Report and Accounts 2004 Contents
1 Highlights
2 Our business
5 Chairman’s statement
6 Chief Executive’s statement
10 Finance Director’s review 
Sector review
15 Highways
16 Property
19 Rail
20 Water
22 Gas
Housing
25 Education
Waste
26 Mouchel Parkman plc Board
27 Mouchel Parkman Group Executive
28 Directors’ report
31 Corporate governance
34 Remuneration report
39 Auditors’ report
42 Group Profit and Loss Account
43 Group Balance Sheet
44 Parent Company Balance Sheet
45 Group Cash Flow Statement
46 Statement of Total Recognised Gains and Losses
Reconciliation of Movements in 
Shareholders’ Funds
47 Notes to the financial statements
72 Five year financial summary
Mouchel Parkman is a professional support services group. We help
clients in the public sector and regulated industry to provide better
everyday services to customers and communities. Our rare combination
of professional, commercial and technical expertise enables them to
improve their strategy, services, people and asset management. Highlights
Group turnover up 22% from £223.6 million to £271.9 million;
Profit before tax, exceptional items and the amortisation of goodwill 
up 43% from £13.5 million to £19.4 million;
Adjusted earnings per share:
before exceptional items and goodwill amortisation, up by 61% 
to 14.5p; and
before exceptional items, goodwill amortisation and tax relief on
providing options to employees under share incentive schemes, 
up by 40% to 12.6p;
Profit before tax of £10.1 million and basic earnings per share of 
7.2p after exceptional items of £7.5 million (2003: £1.0 million) and 
the amortisation of goodwill of £1.8 million (2003: £0.9 million);
Forward order book of £850 million;
Significant sales success in core and incubator market sectors;
£2.5 million in annual cost savings secured; and
Merger integration completed successfully. Our purpose
We help our clients to provide better everyday services to
customers and communities. We provide employees with
security and an environment in which they can develop –
professionally and personally. And, as a company listed on
the London Stock Exchange, we continually work to create
value for the benefit of our shareholders.
Our strategy
We aim to win and retain long-term managed services
contracts, using our consultancy services to initiate and
develop relationships with clients.
Managed services contracts are particularly attractive to us
because they provide a reliable flow of work. This means we
can allocate resources in the most effective way, providing
clients with efficient and effective services and enabling us 
to achieve better margins.
Consultancy plays a pathfinder role for us, gaining clients and
developing our experience and capabilities in new areas.
We operate principally in the UK, working with clients in the
public sector and regulated industry.
Our markets 
We are active in eight sectors – highways, water, property,
rail, housing, education, gas and waste. Clients in these 
areas own or operate a significant asset base requiring:
• Complex operational management
• High maintenance and development expenditure
• Improved performance and efficiency
• New solutions for strategy, management and funding
Our services 
Our expertise enables clients to:
• Develop and implement strategy
• Optimise and manage assets and services
• Enhance the skills and performance of people
Our managed services work is typically based on long-term
contracts of between three and 25 years. Activities include
the management of road networks, public buildings, rail
infrastructure, homes, schools and utilities.
Our consultancy teams deliver management consultancy;
project management; and asset management advice to clients.
Our people
We intend to increase the scale of our organisation significantly,
maintaining recent annual growth rates. This rapid growth is
necessary if we’re to achieve our financial objectives.
We believe the calibre and commitment of our people
determines our success as a business. We have an open
style of management that bonds the aspirations and
development of our staff with our aspirations and
development as a company.
Our values
• We value responsibility – we keep the promises we make 
to colleagues and clients, and don’t make excuses
• We value teamwork – we support each other, share ideas 
and don’t accept behaviour that excludes colleagues
• We value integrity – we treat people fairly, are open and
honest in everything we do and don’t accept hidden agendas
• We value innovation – we want to be inventive and
imaginative, and don’t allow convention or dullness 
to get in our way
• We value respect – we recognise the talents and aspirations
of others, and don’t dismiss their views
• We value delivery – we are responsive and enthusiastic,
and don’t accept the failure to perform
These are not just words – they underpin the way we manage
the business and all of our people know that we stand by our
values all the time. Our values and the way we manage the
business are the key differentiators for Mouchel Parkman.
Our business
Mouchel Parkman intends to become the leading professional
support services company in its chosen markets. We describe
our objectives and approach below.
Mouchel Parkman Report and Accounts 2004 2   Chairman’s statement
Performance 
The first year for Mouchel Parkman has been very successful.
We have produced excellent results – operating profit* up 
by 47%, turnover up by 22% and a forward order book of
£850 million at the end of July.
We are really pleased with these results, especially as they have
been achieved during a year when two sets of people, systems
and resources became one. But perhaps more important is
the strong platform that we have now created for the future.
Our corporate planning process has identified ambitious
financial objectives for the Group. These are nevertheless
realistic, grounded in a sure sense of what Mouchel Parkman
can achieve, in light of the opportunities that exist in our
markets and the strong demand that continues to exist 
for our services.
Market consolidation 
Looking at the dynamics in our markets, consolidation continues
with a number of our competitors joining forces since our merger
in an attempt to provide more scale on the supply-side. On
the client-side, more organisations are placing larger contracts
with fewer providers for longer periods of time. The Highways
Agency (HA) has taken this path for some time; local authorities
and some water companies are now following suit, supporting
the principal rationale for our merger.
It’s great news that we have won some large contracts this
year, and can see opportunities to win many more. Forming
the right relationships with contractors and partners is
important for our future; the merger has given us the mass
and credibility to be able to align with the very best players.
The Board and senior management
Looking inside the Company, we have an excellent management
team in place under the leadership of Richard Cuthbert and
Kevin Young. The successful merger integration and the
Company’s performance this year underline how good our 
top people are.
* Before exceptional items and goodwill amortisation
During the year Jim Harding stood down, after 24 years service
with Mouchel, as did Richard Archer who was forced to resign
through ill-health. It is with great sadness that we report that
Richard subsequently passed away on 27 August 2004 after
a long battle against cancer. Richard was the driving force
behind the recent rise of Parkman, and his energy, personality
and advice are greatly missed. Jim was at the helm during
Mouchel’s transition from a traditional consultancy to a support
services provider and we wish him well in his new ventures.
Good corporate governance is a priority for us. Although we
have the right procedures in place to protect the interests of
our stakeholders, we constantly review and update these to
ensure best practice as the Group develops and expands.
This may include further strengthening of our Board in the
coming year.
Richard Preece stood down on 18 October 2004 as Company
Secretary after 16 years’ outstanding service to Parkman 
and through the first year of the combined Group. We are
delighted that his replacement is Amanda Massie, who joined
us from Atkins.
Looking ahead
After a very exciting and successful 12 months for the Group, 
I’m now looking forward to what comes next. Of course, there
are challenges ahead. But the progress we have made this
year confirms to me that this is a robust company, with strong
leadership, excellent people and many opportunities to grow
and develop. We’ve set ourselves ambitious targets and 
I have every confidence that we can achieve them.
Richard Benton
Chairman
Mouchel Parkman’s first year has been tremendously exciting. 
A huge amount was achieved and there has been significant
change in most of our markets. Richard Benton, Chairman,
assesses our performance and the opportunities that lie ahead.
Mouchel Parkman Report and Accounts 2004 5 Mouchel and Parkman announced an intention to join forces
on 21 August 2003. We have achieved pretty much everything
we set out to do in our first year. We completed our integration
programme on time; met our financial objectives; and created
a new and dynamic force in the market.
Everyone here has played their part in getting us to where we
are. I thank them on behalf of the Board, not just for their hard
work but also for their belief. We have tried hard to create a
culture and working environment in which everyone can flourish
and realise their ambitions. We think we are well on the way.
So does the independent assessor from Investors in People
(IiP) who visited us in July – she interviewed people throughout
the organisation and found that the “level of excitement is
almost tangible”.
The process of putting two fast growing and successful
businesses together has been exciting and rewarding. Our
integration programme, Project One, comprised 16 separate
sub-projects. These included the ‘hard’ – new systems and
processes – and the ‘soft’ – issues that would influence the
way we do things in Mouchel Parkman. We also identified
four critical areas of risk facing us in 2003/4. These, and 
our responses to them, are central to an understanding 
of our performance.
1. We needed to keep the business moving forward, in spite
of our internal challenges
The demands of the merger could have distracted us from
the fundamentals, particularly developing client relationships
and winning new business. We were aware of the need to
keep looking outward, rather than focusing too much on
internal issues. As a result, we have kept the top line moving,
we have grown the order book and we have increased what
was already a very healthy pipeline of new opportunities.
We secured new commissions in the year, in both our core
and incubator sectors. These included:
• Two social housing management contracts, each for seven
years, for the London Borough of Hackney
• Commissions for the DfES to project manage the feasibility
of three new City Academies
• An eight year contract supporting Alcatel in replacing the
signalling for the Jubilee and Northern Lines for the Tube
Lines consortium
• Four managed services contracts in the water industry, some
for up to ten years, to provide operational management
services to Thames Water, Southern Water, Scottish Water
and Severn Trent Water
• The first contract let by the Highways Agency to recruit 
and train its Traffic Officers
• Six long-term highways contracts in partnership with
Cornwall County Council, the Corporation of London, the
London Boroughs of Bexley and Richmond-upon-Thames,
Leeds City Council and the City of Westminster. The last of
these is a local authority Managing Agent Contractor-style
(MAC-style) contract which we secured in joint venture with
Balfour Beatty – the first of what we believe will be a trend
in this type of procurement.
Our existing clients have also reaffirmed their satisfaction,
enabling us to maintain a 100% record in securing managed
service contract extensions. Extensions in the year included:
• Ealing and Wiltshire highways
• Wiltshire and Bedfordshire property
• North Yorkshire ‘bundled’ services
2. We needed to keep staff on board
Anxiety amongst staff is inevitable during major change. 
We opted to address reorganisation and redundancy issues
quickly to minimise uncertainty. We also communicated openly
about our plans. In the end, relatively few full-time posts were
redundant as a result of the merger. And of course we
continue to welcome new staff to the Group through
recruitment and transfer.
The vast majority of our people have shown great support for
the new company, confirming our expectation that the cultures
of Mouchel and Parkman would combine well in a new group.
Chief Executive’s statement
Successfully integrate two companies, deliver significant growth
and improve profitability. That was the expectation in 2003/4.
Richard Cuthbert, Chief Executive, outlines our progress in the
year and assesses our prospects.
Mouchel Parkman Report and Accounts 2004 6 Chief Executive’s statement
3. We needed to establish an effective and co-ordinated
programme of integration for our support systems
Some of the activities within Project One were focused 
on the transformation of business critical processes and
infrastructure. We completed all of these on time and to
budget, so that by the end of our first year, and in some
cases by April 2004, we had in place:
• A single IT platform and technical support team, organisation
and management
• A company-wide finance system
• A set of technical and project management procedures
across quality management, environmental management
and health and safety
• New employment terms and conditions and a new
performance management and appraisal system for 
all employees.
4. We needed to ensure a successful transition for recent
acquisitions and major contract wins
A number of important new contracts and several acquisitions
were secured in the run up to the merger. These had to perform
in line with expectations in their first year, in circumstances that
had not previously been anticipated. As a result of the care
we devoted to this issue, GEL, Atkins Odlin and LDA all
performed well this year.
Our joint venture with Liverpool City Council, 2020 Liverpool
Limited, started on 1 October 2003 and has performed
exceptionally well. We have already developed an identity in
the city, enabling us to attract fresh talent to help us satisfy the
demand for infrastructure improvement works in Liverpool in
the run up to its European Capital of Culture status in 2008.
Finally, our most recent MAC contract with the Highways
Agency, in Cumbria and North Lancashire (Area 13), had 
a very good first year and is another success for the
AmeyMouchel joint venture.
The next phase – core market sectors
Highways
As AmeyMouchel, we are arguably the Highways Agency’s
leading provider of maintenance management services. On the
capital works side, we are already involved in two of the new
Early Contractor Involvement (ECI) schemes and more may
follow. There is also the prospect of major motorway widening
projects. Our leadership of the Active Traffic Management project
on the M42 in the West Midlands is giving us excellent
experience in the application of technology to increase
highway capacity.
We confirmed our pre-eminent position with local authorities
during 2003/4. Our strategic alliances with Hertfordshire and
Wiltshire County Councils went from strength to strength. Our
track record and long list of reference sites puts us in a strong
position for future opportunities. These include second and
even third generation outsourcing contracts in the shire counties,
along with first generation contracts in London and the
metropolitan areas. The signs are that at least some of these
contracts will offer highways as part of a large bundle of
outsourced services. Some could be MAC-style contracts.
Property
We are now market leader in the local authority sector and
expect further growth. Our teams have brought a noticeable
improvement to customer service delivery in both Surrey and
Hertfordshire in the first 12 months of those contracts. The
Building Schools for the Future (BSfF) initiative promises to
dramatically increase investment in secondary school
infrastructure, and we are exploring opportunities to develop
local education partnerships with LEAs in joint venture with
other providers. Our continuing success in the Academies
procurement and project management programme is adding
to our credibility for BSfF.
Rail
We have a good, balanced portfolio of work, with long-term
structures inspection and assessment contracts with Network
Rail and long-term signalling work for London Underground.
We are well positioned for further expansion but, in spite of
the massive spend in the sector, this market remains uncertain,
and we wait to see how Network Rail’s developing plans will
affect us long-term. 
Water
We had a tremendous year, securing valuable long-term asset
management contracts with some of the major water companies
and increasing turnover by over 30%. The outsourcing trend
looks set to continue and opportunities to undertake capital
scheme design work will increase as we formally enter the
new asset management cycle – Asset Management Plan 4
(AMP4). We will increase our scale and market share through
acquisition should the right opportunity present itself.
Incubator market sectors
Our incubator sectors currently represent about 10% of our
turnover. Our objective is for at least one incubator to become
a core market sector. Our approach is to establish a profitable
consultancy business as a forerunner to developing managed
services contracts. We have achieved this in all four sectors now.
Mouchel Parkman Report and Accounts 2004 7 Chief Executive’s statement
Mouchel Parkman Report and Accounts 2004 8
Our team of management consultants provides advice on
infrastructure projects and services across all of our markets,
together with thought leadership. This helps us to set the
agenda for our clients and identify new opportunities for the
Group. The team has again been successful, working primarily
in our incubator sectors.
Gas
National Grid Transco (NGT) is leading the further transformation
and restructuring of the UK gas industry. Through GEL, we
have been able to play a part in this process, supporting
Macquarie Bank in its successful bid for the Wales and West
regional gas distribution network. We expect more opportunities
to flow from this process both before and after the formal
transfer of assets to the new private sector owners next April.
Alongside this, NGT’s pipeline replacement programme will
continue to offer good prospects for us as one of very few
providers in this market. In the year, GEL won contracts in
Norfolk, South Wales and Scotland.
Waste
The fundamental change that the EU Landfill Directive is bringing
to local authority practice means that consultancy opportunities
will remain in this sector. We advised several local authorities
on waste strategy and continued our work for Shanks on new
waste transfer sites in East London. Whilst 2003/4 was a
successful year for our consultancy team, we have not yet been
able to enter the market for managed services in this sector.
Education
The recent Green Paper from the Department for Education
and Skills – ‘Every Child Matters’ – sets out a bold agenda 
for children’s services and recognises that poor educational
performance is often due to poor management and
communication, not poor teaching. We improve the
management of people, projects and assets, so this gives 
us a valuable role in helping to raise standards, as our work
as advisors and interim managers demonstrated this year.
This is an evolving market which, together with the BSfF
programme, indicates that our investment in this sector over 
the last two to three years is likely to bear fruit, as our success
in the Academies programme has indicated. Improving the
management and capacity of LEAs and the promotion of joined
up services supporting urban regeneration, are the most likely
routes for effective public private partnership in this sector.
Housing
Interim manager roles are also a prospect in social housing.
We were delighted with our wins in Hackney and we’ve made
an encouraging start to the contracts. We have excellent
people out there delivering front-line services to the community;
and we are already making a difference. Together with our
successful contract with Westminster, we now have an
established business. This market is still not developing at 
the pace we had anticipated however and we are working 
on alternative service models which might be attractive to
local authorities and residents.
Developing our people
At the end of July 2004 we employed 4,250 people. Recent
joiners included a range of senior management – a new
Company Secretary, HR director and a new business
development director in government services. This autumn
we recruited nearly 100 graduates. The training and continuing
professional development for all of our people is now channelled
through ‘MP Learning’. Staff communications are facilitated
by our intranet ‘MPortal’, our quarterly magazine ‘MPrint’, a
monthly newsletter ‘MP Monthly’ and a regular series of
presentations by the executive team in all offices.
As the Group grows, the sharing of best practice is ever more
important. Our ability to quickly and effectively integrate people
joining us through acquisition or under the Transfer of
Undertakings (Protection of Employment) Regulations (1981)
as amended (TUPE) is also crucial to our continuing success.
With this in mind we have appointed a business transformation
director, whose role is also to champion continuous
improvement across the Group. We introduced the European
Foundation for Quality Management (EFQM) version of
Business Excellence during the year. That has established a
structured approach to self assessment – an essential first step
along the road to service improvement.
Outlook
It has been a privilege to lead Mouchel Parkman in its first
year. Our market prospects and overall business outlook 
are good and we are confident that we can now achieve
more than either Mouchel or Parkman could have achieved
alone. We have the right people, the right approach and a
tremendous opportunity to fulfil our aspiration to become the
leading provider of consultancy and support services in our
chosen markets. We have made an excellent start.
Richard Cuthbert
Chief Executive  Finance Director’s review
Mouchel Parkman Report and Accounts 2004 10
The year since the merger has seen strong growth in turnover and
profits and a marked improvement in operating margins across
the Group. Finance Director, Kevin Young, explains how this has
been achieved.
Trading results
The year ended 31 July 2004 saw significant growth in turnover
and profits. Group turnover increased by 22% from £223.6
million to £271.9 million. Profit before tax, exceptional items
and the amortisation of goodwill rose by 43% from £13.5
million to £19.4 million.
Year end – 31 July 2004 2003 %
£000 £000 Change
Turnover 271,855 223,633 +22%
Operating profit* 19,217 13,041 +47%
Operating margin* 7.1% 5.8%
Interest 153 500
Profit before tax* 19,370 13,541 +43%
Effective tax rate* 21.0% 31.1%
Adjusted earnings per share* 14.5p 9.0p +61%
* Before exceptional items of £7,491,000  (2003: £963,000) and 
goodwill amortisation of £1,774,000 (2003: £874,000).
Group operating margins strengthened from 5.8% to 7.1%
reflecting improved profitability from all parts of the business
as well as the benefit of the initial cost savings arising from the
merger. We are on track to meet our longer term objective of
delivering margins of 8%.
We have also made significant progress in delivering the
synergies identified at the time of the merger and now expect
to reduce the Group’s cost base by £2.5 million a year compared
with the £2.0 million originally anticipated. £1.0 million of this has
been realised in this first year since the merger. The savings
mainly relate to a reduction in the number of senior directors
and back office support staff and have been secured against
a background of increasing technical staff numbers with total
Group headcount rising to 4,250 at the year end.
Exceptional costs associated with the merger of Mouchel and
Parkman totalled £6.0 million in the year (2003: £1.0 million) and
comprised transaction costs of £2.6 million (2003: £1.0 million)
and restructuring and reorganisation costs of £3.4 million
(2003: nil). In terms of reducing the Group’s cost base we
now expect to recover the total exceptional costs associated
with the merger in just over three years.
Other exceptional costs totalled £1.5 million and included the
£0.8 million loss on disposal of our Hong Kong business to
the Meinhardt Group on 30 July 2004. Also included within
exceptional costs is the write off of the remaining goodwill of
£0.7 million which arose on acquisition of the Full Circle
school improvement, inspections and training consultancy
business in 2002. This followed our decision at the half year
to reorganise our education activities and withdraw from the
difficult schools inspections market.
As previously indicated, the results for the enlarged Group
have been accounted for on a merger accounting basis 
in accordance with Financial Reporting Standard (FRS) 6
Acquisitions and Mergers. Therefore, although the merger 
did not take place until after the start of the year, the results
of the merged business have been presented on a combined
basis for the whole year with full restatement of comparative
results for all earlier periods as if the two organisations had
always been one and the same.
Managed Services
Managed Services turnover increased by 20% from £143.8
million to £173.0 million. At the same time operating profits
increased by almost half from £8.3 million to £12.4 million and
operating margins improved from 5.8% to 7.2%.
The growth in turnover and improved profitability reflected the
initial contribution from contracts secured and started during
the year as well as the full year effect of commissions
commenced in the previous year.
The strong performance of the joint venture with Amey Highways
Limited was again very beneficial. On 1 July 2003 we started
work on the Highways Agency Managing Agent Contractor
contract for Area 13 (North Lancashire and Cumbria) with a
value to the Group of more than £35 million over five years
excluding potential extensions. We also benefited from
increased volumes from some of the previously secured
commissions, in particular the Term Maintenance Contractor
commission in Area 10 (Greater Manchester, Merseyside,
South Lancashire and Cheshire) and the Managing Agent
Contractor contract for Area 9 (West Midlands). Mouchel Parkman Report and Accounts 2004 11
Finance Director’s review
In the local government market we benefited from the
commencement in October 2003 of the ten year (extendable 
to 20) bundled service contract for Liverpool City Council. 
The contract, which is worth about £10 million annually, is
operated in joint venture with Liverpool City Council (2020
Liverpool Limited) and covers property, estates, highways and
traffic engineering. Securing this contract was strategically
important for the Group as it is expected to be one of a
number of bundled service contracts to be let in the local
government sector.
In Spring 2003, towards the end of our last financial year, we
commenced two new five year property service commissions
in Hertfordshire and Surrey. In Spring this year, we signed two
housing management contracts with Hackney Borough Council
in London. The two contracts which cover the neighbouring
areas of De Beauvoir/Queensbridge and Homerton are worth
£22 million over seven years and started in April 2004. In January
2004 we began a three year (extendable to five) contract to
deliver building survey and multidisciplinary consultancy services
to Hillingdon Homes, the arms length management organisation
set up by the London Borough of Hillingdon.
Our rail business benefited this year from the five Network
Rail structures examination and assessment contracts which
started in Spring 2003. These comprised a ten year structures
examination contract for the Midlands region, a ten year
structures assessment contract for the Southern region and
ten year structures examination and structures assessment
contracts for the North West region as well as a five year
stations inspection contract for the North West and Midlands. 
In rail, we also began to benefit from the commencement in
February 2004 of the commission to support Alcatel in Tube Lines’
signal upgrading work on London Underground’s Jubilee and
Northern Lines. The contract is worth about £50 million to
Mouchel Parkman over eight years.
In water, we also began to benefit from five new commissions
which were secured and started in the second half of the year.
In Spring 2004 we won an initial two year contract to provide
network management and leakage detection services to
Scottish Water Solutions as well as a two year commission
for the provision of design services in the North East of
Scotland. In May 2004, we started a ten year contract to
provide leak detection services for Thames Water in North
East London followed in June by a further commission to
supply Thames Water with leakage consultancy services
throughout the whole of London. On 1 June 2004 we began
a three year (extendable to five) contract with Southern Water
to carry out operational management of the sewerage network
throughout Kent, Sussex, and Hampshire in joint venture with
M. Holleran Limited.
Project Services
Project Services turnover increased by 27% from £66.7 million
to £84.5 million and operating profits increased by 50% from
£3.3 million to £5.0 million. Margins improved from 5.0% 
to 5.9%.
The increase in turnover and improvement in profitability largely
reflected the full year contributions from Atkins Odlin and GEL.
During the year we also made further progress in improving
the profitability and sharpening the focus of our overseas
activities. In South Africa, we sold our interest in Jeffares
Green Parkman to our joint venture partners following the
successful completion of a major contract locally. In Hong
Kong, having restored the business to profitability, we took
the opportunity to sell it to the Meinhardt Group on 30 July
2004. Both of these moves are consistent with our strategy 
of reducing the Group’s exposure overseas and focusing on
the UK public sector.
Turnover Operating Profit* Margin
2004 2003 % 2004 2003 % 2004 2003
£000 £000 Change £000 £000 Change % %
Managed Services 173,006 143,793 +20% 12,439 8,331 +49% 7.2 5.8
Project Services 84,461 66,720 +27% 4,951 3,303 +50% 5.9 5.0
Management Consultancy 14,388 13,120 +10% 1,827 1,407 +30% 12.7 10.7
Group 271,855 223,633 +22% 19,217 13,041 +47% 7.1 5.8
* Before exceptional items and goodwill amortisation Mouchel Parkman Report and Accounts 2004 12
Finance Director’s review
Management Consultancy
Management Consultancy turnover rose by 10% from £13.1
million to £14.4 million and operating profits increased by
30% from £1.4 million to £1.8 million. Operating margins
improved from 10.7% to 12.7%.
Operating margins for the second half of the year were 14.2%
compared with 11.1% in the first six months.
This further improvement was in line with our expectations
and reflects the gradual increase in consultant utilisation levels 
as our newer activities, in particular the learning services
consultancy business, become more established. We are
currently providing support to a number of local authorities 
in improving standards and have so far been appointed to
project manage the development of seven of the proposed 
new City Academies.
The results for the year also benefited from a full year
contribution from LDA following its acquisition in April 2003.
LDA which provides support to local authorities in improving
their services by using e-technology now forms the core of
our local government consultancy business.
A significant contribution to turnover and profits again came
from the strategic procurement group with continuing work on
a number of projects for the Office of the Deputy Prime Minister
(ODPM), the Department of Constitutional Affairs, the Greater
London Magistrates Authority and HM Prison Service.
Forward order book
The forward order book of the Group as at 31 July 2004 was
£850 million, excluding potential extensions to current contracts.
This was broadly in line with the forward order book at the
half year reflecting the government procurement cycle, but
21% higher than the £704 million reported this time last year.
More than 90% of the Group’s forward order book continues
to be accounted for by Managed Services contracts.
Cash flow and working capital
The Group’s cash performance has again been good. We
finished the year with net funds of £19.2 million compared
with £11.6 million at the half year and £18.5 million twelve
months ago.
Cash conversion continues to be strong with 113% (2003:
129%) of the Group’s operating profits being converted into
operating cash flow (i.e. net cash inflow from operating
activities per note 30 to the financial statements before
foreign exchange movements).
The movement in net funds over the year reflects the strong
operating cash flow offset by earnout payments in the current
year for acquisitions made in earlier periods as well as the
transaction costs and restructuring and reorganisation costs
associated with the merger.
Taxation
The effective rate of tax before exceptional items and the
amortisation of goodwill was 21.0% compared with 31.1% 
for the year ended 31 July 2003. The difference between 
the effective rate of tax and the statutory rate of 30% largely
reflects the tax relief available to the company on providing
options to employees under share incentive schemes. Future
tax relief on employee share incentives will depend on the
value of employee share options exercised in the relevant 
year and on the company’s share price at the time of exercise.
Without this relief the effective rate of tax would have been
31.1% reflecting the normal level of disallowable expenditure.
After exceptional items and the amortisation of goodwill, the
tax charge for the period was £3.0 million representing an
effective rate of tax of 29.7% due to the partially tax deductible
nature of the exceptional expenditure.
Pensions
The Group operates two main defined benefit pension schemes
(the Mouchel Superannuation Fund and the Parkman Staff
Pension Scheme). For both schemes the Group has
continued to apply SSAP 24, Accounting for Pension Costs
and has made the required disclosures under the transitional
rules of FRS 17, Retirement Benefits which are included in
note 37 to the accounts.
FRS 17 calculations have been prepared for the Group at 
31 July 2004 using consistent assumptions for the two schemes.
These show an aggregate deficit of £29.7 million after tax and
a profit and loss account charge for the year of £7.4 million.
The FRS 17 charge of £7.4 million for the year compares with
a SSAP 24 charge of £5.6 million and with contributions paid
over to the schemes of £5.7 million.
Some measures have already been taken to address the funding
shortfall in the two schemes. Both have been closed to new
entrants except for employees transferring under TUPE
regulations, where under an outsourcing contract there is a
requirement to provide benefits which are broadly comparable
to those provided under the Local Government Pension Scheme
or another defined benefit scheme provided by the transferring
employer. Employer and employee contributions to the Parkman
Staff Pension Scheme were increased in April 2003 and 
April 2004. Mouchel Parkman Report and Accounts 2004 13
Finance Director’s review
* Before exceptional items and goodwill amortisation
A single actuary has been appointed to both schemes and 
an actuarial valuation of each of the schemes is currently being
undertaken as at 31 March 2004. As part of the valuation
exercise the Group and trustees of both schemes are giving
consideration to employer and employee contribution levels,
underlying funding assumptions and potential changes to
benefit structures in order to address the funding deficit 
and arrive at an affordable pension provision going forward.
We expect to conclude the valuation exercise by the end 
of December 2004 and consult with members on the
changes required in Spring 2005.
Earnings per share
Including shares held by the Employee Share Ownership Plan
Trusts, the adjusted earnings per share before exceptional items
and the amortisation of goodwill increased by 61% from 
9.0p to 14.5p. Without the benefit of the tax relief relating 
to the provision of options under share incentive schemes,
the adjusted earnings per share before exceptional items and 
the amortisation of goodwill would have been 12.6p
representing an increase of 40% over the prior year.
Dividends
It is proposed that a final dividend of 1.8p per ordinary share
will be paid on 1 December 2004 to shareholders on the
share register as at 29 October 2004. Taken together with the
interim dividend of 0.9p this gives a total dividend of 2.7p for
the year.
It is anticipated that the interim and final dividends will
continue to represent approximately one third and two thirds
respectively of the total dividend for the year.
Kevin Young
Group Finance Director
Turnover Operating profit Adjusted earnings per share Forward order book
(£000) (£000)* (pence)* (£m)
223,633
271,855
94,770
118,570
162,930
00 01 02 03 04
13,041
19,217
4,884
6,468
9,070
00 01 02 03 04
9.0
14.5
5.2
5.6
6.7
00 01 02 03 04
704
850
171
249
493
00 01 02 03 04  Sector review
The Highways Agency (HA) is responsible for England’s strategic
road network and is our single biggest client. We provide
services and technologies for the management, development
and improvement of the HA’s assets, with a strong emphasis
on reducing congestion.
2003/4 was another year of very strong growth. We secured
increased volumes of work on the M25 Sphere – where we are
managing agent – and further developed our innovative Route
Steward initiative. We were also awarded a commission to
establish and manage the HA’s first Traffic Officer Training
Programme, providing vehicle, health and safety, legal and
highway patrol training for 250 recruits. We believe our unique
understanding of clients’ needs, Route Steward experience
and established partnerships with emergency services training
teams were key reasons in securing this appointment. The
Traffic Officer role is central to the HA’s expanded duties as
network manager, and will reduce potential congestion
through rapid response to incidents.
Looking ahead, the HA is introducing a range of larger contracts,
including Enhanced MACs. These are intended to generate
more effective and more efficient long-term use of highways 
assets, and will deliver major ongoing volumes of work for
successful bidders. We have an excellent record for developing
effective partnerships with client and contractor teams to deliver
best value and continuous improvement, and we see Enhanced
MACs as an opportunity for growth.
We are developing our design capability too. This is strategically
important as we expect further opportunities to work with
contractors and other partners on high-value, long-term DBFO
(Design Build Finance Operate) and ECI (Early Contractor
Involvement) projects.
We also see growth opportunities in the wider application of
our technology services, such as Active Traffic Management,
and in tolling and congestion charging. Network operators
recognise that innovative information management can help
to make best use of infrastructure assets.
In local highways our focus is on improving urban and rural
road networks and developing initiatives such as safer routes
to school and green routes for buses. Our ability to manage
entire local highways networks, and our innovative strategic
alliances with contractors and local authorities in Hertfordshire,
Wiltshire and North Yorkshire, put us at the forefront of 
this market.
We won an impressive range of contracts this year, including
long-term highways commissions in Cornwall, Bexley, Leeds,
Calderdale, Westminster and Richmond; transport planning in
Medway; transport and asset maintenance for the Corporation
of London; and London Trams work for the London Borough
of Ealing and with Transport for London. We also secured
contract extensions in Wiltshire and Ealing.
During the year we were named ‘Top Consultant in Roads and
Local Transport’ by the Institution of Highways & Transportation.
We also helped Hertfordshire County Council to attain the
maximum three-star rating for its highways services.
Our highways capabilities are supported by the specialist
expertise of our consultancies. Atkins Odlin is a respected
provider of lighting and traffic control capabilities. Land
Aspects is a provider of property and land services, and 
this year won a significant contract for research services 
from the Countryside Agency.
Highways
We are one of the UK’s leading highways companies, and support
the owners and operators of highway assets.
Mouchel Parkman Report and Accounts 2004 15
Martin Warnes, M25 Route Steward 
Joined: 2001  Location: M25
“I was a police officer for 11 years. My job is now mostly
about incident management. I’ll get a text message telling
me what’s occurred and I’ll respond.
I have to deal with everything from minor shunts to fatal
crashes, broken down goods vehicles and damage to
bridges or lighting. Safety is our number one priority, but
ultimately I’m here to keep traffic flowing.
My PDA enables me to upload information to the Highways
Agency’s real-time information system wherever I am.
They then communicate with drivers through electronic
displays, or their website.
I might drive 250 miles in a day. We’re the eyes and ears
of the HA, and I’ll send observations and suggestions back
to the engineers, safety designers and environment team.” Local authorities in England own a very large portfolio of
property, including schools, youth centres, libraries, social
service facilities, offices and administration centres. Local
government spends more than £5 billion a year on the
management of this infrastructure.
We help local authorities to maximise the contribution their
properties make towards the delivery of services. We provide
architectural design, maintenance consultancy, valuation and
estate management through long-term strategic partnerships. 
We also work with local authorities in advising on and setting
up strategic partnering arrangements for both their capital
and maintenance programmes. 
Our approach is driven by a powerful belief in the need to
understand and meet the operational needs of our clients 
and the day-to-day needs of their customers – the public.
In 2003/4 we extended our position as market leader. This
included the first full year of delivering building maintenance
services to Surrey and Hertfordshire County Councils. In Surrey
we transformed the service by implementing a new property
service desk, improving the level of customer satisfaction. In
Hertfordshire we contributed towards the council’s best ever
year in terms of the performance of its property portfolio.
In October 2003 we started a ten year (extendable to 20)
technical multi service contract for Liverpool City Council. The
contract, operated in joint venture with the council, covers
property, estates, highways and traffic engineering. We expect
more local authorities to introduce long-term multi-service
contracts, and this high-profile commission gives us
exceptional experience in a potential growth area.
We are also entering a period of unprecedented investment 
in the development and renewal of school buildings. The
government’s BSfF initiative represents a major programme 
of capital investment, with £5.1 billion due in 2005/6 and similar
commitments anticipated for the next 10-15 years. To put this
into perspective, BSfF represents an increase of more than
700% compared with schools estate funding in 1996/7.
As part of Building Schools for the Future, the private sector
will work in partnership with local education authorities to
rebuild and renew secondary schools in phases across the
country. Our expertise in property, education and consultancy
– together with specific capabilities in school design and
project management – put us in a strong position to create
excellent partnerships and secure significant BSfF contracts.
Elsewhere we are working with the Department of Constitutional
Affairs to transfer £1 billion of property assets to the new HM
Courts Service. This project is part of the reorganisation of all
courts in England and Wales. We are also engaged with several
local authorities in helping them develop joint service centres
and civic centres.
This is an exciting sector for us with significant potential for
further growth.
Sector review
Property
We support local authorities in the design, procurement, management
and maintenance of their property, enabling them to concentrate
on delivering better front-line services.
Mouchel Parkman Report and Accounts 2004 16
Andy Ratcliffe, Principal architect
Joined: 1998  Location: The Wyvern School, Kent
“I was in private practice, joined Kent County Council, and
then our department was outsourced to Mouchel Parkman.
I’m working with Will Alsop’s practice at the moment
developing designs to further the DfES exemplars, which
will help to show how buildings could be developed through
Building Schools for the Future.
I’ve also been closely involved with The Wyvern School 
in Kent, from inception to completion. It’s a new special
educational needs school. My design had to meet the needs
of kids with some really profound difficulties. During the
design stage and construction I’ve spent time with kids
and teachers at other schools, so I can see the problems
they face.
There were strict financial limits, but I think this project has
created new and better ways for a school like this to work.”   Sector review
Mouchel Parkman Report and Accounts 2004 19
Rail travel is thriving in the UK. Passenger journeys have
increased 33% since 1995, and 78% of people in London
commute by train. But there are enormous challenges
involved in meeting such demand with ageing infrastructure,
and 2003/4 saw significant changes in the management and
funding of the rail network in response.
Despite upheaval in the sector, our rail business continued 
to grow. We have expertise in structures, property and signalling,
and experience across Network Rail’s national network.
On the mainline our focus is maintenance and renewals, where
Network Rail is spending about £3 billion a year. In 2003/4 we
successfully started or continued work on our six managed
services structures and property contracts for Network Rail,
and we are developing ways to further increase the value 
of our services.
Network Rail is encouraging greater co-operation between
suppliers as it works to meet stiff targets, including a 30%
reduction in costs. Our services, scale and extensive
experience of working in partnership put us in a strong
position in this environment.
Network Rail’s decision to take maintenance in-house is also
a positive development for us, offering new opportunities in
areas previously controlled by major contractors. We are also
successfully extending our maintenance and renewals services
to the Underground, and continue to work with London
Underground on the strategic asset management of structures.
Throughout the year we delivered services – including expert
signalling, track, train systems and safety assurance – to the
three major Infracos on the Underground, Tube Lines,
Metronet BCV and Metronet SSL. 
We are also working with Alcatel on the resignalling of the Jubilee
and Northern Lines, a project worth £50 million to us over eight
years. Our involvement in the installation of Alcatel’s innovative
moving-block signalling equipment will significantly enhance
capacity, allowing more trains to run.
This technology was first used in the UK on the Docklands Light
Railway where it was successfully installed by teams who are
now part of Mouchel Parkman. We believe our experience will
become increasingly valuable as other rail networks consider
the adoption of moving-block signalling. In particular, technical
and procurement policies for signalling are under review within
Network Rail, and we see potential for growth here.
Looking forward, we will continue to prioritise maintenance
and renewals, but are well positioned to take advantage of
growth in network enhancement and construction projects as
it occurs. Land Aspects is already providing consultancy
services on Crossrail, and we are consulting on the East London
Line. We are also providing management consultancy advice
to London Underground and Heathrow Airport Limited on the
Terminal 5 extension contract.
Rail
We are helping to improve rail maintenance and renewals, 
reduce costs and implement improvements at a critical time 
in the industry’s life-cycle.
Paul McCormick, Civil engineer 
Joined: 1991  Location: Lancashire
“I worked in our water business, then with highways
structures. Now I’m managing a team carrying out structures
examinations for Network Rail.
There are enormous challenges unique to rail, such as
stringent safety requirements and the age of infrastructure.
We might be examining bridges and tunnels built any time
since 1850.
I manage 30 examiners and 17 support staff, and we
complete 42,000 examinations a year. For tunnel and
major bridge examinations the line has to be closed, so
this is deadline-driven work. Our team must perform so
we don’t cause delays for passengers.
The volume of work and track access issues mean we have
to plan carefully, but we also provide a 24 hour emergency
rapid response service for Network Rail. I’m ready to
respond immediately if a bridge or tunnel is struck.” Sector review
Mouchel Parkman Report and Accounts 2004 20
Water
We have continued our excellent progress, winning significant
long-term frameworks and becoming one of the top ten water
consultancies in the UK by turnover.
In 2003/4 we secured five long-term frameworks and increased
our turnover by over 30% – impressive growth in a very
promising market.
Our wins included two major framework agreements with
Thames Water to provide leakage detection services and
leakage management in North East London. We also secured
a major outsourcing commission with Southern Water Services
for the operational management of its sewerage network. 
This three-year (extendable to five) contract is in joint venture
with M. Holleran Limited.
In Scotland we gained two significant contracts with Scottish
Water Solutions. The integrated network management strategy
and leakage framework contract is initially for two years, while
the capital design framework is a two-year agreement, in joint
venture as TriAqua.
Elsewhere, we continue to provide capital design services for
United Utilities’ AMP3 programme through our strong alliance
with KMI Water. We also provide flood defence and alleviation
studies for public and private sector clients.
This year we demonstrated our operational expertise by
executing a large transition on the Thames leakage contract.
70 crews, with new vehicles and equipment, successfully
mobilised with no interruption in service to Thames Water. 
We believe this sector will remain well funded, with the regulator
recognising the need to maintain investment in the industry to
meet new environmental standards and demand. The current
expectation for AMP4 – the next five-year cycle of investment
in assets by water companies – is total funding of £15 billion.
We see potential for further significant growth in our business
as AMP4 unfolds, but we must also ensure we retain and
develop our existing relationships.
The cyclical nature of the AMP process has created problems
as it produces a large initial burst of investment followed by
tight budgets – feast or famine. Many water companies are
now committing to early start programmes ahead of the main
AMP4 start in April 2005. 
This is a positive development that will help us to plan for and
invest in our people and infrastructure. Work with non-Ofwat
regulated businesses such as Scottish Water Solutions is also
helping to even out the investment cycle.
We see growing demand for managed services as more water
companies focus on customer service and external providers
take day-to-day responsibility for maintenance, operational
management and performance management. We are working
to develop more of these long-term relationships, either
directly or through alliances.
Tara O’Donovan, Team leader
Joined: 2001  Location: West Midlands
“Drinking Water Inspectorate guidelines require improvements
in water quality, and I’ve been managing a team of people
carrying out mains cleaning for Severn Trent.
I studied business and law, so I’m not a technical expert.
Really, my strengths are in helping our people to do their
jobs well, and making sure we’re meeting the real needs
of our clients. Having said that, you pick up specialist
knowledge through experience, and I’m now applying
ideas I learnt in mains cleaning on a new leakage project.
As a graduate, you get constant challenges here. At the
moment, for example, I’m involved in the TUPE transfer 
of 24 people, the ordering of vehicles and equipment,
budgeting, and day-to-day project management. You
could say I’m kept busy!”  Sector review
Mouchel Parkman Report and Accounts 2004 22
The gas market in the UK is going through its biggest
transformation since privatisation, with National Grid Transco
(NGT) selling half of its gas distribution network. Assets valued
at almost £6 billion are due to change hands.
Macquarie Bank, United Utilities, Scottish & Southern Energy
and Cheung Kong Infrastructure Holdings are the preferred
bidders for the four regional distribution networks in question.
We are providing technical support and due diligence advice
to Macquarie Bank for its transaction, and worked closely
with its bid team during the year. 
There are opportunities for us to develop longer-term
relationships with the new infrastructure owners in this sector
and with NGT, which continues to be the single largest owner
of gas assets in the UK. Our rare combination of gas sector
expertise, management consultancy and managed services
capabilities makes us one of few external providers able to
take on major outsourcing work, and maximise the performance
of people, processes and infrastructure in this sector.
While our ultimate goal is to secure managed services contracts,
we are continuing to build a very successful project management
business. GEL, the gas engineering consultancy acquired in
2003/4, has achieved excellent growth this year, including
contracts for conceptual and design work for the Milford Haven
to Aberdulais pipeline, with contractors Lawrence, and the
Kings Lynn and Wisbech compressor uprating project with
Murphy Pipelines.
GEL’s expertise is key to our future. It makes us a respected
organisation in this sector, with an excellent track record in
safety, performance and technical understanding – qualities
that will be required of any company competing for managed
services opportunities in this market.
The government’s drive to achieve the Decent Homes standard
by 2010 is leading to unprecedented levels of investment 
in social housing. The Office of the Deputy Prime Minister’s
‘Sustainable Communities: Building for the Future’ report has
further encouraged this, and local authorities in England now
spend £2 billion a year on social housing management, and 
£2 billion on repairs and capital works.
As one of the first providers to deliver externalised housing
management services, we are in a strong position to support
clients as they seek to improve services. In Westminster, for
example, we have helped the local authority to achieve the
maximum three-star rating for housing services.
The approach here integrates our housing, property,
management consultancy and technical consulting expertise.
Ultimately, however, effectiveness comes down to the
individuals delivering front-line services. We attract and
develop truly excellent employees who are proud to support
tenants and clients.
Gas
We support a range of 
clients who own or operate 
gas infrastructure.
Housing
We support clients in the social
housing sector to provide better
homes and greater value.
Tony Stenning, Housing officer
Joined: 2004  Location: London Borough of Hackney
“I worked in Hackney Council’s housing department from
1992 to this year, when my team was transferred to
Mouchel Parkman.
I look after a number of estates, some are nice, others have
problems. My job involves rent collection, estate visits, helping
OAPs, and dealing with crime and anti-social behaviour.
I try to create trust with the tenants, that’s far more effective.
With rent arrears, for example, we might look at their housing
benefit and find money they haven’t claimed, which then
clears what they owe.
It takes time to settle after a transfer, but we’re already
learning from our new management at Mouchel Parkman.
They listen to us, and I think they’re learning a lot from us
in return.”   Sector review
Mouchel Parkman Report and Accounts 2004 25
Education
We support local and national
government, schools, educational
institutions and communities.
Waste
We support public and private
sector clients developing new
approaches to waste.
Our expertise covers four critical areas – school improvement
strategies, integrated children’s services, learning infrastructure
services and training and development.
Our team grew by 25% in 2003/4, and we won new contracts
or extensions from a range of organisations, including the DfES
and several LEAs. We were also appointed to project manage
three academies – in Corby, Hackney and Southwark. The
academies programme sets out to transform failing schools
into state-maintained independent schools supported by outside
sponsors, establishing at least 53 academies by 2007 and
200 by 2010.
We expect significant change in this sector, with integrated
children’s services set to establish closer links between
education, health and social services, and the DfES five-year
plan enabling schools to commission services individually or
in clusters. Both developments may increase demand for our
services. The BSfF initiative is also promising, and we are
deploying the expertise of the Group to provide integrated
strategic advice, education, property and procurement
services to BSfF clients.
Waste production is growing by around 3% a year, and the 
waste management market in the UK represents expenditure of
£4 billion a year, with an increase to £8 billion expected by 2010.
Tough EU targets for recycling and recovery require a
fundamentally different approach to municipal waste by local
authorities. We’re already seeing a rapid movement away from
landfill towards more sustainable solutions, but the UK lies
behind many European partners in achieving targets, and
greater investment is inevitable. 
We support both private and public sector clients as they develop
and implement municipal waste strategies. We provide services
at all stages from strategy through procurement, to design,
licensing and project management.
Our strategic advice to public sector clients is based on a
thorough understanding of their long-term issues, and is supported
by our unique modelling technology – Purgamentum. This tool
enables authorities to determine waste flows, define associated
costs and risks, and assess the best location and use of facilities.
Clients using Purgamentum include all London Boroughs and
the county councils in Worcestershire, Wiltshire, Derbyshire,
Lancashire and North Yorkshire, and City of York Council.
In the private sector we support clients during the bidding and
project phases. Successes in 2003/4 included the securing of
planning permission and operating permits for six East London
Waste Authority sites. Political, social and environmental issues
delay permissions, but our expertise, documentation and
stakeholder negotiation enabled us to secure a successful
outcome within eight months.
Waste is an evolving market; we will continue to provide
profitable consultancy services to public and private 
sector clients while we monitor this sector for larger 
and longer-term opportunities.
Camilla Antrobus, Principal consultant
Joined: 2003  Location: Hampshire
“I was a secondary school teacher for 15 years, an LEA
adviser for five years, and an acting chief education officer. 
I joined Mouchel Parkman because it gave me the
opportunity to work with a very wide range of LEAs and
schools up and down the country. The variety enables me
to experience new situations and broaden my expertise.
I’m currently leading a major project in Kent supporting 30
schools facing challenging circumstances. We’re advising
the LEA, training and helping staff, and working closely
with the leaders in each school.
It can be demanding, especially when people are
struggling with change. But it’s enormously rewarding
when you advise and coach someone, and you then see
them finding their own way forward.” Mouchel Parkman Report and Accounts 2004 26
1. Richard Benton
Richard is Chairman of Mouchel Parkman. He joined the Board
of Mouchel as a non-executive Director in 1998 and was
appointed Chairman in 2001. Previously, he was a Capita
Group founder director from 1987. As sales director until
1998, he was responsible for much of Capita Group’s rapid
growth and diversification.
2. Richard Cuthbert*
Richard is Chief Executive of Mouchel Parkman. He joined
Parkman in April 2002 from WS Atkins, where he was a
senior director and a member of the Group Executive. 
He is a Chartered Engineer with extensive experience in 
the management of consultancy and outsourcing businesses
in the UK and overseas.
3. Kevin Young*
Kevin is Group Finance Director of Mouchel Parkman. He is 
a Chartered Accountant who qualified and trained with Price
Waterhouse. Prior to joining Mouchel in 1998, he was Group
Financial Controller and Finance Director of the Consumer
Logistics Division of Transport Development Group. He joined
the Board of Mouchel in 1999.
4. Ian Knight
Ian is a non-executive Director of Mouchel Parkman. He joined
the Mouchel Board in 2001. Previously, he was Group Treasurer
of the Yorkshire Water Group from privatisation in 1989 until
1998, when he became Finance and Strategic Development
Director for its non-water subsidiaries, helping to grow these
infrastructure businesses both organically and by acquisition.
5. Professor Sir Michael Lyons
Professor Sir Michael is a non-executive Director of Mouchel
Parkman. He joined the Board of Parkman in June 2001. 
He is chairman of the English Cities Forum, Deputy Chairman
of the Audit Commission and acts as a strategic advisor to
Government and a series of companies. Before this he was
Chief Executive of Birmingham City Council from 1994 to
2001, Chief Executive of Nottinghamshire County Council
from 1990 to 1994, and Chief Executive of Wolverhampton
Metropolitan Borough Council from 1985 to 1990.
6. Rodney Westhead
Rodney is a non-executive Director of Mouchel Parkman. 
He joined the Board of Parkman in June 2001. He is currently
the Group Chief Executive of Ricardo plc, where he previously
held the post of Group Finance Director. He was formerly a
partner at Grant Thornton, holding a number of senior positions,
notably managing partner in the London Office. He is a Fellow
of the Institute of Chartered Accountants in England and Wales.
7. Amanda Massie*
Amanda Massie is Company Secretary of Mouchel Parkman.
She is a Chartered Company Secretary and joined the Group
on 18 October 2004. Previously she worked for WS Atkins plc
as Group Company Secretary and was a member of their
Group Executive Board. Prior to Atkins, Amanda worked in
the City as Company Secretary for a group of mutual
insurance companies.
Mouchel Parkman plc Board
26
1 2 3 4
5 67
* Richard Cuthbert, Kevin Young and Amanda Massie are also members of the Group Executive. 27
Mouchel Parkman Group Executive
8. Richard Coackley
Richard is Managing Director of Mouchel Parkman’s Utilities
business stream. Previously, he was Operations Director,
Consultancy and Professional Services, at Parkman. Earlier 
in his career, he was a Board director of Binnie, Black & Veatch,
and developed infrastructure, energy and environment 
projects world-wide.
9. Keith Jackson
Keith is Managing Director of Mouchel Parkman’s Strategic
Highways business stream. He joined Mouchel in 1975 and
has extensive experience in the management of highway and
transportation infrastructure projects. He has overall responsibility
for the development of the Group’s network management,
traffic management systems and highway project workload
for central government clients.
10. James Measures
James is Managing Director of Mouchel Parkman’s Government
Services business stream. He joined Mouchel from local
government in 1980. He led the development and management
of Mouchel’s local government support services business in
transportation and property, through innovative partnering
arrangements with key clients. He has also managed the
transition of more than 600 local government staff into the Group.
11. Jeff Morris
Jeff is Managing Director of Mouchel Parkman’s Management
Consultancy business stream. Prior to joining Mouchel in
1994, Jeff was a director at Coopers & Lybrand’s management
consultancy. He built up Mouchel’s management consultancy,
specialising in strategy, PPP and PFI, procurement services,
change and project management and asset 
management planning.
12. Ruth Mundy
Ruth is Human Resources Director and joined Mouchel Parkman
on 13 September 2004 having worked for a number of
organisations in Senior HR positions. Most recently she was
UK HR Director for Jones Lang LaSalle where she was involved
in their post-merger transition process. Prior to that Ruth
worked for PricewaterhouseCoopers as Head of HR for one
of their consultancy business streams. She has also held
positions with Coopers & Lybrand, the BBC and BP .
13. Gail Shadlock
Gail is Business Transformation Director of Mouchel Parkman,
and is responsible for generating transformational change in
existing and new contracts. Previously, as our HR Director,
she led the integration of the two companies. Gail joined
Mouchel in 2001, having worked as Business Development
Manager for Hyder Business Services. She has also worked
at senior management level within the NHS, the police service
and local government.
14. Jeremy Wray
Jeremy is Managing Director of Mouchel Parkman’s Roads
and Rail business stream. He joined Parkman from local
government in 1989 having developed extensive experience
in all aspects of highway planning, design, construction and
maintenance. At Parkman he led the delivery of transportation
and development services, including large-scale TUPE
transfers and innovative joint ventures.
Mouchel Parkman Report and Accounts 2004 27
8 9 10 11
12 13 14 Directors’ report
Mouchel Parkman Report and Accounts 2004 28
The Directors present their annual report and the audited financial statements of the Group for the year ended 31 July 2004.
Directors
Date Date
Name Position appointed resigned
Richard Benton Chairman
Richard Archer Non-executive Director 19 Sep 2003 31 Jan 2004
Richard Cuthbert Chief Executive 19 Sep 2003
Jim Harding* Non-executive Director 31 May 2004
Ian Knight Non-executive Director
Professor Sir Michael Lyons Non-executive Director 19 Sep 2003
Rodney Westhead Non-executive Director 19 Sep 2003
Kevin Young Group Finance Director
* On 19 September 2003 Jim Harding resigned as Chief Executive and was appointed as a non-executive Director. On 31 May
2004 he resigned as a non-executive Director.
Dividends (note 12)
Pre merger 2004 2003
Dividends payable to Mouchel Parkman plc (formerly Mouchel plc) shareholders:
First interim dividend 0.75p per share - 380
Second interim (in lieu of final) dividend of 1.45p per share - 735
Dividends payable to Parkman Group plc shareholders:
Special dividend 0.77p per share - 271
Final dividend 1.1p per share - 387
Post merger
Dividends payable to Mouchel Parkman plc shareholders:
Interim dividend 0.9p per share 877 -
Final dividend of 1.8p per share 1,785 -
Total dividends payable 2,662 1,773
Profits
Profit after tax for the year before exceptional items and goodwill amortisation was £15,302,000 (2003: £9,485,000) and total
profit after tax for the year was £7,104,000 (2003: £7,648,000).
Principal activities and business review
Mouchel Parkman plc is a professional services group supporting clients in developing and managing their infrastructure assets.
Services are delivered through three business streams: Managed Services – operational management of services under long-term
partnership contracts, Project Services – project management and specialist technical services and Management Consultancy –
strategic infrastructure planning and management advice.
Mouchel Parkman plc’s performance during the last year as well as its prospects for the future are set out in Our business 
(page 2), Chairman’s statement (page 5), Chief Executive’s statement (pages 6 to 8), Finance Director’s review (pages 10 to 13)
and sector reviews (pages 15 to 25).
Directors and Directors’ shareholdings
The names of the Directors who held office during the financial year and since the year end appear at the head of this report. 
The beneficial interests of the Directors in the share capital of the Company at the beginning and the end of the year to 31 July
2004 are shown in the Remuneration report on pages 34 to 38. Directors’ report
Mouchel Parkman Report and Accounts 2004 29
The Directors’ options over shares in the Company are detailed in the Remuneration report on pages 34 to 38. No Director had
any non-beneficial interest in the shares of the Company or any interest in any other Group company during the year ended 
31 July 2004.
Richard Cuthbert and Ian Knight retire as Directors by rotation and offer themselves for re-election at the Annual General Meeting.
Change of name
On 18 September 2003 at an Extraordinary General Meeting, the shareholders of Mouchel plc approved a resolution to change
the Company’s name to Mouchel Parkman plc.
Substantial shareholdings
As at 1 October 2004 the following shareholders had an interest in 3% or more of the ordinary share capital of the Company:
Number Percentage
of ordinary of issued
shares share capital
State Street Nominees Limited 4,985,742 4.7
Chase Nominees Limited 4,772,611 4.5
BNY/OCS Nominees Limited 4,233,160 4.0
Chase Nominees Limited Lending Acc 3,271,042 3.1
Corporate social responsibility
Employees
The Group’s policy is to provide an organisational environment and incentive for all employees to develop fully their individual
potential and thereby to encourage their contribution to the success of Mouchel Parkman. The Group places considerable value
on the involvement of its employees. The Investors in People programme continues to enhance the Group’s practice of keeping
employees informed on matters affecting them as employees and on factors affecting the Group performance. This is achieved
through formal and informal meetings and various communications.
Save As You Earn schemes have been put in place to promote employee investment in the Company. Shares under option in
both the Mouchel and Parkman Sharesave Schemes are detailed in note 24, Called up share capital.
The Group’s policy and practice in respect of disabled persons is to encourage the recruitment and subsequent training, career
development and promotion of disabled persons on the basis of their aptitude and abilities, and the retention and retraining of
employees who become disabled.
The Group has an equal opportunities policy and is committed to providing equal opportunities to all employees and job
applicants irrespective of sex, marital status, disability, race, colour, nationality, ethnic or national origins, age, social 
background or sexual orientation.
Health and safety
It is the Group’s policy to provide and maintain, so far as is reasonably practicable, safe and healthy working conditions, plant,
equipment and systems of work for all employees. The Directors also recognise the Group’s responsibility to its clients and the
general public who may be affected by its work.
The Group has an in-house Health and Safety department that monitors the Group’s performance and reports this to the Directors
and other senior executives. The Health and Safety department also ensure that the Group is in compliance with the Health and
Safety at Work Act, 1974 and associated regulations.
The Group is represented on the management committee of ‘Working Well Together’ which is the Government/HSE initiative 
to promote health and safety in the construction industry.
During the year the Group received the Bronze Award from RoSPA in recognition of the work done to consolidate systems
following the merger of Mouchel plc and Parkman Group plc. Directors’ report
Environmental policy
Mouchel Parkman is committed to taking positive action to reduce and manage environmental impact and to developing solutions
that incorporate sound and sustainable environmental management. Our corporate Environmental Management System (EMS),
based on the principles of ISO 4001, allows for continuous improvement through the setting and review of environmental
objectives and targets and the monitoring of environmental impacts.
Charitable contributions
Charitable contributions amounted to £18,558 in the year (2003: £28,525). Mouchel Parkman encourages employees to support
local communities and matches funds raised by staff for the Corporate Charity.
Supplier payment policy
The Group agrees terms and conditions for its business transactions with its suppliers. Payment is then made to these terms,
subject to terms and conditions being met by the supplier.
Mouchel Parkman plc holds the investments in the Group companies and does not trade itself. Trade creditor days of the Group 
for the year ended 31 July 2004 were 62 (2003: 47). This represents the ratio, expressed in days, between the amounts invoiced 
to the Group by its suppliers in the year, to the trade creditors owing at year end.
Directors’ responsibilities in respect of the preparation of financial statements
United Kingdom 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 the Group as at the end of the financial year 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 then apply them consistently;
• make judgements and estimates that are reasonable and prudent; and
• state whether applicable accounting standards have been followed.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for the system of internal control, for safeguarding the assets of the Company 
and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Auditors
A resolution to re-appoint Deloitte & Touche LLP as the Company’s auditors will be proposed at the forthcoming Annual 
General Meeting.
Approved by the Board of Directors and signed on behalf of the Board by:
Amanda Massie
Secretary
18 October 2004
Mouchel Parkman Report and Accounts 2004 30 Corporate governance
The Group is committed to managing its affairs in accordance with the Principles of Good Corporate Governance and the Code
Provisions set out in section 1 of the Combined Code on Corporate Governance incorporated into the Listing Rules issued by 
the Financial Services Authority (“the Code”).
This statement describes how the Group applies the principles of the Code. In July 2003 the Financial Reporting Council published
a revised Combined Code on Corporate Governance which will apply for the year ending 31 July 2005. The Board has reviewed
the provisions of the new Combined Code and is working towards ensuring satisfactory compliance. The Group will report formally 
on compliance with the new Code, as required under the Listing Rules, next year.
The provisions of the Code are split into four areas described below:
Board and committee structure
On 19 September 2003 the Board’s structure was changed from consisting of two executive and two non-executive Directors 
to two executive and six non-executive Directors; two non-executive Directors subsequently resigned during the year. The 
non-executive Directors are considered to be independent of management and free from any business or other relationships 
that could materially interfere with the exercise of their independent judgement. Since the merger, the non-executive Directors
have met once without the Chairman being present. On 13 October 2003 Rodney Westhead was appointed as senior 
non-executive Director. The profiles of the Directors is shown on page 26.
The Board meets on a regular monthly basis and has a formal schedule of matters reserved to it. It is responsible for overall 
Group strategy, acquisition and divestment policy, approval of major capital expenditure projects, consideration of significant
financial matters and review of the significant risks facing the business, thereby retaining full and effective control of the Group.
The Board has held a joint meeting with the Group Executive during this year to review Group strategy.
All Directors have access to the advice and services of the Group Company Secretary who is responsible for ensuring that Board
procedures and applicable rules and regulations are observed. There is an agreed procedure for Directors to take independent
professional advice in the furtherance of their duties at the Group’s expense. In accordance with the Company’s Articles of
Association, one third of the Board is required to retire by rotation each year.
The Group Executive is responsible for the management of the business and meets monthly. The Chief Executive chairs the Group
Executive and other members comprise the Finance Director, Company Secretary, the Managing Directors of the business streams,
the Human Resources Director and the Business Transformation Director.
The Audit Committee met four times this year. Following the merger, the composition of the Audit Committee was changed 
on 13 October 2003. At the start of the year, the committee comprised Richard Benton and Ian Knight. On 13 October 2003 
Richard Benton resigned and Jim Harding, Richard Archer and Rodney Westhead were appointed. The committee is chaired by
Ian Knight. With the retirements of Richard Archer and Jim Harding, the committee currently comprises Ian Knight and Rodney
Westhead. This committee has responsibility, within agreed terms of reference, for, among other things, the planning and reviewing 
of the Group’s annual and interim financial statements and the supervision of its auditors in the review of such financial statements.
The committee focuses on the Group’s compliance with legal requirements, accounting standards and the Listing Rules and on
ensuring that effective systems for internal control and for reporting non-financial operating data are maintained. The ultimate
responsibility for reviewing and approving the annual report and accounts and interim statements remains with the Board.
In the past, selection and appointment of executive and non-executive Directors was carried out by the Board itself. On 13 October
2003 a Nominations Committee consisting of Richard Benton, Ian Knight, Professor Sir Michael Lyons and Rodney Westhead 
was established. Richard Benton chairs this committee.
The Remuneration Committee met six times this year. At the start of the year the committee comprised Richard Benton and 
Ian Knight. On 13 October 2003 Ian Knight resigned and Rodney Westhead and Professor Sir Michael Lyons were appointed. The
committee is chaired by Professor Sir Michael Lyons. This committee has responsibility for determining, within agreed terms of
reference, the Group’s policy on the remuneration of senior executives and specific remuneration packages for executive Directors,
including pension rights and compensation payments. It is also responsible for making recommendations for grants of options
under the Share Schemes.
Mouchel Parkman Report and Accounts 2004 31 Corporate governance
Mouchel Parkman Report and Accounts 2004 32
Directors’ remuneration
The Remuneration report is set out on pages 34 to 38. This report contains details of the remuneration policy and the remuneration 
of the Directors for the year.
Internal control
The Board has overall responsibility for the Group’s internal financial and operational controls and review of their effectiveness.
They are designed to meet the specific needs of the Group and to safeguard shareholders’ investments and Group assets. 
Any system of internal control can only provide reasonable, but not absolute, assurance against material misstatement or loss.
The main features operated during the year are as follows:
• Strategic control. The Board reviews the Group’s strategic plans once a year at a strategy event. Progress is monitored at
Board and Group Executive meetings.
• Allocation of responsibilities and control environment. The Board has reviewed and set clear terms of reference for its
committees and the Group has an organisational structure with clearly defined delegation of authority to executive management 
and reporting systems for financial results, risk exposure and control assessment.
• Financial control. The Group has a comprehensive system for reporting financial results to the Board. Each business stream
prepares monthly results with a comparison against budget and forecast. The Chief Executive and Finance Director hold a
monthly review meeting with each of the managing directors of the individual business streams. Actions are identified and a
financial report prepared for the Board for review of the Group as a whole.
• IT systems. The Group has established controls and procedures over the security of data held on IT systems and has put 
in place disaster recovery arrangements.
• Business stream controls. Each business stream’s senior management is responsible for identifying, evaluating and managing
major business risks. Procedures are in place to ensure that risks are identified from project bidding stage through to project
completion and include reviews against key performance indicators.
• Risk management. The Board has overall responsibility for identifying, evaluating and managing major business risks facing 
the Group. It regularly reviews business unit assessments of risk exposure and control and determines appropriate action.
There is an ongoing process for identifying, evaluating and managing the significant risks faced by the business. The process
involves monthly reports, by management, of the risk and internal control issues faced by their business. These risks are then reported
to the Group Executive and the Board is kept fully appraised of any risks and internal control issues arising from these reports.
A bid committee meets fortnightly and reviews all material bids.
• Internal audit. The Board has reviewed the need for an internal audit function and decided that no such function is necessary
due to the size and nature of the Company. The Board reviews the need for an internal audit function annually.
The Board have conducted a review of the process and made changes where necessary in accordance with the provisions 
of the Turnbull Guidance.
Relations with shareholders
The Board places considerable importance on maintaining good communications with shareholders. The Group’s website
(www.mouchelparkman.com) provides regularly updated information in relation to the Group’s activities and financial performance.
All shareholders are notified of the Annual General Meeting and have at least 20 working days’ notice of such. The Annual General
Meeting gives the shareholders the opportunity to meet the Directors and raise questions as they wish. Rodney Westhead, the
senior non-executive, is available to be contacted by shareholders, if required.
Going concern
Following a review of the Group’s financial results and forecasts the Directors are satisfied that the Group has 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
Mouchel Parkman Report and Accounts 2004 33
Statement of compliance
The Company has complied with the provisions stated in Section 1 of the Combined Code since its admission to the London
Stock Exchange on 28 June 2002 with the exception of the items below:
• Number of non-executive Directors: Until 19 September 2003 the number of non-executive Directors did not comply with 
Code provision D.3.1 which recommends that the Audit Committee should consist of at least three non-executive Directors. 
On 13 October 2003 the Audit Committee was changed to include four non-executive Directors, but following resignations, 
the members reduced to two. Its composition is now compliant with the requirements of the new Combined Code.
• On 13 October 2003 Rodney Westhead was appointed as the senior non-executive Director as required by the Code provision
A.2.1. Prior to this there was not a nominated senior non-executive Director.
• Pensionable bonuses: Jim Harding was entitled to a pensionable bonus of up to 45% of salary whilst he was an executive Director.
Accordingly, any bonus paid to Jim Harding may affect his entitlement under the Mouchel Superannuation Fund. Provision 7 
of Schedule A to the Combined Code (Provisions on the Design of Performance Related Remuneration) states that in general
neither annual bonus nor benefits in kind should be pensionable. No current Directors are entitled to pensionable bonuses.
Approved by the Board of Directors and signed on its behalf:
Amanda Massie
Secretary
18 October 2004 Remuneration report
Mouchel Parkman Report and Accounts 2004 34
This report sets out the policy and disclosures on Directors’ remuneration as required by United Kingdom Company law. 
Full consideration has also been given to the Combined Code of the United Kingdom Listing Rules.
Unaudited information
The Remuneration Committee
At the start of the year, the Remuneration Committee comprised its chairman, Ian Knight and Richard Benton. On 13 October
2003 Ian Knight resigned and Rodney Westhead and Professor Sir Michael Lyons were appointed. The committee is chaired by
Professor Sir Michael Lyons.
The committee meets at least twice a year and on behalf of the Board, sets the remuneration packages for executive Directors
including basic salary, bonuses and other compensation payments. The committee also makes recommendations for the grant 
of share options to executive Directors under the approved and unapproved executive share option schemes. 
The committee was assisted by the Company Secretary. Richard Cuthbert attended four of the six meetings of the Remuneration
Committee during the year in an advisory role.
The Remuneration Committee does not retain remuneration consultants but seeks professional advice from external consultants
as it sees fit. During the year advice was sought from The Hay Group Management Limited on executive remuneration packages
as part of an overall review of staff reward and grading.
Remuneration policy
The aims of the remuneration policy are:
• to align individual rewards and incentives directly with the performance of the Group and, hence, with the interests of the
Company’s shareholders;
• to provide remuneration packages that are sufficient to attract, retain and motivate executive Directors of the calibre required,
having regard to the remuneration paid to senior executives performing similar roles in similar organisations; and
• to encourage ownership and investment by executives.
Levels of remuneration are reviewed annually by the Remuneration Committee in light of expert advice, which assesses levels of
remuneration of Directors in similar companies. In addition, comparison is made with remuneration arrangements of other senior
employees in the Group.
In line with the Group’s growth strategy, a significant proportion of the Director’s salary is linked to the performance of the Group.
To this end the Remuneration Committee has agreed to new executive bonus arrangements for Directors and Senior Managers 
in the Group linked to a co-investment plan to take effect in the year 2004/5. These arrangements are designed to provide
consistent awards across the merged Group. Those benefiting from the arrangement will be able to invest their bonuses in
company shares to be held in trust for three years. If the company meets performance targets during the three year period 
the executive will be issued matching shares. The co-investment plan is to be presented for approval of the members at the
forthcoming Annual General Meeting.
If the Group’s performance meets 110% of agreed targets, the variable elements in the executive Directors’ salaries will account
for a maximum of 33% of the Directors’ salary. If the Group’s performance meets 90% of agreed targets, the variable elements 
in the Directors’ salary will account for up to 26% of their salary and if the Group’s performance fails to achieve 90% of targets, 
no incentives will be paid.
The Remuneration Committee keeps this remuneration policy under review in light of Company and market developments. 
Other than outlined above, there are no plans to materially alter the current remuneration arrangements in the current 
financial year.
Non-executive Directors
Remuneration of the non-executive Directors is determined by the Board. Non-executive Directors are not entitled to share
incentives, pensions, annual bonus or any similar payments other than expenses incurred in connection with the performance 
of their duties. Remuneration report
Mouchel Parkman Report and Accounts 2004 35
Executive Directors
The remuneration package
The remuneration package consists of a basic salary, allowances and benefits in kind, and an annual performance bonus.
Executive Directors also receive pension and life assurance benefits.
Basic salary
Salaries are determined by reference to levels prevailing in the employment market generally for executive Directors of a comparable
status. Salaries are reviewed annually at the beginning of each financial year and when an individual changes position or responsibility.
Bonus
Bonus entitlement is related to performance of the Group, the terms of which are reviewed annually. The annual bonus can range
from 0% to 50% of the basic salary for executive Directors. The annual bonus is paid with reference to clearly defined targets. 
Targets are based on levels of Group profit achieved.
It is the role of the Remuneration Committee at the end of each year to review the results against targets that have been set.
During the 2003/4 year, a mix of ex-Parkman and ex-Mouchel bonus scheme principles applied to the executive Directors. 
The committee took these into account in assessing bonus achievement for executive Directors. The committee took the view 
that the Directors had achieved 82% of the targets that had been set for them. Details of payments made for 2004 are set out 
in the remuneration table on page 36.
Share options
The executive Directors are eligible to participate in the Inland Revenue Approved Executive Share (AES) Option Scheme and 
the Unapproved Executive Share (UES) Option Scheme. All executive share options are long-term incentives and are performance
related. No options were granted in the year.
Details of share options outstanding are set out in the share options table on page 38.
For approved options granted during the period from March 1997 to December 2001 the Company’s adjusted earnings per share
(as presented in these financial statements) must increase by 6% or more than RPI over a three year period. For unapproved
share options granted during the period from March 1997 to December 2001 the Company’s adjusted earnings per share must
increase by 12% or more than the RPI over a three year period.
Other benefits
Executive Directors’ benefits include a car, its running costs or an equivalent amount of car allowance, and non-contributory
membership to a private healthcare scheme.
Performance graph
Under the UK Directors’ Remuneration Report Regulations 2002 we are required to show Mouchel Parkman’s relative performance
against a holding of shares in a broad-based equity index over the past five years. The comparison has been shown since June
2002 as this is when the Company’s shares first became publicly traded. The Remuneration Committee has decided to show
Mouchel Parkman’s performance against The FTSE Support Services Index as this is a comparison with companies that are most
similar to Mouchel Parkman. In the prior year, the FTSE All Small Support Services Index was used to measure performance, but this
index is no longer available.
160%
Mouchel Parkman FTSE Support Services Index
80%
60%
120%
20%
0%
100%
140%
40%
31 July ’02 31 July ’03 31 July ’04 Remuneration report
Mouchel Parkman Report and Accounts 2004 36
Executive Directors’ service contracts
It is the Company’s policy to fix notice periods for executive Directors for a period of no more than 12 months. The Remuneration
Committee is of the opinion that the entitlement of Directors to the security of 12 months notice of termination of employment is 
in line with practice in many comparable companies.
Copies of each Directors’ service agreement will be available for inspection at the Annual General Meeting.
The Remuneration Committee aims to always deal fairly with cases of termination, whilst attempting to limit compensation. The
Remuneration Committee has given due consideration to the recommendations of the Combined Code regarding the inclusion 
of specific provisions in Directors’ service contracts for compensation commitments in the event of early termination.
The service agreements currently do not make allowance for specific amounts of compensation in the event of early termination 
of contracts, in order to enable the Remuneration Committee to respond appropriately to particular circumstances. The Remuneration
Committee will continue to review the appropriateness of this practice.
Details of service agreements and notice periods are as follows:
Effective Expiry/ Notice period Notice period
date of retirement for Company for Director
Name of Director contract date (Months) (Months)
Richard Cuthbert 19/09/2003 Ongoing 12 12
Kevin Young 10/06/2002 Ongoing 6 6
Non-executive Directors’ service contracts
Non-executive Directors are appointed under letters of appointment for a period of three years at an annual fee, for a certain
number of days’ service each year.
Effective Expiry No. of days’
date of retirement service
Name of Director contract date required
Richard Benton 07/06/2002 06/06/2005 50 min
Ian Knight 07/06/2002 06/06/2005 24
Professor Sir Michael Lyons 19/09/2003 18/09/2006 24
Rodney Westhead 19/09/2003 18/09/2006 24
Audited information
Directors’ remuneration
Year ended 31 July 2004
Accumulated Gain on the
Basic salary Benefits total accrued exercise of
and fees Bonus in kind Total pension share options
£000 £000 £000 £000 £000 £000
Executive Directors
Richard Cuthbert (appointed 19 Sep)** 172 47 6 225 4-
Jim Harding (1 Aug to 19 Sep) 29 - - 29 -6
Kevin Young 143 87* 1 231 10 1,363
Non-executive Directors
Richard Benton 55 - - 55 --
Ian Knight 35 - - 35 --
Jim Harding (19 Sep to 31 May) 20 - - 20 107 1,449
Rodney Westhead (appointed 19 Sep)** 26 - - 26 --
Richard Archer (19 Sep to 31 Jan) 11 - - 11 --
Professor Sir Michael Lyons (appointed 19 Sep)** 26 - - 26 --
517 134 7 658 121 2,818
* Includes £50,000 exceptional bonus paid on the completion of the merger of Mouchel plc and Parkman Group plc.
** The figures are for the period from 19 September 2004, being the date of appointment until 31 July 2004. Remuneration report
Mouchel Parkman Report and Accounts 2004 37
Year ended 31 July 2003
Accumulated Gain on the
Basic salary Benefits total accrued exercise of
and fees Bonus in kind Total pension share options
£000 £000 £000 £000 £000 £000
Executive Directors
Jim Harding 169 57 1 227 79 54
Kevin Young 126 40 14 180 8-
Non-executive Directors
Richard Benton 55 - - 55 --
Ian Knight 43 - - 43 --
393 97 15 505 87 54
Directors’ pensions
Executive Directors are members of one of the Company pension schemes, which are administered by boards of Trustees. The
schemes are defined benefit schemes, approved by the Inland Revenue and contracted-out of the state earnings related pension
scheme. The Directors contribute to the schemes. The normal retirement age for Richard Cuthbert is 65 and for Kevin Young is
60. Members may accrue the maximum pension of two-thirds of pensionable salary at normal retirement age, dependant upon
service. The pension costs of Directors are charged to the profit and loss account over their estimated service lives based upon
actuarial advice. The company also contributes to a Funded Unapproved Retirement Benefit Scheme for Richard Cuthbert to the
extent of 15% of salary in excess of the Inland Revenue pensionable earnings cap.
During the year three Directors were members of a defined benefit pension scheme (2003: two).
Increase in
accrued
pension Transfer Transfer Total
during value of value of change in Transfer
Accrued the year accrued accrued Employee value during value of
pension at excluding pension pension contributions the year net increase less
Age at the end of any increase at the start at the end during the of Director’s Director’s
31 July 2004 the year for inflation of the year of the year period contributions contributions
Years Months £000 £000 £000 £000 £000 £000 £000
Richard Cuthbert 51 6433 35 7 25 23
Jim Harding 60 10 107 25 1,414 1,745 1 330 430
Kevin Young 45 3 10 2 62 78 5 11 10
The transfer values in the table above have been calculated on the basis of actuarial advice in accordance with Actuarial Guidance
note GN11, less Directors’ contributions. Members of the scheme have the option to pay additional voluntary contributions;
neither the contributions nor the resulting benefits have been included in the above table.
The transfer values disclosed above do not represent a sum paid to or payable to the individual Director. Instead they represent 
a potential liability of the pension scheme. Remuneration report
Share options
Options as at
Options as at Number Number 31 July
1 August of options of options 2004
2003 granted exercised or date of
or date of during during resignation Option price
appointment the year the year or retirement pence Exercisable between
Jim Harding UES* 449,140 - 449,140 - 19.25** 02/2003-02/2007
(retired 31 May 2004) ESS 4,020 - 4,020 - 19.25**** 08/2003-01/2004
AES* 106,180 - 53,090 53,090 28.25*** 03/2004-03/2011
UES* 293,820 - 293,820 - 28.25*** 03/2004-03/2008
UES* 300,000 - - 300,000 31.25 12/2004-12/2008
ESS 1,548 - - 1,548 100.00 08/2005-01/2006
1,154,708 - 800,070 354,638
Kevin Young UES* 753,880 - 753,880 - 19.25** 02/2003-03/2007
UES* 200,000 - - 200,000 28.25 03/2004-03/2008
UES* 300,000 - - 300,000 31.25 12/2004-12/2008
1,253,880 - 753,880 500,000
Richard Cuthbert UES* 539,237 - - 539,237 119.10 04/2005-03/2009
(appointed 19 Sep 2003) AES* 25,196 - - 25,196 119.10 04/2005-03/2012
564,433 - - 564,433
* Options marked * are performance related.
** The market price of these shares was 200.0p on 21 October 2003, this being the date of exercise.
*** The market price of these shares was 212.0p on 6 May 2004, this being the date of exercise.
**** The market price of these shares was 169.5p on 1 August 2003, this being the date of exercise.
The market price of the shares on 31 July 2004 was 201.5p and the shares traded in the range 169.5p to 268.5p during the year.
Directors’ interests
The interests of the Directors of the Company at the beginning and end of the year to 31 July 2004 were as follows:
Beneficial holdings
ordinary shares
31 July 31 July
2004 2003
Richard Benton 700,000 700,000
Richard Cuthbert 14,491 -
Ian Knight 200,000 200,000
Professor Sir Michael Lyons 7,628 -
Rodney Westhead 9,844 -
Kevin Young 858,480 584,600
The remuneration report has been approved by the Board of Directors and signed on its behalf by the Company Secretary.
Amanda Massie
Secretary
18 October 2004
Mouchel Parkman Report and Accounts 2004 38 Independent Auditors’ report to the 
members of Mouchel Parkman plc
Mouchel Parkman Report and Accounts 2004 39
We have audited the financial statements of Mouchel Parkman plc for the year ended 31 July 2004 which comprise the Group
profit and loss account, the Group balance sheet, the Company balance sheet, the Group cash flow statement, the statement 
of total recognised gains and losses, reconciliation of movement in shareholders’ funds and the related notes 1 to 40. These
financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the
remuneration report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state 
to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As described in the statement of Directors’ responsibilities, the Company’s Directors are responsible for the preparation of the
financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibility is to audit
the financial statements in accordance with relevant United Kingdom legal and regulatory requirements, auditing standards, and
the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the part of the Directors’ remuneration report described as having been audited are properly prepared in accordance with the
Companies Act 1985. We also report 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 or the Listing Rules regarding Directors’ remuneration and transactions with the Company
and other members of the Group is not disclosed.
We review whether the Corporate Governance statement and remuneration report reflect the Company’s compliance with the
seven provisions of the Combined Code specified for our review by the Listing Rules and we report if it does not. We are not
required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the
effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
We read the Directors’ report and the other information contained in the annual report for the above year as described in the
contents section including the unaudited part of the Directors’ remuneration report and consider the implications for our report 
if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom 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 circumstances of the Company and the Group,
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. Mouchel Parkman Report and Accounts 2004 40
Independent Auditors’ report to the 
members of Mouchel Parkman plc
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 July 2004 and 
of the profit of the Group for the year then ended; and
• the financial statements and part of the Directors’ remuneration report described as having been audited have been properly
prepared in accordance with the Companies Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
18 October 2004 Financial statements
Contents
42 Group Profit and Loss Account
43 Group Balance Sheet
44 Parent Company Balance Sheet
45 Group Cash Flow Statement
46 Statement of Total Recognised Gains and Losses
Reconciliation of Movements in Shareholders’ Funds
47 Notes to the financial statements
72 Five year financial summary Mouchel Parkman Report and Accounts 2004 42
Group Profit and Loss Account
For the year ended 31 July 2004
Before Exceptional
exceptional items and
items and goodwill
goodwill amortisation
amortisation (Notes 4, 5 & 6) Total Restated**
2004 2004 2004 2003
Notes £000 £000 £000 £000
Turnover: Group and share of joint ventures 272,900 - 272,900 224,858
Less: share of joint ventures’ turnover 17 (1,045) - (1,045) (1,225)
Group turnover 2/3 271,855 - 271,855 223,633
Continuing operations 261,721 - 261,721 222,730
Acquisitions 3,343 - 3,343 903
Discontinued operations 6,791 - 6,791 -
Cost of sales 4 (218,881) - (218,881) (181,167)
Gross profit 52,974 - 52,974 42,466
Administrative expenses (33,757) (2,481) (36,238) (30,299)
Administrative expenses (excluding goodwill amortisation and 
exceptional goodwill impairment) (33,757) - (33,757) (29,425)
Goodwill amortisation - (1,774) (1,774) (874)
Exceptional goodwill impairment - (707) (707) -
Operating profit: Group 3/4 19,217 (2,481) 16,736 12,167
Continuing operations 18,625 (2,481) 16,144 12,126
Acquisitions 248 - 248 41
Discontinued operations 344 - 344 -
Operating profit is analysed between:
Earnings before interest, tax, depreciation and amortisation 22,784 - 22,784 15,421
Depreciation 4 (3,567) - (3,567) (2,380)
Goodwill amortisation 4 - (1,774) (1,774) (874)
Exceptional goodwill impairment 4/5 - (707) (707) -
Operating profit: Group 19,217 (2,481) 16,736 12,167
Non-operating exceptional items 6 - (6,784) (6,784) (963)
Profit on ordinary activities before finance items 19,217 (9,265) 9,952 11,204
Interest receivable and similar income 7 424 - 424 653
Interest payable and similar charges 8 (271) - (271) (153)
Profit on ordinary activities before taxation 19,370 (9,265) 10,105 11,704
Tax on profit on ordinary activities 10 (4,068) 1,067 (3,001) (4,056)
Profit on ordinary activities after taxation 15,302 (8,198) 7,104 7,648
Dividends 12 (2,662) - (2,662) (1,773)
Retained profit for the year transferred to reserves 29 12,640 (8,198) 4,442 5,875
Basic earnings per share 13 15.4p - 7.2p 8.0p*
Diluted earnings per share 13 14.8p - 6.9p 7.5p*
Adjusted earnings per share 13 14.5p - 6.7p 7.3p*
* Basic, diluted and adjusted earnings per share before exceptional items and goodwill amortisation were 9.9p, 9.3p and 9.0p
respectively for the year ended 31 July 2003.
**Restated following application of merger accounting principles of FRS 6, Acquisitions and Mergers and the adoption of 
Urgent Issues Task Force (UITF) 38, Accounting for ESOP Trusts (notes 1b and 1n). Mouchel Parkman Report and Accounts 2004 43
Group Balance Sheet
As at 31 July 2004
Restated*
2004 2003
Notes £000 £000
Fixed assets
Intangible assets 14 13,725 13,312
Tangible assets 15 10,461 11,139
24,186 24,451
Investments in joint ventures:
Share of gross assets 17 66 236
Share of gross liabilities 17 (66) (236)
- -
Investments – other 17 27 175
24,213 24,626
Current assets
Debtors 18 81,093 62,708
Cash at bank and in hand 19,416 21,589
100,509 84,297
Creditors
Amounts falling due within one year 19 (58,986) (48,557)
Net current assets 41,523 35,740
Total assets less current liabilities 65,736 60,366
Creditors
Amounts falling due after more than one year 23 (1,220) (956)
Provisions for liabilities and charges
Deferred taxation 10d (120) (120)
Pension provision 37 (3,200) (3,200)
Other provisions - (31)
61,196 56,059
Capital and reserves
Called up share capital 24 265 264
Share premium 25 21,418 20,779
Shares to be issued 193 1,094
Revaluation reserve 26 3,212 3,212
Merger reserve 9,178 9,099
Other reserves 27 (234) (122)
ESOP reserve 28 (1,738) (2,614)
Profit and loss account 29 28,902 24,347
Equity shareholders’ funds 61,196 56,059
* Restated following application of merger accounting principles of FRS 6, Acquisitions and Mergers and the adoption of 
UITF 38, Accounting for ESOP Trusts (notes 1b and 1n).
The financial statements were approved by the Board of Directors on 18 October 2004 and are signed on its behalf by:
Richard Cuthbert Kevin Young
Director Director Mouchel Parkman Report and Accounts 2004 44
Parent Company Balance Sheet
As at 31 July 2004
Restated*
2004 2003
Notes £000 £000
Fixed assets
Tangible assets 15 4,089 4,089
Investments 17 1,542 1,432
5,631 5,521
Current assets
Debtors 18 47,691 29,222
Cash at bank and in hand 63 155
47,754 29,377
Creditors
Amounts falling due within one year 19 (8,830) (7,117)
Net current assets 38,924 22,260
Total assets less current liabilities 44,555 27,781
Provisions for liabilities and charges
Deferred taxation 10d (120) (120)
44,435 27,661
Capital and reserves
Called up share capital 24 265 155
Share premium 25 21,418 20,779
Revaluation reserve 26 3,212 3,212
Profit and loss account 29 21,278 6,129
ESOP reserve 28 (1,738) (2,614)
Equity shareholders’ funds 44,435 27,661
* Restated following the adoption of UITF 38, Accounting for ESOP Trusts (note 1n).
The financial statements were approved by the Board of Directors on 18 October 2004 and are signed on its behalf by:
Richard Cuthbert Kevin Young
Director Director Mouchel Parkman Report and Accounts 2004 45
Group Cash Flow Statement
For the year ended 31 July 2004
Restated*
2004 2003
Notes £000 £000
Net cash inflow from operating activities 30 19,292 15,718
Returns on investments and servicing of finance
Interest received 421 666
Interest paid (118) (77)
Interest element of finance lease rentals (70) (77)
Net cash inflow from returns on investments and servicing of finance 233 512
Taxation
Overseas tax paid - (10)
UK corporation tax paid (5,254) (2,918)
Tax paid (5,254) (2,928)
Capital expenditure and financial investment
Purchase of tangible fixed assets 15 (3,560) (5,107)
Disposal of tangible fixed assets 20 19
Net cash outflow from capital expenditure and financial investment (3,540) (5,088)
Acquisitions and disposals
Purchase of subsidiary undertakings (3,911) (4,937)
Net cash acquired with subsidiary 34 194 (203)
Payment to acquire unincorporated business (48) (16)
Sale of business 745 -
Net cash outflow from acquisitions and disposals (3,020) (5,156)
Non-operating exceptional cash flows (transaction and restructuring costs) (5,574) -
Dividends paid (2,276) (889)
Net cash (outflow)/inflow before financing (139) 2,169
Financing
Issue and expenses of issue of ordinary shares 90 (429)
Reduction of bank loans - (585)
Capital element of finance lease rentals 33 (526) (401)
Disposal of own shares 989 520
Net cash inflow/(outflow) from financing 553 (895)
Increase in cash 31 414 1,274
* Restated following application of merger accounting principles of FRS 6, Acquisitions and Mergers and the adoption of UITF 38,
Accounting for ESOP Trusts (notes 1b and 1n). Statement of Total Recognised Gains and Losses
For the year ended 31 July 2004
Restated*
2004 2003
£000 £000
Profit for the financial year 7,104 7,648
Currency translation differences on net foreign currency investments 27 (112) (18)
Total recognised gains and losses for the year 6,992 7,630
Reconciliation of Movements in Shareholders’ Funds
For the year ended 31 July 2004
Restated*
2004 2003
£000 £000
Profit for the financial year 7,104 7,648
Dividends (2,662) (1,773)
4,442 5,875
Other recognised losses for the year 27 (112) (48)
Shares issued and share premium arising 640 -
Movement on merger reserves 79 97
Employee Share Ownership Plan (ESOP) Trusts 28 876 537
Profit on sale of own shares held in ESOP Trusts 113 -
Movement on deferred equity consideration (901) 1,094
Opening shareholders’ funds 56,059 48,504
Closing shareholders’ funds 61,196 56,059
* Restated following application of merger accounting principles of FRS 6, Acquisitions and Mergers and the adoption of 
UITF 38, Accounting for ESOP Trusts (note 1b and 1n).
Mouchel Parkman Report and Accounts 2004 46 Notes to the financial statements
For the year ended 31 July 2004
1 Accounting policies
a Basis of accounting
The financial statements are prepared under the historical cost basis of accounting as adjusted for the revaluation of freehold
property, and have been prepared in accordance with applicable accounting standards of the Accounting Standards Board 
and the pronouncements of the Urgent Issues Task Force (UITF).
b Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all subsidiary undertakings. Subsidiaries
acquired in the year are accounted for by the acquisition method of accounting. Associated undertakings and joint ventures are
accounted for in the Group financial statements using the equity method of accounting. A joint arrangement that is not an entity 
is accounted for in accordance with Financial Reporting Standard (FRS) 9, Associates and Joint Ventures, in that the Group
accounts for its own assets and liabilities and cash flows measured according to the agreement governing the arrangement.
The combination of Mouchel plc and Parkman Group plc has been accounted for under the merger accounting principles contained
in FRS 6, Acquisitions and Mergers. The comparatives have been restated in line with these principles.
c Depreciation
No depreciation is provided on the freehold buildings as it is the Group’s policy to maintain the buildings in a continual state 
of sound repair and to make improvements from time to time. Accordingly the Directors consider that the residual value of 
the buildings is such that any depreciation would be immaterial. Other assets are written-off according to the forecast length 
of their useful life on a straight-line basis. The principal rates are:
Plant and office equipment 10%, 20%, and 33.33% per annum
Vehicles 20%, and 33.33% per annum
Leasehold improvement Over the life of the lease, up to the first available break
d Repairs and renewals
These costs are charged against profits as and when they are incurred. No provision for future repairs is made in the 
financial statements.
e Taxation
Current tax, including UK Corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the 
tax rates and laws that have been enacted or substantially enacted by the balance sheet date.
Deferred taxation is provided in full on material timing differences at the rate of taxation anticipated to apply when these differences
crystallise. Timing differences arise from the inclusion of items of income and expenditure in the taxation computations in periods
different from those in which they are included in the financial statements.
A deferred tax asset is only recognised when it is more likely than not that it will be recoverable in the future. Deferred tax assets
and liabilities recognised have not been discounted.
f Foreign exchange
The financial statements of the foreign subsidiaries are translated into sterling at the closing rate of exchange on the balance 
sheet date and the differences arising from the translation of the opening net investment in the subsidiaries at the closing rate 
is taken directly to reserves. Other translation differences are dealt with in the profit and loss account.
g Long-term contracts
A long-term contract is defined as a contract entered into where the time taken to substantially complete the contract is such 
that the contract activity falls into more than one accounting period. These contracts are included in trade debtors at cost plus
attributable profits estimated to be earned to date based on the stage of completion less provision for any known or anticipated
losses and payments on accounts received. Where payments on account are in excess of turnover, these amounts are included
in trade creditors.
h Pension costs
The expected cost of providing defined benefit pensions is charged to the profit and loss account so as to spread the cost for
those employees in the defined benefits scheme over the anticipated service lives of those employees in such a way that pension
cost is a substantially level percentage of current and expected future pensionable payroll.
Mouchel Parkman Report and Accounts 2004 47 Mouchel Parkman Report and Accounts 2004 48
Notes to the financial statements
For the year ended 31 July 2004
1 Accounting policies (continued)
i Leases
Tangible fixed assets held under finance leases and the related lease obligations are recorded in the balance sheet at the fair 
value of the leased assets at the inception of the lease. The excesses of the lease payments over the recorded lease obligations
are treated as finance charges which are amortised over each lease term to give a constant rate of charge on the remaining
balance of the obligations. Rental costs under operating leases are charged to profit and loss account in equal annual amounts
over the periods of the leases.
j Investments
Fixed asset investments are shown at cost less provisions for impairment. A review for impairment is carried out if events or
changes in circumstances indicate that the carrying value of an investment may not be recoverable. Any loss that arises as a
result of such an impairment is recognised in the profit and loss account for the financial year in which it is incurred.
k Goodwill
For acquisitions of a business including an interest in an associated undertaking following the implementation of Financial
Reporting Standard 10, Goodwill and Intangible Assets, purchased goodwill is capitalised in the year in which it arises and
amortised over its estimated useful life. The estimated useful life is currently 10 years, based on the Directors’ best estimate.
Goodwill which arose on the acquisition of a business, including an interest in associated undertakings prior to the adoption
of FRS 10, was written off directly to reserves in the year of acquisition.
l Financial instruments
Note 21 of the financial statements provides an explanation of the role that financial instruments have had during the period in
creating or changing the risks the Group faces in its activities. The explanation summarises the objectives and policies for holding
or issuing financial instruments.
The numerical disclosures in note 21 deal with the financial assets and financial liabilities as defined in FRS 13, Derivatives and
other Financial Instruments. Short-term debtors and creditors have been excluded from the disclosures.
Transactions denominated in foreign currencies are recorded at the rates ruling on the date of the transactions. At the balance
sheet date monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at
that date.
m Share based payments
The difference between the exercise price and the market price, on the date options are granted to employees, is recorded in the
profit and loss account.
n ESOP trusts
The financial statements and the comparatives have been prepared in accordance with UITF 38, ESOP Trusts, which was
adopted retrospectively in the current year. The impact of this adoption was a reclassification of the investment in own shares 
from investments to ESOP reserve. There was no impact to the profit and loss account. The cash flows from the sale of own
shares have been reclassified to cash flows from financing previously cash flows from capital expenditure and financial investment.
2 Turnover
Turnover represents the sales value (excluding value added tax) of services provided by the Group during the year, as adjusted 
for the opening and closing valuations of long-term contracts. Mouchel Parkman Report and Accounts 2004 49
Notes to the financial statements
For the year ended 31 July 2004
3 Segmental analysis
a Turnover
Analysis of turnover by activity is as follows:
Restated
2004 2003
£000 £000
Managed Services 173,006 143,793
Project Services 84,461 66,720
Management Consultancy 14,388 13,120
271, 855 223,633
Turnover from joint ventures (Project Services) 1,045 1,225
Analysis of turnover by origin is as follows:
Restated
2004 2003
£000 £000
United Kingdom 257,123 211,938
Far East 7,035 6,862
Rest of world 7,697 4,833
271,855 223,633
Turnover from joint ventures (United Kingdom) 1,045 1,225
The analysis of turnover by geographical destination is not materially different from that by geographical origin.
b Operating profit
Analysis of operating profit by activity is as follows:
Restated
2004 2003
£000 £000
Managed Services 12,439 8,331
Project Services 4,951 3,303
Management Consultancy 1,827 1,407
Total operating profit before goodwill amortisation and exceptional goodwill impairment 19,217 13,041
Goodwill amortisation and exceptional goodwill impairment (2,481) (874)
Group operating profit 16,736 12,167
Analysis of operating profit by origin is as follows:
Restated
2004 2003
£000 £000
United Kingdom 18,585 12,463
Far East 421 75
Rest of world 211 503
Total operating profit before goodwill amortisation and exceptional goodwill impairment 19,217 13,041
Goodwill amortisation and exceptional goodwill impairment (2,481) (874)
Group operating profit 16,736 12,167
The analysis of operating profit by geographical destination is not materially different from that by geographical origin.
It is not considered appropriate to allocate the goodwill amortisation or exceptional goodwill impairment either by operating activity
or origin. Mouchel Parkman Report and Accounts 2004 50
3 Segmental analysis (continued)
c Net assets
Analysis of net assets by geographical segment is as follows:
Restated
2004 2003
£000 £000
United Kingdom 58,587 52,043
Far East 110 2,707
Rest of world 2,499 1,309
61,196 56,059
Analysis of net assets by activity has not been presented as no balance sheet items are analysed by class of business.
4 Operating profit
Restated
2004 2003
£000 £000
Group operating profit is stated after charging:
Cost of sales 218,881 181,167
Continuing operations 210,073 180,376
Acquisitions 2,744 791
Discontinued operations 6,064 -
Administrative expenses:
Depreciation
Owned assets 3,305 1,742
Finance leases 262 638
Goodwill amortisation 1,774 874
Rentals under operating leases in respect of
Buildings 4,973 4,645
Plant and computer equipment 3,063 2,287
Audit fees
Audit remuneration: Group 138 155
Company 45 33
Audit related services 20 20
Other fees payable to auditors: UK 114 85
Overseas 9 15
Other items
(Profit)/loss on disposal of fixed assets (9) 18
Pension costs in excess of regular pension contributions (note 37) - 900
Other administrative expenses 21,837 18,887
Exceptional goodwill impairment (note 5) 707 -
36,238 30,299
Continuing operations 35,504 30,228
Acquisitions 351 71
Discontinued operations 383 -
In addition to the audit fees disclosed above, fees of £810,000 were paid to the auditors in relation to the merger transaction and
£52,000 was paid in respect of the acquisition of Mouchel GEL Limited.
5 Exceptional goodwill impairment
The exceptional goodwill impairment is an operating exceptional item and relates to the impairment of the remaining goodwill
which arose on the acquisition of Full Circle Educational Services Limited in May 2002.
Notes to the financial statements
For the year ended 31 July 2004 Mouchel Parkman Report and Accounts 2004 51
Notes to the financial statements
For the year ended 31 July 2004
6 Non-operating exceptional items
Restated
2004 2003
£000 £000
Merger transaction costs 2,576 963
Restructuring and reorganisation costs 3,381 -
Loss on disposal of subsidiary undertaking 827 -
6,784 963
Merger transaction costs relate to the merger of Mouchel plc and Parkman Group plc on 19 September 2003 and consist of
amounts paid to the Company’s advisors in relation to the merger.
Restructuring and reorganisation costs are the costs of restructuring the Group subsequent to the merger.
The loss on disposal of subsidiary undertaking relates to the disposal of Mouchel Parkman Asia Limited which is detailed 
in note 35.
7 Interest receivable
Restated
2004 2003
£000 £000
Group 424 653
8 Interest payable and similar charges
Restated
2004 2003
£000 £000
Bank overdrafts 191 67
Finance leases 80 86
271 153
9 Employee costs and numbers
Restated
2004 2003
£000 £000
Staff costs, including Directors, of undertakings within the Group:
Wages and salaries 133,164 111,808
Social security costs 9,990 8,252
Other pension costs (note 37) 7,620 7,138
150,774 127,198
The average number of employees of undertakings in the Group during the year was as follows:
Restated
2004 2003
Number Number
Professional staff 3,719 3,107
Other staff 401 477
4,120 3,584 Mouchel Parkman Report and Accounts 2004 52
10 Taxation
a Analysis of tax charge for the year
Before
exceptional Exceptional
items and items and
goodwill goodwill
amortisation amortisation Restated
2004 2004 2004 2003
£000 £000 £000 £000
Current tax:
Corporation tax on profits of the year
United Kingdom (4,515) 1,067 (3,448) (4,192)
Total current tax (note 10b) (4,515) 1,067 (3,448) (4,192)
Deferred tax:
Current year movement 447 - 447 136
Tax on profit on ordinary activities (4,068) 1,067 (3,001) (4,056)
b Factors affecting the tax charge for the year
The tax charge for each year is different to the standard rate of corporation tax in the UK (30%). The differences are
explained below:
Restated
2004 2003
£000 £000
Profit on ordinary activities before tax 10,105 11,704
Profit on ordinary activities multiplied by the standard rate of
corporation tax in the UK of 30% (3,031) (3,511)
Effects of:
Tax relief on employee share incentives 1,950 -
Expenses not deductible for tax purposes (207) (137)
Depreciation for period in excess of capital allowances
and other timing differences (447) (136)
Exceptional items not deductible for tax purposes (1,181) (146)
Goodwill amortisation (532) (262)
Current tax charge for the year (3,448) (4,192)
c Factors that may affect future tax charges
In the prior year, the Group had an unrecognised deferred tax asset in respect of losses as there was insufficient evidence that
there would be suitable taxable profits within the next 12 months from which the future reversal could be deducted. In the year,
the subsidiary was disposed of.
No deferred tax asset has been recognised in respect of other items amounting to £48,672 (2003: £49,250).
Tax relief on employee share incentives depends on the value of employee share options exercised in the relevant year and on 
the company’s share price at the time of exercise.
Notes to the financial statements
For the year ended 31 July 2004 Mouchel Parkman Report and Accounts 2004 53
Notes to the financial statements
For the year ended 31 July 2004
10 Taxation (continued)
d Deferred tax asset
Restated
2004 2003
£000 £000
Depreciation in excess of capital allowances 522 75
Pension accrual 960 960
Deferred tax asset (note 18) 1,482 1,035
Taxable future profits on sale of shares in the 
Mouchel Employees’ Share Ownership Plan Trust (120) (120)
Net deferred tax asset at 31 July 1,362 915
The movement during the year for deferred taxation was:
At 1 August 915 779
Deferred tax credit in profit and loss account for year 447 136
Net deferred tax asset at 31 July 1,362 915
11 Profit of the parent company
The Group profit and loss account consolidates the profit and loss accounts of the Parent Company and subsidiary undertakings.
As permitted by section 230 of the Companies Act 1985 the profit and loss account of the Parent Company is not presented as
part of these accounts. The Parent Company’s result for the financial year before dividends amounted to a profit of £17,698,000
(2003: profit of £6,203,000).
12 Dividends
Restated
2004 2003
£000 £000
Dividends payable to Mouchel Parkman plc (formerly Mouchel plc) shareholders:
First interim dividend of 0.9p per share (2003: 0.75p per share) 952 465
Second interim dividend nil (2003: 1.45p per share) - 899
Final dividend of 1.8p per share (2003: nil) 1,906 -
Less dividend on own shares (142) (205)
Less dividends waived by ESOP Trusts (54) (44)
Ordinary dividend on equity shares 2,662 1,115
Dividends payable to Parkman Group plc shareholders:
Dividends payable prior to merger - 658
Total dividends payable 2,662 1,773
The final dividend will be paid on 1 December 2004 to the ordinary shareholders on the register at close of business on 
29 October 2004. Mouchel Parkman Report and Accounts 2004 54
Notes to the financial statements
For the year ended 31 July 2004
13 Earnings per ordinary share
Before
exceptional Exceptional
items and items and
goodwill goodwill Restated
amortisation amortisation Total Total
2004 2004 2004 2003
£000 £000 £000 £000
Profit after tax 15,302 (8,198) 7,104 7,648
Basic, diluted and adjusted earnings attributable to shareholders 15,302 (8,198) 7,104 7,648
Basic earnings per share 15.4p 7.2p 8.0p*
Diluted earnings per share 14.8p 6.9p 7.5p*
Adjusted earnings per share 14.5p 6.7p 7.3p*
* Basic, diluted and adjusted earnings per share before exceptional items and goodwill amortisation were 9,9p, 9.3p and 9.0p
respectively for the year ended 31 July 2003.
Restated
2004 2003
Number Number
Weighted average number of ordinary shares 99,215,764 95,732,277
Dilutive share options 1,539,357 3,367,299
Contingent issuable shares 676,688 840,605
Dilutive Save As You Earn schemes 2,265,152 2,242,058
Diluted weighted average number of ordinary shares 103,696,961 102,182,239
Weighted average number of ordinary shares 99,215,764 95,732,277
Average number of shares held by the Employee Share Ownership Plan Trusts 8,094,564 11,708,096
Share options (shares held in the Employee Share Ownership Plan Trusts) 
matured in respect of Executive share option schemes (1,639,518) (2,043,811)
Adjusted weighted average number of ordinary shares 105,670,810 105,396,562
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average
number of ordinary shares during the year.
Diluted earnings per share is calculated by adjusting earnings attributable to ordinary shareholders and the weighted average
number of ordinary shares in issue on the assumption of conversion of all dilutive share options in issue and shares under Save 
As You Earn Schemes. The share price used to calculate diluted earnings per share is based on a weighted average price of 
223.18p (2003: 124.91p).
Adjusted earnings per share is calculated by adjusting the weighted average number of shares to include the shares held by 
the Employee Share Ownership Plan Trusts. The Directors believe that this additional measure provides a better indicator of 
the underlying trends in the business. Mouchel Parkman Report and Accounts 2004 55
Notes to the financial statements
For the year ended 31 July 2004
14 Intangible fixed assets
Restated
Goodwill
£000
Cost at 1 August 2003 14,785
Additions in the year (note 34) 4,981
Adjustment to purchase consideration (2,087)
Exceptional goodwill write down (923)
At 31 July 2004 16,756
Accumulated amortisation at 1 August 2003 1,473
Charge for the year 1,774
Exceptional goodwill write down (216)
At 31 July 2004 3,031
Net book value
At 31 July 2004 13,725
At 31 July 2003 13,312
Goodwill additions arose during the year upon the acquisition of Mouchel GEL Limited (formerly GEL Group Limited). Goodwill is
amortised in accordance with the accounting policy set out in note 1k.
Adjustment was made to the purchase consideration of Atkins Odlin Consulting Engineers Limited, Mouchel Parkman LDA Limited,
Full Circle Educational Consultants Limited and Mouchel Parkman Metro Limited following a review of the earn out positions.
15 Tangible fixed assets
a Group
Plant
Leasehold Freehold and office
improvements properties equipment Vehicles Total
£000 £000 £000 £000 £000
Cost or valuation
At 1 August 2003 (Restated) 1,209 4,089 23,493 346 29,137
Foreign exchange translation difference - - (52) (5) (57)
1,209 4,089 23,441 341 29,080
Acquisitions 16 - 84 - 100
Additions 98 - 3,434 28 3,560
Disposals - - (1,468) (68) (1,536)
At 31 July 2004 1,323 4,089 25,491 301 31,204
Accumulated depreciation
At 1 August 2003 (Restated) 616 - 17,200 182 17,998
Foreign exchange translation difference - - (73) (5) (78)
616 - 17,127 177 17,920
Disposals - - (699) (45) (744)
Charge for the year 153 - 3,346 68 3,567
At 31 July 2004 769 - 19,774 200 20,743
Net book value
At 31 July 2004 554 4,089 5,717 101 10,461
At 31 July 2003 (Restated) 593 4,089 6,293 164 11,139
The net book value of the Group’s tangible fixed assets includes £93,451 of plant and office equipment and vehicles held under
finance leases at 31 July 2004 (2003: £356,058).
Included above was £792,000 of assets written off as part of the reorganisation costs shown in note 6. Mouchel Parkman Report and Accounts 2004 56
Notes to the financial statements
For the year ended 31 July 2004
15 Tangible fixed assets (continued)
b Company
Freehold
properties
£000
Cost or valuation
At 1 August 2003 4,089
Disposals -
At 31 July 2004 4,089
Accumulated depreciation
At 1 August 2003 -
Disposals -
At 31 July 2004 -
Net book value
At 31 July 2004 4,089
At 31 July 2003 4,089
The Company’s freehold property was revalued by Countrywide Surveyors Limited, Commercial and Professional property
advisers, in July 2000 at £4,100,000. The comparable amount under the historical cost convention is £877,000.
In July 2003, being the third year after the original valuation, a valuer was asked to perform a valuation in accordance with
Financial Reporting Standard 15, Tangible Fixed Assets. The valuer, BBG Commercial, valued the property at £4,100,000.
16 Capital commitments
Group and Company
The Group was not committed to any material capital expenditure as at 31 July 2004 or 31 July 2003.
17 Investments
Restated
Shares in Restated
subsidiary Other Restated
undertakings investments Total
£000 £000 £000
a Group
At cost 1 August 2003 - 175 175
Additions -1515
Disposals - (163) (163)
At 31 July 2004 -2727
b Company
At cost 1 August 2003 1,432 - 1,432
Additions 110 - 110
Disposals ---
At 31 July 2004 1,542 - 1,542
Acquisitions
On 1 August 2004 the Group acquired, at a cost of £5,987,028 (including expenses), 100% of the share capital of GEL Group
Limited. The Company’s name was later changed to Mouchel GEL Limited. Net assets on the date of sale were £1,006,488 as
detailed in note 34. Mouchel Parkman Report and Accounts 2004 57
Notes to the financial statements
For the year ended 31 July 2004
17 Investments (continued)
Disposals
On 30 July 2004, the Company disposed of its investment in Mouchel Parkman Asia Limited. Proceeds on the disposal were
£627,000 and net Group assets of £1,454,000 were disposed, resulting in a loss on disposal of £827,000. Details of the 
disposal are contained in note 35.
Subsidiaries
The Company’s wholly owned subsidiaries in which the Company had an interest at 31 July 2004, their country of incorporation
and registration as well as ownership of their share capital are listed below:
Portion of Country of
Company shares held (%) incorporation
Mouchel Parkman Services Limited (formerly Mouchel Parkman UK Limited) 100 Great Britain
Mouchel Parkman Metro Limited (formerly Mouchel Metro Limited) 100 Great Britain
MKB Resourcing Limited 100 Great Britain
Mouchel Biuro Doradztwa Sp Zoo (dormant) 100 Poland
Mouchel Management Limited (dormant) 100 Great Britain
Mouchel Services Limited (dormant) 100 Great Britain
Baker Martin Mouchel Limited (dormant) 100 Great Britain
Mouchel Parkman International (Jersey) Limited
(formerly Mouchel Consulting International Limited) 100 Jersey
Mouchel Middle East Limited 100 Hong Kong
Mouchel Parkman International Limited (formerly Mouchel International Limited) 100 Hong Kong
Mouchel GEL Limited 100 Great Britain
LG Compare.com Limited (dormant) 100 Great Britain
Metro Project Services Limited (dormant) 100 Great Britain
Mouchel Trustee Limited 100 Great Britain
Mouchel Quest Trustee Limited 100 Great Britain
Mouchel Parkman LDA Limited (formerly Mouchel LDA Limited) 100 Great Britain
Mouchel Parkman GB Limited (formerly Parkman Limited) 100 Great Britain
Parkman Property Management Limited 100 Great Britain
Mouchel Parkman Ireland Limited (formerly Parkman Teoranta Limited) 100 Ireland
Parkman Group plc 100 Great Britain
2020 Liverpool Limited* 100 Great Britain
Atkins Odlin Consulting Engineers Limited 100 Great Britain
Full Circle Educational Services Limited (dormant) 100 Great Britain
Newbury King & Co Limited (dormant) 100 Great Britain
Carey Love Associates Limited (dormant) 100 Great Britain
Land Aspects Limited (dormant) 100 Great Britain
Land Concepts Limited (dormant) 100 Great Britain
Parkman NI Limited (dormant) 100 Great Britain
Parkman Consultants Limited (dormant) 100 Great Britain
Parkman Consulting Engineers (dormant) 100 Great Britain
Parkman Group Professional Services Limited (dormant) 100 Great Britain
Parkman Holdings Limited (dormant) 100 Great Britain
Parkman International Limited (dormant) 100 Great Britain
Parkman M & E Consultants Limited (dormant) 100 Great Britain
Parkman Midlands Limited (dormant) 100 Great Britain
Parkman Scotland Limited (dormant) 100 Great Britain
Parkman South East Limited (dormant) 100 Great Britain
PCE Holdings Limited (dormant) 100 Great Britain
PFI Street Lighting Limited (dormant) 100 Great Britain
* On 1 September 2004, Liverpool City Council acquired a 19.9% interest in the ordinary share capital of 2020 Liverpool Limited. Mouchel Parkman Report and Accounts 2004 58
Notes to the financial statements
For the year ended 31 July 2004
17 Investments (continued)
Other investments
The Group’s other investments include a 50% holding in Mouchel IRE Limited, registered in the Ukraine and a 25% holding in
Chotichinda Mouchel Consultants Limited (formerly known as Mouchel (Thailand) Limited), incorporated in Thailand.
Joint arrangement not an entity
During the year Mouchel Parkman Services Limited entered into a 50% joint arrangement with M. Holleran Limited and a 33%
joint arrangement with Faber Mansell Limited and Bullen Consultants Limited.
Mouchel Parkman Services Limited has a 50% interest in joint arrangements with Amey Construction Limited, Lee McCullough
and Partners Limited, WA Fairhurst and Partners and Amey Rail Limited, a 40% share in the arrangements with Mott MacDonald
Limited and Rail First Limited and a 25% interest in joint arrangements with Amey Highways Limited. The arrangement with Lee
McCullough and Partners Limited is through Mouchel McCullough Management Limited, registered in Ireland. All these arrangements
are accounted for in accordance with the policy detailed in note 1b.
Joint ventures
The Group has two joint ventures with Roberts & Partners (Group) PLC, being Speed 8770 Limited and Mouchel Roberts Limited.
Mouchel Parkman owns 50% of the ordinary share capital of Mouchel Roberts Limited and Speed 8770 Limited and both companies
have the same address as Mouchel Parkman plc.
Speed 8770 Limited was dormant in the year and Mouchel Roberts ceased trading in April 2004.
The share of the net assets of both of these joint ventures are shown below.
Mouchel Speed Elimination of Total
Roberts 8770 intercompany joint
Limited Limited transactions ventures
2004 2004 2004 2004
£000 £000 £000 £000
Profit and loss account
Share of turnover 1,045 - - 1,045
Share of profit on ordinary activities before and after taxation ----
Balance sheet
Share of current assets 66 - - 66
Share of gross assets 66 - - 66
Share of liabilities due within one year (66) - - (66)
Share of gross liabilities (66) - - (66)
Share of net assets ---- Mouchel Parkman Report and Accounts 2004 59
Notes to the financial statements
For the year ended 31 July 2004
17 Investments (continued)
Mouchel SpeedElimination of Total
Roberts 8770 intercompany joint
Limited Limited transactions ventures
2003 2003 2003 2003
£000 £000 £000 £000
Profit and loss account
Share of turnover 1,225 9 (9) 1,225
Share of profit on ordinary activities before and after taxation ----
Balance sheet
Share of current assets 236 - - 236
Share of gross assets 236 - - 236
Share of liabilities due within one year 236 - - 236
Share of gross liabilities 236 - - 236
Share of net assets ----
Neither of the joint ventures had any fixed assets or liabilities due after more than one year at 31 July 2004 (2003: £nil).
Transactions of joint ventures of the Group during the year were as follows:
2004 2003
£000 £000
Sales to:
Mouchel Roberts Limited 75 287
Purchases from:
Mouchel Roberts Limited - 9
As at 31 July the Group had the following balances due from joint ventures:
Mouchel Roberts Limited:
Trading 62 62
The amounts due from joint ventures are included within debtors, note 18.
18 Debtors
Restated
Group Group Company Company
2004 2003 2004 2003
£000 £000 £000 £000
Trade debtors 76,076 58,990 - -
Amounts owed by subsidiary undertakings - - 47,678 29,088
Amounts owed by joint ventures (note 17) 62 62 - -
Other debtors 888 920 - -
Prepayments and accrued income 2,585 1,701 - 134
Current corporate taxes - - 13 -
Deferred tax (note 10d) 1,482 1,035 - -
81,093 62,708 47,691 29,222 Mouchel Parkman Report and Accounts 2004 60
Notes to the financial statements
For the year ended 31 July 2004
19 Creditors: Amounts falling due within one year
Restated
Group Group Company Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank overdrafts (note 20) 150 2,538 - -
Obligations under finance leases (note 22) 47 447 - -
Trade creditors 34,247 22,174 - -
Amounts owed to subsidiary undertakings - - 5,534 4,880
Current corporate taxes 1,828 3,511 - -
Other taxes and social security 8,447 4,705 - 134
Other creditors 8,076 9,684 1,469 1,200
Accruals 4,406 3,970 42 33
Dividends 1,785 1,528 1,785 870
58,986 48,557 8,830 7,117
20 Borrowings
Restated
2004 2003
£000 £000
Bank overdraft 150 2,538
21 Financial instruments
The financial instruments of the Group comprise internal cash resources, borrowings, and debtors and creditors arising from
normal trading activities.
The Group’s policy is to manage the financial instruments centrally to provide both the working capital and the investment funds
necessary for ongoing operations and future development. The majority of borrowing for working capital and other requirements 
is sourced from the Group’s principal UK bank.
The majority of UK projects and contracts are in sterling, and otherwise are in line with the currencies in which the majority of the
costs are denominated. The Group’s principal overseas subsidiaries have arranged working capital facilities in their local currency
and it is unusual for them to contract in currencies other than their own functional currency. Consideration is given to hedging
against possible currency movements where considered appropriate. It is the Group’s policy that no trading in derivatives shall 
be undertaken.
Interest rate risk arises under the Group’s overdraft and loan facilities and liquidity risk arises from the Group’s ongoing trading as
well as its obligations under its borrowings. These exposures are regularly monitored and appropriate measures taken to mitigate
associated risks.
Short-term debtors and creditors (other than short-term borrowings) have been omitted from the following disclosures.
a Interest rate risk
Financial assets
Financial assets comprise cash at bank and in hand. Interest on floating rate financial assets is based on the overnight deposit
rate available in the money markets. Rates for fixed term deposits are fixed until the contracts close out. Contracts are typically
one year or less. Mouchel Parkman Report and Accounts 2004 61
Notes to the financial statements
For the year ended 31 July 2004
21 Financial instruments (continued)
Financial assets
Non-interest
Floating rate bearing
financial financial
Total assets assets
31 July 2004 £000 £000 £000
Sterling 18,496 18,496 -
Other currencies 920 355 565
19,416 18,851 565
Restated
Restated Non-interest
Floating rate bearing
Restated financial financial
Total assets assets
31 July 2003 £000 £000 £000
Sterling 20,275 20,275 -
Hong Kong dollars 1,166 1,166 -
Other currencies 148 - 148
21,589 21,441 148
Financial liabilities
The Group negotiates working capital facilities locally in the countries in which it operates. These facilities are agreed annually and
are normally repayable on demand.
31 July 2004
Fixed rate financial liabilities
Weighted
Non-interest average
Floating rate Fixed rate bearing Weighted period for
financial financial financial average which rate
Total instruments liabilities liabilities interest rate is fixed
£000 £000 £000 £000 % Years
Sterling 5,773 1,202 54 4,517 8.24 0.56
Other 73 73 - - N/A N/A
5,846 1,275 54 4,517
31 July 2003
Fixed rate financial liabilities
Restated
Restated Weighted
Restated Restated Non-interest Restated average
Floating rate Fixed rate bearing Weighted period for
Restated financial financial financial average which rate
Total instruments liabilities liabilities interest rate is fixed
£000 £000 £000 £000 % Years
Sterling 5,345 1,305 580 3,460 8.34 1.24
Other 37 37 - - N/A N/A
5,382 1,342 580 3,460
b Currency exposures
The main functional currency of the Group is sterling. Working capital facilities for overseas operations are in local currency. 
A number of transactions are conducted in other currencies which give rise to monetary assets and liabilities denominated 
in other currencies. None of these currency amounts are considered material enough to disclose separately. Mouchel Parkman Report and Accounts 2004 62
Notes to the financial statements
For the year ended 31 July 2004
21 Financial instruments (continued)
c Liquidity
The maturity of financial liabilities is as follows:
Restated
2004 2003
Total Total
£000 £000
Amounts falling due:
In one year or less, or on demand 4,672 4,472
In more than one year but not more than two years 1,174 904
In more than two years but not more than five years - 6
5,846 5,382
The Group did not have any material undrawn committed borrowing facilities.
d Fair value of financial assets and liabilities
The fair value of the assets and liabilities of the Group are considered to be materially equivalent to their book value.
22 Lease obligations
Restated
2004 2003
£000 £000
Obligations under finance leases fall due as follows:
Between one and two years 7 127
Between two and five years - 6
Due after more than one year (note 23) 7 133
Due within one year (note 19) 47 447
54 580
At 31 July 2004 the Group was committed to making the following payments during the next year in respect of operating leases:
Group
land and Group
buildings other
£000 £000
Leases which expire:
Within one year 1,764 664
Between one and five years 4,249 550
In more than five years 685 -
6,698 1,214
23 Creditors: Amounts falling due after more then one year
Restated
Group Group
2004 2003
£000 £000
Obligations under finance leases (note 22)
Total amount payable 8 148
Less: Future finance charges (1) (15)
7 133
Deferred consideration 1,167 777
Other creditors 46 46
1,220 956 Mouchel Parkman Report and Accounts 2004 63
Notes to the financial statements
For the year ended 31 July 2004
24 Called up share capital
Restated
Number 2004 Number 2003
Group of shares £000 of shares £000
Authorised
Ordinary shares of 0.25p 122,063,625 305 122,063,625 305
Allotted and fully paid
Ordinary shares of 0.25p 105,881,233 265 105,396,560 264
Number 2004 Number 2003
Company of shares £000 of shares £000
Authorised
Ordinary shares of 0.25p 122,063,625 305 76,000,000 190
Allotted and fully paid
Ordinary shares of 0.25p 105,881,233 265 62,000,000 155
The difference between Company share capital and Group share capital arises in the year due to the fact that FRS 6, Acquisitions
and Mergers has not been applied to the parent company balance sheet.
Under the UK and overseas Mouchel Sharesave Schemes and the Parkman Sharesave Schemes, employees held options at 
31 July 2004 on 4,095,932 ordinary shares (2003: 5,087,693) as follows:
Option
number of Price
shares per share Exercisable between
1,356,655 28.25p Aug ’04 Jan ’05
739,172 99.15p Oct ’04 Mar ’05
423,648 100.00p Aug ’05 Jan ’06
286,770 82.89p Apr ’06 Sept ’06
702,041 142.00p Aug ’06 Jan ’07
587,646 214.17p Aug ’07 Jan ’08
Under Sharesave Schemes, during the year employees exercised options on 1,276,952 shares at a price of 19.25p per share, 557
shares at 82.89p per share, 738 shares at 142.00p per share, 5,425 shares at 28.25p per share and 9,466 shares at 99.15p per
share and 4,197 shares at 100p per share (2003: 1,342,060 shares at a price of 16.25p per share, 916,648 at 19.25p per share,
2,180 shares at 28.25p per share, 640 shares at 100p per share, 2,249 shares at 102p, 30,593 at 122p and 12,900 at a price of 
11.5p per share). The Company issued 10,761 new shares in the year to satisfy Employee Share Ownership Plan options.
25 Share premium
Company Company
and Group and Group
2004 2003
£000 £000
Balance at 1 August 20,779 20,779
Issue of new shares 639 -
Balance at 31 July 21,418 20,779
26 Revaluation reserve
Company Company
and Group and Group
2004 2003
£000 £000
Balance at 1 August and 31 July 3,212 3,212 Mouchel Parkman Report and Accounts 2004 64
Notes to the financial statements
For the year ended 31 July 2004
27 Other reserves
Restated Restated
Group Group
capital foreign
reserve exchange Restated
arising on translation Group
consolidation reserve Total
£000 £000 £000
Balance at 1 August 2003 67 (189) (122)
Foreign exchange translation differences - (112) (112)
Balance at 31 July 2004 67 (301) (234)
28 ESOP reserves
The ESOP reserve arises because Mouchel Trustee Limited holds shares in Mouchel Parkman plc as agent for the Trustees of 
the Mouchel Employees’ Share Ownership Plan Trust, Mourant & Co. Trustees Limited holds shares in Mouchel Parkman plc 
as Trustee for the Mouchel No. 2 Employees’ Share Ownership Plan Trust and Mouchel Quest Trustee Limited holds shares in
Mouchel Parkman plc as Trustee for the Mouchel Qualifying Employee Share Ownership Trust. These shares are available for
distribution to the employees of the Group at the discretion of the Trustees. In accordance with UITF 38, the investment in own
shares arising out of ESOP trusts has been shown as a reduction in the reserves of the Group.
All income, finance charges and administrative expenses relating to the trusts are recognised within the profit and loss account 
of Mouchel Parkman plc as they accrue, except for the surplus or losses arising on the disposal of shares to third parties which 
are taken directly to reserves.
As at 31 July the shareholding in own shares was as follows:
2004
Cost Nominal value Market value*
Number £000 £000 £000
Mouchel Employees’ Share Ownership Plan Trust 4,700,937 1,115 12 9,472
Mouchel No. 2 Employees’ Share Ownership Plan Trust 1,509,804 471 3 3,042
Mouchel Qualifying Employee Share Ownership Trust 485,359 152 1 978
2003
Cost Nominal value Market value*
Number £000 £000 £000
Mouchel Employees’ Share Ownership Plan Trust 9,273,152 1,990 23 15,718
Mouchel No. 2 Employees’ Share Ownership Plan Trust 1,509,804 471 3 2,559
Mouchel Qualifying Employee Share Ownership Trust 489,556 153 1 830
Of the ordinary shares above 1,780,303 (2003: 3,128,588) are under option to employees and may be exercised according to
note 24. A further 3,394,710 (2003: 6,697,380) of the ordinary shares above are under option to Directors and senior employees
under executive share option schemes.
* Based on a share price on 31 July 2004 of 201.5p per ordinary share (2003: 169.5p).
Movement on ESOP reserve
Group and
Company
£000
Balance at 1 August 2003 (Restated) (2,614)
Sale of shares 876
Balance at 31 July 2004 (1,738) Mouchel Parkman Report and Accounts 2004 65
Notes to the financial statements
For the year ended 31 July 2004
29 Profit and loss account
Group Company
£000 £000
Balance at 1 August 2003 (restated) 24,347 6,129
Profit on sale of own shares held in ESOP Trusts 113 113
Profit for the year after dividend 4,442 15,036
Balance at 31 July 2004 28,902 21,278
30 Net cash inflow from operating activities
Restated
2004 2003
£000 £000
Operating profit 16,736 12,167
Depreciation and amortisation (including exceptional goodwill impairment) 6,048 3,254
(Profit)/loss on sale of fixed assets (note 4) (9) 18
Increase in debtors (19,267) (9,005)
Increase in creditors 15,395 8,304
Increase in provisions - 900
Foreign exchange difference 389 80
Net cash inflow from operating activities 19,292 15,718
31 Reconciliation of net cash flow to movement in net funds
Restated
2004 2003
£000 £000
Increase in cash for the year 414 1,274
Cash outflow on net decrease in debt and lease financing 526 923
Change in net funds resulting from cash flows 940 2,197
Translation difference (199) 61
New finance leases (note 33) - (17)
Loans and finance leases acquired with subsidiary (note 33) - (29)
Movement in net funds in the year 741 2,212
Net funds at the beginning of the year (note 32) 18,471 16,259
Net funds at the end of the year (note 32) 19,212 18,471
32 Analysis of net funds
Restated
Brought Carried
forward Other forward
1 August non-cash 31 July
2003 Cash flow changes 2004
£000 £000 £000 £000
Cash at bank 21,589 (1,974) (199) 19,416
Overdraft (2,538) 2,388 - (150)
19,051 414 (199) 19,266
Debt due within one year (447) 526 (126) (47)
Debt due in more than one year (133) - 126 (7)
18,471 940 (199) 19,212 Mouchel Parkman Report and Accounts 2004 66
Notes to the financial statements
For the year ended 31 July 2004
33 Analysis of changes in financing in the year
Restated
2004 2003
£000 £000
Finance lease obligations:
Balance at 1 August 580 935
Inception of finance lease contracts - 17
Acquisitions - 29
Cash outflow (526) (401)
Balance at 31 July (note 22) 54 580
34 Acquisitions
Mouchel GEL Limited (note 17)
Book value
and fair value
£000
Net assets acquired:
Tangible fixed assets 84
Debtors 1,074
Cash at bank and in hand 194
Creditors (226)
Taxation (120)
1,006
Goodwill 4,981
5,987
Satisfied by:
Cash 3,345
Deferred consideration: amounts falling due within one year 1,475
amounts falling due after more than one year 1,167
5,987
The subsidiary undertaking acquired during the year utilised £130,000 of the Group’s net operating cash flows and paid
£128,000 in respect of taxation.
The consolidated profit after tax of Mouchel GEL Limited for the financial period commencing 1 January 2003 and ending on 
the date of acquisition was £51,715 and for the prior year ended 31 December 2002 was £264,000.
The Directors have reviewed the amounts payable as deferred consideration and do not believe they will differ materially to
amounts provided.
35 Sale of subsidiary undertaking
On 30 July 2004 the Group sold its 100% interest in the share capital of Mouchel Parkman Asia Limited. The profit of Mouchel
Parkman Asia Limited up to the date of disposal and for its last financial year was £344,000.
Net assets disposed of and the related sale proceeds were as follows:
£000
Fixed assets 84
Current assets 1,512
Creditors (142)
Net assets disposed 1,454
Sale proceeds:
Cash 627
Loss on disposal 827 36 Merger accounting
a Alignment of accounting policies
The only impact from the alignment of the accounting policies of Mouchel plc and Parkman Group plc is in respect of costs
incurred in relation to third parties but which are recoverable on contracts. These were previously excluded from the costs and
turnover of Parkman Group plc. The effect of this was to increase turnover and costs in Parkman Group plc by £17,413,000 
in the year to July 2003 and by £2,906,000 in the 2 months to September 2003.
b Analysis of consolidated profit and loss account for the year ended 31 July 2004
10 Months to
2 Months to 2 Months to July 2004 Year to
Sep 2003 Sep 2003 Mouchel July 2004
Mouchel Parkman Parkman Total
£000 £000 £000 £000
Turnover 27,61012,992231,253 271,855
Continuing operations 25,921 12,992 222,808 261,721
Acquisitions 557 - 2,786 3,343
Discontinued operations 1,132 - 5,659 6,791
Operating profit before exceptional items 295 996 15,445 16,736
Continuing operations 209 996 14,939 16,144
Acquisitions 41 - 207 248
Discontinued operations 45 - 299 344
Exceptional items (all continuing) - - (6,784) (6,784)
Profit on ordinary activities before finance items 295 996 8,661 9,952
Net interest 26 - 127 153
Profit before tax 321 996 8,788 10,105
Taxation (96) (297) (2,608) (3,001)
Net profit after tax 225 699 6,180 7,104
c Analysis of consolidated profit and loss account for the year ended 31 July 2003
Year to Year to Year to
July 2003 July 2003 July 2003
Mouchel Parkman Total
£000 £000 £000
Turnover 147,424 76,209 223,633
Continuing operations 147,109 75,621 222,730
Acquisitions 315 588 903
Operating profit before exceptional items 7,768 4,399 12,167
Continuing operations 7,741 4,385 12,126
Acquisitions 27 14 41
Exceptional items (all continuing) (713) (250) (963)
Profit on ordinary activities before finance items 7,055 4,149 11,204
Net Interest 496 4 500
Profit before tax 7,551 4,153 11,704
Taxation (2,661) (1,395) (4,056)
Net profit after tax 4,890 2,758 7,648
Mouchel Parkman Report and Accounts 2004 67
Notes to the financial statements
For the year ended 31 July 2004 Notes to the financial statements
For the year ended 31 July 2004
Mouchel Parkman Report and Accounts 2004 68
36 Merger accounting (continued)
d Analysis of statement of total recognised gains and losses
2004 2003
£000 £000
Profit for the period 7,104 7,648
Mouchel 225 4,890
Parkman 699 2,758
Mouchel Parkman 6,180 -
Currency translation differences on net foreign currency investments (112) (18)
Mouchel - (50)
Parkman - 32
Mouchel Parkman (112) -
Total gains and losses for the year 6,992 7,630
e Net assets
On 19 September 2003, being the date of the merger, Mouchel plc had consolidated net assets of £46,370,000 and Parkman
Group plc had consolidated net assets of £11,292,000. Net assets do not represent fair value on the date of the transaction. 
The market capitalisation of Mouchel plc and Parkman Group plc immediately prior to the merger were £135,160,000 and
£92,930,000 respectively.
f Consideration
Mouchel plc issued 43,396,560 shares in exchange for the entire share capital of Parkman Group plc. The shares had a fair 
value of £91,567,000 on the date of the merger.
37 Pensions
The Group operates several occupational pension schemes for its employees. The Mouchel Superannuation Fund and the
Parkman Staff Pension Scheme are both funded defined benefit schemes. The following defined contribution schemes were also
in place: Legal and General GPP scheme, Parkman DC scheme and the Parkman Ireland Pension Scheme (DC section).
Defined contribution schemes
Contributions to the defined contribution schemes are between 4% and 10% for the employer and between 2% and 10% for 
the employee. Contributions are dependent on age.
The pension charge for contributions payable to the defined contribution schemes was £1,961,000 (2003: £1,470,000).
Defined benefit schemes
The pension charge for the year was made up of contributions of £5,659,000 (2003: £5,668,000). Last year a provision for
pension costs in excess of regular employer contributions of £900,000 was made.
For the main defined benefit schemes the Group continues to apply Statement of Standard Accounting Practice (SSAP 24),
Accounting for Pension Costs and makes disclosures under the transitional rules of FRS 17, Retirement Benefits.
Mouchel Superannuation Fund
The contributions for the year ended 31 July 2004 and the year ended 31 July 2003 were determined by a qualified independent
actuary on the basis of triennial valuations using the projected unit method and a market based valuation approach. The most
recent valuation was at 31 March 2001 and showed that the market value of the scheme’s assets was £70,400,000 and that the
actuarial value of those assets on the funding basis represented 106% of the benefits that had accrued to members, after allowing
for expected future increases in earnings. The assumptions which have the most significant effects are those relating to the rate 
of return on investments and the rates of increase in salaries and pensions. It was assumed that the investment returns prior to
retirement would be 6.75% per annum, investment returns after retirement would be 5.25% per annum, that salary increases
would average 4.25% per annum and that present and future pensions in payment would increase at the rate of 2.25% per
annum. The employer’s contribution rates for the main section were 14.6% and for the public service section were 16.5%. Notes to the financial statements
For the year ended 31 July 2004
Mouchel Parkman Report and Accounts 2004 69
37 Pensions (continued)
Parkman Staff Pension Scheme
Contributions for this scheme are determined by a qualified actuary on the basis of biennial valuations using the projected unit
method. The last actuarial valuation was carried out as at 5 April 2002. It was assumed in that valuation that the long term rate 
of return on investments would be 7.0%, the increase in pensionable salaries would be 5.0% and pension increases would be
2.7% per annum.
At 5 April 2002, the market value of the scheme’s assets was £28.5 million which represented approximately 85% of the benefits
that had accrued to members at that date, allowing for projected increases in earnings. The funding level at that date on the
minimum funding requirement was 93%.
Both the former Mouchel and Parkman schemes are currently undergoing actuarial valuations. The valuation exercise is expected 
to be concluded in December 2004.
Both schemes are closed to new entrants except for employees transferring to the Group under the Transfer of Undertakings
(Protection of Employment) Regulations (1981) as amended, where the Group is required to provide benefits which are broadly
comparable to those provided under the Local Government Pension Scheme or another defined benefit scheme provided by 
the transferring employer.
SSAP 24, Accounting for Pension Costs
In the prior year a pension provision in excess of the regular pension contributions of £900,000 was made.
SSAP 24 requires that pension costs arising from differences between the actuary’s assumptions and actual experience are
spread over the expected remaining service lives of the current employees in the scheme. Variations from regular costs are
normally recognised on the basis of triennial funding valuations of the scheme. The scheme actuary, Mercer Human Resource
Consulting (Mercers) has performed a roll forward valuation which supports the quantum of the provision but this does not
constitute a full valuation. As at 31 July 2004 there was an accrual of £481,000 (2003: £512,000) in respect of pension contributions
due on salaries.
FRS 17, Retirement Benefits
The two defined benefit schemes are presented in aggregate. In accordance with FRS 17, the full actuarial valuation was reviewed
and updated as at 31 July 2004 based upon the following assumptions:
2004 2003 2002
% %%
Rates of increase in salaries 3.9 3.7 3.4
Rates of increase of pensions in payment 2.9 2.7 2.4
Discount rate 5.9 5.7 6.1
Inflation assumption 2.9 2.7 2.4
Scheme assets and liabilities under FRS 17 are disclosed below:
2004 2003 2002
£000 £000 £000
Equities 80,687 84,629 73,149
Bonds 27,180 11,512 13,466
Property 3,976 2,819 2,282
Total fair value of assets 111,843 98,960 88,897
Actuarial value of liability (154,205) (142,488) (111,345)
Deficit (42,362) (43,528) (22,448)
Related deferred tax asset 12,709 13,058 6,734
Net scheme deficit (29,653) (30,470) (15,714) Mouchel Parkman Report and Accounts 2004 70
Notes to the financial statements
For the year ended 31 July 2004
37 Pensions (continued)
The expected return for the scheme assets in the forthcoming year is as follows:
2004 2003 2002
% %%
Equities 7.9 7.6 7.7
Bonds and cash 5.2 5.0 5.5
Property 7.5 7.3 7.4
Had the scheme been accounted for under FRS 17 the impact on equity shareholders’ funds, the Group’s operating profit and 
on the Group’s statement of total recognised gains and losses would have been as follows:
As at As at
31 July 31 July
2004 2003
£000 £000
Equity shareholders’ funds:
Equity shareholders’ funds excluding net pension deficit 61,196 56,059
Amounts already provided 3,200 3,200
Pension deficit (29,653) (30,470)
Total equity shareholders’ funds 34,743 28,789
As at As at
31 July 31 July
2004 2003
£000 £000
Analysis of amount chargeable to operating profit:
Current service cost 6,632 6,128
Analysis of credit due to other finance income:
Expected return on pension scheme assets 7,594 6,676
Interest on pension scheme liabilities (8,340) (6,952)
Net expense (746) (276)
Analysis of amounts recognisable in the statement of total recognised gains and losses:
Actual return less expected return on pension scheme assets 505 (1,380)
Experience gains and losses arising on the scheme liabilities 1,699 -
Changes in assumptions underlying the present value of the scheme liabilities 681 (18,964)
2,885 (20,344)
Movement in deficit during the year:
Deficit in scheme at 1 August (43,528) (22,448)
Current service cost (6,632) (6,128)
Contributions 5,659 5,668
Interest costs on assets (746) (276)
Actuarial gain/(loss) 2,885 (20,344)
Deficit in scheme at 31 July (42,362) (43,528) Notes to the financial statements
For the year ended 31 July 2004
Mouchel Parkman Report and Accounts 2004 71
37 Pensions (continued)
2004 2003 2002
History of experience gains and losses:
Differences between the expected and actual return on scheme assets:
Amount (£000) 505 (1,380) (22,837)
Percentage of scheme assets 0% (1%) (26%)
Experience gains and losses on the scheme liabilities:
Amount (£000) 1,699 --
Percentage of scheme liabilities 1% 0% 0%
Total amount recognisable in the statement of total recognised gains and losses:
Amount (£000) 2,885 (20,344) (21,661)
Percentage of scheme liabilities 2% (14%) (19%)
The actuarial assumptions used in the last valuations of the schemes were modified in accordance with the requirements of FRS 17
in order to arrive at the disclosures detailed.
The assets and liabilities as at 31 July 2004 have been determined using valuations and assumptions as at that date in accordance
with FRS 17. The main assumptions are set out on page 69.
Due to the closure of the schemes to new entrants the FRS 17 current service cost under the projected unit method will increase
as members approach retirement age.
38 Contingent liabilities
Contingent liabilities at 31 July 2004 in respect of guarantees and indemnities in the normal course of business totalled £7,030,587
(2003: £1,133,324).
In addition, bank overdrafts of subsidiaries were guaranteed at 31 July 2004 up to £332,102; the amount overdrawn at that date
being £150,000.
39 Related party transactions
Transactions with joint ventures are disclosed in note 17.
40 Ultimate controlling party
There is no single controlling party. Ultimate control is exercised by the shareholders. Five year financial summary
Mouchel Parkman Report and Accounts 2004 72
Summarised Group profit and loss account for the year ended 31 July
Restated
2000 2001 2002 2003 2004
£000 £000 £000 £000 £000
Group turnover 94,770 118,570 162,930 223,633 271,855
Operating profit* 4,884 6,468 9,070 13,041 19,217
Net interest (240) (514) (200) 500 153
Profit before tax* 4,644 5,954 8,870 13,541 19,370
Operating margin* 5.2% 5.5% 5.6% 5.8% 7.1%
Effective tax rate* 26.6% 30.1% 28.7% 31.1% 21.0%
Adjusted earnings per share* 5.2p 5.6p 6.7p 9.0p 14.5p
* Before exceptional item of £352,000 in 2001, exceptional administrative expenses of £1,422,000 and goodwill amortisation of
£479,000 in 2002, non-operating exceptional item of £963,000 and goodwill amortisation of £874,000 in 2003 and non-operating
exceptional items of £6,784,000, goodwill amortisation of £1,774,000 and exceptional goodwill impairment of £707,000 in 2004.
Summarised Group balance sheet as at 31 July
Restated** Restated
2000 2001 2002 2003 2004
£000 £000 £000 £000 £000
Fixed assets 8,968 13,796 19,364 24,626 24,213
Current assets 33,809 41,814 71,829 84,297 100,509
Current liabilities (23,406) (26,473) (33,661) (48,557) (58,986)
Long term liabilities (533) (7,521) (4,830) (4,307) (4,540)
Equity shareholders’ funds 18,838 21,616 52,702 56,059 61,196
** Restated following the adoption of FRS 19 Deferred Tax.
The balance sheets and profit and loss accounts for 2000 have not been restated for the impact of FRS 19 Deferred Tax.
The profit and loss accounts and balance sheets for 2003 and 2004 have been prepared using audited accounts for both periods.
The balance sheets and profit and loss accounts for 2000, 2001 and 2002 were prepared using the audited accounts of Mouchel plc
and Parkman Group plc as at 31 July and 31 March respectively. Adjustments to align non-concurrent periods have been made 
to the profit and loss accounts. Office and advisors
Mouchel Parkman Registered office:
Mouchel Parkman plc
West Hall Parvis Road
West Byfleet
Surrey  KT14 6EZ
Registered number 95369
Auditors
Deloitte & Touche LLP
Hill House
1 Little New Street
London  EC4A 3TR
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex  BN99 6DA
Financial advisors and joint brokers
Cazenove & Co. Ltd
20 Moorgate
London  EC2R 6DA
Joint brokers
ABN AMRO
250 Bishopsgate
London  EC2M 4AA
Financial PR
Citigate Dewe Rogerson
3 London Wall Buildings
London Wall
London  EC2M 5SY
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