to election by shareholders at the first AGM after their appointment and thereafter at intervals of no more 
than three years. The Board has a formal schedule of matters specifically reserved for its approval including, amongst other 
things, the Group’s budget and strategy, review of the performance of the Group, acquisitions and the financial statements. The 
Board receives timely advice on all material information about the Group. When, in the furtherance of their duties, occasions 
arise where the directors need to seek legal or professional advice, they are able to consult the Group’s advisers or, if 
appropriate, take independent legal advice at the Group’s expense.
Board	 Committees
The Board has delegated specific authority to a number of Committees detailed below. Each Committee has written terms of 
reference approved by the Board, copies of which are published on our website. The Company Secretary acts as secretary to 
each of the Board Committees.
Membership of the Audit Committee changed during the year following the resignation of Ken Lever. The Board recognises  
that for part of the year (following the resignation of Ken Lever) the members of the Committee did not have recent and relevant 
financial experience as required by the Code provision C.3.1. During this period the Committee was chaired by Ian Williams and 
also included Andy Roberts. Andy Roberts remains a member of the Committee following the appointment of Brian Birkenhead 
as Committee Chairman in June 2006. The Committee meets with the auditors at least twice a year. The Chief Executive and 
the Group Finance Director are also normally invited to attend its meetings. The Audit Committee reviews the annual and interim 
financial statements prior to their submission for approval to the Board. It also reviews accounting policies and provides a forum 
through which the Group’s external auditor reports to the Board of Directors. At each meeting that the auditors attend, the 
Committee allocates time to meet with them without management being present. The Committee is responsible for the  
Group’s internal confidential disclosure policy, published on the Group intranet, which allows staff to raise concerns about 
possible improprieties. 
The Nominations Committee is chaired by Andy Roberts and also includes Ian Williams and Phil Cartmell. Its membership has 
not changed during the year except for the resignation of Ken Lever. The responsibilities of the Committee include considering, 
at the request of the Board, the making of any appointment to the Board and to provide advice and recommendations to the 
Board on any such appointment. The Committee met three times during the year, and again in June 2006, to consider and 
recommend to the Board the appointment of Brian Birkenhead as non-executive director. For the recruitment of the non-
executive director the Committee followed a formal and transparent process. It prepared a job description and candidate 
specification against which to evaluate candidates. The Committee employed an external recruitment consultancy to provide  
a shortlist of candidates for interview by the Chairman and other directors. After full consideration, Brian Birkenhead was 
appointed to the position of non-executive director in June 2006. The Committee also reviews and recommends to the Board 
the continued appointment of directors standing for election or re-election at the AGM; directors standing for election or  
re-election do not take part in this process. The Committee keeps under review any significant external appointments of the 
executive directors. During the year and as at 6 July 2006, none of the executive directors held any significant  
external appointments.
Details of the composition and responsibilities of the Remuneration Committee are set out in its Report on pages 26 to 30.
Board	 performance	 and	 training
The Board is subject to an annual assessment process led by the Chairman which includes the completion of a comprehensive 
questionnaire which seeks to identify the effectiveness of the Board and its major Committees. Review of the Chairman was 
conducted by the non-executive directors. The Chief Executive holds formal performance reviews with each of the executive 
directors, the Chief Executive’s performance is evaluated by the Chairman. The non-executive directors meet annually without 
the executive directors present. All directors have undertaken a series of training programmes in relation to their roles, 
responsibilities and duties. 
Shareholder	 relations
We are committed to ongoing communication with all shareholders and have a well established cycle of communication. Our 
Chief Executive and Group Finance Director are the focal points for contact with institutional investors and maintain regular 
dialogue throughout the year. They ensure that the Board is regularly updated on institutional shareholder views following 
meetings with them. The main source of information for shareholders is the Annual Report in which the Board seeks to present, 
in a balanced and understandable way, an assessment of the Group’s performance, position and prospects. All Company 
announcements and presentations are made available on our website, which also contains corporate and customer information 
updated on a regular basis. All shareholders have the opportunity to attend the AGM where relevant aspects of the Group’s 
operations can be questioned and discussed with the directors. We also give shareholders the opportunity to vote on 
substantial issues at the AGM by proposing separate resolutions for each issue. Proxy votes are counted before each AGM  
and the results made available after shareholders have voted at the meeting. In accordance with provision D.2.3. of the Code  
the Chairman and chairs of Board Committees are available to answer questions at the AGM.
Report on Corporate Governance continued 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 25
Internal	 control
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. The Group has an 
established system of internal control designed to manage the risks, both opportunities and threats, to achieving the business 
objectives rather than eliminating the risk of failure to achieve those objectives. Such a system can only provide reasonable and 
not absolute assurance against material misstatement or loss. All the elements of the internal control system have been 
reviewed during the year.
Throughout the year, the Board has complied with the Code by operating an ongoing process for identifying, evaluating and 
managing the significant risks faced by the Group and, through the Audit Committee, the Board has regularly reviewed the 
process for its effectiveness. The system of internal control and the review process have been in operation throughout the year 
and continue to the date of approval of this report, in accordance with the Turnbull Committee guidance.
The primary internal management controls are targeted on achieving the business unit, departmental and Group objectives and 
are applied through a monthly cycle of monitoring, forecasting, reporting and corrective action. The business objectives for this 
financial year were formulated during the period set aside for defining business unit and Group budgets. All the objectives were 
reviewed for their continued applicability throughout the accounting period, as part of the monthly control cycle and in the light 
of any major events. The control process is supported by a full range of detailed authority levels, processes and procedures 
which are documented in the Group Quality System. Notably, the Quality System includes: 
an Organisation Plan defining the Group, business unit and senior management organisation structures, senior 
management terms of reference and the Group Authority Levels; 
a defined process for the sign-off of bids, and subsequent acceptance of contracts, targeted on ensuring that the risks 
associated with entering into contracts to supply products and services are identified, understood and accepted at 
appropriate levels within the Company (in accordance with the Group Authority Levels); and 
a Risk Management System (RMS) applicable to all levels of Group, business unit, departmental and project activities. 
In addition, there are specific matters which are reserved for the Board and these are formally recorded and dealt with by  
the Board. 
The internal control system was reviewed for its effectiveness during the year. It included reviews of Board, business unit  
and departmental reports, meeting minutes and interviews with the executive directors. It covered financial, operational and 
compliance controls and risk management. The internal control system provided the executive directors with a complete view  
of the whole of the organisation at Group, business unit (including major projects and bids) and departmental level. The Board 
were, therefore, well placed to monitor the business, institute corrective action in relation to the significant risks to the Group  
and initiate improvements to the internal control system. The effectiveness review was performed in stages, during the second 
quarter, coincident with the preparation of the half-year interim report, and at the end of the financial year. In addition, the RMS 
and other elements of the internal control system were reviewed for necessary changes required as a result of revisions to the 
management and Company structure implemented during the year. It was noted that during the year there had been a number 
of changes and initiatives which had improved the control system.
The review concluded that the control system had enabled the business to identify and manage the risks in the business, and 
that the business was actively seeking to improve the system in order to gain further benefits. The overall results of this review 
were captured in a report which was submitted to the Audit Committee for their assessment and acceptance. 
The Board has considered the need for an internal audit function. It concluded, on the basis of the size of the Group, the level of 
internal review of fixed price projects already undertaken, the nature of its activities and the maturity of its internal control and 
quality systems, that such a function is not required at this time. 
•
•
• 26	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 27
Directors’ Remuneration Report
Part	 1:	 Unaudited	 information
Remuneration committee 
The principal function of the Committee is to determine, on behalf of the Board, the specific remuneration of all executive 
directors and members of the Group Executive Team (GET members) including service contracts, bonus payments, pension 
contributions, long term incentive plans (LTIP) and share options. It makes recommendations to the Board on the framework  
of executive remuneration.
The Committee is chaired by Ian Williams and during the year its other members were Andy Roberts and Ken Lever. Other  
than the resignation of Ken Lever from the Board in September 2005 there have been no changes to the composition of  
the Committee during the year. Brian Birkenhead joined the Committee in June 2006. All members of the Committee are 
independent directors. Determining fees for non-executive directors is not within the Committee’s remit – these are set by  
the other Board members annually within the limits set in the Company’s Articles of Association. 
The Committee has no formally appointed advisers on remuneration policy. Advice was sought from the Chief Executive,  
Phil Cartmell, on individual executive directors’ and GET members’ remuneration (other than in relation to his own remuneration).
Overall remuneration policy 
The policy of the Committee is to offer executives total packages that are competitive within the IT services sector, providing 
remuneration that reflects the average levels for similar roles at comparable companies of the same size. At the same time  
the Committee needs to retain flexibility to reward exceptional performance with above average levels of remuneration and to 
secure the services of talented individuals who are capable of leading the Company in a period of rapid growth. The packages 
combine fixed basic salary, benefits and pension contributions together with performance related annual bonus, share options 
and LTIP awards. In accordance with the provisions in B.1.1 of the Combined Code, the Committee believes that the overall 
package offered to executive directors provides the right balance of fixed and performance related pay that is appropriate to  
the size and scale of the organisation and is competitive relative to other companies within its sector. 
The individual components of the remuneration packages offered are as follows:
Basic salary 
Basic salary is determined taking account of the individual’s performance and responsibilities and comparable market rates. 
Basic salary is reviewed annually or on promotion and is the only element of remuneration that is pensionable. Non-executive 
directors receive a fee determined annually by the remainder of the Board.
Benefits 
Benefits comprise the provision of a company car or car allowance, fuel and health insurance. Non-executive directors do not 
receive any benefits. 
Annual bonus 
An annual bonus is payable subject to the attainment of specific and challenging targets set for each individual. For executive 
directors, targets are based on Group performance. For GET members, targets are based predominantly on business and 
functional areas where they have direct control, with a smaller element dependent on Group performance. Non-executive 
directors are not entitled to a bonus. Bonuses do not form part of the individual’s statutory employment rights. The Committee 
reserves the right to amend the targets during the year if it feels that changes, in such factors as the marketplace or the Group’s 
strategy, have resulted in the existing targets no longer providing the appropriate incentive to the individual. The targets are 
based on order intake, turnover, operating profit and operating cash flow. 
For the year ended 30 April 2006, bonuses (of 100% of basic salary for the Chief Executive and Chief Operating Officer, and 
50% of basic salary for the Group Finance Director) were payable to executive directors for performance over 100% of targets, 
with maximum entitlement payable for achievement of 130% of targets. Not all of these challenging targets were achieved but 
the Committee felt that, irrespective of this, performance in the year had been creditworthy and mindful of the need to provide 
adequate incentive and reward, that discretionary bonuses should be paid to the executive directors. The table below sets out 
the bonuses awarded by the Committee and the amounts that would have been paid had the formulaic scheme been applied: 
      Bonus resulting 
      from application 
     Bonus payable of the scheme
Phil Cartmell    £40,000 £26,300
Sue Bygrave    £25,000 £8,100
Alan Gaby    £25,000 £15,500 26	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 27
For the year ended 30 April 2007 , the maximum level of bonus that can be earned will increase to 120% of salary for the Chief 
Executive and to 100% of salary for the Group Finance Director. Other elements of the bonus scheme remain unchanged.
Pension contributions
The Company operates defined contribution, Inland Revenue approved pension schemes. Phil Cartmell and Sue Bygrave 
participate in these schemes. Pension contributions for Alan Gaby are made to a personal pension scheme. The Company 
makes contributions of 6% of basic salary to the relevant pension scheme and directors, in common with other employees, are 
entitled to enhance this through salary sacrifice arrangements and additional voluntary contributions subject to Inland Revenue 
limits. Non-executive directors’ fees are non-pensionable. 
Share incentives 
The Group’s policy is to align the interests of executive directors and GET members with those of shareholders.  
To achieve this the Company operates two share incentive schemes. Non-executive directors do not participate  
in any share incentive schemes.
Long term incentive plan 
The Company has provisionally awarded shares worth 100% of basic salary to the executive directors under the terms of its 
LTIP in each of the past two years. Similar awards in the range of 10% to 50% were made to GET members. These awards  
vest on the third anniversary of the date of award to the extent that the performance targets have been met. For awards made  
in 2005-06, the targets again relate to the Company’s Total Shareholder Return (TSR) relative to the TSR of a peer group  
of companies. The Committee believes that TSR is a measure that closely aligns the interests of executives with those of 
shareholders. 30% of the award will vest for median performance and an award will only vest in full if the Company’s TSR 
performance would place it in the top quartile compared to the peer group. 
Share options
In August 2005, the Committee decided that the package offered to the Chief Executive was not sufficient either to guarantee to 
the Company his long term retention or to offer him sufficient reward for the great improvement in financial performance that the 
Group has experienced under his leadership since his appointment. Accordingly during the year the Committee awarded the 
Chief Executive share options with a value equal to his salary of £203,500 in addition to the grant of potential shares under the 
LTIP scheme described above. The performance condition for this award relates to growth in adjusted EPS (before amortisation 
of acquired intangibles and exceptional items) which must be RPI plus 3% measured over three years. The Committee may wish 
to use this scheme again in the future to reward exceptional performance or for recruitment or retention incentives.
Service contracts
It is the policy of the Committee to offer executive directors service agreements with notice periods not exceeding 12 months. 
Current appointments are subject to rolling service agreements that can be terminated by 12 months’ notice as detailed below. 
GET members are typically employed with a notice period of six months. Termination payments are limited to contractual notice 
periods. The non-executive directors do not have service contracts but have letters of appointment with the Group. Each 
appointment is terminable on three months’ notice. A summary of the directors’ service contracts and letters of appointment is 
listed below: 
     Contract date Notice period
Andy Roberts   1 November 1997 3 months
Ian Williams   2 July 2002 3 months
Brian Birkenhead   28 June 2006 3 months
Phil Cartmell   2 May 2001 12 months
Sue Bygrave   1 November 2004 12 months
Alan Gaby   13 August 2001 12 months 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 29 28	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Directors’ interests
The beneficial interests of the directors in the ordinary share capital of the Company as at 30 April 2006 and the date of this 
report are set out in the table below:
     Interest at Interest at 
     beginning of year end of year 
     (number of (number of 
     shares) shares)
Andy Roberts    47,000 47,000
Ian Williams    3,000 3,000
Brian Birkenhead    – –
Phil Cartmell    16,300 16,300
Sue Bygrave    – –
Alan Gaby    6,525 6,525
VEGA Group PLC’s Total Shareholder Return Index compared to FTSE Software and Computer Services Index
The following graph shows the value at 30 April 2006 of £100 invested in the Company on 30 April 2000 compared with £100 
invested in the FTSE Software and Computer Services Sector Index. This index has been chosen for comparative purposes as 
in the view of the Committee it is a recognised index of companies in VEGA’s business sector. To produce a fair value, each 
point is a 30-day average of the relevant index.
Directors’ Remuneration Report continued
0
20
40
60
80
100
120
140
FTSE All Share Software and Computer Services Index
VEGA Group plc
30 April 2006 30 April 2005 30 April 2004 30 April 2003 30 April 2002 30 April 2001
0
20
40
60
80
100
120
140
FTSE All Share Software and Computer Services Index VEGA Group plc
30 April 2006 30 April 2005 30 April 2004 30 April 2003 30 April 2002 30 April 2001
Total shareholder return 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 29
Part	 2:	 Audited	 information
In the following tables, references to GET members mean the individuals who are members of the Group Executive Team (our 
senior management) but who are not executive directors. Two GET members left the Group in 2006 and two new members 
were appointed. In 2006, there were a maximum of eight individuals at any one time who were members of the GET but who 
were not executive directors. 
Directors’ and senior managers’ remuneration
The remuneration of directors and of GET members who served during the year was as follows:
  Pension
 2006 contributions
  Base  Benefits Expense  2006 2005 
Note d
  salary/fees Bonuses Note c allowance Total Total 2006 2005 
 Notes £ £ £ £ £ £ £ £
Andy Roberts  69,000 – – 1,800 70,800 70,800 – –
Ken Lever b 10,507 – – – 10,507 29,500 – –
Ian Williams  27,000 – – – 27,000 27,000 – –
Phil Cartmell a 203,500 40,000 15,433 – 258,933 387,951 30,525 26,825
Sue Bygrave a, b 125,000 25,000 12,829 – 162,829 92,464 15,000 5,750
Alan Gaby a 120,000 25,000 12,433 – 157,433 233,169 20,060 12,010
Sub	 total	 	 555,007	 90,000	 40,695	 1,800	 687,502	 840,884	 65,585	 44,585
GET members  733,643 84,736 71,951 – 890,330 949,384 26,646 25,908
Total	 	 1,288,650	 174,736	 112,646	 1,800	 1,577,832	 1,790,268	 92,231	 70,493
Note a  The Committee has implemented the following changes with effect from 1 May 2006. These changes reflect in particular the recent increases seen in  
the executive pay market together with the growth in size and complexity of the Company. With effect from 1 May 2006 annual salaries for executive 
directors are: Phil Cartmell £237,570 p.a.; Sue Bygrave £127,500 p.a. and Alan Gaby £122,400 p.a.
Note b Sue Bygrave was appointed on 1 November 2004. Ken Lever resigned on 8 September 2005.
Note c Benefits comprise car or car allowance and private medical insurance. 
Note d  Pension contributions include salary sacrifice by Phil Cartmell of £16,237 (2005: £13,940); Sue Bygrave £6,117 (2005: £2,550); Alan Gaby £11,400  
(2005: £4,800).
Directors’ share options
Set out below are the directors’ interest in share options as at 30 April 2006 and the date of this report.
    Number  Number Number  
   Grant or held at granted held at  
Name exercise price beginning during end of  
and date of grant £ of year the year year Vesting date
2004	 Long	 term	 incentive	 plan
Phil	 Cartmell
September 2004 1.585 105,994 – 105,994 September 2007
August 2005 2.150  105,376 105,376 August 2008
    105,994 105,376 211,370
Sue	 Bygrave
November 2004 1.535 37,459 – 37,459 November 2007
January 2005 1.535 37,459 – 37,459  January 2008
August 2005 2.150  58,140 58,140 August 2008
    74,918 58,140 133,058
Alan	 Gaby
September 2004 1.585 69,401 – 69,401  September 2007
August 2005 2.150  55,814 55,814 August 2008
    69,401 55,814 125,215 30	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 31 30	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Part	 2:	 Audited	 information	 continued
Directors’ share options continued
    Number  Number Number  
   Grant or held at granted held at  
Name exercise price beginning during end of Exercisable 
and date of grant £ of year the year year from/to
2004	 Unapproved	 share	 option	 scheme
Phil	 Cartmell
       August 2008/ 
August 2005 2.150 – 94,651 94,651 July 2015
     94,651 94,651
1996	 Approved	 share	 option	 scheme
Alan	 Gaby
       May 2001/ 
May 1998 3.45 8,695 – 8,695 May 2008
    8,695 – 8,695
Performance conditions applicable to each grant are as follows:
2004 Long term incentive plan
For 2005 and 2006 awards, targets relate to the Company’s Total Shareholder Return (TSR) relative to the FTSE  
Software and Computer Services Index. 30% of an award will vest for median performance rising pro rata to 100%  
for upper quartile performance.
2004 Unapproved share option scheme
For 2006 awards, targets relate to growth in adjusted EPS (before amortisation of acquired intangibles and exceptional items) 
which must be at least RPI plus 3% measured over three years.
1996 Approved share option scheme.
No performance conditions were attached to the award in May 1998.
The market price of the shares at 30 April 2006 was 211p and the trading range during the year was 177p to 236p.
Approval
This report was approved by the Board of directors on 6 July 2006 and signed on its behalf by:
Ian	 Williams
Chairman of Remuneration Committee 
6 July 2006
Directors’ Remuneration Report continued 30	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 31 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 31
Statement of Directors’ Responsibilities in Relation 
to the Financial Statements
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable United 
Kingdom law and those International Financial Reporting Standards as adopted by the European Union.
The directors are required to prepare financial statements for each financial year which present fairly the financial position of the 
Company and of the Group and the financial performance and cash flows of the Company and of the Group for that period. In 
preparing those financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and 
understandable information; 
provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to 
understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial 
performance; and
state that the Company has complied with IFRSs, subject to any material departures disclosed and explained in the 
financial statements.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the 
financial position of the Company and of the Group and enable them to ensure that the financial statements comply with the 
Companies Act 1985 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company 
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
•
•
•
• 32	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 33 32	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
We have audited the Group and Parent Company financial 
statements (the financial statements) of VEGA Group PLC  
for the year ended 30 April 2006 which comprise the Group 
Income Statement, the Group and Parent Company Balance 
Sheets, the Group and Parent Company Cash Flow 
Statements, the Group and Parent Company Statement of 
Change in Shareholders’ Equity and the related notes 1 to 25. 
These financial statements have been prepared under the 
accounting policies set out therein. 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 auditors’ report and for no 
other purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other than the 
Company and the Company’s members, as a body, for our 
audit work, for this report, or for the opinions we have formed.
Respective	 responsibilities	 of	 directors	 and	 auditors
The directors are responsible for preparing the Annual 
Report, the Directors’ Remuneration Report and the financial 
statements in accordance with applicable United Kingdom 
law and International Financial Reporting Standards (IFRSs) 
as adopted by the European Union as set out in the 
Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the 
part of the Directors’ Remuneration Report to be audited in 
accordance with relevant legal and regulatory requirements 
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial 
statements give a true and fair view, 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 and Article 4 of the IAS Regulation and 
that the information given in the Directors’ Report is consistent 
with the financial statements. The information given in the 
Directors’ Report includes that specific information presented 
in the Operating and Financial Reviews that is cross referred 
from the Business Review section of the Directors’ Report. 
We also report to you if, in our opinion, 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 other transactions are not disclosed.
We review whether the Corporate Governance Statement 
reflects the Company’s compliance with the nine provisions of 
the 2003 FRC Combined Code specified for our review by the 
Listing Rules of the Financial Services Authority, 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 other information contained in the Annual Report 
and consider whether it is consistent with the audited 
financial statements. The other information comprises only 
the Directors’ Report, the unaudited part of the Directors’ 
Remuneration Report, the Chairman’s Statement, the 
Operating and Financial Reviews and the Corporate 
Governance Statement. We consider the implications for our 
report if we become aware of any apparent misstatements  
or material inconsistencies with the financial statements. Our 
responsibilities do not extend to any other information.
 
Basis	 of	 audit	 opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) 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 and Company’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 Group financial statements give a true and fair view,  
in accordance with IFRSs as adopted by the European 
Union, of the state of the Group’s affairs as at 30 April 2006 
and of its profit for the year then ended;
the parent company financial statements give a true and 
fair view, in accordance with IFRSs as adopted by the 
European Union as applied in accordance with the 
provisions of the Companies Act 1985, of the state of  
the parent company’s affairs as at 30 April 2006;
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 and 
Article 4 of the IAS Regulation; and
the information given in the Directors’ Report is consistent 
with the financial statements.
Ernst	 &	 Young	 LLP
Registered Auditor 
Luton
6 July 2006 
•
•
•
•
Independent Auditor’s Report to the Members of 
VEGA Group PLC 32	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 33 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 33
Consolidated Income Statement
     Year	 ended Year ended 
     30	 April 30 April 
     2006 2005 
    Notes £’000 £’000
Revenue    3 62,126  52,602 
Net	 operating	 costs   4 (57,921) (49,114)
Operating	 profit
Before amortisation of acquired intangibles and exceptional items   4,803 3,992
Amortisation of acquired intangibles    (328) (460)
Exceptional items    5 (270) (44)
Group	 operating	 profit    4,205  3,488 
Finance	 costs   6 (376) (386)
Finance	 revenue   6 25  59 
Profit	 before	 tax    3,854  3,161 
Income	 tax	 expense    7 (745) (997)
Profit	 for	 the	 year    3,109  2,164 
Earnings	 per	 share   8
Basic    15.27p 10.97p
Diluted    14.80p 10.85p
Adjusted	 earnings	 per	 share    8
Basic    17.81p 13.39p
Diluted    17.26p 13.25p
Dividends	 per	 share	 paid	 and	 proposed	 in	 respect	 of	 the	 period	  9
Interim paid    0.625p 0.500p
Final proposed    1.875p 1.500p
All profit for the year and earnings per share are attributable to equity holders of the parent and derived from  
continuing operations. 34	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 35 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 35 34	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Consolidated Balance Sheet
 Group	 	 Company
   As	 at As at As	 at As at 
    30	 April 30 April 30	 April 30 April 
   2006 2005 2006 2005 
  Notes 	 £’000  £’000  	 £’000  £’000 
Non-current	 assets
Property, plant and equipment 10 1,053  1,044  847 810
Intangible assets – goodwill 11 14,874  14,874  8,075 8,075
Intangible assets – other 11 460  675  219 90
Investments in subsidiaries  – – 8,187 8,187
Deferred tax assets 12 177  292  177 292
  16,564  16,885  17,505 17,454
Current	 assets
Trade and other receivables 13 17,746  13,262  14,619 10,492
Income tax receivable  42  9  42 9
Cash  	 2,873  3,492  2,501 2,352
  20,661  16,763  17,162 12,853
Total	 assets  37,225  33,648  34,667 30,307
Current	 liabilities
Trade and other payables 14 (13,812)  (11,198) (13,119) (10,227)
Financial liabilities 15 (1,337) (1,651)  (1,335) (1,651)
Income tax payable 	 (1,608)  (1,788) (1,676) (1,519)
Provisions 16 –  (36)  –	 –
  (16,757)  (14,673)  (16,130) (13,397)
Non-current	 liabilities
Financial liabilities 15 (3,143)  (4,290)  (3,143) (4,290)
Provisions 16 (288)  (288)  (200) (200)
Deferred tax liabilities 12 (135)  (269)  – –
  (3,566)  (4,847)  (3,343) (4,490)
Total	 liabilities  (20,323)  (19,520) (19,473) (17,887)
Net	 assets  16,902 14,128 15,194 12,420
Equity	 attributable	 to	 equity	 holders	 of	 the	 parent
Equity share capital 17 1,018  1,018  1,018 1,018
Share premium  6,226  6,226  6,226 6,226
Retained earnings  7,377  4,603  5,669 2,895
Merger reserve  2,281  2,281  2,281 2,281
Total	 equity 20 16,902  14,128  15,194 12,420
Phil	 Cartmell  Sue	 Bygrave 
Chief Executive Group Finance Director
6 July 2006 6 July 2006 34	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 35 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 35
Consolidated Cash Flow Statement
 Group	 	 Company
   Year	 ended Year ended Year	 ended Year ended 
    30	 April 30 April 30	 April 30 April  
   2006 2005 2006 2005  
   £’000 £’000 £’000  £’000 
Operating	 activities
Profit after tax  3,109 2,164 3,070 1,969
Taxation  745 997 517 684
Net finance expense  351 327 420 359
Operating	 profit	  4,205 3,488 4,007 3,012
(Increase)/decrease in trade and other receivables  (4,404) 312 (4,355) (265)
Increase/(decrease) in trade and other payables 	 2,593 (548) 3,139 (217)
(Decrease)/increase in provisions  (34) 25 – (99)
Depreciation and amortisation  852 892 413 360
Loss/(profit) on sale of plant and equipment  8 (9) 2 (22)
Share based payments  144 44 144 44
Cash	 generated	 from	 operations  3,364 4,204 3,350 2,813
Tax paid  (984) (260) (278) 129
Net	 cash	 flow	 from	 operating	 activities  2,380 3,944 3,072 2,942
Investing	 activities
Purchase of subsidiary undertaking  – (5,263) – (5,472)
Capital expenditure – plant and equipment  (459) (285) (387) (295)
Capital expenditure – intangible assets  (200) (152) (194) (63)
Sale of plant and equipment  7 28 –	 –
Interest received  25 59 – 27
Net	 cash	 flow	 from	 investing	 activities 	 (627) (5,613) (581) (5,803)
Financing	 activities
New bank loan  – 5,000 – 5,000
Debt issue costs  – (102) – (102)
Debt repayments  (1,544) (1,590) (1,544) (1,590)
Interest paid  (367) (365) (411) (344)
Dividends paid to equity shareholders  (432) (287)	 (432) (287)
Net	 cash	 flow	 from	 financing	 activities 	 (2,343) 2,656 (2,387) 2,677
(Decrease)/increase	 in	 cash	 and	 cash	 equivalents  (590) 987 104 (184)
Effect of exchange rates on cash and cash equivalents  (56) 34 20 13
Cash and cash equivalents at beginning of year  3,440 2,419 2,300 2,471
Cash	 and	 cash	 equivalents	 at	 end	 of	 year  2,794 3,440 2,424 2,300 36	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 36	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 37 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 37 36	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Consolidated Statement of  
Recognised Income and Expense
 Group	 	 Company
   Year	 ended Year ended Year	 ended Year ended 
    30	 April 30 April 30	 April 30 April  
   2006 2005 2006 2005  
   £’000 £’000 £’000  £’000 
Exchange difference on retranslation of foreign operation   54 (13) – –
(Loss)/gain on hedge of net overseas investment  (93) 16 – –
Gain on interest rate hedge  49 – 49 –
Income	 recognised	 directly	 in	 equity  10 3 49 –
Profit	 for	 the	 year	  3,109  2,164  3,070 1,969
Total	 recognised	 income	 for	 the	 year  3,119 2,167 3,119 1,969
The Group has adopted IAS 32 and IAS 39 with effect from 1 May 2005 and consequently recognised the fair value of its 
interest rate swaps in equity. This has resulted in the recognition of a liability of £57 ,000 at 1 May 2005. As allowed by IFRS 1 
‘First time adoption of International Financial Reporting Standards’ the provisions of IAS 32 and IAS 39 have not been applied to 
the comparative periods and are applied from 1 May 2005.
  36	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 36	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 37 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 37 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 37
1.	 Authorisation	 of	 financial	 statements	 and	 statement	 of	 compliance	 with	 IFRSs
VEGA Group PLC (the Company) is a limited Company incorporated and domiciled in England and Wales whose shares are 
publicly traded on the London Stock Exchange. The consolidated financial statements of the Company for the year ended  
30 April 2006 comprise the Company and its subsidiaries (together referred to as the Group).
The financial statements were authorised for issue by the Board of directors on 6 July 2006 and the balance sheets were signed 
on behalf of the Board by Phil Cartmell and Sue Bygrave.
The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards  
as adopted by the EU as they apply to the financial statements of the Group for the year ended 30 April 2006 applied in 
accordance with the provisions of the Companies Act 1985. The principal accounting policies adopted by the Group and  
by the Company are set out in note 2.
The Company has taken advantage of the exemption provided under section 230 of the Companies Act 1985 not to publish its 
individual income statement and related notes.
2.	 Accounting	 policies
Basis of preparation
This is the first year in which the Group has prepared its financial statements under IFRSs and the comparatives have been 
restated from UK Generally Accepted Accounting Practice (UK GAAP) to comply with IFRSs. The Group issued a press release 
on 28 October 2005 which comprised an explanation of how the transition to IFRSs has affected the reported financial position, 
financial performance and cash flows of the Group. A copy of this document is available on the Company’s website at www.
vega-group.com and the reconciliations to IFRSs from the previously published UK GAAP financial statements are summarised 
in note 25.
The accounting policies which follow set out those policies which apply in preparing the financial statements for the year  
ended 30 April 2006. Where the Group has applied different policies for part of the period since its transition to IFRSs on  
1 May 2004, this is explained in note 22.
The Group and Company financial statements are presented in sterling and all values are rounded to the nearest thousand 
pounds (£’000) except when indicated otherwise.
Basis of consolidation
The Group financial statements comprise the financial statements of the Company and its subsidiaries as at 30 April each year. 
The financial statements of subsidiaries are prepared for the same reporting period as the parent Company and adjustments 
are made where necessary to align accounting policies.
All intercompany balances and transactions, including unrealised profits arising from them, have been eliminated in full. 
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue 
to be consolidated until the date that such control ceases. Control comprises the power to govern the financial and operating 
policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting 
rights; currently exercisable or convertible voting rights; or by way of contractual agreement.
Change in accounting policy
The Group has adopted IAS 32 and IAS 39 with effect from 1 May 2005. Consequently it has recognised the fair value of its 
interest rate swaps in equity whereas previously under UK GAAP these had not been recognised. This change has resulted  
in the recognition of a liability of £57 ,000 at 1 May 2005. As allowed by IFRS 1 ‘First time adoption of International Financial 
Reporting Standards’ the provisions of IAS 32 and IAS 39 have not been applied to the comparative periods and are applied 
from 1 May 2005. Under UK GAAP hedge accounting was not applied.
Foreign currency translation
Transactions in foreign currencies are initially recorded in the books of the Company in the functional currency by applying  
the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies  
are retranslated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to the 
Consolidated Income Statement, except when hedge accounting is applied and for differences on monetary assets and 
liabilities that form part of the Group’s net investment in a foreign operation. These are taken directly to equity until the disposal  
of the net investment, at which time they are recognised in the Consolidated Income Statement. 
Notes 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 38	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 38	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 38	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
2.	 Accounting	 policies	 continued
Foreign currency translation continued
The Group’s assets and liabilities of foreign operations are translated into sterling at the rate of exchange ruling at the balance 
sheet date. Income and expenses are translated at the weighted average exchange rates for the year. The resulting exchange 
differences are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount 
recognised in equity relating to that particular foreign operation shall be recognised in the income statement. 
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as 
at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency shall be translated using the 
exchange rates at the date when the fair value was determined.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. 
Depreciation is provided on all property, plant and equipment at rates calculated to write off the cost, less estimated residual 
value based on price prevailing at the balance sheet date, of each asset evenly over its expected useful life as follows:
Office equipment     3-10 years 
Motor vehicles     4 years 
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances 
indicate the carrying value may not be recoverable. 
Borrowing costs
Borrowing costs are recognised as an expense when incurred. 
Goodwill
Business combinations on or after 1 May 2004 are accounted for under IFRS 3 using the purchase method. Any excess of the 
cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent 
liabilities is recognised in the balance sheet as goodwill and is not amortised. Goodwill already carried in the balance sheet at the 
date of transition to IFRS, 1 May 2004, has not been amortised after this transitional date. Any goodwill arising on the acquisition 
of equity accounted entities is included within the cost of those entities. 
Following initial recognition, goodwill is stated at cost less any accumulated impairment losses. Goodwill is reviewed  
for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value  
may be impaired. 
For the purpose of impairment testing, goodwill is allocated to the related cash-generating units monitored by management. 
Impairment is determined by assessing the recoverable amount of the cash-generating unit, to which the goodwill relates. 
Where the recoverable amount of the cash-generating unit is less than the carrying amount, including goodwill, an impairment 
loss is recognised in the income statement.
The carrying amount of goodwill allocated to a cash-generating unit is taken into account when determining the gain or loss  
on disposal of the unit, or of an operation within it. Goodwill arising on acquisitions prior to 31 December 1997 remains set off 
directly against reserves even if the related investment becomes impaired or the business is disposed of.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets 
acquired separately from a business are carried initially at cost.
An Intangible asset acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises 
from contractual or other legal rights and its fair value can be measured reliably. 
Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when 
its future recoverability can reasonably be regarded as assured which is considered to be only after its technical feasibility and 
commercial viability can be demonstrated. 
No development expenditure has been capitalised to date.
Notes continued 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 38	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 38	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 39
2.	 Accounting	 policies	 continued
Intangible assets continued
Intangible assets with a finite life are amortised on a straight-line basis over their expected useful lives as follows: 
Computer software     2–5 years
Other intangibles The period over which economic benefit is derived from the related assets
Development expenditure The period of expected future sales from the related project
The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the 
carrying value may not be recoverable. In addition, the carrying value of capitalised development expenditure is reviewed for 
impairment annually before being brought into use.
Impairment of assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of 
impairment exists, the Group makes a formal estimate of the asset’s recoverable amount. An asset’s recoverable amount is the 
higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual 
asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of 
assets. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written 
down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value 
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the 
asset. Impairment losses of continuing operations are recognised in the Income Statement in those expense categories 
consistent with the function of the impaired asset.
Trade and other receivables
Trade receivables, which generally have 30–90 day terms, are recognised and carried at the lower of their original invoiced value 
and recoverable amount. A provision for doubtful debts is made when there is objective evidence that the Group will not be able 
to recover the amounts in full. Balances are written off when the probability of recovery is assessed as being remote.
Cash 
Cash in the balance sheet comprises cash at bank and in hand and short-term deposits with an original maturity of three 
months or less.
For the purpose of the Consolidated Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents  
as defined above, net of outstanding bank overdrafts.
Interest-bearing loans and borrowings 
All loans and borrowings are initially recognised at the fair value of consideration received less directly attributable issue  
costs. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the  
effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on 
settlement. The effective interest rate is the rate that exactly discounts estimated future cash payments and receipts through  
the expected life of the financial instrument, or when appropriate, a shorter period to the net carrying amount of the financial 
instrument. This calculation includes transaction costs and any premiums or discounts.
Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised respectively  
in finance revenue and finance costs. 
Provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of a past event and it is probable that  
an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, expected 
future cash flows are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where 
discounting is used, the increase in the provision due to unwinding the discount is recognised as a finance cost.
Pensions and other post-employment benefits
The Group operates defined contribution pension schemes. Contributions are recognised as an expense in the Income 
Statement in the period in which they become payable in accordance with the rules of the schemes. 
Employee benefits
In accordance with IAS 19, the Group provides for accumulating absences (such as paid holiday). The cost is measured as the 
additional amount the Group expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date. 40	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 40	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 40	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 41 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 41 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 41
2.	 Accounting	 policies	 continued
Share-based payment transactions 
Employees (including executive directors) of the Group receive remuneration in the form of share-based payment transactions, 
whereby employees render services in exchange for shares or rights over shares.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they 
are granted. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions 
linked to the price of the Company’s shares (‘market conditions’).
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which 
the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award 
(‘vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date 
reflects the extent to which the vesting period has expired and the number of awards that, in the opinion of the directors of the 
Group at that date, will ultimately vest. 
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market 
condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other 
performance conditions are satisfied.
Where the terms of an equity-settled award are modified, the cost based on the original award terms continues to be 
recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period 
for the increase in the fair value of the award, based on the difference between the fair value of the original award and the fair 
value of the modified award, both as measured at the date of modification. No reduction is recognised if the fair value of the 
award decreases as a result of the modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not  
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and 
designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a 
modification of the original award, as described in the previous paragraph.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.
The Group has taken advantage of the transitional provisions of IFRS 2 in respect of equity-settled awards and has applied  
IFRS 2 only to equity-settled awards granted after 7 November 2002 that had not vested on or before 1 January 2005. 
Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating 
leases and rentals payable are charged in the Income Statement on a straight-line basis over the lease term. 
Revenue recognition and long term contracts
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be 
reliably measured. Revenue is stated net of VAT.
Revenue from services rendered is recognised to the stage of completion of the contract at the balance sheet date. Stage of 
completion is measured by reference to own labour hours incurred to date as a percentage of total estimate own labour hours for 
each contract. An expected loss on a contract is recognised immediately in the Income Statement. Where the contract outcome 
cannot be measured reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
Amounts recoverable on contracts are included in debtors and represent income recognised in excess of amounts invoiced. 
Where amounts recoverable on contracts are individually significant and recoverable over a period greater than one year, the 
debtor recognised is discounted at an appropriate rate reflecting the period over which the balance will be received. Where 
amounts invoiced are in excess of turnover recognised, a payment received on account arises (which is included within creditors).
Income tax 
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, 
based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.
Notes continued 40	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 40	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 40	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 41 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 41 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 41
2.	 Accounting	 policies	 continued
Income tax continued
Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the 
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are 
recognised for all taxable temporary differences, except:
where the deferred income tax liability arises from goodwill amortisation or the initial recognition of an asset or liability in a 
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor 
taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in 
joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the 
temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and 
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary 
differences, and the carry-forward of unused tax assets and unused tax losses can be utilised except:
where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an 
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the 
accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint 
ventures, deferred tax assets are recognised to the extent that it is probable that the temporary differences will reverse in 
the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is 
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset  
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the 
balance sheet date.
Income tax relating to items recognised directly in equity is recognised in equity and not in the Income Statement.
Derivative financial instruments and hedging
The Group uses derivative financial instruments such as foreign currency contracts and interest rate swaps to hedge its risks 
associated with interest rate and foreign currency fluctuations. From 1 May 2005, such derivative financial instruments are 
initially recognised at fair value on the date on which the derivative contracts are entered into and are subsequently re-measured 
at fair value. Derivatives are carried as assets when the fair value is positive and liabilities when the fair value is negative.
The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts  
with similar maturity profiles. The fair value of interest rate swap contracts is determined by reference to market values for  
similar instruments.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented 
at its inception. This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk 
being hedged and how effectiveness will be measured throughout its duration. Such hedges are expected at inception to be 
highly effective.
For the purpose of hedge accounting, hedges are classified as either fair value hedges when they hedge the exposure to 
changes in the fair value of a recognised asset or liability; or cash flow hedges where they hedge exposure to variability in cash 
flows that is either attributable to a particular risk associated with a recognised asset or liability or a forecasted transaction.
Fair value hedges
In relation to fair value hedges which meet the conditions for hedge accounting, any gain or loss from re-measuring the hedging 
instrument at fair value is recognised immediately in the income statement. Any gain or loss on the hedged item attributable to 
the hedged risk is adjusted against the carrying amount of the hedged item and recognised in the Income Statement. Where the 
adjustment is to the carrying amount of a hedged interest-bearing financial instrument, the adjustment is amortised through the 
income statement such that it is fully amortised by maturity.
•
•
•
• 42	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 42	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 42	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 43 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 43 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 43
2.	 Accounting	 policies	 continued
Derivative financial instruments and hedging continued
Fair value hedges continued
The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the 
hedge no longer meets the criteria for hedge accounting or the Group revokes the designation.
Cash flow hedges
For cash flow hedges to hedge firm commitments which meet the conditions for hedge accounting, the portion of the gain or 
loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity and the ineffective 
portion is recognised in net profit or loss. Amounts taken to equity are transferred to the Income Statement when the hedged 
transaction affects profit or loss such as when a forecast sale or purchase occurs. 
If a forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to profit or loss. 
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a 
hedge is revoked, amounts previously recognised in equity remain in equity until the forecast transaction occurs and are then 
transferred to the Income Statement. If the related transaction is not expected to occur, the amount is taken to profit or loss.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken directly 
to the Income Statement for the year.
Exceptional items
The Group presents as exceptional items on the face of the Income Statement, those material items of income and expense 
which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow 
shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior 
periods and to assess better trends in financial performance. 
New standards and interpretations not applied
During the year, the IASB and IFRIC have issued the following standards and interpretations with an effective date after the date 
of these financial statements:
	     Effective date
International	 Accounting	 Standards	 (IAS/IFRSs)	 IFRS 1 Amendment relating to IFRS 6      1 January 2006
IFRS 4 Insurance Contracts (Amendment to IAS 39 and IFRS 4 – Financial Guarantee Contracts)  1 January 2006
IFRS 6 Exploration for and Evaluation of Mineral Assets      1 January 2006
IFRS 6 Amendment relating to IFRS 6      1 January 2006
IFRS 7 Financial Instruments: Disclosures      1 January 2007
IAS 1 Amendment – Presentation of Financial Statements: Capital Disclosures    1 January 2007
IAS 19 Amendment – Actuarial Gains and Losses, Group Plans and Disclosures    1 January 2006
IAS 39 Fair Value Option      1 January 2006
IAS 39  Amendments to IAS 39 – Transition and Initial Recognition of    1 January 2006
 Financial Assets and Financial Liabilities (Day 1 profits)
IAS 39 Cash Flow Hedge Accounting      1 January 2006
IAS 39 Amendment to IAS 39 and IFRS 4 – Financial Guarantee Contracts    1 January 2006
International	 Financial	 Reporting	 Interpretations	 Committee	 (IFRIC)
IFRIC 4 Determining whether an arrangement contains a lease     1 January 2006
IFRIC 5  Rights to Interests Arising from Decommissioning, Restoration and    1 January 2006
 Environmental Rehabilitation Funds
IFRIC 6  Liabilities arising from Participating in a Specific Market – Waste    1 December 2005
 Electrical and Electronic Equipment
The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the 
Group’s financial statements in the period of initial application.
Upon adoption of IFRS 7 , the Group will have to disclose additional information about its financial instruments, their significance 
and the nature and extent of risks that they give rise to. More specifically the Group will need to disclose the fair value of its 
financial instruments and its risk exposure in greater detail. There will be no effect on reported income or net assets.
Notes continued 42	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 42	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 42	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 43 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 43 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 43
3.	 Segmental	 analysis
The Group operates in only Programme and System Assurance. Segment information is reported geographically. Sales to 
customers disclosed in geographical segments are based on the geographical location of its customers. The following table 
presents revenue, expenditure and certain asset information regarding the Group’s geographical segments for the years ended 
30 April 2006 and 30 April 2005.
 	 Year 	 ended	 30	 April	 2006
	 	 	 United 	 Kingdom	 Germany	 Rest 	 of	 Europe	 Total	 	 	 	 £’000	 £’000	 £’000	 £’000
Revenue
Segment revenue  41,563 17,393 5,193 64,149
Inter-segment sales  (1,576) (399) (48) (2,023)
Sales	 to	 external	 customers	 	 39,987	 16,994	 5,145	 62,126
Operating	 profit
Before central costs  2,735 1,380 657 4,772
Central costs     (567)
Operating	 profit	 	 	 	 	 4,205
Capital	 expenditure	 	 581 78 – 659
Depreciation	 and	 amortisation	 	 413 439 – 852
Segment	 assets  24,395 12,036 794 37,225
Segment	 liabilities  (16,373) (2,935) (1,015) (20,323)
  Year ended 30 April 2005
   United Kingdom Germany Rest of Europe Total 
   £’000 £’000 £’000 £’000
Revenue
Segment revenue  35,147 15,275 3,846 54,268
Inter-segment sales  (1,453) (213) – (1,666)
Sales to external customers  33,694 15,062 3,846 52,602
Operating	 profit
Before central costs  2,107 1,149 709 3,965
Central costs     (477)
Operating profit     3,488
Capital	 expenditure	 305 132 – 437
Depreciation	 and	 amortisation  360 532 – 892
Segment	 assets  20,528 12,554 566 33,648
Segment	 liabilities  (14,837) (3,840) (843) (19,520)
  44	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 44	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 44	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 45 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 45 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 45
Notes continued
3.	 Segmental	 analysis	 continued
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Revenue	 by	 market	 sector
Aerospace    31,511 28,665
Defence    26,750 20,085
Government    3,865 3,852
Total	 revenue    62,126	 52,602
It is not possible to split out assets, liabilities and capital expenditure by business segments. Assets and liabilites within 
geographical segments are not allocated to business segments.
4.	 Net	 operating	 costs
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
a. Operating expenses comprise:
Cost of sales     44,683 36,813
Administrative costs    13,238 12,301
   	 57,921 49,114
Included in administrative costs: 
Depreciation of property, plant and equipment    437 307
Amortisation of intangible assets    415 585
Operating lease expenses     931 1,045
Net foreign exchange differences    (120) (35)
b. Fees paid to the Group’s auditors, Ernst & Young LLP
Audit services     99 90
Taxation services    23 40
Corporate finance fees (2005 fee included within acquisitions)   – 147
Other services    26 4
    148 281
c. Staff costs
Wages and salaries    27,613 25,049
Social security costs    3,589 3,212
Pension costs     1,130 1,064
Cash settled employee costs    32,332 29,325
Share based payments     144 43
    32,476 29,368
d. Weighted average staff numbers during the year
Professional staff    535 490
Administrative staff    56 54
    591 544
e. Directors’ remuneration
The information required by the Companies Act 1985 and the Listing Rules of the Financial Services Authority is contained on 
pages 26 to 30 in the Directors’ Remuneration Report. 44	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 44	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 44	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 45 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 45 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 45
5.	 Exceptional	 items
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Vacant property provision    – (105)
Costs associated with the integration of Anite Systems GmbH   – 149
Staff termination costs    270 –
Total	 exceptional	 items    270 44
Vacant property provisions comprise onerous lease provisions on rationalisation of the Group’s office portfolio. Costs associated 
with the integration of Anite Systems GmbH comprise staff termination costs and costs incurred in exiting the lease on part of 
property occupied in Germany.
Staff termination costs comprise primarily payments arising on the reorganisation of the UK sales management.
6.	 Finance	 costs	 and	 revenue
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
a. Finance costs
Bank loans and overdrafts    376 386
b. Finance revenue
Short term cash deposits   	 (25) (59)
Net	 finance	 costs    351 327
7.	 Income	 tax
a. Tax on profit on ordinary activities 
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Current income tax
Current income tax charge     1,334 1,183
Adjustments in respect of current income tax of previous years   (571) (14)
Total	 current	 income	 tax    763 1,169
Deferred income tax
Origination and reversal of temporary differences    (18) (172)
Total	 tax	 charge	 in	 the	 income	 statement    745 997
UK corporation tax    401 720
Foreign corporation tax    363 449
Current	 tax	 charge    764 1,169
UK deferred tax credit    (13) (51)
Foreign deferred tax credit    (6) (121)
Total    745 997 46	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 46	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 46	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 47 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 47 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 47
Notes continued
7.	 Income	 tax	 continued
a. Tax on profit on ordinary activities continued
A reconciliation of income tax expense applicable to accounting profit before income tax at the statutory income tax rate to 
income tax expense at the Group’s effective income tax rates is as follows: 
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Accounting profit before income tax     3,854 3,161
At UK statutory income tax rate of 30% (2005: 30%)     1,156 948
Adjustments in respect of current income tax of previous years   (571) (14)
Adjustments in respect of deferred income tax of previous years   (55) –
Expenditure not allowable for income tax purposes    14 71
Excess foreign tax on overseas income    73 53
Other    128 (61)
At	 effective	 income	 tax	 rate	 of	 19.3%	 (2005:	 31.5%)	 	 	 	 745	 997
b. Deferred tax in the income statement
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Accelerated capital allowances    	 (68)	 (32)
Temporary differences     41 (149)
Restrictive covenant payments     9 9
Deferred	 income	 tax	 expense	 	 	 	 (18)	 (172)
8.	 Earnings	 per	 share
The calculation of earnings per share is based on profits attributable to shareholders and weighted average numbers of shares 
as set out below. An adjusted earnings per share figure has been calculated in addition to the earnings per share required by  
IAS 33 and is based on earnings before amortisation of acquired intangibles and exceptional items. It has been calculated to 
allow shareholders to gain a clearer understanding of the trading performance of the Group.
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Earnings	 attributable	 to	 shareholders   	 3,109  2,164 
Adjusted	 for:
Amortisation of acquired intangibles    328 460
Exceptional items (net of taxation)    189 17
Adjusted	 earnings    3,626 2,641
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     Ordinary	 shares Ordinary shares
Basic weighted average number of shares   	 20,356,821 19,723,623
Dilutive potential ordinary shares (employee share options)    648,055  213,642
Diluted	 weighted	 average	 number	 of	 shares    21,004,876	 19,937,265
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the 
date of completion of these financial statements. 46	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 46	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 46	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 47 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 47 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 47
9.	 Dividends
     Year	 ended Year ended  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Declared	 and	 paid	 during	 the	 year	 Final dividend for 2005: 1.5p per 5p ordinary share (2004: 1.0p)    305 185
Interim dividend for 2006: 0.625p per 5p ordinary share (2005: 0.5p)   127 102
Total	 dividend	 paid    432 287
Proposed	 for	 approval	 at	 AGM
Final dividend for 2006: 1.875p per 5p ordinary share (2005: 1.5p)  	 382	 305
 
10.	 Property,	 plant	 and	 equipment
    Office 
    equipment Cars Total 
Group   £’000 £’000 £’000 
At	 30	 April	 2006	 At 1 May 2005, net of accumulated depreciation    1,019 25 1,044
Additions    459 – 459
Depreciation    (434) (3) (437)
Disposals    – (15) (15)
Currency translation differences    2 – 2
At	 30	 April	 2006,	 net	 of	 accumulated	 depreciation	 	 	 	 1,046	 7	 1,053
At	 30	 April	 2005	 At 1 May 2004, net of accumulated depreciation   917 21 938
Additions    253 32 285
Acquisition of subsidiary   145 – 145
Depreciation   (291) (16) (307)
Disposals    (7) (12) (19)
Currency translation differences   2 – 2
At	 30	 April	 2005,	 net	 of	 accumulated	 depreciation	 	 	 	 1,019	 25	 1,044
At	 30	 April	 2006
Cost   3,984 22 4,006
Accumulated depreciation   (2,938) (15) (2,953)
Net	 carrying	 amount	 	 	 1,046	 7	 1,053
At	 30	 April	 2005
Cost   3,674 71 3,745
Accumulated depreciation   (2,655) (46) (2,701)
Net	 carrying	 amount	 	 	 1,019	 25	 1,044
  48	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 48	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 48	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 49 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 49 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 49
Notes continued
10.	 Property,	 plant	 and	 equipment	 continued
    Office 
    equipment Cars Total 
Company   £’000 £’000 £’000 
At	 30	 April	 2006	 At 1 May 2005, net of accumulated depreciation    798 12 810
Additions    387 – 387
Depreciation    (344) (4) (348)
Disposals    (1) (1) (2)
At	 30	 April	 2006,	 net	 of	 accumulated	 depreciation	 	 	 	 840	 7	 847
At	 30	 April	 2005	 At 1 May 2004, net of accumulated depreciation   785 21 806
Additions    282 13 295
Depreciation   (303) (10) (313)
Disposals    34 (12) 22
At	 30	 April	 2005,	 net	 of	 accumulated	 depreciation	 	 	 	 798	 12	 810
At	 30	 April	 2006
Cost   3,213 22 3,235
Accumulated depreciation   (2,373) (15) (2,388)
Net	 carrying	 amount	 	 	 840	 7	 847
At	 30	 April	 2005
Cost   3,060 52 3,112
Accumulated depreciation   (2,262) (40) (2,302)
Net	 carrying	 amount	 	 	 798	 12	 810
  48	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 48	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 48	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 49 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 49 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 49
11.	 Intangible	 assets
  Other intangible assets
    Computer   
   Goodwill software Other Total 
Group  £’000 £’000 £’000 £’000 
At	 30	 April	 2006	 At 1 May 2005, net of accumulated amortisation   14,874 135 540 675
Additions   – 200 – 200
Amortisation   – (87) (328) (415)
At	 30	 April	 2006,	 net	 of	 accumulated	 amortisation	 	 	 14,874	 248	 212	 460
At	 30	 April	 2005	 At 1 May 2004, net of accumulated amortisation  8,121 108 – 108
Additions   – 152 – 152
Acquisition of subsidiary  6,753 – 1,000 1,000
Amortisation  – (125) (460) (585)
At	 30	 April	 2005,	 net	 of	 accumulated	 amortisation	 	 	 14,874	 135	 540	 675
At	 30	 April	 2006
Cost  14,874 876 1,000 1,876
Accumulated amortisation  – (628) (788) (1,416)
Net	 carrying	 amount	 	 14,874	 248	 212	 460
At	 30	 April	 2005
Cost  14,874 676 1,000 1,676
Accumulated amortisation  – (541) (460) (1,001)
Net	 carrying	 amount	 	 14,874	 135	 540	 675
Other Intangible assets relate to the acquisition of Anite Systems GmbH and represent the fair value of the order book at the 
date of acquisition and customer relationships. These, and the associated deferred tax liability, are being amortised over their 
useful life and it is expected that they will be fully amortised by the end of 2007/08.
During the period the accounting for the acquisition of Anite Systems GmbH has been finalised which has resulted in an 
amendment of the amounts recoverable on contracts previously published. The effect of this is to increase the fair value of 
amounts recoverable on contracts previously reported by £92,000.
  50	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 50	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 51 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 51 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 51 50	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Notes continued
11.	 Intangible	 assets	 continued
      Computer 
     Goodwill software 
Company    £’000 £’000
At	 30	 April	 2006	 At 1 May 2005, net of accumulated amortisation     8,075 90
Additions      194
Amortisation     – (65)
At	 30	 April	 2006,	 net	 of	 accumulated	 amortisation	 	 	 	 	 8,075	 219
At	 30	 April	 2005	 At 1 May 2004, net of accumulated amortisation    8,075 74
Additions     – 63
Amortisation    – (47)
At	 30	 April	 2005,	 net	 of	 accumulated	 amortisation	 	 	 	 	 8,075	 90
At	 30	 April	 2006
Cost    8,075 681
Accumulated amortisation    – (462)
Net	 carrying	 amount	 	 	 	 8,075	 219
At	 30	 April	 2005
Cost    8,075 487
Accumulated amortisation    – (397)
Net	 carrying	 amount	 	 	 	 8,075	 90
Goodwill acquired through business combinations has been allocated to two cash-generating units for impairment testing 
purposes as follows:
UK Consulting (carrying value of goodwill £8,121,000 (2005: £8,121,000)) of which £8,075,000 (2005: £8,075,000) arises 
in the Company; and
Germany (carrying value of goodwill £6,753,000 (2005: £6,753,000)).
These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.
In both cases the recoverable amounts have been determined based on a value in use calculation. To calculate this, cash flow 
projections are based on financial budgets approved by senior management covering the following year. The discount rate 
applied to cash flow projections is 11%. Cash flows are extrapolated using a 4.0% growth rate, which represents the directors’ 
estimate of the minimum long term growth rate. Cash flows are calculated over a 20 year period which reflects the long term 
nature of the benefit to the Group of these investments. The calculation of value in use for both units is most sensitive to the 
following assumptions: 
Budgeted gross margins – the basis used to determine the value assigned to the budgeted gross margins is the average gross 
margins achieved in the year immediately before the budgeted year, adjusted for expected changes in efficiency.
Discount rate – this represents the Group’s risk adjusted weighted average cost of capital. 
Management believes that no reasonably possible change in either of the above key assumptions would cause the carrying 
value of the unit to exceed its recoverable amount.
•
• 50	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 50	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 51 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 51 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 51
11.	 Intangible	 assets	 continued
In September 2004 the Company acquired 100% of the issued share capital of Anite Systems GmbH for a consideration of 
£7 ,393,000. The consideration was satisfied in cash and in 1,848,938 shares issued by way of a vendor placing at 150p each. 
To partially fund the cash element of consideration the Company arranged a £5,000,000 euro denominated term loan with the 
Bank of Scotland.
The consideration, provisional fair value of acquired assets and resulting goodwill, is set out below:
      £’000
Cash consideration      5,019
Vendor placing shares (net of expenses)      2,374
Total consideration      7,393
Acquisition costs      508
Cost of investment      7,901
Fair value of net assets acquired      (1,148)
Goodwill	 	 	 	 	 	 6,753
The cost of investment was settled by VEGA Group PLC to the extent of £7 ,846,000 and the balance, £55,000, by its wholly 
owned subsidiary VEGA Technologies SAS.
A summary of the book and fair values of net assets acquired is set out below:
      Fair value of 
    Summary of  net assets 
    book values Adjustments acquired 
    £’000 £’000 £’000
Plant and equipment    145  –  145
Intangible assets   – 1,000 1,000
Trade receivables and prepayments    1,026  –  1,026
Amounts recoverable on contracts    143  195  338
Cash    264  –  264
Current liabilities    (1,238)  3 (1,235)
Deferred tax liability   – (390) (390)
Net	 assets	 	 	 	 340 	 	 808	 1,148
Following a detailed review after the acquisition VEGA identified a number of accounting policy adjustments requiring to  
be made. These adjustments principally relate to recognition of the intangible assets (and associated deferred tax liability)  
of customer relationships and order book. In addition, contracts were originally valued on a revenue recognition policy  
that recognises profit at completion or on achievement of a major milestone. VEGA’s policy is to recognise profit as the  
project progresses based on percentage complete. Therefore the contracts were revalued to be in line with the Group’s 
accounting policy. 
In the 12 months to 30 April 2004 Anite Systems GmbH made a profit before tax of £874,000. Results in the period from  
1 May 2004 to the date of acquisition were: Turnover £1,595,000; Operating Profit £273,000; Profit before tax £288,000.  
There was no other recognised income or expense in the period other than the profit above. In the eight months to  
30 April 2005 Anite contributed £439,000 to the Group’s Operating Cashflows.
During the year the accounting for the acquisition of Anite Systems GmbH has been finalised which has resulted in an 
amendment of the amounts recoverable on contracts previously published. The effect of this is to increase the fair value of 
amounts recoverable on contracts previously reported by £92,000. This adjustment has been reflected in the above figures  
in accordance with IFRS 3.  52	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 52	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 52	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 53 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 53 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 53
Notes continued
12.	 Deferred	 income	 tax
   Group	 and	 Company
     As	 at As at  
     30	 April	 2006 30 April 2005  
     £’000 £’000
Assets
Accelerated capital allowances     227 295
Temporary differences – Holiday pay accruals    – 123
 – Potential gains on share options    67 –
Restrictive covenant payments     (117) (126)
Deferred	 income	 tax	 asset    177 292
   Group
     As	 at As at 
     30	 April	 2006 30 April 2005  
     £’000 £’000
Liabilities
Temporary differences  – Germany    (52) (58)
 – Acquired intangibles    (83) (211)
Deferred	 tax	 liability    (135) (269)
The Group has unprovided deferred taxation losses of £960,000 (2005: £960,000) which relates mainly to capital losses arising 
on CBL Technology Ltd. These have not been recognised as there is insufficient evidence, as at the balance sheet date, to 
believe that these assets will be recoverable.
13. Trade and other receivables
 Group	 	 Company
   As	 at As at As	 at As at 
    30	 April 30 April 30	 April 30 April  
   2006 2005 2006 2005  
   £’000 £’000 £’000  £’000 
Due	 within	 one	 year
Amounts recoverable on contracts   7,367 6,667 5,601 4,706
Trade receivables  8,346 4,709 6,482 3,164
Amounts owed by Group undertakings  – – 557 785
Prepayments  455 200 401 154
Other debtors  82 184 82 181
  16,250 11,760 13,123 8,990
Due	 after	 more	 than	 one	 year
Amounts recoverable on contracts  1,496 1,502 1,496 1,502
Total  17,746 13,262 14,619 10,492 52	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 52	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 52	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 53 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 53 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 53
14.	 Trade	 and	 other	 payables
 Group	 	 Company
   As	 at As at As	 at As at 
    30	 April 30 April 30	 April 30 April  
   2006 2005 2006 2005  
   £’000 £’000 £’000  £’000 
Due	 within	 one	 year
Payments received on account   4,720 3,718 2,941 2,256
Trade creditors  3,248 1,787 3,049 1,506
Amounts owed to Group undertakings  – – 2,584 2,403
Other creditors  1,380 1,083 1,041 711
Accruals 	 4,464 4,610 3,504 3,351
Total  13,812 11,198 13,119 10,227
15.	 Financial	 liabilities
 Group	 	 Company
   As	 at As at As	 at As at 
    30	 April 30 April 30	 April 30 April  
   2006 2005 2006 2005  
   £’000 £’000 £’000  £’000 
Current
Bank overdraft   79 52 77 52
Bank loans  1,250 1,599 1,250 1,599
Interest rate swap  8 – 8	 –
Total  1,337 1,651 1,335 1,651
Non	 current
Bank loans  3,143 4,290 3,143 4,290
Total  3,143 4,290 3,143 4,290
Bank overdraft 
The overdraft facility of the Company is secured by a charge over the Company’s assets. The limit is £5,000,000 and the 
outstanding balance is repayable on demand. Interest is payable at 1.5% above Bank of Scotland base rate. The facility, 
which is renewable annually, is multi-currency, denominated in sterling, euros and US dollars. Subsidiary undertakings 
have euro denominated overdraft facilities provided by local banks of €500,000. Cash and cash deposits (all on call) earn 
interest at floating rates. 
Bank loans and interest rate swap
The Company has term loan facilities which relate to funding of its acquisitions and are secured by a charge over the Company’s 
assets. Interest on the five year euro term loan is floating and accrues at 2.25% above EURIBOR. In respect of the euro loan  
the Group has entered into an interest rate swap with the Bank of Scotland which fixes the interest rate payable at 5.3% until 
September 2007 after which interest is floating at 2.25% above EURIBOR subject to a cap of 6.75%. Repayment is by equal 
instalments which commence in February 2006 and continue at six monthly intervals until the loan is fully repaid in August 2009.
  54	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 54	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 55 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 55 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 55 54	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006
Notes continued
16.	 Provisions
    Property Staff   
    provisions termination  
    (non current) (current) Total  
Group   £’000 £’000 £’000
At 1 May 2005   288 36 324
Utilised   – (36) (36)
At	 30	 April	 2006	 	 	 288	 –	 288
     Property  
     provisions  
	    (non current) Total 
Company    £’000 £’000
At	 1	 May	 2005	 and	 30	 April	 2006	 	 	 	 200	 200
Property provisions comprise amounts provided for obligations to undertake remedial work on properties and onerous lease 
provision on rationalisation of the Group’s office portfolio. The provisions will be utilised over the remaining lease periods of  
up to eight years.
 
17.	 Issued	 share	 capital
   Group	 and	 Company
     As	 at	 	 As at  
     30	 April	 2006 30 April 2005  
     £’000 £’000 
Authorised
Equity: 54,000,000 (2005: 54,000,000) ordinary shares of 5p each   2,700 2,700
   Group	 and	 Company
      Nominal	 value	 	 	 	 	 	 Number	 £’000
Allotted,	 called	 up	 and	 fully	 paid
At 1 May 2005 and 30 April 2006    20,356,821 1,018
  54	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 54	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 55 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 55 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 55
18.	 Share	 based	 payments
a. Summary
 1996 ESOP  2004 LTIP  2004 ESOP  Total
 
    Weighted  Weighted  Weighted  Weighted 
    average  average  average  average 
    exercise  exercise  exercise  exercise 
    price  price  price  price 
   Number £ Number £ Number £ Number £
Outstanding at  
 1 May 2004 49,695 2.76 – – – – 49,695 2.76
Granted during the year – – 367,425 0.05 – – 367,425 0.05
Forfeited during the year – – – – – – – –
Expired during the year (2,500) 2.18 – – – – (2,500) 2.18
Outstanding at 30 April 2005 47,195 2.90 367,425 0.05 – – 414,620 0.37
Granted during the year – – 341,860 0.05 94,651 2.15 436,511 0.51
Forfeited during the year – – (29,756) 0.05 – – (29,756) 0.05
Expired during the year (16,000) 2.85 – –  – (16,000) 2.85
Outstanding	 at	 	 30	 April	 2006	 31,195	 2.92	 679,529	 0.05	 94,651	 2.15	 805,375	 0.41
Exercisable	 at	 	 30	 April	 2006	 	 31,195	 2.92	 –	 –	 –	 –	 31,195	 2.92
Exercisable at 30 April 2005 47,195 2.90 – – – – 47,195 2.90
b.	 The	 VEGA	 Group	 1996	 employee	 share	 option	 scheme
   Exercise Options  Options  
   price outstanding at Lapsed during outstanding	 at  
Date	 of	 grant  £ 30 April 2005 the year 30	 April	 2006
August 1995   2.85 8,500 (8,500) –
August 1996  2.90 16,000 (6,000) 10,000
April 1997   2.60 14,000 (1,500) 12,500
May 1998  3.45 8,695 – 8,695
Total   47,195 (16,000) 31,195
All of the above options were granted prior to November 2002. Under the transitional rules allowed for the adoption of IFRS 2 
none of these options have been recognised in the financial statements of the Group or Company.
Each of the above options are exercisable, subject to performance conditions, between the third and tenth anniversary of the 
grant date. The weighted average remaining contractual term of outstanding options is 1.2 years. Performance conditions relate 
to growth in earnings per share. No performance conditions were attached to the award in May 1998. 
  56	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 56	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 56	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 57 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 57 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 57
Notes continued
18.	 Share	 based	 payments	 continued
c. The VEGA Group 2004 long term incentive plan
  Grant Options   Options	 
  price outstanding at Granted during Lapsed during outstanding	 at	 
Date of grant £ 30 April 2005 the year the year 30	 April	 2006
September 2004 1.59 288,929 – (18,304) 270,625
November 2004 1.54 37,459 – – 37,459
January 2005 1.54 37,459 – – 37,459
February 2005 1.98 3,578 – – 3,578
August 2005 2.15 – 337,315 (11,452) 325,863
December 2005 1.98 – 4,545 – 4,545
Total  367,425 341,860 (29,756) 679,529
Each of the above awards vests, subject to performance conditions, on the third anniversary of the grant date. The weighted 
average remaining contractual term of outstanding options is 1.8 years. The weighted average fair value of the options 
outstanding at 30 April 2006 is £1.76 per share.
For 2005 and 2006 awards targets relate to the Company’s Total Shareholder Return (TSR) relative to the FTSE Software  
and Computer Services Index. 30% of an award will vest for median performance rising pro rata to 100% for upper  
quartile performance.
d. The VEGA Group 2004 employee share option scheme
   Grant Options  Options	 
   price outstanding at Granted during outstanding	 at	 
Date of grant  £ 30 April 2005 the year 30	 April	 2006
August 2005  2.15 – 94,651 94,651
The above options are exercisable, subject to performance conditions, between the third and tenth anniversary of the grant 
date. The remaining contractual term of outstanding options is 9.3 years. The weighted average fair value of the options 
outstanding at 30 April 2006 is £1.13 per share. For 2006 awards target relates to growth in adjusted EPS (before amortisation  
of acquired intangibles and exceptional items) which must be RPI plus 3% measured over three years.
The fair value of equity settled share options granted is estimated as at the date of grant using the Black Scholes Merton model 
with the following assumptions: 
     As	 at As at  
     30	 April	 2006 30 April 2005
Dividend yield (%)    1 1
Expected volatility (%)    80 80
Historic volatility (%)    80 80
Risk-free interest rate (%)    5 5
Life of options (years)    3 3
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. 
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not 
necessarily be the actual outcome. No other features of options grant were incorporated into the measurement of fair value. 
The total expense recognised in respect of share based payments is £144,000 (2005: £43,000).
  56	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 56	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 56	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 57 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 57 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 57
19.	 Related	 parties
These consolidated accounts include the financial statements of VEGA Group PLC and the following wholly owned subsidiaries: 
  Country of   
  incorporation and  Class and percentage 
Principal	 subsidiaries principal operation Principal activity of shares held
VEGA Informations Technologien GmbH Germany Programme and System Assurance Ordinary 100%
Crew Group Ltd UK Holding Company Ordinary 100%
VEGA Technologies SAS* France Programme and System Assurance Ordinary 100%
 
* Indirect subsidiary undertaking held by Crew Group Ltd. 
A full list of subsidiaries, including dormant companies, is available from the registered office. 
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and 
are not disclosed in this note. 
Key management of the Group are the executive directors and the Group Executive Team, details of whom are set out in the 
Board Report on Remuneration on pages 26 to 30. Short-term employee benefits expense (including pension contributions) 
relating to these individuals was £1,670,000 (2005: £1,861,000), share-based payments expense was £144,000 (2005: £43,000).
There have been no other related party transactions in the year.  58	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 58	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 58	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 59 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 59 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 59
Notes continued
20.	 Reconciliation	 of	 movements	 in	 equity
  Equity share Share  Retained Merger 
	 	 capital premium  earnings reserve Total equity 
Group £’000 £’000 £’000 £’000 £’000
At 1 May 2004 926 6,226 2,680 – 9,832
New shares issued (net of £400,000 expenses) 92 – – 2,281 2,373
Profit for the year – – 2,164 – 2,164
Share based payment – – 43 – 43
Equity dividends paid – – (287) – (287)
Exchange movements – – (13) – (13)
Gain on hedge of net overseas investments – – 16 – 16
At 30 April 2005 1,018 6,226 4,603 2,281 14,128
Effect of implementing IAS 32/39 – – (57) – (57)
At 1 May 2005 1,018 6,226 4,546 2,281 14,071
Profit for the year  – – 3,109 – 3,109
Share based payment – – 144 – 144
Equity dividends paid – – (432) – (432)
Exchange movements – – 54 – 54
Loss on hedge of net overseas investments – – (93) – (93)
Gain on interest rate hedge – – 49 – 49
At	 30	 April	 2006	 1,018	 6,226	 7,377	 2,281	 16,902
  Equity share Share  Retained Merger 
	 capital premium  earnings reserve Total equity 
Company £’000 £’000 £’000 £’000 £’000
At 1 May 2004 926 6,226 1,170 – 8,322
New shares issued (net of £400,000 expenses) 92 – – 2,281 2,373
Profit for the year – – 1,969 – 1,969
Share based payment – – 43 – 43
Equity dividends paid – – (287) – (287)
At 30 April 2005 1,018 6,226 2,895 2,281 12,420
Effect of implementing IAS 32/39 – – (57) – (57)
At 1 May 2005 1,018 6,226 2,838 2,281 12,363
Profit for the year – – 3,070 – 3,070
Share based payment – – 144 – 144
Equity dividends paid – – (432) – (432)
Gain on interest rate hedge – – 49 – 49
At	 30	 April	 2006	 1,018	 6,226	 5,669	 2,281	 15,194
The merger reserve arose on the acquisition of Anite Systems GmbH.
  58	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 58	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 58	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 59 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 59 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 59
21.	 Operating	 lease	 commitments
 Group	 	 Company
   As	 at As at As	 at As at 
    30	 April 30 April 30	 April 30 April 
   2006 2005 2006 2005 
   	 £’000  £’000  	 £’000  £’000 
Future	 minimum	 payments	 due:
Less than one year  15 44 14 44
Two to five years  2,206 2,480 1,324 1,660
Over five years  1,804 2,269	 1,084 1,216
  4,025 4,793 2,422 2,920
The Group leases its office premises on short term leases typically of three to five years’ duration with options to renew under 
generally similar terms. Leases on office premises are subject to periodic resetting of rentals to prevailing market rates. Motor 
vehicles are leased on three year contracts. 
22.	 Change	 of	 accounting	 policy	 The Group has adopted IAS 32 and IAS 39 with effect from 1 May 2005 and consequently recognised the fair value of its 
interest rate swaps in equity. This has resulted in the recognition of a liability of £57 ,000 at 1 May 2005. As allowed by IFRS 1 
‘First time adoption of International Financial Reporting Standards’ the provisions of IAS 32 and IAS 39 have not been applied  
to the comparative periods and are applied from 1 May 2005.
23.	 Financial	 risk	 management	 objectives	 and	 policies	 The Group’s principal financial instruments, other than derivatives, comprise bank loans, cash and short-term deposits. The 
main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various other financial 
instruments such as trade debtors and trade creditors, which arise directly from its operations. The Group also enters into 
derivative transactions, principally interest rate swaps and forward currency contracts. The purpose is to manage the interest 
rate and currency risks arising from the Group’s operations and its sources of finance. It is, and has been throughout the year 
under review, the Group’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the 
Group’s financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk. The Board reviews and 
agrees policies for managing each of these risks and they are summarised below. The Group’s accounting policies in relation  
to derivatives are set out in note 2.
Interest rate risk 
The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s long-term debt obligations.  
The Group’s policy is to manage its interest cost using a mix of fixed and variable rate debt. The Group’s policy is to keep its 
borrowings denominated in foreign currencies at fixed or capped rates of interest. To manage this mix in a cost-efficient manner, 
the Group enters into interest rate swaps, in which the Group agrees to exchange, at specified intervals, the difference between 
fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are 
designated to hedge underlying debt obligations.
Foreign currency risk
As a result of significant investment operations in Germany, the Group’s balance sheet can be affected significantly by 
movements in the GBP/euro exchange rates. The Group now seeks to mitigate the effect of its structural currency exposure by 
borrowing in euro. £4m of the Group’s investment in euro operations is hedged in this way. The Group also has transactional 
currency exposures. Such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s 
measurement currency, principally the euro. 
Credit risk 
The Group trades only with recognised, creditworthy third parties. Receivable balances are monitored on an ongoing basis  
with the result that the Group’s exposure to bad debts is not significant. With respect to credit risk arising from the other financial 
assets of the Group, which comprise cash and cash equivalents, and certain derivative instruments, the Group’s exposure to 
credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. 
There are no significant concentrations of credit risk within the Group.
Liquidity risk
The Group’s objective is to maintain adequate cash and overdraft facilities to fund its activities. Overdraft facilities are negotiated 
annually to give a minimum of £1m headroom above anticipated requirements. 60	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 60	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 60	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 61 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 61 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 61
24.	 Financial	 instruments
Fair values 
All financial instruments are held at fair value other than bank loans which are held at amortised cost. The fair values of short 
term assets and liabilities (including trade receivables, trade payables and borrowings), are not materially different to their book 
values due to their short maturity and floating rates. The book value of the long term debtor is also equivalent to its fair value as 
this debtor is recognised after discounting the future cash flows, over the period during which the balance will be received, at an 
appropriate rate. 
Interest rate risk 
The following table sets out the carrying amount, by maturity, of the Group’s financial instruments that are exposed to interest 
rate risk:
   Bank Total cash and Interest  
Group Cash overdrafts cash equivalents rate swap Bank loans 
As at 30 April 2006 £’000 £’000 £’000 £’000 £’000 
Within one year 2,873 (79) 2,794 8 (1,250)
1-2 years – – – – (1,250)
2-3 years – – – – (1,250)
3-4 years – – – – (643)
Total	 2,873	 (79)	 2,794	 8	 (4,393)
   Bank Total cash and Interest  
	 Cash overdrafts cash equivalents rate swap Bank loans 
As at 1 May 2005 £’000 £’000 £’000 £’000 £’000 
Within one year 3,492 (52) 3,440 – (1,599)
1-2 years – – – – (1,230)
2-3 years – – – – (1,230)
3-4 years – – – – (1,230)
4-5 years – – – – (600)
Total 3,492 (52) 3,440 – (5,889)
   Bank Total cash and Interest  
Company Cash overdrafts cash equivalents rate swap Bank loans 
As at 30 April 2006 £’000 £’000 £’000 £’000 £’000 
Within one year 2,501 (77) 2,424 8 (1,250)
1-2 years – – – – (1,250)
2-3 years – – – – (1,250)
3-4 years – – – – (643)
Total	 2,501	 (77)	 2,424	 8	 (4,393)
   Bank Total cash and Interest  
	 Cash overdrafts cash equivalents rate swap Bank loans 
As at 1 May 2005 £’000 £’000 £’000 £’000 £’000 
Within one year 2,352 (52) 2,300 – (1,599)
1-2 years – – – – (1,230)
2-3 years – – – – (1,230)
3-4 years – – – – (1,230)
4-5 years – – – – (600)
Total 2,352 (52) 2,300 – (5,889)
All bank loans are held at fixed or capped rates with the exception of £994,000 in 2005 which was held at floating rates and fully 
repaid in May 2005. Cash and overdrafts attract interest at floating rates.
Notes continued 60	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 60	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 60	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 61 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 61 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 61
24.	 Financial	 instruments	 continued
Hedging activities
Cash flow hedges
The Group has an interest rate swap agreement in place against its euro denominated loan whereby it receives a variable rate equal 
to EURIBOR and pays a fixed rate of interest of 3.05% on the notional amount. The swap is being used to hedge the exposure to 
changes in the fair value of its euro loan. The secured loan and interest rate swap have the same critical terms. 
Hedge of net investments in foreign entities 
Included in bank loans at 30 April 2005 is a borrowing of €7 ,386,000 which has been designated as a hedge of the net 
investments in the Anite Systems GmbH and is being used to reduce the exposure to foreign exchange risk. Gains or losses  
on the retranslation of this borrowing are transferred to equity to offset any gains or losses on translation of the net investments 
in the subsidiaries.
Financial assets and liabilities analysed by currency
  Book value 2005
   GBP EUR USD Total 
   £’000 £’000 £’000 £’000
Cash/(overdrafts)   1,163  2,330  (53)  3,440
Current portion of long term borrowings   (994)  (605)  –  (1,599)
Long term borrowings   –  (4,290)  –  (4,290)
Net	 borrowings	 	 	 169 	 	 (2,565) 	 	 (53) 	 	 (2,449)
Long term debtors   1,502  –  –  1,502
Other current assets   6,786  5,062  (2)  11,846
Other current liabilities   (9,237)  (3,389)  (2)  (12,628)
Total	 	 (780) 	 	 (892) 	 	 (57) 	 	 (1,729)
25.	 IFRS	 first	 time	 adoption	 impact	 on	 prior	 period	 accounts
The 2006 financial statements are the first full year statements since the conversion from UK GAAP to IFRS. The Group has 
taken advantage of the relevant exemptions provided by IFRS 1 for first time adoption. The conversion process resulted in 
adjustments to the prior period accounts, the impact of which is disclosed below. A full explanation of these adjustments was 
announced on 28 October 2005 and a copy is available on the website www.vega-group.com. 
The items detailed below under the heading ‘IFRS impact’ are a result of the following changes:
1) IFRS ‘First-time Adoption of International Financial Reporting Standards’
The Group has adopted IFRS 1 ‘First-time Adoption of International Financial Reporting Standards’ and has applied the 
following optional IFRS 1 exemptions:
IFRS 3 – Business combinations
Business combinations prior to 1 May 2004 have not been restated to comply with IFRS 3.
IAS 21 – The effects of changes in foreign exchange rates
Under IAS 21, exchange differences arising on the re-translation of foreign operations are taken directly to a separate 
component of equity. The Group has elected, under the provisions of IFRS 1, to set the historic translation differences  
on foreign subsidiaries to zero.
IFRS 2 – Share based payment
IFRS 2 is mandatory for accounting periods beginning on or after 1 January 2005. The Group has taken advantage of the 
transitional provisions of IFRS 2 in respect of equity-settled awards and has applied IFRS 2 only to equity-settled awards 
granted after 7 November 2002 that had not vested on or before 1 January 2005.
IAS 32 – Financial Instruments: Disclosure and Presentation and IAS 39 – Financial Instruments Recognition and 
Measurement
The Group has taken advantage of the transitional provisions of IAS 32 and IAS 39 and has not adopted these two standards 
early. They have been adopted from 1 May 2005. The comparative information for 2005 has not been restated from UK GAAP 
to IFRS. The impact of this change is described in note 22. 62	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 62	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 62	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 63 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 63
25.	 IFRS	 first	 time	 adoption	 impact	 on	 prior	 period	 accounts	 continued
2) IFRS 3 – Business combinations; IAS 36 – Impairment of assets; IAS 38 – Intangible assets
The Group has elected not to apply IFRS 3 retrospectively to business combinations that took place prior to 1 May 2004. The 
adoption of IFRS 3 and IAS 36 has resulted in the Group ceasing annual goodwill amortisation from 1 May 2004. As a result,  
the UK GAAP amortisation charge of £782,000 (Company: £536,000) has been reversed in arriving at the Group’s 2005 IFRS 
profit for the year. Under IFRS, the Group has recognised £1.0m of intangible assets arising out of the acquisition of Anite 
Systems GmbH in September 2004 relating to the value of its order book and customer relationships. This will be amortised  
on a systematic basis that reflects the expected pattern of economic benefits over a period that does not exceed four years.  
An associated deferred tax creditor of £390,000 has also been recognised (at the income tax rate applicable in Germany) and  
this liability will reduce as the intangible assets to which it relates are amortised. The amortisation charge for the year ended  
30 April 2005 is £281,000.
3) IFRS 2 – Share-based payment
IFRS 2 requires an expense to be recognised where the Group or Company buys goods or services in exchange for shares  
or rights over shares (‘equity-settled transactions’). The only impact of IFRS 2 on the Group and Company is the expensing  
of employees’ and directors’ share options and other share-based incentives using an option-pricing model rather than the 
intrinsic value of the award. Accordingly the charges calculated under UITF 17 (year ended 30 April 2005: £45,000) have been 
reversed and replaced with charges calculated in accordance with IFRS 2 of £43,000 for the year ended 30 April 2005. The 
effect of the revised policy has increased the Group’s 2005 profit before tax by £2,000. 
4) IAS 19 – Employee benefits
IAS 19 requires the Group to recognise in full liabilities in relation to employee benefits. As at 1 May 2004, the Group has 
recognised an additional £520,000 (Company: £361,000) of liabilities for holiday pay. The corresponding provision as at 30 April 
2005 is £663,000 (Company: £410,000). £72,000 arises as a result of the Anite acquisition. As a result, there is a reduction in  
the Group’s profit for the year of £71,000. This introduces seasonality into the Group’s result, because the holiday entitlement of 
employees is typically different at 31 October than at 30 April. 
Since publication of the conversion announcement on 28 October 2005 the Company has decided to adopt IFRS in its own 
accounts. Consequently a deferred tax asset has been established at 1 May 2004 of £108,000 and £123,000 at 30 April 2005. 
The balances have been fully utilised at 30 April 2006.
5) IAS 10 – Events after the balance sheet date
In accordance with IAS 10, dividends declared after the balance sheet date are not recognised as a liability in the financial 
statements as there is no present obligation at the balance sheet date, as defined by IAS 37 – Provisions, Contingent Liabilities 
and Contingent Assets. Accordingly, the final dividends for 2004 of £185,000 and 2005 of £305,000 (as recognised under 
previous GAAP) are de-recognised in the balance sheets for 1 May 2004 and 30 April 2005.
6) IAS 38 – Intangible assets
Computer software that is not an integral part of the related hardware is classified as an intangible asset under IFRS, whereas 
such assets were classified as tangible assets under UK GAAP . Reclassifications of £108,000 (Company: £74,000) have been 
made between tangible and intangible assets at 1 May 2004 and £135,000 (Company: £90,000) at 30 April 2005 accordingly.
The transition from UK GAAP to IFRS has no effect on cash flows generated by the Group or Company. The IFRS cash flow 
statement is presented in a different format from that required under UK GAAP with cash flows split into three categories of 
activities – operating activities, investing activities and financing activities. The reconciling items between the UK GAAP 
presentation and the IFRS presentation have no net impact on the cash flows generated.
 
Notes continued 62	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 62	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 62	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 63 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 63
25.	 IFRS	 first	 time	 adoption	 impact	 on	 prior	 period	 accounts	 continued
Consolidated	 Balance	 Sheets:
 As at 30 April 2005  As at 1 May 2004
   Reported IFRS Restated Reported IFRS Restated 
    UK GAAP   Impact  IFRS   UK GAAP  Impact   IFRS 
   £’000   £’000   £’000   £’000   £’000   £’000 
ASSETS
Non-current	 assets
Property, plant and equipment  1,179   (135)  1,044   1,046   (108)  938 
Goodwill  14,721   153   14,874   8,121   –   8,121 
Other intangible assets  –   675   675   –   108   108 
Deferred income tax assets  169  123  292   133  108   241 
   16,069  816   16,885   9,300  108   9,408 
Current	 assets
Trade and other receivables  12,970   92   13,062   11,945   –   11,945 
Prepayments  200   –   200   293   –   293 
Income tax  9   –   9   144   –   144 
Cash and short-term deposits  3,492   –   3,492   2,621   –   2,621 
   16,671  92   16,763   15,003   –   15,003 
Total	 assets  32,740  908   33,648  24,303  108   24,411
EQUITY	 AND	 LIABILITIES
Equity	 attributable	 to	 equity	 holders	 of	 the	 parent
Issued capital  1,018   –   1,018   926   –   926 
Share premium  6,226   –   6,226   6,226   –   6,226 
Retained earnings  4,264  339   4,603   2,907   (227)  2,680
Other reserves  2,281   –   2,281   –   –   – 
Total	 equity  13,789   339   14,128   10,059   (227)  9,832
Non-current	 liabilities
Interest bearing loans and borrowings  4,290   –   4,290   994   –   994 
Provisions  288   –   288   299   –   299 
Deferred income tax liabilities  58   211   269   –   –   – 
   4,636   211   4,847   1,293   –   1,293 
Current	 liabilities
Trade and other payables  10,535   663   11,198   9,956   520   10,476 
Interest-bearing loans and borrowings  1,651   –   1,651   1,792   –   1,792 
Income tax payable  1,788   –   1,788   1,018   –   1,018 
Dividend payable  305   (305)  –   185   (185)  – 
Provisions  36   –   36   –   –   – 
   14,315   358   14,673   12,951   335   13,286 
Total	 liabilities  18,951   569   19,520   14,244   335   14,579 
Total	 equity	 and	 liabilities  32,740  908   33,648   24,303  108   24,411 64	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 64	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 65 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 65
25.	 IFRS	 first	 time	 adoption	 impact	 on	 prior	 period	 accounts	 continued
Consolidated	 Income	 Statement:
   For the year ended 30 April 2005
     Reported IFRS Restated 
       UK GAAP   Impact   IFRS 
      £’000   £’000   £’000 
Revenue  	 52,602   –   52,602 
Net operating costs    (49,368)  254  (49,114)
Operating profit    3,234   254   3,488 
Finance costs    (386)  –  (386)
Finance income    59   –   59 
Profit before tax    2,907   254   3,161 
Income tax expense    (1,191)  194  (997)
Profit	 for	 the	 year    1,716   448   2,164
Notes continued 64	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 64	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 65 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 65
25.	 IFRS	 first	 time	 adoption	 impact	 on	 prior	 period	 accounts	 continued
Reconciliation	 of	 IFRS	 impact	 on	 Company	 profit	 for	 the	 year:
      Year ended  
      30 April  
      2005 
      £’000
UK	 GAAP	 profit	 for	 the	 year     1,449
IFRS	 adjustments
Amortisation of goodwill     536
Share based payments     2
Other employee benefits     (34)
Gain on hedge of investment in subsidiary     16
IFRS	 profit	 for	 the	 year     1,969 66	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 66	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 67
25.	 IFRS	 first	 time	 adoption	 impact	 on	 prior	 period	 accounts	 continued
Company	 Balance	 Sheets:
 As at 30 April 2005  As at 1 May 2004
  Reported IFRS Restated Reported IFRS Restated 
   UK GAAP Impact  IFRS  UK GAAP Impact IFRS 
  £’000 £’000  £’000  £’000 £’000 £’000
ASSETS
Non-current	 assets
Property, plant and equipment 900 (90) 810 880 (74) 806
Goodwill 7,539 536 8,075 8,075 – 8,075
Investments 8,187 – 8,187 341 – 341
Other intangible assets – 90 90 – 74 74
Deferred tax assets 169 123 292 133 108 241
  16,795 659 17,454 9,429 108 9,537
Current	 assets
Trade and other receivables 10,492 – 10,492 9,681 – 9,681
Income tax 9 – 9 94 – 94
Cash and short-term deposits 2,352 – 2,352 2,471 – 2,471
  12,853 – 12,853 12,246 – 12,246
Total	 assets 29,648 659 30,307 21,675 108 21,783
EQUITY	 AND	 LIABILITIES
Equity	 attributable	 to	 equity	 holders	 of	 the	 parent
Issued capital 1,018 – 1,018 926 – 926
Share premium 6,226 – 6,226 6,226 – 6,226
Retained earnings 2,342 553 2,895 1,238 (68) 1,170
Other reserves 2,281 – 2,281 – – –
Total	 equity 11,867 553 12,420 8,390 (68) 8,322
Non-current	 liabilities
Interest bearing loans and borrowings 4,290 – 4,290 994 – 994
Provisions 200 – 200 299 – 299
  4,490 – 4,490 1,293 – 1,293
Current	 liabilities
Trade and other payables 9,816 411 10,227 9,419 361 9,780
Interest-bearing loans and borrowings 1,651 – 1,651 1,590 – 1,590
Income tax payable 1,519 – 1,519 798 – 798
Dividend payable 305 (305) – 185 (185) –
  13,291 106 13,397 11,992 176 12,168
Total	 liabilities 17,781 106 17,887 13,285 176 13,461
Total	 equity	 and	 liabilities 29,648 659 30,307 21,675 108 21,783
Notes continued 66	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 66	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 67 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006	 	 67 68	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 68	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 68	 	 VEGA	 Group	 PLC	 Annual Report & Accounts 2006 VEGA is an independent consulting and 
technology company that specialises in 
Programme and System Assurance.
We apply consulting and technology solutions that enable 
clients to identify business value, manage risk and realise higher 
levels of success from their programmes and systems. 
With three decades of market domain experience, we have 
evolved a unique approach that assures client value is placed 
at the heart of business change and management, delivering 
exceptional levels of client results.
Contents
01	 Highlights
02	 Company 	 Overview
04	 Chairman’s 	 Statement
06	 Chief 	 Executive’s	 Review
08	 Operating 	 Review
16	 Financial 	 Review
18	 Board 	 of	 Directors
20	 	Shareholder	 Information	 	 and	 Financial	 Calendar
21	 Directors’ 	 Report
23	 Report 	 on	 Corporate	 Governance
26	 Directors’ 	 Remuneration	 Report
31	 	Statement	 of	 Directors’	 Responsibilities
32	 Independent 	 Auditor’s	 Report
33	 	Consolidated	 Income	 Statement
34	 Consolidated 	 Balance	 Sheet
35	 	Consolidated	 Cash	 Flow	 Statement
36	 	Consolidated	 Statement	 of	 Recognised	 	 Income	 and	 Expense
37	 Notes
About VEGA www.vega-group.com
VEGA Group PLC
2 Falcon Way, Shire Park
Welwyn Garden City
Hertfordshire AL7 1TW
United Kingdom
Tel: +44 (0)1707 391999
Fax: +44 (0)1707 393909
360 Bristol Business Park 
Coldharbour Lane 
Bristol BS16 1EJ
United Kingdom
Tel: +44 (0)117 9880033
Fax: +44 (0)117 9880034
Delme Place
Cams Hall Estate
Fareham
Hampshire PO16 8UX
United Kingdom
Tel: +44 (0)1329 223838
Fax: +44 (0)1329 238319
VEGA IT GmbH
Hilpertstrasse 20 A
D-64295 Darmstadt 
Germany
Tel: +49 (0)6151 82570
Fax: +49 (0)6151 8257799
Robert-Bosch-Strasse 7
D-64293 Darmstadt
Germany 
Tel: +49 (0)6151 82570
Fax: +49 (0)6151 8257171
VEGA Group PLC Annual Report & Accounts 2006
vega group plc
VEGA Technologies SAS
West Park, 4 rue Paul Mesplé 
31100 Toulouse 
France
Tel: +33 (0)567 77 19 99
Fax: +33 (0)567 77 19 98
Independent programme 
and System assurance
Annual Report & Accounts 2006