Charteris plc
Charteris House
39/40 Bartholomew Close
London EC1A 7JN
Telephone: 020 7600 9199
Facsimile: 020 7600 9212
e-mail: info@charteris.com
www.charteris.com Charteris plc Annual Report 2004
The essential bridge between business and technology Designed and produced by fourthquarter
Printed in England by Armin & Butler
Photography by Graeme Harris
Highlights 1
Chairman’s statement 2
Chief Executive’s review 4
Practice operating reviews:
–Retail, manufacturing & services 6
–Financial services & media 8
–Government, legal, utilities & energy 10
Charteris services 12
Finance Director’s review 13
Board of Directors 14
Report of the Remuneration Committee 16
Directors’ report 18
Corporate governance 20
Statement of Directors’ responsibilities 21
Independent Auditors’ report 22
Consolidated profit and loss account 23
Balance sheets 24
Consolidated cash flow statement 25
Accounting policies 26
Notes to the financial statements 28
Notice of Annual General Meeting 38
Information for shareholders 40
Business
Practical experience 
of improving business
performance and
potential through
increased operational
effectiveness and the
strategic application 
of technology.
Projects
Industry-leading
experience applied
directly to the most
challenging projects 
and programmes for
business success.
T echnology
Hands-on experience 
of the latest proven
technologies to deliver
maximum benefit 
with minimum risk.
Charteris helps leading organisations improve performance through tangible
business change and the strategic application of the latest proven technologies.
With Charteris experience makes the difference. Our skilled practitioners
bring vision, integrity and realism – providing greater value to our clients
now, and in the long term. £717k
Profit before tax and
goodwill amortisation
26%
Growth in total
cash balances
13%
Growth in revenue
Financial highlights
1
Charteris Annual Report 2004
Revenue increased by 13% to £13.8m (2002/03: £12.2m)
Excellent progress in growing half yearly revenues: 2002/03 H2 – £4.5m,
2003/04 H1 – £5.9m and H2 – £7.9m
Strong improvement in profitability with profit before tax and goodwill
amortisation of £717k (2002/03: £14k)
Profit margin before tax and goodwill amortisation increased from 2%
in H1 to 7% in H2 giving 5% for the year as a whole
Cash balances increased to £4.2m (31 July 2003: £3.3m)
Dividend maintained at 0.4p per share
2004 2003
£’000 £’000
Turnover 13,822 12,174
Profit before tax, exceptional staff costs and goodwill amortisation 717 14
Profit/(loss) before tax 541 (625)
Diluted earnings per share before exceptional
staff costs and goodwill amortisation 1.25p 0.00p
Dividend per share 0.4p 0.4p
Total cash balance 4,155 3,309 Chairman’s statement
“
I am delighted to report very positive results for the
financial year ended 31 July 2004. Throughout the year
Charteris continued to make good progress in recovering
from the market downturn and its effects on trading.
”
I am delighted to report very positive
results for the financial year ended
31 July 2004. Throughout the year
Charteris continued to make good
progress in recovering from the market
downturn and its effects on trading.
The results for the year have exceeded
market expectations, as indicated in
our trading update on 29 July 2004.
Results
T urnover in the year ended 31 July
2004 was £13.8m (2002/03: £12.2m).
The year-on-year growth of 13% was
in itself very pleasing, but the progress
can probably best be seen by looking at
the sequence of half-yearly revenues:
2002/03 H2 – £4.5m, 2003/04 H1 –
£5.9m and H2 – £7.9m.
There was a strong improvement
in profitability with profit before tax
at £541k (2002/03: a loss of £625k).
Profit before tax and the amortisation
of goodwill was £717k and on this
basis profit margins were: 5% for
the year as a whole, 2% in H1 and
7% in H2.
There was good cash generation from
operating activities. The total cash
balance at 31 July 2004 was £4.2m
(31 July 2003: £3.3m).
The Directors are recommending 
the payment of a dividend of 0.4p 
(the same as in the previous year). 
If approved, the dividend will be paid 
on 30 November 2004 to shareholders
on the register on 15 October 2004.
Strategy
The investment in business
development to broaden the base of
the business is paying off. The retail,
manufacturing and services practice
accounted for 39% of turnover
(2002/03: 29%) and the government
and legal practice for 30% (2002/03:
22%). The sectors addressed by the
financial services and media practice
remain very important to Charteris,
Revenue £’000
97 98 99 00 01 02 03 04
579
2,501
4,654
6,716
13,276
19,087
12,174
13,822
2
Charteris Annual Report 2004 position in segments where there are
opportunities for growth, the Directors
believe that the company is well placed
to continue making good progress in
the current financial year.
David Mann
Chairman
4 October 2004
“
In accordance with the three-year
strategic plan developed in 2003, our
aim is now to continue growing the
business across the broader base, focusing
on those segments of the market that
display strong growth potential.
”
but they continue to be on recovery
tracks and therefore accounted for a
smaller proportion of turnover, 31%
(2002/03: 49%); Charteris is less
dependent on these sectors than at
the time of the market downturn.
In accordance with the three-year
strategic plan developed in 2003, our
aim is now to continue growing the
business across the broader base,
focusing on those segments of the
market that display strong growth
potential. Through the practices we
can offer clients specialised services
that are based on a deep
understanding of the demands of
their particular situations, whilst also
drawing on more general experience
of business consulting, project
management and technology from
across the whole Charteris team.
Another important part of our strategy
is for Charteris to grow by acquisition
as well as organically. Our first
acquisition in 2001, The Mandelbrot
Set (International) Limited, has been
very successful. With our good trading
progress and growing cash resources,
the pursuit of other suitable
acquisition opportunities is moving
higher up our agenda.
Prospects 
The Directors consider that the very
positive results demonstrate that
Charteris is well on course at the 
end of the first year of its three-year
strategic plan. In this second year 
we are continuing to emphasise
investment in business development,
e.g. by additional key recruitment, 
and this is likely to temper short-term
improvements in profit margins.
Although the markets in which
Charteris operates generally seem
much more stable than they were 
a year ago, overall conditions remain
challenging. Nevertheless, in view
of the strengthening of Charteris’
3 Revenue by practice 2004 2003
Retail, manufacturing
& services 39% 29%
Financial services & media 31% 49%
Government, legal, 
utilities & energy 30% 22%
2004     2003
Chief Executive’s review
This has been a year of achievement for
Charteris. Emerging from the difficult
trading conditions of the previous financial
year, the business has demonstrated good
growth with improved profitability in what
has remained a tight market. 
This year we have built important new
client relationships, delivered major new
sales and developed a range of tailored
propositions for our target markets. Our
strategy of focused investment in market
sector development has been key to this
strong performance. 
The overall market for our area of
consulting services is generally reported to be
showing slow growth. However, there has
been an increased propensity to invest where
robust business cases can be established.
As a result we have seen the emergence of
opportunities in a number of specific market
areas and it is into those areas that we have
carefully and successfully concentrated our
business development activities. 
Market sector concentration
In a competitive market for consulting
services the companies that stand out
are those that grasp the business context
in which their clients are operating,
develop a complete understanding of their
business needs, and deliver a rapid and
comprehensive response to those needs.
Charteris is achieving this through the
continued development of our three
consulting practices. These practices are
carefully positioned to connect with and
respond to sector-specific opportunities,
as well as to widen the reach of the
company’s services in business consulting,
project management and technology. 
This strategy has led to a broadening and
balancing of the Group’s business base,
as can be seen from the analysis of revenue
by practice.
Revenue from our retail, manufacturing
and services practice grew by 53%
compared with the financial year ended
31 July 2003 (2002/03). In the retail sector,
the practice has further strengthened its
position through several new client
relationships, alongside the development of
existing ones. Our programme and project
management services have featured strongly
in this sector, with Business Intelligence
and Business Integration becoming
increasingly important focus areas. In
manufacturing an important contributor
was the major contract awarded by KCI
International early in 2003/04 for
implementation of a new ERP solution
across fifteen countries. 
Charteris’ reputation as experts in the
enterprise application of leading-edge
Microsoft technologies continues to grow
as we demonstrate to an ever-increasing
number of clients how these technologies
can make a difference in their businesses.
Microsoft now lists Charteris as one of
only nine companies who are “specialist
partners” in Enterprise Integration. 
Our project activities in the services sector
this year have involved us in the application
of advanced technologies to such areas as
legacy billing and administration platforms.
We believe that this experience will position
us well for attractive market opportunities
in the future. 
In the finance sector we have made good
progress in expanding into new accounts
whilst maintaining our long standing client
relationships. Midway through 2002/03
two major projects came to a successful
conclusion. This meant that in a finance
market which was still under pressure, as
we entered 2003/04 our rate of month-by-
month revenue was considerably reduced.
Over the year we increased revenues
significantly to £2.3m in the second half
of 2003/04 (2002/03 H2: £1.1m, 2003/04
H1: £2.0m). 
We have seen steady growth throughout
the year in our business consulting and
project management services, and strong
demand for our technology skill set.
Charteris Annual Report 2004
4 accreditation we achieved this year, and
through the prestigious awards won by
members of our technical team.
There is no substitute for experience – no
short cuts. In expanding our pool of very
experienced people this year we have
continued to devote considerable resources
to recruitment. Our selection processes are
very demanding and we are delighted to
find that people with impressive
capabilities and experience are being
attracted to join Charteris.
My thanks to everyone in Charteris for
their tremendously hard work in making
this year’s achievements a reality.
Business outlook
The achievements of this year provide us
with a sound platform upon which to
build in the execution of the next stage of
our strategy. Central to this strategy is our
commitment to our clients’ success and the
delivery of their business goals. As we
continue to grow, and expand further our
capacity to help solve clients’ business
problems we will ensure that we maintain
the flexibility, responsiveness and depth of
experience that are the hallmarks of
Charteris services.
David Pickering
Chief Executive
4 October 2004
“
The achievements of this year provide
us with a sound platform upon which to
build in the execution of the next stage of
our strategy. Central to this strategy is our
commitment to our clients’ success and
the delivery of their business goals.
”
New clients have been an important
factor in this. These include Butterfield
Bank where we are managing a major
core banking business change programme,
and HBOS financial services where we
are providing mentoring and technical
development services. 
The development of targeted propositions
to the finance market has also had a
marked effect on business development.
Our Portfolio Management offering which
is designed to help organisations prioritise
contending business initiatives within the
framework of their development budgets
has been well received. 
In recent months we were delighted to
be selected by the consortium led by
Australia’s largest investment bank,
Macquarie European Infrastructure Fund
to support them in a major new
infrastructure initiative in the UK.
Our government, legal, utilities and energy
practice continues to develop well, growing
by 52% compared with the previous
financial year. Our focus on National
Security and Law Enforcement has led to
an increasing number and variety of
assignments in this area. Our work with
the Cabinet Office has been a notable
contributor this year. National Security is
a market that draws on a particularly
wide range of our competencies, from
programme management using MSP
(Managing Successful Programmes) and
information security, through to technical
architecture and service management.
Charteris’ technical capability, particularly
with Microsoft .NET , has differentiated us
strongly as client-side advisers, enabling our
clients to accelerate the delivery of business
benefit within major change programmes.
We have continued to expand our work
in the health sector through engagement
on a number of NHS programmes. Over
the year we have worked in the National
Programme for IT, the Electronic Staff
Records project and the Payment by
Results initiative. We are also involved
at the interface between Primary Care
Trusts and Local Authority Social Care
Departments on the Single Assessment
Process and Integrated Children’s
Services initiatives.
Once again this year the services we
provide to the legal sector have featured
prominently. We have been instructed as
expert witnesses in commercial disputes by
a number of leading law firms. We have
also applied our strong commercial skills in
providing independent advice to clients in
the public and energy and utilities sectors
on the procurement and management of
complex IT-related service contracts.
The Charteris team
This year’s many achievements and
the return to growth and improved
profitability that these achievements
have delivered stand testament to the
commitment and dedication of
everyone in the Charteris team. 
In winning business, often in competition
with the largest consulting firms it has
been the credibility and quality of our
people that has again marked Charteris
out. It is therefore particularly gratifying 
to see this quality being recognised
formally through the ISO 9001 quality
5 “
The innovative and award-winning work
we have performed this year demonstrates the
considerable progress of the practice. The
relationships we have built and the initiatives
we have launched provide a firm foundation
for further major growth.
”
Our clients
Alstom Automation
Argos Retail Group
ASDA
AutoCascade
Bovis Lend Lease
British American Tobacco
British Computer Society
BULL Information Systems
Hewlett Packard 
IRIS Software
Jarvis Systems & Technologies
John Lewis Partnership
KCI International
Maersk Sealand
Marks & Spencer
Microsoft
Meyer International 
Patsystems
Portal Software
QSA
Sainsbury’s
Tesco
Practice operating review
Retail, manufacturing & services
During the past year we have performed
innovative work for clients across all of
our sectors, completing many complex,
large-scale projects that include some
of the most advanced solutions delivered
within our industry. In addition, we
have successfully launched several key
initiatives which will ensure the long
term success of the business. 
In the retail sector, we began engagements
with a number of new high-profile
organisations and strengthened long-
standing relationships with existing clients.
Key new clients included two major high
street retailers where we provided advanced
project and programme management skills.
These activities have enabled us to double
our revenue in the UK retail market. Our
strategy is to continue to seek new clients
within our target retail markets whilst
deepening our relationships with existing
clients, helping them to enhance their
business performance and maximise the
return on their investment in IT.
In the manufacturing sector, our recent
ERP project with KCI International, the
global manufacturer of medical devices,
is close to completion of the design and
build phase. We are now working to
enable the organisation to implement the
solution across the 15 countries in which
they operate. This major implementation
project began as an assignment to develop
an IT strategy to underpin the growth 
of their business. This relationship
demonstrates the ability of Charteris to
work across the spectrum from conception
through to completion. It also confirms
our capability to deliver enterprise
solutions in the manufacturing and
distribution sectors. This capability is at
the heart of our strategy of delivering
company-wide business integration and
transformation projects for our clients. 
Our relationship with Microsoft has gone
from strength to strength. We are currently
working with Microsoft on five major
projects across a range of market sectors and
have broadened our services to provide a
combination of technical, business and
project management consultants. In areas
such as .NET , BizT alk and SQL Server we
are now considered the partner of choice by
many. In Enterprise Integration we are one
of only nine companies listed by Microsoft
as specialist partners.
In a key project this year a joint Charteris
and Microsoft team worked with a leading
telecommunications client on a strategic
integration programme to consolidate their
UK-wide legacy billing and administration
solutions. The team delivered major
Di Mabe
Practice Head
Charteris Annual Report 2004
6 efficiencies in deployment of the .NET
application, enabling the client to
accelerate their development cycle and so
meet their deadlines to go live on time.
We were delighted to receive in
recognition for our contribution to this
project a Microsoft award for excellence
in creating an application which has had
significant impact in helping one of
Microsoft’s leading clients win customers.
We continue to maintain our formal 
joint marketing agreements with leading
organisations such as Microsoft and
BACS Limited, which provide for mutual
referral of products and client services.
The relationship with BACS will help
major BACS users plan and migrate to
the new BACSTEL-IP automated
payment system in good time before the
existing system is withdrawn next year.
The practice is poised to build on the
strong foundations created by this year’s
high-growth. A key element of our
strategy is to develop further our offerings
in business integration and transformation
for leading businesses. We will continue
to invest in our people in support of these
propositions and in the development 
of our expanding services in business
intelligence and knowledge management. 
Client: Microsoft
Consultant: Shaun Taylor
Our challenge: A key client of Microsoft had embarked on an aggressive integration
programme of consolidating their UK-wide legacy billing and administration solutions
onto a single integrated platform, central to their business. The ultimate objectives were
significant ongoing cost saving and improvement in customer service, which could only
be achieved through the mass migration of customers to this new platform.
Our solution: The joint Charteris and Microsoft team worked very closely with the
client. An early achievement was a dramatic reduction in deployment time of the .NET
application from approximately three weeks down to just a few hours. This allowed the
client to accelerate their development cycle and so meet their corporate objective of going
live on-time with this complex and business-critical solution. In line with expectations,
substantial ongoing cost-savings are now being realised. 
Graham Pattie, Communications Sector Practice Manager at Microsoft said,
“The project was complex and challenging but the Charteris team were brave enough
to make tough calls when needed, and the business benefit to our client has been
enormous. Charteris understands our technologies inside out, and they have the
quality and agility to offer a business-focused service that is second to none.”
Microsoft award
A major Microsoft award was presented to Charteris for
excellence in helping Microsoft create the application described
above which had a significant impact on assisting the end client
to win new customers. 
The award Charteris received was for the ‘.NET Hosted
Solution of the Year’ in the Certified Partner ‘Winning
Customers’ category and it was made following the evaluation
of many submissions from the Microsoft global Certified
Partner base. The practice received this award on behalf of
Charteris for its highly innovative use of Microsoft technologies
in a solution based on a .NET architecture. 
The award was presented to Charteris at the Microsoft
Worldwide Partner Conference 2004, which was held in
Toronto, Canada – the premier conference for Microsoft
Certified Partners.
Case studies
7 “
In a steadily improving market we have
increased our activities in retail banking and
built business in the insurance market. With
the new relationships created this year,
combined with our well established client
base we look forward to the new financial
year with enthusiasm.
”
Our clients
3i 
Abbey
ABN AMRO
Alchemy Partners (Guernsey)
Ansbacher & Co
APACS
Arium
Bank of New York
Barclaycard
Barclays
Butterfield Bank
Close Brothers Corporate Finance
CSFB
Financial Services Authority
Goldfish Bank
Granville Baird Capital Partners
Guardian Media Group 
HBOS Financial Services
HSA
HSBC Investment Bank
LIFFE
Lloyds TSB
Macquarie European Infrastructure Fund
Nationwide Building Society
NatWest
Northern Rock
Northern Venture Managers
Premium Credit
Reuters 
Standard Chartered Bank
SWX Swiss Exchange
UIA Insurance
William M Mercer
Practice operating review
Financial services & media
Over the year we have seen a steady
improvement in the business climate in
the financial services sector, resulting in
an increased level of activity. Financial
institutions are starting to invest more
in initiatives directed at improving
performance, profitability and regulatory
compliance. Consequently whilst the
financial services market is still
challenging we have seen some increase
in appetite for discretionary spending.
Our plan this year was to build on our
strong base within retail banking and
to develop our activities in a new sector
of the market. We have seen a robust
performance within retail banking
founded on the strength of our existing
relationships, and enhanced with the
addition of new clients such as Abbey.
Our activities in the insurance market
have also grown through the year making
this sector a substantial contributor to
our business.
We have developed offerings which are
carefully targeted on client needs. These
have proved highly effective in opening
dialogue with organisations new to
Charteris. We have been pleased to see
a number of assignments resulting
from our Business Change Portfolio
Management service offering. This has
been particularly topical as organisations
address the challenge of selecting where
to invest for maximum business return;
balancing demand with the realities of
delivery budgets and capacity. 
For Abbey we were engaged to review
the operations and processes of its
Technology Resource Planning function –
the means by which resources were
allocated to new pieces of work within the
IT portfolio of change. Our independent
review validated and enhanced the outputs
of an internal review to define an agreed
target process and associated organisation,
capability and systems.
Our technology activities have been
focused predominantly on helping
organisations implement reliably,
advanced Microsoft technologies whilst
maximising their business benefits. This
has taken the form of early adoption
projects, coaching and mentoring of
clients’ own staff and the implementation
of development methods and frameworks.
With leading insurance premium finance
house, Premium Credit Limited,
Charteris developed an Internet-based
solution for their Personal Lines and
Schemes business which is transforming
Margaret Hassall
Practice Head
Charteris Annual Report 2004 Charteris Annual Report 2004
8 the way in which the business interacts
with its clients. With HBOS financial
services we provided Microsoft .NET
mentoring and technical development
services in support of a major shared
services programme.
Our programme and project management
skills continue to be in strong demand –
particularly in support of complex
business change activities. During the
year, we were engaged by Butterfield Bank
in Bermuda to support the mobilisation
of its strategic programme to refresh its
core retail banking platform. 
We are also delighted with our recent
engagement by a consortium led by the
Macquarie European Infrastructure Fund
which has won the right to buy the Wales
and the West Gas Distribution Network
from National Grid Transco plc. We are
tasked with managing the selection and
implementation of back office IT
systems, processes and capability for
the new infrastructure company
Building on the increased activity
achieved in our markets this year, and the
traction of our market offerings we look
forward to the new financial year with
optimism and enthusiasm.
Our challenge: With more than two million customers, PCL is the UK market leader in
the provision to individuals and businesses of finance for funding insurance premiums.
PCL ’s business comes through client brokers and insurers spread across the UK.
PCL was looking to improve the service it provided to its clients, and strengthen its
competitive position, by providing finance information online, avoiding the need to issue
reports on paper and reducing the queries handled by its call centre.
Our solution: Having assisted PCL in developing a business justification for the PLaSMA
project, Charteris was selected to deliver the solution. This involved managing the entire
project, from requirements analysis to acceptance testing and handover to PCL. 
Sharon Beckett, Managing Director at PCL, said:
“Our relationships with our clients are absolutely crucial to us. We have won a number
of awards for our service quality but we do not stand still and are continually looking
for ways of improving the level of service we provide. PLaSMA is an exciting and
revolutionary new feature of that service, which gives our clients access to information
that will save them time and money.
Charteris impressed us with their overall professionalism and the range and depth of
skills they brought to the table, both from their own consultants and their business
partners. We also liked the fact that the Microsoft .NET technology, of which
Charteris is an expert provider, would allow us to bring the new system to market
with maximum speed.”
Case studies
9
Client: Premium Credit Limited
Consultant: Chris Emery
Our challenge: Butterfield Bank, Bermuda’s largest independent bank, offers a full
range of community banking services in Bermuda, Barbados and the Cayman Islands,
encompassing retail and corporate banking and treasury activities. A key element in
the bank’s strategy to reduce costs and improve service levels is a major change
initiative to implement a new platform to support retail banking activities and to
upgrade its core IT infrastructure. 
Our solution: Charteris was initially engaged to provide support to the bank during
the mobilisation phase of this major change initiative. Among a number of activities,
our team of experienced practitioners defined the programme operating model and
associated governance, assessed critical programme dependencies and risks and built
the programme plan, and established a Programme Office to provide effective support
to the bank’s Project Managers. Most importantly, working with the bank’s own 
team, we built and maintained momentum for the programme, emphasising speed 
of execution and early delivery of business benefits.
Charteris continues to be engaged by the bank, most notably in the role of 
Programme Management for the delivery of the new retail banking platform.
Client: Butterfield Bank
Consultant: Jon Watson “
Our combination of management experience
and technology understanding has enabled
considerable growth in the public sector. We
see continuing strong demand for our highly
differentiated client’s adviser services.
”
Our clients
Barlow Lyde & Gilbert
Boyes T urner
British T rade International
Cabinet Office
Centrica
Clifford Chance
CMS Cameron McKenna
Criminal Justice IT
DLA
Driving Standards Agency
DSS
Electronic Data Systems
Eversheds
Freshfields Bruckhaus Deringer
General Dental Council
Herbert Smith
ICL (UNITAS)
IMS Health
Isle of Man Government
Lovells
Masons 
Matheson Ormsby Prentice
Mayer Brown Rowe & Maw 
Nabarro Nathanson
NHS Shared Services
Olswang
Queen Elizabeth NHS T rust
Rolfe & Nolan
Scottish Enterprise
Tarlo Lyons
UKERNA
UNESCO 
Wandsworth Borough Council
Practice operating review
Government, legal, utilities & energy
The practice has continued its track
record of strong growth. The increasing
demand for our services in the public
sector is directly attributable to the rare
combination of management experience
and technology understanding found in
the Charteris team. Our experience of the
particular needs of the public sector
together with our knowledge of the
rapidly evolving technology landscape
means that Charteris is ideally placed to
fulfill the role of independent advisor to
clients who are defining, designing and
procuring information systems. We see
our success in assisting with strategic
delivery management as being the
platform for continued significant
growth in the next financial year.
Our world-class strength in the application
of Microsoft .NET technology is proving
to be an important differentiator, for
example at the Cabinet Office. Having
these skills allows us to extend beyond the
traditional client advisor role into the
delivery of technology pilots and proofs
of concept. Used in this way, technology
can enable the stakeholders in major
change programmes to gain early visibility
of the ways in which their needs will be
realised. These skills also provide a
powerful tool for accelerating the delivery
of business benefit and thereby helping
programmes retain the support of their
sponsors and customers.
Our ability to provide independent
commercial advice, based on our
considerable experience in the management
of information systems supply relationships,
is much sought-after. We have been asked
to provide independent advice to clients 
in the public sector and in the energy 
and utilities market on the procurement
and management of large and complex 
IT-related service contracts. We are
frequently asked to serve as expert 
witnesses in commercial disputes. 
We have been instructed by leading law
firms, including Barlow Lyde & Gilbert,
Boyes T urner, DLA, Eversheds, Masons 
and Nabarro Nathanson.
In central government, our business has
moved on apace. We have taken on
increased responsibilities in the Cabinet
Office and have continued to win work
at CJIT and in the national security
and law enforcement markets. We are
focussing on helping central government
departments achieve the efficiencies
required by the Gershon review.
In the NHS the experience we have gained
in contributing programme management
and IT architecture expertise to national
Graham Hygate
Practice Head
Charteris Annual Report 2004
10 programmes has given us visibility of key
issues likely to be faced by health trusts.
As they strive to maintain uninterrupted
delivery of service to the patient, trusts
need a strategy for maximising the benefit
they can gain from various current
initiatives including National Programme
for IT, Payment by Results, Agenda for
Change, Electronic Staff Records and the
renewal of NHS infrastructure. Charteris 
is well placed to provide independent
advice in this area. We were delighted to 
be awarded a framework contract with 
the health services in Wales for their
Informing Healthcare initiative.
Our work on the boundary between health
and social care has given us experience of
the many initiatives affecting both local
authorities and primary care trusts, for
example the Single Assessment Process,
Electronic Social Care Record and
Integrated Children’s Services.
Looking ahead, we see continuing strong
demand for our highly differentiated and
high-value client’s adviser services in
central government, in national security
and in health and social care.
Case studies
11
Our challenge: Having supported the Cabinet Office in the definition of a major
new piece of infrastructure to support sharing of information across government,
Charteris was invited to build a prototype report handling application to
demonstrate the potential for early delivery of business benefit.
Our solution: Our on-site information, security, service management and
programme management consultants pulled in skilled technologists from our
Microsoft technology team to carry out the prototyping under the leadership of 
one of our project managers. The prototype was developed while our consultancy
team continued to advise on the full-scale procurement. It proved to be a success 
in two ways. It helped with the specification and design of the full system and 
it helped demonstrate the value of the programme to its customers.
Client: Cabinet Office
Consultant: John Fishburn
Our challenge: Charteris consultants, most of whom have more than 20 years 
IT experience, are often instructed as expert witnesses in disputes arising from 
IT-related contracts. Much of our work is in support of mediation and arbitration,
but if a dispute goes to litigation we can provide experts who have been tested 
in the witness box. 
Our solution: Our consultants are highly valued as expert witnesses because they
bring commercial independence and recent real-world experience of their disciplines,
from programme and project management to highly technical systems and software
issues. They are practitioners, not “professional experts”. This strengthens their
credibility in court. 
“Charteris is my first port of call for expert witnesses as there is a wide range
of true expertise available to provide valuable assistance in resolving complex
technology disputes.”
(Rob McCallough, partner, Masons)
“By drawing on the real-world business knowledge of an experienced practitioner,
Charteris brought clarity and rigour to its analysis of difficult and highly contentious
issues in a major ICC arbitration.”
(Stewart Shackleton, partner, Eversheds)
“Charteris is able to put a widely experienced team on a case, who can
understand the issues quickly and take the initiative in moving them forward.
This gives me great confidence and makes it enjoyable working with them.”
(Geoff Mendelsohn, partner, Boyes Turner)
“I have no hesitation in recommending Charteris to clients. You can be guaranteed
quality service delivered in a timely manner. Their technical expertise coupled with
their knowledge of the industry and market proved to be invaluable to one of our
clients in resolving highly complex issues on a financial lines insurance policy.” 
(Sharon Daly, partner, Matheson Ormsby Prentice)
Service: Expert Witness
Consultant: Annette Hughes Charteris services
Driven by client success
“We continue to expand the Charteris
team through the recruitment of top 
flight professionals. Augmenting this 
team is our pool of Associate Consultants
which also continues to grow. Charteris
Associates are accredited to the same 
high standards as Charteris professionals.
This approach gives us a highly flexible
resourcing model, able to respond to 
a wide range of client requirements.”
“Our concentration on reliable, high
quality delivery to clients is reflected in 
the priority we place on the development
of quality processes and procedures.
The award of ISO 9001 certification
marks therefore the achievement of a 
vital goal. The effort and investment we
have made in achieving this standard
demonstrates how seriously we take our
commitment to quality.”
Our commitment across all Charteris
Practices is to deliver success for our clients. 
We focus on understanding the business
context in which our clients operate.
This enables us to work more closely with
them, applying our skills and experience
to help establish the most appropriate
goals – and then to achieve them. The
versatility of the Charteris team means
that we can respond with agility and
deliver rapid results, reliably.
Charteris helps leading organisations
improve performance through tangible
business change and the strategic application
of the latest proven technologies. As
Charteris grows, we continue to take greater
responsibility for solving our clients’
problems in our three main service areas.
• Business: practical experience of
improving business performance and
potential through increased operational
effectiveness and the strategic
application of technology.
• Projects: industry-leading experience
applied directly to the most
challenging projects and programmes
for business success.
• Technology: hands-on experience of
the latest proven technologies to deliver
maximum benefit with minimum risk.
In all these areas it is the experience of
our people that makes Charteris
distinctive. Our professional standards are
high and the team includes some of the
most skilled practitioners in business and
information technology. The reputation
of Charteris is a major asset in attracting
outstanding candidates to join the team. 
As a company and as a team, we have a
passion for results and a reputation for
delivery. This reputation has been built
on a commitment to quality in all that
we do. We have a rigorous framework
for our operations, which means that in
the diverse assignments undertaken by
Charteris we can commit to and assure
high quality of delivery. This year the
Charteris Quality Framework was
accredited to ISO 9001:2000. 
Charteris Annual Report 2004
12
Mary McIhone
Head of Human Resources
Karen Field
Head of Operations
Professional staff
Principal Consultant  41%
Senior Consultant 18%
Principal T echnologist 7%
Senior Developer 33%
Developer 1% Finance Director’s review
Margin development
A core objective of our three-year
strategy is to improve margin, restoring
the business’ historic profitability. 
I am pleased to say that these results
demonstrate good progress towards this
objective. Profit before tax and goodwill
amortisation stands at 5% of revenue
(2002/03: 0% profit before tax, goodwill
and exceptional items). Profit margin
before tax and goodwill amortisation has
developed well from just above breakeven
in 2002/03 to 2% in the first six months
of this financial year and then 7% in
the second half of the year.
The margin improvement was based on
steady growth in demand for our services,
improved utilisation of our own staff and
a gradual increase in average fee rates in
certain areas of our business. We started
recruiting in the first quarter of the year
and have increased the proportion of
revenue generated by our own staff
compared with external associates and
sub-contractors. As a result, other
external charges (which include project
expenses) have decreased by 16%. This
has had a positive impact on margin, as
we typically generate a higher gross
margin on our own staff.
Administrative expenses have risen by
25%, mainly reflecting our investment
in recruitment activities. Recruitment
spend was £212k in 2003/04, comparing
with £66K last year. We also invested
in other activities, such as ISO 9001
accreditation, to support our strategy.
Cash generation
The Group’s cash performance has been
very strong and our cash balance at 
31 July 2004 was £4.2m, compared with
£3.3m last year. Cash generated by
operating activities was £1.2m. The
Group’s debtor days were steady at 49
at 31 July 2004 (2002/03: 49).
We received a corporation tax refund of
£142k (2002/03: payment of £300k) and
paid a dividend of £158k (2002/03:
£161k). Capital expenditure increased,
mainly as a result of the purchase of
equipment for new joiners, to £94k
(2002/03: £43k). On 1 August 2003 the
Company lent the Charteris plc General
Employee Benefit T rust (the T rust) £126k
which it used, together with cash in the
Trust, to purchase 952,000 ordinary
shares in the Company at 15.5p each.
Financial instruments
The Group is financed through
shareholder funds, retained earnings
and a £1.1m (2002/03: £1.3m)
mortgage. The Group has an agreed
overdraft facility with The Royal Bank
of Scotland plc of £250k (2002/03:
£250k), which has not been used.
The Group manages its treasury position
by placing surplus cash on short-term
deposit. The Group does not use
derivative instruments and continues to
conduct all of its business in sterling.
International accounting standards
Recent proposals from the London Stock
Exchange in relation to the AIM rules
suggest that International Financial
Reporting Standards (IFRSs) will become
mandatory for AIM companies for
accounting periods beginning on or after
1 January 2006. Under these proposals
the Group’s first reporting year to which
IFRSs would apply would be 2006/07,
using restated comparatives for 2005/06.
The Directors therefore currently expect
to implement IFRSs in full in 2006/07.
Marsali Harwood
Finance Director
4 October 2004
“
A core objective of our three-year strategy
is to improve margin, restoring the business’
historic profitability. I am pleased to say that
these results demonstrate good progress
towards this objective.
”
13 Directors
David, aged 60, spent most of
his career with Logica where he
became Group Chief Executive
and finally Deputy Chairman
before leaving the group in
1994. As well as being one of
the founders of Charteris, he 
is a Non-Executive Director 
of Aveva Group(Official List),
Non-Executive Chairman of
Flomerics Group (AIM) and 
a Non-Executive Director of
Ansbacher Holdings and Room
Solutions. He is a Past President
of the British Computer Society
and a Past Master of the
Worshipful Company of
Information T echnologists.
Cliff Preddy
Non-Executive Deputy Chairman
David Pickering
Chief Executive
Paul Biddle
Non-Executive Director
Cliff, aged 57, joined Charteris
in 1996 as founding Chief
Executive. Earlier in his career
he spent 27 years with Logica,
including nine years as an
Executive Director on the
Logica plc Board. He is also 
a Non-Executive Director of
Computacenter plc (Official
List), CODASciSys plc (AIM)
and Acquisition Accounting
Limited (a holding company
for TAH Limited).
David, aged 50, is an
experienced business director
with a track record in leading
service-based businesses to
achieve major growth. He
became Chief Executive of
Charteris in 1999 having
joined the company in 1997
as Business Development
Director. Before joining
Charteris he led a number 
of Logica’s UK businesses.
Latterly he was Director of the
Energy & Utilities Division,
which grew rapidly into one
of the company’s largest
operating units.
Paul, aged 59, joined Charteris
as a Non-Executive Director 
in August 2000. A Chartered
Accountant, he has previously
been Finance Director of the
UK business of Digital
Equipment & Xerox
Corporation. From 1994 to
2000 he was Chief Financial
Officer of NatWest’s Retail 
& Commercial Businesses. 
In 2001 he joined Jarvis plc 
as Chief Executive of a newly
formed Systems & T echnology
Division. Paul is currently
Director of Finance of the Royal
Surrey County Hospital T rust
David Mann
Non-Executive Chairman
Charteris Annual Report 2004
14 Marsali Harwood
Finance Director 
Chris Rees
Executive Director
Alan Woodward
Executive Director
Marsali, aged 37, joined
Charteris as Finance Director
in October 2000. She is a
Chartered Accountant with
strong commercial interest and
experience in technology
businesses. From 1992 to 1996
she worked with Logica, latterly
as Finance Manager of four of
the UK divisions. She then
joined Sony UK Ltd, where she
was responsible for developing
business and relationships with
digital broadcasters. Marsali has
an Honours degree in Politics,
Philosophy and Economics
from Oxford University.
Chris, aged 60, is one of the
founder directors of Charteris,
Chris also practises as
consultant to financial
institutions and as an expert
witness in IT disputes. His
clients include APACS, ABN
AMRO, Barclays Bank, LIFFE
and Reuters. Previously he 
was Partner in Charge of the
Financial Institutions IT
Practice at Deloitte Consulting.
Before that he was Managing
Director of Logica Software
Products Ltd. His earlier career
was spent with IBM and Dun
& Bradstreet.
Alan, aged 42, spent the first
half of his career working in
government where he became
internationally recognised for
his innovative technical
developments. He then joined
Logica in 1990 where he
undertook a variety of roles
involving technical, commercial
and business management,
including overseas operations,
following which he joined
Charteris in 1997. He is a
Chartered Engineer, a Fellow
of the British Computer Society
as well as being a fellow and
member of various other
learned institutions.
15 Charteris Annual Report 2004
16
REMUNERATION
The Chairman of the Remuneration Committee is Cliff Preddy. David Mann and Paul Biddle are the other members. The
committee meets at least twice a year. It makes recommendations to the Board on all elements of the remuneration framework
for the Executive Directors and our most senior employees, and also determines and approves their specific remuneration
packages. The committee determines and approves any contract of employment with Executive Directors and our most senior
employees, and agrees any termination arrangements in the event of early termination. It also makes recommendations
concerning share option schemes and other share-related and long term incentive schemes, approves awards under such
schemes and specifies any performance criteria that should apply.
The objective of the Remuneration Committee is that Executive Directors should receive compensation which is appropriate to
their responsibilities and performance and which will attract, motivate and retain executives of the right calibre. The comparator
group for remuneration purposes comprises companies and partnerships in the management consultancy and IT fields, matched
to Charteris by reference to sectors and the growth and size characteristics of the business.
The Executive Directors have guaranteed remuneration that is primarily determined by the time spent on the business development
and general management of the Company. In addition, they are paid bonuses, which are dependent upon the financial performance
of the Company and individual time billed to consultancy clients. Aggregate remuneration built up from these elements will be at the
level of a notional full time salary, if financial targets and/or individual consultancy billing targets are achieved. However, dependent
upon the extent of such achievement, aggregate remuneration may exceed or fall short of the notional full time salary.
Guaranteed remuneration for the Non-Executive Directors consists of their Directors’ fees.
Directors’ remuneration
For the year ended 31 July 2004 the total remuneration was as follows:
Money Money 
purchase purchase 
FixedVariable pension T otal FixedVariable pension T otal
remuneration remuneration Remuneration contributions remuneration remuneration remuneration Remuneration contributions remuneration 
2004 2004 2004 2004 2004 2003 2003 2003 2003 2003
David Mann 40,000 – 40,000 – 40,000 49,567 – 49,567 – 49,567 
Cliff Preddy 40,000 – 40,000 – 40,000 49,412 – 49,412 – 49,412 
David Pickering* 151,470 85,054 236,524 18,922 255,446 137,650 7,073 144,723 11,575 156,298 
Paul Biddle 15,917 – 15,917 – 15,917 15,912 – 15,912 – 15,912 
Marsali Harwood 93,962 46,423 140,385 11,231 151,616 42,508 2,816 45,324 3,639 48,963 
John Millar 17,413 111,971 129,384 10,400 139,784 31,781 70,814 102,595 8,207 110,802 
Chris Rees 26,576 163,667 190,243 – 190,243 31,781 108,639 140,420 – 140,420 
Alan Woodward 100,000 93,680 193,680 15,494 209,174 106,080 4,834 110,914 8,875 119,789 
Joanne Stimpson ––––– 60,361 – 60,361 – 60,361 
Total 485,338 500,795 986,133 56,047 1,042,180 525,052 194,176 719,228 32,296 751,524 
*Highest paid Director
John Millar resigned his directorship on 31 March 2004 in order to focus on consultancy assignments for Charteris clients and
his remuneration in FY2004 is shown up to that date. Marsali Harwood was on maternity leave from 17 October 2002 to 6
May 2003 and Joanne Stimpson was interim Finance Director in her absence.
SERVICE AGREEMENTS AND LETTERS OF APPOINTMENT
Each of the Executive Directors has a rolling service agreement that may be terminated by either party giving six months’ notice.
The agreements with the Non-Executive Directors may be terminated with six months’ notice given by either party in the case
of David Mann and Cliff Preddy and three months notice by either party in the case of Paul Biddle.
SHARE OPTION SCHEMES
Existing Unapproved Scheme
The Company adopted an unapproved option scheme (the Existing Unapproved Scheme) on 20 April 1998 under which
options over 5,787,000 shares were later granted to certain team members and Directors of which 640,333 remain exercisable.
No options have been granted under the scheme since 1 August 2000 and none will be granted in future.
EMI Scheme
The Company adopted an Enterprise Management Incentive Scheme on 24 October 2000. Financial targets may be imposed
that must be satisfied before any options granted can be exercised. Options over 2,126,811 shares remain exercisable or
potentially exercisable under this scheme.
Report of the Remuneration Committee 17
Unapproved Scheme
The Company adopted an Unapproved Scheme on 24 October 2000. Financial targets may be imposed that must be satisfied
before any option granted can be exercised. Options over 100,889 shares remain potentially exercisable under this scheme.
Approved Scheme
The Company adopted an Approved Share Option Scheme on 21 November 2001. The Company may issue share options
under this scheme to its employees within the prescribed limits of £30,000, or four times the employee’s salary, whichever is the
lower. Options will not be exercisable within three years or after ten years from the date of grant. Options over 187,000 shares
remain potentially exercisable under this scheme.
General Employee Benefit Trust
At key points in the development of Charteris the Directors have felt it appropriate to establish special incentives for key
members of management, sales staff and team members. In such cases, whenever possible, they have sought to match the
associated option grants with existing shares held by a General Employee Benefit Trust (the Trust) that was established in March
2000. The Trust initially subscribed for a total of 1,500,000 Ordinary Shares in the Company and later purchased an additional
1,020,781 existing shares in the market.
1,050,000 of the Trust’s shares were linked to EMI share options granted under a pre-existing incentive scheme to selected team
members on 3 December 2001 at a price of 18.57p per share. As at 31 July 2004 127,200 shares had been used by the Trust in
satisfaction of share option exercises under these arrangements and options over 323,600 shares had lapsed, leaving options over
599,200 shares outstanding.
Two additional grants of EMI share options were later made, each linked to trust shares and with performance conditions based
upon the achievement of the strategic plan over the three-year period ending 31 July 2006. These grants were over 695,000
shares on 25 July 2003 at 18p and a further 568,000 shares on 14 October 2003 at 28p.
The EMI options linked to shares held by the Trust are included in the total for the EMI Scheme disclosed above. 
At 31 July 2004 the Trust held 2,393,581 shares and the remaining 531,381 shares in the Trust can potentially be used to satisfy
other exercises of options.
Limits on issue of new shares
The maximum number of new Ordinary Shares issued or issuable by the Company under the EMI Scheme, the Unapproved
Scheme and the Approved Scheme during the ten-year period commencing on 24 October 2000 is limited to 15% of the
Company’s issued share capital. As at 31 July 2004 options had been granted over a total of 978,589 shares that were not
specifically matched by existing shares held by the Trust, representing 2.3% of issued share capital. 
Directors’ share options
Certain of the Directors have rights to acquire ordinary shares in the Company by the exercise of options. The grants have been
made subject to performance conditions based upon significant growth in revenue or profit during a performance period. These
conditions determine the percentage of the options granted that may be exercised. Details of these options are set out below,
including the number of options that may now be exercised, where the relevant performance period has been completed.
Name Number of shares Exercise price Grant date Date exercisable Expiry date
Alan Woodward 300,000 18.57p 31 March 2000 31 March 2003 31 March 2007
David Pickering 20,233 26.57p 28 July 2000 28 July 2003 28 July 2007
David Pickering 61,111 27p 4 December 2002 4 December 2005 4 December 2012
Marsali Harwood 60,000 25p 19 December 2002 19 December 2005 19 December 2012
David Pickering 38,889 25p 19 December 2002 19 December 2005 19 December 2012
David Pickering 250,000 28p 14 October 2003 14 October 2006 14 October 2013
Marsali Harwood 140,000 28p 14 October 2003 14 October 2006 14 October 2013
Alan Woodward 180,000 28p 14 October 2003 14 October 2006 14 October 2013
No share options were exercised during the year.
Cliff Preddy
Chairman of the Remuneration Committee
4 October 2004 Charteris Annual Report 2004
18
The Directors present their annual report and the audited financial statements for the year ended 31 July 2004.
PRINCIPAL ACTIVITY
The principal activity of the group is to provide consultancy services which help clients improve business performance and
create new business opportunities through the effective application of information technology.
BUSINESS REVIEW
A review of the development of the business during the year is given in the Chairman’s and Chief Executive’s statements on
pages 2 to 5. This also includes reference to the Company’s future prospects.
RESULTS AND DIVIDENDS
The results for the year are set out on page 23.
The Directors recommend that a dividend of 0.4p per share is payable. This will absorb £0.2m leaving a retained profit for the
financial year of £0.2m which will be transferred to reserves. If approved, the dividend will be paid on 30 November 2004 to
eligible shareholders on the register at close of business on 15 October 2004.
SHARE CAPITAL
Details of share capital are given in note 17 to the financial statements on page 35.
DIRECTORS AND THEIR INTERESTS
The Directors who held office during and at the end of the financial year had the following interests in the ordinary shares of
the Company (all the interests are beneficial unless indicated otherwise): 
Ordinary Shares of 1p each Ordinary Shares of 1p each
31 July 2004 1 August 2003
David Mann 5,642,220 5,642,220
David Mann (as trustee without beneficial interest) 3,696,000 3,696,000
Cliff Preddy 5,438,220 5,438,220
Cliff Preddy (as trustee without beneficial interest) 3,600,000 3,600,000
David Pickering 3,359,566 3,359,566
John Millar (resigned as Director 31 March 2004) 3,359,566 3,359,566
Alan Woodward 459,566 459,566
Chris Rees 4,400,000 4,400,000*
Paul Biddle 110,074 60,074
Marsali Harwood 27,013 14,513
*Chris Rees’ holding was understated by 23,000 in last year’s Directors’ report due to one of his nominee holdings being
recorded within a broker account.
All of the Directors are regarded as having an interest in the 531,381 ordinary shares held by the trustees of the Company’s
employee benefit trust which are not subject to option agreements (1 August 2003: 883,581 ordinary shares).
Information in relation to Directors’ share options is provided in the Report of the Remuneration Committee.
TRANSACTIONS WITH DIRECTORS
There were no transactions with Directors during the period.
Directors’ report 19
SIGNIFICANT SHAREHOLDINGS
At the time of approving the financial statements, the Directors had been notified that the following persons had interests
amounting to 3% or more in the issued voting share capital of the Company.
Percentage of issued
Number of Ordinary Shares ordinary share capital
David Mann 9,338,220 22.30%
Cliff Preddy 9,038,220 21.58%
Chris Rees 4,400,000 10.51%
David Pickering 3,359,566 8.02%
John Millar 3,359,566 8.02%
Baring Trustees (Guernsey) Ltd* 2,393,581 5.72%
Victory Capital Ltd 1,600,000 3.82%
*These are the shares held by the Company’s employee benefit trust.
CREDITOR PAYMENT POLICY AND PRACTICE
It is the Group’s policy to abide by the payment terms agreed with suppliers whenever it is satisfied that the supplier has
provided the goods and services in accordance with the agreed terms and conditions. The trade creditor payment days
outstanding for the Group as at 31 July 2004 reduced to 34 days (2003: 43 days).
POLITICAL AND CHARITABLE CONTRIBUTIONS
During the year ended 31 July 2004 the Group contributed a total of £750 (2003: £1,575) to support various charities.
The Group made no political donations.
POST BALANCE SHEET EVENTS
There are no material post balance sheet events in the Group.
INTRODUCTION OF THE EURO
All relevant parts of the Group will be able to handle euro transactions when required.
SHARE PRICE
The share price at 31 July 2004 was 25p. The highest and lowest share price in the year was 32.5p and 14.5p respectively.
AUDITORS
In accordance with Section 384 of the Companies Act 1985, a resolution for the reappointment of Baker Tilly is to be
proposed at the forthcoming Annual General Meeting.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held in London on 29 November 2004. The formal notice of meeting is set out on
pages 38 and 39.
By order of the Board
Marsali Harwood
Secretary
4 October 2004 Charteris Annual Report 2004
20
The Board of Directors is accountable to shareholders for the good corporate governance of the Group. The principles of
corporate governance and a code of best practice are set out in the Combined Code. Under the rules of the Alternative
Investment Market (AIM) the Group is not required to comply in full with the Code nor to state where it derogates from it.
The Board considers that the size and nature of the Group does not warrant compliance with all the Code’s requirements.
This statement sets out how the principles of the Code are applied to Charteris plc. The Revised Combined Code applies to
reporting years beginning on or after 1 November 2003. The Board has reviewed the extent to which it complies already, and
has taken the small number of steps necessary to continue to maintain appropriate compliance with this new code for the
period commencing on 1 August 2004.
BOARD OF DIRECTORS
The Non-Executive Chairman of the Company is David Mann. David Pickering is the Chief Executive and is responsible for the
day to day running of the Group. In total the Board comprises four Executive Directors and three Non-Executive. Paul Biddle is
an Independent Non-Executive Director. It is considered that this gives the necessary mix of industry specific and broad business
experience necessary for the effective governance of the Group. The Board meets regularly, normally on a monthly basis.
AUDIT COMMITTEE
The Audit Committee is chaired by Paul Biddle and comprises the Non-Executive Directors, with the Finance Director and
external auditors generally in attendance. Paul Biddle, as a Chartered Accountant and Director of Finance of the Royal Surrey
County Hospital Trust, provides current financial experience.
The remit of the Committee is to review: 
the appointment and performance of the external auditors;
the audit fee and nature and scope of the audit;
the interim and final report and accounts;
the external auditors’ management letter and management’s response;
the systems of risk management and internal controls;
operating, financial and accounting policies and practices
and to make related recommendations to the Board. The Audit Committee meets at least three times a year.
The Audit Committee undertakes a formal assessment of the auditors’ independence each year which includes a review of 
non-audit services provided to the Group and the related fees and discussion with the auditors about any relationships with
the group or its directors that could affect their independence or the perception of independence.
REMUNERATION COMMITTEE
The Remuneration Committee is chaired by Cliff Preddy and comprises the Non-Executive Directors. A report from the
Remuneration Committee is set out on pages 16 and 17.
RISK COMMITTEE
It is currently part of the responsibility of the Audit Committee to address risk. The Board intends to establish a separate Risk
Committee when it considers that the scale and nature of the Group’s business warrant that.
INTERNAL FINANCIAL CONTROL
The Board is ultimately responsible for the Group’s system of internal financial control and for reviewing its effectiveness. 
The Group maintains a comprehensive process of financial reporting. The annual budget is reviewed and approved before
being formally adopted. The Board receives financial reports of the Group’s performance compared to budget and prior years
with explanations of significant variances. In addition monthly reforecasts are presented to the Board.
The effectiveness of the Group’s internal financial controls is the responsibility of the Audit Committee. The maintenance and
constant improvement of these controls is the responsibility of the Finance Director. The external auditors review the internal
financial controls in so far as they are relevant to expressing their audit opinion and report to the Audit Committee on their
findings where appropriate.
GOING CONCERN
After making enquiries, the Directors have formed a judgement at the time of approving the financial statements that there is 
a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the
foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.
Corporate governance 21
Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of
the state of affairs of the Company and of the Group and of the profit or loss of the Group for that year. In preparing those
financial statements, the Directors are required to:
select suitable accounting policies and apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed subject to any material departures disclosed and
explained in the financial statements;
prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will
continue in business for the foreseeable future.
The Directors confirm that the financial statements comply with the above requirements.
The Directors are also responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies
Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
The Directors are also responsible for the maintenance and integrity of the Charteris plc website.
Statement of Directors’ responsibilities Charteris Annual Report 2004
22
We have audited the financial statements on pages 23 to 37.
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state
to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report,
or for the opinion we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable
law and United Kingdom Accounting Standards are set out in the Statement of Directors’ responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
United Kingdom Auditing Standards. 
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ report is not consistent 
with the financial statements, if the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration
and transactions with the company is not disclosed. 
We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial
statements. This other information comprises only the Directors’ report, the Chairman’s statement, the Chief Executive’s
review, the Report of the Remuneration Committee, the Finance Director’s review and the Corporate Governance statement.
We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies
with the financial statements. Our responsibilities do not extend to any other information.
BASIS OF OPINION
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the 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 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.
OPINION
In our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group at
31 July 2004 and of the Group profit for the year then ended and have been properly prepared in accordance with the
Companies Act 1985.
Baker Tilly
Registered Auditor
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST
4 October 2004
Independent Auditors’ report
to the members of Charteris plc 23
2004 2003
Notes £’000 £’000
Turnover 1 13,822 12,174
Other external charges 3 2,790 3,320
Staff costs 4
–exceptional – 464
– other 9,085 7,828
Depreciation 120 128
Goodwill amortisation 176 175
Administrative expenses 1,169 935
13,340 12,850
Operating profit/(loss) before goodwill amortisation and exceptional staff costs 658 (37)
Goodwill amortisation (176) (175)
Exceptional staff costs – (464)
Operating profit/(loss) 482 (676)
Interest receivable 123 119
Interest payable and similar charges 2 (64) (68)
Profit on ordinary activities before taxation, goodwill amortisation
and exceptional staff costs 717 14
Goodwill amortisation (176) (175)
Exceptional staff costs – (464)
Profit/(loss) on ordinary activities before taxation 3 541 (625)
Taxation 5 (220) 117
Profit/(loss) on ordinary activities after taxation and for the financial year 321 (508)
Dividends proposed 6 (158) (158)
Retained profit/(loss) for the year 18 163 (666)
Earnings/(loss) per share 7
Basic 0.81p (1.26)p
Diluted 0.81p (1.26)p
Basic before amortisation of goodwill and exceptional staff costs 1.26p 0.00p
Diluted before amortisation of goodwill and exceptional staff costs 1.25p 0.00p
Turnover and operating profit/(loss) all derive from continuing operations.
No separate statement of total recognised gains and losses has been presented as all such gains and losses have been dealt
with in the profit and loss account.
Consolidated profit and loss account
for the year ended 31 July 2004 Charteris Annual Report 2004
24
Group Company
2003 2003
2004 (restated) 2004 (restated)
Notes £’000 £’000 £’000 £’000
Fixed assets
Intangible assets 9 2,954 3,130 – –
Tangible assets 10 2,557 2,583 2,557 2,583
Investments 11 1 1 251 251
5,512 5,714 2,808 2,834
Current assets
Debtors 12 2,950 1,723 2,950 1,723
Cash at bank and in hand 4,155 3,309 4,155 3,309
7,105 5,032 7,105 5,032
Creditors: Amounts falling due within one year 13 (4,020) (2,160) (4,055) (2,195)
Net current assets 3,085 2,872 3,050 2,837
Total assets less current liabilities 8,597 8,586 5,858 5,671
Creditors: Amounts falling due after more than one year 14 (947) (1,092) (947) (1,092)
Provisions for liabilities and charges 15 (25) (32) (25) (32)
Net assets 7,625 7,462 4,886 4,547
Capital and reserves
Called up share capital 17 419 419 419 419
Share premium account 18 2,544 2,544 2,544 2,544
Merger reserve 3,284 3,284 – –
Other reserves 18 19 19 19 19
Profit and loss account 18 1,560 1,397 2,105 1,766
ESOP reserve 18 (201) (201) (201) (201)
Equity shareholders’ funds 19 7,625 7,462 4,886 4,547
Approved by the board on 4 October 2004
David Pickering
Director
Balance sheets
31 July 2004 25
2003
2004 (restated)
Note £’000 £’000
Cash flow from operating activities 20a 1,201 (1,093)
Returns on investments and servicing of finance
Interest received 123 119
Interest paid (63) (67)
Net cash inflow from returns on investments and servicing of finance 60 52
Taxation 142 (300)
Capital expenditure and financial investment
Purchase of tangible fixed assets (94) (43)
Sale of tangible fixed assets – 76
Net cash (outflow)/inflow from capital expenditure and financial investment (94) 33
Equity dividends paid (158) (161)
Cash inflow/(outflow) before use of liquid resources and financing 1,151 (1,469)
Management of liquid resources
(Increase)/decrease in term bank deposits (474) 1,528
Net cash (outflow)/inflow from management of liquid resources (474) 1,528
Financing
Issue of ordinary share capital – 5
Repayment of mortgage loan (156) (156)
Purchase of own shares (149) (1)
Sale of own shares – 21
Net cash outflow from financing (305) (131)
Increase/(decrease) in cash in the year 372 (72)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2004 2003
Note £’000 £’000
Increase/(decrease) in cash in the year 372 (72)
Cash outflow from change in debt 156 156
Cash outflow/(inflow) from increase/(decrease) in liquid resources 474 (1,528)
Change in net funds resulting from cash flows 1,002 (1,444)
Amortisation of loan arrangement fees (1) (1)
Movement in net funds in the period 1,001 (1,445)
Opening net funds 2,058 3,503
Closing net funds 20b 3,059 2,058
Consolidated cash flow statement
for the year ended 31 July 2004 Charteris Annual Report 2004
26
BASIS OF ACCOUNTING
The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting
standards.
The following accounting policies are consistent with those used in previous years except with regard to accounting for the
employee benefit trust. This change, which is explained in note 8, is to comply with UITF Abstract 38 “Accounting for
ESOP Trusts”, which is applied to the financial statements for the first time. The comparative figures have been restated
where appropriate.
BASIS OF CONSOLIDATION
The Group financial statements consolidate those of Charteris plc and its subsidiary undertaking made up to 31 July 2004.
Subsidiaries acquired during the year are consolidated using the acquisition method. Their results are incorporated from the
date that control passes. 
PURCHASED GOODWILL
Goodwill representing the excess of the purchase price compared with the fair value of net assets acquired is capitalised and
written off evenly over its estimated useful economic life. The useful economic life is the period over which the directors
estimate that the value of the underlying business acquired is expected to exceed the value of its identifiable net assets. 
TANGIBLE FIXED ASSETS
Depreciation is provided on all tangible fixed assets other than freehold land at rates calculated to write each asset down to its
estimated residual value evenly over its expected useful life, as follows:-
Freehold buildings over 50 years
Leasehold premises over the lease term
Fixtures and fittings over 4 to 5 years
Office equipment over 2 years
INVESTMENTS
Fixed assets investments are stated at cost less any provisions for permanent diminution in value.
EMPLOYEE BENEFIT TRUST
The Group operates an employee benefit trust which holds shares in the Company. The Group records the assets and liabilities
of the trust as its own. In accordance with UITF Abstract 38, own shares held are deducted in arriving at shareholders’ funds
and included in a separate negative reserve described as an “ESOP reserve”.
FOREIGN CURRENCIES
Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the
profit and loss account.
DEFERRED TAXATION
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have
occurred at the balance sheet date. Timing differences are differences between the Group’s taxable profits and its results as stated
in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in
which they are recognised in the financial statements. 
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are
expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date.
Deferred tax is measured on a non-discounted basis.
Accounting policies
for the year ended 31 July 2004 27
OPERATING LEASES
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are
charged to the profit and loss account on a straight line basis over the lease term.
FINANCE COSTS
The costs relating to the obtaining of loan finance are amortised through the profit and loss account at a constant periodic
rate. Loans are included in the balance sheet at the amount received from the lender less the unamortised costs.
PENSIONS
The Group contributes to the personal pension plans of certain employees or to the Group’s personal pension plan. The
Group’s contributions are charged to the profit and loss account as they become due.
TURNOVER
Turnover represents the invoiced value, net of Value Added Tax, of services provided to clients except in respect of fixed price
contracts where turnover represents the sales value of work done in the year. Provision is made for all foreseeable losses on
fixed price contracts. 1 SEGMENTAL INFORMATION
The Group’s operations were all based in the United Kingdom.
The Group’s turnover was made to the following geographical markets:
2004 2003
£’000 £’000
United Kingdom 12,823 11,966
Europe (excluding United Kingdom) 464 192
North America 511 16
Asia 24 –
13,822 12,174
2 INTEREST PAYABLE AND SIMILAR CHARGES
2004 2003
£’000 £’000
On bank loans and overdrafts 63 65
Amortisation of loan finance costs 1 1
Other interest – 2
64 68
3PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION
2004 2003
£’000 £’000
Profit/(loss) on ordinary activities before taxation is stated after charging:
Operating lease rentals in respect of land and buildings – 3
Other external charges represent project costs including expenses and fees payable to associates and subcontractors.
Amounts payable to Baker Tilly by the Group in respect of both audit and non-audit services are set out below:
2004 2003
£’000 £’000
Services as auditors 24 24
Further assurance services
– interim procedures 5 5
Tax services
– compliance services 6 6
– advisory services 6 11
Other services 4 4
45 50
Notes to the financial statements
for the year ended 31 July 2004
Charteris Annual Report 2004
28 4EMPLOYEES
2004 2003
No. No.
The average monthly number of persons (including Directors) employed
by the Group during the year was:
Management 8 9
Consultants 76 75
Administration 5 5
89 89
2004 2003
£’000 £’000
Staff costs for the above persons:
Wages and salaries 7,521 6,988
Social security costs 963 786
Other pension costs 601 518
9,085 8,292
Included in staff costs above are exceptional staff costs of £Nil (2003: £463,578) being redundancy costs.
2004 2003
£’000 £’000
Directors’ remuneration
Emoluments 986 719
Money purchase pension contributions 56 32
Total emoluments 1,042 751
Details of Directors’ remuneration during the year are set out in the Report of the Remuneration Committee on page 16.
Directors’ remuneration disclosed above includes total emoluments earned by the highest paid Director during the year ended
31 July 2004 of £255,446 (2003: £156,298), which included money purchase pension contributions of £18,922 (2003: £11,575).
The Group’s pension costs include money purchase pension contributions for four Directors (2003: four).
29 5TAXATION
2004 2003
£’000 £’000
Current tax:
UK corporation tax on results of the year 239 (141)
Overprovision in prior year (1) (2)
Total current tax 238 (143)
Deferred tax:
Origination and reversal of timing differences (18) 26
Total deferred tax (18) 26
Tax on profit/(loss) on ordinary activities 220 (117)
Factors affecting tax charge for the year:
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The differences are explained below:
2004 2003
£’000 £’000
Profit/(loss) on ordinary activities before tax 541 (625)
Profit/(loss) on ordinary activities multiplied by the standard rate of
corporation tax in the UK of 30% (2003: 30%) 162 (188)
Effects of:
Expenses not deductible for tax purposes
– goodwill amortisation 53 53
– depreciation on assets not eligible for capital allowances 13 9
– other expenses 10 11
Capital allowances in excess of depreciation (13) (8)
Other timing differences 31 (18)
Benefit of small companies rate (17) –
Adjustment to tax charge in respect of prior years (1) (2)
Current tax charge/(credit) for the year 238 (143)
Factors that may affect future tax charges:
The lack of tax deductibility for goodwill amortisation will continue to affect the tax charge of future years until such time
as the goodwill has been fully amortised.
6 DIVIDENDS
2004 2003
£’000 £’000
Proposed dividend of 0.4p (2003: 0.4p) 158 158
Dividends payable to the trustee of the Group’s employee benefit trust are waived under the terms of the trust deed; the amount
of the proposed dividend so waived is £9,574 (2003: £9,574).
Notes to the financial statements continued
for the year ended 31 July 2004
Charteris Annual Report 2004
30 7 EARNINGS/(LOSS) PER SHARE
The calculations of earnings/(loss) per share are based on the following profits/(losses) and numbers of shares.
2004 2003
£’000 £’000
Profit for the financial year before goodwill amortisation
and exceptional staff costs 497 1
Goodwill amortisation (176) (175)
Exceptional staff costs (net of tax relief) – (334)
Profit/(loss) for the financial year 321 (508)
2004 2003
No. of No. of
shares shares
Weighted average number of shares ’000 ’000
For basic earnings/(loss) per share 39,480 40,289
Dilutive effect of share options 187 –
For diluted earnings/(loss) per share 39,667 40,289
The weighted average number of shares for the purposes of basic earnings/(loss) per share excludes those owned by the Group’s
employee benefit trust.
8 PRIOR YEAR ADJUSTMENT
On 15 December 2003, the UITF published Abstract 38 “Accounting for ESOP T rusts” which superseded Abstract 13 and
amended Abstract 17. It is effective for periods ending on or after 22 June 2004 so the new requirements have been adopted in
the preparation of these financial statements.  The Abstract requires own shares held through an ESOP trust to be deducted in
arriving at shareholders’ funds and recommends the creation of a separate negative reserve, which has been described as an “ESOP
reserve”. The comparative figures in the balance sheet and cash flow statement have been restated to reflect this new policy; there
has been no effect on the profit and loss account for the current or previous year. Net assets and fixed asset investments have been
reduced by £201,000 as at 31 July 2004 and as at 31 July 2003 as a result of this new policy.
9 INTANGIBLE FIXED ASSETS
Purchased
goodwill
Group £’000
Cost:
1 August 2003 and 31 July 2004 3,510
Amounts written off:
1 August 2003 380
Charged in the year 176
31 July 2004 556
Net book value:
31 July 2004 2,954
31 July 2003 3,130
On 31 May 2001, the Group acquired 100% of the issued share capital of The Mandelbrot Set (International) Limited.
The goodwill is being written off over its estimated useful economic life of 20 years.
31 10 TANGIBLE FIXED ASSETS
Fixtures
Freehold and Office
property fittings equipment Total
Group and Company £’000 £’000 £’000 £’000
Cost:
1 August 2003 2,495 310 320 3,125
Additions – 3 91 94
31 July 2004 2,495 313 411 3,219
Depreciation:
1 August 2003 105 160 277 542
Charged in the year 31 45 44 120
31 July 2004 136 205 321 662
Net book value:
31 July 2004 2,359 108 90 2,557
31 July 2003 2,390 150 43 2,583
11 FIXED ASSET INVESTMENTS
Listed
investments
Group £’000
Cost:
1 August 2003 (restated) and 31 July 2004 5
Amounts written off:
1 August 2003 and 31 July 2004 4
Net book value:
31 July 2004 1
31 July 2003 (restated) 1
Notes to the financial statements continued
for the year ended 31 July 2004
Charteris Annual Report 2004
32 11 FIXED ASSET INVESTMENTS continued
Shares in Listed
subsidiary investments Total
Company £’000 £’000 £’000
Cost:
1 August 2003 (restated) and 31 July 2004 250 5 255
Amounts written off:
1 August 2003 and 31 July 2004 – 4 4
Net book value:
31 July 2004 250 1 251
31 July 2003 (restated) 250 1 251
Shares in Subsidiary
On 31 May 2001, the company acquired 100% of the issued ordinary share capital of The Mandelbrot Set (International)
Limited (“TMS”) whose business was the provision of information technology professional services.
On 1 August 2001, the trade and net assets of TMS were hived up to Charteris plc at their book value and TMS paid a
dividend of all its distributable reserves. No adjustment was made to the carrying value of the Company’s investment in its
subsidiary, as there had been no loss to the Group because the trade and net assets had been retained within the Group. The
Directors consider that the policy that the Company adopted was necessary in order for the financial statements to give a true
and fair view. This represents a departure from the Companies Act and the Company’s accounting policy, which requires fixed
asset investments to be stated at cost less any provisions for permanent diminution in value. If a provision had been made it
would have required £215,000 to be written off the cost of the investment through the Company’s profit and loss account
(this would have had no effect on the consolidated profit and loss account).
12 DEBTORS
Group and Company
2004 2003
£’000 £’000
Due within one year:
Trade debtors 2,676 1,285
Other debtors 46 26
Corporation tax recoverable – 141
Prepayments and accrued income 217 271
2,939 1,723
Due in more than one year:
Deferred tax asset 11 –
2,950 1,723
The deferred tax asset comprises the tax effect of general timing differences of £56,000 less accelerated capital allowances of
£45,000. At 31 July 2003, there was a provision for deferred tax which is disclosed in note 15.
33 13 CREDITORS – AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Bank loans (see note 14) 149 159 149 159
Trade creditors 505 142 505 142
Amounts owed to subsidiary undertaking – – 35 35
Corporation tax 273 – 273 –
Other taxation and social security 855 374 855 374
Other creditors 616 513 616 513
Accruals and deferred income 1,464 814 1,464 814
Proposed dividend 158 158 158 158
4,020 2,160 4,055 2,195
14 CREDITORS – AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group and Company
2004 2003
£’000 £’000
Bank loans 947 1,092
The bank loans are secured by a legal mortgage over the freehold property and a mortgage debenture on the fixed and floating
assets of the Group. The loans are repayable by instalments, with interest being charged at base rate plus 1.5%, as follows:
Group and Company
2004 2003
£’000 £’000
In less than one year 149 159
Between one and two years 157 168
Between two and five years 544 556
In five years or more 246 368
1,096 1,251
15 PROVISION FOR LIABILITIES AND CHARGES
Group and Company
Dilapidation Deferred
costs taxation Total
£’000 £’000 £’000
1 August 2003 25 7 32
Transfer to profit and loss account – (7) (7)
31 July 2004 25 – 25
Dilapidation costs reflect provision for the cost of returning leased premises to the conditions in which they were first occupied
and are expected to be fully utilised by 31 July 2005.
Notes to the financial statements continued
for the year ended 31 July 2004
Charteris Annual Report 2004
34 16 FINANCIAL INSTRUMENTS
All the Group’s financial assets and liabilities are designated in sterling.
The Group had cash balances on deposit at 31 July 2004 of £4,155,000 (2003: £3,309,000) which were earning interest at
variable market rates.
Details of the Group’s secured bank loans are given in note 14.
There is no material difference between the fair value of borrowings and other financial assets and their book value at the
balance sheet date.
Details of the Group’s policy with regard to the management of financial instruments is given in the Finance Director’s
review on page 13.
17 SHARE CAPITAL
2004 2003
£’000 £’000
Authorised:
100,000,000 Ordinary Shares of 1p each 1,000 1,000
Allotted, issued and fully paid:
41,873,514 Ordinary Shares of 1p each 419 419
Share options
The Company has granted options, which remain exercisable, to subscribe for Ordinary Shares of 1p each, as follows:
Subscription Number of shares for which 
price per share Period within which rights are exercisable
Grant date £ options are exercisable 31.7.04 1.8.03
31.03.2000 0.19 31.03.2003 – 31.03.2007 300,000 300,000
28.07.2000 0.27 28.07.2003 – 28.07.2007 340,333 383,833
31.01.2001 1.27 31.01.2004 – 31.01.2011 – 47,431
24.10.2001 0.84 24.10.2004 – 24.10.2011 10,000 170,000
29.10.2001 0.84 29.10.2004 – 29.10.2011 54,000 61,000
14.06.2002 0.95 14.06.2005 – 14.06.2012 75,000 75,000
04.12.2002 0.27 04.12.2005 – 04.12.2012 125,611 129,111
19.12.2002 0.25 19.12.2005 – 19.12.2012 98,889 98,889
14.10.2003 0.28 14.10.2006 – 14.10.2013 2,000 –
13.11.2003 0.23 13.11.2006 – 13.11.2013 187,000 –
1,192,833 1,265,264
In addition to the options disclosed above, the EBT has granted options to employees over shares held by the EBT. Details of
these options are disclosed in note 18.
35 18 RESERVES
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Share premium:
1 August 2003 2,544 2,540 2,544 2,540
Premium on allotment during year – 4 – 4
31 July 2004 2,544 2,544 2,544 2,544
Other reserve:
1 August 2003 19 2 19 2
Premium on options exercised for EBT shares – 17 – 17
31 July 2004 19 19 19 19
Profit and loss:
1 August 2003 1,397 2,063 1,766 2,257
Retained profit/(loss) for year 163 (666) 339 (491)
31 July 2004 1,560 1,397 2,105 1,766
ESOP reserve:
1 August 2003 (restated) (201) (55) (201) (55)
Purchase of own shares by ESOP – (150) – (150)
Options exercised for EBT shares – 4 – 4
31 July 2004 (201) (201) (201) (201)
Own shares
The Group has established a General Employee Benefit Trust (“EBT”) which owned 2,393,581 ordinary shares of 1p each at
1 August 2003 and 31 July 2004. The market value of these shares at 31 July 2004 was £598,395. At 31 July 2004, there were
599,200 (2003: 815,000) outstanding options for employees to acquire shares from the EBT at 18.57p per share, 695,000
(2003: 695,000) at 18p per share and 568,000 (2003: 568,000) at 28p per share.
The report of the remuneration committee on page 17 gives further information regarding the EBT.
19 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS’ FUNDS
Group Company
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Profit/(loss) for the financial year 321 (508) 497 (333)
Dividends (158) (158) (158) (158)
163 (666) 339 (491)
New share capital issued net of costs – 11 – 11
Deferred share consideration in respect of acquisition – (6) – (6)
Purchase of own shares by ESOP – (150) – (150)
Exercise of share options to acquire shares held by ESOP – 21 – 21
Net addition to/(reduction in) equity shareholders’ funds 163 (790) 339 (615)
Opening equity shareholders’ funds (as previously stated) 7,663 8,307 4,748 5,217 
Prior year adjustment (note 8) (201) (55) (201) (55)
Opening equity shareholders’ funds (as restated) 7,462 8,252 4,547 5,162
Closing equity shareholders’ funds 7,625 7,462 4,886 4,547
Notes to the financial statements continued
for the year ended 31 July 2004
Charteris Annual Report 2004
36 20 CASH FLOWS
2004 2003
£’000 £’000
aReconciliation of operating profit/(loss) to net cash inflow/(outflow) from operating activities
Operating profit/(loss) 482 (676)
Depreciation 120 128
Profit on disposal of fixed assets – (12)
Amortisation of goodwill 176 175
Amounts written off investments – 1
(Increase)/decrease in debtors (1,323) 2,066
Increase/(decrease) in creditors 1,746 (2,774)
Decrease in provisions – (1)
Net cash flow from operating activities 1,201 (1,093)
At At
1 August Other 31 July
2003 Cash flow changes 2004
£’000 £’000 £’000 £’000
b Analysis of net funds
Cash in hand, at bank 387 372 – 759
Bank deposits 2,922 474 – 3,396
3,309 846 – 4,155
Debt due within 1 year (159) 156 (146) (149)
Debt due after 1 year (1,092) – 145 (947)
Total 2,058 1,002 (1) 3,059
21 PENSION COMMITMENTS
The Group contributes to personal pension plans of certain employees. The pension cost charge represents contributions
payable by the Group and amounted to £601,000 (2003: £518,000). Contributions totalling £94,874 (2003: £52,979) were
payable at the year end and are included in creditors.
22 COMPANY PROFIT AND LOSS ACCOUNT
As permitted by s230 Companies Act 1985, the Company has not presented its own profit and loss account.
37 Notice is given that the Annual General Meeting of Charteris plc will be held at Charteris House, 39/40 Bartholomew Close,
London on Monday 29 November 2004 at 11.00am for the following purposes:
To consider and, if thought fit, pass the following resolutions as ordinary resolutions in the case of resolutions 1 to 7 and
special resolutions in the case of resolutions 8 and 9.
ORDINARY RESOLUTIONS 
1. THAT the report of the Directors and the accounts for the year ended 31 July 2004 be received and considered.
2. THAT a dividend for the year ending 31 July 2004 of 0.4p per Ordinary Share, as recommended by the Directors,
be declared, the record date for such dividend having been fixed by the Directors as 15 October 2004.
3. THAT Baker Tilly be and they are hereby re-appointed as auditors of the Company to hold office from the conclusion
of this meeting until the conclusion of the next general meeting at which accounts are laid before the Company at a
remuneration to be fixed by the Directors of the Company from time to time (the “Directors”).
4. THAT Cliff Preddy, who pursuant to the articles of association of the Company (the “Articles”) has retired by rotation
and is eligible for re-election, be re-elected as a Director of the Company.
5. THAT Chris Rees, who pursuant to the Articles has retired by rotation and is eligible for re-election, be re-elected as a
Director of the Company.
6. THAT David Pickering, who pursuant to the Articles has retired by rotation and is eligible for re-election, be re-elected as
a Director of the Company.
7. THAT in substitution for any existing such authority the Directors be and they are hereby generally and unconditionally
authorised for the purposes of section 80 of the Companies Act 1985 (the “Act”) to exercise all the powers of the
Company to allot relevant securities (within the meaning of section 80(2) of Act) of the Company up to an aggregate
nominal amount of £418,735 provided that the powers granted by this authority shall expire (unless previously renewed,
varied or revoked by the Company in general meeting) on the conclusion of the next general meeting of the Company at
which statutory accounts are laid after the passing of this resolution (the “Section 80 Period”) save that the Company may,
prior to the expiry of the Section 80 Period, make an offer or agreement which would or might require relevant securities
to be allotted after the Section 80 Period and the Directors may allot relevant securities in pursuance of such offer or
agreement as if the authority hereby conferred had not expired.
SPECIAL RESOLUTIONS
8. THAT in substitution for any existing such authority the Company be and it is hereby generally and unconditionally
authorised to make market purchases (within the meaning of section 163(3) of the Companies Act 1985) of Ordinary
Shares of 1 pence each provided that:
i. the maximum number of Ordinary Shares hereby authorised to be acquired is 1,256,205 (representing 3 per cent of
the Company’s issued ordinary share capital);
ii. the minimum price which may be paid for any such share is the nominal value (exclusive of expenses); 
iii. the maximum price (exclusive of expenses) which may be paid for any such share is an amount equal to 105 per cent
of the average of the middle market quotations for an Ordinary Share as derived from the London Stock Exchange
Daily Official List for the 5 business days immediately preceding the day on which the share is contracted to be
purchased; and
iv. the authority hereby conferred shall expire 12 months from the date of this Resolution or, if earlier, at the conclusion
of the Annual General Meeting of the Company in 2004, except that a contract of purchase may be made before such
expiry which will or may be executed wholly or partly thereafter, and a purchase of shares may be made in pursuance
of any such contract.
Notice of Annual General Meeting
Charteris Annual Report 2004
38 9. THAT the Directors be and hereby empowered:
a. pursuant to section 95 of the Act to allot equity securities (within the meaning of section 94(2) of the Act) for cash
as if section 89(1) of the Act did not apply to such allotment; and
b. to sell any relevant shares in the Company if immediately before such sale the shares were held by the Company as
treasury shares notwithstanding that section 89(1) may otherwise apply to the sale of such relevant shares;
provided that this power:
i. shall be limited to:
1. the allotment of equity securities pursuant to rights issues, open offers and other pre-emptive offers but subject
to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with the legal
or practical problems under the laws or requirements of any regulatory or other authority in any jurisdiction;
2. otherwise than pursuant to paragraph 1 above, the allotment of further equity securities up to an aggregate
nominal value of £20,937; and
ii. shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the end of the
Section 80 Period (in this resolution, referred to as the “Section 95 Period”) but so that the Company may, at any
time prior to the expiry of the Section 95 Period make an offer or agreement which would or might require equity
securities to be allotted or treasury shares sold after the expiry of the Section 95 Period and the Directors may allot
equity securities or sell treasury shares in pursuance of such offer or agreement as if the authority hereby conferred
had not expired.
By order of the Board
Marsali Harwood
Secretary
Registered office: Charteris House, 39/40 Bartholomew Close, London, EC1A 7JN
4 October 2004
NOTES:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and on a poll to
vote instead of him/her. A proxy need not be a member of the Company. A form of proxy is provided with this notice
and instructions for its use as shown on the form. To be valid, completed forms must be received at the office of the
Company’s registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU not less than
48 hours before the time fixed for the meeting. Deposit of the form of proxy will not prevent a member attending the
meeting and voting in person. If someone else signed the form on your behalf, you or that person must send the power of
attorney or other written authority under which it is signed (or a notarially certified copy of such power or authority) to
the Company’s registrars at the above address.
2. The following documents are available for inspection at the registered office of the Company during normal business
hours on each weekday (public holidays excluded) and at the place of the Annual General Meeting for 15 minutes prior
to and during the Meeting:
a. The register of Directors’ (and their families’) interests in the shares of the Company; and
b. Copies of the Directors’ service contracts.
39 Charteris Annual Report 2004
40
Information for shareholders
FIVE YEAR RECORD
2004 2003 2002 2001 2000
Revenue (£’000) 13,822 12,174 19,087 13,276 6,716
Profit before tax, goodwill and exceptional items (£’000) 717 14 1,758 863 371
Profit/(loss) before tax (£’000) 541 (625) 1,588 828 371
Cash at year end (£’000) 4,155 3,309 4,909 3,807 1,099
Net funds at year end (£’000) 3,059 2,058 3,503 2,273 1,099
No. staff at year end 99 84 107 104 46
Net current assets (£’000) 3,085 2,872 3,500 2,660 856
Shareholders funds (£’000) 7,625 7,462 8,252 7,637 920
Basic earnings per share before goodwill amortisation
and exceptional costs 1.26p 0.00p 3.37p 1.87p 0.86p
Basic earnings/(loss) per share 0.81p (1.26)p 2.89p 1.76p 0.86p
Diluted earnings per share before goodwill
amortisation and exceptional costs 1.25p 0.00p 2.91p 1.61p 0.85p
Diluted earnings/(loss) per share 0.81p (1.26)p 2.50p 1.52p 0.85p
FINANCIAL CALENDAR
The Annual General Meeting will be held at Charteris House, 39/40 Bartholomew Close on 29 November 2004
Interim statements for the half year ended 31 January will be issued to shareholders in late March or early April
Preliminary results for the year ended 31 July will be announced in October
Annual reports will be posted to shareholders in late October or early November
INVESTOR RELATIONS
Our Corporate website at www.charteris.com has an investor relations section. Our interim and annual reports can be
downloaded from the site. We welcome any input as to how this website can be improved and made more informative
for our shareholders.
We like to hear from our shareholders and David Mann, David Pickering and Marsali Harwood are pleased to receive calls
or respond to emails (david.mann@charteris.com, david.pickering@charteris.com and marsali.harwood@charteris.com).
Registered office:
Charteris House, 39/40 Bartholomew Close, London, EC1A 7JN
Nominated broker and nominated adviser:
KBC Peel Hunt Ltd, 111 Old Broad Street, London, EC2N 1PH
Principal bankers:
The Royal Bank of Scotland plc, Floors 8 & 9, 280 Bishopsgate, London, EC2M 4RB
Registrars:
Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
Financial PR:
Biddick Associates, Mercury House, Triton Court, 14-18 Finsbury Square, London, EC2A 1BR  Designed and produced by fourthquarter
Printed in England by Armin & Butler
Photography by Graeme Harris
Highlights 1
Chairman’s statement 2
Chief Executive’s review 4
Practice operating reviews:
–Retail, manufacturing & services 6
–Financial services & media 8
–Government, legal, utilities & energy 10
Charteris services 12
Finance Director’s review 13
Board of Directors 14
Report of the Remuneration Committee 16
Directors’ report 18
Corporate governance 20
Statement of Directors’ responsibilities 21
Independent Auditors’ report 22
Consolidated profit and loss account 23
Balance sheets 24
Consolidated cash flow statement 25
Accounting policies 26
Notes to the financial statements 28
Notice of Annual General Meeting 38
Information for shareholders 40
Business
Practical experience 
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Industry-leading
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T echnology
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With Charteris experience makes the difference. Our skilled practitioners
bring vision, integrity and realism – providing greater value to our clients
now, and in the long term. Charteris plc
Charteris House
39/40 Bartholomew Close
London EC1A 7JN
Telephone: 020 7600 9199
Facsimile: 020 7600 9212
e-mail: info@charteris.com
www.charteris.com Charteris plc Annual Report 2004
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