2
contents
contents
highlights 2
group profile 3
chairman’s report 4
chief executive’s review 8
financial review 12
directors and senior management 16
directors’ report 20
corporate governance 22
directors’ remuneration report 26
statement of directors’ responsibilities 31
corporate social responsibility report 32
independent auditors report to the members of ncc group plc 34
consolidated income statement 35
group balance sheet 36
company balance sheet 37
group cash flow statement 38
company cash flow statement 39
statement of changes in equity 40
notes 42
company information 72
largest software escrow provider
ncc group is the world’s 1 1
uk
head office
manchester united kingdom
t 44 0161 209 5200
f 44 0161 209 5100
e responsenccgroupcom
wwwnccgroupcom
london office
united kingdom
t 44 020 7383 9170
f 44 020 7383 9179
e responsenccgroupcom
wwwnccgroupcom
dorking office
united kingdom
t 44 0870 850 8520
f 44 0870 850 8521
e  infositeconfidencecom
wwwsiteconfidencecom
thame office
united kingdom
t 44 01844 210 300
f 44 08709 908 423
e  enquiriessecuretestcom
wwwsecuretestcom
europe
amsterdam office
netherlands
t 31 020 620 7151 
f 31 020 420 1733 
e infoescroweuropecom
wwwescroweuropecom 
munich office
germany
t 49 089 599 762 0
f 49 089 599 762 599
e europenccgroupcom
wwwnccgroupde
usa
san jose office
california usa
t 1 408 441 4660
f 1 408 441 4658
e usanccgroupcom
wwwnccgroupusacom
the ncc group of companies
recycled paper 2
increased
by 41
group revenue
financial highlights
n
 group revenue up by 41 to £357m 2007 £254m
 escrow solutions revenue up by 20 to £180m
 assurance testing revenue up by 121 to £128m
 consultancy revenue up by 7 to £49m 
n
  group adjusted operating profits up by 30 to £107m  
2007 £82m
 escrow solutions operating profits up by 28 to £102m
 assurance testing operating profits up by 127 to £17m
 consultancy operating profits up by 1 to £07m 
n
 group adjusted operating margins at 30 2007 32
n
  group adjusted pre tax profits up by 29 to £105m 
2007 £81m
n
  adjusted fully diluted earnings per share up 33 to 224p 
2007 168p
n
  final dividend proposed of 475p giving a total dividend 
of 700p up 47 from last year
acquisitions 2008
n
 two acquisitions completed and integrated in the year
  secure test a penetration and security testing business in 
august 2007 for up to £40m
  escrow europe bv in january 2008 for up to €105m  
confirming our position as the world’s largest software 
escrow provider
operating profit is adjusted for amortisation of acquired intangibles of £740000 
and exceptional costs of £711000 relating to the move to the official list and 
the costs of reorganising escrow europe’s corporate and contractual structure 
pre tax profit is adjusted for these items and the unwinding of the discount on 
the acquisitions deferred consideration of £333000 the directors believe the 
adjusted measures better reflect the ongoing performance of the business
highlights
ncc group annual report and accounts 2008 3 3
ncc group is a leading global provider of independent it 
assurance security and consultancy services as a trusted 
advisor we help over 15000 public private and not for profit 
sector organisations including 94 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
with a head office in manchester and offices throughout 
england continental europe and the usa ncc group 
serves the needs of a wide variety of clients worldwide we 
are listed on the official list of the london stock exchange
the group operates three complementary divisions the 
escrow solutions division trades under the ncc group 
escrow brand whilst assurance testing trades under the 
ncc group secure test and the site confidence brands 
the consultancy division operates under the ncc group 
consultancy brand 
all the divisions are encompassed under the ncc group 
plc banner which enables us to assure secure and advise 
our clients
escrow solutions
n
  ensuring business critical material or source code is 
protected and accessible should anything happen to a 
key supplier and enabling stronger supplier relationships
n
  confirming the material held is properly protected by 
verifying it can be rebuilt from its components 
assurance testing
n
  site confidence – testing and monitoring relevant aspects 
of system network and website performance to ensure 
the technology used can deliver optimum performance
n
  secure test – penetration and security testing of networks 
and applications and security policies in practice to 
ensure organisations are safe from the constantly evolving 
threat of unauthorised access
consultancy
n
  providing advice at all levels to help organisations 
improve their performance through the effective use of 
information technology and business processes
n
  protecting organisations against a variety of risks through 
the development and implementation of effective plans 
and compliance with relevant standards and guidelines
group profile
3
recycled paper 4
overview
this year ncc group plc has delivered its strongest 
performance to date and is reporting a full year for the first 
time as a fully quoted company on the official list on the 
london stock exchange yet again we saw an excellent 
performance from all areas of the group and in addition 
we completed two acquisitions further strengthening 
the group’s capability in both escrow solutions and 
assurance testing
overall group revenues for the year grew by 41 to £357m 
2007 £254m excluding the acquisitions the group showed 
very strong organic growth up 17 adjusted operating 
profits increased by 30 to £107m 2007 £82m as a 
group we continue to generate strong margins with our 
adjusted operating profit margin remaining strong at 30 
2007 32 in line with expectations 
adjusted pretax profits were up 29 to £105m 2007 £81m 
and fully diluted adjusted earnings per share increased 33 
to 224p 2007 168p 
the group continues to be highly cash generative 
and had only £34m net debt at the year end despite 
meeting the £104m cost of two acquisitions out of cash 
resources operating cash conversion represented 122 of 
operating profits
over the longer term ncc group has shown consistent strong 
and reliable growth since the group gained admission to 
aim in 2004 followed by its switch to the official list in july 
2007 revenues have grown at a compound annual growth 
rate cagr of over 25 adjusted pre tax profits have seen 
a cagr rate of over 22 the group has generated £34m 
of cash from operations before interest tax and dividends
 
total shareholder returns over the four years since flotation 
are 137 this is not just a testament to a successfully 
implemented strategy exploiting market conditions but also 
to excellent operational management at all levels
operations
the acquisition of secure test in august 2007 was a very 
positive move for us not only did it confirm our commitment 
to this market place but it has proved to be a highly 
successful complementary business in addition it has 
allowed us to develop and maintain the largest team of 
accredited security and penetration testers in the uk as we 
seek to become the leading player in the market
the acquisition of escrow europe had been a long time 
coming and we were delighted to complete the purchase of 
the business in january 2008 after many years of negotiation 
this acquisition provides us with a strong european base from 
which to operate and strengthens our german business 
it allows us to grow our multi national customer base by 
providing local agreements and account management in 
culturally aligned ways 
our escrow businesses worldwide have performed very 
well with each country delivering good growth in revenues 
and operating profits in escrow solutions uk contract and 
beneficiary terminations remained around 10 and net 
new beneficiary growth was 12 verification testing saw 
revenues grow by 26 to £30m 2007 £24m 
escrow europe which predominately operates from the 
netherlands saw a good first five months of trading under 
our ownership the business integration is now complete and 
we are actively recruiting account managers to grow the 
already substantial but underperforming customer base our 
existing german business has grown well on a substantially 
reduced cost base and revenues grew by 21 enabling 
the business to break even the inclusion of the escrow 
europe german renewals base will now allow this business to 
continue growing profitably
in assurance testing revenues grew by 121 and 
profitability by 127 as the benefits of the acquisitions 
start to be realised the acquisition of the secure test 
business helped our penetration and security testing 
revenues to grow by 139 even without the inclusion 
of this acquisition revenues grew by over 37 despite  
foregoing over £08m of specialist testing revenues as we 
withdrew from that area at the start of this financial year  
site confidence’s performance and load testing offerings 
saw 226 growth in sales as full year revenues exceeded 
£51m and the business delivered a very successful first 
twelve months of our ownership 
consultancy had a particularly strong second half to the 
year and improved revenues by 7 year on year despite 
being 5 behind last year’s revenues at h1 the benefits of 
being a key provider in the information security standards 
area are now starting to be realised we continue to provide 
it consultancy to our client base but have now moved firmly 
away from areas of discretionary expenditure and from our 
historic reliance on the public and local authority sectors of 
the market profits improved 1 to over £07m 2007 £07m 
as a consequence of our caution in recruitment and our use 
of high quality associate resources until we are sure that the 
revenue streams are sustainable long term
chairman’s report
ncc group annual report and accounts 2008 5 5
corporate governance
ncc group believes in the highest standards of corporate 
governance and investor relations we have 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 
our move to the official list where compliance and 
adherence to these levels of corporate governance are 
better recognised has been welcomed by our investors 
customers and employees alike we 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 
strong
at 30
operating profit margin
people
ncc group remains totally committed to its workforce as 
people are the reason for the group’s continued success it 
is worth pointing out that the commitment shown from the 
newly acquired businesses has matched that of our existing 
employees and has at times exceeded it
we believe that our approach to total employee 
remuneration and worklife balance is well judged and is 
essential to ensure staff retention we believe that our all 
round packages place us in the top quartile of remuneration 
in the locations from which we operate our objective is to 
continue with this approach 
the group’s board was unchanged although i would like to 
welcome ken munro as a director on the operational board 
he has taken responsibility for sales within our enlarged 
penetration and security testing division which is branded 
ncc group secure test again this reflects our objective 
of recruiting and promoting the best senior managers to 
continue to strengthen the management team to meet 
the group’s growth ambitions in december 2007 jane pink 
who had been an operational director in assurance testing 
retired after 21 years of service
it is with sadness that we learnt that bill kirkwood one of 
the founders of site confidence died after a lengthy and 
courageous battle against cancer
recycled paper 6
dividends
the board is recommending a final dividend of 475p per 
share which makes a total of 700p for the year up 47 2007 
475p if approved at the annual general meeting the 
dividend will be paid on 26 september 2008 to shareholders 
on the register at 29 august 2008 the exdividend date will 
be 27 august 2008
outlook
we believe that our strategy of measured acquisitions allied 
to strong organic growth will allow the group to continue with 
our ambitious and exciting growth plans despite the widely 
acknowledged deteriorating economic environment 
the group’s target remains to be the most significant player 
in each of the market niches in which we operate and to 
constantly evolve what we offer the launch of our 247 
assured security monitoring proposition is a prime example 
of this and it will be a key product for us in the medium term 
it also fits with our strategy of delivering products and services 
that are not discretionary 
 
the start to the year sees our group escrow solutions 
renewals at £138m up from £105m this time last year 
and a verification order book of £16m which is over £2m 
worldwide the assurance testing businesses’ order books 
have improved to £46m from £22m in 2007 and have 
£39m of monitoring renewals forecast for 200809 the 
consultancy business has £25m of orders up from £18m 
last year 
we remain committed to the delivery of organic growth in 
all of our businesses worldwide as well as the newly acquired 
operations the outlook for ncc group remains good and 
we remain very confident in our ability to deliver good levels 
of sustainable growth
continued
chairman’s report
we remain committed 
to the delivery of 
organic growth in 
all of our businesses 
worldwide
ncc group annual report and accounts 2008 7
paul mitchell
non executive chairman
ncc group plc
2 july 2008
7
recycled paper 8
chief executive’s review
8 ncc group annual report and accounts 2008
30 growth
in adjusted operating profits
overview
for the fourth successive year as a listed company we 
produced a record performance delivering for the year 
ended 31 may 2008 a 41 growth in revenues that translated 
through to a 30 growth in adjusted operating profits
overall the group delivered £357m of revenue up from 
£254m in 2007 and adjusted operating profits of £107m 
up from £82m in 2007 after £02m of one off exceptional 
reorganisation charges as a result of the acquisition of escrow 
europe the adjusted group operating profits were £105m 
despite the strong results this year the last twelve months 
have been tough aside from the increasing uncertainty 
caused by the impact of the credit crunch and the global 
economic downturn that has blighted business worldwide 
we moved our share listing to the official list in july 2007 
and completed the acquisition of and fully integrated two 
complementary businesses 
the group continues to demonstrate that our strategy of 
focused sustainable organic growth allied to carefully 
targeted acquisitions is highly successful as confirmed by 
our enviable track record as a listed company over the last 
four years
current markets
since flotation we have positioned the group to avoid 
the vagaries of the domestic economy as now most of 
our products and services fall into the non discretionary 
expenditure category whilst no business can be completely 
immune from economic cycles the board is confident 
that the group is as well insulated as it can be against any 
economic downturn 
examples of how our activities occupy areas of it expenditure 
where curtailment would be extremely difficult include
n
  organisations who understand the need for protection of 
their business critical applications as corporate failures and 
product withdrawals increase 
 
n
  systems networks and data security have not kept pace 
with the growth of data and of identity theft and hacking 
which continue to reach new levels on an almost daily 
basis and
n
  web site performance is critical to all types of businesses 
as the web is now often their primary shop window on the 
commercial world  
furthermore we have carefully and significantly reduced 
our reliance on public sector contracts
ncc group is now the largest provider of escrow services in 
the world further we are the only provider who mandates 
quality ahead of price we expect that with the continuing 
economic pressure low cost low value propositions will 
prove to be false economy this applies as much in the 
us where the lack of even basic testing compromises the 
solution sold by most of our competitors
there is little doubt that the underlying economics of the it 
software and services markets are poor but for us this current 
adversity is beneficial as escrow decisions are not delayed 
they are seen as critical by well managed corporate users 
who are determined to mitigate risk effectively   9
recycled paper
since we last reported we have not seen a large software 
owner going out of business however given the current 
economic cycle as history has repeatedly shown this is 
now a distinct possibility we have consistently worked with 
software owners to put together proactive escrow solutions 
and are now beginning to see some real benefits as this 
offers a very positive commitment from the owners to both 
their existing and prospective clients  
our approach has been extended to adapting the less valued 
two party escrow model as employed by our competitors 
and developing it so that it is truly beneficial for both parties 
traditionally two party agreement cover was low cost and low 
value as none of the beneficiaries knew if they were covered 
or not the ncc group version of this agreement provides 
a certificate of cover so the beneficiary knows exactly 
when cover is being provided and more importantly when 
it is not respected owners are being proactive towards 
this proposition and we expect the take up by owners to 
continue to grow 
 
within assurance testing the market for secure test our 
penetration and security testing service continues to see strong 
growth as the headlines are dominated by easily avoidable 
examples of weak security that have resulted in real data 
and financial loss over the last 12 months the constant 
stream of media coverage of repeated and significant failures 
of government departments to keep data and laptops 
safe and secure has been our best marketing campaign 
these constant embarrassing failures highlight the potential 
for a substantial growth in the demand for our testing services 
as well as our information security consultancy services in 
addition to human error the criminal world continues to use 
hacking as a prime method of fraud it is a big and lucrative 
business as demonstrated by the recent hacking into the 
cotton traders website 
the secure test business continues to be the largest team of 
cesg check accredited ethical security testers in the uk with 
currently over 44 testers  however we are seeking greater 
strength and capacity to deliver the more significant contracts 
for cesg the information assurance arm of the uk 
government communications headquarters as well as to 
public and private organisations all of whom require ncc 
group services
site confidence continues to offer a highly valued alternative 
to the entry level unsophisticated web and monitoring 
services available in the market and is suitably adaptable 
flexible and user friendly to offer a real alternative to the 
more expensive and complex network test tools this and our 
dedicated account management approach will continue 
to ensure our ongoing success in the market place
the security side of our consultancy division complements 
our secure test propositions we offer advice to organisations 
to ensure that they are best placed to protect themselves 
and their business assets from attack ncc group provides 
information security advice from every perspective 
especially for those organisations that are covered by the 
pci data security standards our position in the information 
security market is further enhanced by our being accredited 
pci auditors having clas consultants and the biggest check 
test teams in the uk as the new financial year progresses 
this area will become an even more significant part of our 
consultancy division’s offering
business performance
we continue to manage the group through three distinct 
business units escrow solutions assurance testing and 
consultancy each is independent and run 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
group escrow solutions
the group escrow solutions business remains the cornerstone 
of the group representing 50 of our revenue we have 
experienced good growth in all our key performance 
measures of profitability new contracts beneficiaries 
renewals and verification testing
group escrow solutions profitability grew to £102m 2007 
£80m an increase of 28 on revenue of £180m with the 
uk contributing £157m
escrow renewals for the group represented £112m 2007 
£94m in the year benefiting from continued tight controls 
over the termination process contract terminations were 
less than 10 in the year and below 11 for agreement 
beneficiaries
 
worldwide the beneficiary base has now grown to 25193 
there are 15102 2007 13521 beneficiaries to 8124 2007 
7440 agreements in the uk and we have 844 minimum 
annual fees on agreements
the rate of agreement completions renewals and 
terminations has been such that we are forecasting group 
escrow renewals to be £138m for 200809 with uk renewals 
forecast to be £112m
escrow verification testing remains a predominantly uk sale 
although we are seeing very good progress within the us 
and european marketplaces with customers beginning to 
understand the benefits of increased levels of protection 
the escrow uk verification testing service delivered £30m 
of revenue 2007 £24m we continue to see over 40 
of verifications being repeated and have an order book 
of £16m with a further £05m of verifications in the other 
escrow businesses 10
assurance testing
assurance testing consists of two components secure test 
and site confidence assurance testing revenue grew 121 
to £128m with an increase in profitability of 127 to £17m 
2007 £07m 
secure test includes the remainder of our specialist testing 
activities and despite moving out of this area at the start of 
the financial year and foregoing £08m of revenues growth 
was still up 139 to £77m in 2008 from £31m in 2007 
or 37 excluding the acquisition as risk mitigation moves 
further up the corporate agenda regardless of budget we 
see significant growth in this area  
the site confidence operation encompasses our web site 
monitoring and load testing business and saw revenues 
increase to £51m 2007 £16m in our first full twelve months 
of ownership it offers an excellent opportunity across the 
group as it fits with all parts of our assurance testing offerings 
and forms part of the framework of our 247 assured security 
monitoring proposition the online monitoring business offers 
a high level of recurring revenues comprising of at least 
90 of our blue chip customers continuing to renew their 
annual contracts
consultancy
consultancy revenues grew by 7 to £49m 2007 £46m 
as we continued to grow our presence in the information 
security marketplace once again this division had a strong 
second half with revenues up 18 to £28m 2007 £23m 
for h2 and with it we saw a return to our anticipated utilisation 
levels of c75
as a result of the growth in revenues we generated profits 
of £06m in h2 however we remained cautious in our 
recruitment so did not take full advantage of the margin 
opportunities as we relied on high quality trusted associates 
rather than increasing the headcount operating profits for 
the year were unchanged at £07m 2007 £07m
investment and product development
we have for a long time held the belief that a managed 
security offering in the market is long overdue to date no 
organisation has been able to provide an effective combination 
of web monitoring to cover capacity and performance with 
security assurance to ensure vulnerabilities are not appearing in 
monitored corporate and internet applications 
penetration and security testing provides a degree of comfort 
that a network is safe however this needs to be carried out 
on a regular minute by minute basis if total assurance is to 
be achieved  
our new service offering 247 assured helps businesses get 
closer to that peace of mind and repel the threat of organised 
crime and opportunist hackers as more and more money is 
lost to fraud and it becomes more widely reported business 
and importantly the major retailers are fast beginning to 
accept the threat as very real the group see 247 assured 
as offering companies genuine protection
our investment in this area of £1m to £15m over the next 
12 months will be on developing new tools for the new 
product as well as on updating our current monitoring and 
performance solutions  the group will not only benefit from 
monitoring revenues and the new product set revenues 
but will also become more embedded in customers’ web 
work streams
acquisitions
we successfully completed two acquisitions in the financial 
year and through our integration team have carefully 
brought them in to the group we are already maximising 
the benefits and returns from the increased scale territory 
and customer opportunities they bring 
we will continue to invest in appropriate complementary 
businesses by way of company or asset based acquisitions 
we are regularly involved in discussions 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 ours the last 12 months 
has seen a good intake of new testers and technical staff in 
the assurance division as well as some excellent well qualified 
information security consultants the escrow solutions uk  
sales teams have gone through a period of change with 
a refreshing of the teams as practices and processes 
change
as a group we are committed to employing the best people 
in the market wherever possible we have a headcount of 
334 employees worldwide
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 five 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 
chief executive’s review
continued
ncc group annual report and accounts 2008 11
rob cotton
chief executive
ncc group plc
2 july 2008
as a group we are 
committed to 
empl oying the best 
people in the market 
wherever possible
recycled paper 12
revenue analysis
group revenues for the year ended 31 may 2008 increased by 41 to £357m 2007 
£254m supported by the acquisitions of secure test and escrow europe in august 2007 and 
january 2008 respectively the group’s half year split saw 46 of revenue delivered in the first 
half 2007 45 and 54 in the second half 2007 55 excluding acquisitions made in this 
financial year group revenue grew by 25
group escrow solutions accounted for 50 of group revenue 2007 59 including five 
months of revenue from escrow europe assurance testing now accounts for 36 2007 
23 with consultancy the smallest division accounting for 14 of revenue 2007 18 
the change reflects the increased size of the assurance division due to its strong organic 
growth and acquisitions
the geographic split of revenue has continued to evolve with the acquisition of escrow 
europe the continued growth in the us escrow solutions business and further penetration into 
continental europe from the uk however the vast majority of the revenue is still contributed 
by the uk at £292m 2007 £206m or 82 2007 81 of total revenues revenue from the 
rest of the world has increased 24 to £38m 2007 £30m with europe contributing £27m 
2007 £18m
group escrow solutions revenue for the year increased by 20 to £180m 2007 £150m 
driven by continued growth in the uk which increased its revenue by 14 to £157m 2007 
£138m the us increased its revenue by 16 to £12m 2007 £10m and escrow verification 
testing contributed a 26 increase in revenues 
escrow solutions contract terminations remain constant at approximately 10 with annual 
renewals increasing by 19 to £112m 2007 £94m excluding the acquisition of escrow 
europe group escrow solutions grew by 14 
our assurance testing division delivered strong revenue growth of 121 to £128m 2007 
£58m and was up by 67 excluding the impact of two acquisitions made in this financial 
year the continued demand for penetration and security testing has seen its revenue increase 
by 139 the performance and load testing business of site confidence contributed £51m 
of revenue which showed an annualised growth rate of 24
consultancy revenues grew by 7 to £49m 2007 £46m with as expected a stronger 
second half of the year
profitability
adjusted group operating profit as set out in the table below grew by 30 to £107m 2007 
£82m adjusted operating margins were slightly lower at 30 2007 32 reflecting the 
inclusion of lower margin acquisitions but an increase from 29 at the time of the interim 
results the adjusted operating profit includes £09m 2007 £06m of share based charges 
and related costs excluding the share based charges adjusted operating profits grew by 32
in july 2007 the group moved to the official list and incurred one off costs of £531000 in 
completing the process the acquisition of escrow europe in january 2008 brought unforeseen 
legal and financial complexity which with onerous legal and employment contracts to 
reorganise cost the group a one off charge of over £180000 these costs are directly as a 
result of the transaction are one off nontrading and exceptional
the half year split of adjusted operating profits was h1 44 h2 56 2007 h1 40 h2 60  
as expected 
 
 
 2008 2007
 £000 £000
  
reported operating profit 9217 7952
amortisation of acquired intangibles 740 230
exceptional items 711 
adjusted operating profit 10668 8182
  
  
 
  
 2008 2007
 £000 £000
  
reported profit before tax 8693 7785
amortisation of acquired intangibles 740 230
exceptional items 711 
unwind of the discount on deferred consideration 333 102
adjusted profit before tax 10477 8117
financial review
operating profit
profit before t ax
ncc group annual report and accounts 2008 13
group escrow solutions operating profit for the year ended 31 may 2008 increased 28 to 
£102m 2007 £80m escrow solutions uk contributed £94m an increase of 15 while 
escrow solutions us contributed £04m an increase of 59 escrow solutions germany broke 
even following last year’s loss of £05m with escrow europe contributing £04m in its first five 
months of ownership in future the group will report both the german operations’ operating 
profits within escrow europe although revenues will be separated out
escrow solutions operating margins remained strong as a consequence of focused control 
over contract terminations and continued scope for price increases on the back of adding 
value to the escrow proposition group escrow solutions operating margin increased to 56 
2007 53 escrow solutions uk increased its margins to 60 2007 59
the continued increase in demand for penetration and security testing and performance and 
load testing contributed to an assurance testing operating profit increase of 127 to £17m 
2007 £07m the acquisition of secure test a penetration and security testing business in 
august 2007 contributed £03m in ten months
the margin in assurance testing remained consistent at 13 2007 13 even after significant 
investment in the management structure in the businesses 
consultancy continued the trend of prior years delivering a stronger second half year and 
maintained its contribution to operating profit at £07m 2007 £07m with a margin of 15 
200716
currency fluctuations were minimal with a £15000 adverse impact on the group’s profits in 
the financial year ended 31 may 2008
pretax profit
adjusted pretax profit increased 29 to £105m 2007 £81m the group’s reported pre
tax profit was up 12 to £87m 2007 £78m after the inclusion of the one off exceptional 
charges non cash amortisation of intangible assets and the unwinding of the discount on the 
acquisitions deferred consideration 
taxation
the group’s effective tax rate is 269 2007 310 
the effective rate is below the standard uk rate of 30 28 from 6 april 2008 largely due to 
the positive impact of the tax allowance on exercise of share options granted in 2004 
throughout the option vesting period the difference between the deferred tax asset based 
on the closing actual value of the share price and 30 of the fair value of the option schemes 
had been recognised in equity following the exercise of the options the full benefit of the 
tax deduction is realised and the difference between the accounting and tax treatment 
becomes permanent the resulting credit has been recognised in the income statement
the effective rate is adversely affected by the unwinding of the discount on the retention 
payment for site confidence secure test and escrow europe
 
13
recycled paper 14
earnings per share
the adjusted fully diluted earnings per share increased 33 to 224p 2007 168p the basic 
earnings per share increased 15 to 189p 2007 165p whilst fully diluted earnings per 
share increased 15 to 183p 2007 159p growth in basic earnings per share is different 
from the growth in profits in the year due to the fact that the weighted average number of 
shares has increased
 
the table below analyses the effect on 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
 2008 2007
 pence pence 
  
diluted eps as per the income statement 183 159
amortisation of acquired intangibles 16 06
unwind of the discount on the deferred  
consideration of the acquisitions 10 03
exceptional item after tax 15 
adjusted diluted eps 224 168
dividends
in line with the continuing progressive dividend policy the board is recommending a final 
dividend of 475p per ordinary share making the total 700p for the year this represents cover 
of 27 times 2007 35 times based on basic earnings 
shareholders’ funds at the end of the year were £395m 2007 £334m
cash
the group continues to be highly cash generative with operating cash flow before interest 
and tax of £112m 2007 £78m which is 122 of operating profit before interest and tax 
2007 98
after accounting for net cash out flows of £104m for acquisitions made during this year the 
group ended the year with net debt of £34m 2007 net cash £09m 
capital expenditure increased to £15m 2007 £07m it will increase in the coming financial 
year as the group upgrades its core it systems to meet the demands of a larger global 
business and with the continuing need to bring facilities up to the standard appropriate for our 
employees and customers
balance sheet
following the acquisitions of secure test and escrow europe goodwill increased by £88m and 
intangible assets relating to customer contracts and associated relationships increased by 
£45m 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 5 and 20 years and are to be amortised over that period
paul edwards
finance director
ncc group plc
2 july 2008
financial review
continued
ncc group annual report and accounts 2008 15
recycled paper
£395m
shareholders’ funds 
at the end of the year 
were 16
and senior management
directors
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 and chairman of 
hollins murray group limited a property investment company
he is a qualified chartered accountant
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 buyout 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
ncc group annual report and accounts 2008 17
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
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 
and recently retired as chairman of bodycote plc he is 
chairman of scapa group plc and a non executive director 
of holidaybreak plc and manchester airport group plc
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 pure wafer plc and the principality building society
recycled paper 18
and senior management
directors
continued
felicity brandwood 
group company secretary  
and operational director 
escrow solutions
felicity brandwood a qualified 
solicitor was appointed a 
director of escrow solutions in 
2006 alongside her role as group 
company secretary having joined 
the group in 1984 along with  
daytoday responsibility for the 
operational management of the 
group’s escrow solutions division 
she is responsible for the overall 
operation of the us business and 
implementation of the group’s us 
expansion plans
jon leigh
operational director 
escrow solutions
jon leigh has been director of 
escrow solutions since 2003 he 
is responsible for the product 
development and sales strategies 
of the group’s escrow solutions 
division and the development of 
the group’s european business 
including integration of the recent 
acquisition of escrow europe with 
a background in testing he has 
worked for ncc group for over 20 
years and previously held a variety 
of management roles
andy hague
operational director  technical
penetration and security testing  
andy hague joined ncc group 
in 2006 and is responsible for the 
operational management and 
technical development of the 
group’s security testing business 
 secure test he was previously 
managing director at technology 
company xal group and has 
more than ten years technology 
and senior management 
experience
ken munro
operational director
business development 
penetration and security testing
ken munro joined ncc group in 
2007 with the acquisition of the 
secure test business which he co
founded in 2002 ken is responsible 
for the operational management 
and business development of the 
group’s security testing business 
he previously held various positions 
with security experts vigilante and 
network associates as well as 
the antivirus software provider dr 
solomon’s having worked in the 
field of security since 1996 
ncc group annual report and accounts 2008
operational board
the senior management 
team detailed below is 
responsible for the operation 
of the group’s three divisions 
the members of the senior 
management team include 19
bob dowson 
operational director 
performance and load testing
bob dowson is responsible for 
the operational management 
and development of the group’s 
performance and load testing 
business  site confidence he 
joined the company in 2002 from 
forrester research where he was 
commercial director responsible for 
account management in europe 
roger rawlinson
operational director
consultancy
roger rawlinson is responsible for 
the operational management of 
the group’s consultancy business 
and the scheduling and resource 
management of the group’s day 
rate businesses 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
john redeyoff
group development director
john redeyoff is responsible for 
the strategic development of 
new services and markets and 
delivery of new revenue streams 
in particular our 247 assured 
security and monitoring services 
having joined ncc group in 2003 
as a director of the consultancy 
division
craig motta
general manager 
north america
 craig motta joined ncc 
group as general manager of  
escrow solutions in the us in 2006 
following the acquisition of the 
escrow business of recall total 
information management and 
is responsible for the day to day 
management of the us business 
he previously held several 
management positions within 
recall including sales director 
of recall’s north american 
document management business 
niels hagels
general manager germany
niels hagels joined ncc group 
in 1995 and is responsible for 
the day to day management 
of the group’s german office 
prior to joining ncc group he 
was commercial director of 
escrow europe having previously 
managed a number of it and 
internet companies
felicity brandwood 
group company secretary  
and operational director 
escrow solutions
felicity brandwood a qualified 
solicitor was appointed a 
director of escrow solutions in 
2006 alongside her role as group 
company secretary having joined 
the group in 1984 along with  
daytoday responsibility for the 
operational management of the 
group’s escrow solutions division 
she is responsible for the overall 
operation of the us business and 
implementation of the group’s us 
expansion plans
jon leigh
operational director 
escrow solutions
jon leigh has been director of 
escrow solutions since 2003 he 
is responsible for the product 
development and sales strategies 
of the group’s escrow solutions 
division and the development of 
the group’s european business 
including integration of the recent 
acquisition of escrow europe with 
a background in testing he has 
worked for ncc group for over 20 
years and previously held a variety 
of management roles
andy hague
operational director  technical
penetration and security testing  
andy hague joined ncc group 
in 2006 and is responsible for the 
operational management and 
technical development of the 
group’s security testing business 
 secure test he was previously 
managing director at technology 
company xal group and has 
more than ten years technology 
and senior management 
experience
ken munro
operational director
business development 
penetration and security testing
ken munro joined ncc group in 
2007 with the acquisition of the 
secure test business which he co
founded in 2002 ken is responsible 
for the operational management 
and business development of the 
group’s security testing business 
he previously held various positions 
with security experts vigilante and 
network associates as well as 
the antivirus software provider dr 
solomon’s having worked in the 
field of security since 1996 
recycled paper 20
the directors present their annual report and financial statements for the year ended 31 may 2008
principal activity and review of the business
the principal activity of the group is the independent provision of it assurance through escrow 
solutions assurance testing and consultancy 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 4 to 7 as well as the chief executive’s review on pages 8 to 
11 report on the group’s development during the year to 31 may 2008 its position at that date 
and the group’s likely future development 
any forward looking statements made in this document represent managements’ best 
judgement 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 35
dividends
the directors propose a final dividend of 475p per ordinary share which together with 
the interim dividend of 225p per ordinary share paid on 29 february 2008 makes a total 
dividend of 700p 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 26 september 2008 to shareholders on the register at the close of business 
on 29 august 2007
the company received dividends of £4000000 2007 nil 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 16 to 17 directors’ interests  
in shares and share options in the company are detailed in the directors’ remuneration report 
set out on pages 26 to 30
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 2008
 ordinary   of issued
 shares of 1p share capital
axa framlington investment mgmt  4203355 1250
legal  general investment mgmt 3210565 955
montanaro inv managers 2195000 653
standard life investment mgmt 1752917 521
rob cotton 1557169 463
morgan stanley securities 1509875 449
hsbc securities 1492650 444
jp morgan asset mgmt 1397713 416
hansa capital ltd 1250000 372    
baillie gifford  co 1011070 301
directors’ report
ncc group annual report and accounts 2008 21
corporate social responsibility
the corporate social responsibility section on pages 32 to 33 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
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 solutions 
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
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 and 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 384 of the companies act 1985 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 directors consider that the resolutions set out in the notice of annual general meeting 
are in the best interests of the company and its shareholders as a whole and accordingly 
recommend that its shareholders vote in favour of them as the directors intend to do in 
respect of their own beneficial shareholdings
by order of the board
rob cotton
chief executive
ncc group plc
2 july 2008
21
recycled paper 22
ncc group is committed and is accountable to shareholders for high standards of 
corporate governance in respect of the year ending 31 may 2008 ncc group has been 
in full compliance with the provisions of section 1 of the 2006 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 three non executive directors whose board and 
committee responsibilities are set out in the table below
  board audit remuneration nomination
   committee committee committee
paul  non executive chairman  member chairman
mitchell chairman
rob 
cotton chief executive member   
paul 
edwards finance director member   
james senior non  member chairman member member
wallace  executive director 
eurfyl ap  non executive member member chairman member
gwilym director
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 uk
 
the board normally meets on a monthly basis during the year the board met on twelve 
scheduled occasions and further meetings and conference calls were held as and when 
necessary in addition a one day strategy meeting took place 
the attendance of individual directors at the scheduled board meetings is shown in the table 
below
  board
  meetings attended
paul mitchell non executive chairman 1212
rob cotton chief executive 1212
paul edwards finance director 1112
james wallace senior non executive director 1212
eurfyl ap gwilym non executive director 1112
 
after careful review the board has again concluded that james wallace and eurfyl ap gwilym 
were independent throughout the year in coming to this assessment the board considered 
the character of the individuals concerned and the fact that none of them
n
 has ever been an employee of the group
n
 has ever had a material business relationship with the group
n
 receives any remuneration other than their fees
n
  has close family ties with advisors other directors or senior management of the group that 
could reasonably be expected to cause a conflict
n
 has significant links with other directors through involvement with other companies
n 
represents a significant shareholder or
n
 has served on the ncc group board for more than nine years
corporate governance
ncc group annual report and accounts 2008 23
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
n
 changes to the structure size and composition of the board
n
 consideration of the independence of non executive directors
n
 review of management structure and senior management responsibilities
n
  with the assistance of the remuneration committee approval of remuneration policies  
across the group
n
 approval of strategic plans profit plans and budgets and any material changes to them
n
  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
n
 final approval of annual accounts and accounting policies
n
 approval of the dividend policy
n
  approval of the acquisition or disposal of subsidiaries and major investments and 
capital projects
n
  delegation of the board’s powers and authorities including the division of responsibilities 
between the chairman the chief executive and other executive directors and
n
 receiving reports on the views of the company’s shareholders
operational management of the group is delegated to the operating board of ncc group 
and ncc group inc
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 
all directors have access to the company secretary for advice
all directors are required to submit themselves for reelection 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 annually 
audit committee
the audit committee which is chaired by james wallace who has recent relevant experience 
as a former finance director and is currently chairman of another pic audit committee 
comprises the two independent non executive directors and meets at least twice 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
n
  to monitor the integrity of the financial statements and review significant financial reporting 
judgements contained in them
n
  to review the company’s internal financial control system and risk management systems
n
  to make recommendations to the board in relation to the appointment of the external auditor 
and to approve the remuneration and terms of engagement of the external auditors
n
  to review and monitor the external auditors’ independence objectivity and effectiveness
n
  to develop and implement policy on the engagement of the external auditors to supply 
nonaudit services
n
  to monitor the company’s whistleblowing procedures and
n
  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
 meetings attended
james wallace 22 
eurfyl ap gwilym 22
23
recycled paper 24
corporate governance
continued
during the year the audit committee considered the following issues
n
  the appropriate valuation techniques to be utilised in valuing share options under ifrs
n
  the areas of judgement in the financial statements including the valuation of intangible 
assets and goodwill impairment
n
  the requirement for a formal internal audit function
n
  the independence of rickitt mitchell as corporate finance advisors
n
  the level of fees payable to kpmg audit plc in respect of nonaudit work
n
  the separation of the audit non audit and tax work and appointment of the appropriate 
advisors
n
  various tax issues within the group and
n
  corporate governance issues
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
 meetings attended
paul mitchell  44
james wallace 44 
eurfyl ap gwilym 44
the directors’ remuneration report is set out on pages 26 to 30
nomination committee
the nomination committee is chaired by paul mitchell and comprises the non executive 
directors the committee is responsible for proposing candidates to the board having regard 
to the balance and structure of the board there has been one meeting in the year
 meetings attended
paul mitchell  11 
james wallace 11 
eurfyl ap gwilym 11 
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 misstatement or loss
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
n
  clearly defined management structure and delegation of authority to committees of the 
board subsidiary boards and associated business units
n
  clearly documented internal procedures set out in the group’s iso 90012000 accredited  
quality manual
n
  high recruitment standards and formal career development and training to ensure the 
integrity and competence of staff
ncc group annual report and accounts 2008 25
n
  regular and comprehensive information provided to management covering financial 
performance and key performance indicators including nonfinancial measures
n
  a detailed budgeting process where business units prepare budgets for the coming years 
and rolling threeyear strategic plans which are approved by the board
n
  procedures for the approval of capital expenditure and investments and acquisitions
n
  monthly monitoring and reforecasting of results against budget with major variances 
followed up and management action taken where appropriate
n
  regular internal audits of key processes and procedures under the group’s iso 9001 
accredited quality assurance process
n
  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
n
  formal consideration of progress made against significant business risks at monthly operational  
board meetings
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 nonaudit work all significant non
audit work commissioned from the external auditors requires audit committee approval 
the external auditors are only selected to undertake nonaudit work where the nature of the 
advice makes it more timely and costeffective to select advisors who already have a good 
understanding of the group
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
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 
will be 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 wwwnccgroupcom on which financial and other 
information is available and regularly updated
the board receives reports from the group’s broker twice a year that communicate feedback 
from institutional shareholders 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
by order of the board
rob cotton
chief executive
ncc group plc
2 july 2008
25
recycled paper 26
remunera tion report
directors’
26 26 ncc group annual report and accounts 2008
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 and james wallace the chief executive may attend the remuneration committee 
by invitation and assist 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 marketbased 
packages which reward group and individual performance and motivate senior executives 
to achieve stated business objectives and deliver outstanding shareholder returns 
remuneration packages comprise
n
 basic salary
n
 annual performance related bonus
n
 other benefits
n
 participation in the share 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 
an employee share option scheme a long term incentive plan ltip and a save as you earn 
saye scheme
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 hightech sectors 
the salaries of rob cotton and paul edwards for the last two financial years are set out in the 
table on page 28
a benchmarking exercise was undertaken in april 2008 to provide the remuneration 
committee with relevant comparable data which identified that the existing salaries of the 
executive directors were in line with marketplace comparators 
in addition the committee considered the excellent performance of the group over the last 
two years and its increasing size and complexity and the specific experience of the executive 
directors which is critical to the group’s continued success when agreeing salaries for the year 
commencing 1 june 2008 with effect from 1 june 2008 rob cotton’s salary is £350000 an 
increase of 167 and paul edwards’ salary is £180000 an increase of 161
performance related bonuses
the performance related pay scheme for executive directors is in line with the scheme 
covering other senior members of staff payments under the scheme are based upon the 
achievement of profit targets for the group as set by the remuneration committee
pensions
the executive directors are entitled to a company pension contribution of 9 of basic salary 
providing they make a contribution of not less than 5 which is paid into the group defined 
contribution 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
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 precluded 
from joining the employee share option scheme but have participated in the ltip scheme 
during the financial year
  27
the remuneration committee agreed in 2006 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 ended
 
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 alone the previous schemes approved in 2005 and 2006 are 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
for the 2005 and 2006 schemes the eps and tsr conditions will govern the vesting of up 
to 50 of each of the ltip awards 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 believes that this is a more 
appropriate measure of the company’s performance given its current position and it aligns 
the interests of the key executives and directors with those of the shareholders
the tsr condition will govern the vesting of 50 of the 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 
performance graph
the following graph shows the total shareholder return with dividends reinvested from 12 july 
2004 the date of the company’s flotation on the london stock exchange aim 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 capitalisationbased perspective whilst the ftse software and computer 
services index gives an industry sector perspective 
the share price of the company at 12 july 2004 being the date of the company’s flotation 
was 170p and at 31 may 2008 was 385p
 
recycled paper
 28
service contracts
the service contracts and letters of appointment of the directors include the following terms
 date of contract notice period period of
   appointment
executive   
rob cotton 12 july 2005 1 year 
paul edwards 12 july 2005 6 months 
non executive   
paul mitchell 26 june 2007 3 months 3 years
james wallace 26 june 2007 3 months 3 years
eurfyl ap gwilym 26 june 2007 3 months 
   
the executive directors are subject to rolling contracts and offer themselves for reelection  
by rotation in accordance with the company’s articles of association these contracts  
maybe 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
 ordinary shares ordinary shares
 of 1p each 2008  of 1p each 2007
executive  
rob cotton 1557169 1879003
paul edwards 248316 276645
non executive  
paul mitchell 196600 228100
james wallace 14705 14705
eurfyl ap gwilym 14705 14705
the auditors have audited the information in the following tables 
remuneration
the remuneration of the directors for the year ended 31 may 2007 was as follows
year ended 31 may 2007 salary bonus pension benefits fees total
 £000 £000 £000 £000 £000 £000
executive       
rob cotton 250 29 18 31  328
paul edwards 123 14 9 24  170
non executive      
paul mitchell     45 45
james wallace 40     40
eurfyl ap gwilym 30     30
 443 43 27 55 45 613
the remuneration of the directors for the year ended 31 may 2008 was as follows
year ended 31 may 2008 salary bonus pension benefits fees total
 £000 £000 £000 £000 £000 £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
remunera tion report
directors’
28
continued
ncc group annual report and accounts 2008 29
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 2008 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
  market options options
  value at held at held at   earliest
 date of date of 1 june 31 may exercise performance exercise expiry
 grant grant 2007 2008 price conditions date date       
rob cotton 140704 £170 117647 nil nil 1 010607 130708
rob cotton 050804 £170 6909 nil £136 2 010907 280208
rob cotton 210905 £236 78431 78431 nil 3 010608 200909
rob cotton 190706 £270 nil 83333 nil 3 010609 180610
rob cotton 130807 £374 nil 2914 £324 6 011010 310311
rob cotton 191007 £372 nil 80645 nil 5 010610 010611
paul edwards 140704 £170 51471 nil nil 1 010607 130708
paul edwards 190805 £258 4577 4577 £206 4 010908 280209
paul edwards 210905 £236 34313 34313 nil 3 010608 200909
paul edwards 190706 £270 nil 38888 nil 3 010609 180610
paul edwards 191007 £372 nil 41666 nil 5 010610 010611
 exercise price of £1 on each occasion
  on 30 july 2007 rob cotton exercised 102839 shares 14808 shares were forfeited paul edwards exercised 44992 shares 6479 shares were forfeited  
the  market price of the company’s shares on this date was £371
 on 30 august 2007 rob cotton exercised 6909 shares the market price of the company’s shares on this date was £360
recycled paper 30
performance conditions and notes
1  the awards will vest in full if average growth of ebita over the three years from grant equals 
or exceeds 25 per annum if ebita over the three year period falls below 10 then the 
awards vested will be nil if ebita over the three years falls between 10 and 25 then 
the amount of awards granted will be calculated on a straight line basis between the two 
percentages
2  the saye scheme is subject to a three year savings contract if this is completed a maximum 
of 6909 shares will be granted
3  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
4  the saye scheme is subject to a three year savings contract if this is completed a maximum 
of 4577 shares will be granted
5  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
6  the saye scheme is subject to a three year savings contract if this is completed a maximum 
of 2914 shares will be granted
the remuneration committee recommends the granting of additional share options to the 
value of each executive director’s annual salary using the same performance criteria to be 
defined and outlined at the agm
during the year the company’s share price varied between 303p and 431p and ended the year  
at 385p
approved by the board and signed on its behalf
eurfyl ap gwilym
chairman remuneration committee
ncc group plc
2 july 2008
remuneration report
directors’
continued
ncc group annual report and accounts 2008 31
directors’ responsibilities
statement of
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 ifrss as adopted by the eu and applicable law and 
have elected to prepare the parent company financial statements on the same basis
the group and parent company financial statements are required by law and ifrss as adopted 
by the eu to present fairly the financial position of the group and the parent company and the 
performance for that period the companies act 1985 provides in relation to such financial 
statements that references in the relevant part of that act to financial statements giving a true 
and fair view are references to their achieving a fair presentation
in preparing each of the group and parent company financial statements the directors are 
required to 
n
 select suitable accounting policies and then apply them consistently
n
 make judgements and estimates that are reasonable and prudent
n
  state whether they have been prepared in accordance with ifrs as adopted by the eu 
and
n
  prepare the financial statements on the going concern basis unless it is inappropriate to 
presume that the group will continue in business
the directors are responsible for keeping proper accounting records that 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 1985 they have 
general responsibility for taking such steps as are reasonably open to them to safeguard the 
assets of the group and to prevent and detect fraud and other irregularities
under applicable law and regulations the directors are also responsible for preparing a 
directors’ report directors’ remuneration report and corporate governance statement that 
comply 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 website legislation in the uk governing the preparation 
and dissemination of financial statements may differ from legislation in other jurisdictions
responsibility statement of the directors in respect 
of the annual financial report
we confirm that to the best of our knowledge
n
  the financial statements prepared in accordance with the applicable set of accounting 
standards give a true and fair view of the assets liabilities financial position and profit or loss 
of the company and the undertakings included in the consolidation taken as a whole and
n
  the directors’ report includes a fair review of the development and performance of  
the business and the position of the issuer and the undertakings included in the consolidation 
taken as a whole together with a description of the principal risks and uncertainties that  
they face
by order of the board
rob cotton
chief executive
ncc group plc
2 july 2008
31
recycled paper 32
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
social responsibility report
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 named one of the top it employers in the uk for 2008 in 
an independent study for computing magazine carried out by crf an independent research 
company ncc group scored high marks for career development training and innovation 
in particular demonstrating that our commitment to developing staff and offering defined 
career paths is delivering results
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
the 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 rare instances 
of negative feedback are treated with the utmost seriousness and dealt with swiftly by 
management through to resolution
32
corporate
ncc group annual report and accounts 2008 33 33
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’ holiday
during the year we supported fundraising for christie’s the charity which raises funds for the 
manchesterbased christie hospital one of the largest cancer treatment centres in europe 
through a series of events and sponsored activities ranging from mountainclimbing to cycling 
and fiveaside football we raised in excess of £23000 after two very successful years 
supporting christie’s where we raised in excess of £37000 in total we have now committed 
to support the nspcc charity with particular focus on the childline operations we have set a 
goal to facilitate the raising of at least £100000 over the next three years
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 2008 the group had an average of 45 days purchases outstanding in trade 
creditors 2007 28 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
key policies
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
2 july 2008
recycled paper 34
we have audited the group and parent company financial 
statements the ‘’financial statements’’ of ncc group 
plc for the year ended 31 may 2008 which comprise the 
group income statement the group and parent company 
balance sheets the group and parent company cash flow 
statements the group and parent company statements 
of changes in equity and the related notes these financial 
statements have been prepared under the accounting 
policies set out therein we have also audited the information 
in the directors’ remuneration report that is described as 
having been audited
this report is made solely to the company’s members as a 
body in accordance with section 235 of the companies act 
1985 and the terms of our engagement our audit work has 
been undertaken so that we might state to the company’s 
members those matters we are required to state to them in 
an auditor’s report and for no other purpose to the fullest 
extent permitted by law we do not accept or assume 
responsibility to anyone other than the company and the 
company’s members as a body for our audit work for this 
report or for the opinions we have formed 
respective responsibilities of 
directors and auditors
the directors’ responsibilities for preparing the annual 
report the directors’ remuneration report and the 
financial statements in accordance with applicable law 
and international financial reporting standards ifrs as 
adopted by the eu are set out in the statement of directors’ 
responsibilities on page 31
our responsibility is to audit the financial statements and the 
part of the directors’ remuneration report to be audited in 
accordance with relevant legal and regulatory requirements 
and international standards on auditing uk and ireland
 
we report to you our opinion as to whether the financial 
statements give a true and fair view and whether the financial 
statements and the part of the directors’ remuneration report 
to be audited have been properly prepared in accordance 
with the companies act 1985 and as regards the groups’ 
financial statements article 4 of the ias regulation we also 
report to you whether in our opinion the information given in 
the directors’ report is consistent with the financial statements 
the information given in the directors’ report includes that 
specific information presented in the chairman’s report and 
the chief executive’s report that is cross referred from the 
business review section of the directors’ report
in addition we report to you if in our opinion the company 
has not kept proper accounting records if we have not 
received all the information and explanations we require for 
our audit or if information specified by law regarding directors’ 
remuneration and other transactions is not disclosed
we review whether the corporate governance statement 
reflects the company’s compliance with the nine provisions 
of the 2006 combined code specified for our review by 
the listing rules of the financial services authority and we 
report if it does not we are not required to consider whether 
the board’s statements on internal control cover all risks 
and controls or form an opinion on the effectiveness of the 
group’s corporate governance procedure or its risks and 
control procedures 
we read the other information contained in the annual 
report and consider whether it is consistent with the audited 
financial statements we consider the implications for our 
report if we become aware of any apparent misstatements 
or material inconsistencies with the financial statements our 
responsibilities do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international 
standards on auditing uk and ireland issued by the 
auditing practices board an audit includes examination 
on a test basis of evidence relevant to the amounts and 
disclosures in the financial statements and the part of the 
directors’ remuneration report to be audited it also includes 
an assessment of the significant estimates and judgments 
made by the directors in the preparation of the financial 
statements and of whether the accounting policies are 
appropriate to the group’s and company’s circumstances 
consistently applied and adequately disclosed 
we planned and performed our audit so as to obtain all 
the information and explanations which we considered 
necessary in order to provide us with sufficient evidence to 
give reasonable assurance that the financial statements and 
the part of the directors’ remuneration report to be audited 
are free from material misstatement whether caused by 
fraud or other irregularity or error in forming our opinion we 
also evaluated the overall adequacy of the presentation of 
information in the financial statements and the part of the 
directors’ remuneration report to be audited 
opinion 
in our opinion 
n
  the group financial statements give a true and fair view in 
accordance with ifrs as adopted by the eu of the state 
of the group’s affairs as at 31 may 2008 and of its profit for 
the year then ended
n
  the parent company financial statements give a true  
and fair view in accordancewith ifrss as adopted by the 
eu and applied in accordance with the provisions of the 
companies act 1985 of the state of the parent company’s 
affairs as at 31 may 2008
n
  the financial statements as the part of the directors’ 
remuneration report to be audited have been properly 
prepared in accordance with the companies act 1985 
and as regards the group financial statements article 4 
of the ias regulation and
n
  the information given in the directors’ report is consistent 
with the financial statements
 
kpmg audit plc
chartered accountants 
registered auditor
st james’ square
manchester m2 6ds 
united kingdom
to the members of ncc group plc
independent auditors report
34 ncc group annual report and accounts 2008 35
  notes 2008  2007  
   £000  £000  
   
revenue 2  35745  25400  
cost of sales   20055 13365
gross profit  15690  12035  
   
administrative expenses before amortisation of  
intangible assets and exceptional items   5022 3853
earnings before interest tax amortisation and exceptional items  10668  8182  
amortisation of intangible assets  740 230
exceptional items 3 711   
total administrative expenses  6473 4083
   
operating profit 2 9217  7952  
   
financial income 6 78  109   
finance expense excluding unwinding of discount  269 174
net financing costs excluding unwinding of discount  191 65
unwinding of discount effect relating to deferred  
consideration on business combinations  333 102
financial expenses 6 602 276
   
net financing costs  524 167
   
profit before taxation 4 8693  7785  
taxation 7 2340 2411
profit for the year  6353  5374   
   
attributable to equity holders of the parent company  6353  5374   
profit for the year  6353  5374  
   
earnings per share 9  
basic earnings per share  189p 165p
diluted earnings per share  183p 159p
    
recycled paper
income statement
consolidated
for the year ended 31 may 2008 36
 notes  2008               2007              
  £000 £000 £000 £000
non current assets     
intangible assets 11 51833  39302 
plant and equipment 12 1939  1482 
deferred tax assets 15 1145  2005 
total noncurrent assets  54917  42789 
     
current assets     
trade and other receivables 13 12351  7757 
cash and cash equivalents  1142  4377 
total current assets  13493  12134 
     
total assets   68410  54923
     
equity     
issued capital 21 336  326 
share premium  21537  19929 
retained earnings  17569  13144 
currency translation reserve  12  39 
total equity attributable to equity holders of the parent   39454  33438 
  
non current liabilities     
interest bearing loans 18 54  3500 
other financial liabilities 18 92  3782 
deferred tax liability 15 1499  473 
total non current liabilities  1645  7755 
     
current liabilities     
interest bearing loans 19 4500   
trade and other payables            16 11270  3931 
deferred revenue                   17 11009  8620 
current tax payable  532  1179 
total current liabilities  27311  13730 
total liabilities   28956  21485
total liabilities and equity   68410  54923
     
at 31 may 2008
group balance sheet
these financial statements were approved 
by the board of directors on 2 july 2008 
and were signed on its behalf by 
 
 
 
 
rob cotton
chief executive
ncc group plc 
 
ncc group annual report and accounts 2008 37
     restated             
 notes  2008              2007             
  £000 £000 £000 £000
non current assets     
investments 26 29994  29550 
total noncurrent assets  29994  29550  
     
current assets     
trade and other receivables         13   235 
cash and cash equivalents  12  12 
total current assets  12  247 
     
total assets   30006  29797
     
equity     
issued capital                      21 336  326 
share premium                     21537  19929 
retained earnings                   4974  3686 
total equity    26847  23941
     
current liabilities     
trade and other payables            16 3159  5856 
total current liabilities  3159  5856 
total liabilities   3159  5856
total liabilities and equity   30006  29797
     
     
     
at 31 may 2008
company balance sheet
these financial statements were approved 
by the board of directors on 2 july 2008 and 
were signed on its behalf by 
 
 
 
 
rob cotton
chief executive
ncc group plc 
 
recycled paper 38
 notes 2008  2007  
  £000  £000  
cash inflow from operating activities   
profit for the year  6353  5374  
adjustments for   
depreciation charge  1045  688  
share based charges  742  575  
amortisation of intangible assets  740  230  
net financing costs  191  167  
profit on sale of plant and equipment  5   
income tax expense  2340  2411  
profit for the year before changes in working capital   11406  9445  
increase in receivables  3620 1976
increase in payables  3460  314  
cash generated from operating activities before interest and tax  11246  7783   
interest paid  489 166
income taxes paid  2657 2449
net cash generated from operating activities  8100  5168  
   
cash flows from investing activities    
interest received  273  109  
proceeds from the sale of plant and equipment  69  1  
acquisition of plant and equipment  1466 734
acquisition of business 14 10418 3641
net cash used in investing activities  11542 4265
   
cash flows from financing activities   
proceeds from the issue of ordinary share capital  1618  16  
proceeds from borrowings  993  3500  
purchase of own shares  559   
payment of bank loans   3900
equity dividends paid  1817 1304
net cash from financing activities  235  1688
   
net decrease in cash and cash equivalents 22 3207 785
   
cash and cash equivalents at beginning of year  4377  5139  
effect of exchange rate fluctuations on cash held  28 23  
cash and cash equivalents at end of year  1142  4377  
   
   
for the year ended 31 may 2008
group cash flow statement
ncc group annual report and accounts 2008 39
for the year ended 31 may 2008
company cash flow statement
 2008  2007  
 £000  £000  
cash inflow from operating activities  
loss for the year 1050 77
adjustments for  
share based charges 270  169  
net financing costs   57  
loss  profit for the year before changes in working capital  780 149  
increase  decrease in receivables   70
decrease  increase in payables 2462 5195  
profit for the year before interest and tax 3242 5274  
interest paid   80
net cash generated from operating activities 3242 5194  
  
cash flows from investing activities  
interest received   1  
net cash inflow in investing activities   1  
  
cash flows from financing activities  
proceeds from the issue of ordinary share capital 1618  16  
purchase of own shares 559   
payment of bank loans   3900
equity dividends received 4000    
equity dividends paid 1817 1304
net cash from financing activities 3242  5188
  
net increase in cash and cash equivalents   7  
    
cash and cash equivalents at beginning of year 12  5  
cash and cash equivalents at end of year 12  12  
  
recycled paper 40
group share share retained  currency  total    
 capital premium earnings  translation  equity   
 £000 £000 £000  £000  £000  
balance at 1 june 2006 326 19913 7964  15  28218   
share based charges   575    575   
deferred tax on share based payments   535    535   
profit for the year   5374    5374   
shares issued  16     16   
currency translation reserve     24  24   
dividends to shareholders   1304   1304 
balance at 31 may 2007 326 19929 13144  39  33438 
balance at 1 june 2007 326 19929 13144  39  33438   
share based charges   742    742   
purchase of own shares   559   559 
deferred tax on share based payments   294   294 
profit for the year   6353    6353   
shares issued 10 1608     1618   
currency translation reserve     27 27 
dividends to shareholders   1817   1817 
balance at 31 may 2008 336 21537 17569  12  39454         
company share share retained   total    
 capital premium earnings   equity    
 £000 £000 £000   £000   
balance at 1 june 2006 326 19913 4493   24732    
share based charges   169   169    
increase in subsidiary investment for share based charges   405   405    
loss for the year   77  77 
shares issued  16    16    
dividends to shareholders   1304  1304 
balance at 31 may 2007 restated 326 19929 3686   23941 
balance at 1 june 2007 326 19929 3686   23941    
share based charges   270   270    
increase in subsidiary investment for share based charges   444   444    
loss for the year   1050  1050 
shares issued 10 1608    1618    
purchase of own shares   559  559 
dividends from subsidiaries   4000   4000    
dividends to shareholders   1817  1817 
balance at 31 may 2008 336 21537 4974   26847          
   
             
  
for the year ended 31 may 2008
st atement of changes in equity
ncc group annual report and accounts 2008 41
increased
by 33
earnings per share
41
recycled paper 42
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 
s230 of the companies act 1985 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 
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 
cashgenerating units based on the allocation of the business acquired 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 
5 and 20 years
related party transactions
details of related party transactions are set out in note 25 to these financial statements
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
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 
n
   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 
n
   escrow and website 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 solutions agreement 
revenue is deferred and released to the income statement on a straightline basis over the 
life of the related agreement on the basis that the performance is deemed to fall evenly 
over the contract period
forming part of the financial statements
notes
ncc group annual report and accounts 2008 43
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 straightline 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
employee benefits – defined 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
sharebased 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
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 
intragroup 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
recycled paper 44
ifrs adopted for the first time
in these financial statements the following new statements have been adopted for the  
first time
ifrs 7 financial instruments disclosures note 19
ifrs 1 amendment to ias 1 – capital disclosures note 19
ifric 11 group and treasury share transactions
the adoption of the ifric 11 is referred to in note 26 and has required a prior year adjustment 
this adjustment has increased investments in subsidiaries in the company by £444000 in the 
current year and £405000 in the prior year with a corresponding increase in equity there has 
been no impact on the group of the adoption of ifric 11 the impact of adoption of ifrs 7 
and ifrs 1 amendment is shown in the referred notes
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
international accounting standards ifrs
ifrs 8  operating segments
ifric 7 hyperinflation
ifric 8 scope of ifrs 2 – share based payments
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 of 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
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
continued
notes
ncc group annual report and accounts 2008 45
2 segmental information
the group is organised into three primary business segments escrow solutions assurance testing and consultancy these three segments 
are the group’s primary reporting format for segment information escrow solutions europe includes amounts previously reported as escrow 
solutions germany all segments are located in the uk unless indicated otherwise
    2008  2007   
    £000  £000  
revenue by business segment  
escrow solutions uk    15724  13790  
escrow solutions europe    1094  203  
escrow solutions us    1190  1028  
total escrow solutions    18008  15021  
assurance testing    12835  5795  
consultancy    4902  4584  
total revenue    35745  25400  
  
operating profit by business segment  
escrow solutions uk    9393  8182  
escrow solutions europe    376  476
escrow solutions us    394  248  
total escrow solutions    10163  7954  
assurance testing    1678  740  
consultancy    726  717  
segment operating profit    12567  9411  
head office costs    1899 1229
operating profit before amortisation and exceptional items   10668 8182 
amortisation of intangible assets escrow us    115 118
amortisation of intangible assets assurance testing    458 112
amortisation of intangible assets escrow europe    167   
operating profit before exceptional items    9928  7952  
exceptional items    711    
operating profit    9217  7952    
interest and tax are not allocated to business segments and there are no inter segment sales
 
recycled paper 46
  assets liabilities  assets liabilities  
  2008 2008  2007 2007  
  £000 £000  £000 £000  
assets  liabilities by business segment    
escrow solutions uk  4623 7775 3419 7063
escrow solutions europe  5268 3296 175 126
escrow solutions us  4483 744 4341 664
total escrow solutions  14374 11815 7935 7853
consultancy  2790 823 2108 666
assurance testing  8055 9451 7199 7794
unallocated net assets  43191 6871 37681 5172
total assets  liabilities  68410 28960 54923 21485
unallocated net assets consist of goodwill arising on consolidation cash tax payable and other centrally held assets and liabilities
     total costs
     incurred to
     acquire
    capital  segmental
2007   depreciation expenditure assets
   £000 £000 £000
escrow solutions uk   318 331 
escrow solutions europe   32 12 
escrow solutions us   52 89 1124
total escrow solutions   402 432 1124
consultancy   85 60 
assurance testing   195 242 4766
head office   6 5 
total   688 739 5890
     total costs
     incurred to
     acquire
    capital  segmental
2008   depreciation expenditure assets
   £000 £000 £000
escrow solutions uk   508 807 
escrow solutions europe   51 26 6832
escrow solutions us   55 17 
total escrow solutions   614 850 6832
consultancy   71 137 
assurance testing   360 485 2725
head office     
total   1045 1472 9557
continued
notes
ncc group annual report and accounts 2008
ian lever
technical director  consultancy 47
2 segmental information continued
the table below provides additional disclosure on revenue by geographical market where the customer is based
    2008  2007   
    £000  £000   
revenue by geographical segment      
uk    29238 20620  
rest of europe    2745 1756  
rest of the world    3762 3024  
total revenue    35745 25400
   
the table below provides additional disclosure on assets  liabilities by geographical market where the assets  liabilities are based
 
  assets liabilities  assets liabilities  
  2008 2008  2007 2007  
  £000 £000  £000 £000  
assets  liabilities by geographical segment      
uk  58659 21354 50407 20695 
rest of europe  5268 3610 175 126 
rest of the world  4483 3992 4341 664 
total assets  liabilities  68410 28956 54923 21485 
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 2008 were costs relating to the move to the london stock exchange’s official list on 13 july 2007  
£531000 and reorganisation costs following the acquisition of escrow europe £180000
 
ian lever
technical director  consultancy
recycled paper 48
4 expenses and auditors’ remuneration
    2008   2007   
    £000   £000 
 
profit before taxation is stated after chargingcrediting
      
amounts receivable by auditors and their associates in respect of      
audit of these financial statements    32  5 
audit of financial statements of subsidiaries pursuant to legislation   10  29 
other services pursuant to legislation      5 
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    1045  688 
amortisation of intangible assets    740  230 
exchange losses    15  11 
operating lease rentals charged      
hire of property plant and equipment    604  305 
other operating leases    420  445 
profit on disposal of fixed assets    5  
      
continued
notes
ncc group annual report and accounts 2008
eileen conlon
assistant company secretary 49
5 staff numbers and costs
directors’ emoluments are disclosed in the directors’ remuneration report on pages 26 to 30
group
the average number of persons employed by the group during the year including directors is analysed by category as follows
    number of  number of  
    employees employees  
    2008 2007  
      
operational    77 59 
administration sales and marketing    230 179 
    307 238 
      
the aggregate payroll costs of these persons were as follows      
    2008 2007 
    £000 £000
      
wages and salaries    14315 9829 
share based payments note 20    742 575 
social security costs    1891 1120 
other pension costs note 24    324 257 
    17272 11781 
company
the average number of persons employed by the company during the year including directors is analysed by category as follows
    number of  number of
    employees employees
    2008 2007 
      
administration sales and marketing    2 2 
    2 2
 
the aggregate payroll costs of these persons were as follows      
    2008 2007 
    £000 £000 
      
wages and salaries    589 435 
share based payments note 20    270 169 
social security costs    74 62 
other pension costs note 24    32 26 
    965 692 
recycled paper 50
6 net financing costs
    2008  2007   
    £000  £000   
financial income      
interest on short term deposits    78  109  
    78  109  
      
financial expenses      
interest payable on bank loans and overdrafts    269 163 
amortisation of deal fees on term loans      11 
deferred consideration finance expense see below    333 102 
    602 276
 
 the deferred consideration finance expense of £333000 2007 £102000 relates to the acquisition of site confidence 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
deferred consideration finance expense    2008  2007   
    £000  £000  
    
site confidence limited    233  102  
secure test limited    76    
escrow europe holdings bv    24    
    333  102  
the discount rate used was 65 2007 65 
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    2008  2007   
    £000  £000   
       
site confidence limited    3908  891   
secure test limited    1485     
escrow europe holdings bv    717     
source harbor inc      105   
    6110  996   
noncurrent liabilities – deferred consideration note 18       
site confidence limited transferred to current liabilities      3675    
 
      3675   
continued
notes
ncc group annual report and accounts 2008
barry clegg
escrow sales manager 51
7 taxation
recognised in the income statement
    2008  2007  
    £000  £000  
current tax expense   
current year    2029  2571  
adjustment to tax expense in respect of prior periods    4  11  
foreign tax    10 12  
total current tax    2023  2572  
deferred tax see note 15    317  161
tax in income statement    2340  2411  
reconciliation of effective tax rate
    2008  2007  
    £000  £000  
   
profit before taxation    8693  7785  
current tax using the uk corporation tax rate of 30 2007 30   2608  2336  
   
effects of   
items not taxable  deductable for tax purposes    257 74  
foreign tax    1 12  
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    19  11
total current tax    2340  2411   
deferred tax recognised directly in equity was £294000 2007 £535000
recycled paper 52
8 dividends
    2008 2007 
    £000 £000
dividends paid and recognised in the year    1817 1304
dividends proposed but not recognised in the year    1596 1060
  
dividends per share paid and recognised in the year    225p 400p
dividends per share proposed but not recognised in the year    475p 325p
9 earnings per share
the calculation of earnings per share is based on the following
    2008  2007  
    £000  £000  
  
profit for the year    6353 5374
  
    number of  number of
    shares shares
    000’s 000’s
     
basic weighted average number of shares in issue    33653 32611
dilutive effect of share options    1021 1256
diluted weighted average shares in issue    34674 33867
10 profit attributable to members of the parent company
the loss for the year dealt with in the accounts of the parent company was £1050000 2007 £77000 loss
continued
notes
ncc group annual report and accounts 2008 53
11 intangible assets  group
   customer 
   contracts and 
   relationships goodwill  total
   £000 £000 £000
cost     
at 1 june 2006   2250 28217 30467
additions   1964 7148 9112
at 31 may 2007   4214 35365 39579
additions    4515 8756 13271
at 31 may 2008   8729 44121 52850
    
amortisation    
at 1 june 2006   47  47
charge for year   230  230
at 31 may 2007   277  277
charge for year   740  740
at 31 may 2008   1017  1017
    
net book value    
at 31 may 2008   7712 44121 51833
net book value    
at 31 may 2007   3937 35365 39302
the group has made two acquisitions in the year details of which are included in note 14 the company has no intangible assets
goodwill considered significant in comparison to the group’s total carrying amount of such assets have been allocated to cash generating 
units or groups of cash generating units as follows
    goodwill goodwill
    2008 2007
cash generating units    £000 £000
escrow    22871 22871
assurance testing    2301 2301
consultancy    2229 2229
ncc group plc    27401 27401
ncc group inc     1218 1354
site confidence limited    6610 6610
secure test limited    3351 
escrow europe holdings bv    5541 
    44121 35365
recycled paper
iain lewis
managing consultant  securet est
recycled paper
53 54
ncc group inc includes goodwill on the acquisition of the escrow division of recall information management inc and source harbor inc 
the recoverable amount of the cash generating units has been calculated with reference to its fair value in use in calculating this value 
management have used the following assumptions management have used experience in determining the values assigned to each key 
assumption sales levels are based on historical trends and a prudent estimate of market growth the period over which management 
approved forecasts are based is three years using a discount rate of 115 the growth rate beyond 3 years is assumed to be zero there is 
significant headroom on this basis 
12 plant and equipment – group
 computer plant and fixtures motor 
 equipment equipment and fittings vehicles total  
 £000 £000 £000 £000 £000  
cost      
at 1 june 2006 2096 358 500 197  3151  
additions 627 14 56 42  739  
acquisition of group companies 381 33 38   452  
disposals 1     1
at 31 may 2007 3103 405 594 239  4341  
additions 828  480 164  1472  
acquisition of group companies 115  95   210  
disposals    122 122
at 31 may 2008 4046 405 1169 281  5901  
     
depreciation     
at 1 june 2006 1442 193 233 26  1894  
charge for year 458 64 109 57  688  
on disposals 244 10 23   277  
at 31 may 2007 2144 267 365 83  2859  
charge for year 757 56 160 72  1045  
acquisition of group companies 69  48   117  
disposals    59 59
at 31 may 2008 2970 323 573 96  3962  
     
net book value     
at 31 may 2008 1076 82 596 185  1939  
net book value     
at 31 may 2007 959 138 229 156  1482  
the company has no plant and equipment 
continued
notes
ncc group annual report and accounts 2008
lloyd brough
managing consultant  securet est 55
13 trade and other receivables
  group group company company
  2008 2007 2008 2007
  £000 £000 £000 £000
     
trade receivables  10235 5792  
amounts owed by group undertakings     235
prepayments and accrued income  2116 1965  
  12351 7757  235
55
recycled paper 56
continued
notes
14 acquisitions
a on 1 august 2007 the group acquired 100 of the share capital of secure test limited for a maximum consideration of £4000000 of which 
£1500000 has been withheld subject to the achievement of performance criteria specified in the purchase agreement the present value of 
the deferred consideration on 1 august 2007 was £1408000 the performance conditions are required to be satisfied by july 2008
the acquisition had the following effect on the group’s assets and liabilities
   acquiree’s  fair value  acquisition  
   book values  adjustments  amounts  
   £000  £000  £000  
acquiree’s identifiable net assets at the acquisition date   
plant and equipment   60    60  
trade and other receivables   550    550  
deferred tax asset     29  29  
deferred tax liability     154 154
cash   222    222  
creditors and accruals   438         438
intangible assets purchased     512  512  
net identifiable liabilities  assets    394  387  781  
goodwill on acquisition     3352  
maximum consideration to be paid including expenses     4133  
less purchase consideration withheld     1408
net cash outflow     2725  
cash acquired     222
net cash outflow excluding cash acquired     2503  
goodwill has arisen on the acquisition because the purchase price exceeds the fair value of the separately identifiable net assets acquired 
including £512000 assigned to customer relationships and contracts 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 secure test limited contributed an operating profit before amortisation of intangible assets of £337000 and 
revenue of £3150000 to the group consolidated income statement for the year ended 31 may 2008 after amortisation of intangible 
assets operating profits were £169000 
b on 22 january 2008 the group acquired 100 of escrow europe holdings bv for a maximum consideration of £7955000 of which 
£2299000 was withheld subject to the achievement of performance criteria specified in the purchase agreement a second instalment 
of £647000 was paid on 10 april 2008 in relation to the partial achievement of the performance conditions the remaining performance 
conditions are due to be satisfied by july 2008 £693000 is recognised as a liability in the financial statements for the year ended 31 may 
2008 in relation to the final instalment 
 
ncc group annual report and accounts 2008
craig foster
financial controller  acquisitions 57
14 acquisitions continued
the acquisition had the following effect on the group’s assets and liabilities
   acquiree’s  fair value  acquisition  
   book values  adjustments  amounts  
   £000  £000 £000  
acquiree’s identifiable net assets at the acquisition date 
goodwill   583    583  
plant and equipment   33    33  
trade and other receivables   428    428  
tax recoverable   25    25  
deferred tax liability     1121 1121
cash   98    98  
creditors and accruals   278   278
interest bearing loans   61   61
deferred consideration on acquisition   319         319
deferred income   823   823
intangible assets purchased     4003  4003  
net indentifiable assets   314 2882  2568  
goodwill on acquisition     4957  
expected consideration to be paid including expenses     7525  
less purchase consideration withheld     693
net cash outflow      6832  
cash acquired     98
net cash outflow excluding cash acquired     6734  
goodwill has arisen on the acquisition because the purchase price exceeds the fair value of the separately identifiable net assets acquired 
including £4003000 assigned to customer relationships and contracts 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 escrow europe holdings bv contributed an operating profit before amortisation of intangible assets of £381000 
and revenue of £849000 to the group consolidated income statement for the year ended 31 may 2008 after amortisation of intangible 
assets operating profits were £214000
c on 7 july 2006 the group acquired the trade and net assets of source harbor inc for a maximum consideration of £897000 of which 
£111000 was withheld subject to the achievement of performance criteria specified in the purchase agreement 
the performance conditions were required to be satisfied by 30 september 2006 were not achieved and the liability for deferred consideration 
recognised in the financial statements for the year ended 31 may 2007 of £111000 was reversed in addition a refund of £25000 was paid back 
to the group in recognition of the shortfall in performance levels this has been accounted for by reducing the carrying value of goodwill
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 2008 would have been approximately £375m and £112m respectively
 
recycled paper 58
john mundell
escrow commercial sales manager
continued
notes
15 deferred tax assets and liabilities
recognised deferred tax assets and liabilities
deferred tax assets and liabilities are attributable to the following
  assets                     liabilities           net                 
 2008  2007   2008   2007   2008   2007   
 £000 £000  £000  £000  £000  £000  
plant and equipment 180 137      180  137  
short term temporary differences 13 13      13  13  
trade losses 390 815      390  815  
intangible assets    1499 473 1499 473
share based payments 562 1040      562  1040  
deferred tax assets  liabilities 1145 2005  1499 473 354 1532  
movement in deferred tax during the year
  1 june  recognised  recognised  arising on  31 may  
  2007  in income  in equity  acquisition  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    1275 1498
share based payments  1040  185 294   561  
  1532  317 294 1275 354
movement in deferred tax during the prior year
  1 june  recognised  recognised  arising on  31 may  
  2006  in income  in equity  acquisition  2007  
  £000  £000  £000  £000  £000  
plant and equipment  74  63      137  
short term temporary differences  9  4      13  
trade losses    78   893  815  
intangible assets        473 473
share based payments  333  172  535    1040  
     416  161  535  420  1532  
the company has no deferred tax assets or liabilities
ncc group annual report and accounts 2008 59
16 trade and other payables
  group group company company 
  2008 2007 2008 2007 
  £000 £000 £000 £000
 
trade payables  965 431   
amounts owed to group undertakings    2987 5807 
interest payable  4 29   
non trade payables  1655 963   
deferred consideration on acquisition of subsidiary note 6  6110 996  
accruals  2536 1512 172 49 
  11270 3931 3159 5856 
17 deferred revenue
  group group company company
  2008 2007 2008 2007
  £000 £000 £000 £000
     
deferred revenue  11009 8620  
  11009 8620  
deferred revenue of £9043000 2007 £6856000 consists of escrow solutions agreement revenue and maintenance revenue that has 
been deferred to be released to the income statement over the contract term on a prorata basis 
deferred revenue of £1966000 2007 £1764000 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 prorata basis 
recycled paper recycled paper 60
18 noncurrent liabilities
  group group  company company  
  2008 2007  2008 2007   
  £000 £000  £000 £000  
    
unsecured bank loan  54      
revolving credit facility see note 19   3500     
other financial liabilities  92 3782     
total  146 7282     
     
issue costs   26  26
amortisation of issue costs   26   26  
net book value  146 7282     
the issue costs have been amortised to zero since the term loan to which it relates has been repaid
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 £92000 relates to the balance of a rent free period 2007 £107000 which is released to the income statement 
over the term of the lease in the prior year £3675000 related to deferred consideration on acquisitions
19 financial instruments 
financial risk management
the group has exposure to the followings risks from its use of financial instruments
• credit risk
• liquidity risk
• currency risk
• interest rate risk
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 board monitors return on capital and the level of dividend to shareholders
financial instruments policy
all instruments utilised by the company and group are for financing purposes the daytoday financial management and treasury are 
controlled centrally for all operations 
continued
notes
ncc group annual report and accounts 2008
paul vlissidis
technical director  securetest 61
19 financial instruments continued
fair value of financial instruments
as at 31 may 2008 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
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
  group group  company company  
  2008 2007  2008 2007   
  £000 £000  £000 £000  
      
loans and receivables  10235 5792  235 
cash and cash equivalents  1142 4377 12 12 
  11377 10169 12 247 
the maximum exposure to credit risk for trade receivables at the reporting date by geographic region was
debtors by geographical segment 
  group group  company company  
  2008 2007  2008 2007   
  £000 £000  £000 £000  
      
uk  9489 5455  235 
rest of europe  464 36   
rest of the world  282 301   
  10235 5792  235 
recycled paper 62
19 financial instruments continued
the maximum exposure to credit risk at the reporting date by business segment was
debtors by business segment  group group  company company 
  2008 2007  2008 2007   
  £000 £000  £000 £000  
      
escrow solutions  3829 3054   
escrow europe  464 35   
escrow usa  282 301   
consultancy  1922 1294   
assurance testing  3738 1108   
amounts owed by group undertakings     235 
  10235 5792  235 
the trade receivables of the group typically comprise of 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 4 of total group receivables 2007 2 all of the group’s cash is held with financial institutions of high credit rating
impairment losses
the ageing of trade receivables at the reporting date was 
  group group  company company  
  2008 2007  2008 2007   
  £000 £000  £000 £000  
      
not past due  5210 3171   
past due 030 days  2640 1465   
past due 3190 days  2310 1092   
past due more than 90 days but less than one year  346 180   
  10506 5908   
continued
notes
ncc group annual report and accounts 2008
rob pope
technical director  securetest 63
19 financial instruments continued
the movement in the allowance in respect of trade receivables during the year was as follows
     group group 
     2008 2007 
     £000 £000 
balance at 1st june     116 34
impairment loss recognised     155 82
balance at 31st may     271 116
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
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 reporting to the board on a monthly basis
the following are the contractual maturities of financial liabilities including interest payments of the group
 carrying contractual 6 months 612 12 23
at 31st may 2008 amount cash flows or less months years years
 £000 £000 £000 £000 £000 £000 
unsecured bank borrowings 4500 4524 4524     
trade and other payables 11270 11270 11270     
      
at 31st may 2007      
unsecured bank borrowings 3500 3522     3522
trade and other payables 3931 3931 3931     
the financial liabilities of the company all have contractual maturities within 6 months 2007 within 6 months
recycled paper 64
19 financial instruments continued
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
  2008   2007   
 gbp eur usd gbp eur usd
 £000 £000 £000 £000 £000 £000
loans and receivables 9489 464 282 5403 36 353
cash and cash equivalents 331 271 539 4214 71 92
      
unsecured bank borrowings 4500   3500  
trade and other payables 10491 749 30 3781 40 110
      
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
     2008 2007
     £000 £000
sterling denominated financial assets     618 4253
euro denominated financial assets     35 32
us dollar denominated financial assets     489 92
current trade and other receivables     12351 7757
     13493 12134
the financial assets of the company at the end of the financial year were as follows
     2008 2007
     £000 £000
sterling denominated financial assets     12 12
     12 12
 
the financial liabilities of the group and their maturity profile is as follows
     2008 2007
maturity     £000 £000
less than 1 year     4500 
1 to 2 years      
2 to 3 years      3500
3 to 4 years      
current trade and other payables     11270 3931
sterling denominated financial liabilities     15770 7431
continued
notes
ncc group annual report and accounts 2008
rob quayle
group it manager 65
19 financial instruments continued
 
the financial liabilities of the company and their maturity profile is as follows
    2008 2007
maturity    £000 £000
less than 1 year     
1 to 2 years     
2 to 3 years     
3 to 4 years     
current trade and other payables    7159 5856
sterling denominated financial liabilities    7159 5856
as at 31 may 2008 the group had a committed unsecured revolving credit facility of £10 million 2007 £63 million the interest payable on 
drawn down funds is 085 above libor
the revolving credit facility is available until july 2009 a change of 100 basis points in interest rates would not have a significant impact on 
these financial statements
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
date of grant expected  exercisable exercise 2008 number
 term of options  between price outstanding  
july 2004 6 years july 2007  july 2014 £170 165073
july 2005 6 years july 2008  july 2015 £2565 13644
july 2006 6 years july 2009  july 2016 £270 9259
august 2007 6 years july 2010  july 2017 £385 335855
february 2008 6 years july 2010  july 2017 £389 47252
recycled paper 66
20 share based payments continued
ltip schemes
the vesting condition for the award of the july 2004 and october 2007 ltip schemes is average growth of ebita over the life of the ltip  if 
average ebita growth is above 25 the shares will vest fully if growth is less than 10 no shares will vest and if the average ebita growth is 
between 10 and 25 the shares vest on a straight line basis between the two percentages
the vesting condition for the award of the other ltip schemes is split 5050 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 
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
date of grant expected  exercisable exercise 2008 number
 term of options  between price outstanding  
july 2005 3 years june 2008  sept 2009 nil 230389
july 2006 3 years june 2009  june 2010 nil 245368
sept 2006 3 years june 2009  june 2010 nil 53180
oct 2007 3 years june 2010  june 2011 nil 316662
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
date of grant expected  exercisable exercise 2008 number
 term of options between price outstanding  
july 2005 325 years september 2008  february 2009 £207 29422
august 2006 325 years september 2009  february 2010 £216 22844
august 2007 325 years september 2010  february 2011 £324 179992
continued
notes
ncc group annual report and accounts 2008
shelley edmondson
group financial controller 67
20 share based payments continued
the following tables illustrate the number of share options for the schemes
 number of instruments options forfeitures number of
 instruments as  granted during exercised in in the year instruments as
scheme at 1 june 2006 the year the year  at 31 may 2007
approved emi scheme  964412  7572 62699 894141
approved emi scheme  42882    29238 13644
approved emi scheme  9259     9259
sharesave scheme 291803  2212 13114 276477
sharesave scheme 49771    12793 36978
sharesave scheme  28901   4321 24580
ltip 169118      169118
ltip 261761      261761
ltip  280553     280553
ltip  53180     53180
the weighted average share price at the time the share options were exercised in the year was £258 the weighted average share price at 
the time the share price was forfeited in the year was £281 
 number of instruments options forfeitures number of
 instruments as  granted during exercised in in the year instruments as
scheme at 1 june 2006 the year the year  at 31 may 2007
approved emi scheme  894141  729068   165073
approved emi scheme  13644      13644
approved emi scheme 9259      9259
approved emi scheme  367560   31705 335855
approved emi scheme  49117   1865 47252
sharesave scheme 276477  274405 2072 
sharesave scheme 36978  1998 5558 29422
sharesave scheme 24580    1736 22844
sharesave scheme  218389   38397 179992
ltip 169118  147831 21287 
ltip 261761    31372 230389
ltip 280553    35185 245368
ltip 53180      53180
ltip  316662     316662
the weighted average share price at the time the share options were exercised in the year was £363
the weighted average share price at the time the share options were forfeited in the year was £375
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 blackscholes 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
recycled paper 68
20 share based payments continued
the assumptions used in the model are illustrated in the table below
  fair value at   option riskfree
 grant  measurement exercise expected expected interest
 date date price volatility term rate
emi jul04 £066 £170 44 6 years 509
emi jul05 £107 £257 40 6 years 509
emi jul06 £078 £270 25 6 years 475
emi aug07 £119 £385 25 6 years 600
emi feb08 £127 £389 25 6 years 600
saye jul04 £068 £136 44 325 years 506
saye jul05 £100 £207 40 325 years 506
saye aug06 £081 £216 25 325 years 476
saye sept07 £113 £324 25 325 years 600
ltip jul04 £159 £nil 44 3 years 501
ltip sep05 £187 £nil 40 3 years 501
ltip sep05 £227 £nil 40 3 years 501
ltip jul06 £221 £nil 25 3 years 479
ltip sep06 £180 £nil 25 3 years 479
ltip oct07 £358 £nil 25 3 years 600
 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 2008 dividend yield assumed at the time of option grant is 13 2007 
16 for other option schemes dividend yield assumed at the time of option grant was 23
a charge of £934000 2007 £575000 has been made to cost of sales in the group income statement in respect of share based payment 
transactions including £192000 of provision for national insurance contributions a charge of £270000 2007 £169000 has been made 
to cost of sales in the company income statement in respect of share based payment transactions 
continued
notes
ncc group annual report and accounts 2008
mark turner
managing consultant  securet est 69
21 called up share capital
   number  
   of shares 2008 2007
    £000 £000 
authorised     
ordinary shares of 1p each   50000000 500 500
    500 500
     
allotted called up and fully paid     
ordinary shares of 1p each at the beginning of the year   32613969 326 326
ordinary shares of 1p each issued in the year   1005471 10 
ordinary shares of 1p each at the end of the year   33619440 336 326
during the year 1005471 shares were issued for total consideration of £1618000 settled in cash 
22 cash and cash equivalents
  at beginning cash flow non cash at end of
  of year  items year
  £000 £000 £000  £000
 
cash and cash equivalents per balance sheet  4377 3207 28 1142
cash and cash equivalents per cash flow statement  4377 3207 28 1142
recycled paper recycled paper 70
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
    2008 2007
    £000 £000
 
contracted    57 350
b noncancellable operating lease rentals are payable as follows
   2008                2007               
             land and  land and 
  buildings other buildings other
  £000 £000 £000 £000
     
within 1 year  84 104 14 66
in second to fifth year inclusive  569 132 499 191
  653 236 513 257
there are no contingent liabilities not provided for at the end of the financial year
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 £324000 2007 £257000 the outstanding contributions at 
the year end were £46870 2007 £42240 
for the company the pension cost charge for the year represents contributions payable by the company to the fund and amounted to 
£32000 2007 £26000 
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 £236000 2007  £239000 with rickitt mitchell and partners limited included within the charge is £178000 relating to advice 
received in connection with acquisitions made during the year ended 31 may 2008 the remaining £58000 relates to the services of the 
non executive chairman rickitt mitchell and partners limited also held 7000 10p ordinary shares 2007 7000
continued
notes
ncc group annual report and accounts 2008
nathan jackson
technical director  consultancy 71
26 fixed asset investments
     shares in group
      undertakings 
     restated
company     £000
  
at 1st june 2006     29145
increase in subsidiary investment for share based charges     405
at 31st may 2007     29550
at 1st june 2007     29550
increase in subsidiary investment for share based charges     444
at 31st may 2008     29994
during the year the company adopted ifric 11 resulting in a prior year adjustment of £405000 as shown above 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 solutions  consultancy services
ncc services limited  england and wales escrow solutions  consultancy services
ncc escrow international limited england and wales dormant
ncc group inc usa escrow solutions
ncc group employee’s trustees limited england and wales employee benefit trust
ncc group gmbh germany escrow solutions
escrow 4 software limited england and wales dormant
site confidence limited england and wales internet monitoring  load testing
secure test limited england and wales ethical security testing
escrow europe holdings bv netherlands escrow solutions
escrow europe bv netherlands escrow solutions
escrow industrial bv netherlands dormant
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 deustchland gmbh 90 germany escrow solutions
escrow europe nv 25 belgium escrow solutions
escrow europe israel limited 25 israel escrow solutions
escrow europe pty limited 25 south africa escrow solutions
deposit ab 25 sweden escrow solutions
escrow europe switzerland ag 24 switzerland escrow solutions
  
recycled paper
nathan jackson
technical director  consultancy 72
company informa tion
directors
paul mitchell – non executive chairman
rob cotton – chief executive
paul edwards – finance director
james wallace – senior non executive director
eurfyl ap gwilym – non executive director
secretary
felicity brandwood
registered office
manchester technology centre
oxford road
manchester m1 7ef
registered number
4627044
brokers and corporate finance advisers
dresdner kleinwort limited
po box 52715
30 gresham street
london ec2p 2xv
corporate finance advisers
rickitt mitchell  partners limited
clarence house
clarence street
manchester m2 4dw
auditors
kpmg audit plc
st james’ square
manchester m2 6ds
solicitors
eversheds llp
70 great bridgewater street
manchester
m1 5es
bankers
barclays bank plc
7th floor 1 marsden street
manchester m2 1 hw
registrars
equiniti
aspect house
spencer road
lancing
west sussex bn99 6da
72 ncc group annual report and accounts 2008 73
cont act us
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
email responsenccgroupcom
london office
floor 4 
tavistock house north
london
wc1h 9hr
phone 44 0 207 383 9170
fax 44 0 207 383 9179
dorking office
st martins house
st martins walk
dorking
surrey
rh4 1uw
phone 44 0 870 850 8520
fax 44 0 870 850 8521
email informationsiteconfidencecom
thame office
eastern bypass
thame
oxfordshire
ox9 3ff
united kingdom
phone 44 0 1844 210 300
fax 44 0 8709 908 423
email enquiriessecuretestcom
european offices
amsterdam office
herengracht 414 
1017 bz amsterdam 
phone 31 020 620 7151 
fax 31 020 420 1733 
email infoescroweuropecom
munich office
heimeranstrasse 37
d80339 munchen
germany
phone 49 0 89 599 7620
fax 49 0 89 599 762 599
email europenccgroupcom
north american office
usa office
1731 technology drive
suite 880
san jose
ca 95110
phone 1 408 441 4660
fax 1 408 441 4658
email usanccgroupcom
73
recycled paper wwwnccgroupcom    wwwsiteconfidencecom    wwwsecuretestcom    wwwnccgroupde    wwwnccgroupusacom    wwwescroweuropecom


Summary:
 2
increased
by 41
group revenue
financial highlights
n
 group revenue up by 41 to £357m 2007 £254m
 escrow solutions revenue up by 20 to £180m
 assurance testing revenue up by 121 to £128m
 consultancy revenue up by 7 to £49m 
n
  group adjusted operating profits up by 30 to £107m  
2007 £82m
 escrow solutions operating profits up by 28 to £102m
 assurance testing operating profits up by 127 to £17m
 consultancy operating profits up by 1 to £07m 
n
 group adjusted operating margins at 30 2007 32
n
  group adjusted pre tax profits up by 29 to £105m 
2007 £81m
n
  adjusted fully diluted earnings per share up 33 to 224p 
2007 168p
n
  final dividend proposed of 475p giving a total dividend 
of 700p up 47 from last year
acquisitions 2008
n
 two acquisitions completed and integrated in the year
  secure test a penetration and security testing business in 
august 2007 for up to £40m
  escrow europe bv in january 2008 for up to €105m  
confirming our position as the world’s largest software 
escrow provider
operating profit is adjusted for amortisation of acquired intangibles of £740000 
and exceptional costs of £711000 relating to the move to the official list and 
the costs of reorganising escrow europe’s corporate and contractual structure 
pre tax profit is adjusted for these items and the unwinding of the discount on 
the acquisitions deferred consideration of £333000 the directors believe the 
adjusted measures better reflect the ongoing performance of the business
highlights
ncc group annual report and accounts 2008