Annual Report 
and Accounts 2003
Group plc
Group
VT Group cover art 2003  9/6/03  2:51 pm  Page 4 1 Overview & ﬁnancial highlights
2 Chairman’s statement 
4 Chief executive’s review 
6 Support services
8 Shipbuilding
10 HR, Commercial and Partnerships
12 Financial review 
14 Board of directors 
16 Report of the directors 
19 Remuneration report 
25 Report of the independent auditors 
26 Consolidated proﬁt and loss account
27 Balance sheets 
28 Consolidated cash ﬂow statement
2 Reconciliation of net cash ﬂow to movement in net debt
29 Consolidated statement of total recognised gains and losses
27 Reconciliation of movements in shareholders funds
30 Notes to the ﬁnancial statements
48 Five year summary
49 Principal locations
50 Notice of Annual General Meeting
51 Proxy form
The existing Vosper Thornycroft logo and
name has been used without change since
the merger of the two companies in 1966.
The identity has served the company well
but has now been updated to reﬂect the
current broad-based businesses which 
form the company.
Group plc
1423 VT front art  03/06  9/6/03  2:19 pm  Page 2 VT Group is an international Government services provider. The group 
is divided into two business units, Support services and Shipbuilding.
Together these activities employ 10,000 people.
VT Group Annual Report 2003  01
2003 2002
£m £m %
Turnover 565 479 +18
Proﬁt before taxation, goodwill and exceptionals 41.5 37.5 +11
(Net debt)/cash excuding PFI (6.0) 4.2
Dividend per share 8.4p 7.8p +8
VT Support services
VT Support services comprises activities in
both the military and public sectors and
now accounts for over two thirds of group
turnover. Military support is tri-service and
includes training, platform and equipment
maintenance and facilities management,
while services for the public sector focus
on training and education, careers
guidance, and secure communications.
VT Shipbuilding
VT Shipbuilding designs and builds a wide
range of vessels for the Royal Navy and
navies throughout the world. Smaller boats
are also supplied to the commercial market.
Specialist marine equipment is provided to
both the naval and commercial sectors.
1423 VT front art  03/06  9/6/03  2:19 pm  Page 3 Chairman’s statement
I am delighted to be able to report in this, 
my ﬁrst annual statement as chairman, 
that the business is in good shape and 
has performed in line with our expectations.
This represents a strong performance against
a background of general stock market
volatility, and some economic uncertainty,
and reﬂects the long-term nature of the
businesses we are concentrating on.
Overall turnover has increased by 18 per cent
to £565m (2002: £479m) reﬂecting the full
year impact of recent acquisitions. Proﬁt
before tax and the amortisation of goodwill
and exceptional items was up by just under
11 per cent to £41.5m (2002: £37.5m), 
with earnings per share also increasing by
10 per cent to 16.6p (2002: 15.1p).
This performance has enabled the board to
recommend a ﬁnal dividend of 6.0 pence
giving a total dividend for the year of 8.4
pence per share, an increase of 7.7 per
cent over last year.
Paul Lester has undertaken a thorough
review of the entire business to position the
group as a leading provider of government
services internationally. We are concentrating
on two divisions, Support services and
Shipbuilding. Our Marine products business
has been reorganised and elements brought
within the Shipbuilding division.
A key theme of the year has been the
investments the group has been making to
enable us to achieve our growth targets for
future years. These include the new
Portsmouth Shipbuilding Facility and Private
Finance Initiative (PFI) contracts. They follow
the investments we have already made in
12 acquisitions over the past four years. We
have therefore been putting our cash
reserves to good use as well as improving
our cash management.
We reached agreement in March with the
South East England Development Agency
for the sale of our Woolston Shipyard for a
total consideration of £15m, with an
immediate initial payment of £7.5m.
Martin Jay Chairman
02 VT Group Annual Report 2003
1423 VT front art  03/06  9/6/03  2:19 pm  Page 4 This agreement gives rise to an exceptional
proﬁt of £4m. We have decided to use the bulk
of this cash receipt to make a £5m contribution
to the group’s principal pension scheme.
Overall it has been a year of notable
developments.
Our Support services business has continued
to grow strongly, with turnover up by over a
third. The two largest acquisitions to date -
VT Merlin and VT Grifﬁn - have bedded
down well and enjoyed further contract
success. VT Grifﬁn won the largest ever US
base maintenance and operations contract.
VT Merlin was named preferred bidder for
the contract to operate, maintain and
enhance the MoD’s high frequency
communications facilities both in the UK and
overseas. On the civil side VT has continued
to establish itself as a signiﬁcant player in
the growing UK education and skills sector.
In April 2003 our Shipbuilding business
successfully commissioned the new
Portsmouth Shipbuilding Facility on time
and within budget, ready for the start of
production for the Type 45 destroyer
programme. The transfer of staff from
Woolston is well underway and due for
completion by the year end. The new state-
of-the art facility will provide the platform to
make major improvements in productivity
and to compete effectively for contracts at
home and abroad. VT is well-placed to
secure a signiﬁcant share of the contract to
design, build and support the two new
aircraft carriers for the Royal Navy.
I should also note that during the recent
action in the Gulf, equipment supplied by VT
performed well. Indeed the VT-built
minehunter HMS Sandown was the ﬁrst
coalition vessel into the Iraqi port of Um-Qasr,
playing a major role in the mine clearance
operation in the Shatt al Arab waterway that
made possible the ﬂow of humanitarian aid.
A year ago we announced our intention to
appoint further non-executive directors 
to the board to ensure that we continue to
beneﬁt from the right mix of skills and
experience in light of the increasing importance
of support services to our overall business.
In September, Andrew Given joined the
board having been successively Group
Finance Director and then Deputy Chief
Executive of the international IT services
group Logica. In January David Thorpe was
appointed to the board, having been most
recently President of Europe for Electronic
Data Systems. They are very welcome
additions to the board.
We also announced a year ago that it was
Lord Wakeham’s intention to retire from the
board following the Annual General Meeting.
I wish to place on record my thanks for the
immense contribution he has made to the
company over seven years as chairman and
in the last year as deputy chairman, and for
the support and wise counsel he has given
over that time. We wish him well in retirement.
On 19 May 2003, David Barclay joined the
board as a non-executive director. David is
Vice Chairman of the investment bank
Dresdner Kleinwort Wasserstein and has
been involved as a ﬁnancial advisor to the
group since ﬂotation. He has a wealth of
knowledge and experience of the VT Group
and will bring to our deliberations an
important City perspective.
Under the new board arrangements 
Andrew Given will chair the audit committee
and fulﬁl the role of senior independent
director, while David Thorpe will chair the
remuneration committee.
The company is in good shape and well-
placed to continue the strong growth we
have seen in Support services, to capitalise
on the strategic Shipbuilding asset we now
have at Portsmouth, to maximise the
returns from all the investments we have
made and to exploit the numerous
opportunities to expand our business in
overseas markets. In this way I am
conﬁdent that VT Group plc will continue 
to deliver excellent value to its shareholders. 
VT Group Annual Report 2003  03
Dividends per share pence
8.4
7.8
7.3
6.7
6.2
2003 2002 2001 2000 1999
Order book £m
2,031
1,551
1,117
0.735
0.698
2003 2002 2001 2000 1999
1423 VT front art  03/06  9/6/03  2:19 pm  Page 5 Chief executive’s review
Having completed my ﬁrst nine months as 
Chief Executive, I am very pleased to report 
a strong performance from the company.
Obviously much of the performance must 
be attributed to Martin Jay as a result of his
stewardship of VT Group until July 2002. 
The business is in good shape and I 
believe can continue to produce double
digit growth in proﬁt before tax this year and
in the foreseeable future.
There is always room to improve and we
have identiﬁed a number of key performance
improvement targets to help us achieve this:
Cash
As can be seen from the results, operating
cash generation pre exceptional items at
£57m has been particularly strong. We 
have embarked on an investment in the 
new Portsmouth Shipbuilding Facility (£50m)
together with a number of PFI and Public
Private Partnership (PPP) projects (£80m).
These projects will deliver substantial long
term beneﬁts but we need to generate cash
and borrow funds now to create the project
vehicles. During 2003/04 a continued focus
on cash management will help provide the
working capital that is needed to fund our
growth.
Procurement 
We have typically spent £350m annually
with 22,000 suppliers. During 2002/03 
we have already reduced this number to
8,000 and hence improved our purchasing
power considerably. We are in the process
of establishing around 1,000 preferred
suppliers who will provide over 60% of our
requirements. Close relationships with these
suppliers will result in reduced product and
service purchase costs as well as
administration costs. We have set an
internal goal of saving £10m in total over the
next three years by improving our supply
chain management.
Information Technology (IT)
IT is the “glue” that keeps our business
performing. We currently spend around
£7.5m per annum, which is typical for a
business of our size. However, as a result 
of a number of acquisitions we now have a
diversity of hardware and software. We have
04 VT Group Annual Report 2003
Paul Lester Chief Executive
1423 VT front art  03/06  9/6/03  2:19 pm  Page 6 appointed a chief information ofﬁcer who
has already identiﬁed a number of areas for
improvement. It is unlikely that we will
reduce our level of expenditure, but will
focus on improving the delivery of our
products and services to our customers.
We also have the basis of a knowledge
management system which will enable best
practice to be shared through the group.
This is particularly important for our Support
services business which relies on applying
well proven processes on new contracts to
deliver customer performance requirements
and acceptable returns.
People
VT is a people business. Including our share
of the joint ventures we employ in excess of
10,000 and our customers rely on the
performance of our people to deliver
products and services to meet their
demanding needs. We have introduced a
programme to establish a performance
culture and increase individual contributions.
We must continue to initiate and lead major
change programmes to deliver business
case beneﬁts. The motivation of our
employees is critical to our success.
Customers and Partners
During the past twelve months we have
worked hard at developing improved
relationships with our customers and
partners. In particular, we have held a
number of senior management workshops
with BAE Systems on a variety of subjects.
This has resulted in establishing a way
forward on both some speciﬁc projects as
well as a general understanding of the
export warship market. We have also
developed an excellent working relationship
with BAE Systems on the Type 45 and the
Future Carrier (CVF) programmes. Our
performance history of delivering on time
and to cost continues to hold us in good
stead with the Ministry of Defence (MoD).
Our growing education business puts us 
VT Group Annual Report 2003  05  
in a position as one of the largest private
providers of education services to the
Department for Education and Skills. Also,
in the USA, VT Grifﬁn has continued to 
grow and is now a well established leading
provider of facilities management for the
Department of Defense.
Looking ahead, we have a number of
exciting opportunities. The commencement
of the Type 45 programme gives an
excellent platform for the next four to ﬁve
years for Shipbuilding to build upon. 
During 2003/04 we will intensify our
discussions with BAE Systems/Thales and
MoD regarding our involvement in the
Future Carrier (CVF) programme. If
successful, the CVF programme will provide
VT with a substantial workload both for
design work and manufacturing. Design will
commence during the 2003/04 year with
manufacturing starting around 2006. The
opportunities in the export market for ships
are also encouraging with a number of
countries requiring well equipped Offshore
Patrol Vessels or Fast Attack Craft. The
need to protect individual countries’
economic zones as well as the protection 
of coastlines has created a signiﬁcant
requirement for this type of vessel which VT
has a good track record of providing.
Needless to say, competition will be strong
and in many cases the governments
concerned require manufacturing to take
place at facilities in their own countries. 
As already demonstrated by our contract
with Elefsis in Greece, we are more than
capable of meeting the needs of technology
transfer and constructing ships to our
design offshore.
In Support services, the market in the UK
Defence sector remains good. There are a
number of PFI/PPP opportunities ranging
from airﬁeld services and military ﬂying
training to training the personnel of all three
services. A large PFI/PPP project can take
two to three years from the initial tender up
to contract implementation. We therefore
need to manage our bid costs carefully as
well as being very selective in terms of what
we should bid for. Nevertheless the projects
mentioned are all potentially multi billion
pound contracts and represent a real
opportunity for VT and our partners.
The defence market in the USA is the
largest individual market of its kind in the
world and is estimated to be around ten
times the size of the UK market. We have
therefore budgeted to increase our business
development activity to position ourselves 
to win more work. We have an excellent
base in the USA with VT Grifﬁn and, with
their track record and the skills we possess
elsewhere in the group we should see an
increasing USA order book from 2004
onwards.
The UK education market is potentially
larger than the defence market, but it is 
in its infancy regarding outsourcing to the
private sector. We have established
ourselves as a major provider of services 
to the Department for Education and Skills
and are well placed to continue to grow this
business sector.
There are ample opportunities for VT Group
to continue to grow. We will continuously
seek to improve our performance in order to
maximise the beneﬁts of this growth for our
customers, employees and shareholders.
Proﬁt before tax, goodwill and exceptionals £m
41.5
37.5
35.4 35.5
34.4
2003 2002 2001 2000 1999
Turnover £m
565
479
379
274
241
2003 2002 2001 2000 1999
1423 VT front art  03/06  9/6/03  2:19 pm  Page 7 Support services
The pattern of strong growth of our Support
services business has been maintained over 
the past year. Turnover has increased by 
36 per cent to over £400m. This growth has
been balanced across all the main areas of 
our Support services activity. Organic growth
was 9 per cent, with the balance achieved
through acquisition. VT Support Services is 
now focussed on four main areas of activity
servicing public sector clients. These are UK
defence, US defense, communications and
education and skills.
06 VT Group Annual Report 2003
Operating review
UK Defence
The UK defence market has remained - at
over 40 per cent of turnover - the largest
part of our Support services business.
Flagship Training Limited, one of our two
joint ventures with BAE Systems and now in
its seventh year of operation, continues to
perform strongly. It has completed the new
Navigation Training School project for the
Royal Navy, a major turnkey project including
the design and construction of the building,
and the provision of training simulators and
other equipment. During the year it has
continued to grow its business. It secured
three signiﬁcant export contracts for Brunei,
Kuwait and Romania and has built on its
existing long term relationship with the
Royal Navy by securing the right to be prime
contractor for all construction projects across
the RN’s training estate through to 2011.
In September VT and BAE Systems, bought
out Johnson Controls’ 26 per cent
shareholding in Flagship and now have a
50:50 holding in the joint venture. This will
facilitate the use of Flagship as a vehicle for
the two companies to expand their naval
training activities.
Fleet Support Limited (FSL), our second
joint venture with BAE Systems, has been
awarded a 10 year, £700m partnering
contract by the Secretary of State for
Defence. This extends FSL’s existing
contract to manage the Fleet Maintenance
and Repair Organisation at Portsmouth and
signiﬁcantly increases FSL’s capabilities for
ship maintenance, facilities management
and logistics. It conﬁrms FSL as a long-term
strategic partner to the MoD.
FSL’s reputation for timely delivery and
competitiveness has been recognised with
two signiﬁcant contract wins. In December FSL
won the contract to repair HMS Nottingham,
the Type 42 destroyer damaged off Australia.
In March, it was awarded a contract to reﬁt
two former Royal Navy Type 22 frigates -
HMS Coventry and HMS London - that
have been sold to the Romanian Navy.
Taken together these contracts are worth
around £50m and will provide FSL with a
Simon Tarrant MD Support services
1423 VT front art  03/06  9/6/03  2:19 pm  Page 8 core workload for at least the next year. 
The increased activities in Portsmouth Naval
Base will require additional manpower over
the next 18 months reversing decades of
decline. There are substantial opportunities
to achieve operational efﬁciencies between
FSL and VT’s shipbuilding activities as the
new shipyard facility at Portsmouth
becomes fully operational later in 2003.
VT has completed the construction phase
of the Somerset Avon and Gloucester Fire
Training School PFI on time and to budget.
The school is now fully operational with the
ﬁrst training courses commencing in April
2003. The project is worth £50m over the
25-year concession period.
Our growing involvement in ﬁre training with
both the MoD and Fire Authorities was boosted
by selection as preferred bidder for a Fire
Training School PFI to be built in South Wales.
VT Aerospace is a member of a consortium
tendering for the Airﬁeld Support Services
PPP . During the year this consortium which
includes LEX and Air BP was shortlisted
along with two other bidders. This opportunity
is worth over £1bn and covers the provision
of ﬁre ﬁghting, vehicle driving and
maintenance, and specialist vehicles for all
of the RAF airﬁelds worldwide. The selection
of preferred bidder for this contract is
expected during the next ﬁnancial year.
US Defense
VT Grifﬁn has continued to grow strongly
under VT. It secured a notable contract win
during the year for the management of Fort
McCoy, a reservist base in Wisconsin. The
ﬁve-year contract worth $120m became
effective in January. This represents the
largest contract ever let to the private sector
by the US Department of Defense for base
maintenance and operation. VT Grifﬁn is
now well-placed to exploit the increasing
opportunities that will arise as the DoD
seeks to extend its outsourcing programme.  
Communications
VT’s recent acquisition, VT Merlin, had a
good year, delivering on current contracts
and winning important new business.
VT Group Annual Report 2003  07  
VT Merlin has successfully completed the
design and build of a new short and medium
wave transmission station in Oman for the
BBC World Service. Work on this contract
started in March 2000 and the station is now
providing a 24 hours broadcast service.
VT Merlin is also a 20% shareholder in the
Alert JV that won the 30 year PFI contract
with the Defence Communications Services
Agency (DCSA) for a new Submarine
Communications Facility. VT Merlin is
responsible for the design and build of the
facility, and for its operation and maintenance.
The project is running to programme and
budget, with the transmitter station built and
fully operational.  This is successfully providing
an interim service whilst the receivers, which
have been fully tested, are installed on the
submarines.
In March VT Merlin was selected as preferred
bidder for the Defence High Frequency
Communications Service contract, further
strengthening its relationship with the DCSA.
The 15 year Public Private Partnership
contract is expected to be ﬁnalised in June
2003 and will be worth £220m. Under the
contract VT Merlin will operate, maintain 
and enhance the MoD’s High Frequency
Communications Facilities in the UK and
overseas that are used by all three armed
services.
Education and skills
During the year VT has consolidated its
position as a signiﬁcant player in the UK
education and skills market, an area that is an
important priority for government and which
overall has seen substantial increases in funding.
VT Plus Training is the UK’s second largest
private sector provider of vocational, work-
based training with over ten years’
experience. Through over 40 regional ofﬁces
it has a national presence and is responsible
for delivering modern apprenticeships for
over 10,000 young people. It is growing
strongly and has expanded its service
offering during the course of the year from
training in the hospitality and engineering
sectors into new vocational areas including
sport and recreation and residential care.
VT Education has developed a signiﬁcant
business, supplying specialist services in
support of education - including schools
inspection, training and consultancy, and
facilities, ﬁnancial and personnel
management - to both central and local
government. During the year it won a new
schools inspection contract from OFSTED.
The contract will commence in September
2003 and covers the inspection of 185
schools. OFSTED has a policy of reducing
the number of suppliers with the intention
that each of those selected undertakes a
larger number of inspections. Winning this
contract is therefore a critical step towards
VT Education increasing its market share in
this area.
VT Education was also selected in April 2003
as preferred bidder to partner Surrey County
Council for the Surrey School Support
Service. A ﬁnal contract is expected to be
agreed in June and to become effective in
September. The initial contract for Surrey
schools is for a seven-year period and is
valued at around £100m. Under the
contract the joint venture company will
provide a range of school improvement
services.  Success in Surrey provides VT
Education with the opportunity to develop a
stand-alone business providing quality
services to other schools and local
education authorities around the country.
VT Careers Management, our group of
companies that provides careers advice and
guidance for young people and adults, is
now fully operational as part of the
government’s new Connexions service.
This service is for 13 to 19 year-olds, and
brings together all the various support
services for young people, including careers
guidance.  Within local Connexions
Partnerships VT Careers Management has
secured contract renewal for careers
services in all eight areas in which it has
been operating to date.
Above HMS Nottingham undergoing repairs at 
FSL Portsmouth following damage off the coast 
of Australia.
Right The Somerset Avon and Gloucester Fire Training
School is now fully operational.
1423 VT front art  03/06  9/6/03  2:19 pm  Page 9 Shipbuilding
The year has been one of change and transition
for our Shipbuilding business, with our move
from Woolston to Portsmouth, existing
contracts nearing completion, preparation for
the start of production on the Type 45 and the
restructuring of our Marine products business.
VT has to date spent £41m of its committed
£50m of investment to develop its new
Portsmouth Shipbuilding Facility. It is the
ﬁrst purpose-built shipyard constructed in
Britain for many years and is Europe’s most
advanced naval shipbuilding facility. The
new facility will provide two large covered
construction halls for unit and ship assembly.
It will also have the latest manufacturing
plant and facilities for advanced outﬁtting.
Its opening this year will mark the start of 
a new era for VT’s Shipbuilding business. 
The construction programme has proceeded
on time and to budget. At the end of April
2003, the new facility passed its formal
Production Readiness Review carried out 
by BAE Systems, the Type 45 prime
contractor, with the involvement of the
MoD’s Defence Procurement Agency. This
was followed by a commissioning phase
prior to the ﬁrst cutting of steel in mid-May.
In parallel with the commissioning of
Portsmouth, the Woolston Shipyard has
been sold to the South East England
Development Agency. Nearly half of the
Woolston workforce of 1,000 have now
completed the transfer to Portsmouth, with
the remaining staff scheduled to complete
the transfer by September. VT aim to vacate
the Woolston site by the end of the year.
The investment in Portsmouth was made
possible by VT’s contract to construct and
outﬁt major blocks for each of the ﬁrst six
Type 45 destroyers. Work on trials masts to
test the radar systems for the Type 45 is
underway. Production of the Type 45 blocks
will start a few months later than originally
anticipated in the early autumn.
VT has a strong reputation for delivering
ships to its customers on time and to a high
standard. Satisfactory progress has been
made through the year with existing
contracts. Under VT’s prime contract to
supply two Survey Vessels to the MoD, the
ﬁrst vessel, HMS Echo, was successfully
08 VT Group Annual Report 2003
Operating review
Andrew Bunney MD Shipbuilding
Terry Madden MD Marine products
1423 VT front art  03/06  9/6/03  2:19 pm  Page 10 handed over and commissioned and the
second, HMS Enterprise, is about to
commence sea trials.
The ground-breaking PFI contract to supply
three River Class Offshore Patrol Vessels for
the Royal Navy has also passed a number
of important milestones. The First of Class
vessel, HMS Tyne, has now been accepted
into service; the second, HMS Severn, was
launched in December and is about to start
sea trials and the third vessel is due to be
launched in June 2003.
As these contracts near completion 
VT Shipbuilding has been faced with a
short-term gap in production until the work
on the Type 45 programme commences. 
As a consequence the company had to
issue a precautionary redundancy notice for
up to 160 employees. In the event the
company was able to take steps to mitigate
the impact of this notice and to avoid the
need for any compulsory redundancies.
Some of its shipbuilding workforce will be
temporarily transferred to its ship reﬁt and
repair joint venture Fleet Support Limited to
assist with an increased workload resulting
from recent contract wins, illustrating one of
the beneﬁts of co-location at Portsmouth.
Others will commence work on the
construction of the barge required for
transporting Type 45 modules to Scotland
for assembly. The balance of 70 staff have
volunteered to take redundancy.
VT Shipbuilding stands to beneﬁt from the
announcement by the Secretary of State for
Defence in January to place a contract with
BAE Systems in partnership with Thales to
design and deliver two new aircraft carriers
for the Royal Navy. In this announcement
the Secretary of State indicated his belief
that the carriers would be built by a
combination of four yards including VT at
Portsmouth. VT is closely involved in
discussions with the BAE Systems/Thales
team about both the level and nature of
work it is best placed to carry out on the
VT Group Annual Report 2003  09
programme. We remain conﬁdent of securing
around 20 per cent of the production hours on
the carrier programme, as well as participating
in the design and support activities.
VT has launched its Skills for Life initiative to
recruit and train the 1,000 additional employees
it is likely to need for the carrier programme.
This has been designed to equip staff with
skills that go beyond shipbuilding to ensure
that when the peak requirements of the
carrier have been met, they can apply those
skills elsewhere in the VT Group.
On the export front, VT has completed a
signiﬁcant proportion of its share of the
work as part of the technology transfer deal
with the Greek shipyard Elefsis to supply
three Super Vita Fast Attack Craft for the
Hellenic Navy. We are currently in
discussion with Elefsis about two follow-on
Fast Attack Craft with a potential contract
value to VT of £100m. In addition, Elefsis
and VT have been solely nominated to
submit proposals for a new corvette for the
Hellenic Navy.
We have a number of other opportunities in
the export market. VT has been short-listed
to supply, under a technology transfer deal,
up to seven patrol vessels of varying sizes
to the New Zealand Navy and is also bidding
to supply three Ocean Patrol Vessels to
Oman. A preferred bidder is expected to be
selected by the end of the year on each of
these programmes.
The Mirabella V Project to build the world’s
largest composite sloop-rigged super yacht
is moving towards completion. This has proved
to be a challenging programme but despite
this, the yacht is due to be launched this
summer and delivered by the end of the year.
VT Halmatic continue to grow through
contract wins and some acquisitions.
During the year they acquired the commercial
products of CARA (a builder of small
composite boats), from which the ﬁrst product
has been delivered to Clydeport. They also
won a signiﬁcant contract from Associated
British Ports (ABP) Southampton for the
lease and support of pilot and port vessels.
The ﬁrst new vessels under this scheme are
due for delivery in the summer.
VT announced in March its decision not to
make any further signiﬁcant new investments
in Marine products. This has involved
withdrawing from oil and gas activities,
closing a number of sites and integrating
the residual motion and electrical controls
businesses into an enlarged Shipbuilding
division. The reorganisation will be completed
by mid-summer with the closure of two
sites, including its Houston operation and
the consequent sale to the Wood Group plc
of the associated intellectual property in
April 2003. The reorganisation is on target
for completion in line with the ﬁnancial
provision made at the half year.
Above Paciﬁc 32 and Arctic 22 patrol boats 
built by VT Halmatic for the UK Maritime and
Coastguard Agency.
Right The new Portsmouth Shipbuilding Facility 
taking shape, Spring 2003. 
1423 VT front art  03/06  9/6/03  2:19 pm  Page 11 HR
During the past twelve months our new
businesses have been integrated into the
VT Group. This has changed the content
and composition of VT with differing cultures
entering and impacting the business. We
have commenced a programme to establish
common values and standards across all
our operations.
As a response to the growth of the group
we have also reviewed our management
development programmes. The forthcoming
ﬁnancial year will see a greater emphasis on
both succession planning and management
development.
We have invested in a new HR system,
which will enable all our businesses to
operate and report using standard data,
timetables and performance criteria. This 
will enable us to manage all divisional
payrolls from our new head ofﬁce site in
Hedge End, Southampton. The majority of
head ofﬁce staff relocated to these new
ofﬁces at the beginning of December 2002
and the move has been well received by all.
At our annual management conference in
March 2003 senior teams from all our
businesses met and worked on common
issues. The resulting action plan will be
regularly reviewed in both the individual
businesses and also at future management
communications meetings.
We have conducted an independent health
and safety audit across all businesses and
as a result we have further improved our
processes to reﬂect best practice.
Our participation in the forthcoming CVF
programme has provided VT with a unique
opportunity to review both skill requirements
and our training and development offerings.
Work has begun on our ‘Skills for Life’
programme. This will provide new recruits
with the opportunity to gain, after ﬁrst
completing a new modern apprenticeship, 
a wide range of further qualiﬁcations,
including at degree level. Additionally, 
we are establishing a route for existing
employees to gain recognition for their prior
learning experiences so that they too can
pursue an appropriate level of qualiﬁcations.
We believe the combination of formal
qualiﬁcations and diverse work experience
across the group will provide a strong
foundation for future employment either
within or outside VT.
10 VT Group Annual Report 2003
Commercial
The group commercial organisation comprises
a small central team with responsibility for
maintaining control of bid processes,
conformity with legal and statutory requirements,
including the appropriate OECD conventions,
and minimising contract risks.
Each operating division is responsible for
negotiating its own contracts in accordance
with group commercial guidelines.
Group commercial has assisted in
negotiating and completing around £1 billion
of new contracts during the ﬁnancial year.
Major contracts secured include education
services, VT’s share of the Type 45 destroyer
contract, fabrication work for a nuclear
treatment plant, re-engining minehunters for
the Hellenic Navy, a new 11 year partnering
agreement for Fleet Support Limited,
extensions won by Flagship Training Limited
for Royal Navy and facilities accommodation,
facilities management services won by 
VT Grifﬁn for the US Fort McCoy army base,
a ﬁre ﬁghting training school in South Wales
and the provision of new vessels and
services for Associated British Ports.
Group commercial’s responsibility has also
been extended to include our group
purchasing initiative to improve cash ﬂow
and operating proﬁts.
Operating review
John Brown HR Director
Dick Taylor Group Commercial Director
1423 VT front art  03/06  9/6/03  2:19 pm  Page 12 VT Group Annual Report 2003  11 
Partnerships
VT Partnerships fulﬁls two functions within
the group. It provides the central support 
for group business development, including
communications and marketing. It also
manages VT’s shareholding in our two joint
ventures with BAE Systems – Flagship Training
Limited and Fleet Support Limited.
The group business development function
was centralised to provide core expertise on
mergers and acquisitions, to be responsible
for major PPP/PFI bids, to co-ordinate group
marketing and to lead the corporate strategic
planning process. Rationalisation of these
activities has realised signiﬁcant savings,
improved quality and reduced risks.
A new group corporate identity was
successfully launched in August 2002.
Both Flagship Training Limited and Fleet
Support Limited continue to perform
strongly and build upon their reputation 
for quality delivery.
Simon Withey MD Partnerships
1423 VT front art  03/06  9/6/03  2:19 pm  Page 13 Financial review
2003 was a year of transition following the
acquisitions made last year.
Total group turnover increased by 18% to 
£565m. This includes a contribution of £145.5m
(2002: £62.1m) in respect of acquisitions made
last year. Support services grew by 36% to £424m
and now represents 75% of group turnover.
Proﬁt and Loss Account
Reported pre-tax proﬁt before goodwill
amortisation and exceptional items was
£31.1m.
Reported pre-tax proﬁt was affected by
exceptional items in both 2003 and 2002. 
In order to allow comparison of the year 
on year results, the growth in underlying
pre-tax proﬁt is shown below:
2003 2002
£m £m
Reported pre-tax proﬁts
before goodwill and
after exceptional items 31.1 36.8
Reorganisation costs 14.4 0.8
Proﬁt on sale of property (4.0) -
Proﬁt before tax 41.5 37.6
Pre-tax proﬁts grew by 10.5%.
Proﬁts are stated before the sale of Woolston
(which provided a net contribution of £4.0m),
the reorganisation costs associated with the
move of the shipyard from Woolston to
Portsmouth and the reorganisation of the
Marine products business.
The tax charge for the year was £8.1m
(2002: £10.7m) representing an effective 
tax rate pre-goodwill, of 26% (2002: 29%).
Taking into account the share split, earnings
per share before goodwill amortisation and
exceptional items was 16.6p (2002: 15.1p)
an increase of 10%.
The proposed ﬁnal dividend of 6.0p per
share gives a cumulative dividend for 2003
of 8.4p, up 7.7% on 2002.
Cashﬂow
During the year there was a net cash
outﬂow of £41.5m (2002: £44.5m).
Operating cashﬂow, before exceptional
items, was £57.4m (2002: £53.3m), which
converts 165% of our operating proﬁt, 
pre-exceptional items and goodwill, into cash.
12 VT Group Annual Report 2003
Chris Cundy Finance Director
1423 VT front art  03/06  9/6/03  2:19 pm  Page 14 The working capital movement reﬂects the
strong emphasis given to cash generation.
Capital expenditure, excluding investment in
PFIs, for the year was £32.0m. This high
level of expenditure reﬂects the investment
in new shipbuilding facilities at Portsmouth.
Net debt at 31 March 2003 was £80.9m
(2002: £37.3m). This can be analysed
between recourse and non-recourse debt,
to fund PFI projects, as follows:
2003 2002
£m £m
Cash 29.5 71.0
Bank loans and overdrafts (13.8) (16.6)
Loan notes and deferred consideration (21.7) (50.2)
(6.0) 4.2
Non-recourse debt on PFI projects (74.9) (41.5)
(80.9) (37.3)
Non-recourse debt is excluded from the
group’s banking facility covenants but is
presented as a liability in the group’s
balance sheet.
Private Finance Initiatives
VT Group’s PFI portfolio consists of six
projects, three of which are in their operational
phase. In 2003 PFI contributed £20.1m to
turnover and £0.3m to proﬁt before tax.
Funding for the projects is via long-term
loans which are non-recourse to VT Group.
• The offshore patrol vessels and ﬁre 
training schools are contracted through 
entities in which VT Group owns 100% of 
the equity. Non-recourse loans of 
£74.9m to fund assets under construction 
are included in short (£4.5m) and long term
(£70.2m) creditors in the balance sheet.
• In addition to the above, our share of 
non-recourse debt in which VT Group holds
a minority stake in the special purpose 
vehicle was £10m at March 2003. This is 
included as a liability within investments in 
joint ventures on our balance sheet.
VT Group Annual Report 2003  13
Treasury Policies 
The group’s tax and treasury function is
responsible for managing the group’s
exposure to ﬁnance risks.
The group treasury function operates in line
with policies set by the board. The primary
objectives are to:
• manage interest rate and foreign 
currency exposure
• provide cash management
• ensure the availability of facilities to 
ﬁnance new investment, working capital 
and guarantees
The board has a conservative policy
towards the investment of cash. Treasury
instruments are used only to reduce risk
and speculation is not permitted.
The group has bank facilities that can either
be drawn as borrowings or to support
performance bonds and advance payment
guarantees. At 31 March 2003 the group
has undrawn committed bank credit facilities
of £60m.
Pensions
VT Group has three pension schemes
accounted for as deﬁned beneﬁt schemes.
FRS17 Retirement Beneﬁts was issued in
November 2000 to replace SSAP 24 for
accounting periods ending on or after 
22 June 2003. In July 2002 the Accounting
Standards Board delayed the full
implementation of FRS 17 until 2005,
following an announcement by the
International Accounting Standards Board
that it would also issue a new standard.
For 2003 we have continued to apply the
transitional rules and disclosures. FRS 17
requires the market value of assets and
liabilities for deﬁned beneﬁt schemes to be
calculated and included in the balance
sheet. At 31 March 2003 we estimate that
there was a net deﬁcit of £57m in relation to
the deﬁned beneﬁt schemes and an asset
base of approximately £164m, whilst the
Minimum Funding Rate funding level was
100%. After discussions with the actuary, in
March 2003 a £5m prepayment was made
to the pension fund. This enables the
contribution rates to remain at their current
levels until the next review in 2004.
In April 2003 we merged the Merlin Pension
Scheme into the deﬁned beneﬁts section of
the Shipbuilding Industries Pension Scheme
to achieve cost and investment efﬁciencies.
Earnings per share pre goodwill and exceptional items pence
16.6
15.1
14.7 14.7
13.9
2003 2002 2001 2000 1999
Cash Flow from operating activities (before exceptionals) £m
57
53
5
57
21
2003 2002 2001 2000 1999
1423 VT front art  03/06  9/6/03  2:19 pm  Page 15 06 Andrew Bunney
Managing Director, Shipbuilding, age 45
A naval architect and MBA, he joined the
group in 1978 as a graduate trainee and
has held various positions within the
shipbuilding operation. He was appointed 
to the board in 2001.
07 Terry Madden
Managing Director, Marine products, age 53
A chartered engineer, he joined the group 
in 1988 as general manager of the controls
division and was appointed to his present
position in September 1996. He was
appointed to the board in 1997.
08 George Cameron OBE
Director, age 59
Joined the group in 1961 and has held
various management positions in the group.
He has been a board member since 1985.
14  VT Group Annual Report 2003
Board of directors
01 Martin Jay CBE ø
Non-executive Chairman, age 63
Joined the group and the board as 
Chief Executive in 1989 from GEC, where
he was a member of the UK Board of
Management and the group managing
director of GEC Electronic Components.
He was appointed a non-executive director
of Invensys plc in January 2003.
02 Paul Lester ø
Chief Executive, age 53
Became Chief Executive of VT Group in
July 2002 having been a non-executive
board member since 1998. Previously he
was group managing director of Balfour
Beatty plc. A graduate mechanical
engineer, he has held a number of board 
or senior management positions in
engineering and support services
companies in both the UK and the US.
03 Chris Cundy
Finance Director, age 42
Joined from KPMG in 1993 as group
accountant. He was appointed to his 
current position in 1997 and subsequently 
became a board member in 1999.
04 Dick Taylor OBE
Group Commercial Director, age 57
Joined the group in 1967, has held various
positions within the group and has been a
board member since 1991.
05 Simon Tarrant
Managing Director, Support services, age 50
Joined the group as a graduate trainee in
1975 and has held various positions within
the group. He was appointed to the board
in 1999.
04
03
02
05
06
01
1423 VT front art  03/06  9/6/03  2:19 pm  Page 16 Group Information
Secretary
P G Dawes
Registered Ofﬁce
VT House, Grange Drive,
Hedge End,
Southampton,
SO30 2DQ
Registered Number
1915771
Auditors
KPMG Audit Plc,
Dukes Keep, Marsh Lane,
Southampton, SO14 3EX
Registrars
Capita Registrars,
The Registry,
34 Beckenham Road,
Beckenham, Kent,
BR3 4TU
Tel: 0870 162 3100
09 Sir Jock Slater GCB LVO DL * † ø #
Non-executive director, age 65
Retired from the Royal Navy as First Sea
Lord and Chief of the Naval Staff in 1998.
He was also a member of the Defence
Council 1993-98. Sir Jock has been a
board member since 1999.
10 Lord Wakeham * † ø #
Deputy Chairman, age 70
A former Leader of the House of Commons
and Leader of the House of Lords. 
His previous ministerial posts include
Government Chief Whip and Secretary of
State for Energy. Non-executive: he has
been a member of the board since 1995.
11 Andrew Given * † #
Non-executive Director, age 55
Retired as Deputy Chief Executive of Logica plc
in December 2002 having previously been
its ﬁnance director since 1990. Prior to that
he held roles in the telecommunications
industry. He is also a non-executive director
of Spectris plc. Was appointed to the VT Group
board in September 2002.
VT Group Annual Report 2003  15
10
11
12
13
05
08
09
07
12 David Thorpe * † #
Non-executive Director, age 53
In April 2003, Mr Thorpe retired as President
of EDS Europe having been with that
organisation since 1994. He was previously
involved in public sector operations with Bull
Information Systems. He is a non-executive
director of Anite plc and was appointed to
the VT Group board in January 2003.
13 David Barclay *†
Non-executive director, age 49
Currently Vice Chairman of Dresdner Kleinwort
Wasserstein, Mr Barclay has been corporate
ﬁnance adviser to the group since ﬂoatation
in 1988. He was appointed to the board on
19 May 2003.
*  Member of Remuneration Committee
† Member of Audit Committee
ø Member of Nomination Committee
# Independent
1423 VT front art  03/06  9/6/03  2:20 pm  Page 17 Report of the directors
for the year ended 31 March 2003
16 VT Group Annual Report 2003
The directors present their annual report and the audited financial
statements of the group for the year ended 31 March 2003.
a. The business and its management
Principal activities
The principal activities of the group are:
• Support services - provision of facilities management and
training services to Government and Industry
• Shipbuilding - designing and building ships and the design and
supply of electronic control systems and engineering products
Review of the business and future developments
Although shipbuilding remains a major activity, other activities are 
of growing importance to the group and support services now
account for over 75% of turnover. The directors are continuing to
work to broaden the base of the group’s activities by developing
the existing businesses and through joint ventures, supplemented
where appropriate by selective acquisitions. Developments
affecting the group during the year and its prospects for the future
are evaluated in the Chairman’s Statement and in the Chief Executive’s
and Operational and Financial Reviews on pages 2 to 13.
Directors
The names of the current directors together with brief biographical
details are shown on pages 14 and 15.
At the conclusion of the forthcoming Annual General Meeting, 
Lord Wakeham will retire from the board
Mr A F Given, Mr D A Thorpe and Mr D Barclay were appointed to
the board on 5 September 2002, 31 January 2003 and 19 May
2003 respectively. In accordance with the articles of association
each retires and offers himself for re-appointment.
In accordance with the articles of association as amplified by the
Corporate Governance Statement set out below, Mr G W Cameron,
Mr C J Cundy and Sir Jock Slater retire by rotation. Being eligible,
each offers himself for re-appointment. Mr Cundy has a rolling
service contract under which the period of notice to be given by
the company will reduce to eighteen months after 30 June 2003
and to twelve months after 30 June 2004. Mr Cameron will retire 
in January 2004 on reaching normal retirement age.
Research and development
The group continued to maintain its levels of research and
development relating to composite materials, shipbuilding,
electronic control systems and engineering products.
Fixed assets
On 28 March 2003, the freehold of the shipyard at Woolston,
Southampton, was sold for £15 million: details are contained in
Note 4.
In the opinion of the directors, the market value of the group’s
properties at 31 March 2003 is not significantly different from the
book value shown in the financial statements.
Employment of disabled persons
Full and fair consideration is given to employment applications from
disabled persons having regard to their particular aptitudes and
abilities. So far as is practical, arrangements are made to continue
the employment of an individual who becomes disabled. Disabled
employees are given fair consideration for training, career development
and promotion.
Employment policies
The development of employee involvement in the group’s business
is kept under regular review and the directors are committed to
encouraging greater involvement by all employees. Formal and
informal briefing of employees takes place as appropriate. The
company has operated UK based savings related share option
arrangements since 1988 and all eligible employees are
encouraged to participate: a re-launch of the scheme took place 
in June 2002. It is proposed, subject to shareholders’ approval, 
to introduce a similar scheme for employees based in the USA:
details are contained in a separate circular to shareholders and 
the matter appears as Item 10 in the Notice convening the Annual
General Meeting.
The group takes all reasonable steps to ensure that employment
conditions are equal in all respects for both men and women.
The group devotes significant resources to employee training and
retraining and this year has spent £2,732,000 (2002: £2,494,000)
in this regard. This excludes the cost of on-the-job training which,
whilst substantial, is impractical to quantify.
Charitable and political contributions
During the year the group contributed £67,000 (2002: £69,000) to
charitable organisations. Preference is normally given to charities
which are local to the group’s principal places of business and
which relate to education, health, community and the arts. There
were no political donations.
b. Statutory and other compliance
Dividend
The group profit for the year available to ordinary shareholders after
tax amounted to £2,742,000 (2002: £19,323,000).
The directors recommend the payment of a final dividend of 6.00p
(2002: 5.55p) per ordinary share, amounting to £10,274,000 
(2002: £9,454,000) which together with the interim dividend of
2.4p (2002: 2.25p) makes a total of 8.4p or £14,367,000 
(2002: 7.8p or £13,199,000) for the year.
If approved, the final dividend will be paid on 6 August 2003 to
ordinary shareholders on the register at the close of business on 
27 June 2003.
Substantial interests in shares
Details of substantial holdings in the issued ordinary share capital
of the company notified as at 19 May 2003 were:
Number % of
of shares total
Fidelity International Limited 17,723,794 10.37
Deutsche Asset Management 16,229,971 9.50
Isis Asset Management Plc 11,948,889 6.99
Threadneedle Investment Management 11,656,830 6.82
Schroder Investment Management Limited 10,990,228 6.43
Merrill Lynch Investment Managers 8,593,628 5.03
Zurich Financial Services 6,884,867 4.03
Legal & General Investment Management 6,141,439 3.59
Newton Investment Management 6,105,045 3.57
SLC Asset Management Limited 6,070,009 3.55
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 16 VT Group Annual Report 2003  17
Change of name
Following shareholder approval, the name of the company was
changed on 5 July 2002 from Vosper Thornycroft Holdings plc 
to VT Group plc.
Environmental policy
The group is committed to the protection of the natural environment
by reducing discharges to air, land and water wherever possible
and by applying the principles of sustainable development whilst
maintaining commercial and business effectiveness.
To achieve these aims the group will work towards:
• applying the principles of integrated pollution prevention and
control to discharges to air, land, and water arising from its 
business activities
• applying the best available techniques and where practicable 
the best practicable environmental option methodologies to its 
business processes through life cycle analysis
•reducing waste at source by preventing unnecessary use and 
minimising the amount generated. Where this is not practicable 
every endeavour will be made to ensure waste will be 
recovered, reused or recycled 
• managing the consumption of energy in an efficient manner 
through managers attaching particular regard to the 
economical use of energy in order to reduce running costs and 
emissions as an integral and essential part of their overall 
management responsibilities
•reducing the contribution to global warming by operating a 
‘green’ transport policy
• developing an environmental management system in order to 
pursue continuous improvement in line with its ISO 9000 ideals, 
in close connection with enforcing authorities, shareholders, 
neighbours, customers, joint venture partners and all members 
of our supply chain
•promoting environmental awareness through effective education
and training
Overall responsibility for environmental matters rests with the Chief
Executive. However, the Group HR Director has authority to act on
all general matters affecting environmental protection.
Policy on payment of commercial debts
The company’s policy, in relation to all of its suppliers, is to settle
the terms of payment when agreeing the terms of the transaction
provided always that it is satisfied the supplier has provided the
goods or services in accordance with the agreed terms and
conditions. The company does not follow any code or standard on
payment practice but it is the company’s policy, unless otherwise
negotiated, to pay all its suppliers within 45 days of the end of the
month in which it receives the goods or services.
The number of days’ purchases outstanding for payment by the
group at the year-end was 38 days.
Authority to allot shares
In accordance with current guidelines, the directors seek authority
for a period of five years from the date of the annual general
meeting to allot a maximum of 29,114,489 relevant securities. This
represents the outstanding authorised but unissued ordinary shares
and is less than one third of the aggregate of the current issued
ordinary share capital. Further, in order to retain some flexibility, the
directors seek the power to allot 8,544,275 equity securities wholly
for cash other than on a pre-emptive basis to current shareholders
pro rata to their existing holdings. This amount represents 5% of
the issued ordinary share capital on the balance sheet at 31 March
2003. Resolutions covering the above matters appear as Items 6
and 7 in the Notice convening the Annual General Meeting.
Subdivision of share capital
By shareholder resolution on 5 July 2002, each ordinary share of
25p each was subdivided into 5 new ordinary shares of 5p each.
Non-executive directors’ fees
The total authorised annual amount payable in fees to non-
executive directors was last reviewed in 1998 when it was fixed at
£150,000. Changes since then means this limit is no longer
appropriate and it is therefore proposed to increase the authorised
maximum to £300,000. A resolution covering this appears as 
Item 8 in the Notice convening the Annual General Meeting.
Auditors
In accordance with Section 384 of the Companies Act 1995, a resolution
for the re-appointment of KPMG Audit Plc as auditors of the company
is to be proposed at the forthcoming Annual General Meeting.
c. Corporate governance
Overview
The board continues to embrace the Principles of Good
Governance and Code of Best Practice (the “Combined Code”)
issued by the Financial Services Authority. The directors believe the
board is soundly constituted, and with at least seven full meetings
spread realistically throughout the year, it is well able to exercise
adequate control over the activities of the group. There exists a
clear distinction between the role of the non-executive chairman 
in running the board and that of the chief executive in running the
company’s business: the latter is obliged to adhere to a practical
schedule (which is reviewed at least annually) of matters requiring
board approval before implementation. The agenda for each
regular board meeting is accompanied by substantial reports
covering all aspects of the group’s business and ad hoc reports are
circulated if specific decisions are required between such meetings.
With advice and assistance from Spencer Stuart, three additional
non-executive directors have been appointed. The directors now
consider that the balance of the board between executive and 
non-executive (including independent non-executive) directors is
satisfactory. Each director submits himself for re-election at least
once every three years. All appointments to the board are
considered by the nomination committee before being formally
approved by the board and that committee, in its deliberations, has
regard to maintaining a proper balance in the circumstances from
time to time. The committee comprises: Lord Wakeham (chairman
until 5 September 2002), Mr M Jay (chairman from 5 September
2002), Mr P J Lester and Sir Jock Slater. The company secretary 
is secretary to this committee.
Lord Wakeham has been designated as senior independent director:
following his retirement, Mr A F Given will assume this position.
All directors have access to the advice and services of the
company secretary.
Directors’ remuneration is the subject of a separate report.
The company adopts a pro-active approach to its major
institutional shareholders, both current and prospective. Regular
visits are made to institutions’ offices within this country and
elsewhere and there are frequent reciprocal visits to the company’s
premises, especially at Southampton and Portsmouth. Resulting
from the origins of the present listed company and certain
acquisitions, many private shareholders are also employees. The
Annual General Meeting will this year be held in Southampton: this
is convenient for a significant proportion of employees to attend
and they are actively encouraged to do so.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 17 Report of the directors
Year ended 31 March 2003
18 VT Group Annual Report 2003
The board audit committee comprises Lord Wakeham (chairman
until 5 September 2002), Mr A F Given (appointed to the
committee and chairman from 5 September 2002), Sir Jock Slater,
Mr D A Thorpe (appointed 31 January 2003) and Mr D M Barclay
(appointed 19 May 2003). The finance director and a representative
of the external auditors attend by invitation. Mr P J Lester resigned
on 30 June 2002 immediately prior to taking up his executive
appointment with the group. The company secretary is secretary to
this committee which meets as required but on no less than two
occasions each year.
Compliance
The directors consider that the board has complied with the
provisions of good governance set out in Section 1 of the Code of
Best Practice.
Internal controls
Following the publication of guidance for directors “Internal Control:
Guidance for Directors on the Combined Code” (the Turnbull
guidance), the board confirms that there is an ongoing process for
identifying, evaluating and managing the significant risks faced by
the group. The process has been embedded into the fabric of the
group and has been in place for the year under review and up to
the date of approval of the annual report and financial statements.
This process is regularly reviewed by the board.
The board is ultimately responsible for the group’s system of
internal controls and for reviewing its effectiveness whilst the role of
management is to implement board policies on risk and control.
The system of internal controls is designed to manage rather than
eliminate the risk of failure to the achievement of the business
objectives. In pursuing these objectives, internal controls can only
provide reasonable and not absolute assurance against material
misstatement or loss.
A process of control self-assessment and hierarchical reporting has
been established which provides for a documented and auditable
trail of accountability. These procedures are relevant across the
group operations and provide for successive assurances to be
given at increasingly higher levels of management and, finally, to
the board. 
This process is facilitated by internal audit, which also provide a
degree of assurance as to the operation and validity of the system
of internal controls. Internal audit ensure that corrective action is
taken to rectify any weaknesses.
The processes used by the board to review the effectiveness of the
system of internal control include the following:
• annual budgets are prepared for each operating business and
compared with monthly management reporting which focuses
on actual performance against these budgets;
• considers reports from management, internal and external audit
of the system of internal controls and any material control
weaknesses;
• discusses with management the actions taken on problem
areas identified by board members or in the internal/external
audit reports;
• policies and procedures for such matters as delegation of
authority, capital expenditure and treasury management are
regularly updated.
• throughout the group the directors ensure the placement of
experienced and professional staff of the necessary calibre to
discharge their delegated responsibilities;
•major tenders are specifically approved by the board and
contract performance is regularly reviewed and compared
against estimates drawn up at the time of original tender;
•review the external and internal audit work plans.
The group’s management operates a risk management process,
which identifies the key risks facing each business.  The process is
based on each business unit producing a risk register which
identifies their key risks occurring, their impact if they do occur and
the action being taken to manage those risks to the desired level.
Internal audit independently review the risk identification
procedures and control process implemented by management,
and reports to the audit committee on a quarterly basis. The audit
committee review the assurance procedures, ensuring that an
appropriate mix of techniques is used to obtain the level of
assurance required by the board. The audit committee chairman
presents their findings to the board on a six monthly basis or earlier
as appropriate.
Statement of directors’ responsibilities
Company law requires the directors to prepare financial statements
for each financial year which give a true and fair view of the state of
affairs of the company and group and of the profit or loss for that
period.  In preparing those financial statements, the directors are
required to:
• select suitable accounting policies and then apply them
consistently;
•make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
•prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group will
continue in business.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure
that the financial statements comply with the Companies Act 1985.
They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the group and
to prevent and detect fraud and other irregularities.
Going concern
After making enquiries, the directors have a reasonable expectation
that the group has adequate resources to continue in operational
existence for the foreseeable future.  For this reason they continue
to adopt the going concern basis in preparing the financial
statements.
By order of the board
P G Dawes
Secretary 19 May 2003
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 18 VT Group Annual Report 2003  19
Remuneration committee
In accordance with the Combined Code, the remuneration of the executive directors is determined by the remuneration committee.
During the year, the remuneration committee was comprised exclusively of non-executive directors. The members of the committee were:
Lord Wakeham (chairman until 5 September 2002)
Mr A F Given (appointed to the committee and chairman from 5 September 2002)
Mr D M Barclay (appointed 19 May 2003)
Mr P J Lester (resigned 30 June 2002)
Sir Jock Slater
Mr D A Thorpe (appointed 31 January 2003)
The Chairman and the Chief Executive also attended the committee by invitation when appropriate during the year. The company secretary is
secretary to the committee.
The committee members have no personal interest, other than as shareholders, in the matters decided by the committee.
Directors’ service agreements
The board has decided to bring directors’ service contracts in line with best practice and reduce to one year the period of notice to be given to
an executive director to terminate his contract other than for gross misconduct. Agreement has been reached with all directors who have a
service contract whereby none of the executive directors will, after 30 June 2004, have an entitlement to more than 12 months’ notice of termination.
Details of directors’ service contracts are as follows;
Name Notice period Notice period
Date of contract at 1.7.2003 at 1.7.2004
M Jay 26 March 2002 18 months 12 months
P J Lester 14 May 2002 18 months 12 months
A Bunney 27 January 2003 12 months 12 months
G W Cameron 8 March 1988 7 months# –
C J Cundy 29 October 1999 18 months 12 months
T J Madden 24 October 1997 18 months 12 months
S E Tarrant 19 May 2003 18 months 12 months
R W Taylor 3 April 1991 18 months 12 months
# retires 23 January 2004
All contracts are terminable by the director on twelve months’ notice, with the exception of the Chairman.
Non-executive directors are normally appointed for a three year term which is extendible at the board’s discretion. All appointees are subject to
regular re-appointment by shareholders with the exception of the chairman. Contracts are terminable without notice in accordance with the
articles of association.
Non-executive directors’ remuneration
The remuneration for non-executive directors is set by the full board on the recommendation of the executive directors. Remuneration comprises
an annual fee. Non-executive directors are not eligible to participate in any of the company’s bonus or share option schemes.
Remuneration policy
It is the company’s policy to provide for each of its executive directors a remuneration package which is adequate to attract, retain and motivate
individuals of the appropriate calibre, whilst at the same time not paying more than is necessary for this purpose.
Executive directors’ remuneration
The following comprised the principal elements of executive directors remuneration for the period under review:
• base salary
• benefits, including pension, company car and fuel, healthcare and private telephone costs
• annual short term performance related bonus
•long term incentive plan (“LTIP”)
• share options
At present the arrangements for executive directors are as follows:-
• the short term bonus awarded annually by the remuneration committee and relates to group and (other than for the chief executive, finance 
director and group commercial director) business group profit achievement supplemented by a discretionary element. The maximum bonus 
payable is 40% of salary
•LTIP , under which each year shares may be awarded to executive directors equal in value to 30% of basic salary. The shares are held in trust 
and released after three years pro rata to achievement of the performance target. The performance criterion is the Total Shareholder Return 
(“TSR”) of the Industry Group which comprises the members of the FTSE 250 (but excluding Investment Trusts). Relative movements in TSR 
are shown in the graph below. Each time executive directors are awarded shares under the LTIP they are entitled to invest up to 5% of basic 
salary to purchase additional shares in the company: provided these shares are held in the trust for at least three years, they will be matched 
on a 1:1 basis with further shares
Remuneration report
Year ended 31 March 2003
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 19 20 VT Group Annual Report 2003
Remuneration report
Year ended 31 March 2003
Restructuring of remuneration for future years
In order to better reflect the stated remuneration policy and to provide a greater amount of variable compensation depending upon performance,
in autumn 2002 the remuneration committee took comprehensive advice from The Remuneration Practice and Monks Partnership and as a result
approved revised compensation packages for executive directors. These included all or some of the following elements on an individual basis:
•base salary 
• benefits including pension, company car and fuel, healthcare and private telephone costs
• short term bonus awarded annually on the achievement of group profit and cash targets as set each year by the remuneration committee. 
Such achievement will result in the payment of a bonus equal to 30% of base salary: substantially exceeding the target could result in a 
bonus of up to 50% whilst under achievement will produce a substantially diminished amount. Payment of any bonus will require growth 
compared with the financial period ended 31 March 2003
•LTIP , the revised rules of which are to be submitted to the Annual General Meeting. If approved, there will be an annual allocation of shares at
the discretion of the remuneration committee but these shares will vest in whole or in part only if the TSR of the company equals or exceeds 
the median of its comparator group. Further details are contained in the Chairman’s letter accompanying this report and the matter appears 
as Item 9 in the Notice convening the Annual General Meeting
• executive share options
Share option plans
The company operates two share option plans (a UK Inland Revenue approved plan and an unapproved plan) under which directors and other
executives are eligible to participate at the discretion of the remuneration committee. Options are granted at market value, determined
immediately before the grant. Annual awards will not normally exceed one times base salary.
Options under the company’s schemes can normally be exercised only on the achievement of an objective performance condition set by the
remuneration committee and linked to the underlying performance of the company. The performance condition currently applying is real growth in
earnings per share (excluding goodwill amortisation and exceptional items) of at least 2% per annum over three consecutive years.
Performance graph
As the company is a constituent of the FTSE 250, the FTSE 250 index provides an appropriate indication of market movements against which to
benchmark the company’s performance. The chart below shows the company’s TSR performance against the FTSE 250 index over the five years
ended 31 March 2003.
260
240
220
200
180
160
140
120
100
80
60
1998 1999 2000 2001 2002
VT Group - Total Return Index
FTSE Mid 250 - Total Return Index 
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 20 VT Group Annual Report 2003  21
The auditors are required to report on the information contained in the following section of this report.
1Directors’ emoluments
Remuneration
The various elements of remuneration (excluding employer pension contributions) received by each director were as follows:
Salary & Fees Benefits Annual Bonus Other Total
2003 2002 2003 2002 2003 2002 2003 2002 2003 2002
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Executive
M Jay* 71 250 3 13 24 90 30
@
– 128 353
P J Lester 250 – 16 – 84 – 261
#
– 611 –
A Bunney 115 55 13 7 17 11 – – 145 73
G W Cameron 150 144 7 16 13 58 – – 170 218
C J Cundy 163 128 12 13 54 46 – – 229 187
T J Madden 133 121 17 15 29 24 – – 179 160
S E Tarrant 140 110 14 12 45 37 – – 199 159
R W Taylor 150 139 13 12 50 50 – – 213 201
Non-executive
M Jay
+
92 – 1 – – – – – 93 –
D M Barclayø – – – – – – – – – –
N F Baldock – 5 – – – – – – – 5
A F Given 14 – – – – – – – 14 –
P J Lester* 5 18 – – – – – – 5 18
Dr A G Raper – 11 – – – – – – – 11
Sir Jock Slater 19 18 – – – – – – 19 18
D A Thorpe 8 – – – – – – – 8 –
Lord Wakeham 42 41 5 5 – – – – 47 46
*= to 5/7/02
@= a payment of £30k was made to Mr Jay in respect of the early termination of his executive service contract
+= from 5/7/02
#= comprises payments made in respect of relocation costs (£17k) and buyout of executive share options, LTIP and bonus from his previous employment (£244k)
ø= appointed 19/5/03
Benefits include provision of company car and fuel, healthcare and personal telephone costs, all of which are taxable.
The highest paid director was Mr P J Lester.
Pension benefits
Executive directors are members of the group’s contributory pension scheme which entitles them to a pension on retirement of two-thirds of
pensionable salary after twenty years’ service: details of accrued benefits are set out below.
Mr P J Lester and Mr C J Cundy are subject to the Inland Revenue pensions cap. Consequently, in each case a Funded Unapproved Retirement
Benefits Scheme has been established to which they pay the same rate of contribution (subject to Inland Revenue limits) as for the main scheme.
The company contributions to these schemes during the year were £80,614 (2002: £nil) for Mr Lester and £25,630 (2002: £10,800) for Mr Cundy.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 21 1Directors’ emoluments continued
Pension benefits
Total accrued Change in Transfer value of Transfer value of Increase in transfer
pension at accrued benefits accrued pension as at accrued pension as at value less member
Director 1 April 2003 (£) (£) 1 April 2002 (£) 31 March 2003 (£) contributions (£)
M Jay 111,935 4,812 1,839,601 2,023,358 180,001
P J Lester 2,430 2,430 – 27,675 23,301
A Bunney 45,575 10,105 320,832 323,510 (4,234)
G W Cameron 98,058 6,052 1,570,701 1,799,421 219,720
C J Cundy 22,461 2,757 151,679 135,674 (25,780)
T J Madden 73,968 10,282 824,973 858,732 25,797
S E Tarrant 66,695 16,112 568,147 594,562 18,040
R W Taylor 92,913 8,789 1,260,513 1,410,582 141,104
i) The pension entitlement shown is that which would be paid annually on retirement based on service to the end of the year, or leaving
service if earlier.
ii) The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11.
iii) Members of the Scheme have the option to pay Additional Voluntary Contributions; neither the contributions nor the resulting benefits are 
included in the above table.
iv) Mr Lester joined SIPS on 1 July 2002. His cost includes the increase in pension from this date until the end of the accounting year.
v) Mr Jay retired from SIPS on 5 July 2002. The pension figure as at the end of the year is given as the pre-commutation pension at his 
date of retirement.
vi) No allowance is made in the transfer value of accrued pension figures for Guaranteed Minimum Pensions or for the value of any refund of 
member’s contributions. The impact of this is not expected to be significant.
2Directors’ interests in shares
Ordinary shares At 1 April 2002 At 31 March 2003
Beneficial Non-beneficial Beneficial Non-beneficial
D M Barclay –– –* –*
A Bunney 66,450 – 69,375 –
G W Cameron 454,000 – 454,000 –
C J Cundy 10,515 – 17,785 –
A F Given –* –* 3,000 –
M Jay 50,050 – 50,050 –
P J Lester –– 43,710 –
T J Madden 20,700 – 18,450 –
Sir Jock Slater 5,000 – 5,000 –
S E Tarrant 2,750 – 4,725 –
R W Taylor 11,980 – 16,660 –
D A Thorpe –* –* – –
Lord Wakeham –– ––
*At date of appointment.
On 5 July 2002 the company subdivided its shares, so that each ordinary share of 25p each became five ordinary shares of 5p each.
The shareholdings for the directors at 1 April 2002 have been restated in terms of 5p shares.
During the year none of the directors had an interest in the share capital of the company’s subsidiaries. Following the exercise of options under
the company’s Savings related Share Option Scheme, on 2 May 2003 Mr A Bunney acquired 950 ordinary shares and Mr C J Cundy acquired
760 shares. Subject to this, there have been no changes in the above holdings between 31 March and 19 May 2003.
22 VT Group Annual Report 2003
Remuneration report
Year ended 31 March 2003
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 22 VT Group Annual Report 2003  23
Share options
The following figures relate to participation in the group’s executive share option schemes. The middle market value of the company’s ordinary
shares on 31 March 2003 was 201p and the range during the year was 166p to 302.5p (all expressed in terms of 5p ordinary shares).
Number of options
Exercised
Granted and sold Exercise Gain on Date from
At during during At price exercise which Expiry
1.4.2002 year year 31.3.2003 p price exercisable date
M Jay ––––––––
P Lester – 11,535
+–
11,535 260 – 05.07.05 04.07.12
– 238,465* – 238,465 260 – 05.07.05 04.07.09
A Bunney 15,000* – – 15,000 167 – 18.11.99 17.11.03
25,000* – – 25,000 160.2 – 23.11.01 22.11.05
13,030* – – 13,030 250.6 – 17.11.03 16.11.07
11,970
#
–– 11,970 250.6 – 17.11.03 16.11.10
35,000* – – 35,000 274.4 – 26.06.04 25.06.08
– 63,194* – 63,194 216 – 18.12.05 17.12.09
G W Cameron ––––––––
C J Cundy 15,000* – – 15,000 171.6 – 28.05.01 27.05.05
15,000* – – 15,000 160.2 – 23.11.01 22.11.05
– 13,888
+–
13,888 216 – 18.01.05 17.12.12
– 76,389* – 76,389 216 – 18.12.05 17.12.09
T J Madden ––––––––
S E Tarrant 10,000* – – 10,000 156.4 – 11.07.99 10.07.03
12,500* – – 12,500 160.2 – 23.11.01 22.11.05
– 13,888
+
– 13,888 216 – 18.12.05 17.12.12
– 60,186* – 60,186 216 – 18.12.05 17.12.09
R W Taylor ––––––––
# The Vosper Thornycroft Executive Share Option Scheme
* The Vosper Thornycroft Executive Share Option Plan 1996
+ The Vosper Thornycroft Approved Share Option Plan 1999
Options were granted to executive directors during 2002 under the terms of the Vosper Thornycroft Approved Share Option Plan 1999 in
contravention of its rules. With the approval of the Inland Revenue, these options will be treated as unapproved options. A resolution to correct
this anomaly for future grants is included at Item 11 of the Notice convening the Annual General Meeting.
In addition Mr C J Cundy and Mr A Bunney have the following interests in the company’s savings related Share Option Schemes, which relate to
5 year contracts
C J Cundy: 1,225 options at 166.2p granted 01.09.99
A Bunney: 1,075 options at 153.6p granted 01.09.98
720 options at 166.2p granted 01.09.99
610 options at 258.4p granted 01.09.02
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 23 Long Term Incentive Plan
This table sets out the shares provisionally allocated under the long term incentive plan.
Value of shares
Date of Allocated Retained Matching Earliest date on date of
allocation # shares* shares for release allocation
+
(p)
M Jay 20.11.01 25,430 4,195 4,195 20.11.04 312.6
P J Lester 05.07.02 37,500 5,710 5,710 05.07.05 216.0
A Bunney 20.11.01 5,440 895 895 20.11.04 312.6
23.05.02 9,985 985 985 23.05.05 300.4
G W Cameron 20.11.01 14,395 2,375 2,375 20.11.04 312.6
C J Cundy 20.11.01 13,435 2,215 2,215 20.11.04 312.6
23.05.02 13,980 2,305 2,305 23.05.05 300.4
T J Madden 20.11.01 12,475 2,055 2,055 20.11.04 312.6
23.05.02 12,980 0 0 23.05.05 300.4
S E Tarrant 20.11.01 11,995 1,975 1,975 20.11.04 312.6
23.05.02 12,480 0 0 23.05.05 300.4
R W Taylor 20.11.01 13,915 2,295 2,295 20.11.04 312.6
23.05.02 14,480 2,385 2,385 23.05.05 300.4
# This represents the maximum allocation, subject to the achievement of the performance target
* The purchase of the retained shares has been funded by subscription from the individual directors and the share numbers are included in the table on page 22.
+ This figure is used to calculate the number of shares originally allocated
By order of the board 
A F Given
Chairman of the remuneration committee 19 May 2003
Remuneration report
Year ended 31 March 2003
24 VT Group Annual Report 2003
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 24 Report of the independent auditors
To the members of VT Group plc (formerly Vosper Thornycroft Holdings plc)
VT Group Annual Report 2003  25
We have audited the financial statements on pages 26 to 47. We have
also audited the information in the directors’ remuneration report that is
described as having been audited.
This report is made solely to the company’s members, as a body, in
accordance with section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the Annual Report and the
directors’ remuneration report. As described on page 18, this includes
responsibility for preparing the financial statements in accordance with
applicable United Kingdom law and accounting standards. Our
responsibilities, as independent auditors, are established in the United
Kingdom by statute, the Auditing Practices Board, the Listing Rules of
the Financial Services Authority and by our profession’s ethical
guidance.
We report to you our opinion as to whether the financial statements
give a true and fair view and whether the financial statements and the
part of the directors’ remuneration report to be audited have been
properly prepared in accordance with the Companies Act 1985. We
also report to you if, in our opinion, the directors’ report is not
consistent with the financial statements, if the company has not kept
proper accounting records, if we have not received all the information
and explanations we require for our audit, or if information specified by
law regarding directors’ remuneration and transactions with the group
is not disclosed.
We review whether the statement on pages 17 and 18 reflects the
company’s compliance with the seven provisions of the Combined
Code specified for our review by the Listing Rules, and we report if it
does not. We are not required to consider whether the board’s
statements on internal control cover all risks and controls, or form an
opinion on the effectiveness of the group’s corporate governance
procedures or its risk and control procedures.
We read the other information contained in the Annual Report,
including the corporate governance statement and the unaudited part
of the directors’ remuneration report, and consider whether it is
consistent with the audited financial statements. We consider the
implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued
by the Auditing Practices Board. An audit includes examination, on a
test basis, of evidence relevant to the amounts and disclosures in the
financial statements and the part of the directors’ remuneration report
to be audited. It also includes an assessment of the significant
estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are
appropriate to the group’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide
us with sufficient evidence to give reasonable assurance that the
financial statements and the part of the directors’ remuneration report
to be audited are free from material misstatement, whether caused by
fraud or other irregularity or error.  In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the
financial statements and the part of the directors’ remuneration report
to be audited.
Opinion
In our opinion –
• the financial statements give a true and fair view of the state of 
affairs of the company and the group as at 31 March 2003 and 
of the profit of the group for the year then ended; and 
• the financial statements and the part of the directors’ remuneration 
report to be audited have been properly prepared in accordance 
with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants Southampton
Registered Auditor 19 May 2003
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 25 Consolidated profit and loss account
For the year ended 31 March 2003
26 VT Group Annual Report 2003
2003
Before
exceptional
items and 2003 2003
amortisation Amortisation Exceptional 2003 2002
of goodwill of goodwill items Total Total
Notes £000 £000 £000 £000 £000
Turnover: Group and share of joint ventures 2,3 564,639 – – 564,639 478,953
Less: share of joint ventures’ turnover (83,615) – – (83,615) (67,440)
Group turnover 481,024 – – 481,024 411,513
Cost of sales 4,12 (398,468) (19,475) (11,381) (429,324) (352,684)
Gross profit 82,556 (19,475) (11,381) 51,700 58,829
Administrative expenses 4 (47,616) – (3,043) (50,659) (36,196)
Group operating profit 34,940 (19,475) (14,424) 1,041 22,633
Share of operating profit in joint ventures 8,125 – – 8,125 6,062
Total operating profit: Group and share of joint ventures 3 43,065 (19,475) (14,424) 9,166 28,695
Profit on disposal of tangible fixed assets 4 –– 4,000 4,000 –
Profit on ordinary activities before interest 43,065 (19,475) (10,424) 13,166 28,695
Net interest (payable)/receivable – group 5 (1,975) – – (1,975) 2,297
– joint ventures 5 457 – – 457 446
(1,518) – – (1,518) 2,743
Profit on ordinary activities before taxation 3,7 41,547 (19,475) (10,424) 11,648 31,438
Tax on profit on ordinary activities – group 8 (5,363) (8,714)
– joint ventures 8 (2,746) (1,999)
(8,109) (10,713)
Profit on ordinary activities after tax 3,539 20,725
Equity minority interest (797) (1,402)
Profit for the financial year 2,742 19,323
Dividends 10 (14,367) (13,199)
Retained (loss)/profit for the group 
and its share of joint ventures 22 (11,625) 6,124
Earnings per share 11
Basic – before amortisation of goodwill and exceptional items 16.60p 15.08p
Basic – before amortisation of goodwill 13.03p 14.77p
Basic – after amortisation of goodwill 1.61p 11.55p
Diluted – after amortisation of goodwill 1.60p 11.41p
All results arise from continuing operations.
No note of historical cost profits required by FRS3 has been presented since reported profits do not materially differ from historical cost profits.
The prior year earnings per share figures have been restated to recognise the share split in July 2002 (see note 21).
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 26 Balance sheets
At 31 March 2003
VT Group Annual Report 2003  27
Group Company
2003 2002 2003 2002
Notes £000 £000 £000 £000
Fixed assets
Intangible assets
Goodwill 12 159,381 174,414 – –
Tangible assets 13 157,699 105,654 10 20
Investments in subsidiary undertakings 14 – – 41,500 41,500
Investments in joint ventures
Share of gross assets 51,663 28,262 – –
Share of gross liabilities (42,840) (22,522) – –
14 8,823 5,740 41,500 41,500
Investment in own shares 14 665 1,266 – –
326,568 287,074 41,510 41,520
Current assets
Stocks 15 21,000 23,064 – –
Debtors – due within one year 16 109,912 106,002 107,997 111,061
Debtors – due after one year 16 12,500 – – –
122,412 106,002 107,997 111,061
Cash at bank and in hand 29,455 70,991 13,462 3,165
172,867 200,057 121,459 114,226
Creditors –
amounts falling due within one year 17 (228,325) (242,386) (103,384) (102,437)
Net current (liabilities)/assets (55,458) (42,329) 18,075 11,789
Total assets less current liabilities 271,110 244,745 59,585 53,309
Creditors –
amounts falling due after more than one year 18 (88,625) (64,538) – –
Provisions for liabilities and charges 20 (35,338) (23,156) – –
Net assets 147,147 157,051 59,585 53,309
Capital and reserves
Called up share capital 21 8,544 8,502 8,544 8,502
Share premium account 22 23,378 21,388 23,378 21,388
Revaluation reserve 22 – – 10,257 10,257
Profit and loss account 22 111,503 123,100 17,406 13,162
Equity shareholders’ funds 143,425 152,990 59,585 53,309
Equity minority interest 3,722 4,061 – –
147,147 157,051 59,585 53,309
These financial statements were approved by the board of directors on 19 May 2003 and were signed on its behalf by:
C J Cundy
Director
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 27 Consolidated cash flow statement
For the year ended 31 March 2003
28 VT Group Annual Report 2003
2003 2002
Notes £000 £000
Cash flow from operating activities 24 42,980 52,533
Dividends received from joint ventures 2,746 3,812
Returns on investments and servicing of finance 25 (6,073) 2,193
Taxation (7,603) (3,661)
Capital expenditure and financial investment 25 (60,066) (39,112)
Acquisitions and disposals 25 (30,193) (90,025)
Equity dividends paid (13,547) (12,273)
Cash outflow before use of liquid resources and financing (71,756) (86,533)
Management of liquid resources 25 17,764 26,391
Financing 25 30,220 42,006
Decrease in cash in year (23,772) (18,136)
Reconciliation of net cash flow to movement in net debt
For the year ended 31 March 2003
Notes 2003 2002
£000 £000
Decrease in cash in year 27 (23,772) (18,136)
Cash inflow from decrease in liquid resources 27 (17,764) (26,391)
Movement in cash balances (41,536) (44,527)
Cash inflow from increase in debt 27 (3,787) (39,483)
Change in net debt resulting from cash flows (45,323) (84,010)
Loan notes issued and deferred consideration 27 238 (39,249)
Translation differences 27 1,425 –
Movement in net debt in the year (43,660) (123,259)
Net (debt)/funds at 1 April 27 (37,260) 85,999
Net debt at 31 March 27 (80,920) (37,260)
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 28 Consolidated statement of total recognised gains and losses
For the year ended 31 March 2003
VT Group Annual Report 2003  29
2003 2002
£000 £000
Profit for the financial year 2,742 19,323
Currency translation difference on foreign currency net investments (670) 63
Movements on employee share ownership trust 1,547 (2,253)
Total recognised gains and losses relating to the financial year 3,619 17,133
Reconciliation of movements in shareholders’ funds
For the year ended 31 March 2003
2003 2002
Group £000 £000
Profit for the financial year 2,742 19,323
Dividends (14,367) (13,199)
Retained (loss)/profit for the year (11,625) 6,124
Other recognised gains and losses relating to the year (net) (670) 63
Movement on employee share ownership trust 1,547 (2,253)
New share capital subscribed 1,183 11,512
Net (reduction in)/addition to shareholders’ funds (9,565) 15,446
Opening shareholders’ funds 152,990 137,544
Closing shareholders’ funds 143,425 152,990
2003 2002
Company £000 £000
Profit for the financial year 19,460 14,446
Dividends (14,367) (13,199)
Retained profit for the year 5,093 1,247
New share capital subscribed 1,183 11,512
Net addition to shareholders’ funds 6,276 12,759
Opening shareholders’ funds 53,309 40,550
Closing shareholders’ funds 59,585 53,309
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 29 Notes
(forming part of the financial statements)
30 VT Group Annual Report 2003
1 Accounting policies
i Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards under the historical cost convention, 
modified to include the revaluation of certain fixed asset investments.
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the 
group’s financial statements.
ii Basis of consolidation
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31 
March 2003. Unless otherwise stated, the acquisition method of accounting has been adopted. Under this method, the results of 
subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit and loss account from the date of 
acquisition or up to the date of disposal.
A joint venture is an undertaking in which the group has a long-term interest and over which it exercises joint control. The group’s share 
of profits less losses of joint ventures is included in the consolidated profit and loss account and its interest in their net assets, other than 
goodwill, is included in investments in the consolidated balance sheet.
Under section 230(4) of the Companies Act 1985 the company is exempt from the requirement to present its own profit and loss account.
iii Turnover
Turnover represents the sales value of work done including revenue from technical and consultancy services. Turnover is stated excluding VAT.
iv Goodwill
Purchased goodwill arising on consolidation in respect of acquisitions before 1 April 1998, when Financial Reporting Standard 10: 
Goodwill and Intangible Assets was adopted, was written off to reserves in the year of acquisition. Goodwill previously eliminated against 
reserves has not been reinstated on implementation of FRS 10.
Positive goodwill arising on consolidation in respect of acquisitions after 1 April 1998 is capitalised, classified as an asset on the balance 
sheet and amortised on a straight line basis over its useful economic life up to a presumed maximum of twenty years. It is reviewed for 
impairment at the end of the first full financial year following the acquisition and in other subsequent periods if events or changes in 
circumstances indicate that the carrying value may not be recoverable.
If a subsidiary undertaking or business is subsequently sold or closed, any goodwill arising on acquisition that was written off directly to 
reserves or that has not been amortised through the profit and loss account is taken into account in determining the profit or loss on sale 
or closure.
v Fixed assets and depreciation
Depreciation is provided on tangible fixed assets, other than freehold land and assets in course of construction, at rates calculated to 
write off the cost less residual value of each asset on a straight line basis over the expected useful life as follows:
Freehold and long leasehold buildings 50 years
Leasehold land and short leasehold buildings unexpired period of lease
Computers 3 years
Office furniture and equipment 5 years
Motor vehicles 4 years
Plant and machinery 5 to 10 years
Heavy equipment 20 to 33 years
Interest costs relating to specific project financing are capitalised up to the date of completion of the project.
vi Fixed asset investments: Own shares
Investment in own shares represents shares in VT Group plc held by:
(a) The Vosper Thornycroft Employees Share Ownership Trust which is a discretionary trust for the benefit of executives and directors 
holding shares to satisfy the group’s liabilities to employees and directors for the long term incentive plan. Dividends on these shares have 
been waived during the period that they are within the trust except for those relating to shares held as Retained Shares under the terms 
of the trust which are paid to the beneficiaries on a timely basis. The net cost to the group of these shares (apart from the Retained 
Shares) is charged to the profit and loss account over the period to which they relate.
(b) The Vosper Thornycroft Holdings plc Qualifying Employee Share Ownership Trust which is a discretionary trust for the benefit of 
employees holding from time to time shares to satisfy the group’s liabilities under its Savings related Share Option Scheme and Sharesave 
Scheme 1998. The dividends on these shares are waived during the period they are within the trust. The shares were initially purchased 
with a loan from the group which has been progressively repaid as options are exercised.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 30 VT Group Annual Report 2003  31
vii Stocks
Stocks are valued at the lower of cost and net realisable value. For work in progress and finished goods, cost is taken as production 
cost, which includes an appropriate proportion of attributable overheads.
viii Long term contracts
The amount of profit attributable to the stage of completion of a long term contract is recognised when the outcome of the contract can
be foreseen with reasonable certainty. Turnover for such contracts is stated at cost appropriate to their stage of completion plus
attributable profits, less amounts recognised in previous years. Provision is made for any losses as soon as they are foreseen.
Contracts work in progress is stated at costs incurred, less those transferred to the profit and loss account, after deducting foreseeable 
losses and payments on account not matched with turnover.
Amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of payments on account.
ix Pension costs
The group operates a number of contributory pension schemes, both defined benefit and money purchase, and accounts for pension
costs in accordance with the requirement of SSAP24.
The assets of the schemes are held separately from those of the group. Contributions are charged to the profit and loss account so as to 
spread the cost of pensions over the service lives of pensionable employees.
The group has adopted the transitional disclosure requirements of FRS 17.
x Research and development
Expenditure on research is charged to the profit and loss account in the year in which it is incurred. Expenditure on development work is
charged to the specific contract to which it relates and is carried in work in progress.
xi Deferred taxation
Deferred taxation is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation 
and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.
xii Leased assets
Operating lease rentals are charged to the profit and loss account as incurred.
xiii Foreign currencies
Transactions denominated in foreign currencies are recorded in local currency at the rate of exchange ruling on the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the year end exchange rates or
at the rate at which they are hedged if appropriate.
Exchange gains and losses arising on foreign currency borrowings used to finance subsidiary undertakings are taken to reserves to the 
extent that they can be offset against the exchange differences arising on the equity investment. Assets and liabilities of foreign subsidiary 
undertakings are translated on consolidation into sterling at the rate of exchange ruling at the balance sheet date and the results are 
translated using the average exchange rates for the period. These consolidation differences on exchange are taken to reserves. All other 
exchange differences are dealt with in the profit and loss account.
xiv Financial instruments
The group uses derivative financial instruments to hedge its exposure to fluctuations in foreign exchange rates. Immediately a contractual
requirement is known the group enters into a forward contract to eliminate any exposure that may arise on future transactions
denominated in foreign currencies. Contract profits or losses taken to the profit and loss account are assessed using these forward
contact rates. Changes in the ‘fair value’ of these instruments have no affect on the profit and loss account and are therefore not
recognised in the financial statements.
xv Accounting for PFI contracts
The group considers the accounting treatment of PFI assets on a contract by contract basis and determines whether the risks and
rewards associated with the assets are retained or passed to the purchaser.
If the risks and rewards of ownership are retained by the group the assets are allocated to fixed assets, otherwise they are allocated to 
debtors in accordance with the relevant accounting standards.
It is group policy to expense all bid costs until preferred bidder status has been achieved.
xvi Liquid Resources
For the purposes of the cash flow statement, liquid resources are defined as current asset investments and short term deposits.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 31 Notes
(forming part of the financial statements)
32 VT Group Annual Report 2003
2 Analysis of turnover
Joint 2003 2002
Group ventures Total Total
By destination £000 £000 £000 £000
United Kingdom 264,555 82,957 347,512 311,855
Africa and Asia 67,511 507 68,018 65,646
Rest of Europe 51,613 – 51,613 52,648
North America 94,682 – 94,682 42,770
Other 2,663 151 2,814 6,034
481,024 83,615 564,639 478,953
Turnover and profits principally arise from activities and net assets within the United Kingdom.
3 Analysis of business segments
Support Services Shipbuilding Group
2003 2002 2003 2002 2003 2002
£000 £000 £000 £000 £000 £000
Turnover
Sales to third parties
Group 340,074 242,969 140,950 168,544 481,024 411,513
Share of joint ventures 83,615 67,440 – – 83,615 67,440
423,689 310,409 140,950 168,544 564,639 478,953
Operating profit
Group 24,261 17,956 10,679 10,824 34,940 28,780
Reorganisation costs – – (14,424) (750) (14,424) (750)
Share of joint ventures 8,125 6,062 – – 8,125 6,062
32,386 24,018 (3,745) 10,074 28,641 34,092
Goodwill amortisation and impairment (11,542) (4,540) (7,933) (857) (19,475) (5,397)
20,844 19,478 (11,678) 9,217 9,166 28,695
Profit on disposal of tangible fixed assets 4,000 –
13,166 28,695
Net interest (payable)/receivable (1,518) 2,743
Profit before taxation 11,648 31,438
Net assets
Segment net assets 11,127 13,879 127,197 137,432 138,324 151,311
Group share of the net assets of joint ventures 8,823 5,740 – – 8,823 5,740
Total net assets 19,950 19,619 127,197 137,432 147,147 157,051
The above analysis has been changed to reflect the new focus of the group on 2 divisions.
Support services includes all activities connected with facilities management, training and education and the equipping and/or supporting 
of company designed warships. Shipbuilding includes all activities in respect of designing and building ships, the design and supply of
electronic control systems, steering gear, stabilisers, bow thrusters, water jets, ride control equipment and the manufacture of engineering
products.
Support services’ activities are not dependent on the group winning major ship orders.
4Exceptional items
The exceptional items are made up of £14,424,000 of cost relating to the reorganisation of the Shipbuilding business (including move costs,
relocation, redundancy and site closure costs)  and £4,000,000 of profit relating to the disposal of Woolston shipyard.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 32 VT Group Annual Report 2003  33
5 Net interest (payable)/receivable
2003 2002
£000 £000
Interest receivable
Group bank interest 4,440 4,841
Joint ventures 457 446
4,897 5,287
Interest payable
Group - loan notes (843) (918)
- on recourse debt (3,841) (491)
- on non recourse debt (1,731) (1,135)
(6,415) (2,544)
Net interest (payable)/receivable (1,518) 2,743
In addition to the above, there is £2,622,000 (2002: £636,000) of interest payable which has been capitalised
6 Staff numbers and costs
The average number of persons employed by the group (including directors) during the year was as follows:
Number of employees
2003 2002
Management 566 445
Administration 1,073 845
Sales 70 63
Manufacturing and operations 6,221 4,846
7,930 6,199
The aggregate payroll costs of those persons were as follows:
2003 2002
£000 £000
Wages and salaries 175,919 140,366
Social security costs 13,059 9,989
Other pension costs (see note 30) 9,544 5,999
198,522 156,354
7Profit on ordinary activities before taxation
2003 2002
£000 £000
Profit on ordinary activities before taxation is stated after charging/(crediting):
Depreciation of tangible fixed assets 8,159 7,028
(Profit)/loss on disposal of fixed assets (4,660) 148
Amortisation and impairment of goodwill 19,475 5,397
Auditors’ remuneration – audit services:
Group 304 243
Company 13 12
Other fees paid to the auditors and their associates for non audit services
to the company and its UK subsidiary undertakings:
Group 154 161
Company 21 1
Exchange differences (1,176) 83
Operating lease rentals – land and buildings 2,303 2,003
Operating lease rentals – plant and machinery 2,636 3,330
Research and development expenditure not recovered by specific contracts 1,909 1,009
Fees paid to KPMG Audit Plc for non audit services which have not been charged in profit before interest, amounted to £nil (2002: £816,000).
These non-audit fees principally related to transaction due diligence and have been capitalised in costs associated with acquisitions.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 33 Notes
(forming part of the financial statements)
34 VT Group Annual Report 2003
8Tax on profit on ordinary activities
2003 2001
£000 £000
United Kingdom corporation tax at 30% (2002: 30%) (877) 7,061
Overseas taxation (includes £204,000 deferred tax credit) (899) 622
Joint ventures 2,746 1,999
Adjustments in respect of prior years (1,623) 453
Total current tax (653) 10,135
Deferred taxation – origination and reversal of timing differences 7,128 578
Adjustment in respect of prior years 1,634 –
Total deferred tax 8,762 578
Taxation charge 8,109 10,713
The current tax charge for the year is lower (2002: higher) than the standard rate of corporation tax in the UK (30%). The differences are
explained below:
2003 2002
£000 £000
Profit on ordinary activities before tax 11,648 31,438
Profit on ordinary activities multiplied by the standard rate 
of corporation tax in the UK of 30% (2002: 30%) 3,494 9,431
Effects of:
Goodwill amortisation not deductible for tax purposes 5,843 1,619
Non taxable profit on disposal of capital assets (1,200) –
Timing differences
- interest capitalised but immediately deductable for tax (781) –
- capital allowances in excess of depreciation (5,126) (757)
- pensions (1,454) 3
- on long term contracts 159 592
- other 35 (215)
Adjustments to tax charge in respect of prior years (1,623) 453
Current year corporation tax offset against deferred 
tax asset acquired in year – (991)
Current tax charge (653) 10,135
9Profit for the financial year
The profit dealt with in the financial statements of VT Group plc is £19,460,000 (2002: £14,446,000).
10 Dividends
2003 2002
£000 £000
Interim paid of 2.4p (2002: 2.25p) per ordinary share 4,093 3,745
Final proposed of 6.0p (2002: 5.55p) per ordinary share 10,274 9,454
Total dividend of 8.4p (2002: 7.8p) per ordinary share 14,367 13,199
Prior year’s figures have been restated, see note 21.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 34 VT Group Annual Report 2003  35
11 Earnings per share
Basic earnings per share are calculated on earnings of £2,742,000 (2002: £19,323,000) and 170,558,192 (2002: 167,369,345) issued
ordinary shares, being the weighted average number in issue during the year. 
The diluted earnings per share are calculated on earnings of £2,742,000 (2002: £19,323,000) and 171,593,647 (2002: 169,390,600) 
ordinary shares, calculated as follows:
2003 2002
Basic weighted average number of shares 170,558,192 167,369,345
Dilutive potential ordinary shares
Employee share options 1,035,455 2,021,255
171,593,647 169,390,600
The prior year’s figures have been restated, see note 21.
12 Intangible fixed assets
Group £000
Goodwill
Cost
At beginning of year 183,733
Additions (see note 26) 5,167
Disposals (138)
Adjustments (587)
At end of year 188,175
Amortisation
At beginning of year 9,319
Charge for year – amortisation 9,420
– impairment 10,055
At end of year 28,794
Net book value at 31 March 2003 159,381
Net book value at 31 March 2002 174,414
Adjustments represents changes to the fair values of previous year’s acquisitions.
An impairment exercise has been undertaken on previous acquisitions following the restructuring of the group which resulted in impairments
to goodwill of £10,055,000.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 35 Notes
(forming part of the financial statements)
36 VT Group Annual Report 2003
13 Tangible fixed assets
Land and buildings
Short Plant and Assets in course
Freeholds leaseholds machinery of construction Total
Group £000 £000 £000 £000 £000
Cost
At beginning of year 27,874 11,243 66,791 42,882 148,790
Exchange adjustment – (121) (414) – (535)
Additions 78 193 11,744 58,333 70,348
Transfers – – 21,545 (21,445) 100
Disposals (14,833) (32) (7,338) (92) (22,295)
At end of year 13,119 11,283 92,328 79,678 196,408
Depreciation
At beginning of year 9,337 871 32,928 – 43,136
Exchange adjustment – (15) (251) – (266)
Charge 526 672 6,961 – 8,159
Disposals (6,192) (27) (6,101) – (12,320)
At end of year 3,671 1,501 33,537 – 38,709
Net book value at 31 March 2003 9,448 9,782 58,791 79,678 157,699
Net book value at 31 March 2002 18,537 10,372 33,863 42,882 105,654
The gross book value of freehold land and buildings includes £9,848,000 (2002: £23,913,000) of depreciable assets.
The gross book value of tangible fixed assets includes £4,909,000 (2002: £2,827,000) of capitalised interest.
Plant and
machinery
Company £000
Cost
At beginning and end of the year 29
Depreciation
At beginning of year 9
Charge for year 10
At end of year 19
Net book value at 31 March 2003 10
Net book value at 31 March 2002 20
14 Fixed asset investments
Group At Share of At
1.4.2002 Acquisitions Disposal retained results 31.3.2003
a) Group investments in joint ventures £000 £000 £000 £000 £000
Shares in joint ventures 1,289 491 (497) – 1,283
Share of retained profits 4,451 – – 3,089 7,540
Share of net assets 5,740 491 (497) 3,089 8,823
The aggregate cost of investments at 31 March 2003 was £1,451,000 (2002: £1,457,000) of which provisions previously written off to profit
and loss were £168,000 (2002: £168,000).
Included within gross assets of joint ventures are fixed assets of £1,250,000 (2002: £1,019,000) and current assets of £50,363,000 (2002: £27,243,000).
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 36 VT Group Annual Report 2003  37
14 Fixed asset investments continued
b) Investment in own shares £000
At beginning of year 1,266
Additions 1,770
Exercise of options (2,371)
At end of the year 665
Investment in own shares represents 231,657 shares in VT Group plc held by the Employee Share Ownership Trust (0.1% of current allotted
share capital). The market value of shares held by the Trust at 31 March 2003 was £456,631.
2003 2002
Company £000 £000
Shares in subsidiary undertakings at cost or directors’ valuation 41,500 41,500
The cost of investment in subsidiary undertakings according to historical cost accounting rules is £24,100,000 (2002: £24,100,000).
Capital gains tax has not been provided for as it is not the group’s intention to dispose of these investments in the foreseeable future.
Details of principal subsidiary and joint venture undertakings are disclosed in note 32.
15 Stocks
2003 2002
Group £000 £000
Raw materials and consumables 9,246 9,927
Work in progress 8,454 9,594
Finished goods 3,300 3,543
21,000 23,064
16 Debtors
Group Company
2003 2002 2003 2002
Amounts falling due within one year £000 £000 £000 £000
Amounts recoverable on contracts 19,153 8,243 – –
Trade debtors 65,410 76,623 – –
Amounts owed by subsidiary undertakings – – 107,334 110,532
Amounts owed by joint ventures 978 2,976 – –
Corporation tax recoverable 5,542 – – –
Other debtors 1,857 5,058 655 529
Prepayments and accrued income 14,811 13,017 8 –
Recoverable taxation 2,161 85 – –
109,912 106,002 107,997 111,061
Amounts falling due after more than one year
Other debtors 7,500 – – –
Prepayments 5,000 – – –
12,500 – – –
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 37 Notes
(forming part of the financial statements)
38 VT Group Annual Report 2003
17 Creditors – amounts falling due within one year
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Guaranteed loan notes 12,591 37,839 10,388 19,810
Bank loans (note 18) 5,829 2,572 – –
Payments received on account 91,642 74,276 – –
Trade creditors 28,865 25,467 – –
Amounts owed to subsidiary undertakings – – 81,212 72,155
Amounts owed to joint venture undertakings 10,237 878 – –
Corporation tax – 5,980 1,048 276
Social security costs 4,054 3,078 41 25
Other taxes 3,098 3,986 8 –
Other creditors 8,330 13,182 189 431
Accruals and deferred income 53,405 65,674 224 286
Proposed dividends 10,274 9,454 10,274 9,454
228,325 242,386 103,384 102,437
18 Creditors – amounts falling due after more than one year
2003 2002
Group £000 £000
Guaranteed loan notes 100 100
Bank loans 81,030 53,802
Other creditors 7,495 10,636
88,625 64,538
Financial liabilities are due:
Other financial Other financial
Bank loans Bank loans liabilities liabilities
2003 2002 2003 2002
£000 £000 £000 £000
– in one year or less 5,829 2,572 25,921 41,141
– in more than one year but not more than two years 7,873 6,114 3,025 3,138
– in more than two years but not more than five years 28,500 31,670 2,760 5,788
– in more than five years 44,657 16,018 1,810 1,810
86,859 56,374 33,516 51,877
All bank loans are secured, details of the security involved are as follows:
a) A non recourse loan of £16,551,000 is secured on the assets relating to the Fire Fighting Units PFI contract. The secured assets have 
a net book value of £15,677,000 and are within Short Leaseholds and Plant and Machinery.
b) A non recourse loan of £58,321,000 is secured on three Offshore Patrol Vessels. £32,523,000 of costs have been capitalised within 
Assets in course of construction with a further £21,445,000 transferred to Plant and Machinery following acceptance under charter by the
Royal Navy of the first vessel.
c) The other loans are secured by a fixed and floating charge over the assets of the group and company.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 38 VT Group Annual Report 2003  39
19 Financial instruments
a) Interest rate risk profile of financial liabilities
The interest rate risk profile of the group’s financial liabilities at 31 March 2003, after taking account of the interest rate swaps used to manage
the interest and currency profile was:
Financial liabilities
Floating rate Fixed rate on which no
financial liabilities financial liabilities interest is paid Total
Currency £000 £000 £000 £000
Sterling 22,691 76,682 2,580 101,953
Dollars 11,392 595 6,435 18,422
At 31 March 2003 34,083 77,277 9,015 120,375
Sterling 37,939 43,357 3,818 85,114
Dollars 14,084 743 8,310 23,137
At 31 March 2002 52,023 44,100 12,128 108,251
Fixed rate Interest free
Weighted average
Weighted average period of which Weighted average
interest rate rate is fixed period until maturity
Currency %Years Years
Sterling 6.4 8.2 0.9
Dollars 6.0 6.5 1.3
At 31 March 2003 6.4 8.2 1.2
Sterling 6.5 11.3 1.4
Dollars 6.0 7.5 1.8
At 31 March 2002 6.5 11.2 1.7
The floating rate borrowings comprise bank borrowings and loan notes bearing interest rates based upon LIBOR.
b) Interest rate risk of financial assets
The group held the following financial assets:
2003 2002
Currency £000 £000
Sterling 10,824 41,920
Euros 14,341 26,180
Dollars 1,709 1,038
Other 2,581 1,853
29,455 70,991
All the group’s financial assets are held at floating rates. The floating rate assets include monies deposited on money markets for periods
varying from overnight to three months.
c) Currency exposure
The group’s policy is, where practicable, to hedge all exposures on monetary assets and liabilities.
d) Fair value of financial instruments
The carrying amounts and the fair values of the group’s financial instruments at 31 March 2003 are not materially different. 
Foreign currency cash balances are held to satisfy future liabilities on contracts and are payable in that currency. Any differences between the
book value and fair value of cash assets is as a result of some foreign currency balances being converted at contract rates. 
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 39 Notes
(forming part of the financial statements)
40 VT Group Annual Report 2003
19 Derivatives and other financial instruments continued
e) Undrawn bank facilities
The group has the following undrawn committed bank facilities available to it:
2003 2002
£000 £000
Expiring within one year 50,300 58,552
Expiring after more than one year 58,000 –
These facilities represent bonds, guarantees, letters of credit and forward contracts.
f) Hedges
The table below shows the extent to which the group has off-balance sheet (unrecognised) gains and losses in respect of hedges at the
beginning and end of the year.
Total net
Gains Losses gain/(loss)
£000 £000 £000
Unrecognised gains and losses on hedges at 1 April 2002 6 (37) (31)
Gains and losses arising in previous years that were recognised in 2002/03 (6) 37 31
Gains and losses arising before 1 April 2002 that were not recognised in 2002/03 – – –
Gains and losses arising in 2002/03 that were not recognised in 2002/03 750 (409) 341
Unrecognised gains and losses on hedges at 31 March 2003 750 (409) 341
Of which:
Gains and losses expected to be recognised in:
2003/04 750 (409) 341
20 Provisions for liabilities and charges
Contract and
warranty Reorganisation Deferred
provisions and redundancy taxation Total
Group £000 £000 £000 £000
At 1 April 2002 17,367 344 5,445 23,156
Exchange differences (50) – 2 (48)
Created during the year 11,031 2,863 8,556 22,450
Unused amounts reversed (3,457) – – (3,457)
Utilised (5,890) (873) – (6,763)
At 31 March 2003 19,001 2,334 14,003 35,338
Deferred taxation liability is analysed as follows: 
2003 2002
£000 £000
Accelerated capital allowances 6,834 2,394
Other timing differences 7,169 3,051
14,003 5,445
Full provision has been made for deferred taxation.
Contract and warranty provisions
Provisions are made when contracts are put to sales to cover expected warranty claims. Provisions are based on an assessment of future
claims with reference to past experience. Such costs are generally incurred within one to five years post delivery.
Reorganisation and redundancy
Provisions are made to cover costs to be incurred in respect of committed programmes.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 40 VT Group Annual Report 2003  41
21 Share capital
2003 2002
£000 £000
Authorised – 200,000,000 ordinary shares of 5p each (2002: 200,000,000 ordinary shares of 5p each) 10,000 10,000
Allotted called up and fully paid – 170,885,511 ordinary shares of 5p each 
(2002: 170,034,620 ordinary shares of 5p each) 8,544 8,502
The following movements in share options took place during the year:
Number of options Normally
Scheme Granted Exercised Lapsed Outstanding Price range (p) exercisable to
A– 109,140 – 1,157,900 116.3-201.6 23.05.09
B 988,254 32,500 3,030 2,151,364 156.4-299.0 17.12.09
C 268,831 – 9,470 1,158,951 239.6-299.0 17.12.12
D 1,743,512 959,524 53,996 3,357,897 144.8-258.4 01.09.07
AVosper Thornycroft Executive Share Option Scheme
BVosper Thornycroft Executive Share Option Plan 1996
CVosper Thornycroft Approved Share Option Plan 1999
DVosper Thornycroft Savings related Share Option Scheme and Vosper Thornycroft Sharesave Scheme 1998
On 5 July 2002 the company sub-divided each ordinary share of 25p into 5 new ordinary shares of 5p each.
22 Reserves
Profit & loss Share premium
account account Total
Group £000 £000 £000
At beginning of year 123,100 21,388 144,488
Retained loss for the year (11,625) – (11,625)
Movement on employee share ownership trust 1,547 – 1,547
Premium on issue of shares (849) 1,990 1,141
Currency translation differences on foreign currency net investments (670) – (670)
At end of year 111,503 23,378 134,881
The amount of cumulative goodwill resulting from acquisitions which has been written off to reserves is £9,112,000 (2002: £9,112,000).
Profit & loss Revaluation Share premium
account reserve account Total
Company £000 £000 £000 £000
At beginning of year 13,162 10,257 21,388 44,807
Retained profit for the year 5,093 – – 5,093
Premium on issue of shares (849) – 1,990 1,141
At end of year 17,406 10,257 23,378 51,041
23 Capital commitments
Group Company
2003 2002 2003 2002
£000 £000 £000 £000
Contracted but not provided for 16,369 11,917 – –
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 41 Notes
(forming part of the financial statements)
42 VT Group Annual Report 2003
24 Reconciliation of operating profit to operating cash flows
2003 2002
£000 £000
Operating profit 1,041 22,633
Goodwill amortisation and impairment 19,475 5,397
Depreciation charge 8,159 7,028
(Profit)/Loss on sale of fixed assets (660) 148
Increase in provisions 3,675 3,338
Decrease/(Increase) in stocks 1,920 (2,581)
Increase in debtors (6,020) (21,099)
Increase in creditors 15,390 37,669
Net cash flow from operating activities 42,980 52,533
25 Analysis of cash flows for headings netted in the cash flow statement
2003 2002
£000 £000 £000
Return on investments and servicing of finance
Interest received 4,451 5,696
Interest paid (9,388) (2,777)
Dividends paid to minority shareholders in subsidiary companies (1,136) (726)
Net cash (outflow)/inflow for returns on investments and servicing of finance (6,073) 2,193
Capital expenditure and financial investment 
Purchase of tangible fixed assets (67,726) (38,470)
Sale of tangible fixed assets 7,059 278
Investment in own shares 601 (920)
Net cash outflow from capital expenditure and financial investment (60,066) (39,112)
Acquisitions and disposals
Repayment of loan notes in respect of prior year acquisitions (25,250) (210)
Purchase of subsidiary undertakings and joint ventures (5,657) (95,372)
Net cash assumed with subsidiaries – 5,557
Sale of joint ventures 714 –
Net cash outflow from acquisitions and disposals (30,193) (90,025)
Management of liquid resources
Movements in long term deposits 17,764 26,391
Financing
Issue of ordinary share capital 1,183 2,313
Debt due in less than one year (5,370) 1,949
Debt due in more than one year 34,407 37,744
Net cash inflow from financing 30,220 42,006
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 42 VT Group Annual Report 2003  43
26 Purchase of subsidiary undertakings and joint ventures
2003 2002
£000 £000
Net assets acquired (book and fair values):
Tangible fixed assets 174 14,039
Investments – 579
Stocks and work in progress 468 3,115
Debtors 1,695 22,682
Cash at bank and in hand 4,019 5,557
Creditors (5,866) (30,063)
Provisions for liabilities and charges – 1,946
490 17,855
Goodwill 5,167 125,966
Cash consideration 5,657 95,372
Loan notes – 27,121
Issue of shares in group – 9,200
Deferred consideration – 12,128
Total consideration 5,657 143,821
The above relates principally to the acquisition of a 13% stake in the share capital of Flagship Training Limited from our previous joint venture
partner to take our investment in the joint venture to 50%.
27 Analysis of debt
At Exchange At
1.4.2002 Cash flow Non cash movement 31.3.2003
£000 £000 £000 £000 £000
Cash at bank and in hand 34,618 (23,772) – – 10,846
Current asset investments 36,373 (17,764) – – 18,609
70,991 (41,536) – – 29,455
Debt due within one year (43,713) 30,620 (8,657) – (21,750)
Debt due after more than one year (64,538) (34,407) 8,895 1,425 (88,625)
(37,260) (45,323) 238 1,425 (80,920)
28 Operating leases
At the end of the financial year the group had commitments under operating leases to make annual payments as follows:
Other
Land and operating 2003 2002
buildings leases Total Total
£000 £000 £000 £000
Expiring:
Within one year 617 55 672 570
In the second to fifth years inclusive 904 616 1,520 1,546
After more than five years 1,459 2,128 3,587 3,203
2,980 2,799 5,779 5,319
29 Contingent liabilities
In the ordinary course of business, group companies from time to time enter into contracts which can account for a substantial part of the
consolidated turnover.
In connection with these contracts, particularly with overseas customers, group companies are required to undertake significant obligations 
in relation to the performance and financing of the contracts.
In the opinion of the directors no further provision is required in respect of these obligations.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 43 Notes
(forming part of the financial statements)
44 VT Group Annual Report 2003
30 Pension arrangements
The group has continued to account for pensions in accordance with Statement of Standard Accounting Practice 24 ‘Accounting for Pension
Costs’ and the disclosures in (a) below are those required under the standard. The transitional disclosures in (b) below are required under the
new accounting standard Financial Reporting Standard 17 ‘Accounting for Retirement Benefits’.
a) SSAP24 Disclosure
The group operates three funded defined benefit schemes and several money purchase schemes. The majority of employees are members of
one of these arrangements.
The group participates in the Shipbuilding Industries Pension Scheme (SIPS). This scheme is administered by independent trustees and the
funds are separate from the group’s finance. The scheme is of the defined benefits type and actuarial valuations are undertaken every three
years. The rates at which the group contributes to the scheme have been determined in accordance with the advice of independent qualified
actuaries. The latest valuation of the scheme, of which most employees are members, was at 1 April 2001 using the attained age method.
The principal assumption in this valuation was that investment returns would be 2% higher than the rate of annual pay increases. The market
value of the assets was £182 million, and the actual value of the assets was sufficient to cover 120% of the benefits accruing to members
after allowing for expected future pay increases. The surplus revealed by the actuarial valuation will be spread over the expected remaining
service lives of scheme members currently employed by the group.
The superannuation arrangements of the LAWDC pension scheme, is a centralised defined benefit scheme for certain employees, with the
assets held in separate trustee-administered funds. The scheme is subject to triennial valuation by professionally qualified and independent
actuaries. The last formal valuation was carried out at 31 March 2000, using the projected unit credit method in which the actuarial liability
makes allowance for projected earnings. The principal assumption in this valuation was that investment returns would be 2% higher than the
rate of annual pay increases. The market value of the scheme’s assets was £6,522,000, and the actuarial value of those assets represented
87% of the liability for benefits after allowing for expected future increases in earnings. 
The group also operates a defined benefit pension scheme for the subsidiary undertaking, Merlin Communications Group. The scheme is
subject to triennial valuation by professionally qualified and independent actuaries. The last formal valuation was carried out at 31 July 2000,
using the projected unit credit method in which the actuarial liability makes allowance for projected earnings. The principal assumption in this
valuation was that investment returns would be 2% higher than the rate of annual pay increases. The market value of the scheme’s assets
was £6,700,000, and the actuarial value of those assets represented 97% of the liability for benefits after allowing for expected future
increases in earnings.
b) FRS17 Disclosure
The latest scheme valuations have been updated by the actuaries on an FRS17 basis as at 31 March 2003. The major assumptions used in
these valuations were:
Group Scheme: SIPS LAWDC’s Merlin
Latest valuation date 1 April 2001 31 March 2000 31 July 2000
2003 2002 2003 2002 2003 2002
Rate of increase in salaries 4.0% 4.25% 3.5% 3.75% 4.0% 4.25%
Rate of increase in pension payments 2.5% 2.75% or 3.0% 2.5% 2.75% 2.5% 2.75% or 3.0%
Discount rate 5.5% 6.25% 5.5% 6.25% 5.5% 6.25%
Inflation assumption 2.5% 2.75% 2.5% 2.75% 2.5% 2.75%
Long term return on equities 8.5% 8.0% 8.5% 7.5% 8.5% 8.0%
Long term return on fixed interest gilts 4.5% 5.0% 4.5% 5.0% 4.5% 5.0%
The assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial assumptions which, due to the
timescale covered, may not necessarily be borne out in practice.
The fair value of the scheme assets, which are not intended to be realised in the short term and may be subject to significant changes before
they are realised, and the present value of the scheme liabilities, which are derived from cash flow projections over long periods and thus
inherently uncertain, were:
Value at 31 March 2003
Total
SIPS LAWDC’s Merlin Total 2002
£000 £000 £000 £000 £000
Equities 135,158 6,321 6,540 148,019 182,381
Fixed interest gilts 15,018 702 727 16,447 20,264
Market value of assets 150,176 7,023 7,267 164,466 202,645
Value of liabilities (217,873) (13,132) (15,485) (246,490) (199,288)
(Deficit)/Surplus (67,697) (6,109) (8,218) (82,024) 3,357
Related deferred tax asset/(liability) 20,309 1,833 2,465 24,607 (1,007)
Net pension (liability)/asset (47,388) (4,276) (5,753) (57,417) 2,350
The amount of this net pension liability  would be included in the group’s profit and loss reserve.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 44 VT Group Annual Report 2003  45
b) FRS17 Disclosure continued
An analysis of the amount which would have been charged to operating profit is as follows:
£000
Current service cost 12,427
Past service cost –
Total operating charge 12,427
An analysis of the amount which would have been credited to other financing income is as follows:
£000
Expected return on pension scheme assets 15,662
Interest on pension scheme liabilities (12,754)
Net return 2,908
An analysis of the amount which would have been recognised in the statement of total recognised gains and losses (STRGL) is as follows:
£000
Actual return less expected return on pension scheme assets (63,028)
Experience gains and losses arising on pension scheme liabilities (1,266)
Changes in assumptions underlying the present value of the scheme liabilities (23,786)
Acturial loss recognised in STRGL (88,080)
An analysis of the movement in surplus during the year to 31 March 2003 would have been as follows:
£000
Surplus in scheme at beginning of the year 3,357
Movement in year:
Current service cost (12,427)
Contributions 12,218
Other finance income 2,908
Actuarial loss (88,080)
Deficit in scheme at the end of the year (82,024)
A history of experience gains and losses at 31 March 2003 would have been as follows:
£000
Difference between the expected and actual return on scheme assets:
Amount (63,028)
Percentage of scheme assets (38.3%)
Experience gains and losses on scheme liabilities:
Amount (1,266)
Percentage of present value of scheme liabilities (0.5%)
Total amount recognised in statement of total recognised gains and losses:
Amount (88,080)
Percentage of present value of scheme liabilities (35.7%)
In order to mitigate some of the pension deficit a prepayment of £5m was made into the SIPS scheme as at 31 March 2003.
On 1 April 2003 the Merlin scheme was transferred into the SIPS Scheme.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 45 Notes
(forming part of the financial statements)
46 VT Group Annual Report 2003
31 Related party transactions
During the year the group has entered into transactions, in the ordinary course of business, with other related parties. Transactions entered
into, and trading balances outstanding at 31 March 2003, are as follows:
Sales to Purchases from Amounts owed Amounts owed
related party related party by related party to related party
Related party £000 £000 £000 £000
Flagship Training Limited
2003 4,534 3,560 438 10,048
2002 4,645 3,887 861 878
Fleet Support Limited
2003 307 374 540 191
2002 1,646 180 2,115 –
University of Wales, Bangor
2003 449 – 267 –
2002 506 – 63 –
In addition Vosper Thornycroft (UK) Limited operated the payroll of Fleet Support Limited and during the year made payroll cost recharges of
£23,852,000 (2002: £26,461,000).
Flagship Training Limited
The group has a 50% (2002: 37%) interest in Flagship Training Limited.
Fleet Support Limited
The group has a 50% interest in Fleet Support Limited.
University of Wales, Bangor
The University of Wales, Bangor, holds a 50% stake in the VT controlled company, VT Ocean Sciences Limited. The majority of the turnover
of this company is to the related party, University of Wales, Bangor. In addition to the amounts shown above the University of Wales, Bangor
has provided a fixed rate interest loan of £1,810,000 (2002: £1,810,000); during the year interest of £131,000 (2002: £87,000) was charged.
All dealings with related parties are conducted on an arm’s length basis.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 46 VT Group Annual Report 2003  47
32 Principal subsidiary and joint venture undertakings
The following is a list of the group’s principal subsidiary and joint venture undertakings. All holdings are of ordinary shares or common stock
and are 100% unless otherwise stated. A full list of the group companies will be included in the company’s annual return.
Country of
incorporation 
Name Activity and operation
Airwork Limited* Support services for overseas airforces England
Careers Enterprise Limited* (50%) Provision of careers services in the counties of 
Buckinghamshire and Kent and in the City of London England
Flagship Training Limited*† (50%) World-wide provision of naval training services to 
HMG naval and other establishments England
Fleet Support Limited*† (50%) Support services for the Royal Navy Fleet at Portsmouth England
Griffin Services, Inc.* Support services for US Armed Forces USA
Koop Nautic Holland BV* Design and supply of stabilisers and bow thrusters for yachts Holland
Naiad Marine Florida, Inc.* Supply and repair of stabilisers and bow thrusters for yachts USA
Maritime Dynamics, Inc.* Design and supply of electronic maritime ride control systems USA
Saudi Vosper Thornycroft Company Limited*† (49%) Maintenance, repair, training and operation of military/
civilian ships and boats and related training Saudi Arabia
Surrey Careers Services Limited* (74.9%) Provision of careers services in the county of Surrey England
Van Dusen & Meyer, Inc.* Design and supply of stabilisers and bow thrusters for yachts USA
Vosper Thornycroft (Malaysia) Sdn. Bhd.* Representative company Malaysia
Vosper Thornycroft (UK) Limited Shipbuilding, and design and manufacture of engineering products England
Vosper-ManTech Limited* (60%) Provision of engineering services to GCHQ England
VT Aerospace Limited* Support services for the Royal Air Force England
VT Career Progressions Limited* (80%) Provision of software for careers services Scotland
VT Careers Management Limited* Holding company England
VT Controls, Inc.* Design and supply of electronic control systems USA
VT Controls Limited* Design and supply of electronic and sub-sea control systems England
VT Education Limited* Provision of education services England
VT Fire Services Limited* Special projects operating company England
VT Fire Training (Avonmouth) Limited Special projects operating company England
VT Group International Limited Holding company England
VT Group Services Limited* Provision of group services England
VT Halmatic Limited* Design and manufacture of small boats England
VT Hellas Marine Consultants SA* Provision of shipbuilding management services Greece
VT, Inc.* Holding company USA
VT International Services Limited* Holding company England
VT Investments Limited Group investment holding company England
VT Marine Products Limited* Design and supply of stabilisers, steering gear and bow thrusters England
VT Maritime Affairs Limited* Special projects operating company England
VT Merlin Communications International Limited* Provision of worldwide communications systems England
VT Ocean Sciences Limited* (50%) Special projects operating company England
VT Plus Training Plc* Provision of training services England
VT Services Limited* Provision of manpower and training services England
VT Shipbuilding Limited* Design and construction of warships England
VT Shipbuilding International Limited* Design and construction of warships England
VT Southern Careers Limited* (75.1%) Provision of careers services in the counties of
Hampshire and the Isle of Wight England
VT Technical Services Limited* Construction of contract related buildings England
VT TSS Limited* Design, manufacture and distribution of marine survey instruments
and the provision of related services England
VT West Sussex Careers Limited* (80.1%) Provision of careers services in the county of West Sussex England
Westminster Education Consultants Limited* Provision of schools inspection services England
* Investment held by a subsidiary company 
† Joint venture undertaking
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 47 Five year summary
48 VT Group Annual Report 2003
2003 2002 2001 2000 1999
£000 £000 £000 £000 £000
Turnover 564,639 478,953 378,523 274,043 240,589
Operating profit before goodwill
amortisation and exceptional items 34,940 28,780 24,049 26,253 24,128
Operating profit from joint ventures 8,125 6,062 4,863 3,238 1,973
Property services 4,000 – 916––
Reorganisation costs (14,424) (750) – – –
Net interest receivable/(payable) (1,518) 2,743 6,496 5,981 8,267
Profit on ordinary activities before tax
and goodwill amortisation 31,123 36,835 36,324 35,472 34,368
Goodwill amortisation (19,475) (5,397) (2,599) (1,114) (209)
Profit on ordinary activities before tax 11,648 31,438 33,725 34,358 34,159
Taxation (8,109) (10,713) (10,929) (10,494) (10,564)
Profit on ordinary activities after tax 3,539 20,725 22,796 23,864 23,595
Minority interest (797) (1,402) (996) (840) (1,067)
Profit for the financial year 2,742 19,323 21,800 23,024 22,528
Fixed assets
Goodwill 159,381 174,414 53,845 22,848 12,542
Tangible assets 157,699 105,654 47,944 44,830 30,597
Investments 9,488 7,006 4,810 2,719 953
Cash balance 29,455 70,991 115,518 155,553 128,858
Other current assets 143,412 129,066 81,574 50,966 60,704
Current liabilities (228,325) (242,386) (123,858) (118,818) (109,606)
Long-term liabilities (88,625) (64,538) (17,868) (16,806) –
Provisions for liabilities and charges (35,338) (23,156) (21,086) (12,155) (10,037)
Minority interest (3,722) (4,061) (3,335) (2,948) (1,847)
Equity shareholders’ funds 143,425 152,990 137,544 126,189 112,164
Earnings per share – pre goodwill amortisation
and exceptional items 16.6p 15.1p 14.7p 14.7p 13.9p
Earnings per share – pre goodwill amortisation 13.0p 14.8p 14.7p 14.7p 13.9p
Earnings per share – post goodwill amortisation 1.6p 11.5p 13.2p 14.0p 13.8p
Earnings per share – diluted post goodwill amortisation 1.6p 11.4p 13.0p 13.9p 13.8p
Dividend per share 8.4p 7.8p 7.3p 6.7p 6.2p
During the year the company’s 25p ordinary shares were subdivided into 5 new 5p ordinary shares.  As a result the earnings and dividends 
per share for the previous four years have been restated.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 48 Principal locations
VT Group Annual Report 2003  49
Head Office
VT Group plc
VT House
Grange Drive, Hedge End
Southampton SO30 2DQ
T: (023) 8083 9001
F: (023) 8083 9002
E: vtgroup@vtplc.com
W: www.vtplc.com
Shipbuilding
VT Shipbuilding
Fleet Way
Portsmouth PO1 3AQ
T: (023) 9285 7200
F: (023) 9285 7400
E:shipsales@vosperthornycroft.com
VT Halmatic 
Portchester Shipyard 
Hamilton Road
Portsmouth PO6 4QB
T: (023) 9253 9600
F: (023) 9253 9601
E: enquiries@halmatic.com
VT Controls
Northarbour Road, Cosham
Portsmouth, Hampshire PO6 3TL
Telephone: (023) 9231 0000
F: (023) 9231 0001
E: enquiry@vospvtc.com
W: www.vtcontrols.co.uk
VT Marine Products
Hamilton Road, Cosham
Portsmouth PO6 4PX
T: (023) 9253 9750
F: (023) 9253 9764
E: info@vtmc.demon.co.uk
VT Naiad
Naiad Marine Systems
50 Parrott Drive, Shelton
Connecticut 06484 USA
T: +1 (203) 929 6355
F: +1 (203) 929 3594
E: sales@naiad.com
W: www.naiad.com
Maritime Dynamics
21001 Great Mills Road, Lexington Park
Maryland 20653 USA
T: +1 (301) 863 5499
F: +1 (301) 863 0254
E: sales@maritimedynamics.com
VT Naiad Holland
Breukerweg 3a, 6411 RP Heerlen
The Netherlands
T: +31 (45) 544 7100
F: +31 (45) 574 2345
E: info@Koopnautic.com
Brisco Engineering
Bessemer Way
Harfreys Industrial Estate
Great Yarmouth
Norfolk NR31 0LX
T: (01493) 668811
F: (01493) 651137
E: marketing@brisco-eng.co.uk
VT TSS
1 Garnett Close
Greycaine Industrial Estate 
Watford, Herts WD24 7JZ
T: (01923) 470800
F: (01923) 470838
E: sgbmail@tssuk.co.uk
VT Naiad Florida
Broward Business Park
3700 Hacienda Bvd. Suite 1
Fort Lauderdale, Florida 33314 USA
T: +1 (954) 797 7566
F: +1 (954) 791 0827
E: sales@nmfl.com
Support services
VT Integrated Logistics
Victoria Road, Woolston
Southampton SO19 9RR
T: (023) 8042 6000
F: (023) 8042 6079
E: ildsales@vosperthornycroft.com
Saudi Vosper Thornycroft Limited
PO Box 4900, Riyadh 114212
Kingdom of Saudi Arabia
T: 966 1 464 9770
F: 966 1 465 1139
Flagship Training Limited
PO Box 152, HMS Collingwood
Newgate Lane, Fareham
Hampshire PO14 1YW
Telephone: (01329) 229000
F: (01329) 229001
E: marketing@flagshiptraining.co.uk
W: www.flagshiptraining.co.uk
VT Plus Training
2 The Drive, Hove,
East Sussex, BN3 3JA
T: (01273) 722666
F: (01273) 327928
E: info@hospitalityplus.co.uk
W: www.hospitalityplus.co.uk
VT Merlin Communications 
20 Lincoln's Inn Fields
London WC2A 3ES
T: 020 7969 0000
F: 020 7396 6221
E: marketing@merlincommunications.com
W: www.merlincommunications.com
Vosper-ManTech
223 Southampton Road
Paulsgrove
Portsmouth PO6 4QA
T: (023) 9235 4000
F: (023) 9235 4001
VT Griffin
5755 Dupree Drive, NW, Suite 220
Atlanta, Georgia 30327-4352 USA
T: +1 (770) 952 1479
F: +1 (770) 859 0410
E: info@griffinserv.com
VT Southern Careers
1st Floor, 24 West Street
Fareham PO16 0LF
T: (01329) 236740
F: (01329) 236824
E: southerncareers@vtis.com
VT West Sussex Careers
1-3 Chambers, Chapel Street
Chichester, West Sussex PO19 1DL
T: (01243) 537799
F: (01243) 533111
E: westsussexcareers@vtis.com
VT Careers Management
Sutton House, Weyside Park
Catteshall Lane, Godalming
Surrey GU7 1XJ
T: (01483) 413200
F: (01483) 413201
E: info@careersmanagement.co.uk
Fleet Support Limited
Postal Point 100, Building 2/166
HM Naval Base, Portsmouth PO1 3NJ
T: (023) 9272 2669
F: (023) 9272 2179
E: enquiries@fleet-support.co.uk
W: www.fleet-support.co.uk
VT Bordon
SEME, Budds Lane
Bordon, Hampshire GU35 0JE
T: (01420) 485509
F: (01420) 485522
VT Arborfield
Hazebrouck Barracks, Arborfield
Reading RG2 9NJ
T: (0118) 976 2202
F: (0118) 976 2208
VT Aerospace
Bournemouth International Airport 
Bournemouth BH23 6BS
T: (01202) 365200
F: (01202) 573692
E: info@vtae.co.uk
W: www.vtplc/air
VT Education
First Floor, Ashville House
260-262 Havant Road, Drayton
Portsmouth, Hants PO6 1PA
T: 023 9232 6754
F: 023 9232 6809
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 49 Notice of Annual General Meeting
50 VT Group Annual Report 2003
NOTICE IS HEREBY GIVEN that the seventeenth Annual General Meeting of VT Group plc will be held at the Friends Provident 
St. Mary’s Football Stadium, Britannia Road, Southampton on Tuesday 8 July 2003 at 12 noon for the following purposes:
1. To receive the report of the directors and the audited financial statements for the year ended 31 March 2003.
2. To declare a dividend.
3. To approve the Remuneration Report
4. To re-appoint Mr D Barclay, Mr A F Given, Mr D A Thorpe, Sir Jock Slater, Mr G W Cameron and Mr C J Cundy 
as directors of the company.
5. To re-appoint KPMG Audit Plc as the company’s auditors and to authorise the directors to determine their remuneration.
Special Business
6. To consider and, if thought fit, to pass the following Resolution which will be proposed as an Ordinary Resolution:
THAT the directors of the company be and are hereby generally and unconditionally authorised, pursuant to and in accordance with Section 80 
of the Companies Act 1985 (“the Act”), for a period expiring at the end of five years from the date on which this Resolution is passed, to allot
relevant securities (within the meaning of section 80(2) of the Act) up to a maximum nominal amount equal to the nominal amount of the
authorised but unissued share capital of the company at the date of passing this Resolution, provided that the company may before such expiry
make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors of the company may
allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired and provided further that
the authority hereby conferred shall be in substitution for, and to the exclusion of, the existing authority conferred upon the directors on 5 July 2002.
7. To consider and, if thought fit, to pass the following Resolution which will be proposed as a Special Resolution:
THAT the directors of the company be and hereby are empowered pursuant to section 95 of the Companies Act 1985 (“the Act”) to allot equity
securities (within the meaning of section 94 of the Act) pursuant to the authority conferred on them under section 80 of the Act by Resolution 6
above as if section 89(1) of the Act did not apply under any such allotment provided that this power shall be limited:
(a) to the allotment of equity securities in connection with any rights issue in favour of the holders of ordinary shares of 5p each in the 
company where the equity securities respectively attributable to the interests of all such holders of shares are proportionate (as nearly as may 
be) to the respective numbers of shares held by them, provided that the directors of the company may make such arrangements in 
respect of overseas holders of shares as they consider necessary or convenient; and
(b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of £427,213.
and this authority shall expire at the at the end of five years from the date on which this resolution is passed, provided that the company may before
such expiry make offers or agreements which would or might require equity securities to be allotted after such expiry and the directors of the company
may allot equity securities in pursuance of such offers or agreements as if the power conferred hereby had not expired and provided further that
the authority hereby conferred shall be in substitution for, and to the exclusion of, the existing authority conferred on the directors on 5 July 2002.
8. To consider and, if thought fit, to pass the following Resolution which will be proposed as an Ordinary Resolution:
THAT the aggregate amount of fees payable to directors in accordance with Article 1(E) of the company’s articles of association be increased to £300,000
9. To consider and, if thought fit, to pass the following Resolution which will be proposed as an Ordinary Resolution:
THAT the changes to the VT Group plc Long Term Incentive Plan (“the Plan”), the main features of which are summarised in Appendix A to the
Chairman’s letter to shareholders dated the same day as this Notice, be and the same are hereby approved and the directors (or any duly authorised
committee thereof) be and are hereby authorised to do all such acts and things as may be necessary or desirable to carry the same into effect,
including obtaining such approvals as the directors may consider necessary or desirable.
10. To consider and, if thought fit, to pass the following Resolution which will be proposed as an Ordinary Resolution:
THAT the rules and ancillary documents of the US Sharesave Plan, the principal terms of which are set out in Appendix B to the Chairman’s letter to
shareholders dated the same day as this Notice, be and are hereby approved for adoption by the directors on behalf of the Company and the company
secretary be and is hereby authorised to execute all documents and do all acts and things that may be required to implement the said US Sharesave Plan.
11. To consider and, if thought fit, to pass the following Resolution which will be proposed as an Ordinary Resolution:
THAT the proposed amendment of the rules of the Vosper Thornycroft Approved Share Option Plan 1999 (the “Approved Plan”) by the Remuneration
Committee to permit directors to participate in the Approved Plan be and is hereby approved and the Remuneration Committee be and is hereby
authorised to make the proposed amendment and the company secretary be and is hereby authorised to liaise with the Remuneration Committee,
the company’s solicitors and the Inland Revenue and to do all acts and things, including making any further minor amendments to the rules of the
Approved Plan as may be required by the Inland Revenue, to effect the proposed amendment.
VT House By order of the Board
Grange Drive P G Dawes
Hedge End Secretary
Southampton
SO30 2DQ 9 June 2003
Notes:
1. A member entitled to attend and vote at the meeting may appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the company. 
A form of proxy is attached; the form must be lodged at the office of the company’s registrars not less than 48 hours before the time appointed for the holding of the meeting.
2. The following documents will be available for inspection at the company’s registered office during normal business hours on any weekday (Saturdays and Sundays excluded)
from the date of this Notice until the date of the meeting and at the place of the meeting from 11.45 am on 8 July until its conclusion: (a) the register of directors’ interests in the
capital of the company, (b) copies of the directors’ contracts of service (c) the rules of and proposed amendments to the VT Group Long Term Incentive Plan (d) the draft rules of
the US Sharesave plan (e) the revised rules of the Approved Plan.
1423 VT accounts art 03/06   9/6/03  2:07 pm  Page 50 Proxy form
I/We, being (a) holder(s) of ordinary shares in VT Group plc hereby appoint the Chairman of the meeting
(or)
of
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on Tuesday 8 July 2003 and at any adjournment
thereof and in particular, in respect of the undermentioned resolutions referred to in the Notice of the Annual General Meeting dated 9 June 2003, to vote:
Resolution For Against
ORDINARY BUSINESS
1 Receive the report and accounts
2 Declare a dividend
3 Approve the Remuneration Report
4a Re-appoint Mr D M Barclay
4b Re-appoint Mr A F Given
4c Re-appoint Mr D A Thorpe
4d Re-appoint Sir Jock Slater
4e Re-appoint Mr G W Cameron
4f Re-appoint Mr C J Cundy
5 Auditors’ re-appointment and remuneration
Special business
6 Authority to allot relevant securities pursuant to section 80 Companies Act 1985
7 Disapplication of section 89(1) Companies Act 1985
8Increase aggregate fees payable to directors
9 Approve amendments to the VT Group plc Long Term Incentive Plan
10 Approve the US Sharesave Plan
11 Approve amendment to the Vosper Thornycroft Approved Share Option Plan 1999
Full names
(in block letters)
Address
Postcode
Signature Date
Notes:
1. A proxy need not be a member of the company.
2. Please indicate with and ‘X’ in the appropriate boxes above how you wish your votes to be cast. Unless otherwise instructed, the proxy may vote or 
abstain from voting as he thinks fit.
3. To be valid this proxy form must be deposited with or despatched to Capita Registrars (Proxies), P .O.Box 25, Beckenham, Kent BR3 4BR, so as 
to be received by them not less than 48 hours before the time fixed for the meeting.
4. The proxy form must be signed by the member or the member’s attorney duly authorised in writing or, if the member is a corporation, it must be 
either under its common seal or signed on its behalf by an attorney or officer so authorised.
5. In the case of joint members the vote of the senior joint member who signs a proxy form will be accepted to the exclusion of others, seniority 
being determined by the order of names in the register.
6. If you wish to appoint someone other than the Chairman as your proxy, delete "the Chairman of the meeting (or)" and insert the name and address 
of your proxy in the spaces provided.
7. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting should you subsequently decide to do so.
8. Any alteration made to this proxy form should be initialled.
CUT
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Capita Registrars (PROXIES)
P.O. BOX 25
BECKENHAM
KENT
BR3 4BR
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