NCC Group plc Annual Report and Accounts for the year ended 31 May 2009
GLOBAL
  STRENGTH
SOLID FOUNDATIONS
www.nccgroup.com
www.escroweurope.ch
www.escroweurope.com
www.nccgroup.de
www.nccgroup.us
www.ngssoftware.com
www.securetest.com
www.siteconfidence.com
www.nccgroupplc.com
Registered number: 4627044 assure •secure •advise
nccgroup
NCC Group plc Annual Report and Accounts 2009  1_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_2 
WORLDWIDE
STRENGTH
UK: 
Head Office
Manchester Technology 
Centre, Oxford Road, 
Manchester, M1 7EF, 
United Kingdom.
T +44 (0)161 209 5200 
F +44 (0)161 209 5100 
E response@nccgroup.com 
www.nccgroup.com 
London Office 
Floor 4, Tavistock House
North, London,  
WC1H 9HR,  
United Kingdom. 
T +44 (0)20 7383 9170 
F +44 (0)20 7383 9179 
E response@nccgroup.com 
www.nccgroup.com 
Site Confidence
St Martins House,  
St Martins Walk, Dorking,  
Surrey, RH4 1UW,  
United Kingdom.
T +44 (0)870 850 8520 
F +44 (0)870 850 8521 
E info@siteconfidence.com 
www.siteconfidence.com 
NGS
52 Throwley Way,  
Sutton, 
SM1 4BF,  
United Kingdom.
T +44 (0)208 401 0070
F +44 (0)208 401 0076
E sales@ngssoftware.com
www.ngssoftware.com
Secure Test
Eastern Bypass,  
Thame, Oxfordshire,  
OX9 3FF,  
United Kingdom. 
T +44 (0)1844 210 300 
F +44 (0)8709 908 423 
E securetest@nccgroup.com 
www.securetest.com
EUROPE:
Escrow Europe BV
Veemkade 396,  
NL-1019 HE,  
Amsterdam, 
The Netherlands.
T +31 20 620 7151 
F +31 20 420 1733 
E info@escroweurope.com 
www.escroweurope.com 
NCC Group GmbH
Heimeranstrasse 37, 
D-80339, 
Munchen,  
Germany. 
T +49 (0)89 599 762 0 
F +49 (0)89 599 762 599 
E europe@nccgroup.com 
www.nccgroupescrow.de
Escrow Europe 
Switzerland AG,
Ibelweg 18a,
CH-6300 Zug, (Zurich)
Switzerland.
T +41 (0)41 763 2800
F +41 (0)41 763 2801
E info@escroweurope.ch
www.escroweurope.ch
US: 
NCC Group Inc
1731 Technology Drive,  
Suite 880, San Jose,  
CA 95110, California,  
USA. 
T +1 408 441 4660 
F +1 408 441 4658 
E usa@nccgroup.com 
www.nccgroup.us   3_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_4 
STRONG 
TEAM
421
 3_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_4   5_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_6 
LEADING FROM   
 THE FRONT
Highlights 07
Group Profile 10
Chairman’s Report 11
Chief Executive’s Review 15
Financial Review 21
Directors 25
Senior Management 27
Directors’ Report 31
Consolidated Income Statement 52
Group Balance Sheet 53
Company Balance Sheet 54
Group Cash Flow Statement 55
Company Cash Flow Statement 56
Statements of Changes of Equity 57
Notes 59
Company Information 100
Contact us 102
STRONG 
LINE-UP
NCC GROUP SERVES  
THE NEEDS OF A VARIETY  
OF WORLDWIDE CLIENTS 
WITH OFFICES THROUGHOUT 
THE UK, CONTINENTAL 
EUROPE AND THE USA
Corporate Governance 34
Directors’ Remuneration Report 39
Statement of Directors’ Responsibilities 46
Corporate Social Responsibility Report 47
Independent Auditors’ Report 49
NCC Group has also produced  
a dedicated web site for the 2009 
Annual Report featuring dynamic 
functionality, located at: 
www.nccgroupplc.com  7_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_8 
HIGH
LIGHTS 
 NCC GROUP
 ANNUAL 
 REPORT 2009
£12.7M
Group adjusted 
operating profits* up 
by 19% to £12.7m  
(2008: £10.7m)
13%
  13% Group Escrow 
maintained strong  
organic revenue growth
17%
   Adjusted fully diluted 
earnings per share* 
up 17% to 26.1p 
(2008: 22.4p)
17%
  Group adjusted  
pre tax profits* up  
by 17% to £12.3m 
(2008: £10.5m)
140%
  Cash conversion 
ratio up to 140%  
of operating profits  
(2008: 122%)
£9.4M
Assurance Testing  
order book, including 
Consultancy, £9.4m  
(2008: £7.1m)
*  Operating profit is adjusted 
for amortisation of acquired 
intangibles of £1.2m.  
Pre-tax profit is adjusted for  
this item and the unwinding of 
the discount on the acquisitions 
deferred consideration of 
£0.2m. The Directors believe 
the adjusted measures better 
reflect the ongoing performance 
of the business.
32%
Total dividend up  
32% to 9.25p
Escrow Europe Switzerland 
acquired the remaining 
76% in May 2009, further 
strengthening the Group’s 
position as the world’s 
largest software Escrow 
provider
TWO ACQUISITIONS 
COMPLETED  
& INTEGRATED
Next Generation Security 
Software (NGS) an 
Ethical Security Testing  
business acquired for  
up to £10M in 
November 2008
THE WORLDWIDE 
ESCROW BUSINESSES 
ARE THE  
CORNERSTONE 
OF THE GROUP’S 
PROFITABILITY AND 
PROVIDE A NOTABLY 
HIGH DEGREE OF 
RECURRING REVENUE
£2.0M
Group Escrow  
verification order  
book £2.0m  
(2008: £2.0m)
£4.1 M
Site Confidence  
monitoring renewals  
forecast to be £4.1m  
(2008: £3.8m)
£5.6M
Net debt at year  
end £5.6m – expected  
to be net debt free  
by August 2010
£14.9M
Group Escrow renewals  
forecast to be £14.9m  
(2009: £13.6m)
ASSURANCE 
TESTING NOW 
FIRMLY ESTABLISHED 
AS UK’S LARGEST 
INDEPENDENT 
INFORMATION 
SECURITY BUSINESS
31%
 Group revenue up 
by 31% to £46.8m  
(2008: £35.7m)
Overview  9_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_10 
   
GROUP PROFILE
NCC Group is a leading global 
provider of independent IT assurance, 
security and consultancy services.  
As a trusted advisor, we help over 
15,000 public, private and not for 
profit sector organisations, including 
94 out of the FTSE 100 to make 
the most efficient use of information 
and technology and to manage the 
associated risks.
Our independence from  
hardware and software providers 
ensures the advice we offer is 
unbiased and impartial. We 
focus on developing intelligent 
solutions to real business issues  
and building lasting partnerships  
through our comprehensive  
portfolio of IT assurance, security  
and consultancy services.
NCC Group serves the needs of a  
wide variety of clients worldwide with 
offices throughout the UK, continental 
Europe and the USA. We are listed on 
the London Stock Exchange.
The Group operates two main 
complementary divisions; Escrow,  
which trades under the NCC Group 
Escrow brand and Assurance  
Testing, which trades under the Secure 
Test, NGS and Site Confidence 
brands. The consultancy operations, 
with effect from the beginning of the 
current financial year, now form part of 
Assurance Testing and operate under 
the NCC Group Consultancy brand. 
 STRONG 
CHARACTER
Escrow:
• 	 Ensuring source code or 
other business critical material  
is protected and accessible 
should anything happen to a key 
supplier and to enable stronger 
supplier relationships
• 	 	 	 Confirming the material held is 
properly protected by verifying 
it can be rebuilt from its source 
code components. 
Assurance Testing:
• 	 	 S i t e 	 C o n fi d e n c e 	 – testing and 
monitoring relevant aspects 
of system, network and web 
site performance to ensure the 
technology used can deliver 
optimum performance
• 	 	 N G S 	 – expert led security 
testing, covering forensics, 
vulnerability research and the 
development of expert software  
to aid organisations in their 
ongoing battle with information 
security breaches
• 	 	 S e c u r e 	 T e s t 	 – penetration and 
security testing of networks, 
applications and security 
policies in place to ensure an 
organisation’s information is 
safe from the constantly evolving 
challenges of unauthorised access
• 	 Information Security 
C o n s u l t a n c y 	 – protecting 
organisations against a variety of 
risks through the development 
and implementation of effective 
strategy and compliance with 
relevant standards and guidelines
• 	 Information Technology 
C o n s u l t a n c y 	 – providing advice 
at all levels on the effective use 
of information, technology and 
business processes.
AS A TRUSTED 
ADVISOR, WE 
HELP OVER 
15,000 PUBLIC, 
PRIVATE AND 
NOT FOR 
PROFIT SECTOR 
ORGANISATIONS
Overview  11_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_12 
CHAIRMAN’S
REPORT
Overview
In our fifth successive year as a  
public listed company, NCC Group 
plc has delivered its strongest ever 
performance, but this time against a 
backdrop of economic and worldwide 
financial downturn and uncertainty. 
Without doubt the global economy in 
which the Group operates is the worst 
ever encountered. However, the Group 
developed and continued to grow in 
the face of this adversity. As well as 
delivering strong financial growth, two 
acquisitions were made in the financial 
year to complement our Escrow and 
Assurance divisions.
Overall Group revenues for the  
year grew by 31% to £46.8m (2008: 
£35.7m). Excluding the acquisitions, 
the Group showed very strong organic 
growth of 19%. Adjusted operating 
profits increased by 19% to £12.7m 
(2008: £10.7m). Adjusted pre-tax profits 
were up 17% to £12.3m (2008: £10.5m) 
and fully diluted adjusted earnings  
per share increased 17% to 26.1p 
(2008: 22.4p). 
Group margins remained strong.  
Our adjusted operating profit margin  
was 27% (2008: 30%) changing  
as expected as a result of acquiring  
non escrow businesses whose margins  
are closer to 15%.
The Group continues to be highly cash 
generative and has only £5.6m net 
debt at the year end after meeting the 
initial payments on two acquisitions and 
completing the cash payments of two 
earn outs. Operating cash conversion 
represented 140% of operating profits 
(2008: 122%).
NCC Group has further enhanced 
its reputation as a consistent, strong 
deliverer of reliable growth and 
has maintained its commitment to 
shareholders by further improving the 
dividend for the year to 9.25p, up 32%.
Operations
Our worldwide Escrow businesses 
are the cornerstone of the Group’s 
profitability and provide a notably high 
degree of recurring revenue due to the 
high contracts renewals base. Organic  
revenue growth in the year was 13%,  
with strong performances from the 
overseas operations.
For Escrow UK, growth in the first half 
of the year was slower than the Board 
would have liked, as our clients were 
affected by the severity and speed of the 
economic downturn which curtailed their 
investment in IT software and services. 
The Group also experienced a fall off in 
demand for our verification services. In 
the first six months, overall growth was 
1%. In the second six months, due to 
swift action taken to refocus the sales 
message, new contract and verifications 
growth was once again 10%.
At an operating profit level the Escrow 
businesses overall grew by 15% 
to £11.7m (2008: £10.2m) with all 
geographies seeing double digit growth.
In Assurance Testing, revenues grew 
by 49% and profitability by 67% as the 
benefits of our acquisitions over the 
last few years continued to be realised. 
Secure Test saw another year of solid 
growth, growing organically by 31%  
and Site Confidence saw a 9% growth  
in sales.
The acquisition of NGS broadened our 
appeal in the ethical security market by 
further increasing our technical expertise 
and adding forensics skills and research 
to our already strong set of propositions.
Assurance Testing continues to  
benefit from the integration of the  
various units acquired to date and is 
focusing on improving its operating 
margins, which grew to 15% from  
13% in the previous year.
Consultancy continues to focus on  
being a key provider in the information 
security standards arena and the 
business saw a 36% growth in 
revenues. Operating profits grew by  
4% as the general IT consultancy 
market, which we have been moving 
away from during the last two years,  
has continued to be very competitive. 
 
People
NCC Group remains committed  
to being a first class employer and 
we recognise our dedicated and 
hardworking team is the major reason  
for the Group’s continued success. 
We have always worked hard to  
recruit only the best and we continue  
to ensure all employee bonus plans 
motivate towards the Group’s long  
term success. On behalf of the  
Board, I would like to congratulate  
and thank all employees of NCC Group 
who have made this year such a  
success during this very demanding  
and uncertain time.
Board Changes
As the Group has grown and developed 
so the Board has evolved. We were 
delighted to welcome Debbie Hewitt  
on 18 September 2008, as a Non 
Executive Director. She brings with  
her a first class business acumen and 
strong background of people skills.
I would also like to welcome David 
McKeith who will join us on 29 July 
2009. David brings strong professional 
financial skills to further complement  
the Board and will replace Eurfyl  
ap Gwilym who retires at the AGM  
after five years with the Group.  
I would like to put on record mine 
and the Group’s sincere thanks for  
his time with us, joining as he did at  
the time of flotation and helping us 
become an established and well 
respected PLC. Debbie Hewitt will  
chair the Remuneration Committee 
following Eurfyl’s departure.
Paul Mitchell
Non Executive Chairman
NCC Group plc
1 July 2009
WITHOUT DOUBT THE 
GLOBAL ECONOMY IN 
WHICH WE OPERATE 
IS THE WORST EVER 
ENCOUNTERED. 
HOWEVER, THE 
GROUP DEVELOPED 
AND CONTINUED TO 
GROW IN THE FACE 
OF THIS ADVERSITY
OVERALL GROUP 
REVENUES FOR THE 
YEAR GREW BY  
31%
GROUP 
MARGINS 
REMAINED 
STRONG. 
OUR ADJUSTED 
OPERATING 
PROFIT MARGIN 
WAS 27% 
IN ASSURANCE 
TESTING, 
REVENUES GREW 
BY 49% AND 
PROFITABILITY  
BY 67% 
Overview  13_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_14 
NCC Group has a very strong market 
leading position in all of the niches in 
which it operates and the services and 
advice it provides is as far away from 
discretionary expenditure as it can be. 
The Group also continues to evolve its 
range of offerings to ensure it maintains 
its market leading positions.
The start to the year sees Group Escrow 
renewals at £14.9m, up from £13.6m 
achieved in the financial year to 31 May 
2009 and a verification order book of 
£2.0m, of which £0.6m relates to Escrow 
Europe and Escrow US. 
The Assurance Testing businesses’ order 
books have improved to £9.4m (2008: 
£7.1m), included in this is £2.9m (2008: 
£2.5m) from the Consultancy division. 
The division also has £4.1m of monitoring 
renewals forecast for the coming financial 
year (2008: £3.8m). 
The outlook for NCC Group is good 
and the Board remains very confident 
in the Group’s ability to deliver further 
sustainable growth. 
Paul Mitchell
Non Executive Chairman
NCC Group plc
1 July 2009
CHAIRMAN’S
REPORT
CONTINUED
THE START TO THE 
YEAR SEES OUR 
GROUP ESCROW 
RENEWALS AT 
£14.9M
The Operational Board, which runs the 
day to day affairs of the Group, has 
been revised to reflect the enlarged 
Group. It now predominately operates 
as two business strands, Escrow and 
Assurance Testing. Roger Rawlinson has 
been promoted to Managing Director of 
Assurance Testing and we are currently 
in the process of recruiting a Managing 
Director to lead our global Group of 
Escrow businesses. 
Corporate Governance
NCC Group has always maintained 
that for a business such as ours, which 
acts as an independent trusted advisor 
to its clients, the highest standards of 
corporate governance and application of 
the most prudent accounting standards 
are essential. 
NCC Group will continue to take every 
practical step to adhere to the revised 
Combined Code, with which we comply 
fully and will continue using FTSE 250 
companies as our benchmark.
Dividends
The Board is recommending a final 
dividend of 6.25p per share which  
makes a total for the year of 9.25p 
(2008: 7.00p). If approved at the  
Annual General Meeting, the dividend  
will be paid on 25 September 2009 
to shareholders on the register at  
28 August 2009. The ex-dividend date 
will be 26 August 2009.
I WOULD 
LIKE TO 
CONGRATULATE 
AND THANK ALL 
EMPLOYEES OF 
NCC GROUP 
WHO HAVE 
MADE THIS 
YEAR SUCH 
A SUCCESS
WE HAVE ALWAYS 
WORKED HARD 
TO RECRUIT ONLY  
THE BEST
Outlook
NCC Group continues to make 
a virtue of acting independently 
and operating as trusted, 
equitable advisors. To date it 
has successfully acquired and 
integrated seven businesses that 
have complemented its service 
and delivery offerings. The Group 
has an outstanding track record 
of organic growth and a sound 
business model that it will continue 
to evolve and develop to grow the 
business further.
The economic landscape has 
fundamentally shifted over the last 
year and for many businesses  
this is causing considerable 
hardship and has led to a period  
of uncertainty. 
For NCC Group, that is not the 
case. The decisive action taken 
over the last three years has 
ensured the Group has and will 
continue to weather this economic 
storm and the Board is confident 
the business will go from strength 
to strength. 
Overview  15_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_16 
CHIEF EXECUTIVE’S
REVIEW
Corporate Overview
The Group delivered 31% growth in 
revenues and growth of 17% in adjusted 
pre tax profits, emphasising the strength 
of the Group’s proposition despite the 
global economic uncertainty faced by all 
businesses over the last year. 
Overall the Group delivered £46.8m 
revenue, up from £35.7m in 2008 and 
adjusted operating profits of £12.7m,  
up 19% from £10.7m in 2008. 
The last five years of solid growth, 
revenue CAGR of 25% and 22% for 
adjusted operating profit, demonstrate 
the success of our strategy of focused 
sustainable organic growth, allied to 
carefully targeted acquisitions.
Market and Positioning
It is without doubt a difficult and 
uncertain global and domestic  
economic environment in which to 
operate, with the financial world 
continuing to change shape rapidly  
and the future still only being measured  
in months rather than years.
 
The Board believes that the basic 
underpinning of demand for its products 
and services has remained unchanged. 
However, it is very aware that business 
investment in new infrastructure and 
software continues to be considerably 
less than it has seen over the last few 
years, as corporations defer decisions  
and as a consequence, implementations 
and upgrades.
The IT software and services market 
is also under attack from cost cutters. 
Decision making ability is being removed 
and authority levels are being reduced. 
Discretionary expenditure has been 
culled. However, selling is still very much 
possible, providing it is in the right area 
with the right products. 
Although NCC Group was not  
immune from the downturn, its 
positioning helped to avoid the worst 
effects of the downturn in the domestic 
economy as its products and services  
fall into the non-discretionary  
expenditure category.
NCC Group remains the largest 
provider of escrow services in the world. 
Furthermore, it is the only provider 
that mandates quality ahead of price 
and does not intend to change that 
philosophy. There are no signs that the 
very small virtual providers who offer 
a low cost, low value proposition are 
gaining traction in the market. The Board 
believes their future is in jeopardy as 
the market shows no sign of wanting to 
make false economy by trusting part of 
their disaster recovery and risk mitigation 
plans to unknown organisations.
The dynamics of the escrow market have 
not materially changed since the Group 
floated in 2004 and the same market 
assumptions, as detailed by Gartner at 
the time, remain. As was confirmed then, 
many companies were significantly less 
protected than they should be and apart 
from those the Group has worked closely 
with, the Board still believes that to be  
the case. 
Both the public and private sector still 
typically believe that they have several 
times more cover than they actually do 
have. They are still unaware that they 
should have considerably more. The 
UK escrow market without verification 
testing is still very niche and the 
Group estimates that the market size 
is approximately £100m, which still 
provides NCC Group with considerable 
headroom for growth.
Within Assurance Testing, the market 
for Secure Test and NGS, the ethical 
security testing and forensics service 
providers, continues to see strong 
growth. Media headlines continue to 
highlight embarrassing and avoidable 
examples of poor security that have 
resulted in real data and financial loss.
Within Assurance Testing, the Group 
has the largest team of CESG CHECK 
accredited ethical security testers in 
the UK, with currently over 100 testers. 
NCC Group is committed to investing in 
the number of employees who have the 
CHECK or equivalent Crest qualification 
to ensure that as the Group and the 
industry grows, the highest ethical and 
technical standards are maintained.
The information security side of the 
Consultancy division now fits well into 
Assurance Testing. NCC Group is fast 
becoming the name of choice for major 
companies wanting to ensure that they 
are best placed to protect themselves 
and their business assets from attack. 
The Group provides information security 
advice from every perspective, especially 
for those organisations that are covered 
by the PCI Data Security Standards. 
NCC Group’s position in the information 
security market is further enhanced by 
being accredited PCI Auditors and by 
having more CLAS consultants in the  
UK than anybody else.
The Group is managed through two 
distinct business units, Group Escrow 
and Assurance Testing. Each is run 
independently by an autonomous 
management team responsible for setting 
and, after Board approval, delivering its 
own plans, with each area being tasked 
with generating organic growth. 
This change from three to two divisions 
reflects the very substantial shift in 
consulting activity, as it becomes even 
closer to Assurance Testing and as 
the Group withdraws further from the 
low margin commoditised areas of 
consulting. All future reporting will follow 
this structure, with non-information 
security consulting being disclosed 
separately in the Assurance Division.
Business Performance
The Group grew revenue by 31% to 
£46.8m and adjusted operating profits  
by 19% to £12.7m. More importantly, 
we saw our recurring income levels 
consolidate. In Escrow UK nearly  
89% of all contracts renewed, whilst  
in Assurance Testing, 79% of prior  
year testing revenue was retained,  
with those customers spending on 
average 24% more with us at nearly 
£22,000 per renewal. In addition, 90%  
of our performance monitoring and  
load testing revenues were renewed 
and are recurring.
As a Group, we continue to generate 
strong margins, with our adjusted 
operating profit margin remaining  
strong at 27% (2008: 30%) in line  
with expectations. The change in  
margin is, as always, the effect of 
acquiring non-escrow businesses  
whose margins are closer to 15%.
As has always been the case, the Group 
had no reliance on one customer or 
sector for its revenue. The analysis is as 
follows and shows a consistent trend.
Rob Cotton
Chief Executive
NCC Group plc
1 July 2009
NCC GROUP 
REMAINS 
THE LARGEST 
PROVIDER 
OF ESCROW 
SERVICES IN 
THE WORLD 
NCC GROUP IS  
FAST BECOMING 
THE NAME 
OF CHOICE 
FOR MAJOR 
COMPANIES
For NCC Group, the product  
sets are still compelling to its 
customers as it continues to  
provide services that are critical  
to business, for example:
• 	 	 O r g a n i s a t i o n s 	 w h o 	 n e e d	
protection for their business critical 
applications as corporate failures 
and product withdrawals increase; 
• 	 	 S y s t e m s , 	 n e t w o r k s 	 a n d 	 d a t a	
security have not kept pace with 
the growth of data and of identity 
theft and hacking globally, which 
continue to reach new levels on an 
almost daily basis. As the Group 
has stated before, this is ‘an arms 
race’ which is not getting any 
slower, nor is there any end in 
sight; and
	 • 	 	 W e b 	 s i t e 	 p e r f o r m a n c e 	 i s 	 c r i t i c a l	 
to all types of businesses as the 
web is now often their primary 
shop window. 
Overview  17_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_18 
CONTINUED
Top three sectors by division
               
Escrow               Assurance Consultancy
Banks & Insurance 23% 20% –
Software Computer Services 13% 22% –
Telecoms 18% – –
Retail – 17% –
Housing – – 29%
Local Govt – – 19%
Central Govt – – 9%
GROUP 
REVENUE SPLIT 
BY SECTOR
Group Escrow
During the year the Group has expanded 
its footprint in continental Europe 
by adding operations in Zurich, to 
complement its presence in Amsterdam 
and Munich.
The acquisition of Escrow Europe 
Switzerland, in which we already held a 
24% stake, demonstrated our intention 
to widen and strengthen, by acquisition 
and organically, our geographical spread 
carefully both in continental Europe and 
the US.
Across the Escrow businesses in 
the various countries, the Group has 
experienced positive changes in most 
of its key performance measures of 
profitability, renewals, terminations 
and verification testing. Group Escrow 
profitability grew 15% to £11.7m (2008: 
£10.2m), on revenue of £21.0m (2008: 
£18.0m), with the UK contributing 79% 
(2008: 87%). Group recurring revenues 
through our renewals process grew 
by 22% to £13.6m (2008: £11.2m). 
Verifications grew throughout the Group 
by 13% in the year despite a poor 
performance during the first half.
Escrow UK
This was very much a year of two 
halves, with the first six months of the 
year suffering from the full impact of the 
global banking crisis, as outlined above. 
Key changes were made to better take 
advantage of the market place and the 
second half of the year saw a 10% 
growth in revenue. Contained within 
that excellent result was that Verification 
revenues grew by 8.5%, which for the 
year as a whole saw Verification revenue 
only 5% down at £2.9m (2008: £3.0m).
Escrow UK recurring revenues grew 
10% to £10.9m (2008: £9.9m) 
but terminations varied significantly 
particularly in the first eight months of 
the year. An improvement in the Group’s 
processes, allied to the passing of the 
initial knee jerk reaction to the economic 
downturn, has seen UK termination rates 
for the last year of 11.5%.
Below are the termination rates for the 
last three years. Importantly, the Group 
is now seeing a reduction in termination 
requests which leads the Board to 
believe rates are returning to normal.
Termination Rate % 
2006 2007 2008 2009
10.3 10.2 9.2 11.5
The external planning guidance 
historically given was between 11% and 
13% for terminations for the previous 
three years and until September 2009 
that had been unchanged. Currently the 
Board believes the peak of 12% seen in 
January is unlikely to be a long-term trend 
and so the benchmark remains between 
these two levels. 
Escrow Europe and Escrow US
Escrow Europe had a successful year, 
despite the management team being 
replaced. The business has benefited 
from the strong Euro, but succeeded 
in growing profitability by 113% on a 
consistent currency basis. The Swiss 
acquisition further consolidates NCC 
Group’s position and the business 
is already seeing benefits from that 
acquisition. The two German offices are 
fully amalgamated and the business is 
growing at 102% per annum.
Escrow US also benefited from the 
exchange rate, but underlying growth 
was still good with revenues up by 70% 
and profits up by 36% on a consistent 
currency basis. The US office now has 
16 employees and is growing as the 
NCC Group brand starts to have an 
impact in the US Escrow market.
Assurance Testing
Assurance Testing in this financial year 
consists of three component parts; 
Secure Test, NGS and Site Confidence. 
Assurance Testing revenue grew 49% 
to £19.1m with an increase in profitability 
of 67% to £2.8m (2008: £1.7m), the 
organic element of which was 38%. 
A key feature of the division is the 
frequency that customers renew the 
testing work performed by the Group. 
The division currently has a high 
recurrence rate for ethical security 
testing of 79% of prior year’s revenues, 
which represents 51% of all customers 
which is a slight change from last year, 
when the renewal rate was 82% and 
56% respectively. This entirely expected 
change is due to the increased demand 
for testing generally, as reflected by 
the revenue growth seen in the year. 
More importantly, renewing customers’ 
expenditure has gone up from £17,463 
to £21,732 in 2009 and to £15,525 from 
£14,120 for new customers. 
Site Confidence performance monitoring 
and load testing had a recurring revenue 
rate of 90%.
 
Secure Test and NGS both had  
very strong years and the business 
witnessed the team of 97 testers 
operating at capacity for most of the year. 
CHIEF EXECUTIVE’S
REVIEW
THE US OFFICE 
NOW HAS 16 
EMPLOYEES AND 
IS GROWING AS 
THE NCC GROUP 
BRAND STARTS  
TO HAVE AN  
IMPACT IN THE US 
ESCROW MARKET
Fixed & Mobile 
Telecommunications
9%
Local Govt 8%
Central Govt 6%
Travel & Leisure 5%
Housing 5%
Healthcare 
Equipment
& Services
4%
Support Services 4%
3% Education
18% Banks &   
Insurance
15% Software  
& Computer  
Services
13% Other
10% General Retailers
Overview  19_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_20 
In addition, the Group gained valuable 
new clients from its acquisition of NGS, 
all of which continue to use the best 
security testers in the market regardless 
of the economic uncertainty.
The Site Confidence operation 
encompassing the web site monitoring 
and load testing business had a good  
year in which revenues grew by 9%.  
This is before the Group started on its 
product upgrades which will further 
improve the competitiveness of the 
products and services. 
The market place for the Site Confidence 
products has been more affected by 
the recession than the other areas 
of Assurance Testing, as customers 
have been more willing to switch off 
the Group’s services and risk falling 
behind their competitors’ web site 
performances. However the recurring 
income renewal rates remain consistent 
at 90%.
The acquisition of NGS broadened  
the Group’s appeal in the ethical  
security market by further increasing the 
technical expertise and adding forensics 
skills and research to the already strong 
set of propositions.
Group Strategy
The Group strategy remains to develop 
further the two core strands of Escrow 
and Assurance organically by developing 
new ideas and looking for new 
opportunities in the IT and Information 
Security markets, geographically and by 
acquisition when appropriate. 
The Group has always viewed profits, 
margins and cash generation as the 
most important features of its business 
model and we do not intend to change 
that approach. Escrow’s margin has 
continued to increase and it is normal 
for us to use a combination of effective 
selling and price increases to improve it 
further. The Board does not expect this to 
change although price increases will be 
lower than seen in the past.
In Assurance Testing, the Group has 
been growing rapidly and has historically 
built revenue and market share at the 
expense of margin. Over the last 12 
months, the Board set about realising 
scale and established market position 
and changing the focus onto margin 
improvement. The margin has improved 
and is expected to continue going 
forward. Further with the acquisition of 
NGS, the premium service offering, the 
Board expects to gain higher day rates.
The strength of the Group’s proposition  
is that it is independent; the Group 
delivers the right solution for the client 
without being biased towards a  
particular vendor or solution. The  
Group would not consider entering the 
already over populated reseller market 
other than to sell its own tools, as is the 
case with the Site Confidence monitoring 
and load tools and the NGS database 
security tools.
CHIEF EXECUTIVE’S
REVIEW
CONTINUED
CONSULTANCY 
REVENUES GREW  
BY 36% TO
£6.7M
Consultancy
Consultancy revenues grew  
by 36% to £6.7m (2008: £4.9m) 
as the Group continued to grow  
its presence in the Information 
Security marketplace. With 
the increased presence of 
Information Security and the 
synergies that are being achieved 
from being part of the Assurance 
division, the Board expects to be 
able to continue growing both 
profits and revenues despite 
dropping certain types of work.
Acquisitions 
The Group has consistently 
complemented its organic growth by 
carefully adding accretive acquisitions. 
The Group successfully completed 
two acquisitions in the financial year: 
NGS and the remaining shareholding in 
Escrow Europe Switzerland. In addition it 
concluded the earn out and integration of 
Escrow Europe.
Acquisitions are still very important to the 
Group. Seven have been completed and 
have all been successful and at fair prices 
reflecting their strategic importance. NGS 
is now firmly part of the Group and is 
adding a tremendous amount of value. 
Agreeing a price is always the hardest 
part of any negotiation and there is a 
misconception that there are bargains to 
be had for people businesses. Clearly, 
the disappearance of the overinflated 
private equity-led pricing models will 
make acquisition pricing ease, but 
bargains are unlikely to be found.
 
The strategy is to look at the highest 
quality businesses and pay a full and fair 
price for them. As importantly, the Group 
typically buys small or mid-size people 
businesses. The Group will continue 
to invest in appropriate complementary 
businesses by way of company or asset 
based acquisitions. NCC Group remains 
involved in a number of dialogues with 
suitable target companies but will always 
remain cautious, as the integration 
and extraction of enhanced value is of 
paramount importance to the Group. 
Employees, Recruitment  
and Retention
Recruitment and retention remains the 
biggest challenge to growth for a people 
business such as NCC Group and the 
management has made good progress. 
The Board is committed to employing 
the best people in the market wherever 
possible. The Group had a headcount of 
421 employees worldwide at the end of 
the last financial year.
The Group has seen a good intake 
of new testers and well qualified 
Information Security consultants in 
Assurance Testing as it capitalised  
on its market leading position. In  
Escrow worldwide all sales teams  
have grown, even in the UK, where  
at the year end the Escrow sales team 
reached a record 95. 
As important as recruitment is retention. 
The management believes that its all 
round packages place it in the top 
quartile of remuneration in the locations 
from which the Group operates. 
Therefore as in all previous years, the 
Group has reviewed all salaries and 
bonuses in the normal way. NCC Group 
has resisted the temptation to implement 
a cap or freeze on pay, so as to ensure 
that its people remain motivated and 
valued so that the Group is able to retain 
them when there is an economic upturn.
The Way Forward
We continue to make a virtue of 
acting independently and operating 
as trusted, equitable advisors. To date 
we have successfully acquired and 
integrated seven businesses that have 
complemented our service and delivery 
offerings. Combining that with our 
outstanding track record of organic 
growth, we have a sound business  
model that we will continue to evolve  
and develop to grow the Group further.
Rob Cotton
Chief Executive
NCC Group plc
1 July 2009
Overview NCC Group Annual Report and Accounts 2009_22 
FINANCIAL
REVIEW
Group Revenue
Group revenue for the year ended 31 
May 2009 increased by 31% to £46.8m 
(2008: £35.7m), with the previous year’s 
acquisitions of Secure Test and Escrow 
Europe successfully integrated into the 
Group. The Group has continued to be 
acquisitive in the year, purchasing the UK 
based NGS and the remaining 76% of 
Escrow Europe Switzerland in November 
2008 and May 2009 respectively. Excluding 
these acquisitions, Group revenue grew by 
19% to £43.4m.
The Group half year split saw 44%  
of revenue delivered in the first half  
(2008: 46%) and 56% in the second  
half (2008: 54%). 
The geographic split of revenue has 
continued to evolve with the acquisition 
of NGS which has a global presence. 
However, the majority of Group revenue 
is derived from the UK. UK revenue was 
£36.6m (2008: £29.2m) representing 78% 
(2008: 82%) of the total of the Group, with 
the rest of the world increasing by 48% to 
£5.6m (2008: £3.8m) within which Europe 
contributed £4.6m (2008: £2.7m).
Profitability
Adjusted Group operating profit, excluding 
the amortisation of acquired intangibles, 
as set out in the table opposite, grew by 
19% to £12.7m (2008: £10.7m). Adjusted 
operating margins were, as expected, 
slightly lower at 27% (2008: 30%) 
reflecting the change in the Group’s margin 
mix as a result of the acquisitions.  
Non-escrow businesses’ margins are 
typically closer to 15%. The adjusted 
operating profit includes £1.0m (2008: 
£0.7m) of share based charges and related 
costs. Excluding the share based charges, 
adjusted operating profits grew by 21%.
The half year split of adjusted operating 
profits was H1 43%: H2 57% (2008: H1 
44%: H2 56%). 
Currency fluctuations resulted in a £28,000 
positive impact on the Group’s profits in 
the financial year ended 31 May 2009.
Adjusted pre-tax profit increased 17% 
to £12.3m (2008: £10.5m). The Group’s 
reported pre-tax profit was up 25% to 
£10.9m (2008: £8.7m) after the inclusion 
of the unwinding of the discount on the 
acquisitions deferred consideration and 
amortisation of intangible assets.
Escrow
The worldwide Escrow businesses  
are the cornerstone of the Group’s 
profitability and provide a notably high 
degree of recurring revenue due to the 
high contracts renewals base. Group 
Escrow remains the largest division, 
accounting for 45% of total revenue 
(2008: 50%). It increased revenue  
by 17% to £21.0m (2008: £18.0m). 
47% of revenue was delivered in the  
first half (2008: 47%) and 53% in  
the second half (2008: 53%). Organic 
revenue growth in the year was 13%, 
with strong performances from the 
overseas operations.
Escrow UK increased revenue by 6%  
to £16.6m (2008: £15.7m). UK growth  
in the first half of the year was slower 
than the Board would have liked, as 
clients were affected by the severity  
and speed of the economic downturn 
which curtailed their investment in IT 
software and services. The business  
also experienced a fall off in demand  
for verification services. In the first six 
months overall growth was 1%. In the 
second six months, due to swift action 
taken to refocus the sales message, new 
contract and verifications growth was 
once again 10%. 
Escrow US increased its revenue  
by 70% to £2.0m (2008: £1.2m)  
and Escrow Europe increased  
revenues by 121% to £2.4m (2008: 
£1.1m) of which £0.5m was derived 
from Escrow Germany.
Escrow UK contract terminations as 
anticipated at the interim results  
increased in the year to 11.5% (2008: 
9.2%) - more details on page 18. 
However recurring revenues obtained 
through renewals increased by 22%  
to £13.6m (2008: £11.2m).
Group Escrow operating profit increased 
15% to £11.7m (2008: £10.2m) with 
Escrow UK contributing 88%. Escrow  
US and Escrow Europe continued to 
increase profitability and contributed  
5% and 7% of total Escrow operating 
profits respectively with all geographies  
seeing double digit growth. 
Group Escrow operating margins 
remained strong as a consequence 
of focused control over contract 
terminations and new business wins 
at 55% (2008: 56%) with Escrow  
UK increasing its margins to 62%  
(2008: 60%).
        Operating profit
2009 2008
£000 £000
Reported operating profit 11,486 9,217
Amortisation of acquired intangibles 1,237 740
Exceptional items – 711
Adjusted operating profit 12,723 10,668
         Profit before tax
2009 2008
£000 £000
Reported profit before tax 10,867 8,693
Amortisation of acquired intangibles 1,237 740
Exceptional items – 711
Unwind of the discount on deferred consideration 177 333
Adjusted before tax 12,281 10,477
 
Paul Edwards
Finance Director
NCC Group plc
1 July 2009
GROUP ESCROW 
SOLUTIONS 
REMAINS THE 
LARGEST DIVISION 
ACCOUNTING  
FOR 45% OF  
TOTAL REVENUE
 21_NCC Group Annual Report and Accounts 2009
Overview  23_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_24 
Assurance Testing
Assurance Testing now accounts for 
41% (2008: 36%) of Group revenues 
due to the full year contribution from 
Secure Test and the acquisition of NGS 
during the year. Revenue increased 
by 49% to £19.1m (2008: £12.8m) 
and, excluding the acquisition of NGS, 
Assurance Testing revenues increased 
22% to £15.7m.
Operating profit increased 67% to 
£2.8m (2008: £1.7m) and it is expected 
that both revenues and operating profits 
will increase further in the current 
financial year as the demand for ethical 
security testing and performance and 
load testing continues to grow.
Assurance Testing continues to benefit 
from the integration of the various  
units acquired to date and is focusing  
on improving its operating margins,  
which grew to 15% from 13% in the 
previous year.
Consultancy
Consultancy accounted for 14% of 
Group revenue (2008: 14%). Revenues 
grew by 36% to £6.7m (2008: £4.9m), 
and operating profit for the year 
increased by 4% to £0.8m (2008: 
£0.7m) as the general IT consultancy 
market, which we have been moving 
away from during the last two years, has 
continued to be very competitive. 
Taxation
The Group’s effective tax rate is 29.2% 
(2008: 26.9%). The increase in the 
effective tax rate is largely due to the 
impact in the prior year of the tax 
allowance in relation to the exercise of 
share options granted in 2004. This 
exceeded the reduction in the tax rate  
from 30% in 2008 to 28% in 2009.
The effective tax rate is above the 
standard UK rate of 28% largely due  
to the impact of foreign tax and items  
not deductible for tax purposes. 
Earnings Per Share
The adjusted fully diluted earnings per 
share increased 17% to 26.1p (2008: 
22.4p). The basic earnings per share 
increased 21% to 22.9p (2008: 18.9p), 
whilst fully diluted earnings per share 
increased 20% to 22.1p (2008: 18.3p). 
The table on page 24 analyses the 
effect on the Group’s fully diluted 
earnings per share of the amortisation 
of acquired intangibles, unwind of the 
discount on the deferred consideration 
for acquisitions and the effect of the 
exceptional costs.  
 
Dividends
In line with the continuing progressive 
dividend policy, the Board is 
recommending a final dividend of 6.25p 
per ordinary share, making the total 
9.25p for the year. This represents cover 
of 2.5 times (2008: 2.7 times) based on 
basic earnings per share. 
Shareholders’ funds at the end of the  
year were £44.8m (2008: £39.5m).
FINANCIAL
REVIEW
2009
pence               
2008
pence
Diluted EPS as per the income statement 22.1 18.3
Amortisation of acquired intangibles 3.5 1.6
Exceptional items – 1.5
Unwind of the discount on the deferred 
consideration of the acquisitions
0.5 1.0
Adjusted diluted EPS 26.1 22.4
CONTINUED
Cash
The Group continues to be highly  
cash generative with operating cash  
flow before interest and tax of £16.1m 
(2008: £11.2m) which is 140% of 
operating profit before interest and  
tax (2008: 122%).
After accounting for net cash  
outflows of £11.4m for acquisitions 
and deferred acquisitions payments 
made during this year, the Group  
ended the year with net debt of  
£5.6m (2008: £3.4m). 
Capital expenditure remained  
tightly controlled at £1.4m (2008: 
£1.5m). In the current financial  
year as the Group upgrades its  
core IT systems to SAP, there will  
be a one-time capital expenditure  
increase of approximately £1.8m.
In the year, the Group underwent a 
refinancing deal to secure a £15m 
multi-option facility term loan which 
at the year end was 59% utilised at 
£8.9m. This facility along with the highly 
cash generative nature of the Group’s 
businesses, provides flexibility for 
future acquisitions and expected capital 
projects. It expires in July 2010 when the 
Group expects to be almost debt free.
Balance Sheet
Following the acquisitions of NGS and 
Escrow Europe Switzerland, goodwill 
increased by 18% to £52.2m (2008: 
£44.1m) and the cost of intangible 
assets relating to customer contracts 
and associated relationships increased 
by 15.7% to £10.1m (2008: £8.7m). The 
value of goodwill has been assessed and 
no impairment has been evidenced. The 
contracts and customer relationships 
have been assigned a useful economic 
life of between three and twenty years 
and are to be amortised over that period.
Paul Edwards
Finance Director
NCC Group plc
1 July 2009
CAPITAL 
EXPENDITURE 
REMAINED 
TIGHTLY 
CONTROLLED 
AT £1.4M
Overview Rob Cotton 
Chief Executive
Rob Cotton has been Chief Executive 
since 2003, having joined the Group as 
Finance Director and Managing Director  
of Escrow in 2000.
He steered the Group through its move 
to the London Stock Exchange’s main 
market in July 2007 following admission 
to AIM in July 2004, and through a 
management buy-out in April 2003. As 
well as delivering consistent organic 
growth in revenue and profits, he has 
instigated and overseen a series of 
strategic expansion plans including 
the acquisition of complementary 
businesses worldwide.
A qualified chartered accountant, he 
previously held a number of Director and 
senior management positions in industry.
Paul Edwards 
Finance Director
Paul Edwards was appointed Finance 
Director in April 2003, having joined 
NCC Group in 2000 as Group 
Financial Controller. He played a 
key role in the Company’s flotation 
on AIM in July 2004 and its move to 
the London Stock Exchange’s main 
market in July 2007.
He is a qualified chartered 
management accountant and  
holds an MBA from Manchester 
Business School.
Paul Mitchell 
Non Executive Chairman
Paul Mitchell was appointed Non 
Executive Chairman of NCC Group 
in 1999. He is Managing Director of 
Rickitt Mitchell & Partners Limited, 
a corporate financial advisory firm 
based in Manchester. He is also a 
Non Executive Director of Styles & 
Wood Group plc.
He is a qualified chartered 
accountant.
 STRONGER
TOGETHER
James Wallace 
Senior Non 
Executive Director
James Wallace joined NCC 
Group in June 2004 as a 
Non Executive Director. 
He is a qualified chartered 
accountant. He is Chairman 
of Scapa Group plc and a 
Non Executive Director of 
Manchester Airport Group  
plc and Cryptologic Limited.
Debbie Hewitt 
Non Executive Director
Debbie Hewitt joined NCC 
Group in September 2008 as 
a Non Executive Director. She 
is an MBA and is a Fellow 
of the Chartered Institute of 
Personnel Development. She 
is a non Executive of Mouchel 
plc, Domestic and General 
Group plc, Luminar Group 
Holdings plc, HR Owen and 
Moss Brothers plc. She is 
also a Non Executive Director 
of the Office of Government 
Commerce which oversees 
the Government’s purchasing 
budget and reports to  
the Treasury. 
David McKeith
Non Executive Director
David McKeith will join  
NCC Group as a  
Non Executive Director 
as from 29 July 2009. He 
is a qualified chartered 
accountant and retired from 
PricewaterhouseCoopers  
LLP after 19 years as  
a partner at the end of  
2008. He is the Chairman  
of the Hallé Orchestra  
and is Chairman of  
Greater Manchester  
Chamber of Commerce.
 25_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_26 
DIRECTORS
Eurfyl ap Gwilym 
Non Executive Director
Eurfyl ap Gwilym joined 
NCC Group in June 2004 
as a Non Executive Director. 
He has worked at board 
level for many years in an 
Executive capacity and is a 
Non Executive Director of the 
Principality Building Society 
and Pure Wafer plc.
Business Review Senior Management
The senior management team 
detailed on pages 27-30, is 
responsible for the operation of the 
Group’s two divisions. The Group 
is currently recruiting a Group 
Managing Director for the Escrow 
businesses. 
The members of the senior 
management team include:
John Redeyoff 
Group Development Director 
Assurance Division
John Redeyoff is responsible for 
the strategic development of new 
services and markets in particular our 
365 assured security and monitoring 
services, having joined NCC Group  
in 2003 as a Director of Consultancy. 
Roger Rawlinson 
Managing Director 
Assurance Division
Roger Rawlinson is responsible for the 
operational management of the Group’s 
Assurance Division. He has worked 
for NCC Group for over ten years in 
a variety of testing and consultancy 
roles and was appointed a Director of 
Consultancy in 2004.
Andy Hague  
Operational Director 
Secure Test
Reporting to Roger Rawlinson,  
Andy Hague joined NCC Group in  
2006 and is responsible for the 
operational delivery and technical 
development for Secure Test. He  
was previously Managing Director  
at technology company XAL Group.
Felicity Brandwood 
Group Company Secretary  
and Operational Director
Escrow UK & USA
Felicity Brandwood, a qualified solicitor, 
was appointed a Director of Escrow 
in 2006 alongside her role as Group 
Company Secretary, having joined the 
Group in 1984. Felicity is responsible 
for operational controls and processes 
for Group Escrow and for Escrow US. 
Jon Leigh  
Operational Director
Escrow UK & Europe
Jon Leigh has been Director 
of Escrow UK since 2003. He 
is responsible for the product 
development and sales strategies 
for Escrow UK and Europe. With 
a background in testing, he has 
worked for NCC Group for over  
20 years and previously held a 
variety of senior management roles.
 27_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_28 
 STRONGER
TOGETHER
SENIOR MANAGEMENT
Business Review Niels Hagels 
Operational Director 
Escrow Europe 
Niels Hagels joined NCC Group 
in 2005 and is responsible for 
the day to day management of 
the Escrow Europe group of 
businesses. Prior to joining  
the Group, he was Commercial 
Director of Escrow Europe, 
having previously managed 
a number of IT and Internet 
companies.
Craig Motta 
Operational Director 
North America & Escrow US
Craig Motta joined NCC Group as  
General Manager of Escrow US  
in 2006 following the acquisition 
of the Escrow business of Recall 
Total Information Management. He 
is responsible for the day to day 
activities of the US businesses. He 
previously held a number of senior 
manager and Director positions.
Rob Horton  
Operational Director  
NGS
Reporting to Roger Rawlinson,  
Rob Horton joined NCC Group on the 
acquisition of NGS and is responsible 
for the operational delivery and technical 
development for NGS.
Bob Dowson 
Operational Director
Site Confidence 
Bob Dowson is responsible for 
the operational management and 
development of Site Confidence, 
the Group’s Web Site Performance 
and Load Testing business. He 
joined the Company in 2002 from  
Forrester Research. 
Nathan Jackson
Director of Consultancy
Reporting to Roger Rawlinson, Nathan 
Jackson is Director of the Consultancy 
Assurance practice and is responsible for 
the strategic development, direction and 
delivery of the Group’s comprehensive 
range of Risk, Compliance and 
Assurance services and manages a  
team of experienced security consultants. 
 29_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_30 
 STRONGER
TOGETHER
SENIOR MANAGEMENT
Business Review  31_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_32 
Principal Risks and Uncertainties
The principal financial risks and 
uncertainties the Group faces are 
described in note 19 to the annual  
report and accounts. 
The Group faces operational risks and 
uncertainties which the Directors take all 
reasonable steps possible to mitigate. 
However, the Directors recognise that 
they can never be eliminated completely. 
The principal operational risks and 
uncertainties the Group faces include 
those in relation to the recruitment of 
additional staff to meet the Group’s 
ambitious growth plans, the entry of a 
significant competitor to threaten the 
Group’s leading position in its domestic 
Escrow market, the occurrence of 
unforeseen difficulties in the integration  
of future acquisitions the Group may 
enter into and the dependence on  
key Executives and senior managers. 
There are no persons with whom the 
Company has contractual or other 
arrangements that are deemed to be 
essential to the Group.
Risk and uncertainties outside the  
Group’s control include those relating 
to the implementation of changes in 
government policy for the procurement 
of IT Services and alterations to the 
legislative and taxation framework in  
which the Group operates.
Disclosure of Information  
to Auditors
The Directors who held office at the 
date of approval of this Directors’ 
report confirm that so far as they are 
each aware, there is no relevant audit 
information of which the Company’s 
auditors are unaware. Each Director  
has taken all the steps that they ought 
to have taken as a Director to make 
themselves aware of any relevant audit 
information and to establish that the 
Company’s auditors are aware of  
that information.
Auditors
KPMG Audit Plc has expressed 
its willingness to continue in office. 
Therefore, in accordance with Section 
489 of the Companies Act 2006, a 
resolution to reappoint KPMG Audit Plc 
as the Group’s auditor and authorising 
the Directors to fix the remuneration of 
the auditor will be put to the forthcoming 
Annual General Meeting.
Annual General Meeting
The notice of the Company’s Annual 
General Meeting to be held at the 
Manchester Technology Centre is sent 
to shareholders with this annual report 
along with details of the business to be 
proposed and explanatory notes.
By order of the Board
Rob Cotton
Chief Executive
NCC Group plc
1 July 2009
DIRECTORS’
REPORT
The Directors present their annual report 
and financial statements for the year 
ended 31 May 2009.
Principal Activity and Review of  
the Business
The principal activity of the Group is the 
independent provision of IT assurance 
through Escrow and Assurance Testing 
to both the public and private sectors 
worldwide. The performance in the year 
and the year end financial position were 
satisfactory and the Directors expect 
the Group to continue its growth for the 
foreseeable future. 
The Chairman’s report on pages 11 to 14 
as well as the Chief Executive’s review 
on pages 15 to 20 report on the Group’s 
development during the year to 31 May 
2009, its position at that date and the 
Group’s likely future development. 
Any forward looking statements made in 
this document represent management’s 
best judgment as to what may occur in 
the future. However, the Group’s actual 
results for the current and future fiscal 
periods and corporate developments 
will depend on a number of economic, 
competitive and other factors, some of 
which will be outside the control of the 
Group. Such factors could cause the 
Group’s actual results for future periods 
to differ materially from those expressed 
in any forward looking statements made 
in this document.
The financial results of the Group are 
shown in the income statement on  
page 52.
Dividends
The Directors propose a final dividend 
of 6.25p per ordinary share which, 
together with the interim dividend of 3.0p 
per ordinary share paid on 27 February 
2009, makes a total dividend of 9.25p 
for the year. The final dividend has not 
been accrued for in these financial 
statements. The final dividend will, if 
approved by shareholders at the Annual 
General Meeting (AGM), be paid on 25 
September 2009 to shareholders on the 
register at the close of business on 28 
August 2009. The ex-dividend date will 
be 26 August 2009.
The Company received dividends of 
£2.0m (2008: £4.0m) from subsidiary 
undertakings during the financial year.
Share Capital
Details of the movements of the  
authorised and called up share capital  
of the Company are set out in note 21  
to the financial statements.
Directors and Their Interests
Details of the Company’s current 
Directors are set out on pages 25 to 30. 
Directors’ interests in shares and share 
options in the Company are detailed in 
the Directors’ remuneration report set out 
on pages 39 to 45.
Corporate Social Responsibility
The corporate social responsibility 
section on pages 47 to 48 provides 
an update on the Group’s policies 
and activities in respect of its wider 
stakeholders - employees, clients, 
suppliers and the community – and 
environmental, ethical and health and 
safety issues.
THE PRINCIPAL 
ACTIVITY OF THE 
GROUP IS THE 
INDEPENDENT 
PROVISION OF 
IT ASSURANCE 
THROUGH 
ESCROW AND 
ASSURANCE 
TESTING
Ordinary shares of 1p % of issued share capital
AXA Framlington Investment Management 4,274,507 12.70
AKO Capital LLP 3,522,929 10.46
Legal & General Investment Management 3,255,362 9.67
Montanaro Inv Managers 2,540,000 7.55
Rob Cotton 1,594,212 4.74
SEB Asset Management 1,360,599 4.04
Hansa Capital Limited 1,250,000 3.71
Standard Life Investment Management 1,151,427 3.42
JP Morgan Asset Management 1,096,823 3.26
Principal Shareholders
The following have notified the Company as being interested in 3% or more of the Company’s issued ordinary share capital as at 
30 June 2009:
Business Review  33_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_34 
The Non Executive Chairman, Paul Mitchell, is responsible for the running of the 
Board. Executive responsibility for the running of the Group’s business rests with the 
two Executive Directors, Rob Cotton and Paul Edwards, who are supported in this by 
the Operational Board of NCC Group.
 
The Board normally meets on a monthly basis. During the year, the Board met on 12 
scheduled occasions. 
The Board conducted a self evaluation on its effectiveness in February 2009 and has 
concluded no significant amendments are required to its operating procedures of the 
Board as a result of the review. In addition a review of the Chairman’s performance 
was conducted in January 2009 by the other Non Executive Directors and no actions 
were felt necessary to improve the Chairman’s effectiveness. 
The attendance of individual Directors at the scheduled Board meetings is shown in 
the table below:
A MEASURE
OF STRENGTH
Board Audit
Committee
Remuneration
Committee
Nomination
Committee
Paul Mitchell Non Executive Chairman Chairman – Member Chairman
Rob Cotton Chief Executive Member – – Member
Paul Edwards Finance Director Member – – –
James Wallace Senior Non Executive Director Member Chairman Member Member
Debbie Hewitt Non Executive Director Member Member Member Member
Eurfyl ap Gwilym Non Executive Director Member Member Chairman Member
CORPORATE
GOVERNANCE
NCC Group is committed and is accountable to shareholders for high standards of 
corporate governance. In respect of the year ended 31 May 2009, NCC Group has been in 
full compliance with the provisions of section 1 of the June 2008 (revised) Combined Code 
on Corporate Governance.
This statement describes how principles of corporate governance are applied to the Group.
The Board
The Board comprises two Executive and four Non Executive Directors whose Board and 
Committee responsibilities are set out in the table below:
Board
meetings attended
Paul Mitchell Non Executive Chairman 12/12
Rob Cotton Chief Executive 12/12
Paul Edwards Finance Director 12/12
James Wallace Senior Non Executive Director 11/12
Debbie Hewitt Non Executive Director 7/8
Eurfyl ap Gwilym Non Executive Director 10/12
Governance  35_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_36 
After careful review, the Board has 
again concluded that James Wallace, 
Eurfyl ap Gwilym and Debbie Hewitt 
were independent. In coming to this 
assessment the Board considered the 
character of the individuals concerned 
and the fact that none of them:
• 	 	 has	ever	been	an	employee	of	 
the Group;
• 	 	 has	ever	had	a	material	business	
relationship with the Group;
• 	 	 receives	any	remuneration	other	than	
their fees;
• 	 	 has	close	family	ties	with	advisors,	
other Directors or senior management 
of the Group that could reasonably be 
expected to cause a conflict;
• 	 	 has	significant	links	with	other	
Directors through involvement with 
other companies;
• 	 	 represents	a	significant	 
shareholder; or
• 	 	 has	served	on	the	NCC	Group	Board	
for more than nine years.
The Board is responsible to 
shareholders for the proper management 
of the Group and for its system of 
corporate governance. It receives 
information on (at least) a monthly 
basis to enable it to review trading 
performance, forecasts and strategy  
and it has a schedule of matters 
specifically reserved for its decision.  
The most significant of these are:
• 	 	 changes	to	the	structure,	size	and	
composition of the Board;
• 	 	 consideration	of	the	independence	of	
Non Executive Directors;
• 	 	 review	of	management	structure	and	
senior management responsibilities;
• 	 	 with	the	assistance	of	the	
Remuneration Committee,  
approval of remuneration policies 
across the Group;
• 	 	 approval	of	strategic	plans,	profit	
plans and budgets and any material 
changes to them;
• 	 	 oversight	of	the	Group’ s	operations	
ensuring competent and prudent 
management, sound planning,  
an adequate system of internal  
control and adequate accounting  
and other records;
• 	 	 final	approval	of	annual	accounts	and	
accounting policies;
• 	 	 approval	of	the	dividend	policy;
• 	 	 approval	of	the	acquisition	or	disposal	
of subsidiaries and major investments 
and capital projects;
• 	 	 delegation	of	the	Board’ s	powers	
and authorities, including the division 
of responsibilities between the 
Chairman, the Chief Executive and 
other Executive Directors; and
• 	 	 receiving	reports	on	the	views	of	the	
Company’s shareholders.
Operational management of the Group  
is delegated to the operating Board of 
NCC Group.
Procedures exist to allow the Directors 
to seek independent legal and 
professional advice in respect of their 
duties at the Company’s expense where 
the circumstances are appropriate. 
During the year a training course was 
run to remind the Directors of their 
responsibilities as well as to inform them 
of the changes made by the Companies 
Act 2006. In addition, all of the Directors 
have access to the Company Secretary 
for advice.
All Directors are required to submit 
themselves for re-election at regular 
intervals and at least every three years.
The following formally constituted 
committees deal with specific aspects  
of the Group’s affairs in accordance  
with their written terms of reference, 
which are reviewed regularly.
Audit Committee
The Audit Committee, which is  
chaired by James Wallace, who is  
a member and former Chairman of  
other PLC Audit Committees, comprises 
three independent Non Executive 
Directors and meets at least three  
times a year. The Chairman, Chief 
Executive, Finance Director and  
external auditors attend these meetings 
as required by the Committee.
The purpose of the Committee is to 
assist the Board in the discharge of its 
responsibilities for financial reporting  
and corporate control and to provide 
a forum for reporting by the external 
auditors. The responsibilities of the 
Committee include:
• 	 	 to	consider	liquidity	risk	and	the	going	
concern of the Group;
• 	 	 to	monitor	the	integrity	of	the	financial	
statements and review significant 
financial reporting judgements 
contained in them;
• 	 	 to	review	the	Company’ s	internal	
financial control system and risk 
management systems;
• 	 	 to	make	recommendations	to	the	
Board in relation to the appointment of 
the external auditors and to approve 
the remuneration and terms of 
engagement of the external auditors;
• 	 	 to	review	and	monitor	the	external	
auditors’ independence, objectivity 
and effectiveness;
• 	 	 to	develop	and	implement	policy	
on the engagement of the external 
auditors to supply non-audit services;
• 	 	 to	monitor	the	Company’ s	 
whistle-blowing procedures; and
• 	 	 to	review	regularly	the	need	for	an	
internal audit function.
The attendance of individual Committee 
members at Audit Committee meetings 
is shown in the table below:
During the year, the Audit Committee 
considered the following issues:
• 	 	 the	appropriate	valuation	techniques	
to be utilised in valuing share options 
under IFRS;
• 	 	 the	areas	of	judgement	in	the	 
financial statements including the 
valuation of intangible assets and 
goodwill impairment;
• 	 	 the	requirement	for	a	formal	internal	
audit function;
• 	 	 the	independence	of	Rickitt	Mitchell	
as corporate finance advisors;
• 	 	 the	level	of	fees	payable	to	KPMG	
Audit plc in respect of non-audit work;
• 	 	 the	separation	of	the	audit,	non	audit	
and tax work and appointment of the 
appropriate advisors;
• 	 	 various	tax	issues	within	the	 
Group; and
• 	 corporate	governance	issues.
Meetings attended
James Wallace 3/3 
Debbie Hewitt 2/2
Eurfyl ap Gwilym 3/3
THE NOMINATION 
COMMITTEE MET 
THREE TIMES IN THE 
YEAR, IN PARTICULAR 
TO DISCUSS AND 
PLAN SUCCESSION 
FOR ALL KEY  
SENIOR EXECUTIVES 
IN THE BUSINESS
THE COMPANY 
VALUES THE VIEWS 
OF SHAREHOLDERS 
AND RECOGNISES 
THEIR INTERESTS 
IN THE GROUP’S 
STRATEGY AND 
PERFORMANCE
CORPORATE
GOVERNANCE
CONTINUED
Governance  37_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_38 
NCC Group does not have a dedicated 
internal audit function, although regular 
internal audits are conducted under the 
Group’s ISO 9001 accredited quality 
assurance process and at the request 
of the Audit Committee. The Board 
has considered the need for an internal 
audit function and believes that current 
arrangements are adequate given the 
structure of the Group’s accounting 
function and the size of the Group.
Auditor Independence
The Company operates a rigorous policy 
designed to ensure that the auditors’ 
independence is not compromised by 
their undertaking inappropriate non-
audit work. Every five years, the audit is 
put out to formal tender to ensure that 
independence is maintained, the last 
time this took place was 2006. The next 
formal date for tender will be in 2011. 
All significant pieces of non audit work 
are put to informal tender to suitable 
parties. Upon review as to suitability  
and price, the work will then be placed  
to the provider recommended after 
approval by the Audit Committee. The 
Audit Committee has delegated the 
placing of financial non audit work 
under £25,000 to the discretion of the 
Executive Directors. 
The Audit Committee has undertaken its 
annual review of the nature and amount 
of non-audit work undertaken by the 
external auditors to satisfy itself that there 
is no effect on their independence.
Going Concern
The Directors are satisfied that the  
Group has adequate resources to 
continue in operational existence for the 
foreseeable future, a period of not less 
than 12 months from the date of this 
report. For this reason, they continue 
to adopt the going concern basis in 
preparing the financial statements.  
See page 59 for the note on the Basis 
of Preparation.
Communication with Shareholders
The Company values the views of 
shareholders and recognises their 
interests in the Group’s strategy and 
performance. It holds briefings with 
institutional fund managers, analysts 
and other investors, including staff 
shareholders, primarily following the 
announcement of interim and preliminary 
results, as well as at other times during 
the year as may be appropriate. 
The Company’s programme of  
investor relations activities is designed 
to ensure that the investing community 
receives a balanced and consistent  
view of the Group’s performance. All 
shareholders are welcomed to the  
Annual General Meeting, at which the 
Board of Directors are available to  
answer questions from shareholders. 
Communication is also provided  
through the Annual Report, the Interim 
Report and the investor relations  
area on the Company’s web site,  
www.nccgroup.com on which financial 
and other information is available and 
regularly updated.
The Board receives reports from  
the Group’s brokers twice a year  
that communicate feedback from 
institutional shareholders. 
It reviews analyst coverage of the Group 
every month and receives reports twice a  
year from its financial public relations 
advisors regarding the views of analysts. 
There were no meetings between the 
investors and Non Executive Directors,  
as none were requested or required. 
By order of the Board.
Rob Cotton
Chief Executive
NCC Group plc
1 July 2009
Remuneration Committee
The Remuneration Committee,  
which is chaired by Eurfyl ap Gwilym  
and comprises the Non Executive 
Directors, meets at least three times a 
year and additionally as required. It is 
responsible for reviewing remuneration 
arrangements for members of the  
Board and other senior employees of 
the Group and for providing general 
guidance on aspects of remuneration 
policy throughout the Group.
The attendance of individual Committee 
members at Remuneration Committee 
meetings is shown in the table below:
The Directors’ Remuneration Report is 
set out on pages 39 to 45.
Nomination Committee
The Nomination Committee is chaired 
by Paul Mitchell and comprises the 
Chief Executive and the Non Executive 
Directors. The Committee is responsible 
for proposing candidates to the Board, 
having regard to the balance and 
structure of the Board. The Committee 
met three times in the year, in particular 
to discuss and plan succession for all key 
senior Executives in the business.
Internal  Control
The Board is responsible for establishing 
and maintaining the Group’s system of 
internal control. Internal control systems 
are designed to meet the particular 
needs of the Group and the risks to 
which it is exposed. By their nature 
however, internal control systems 
are designed to manage rather than 
eliminate the risk of failure to achieve 
business objectives and can provide only 
reasonable and not absolute assurance 
against material mis-statement or loss.
Meetings 
attended
Paul Mitchell 5/5
James Wallace 5/5 
Debbie Hewitt 3/3
Eurfyl ap Gwilym 5/5
Meetings 
attended
Paul Mitchell 3/3
Rob Cotton 3/3
James Wallace 3/3
Debbie Hewitt 2/2
Eurfyl ap Gwilym 3/3 
INTERNAL 
CONTROL 
SYSTEMS ARE 
DESIGNED 
TO MEET THE 
PARTICULAR 
NEEDS OF THE 
GROUP AND THE 
RISKS TO WHICH 
IT IS EXPOSED
Key elements of the internal 
control system are described 
below. These have all been in 
place throughout the year and 
up to the date of this report  
and are reviewed regularly by 
the Board:
•  clearly defined management 
structure and delegation of 
authority to Committees of the 
Board, subsidiary boards and 
associated business units;
•  clearly documented internal 
procedures set out in the 
Group’s ISO 9001:2000  
accredited quality manual;
•  high recruitment standards 
and formal career development 
and training to ensure the 
integrity and competence  
of staff;
•  regular and comprehensive 
information provided to 
management, covering 
financial performance and 
key performance indicators, 
including non-financial 
measures;
•  a detailed budgeting 
process where business  
units prepare budgets  
for the coming years and  
rolling three-year strategic 
plans, which are approved  
by the Board;
•  procedures for the approval 
of capital expenditure and 
investments and acquisitions;
•  monthly monitoring and 
re-forecasting of results 
against budget, with major 
variances followed up and 
management action taken 
where appropriate;
•  regular internal audits 
of key processes and  
procedures under the  
Group’s ISO 9001  
accredited quality  
assurance process;
•  ongoing procedures to 
identify, evaluate and  
manage significant risks  
faced by the business in 
accordance with the  
guidance of the Turnbull 
Committee on Internal  
Controls and procedures  
to monitor the control  
systems in place to reduce 
these risks to an acceptable 
level; and
•  formal consideration of 
progress made against 
significant business risks  
at monthly operational  
board meetings.
CORPORATE
GOVERNANCE
CONTINUED
Governance  39_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_40 
Remuneration Committee
The Remuneration Committee advises 
the Board and makes recommendations 
to it about all elements of the 
remuneration packages of the Executive 
Directors. The members of the 
Remuneration Committee during the year 
were Eurfyl ap Gwilym as Committee 
Chairman, Paul Mitchell, James Wallace 
and Debbie Hewitt. The Chief Executive 
attends the Remuneration Committee by 
invitation and assists the Committee with 
its considerations. No Director is involved 
in setting their own remuneration plan.
Remuneration Policy
The Committee and the Board believe 
that in order to attract and maintain 
a senior management team of the 
right calibre it is necessary to provide 
competitive market-based packages 
which reward Group and individual 
performance and motivate senior 
Executives to achieve stated business 
objectives and deliver outstanding 
shareholder returns. 
Remuneration packages comprise:
• 	 b a s i c 	 s a l a r y
• 	 a n n u a l 	 p e r f o r m a n c e 	 r e l a t e d 	 b o n u s
• 	 o t h e r 	 b e n e fi t s
• 	 	 p a r t i c i p a t i o n 	 i n 	 t h e 	 s h a r e	 
incentive plans
The Group introduced a number of 
share incentive schemes on flotation, 
of which all members of staff, including 
the Executive Directors are potential 
beneficiaries. These include a Long  
Term Incentive Plan (LTIP) and a Save 
As You Earn (SAYE) Scheme. The EMI 
scheme put in place on flotation was 
replaced last year by a Company Share 
Option Plan (CSOP).
Performance-related Bonuses
The performance-related pay scheme for 
Executive Directors is the same as that 
of the operational Directors and senior 
managers within the business.
Payments under the scheme are based 
upon the achievement of profit targets  
set by the Remuneration Committee.  
The profit target is based on delivery of 
the Group’s own internal plans overlaid 
on to the financial forecasts out in the 
market. The schemes do not start to 
reward until 80% of the stringent, internal 
target set is achieved but are capped 
at 120%. This prevents short term 
decisions being made. The maximum 
bonus payable under the scheme is 
£210,000 for Rob Cotton and £110,000 
for Paul Edwards.
DIRECTORS’ 
REMUNERATION REPORT
Share Incentives
The Group’s policy is to award share 
incentives to Executive Directors in 
order to align their interests with those 
of the Company’s shareholders. Both 
the Executive Directors are currently 
precluded from joining the CSOP, but 
have participated in the LTIP scheme 
during the financial year.
 
The Remuneration Committee agreed, 
in 2005, to extend participation in the 
LTIP to other senior Executives within 
the Group. The maximum award is equal 
to one times the Director’s or senior 
Executive’s annual basic salary in the 
year of award.
 
There are two LTIP schemes in place. 
From 1 June 2007 the Group’s LTIP 
schemes are based on the earnings 
per share (EPS) performance of the  
Group over the performance period 
of three years. The previous scheme 
approved in 2006 was based on 
performance targets that relate to both 
the total shareholder returns (TSR) and 
earnings per share (EPS) performance 
of the Group over the performance 
period. We still contend that EPS drives 
the Executive’s performance best, which 
is even more applicable in the current 
economic climate.
For the 2006 scheme, the EPS and  
TSR conditions each will govern the 
vesting of up to 50% of the LTIP award. 
The EPS measure will relate to the 
growth in the Group’s EPS performance 
over the performance period and TSR 
measure will compare the Group’s TSR 
performance over the performance 
period with the TSR performance of 
the constituent companies of the FTSE 
software and computer services index 
over the performance period. The 
performance period is three years.
For both schemes, if growth is equal to 
25% or more per annum then 100% 
of the award governed by the EPS 
condition will vest. If, however, growth is 
less than 10% per annum, none of the 
award governed by the EPS condition 
will vest. Between these two points, 
vesting will be determined on a straight 
line basis. The Remuneration Committee 
believed that this is a more appropriate 
measure of the Company’s performance 
and it aligned the interests of the key 
Executives and Directors with those of 
the shareholders.
The TSR condition will govern the 
vesting of 50% of the 2006 LTIP 
award and will compare the Group’s 
TSR performance over the three 
year performance period with the 
TSR performance of the constituent 
companies of the FTSE Software and 
Computer Services Index. Where the 
Company’s TSR performance equates 
to median level in the comparator group, 
30% of the award governed by the TSR 
condition will vest. 100% of the award 
governed by the TSR condition will vest 
for upper quartile performance or above. 
Between these two points, vesting will 
be determined on a straight line basis.
Rob Cotton joined the SAYE Scheme  
at the time of flotation and has  
continued to subscribe to the scheme. 
Paul Edwards joined the SAYE Scheme 
on 1 September 2005 and continues to 
subscribe to the scheme.
THE PROFIT 
TARGET IS BASED 
ON DELIVERY OF 
THE GROUP’S 
OWN INTERNAL 
PLANS OVERLAID 
ON TO THE 
FINANCIAL 
FORECASTS OUT 
IN THE MARKET
Basic salary
Salaries are normally reviewed 
annually and any changes are 
effective from 1 June in each year. 
Pay reviews take into account 
Group and personal performance 
and externally benchmarked 
market data for comparable 
companies operating in IT 
services, management consulting 
and relevant high-tech sectors. 
The salaries of Rob Cotton and 
Paul Edwards for the last two 
financial years are set out in the 
table on page 43.
A formal benchmarking exercise 
was undertaken in April 2009, 
using Deloitte, to provide the 
Remuneration Committee with 
relevant comparable data. 
The Committee also considered 
the excellent performance of the 
Group over the last five years, its 
increasing size and complexity and 
viewed this in light of the economic 
backdrop and remuneration 
levels being set in the rest of the 
business.
With effect from 1 June 2009, Rob 
Cotton’s salary is £360,000 and 
Paul Edwards’ salary is £185,000 
increases of 2.8%.
Pensions
The Executive Directors are  
entitled to a company pension 
contribution of 10% of basic 
salary, providing they make a 
contribution of not less than 5%, 
which is paid into the Group 
defined contribution personal 
pension scheme, which is also 
open to all of its permanent 
employees.
Benefits
Benefits in kind include the 
provision of a car or car allowance, 
payment of private fuel, car 
insurance, private medical 
insurance, life assurance and 
permanent health insurance.
Governance  41_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_42 
Performance Graph
The following graph shows the total shareholder return, with dividends reinvested, 
from 12 July 2006 against the corresponding change in a hypothetical holding in 
shares in both the FTSE All Share Index and the FTSE Software and Computer 
Services Index.
The FTSE All Share and FTSE Software and Computer Services indices both 
represent broad equity indices in which the Company is a constituent member. 
Inclusion of the FTSE All Share Index gives a market capitalisation-based 
perspective, whilst the FTSE Software and Computer Services Index gives an 
industry sector perspective. 
The share price of the Company at 1 June 2006 was 253p and was 335p at  
31 May 2009.
Service Contracts
The service contracts and letters of appointment of the Directors include the  
following terms:
The Executive Directors are subject to rolling contracts and offer themselves for  
re-election by rotation in accordance with the Company’s Articles of Association. 
These contracts may be terminated by either the Company or the relevant 
Executive Director giving the appropriate notice. 
Payments on termination for Executive Directors are restricted to the value of 
salary and contractual benefits for the notice period. There are no predetermined 
special provisions for Executive Directors with regard to compensation in the  
event of loss of office.
Directors’ Interest in Shares
Directors had the following beneficial interest in the issued share capital of  
the Company:
CONTINUED
100
150
200
250
300
350
400
450
pence
2004 2005 2006 2007 2008 2009
Date of contract Notice period Period of appointment
Executive
Rob Cotton 8 July 2004 1 year –
Paul Edwards 8 July 2004 6 months –
Non Executive
Paul Mitchell 26 June 2007 3 months 3 years
James Wallace 26 June 2007 3 months 3 years
Debbie Hewitt 18 September 2008 3 months –
Eurfyl ap Gwilym 26 June 2007 3 months –
ncc group small cap all share comp software & services
Ordinary Shares of 1p each 2009 Ordinary Shares of 1p each 2008
Executive
Rob Cotton 1,594,212 1,557,169
Paul Edwards 306,098 289,893
Non Executive
Paul Mitchell 196,600 196,600
James Wallace 14,705 14,705
Debbie Hewitt 5,665 –
Eurfyl ap Gwilym 14,705 14,705
DIRECTORS’ 
REMUNERATION REPORT
Governance  43_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_44 
The auditors have audited the information in the following tables:
Remuneration
The remuneration of the Directors for the year ended 31 May 2009 was as follows:
The remuneration of the Directors for the year ended 31 May 2008 was as follows:
Directors’ Share Options
The Group has a number of share option schemes whereby Directors and staff  
are able to subscribe for ordinary shares in the Company. 
As at 31 May 2009 the Directors held options over ordinary shares as follows.  
There have been no changes between the end of the financial year and the date  
of this report.
On 30 July 2008 Rob Cotton exercised options granted to him under the NCC 
Group LTIP scheme over 62,916 shares, 15,515 shares were forfeited. Paul 
Edwards exercised his options over 27,525 shares, 6,788 shares were forfeited.  
The market price of the Company’s shares on this date was £3.55.
On 18 September 2008 Paul Edwards exercised options granted to him under the 
NCC Group plc Sharesave Scheme over 4,577 shares. The exercise price of  
the Company’s shares on this date was £2.06.
Year ended 31 May 
2008
Salary
£000
Bonus
£000
Pension
£000
Benefits
£000
Fees
£000
Total
£000
Executive
Rob Cotton 300 109 21 30 – 460
Paul Edwards 155 44 11 31 – 241
Non Executive
Paul Mitchell – – – – 58 58
James Wallace 45 – – – – 45
Eurfyl ap Gwilym 34 – – – – 34
534 153 32 61 58 838
Director
Date of 
grant
Market value  
at date 
 of grant
Maximum 
Options  
held at  
31 May 2009
Exercise 
price
Performance 
conditions
Earliest 
exercise date
Expiry 
date
Rob Cotton 19/07/06 £2.70 83,333 nil* 1 01/06/09 18/06/10
Rob Cotton 13/08/07 £4.05 2,914 £3.24 3 01/10/10 31/03/11
Rob Cotton 19/10/07 £3.72 80,645 nil* 2 01/06/10 01/06/11
Rob Cotton 18/07/08 £3.52 98,315 nil* 2 01/06/11 01/06/12
Paul Edwards 19/07/06 £2.70 38,888 nil* 1 01/06/09 18/06/10
Paul Edwards 19/10/07 £3.72 41,666 nil* 2 01/06/10 01/06/11
Paul Edwards 11/08/08 £3.56 3,286 £2.85 4 01/10/11 31/03/12
Paul Edwards 18/07/08 £3.52 50,562 nil* 2 01/06/11 01/06/12
*£ exercise price of £1 on each occasion
DIRECTORS’ 
REMUNERATION REPORT
CONTINUED
Year ended 31 May 
2009
Salary
£000
Bonus
£000
Pension
£000
Benefits
£000
Fees
£000
Total
£000
Executive
Rob Cotton 350 148 32 30 – 560
Paul Edwards 180 65 16 33 – 294
Non Executive
Paul Mitchell – – – – 60 60
James Wallace 45 – – – – 45
Debbie Hewitt – – – – 23 23
Eurfyl ap Gwilym 34 – – – – 34
609 213 48 63 83 1,016
Governance  45_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_46 
STATEMENT OF 
DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT & THE FINANCIAL STATEMENTS
The Directors are responsible for 
preparing the Annual Report and the 
Group and parent company financial 
statements in accordance with 
applicable law and regulations.
Company law requires the Directors 
to prepare Group and parent company 
financial statements for each financial 
year. Under that law they are required to 
prepare the Group financial statements 
in accordance with IFRS as adopted 
by the EU and applicable law and have 
elected to prepare the parent company 
financial statements on the same basis.
Under company law the Directors must 
not approve the financial statements 
unless they are satisfied that they give  
a true and fair view of the state of affairs 
of the Group and parent company and  
of their profit or loss for that period.  
In preparing each of the Group and 
parent company 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	they	have	been	prepared	
in accordance with IFRS as adopted 
by the EU; and
•		 prepare	the	financial	statements	on	
the going concern basis unless it is 
inappropriate to presume that the 
Group and the parent company will 
continue in business.
The Directors are responsible for 
keeping adequate accounting records 
that are sufficient to show and explain 
the parent company’s transactions. They 
must disclose with reasonable accuracy 
at any time the financial position of 
the parent company and enable them 
to ensure that its financial statements 
comply with the Companies Act 2006. 
They have general responsibility for 
taking such steps as are reasonably 
open to them to safeguard the assets 
of the Group and to prevent and detect 
fraud and other irregularities.
Under applicable law and regulations, 
the Directors are also responsible for 
preparing a Directors’ Report, Directors’ 
Remuneration Report and Corporate 
Governance Statement that complies 
with that law and those regulations.
The Directors are responsible for 
the maintenance and integrity of the 
corporate and financial information 
included on the company’s web site. 
Legislation in the UK governing the 
preparation and dissemination of  
financial statements may differ from 
legislation in other jurisdictions. 
THE DIRECTORS ARE 
RESPONSIBLE FOR 
THE MAINTENANCE 
AND INTEGRITY OF 
THE CORPORATE 
AND FINANCIAL 
INFORMATION
Performance Conditions and Notes
1.  LTIP 1 Scheme. The awards will 
fully vest if both the total shareholder 
returns (TSR) and earnings per share 
(EPS) performance targets of the 
Group are met. 
The TSR condition will govern the 
vesting of 50% of the LTIP award. 
Where TSR performance equates 
to median level in the comparator 
group, 30% of the award governed 
by the TSR condition will vest. 100% 
of the award governed by the TSR 
condition will vest for upper quartile 
performance or above.
The EPS condition will govern the 
vesting of the remaining 50% of the 
LTIP, if growth is equal to 25% or 
more per annum then 100% of the 
award governed by the EPS condition 
will vest. If, however, growth is less 
than 10% per annum, none of the 
award governed by the EPS condition 
will vest. 
For both TSR and EPS, performance 
between the two points of measure 
will be determined on a straight  
line basis.
2.  LTIP 2 Scheme. If EPS growth is 
equal to 25% or more per annum 
then 100% of the award will vest. If, 
however, growth is less than 10% per 
annum, none of the award governed 
by the EPS condition will vest, 
performance between the two points 
of measure will be determined on a 
straight line basis.
3.  SAYE 2007 Scheme. The SAYE 
scheme is subject to a three year 
savings contract. If this is completed  
a maximum of 2,914 shares will  
be granted. 
4.  SAYE 2008 Scheme. The SAYE 
scheme is subject to a three year 
savings contract. If this is completed  
a maximum of 3,286 shares will  
be granted.
The Remuneration Committee 
recommends the granting of additional 
share options to the value of each 
Executive Director’s annual salary under 
the performance criteria of LTIP 2.
During the year the Company’s share 
price varied between £2.72 and £4.20 
and ended the year at £3.35.
THE COMPANY’S 
SHARE PRICE ENDED 
THE YEAR AT 
£3.35
DIRECTORS’ 
REMUNERATION REPORT
CONTINUED
Approved by the Board and signed on  
its behalf:
Eurfyl ap Gwilym
Chairman, Remuneration Committee
NCC Group plc
1 July 2009
By order of the Board.
Rob Cotton
Chief Executive
NCC Group plc
1 July 2009
Governance  47_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_48 
CORPORATE SOCIAL 
 RESPONSIBILITY REPORT
NCC Group takes its corporate social 
responsibilities very seriously and 
recognises the important contributions 
to the business made by the wider 
community of stakeholders, in particular 
employees, clients, suppliers and the 
local communities in which we operate. 
The Board takes into account social, 
environmental and ethical issues in 
its discussions and decision making 
and makes the health and safety of 
employees a priority.
Stakeholders
Employees
People are at the heart of the Group’s 
business and the support and 
involvement of the talented individuals 
who form our team is vital to the 
continued success of the Group overall. 
The Group has a policy of keeping 
employees informed of, and engaged 
in, its business strategy through the 
Intranet, regular employee briefings and 
divisional meetings. 
We are extremely proud to have  
been MEN Business of the Year in 
2008, one of the top business awards 
in the North West. NCC Group scored 
high marks for its dedication to people, 
training and innovation.
Comments and suggestions 
from employees on the Group’s 
performance and management are 
actively encouraged and a free flow 
of information between the Directors, 
managers and employees ensures  
that everyone has an opportunity 
to contribute. 
Clients
NCC Group values each and every  
client and is proud of the long standing 
nature of its client relationships. 
Continuing client satisfaction is central 
to our ongoing success and is regularly 
measured and monitored through the 
ISO 9001 certified quality programme. 
This includes written and telephone 
satisfaction surveys each month.
Rare instances of negative feedback 
are treated with the utmost seriousness 
and dealt with swiftly by management 
through to resolution. Each Operational 
Director takes direct responsibility  
for customer satisfaction, with the  
CEO investigating directly where 
divisional performances fail to meet  
the 80% threshold.
The Community
We are committed to ensuring that 
as well as delivering consistently 
strong results as a business, we give 
something back to the local community. 
We continue to support charitable 
organisations and actively encourage 
the involvement of our employees in 
fundraising by covering expenses and 
awarding additional days’ holidays.
During the year, we supported 
fundraising for the NSPCC and in 
particular the Child’s Voice appeal in 
Manchester. We are very proud to  
be patrons of the NSPCC and to  
date have raised and contributed directly 
£48,572. 
The aim of the appeal we support  
is to raise £2.7m for improved 
Manchester based Childline and 
NSPCC facilities. We are committed 
to helping achieve this and in today’s 
economic climate it is even more 
important that charity is supported and in 
particular the NSPCC, as the evidence 
is that in a recession, child abuse 
dramatically increases. 
Suppliers
The Group’s policy is to pay suppliers  
in accordance with terms and conditions 
agreed when orders are placed. 
Although the Group does not follow any 
code or standard on payment policy, 
where terms have not been specifically 
agreed, invoices dated in one calendar 
month are paid close to the end of the 
following month.
At 31 May 2009, the Group had 
an average of 40 days purchases 
outstanding in trade creditors  
(2008: 45 days).
The Environment
Although the impact of the Group’s 
operations on the environment is limited 
compared with other industries, we 
recognise our responsibility to respect 
and limit damage to the environment. 
In 2006, an environmental policy was 
introduced outlining the responsibilities 
of the Group and each employee to 
act in an environmentally responsible 
manner, in particular through efficient 
route planning, recycling and  
sustainable procurement.
NCC GROUP VALUES 
EACH AND EVERY  
CLIENT AND IS 
PROUD OF THE 
LONG STANDING 
NATURE OF 
ITS CLIENT 
RELATIONSHIPS
Ethics Policy
The Group recognises and 
understands that our relationships 
with those who we deal with are 
the key to our success and, as 
such, we take our obligations and 
commitments to those people 
and organisations very seriously. 
Our independence, reputation as 
a supplier of quality services and 
the trust of our clients are all key 
assets that we aim to protect at all 
times. We aim to engender in our 
employees principles of honesty 
and integrity and the desire to work 
to the best of their ability.
All of these values and principles 
are founded on an ethics policy 
which permeates everything that 
we do.
Equal Opportunities and 
Employment Policy
The Group is committed to  
offering equal opportunities to  
all; no employee or potential 
employee receives more or less 
favourable treatment due to their 
gender, age, race, national or 
ethnic origin, disability, sexual 
orientation, or marital status. The 
Group is committed to the training 
and development of all employees 
and to providing a productive 
working environment. 
Should an existing employee’s 
circumstances change, it is 
the Group’s policy, wherever 
practicable, to provide continuing 
employment under normal terms 
and conditions and to provide 
training and career development 
and promotion wherever possible.
Health and Safety Policy
The Group is committed to the 
good health and wellbeing of its 
employees and strives to provide 
and maintain a safe and pleasant 
environment for all employees, 
clients and visitors to its premises 
and to comply with the relevant 
health and safety legislation. 
Continued investment is planned 
in the coming financial year to 
enhance the working environments 
of employees in all of our offices.
By order of the Board.
Rob Cotton
Chief Executive
NCC Group plc
1 July 2009
Governance  49_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_50 
We have audited the financial statements 
of NCC Group plc for the year ended 
31 May 2009 set out on pages 51 to 99. 
The financial reporting framework that 
has been applied in their preparation is 
applicable law and International Financial 
Reporting Standards (IFRS) as adopted 
by the EU and, as regards the parent 
company financial statements, as applied 
in accordance with the provisions of the 
Companies Act 2006.
This report is made solely to the 
Company’s members, as a body, in 
accordance with sections 495, 496 
and 497 of the Companies Act 2006. 
Our audit work has been undertaken so 
that we might state to the Company’s 
members those matters we are required 
to state to them in an auditors’ report 
and for no other purpose. To the fullest 
extent permitted by law, we do not 
accept or assume responsibility to 
anyone other than the Company and 
the Company’s members, as a body, for 
our audit work, for this report, or for the 
opinions we have formed.
Respective responsibilities of  
Directors and auditors
As explained more fully in the Directors’ 
Responsibilities Statement set out on 
page 46, the Directors are responsible 
for the preparation of the financial 
statements and for being satisfied 
that they give a true and fair view. 
Our responsibility is to audit the 
financial statements in accordance 
with applicable law and International 
Standards on Auditing (UK and Ireland). 
Those standards require us to comply 
with the Auditing Practices Board’s 
(APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial 
statements
A description of the scope of an audit  
of financial statements is provided on  
the APB’s web-site at: 
www.frc.org.uk/apb/scope/UKP
Opinion on Financial Statements
In our opinion:
•	 	 	 the	financial	statements	give	a	true	
and fair view of the state of the 
Group’s and of the parent company’s 
affairs as at 31 May 2009 and of the 
Group’s profit for the year then ended;
•		 	 the	Group	financial	statements	have	
been properly prepared in accordance 
with IFRS as adopted by the EU;
•	 	 the	parent	company	financial	
statements have been properly 
prepared in accordance with IFRS as 
adopted by the EU and as applied in 
accordance with the provisions of the 
Companies Act 2006; and
•		 	 the	financial	statements	have	been	
prepared in accordance with the 
requirements of the Companies Act 
2006 and, as regards the Group 
financial statements, Article 4 of the  
IAS Regulation.
INDEPENDENT 
AUDITORS’ REPORT
TO THE MEMBERS OF NCC GROUP PLC
Opinion on other matters  
prescribed by the Companies  
Act 2006
In our opinion:
•		 	 the	part	of	the	Directors’	
Remuneration Report to be audited 
has been properly prepared in 
accordance with the Companies Act 
2006; and
•		 	 the	information	given	in	the	Directors’	
Report for the financial year for  
which the financial statements are 
prepared is consistent with the 
financial statements.
Matters on which we are required 
to report by exception
We have nothing to report in respect of 
the following:
Under the Companies Act 2006 we  
are required to report to you if, in  
our opinion:
•	 	 adequate	accounting	records	have	not	
been kept by the parent company, or 
returns adequate for our audit have 
not been received from branches not 
visited by us; or
•	 	 the	parent	company	financial	
statements and the part of the 
Directors’ Remuneration Report to be 
audited are not in agreement with the 
accounting records and returns; or
•	 	 certain	disclosures	of	Directors’	
remuneration specified by law are not 
made; or
•	 	 we	have	not	received	all	the	 
information and explanations we  
require for our audit.
Under the Listing Rules we are required 
to review:
•	 	 the	Directors’	statement,	set	out	 
on page 46, in relation to going 
concern; and
•	 	 the	part	of	the	Corporate	Governance	
Statement relating to the Company’s 
compliance with the nine provisions 
of the June 2008 Combined Code 
specified for our review.
Nick Plumb 
(Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, 
Statutory Auditor
KPMG Audit Plc
8 Salisbury Square,
London,
EC4Y 8BB
1 July 2009
THE FINANCIAL 
REPORTING 
FRAMEWORK 
THAT HAS BEEN 
APPLIED IN THEIR 
PREPARATION 
IS APPLICABLE 
LAW AND 
INTERNATIONAL 
FINANCIAL 
REPORTING 
STANDARDS 
(IFRS)
Governance  51_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_52 
CONSOLIDATED 
INCOME STATEMENT
For the year ended 31 May 2009
FINANCIALS
FOR THE YEAR ENDED 31 MAY 2009
Notes 2009 2008
£000 £000
Revenue 2 46,836 35,745
Cost of sales (26,275) (20,055)
Gross profit 20,561 15,690
Administrative expenses before amortisation of intangible assets and  
exceptional items
(7,838) (5,022)
Earnings before interest, tax, amortisation and exceptional items 12,723 10,668
Amortisation of intangible assets (1,237) (740)
Exceptional items 3 – (711)
Total administrative expenses (9,075) (6,473)
Operating profit 2 11,486 9,217
Financial income 6 24 78
Finance expense excluding unwinding of discount (466) (269)
Net financing costs excluding unwinding of discount (442) (191)
Unwinding of discount effect relating to deferred consideration on  
business combinations
(177) (333)
Financial expenses 6 (643) (602)
Net financing costs (619) (524)
Profit before taxation 4 10,867 8,693
Taxation 7 (3,170) (2,340)
Profit for the year 7,697 6,353
Attributable to equity holders of the parent company 7,697 6,353
Profit for the year 7,697 6,353
Earnings per share 9
Basic earnings per share 22.9p 18.9p
Diluted earnings per share 22.1p 18.3p
Financials  53_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_54 
GROUP 
BALANCE SHEET
At 31 May 2009
Notes         2009       2008
£000 £000 £000 £000
Non current assets
Intangible assets                   11 60,009 51,833
Plant and equipment      12 2,131 1,939
Deferred tax assets 15 787 1,145
Total non current assets 62,927 54,917
Current assets
Trade and other receivables        13 14,785 12,351
Cash and cash equivalents 3,356 1,142 
Total current assets 18,141 13,493
Total assets 81,068 68,410
Equity
Issued capital                     21 337 336
Share premium                   21,630 21,537
Retained earnings                 22,891 17,569
Currency translation reserve (104) 12
Total equity attributable to equity holders of the parent 44,754 39,454
Non current liabilities
Other financial liabilities 18 76 92
Deferred tax liability 15 1,588 1,499
Interest bearing loans 18,19 8,932 54
Total non current liabilities 10,596 1,645
Current liabilities
Interest bearing loans 19 – 4,500
Trade and other payables           16 11,317 11,270
Deferred revenue                  17 12,406 11,009
Current tax payable 1,995 532
Total current liabilities 25,718 27,311
Total liabilities 36,314 28,956
Total liabilities and equity 81,068 68,410
COMPANY 
BALANCE SHEET
At 31 May 2009
Notes          2009          2008
£000 £000 £000 £000
Non current assets
Investments 26 30,673 29,994
Deferred tax assets 15 178 –
Total non current assets 30,851 29,994
Current assets
Cash and cash equivalents 1 12
Total current assets 1 12
Total assets 30,852 30,006
Equity
Issued capital                     21 337 336
Share premium                   21,630 21,537
Retained earnings                 4,931 4,974
Total equity 26,898 26,847
Current liabilities
Trade and other payables           16 3,940 3,159
Current tax payable 14 –
Total current liabilities 3,954 3,159
Total liabilities 3,954 3,159
Total liabilities and equity 30,852 30,006
These financial statements were approved by the Board of Directors on 1 July 2009 and were signed on its behalf by:
Rob Cotton
Chief Executive
NCC Group plc
These financial statements were approved by the Board of Directors on 1 July 2009 and were signed on its behalf by:
Rob Cotton, Chief Executive, NCC Group plc
Financials  55_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_56 
GROUP CASH FLOW 
STATEMENT
For the year ended 31 May 2009
Notes 2009 2008
£000 £000
Cash inflow from operating activities
Profit for the year 7,697 6,353
Adjustments for:      
Depreciation charge 1,283 1,045
Share based charges 1,031 742
Amortisation of intangible assets 1,237 740
Net financing costs 619 191
Profit on sale of plant and equipment (1) (5)
Income tax expense 3,170 2,340
Profit for the year before changes in working capital 15,036 11,406
Increase in receivables (866) (3,620)
Increase in payables 1,955 3,460
Cash generated from operating activities before interest and tax 16,125 11,246
Interest paid
(468) (489)
Income taxes paid (1,772) (2,657)
Net cash generated from operating activities 13,885 8,100
Cash flows from investing activities
Interest received
25 273
Proceeds from the sale of plant and equipment – 69
Acquisition of plant and equipment (1,409) (1,466)
Acquisition of business 14 (11,358) (10,418)
Net cash used in investing activities (12,742) (11,542)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital 94 1,618
Draw down of borrowings 4,412 993
Purchase of own shares (656) (559)
Payment of bank loans (56) –
Equity dividends paid (2,607) (1,817)
Net cash from financing activities 1,187 235
Net increase in cash and cash equivalents 22 2,330 (3,207)
Cash and cash equivalents at beginning of year 1,142 4,377
Effect of exchange rate fluctuations on cash held (116) (28)
Cash and cash equivalents at end of year 3,356 1,142
COMPANY CASH FLOW 
STATEMENT
For the year ended 31 May 2009
2009 2008
£000 £000
Cash inflow from operating activities
Profit for the year 189 (1,050)
Adjustments for:
Share based charges 352 270
Income Tax expense (164) –
(Loss)/profit for the year before changes in working capital 377 (780)
(Decrease)/ Increase in payables 781 (2,462)
Profit for the year before interest and tax 1,158 (3,242)
Interest paid
– –
Net cash generated from operating activities 1,158 (3,242)
Cash flows from financing activities
Proceeds from the issue of ordinary share capital 94 1,618
Purchase of own shares (656) (559)
Equity dividends received 2,000 4,000
Equity dividends paid (2,607) (1,817)
Net cash from financing activities (1,169) 3,242
Net (decrease) in cash and cash equivalents (11) –
Cash and cash equivalents at beginning of year 12 12
Cash and cash equivalents at end of year 1 12
Financials  57_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_58 
STATEMENTS OF CHANGES  
OF EQUITY
For the year ended 31 May 2009
Share 
capital
Share 
premium
Retained 
earnings
Currency 
translation
Total 
Equity
£000 £000 £000 £000 £000
Balance at 1 June 2007 326 19,929 13,144 39 33,438
Share based charges – – 742 – 742
Purchase of own shares – – (559) – (559)
Deferred tax on share based payments – – (294) – (294)
Profit for the year – – 6,353 – 6,353
Shares issued 10 1,608 – – 1,618
Currency translation reserve – – – (27) (27)
Dividends to shareholders – – (1,817) – (1,817)
Balance at 31 May 2008 336 21,537 17,569 12 39,454
Balance at 1 June 2008 336 21,537 17,569 12 39,454
Share based charges – – 1,031 – 1,031
Purchase of own shares – – (656) – (656)
Deferred tax on share based payments – – (143) – (143)
Profit for the year – – 7,697 – 7 ,697
Shares issued 1 93 – – 94
Currency translation reserve – – – (116) (116)
Dividends to shareholders – – (2,607) – (2,607)
Balance at 31 May 2009 337 21,630 22,891 (104) 44,754
STATEMENTS OF CHANGES  
OF EQUITY
For the year ended 31 May 2009
Share 
capital
Share 
premium
Retained 
earnings
Total 
Equity
£000 £000 £000 £000
Balance at 1 June 2007 326 19,929 3,686 23,941
Share based charges – – 270 270
Increase in subsidiary investment for  
share based charges
– – 444 444
Profit for the year – – 2,950 2,950
Shares issued 10 1,608 – 1,618
Purchase of own shares – – (559) (559)
Dividends to shareholders – – (1,817) (1,817)
Balance at 31 May 2008 336 21,537 4,974 26,847
Balance at 1 June 2008 336 21,537 4,974 26,847
Share based charges – – 352 352
Increase in subsidiary investment for  
share based charges
– – 679 679
Profit for the year – – 2,189 2,189
Shares issued 1 93 – 94
Purchase of own shares – – (656) (656)
Dividends to shareholders – – (2,607) (2,607)
Balance at 31 May 2009 337 21,630 4,931 26,898
Financials
Group Company  59_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_60 
1 Accounting Policies
Basis of Preparation
NCC Group plc (“the Company”) is a 
company incorporated in the UK.
The Group financial statements 
consolidate those of the Company and 
its subsidiaries (together referred to as 
the “Group”).  
The parent company financial 
statements present information about 
the Company as a separate entity and  
not about its Group.
Both the parent and the Group  
financial statements have been  
prepared and approved by the  
Directors in accordance with 
International Financial Reporting 
Standards as adopted by the EU 
(“Adopted IFRS”). On publishing the 
parent company financial statements 
here together with the Group financial 
statements, the Company is taking 
advantage of the exemption in s403  
of the Companies Act 2006 not  
to present its individual income 
statement and related notes that  
form a part of these approved  
financial statements.
The accounting policies set out  
below have, unless otherwise stated, 
been applied consistently to all  
periods presented in these Group 
financial statements. 
The Group’s business activities, 
together with the factors likely to affect 
its future development, performance and 
position are set out in the Chief 
Executive’s Review on pages 15 to 20. 
The financial position of the Group, its 
cash flows, liquidity position and 
borrowing facilities are described in the 
Financial Review on pages 21 to 24. In 
addition note 19 to the financial statements 
includes the Group’s objectives, 
policies and processes for managing  
its capital, its financial risk management 
objectives, details of its financial 
instruments and hedging activities,  
and its exposures to credit risk and 
liquidity risk.
The Group’s forecast and projections 
taking into account reasonably possible 
changes in trading performance show 
that the Group is able to operate within 
the level of its current facility. 
As a consequence, the Directors 
believe that the Group is well placed  
to manage its business risks 
successfully despite the current 
uncertain economic outlook. 
After making enquiries, the Directors 
have a reasonable expectation that the 
Company and the Group have adequate 
resources to continue in operational 
existence for the foreseeable future. 
Accordingly, they continue to adopt  
the going concern basis in preparing  
the annual report and accounts.
Basis of Consolidation
Subsidiaries are entities controlled by 
the Group. Control exists when the 
Group has the power, directly or 
indirectly, to govern the financial and 
operating policies of an entity so as to 
obtain benefits from its activities. In 
assessing control, potential voting rights 
that are currently exercisable or 
convertible are taken into account.  
The financial statements of subsidiaries 
are included in the consolidated 
financial statements from the date that 
control commences until the date that 
control ceases.
Intangible Assets and Goodwill
All business combinations are 
accounted for by applying the purchase 
method. Goodwill represents amounts 
arising on acquisition of subsidiaries.  
In respect of business acquisitions that 
have occurred since 1 June 2004, 
goodwill represents the difference 
between the cost of the acquisition  
and the fair value of the net identifiable 
assets acquired including identifiable 
intangible assets. Identifiable intangibles 
are those which can be sold separately 
or which arise from legal rights 
regardless of whether those rights  
are separable.
Goodwill is stated at cost less any 
accumulated impairment losses.
Goodwill is allocated to cash-generating 
units where the expected cash flows are 
not independent of other assets and is 
not amortised but is tested annually  
for impairment. 
In respect of acquisitions prior to  
1 June 2004, goodwill is included at  
its deemed cost, which represents the 
amount recorded under UK GAAP  
at 31 May 2004 which was broadly 
comparable save that only separable 
intangibles were recognised and goodwill 
was amortised. 
Other intangible assets that are 
acquired by the Group are stated at 
cost less accumulated amortisation. 
Amortisation is charged to the income 
statement on a straight line basis over 
the estimated useful lives of intangible 
assets unless such lives are indefinite. 
Goodwill is tested for impairment at 
each balance sheet date or whenever 
there is an indication of impairment. 
Other intangibles are amortised from the 
date they are available for use. Acquired 
customer contracts and relationships 
are amortised over their estimated 
useful economic life of between 3 and 
20 years.
Related Party Transactions
Details of related party transactions are 
set out in note 25 to these financial 
statements.
Plant and Equipment
Plant and equipment is stated at cost 
less accumulated depreciation. 
Depreciation is charged to the income 
statement on a straight line basis over 
the estimated useful lives of each part  
of an item of plant and equipment.  
The rates applied are as follows:
Computer equipment – 20% to 33%
Plant and equipment – 20%
Fixtures and fittings – 20%
Motor vehicles – 25%
Plant and equipment is also tested for 
impairment whenever there is an 
indication of potential impairment.
NOTES
ACCOUNTING POLICIES
(
FORMING PART OF THE FINANCIAL STATEMENTS)
NOTES CONTINUED
ACCOUNTING POLICIES CONTINUED
Notes  61_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_62 
Taxation
Tax on the profit or loss for the year 
comprises current and deferred tax. Tax 
is recognised in the income statement 
except to the extent that it relates to 
items recognised directly in equity, in 
which case it is recognised in equity.
Current tax is the expected tax payable 
on the taxable income for the year,  
using tax rates enacted or substantively 
enacted at the balance sheet date, and 
any adjustment to tax payable in respect 
of previous years.
Deferred tax is provided on temporary 
differences between the carrying 
amounts of assets and liabilities for 
financial reporting purposes and the 
amounts used for taxation purposes. 
The following temporary differences are 
not provided for: the initial recognition of 
goodwill and the initial recognition of 
assets or liabilities that affect neither 
accounting nor taxable profit other than 
in a business combination. The amount 
of deferred tax provided is based on the 
expected manner of realisation or 
settlement of the carrying amount of 
assets and liabilities, using tax rates 
enacted or substantively enacted at the 
balance sheet date.
A deferred tax asset is recognised only  
to the extent that it is probable that 
future taxable profits will be available 
against which the asset can be utilised. 
Intra-group Financial Instruments
Where the Company enters into financial 
guarantee contracts to guarantee the 
indebtedness of other companies within 
the Group, the Company considers 
these to be insurance arrangements  
and accounts for them as such. In this 
respect the Company treats the 
guarantee contract as a contingent 
liability until such time as it becomes 
probable that the Company will be 
required to make a payment under  
the guarantee.
Adopted IFRS not yet Applied
The following adopted IFRS were 
available for early adoption but have not 
been applied by the Group in these 
financial statements:
The Directors do not anticipate that  
the adoption of these standards  
and interpretations will have a  
material impact on the Group’s  
financial statements. 
Trade and Other Receivables
Trade and other receivables are  
stated at their nominal amount less 
impairment losses.
Cash and Cash Equivalents
Cash and cash equivalents comprise  
cash in hand and deposits repayable  
on demand. Bank overdrafts that are 
repayable on demand form part of the 
Group’s cash management and are 
included as a component of cash and 
cash equivalents for the purpose only  
of the statement of cash flows. 
Basis of Measurement
The financial statements are prepared 
on the historical cost basis except for 
share based payment transactions and 
assets and liabilities acquired in a 
business combination which are 
measured at fair value.
Use of Estimates and Judgements
Information about the most significant 
areas of estimation and judgements is 
described in the following notes; 
11 Goodwill, 14 Acquisitions, 20 
Measurement of share based payments.
Investments in Subsidiaries
Investments in subsidiaries are  
carried at cost less impairment  
and pre-acquisition dividends.
Revenue Recognition
Revenue represents the value of 
services provided during the period, 
excluding VAT. 
Testing and Consultancy
The results of partially completed 
contracts whether fixed price or on a 
time and materials basis are dealt with 
on a percentage completion basis 
according to the number of days worked 
by including the profit or loss earned on 
work completed to the balance sheet 
date. Provisions are made for any losses 
on uncompleted contracts expected to 
be incurred after the balance sheet date. 
Escrow and Web Site Monitoring
Other than fees attributable to initial 
setup on the signing of a new contract, 
which is recognised when the contract 
is signed, maintenance and escrow 
agreement revenue is deferred and 
released to the income statement on a 
straight-line basis over the life of the 
related agreement, on the basis that the 
performance is deemed to fall evenly 
over the contract period.
Foreign Currencies
Transactions in foreign currencies are 
recorded using the rate of exchange 
ruling at the date of the transaction. 
Monetary assets and liabilities 
denominated in foreign currencies are 
translated using the rate of exchange 
ruling at the balance sheet date and the 
gains or losses on translation are 
included in the income statement.
The assets and liabilities of overseas 
subsidiaries denominated in foreign 
currencies are translated at the closing 
rate and income statements of overseas 
subsidiary undertakings are translated at 
the average exchange rates. Gains and 
losses arising on these transactions are 
taken to the currency translation reserve. 
They are released to the income 
statement upon disposal.
Operating Leases Payments
Operating lease rentals are charged to 
the income statement on a straight-line 
basis over the period of the lease. Lease 
incentives received are recognised in 
the income statement as an integral part 
of the total lease expense.
E m p l o y e e 	 B e n e fi t s 	 – 	 D e fi n e d	 
Contribution Plans
The Group operates a defined 
contribution pension scheme. The  
assets of the scheme are kept separately 
from those of the Group in an 
independently administered fund. The 
amount charged as expense in the 
income statement represents the 
contributions payable to the scheme  
in respect of the accounting period.
Share-based Payment Transactions
The share option programme allows 
Group employees to acquire shares of 
the parent company; these awards are 
granted by the parent. The fair value of 
options granted is recognised as an 
employee expense with a corresponding 
increase in equity. The fair value is 
measured at grant date and spread over 
the period during which the employees 
become unconditionally entitled to the 
options. The fair value of the options 
granted is measured using an option 
valuation model, taking into account the 
terms and conditions upon which the 
options were granted. The amount 
recognised as an expense is adjusted to 
reflect the actual number of share 
options that vest except where forfeiture 
is due only to share prices not achieving 
the threshold for vesting. In the 
Company’s accounts, the fair value 
of share options granted to employees 
of subsidiary companies is included  
in Investments with a corresponding 
increase in equity.
Interest Bearing Borrowings
Interest bearing borrowings are 
recognised initially at fair value,  
less attributable transaction costs. 
Subsequent to initial recognition  
interest bearing borrowings are  
stated at amortised cost with any 
difference between cost and  
redemption value being recognised  
in the income statement over the  
period of the borrowings on an  
effective interest basis.
Net Financing Costs
Net financing costs comprise interest 
payable and interest receivable on  
funds invested. 
Interest income and interest payable  
is recognised in the income statement 
as they accrue. Dividend income is 
recognised in the income statement  
on the date the entity’s right to  
receive the payments is established  
and pre-acquisition dividends are 
deducted from the cost of investment.
Contingent Consideration under  
Business Combinations
Contingent consideration on business 
combinations is recognised only to the 
extent that it can be reliably estimated 
and it is probable that the consideration 
will be paid.
International accounting
standards (IFRS)
IFRS 8 Operating segments 
IAS 1
Presentation of Financial 
Statements
IFRS 2
Share based payments:  
vesting conditions and 
cancellations
Notes
NOTES CONTINUED
ACCOUNTING POLICIES CONTINUED
NOTES CONTINUED
ACCOUNTING POLICIES CONTINUED  63_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_64 
2 Segmental Information
The Group is organised into three primary business segments: Escrow, Assurance 
Testing and Consultancy. These three segments are the Group’s primary reporting 
format for segment information. Escrow Europe includes amounts previously reported 
as Escrow Germany. All segments are located in the UK unless indicated otherwise.
Interest and tax are not allocated to business segments and there are no inter segment sales.
2009 2008
£000 £000
Revenue by business segment
Escrow UK 16,611 15,724
Escrow Europe 2,415 1,094
Escrow US 2,022 1,190
Group Escrow 21,048 18,008
Assurance Testing 19,124 12,835
Consultancy 6,664 4,902
Total revenue 46,836 35,745
Operating profit by business segment
Escrow UK 10,320 9,393
Escrow Europe 797 376
Escrow US 535 394
Group Escrow 11,652 10,163
Assurance Testing 2,804 1,678
Consultancy 754 726
Segment operating profit 15,210 12,567
Head office costs (2,487) (1,899)
Operating profit before amortisation and exceptional items 12,723 10,668
Amortisation of intangible assets Escrow US (143) (115)
Amortisation of intangible assets Assurance Testing (694) (458)
Amortisation of intangible assets Escrow Europe (400) (167)
Operating profit before exceptional items 11,486 9,928
Exceptional items – (711)
Operating profit 11,486 9,217
Assets Liabilities Assets Liabilities
2009 2009 2008 2008
£000 £000 £000 £000
Assets/(liabilities) by business segment
Escrow UK 4,145 (8,322) 4,623 (7 ,775)
Escrow Europe 5,632 (2,520) 5,268 (3,296)
Escrow US 4,478 (1,146) 4,483 (744)
Group Escrow 14,255 (11,988) 14,374 (11,815)
Consultancy 2,604 (873) 2,790 (823)
Assurance Testing 11,342 (5,750) 8,055 (9,451)
Unallocated net assets 52,867 (17,703) 43,191 (6,867)
Total assets/(liabilities) 81,068 (36,314) 68,410 (28,956)
Unallocated net assets consist of goodwill arising on consolidation, cash, tax payable and other centrally held assets and liabilities.
Notes
SEGMENTAL INFORMATION CONTINUED
NOTES CONTINUED NOTES CONTINUED
SEGMENTAL INFORMATION   65_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_66 
Notes
2008 Depreciation Capital  
expenditure
Total costs incurred to 
acquire segmental assets
£000 £000 £000
Escrow UK 508 807 –
Escrow Europe 51 26 6,832
Escrow US 55 17 –
Group Escrow 614 850 6,832
Consultancy 71 137 –
Assurance Testing 360 485 2,725
Total 1,045 1,472 9,557
2009 Depreciation Capital  
expenditure
Total costs incurred to 
acquire segmental assets
£000 £000 £000
Escrow UK 732 519 –
Escrow Europe 55 78 1,462
Escrow US 77 56 –
Group Escrow 864 653 1,462
Consultancy 92 64 –
Assurance Testing 327 708 10,597
Total 1,283 1,425 12,059
2009 2008
£000 £000
Revenue by geographical segment
UK 36,648 29,238
Rest of Europe 4,604 2,745
Rest of the World 5,584 3,762
Total revenue 46,836 35,745
Assets Liabilities Assets Liabilities
2009 2009 2008 2008
£000 £000 £000 £000
Assets/(liabilities) by geographical segment
UK 70,731 (27 ,913) 58,659 (21 ,354)
Rest of Europe 5,632 (3,757) 5,268 (3,610)
Rest of the World 4,705 (4,644) 4,483 (3,992)
Total assets/(liabilities) 81,068 (36,314) 68,410 (28,956)
The table below provides additional disclosure on revenue by geographical market where the customer is based.
The table below provides additional disclosure on assets/(liabilities) by geographical market where the assets/(liabilities) 
are based.
NOTES CONTINUED
SEGMENTAL INFORMATION CONTINUED
SEGMENTAL INFORMATION CONTINUED
NOTES CONTINUED  67_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_68 
2009 2008
£000 £000
Profit before taxation is stated after charging/(crediting):
Amounts receivable by auditors and their associates in respect of:
Audit of these financial statements 33 32
Audit of financial statements of subsidiaries pursuant to legislation 23 10
Services relating to corporate finance transactions entered into or proposed to be entered into  
by or on behalf of the Company or Group
– 115
Depreciation and other amounts written off tangible and intangible fixed assets:
Owned 1,283 1,045
Amortisation of intangible assets 1,237 740
Exchange (profits) / losses (28) 15
Operating lease rentals charged:
Hire of property, plant and equipment 832 604
Other operating leases 470 420
Profit on disposal of fixed assets (1) (5)
3 Exceptional Items
The Group identifies separately items as “exceptional”. These are items which in the 
management’s judgement, need to be disclosed by virtue of their size or incidence in 
order for the user to obtain a proper understanding of the financial information.
Exceptional items in the year ended 31 May 2009 were £nil, exceptional items in the 
year ended 31 May 2008 were costs relating to the move to the London Stock 
Exchange’s Official List on 13 July 2007 (£531,000) and reorganisation costs 
following the acquisition of Escrow Europe (£180,000).
4  Expenses and Auditors’ Remuneration
Notes
5 Staff Numbers and Costs
Directors’ emoluments are disclosed in the Directors’ remuneration report on pages 39 to 46.
Group
The average number of persons employed by the Group during the year, including Directors, is analysed by category as follows:
Number of employees
2009 2008
Operational 93 77
Administration, sales and marketing 259 230
352 307
The aggregate payroll costs of these persons were as follows:
2009 2008
£000 £000
Wages and salaries 19,625 14,315
Share based payments (note 20) 1,031 742
Social security costs 2,140 1,891
Other pension costs (note 24) 429 324
23,225 17 ,272
NOTES CONTINUED
EXCEPTIONAL ITEMS AND EXPENSES AND  
AUDITORS’ REMUNERATION
STAFF NUMBERS AND COSTS
NOTES CONTINUED  69_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_70 
Company
The average number of persons employed by the Company during the year, 
including Directors, is analysed by category as follows:
Number of employees
2009 2008
Administration, sales and marketing 2 2
2 2
The aggregate payroll costs of these persons were as follows:
2009 2008
£000 £000
Wages and salaries 805 589
Share based payments (note 20) 352 270
Social security costs 103 74
Other pension costs (note 24) 48 32
1,308 965
Notes
NOTES CONTINUED
NET FINANCING COSTS
2009 2008
£000 £000
Financial income
Interest on short term deposits 24 78
24 78
Financial expenses
Interest payable on bank loans and overdrafts (466) (269)
Amortisation of deal fees on term loans (20) –
Deferred consideration finance expense (see below) (157) (333)
(643) (602)
Deferred consideration finance expense 2009 2008
£000 £000
Site Confidence Limited 138 233
Secure Test Limited 16 76
Escrow Europe Holdings B.V. 3 24
157 333
6 Net Financing Costs
The deferred consideration finance expense of £157,000 (2008: £333,000)  
relates to the acquisition of Next Generation Security Software, Secure Test and 
Escrow Europe.
Deferred consideration related to the acquisition of subsidiary undertakings has 
been discounted to present values. The unwinding of the discount has been treated 
as a finance expense and is analysed in the table below: 
 
 
The discount rate used was 6.5% (2008: 6.5%).
NOTES CONTINUED
STAFF NUMBERS AND COSTS CONTINUED  71_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_72 
The total net present value of the deferred contingent consideration as at 31 May is shown in the following table:
Current liabilities – deferred consideration (note 16) 2009 2008
£000 £000
Site Confidence Limited 55 3,908
Secure Test Limited – 1,485
Escrow Europe Holdings B.V. 158 717
Escrow Europe Switzerland A.G. 63 –
Next Generation Security Software Limited 4,263 –
4,539 6,110
Notes
Reconciliation of Effective Tax Rate
2009 2008
£000 £000
Current tax expense
Current year 2,911 2,029
Adjustment to tax expense in respect of prior periods 35 4
Foreign tax 320 (10)
Total current tax 3,266 2,023
Deferred tax (note 15) (96) 317
Tax in income statement 3,170 2,340
2009 2008
£000 £000
Profit before taxation 10,867 8,693
Current tax using the UK corporation tax rate of 28% (2008: 30%) 3,043 2,608
Effects of:
Items not (taxable)/ deductable for tax purposes 52 (257)
Foreign tax 50 (1)
Marginal relief – (2)
Difference in tax rates (Deferred tax) – (5)
Difference in tax rates (Current tax) – (22)
Adjustment to tax charge in respect of prior periods 25 19
Total current tax 3,170 2,340
7 Taxation 
Recognised in the Income Statement
Deferred tax recognised directly in equity was £143,000 (2008: £294,000).
NOTES CONTINUED
NET FINANCING COSTS CONTINUED
NOTES CONTINUED
TAXATION  73_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_74 
8 Dividends
2009 2008
£000 £000
Dividends paid and recognised in the year 2,607 1,817
Dividends proposed but not recognised in the year 2,104 1,596
Dividends per share paid and recognised in the year 7.75p 2.25p
Dividends per share proposed but not recognised in the year 6.25p 4.75p
2009 2008
£000 £000
Profit for the year 7,697 6,353
Number of Shares 
000’s 
Number of Shares 
000’s
Basic weighted average number of shares in issue 33,653 33,653
Dilutive effect of share options 1,211 1,021
Diluted weighted average shares in issue 34,864 34,674
9 Earnings Per Share
The calculation of earnings per share is based on the following:
Notes
Customer contracts 
and relationships
Goodwill Total
£000 £000 £000
Cost
At 1 June 2007 4,214 35,365 39,579
Additions 4,515 8,756 13,271
At 31 May 2008 8,729 44,121 52,850
Additions 1,371 8,042 9,413
At 31 May 2009 10,100 52,163 62,263
Amortisation
At 1 June 2007 277 – 277
Charge for year 740 – 740
At 31 May 2008 1,017 – 1,017
Charge for year 1,237 – 1,237
At 31 May 2009 2,254 – 2,254
Net book value
At 31 May 2009 7,846 52,163 60,009
Net book value
At 31 May 2008 7,712 44,121 51,833
10  Profit Attributable to Members of the Parent Company
The profit for the year dealt with in the accounts of the parent company was £2,189,000 (2008: £2,950,000).
11 Intangible Assets – Group
The Group has made two acquisitions in the year, details of which are included in note 14. The Company has no intangible assets.
NOTES CONTINUED
DIVIDENDS AND EARNINGS PER SHARE
NOTES CONTINUED
PROFIT ATTRIBUTABLE TO MEMBERS OF THE  
PARENT COMPANY AND INTANGIBLE ASSETS – GROUP  75_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_76 
Goodwill considered significant in comparison to the Group’s total carrying amount 
of such assets have been allocated to cash generating units for the purposes of 
impairment testing as follows:
The cash generating units’ recoverable amounts are based on value in use 
calculations using projections of the Group’s future performance reflecting the 
Directors’ best estimates of the cash flows. Key assumptions for the value in use 
calculations are the discount rates, growth rates and expected changes in revenues 
and direct costs during the period. Risk adjusted discount factors of 10% (2008: 
11.5%) have been applied to the projections. The discount rate has been based on 
management’s calculation of the weighted average cost of capital, using the capital 
asset pricing model to calculate the cost of equity. A range of alpha factors were used 
to reflect the risk of the cash generating units. The Directors do not believe that a 
reasonably possible change of assumptions would cause the recoverable amounts  
to fall below book value for any of the cash generating units.
          Goodwill
2009 2008
Cash generating units £000 £000
Escrow 22,871 22,871
Assurance Testing 2,301 2,301
Consultancy 2,229 2,229
NCC Group plc 27,401 27 ,401
NCC Group Inc 1,218 1,218
Site Confidence Limited 6,396 6,610
Secure Test Limited 3,351 3,351
Next Generation Security Software Limited 7,338 –
Escrow Europe 6,459 5,541
52,163 44,121
Notes
12 Plant and Equipment – Group
Computer 
equipment
Plant and 
equipment
Fixtures 
and fittings
Motor  
vehicles
 
Total
£000 £000 £000 £000 £000
Cost
At 1 June 2007 3,103 405 594 239 4,341
Additions 828 – 480 164 1,472
Acquisition of group companies 115 – 95 – 210
Disposals – – – (122) (122)
At 31 May 2008 4,046 405 1,169 281 5,901
Additions 947 – 363 115 1,425
Acquisition of group companies 259 – 7 – 266
Disposals (2) – – (38) (40)
At 31 May 2009 5,250 405 1,539 358 7,552
Depreciation
At 31 May 2007 2,144 267 365 83 2,859
Charge for year 757 56 160 72 1,045
Acquisition of group companies 69 – 48 – 117
Disposals – – – (59) (59)
At 31 May 2008 2,970 323 573 96 3,962
Charge for year 893 58 259 73 1,283
Acquisition of group companies 197 – 3 – 200
Disposals – – – (24) (24)
At 31 May 2009 4,060 381 835 145 5,421
Net book value
At 31 May 2009 1,190 24 704 213 2,131
Net book value
At 31 May 2008 1,076 82 596 185 1,939
The Company has no plant and equipment.
NOTES CONTINUED
INTANGIBLE ASSETS – GROUP CONTINUED
NOTES CONTINUED
PLANT AND EQUIPMENT – GROUP  77_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_78 
13 Trade and Other Receivables
Group Group Company Company
2009 2008 2009 2008
£000 £000 £000 £000
Trade receivables 11,193 10,235 – –
Prepayments and accrued income 3,592 2,116 – –
14,785 12,351 – –
 
Notes
14 Acquisitions
A.  On 26 November 2008 the Group acquired 100% of the share capital of 
Next Generation Security Software Limited for a maximum consideration of 
£10,000,000 of which up to £5,000,000 has been withheld subject to the 
achievement of performance criteria specified in the purchase agreement.  
The present value of the deferred consideration expected to be paid on 26 
November 2008 was £4,127,000. The performance conditions are required to 
be satisfied by July 2009.
The acquisition had the following effect on the Group’s assets and liabilities:
Goodwill has arisen on the acquisition because the purchase price exceeds the fair 
value of the separately identifiable net assets acquired including £1,242,000 assigned 
to customer relationships, contracts, non-compete agreements and software. 
Goodwill represents synergies, business processes and the assembled value of  
the work force including industry specific knowledge and technical skills. 
From the date of acquisition Next Generation Security Software Limited contributed an 
operating profit before amortisation of intangible assets of £481,000 and revenue of 
£3,450,000 to the Group consolidated income statement for the year ended 31 May 
2009. After amortisation of intangible assets, operating profits were £274,000. 
B.  On 1 May 2009 the Group acquired 100% of Escrow Europe Switzerland A.G. for a 
maximum consideration of £539,000 of which £62,000 was withheld subject  
to the achievement of performance criteria specified in the purchase agreement.                                                                
Acquiree’s
 book values
Fair value
 adjustments
Acquisition 
amounts
£000 £000 £000
Acquiree’s identifiable net assets at the acquisition date:
Plant and equipment 66 – 66
Trade and other receivables 1,554 – 1,554
Tax recoverable 14 – 14
Deferred tax liability – (347) (347)
Cash 680 – 680
Creditors & accruals (963)           – (963)
Intangible assets purchased – 1,242 1,242
Net identifiable (liabilities) / assets 1,351 895 2,246
Goodwill on acquisition – – 7,338
Expected consideration to be paid including expenses – – 9,584
Less purchase consideration withheld – – (4,127)
Net cash outflow – – 5,457
Cash acquired – – (680)
Net cash outflow excluding cash acquired – – 4,777
NOTES CONTINUED
TRADE AND OTHER RECEIVABLES
NOTES CONTINUED
ACQUISITIONS  79_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_80 
The acquisition had the following effect on the Group’s assets and liabilities.
Goodwill has arisen on the acquisition because the purchase price exceeds the fair 
value of the separately identifiable net assets acquired including £128,000 assigned  
to customer relationships and contracts. Goodwill represents synergies and business 
processes. 
From the date of acquisition Escrow Europe Switzerland A.G. contributed an 
operating profit before amortisation of intangible assets of £8,000 and revenue of 
£12,000 to the Group consolidated income statement for the year ended 31 May 
2009. After amortisation of intangible assets, operating profits were £7,000.
C.  During the year ended 31 May 2009, payments were made in relation to the settlement 
of deferred consideration arising on acquisitions completed in prior years. The amounts 
paid were; £893,000 in relation to the acquisition of Escrow Europe Holdings B.V., 
£1,500,000 in relation to the acquisition of SecureTest Limited and £3,640,000 in 
relation to the acquisition of Site Confidence Limited. Additionally a payment of £30,000 
was made during the year in relation to the acquisition of the minority interest in Escrow 
Europe GmbH.
D.  If all of the acquisitions had occurred at the beginning of the financial year it 
is estimated that the consolidated revenue and operating profit for the year ended  
31 May 2009 would have been approximately £50.3m and £11.9m respectively.
Acquiree’s
 book values
Fair value
 adjustments
Acquisition 
amounts
£000 £000 £000
Acquiree’s identifiable net assets at the acquisition date:
Trade and other receivables 35 – 35
Deferred tax liability – (36) (36)
Cash 21 – 21
Creditors and Accruals (12) – (12)
Deferred Income (70) – (70)
Intangible assets purchased – 128 128
Net identifiable (liabilities) /assets  (26) 92 66
Goodwill on acquisition – – 535
Expected consideration to be paid including expenses – – 601
Less purchase consideration withheld – – (62)
Net cash outflow – – 539
Cash acquired – – (21)
Net cash outflow excluding cash acquired – – 518
Notes
   Assets            Liabilities           Net
2009 2008 2009 2008 2009 2008
£000 £000 £000 £000 £000 £000
Plant and equipment 246 180 (12) – 234 180
Short term temporary differences 26 13 – – 26 13
Trade losses – 390 – – – 390
Intangible assets – – (1,576) (1,499) (1,576) (1,499)
Share based payments 515 562 – – 515 562
Deferred tax assets/(liabilities) 787 1,145 (1,588) (1,499) (801) (354)
 
15  Deferred Tax Assets and Liabilities
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Movement in deferred tax during the year
1 June  
2008
Recognised 
in income
Recognised
In equity
Arising on 
acquisition
31 May  
2009
£000 £000 £000 £000 £000
Plant and equipment 180 70 – (16) 234
Short term temporary differences 13 13 – – 26
Trade losses 390 (390) – – –
Intangible assets (1,498) 306 – (384) (1,576)
Share based payments 561 97 (143) – 515
(354) 96 (143) (400) (801)
NOTES CONTINUED
ACQUISITIONS CONTINUED
NOTES CONTINUED
DEFERRED TAX ASSETS AND LIABILITIES  81_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_82 
16 Trade and Other Payables
17 Deferred Revenue
Group Group Company Company
2009 2008 2009 2008
£000 £000 £000 £000
Trade payables 1,217 965 – –
Amounts owed to Group undertakings – – 3,714 2,987
Interest payable 3 4 – –
Non trade payables 1,807 1,655 – –
Deferred consideration on acquisition of subsidiary (note 6) 4,539 6,110 – –
Accruals 3,751 2,536 226 172
11,317 11,270 3,940 3, 159
 
Group Group Company Company
2009 2008 2009 2008
£000 £000 £000 £000
Deferred revenue 12,406 11,009 – –
12,406 11,009 – –
 
Deferred revenue of £10,246,000 (2008: £9,043,000) mainly consists of Escrow 
agreement revenue that has been deferred to be released to the income statement 
over the contract term on a pro-rata basis. 
Deferred revenue of £2, 160,000 (2008: £1 ,966,000) consists of internet monitoring 
and load testing agreement revenue that has been deferred to be released to the 
income statement over the contract term on a pro-rata basis. 
Movement in deferred tax during the prior year
The Company has deferred tax assets related to share based payments of £178,000 (2008: nil).
1 June  
2007
Recognised 
in income
Recognised
In equity
Arising on 
acquisition
31 May  
2008
£000 £000 £000 £000 £000
Plant and equipment 137 43 – – 180
Short term temporary differences 13 – – – 13
Trade losses 815 (425) – – 390
Intangible assets (473) 250 – (1,275) (1,498)
Share based payments 1,040 (185) (294) – 561
1,532 (317) (294) (1,275) (354)
Notes
NOTES CONTINUED
DEFERRED TAX ASSETS AND LIABILITIES CONTINUED
NOTES CONTINUED
TRADE AND OTHER PAYABLES AND DEFERRED REVENUE  83_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_84 
19 Financial Instruments
Financial Risk Management
The Group has exposure to the  
following risks from its use of  
financial instruments:
• 	 C r e d i t 	 r i s k
• 	 L i q u i d i t y 	 r i s k
• 	 C u r r e n c y 	 r i s k
• 	 I n t e r e s t 	 r a t e 	 r i s k
The Board has overall responsibility for 
establishing appropriate management of 
exposure to risk. The Audit Committee 
oversees how management identify and 
address risks to the Group. 
Capital Management
The Board’s policy is to maintain a 
strong capital base so as to maintain 
investor, creditor and market confidence 
and to sustain future development of  
the business. 
The Group monitors capital on the basis 
of the gearing ratio. This ratio is 
calculated as net debt divided by total 
capital. Net debt is calculated as total 
interest bearing loans as shown in the 
consolidated balance sheet, less cash 
and cash equivalents. Total capital is 
calculated as equity, as shown in the 
consolidated balance sheet, plus net 
debt. As at 31 May 2009 the Group’s 
gearing ratio was 11% (2008: 8%).
Financial Instruments Policy
All instruments utilised by the Company 
and Group are for financing purposes. 
The day-to-day financial management 
and treasury are controlled centrally for 
all operations. 
Fair Value of Financial Instruments
As at 31 May 2009 the Group and 
Company had no other financial 
instruments than those disclosed below. 
The carrying value of all financial 
instruments in these financial statements 
represents their fair value. 
Credit Risk
Credit risk is the risk of financial loss  
to the Group if a customer or 
counterparty to a financial instrument 
fails to meet its contractual obligations 
and arises principally from the Group’s 
receivables from customers. The 
Group’s exposure to credit risk is 
influenced mainly by the individual 
characteristics of each customer.
Group
2009
Group
2008
Company
2009
Company
2008
£000 £000 £000 £000
Trade receivables 11,193 10,235 – –
Cash and cash equivalents 3,356 1,142 1 12
14,549 11,377 1 12
 
This note provides information about the contractual terms of the Group and 
Company’s interest bearing loans and borrowings for more information about  
the Group and Company’s exposure to interest rate and foreign currency risk see 
note 19.
Other financial liabilities of £76,000 relates to the balance of a rent free period 
(2008: £92,000) which is released to the income statement over the term of  
the lease. 
18 Non Current Liabilities
Group
2009
Group
2008
Company
2009
Company
2008
£000 £000 £000 £000
Unsecured bank loan 9,000 54 – –
Issue costs (88) – – –
Amortisation of issue costs 20 – – –
Interest bearing loans 8,932 54 – –
Deferred tax (note 15) 1,588 1,499 – –
Other financial liabilities 76 92 – –
Total non current liabilities 10,596 1,645 – –
 
Notes
Exposure to Credit Risk
The carrying value of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the 
reporting date was:
NOTES CONTINUED
NON CURRENT LIABILITIES
NOTES CONTINUED
FINANCIAL INSTRUMENTS  85_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_86 
Impairment Losses
The ageing of trade receivables at the reporting date was: 
The movement in the allowance in respect of trade receivables during the year was 
as follows:
The Group establishes an allowance for impairment that represents its estimate  
of incurred losses in respect of specific trade receivables. 
The allowance accounts in respect of trade receivables are used to record impairment 
losses unless the Group is satisfied that no recovery of the amounts owing  
is possible; at that point the amount is considered irrecoverable and is written off 
against the financial asset directly. The Group reviews all debt more than 90 days 
past due and provides for impairment losses, net of any revenue which has been 
deferred, based on trading experience with that customer. The ageing of Group  
debt and associated impairment loss is reported to the Board on a monthly basis.
 Group
2009
Group
2008
Company
2009
Company
2008
£000 £000 £000 £000
Not past due 5,701 5,210 – –
Past due 0-30 days 3,435 2,640 – –
Past due 31-90 days 1,897 2,310 – –
Past due more than 90 days 787 346 – –
11,820 10,506 – –
 
 Group
2009
Group
2008
£000 £000
Balance at 1st June 271 116
Impairment loss recognised 356 155
Balance at 31st May 627 271
 
 
Debtors by geographical segment
Group
2009
Group
2008
Company
2009
Company
2008
£000 £000 £000 £000
UK 9,941 9,489 – –
Rest of Europe 622 464 – –
Rest of the World 630 282 – –
11,193 10,235 – –
 
 
Debtors by business segment
Group
2009
Group
2008
Company
2009
Company
2008
£000 £000 £000 £000
Escrow UK 3,848 3,829 – –
Escrow Europe 622 464 – –
Escrow USA 630 282 – –
Consultancy 1,864 1,922 – –
Assurance Testing 4,229 3,738 – –
11,193 10,235 – –
 
The maximum exposure to credit risk for trade receivables at the reporting date by 
geographic region was:
The maximum exposure to credit risk at the reporting date by business segment was:
The trade receivables of the Group typically comprise amounts due from a large  
number of small customers. The Group’s customer base, whilst concentrated largely  
in the UK, represents a spread of industry sectors. The largest amount due from a single 
customer at the reporting date represented 3% of total Group receivables (2008: 4%). 
All of the Group’s cash is held with financial institutions of high credit rating.
Notes
NOTES CONTINUED
FINANCIAL INSTRUMENTS CONTINUED FINANCIAL INSTRUMENTS CONTINUED
NOTES CONTINUED  87_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_88 
Currency Risk
The Group is exposed to currency risk on sales, purchases and borrowings that  
are denominated in a currency other than the respective functional currencies of  
the Group entities. The Group’s management review the size and probable timing  
of settlement of all financial assets and liabilities denominated in foreign currencies. 
Where there is substantial exposure to currency risk, hedging arrangements are  
put in place. 
The Group’s exposure to currency risk is as follows:
Interest Rate Risk
The Group and Company finances its operations through a mixture of retained 
profits and bank borrowings. The Group borrows and invests surplus cash at 
floating rates of interest based upon bank base rate. 
The financial assets of the Group at the end of the financial year were as follows:
          2009                2008
 Sterling Euros USD Sterling Euros USD
£000 €000 $000 £000 €000 $000
Loans and receivables 9,941  622 630 9,489 464 282
Cash and cash equivalents 2,187 773 396 331 271 539
    
Unsecured bank borrowings 8,932 – – 4,500 – –
Trade and other payables 10,726 340 251 10,491 749 30
 
 2009 2008
£000 £000
Sterling denominated financial assets 2,187 618
Euro denominated financial assets 773 35
US dollar denominated financial assets 396 489
Current trade and other receivables 14,785 12,351
18,141 13,493
 
Carrying Contractual 6 months 6-12 1-2 2-3
At 31st May 2009 amount Cash flows or less Months Years Years
£000 £000 £000 £000 £000 £000
Unsecured bank borrowings 8,932 (8,932) – – (8,932) –
Trade and other payables 11,317 (11,317) (11,317) – – –
At 31st May 2008
Unsecured bank borrowings 4,500 (4,524) (4,524) – – –
Trade and other payables 11,270 (11,270) (11,270) – – –
 
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial 
obligations as they fall due. The Group manages liquidity risks by regular reviews  
of forecast cash flows in line with contractual maturities of financial liabilities and 
Revolving Credit Facility available. Forecast cash flows are reported to the Board on 
a monthly basis. The following are the contractual maturities of financial liabilities, 
including interest payments of the Group:
The financial liabilities of the Company all have contractual maturities within 6 months 
(2008: within 6 months).
Notes
NOTES CONTINUED
FINANCIAL INSTRUMENTS CONTINUED FINANCIAL INSTRUMENTS CONTINUED
NOTES CONTINUED  89_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_90 
20 Share Based Payments 
The Company has a number of share option schemes under which options to 
subscribe for the Company’s shares have been granted to Directors and staff,  
details of which are illustrated in the tables below. Expected term of options 
represents the period over which the fair value calculations are based.
Approved EMI Scheme
Under the Approved EMI Scheme, options granted will be subject to  
performance criteria. Options will vest if the average EPS growth for the  
3 years following their grant is greater than 3% above RPI per annum.  
The options are to be settled in equity.
LTIP Schemes
The vesting condition for the award of the 2006 LTIP scheme is split 50:50 between 
Total Shareholder Return (TSR) & EPS. The TSR condition compares the Group’s 
TSR performance over the 3 year performance period with the TSR performance of 
the constituent companies of the FTSE software and computer services index. Where 
the Group’s TSR performance equates to median level in the comparator group, 30% 
of the award governed by the TSR condition will vest. 100% of the award governed 
by the TSR condition will vest for upper quartile performance or above. Between 
these two points, vesting will be determined on a straight line basis.
 
Date of grant 
Expected term  
of options
Exercisable  
between
Exercise
Price
2009 Number 
Outstanding
July 2004 6 years July 2007 – July 2014 £1.70 156,553
July 2005 6 years July 2008 – July 2015 £2.565 5,847
July 2006 6 years July 2009 – July 2016 £2.70 9,259
August 2007 6 years July 2010 – July 2017 £3.85 287 ,259
February 2008 6 years July 2010 – July 2017 £3.89 45,351
 
The financial assets of the Company at the end of the financial year were as follows:
The financial liabilities of the Group and their maturity profile is as follows:
The financial liabilities of the Company and their maturity profile is as follows:
As at 31 May 2009 the Group had a committed multi-option credit facility of  
£15 million (2008: £10 million). The interest payable on drawn down funds is 1.6%  
above Libor (2008: 0.85%).
The revolving credit facility is available until July 2010. A change of 100 basis points  
in interest rates would not have a significant impact on these financial statements.
 2009 2008
£000 £000
Sterling denominated financial assets 1 12
1 12
 
 2009 2008
Maturity £000 £000
Less than 1 year – 4,500
1 to 2 years 8,932 –
2 to 3 years – –
3 to 4 years – –
Current trade and other payables 11,317 11,270
Sterling denominated financial liabilities 20,249 15,770
 
 2009 2008
Maturity £000 £000
Less than 1 year – –
1 to 2 years – –
2 to 3 years – –
3 to 4 years – –
Current trade and other payables 3,954 3,159
Sterling denominated financial liabilities 3,954 3,159
 
Notes
NOTES CONTINUED
FINANCIAL INSTRUMENTS CONTINUED SHARE BASED PAYMENTS
NOTES CONTINUED  91_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_92 
The following tables illustrate the number of share options for the schemes.
The weighted average share price at the time the share options were exercised in the 
year was £3.63. The weighted average share price at the time the share price was 
forfeited in the year was £3.75. 
 
 
Scheme
Number of 
instruments as 
at 1 June 2007
Instruments 
granted during 
the year
Options 
exercised in 
the year
Forfeitures  
in the year
Number of 
instruments as 
at 31 May 2008
Approved EMI scheme 894,141 – (729,068) – 165,073
Approved EMI scheme 13,644 – – – 13,644
Approved EMI scheme 9,259 – – – 9,259
Approved EMI scheme – 367 ,560 – (31,705) 335,855
Approved EMI scheme – 49,117 – (1 ,865) 47 ,252
Sharesave scheme 276,477 – (274,405) (2,072) –
Sharesave scheme 36,978 – (1,998) (5,558) 29,422
Sharesave scheme 24,580 – – (1,736) 22,844
Sharesave scheme – 218,389 – (38,397) 179,992
LTIP 169,118 – (147 ,831) (21,287) –
LTIP 261,761 – – (31,372) 230,389
LTIP 280,553 – – (35,185) 245,368
LTIP 53,180 – – – 53, 180
LTIP – 316,662 – – 316,662
 
Date of Grant Expected term  
of options
Exercisable  
between
Exercise
price
2009 Number 
outstanding
July 2006 3 years June 2009 – June 2010 nil* 245,368
Sept 2006 3 years June 2009 – June 2010 nil* 53, 180
Oct 2007 3 years June 2010 – June 2011 nil* 316,662
Oct 2008 3 years June 2011 – June 2012 nil* 363,062
 
Date of Grant Expected term  
of options
Exercisable  
between
Exercise
price
2009 Number 
outstanding
August 2006 3.25 years September 2009 – February 2010 £2.16 16,181
August 2007 3.25 years September 2010 – February 2011 £3.24 157 ,331
August 2008 3.25 years September 2011 – February 2012 £2.86 140,119
 
The EPS condition governs the vesting of the remaining 50% of the LTIP award and 
relates to the growth in the Group’s EPS over the performance period. If growth is 
equal to 25% or more per annum then 100% of the award governed by the EPS 
condition will vest. If, however, growth is less than 10% per annum, none of the award 
governed by the EPS condition will vest. Between these two points, vesting is 
determined on a straight line basis. The options are to be settled in equity.
The vesting condition for the award of the other LTIP option schemes is based on 
EPS growth. If growth is equal to 25% or more per annum then 100% of the award 
governed by the EPS condition will vest. If, however, growth is less than 10% per 
annum none of the award will vest. Between these two points, vesting is determined 
on a straight line basis. The options are to be settled in equity.
* The option exercise price is nil. However, £1 is payable on each occasion of exercise.
Sharesave Scheme
The Company operates a Sharesave scheme, which is available to all employees and full time 
Executive Directors of the Company and its subsidiaries who have worked for a qualifying  
period. All options are to be settled by equity.
 
Under the scheme the following options have been granted and are outstanding at year end. Notes
NOTES CONTINUED
SHARE BASED PAYMENTS CONTINUED SHARE BASED PAYMENTS CONTINUED
NOTES CONTINUED  93_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_94 
The assumptions used in the model are illustrated in the table below:
* The option exercise price is nil. However, £1 is payable on each occasion of exercise. 
The expected volatility is based on the historical volatility, adjusted for any expected 
changes to future volatility due to publicly available information. For the options granted 
in the year ending 31 May 2009, dividend yield assumed at the time of option grant 
is 1.5% (2008: 1.3%). 
A charge of £1,122,000 (2008: £934,000) has been made to cost of sales in the 
Group income statement in respect of share based payment transactions, including 
£91 ,000 of provision for National Insurance contributions (2008: £192,000).  
A charge of £350,000 (2008: £270,000) has been made to cost of sales in the 
Company income statement in respect of share based payment transactions. 
 
 
Grant date Fair value at 
measurement 
date
Exercise  
price
Expected 
volatility
Option  
expected  
term
Risk-free 
interest  
rate
EMI Jul-04 £0.66 £1.70 44% 6 Years 5.09%
EMI Jul-05 £1.07 £2.57 40% 6 Years 5.09%
EMI Jul-06 £0.78 £2.70 25% 6 Years 4.75%
EMI Aug-07 £1.19 £3.85 25% 6 Years 6.00%
EMI Feb-08 £1.27 £3.89 25% 6 Years 6.00%
SAYE Aug-06 £0.81 £2.16 25% 3.25 Years 4.76%
SAYE Sept-07 £1.13 £3.24 25% 3.25 Years 6.00%
SAYE Sept-08 £1.20 £2.86 25% 3.25 Years 6.00%
LTIP Jul-06 £2.21 £nil* 25% 3 Years 4.79%
LTIP Sep-06 £1.80 £nil* 25% 3 Years 4.79%
LTIP Oct-07 £3.58 £nil* 25% 3 Years 6.00%
LTIP Oct-08 £3.41 £nil* 25% 3 Years 6.00%
 
The weighted average share price at the time the share options were exercised in 
the year was £3.59.
The weighted average share price at the time the share options were forfeited in the 
year was £3.55.
The fair value of services received in return for share options is calculated with 
reference to the fair value of the award on the date of grant. The fair value is spread 
over the period during which the employee becomes unconditionally entitled to the 
award, adjusted to reflect actual and expected levels of vesting. Black-Scholes, 
Binomial and Monte Carlo simulation models have been used to calculate the fair 
values of options on their grant date for all options issued after 7 November 2002 
which had not vested by 1 January 2005.
 
 
Scheme
Number of 
instruments as 
at 1 June 2008
Instruments 
granted during 
the year
Options 
exercised in 
the year
Forfeitures  
in the year
Number of 
instruments as 
at 31 May 2009
Approved EMI scheme 165,073 – (8,520) – 156,553
Approved EMI scheme 13,644 – (7,797) – 5,847
Approved EMI scheme 9,259 – – – 9,259
Approved EMI scheme 335,855 – – (48,596) 287,259
Approved EMI scheme 47,252 – – (1,901) 45,351
Sharesave scheme 29,422 – (28,740) (682) –
Sharesave scheme 22,844 – – (6,663) 16,181
Sharesave scheme 179,992 – – (22,661) 157,331
Sharesave scheme – 176,262 – (36,143) 140,119
LTIP 230,389 – (184,815) (45,574) –
LTIP 245,368 – – – 245,368
LTIP 53,180 – – – 53,180
LTIP 316,662 – – – 316,662
LTIP – 393,961 – (30,899) 363,062
 
Notes
NOTES CONTINUED
SHARE BASED PAYMENTS CONTINUED SHARE BASED PAYMENTS CONTINUED
NOTES CONTINUED  95_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_96 
23  Other Financial Commitments and Contingent Liabilities
a) Capital commitments at the end of the financial year, for which no provision has 
been made, are as follows:
There are no contingent liabilities not provided for at the end of the financial year.
b) Non-cancellable operating lease rentals are payable as follows:
2009 2008
£000 £000
Contracted – 57
 
                 2009                 2008
Land and 
Buildings
£000
 
 Other
£000
Land and 
Buildings
£000
 
 Other
£000
Within 1 year 124 76 84 104
In second to fifth year inclusive 769 223 569 132
893 299 653 236
 
21 Called Up Share Capital
22 Cash and Cash Equivalents
During the year 45,057 shares were issued in relation to the exercise of employee share 
options for a total consideration of £94,000 settled in cash. 
Number of shares 2009 2008
£000 £000
Authorised
Ordinary shares of 1p each 50,000,000 500 500
500 500
Allotted, called up and fully paid
Ordinary shares of 1p each at the beginning of the year 33,619,440 336 326
Ordinary shares of 1p each issued in the year 45,057 1 10
Ordinary shares of 1p each at the end of the year 33,664,497 337 336
 
At beginning  
of year
Cash flow Non cash  
items
At end  
of year
£000 £000 £000 £000
Cash and cash equivalents per balance sheet 1,142 2,330 (116) 3,356
Cash and cash equivalents per cash flow statement 1,142 2,330 (116) 3,356
 
Notes
NOTES CONTINUED
CALLED UP SHARE CAPITAL AND  
CASH AND CASH EQUIVALENTS
OTHER FINANCIAL COMMITMENTS  
AND CONTINGENT LIABILITIES
NOTES CONTINUED  97_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_98 
26 Fixed Asset Investments
Shares in group undertakings 
Company £000
At 1st June 2007 29,550
Increase in subsidiary investment for share based charges 444
At 31st May 2008 29,994
At 1st June 2008 29,994
Increase in subsidiary investment for share based charges 679
At 31st May 2009 30,673
 
The cost represents the cost of acquiring the whole of the issued share capital of NCC 
Group (Solutions) Limited and its subsidiary undertakings. Fixed asset investments 
are recognised at cost. The principal undertakings in which the Company’s interest at 
the year end is 100% are as follows:
Subsidiary undertakings Country of incorporation Principal Activity
NCC Group (Solutions) Limited England and Wales Escrow & Consultancy services 
NCC Services Limited England and Wales Escrow & Consultancy services 
NCC Escrow International Limited England and Wales Dormant
NCC Group Inc USA Escrow
NCC Group Employees’ Trustees Limited England and Wales Employee Benefit Trust
NCC Group GmbH Germany Escrow
Escrow 4 Software Limited England and Wales Dormant
Site Confidence Limited England and Wales Web site monitoring & load testing
Secure Test Limited England and Wales Ethical Security Testing
Escrow Europe BV Netherlands Escrow
Escrow Europe (Deutschland) GmbH Germany Escrow
Escrow Europe (Switzerland) AG Switzerland Escrow
Next Generation Security Software Limited England and Wales Ethical Security Testing
Next Generation Security Software LLC USA Ethical Security Testing
Next Generation Security Software Pty Australia Ethical Security Testing
24 Pension Scheme
The Group operates a defined contribution pension scheme that is open to all  
eligible employees. The pension cost charge for the year represents contributions 
payable by the Group to the fund and amounted to £429,000 (2008: £324,000). 
The outstanding contributions at the year end were £73, 187 (2008: £46,870). 
For the Company, the pension cost charge for the year represents contributions 
payable by the Company to the fund and amounted to £52,000 (2008: £32,000). 
25 Related Party Transactions  
The Group and Company’s transactions with Directors are disclosed in the Directors’ 
Remuneration Report.
NCC Group’s Non Executive Chairman Paul Mitchell is a Director of Rickitt Mitchell 
and Partners Limited and the Group conducted business to the value of £220,000 
(2008 : £236,000) with Rickitt Mitchell and Partners Limited. Included within the 
charge is £160,000 relating to advice received in connection with acquisitions made 
during the year ended 31 May 2009. The remaining £60,000 relates to the services 
of the Non Executive Chairman. Rickitt Mitchell and Partners Limited also held 
7,000 1.0p ordinary shares (2008: 7,000).
Notes
NOTES CONTINUED
PENSION SCHEME AND  
RELATED PARTY TRANSACTIONS
FIXED ASSET INVESTMENTS
NOTES CONTINUED  99_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_100 
Directors 
Paul Mitchell  
Non Executive Chairman
Rob Cotton
Chief Executive
Paul Edwards
Finance Director
James Wallace 
Senior Non Executive Director
Debbie Hewitt
Non Executive Director
Eurfyl ap Gwilym
Non Executive Director
David McKeith
Non Executive Director  
(as from 29 July 2009)
Secretary 
Felicity Brandwood
Registered office 
Manchester Technology Centre,
Oxford Road,
Manchester,  
M1 7EF
Registered number
4627044
Joint brokers and corporate 
finance advisers 
Altium Capital Limited,
30 St James’s Square,
London,
SW1Y 4AL
 
KBC Peel Hunt,
111 Old Broad Street,
London,
EC2N 1PH
Corporate finance advisers 
Rickitt Mitchell & Partners Limited,
Clarence House,
Clarence Street,
Manchester,  
M2 4DW
Auditors 
KPMG Audit plc,
8 Salisbury Square,
London,
EC4Y 8BB
Solicitors 
Eversheds LLP,
70 Great Bridgewater Street,
Manchester,
M1 5ES
Bankers 
Barclays Bank plc,
7th Floor, 1 Marsden Street,
Manchester,  
M2 1HW
Registrars
Equiniti,
Aspect House,
Spencer Road,
Lancing,
West Sussex  
BN99 6DA
COMPANY 
INFORMATION
The principal undertakings in which the Company’s interest at the year end is less 
than 100% are as follows:
Interest Country of incorporation Principal Activity
Escrow Europe NV 25% Belgium Escrow
Escrow Europe (Israel) Limited 25% Israel Escrow
Escrow Europe (Pty) Limited 25% South Africa Escrow
Deposit AB 25% Sweden Escrow
NOTES CONTINUED
FIXED ASSET INVESTMENTS CONTINUED
Company  
Information  101_NCC Group Annual Report and Accounts 2009 NCC Group Annual Report and Accounts 2009_102 
UK offices
Head Office
Manchester Technology Centre
Oxford Road
Manchester
M1 7EF
United Kingdom
Phone: +44 (0) 161 209 5200
Fax: +44 (0) 161 209 5100
e-mail: response@nccgroup.com
Dorking
St Martins House
St Martins Walk
Dorking
Surrey
RH4 1UW
United Kingdom
Phone: +44 (0) 870 850 8520
Fax:  +44 (0) 870 850 8521
e-mail: info@siteconfidence.com
London
Floor 4 
Tavistock House North
London
WC1H 9HR
United Kingdom
Phone: +44 (0) 207 383 9170
Fax: +44 (0) 207 383 9179
Sutton
52 Throwley Way
Sutton
Surrey SM1 4BF
United Kingdom
Phone: +44 (0) 208 401 0070
Fax: +44 (0) 208 401 0076
e-mail: sales@ngssoftware.com
Thame
Eastern Bypass
Thame
Oxfordshire
OX9 3FF
United Kingdom
Phone: +44 (0) 1844 210 300
Fax: +44 (0) 8709 908 423
e-mail: securetest@nccgroup.com
European offices
The Netherlands
Herengracht 414 
1017 BZ  
Amsterdam 
Phone: +31 20 620 7151 
Fax: +31 20 420 1733 
e-mail: info@escroweurope.com
Germany
Heimeranstrasse 37
D-80339 
Munchen
Germany
Phone: +49 (0) 89 599 7620
Fax: +49 (0) 89 599 762 599
e-mail: europe@nccgroup.com
Switzerland
Ibelweg 18A 
CH-6300 Zug  
(Zurich) 
Phone: +41 (0)41 763 2800 
Fax: +41 (0)41 763 2801 
e-mail: info@escroweurope.ch
North American office
US
1731 Technology Drive
Suite 880
San Jose
CA 95110
USA
Phone: +1 (408) 441 4660
Fax: +1 (408) 441 4658
e-mail: usa@nccgroup.com
CONTACT  
US
Company  
Information