Report and Accounts 2002
Mouchel plc
West Hall  Parvis Road
West Byfleet  Surrey  KT14 6EZ
T +44 (0)1932 337000
www.mouchel.com
Mouchel plc Report and Accounts 2002 Mouchel is a professional support services group.
We deliver high value technical, commercial
and financial expertise to clients in the public
and private sectors. We work with these
organisations to develop and implement 
their strategy, to operate and optimise their
infrastructure and service delivery, and to
enhance the skills and performance of their
people. Our work supports them in providing
better and more efficient everyday services 
to customers and communities.
Contents
1 Financial highlights
2 Our strategy
4 Chairman’s statement
6 Chief Executive’s review
10 Strategic highways
13 Local highways
14 Property
17 Rail
18 Education
20 Further sectors
22 Directors
24 Finance Director’s review
28 Directors’ Report
31 Corporate Governance
34 Remuneration Report
36 Auditors’ Report
38 Group Profit and Loss Account
38 Statement of Total Recognised
Gains and Losses
39 Group Balance Sheet
40 Parent Company Balance Sheet
41 Group Cash Flow Statement
42 Notes to the Financial Statements
72 Five Year Financial Summary
Office and Advisors
Mouchel Registered office:
Mouchel plc
West Hall  Parvis Road
West Byfleet
Surrey  KT14 6EZ
Registered number 95369
Auditors
Deloitte & Touche
180 Strand
London  WC2R 1BL
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex  BN99 6DA
Solicitors
Clifford Chance LLP  
200 Aldersgate Street
London  EC1A 4JJ
Stockbrokers
Cazenove & Co. Ltd
12 Tokenhouse Yard
London EC2R 7AN
Designed by FOUR IV Design Consultants  London  T +44 (0)20 7837 8659 Financial highlights
6.8
7.0
4.1
3.3
Adjusted earnings per share (pence)*
* Before exceptional items and goodwill amortisation
98 99 00 01 02
7.9
3,854
4,255
2,470
2,096
Operating profit (£000)*
98 99 00 01 02
5,641
62,437
71,474
55,623
53,673
Turnover (£000)
98 99 00 01 02
102,384
114
166
106
94
Forward order book (£m)
98 99 00 01 02
308 > Focus on long-term managed services contracts
> Partnerships created with key clients in key markets
> Unique set of technical, commercial and financial services
Our strategy
2
Mouchel’s strategy is to continue to
develop a fast growing, sustainable and
high value Managed Services business,
using the company’s established and
profitable Management Consultancy
and Project Services businesses to
strengthen our proposition.
Managed Services
We are focused on meeting growing
demand for expert outsourced support
services in both the public and private
sectors. We provide clients with a unique
combination of technical, commercial
and financial services by working with
them to: 
• Formulate their strategy and policy
• Develop their people, their organisation
and their services
• Operate and optimise their
infrastructure assets and 
service delivery
Our early success in securing long-term
managed services contracts has provided
us with a solid platform for growth, based
on an order book of £308 million at
year end – an increase of 86% on last
year’s final order book.
The right markets
We are focused on market sectors
which have a significant infrastructure
asset base requiring:
• Complex operational management
• Significant maintenance and 
development expenditure
• New solutions for strategy, 
management and funding
We currently operate in the following
markets – Strategic Highways, Local
Highways, Property, Rail, Education,
Defence, Law and Order, Oil and Gas,
Marine and Waste.
The right clients
We are focused on developing long-term
partnerships with key clients. We tailor
our operations around the changing
needs of these organisations, using 
our key client programme to ensure 
we develop and deliver the support
services they need to thrive.
The right people
We have an open style of management
that works to bond the aspirations 
and development of our professional
staff with our objectives as a company.
Our share schemes have helped 
to nurture a rare and positive spirit,
encouraging a sense of staff ownership
and a commitment to personal and
organisational growth. Our approach
has been recognised by the award 
of ‘Investors In People’.
Acquisitions and alliances
There are a number of companies
operating in our market sectors whose
skills and relationships could help us 
to secure managed services contracts.
We will pursue acquisitions and
alliances with selected companies 
if they are able to complement and
extend our existing range of services,
helping us to deliver greater value to
our clients and our shareholders.
Moving towards private funding
We see opportunities for managed
services arising from the increasing use
of private sector funding for public sector
infrastructure. Our approach is to pursue
selective opportunities in areas where
there are quality long-term service
revenue streams, and where our set of
experience, knowledge and skills gives
us a strong competitive advantage.
Developing the future
The public continues to express serious
concern over the state and standard 
of the nation’s infrastructure and public
services. The government’s positive
response to public opinion is creating
unprecedented opportunities for
companies providing support services.
We have shaped our business to be 
in the best possible position to benefit
from this exceptionally promising 
long-term market. 5
I believe our rare combination of technical,
commercial and financial skills is the
primary reason for our current growth.
There are many companies operating in
and across our market sectors – none
are able to match our mix of skills and
experience. Strategic alliances and
recent acquisitions have enhanced 
our proposition considerably.
We have a powerful impact on our clients’
activities. Our increasingly impressive
record for delivering real improvements
in efficiency and value for money is also
helping us to develop new opportunities
within existing client relationships. For
example, our property management work
for Kent County Council has helped 
us to win further contracts with Kent’s
Magistrates Courts and an additional 
£6 million contract with the council for
estates management services.
New types of opportunity
We have changed the strategic focus 
of Mouchel quite quickly, moving from
provision of engineering services to our
concentration on Managed Services
supported by Project Services and
Management Consultancy. 
We are confident our clients understand
how and why we have evolved, and that
is important – it gives us credibility and
encourages them to consider us for
new opportunities. For example, with
the Highways Agency we are now both 
a Managing Agent Contractor and a 
co-developer of next generation solutions,
such as the UK’s first Active Traffic
Management system – an innovation
which could transform traffic flow on
motorways during peak periods.
Private Finance 
– balancing risk and reward
An increasing number of private finance
initiatives (PFIs) are being introduced
across the public sector.
We are very selective in our approach.
We only develop bids when the resulting
contract corresponds to our strategy of
securing long-term partnerships with
quality clients in key markets. 
If appropriate, we will use our own
funds to help us secure the right work,
with our successful IPO helping us in
this regard. Where necessary we will
strengthen our position through an
alliance. We will also support clients in
their bids for PFI contracts, but only
where there is potential for us to work
as a long-term partner.
Of course, PFI is not a new challenge for
Mouchel. Since 1995 our management
consultants have advised our clients on
PFI/PPP transactions valued at £7 billion.
Now we are benefiting from our own
experience in this area.
Growing the value of Mouchel
Our results this year, together with 
our strong position in an exceptionally
promising market, give me confidence
in our ability to grow the value of our
business. I am also confident that we 
can play an increasingly valuable role 
in helping to create more efficient
services in the UK.
With such a clear purpose and vision, 
I look forward to Mouchel achieving
excellent progress over the next 
12 months.
Richard Benton
Chairman
> Unique set of strengths, skills and services in place
> Market opportunities of more than £2 billion
> Clear strategy for maximising private finance initiatives
Chairman’s statement
These are extraordinary times for Mouchel
and for our industry as a whole.
In the public sector, the government’s
commitment to deliver better services 
is creating a wide range of high value
opportunities, driven forward by major
policy initiatives. In both public and
private sectors, an increasing number 
of organisations are focusing on their
core customer related activities while
turning to specialists such as Mouchel
to develop, manage and optimise 
their infrastructure.
A £2 billion opportunity
These developments have grown total
expenditure in our chosen market sectors
to more than £21 billion per annum.
Within this, we have identified current,
addressable sales opportunities for
Mouchel of more than £2 billion.
This constitutes an extremely healthy
market opportunity. It is also a market 
in which a significant proportion of growth
is independent of macro-economic
cycles, with many managed services
contracts guaranteeing secure long-term
revenue streams. Our order book reflects
this, with more than £308 million worth
of secured orders in place – an excellent
achievement which reflects the strength
of our strategy and the calibre of 
our people.
Understanding and meeting 
client needs
Despite the promise of a robust 
market, we must not lose sight of 
the fundamental equation at the 
heart of our business. Put simply, 
our success is determined by how 
well we understand and meet our
customers’ changing needs. During the year we also tendered for and
secured four Highways Agency Super
Agency contracts in joint venture with
Amey Highways Limited. The duration 
of these contracts ranges between
three and five years, excluding potential
extensions, and their combined annual
value to Mouchel amounts to around
£24 million. The South West and East
Anglia contracts commenced on 1 June
2002, and West Midlands and North
West commenced on 1 July 2002.
This year we successfully re-tendered
for the Hertfordshire County Council
Highways and Transportation contract,
which we originally secured in October
1997. The new contract commenced in
October 2002 and has an annual value
of £8 million. It has an initial term of seven
years and is potentially extendable by 
a further three years.
During the year we secured three new
Highways Agency contracts for traffic
management systems – a technology
framework contract, the Active Traffic
Management Scheme and the Regional
Maintenance Contractor Managing
Consultant contract. The duration of
these contracts is between four and six
years, with an aggregate annual value
of £3 million.
> Strong growth in turnover and profits
> New service streams introduced to meet client demand
> Reorganisation creating new opportunities
Chief Executive’s review
The facts and figures of our performance
this year speak for themselves: Group
turnover up by 43%, pre-tax profits 
up 28% and a forward order book of
£308 million. We have delivered yet
another year of significant annual 
growth in profits and I am delighted 
by that achievement.
The details of these figures are discussed
elsewhere in this annual report. What 
I would like to concentrate on here is
how we are shaping Mouchel to create
even greater value for shareholders,
clients and staff.
Getting into shape
Last year on 1 August 2001 we
announced a reorganisation. This
underlined our focus on securing 
long-term Managed Services contracts
with key clients in key markets, and
established three business streams
through which we would support those
clients – Managed Services, Project
Services, and Management Consultancy.
This year that reorganisation has had 
a major impact. The clarity of our
approach helped potential clients develop
a clear understanding of how we can
help them in the short, medium and
long-term. It also helped our teams to
identify even more effective and innovative
ways to work with one another. We saw
an extraordinary circulation of ideas,
expertise, skills and relationships within
Mouchel, and this collaborative approach
is serving to strengthen our competitive
advantage. I expect to see even more
dynamic relationships forming between
our people over the next 12 months.
Two fundamentals – long-term, 
high value
There is a simple rationale behind our
strategic focus on winning managed
services contracts: they provide us with
secure, valuable and long-term revenue
streams. Equally, they enable us to do
what we do best. That is, to support
our clients throughout the entire life of
their infrastructure, from strategy and
procurement right through to the
optimisation of ageing assets. This year’s
65% increase in turnover in Managed
Services supports our decision to
concentrate on this area.
Our focus creates a clear pathfinder
role for our Management Consultancy
teams. They engage with clients at a
strategic level – often at board level –
and their work is creating an invaluable
flow of knowledge and relationships into
our core Managed Services business.
Perhaps our greatest management
challenge has been defining the role for
our Project Services business stream.
However, our investment of time and
resources in thinking this through has
been repaid. Project Services continues
to deliver profitable business in its own
right, but is now acting as a well-spring
for future managed services work.
Acquisitions, alliances and 
service innovation
We must always present potential clients
with the best possible set of solutions,
and sometimes that means looking
outside Mouchel for skills and capabilities.
For this reason, we have formalised a
number of strategic alliances this year.
We have also secured some excellent
acquisitions, including rail specialists
Metro Consulting Limited (now Mouchel
Metro Limited) and an education related
project management business Chelstoke.
Our successful IPO will help us to
acquire other companies able to
enhance our proposition.
Internally, we have created an
environment where groups of specialists
can quickly establish a new service
offering. The creation of QLM, our school
training and performance management
service which we established during the
year as part of our education team is
one example.
Operational review
During the year all three of our business
streams have made significant progress
in delivering the Group’s objectives.
Managed Services
In September 2001 we commenced
work on the Highways Agency Area 5
Managing Agent contract (M25 Sphere).
This contributed revenues of £10.3 million
in the year to 31 July 2002.
Managed Services also benefited from
our Kent County Council Property
Services contract, which commenced 
in April 2001. Revenues to the end of
the year totalled £5.2 million. In
December 2001 Kent County Council
awarded us a second contract worth 
£6 million over five years, to provide
estates management services to the
council. This contract contributed
revenues of £0.4 million in the year 
to 31 July 2002.
6 8
Project Services
We secured two Principle Support
Provider contracts with the Ministry of
Defence, one for Scotland and another
for Catterick and Marne, North Yorkshire.
The potential duration of these contracts
is up to seven years and their aggregate
annual value is approximately £1.5 million.
In the rail sector, turnover from Mouchel
Metro amounted to £6.3 million, from the
date of acquisition to year end. Another
major contribution to turnover came
from the provision of specialist design
and project management services for
Railtrack’s (now Network Rail) customer
information systems.
Management Consultancy
During the year, we expanded the
number of service streams within
Management Consultancy, adding
strategic consultancy and education
and learning services to our already
established procurement, change
management, asset management, 
local government and contracts and
disputes services.
We also provided strategic consultancy
services to BG Group and helped
develop strategies to address market
positioning and asset management.
In February 2002 we secured our first
education and learning services contract
with the Department for Education and
Skills (DfES) to help raise standards in
secondary schools in Hull. This contract,
will run potentially for two years, involving
a partnership between the DfES, Hull
City Council, Hull secondary schools
and Mouchel. In addition we have
recently secured a similar contract 
for Nottingham City Council.
Our procurement group continued to
work on the Colchester Garrison contract,
in which we are the lead PFI adviser.
Our change management team continued
its work with the Meteorological Office,
relocating more than 1,100 staff from 
its offices in Bracknell, to new premises
in Exeter. Our results for the year also
reflect our ongoing role with Railtrack 
in the Structures Asset Management
Process (STAMP).
Developing partnerships
I believe we are now in an excellent
position to benefit from the rapid growth
in demand for support services. We 
are in the right shape, with a strong
management team, excellent people
and a unique and increasingly integrated
set of technical, commercial and
financial skills.
However, I think we must remember
one important quality which often gets
overlooked – character. Every day we
work hand in hand with our clients,
supporting them in their key activities. 
It is not enough for us to offer the right
mix of services; we must also make
clients feel we are the right people to
work with them, long-term. That so
many clients chose to work in partnership
with us this year is positive news indeed.
Jim Harding
Chief Executive
Chief Executive’s review > Market consolidation increasing value of contracts
> Joint venture establishing strong market position
> Growth in technology solutions to manage traffic
Strategic highways
10
The UK Highways Agency is investing
£21 billion over a ten year period to 2010,
with much of the work required being
outsourced to private sector companies.
We have established a strong position
in this market. Our work as Managing
Agent for Area 5 (M25 Sphere) gives us
sole responsibility for the entire M25 and
its intersections, enabling us to develop
unique experience in managing and
improving a high profile motorway.
In the last 12 months we have used this
experience to strengthen our proposition.
Network management – 
the move to MACs
This market has been made even more
attractive by the Highways Agency’s
evolution towards Managing Agent
Contractor contracts (MACs). The MAC
provider is responsible for designing,
managing and executing or procuring
all maintenance and improvement work
on the network, a role which combines
the previously separated responsibilities
of Managing Agent (MA) and Term
Maintenance Contractor (TMC). The
value of these new and innovative
contracts reflects this, with typical
annual turnover on a MAC contract
varying from £25 million to £50 million.
A strategic alliance
This market consolidation has provided
us with opportunities to gain long-term
managed services contracts. However,
it has also created increased competition,
and the new contracts demand that
suppliers provide a comprehensive set of
services, from long-term strategy to day
to day maintenance.
To meet these demands we have
established a strategic alliance with 
Amey Highways Limited. The strategic
development of this alliance in the spring
of 2001 followed our successful 50:50
joint venture bid for Area 19 (Cumbria),
where we have provided MA services
since 1998.
During the year, the joint venture won
TMC contracts for Areas 1 (South
West), 6 (East Anglia) and 10 (North
West), and a combined MAC contract
for Area 9 (West Midlands). The Area 9
contract is a particularly important
indicator of how Amey’s and Mouchel’s
complementary strengths can combine
to win large contracts.
Further market consolidation 
In line with its planned reorganisation 
of key operational areas, we expect 
the Highways Agency to further reduce
the total number of contracts it awards
and directs. We also anticipate the
introduction of longer term MACs with 
a significant private finance element
(PFMACs). We believe this market will
eventually mature into fewer larger,
long-term MAC or PFMAC contracts.
The joint venture is now well positioned
to compete for and win these extensive,
high value contracts.
Success for specialist services
This involves the planning, design,
operation and maintenance of
communications systems for motorways
and trunk roads. During the year we were
appointed by the Highways Agency to
two long-term technology framework
contracts incorporating consultancy
services for the introduction of enhanced
technology to the network. In January
2002, the Highways Agency re-appointed
Mouchel as managing consultant for
the management of their telematics
infrastructure for the East Midlands 
and South East of England.
In March 2002 the Agency also appointed
us as managing consultant for the first
Active Traffic Management system in the
UK. This will utilise a combination of
control devices and traffic management
measures, including the use of the hard
shoulder in specific circumstances, to
reduce congestion on the M42. We
believe the successful implementation
of this scheme will be fundamental to
the future development of technology led
solutions to infrastructure capacity issues
in the highways sector.
Finally, in the early part of the year we
secured a five year framework contract 
with the Highways Agency for the
planning and design of new and
improved highway infrastructure 
for the North of England. Local highways
‘The Ten Year Plan’ for transport will
have delivered £19.3 billion of public
capital funding and £9 billion of private
investment for local transport initiatives
by 2010. In 2001/2002, approximately
70 per cent of the £4.6 billion expenditure
on local authority transport infrastructure
was spent by the 34 County Councils
and 36 Metropolitan Councils. These
organisations are the focus of our
strategy in this sector. 
Meeting demand from councils
At year end we held long-term partnership
contracts with Hertfordshire, North
Yorkshire and Essex County Councils
for the management of their roads 
and associated services. We also held
partnership contracts for the supply 
of highway support to Suffolk County
Council, Medway Council and Rotherham
Metropolitan Borough Council.
We see excellent potential for growth 
in this area, with an increasing number 
of local authorities seeking to outsource
some or all of the transport services they
currently carry out in-house. A number
of existing contracts between competitors
and local authorities are also due for 
re-bidding, and we have identified
opportunities for potential gains.
Of course, re-bidding can also be a cause
for concern, as we have to compete 
to keep valued clients. However, our
successful re-bid for the Hertfordshire
County Council contract – announced
this year – underlines our strengths 
in this market.
Local transport expertise
Our work in Hertfordshire also illustrates
the breadth and depth of our expertise.
This now includes: network management,
including the implementation of
maintenance, improvement and safety
work; sustainable transport, initiating
the use of traffic calming, green routes
for buses and cycling facilities; specialist
services, such as surveying, lighting,
traffic control and structural strengthening.
The five year Hertfordshire County
Council contract was our first managed
services contract. In 1998 it was worth
£5.1 million per annum and employed
135 staff. By 2001 it had increased to
£9 million per annum and involved 220
staff – an example of how we can grow
the value of our client relationships.
Since 31 July 2002 we have secured
new partnership contracts for highways
support with Wakefield and Doncaster
Metropolitan Borough Councils.
‘Maintain, Finance and Operate’ arrives
Portsmouth City Council, Birmingham
City Council and Lincolnshire County
Council have been amongst the first
local authorities to assess the benefits 
of a new type of local highways contract
– a 25 year ‘Maintain, Finance and
Operate’ PFI. Portsmouth is adopting
this approach, and has developed a
contract that includes responsibility 
for 450 km of roads, 70 bridges and
structures and 16,000 street lights. 
The Birmingham contract, which is in
development, is estimated to have a
total value in excess of £1 billion.
Many other local authorities are likely to
follow the path set by these pioneering
organisations. We are positioning
ourselves to benefit from this significant
market development.
Strategic advice
During the year we have worked at
senior level with Essex County Council
in carrying out a Best Value Review 
of their planning and transportation
services and assisting them in the
development of their relationships 
within the district councils.
13
> Significant move towards long-term partnership contracts
> Hertfordshire work demonstrates expertise and opportunity
> Opportunities developing in local highways PFI > Strong business established
> Excellent market potential
> Activities in Kent demonstrate value of partnerships
Property
14
Local authorities in England and Wales
own a varied portfolio of service and
commercial properties. These assets
are valued at around £78 billion, excluding
council housing. Local government
spends at least £5 billion a year running
and managing this portfolio, which
extends to over 21,000 schools, 3,800
libraries, 1,800 leisure facilities and
2,000 community centres.
Despite the scale and scope of these
responsibilities, local authorities have been
relatively slow to embrace outsourcing
in this sector. With 16 of 34 Councils
currently providing some or all of their
property services in-house, there is
significant market potential for Mouchel 
within this sector.
Our challenge is to demonstrate to 
local authorities that the use of an
expert external company for property
management can reduce costs, improve
the quality of services provided and offer
the professional staff involved greater
career opportunities.
Growing our activities
We have already secured long-term
partnering contracts for property services
with Bedfordshire, Cambridgeshire, Kent
and North Yorkshire County Councils,
Bedfordshire Police and a range of
other public sector clients. We are 
now responsible for maintaining and
developing approximately 800 schools,
1,200 public buildings, and 19,000
hectares of public estate land.
Our services are worth over £10 million
per annum in total and involve 225
professionals, including estates surveyors,
valuers, building surveyors, architects,
structural, mechanical and electrical
engineers and quantity surveyors.
Valuable partnerships in Kent 
and Hertfordshire
In April 2001 we started work on a 
£17.5 million partnership contract with
Kent County Council for the provision 
of property, design and maintenance
services over five years. Our work in
this area illustrates how we can grow
the extent and value of our work within
a partnership. Having completed the
first year of the contract, we are now
also working with Kent’s Magistrates
Courts, Probation Services and a
number of schools. In December 2001
we also secured a second contract
worth £6 million to provide estates
management services to the council, 
a partnership that includes the
management of the council’s entire
portfolio of public and school buildings.
Since 31 July 2002 we have secured a
further partnership contract for property
maintenance services with Hertfordshire
County Council. This contract is valued
at £17.5 million over its five year term.
Best practice
This expansion of our activities has
required the rapid recruitment of property
professionals. One approach has been
to manage the successful transfer of
skilled and experienced people from 
our local government client. For example,
our office in Kent now employs 130
people, 103 having transferred to
Mouchel from Kent County Council.
This process of staff transfer helps
councils to reduce their overheads. It
also enables staff to benefit from a wider
set of career options. It provides Mouchel
with a group of experienced professionals
able to help us develop best practice
amongst our clients and communicate
the value of an external company to
potential clients.
Strategic advice
Early in 2002 we were appointed by
Devon County Council to implement 
the findings of a Best Value Review of
property services. This work involved
the introduction of a new organisational
structure and the procurement of private
sector service delivery partners. Rail
The UK’s rail infrastructure requires 
a major programme of development 
to rectify the effects of previous low
investment and to meet the demands
created by increasing passenger and
freight traffic.
The government’s response to this
situation has created exceptional
opportunities for support services
companies. ‘The 10 Year Plan’ for
transport includes provision for public
investment in rail of £26 billion, with 
a further £34 billion to be sought from
private investment. Planned annual
expenditure is £6 billion. In addition,
expected changes in stewardship 
will create new and far reaching
opportunities for providers of
consultancy and managed services.
These conditions make rail an important
and attractive market sector for us. 
We are already delivering management
consultancy services and project services
in this sector; our intention is to use our
expertise, experience and relationships
to win managed services rail contracts.
Optimising the rail network
We help infrastructure owners and
operators in this sector to optimise 
the effectiveness of their networks and
operations. Our clients include Network
Rail, Transport for London, London
Underground Limited and the Strategic
Rail Authority. Our core engineering
consultancy services are supported 
by specialist services. For example, 
our engineers work closely with asset
management consultants and modellers
to model and predict future asset
deterioration scenarios and funding
requirements, providing clients with the
analytical frameworks required to make
board level investment decisions about
their infrastructure.
In support of London Underground, 
we are working on the Piccadilly Line
extension to Heathrow Terminal 5,
developing and negotiating a commercial
framework for delivery of this important
public transport link.
STAMP makes its mark
An example of our integrated approach 
is the Structures Asset Management
Process, or STAMP . This decision making
support tool was developed by our
Management Consultancy and Project
Services teams working with Railtrack. 
Its software enables engineers to identify
the best maintenance strategy when
faced with conflicting demands of
safety, access and funding for ageing
infrastructure. STAMP also gives the
new Network Rail’s management a
reliable view of future expenditure
requirements. It has the potential 
to deliver such benefits for other
infrastructure owners.
Demand for specialist services
In 2001 we enhanced our proposition
with the acquisition of Metro Consulting
Limited (now Mouchel Metro Limited), 
a specialist engineering, signalling and
safety consultancy. The rail industry is
embarking on extensive programmes 
in these areas and demand for this
expertise is high. Clients include London
Underground, Network Rail, Infracos,
train operating companies and major 
rail suppliers.
We are continuing to develop our
successful customer information
systems services. Our work in this area
for Network Rail illustrates our progress, 
and includes the management, design
and installation of real time information
systems at major stations around London,
including Gatwick, King’s Cross,
London Bridge and Waterloo. We also
remain highly active in the research,
development and application of
innovative technologies and materials.
This work helps our clients to improve
their assets with minimum business
interruption. For example, we are using
advanced composite materials such as
carbon fibre and reinforced plastics to
strengthen bridges and other physical 
rail infrastructure.
Meeting national expectations
The upgrading of the UK’s rail
infrastructure is creating important
growth opportunities for Mouchel. In
bringing together our complementary
set of expert rail services, we intend to
significantly increase the scale and value
of our activities in this area, helping to
deliver the sort of rail system people
expect and require.
17
> Infrastructure upgrade creating strong demand
> Active in optimisation of networks and operations
> Growth in specialist services > A priority area for government
> Excellent potential for long-term partnerships
> Rapid contract wins by new team
Education
18
Total expenditure by local education
authorities (LEAs) is approximately 
£40 billion per annum. Around £2.5
billion of that is currently provided by
the private sector, with the potential 
for an increase of up to £5 billion in 
the short to medium term.
In addition to the scale of the opportunities
in this market, the education sector has
several characteristics that make it
particularly attractive to Mouchel. First,
it is a high priority area for two of our
key client groups – local authorities and
central government. Second, it involves
complex challenges that require the
expertise of support service professionals
and technical specialists. Third, many
potential clients in this sector, such as
local education authorities, are actively
seeking partnerships with companies
able to provide new ideas, fresh energy
and private sector funding expertise.
A new team established
This is a relatively new market for us, but
we have already identified both immediate
and long-term client needs for the
provision of consultancy services and
long-term managed services. To explore
these opportunities we have established
a team of education specialists. Launched
in August 2001, the team is working to
support LEAs across a range of activities,
such as strategy development, service
reviews, asset management and service
review, and delivery in core areas such
as school improvement and Special
Educational Needs (SEN).
Early successes
We have made substantial and rapid
progress, with orders in excess of 
£1.6 million at 31 July 2002 and 22
contracts signed with LEAs, consortia
and the Department for Education and 
Skills (DfES).
In February 2002, the DfES appointed 
us to help raise standards in secondary
schools in Hull. This contract, which 
will run potentially for two years, involves
the DfES, Hull City Council, Hull’s
secondary schools and Mouchel working
together to improve teaching and
learning, to develop management and
leadership skills in schools and to raise
the profile of education. We believe our
activities will help the local authority to
build a better future for this area.
Our other activities in this sector include
a similar programme of improvement in
Nottingham, the development of strategy
and finance programmes for high quality
SEN services in Barnet, and a review of
education and training provision for
fourteen to nineteen year-olds in the
East Riding of Yorkshire.
Expert services developed
Our services range from improving
performance in the classroom to
delivering strategic policy advice.
We have further enhanced our
proposition in the education sector with
two important initiatives. In April 2002
we acquired Chelstoke Educational
Consultants. The Chelstoke team provide
expert education building services and
have previously project managed projects
valued at £300 million.
In April 2002 we established training
support and performance management
consultancy QLM. QLM is expert in
areas such as professional
development, performance management
and staff retention in education, and is
active in many of our current projects,
to date the team have worked with over
3,000 schools.
Making better education a priority
The public has made it clear that
improvements in the provision of
education services must be considered
a matter of priority, opinion now reflected
in central and local government policy.
Through the development of a broad
based team of education specialists,
we are positioning ourselves to play 
an increasingly influential and valuable
role in this area. Marine
We have two market areas in this 
sector – coastal defence and ports. 
The Environment Agency is a key 
client in the former, with responsibility
for over 800km of coastline. Mouchel 
is working closely with the Agency as 
part of Pentium Coastal Defence
Limited. This consortium is two years
into a 25 year, £30 million pathfinder
PFI contract for the management of
Pevensey Bay sea defences.
The ports market promises strong
growth, as operators respond to the
increase in world trade by developing
bigger and more efficient terminals. 
Our ports team is active in the UK 
and internationally. For example, we 
are programme manager for CSX World
Terminals’ new US$230 million container
port in the Dominican Republic.
Waste
The government is demanding higher
levels of recycling and recovery, but waste
is growing by 3–5% each year. We have
two market opportunities here. First, to
help local authorities develop strategy,
policy and procurement programmes.
Second, to support operators through
specialist consultancy services. For
example, Mouchel has helped Shanks
Group to develop successful bids for
waste management and disposal
contracts. We developed a business
and logistics model using our numeric
modelling skills to help Shanks win
preferred bidder status for the 25 year
PFI East London Waste Authority
Integrated Waste Management project.
21
Further sectors
20
Defence
The Ministry of Defence (MoD) spends
£2 billion a year on land and buildings,
and has £14 billion of infrastructure
assets, many of which require repair 
or fail to meet the organisation’s needs.
The Strategic Defence Review is
rationalising this infrastructure through
procurement initiatives, including PPPs
and PFIs. We believe these will provide
extensive opportunities for Mouchel, 
both as advisers to the MoD and as
suppliers to consortia. For example,
Mouchel is currently working with the
MoD as lead PFI adviser for Colchester
Garrison. We are providing financial,
commercial and technical advice in
support of the procurement process.
Our strategy is to develop our project
and consultancy services into long-term
managed services. Our appointment in
2001 as Principal Support Provider for
the MoD in Scotland on the first regional
prime contract, potentially for seven
years, is a first and significant step in
this direction.
Law and Order
The government is driving forward with
a series of modernisation programmes
and more effective integration between
the police, courts and prison services.
However, the departments and agencies
responsible are also required to find
new efficiencies, and are seeking cost
saving solutions in operational delivery
and estate management.
During the year our activities included:
the launch of the Manchester Civil
Justice Centre Private Developer Scheme,
a key advisory role with the Court Service
on its PFI building programme and a
strategic advisory role with the Prison
Service on the next generation of prisons.
We are now pursuing a wider range of
opportunities, particularly advising on
potential PFI and PPP initiatives in the
judicial and custodial sectors.
Oil and Gas
The outsourcing by oil companies of
non-core activities, increasing regulation,
the optimisation of ageing assets, and
sustainability issues, are all high on 
the agenda in this sector. Our logistics
planning, engineering and asset
management services can provide
owners and operators of oil and gas
terminals and gas distribution networks
with solutions to these issues. We have
undertaken design development and
management of some of the world’s
largest marine oil and gas terminals. 
For example, Mouchel is helping Shell 
to manage the construction of a 
US$2 billion liquefied natural gas plant.
We are also providing strategic
consultancy services to BG Group. Other
key clients include BP and Transco. Management Board
6. Stuart Black, 38, Group Business
Development Director
Stuart joined Mouchel in 2001 from Citex
where he was corporate development
director. He was a member of the MBO
team that created Citex from the Bucknall
Group in 1998 and was instrumental in
its rapid growth.
7. Keith Jackson, 49, Director –
Central Government Highways
Keith 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.
8. Ian Manser, 45, 
Director – Project Services
Joining Mouchel as a graduate engineer
in 1979, Ian specialises in maritime
works and the management of large
projects. He has broad international
experience of multi-disciplinary projects.
9. James Measures, 50, 
Director – Local Government
James joined Mouchel from local
government in 1980. He has led the
development and management of the
local government support services
business in transportation and property,
through innovative ‘partnering’
arrangements with key clients and has
managed the transition of more than
450 local government staff into new
Mouchel offices.
10. Jeff Morris, 49, 
Director – Management Consultancy
Prior to joining Mouchel in 1994, Jeff
was a director at Coopers & Lybrand’s
management consultancy. He has 
built up Mouchel’s management
consultancy, specialising in strategy,
PPP and PFI, procurement services,
disputes management, change and
project management and asset
management planning.
23
1 2 3 4 5 6      7 8 9 10
Directors
22
Mouchel plc Board
1. Richard Benton, 45, 
Non-Executive Chairman
Richard 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. Richard joined the Board
as a Non-Executive Director in 1998
and was appointed Chairman in 2001.
2. Jim Harding, 59, Chief Executive
After an early career as an engineer 
and an accountant with Vickers and
Tube Investments, Jim became finance
director of a UK subsidiary of Otis
Elevator Inc. He joined Mouchel in 1981,
was appointed to the Board as finance
director in 1988 and became Chief
Executive in 1997.
3. Rosemary Hart, 54, 
Company Secretary
Rosemary joined Mouchel in 1982 as
assistant to the then Company Secretary,
later becoming Company Secretary 
in October 1996. As well as advising 
on legal matters, contract risk and
negotiation she has overall responsibility
for human resources.
4. Ian Knight, 51, 
Non-Executive Director
Ian 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 until 30 June
2001, helping to grow these infrastructure
businesses both organically and by
acquisition. He joined the Board in 2001.
5. Kevin Young, 43, 
Group Finance Director
Kevin 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 in 1999. 25
Exceptional costs of £1.4 million were
incurred in connection with the listing of
the business in June 2002 and charged
against the profit and loss account.
Further costs were incurred, totalling
£1.3 million, which were directly related
to the placing of the company’s shares
and the raising of new money. These
costs were written off against the share
premium account.
Managed Services
Managed Services turnover increased by
65% from £35.4 million to £58.3 million.
Overall operating margins for Managed
Services were 4.1% for the year
compared with 5.9% in the previous
year. The reduction in margins reflects
not just the costs of bidding and securing
new contracts but also the expenditure
incurred in mobilising the new
commissions, much of which was
incurred in the final two months of the
year. All tender and mobilisation costs
are written off as incurred.
Project Services
Project Services turnover increased
22% from £30.2 million to £36.9 million.
Operating margins improved from 3.5%
to 5.0%. These increases were achieved
despite the investment costs associated
with securing new long-term Principal
Support Provider contracts with the
Ministry of Defence and challenging
market conditions in the Far East.
The result for the year also benefited
from the first eight months’ trading 
from Mouchel Metro Limited which 
was acquired in December 2001.
Management Consultancy
Management Consultancy turnover
increased by 20% from £5.9 million 
to £7.1 million. Operating margins
improved from 18.5% to 20.0%.
The growth during the year reflects strong
performances in procurement, change
management and asset management
as well as the development of two new
services – strategic consultancy and
education and learning services.
Forward order book
The forward order book as at 31 July
was £308 million, representing an 86%
increase compared to the same time
last year. This is due principally to the
growth in Managed Services, which
currently accounts for more than 90%
of the Group’s forward workload.
Cash flow and working capital
Cash conversion has improved over 
the prior year. The net cash inflow 
from operating activities expressed 
as a percentage of operating profit 
after adding back depreciation and
amortisation has increased from 16% 
to 28%. This improvement has been
achieved notwithstanding the
substantial investment in working
capital required as a result of the
additional Managed Services turnover,
which was tendered for and secured
during the year.
> Group turnover up 43% to £102 million
> Profit before tax up 28% to £5.5 million
> Adjusted earnings per share up 13% to 7.9p
Finance Director’s review
Segmental performance
For the year ended 31st July
Turnover Operating Profit* Margin
2002 2001 % 2002 2001 % 2002 2001
£000 £000 Change £000 £000 Change % %
Managed Services 58,336 35,391 +65% 2,366 2,090 +13% 4.1 5.9
Project Services 36,934 30,160 +22% 1,854 1,069 +73% 5.0 3.5
Management Consultancy 7,114 5,923 +20% 1,421 1,096 +30% 20.0 18.5
Group 102,384 71,474 +43% 5,641 4,255 +33% 5.5 6.0
*Before exceptional items and goodwill amortisation
Trading results
2001/2002 saw another year of
significant growth in turnover and profits.
Group turnover increased by 43% from
£71.5 million to £102.4 million, and profit
before tax, exceptional items and the
amortisation of goodwill rose by 28%
from £4.3 million to £5.5 million.
Notwithstanding substantial investments
made during the year tendering and
securing new Managed Services
contracts, operating margins held up
well at 5.5% (6.0% last year).
Year end – 31 July 2002 2001 %
£000 £000 Change
Turnover 102,384 71,474 +43%
Operating profit* 5,641 4,255 +33%
Operating margin* 5.5% 6.0% -0.5%
Joint ventures profit 5 79
5,646 4,334 +30%
Interest (136) (43)
Profit before tax* 5,510 4,291 +28%
Effective tax rate* 33.1% 32.9% +0.2%
Adjusted earnings per share* 7.9p 7.0p +13%
* Before exceptional items and goodwill amortisation Taxation
The effective rate of tax before
exceptional items and the amortisation
of goodwill was 33.1% compared to
32.9% last year, and a statutory rate 
of 30%. The high effective rate of tax
compared to the statutory rate largely
reflects the losses incurred in our
overseas business following the decision
at the half year to provide against certain
under-performing contracts.
Earnings per share
In December 2001 we issued the
equivalent of 2,000,000 new ordinary
shares of 0.25p to the Mouchel No. 2
Employee Share Ownership Plan Trust.
In June 2002 a further 16,000,000 new
ordinary shares of 0.25p were issued
on flotation of the business.
Taking into account the above and
other shares held by Employee Share
Ownership Plan Trusts, the adjusted
earnings per share before exceptional
items and the amortisation of goodwill
increased by 13% from 7.0p to 7.9p.
Dividends
On 7 June 2002 an interim dividend of
0.35p per ordinary share after the 20 
for one share split on 14 June 2002
was paid to shareholders on the share
register as at 17 May 2002.
As indicated in the Listing Particulars it
is not proposed that a final dividend will
be declared or paid in respect of the
year ended 31 July 2002. It is intended
that thereafter we will adopt a progressive
dividend policy taking into account the
Group’s long-term earnings potential
whilst maintaining appropriate levels of
earnings cover. It is envisaged that the
interim dividend will be paid in, or about,
May with the final dividend paid in, or
about, November of each year and 
that the interim dividend will represent
approximately one third of the expected
total annual dividend.
As a result, the next dividend to be paid
by the Group is expected to be the
interim dividend in respect of the year
ending 31 July 2003 and is expected 
to be paid in, or about, May 2003.
Pensions
The last actuarial valuation of the
Group’s defined benefit scheme was
carried out as at 31 March 2001 as a
result of which the employer’s contribution
rates for the main and public service
sections of the scheme were increased 
to 14.6% and 16.5% respectively.
Employee contributions for both
sections remain unchanged.
The scheme was closed to new entrants
in January 2002 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.
FRS 17 Retirement Benefits was issued
in November 2000 to fully replace
SSAP 24 for accounting periods ending
on or after 22 June 2003. In July 2002
the Accounting Standards Board
announced it was delaying the
introduction of FRS 17 pending the
review by the International Accounting
Standards Board of its existing pensions
standard IAS 19 Employment Benefits.
FRS 17 requires the surplus or deficit
arising on the difference between the
market value of the scheme assets and
an actuarial valuation of the scheme
liabilities to be recorded in the balance
sheet, net of related deferred tax. At 
31 July 2002 the net scheme deficit 
on a FRS 17 basis was £11.6 million. 
The asset base of the scheme is 
£64.3 million and long-term contribution
rates will address this shortfall if the
deficit continues. The net pension charge
to the profit and loss account under
FRS 17 for the year to 31 July 2002
would not have been materially different
from the SSAP 24 pension charge.
For the year ended 31 July 2002 we
have continued to follow the FRS 17
transitional rules and accordingly the
net scheme deficit and FRS 17 profit
and loss account charge are disclosed
in note 36 to the accounts.
Acquisitions
On 5 December 2001, the Group
acquired Metro Consulting Limited for
an initial consideration of £1.5 million. 
At 31 July 2002 the accounts include
provision for additional consideration 
of £3.3 million based on current
estimates of future performance.
On 1 April 2002, the Group acquired 
at a cost of £0.2 million the business
and net assets of Chelstoke
Educational Consultants Limited.
Further details of both acquisitions 
are included in notes 17 and 35 to 
the accounts.
Kevin Young
Group Finance Director
27
Finance Director’s review
6.8
7.0
4.1
3.3
Adjusted earnings per share (pence)*
98 99 00 01 02
7.9
3,854
4,255
2,470
2,096
Operating profit (£000)*
98 99 00 01 02
5,641
62,437
71,474
55,623
53,673
Turnover (£000)
98 99 00 01 02
102,384
114
166
106
94
Forward order book (£m)
98 99 00 01 02
308
* Before exceptional items and goodwill amortisation 29
Substantial Shareholdings
As at 2 October 2002 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
Mouchel Trustee Limited (see note 17) 10,228,280 16.5
BNY/OCS/Nominees Limited 4,150,000 6.7
Littledown Nominees Limited 3,783,084 6.1
Morgan Nominees Limited 2,688,850 4.3
Nutraco Nominees Limited 2,477,649 4.0
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. 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 Consultancy Group Newsletters.
Save as you earn schemes have been put in place to promote employee investment in the Company. Shares under option in 
the Mouchel Sharesave Schemes are detailed in note 25, 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.
A Group personal pension plan was set up for employees in January 2002 following the closure of the defined benefit pension
scheme to new entrants (note 36).
Charitable Contributions
Charitable contributions amounted to £31,228 in the year (2001: £20,274).
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 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 2002 were 41 (2001: 56). 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’ Report
28
The Directors present their annual report and the audited financial statements of the Group for the year ended 31 July 2002.
Directors: R M Benton (Chairman)
J A Harding
K A Young
I G Knight (appointed 9 October 2001)
Profits and Dividends
Profit after tax for the year before exceptional items and goodwill amortisation was £3,685,000 (2001: £2,881,000) and total profit
after tax for the year was £2,144,000 (2001: £2,881,000). An interim dividend was paid of £101,000 (2001: £nil). A final dividend
is not proposed (2001: £72,000). Please refer to note 12, Dividends for further information.
Principal Activities and Business Review
Mouchel 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 plc’s performance during the last year as well as its prospects for the future are set out in Our Strategy (page 2),
Chairman’s statement (pages 4 and 5), Chief Executive’s review (pages 6 to 8), sector reviews (pages 10 to 21) and Finance
Director’s review (pages 24 to 27).
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
2002 were as follows:
Beneficial
Holdings Ordinary
31 July 31 July
2002 2001
RM Benton 700,000 700,000
JA Harding 1,424,300 1,829,760
KA Young 584,600 500,000
IG Knight 200,000 -
The Directors’ options over shares in the Company are detailed in note 9 of the financial statements. 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 2002.
Acquisition of own shares
Acquisition of own shares arises from the Trusts that have been established to encourage employees to invest in the Company.
All trusts are under the control of trustees and details of movements during the year are shown in note 17, Investments. 30
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 period and of the profit or loss of the 
Group for that period. In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; 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 for the re-appointment of Deloitte & Touche as auditors of the Company is to be proposed at the forthcoming 
Annual General Meeting.
Approved by the Board of Directors and signed on behalf of the Board by:
Rosemary Hart
Secretary
25 October 2002
31
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”).
The provisions of the Code are split into four areas described below:
Board and Committee structure
The Board consists of two executive and two non-executive Directors. 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. The Chairman is responsible for the running of the Board and has to ensure that all Directors
receive sufficient relevant information on financial, business and corporate issues prior to meetings. The Chief Executive’s
responsibilities focus on running the Group’s businesses and implementing Group strategy. The profiles of the Directors are 
shown on page 22.
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 and consideration of significant
financial matters, thereby retaining full and effective control of the Group.
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 Management Board is responsible for the management of the business and meets at least six times per year. 
The Chief Executive chairs the meetings and other members comprise the Group Finance Director, non-executive Directors, 
Group Company Secretary, Group Business Development Director and the four managers of the business units.
The Audit Committee comprises the two non-executive Directors and is chaired by Richard Benton. The committee meets at
least twice a year. 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.
A Nominations Committee has not been established. Given the current size of the Board and the stage of the Group’s development,
the selection process for the appointment of executive Directors and non-executive Directors to the Board has been carried out
by the Board itself, using the company’s well established recruitment procedures.
The Remuneration Committee comprises the two non-executive Directors and is chaired by Ian Knight. The committee meets 
at least twice a year. 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 executive 
share schemes.
Directors’ Report 33
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. This statement also forms part of the operating and financial review which comprises 
the Chief Executive’s review and Finance Director’s review.
Statement of Compliance
The Company has complied with the provisions stated in Section 1 of the Combined Code on Corporate Governance since its
admission to the London Stock Exchange on 28 June 2002 with the exception of the items below:
• Number of non-executive Directors: The present number of non-executive Directors means that the Company does not comply
with Code provision D.3.1 which recommends that the Audit Committee should consist of at least three non-executive
Directors. In addition, there is not presently a nominated senior non-executive Director as required by Code provision A.2.1.
• Pensionable bonuses: Jim Harding is entitled to a pensionable bonus as a percentage of salary. 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 or benefits 
in kind should be pensionable. However, as Jim Harding has been entitled to a pensionable bonus since he joined the Company 
in 1981 the Remuneration Committee feels that, in order to maintain an effective incentive package, it is appropriate for this
arrangement to be maintained.
Approved by the Board of Directors and signed on its behalf:
Rosemary Hart
Secretary
25 October 2002
Corporate Governance
32
Directors’ Remuneration
The remuneration report is set out on pages 34 and 35 and in note 9 of the Financial Statements. These include details of the
remuneration policy and the remuneration of the Directors for the year.
Financial Reporting
Detailed reviews of the performance and financial position of each business unit are included in the Chief Executive’s review and
Finance Director’s review. The Board uses these reviews, together with the Chairman’s statement and Directors’ Report to present
a balanced and understandable assessment of the Group’s position and prospects.
Internal Control
The Board has overall responsibility for the Group’s internal financial and operational controls. These controls 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. They are also designed 
to manage rather than eliminate risk of failure to achieve business objectives.
The main features of the systems of internal control which 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 
bi-monthly Group Management Board meetings.
• Allocation of Responsibilities and Control Environment. The Board has set clear terms of reference for the Audit and
Remuneration 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 unit
prepares monthly results with a comparison against budget and forecast. The Group Finance Director holds a monthly review
meeting with each of the managers of the four business units. Actions are identified and a financial report prepared for the
Board to enable it to review the Group as a whole.
• IT Systems. The Group has established controls and procedures over the security of data and has put in place disaster
recovery arrangements for IT systems.
• Business Unit Controls. The senior management of each business unit are responsible for identifying, evaluating and
managing major business risks. Procedures have been put in place so 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.
As part of the flotation process in June 2002 a review of all internal controls was undertaken by the Board, including financial,
operational and compliance controls and risk management. A similar review of all internal controls will be carried out by the
Directors on an annual basis.
Relations with Shareholders
The Board places considerable importance on maintaining good communications with shareholders. The Group’s website
(www.mouchel.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, both private and institutional, the opportunity to meet the Directors and raise 
questions as they wish. Remuneration Report
34
Remuneration Policy
The aims of the remuneration policy are:
• to align individual reward 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 with similar positions and employed by comparable companies.
Membership
The Remuneration Committee comprises the two non-executive Directors, Ian Knight being chairman and Richard Benton.
Remuneration Information
The remuneration agreed by the Committee for the executive Directors consists of a basic salary, benefits in kind, bonus
incentives and pension and life assurance benefits. The Committee also makes recommendations for the grant of options 
to executive Directors under the approved and unapproved executive share option schemes.
Basic Salary
Salaries are determined by reference to levels prevailing in the employment market generally for executive Directors of a
comparable status and employed by comparable companies, taking account of relative performance. Salaries are reviewed
annually by the Committee at the beginning of each financial year and when an individual changes position or responsibility.
Advice has been sought from Towers, Perrin, Forster & Crosby Inc. in respect of the year commencing 1 August 2002.
Bonus
Bonus entitlement is related to performance of both the executive Director and the Group, the terms of which are reviewed 
annually. Jim Harding is entitled to a pensionable bonus, further details may be found in the statement of compliance in the 
Corporate Governance report.
Share Options
The executive Directors are eligible to participate in the Inland Revenue Approved Executive Share Option Scheme and Sharesave
Scheme and the Unapproved Executive Share Option Scheme. All executive share options are performance related, dependent 
on the increase in earnings per share, over the three year period following the financial year ending immediately before the date 
of grant. It is intended to make an annual grant of options to participants. The remuneration committee will decide the level of
awards in each year. It is anticipated that in the first year, the aggregate market value of shares that may be put under option will
be two times basic salary for executive Directors. The Committee may apply a higher level in exceptional circumstances where
specifically required to recruit or retain an executive.
Retirement Benefits
The two executive Directors are members of the Company’s defined benefit pension scheme, which is administered by a Board 
of Trustees. The scheme is approved by the Inland Revenue and is contracted out of the state earnings related pension scheme.
The executive Directors contribute 5 per cent of their pensionable salary to the scheme and their normal retirement age under 
the scheme is 60. The accrual rate is 1/60th of pensionable salary for each complete year of pensionable service. Members may
accrue the maximum pension of two thirds of pensionable salary at normal retirement age, dependent upon service. The pension
costs of executive Directors are charged to the profit and loss account over their estimated service lives based upon actuarial
advice. Benefits under the scheme also include life cover of three times pensionable salary.
Other Benefits
Executive Directors’ benefits include a car, its running costs and fuel, or an equivalent car and fuel allowance, and non-contributory
membership to a private health care scheme for the executive Director and his spouse.
35
Directors’ Service Contracts
Executive Directors’ service contracts are terminable by either party giving either twelve or six months’ notice or on retirement 
at the age of 60 or such later date as may be agreed in writing between the executive Director and the Company. Copies of 
each Director’s service agreement will be available for inspection at the Annual General Meeting.
The service agreements do not make allowance for specific amounts of compensation in the event of early termination of 
the contract.
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 properly incurred in connection with the
performance of their duties. The 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. Copies of each Director’s letter of appointment will 
be available for inspection at the Annual General Meeting.
Details of Directors’ remuneration and share options
This report should be read in conjunction with note 9 to the financial statements which also constitutes part of this report 
giving full details of the amounts in the remuneration package of each Director and details of each Director’s share options.
Approved by the Board of Directors and signed on its behalf:
Rosemary Hart
Secretary
25 October 2002 Financial Statements
Contents
38 Group Profit and Loss Account
38 Statement of Total Recognised Gains 
and Losses
39 Group Balance Sheet
40 Parent Company Balance Sheet
41 Group Cash Flow Statement
42 Notes to the Financial Statements
72 Five Year Financial Summary
37
Independent Auditors’ Report 
to the Members of Mouchel plc
36
We have audited the financial statements of Mouchel plc for the year ended 31 July 2002 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 and the related notes 1 to 39. These financial statements have been prepared under the
accounting policies set out therein.
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 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 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.
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 2002 and of the profit of the Group for the year then ended and have been properly prepared in accordance with 
the Companies Act 1985.
Deloitte & Touche
Chartered Accountants and Registered Auditors
London
25 October 2002 Group Balance Sheet
As at 31 July 2002
39
Restated*
2002 2001
Notes £000 £000
Fixed assets
Intangible assets 14 4,060 -
Tangible assets 15 6,408 5,420
10,468 5,420
Investments in joint ventures:
Share of gross assets 17 306 3,875
Share of gross liabilities 17 (306) (3,813)
- 62
Investments – own shares 17 3,151 3,282
Investments – other 17 2 -
13,621 8,764
Current assets
Debtors 18 34,624 26,810
Cash at bank and in hand 17,243 1,383
51,867 28,193
Creditors
Amounts falling due within one year 19 (21,188) (16,146)
Net current assets 30,679 12,047
Total assets less current liabilities 44,300 20,811
Creditors
Amounts falling due after more than one year 24 (2,205) (319)
Provisions for liabilities and charges
Deferred taxation 10d (120) -
41,975 20,492
Capital and reserves
Called up share capital 25 155 110
Share premium 26 20,779 1,520
Revaluation reserve 27 3,212 3,212
Other reserves 28 (74) 221
Profit and loss account 29 17,903 15,429
Shareholders’ funds 30 41,975 20,492
Attributable to equity shareholders 41,975 20,492
* Restated following adoption of FRS 19 Deferred Tax in order to achieve fair presentation of comparative information (note 1m).
The financial statements were approved by the Board of Directors on 25 October 2002 and are signed on its behalf by:
Jim Harding, Director
Kevin Young, Director
38
Group Profit and Loss Account
For the year ended 31 July 2002
Before Exceptional
exceptional item and
item and goodwill
goodwill amortisation
amortisation (Notes 2 & 14) Total Restated*
2002 2002 2002 2001
Notes £000 £000 £000 £000
Turnover: Group and share of joint ventures 103,129 - 103,129 75,268
Less: share of joint ventures’ turnover (745) - (745) (3,794)
Group turnover 3/4 102,384 - 102,384 71,474
Continuing operations 96,062 - 96,062 71,474
Acquisitions 6,322 - 6,322 -
Cost of sales (81,933) - (81,933) (57,287)
Gross profit 20,451 - 20,451 14,187
Administrative expenses (14,810) (1,697) (16,507) (9,932)
Administrative expenses (excluding goodwill amortisation) (14,810) (1,422) (16,232) (9,932)
Goodwill amortisation - (275) (275) -
Operating profit: Group excluding share of joint ventures 4/5 5,641 (1,697) 3,944 4,255
Continuing operations 5,403 (1,697) 3,706 4,255
Acquisitions 238 - 238 -
Operating profit is analysed between:
Earnings before interest, tax, depreciation and amortisation 6,776 (1,422) 5,354 5,057
Depreciation 5 (1,135) - (1,135) (802)
Goodwill amortisation 5 - (275) (275) -
Operating profit: Group 5,641 (1,697) 3,944 4,255
Operating profit: Share of joint ventures 5 - 5 79
Operating profit: Group and share of joint ventures 5,646 (1,697) 3,949 4,334
Interest receivable 6 63 - 63 44
Interest payable 7 (199) - (199) (87)
Profit on ordinary activities before taxation 5,510 (1,697) 3,813 4,291
Tax on profit on ordinary activities 10a (1,825) 156 (1,669) (1,410)
Profit on ordinary activities after taxation 3,685 (1,541) 2,144 2,881
Dividends 12 (101) - (101) (72)
Retained profit for the year transferred to reserves 29 3,584 (1,541) 2,043 2,809
Basic earnings per share 13 9.2p 5.4p 11.2p
Diluted earnings per share 13 8.1p 4.7p 10.1p
Adjusted earnings per share 13 7.9p 4.6p 7.0p
Statement of Total Recognised Gains and Losses
Restated*
2002 2001
£000 £000
Profit for the financial year 2,144 2,881
Currency translation differences on net foreign currency investments (295) 198
Total recognised gains and losses for the year 1,849 3,079
Prior period adjustment (note 1m) 181
Total recognised gains and losses since the last annual report 2,030
* Restated following adoption of FRS 19 Deferred Tax in order to achieve fair presentation of comparative information, (note 1m). Group Cash Flow Statement
For the year ended 31 July 2002
41
2002 2001
Notes £000 £000
Net cash inflow from operating activities 31 1,495 827
Returns on investments and servicing of finance
Interest received 57 43
Interest paid (114) (28)
Interest element of finance lease rentals (68) (54)
Net cash outflow from returns on investments and servicing of finance (125) (39)
Taxation
Overseas tax paid (12) (257)
UK corporation tax paid (2,104) (1,148)
Tax paid (2,116) (1,405)
Capital expenditure and financial investment
Purchase of tangible fixed assets (1,742) (345)
Disposal of tangible fixed assets 32 48
Purchase of own shares (122) (508)
Disposal of own shares 1,439 755
Net cash outflow from capital expenditure and financial investment (393) (50)
Acquisitions
Purchase of subsidiary undertaking (1,641) -
Net cash acquired with subsidiary 189 -
Payment to acquire unincorporated business (74) -
(1,526) -
Dividends paid (173) (53)
Net cash outflow before financing (2,838) (720)
Financing
Issue of ordinary shares 19,108 -
New borrowings 207 -
Capital element of finance lease rentals 34 (482) (386)
Net cash inflow/(outflow) from financing 18,833 (386)
Increase/(decrease) in cash 32 15,995 (1,106)
During the year the Group entered into finance lease arrangements in respect of assets, with a total capital value at the inception
of the leases of £284,000 (2001: £462,000), giving a total amount of £2,026,000 (2001: £807,000) for the purchase of tangible
fixed assets.
40
Parent Company Balance Sheet
As at 31 July 2002
2002 2001
Notes £000 £000
Fixed assets
Tangible assets 15b 4,089 4,089
Investments 17b 4,583 4,714
8,672 8,803
Current assets
Debtors 18 22,336 4,035
Cash at bank and in hand 96 -
22,432 4,035
Creditors
Amounts falling due within one year 19 (5,797) (5,937)
Net current assets/(liabilities) 16,635 (1,902)
Total assets less current liabilities 25,307 6,901
Provisions for liabilities and charges
Deferred taxation 10d (120) -
25,187 6,901
Capital and reserves
Called up share capital 25 155 110
Share premium 26 20,779 1,520
Revaluation reserve 27 3,212 3,212
Profit and loss account 29 1,041 2,059
Shareholders’ funds 25,187 6,901
Attributable to equity shareholders 25,187 6,901
The financial statements were approved by the Board of Directors on 25 October 2002 and are signed on its behalf by:
Jim Harding, Director
Kevin Young, Director 43
Notes to the Financial Statements
For the year ended 31 July 2002
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 Adoption of FRS 19 Deferred Tax
Deferred tax is now stated on a full liability basis in accordance with FRS 19 Deferred Tax, and comparative financial information
has been restated as necessary. The impact of adopting FRS 19 was to decrease the tax charge for the years ended 31 July 2002
and 31 July 2001 by £55,000 and £58,000 respectively. This change in accounting policy resulted in the recognition of a deferred
tax asset of £181,000 as at 31 July 2001 and increased equity shareholders’ funds by the same amount at that date.
2 Initial Public Offer for the Shares of Mouchel plc
On 28 June 2002, the ordinary shares of Mouchel plc were admitted to the Official List of the UK Listing Authority and to trading
on the London Stock Exchange. The ordinary shares were offered at 125 pence per share. A total number of 24,260,000 ordinary
shares were offered, this comprised 16,000,000 new shares issued by Mouchel plc and 8,260,000 offered for sale by existing
shareholders.
From this initial public offer, Mouchel plc received £20,000,000 gross proceeds. Exceptional costs of £1,422,000 were incurred in
connection with the listing of the business and are included within exceptional administrative costs. Further costs totalling £1,321,000
which were directly related to the placing of the Company’s shares and the raising of new money have been written off against the
share premium account. A tax credit in respect of the exceptional costs has been recognised amounting to £156,000.
42
Notes to the Financial Statements
For the year ended 31 July 2002
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.
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 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.
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
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 Deferred Taxation
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. 45
Notes to the Financial Statements
For the year ended 31 July 2002
4 Segmental Analysis (continued)
b Operating profit
Analysis of operating profit by activity is as follows:
2002 2001
£000 £000
Managed Services 2,366 2,090
Project Services 1,854 1,069
Management Consultancy 1,421 1,096
5,641 4,255
Income from joint ventures (Project Services) 5 79
Total operating profit before exceptional items 5,646 4,334
Exceptional administrative expenses (1,422) -
Goodwill amortisation (275) -
Group operating profit 3,949 4,334
Analysis of operating profit by origin is as follows:
2002 2001
£000 £000
United Kingdom 6,799 5,591
Far East (843) (1,218)
Rest of world (315) (118)
5,641 4,255
Income from joint ventures (United Kingdom) 5 79
Total operating profit before exceptional items 5,646 4,334
Exceptional administrative expenses (1,422) -
Goodwill amortisation (275) -
Group operating profit 3,949 4,334
The analysis of operating profit before exceptional items by geographical destination is not materially different from that by
geographical origin.
The goodwill amortisation mainly relates to the acquisition of Mouchel Metro limited. Allocating this charge to Project Services and
United Kingdom in the above analyses gives operating profit before exceptional items of £1,579,000 and £6,524,000 respectively.
It is not considered appropriate to allocate the exceptional administrative expenses, either by operating activity or origin.
44
Notes to the Financial Statements
For the year ended 31 July 2002
3 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.
4 Segmental Analysis
a Turnover
Analysis of turnover by activity is as follows:
2002 2001
£000 £000
Managed Services 58,336 35,391
Project Services 36,934 30,160
Management Consultancy 7,114 5,923
102,384 71,474
Turnover from joint ventures (Project Services) 745 3,794
Analysis of turnover by origin is as follows:
2002 2001
£000 £000
United Kingdom 94,450 62,085
Far East 6,455 7,808
Rest of world 1,479 1,581
102,384 71,474
Turnover from joint ventures (United Kingdom) 745 3,794
The analysis of turnover by geographical destination is not materially different from that by geographical origin. 47
Notes to the Financial Statements
For the year ended 31 July 2002
6 Interest Receivable
2002 2001
£000 £000
Group 57 43
Joint ventures 6 1
63 44
7 Interest Payable and Similar Charges
2002 2001
£000 £000
Bank loans and overdrafts: Group 123 28
Joint ventures 11 5
Finance leases 65 54
199 87
8 Employee Costs and Numbers
2002 2001
£000 £000
Staff costs, including Directors, of undertakings within the Group:
Wages and salaries 55,978 41,816
Social security costs 3,333 2,536
Other pension costs 4,186 2,746
63,497 47,098
The average number of employees of undertakings in the Group during the year was as follows:
2002 2001
Number Number
Professional staff 1,365 1,104
Other staff 195 188
1,560 1,292
46
Notes to the Financial Statements
For the year ended 31 July 2002
4 Segmental Analysis (continued)
c Net assets
Analysis of net assets by geographical segment is as follows:
2002 2001
£000 £000
United Kingdom 37,394 14,522
Far East 3,467 4,856
Rest of world 1,114 1,114
41,975 20,492
Analysis of net assets by activity has not been presented as no balance sheet items are analysed by class of business.
5 Operating Profit
2002 2001
£000 £000
Group operating profit is stated after charging/(crediting):
Cost of sales 81,933 57,287
Continuing operations 76,531 57,287
Acquisitions 5,402 -
Administrative expenses:
Depreciation
Owned assets 544 412
Finance leases 591 390
Goodwill amortisation 275 -
Rentals under operating leases in respect of
Buildings 2,039 1,324
Plant and computer equipment 944 667
Audit fees
Audit remuneration: Group 73 49
Company 20 16
Other fees payable to auditors: UK 9 5
Overseas 14 -
Other items
Loss/(profit) on disposal of fixed assets 5 (34)
Other administrative expenses 10,571 7,103
Exceptional administrative expenses (note 2) 1,422 -
16,507 9,932
Continuing operations 15,825 9,932
Acquisitions 682 - Notes to the Financial Statements
For the year ended 31 July 2002
49
9 Directors’ Emoluments and Share Options (continued)
Increase in Accumulated Accumulated
accrued pension total total
during the accrued accrued
year excluding Transfer pension at pension at
any increase value of 31 July 31 July
for inflation increase 2001 2002
£000 £000 £000 £000
J A Harding 8 190 54 63
K A Young 211 4 6
10 201 58 69
The transfer value in the above tables has 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 are included in the above tables.
Share Options were granted to certain Directors and senior employees of the Group under the terms of the Approved Executive
Share Option Scheme (AES) and the terms of the Unapproved Executive Share Option Scheme (UES). Options granted to
Executive Directors during the year ended 31 July 2002 under the Executive Share Option Schemes and under the general
Employee Sharesave Scheme (ESS) were as follows:
Number of Number of
Options options options Options
as at granted exercised as at 31
1 August during during July Option
2001 the year the year 2002 price Exercisable Between
J A Harding UES* 69,320 - (69,320) - 15.00p Mar 2001-Mar 2005
ESS 52,460 - - 52,460 16.25p Aug 2002-Jan 2003
UES* 449,140 - - 449,140 19.25p Feb 2003-Feb 2007
ESS 4,020 - - 4,020 19.25p Aug 2003-Jan 2004
AES* 106,180 - - 106,180 28.25p Mar 2004-Mar 2011
UES* 293,820 - - 293,820 28.25p Mar 2004-Mar 2008
UES* - 300,000 - 300,000 31.25p Dec 2004-Dec 2008
ESS - 1,548 - 1,548 100.00p Aug 2005-Jan 2006
974,940 301,548 (69,320) 1,207,168
K A Young AES* 184,600 - (184,600) - 16.25p Mar 2002-Mar 2009
UES* 61,520 - (61,520)** - 16.25p Mar 2002-Mar 2006
UES* 753,880 - - 753,880 19.25p Feb 2003-Feb 2007
UES* 200,000 - - 200,000 28.25p Mar 2004-Mar 2008
UES* - 300,000 - 300,000 31.25p Dec 2004-Dec 2008
1,200,000 300,000 (246,120) 1,253,880
* Options marked * are performance related. 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, see note 13) must increase by 
6 per cent. more than RPI over a three year period and for unapproved options granted during the period from March 1997 
to December 2001 the Company’s adjusted earnings per share must increase by 12 per cent. more than RPI over a three 
year period. Options granted in March and December 2001 are also subject to further performance criteria.
** The market price of these shares was 125.0p on 28 June 2002, this being the date of exercise.
The market price of the shares on 31 July 2002 was 122.5p and the shares traded in the range 122.5p to 140.0p from the date
of flotation to the year end.
Prior to the 28 June 2002, share option prices were fixed at the market valuation agreed with the Inland Revenue 
at the date the options were granted.
Notes to the Financial Statements
For the year ended 31 July 2002
9 Directors’ Emoluments and Share Options
The information contained in this note forms part of the remuneration report on pages 34 and 35.
Year ended 31 July 2002
Accumulated Gains on
total the exercise
Basic salary Benefits accrued of share
and fees Bonus in kind Total pension options
£000 £000 £000 £000 £000 £000
Executive Directors:
J A Harding 129 53 11 193 63 9
K A Young 101 38 13 152 6 95
Non-Executive Directors:
R M Benton 54 -- 54--
I G Knight 19 -- 19--
303 91 24 418 69 104
Year ended 31 July 2001
Accumulated Gains on
total the exercise
Basic salary Benefits accrued of share
and fees Bonus in kind Total pension options
£000 £000 £000 £000 £000 £000
Executive Directors:
J A Harding 108 39 13 160 54 81
K A Young 95 30 10 135 4 -
Non-Executive Directors:
R M Benton 46 - - 46 - -
M A Burr* 48 - - 48 - 31
297 69 23 389 58 112
* M A Burr was a Director until 28 February 2001.
Directors’ pensions
During the year, two directors were members of a defined benefit pension scheme (2001: two).
48 10 Taxation (continued)
c Factors that may affect future tax charges
No deferred tax asset has been recognised in respect of losses in Mouchel Asia Limited as there is insufficient evidence that
there will be suitable taxable profits within the next 12 months from which the future reversal can be deducted. The amount
of the asset not recognised is £294,000.
No deferred tax asset has been recognised in respect of other items amounting to £49,250.
d Deferred tax asset
Restated
2002 2001
£000 £000
Depreciation in excess of capital allowances 84 76
Pension accrual 152 105
Deferred tax asset (note 18) 236 181
Taxable future profits on sale of shares in the 
Mouchel Employees’ Share Ownership Plan Trust (120) -
Net deferred tax asset 116 181
The movement during the year for deferred taxation was:
At 1 August 181 123
Deferred tax credit in profit and loss account for year 55 58
Charged against reserves (120) -
Net deferred tax asset at 31 July 116 181
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 loss of £1,348,000
(2001: profit of £140,000). The reason for this loss is exceptional administrative costs incurred on the flotation of the business.
Refer to note 2 for more details.
12 Dividends
2002 2001
£000 £000
Interim paid 0.35p per ordinary share (2001: nil) 154 -
Final – nil per ordinary share (2001: 0.3p per ordinary share) - 132
Less dividend on own shares (46) (60)
Less dividend waived by Mouchel Qualifying Employee Share Ownership Trust (7) -
Ordinary dividend on equity shares 101 72
Notes to the Financial Statements
For the year ended 31 July 2002
51
Notes to the Financial Statements
For the year ended 31 July 2002
10 Taxation
a Analysis of tax charge for the year
Before
exceptional Exceptional
item and item and
goodwill goodwill
amortisation amortisation Restated
2002 2002 2002 2001
£000 £000 £000 £000
Current tax:
Corporation tax on profits of the year
United Kingdom (2,076) 156 (1,920) (1,593)
Overseas --- -
(2,076) 156 (1,920) (1,593)
Adjustments in respect of prior years 196 - 196 125
Total current tax (note 10b) (1,880) 156 (1,724) (1,468)
Deferred tax:
Current year 55 - 55 58
Tax on profit on ordinary activities (1,825) 156 (1,669) (1,410)
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:
2002 2001
£000 £000
Profit on ordinary activities before tax 3,813 4,291
Profit on ordinary activities multiplied by the standard rate of
corporation tax in the UK of 30% (1,144) (1,287)
Effects of:
Expenses not deductible for tax purposes (103) (64)
Overseas losses not deductible in the UK for tax purposes (264) (173)
Capital allowances for period in excess of depreciation and 
other timing differences (as restated) (55) (58)
Adjustment in respect of prior periods 196 125
Other - (11)
Exceptional administrative expenses not deductible for tax purposes (271) -
Goodwill amortisation (83) -
Current tax charge for the year (1,724) (1,468)
The information contained in this note forms part of the remuneration report on pages 34 and 35.
50 14 Intangible Fixed Assets
Goodwill
£000
Cost at 1 August 2001 -
Additions in the year 4,335
At 31 July 2002 4,335
Accumulated amortisation at 1 August 2001 -
Charge for the year 275
At 31 July 2002 275
Net book value
At 31 July 2002 4,060
At 31 July 2001 -
Goodwill additions arose during the year upon the acquisition of Mouchel Metro Limited (formerly Metro Consulting Limited) and
the acquisition of the net assets of Chelstoke Educational Consultants Limited. Goodwill is amortised in accordance with the
accounting policy set out in note 1k.
15 Tangible Fixed Assets
a Group
Plant
Freehold and office
properties equipment Vehicles Total
£000 £000 £000 £000
Cost or valuation
At 1 August 2001 4,089 7,977 121 12,187
Foreign exchange translation difference - (51) (7) (58)
4,089 7,926 114 12,129
Acquisitions - 78 64 142
Additions - 2,023 3 2,026
Disposals - (43) (59) (102)
At 31 July 2002 4,089 9,984 122 14,195
Accumulated depreciation
At 1 August 2001 - 6,658 109 6,767
Foreign exchange translation difference - (43) (7) (50)
- 6,615 102 6,717
Disposals - (35) (30) (65)
Charge for the year - 1,117 18 1,135
At 31 July 2002 - 7,697 90 7,787
Net book value
At 31 July 2002 4,089 2,287 32 6,408
At 31 July 2001 4,089 1,319 12 5,420
The net book value of the Group’s tangible fixed assets includes £656,944 of plant and office equipment and vehicles held under
finance leases at 31 July 2002 (2001: £465,000).
Notes to the Financial Statements
For the year ended 31 July 2002
53
13 Earnings Per Ordinary Share
Before
exceptional Exceptional
item and item and
goodwill goodwill
amortisation amortisation Total Restated
2002 2002 2002 2001
£000 £000 £000 £000
Profit after tax 3,685 (1,541) 2,144 2,881
Basic diluted and adjusted earnings attributable to shareholders 3,685 (1,541) 2,144 2,881
Basic earnings per share 9.2p 5.4p 11.2p
Diluted earnings per share 8.1p 4.7p 10.1p
Adjusted earnings per share 7.9p 4.6p 7.0p
Restated*
2002 2001
Number Number
Weighted average number of ordinary shares 40,029,922 25,644,700
Dilutive share options 2,392,867 870,960
Dilutive Save As You Earn schemes 2,849,551 1,987,920
Diluted weighted average number of ordinary shares 45,272,340 28,503,580
Weighted average number of ordinary shares 40,029,922 25,644,700
Average number of shares held by the Employee Share Ownership Plan Trusts 6,778,909 17,016,440
Share options (shares held in the Employee Share Ownership Plan Trusts) 
matured in respect of Executive share option schemes (96,502) (1,729,640)
Adjusted weighted average number of ordinary shares 46,712,329 40,931,500
* The number of shares has been restated following the division of each ordinary share of 5p into 20 ordinary shares of 0.25p on
14 June 2002.
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average
number of 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 
39.77p (2001: 29.25p). This price reflects the share division described above.
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.
Notes to the Financial Statements
For the year ended 31 July 2002
52 Notes to the Financial Statements
For the year ended 31 July 2002
17 Investments
Shares in
subsidiary Joint Own Other
undertakings ventures shares investments Total
£000 £000 £000 £000 £000
a Group
At cost 1 August 2001 - 62 3,282 26 3,370
Additions - - 747 2 749
Disposals - - (878) - (878)
Share of retained loss - (62) - - (62)
Provisions made in prior years - - - (26) (26)
At 31 July 2002 - - 3,151 2 3,153
b Company
At cost 1 August 2001 1,432 - 3,282 - 4,714
Additions - - 747 - 747
Disposals - - (878) - (878)
At 31 July 2002 1,432 - 3,151 - 4,583
The investment in own shares arises because Mouchel Trustee Limited holds shares in Mouchel plc as agent for the Trustees of
the Mouchel Employees’ Share Ownership Plan Trust, Mourant & Co. Trustees Limited holds shares in Mouchel plc as Trustee for
the Mouchel No. 2 Employees’ Share Ownership Plan Trust and Mouchel Quest Trustee Limited holds shares in Mouchel 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. None of the shares held by Mouchel Trustee Limited, Mourant & Co. Trustees Limited
or Mouchel Quest Trustee Limited at 31 July 2002 had been unconditionally offered to employees and so in accordance with UITF
Abstract 13, the assets and liabilities of the trust relating to these shares have been included within the accounts of Mouchel plc.
All income, finance charges and administrative expenses relating to the trusts are recognised within the profit and loss account 
of Mouchel plc as they accrue, except for the surplus arising on the disposal of shares to third parties.
As at 31 July the shareholding in own shares was as follows:
2002
Cost Nominal value Market value
Number £000 £ £000
Mouchel Employees’ Share Ownership Plan Trust 12,439,700 2,527 31,099 15,239
Mouchel No. 2 Employees’ Share Ownership Plan Trust 1,509,804 471 3,775 1,849
Mouchel Qualifying Employee Share Ownership Trust 490,196 153 1,225 600
2001
Cost Nominal value Market value
Number £000 £ £000
Mouchel Employees’ Share Ownership Plan Trust 19,840,920 3,282 49,602 -
Ordinary shares of 6,227,936 (2001: 7,560,380) are under option to employees and may be exercised according to note 25. 
A further 7,035,240 (2001; 9,750,380) Ordinary shares are under option to Directors and senior employees under executive 
share option schemes.
55
15 Tangible Fixed Assets (continued)
b Company
Freehold
properties
£000
Cost or valuation
At 1 August 2001 4,089
Disposals -
At 31 July 2002 4,089
Accumulated depreciation
At 1 August 2001 -
Disposals -
At 31 July 2002 -
Net book value
At 31 July 2002 4,089
At 31 July 2001 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.
The Directors are not aware of any material impairment of the freehold property since it was valued in July 2000.
16 Capital Commitments
Group and Company
Capital expenditure of £366,513 (2001: £109,334) had been contracted for at 31 July 2002 but not provided for in the 
financial statements.
Notes to the Financial Statements
For the year ended 31 July 2002
54 17 Investments (continued)
Joint arrangement not an entity
Mouchel Consulting Limited has a 50% interest in joint arrangements with Amey Construction Limited and Lee McCullough and
Partners 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
In April 2000 the Group entered into a joint venture arrangement with Roberts and Partners (Group) PLC with a view to 
securing work within property management, facilities management, project management and integrated engineering services 
to identified sectors. A company, Mouchel Roberts Limited, was established for this purpose, of which Mouchel owns 50% 
of the ordinary shares.
In June 2001 the Group entered into a second joint venture arrangement with Roberts and Partners (Group) PLC in order 
to facilitate a project on behalf of a key client and a company, Speed 8770 Limited was set up, of which Mouchel owns 50% 
of the ordinary shares. The joint venture was commissioned to finance, design and manage the construction of a major 
new development.
Mouchel Roberts Limited and Speed 8770 Limited both have registered offices at the same address as Mouchel plc.
The share of the net assets of both these joint ventures are shown on this page and page 58.
Mouchel Speed Elimination of Total
Roberts 8770 intercompany joint
Limited Limited transactions ventures
2002 2002 2002 2002
£000 £000 £000 £000
Profit and loss account
Share of turnover 727 111 (93) 745
Share of profit on ordinary activities before taxation ----
Share of tax on profit on ordinary activities before taxation ----
Share of profit on ordinary activities after taxation ----
Balance sheet
Share of current assets 306 - - 306
Share of gross assets 306 - - 306
Share of liabilities due within one year (306) - - (306)
Share of gross liabilities (306) - - (306)
Share of net assets ----
Notes to the Financial Statements
For the year ended 31 July 2002
57
17 Investments (continued)
Acquisitions
On 5 December 2001 the Group acquired at a cost of £4,825,000 (including costs) 100 per cent. of the share capital of 
Metro Consulting Limited. The name was changed on 11 December 2001 to Mouchel Metro Limited. Net assets at the 
date of acquisition amounted to £772,000 as detailed in note 35.
On 1 April 2002, the Group acquired at a cost of £224,000 (including costs) the business and net assets of Chelstoke 
Educational Consultants Limited. Net assets at the date of acquisition amounted to £3,000 as detailed in note 35.
Subsidiaries
The Company’s wholly owned subsidiaries in which the Company has an interest, 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 Consulting Limited 100 Great Britain
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 Consulting International Limited 100 Jersey
Mouchel Middle East Limited 100 Hong Kong
Mouchel International Limited 100 Hong Kong
Mouchel Asia Limited 100 Hong Kong
Mouchel Asia Environmental Limited 100 Hong Kong
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
Other Investments
The Group’s other investments include a 50 per cent. holding in Mouchel IRE Limited, registered in the Ukraine, a 50 per cent.
holding in Mouchel Ho Wang Limited, registered in Hong Kong and a 25 per cent. holding in Chotichinda Mouchel Consultants
Limited (formerly known as Mouchel (Thailand) Limited), incorporated in Thailand.
The Group made an investment in KMW Property Services Company Limited and holds 50 per cent. of this Hong Kong 
Registered Company.
Notes to the Financial Statements
For the year ended 31 July 2002
56 18 Debtors
Restated
Group Group Company Company
2002 2001 2002 2001
£000 £000 £000 £000
Trade debtors 33,200 23,666 - -
Amounts owed by subsidiary undertakings - - 22,336 3,975
Amounts owed by joint ventures (note 17) 171 1,903 - -
Other debtors 225 219 - -
Prepayments and accrued income 730 841 - 60
Current corporate taxes 62 - - -
Deferred tax (note 10d) 236 181 - -
34,624 26,810 22,336 4,035
Included within trade debtors is £12,687,000 (2001: £14,855,000) due under long-term contracts (note 23).
19 Creditors
Group Group Company Company
2002 2001 2002 2001
£000 £000 £000 £000
Amounts falling due within one year:
Bank loans and overdrafts (secured) 597 108 - -
Obligations under finance leases (note 22) 360 364 - -
Trade creditors 12,130 9,669 - -
Amounts owed to subsidiary undertakings - - 4,880 4,880
Current corporate taxes 1,098 1,321 - 98
Other taxes and social security 2,801 1,994 94 61
Other creditors 3,800 2,045 803 750
Accruals 402 513 20 16
Dividends - 132 - 132
21,188 16,146 5,797 5,937
Included within trade creditors is £4,321,000 (2001: £3,171,000) of payments on account in respect of long-term contracts 
(note 23).
20 Borrowings
2002 2001
£000 £000
Bank overdraft 12 108
Bank loan (note 34) 585 -
597 108
The bank loan is secured by a fixed and floating charge over the assets of the wholly owned subsidiary, Mouchel Metro Limited.
Notes to the Financial Statements
For the year ended 31 July 2002
59
Notes to the Financial Statements
For the year ended 31 July 2002
17 Investments (continued)
Mouchel SpeedElimination of Total
Roberts 8770 intercompany joint
Limited Limited transactions ventures
2001 2001 2001 2001
£000 £000 £000 £000
Profit and loss account
Share of turnover 2,200 1,994 (400) 3,794
Share of profit on ordinary activities before taxation 79 - - 79
Share of tax on profit on ordinary activities before taxation (17) - - (17)
Share of profit on ordinary activities after taxation 62 - - 62
Balance sheet
Share of current assets 2,016 2,259 (400) 3,875
Share of gross assets 2,016 2,259 (400) 3,875
Share of liabilities due within one year (1,954) (2,259) 400 (3,813)
Share of gross liabilities (1,954) (2,259) 400 (3,813)
Share of net assets 62 - - 62
Neither of the joint ventures had any fixed assets or liabilities due after more than one year at 31 July 2002 (2001: £nil).
Transactions of joint ventures of the Group during the year were as follows:
2002 2001
£000 £000
Sales to:
Mouchel Roberts Limited 936 617
Purchases from:
Mouchel Roberts Limited 33 22
As at 31 July the Group had the following balances due from joint ventures:
Mouchel Roberts Limited:
Loan - 30
Trading 171 584
Speed 8770 Limited:
Loan - 1,289
The amounts due from joint ventures are included within debtors, note 18.
58 21 Financial Instruments (continued)
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 2002
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 4,464 585 554 3,325 8.67 1.46
Other 12 12 - - n/a n/a
4,476 597 554 3,325
31 July 2001
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 681 - 681 - 8.91 1.47
Hong Kong dollars 2 - 2 - 6.78 0.50
Other 108 108 - - n/a n/a
791 108 683 -
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.
Notes to the Financial Statements
For the year ended 31 July 2002
61
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 and comprises overdraft and short-term loan facilities.
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 other than
the currency profile note in 21b on the following page.
a Interest rate risk
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.
Financial assets
31 July 2002
Non-interest
Floating rate Fixed rate bearing
financial financial financial
Total assets assets assets
£000 £000 £000 £000
Sterling 16,084 9,084 7,000 -
Hong Kong dollars 626 626 - -
Other currencies 533 - - 533
17,243 9,710 7,000 533
31 July 2001
Non-interest
Floating rate Fixed rate bearing
financial financial financial
Total assets assets assets
£000 £000 £000 £000
Sterling 788 788 - -
Hong Kong dollars 325 325 - -
Other currencies 270 - - 270
1,383 1,113 - 270
Notes to the Financial Statements
For the year ended 31 July 2002
60 23 Long-term Contracts
Group Group
2002 2001
£000 £000
Costs to date plus attributable profit less provisions 205,983 201,203
Payments received on account (197,617) (189,519)
8,366 11,684
Turnover in excess of payments on account for individual contracts is included within trade debtors (note 18). Payments on
account in excess of turnover for individual contracts is included within trade creditors (note 19).
24 Creditors
Group Group
2002 2001
£000 £000
Amounts falling due after more than one year:
Obligations under finance leases (note 22)
Total amount payable 219 365
Less: Future finance charges (25) (46)
194 319
Deferred consideration 2,011 -
2,205 319
25 Called up Share Capital
Restated*
Number 2002 Number 2001
of shares £000 of shares £000
Authorised
Ordinary shares of 0.25p 76,000,000 190 76,000,000 190
Allotted and fully paid
Ordinary shares of 0.25p 62,000,000 155 44,000,000 110
* On 14 June 2002, the Company resolved to divide each issued and unissued 5p ordinary share into 20, 0.25p ordinary shares,
each ranking pari passu and having identical rights and restrictions to the former 5p ordinary shares. The number of shares as at
31 July 2001 have been restated to reflect this.
Notes to the Financial Statements
For the year ended 31 July 2002
63
21 Financial Instruments (continued)
c Liquidity
The maturity of financial liabilities is as follows:
2002 2001
Total Total
£000 £000
Amounts falling due:
In one year or less, or on demand 2,271 472
In more than one year but not more than two years 2,205 247
In more than two years but not more than five years - 72
In more than five years - -
4,476 791
The Group had the following undrawn committed borrowing facilities:
2002 2001
£000 £000
Expiry date:
In one year or less 2,066 4,545
In more than one year but not more than two years - -
In more than two years - -
2,066 4,545
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
2002 2001
£000 £000
Obligations under finance leases fall due as follows:
Between one and two years 194 247
Between two and five years - 72
Due after more than one year (note 24) 194 319
Due within one year (note 19) 360 364
554 683
At 31 July 2002 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 71 31
Between one and five years 1,892 595
1,963 626
Notes to the Financial Statements
For the year ended 31 July 2002
62 29 Profit And Loss Account
Group Company
£000 £000
Balance at 1 August 2001 (restated) 15,429 2,059
Profit/(loss) for the year after dividend 2,043 (1,449)
Surplus on disposal of shares by Employee Share Ownership Plan Trusts 431 431
Balance at 31 July 2002 17,903 1,041
30 Reconciliation of Movements in Shareholders’ Funds
Restated
2002 2001
£000 £000
Profit for the financial year 2,144 2,881
Dividends (101) (72)
2,043 2,809
Other recognised (losses)/gains for the year (295) 198
Shares issued 20,625 1,540
Issue costs (1,321) -
Employee Share Ownership Plan Trusts 431 -
21,483 4,547
Opening shareholders’ funds (as restated) 20,492 15,945
Closing shareholders’ funds 41,975 20,492
31 Net Cash Inflow from Operating Activities
2002 2001
£000 £000
Operating profit 3,944 4,255
Depreciation and amortisation 1,410 802
Loss/(profit) on sale of fixed assets 5 (34)
Profit on sale of own shares - (221)
Increase in debtors (6,384) (6,335)
Increase in creditors 2,212 2,436
Foreign exchange difference 308 (76)
Net cash inflow from operating activities 1,495 827
Notes to the Financial Statements
For the year ended 31 July 2002
65
25 Called up Share Capital (continued)
Under the UK and overseas Mouchel Sharesave Schemes, employees held options at 31 July 2002 on 6,227,936 ordinary 
shares (2001: 7,560,380) as follows:
Option
number of Price
shares per share Exercisable between
2,779,240 16.25p Aug 2002 Jan 2003
190,720 16.25p Oct 2002 Mar 2003
1,355,380 19.25p Aug 2003 Jan 2004
1,410,800 28.25p Aug 2004 Jan 2005
491,796 100.00p Aug 2005 Jan 2006
During the year employees exercised options on 1,580,020 shares at a price of 15p per share, 8,900 shares at 16.25p per share
and 800 shares at a price of 19.25p per share (2001: 707,180 shares at a price of 11.5p per share and 34,000 shares at a price
of 15p per share). The Company issued 2,000,000 ordinary shares of 0.25p during the year to the Mouchel No. 2 Employees’
Share Ownership Plan Trust (2001: 8,000,000 ordinary shares of 0.25p to the Mouchel Employees’ Share Ownership Plan Trust).
26 Share Premium
Group Company Group Company
2002 2002 2001 2001
£000 £000 £000 £000
Balance at 1 August 1,520 1,520 --
Issue of new shares 20,580 20,580 1,520 1,520
Issue costs (1,321) (1,321) --
Balance at 31 July 20,779 20,779 1,520 1,520
27 Revaluation Reserve
Group Company Group Company
2002 2002 2001 2001
Balance at 1 August and 31 July 3,212 3,212 3,212 3,212
28 Other Reserves
Group Group
capital foreign
reserve exchange
arising on translation Group
consolidation reserve Total
£000 £000 £000
Balance at 1 August 2001 68 153 221
Foreign exchange translation differences - (295) (295)
Balance at 31 July 2002 68 (142) (74)
Notes to the Financial Statements
For the year ended 31 July 2002
64 Notes to the Financial Statements
For the year ended 31 July 2002
35 Acquisitions
Mouchel Metro Limited (note 17)
Accounting
Book policy Fair value Fair
value adjustments adjustment value
£000 £000 £000 £000
Net assets acquired:
Tangible fixed assets 169 (36) - 133
Debtors 1,942 - (20) 1,922
Cash at bank and in hand 189 - - 189
Creditors (920) - - (920)
Taxation (157) - - (157)
Loans and finance leases (446) - - (446)
Deferred tax (5) - - (5)
772 (36) (20) 716
Goodwill 4,109
4,825
Satisfied by:
Cash 1,641
Deferred consideration: amounts falling due within one year 1,252
Deferred consideration: amounts falling due after more than one year 1,932
4,825
The subsidiary undertaking acquired during the year utilised £232,000 of the Group’s net operating cash flows, paid £207,000
in respect of taxation and drew down £207,000 of new borrowings.
Deferred purchase consideration is based on the consolidated earnings of Mouchel Metro Limited for the financial years ending
31 March 2002 and 31 March 2003 and is therefore partly a provisional estimate of the amount payable. The Directors have
reviewed the forecast earnings and believe that the amounts provided will not differ materially from those arising from the actual
earnings for these periods.
The consolidated profit after tax of Mouchel Metro Limited and its wholly owned subsidiary MKB Resourcing Limited for the
financial period commencing 1 April 2001 and ending on the date of acquisition was £248,000 and for the prior year ended
31 March 2001 was £375,000.
67 66
Notes to the Financial Statements
For the year ended 31 July 2002
32 Reconciliation of Net Cash Flow to Movement in Net Funds
2002 2001
£000 £000
Increase/(decrease) in cash for the year 15,995 (1,106)
Cash outflow on net decrease in debt and lease financing 275 386
Change in net funds resulting from cash flows 16,270 (720)
Translation difference (40) 2
New finance leases (284) (462)
Loans and finance leases acquired with subsidiary (446) -
Movement in net funds in the year 15,500 (1,180)
Net funds at the beginning of the year 592 1,772
Net funds at the end of the year 16,092 592
33 Analysis of Net Funds
Acquired
Brought (excluding cash Carried
forward and overdrafts Other forward
1 August with subsidiary non-cash 31 July
2001 Cash flow undertaking) changes 2002
£000 £000 £000 £000 £000
Cash at bank 1,383 15,909 - (49) 17,243
Overdraft (108) 86 - 10 (12)
1,275 15,995 - (39) 17,231
Debt due within one year (364) 273 (446) (408) (945)
Debt due in more than one year (319) - - 125 (194)
592 16,268 (446) (322) 16,092
34 Analysis of Changes in Financing in the Year
2002 2001
£000 £000
Finance lease obligations:
Balance at 1 August 683 607
Inception of finance lease contracts 284 462
Acquisitions 69 -
Cash outflow (482) (386)
Balance at 31 July 554 683
Bank loans:
Acquisitions 378 -
Cash outflow 207 -
Balance at 31 July 585 - Notes to the Financial Statements
For the year ended 31 July 2002
36 Pensions (continued)
At 31 July 2002, there were no provisions or prepayments in the balance sheet resulting from a difference between the amounts
recognised as cost and the amount of contributions paid into the scheme (31 July 2001: £nil). As at 31 July 2002 there was an
accrual of £487,000 (2001: £350,000) in respect of pension contributions due on salaries.
In accordance with Financial Reporting Standard 17, Retirement Benefits (FRS 17), the full actuarial valuation was reviewed 
and updated as at 31 July 2002 based upon the following assumptions:
2002 2001
% %
Rates of increase in salaries 4.4 4.5
Rates of increase of pensions in payment 2.4 2.5
Discount rate 5.9 6.0
Inflation 2.4 2.5
Scheme assets and liabilities under FRS17 are disclosed below:
2002 2001
£000 £000
Equities 47,599 48,245
Bonds 11,696 13,882
Other:
Property 2,086 2,086
Cash 2,939 6,572
Total fair value of assets 64,320 70,785
Actuarial value of liability (80,878) (71,383)
Deficit (16,558) (598)
Related deferred tax asset 4,967 179
Net scheme deficit (11,591) (419)
The expected return for the scheme assets in the forthcoming year is as follows:
2002 2001
% %
Equities 6.9 7.0
Bonds and cash 5.4 5.4
Property 6.4 6.5
69
Notes to the Financial Statements
For the year ended 31 July 2002
35 Acquisitions (continued)
Chelstoke Educational Consultants (note 17)
Accounting
Book policy Fair value Fair
value adjustments adjustment value
£000 £000 £000 £000
Net assets acquired:
Tangible fixed assets 15 (5) - 10
Debtors 155 - - 155
Creditors (118) - - (118)
Taxation (49) - - (49)
3 (5) - (2)
Goodwill 226
224
Satisfied by:
Cash 74
Deferred consideration: amounts falling due within one year 72
Deferred consideration: amounts falling due after more than one year 78
224
The business acquired during the year contributed £41,000 to the Group’s net operating cash flows.
Deferred purchase consideration is based on the earnings of the business for the three year period commencing 1 April 2002 
and is therefore a provisional estimate of the amount payable. The Directors have reviewed the forecast earnings and believe 
that the amounts provided will not differ materially from those arising from the actual earnings for these periods.
36 Pensions
The pension charge in the financial statements of the Group and the contributions payable for the Mouchel Superannuation 
Fund for the year ended 31 July 2002 was £4,186,000 (31 July 2001: £2,746,000). The higher charge for the year ended 31 July
2002 is mainly due to the increase in employers’ contributions and an increase in the number of members of the scheme.
The contributions for the year ended 31 July 2002 and the year ended 31 July 2001 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 per cent. 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 cent. per annum, investment returns after retirement would be 5.25 per cent. per annum,
that salary increases would average 4.25 per cent. per annum and that present and future pensions in payment would increase 
at the rate of 2.25 per cent. per annum. The employer’s contribution rates for the main section were increased from 12 per cent.
to 15 per cent. on 1 October 2001 and reduced to 14.6 per cent. on 1 November 2001. Employer’s contribution rates for the
public service section were increased from 14 per cent. to 16.5 per cent. on 1 November 2001.
The scheme was closed to new entrants in January 2002 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.
68 Notes to the Financial Statements
For the year ended 31 July 2002
71
36 Pensions (continued)
The actuarial assumptions used in the triennial valuation of the scheme at 31 March 2001 have been modified in accordance with 
the requirements of FRS 17 in order to arrive at the disclosures detailed of the scheme opposite.
The assets and liabilities as at 31 July 2002 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 scheme to new entrants the FRS 17 current service cost under the projected unit method will increase
as members approach retirement age.
37 Contingent Liabilities
Contingent liabilities at 31 July 2002 in respect of guarantees and indemnities in the normal course of business total £1,334,000
(2001: £1,279,000).
In addition, bank overdrafts of subsidiaries were guaranteed at 31 July 2002 up to £596,000; the amount overdrawn at that 
date being £13,000.
These overdrafts are secured by a fixed charge on the freehold property together with a fixed and floating charge on the other
assets of the Group.
38 Related Party Transactions
Transactions with joint ventures are disclosed in note 17.
39 Ultimate Controlling Party
There is no single controlling party. Ultimate control is exercised by the shareholders.
Notes to the Financial Statements
For the year ended 31 July 2002
36 Pensions (continued)
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
2002 2001
£000 £000
Equity shareholders’ funds:
Equity shareholders’ funds excluding net pension deficit 41,975 20,492
Pension deficit (11,591) (419)
Total equity shareholders’ funds 30,384 20,073
As at
31 July
2002
£000
Analysis of amount chargeable to operating profit:
Current service cost (4,785)
Analysis of credit due to other finance income:
Expected return on pension scheme assets 4,756
Interest on pension scheme liabilities (4,418)
Net return 338
Analysis of amounts recognisable in the statement of total recognised gains and losses:
Actual return less expected return on pension scheme assets (15,133)
Experience gains and losses arising on the scheme liabilities -
Changes in assumptions underlying the present value of the scheme liabilities (566)
(15,699)
Movement in deficit during the period:
Deficit in scheme at 1 August 2001 (598)
Current service cost (4,785)
Contributions 4,186
Net return on assets/(interest costs) 338
Actuarial loss (15,699)
Deficit in scheme at 31 July 2002 (16,558)
History of experience gains and losses:
Differences between the expected and actual return on scheme assets:
Amount (15,133)
Percentage of scheme assets (24)%
Experience gains and losses on the scheme liabilities:
Amount -
Percentage of scheme liabilities 0%
Total amount recognisable in the statement of total recognised gains and losses:
Amount (15,699)
Percentage of scheme liabilities (19)%
70 Group Profit and Loss Account for the year ended 31 July
Restated
1998 1999 2000 2001 2002
£000 £000 £000 £000 £000
Group and share of joint ventures’ turnover 53,673 55,623 62,437 75,268 103,129
Share of joint ventures’ turnover - - - (3,794) (745)
Group turnover 53,673 55,623 62,437 71,474 102,384
Operating profit* 2,096 2,470 3,854 4,255 5,641
Share of operating profit
in joint ventures - - - 79 5
Profit before interest* 2,096 2,470 3,854 4,334 5,646
Net interest (225) (73) 25 (43) (136)
Profit before tax* 1,871 2,397 3,879 4,291 5,510
Operating margin* 3.9% 4.4% 6.2% 6.0% 5.5%
Effective tax rate* 27.2% 30.8% 25.1% 32.9% 33.1%
Adjusted earnings per share* 3.3p 4.1p 6.8p 7.0p 7.9p
* Before exceptional item of £352,000 in 2000 and exceptional administrative expenses of £1,422,000 and goodwill amortisation 
of £275,000 in 2002.
Group Balance Sheet as at 31 July
Restated
1998 1999 2000 2001 2002
£000 £000 £000 £000 £000
Fixed assets 8,051 7,872 7,189 8,764 13,621
Current assets 17,208 20,313 22,547 28,193 51,867
Current liabilities (11,147) (12,839) (13,610) (16,146) (21,188)
Long term liabilities (308) (249) (329) (319) (2,325)
Equity shareholders’ funds 13,804 15,097 15,797 20,492 41,975
The balance sheets and profit and loss accounts for 1998,1999 and 2000 have not been restated for the impact of FRS 19
Deferred Tax.
Group Cash Flow for the year ended 31 July
1998 1999 2000 2001 2002
£000 £000 £000 £000 £000
Net cash inflow from
operating activities 3,065 3,210 3,720 827 1,495
Returns on investments
and servicing of finance (225) (69) 24 (39) (125)
Tax paid (328) (585) (882) (1,405) (2,116)
Capital expenditure (753) (495) (315) (297) (1,710)
Disposal of own shares (net) (35) 161 813 247 1,317
Acquisitions ---- (1,526)
Dividends paid (209) (242) (195) (53) (173)
Redemption of preference share capital - - (1,884) - -
Issue of ordinary shares ---- 19,108
Other financing (106) (188) (299) (386) (275)
Increase/(decrease) in cash 1,409 1,792 982 (1,106) 15,995
Non-cash changes (33) 8 (39) 2 (39)
Opening cash (1,740) (364) 1,436 2,379 1,275
Closing cash (364) 1,436 2,379 1,275 17,231
72
Five Year Financial Summary Mouchel is a professional support services group.
We deliver high value technical, commercial
and financial expertise to clients in the public
and private sectors. We work with these
organisations to develop and implement 
their strategy, to operate and optimise their
infrastructure and service delivery, and to
enhance the skills and performance of their
people. Our work supports them in providing
better and more efficient everyday services 
to customers and communities.
Contents
1 Financial highlights
2 Our strategy
4 Chairman’s statement
6 Chief Executive’s review
10 Strategic highways
13 Local highways
14 Property
17 Rail
18 Education
20 Further sectors
22 Directors
24 Finance Director’s review
28 Directors’ Report
31 Corporate Governance
34 Remuneration Report
36 Auditors’ Report
38 Group Profit and Loss Account
38 Statement of Total Recognised
Gains and Losses
39 Group Balance Sheet
40 Parent Company Balance Sheet
41 Group Cash Flow Statement
42 Notes to the Financial Statements
72 Five Year Financial Summary
Office and Advisors
Mouchel Registered office:
Mouchel plc
West Hall  Parvis Road
West Byfleet
Surrey  KT14 6EZ
Registered number 95369
Auditors
Deloitte & Touche
180 Strand
London  WC2R 1BL
Registrars
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex  BN99 6DA
Solicitors
Clifford Chance LLP  
200 Aldersgate Street
London  EC1A 4JJ
Stockbrokers
Cazenove & Co. Ltd
12 Tokenhouse Yard
London EC2R 7AN
Designed by FOUR IV Design Consultants  London  T +44 (0)20 7837 8659 Report and Accounts 2002
Mouchel plc
West Hall  Parvis Road
West Byfleet  Surrey  KT14 6EZ
T +44 (0)1932 337000
www.mouchel.com
Mouchel plc Report and Accounts 2002