report and accounts 2004 contents
1 highlights
2 our business
5 chairman’s statement
6 chief executive’s statement
10 finance director’s review 
sector review
15 highways
16 property
19 rail
20 water
22 gas
housing
25 education
waste
26 mouchel parkman plc board
27 mouchel parkman group executive
28 directors’ report
31 corporate governance
34 remuneration report
39 auditors’ report
42 group profit and loss account
43 group balance sheet
44 parent company balance sheet
45 group cash flow statement
46 statement of total recognised gains and losses
reconciliation of movements in 
shareholders’ funds
47 notes to the financial statements
72 five year financial summary
mouchel parkman is a professional support services group we help
clients in the public sector and regulated industry to provide better
everyday services to customers and communities our rare combination
of professional commercial and technical expertise enables them to
improve their strategy services people and asset management highlights
group turnover up 22 from £2236 million to £2719 million
profit before tax exceptional items and the amortisation of goodwill 
up 43 from £135 million to £194 million
adjusted earnings per share
before exceptional items and goodwill amortisation up by 61 
to 145p and
before exceptional items goodwill amortisation and tax relief on
providing options to employees under share incentive schemes 
up by 40 to 126p
profit before tax of £101 million and basic earnings per share of 
72p after exceptional items of £75 million 2003 £10 million and 
the amortisation of goodwill of £18 million 2003 £09 million
forward order book of £850 million
significant sales success in core and incubator market sectors
£25 million in annual cost savings secured and
merger integration completed successfully our purpose
we help our clients to provide better everyday services to
customers and communities we provide employees with
security and an environment in which they can develop –
professionally and personally and as a company listed on
the london stock exchange we continually work to create
value for the benefit of our shareholders
our strategy
we aim to win and retain longterm managed services
contracts using our consultancy services to initiate and
develop relationships with clients
managed services contracts are particularly attractive to us
because they provide a reliable flow of work this means we
can allocate resources in the most effective way providing
clients with efficient and effective services and enabling us 
to achieve better margins
consultancy plays a pathfinder role for us gaining clients and
developing our experience and capabilities in new areas
we operate principally in the uk working with clients in the
public sector and regulated industry
our markets 
we are active in eight sectors – highways water property
rail housing education gas and waste clients in these 
areas own or operate a significant asset base requiring
• complex operational management
• high maintenance and development expenditure
• improved performance and efficiency
• new solutions for strategy management and funding
our services 
our expertise enables clients to
• develop and implement strategy
• optimise and manage assets and services
• enhance the skills and performance of people
our managed services work is typically based on longterm
contracts of between three and 25 years activities include
the management of road networks public buildings rail
infrastructure homes schools and utilities
our consultancy teams deliver management consultancy
project management and asset management advice to clients
our people
we intend to increase the scale of our organisation significantly
maintaining recent annual growth rates this rapid growth is
necessary if we’re to achieve our financial objectives
we believe the calibre and commitment of our people
determines our success as a business we have an open
style of management that bonds the aspirations and
development of our staff with our aspirations and
development as a company
our values
• we value responsibility – we keep the promises we make 
to colleagues and clients and don’t make excuses
• we value teamwork – we support each other share ideas 
and don’t accept behaviour that excludes colleagues
• we value integrity – we treat people fairly are open and
honest in everything we do and don’t accept hidden agendas
• we value innovation – we want to be inventive and
imaginative and don’t allow convention or dullness 
to get in our way
• we value respect – we recognise the talents and aspirations
of others and don’t dismiss their views
• we value delivery – we are responsive and enthusiastic
and don’t accept the failure to perform
these are not just words – they underpin the way we manage
the business and all of our people know that we stand by our
values all the time our values and the way we manage the
business are the key differentiators for mouchel parkman
our business
mouchel parkman intends to become the leading professional
support services company in its chosen markets we describe
our objectives and approach below
mouchel parkman report and accounts 2004 2   chairman’s statement
performance 
the first year for mouchel parkman has been very successful
we have produced excellent results – operating profit up 
by 47 turnover up by 22 and a forward order book of
£850 million at the end of july
we are really pleased with these results especially as they have
been achieved during a year when two sets of people systems
and resources became one but perhaps more important is
the strong platform that we have now created for the future
our corporate planning process has identified ambitious
financial objectives for the group these are nevertheless
realistic grounded in a sure sense of what mouchel parkman
can achieve in light of the opportunities that exist in our
markets and the strong demand that continues to exist 
for our services
market consolidation 
looking at the dynamics in our markets consolidation continues
with a number of our competitors joining forces since our merger
in an attempt to provide more scale on the supplyside on
the clientside more organisations are placing larger contracts
with fewer providers for longer periods of time the highways
agency ha has taken this path for some time local authorities
and some water companies are now following suit supporting
the principal rationale for our merger
it’s great news that we have won some large contracts this
year and can see opportunities to win many more forming
the right relationships with contractors and partners is
important for our future the merger has given us the mass
and credibility to be able to align with the very best players
the board and senior management
looking inside the company we have an excellent management
team in place under the leadership of richard cuthbert and
kevin young the successful merger integration and the
company’s performance this year underline how good our 
top people are
 before exceptional items and goodwill amortisation
during the year jim harding stood down after 24 years service
with mouchel as did richard archer who was forced to resign
through illhealth it is with great sadness that we report that
richard subsequently passed away on 27 august 2004 after
a long battle against cancer richard was the driving force
behind the recent rise of parkman and his energy personality
and advice are greatly missed jim was at the helm during
mouchel’s transition from a traditional consultancy to a support
services provider and we wish him well in his new ventures
good corporate governance is a priority for us although we
have the right procedures in place to protect the interests of
our stakeholders we constantly review and update these to
ensure best practice as the group develops and expands
this may include further strengthening of our board in the
coming year
richard preece stood down on 18 october 2004 as company
secretary after 16 years’ outstanding service to parkman 
and through the first year of the combined group we are
delighted that his replacement is amanda massie who joined
us from atkins
looking ahead
after a very exciting and successful 12 months for the group 
i’m now looking forward to what comes next of course there
are challenges ahead but the progress we have made this
year confirms to me that this is a robust company with strong
leadership excellent people and many opportunities to grow
and develop we’ve set ourselves ambitious targets and 
i have every confidence that we can achieve them
richard benton
chairman
mouchel parkman’s first year has been tremendously exciting 
a huge amount was achieved and there has been significant
change in most of our markets richard benton chairman
assesses our performance and the opportunities that lie ahead
mouchel parkman report and accounts 2004 5 mouchel and parkman announced an intention to join forces
on 21 august 2003 we have achieved pretty much everything
we set out to do in our first year we completed our integration
programme on time met our financial objectives and created
a new and dynamic force in the market
everyone here has played their part in getting us to where we
are i thank them on behalf of the board not just for their hard
work but also for their belief we have tried hard to create a
culture and working environment in which everyone can flourish
and realise their ambitions we think we are well on the way
so does the independent assessor from investors in people
iip who visited us in july – she interviewed people throughout
the organisation and found that the “level of excitement is
almost tangible”
the process of putting two fast growing and successful
businesses together has been exciting and rewarding our
integration programme project one comprised 16 separate
subprojects these included the ‘hard’ – new systems and
processes – and the ‘soft’ – issues that would influence the
way we do things in mouchel parkman we also identified
four critical areas of risk facing us in 20034 these and 
our responses to them are central to an understanding 
of our performance
1 we needed to keep the business moving forward in spite
of our internal challenges
the demands of the merger could have distracted us from
the fundamentals particularly developing client relationships
and winning new business we were aware of the need to
keep looking outward rather than focusing too much on
internal issues as a result we have kept the top line moving
we have grown the order book and we have increased what
was already a very healthy pipeline of new opportunities
we secured new commissions in the year in both our core
and incubator sectors these included
• two social housing management contracts each for seven
years for the london borough of hackney
• commissions for the dfes to project manage the feasibility
of three new city academies
• an eight year contract supporting alcatel in replacing the
signalling for the jubilee and northern lines for the tube
lines consortium
• four managed services contracts in the water industry some
for up to ten years to provide operational management
services to thames water southern water scottish water
and severn trent water
• the first contract let by the highways agency to recruit 
and train its traffic officers
• six longterm highways contracts in partnership with
cornwall county council the corporation of london the
london boroughs of bexley and richmonduponthames
leeds city council and the city of westminster the last of
these is a local authority managing agent contractorstyle
macstyle contract which we secured in joint venture with
balfour beatty – the first of what we believe will be a trend
in this type of procurement
our existing clients have also reaffirmed their satisfaction
enabling us to maintain a 100 record in securing managed
service contract extensions extensions in the year included
• ealing and wiltshire highways
• wiltshire and bedfordshire property
• north yorkshire ‘bundled’ services
2 we needed to keep staff on board
anxiety amongst staff is inevitable during major change 
we opted to address reorganisation and redundancy issues
quickly to minimise uncertainty we also communicated openly
about our plans in the end relatively few fulltime posts were
redundant as a result of the merger and of course we
continue to welcome new staff to the group through
recruitment and transfer
the vast majority of our people have shown great support for
the new company confirming our expectation that the cultures
of mouchel and parkman would combine well in a new group
chief executive’s statement
successfully integrate two companies deliver significant growth
and improve profitability that was the expectation in 20034
richard cuthbert chief executive outlines our progress in the
year and assesses our prospects
mouchel parkman report and accounts 2004 6 chief executive’s statement
3 we needed to establish an effective and coordinated
programme of integration for our support systems
some of the activities within project one were focused 
on the transformation of business critical processes and
infrastructure we completed all of these on time and to
budget so that by the end of our first year and in some
cases by april 2004 we had in place
• a single it platform and technical support team organisation
and management
• a companywide finance system
• a set of technical and project management procedures
across quality management environmental management
and health and safety
• new employment terms and conditions and a new
performance management and appraisal system for 
all employees
4 we needed to ensure a successful transition for recent
acquisitions and major contract wins
a number of important new contracts and several acquisitions
were secured in the run up to the merger these had to perform
in line with expectations in their first year in circumstances that
had not previously been anticipated as a result of the care
we devoted to this issue gel atkins odlin and lda all
performed well this year
our joint venture with liverpool city council 2020 liverpool
limited started on 1 october 2003 and has performed
exceptionally well we have already developed an identity in
the city enabling us to attract fresh talent to help us satisfy the
demand for infrastructure improvement works in liverpool in
the run up to its european capital of culture status in 2008
finally our most recent mac contract with the highways
agency in cumbria and north lancashire area 13 had 
a very good first year and is another success for the
ameymouchel joint venture
the next phase – core market sectors
highways
as ameymouchel we are arguably the highways agency’s
leading provider of maintenance management services on the
capital works side we are already involved in two of the new
early contractor involvement eci schemes and more may
follow there is also the prospect of major motorway widening
projects our leadership of the active traffic management project
on the m42 in the west midlands is giving us excellent
experience in the application of technology to increase
highway capacity
we confirmed our preeminent position with local authorities
during 20034 our strategic alliances with hertfordshire and
wiltshire county councils went from strength to strength our
track record and long list of reference sites puts us in a strong
position for future opportunities these include second and
even third generation outsourcing contracts in the shire counties
along with first generation contracts in london and the
metropolitan areas the signs are that at least some of these
contracts will offer highways as part of a large bundle of
outsourced services some could be macstyle contracts
property
we are now market leader in the local authority sector and
expect further growth our teams have brought a noticeable
improvement to customer service delivery in both surrey and
hertfordshire in the first 12 months of those contracts the
building schools for the future bsff initiative promises to
dramatically increase investment in secondary school
infrastructure and we are exploring opportunities to develop
local education partnerships with leas in joint venture with
other providers our continuing success in the academies
procurement and project management programme is adding
to our credibility for bsff
rail
we have a good balanced portfolio of work with longterm
structures inspection and assessment contracts with network
rail and longterm signalling work for london underground
we are well positioned for further expansion but in spite of
the massive spend in the sector this market remains uncertain
and we wait to see how network rail’s developing plans will
affect us longterm 
water
we had a tremendous year securing valuable longterm asset
management contracts with some of the major water companies
and increasing turnover by over 30 the outsourcing trend
looks set to continue and opportunities to undertake capital
scheme design work will increase as we formally enter the
new asset management cycle – asset management plan 4
amp4 we will increase our scale and market share through
acquisition should the right opportunity present itself
incubator market sectors
our incubator sectors currently represent about 10 of our
turnover our objective is for at least one incubator to become
a core market sector our approach is to establish a profitable
consultancy business as a forerunner to developing managed
services contracts we have achieved this in all four sectors now
mouchel parkman report and accounts 2004 7 chief executive’s statement
mouchel parkman report and accounts 2004 8
our team of management consultants provides advice on
infrastructure projects and services across all of our markets
together with thought leadership this helps us to set the
agenda for our clients and identify new opportunities for the
group the team has again been successful working primarily
in our incubator sectors
gas
national grid transco ngt is leading the further transformation
and restructuring of the uk gas industry through gel we
have been able to play a part in this process supporting
macquarie bank in its successful bid for the wales and west
regional gas distribution network we expect more opportunities
to flow from this process both before and after the formal
transfer of assets to the new private sector owners next april
alongside this ngt’s pipeline replacement programme will
continue to offer good prospects for us as one of very few
providers in this market in the year gel won contracts in
norfolk south wales and scotland
waste
the fundamental change that the eu landfill directive is bringing
to local authority practice means that consultancy opportunities
will remain in this sector we advised several local authorities
on waste strategy and continued our work for shanks on new
waste transfer sites in east london whilst 20034 was a
successful year for our consultancy team we have not yet been
able to enter the market for managed services in this sector
education
the recent green paper from the department for education
and skills – ‘every child matters’ – sets out a bold agenda 
for children’s services and recognises that poor educational
performance is often due to poor management and
communication not poor teaching we improve the
management of people projects and assets so this gives 
us a valuable role in helping to raise standards as our work
as advisors and interim managers demonstrated this year
this is an evolving market which together with the bsff
programme indicates that our investment in this sector over 
the last two to three years is likely to bear fruit as our success
in the academies programme has indicated improving the
management and capacity of leas and the promotion of joined
up services supporting urban regeneration are the most likely
routes for effective public private partnership in this sector
housing
interim manager roles are also a prospect in social housing
we were delighted with our wins in hackney and we’ve made
an encouraging start to the contracts we have excellent
people out there delivering frontline services to the community
and we are already making a difference together with our
successful contract with westminster we now have an
established business this market is still not developing at 
the pace we had anticipated however and we are working 
on alternative service models which might be attractive to
local authorities and residents
developing our people
at the end of july 2004 we employed 4250 people recent
joiners included a range of senior management – a new
company secretary hr director and a new business
development director in government services this autumn
we recruited nearly 100 graduates the training and continuing
professional development for all of our people is now channelled
through ‘mp learning’ staff communications are facilitated
by our intranet ‘mportal’ our quarterly magazine ‘mprint’ a
monthly newsletter ‘mp monthly’ and a regular series of
presentations by the executive team in all offices
as the group grows the sharing of best practice is ever more
important our ability to quickly and effectively integrate people
joining us through acquisition or under the transfer of
undertakings protection of employment regulations 1981
as amended tupe is also crucial to our continuing success
with this in mind we have appointed a business transformation
director whose role is also to champion continuous
improvement across the group we introduced the european
foundation for quality management efqm version of
business excellence during the year that has established a
structured approach to self assessment – an essential first step
along the road to service improvement
outlook
it has been a privilege to lead mouchel parkman in its first
year our market prospects and overall business outlook 
are good and we are confident that we can now achieve
more than either mouchel or parkman could have achieved
alone we have the right people the right approach and a
tremendous opportunity to fulfil our aspiration to become the
leading provider of consultancy and support services in our
chosen markets we have made an excellent start
richard cuthbert
chief executive  finance director’s review
mouchel parkman report and accounts 2004 10
the year since the merger has seen strong growth in turnover and
profits and a marked improvement in operating margins across
the group finance director kevin young explains how this has
been achieved
trading results
the year ended 31 july 2004 saw significant growth in turnover
and profits group turnover increased by 22 from £2236
million to £2719 million profit before tax exceptional items
and the amortisation of goodwill rose by 43 from £135
million to £194 million
year end – 31 july 2004 2003 
£000 £000 change
turnover 271855 223633 22
operating profit 19217 13041 47
operating margin 71 58
interest 153 500
profit before tax 19370 13541 43
effective tax rate 210 311
adjusted earnings per share 145p 90p 61
 before exceptional items of £7491000  2003 £963000 and 
goodwill amortisation of £1774000 2003 £874000
group operating margins strengthened from 58 to 71
reflecting improved profitability from all parts of the business
as well as the benefit of the initial cost savings arising from the
merger we are on track to meet our longer term objective of
delivering margins of 8
we have also made significant progress in delivering the
synergies identified at the time of the merger and now expect
to reduce the group’s cost base by £25 million a year compared
with the £20 million originally anticipated £10 million of this has
been realised in this first year since the merger the savings
mainly relate to a reduction in the number of senior directors
and back office support staff and have been secured against
a background of increasing technical staff numbers with total
group headcount rising to 4250 at the year end
exceptional costs associated with the merger of mouchel and
parkman totalled £60 million in the year 2003 £10 million and
comprised transaction costs of £26 million 2003 £10 million
and restructuring and reorganisation costs of £34 million
2003 nil in terms of reducing the group’s cost base we
now expect to recover the total exceptional costs associated
with the merger in just over three years
other exceptional costs totalled £15 million and included the
£08 million loss on disposal of our hong kong business to
the meinhardt group on 30 july 2004 also included within
exceptional costs is the write off of the remaining goodwill of
£07 million which arose on acquisition of the full circle
school improvement inspections and training consultancy
business in 2002 this followed our decision at the half year
to reorganise our education activities and withdraw from the
difficult schools inspections market
as previously indicated the results for the enlarged group
have been accounted for on a merger accounting basis 
in accordance with financial reporting standard frs 6
acquisitions and mergers therefore although the merger 
did not take place until after the start of the year the results
of the merged business have been presented on a combined
basis for the whole year with full restatement of comparative
results for all earlier periods as if the two organisations had
always been one and the same
managed services
managed services turnover increased by 20 from £1438
million to £1730 million at the same time operating profits
increased by almost half from £83 million to £124 million and
operating margins improved from 58 to 72
the growth in turnover and improved profitability reflected the
initial contribution from contracts secured and started during
the year as well as the full year effect of commissions
commenced in the previous year
the strong performance of the joint venture with amey highways
limited was again very beneficial on 1 july 2003 we started
work on the highways agency managing agent contractor
contract for area 13 north lancashire and cumbria with a
value to the group of more than £35 million over five years
excluding potential extensions we also benefited from
increased volumes from some of the previously secured
commissions in particular the term maintenance contractor
commission in area 10 greater manchester merseyside
south lancashire and cheshire and the managing agent
contractor contract for area 9 west midlands mouchel parkman report and accounts 2004 11
finance director’s review
in the local government market we benefited from the
commencement in october 2003 of the ten year extendable 
to 20 bundled service contract for liverpool city council 
the contract which is worth about £10 million annually is
operated in joint venture with liverpool city council 2020
liverpool limited and covers property estates highways and
traffic engineering securing this contract was strategically
important for the group as it is expected to be one of a
number of bundled service contracts to be let in the local
government sector
in spring 2003 towards the end of our last financial year we
commenced two new five year property service commissions
in hertfordshire and surrey in spring this year we signed two
housing management contracts with hackney borough council
in london the two contracts which cover the neighbouring
areas of de beauvoirqueensbridge and homerton are worth
£22 million over seven years and started in april 2004 in january
2004 we began a three year extendable to five contract to
deliver building survey and multidisciplinary consultancy services
to hillingdon homes the arms length management organisation
set up by the london borough of hillingdon
our rail business benefited this year from the five network
rail structures examination and assessment contracts which
started in spring 2003 these comprised a ten year structures
examination contract for the midlands region a ten year
structures assessment contract for the southern region and
ten year structures examination and structures assessment
contracts for the north west region as well as a five year
stations inspection contract for the north west and midlands 
in rail we also began to benefit from the commencement in
february 2004 of the commission to support alcatel in tube lines’
signal upgrading work on london underground’s jubilee and
northern lines the contract is worth about £50 million to
mouchel parkman over eight years
in water we also began to benefit from five new commissions
which were secured and started in the second half of the year
in spring 2004 we won an initial two year contract to provide
network management and leakage detection services to
scottish water solutions as well as a two year commission
for the provision of design services in the north east of
scotland in may 2004 we started a ten year contract to
provide leak detection services for thames water in north
east london followed in june by a further commission to
supply thames water with leakage consultancy services
throughout the whole of london on 1 june 2004 we began
a three year extendable to five contract with southern water
to carry out operational management of the sewerage network
throughout kent sussex and hampshire in joint venture with
m holleran limited
project services
project services turnover increased by 27 from £667 million
to £845 million and operating profits increased by 50 from
£33 million to £50 million margins improved from 50 
to 59
the increase in turnover and improvement in profitability largely
reflected the full year contributions from atkins odlin and gel
during the year we also made further progress in improving
the profitability and sharpening the focus of our overseas
activities in south africa we sold our interest in jeffares
green parkman to our joint venture partners following the
successful completion of a major contract locally in hong
kong having restored the business to profitability we took
the opportunity to sell it to the meinhardt group on 30 july
2004 both of these moves are consistent with our strategy 
of reducing the group’s exposure overseas and focusing on
the uk public sector
turnover operating profit margin
2004 2003  2004 2003  2004 2003
£000 £000 change £000 £000 change  
managed services 173006 143793 20 12439 8331 49 72 58
project services 84461 66720 27 4951 3303 50 59 50
management consultancy 14388 13120 10 1827 1407 30 127 107
group 271855 223633 22 19217 13041 47 71 58
 before exceptional items and goodwill amortisation mouchel parkman report and accounts 2004 12
finance director’s review
management consultancy
management consultancy turnover rose by 10 from £131
million to £144 million and operating profits increased by
30 from £14 million to £18 million operating margins
improved from 107 to 127
operating margins for the second half of the year were 142
compared with 111 in the first six months
this further improvement was in line with our expectations
and reflects the gradual increase in consultant utilisation levels 
as our newer activities in particular the learning services
consultancy business become more established we are
currently providing support to a number of local authorities 
in improving standards and have so far been appointed to
project manage the development of seven of the proposed 
new city academies
the results for the year also benefited from a full year
contribution from lda following its acquisition in april 2003
lda which provides support to local authorities in improving
their services by using etechnology now forms the core of
our local government consultancy business
a significant contribution to turnover and profits again came
from the strategic procurement group with continuing work on
a number of projects for the office of the deputy prime minister
odpm the department of constitutional affairs the greater
london magistrates authority and hm prison service
forward order book
the forward order book of the group as at 31 july 2004 was
£850 million excluding potential extensions to current contracts
this was broadly in line with the forward order book at the
half year reflecting the government procurement cycle but
21 higher than the £704 million reported this time last year
more than 90 of the group’s forward order book continues
to be accounted for by managed services contracts
cash flow and working capital
the group’s cash performance has again been good we
finished the year with net funds of £192 million compared
with £116 million at the half year and £185 million twelve
months ago
cash conversion continues to be strong with 113 2003
129 of the group’s operating profits being converted into
operating cash flow ie net cash inflow from operating
activities per note 30 to the financial statements before
foreign exchange movements
the movement in net funds over the year reflects the strong
operating cash flow offset by earnout payments in the current
year for acquisitions made in earlier periods as well as the
transaction costs and restructuring and reorganisation costs
associated with the merger
taxation
the effective rate of tax before exceptional items and the
amortisation of goodwill was 210 compared with 311 
for the year ended 31 july 2003 the difference between 
the effective rate of tax and the statutory rate of 30 largely
reflects the tax relief available to the company on providing
options to employees under share incentive schemes future
tax relief on employee share incentives will depend on the
value of employee share options exercised in the relevant 
year and on the company’s share price at the time of exercise
without this relief the effective rate of tax would have been
311 reflecting the normal level of disallowable expenditure
after exceptional items and the amortisation of goodwill the
tax charge for the period was £30 million representing an
effective rate of tax of 297 due to the partially tax deductible
nature of the exceptional expenditure
pensions
the group operates two main defined benefit pension schemes
the mouchel superannuation fund and the parkman staff
pension scheme for both schemes the group has
continued to apply ssap 24 accounting for pension costs
and has made the required disclosures under the transitional
rules of frs 17 retirement benefits which are included in
note 37 to the accounts
frs 17 calculations have been prepared for the group at 
31 july 2004 using consistent assumptions for the two schemes
these show an aggregate deficit of £297 million after tax and
a profit and loss account charge for the year of £74 million
the frs 17 charge of £74 million for the year compares with
a ssap 24 charge of £56 million and with contributions paid
over to the schemes of £57 million
some measures have already been taken to address the funding
shortfall in the two schemes both have been closed to new
entrants except for employees transferring under tupe
regulations where under an outsourcing contract there is a
requirement to provide benefits which are broadly comparable
to those provided under the local government pension scheme
or another defined benefit scheme provided by the transferring
employer employer and employee contributions to the parkman
staff pension scheme were increased in april 2003 and 
april 2004 mouchel parkman report and accounts 2004 13
finance director’s review
 before exceptional items and goodwill amortisation
a single actuary has been appointed to both schemes and 
an actuarial valuation of each of the schemes is currently being
undertaken as at 31 march 2004 as part of the valuation
exercise the group and trustees of both schemes are giving
consideration to employer and employee contribution levels
underlying funding assumptions and potential changes to
benefit structures in order to address the funding deficit 
and arrive at an affordable pension provision going forward
we expect to conclude the valuation exercise by the end 
of december 2004 and consult with members on the
changes required in spring 2005
earnings per share
including shares held by the employee share ownership plan
trusts the adjusted earnings per share before exceptional items
and the amortisation of goodwill increased by 61 from 
90p to 145p without the benefit of the tax relief relating 
to the provision of options under share incentive schemes
the adjusted earnings per share before exceptional items and 
the amortisation of goodwill would have been 126p
representing an increase of 40 over the prior year
dividends
it is proposed that a final dividend of 18p per ordinary share
will be paid on 1 december 2004 to shareholders on the
share register as at 29 october 2004 taken together with the
interim dividend of 09p this gives a total dividend of 27p for
the year
it is anticipated that the interim and final dividends will
continue to represent approximately one third and two thirds
respectively of the total dividend for the year
kevin young
group finance director
turnover operating profit adjusted earnings per share forward order book
£000 £000 pence £m
223633
271855
94770
118570
162930
00 01 02 03 04
13041
19217
4884
6468
9070
00 01 02 03 04
90
145
52
56
67
00 01 02 03 04
704
850
171
249
493
00 01 02 03 04  sector review
the highways agency ha is responsible for england’s strategic
road network and is our single biggest client we provide
services and technologies for the management development
and improvement of the ha’s assets with a strong emphasis
on reducing congestion
20034 was another year of very strong growth we secured
increased volumes of work on the m25 sphere – where we are
managing agent – and further developed our innovative route
steward initiative we were also awarded a commission to
establish and manage the ha’s first traffic officer training
programme providing vehicle health and safety legal and
highway patrol training for 250 recruits we believe our unique
understanding of clients’ needs route steward experience
and established partnerships with emergency services training
teams were key reasons in securing this appointment the
traffic officer role is central to the ha’s expanded duties as
network manager and will reduce potential congestion
through rapid response to incidents
looking ahead the ha is introducing a range of larger contracts
including enhanced macs these are intended to generate
more effective and more efficient longterm use of highways 
assets and will deliver major ongoing volumes of work for
successful bidders we have an excellent record for developing
effective partnerships with client and contractor teams to deliver
best value and continuous improvement and we see enhanced
macs as an opportunity for growth
we are developing our design capability too this is strategically
important as we expect further opportunities to work with
contractors and other partners on highvalue longterm dbfo
design build finance operate and eci early contractor
involvement projects
we also see growth opportunities in the wider application of
our technology services such as active traffic management
and in tolling and congestion charging network operators
recognise that innovative information management can help
to make best use of infrastructure assets
in local highways our focus is on improving urban and rural
road networks and developing initiatives such as safer routes
to school and green routes for buses our ability to manage
entire local highways networks and our innovative strategic
alliances with contractors and local authorities in hertfordshire
wiltshire and north yorkshire put us at the forefront of 
this market
we won an impressive range of contracts this year including
longterm highways commissions in cornwall bexley leeds
calderdale westminster and richmond transport planning in
medway transport and asset maintenance for the corporation
of london and london trams work for the london borough
of ealing and with transport for london we also secured
contract extensions in wiltshire and ealing
during the year we were named ‘top consultant in roads and
local transport’ by the institution of highways  transportation
we also helped hertfordshire county council to attain the
maximum threestar rating for its highways services
our highways capabilities are supported by the specialist
expertise of our consultancies atkins odlin is a respected
provider of lighting and traffic control capabilities land
aspects is a provider of property and land services and 
this year won a significant contract for research services 
from the countryside agency
highways
we are one of the uk’s leading highways companies and support
the owners and operators of highway assets
mouchel parkman report and accounts 2004 15
martin warnes m25 route steward 
joined 2001  location m25
“i was a police officer for 11 years my job is now mostly
about incident management i’ll get a text message telling
me what’s occurred and i’ll respond
i have to deal with everything from minor shunts to fatal
crashes broken down goods vehicles and damage to
bridges or lighting safety is our number one priority but
ultimately i’m here to keep traffic flowing
my pda enables me to upload information to the highways
agency’s realtime information system wherever i am
they then communicate with drivers through electronic
displays or their website
i might drive 250 miles in a day we’re the eyes and ears
of the ha and i’ll send observations and suggestions back
to the engineers safety designers and environment team” local authorities in england own a very large portfolio of
property including schools youth centres libraries social
service facilities offices and administration centres local
government spends more than £5 billion a year on the
management of this infrastructure
we help local authorities to maximise the contribution their
properties make towards the delivery of services we provide
architectural design maintenance consultancy valuation and
estate management through longterm strategic partnerships 
we also work with local authorities in advising on and setting
up strategic partnering arrangements for both their capital
and maintenance programmes 
our approach is driven by a powerful belief in the need to
understand and meet the operational needs of our clients 
and the daytoday needs of their customers – the public
in 20034 we extended our position as market leader this
included the first full year of delivering building maintenance
services to surrey and hertfordshire county councils in surrey
we transformed the service by implementing a new property
service desk improving the level of customer satisfaction in
hertfordshire we contributed towards the council’s best ever
year in terms of the performance of its property portfolio
in october 2003 we started a ten year extendable to 20
technical multi service contract for liverpool city council the
contract operated in joint venture with the council covers
property estates highways and traffic engineering we expect
more local authorities to introduce longterm multiservice
contracts and this highprofile commission gives us
exceptional experience in a potential growth area
we are also entering a period of unprecedented investment 
in the development and renewal of school buildings the
government’s bsff initiative represents a major programme 
of capital investment with £51 billion due in 20056 and similar
commitments anticipated for the next 1015 years to put this
into perspective bsff represents an increase of more than
700 compared with schools estate funding in 19967
as part of building schools for the future the private sector
will work in partnership with local education authorities to
rebuild and renew secondary schools in phases across the
country our expertise in property education and consultancy
– together with specific capabilities in school design and
project management – put us in a strong position to create
excellent partnerships and secure significant bsff contracts
elsewhere we are working with the department of constitutional
affairs to transfer £1 billion of property assets to the new hm
courts service this project is part of the reorganisation of all
courts in england and wales we are also engaged with several
local authorities in helping them develop joint service centres
and civic centres
this is an exciting sector for us with significant potential for
further growth
sector review
property
we support local authorities in the design procurement management
and maintenance of their property enabling them to concentrate
on delivering better frontline services
mouchel parkman report and accounts 2004 16
andy ratcliffe principal architect
joined 1998  location the wyvern school kent
“i was in private practice joined kent county council and
then our department was outsourced to mouchel parkman
i’m working with will alsop’s practice at the moment
developing designs to further the dfes exemplars which
will help to show how buildings could be developed through
building schools for the future
i’ve also been closely involved with the wyvern school 
in kent from inception to completion it’s a new special
educational needs school my design had to meet the needs
of kids with some really profound difficulties during the
design stage and construction i’ve spent time with kids
and teachers at other schools so i can see the problems
they face
there were strict financial limits but i think this project has
created new and better ways for a school like this to work”   sector review
mouchel parkman report and accounts 2004 19
rail travel is thriving in the uk passenger journeys have
increased 33 since 1995 and 78 of people in london
commute by train but there are enormous challenges
involved in meeting such demand with ageing infrastructure
and 20034 saw significant changes in the management and
funding of the rail network in response
despite upheaval in the sector our rail business continued 
to grow we have expertise in structures property and signalling
and experience across network rail’s national network
on the mainline our focus is maintenance and renewals where
network rail is spending about £3 billion a year in 20034 we
successfully started or continued work on our six managed
services structures and property contracts for network rail
and we are developing ways to further increase the value 
of our services
network rail is encouraging greater cooperation between
suppliers as it works to meet stiff targets including a 30
reduction in costs our services scale and extensive
experience of working in partnership put us in a strong
position in this environment
network rail’s decision to take maintenance inhouse is also
a positive development for us offering new opportunities in
areas previously controlled by major contractors we are also
successfully extending our maintenance and renewals services
to the underground and continue to work with london
underground on the strategic asset management of structures
throughout the year we delivered services – including expert
signalling track train systems and safety assurance – to the
three major infracos on the underground tube lines
metronet bcv and metronet ssl 
we are also working with alcatel on the resignalling of the jubilee
and northern lines a project worth £50 million to us over eight
years our involvement in the installation of alcatel’s innovative
movingblock signalling equipment will significantly enhance
capacity allowing more trains to run
this technology was first used in the uk on the docklands light
railway where it was successfully installed by teams who are
now part of mouchel parkman we believe our experience will
become increasingly valuable as other rail networks consider
the adoption of movingblock signalling in particular technical
and procurement policies for signalling are under review within
network rail and we see potential for growth here
looking forward we will continue to prioritise maintenance
and renewals but are well positioned to take advantage of
growth in network enhancement and construction projects as
it occurs land aspects is already providing consultancy
services on crossrail and we are consulting on the east london
line we are also providing management consultancy advice
to london underground and heathrow airport limited on the
terminal 5 extension contract
rail
we are helping to improve rail maintenance and renewals 
reduce costs and implement improvements at a critical time 
in the industry’s lifecycle
paul mccormick civil engineer 
joined 1991  location lancashire
“i worked in our water business then with highways
structures now i’m managing a team carrying out structures
examinations for network rail
there are enormous challenges unique to rail such as
stringent safety requirements and the age of infrastructure
we might be examining bridges and tunnels built any time
since 1850
i manage 30 examiners and 17 support staff and we
complete 42000 examinations a year for tunnel and
major bridge examinations the line has to be closed so
this is deadlinedriven work our team must perform so
we don’t cause delays for passengers
the volume of work and track access issues mean we have
to plan carefully but we also provide a 24 hour emergency
rapid response service for network rail i’m ready to
respond immediately if a bridge or tunnel is struck” sector review
mouchel parkman report and accounts 2004 20
water
we have continued our excellent progress winning significant
longterm frameworks and becoming one of the top ten water
consultancies in the uk by turnover
in 20034 we secured five longterm frameworks and increased
our turnover by over 30 – impressive growth in a very
promising market
our wins included two major framework agreements with
thames water to provide leakage detection services and
leakage management in north east london we also secured
a major outsourcing commission with southern water services
for the operational management of its sewerage network 
this threeyear extendable to five contract is in joint venture
with m holleran limited
in scotland we gained two significant contracts with scottish
water solutions the integrated network management strategy
and leakage framework contract is initially for two years while
the capital design framework is a twoyear agreement in joint
venture as triaqua
elsewhere we continue to provide capital design services for
united utilities’ amp3 programme through our strong alliance
with kmi water we also provide flood defence and alleviation
studies for public and private sector clients
this year we demonstrated our operational expertise by
executing a large transition on the thames leakage contract
70 crews with new vehicles and equipment successfully
mobilised with no interruption in service to thames water 
we believe this sector will remain well funded with the regulator
recognising the need to maintain investment in the industry to
meet new environmental standards and demand the current
expectation for amp4 – the next fiveyear cycle of investment
in assets by water companies – is total funding of £15 billion
we see potential for further significant growth in our business
as amp4 unfolds but we must also ensure we retain and
develop our existing relationships
the cyclical nature of the amp process has created problems
as it produces a large initial burst of investment followed by
tight budgets – feast or famine many water companies are
now committing to early start programmes ahead of the main
amp4 start in april 2005 
this is a positive development that will help us to plan for and
invest in our people and infrastructure work with nonofwat
regulated businesses such as scottish water solutions is also
helping to even out the investment cycle
we see growing demand for managed services as more water
companies focus on customer service and external providers
take daytoday responsibility for maintenance operational
management and performance management we are working
to develop more of these longterm relationships either
directly or through alliances
tara o’donovan team leader
joined 2001  location west midlands
“drinking water inspectorate guidelines require improvements
in water quality and i’ve been managing a team of people
carrying out mains cleaning for severn trent
i studied business and law so i’m not a technical expert
really my strengths are in helping our people to do their
jobs well and making sure we’re meeting the real needs
of our clients having said that you pick up specialist
knowledge through experience and i’m now applying
ideas i learnt in mains cleaning on a new leakage project
as a graduate you get constant challenges here at the
moment for example i’m involved in the tupe transfer 
of 24 people the ordering of vehicles and equipment
budgeting and daytoday project management you
could say i’m kept busy”  sector review
mouchel parkman report and accounts 2004 22
the gas market in the uk is going through its biggest
transformation since privatisation with national grid transco
ngt selling half of its gas distribution network assets valued
at almost £6 billion are due to change hands
macquarie bank united utilities scottish  southern energy
and cheung kong infrastructure holdings are the preferred
bidders for the four regional distribution networks in question
we are providing technical support and due diligence advice
to macquarie bank for its transaction and worked closely
with its bid team during the year 
there are opportunities for us to develop longerterm
relationships with the new infrastructure owners in this sector
and with ngt which continues to be the single largest owner
of gas assets in the uk our rare combination of gas sector
expertise management consultancy and managed services
capabilities makes us one of few external providers able to
take on major outsourcing work and maximise the performance
of people processes and infrastructure in this sector
while our ultimate goal is to secure managed services contracts
we are continuing to build a very successful project management
business gel the gas engineering consultancy acquired in
20034 has achieved excellent growth this year including
contracts for conceptual and design work for the milford haven
to aberdulais pipeline with contractors lawrence and the
kings lynn and wisbech compressor uprating project with
murphy pipelines
gel’s expertise is key to our future it makes us a respected
organisation in this sector with an excellent track record in
safety performance and technical understanding – qualities
that will be required of any company competing for managed
services opportunities in this market
the government’s drive to achieve the decent homes standard
by 2010 is leading to unprecedented levels of investment 
in social housing the office of the deputy prime minister’s
‘sustainable communities building for the future’ report has
further encouraged this and local authorities in england now
spend £2 billion a year on social housing management and 
£2 billion on repairs and capital works
as one of the first providers to deliver externalised housing
management services we are in a strong position to support
clients as they seek to improve services in westminster for
example we have helped the local authority to achieve the
maximum threestar rating for housing services
the approach here integrates our housing property
management consultancy and technical consulting expertise
ultimately however effectiveness comes down to the
individuals delivering frontline services we attract and
develop truly excellent employees who are proud to support
tenants and clients
gas
we support a range of 
clients who own or operate 
gas infrastructure
housing
we support clients in the social
housing sector to provide better
homes and greater value
tony stenning housing officer
joined 2004  location london borough of hackney
“i worked in hackney council’s housing department from
1992 to this year when my team was transferred to
mouchel parkman
i look after a number of estates some are nice others have
problems my job involves rent collection estate visits helping
oaps and dealing with crime and antisocial behaviour
i try to create trust with the tenants that’s far more effective
with rent arrears for example we might look at their housing
benefit and find money they haven’t claimed which then
clears what they owe
it takes time to settle after a transfer but we’re already
learning from our new management at mouchel parkman
they listen to us and i think they’re learning a lot from us
in return”   sector review
mouchel parkman report and accounts 2004 25
education
we support local and national
government schools educational
institutions and communities
waste
we support public and private
sector clients developing new
approaches to waste
our expertise covers four critical areas – school improvement
strategies integrated children’s services learning infrastructure
services and training and development
our team grew by 25 in 20034 and we won new contracts
or extensions from a range of organisations including the dfes
and several leas we were also appointed to project manage
three academies – in corby hackney and southwark the
academies programme sets out to transform failing schools
into statemaintained independent schools supported by outside
sponsors establishing at least 53 academies by 2007 and
200 by 2010
we expect significant change in this sector with integrated
children’s services set to establish closer links between
education health and social services and the dfes fiveyear
plan enabling schools to commission services individually or
in clusters both developments may increase demand for our
services the bsff initiative is also promising and we are
deploying the expertise of the group to provide integrated
strategic advice education property and procurement
services to bsff clients
waste production is growing by around 3 a year and the 
waste management market in the uk represents expenditure of
£4 billion a year with an increase to £8 billion expected by 2010
tough eu targets for recycling and recovery require a
fundamentally different approach to municipal waste by local
authorities we’re already seeing a rapid movement away from
landfill towards more sustainable solutions but the uk lies
behind many european partners in achieving targets and
greater investment is inevitable 
we support both private and public sector clients as they develop
and implement municipal waste strategies we provide services
at all stages from strategy through procurement to design
licensing and project management
our strategic advice to public sector clients is based on a
thorough understanding of their longterm issues and is supported
by our unique modelling technology – purgamentum this tool
enables authorities to determine waste flows define associated
costs and risks and assess the best location and use of facilities
clients using purgamentum include all london boroughs and
the county councils in worcestershire wiltshire derbyshire
lancashire and north yorkshire and city of york council
in the private sector we support clients during the bidding and
project phases successes in 20034 included the securing of
planning permission and operating permits for six east london
waste authority sites political social and environmental issues
delay permissions but our expertise documentation and
stakeholder negotiation enabled us to secure a successful
outcome within eight months
waste is an evolving market we will continue to provide
profitable consultancy services to public and private 
sector clients while we monitor this sector for larger 
and longerterm opportunities
camilla antrobus principal consultant
joined 2003  location hampshire
“i was a secondary school teacher for 15 years an lea
adviser for five years and an acting chief education officer 
i joined mouchel parkman because it gave me the
opportunity to work with a very wide range of leas and
schools up and down the country the variety enables me
to experience new situations and broaden my expertise
i’m currently leading a major project in kent supporting 30
schools facing challenging circumstances we’re advising
the lea training and helping staff and working closely
with the leaders in each school
it can be demanding especially when people are
struggling with change but it’s enormously rewarding
when you advise and coach someone and you then see
them finding their own way forward” mouchel parkman report and accounts 2004 26
1 richard benton
richard is chairman of mouchel parkman he joined the board
of mouchel as a nonexecutive director in 1998 and was
appointed chairman in 2001 previously he was a capita
group founder director from 1987 as sales director until
1998 he was responsible for much of capita group’s rapid
growth and diversification
2 richard cuthbert
richard is chief executive of mouchel parkman he joined
parkman in april 2002 from ws atkins where he was a
senior director and a member of the group executive 
he is a chartered engineer with extensive experience in 
the management of consultancy and outsourcing businesses
in the uk and overseas
3 kevin young
kevin is group finance director of mouchel parkman he is 
a chartered accountant who qualified and trained with price
waterhouse prior to joining mouchel in 1998 he was group
financial controller and finance director of the consumer
logistics division of transport development group he joined
the board of mouchel in 1999
4 ian knight
ian is a nonexecutive director of mouchel parkman he joined
the mouchel board in 2001 previously he was group treasurer
of the yorkshire water group from privatisation in 1989 until
1998 when he became finance and strategic development
director for its nonwater subsidiaries helping to grow these
infrastructure businesses both organically and by acquisition
5 professor sir michael lyons
professor sir michael is a nonexecutive director of mouchel
parkman he joined the board of parkman in june 2001 
he is chairman of the english cities forum deputy chairman
of the audit commission and acts as a strategic advisor to
government and a series of companies before this he was
chief executive of birmingham city council from 1994 to
2001 chief executive of nottinghamshire county council
from 1990 to 1994 and chief executive of wolverhampton
metropolitan borough council from 1985 to 1990
6 rodney westhead
rodney is a nonexecutive director of mouchel parkman 
he joined the board of parkman in june 2001 he is currently
the group chief executive of ricardo plc where he previously
held the post of group finance director he was formerly a
partner at grant thornton holding a number of senior positions
notably managing partner in the london office he is a fellow
of the institute of chartered accountants in england and wales
7 amanda massie
amanda massie is company secretary of mouchel parkman
she is a chartered company secretary and joined the group
on 18 october 2004 previously she worked for ws atkins plc
as group company secretary and was a member of their
group executive board prior to atkins amanda worked in
the city as company secretary for a group of mutual
insurance companies
mouchel parkman plc board
26
1 2 3 4
5 67
 richard cuthbert kevin young and amanda massie are also members of the group executive 27
mouchel parkman group executive
8 richard coackley
richard is managing director of mouchel parkman’s utilities
business stream previously he was operations director
consultancy and professional services at parkman earlier 
in his career he was a board director of binnie black  veatch
and developed infrastructure energy and environment 
projects worldwide
9 keith jackson
keith is managing director of mouchel parkman’s strategic
highways business stream he joined mouchel in 1975 and
has extensive experience in the management of highway and
transportation infrastructure projects he has overall responsibility
for the development of the group’s network management
traffic management systems and highway project workload
for central government clients
10 james measures
james is managing director of mouchel parkman’s government
services business stream he joined mouchel from local
government in 1980 he led the development and management
of mouchel’s local government support services business in
transportation and property through innovative partnering
arrangements with key clients he has also managed the
transition of more than 600 local government staff into the group
11 jeff morris
jeff is managing director of mouchel parkman’s management
consultancy business stream prior to joining mouchel in
1994 jeff was a director at coopers  lybrand’s management
consultancy he built up mouchel’s management consultancy
specialising in strategy ppp and pfi procurement services
change and project management and asset 
management planning
12 ruth mundy
ruth is human resources director and joined mouchel parkman
on 13 september 2004 having worked for a number of
organisations in senior hr positions most recently she was
uk hr director for jones lang lasalle where she was involved
in their postmerger transition process prior to that ruth
worked for pricewaterhousecoopers as head of hr for one
of their consultancy business streams she has also held
positions with coopers  lybrand the bbc and bp 
13 gail shadlock
gail is business transformation director of mouchel parkman
and is responsible for generating transformational change in
existing and new contracts previously as our hr director
she led the integration of the two companies gail joined
mouchel in 2001 having worked as business development
manager for hyder business services she has also worked
at senior management level within the nhs the police service
and local government
14 jeremy wray
jeremy is managing director of mouchel parkman’s roads
and rail business stream he joined parkman from local
government in 1989 having developed extensive experience
in all aspects of highway planning design construction and
maintenance at parkman he led the delivery of transportation
and development services including largescale tupe
transfers and innovative joint ventures
mouchel parkman report and accounts 2004 27
8 9 10 11
12 13 14 directors’ report
mouchel parkman report and accounts 2004 28
the directors present their annual report and the audited financial statements of the group for the year ended 31 july 2004
directors
date date
name position appointed resigned
richard benton chairman
richard archer nonexecutive director 19 sep 2003 31 jan 2004
richard cuthbert chief executive 19 sep 2003
jim harding nonexecutive director 31 may 2004
ian knight nonexecutive director
professor sir michael lyons nonexecutive director 19 sep 2003
rodney westhead nonexecutive director 19 sep 2003
kevin young group finance director
 on 19 september 2003 jim harding resigned as chief executive and was appointed as a nonexecutive director on 31 may
2004 he resigned as a nonexecutive director
dividends note 12
pre merger 2004 2003
dividends payable to mouchel parkman plc formerly mouchel plc shareholders
first interim dividend 075p per share  380
second interim in lieu of final dividend of 145p per share  735
dividends payable to parkman group plc shareholders
special dividend 077p per share  271
final dividend 11p per share  387
post merger
dividends payable to mouchel parkman plc shareholders
interim dividend 09p per share 877 
final dividend of 18p per share 1785 
total dividends payable 2662 1773
profits
profit after tax for the year before exceptional items and goodwill amortisation was £15302000 2003 £9485000 and total
profit after tax for the year was £7104000 2003 £7648000
principal activities and business review
mouchel parkman plc is a professional services group supporting clients in developing and managing their infrastructure assets
services are delivered through three business streams managed services – operational management of services under longterm
partnership contracts project services – project management and specialist technical services and management consultancy –
strategic infrastructure planning and management advice
mouchel parkman plc’s performance during the last year as well as its prospects for the future are set out in our business 
page 2 chairman’s statement page 5 chief executive’s statement pages 6 to 8 finance director’s review pages 10 to 13
and sector reviews pages 15 to 25
directors and directors’ shareholdings
the names of the directors who held office during the financial year and since the year end appear at the head of this report 
the beneficial interests of the directors in the share capital of the company at the beginning and the end of the year to 31 july
2004 are shown in the remuneration report on pages 34 to 38 directors’ report
mouchel parkman report and accounts 2004 29
the directors’ options over shares in the company are detailed in the remuneration report on pages 34 to 38 no director had
any nonbeneficial interest in the shares of the company or any interest in any other group company during the year ended 
31 july 2004
richard cuthbert and ian knight retire as directors by rotation and offer themselves for reelection at the annual general meeting
change of name
on 18 september 2003 at an extraordinary general meeting the shareholders of mouchel plc approved a resolution to change
the company’s name to mouchel parkman plc
substantial shareholdings
as at 1 october 2004 the following shareholders had an interest in 3 or more of the ordinary share capital of the company
number percentage
of ordinary of issued
shares share capital
state street nominees limited 4985742 47
chase nominees limited 4772611 45
bnyocs nominees limited 4233160 40
chase nominees limited lending acc 3271042 31
corporate social responsibility
employees
the group’s policy is to provide an organisational environment and incentive for all employees to develop fully their individual
potential and thereby to encourage their contribution to the success of mouchel parkman the group places considerable value
on the involvement of its employees the investors in people programme continues to enhance the group’s practice of keeping
employees informed on matters affecting them as employees and on factors affecting the group performance this is achieved
through formal and informal meetings and various communications
save as you earn schemes have been put in place to promote employee investment in the company shares under option in
both the mouchel and parkman sharesave schemes are detailed in note 24 called up share capital
the group’s policy and practice in respect of disabled persons is to encourage the recruitment and subsequent training career
development and promotion of disabled persons on the basis of their aptitude and abilities and the retention and retraining of
employees who become disabled
the group has an equal opportunities policy and is committed to providing equal opportunities to all employees and job
applicants irrespective of sex marital status disability race colour nationality ethnic or national origins age social 
background or sexual orientation
health and safety
it is the group’s policy to provide and maintain so far as is reasonably practicable safe and healthy working conditions plant
equipment and systems of work for all employees the directors also recognise the group’s responsibility to its clients and the
general public who may be affected by its work
the group has an inhouse health and safety department that monitors the group’s performance and reports this to the directors
and other senior executives the health and safety department also ensure that the group is in compliance with the health and
safety at work act 1974 and associated regulations
the group is represented on the management committee of ‘working well together’ which is the governmenthse initiative 
to promote health and safety in the construction industry
during the year the group received the bronze award from rospa in recognition of the work done to consolidate systems
following the merger of mouchel plc and parkman group plc directors’ report
environmental policy
mouchel parkman is committed to taking positive action to reduce and manage environmental impact and to developing solutions
that incorporate sound and sustainable environmental management our corporate environmental management system ems
based on the principles of iso 4001 allows for continuous improvement through the setting and review of environmental
objectives and targets and the monitoring of environmental impacts
charitable contributions
charitable contributions amounted to £18558 in the year 2003 £28525 mouchel parkman encourages employees to support
local communities and matches funds raised by staff for the corporate charity
supplier payment policy
the group agrees terms and conditions for its business transactions with its suppliers payment is then made to these terms
subject to terms and conditions being met by the supplier
mouchel parkman plc holds the investments in the group companies and does not trade itself trade creditor days of the group 
for the year ended 31 july 2004 were 62 2003 47 this represents the ratio expressed in days between the amounts invoiced 
to the group by its suppliers in the year to the trade creditors owing at year end
directors’ responsibilities in respect of the preparation of financial statements
united kingdom company law requires the directors to prepare financial statements for each financial year which give a true and
fair view of the state of affairs of the company and the group as at the end of the financial year and of the profit or loss of the
group for that year in preparing those financial statements the directors are required to
• select suitable accounting policies and then apply them consistently
• make judgements and estimates that are reasonable and prudent and
• state whether applicable accounting standards have been followed
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and the group and to enable them to ensure that the financial statements comply with the
companies act 1985 they are also responsible for the system of internal control for safeguarding the assets of the company 
and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities
auditors
a resolution to reappoint deloitte  touche llp as the company’s auditors will be proposed at the forthcoming annual 
general meeting
approved by the board of directors and signed on behalf of the board by
amanda massie
secretary
18 october 2004
mouchel parkman report and accounts 2004 30 corporate governance
the group is committed to managing its affairs in accordance with the principles of good corporate governance and the code
provisions set out in section 1 of the combined code on corporate governance incorporated into the listing rules issued by 
the financial services authority “the code”
this statement describes how the group applies the principles of the code in july 2003 the financial reporting council published
a revised combined code on corporate governance which will apply for the year ending 31 july 2005 the board has reviewed
the provisions of the new combined code and is working towards ensuring satisfactory compliance the group will report formally 
on compliance with the new code as required under the listing rules next year
the provisions of the code are split into four areas described below
board and committee structure
on 19 september 2003 the board’s structure was changed from consisting of two executive and two nonexecutive directors 
to two executive and six nonexecutive directors two nonexecutive directors subsequently resigned during the year the 
nonexecutive directors are considered to be independent of management and free from any business or other relationships 
that could materially interfere with the exercise of their independent judgement since the merger the nonexecutive directors
have met once without the chairman being present on 13 october 2003 rodney westhead was appointed as senior 
nonexecutive director the profiles of the directors is shown on page 26
the board meets on a regular monthly basis and has a formal schedule of matters reserved to it it is responsible for overall 
group strategy acquisition and divestment policy approval of major capital expenditure projects consideration of significant
financial matters and review of the significant risks facing the business thereby retaining full and effective control of the group
the board has held a joint meeting with the group executive during this year to review group strategy
all directors have access to the advice and services of the group company secretary who is responsible for ensuring that board
procedures and applicable rules and regulations are observed there is an agreed procedure for directors to take independent
professional advice in the furtherance of their duties at the group’s expense in accordance with the company’s articles of
association one third of the board is required to retire by rotation each year
the group executive is responsible for the management of the business and meets monthly the chief executive chairs the group
executive and other members comprise the finance director company secretary the managing directors of the business streams
the human resources director and the business transformation director
the audit committee met four times this year following the merger the composition of the audit committee was changed 
on 13 october 2003 at the start of the year the committee comprised richard benton and ian knight on 13 october 2003 
richard benton resigned and jim harding richard archer and rodney westhead were appointed the committee is chaired by
ian knight with the retirements of richard archer and jim harding the committee currently comprises ian knight and rodney
westhead this committee has responsibility within agreed terms of reference for among other things the planning and reviewing 
of the group’s annual and interim financial statements and the supervision of its auditors in the review of such financial statements
the committee focuses on the group’s compliance with legal requirements accounting standards and the listing rules and on
ensuring that effective systems for internal control and for reporting nonfinancial operating data are maintained the ultimate
responsibility for reviewing and approving the annual report and accounts and interim statements remains with the board
in the past selection and appointment of executive and nonexecutive directors was carried out by the board itself on 13 october
2003 a nominations committee consisting of richard benton ian knight professor sir michael lyons and rodney westhead 
was established richard benton chairs this committee
the remuneration committee met six times this year at the start of the year the committee comprised richard benton and 
ian knight on 13 october 2003 ian knight resigned and rodney westhead and professor sir michael lyons were appointed the
committee is chaired by professor sir michael lyons this committee has responsibility for determining within agreed terms of
reference the group’s policy on the remuneration of senior executives and specific remuneration packages for executive directors
including pension rights and compensation payments it is also responsible for making recommendations for grants of options
under the share schemes
mouchel parkman report and accounts 2004 31 corporate governance
mouchel parkman report and accounts 2004 32
directors’ remuneration
the remuneration report is set out on pages 34 to 38 this report contains details of the remuneration policy and the remuneration 
of the directors for the year
internal control
the board has overall responsibility for the group’s internal financial and operational controls and review of their effectiveness
they are designed to meet the specific needs of the group and to safeguard shareholders’ investments and group assets 
any system of internal control can only provide reasonable but not absolute assurance against material misstatement or loss
the main features operated during the year are as follows
• strategic control the board reviews the group’s strategic plans once a year at a strategy event progress is monitored at
board and group executive meetings
• allocation of responsibilities and control environment the board has reviewed and set clear terms of reference for its
committees and the group has an organisational structure with clearly defined delegation of authority to executive management 
and reporting systems for financial results risk exposure and control assessment
• financial control the group has a comprehensive system for reporting financial results to the board each business stream
prepares monthly results with a comparison against budget and forecast the chief executive and finance director hold a
monthly review meeting with each of the managing directors of the individual business streams actions are identified and a
financial report prepared for the board for review of the group as a whole
• it systems the group has established controls and procedures over the security of data held on it systems and has put 
in place disaster recovery arrangements
• business stream controls each business stream’s senior management is responsible for identifying evaluating and managing
major business risks procedures are in place to ensure that risks are identified from project bidding stage through to project
completion and include reviews against key performance indicators
• risk management the board has overall responsibility for identifying evaluating and managing major business risks facing 
the group it regularly reviews business unit assessments of risk exposure and control and determines appropriate action
there is an ongoing process for identifying evaluating and managing the significant risks faced by the business the process
involves monthly reports by management of the risk and internal control issues faced by their business these risks are then reported
to the group executive and the board is kept fully appraised of any risks and internal control issues arising from these reports
a bid committee meets fortnightly and reviews all material bids
• internal audit the board has reviewed the need for an internal audit function and decided that no such function is necessary
due to the size and nature of the company the board reviews the need for an internal audit function annually
the board have conducted a review of the process and made changes where necessary in accordance with the provisions 
of the turnbull guidance
relations with shareholders
the board places considerable importance on maintaining good communications with shareholders the group’s website
wwwmouchelparkmancom provides regularly updated information in relation to the group’s activities and financial performance
all shareholders are notified of the annual general meeting and have at least 20 working days’ notice of such the annual general
meeting gives the shareholders the opportunity to meet the directors and raise questions as they wish rodney westhead the
senior nonexecutive is available to be contacted by shareholders if required
going concern
following a review of the group’s financial results and forecasts the directors are satisfied that the group has adequate resources
to continue in operational existence for the foreseeable future for this reason the directors continue to adopt the going concern
basis in preparing the financial statements  corporate governance
mouchel parkman report and accounts 2004 33
statement of compliance
the company has complied with the provisions stated in section 1 of the combined code since its admission to the london
stock exchange on 28 june 2002 with the exception of the items below
• number of nonexecutive directors until 19 september 2003 the number of nonexecutive directors did not comply with 
code provision d31 which recommends that the audit committee should consist of at least three nonexecutive directors 
on 13 october 2003 the audit committee was changed to include four nonexecutive directors but following resignations 
the members reduced to two its composition is now compliant with the requirements of the new combined code
• on 13 october 2003 rodney westhead was appointed as the senior nonexecutive director as required by the code provision
a21 prior to this there was not a nominated senior nonexecutive director
• pensionable bonuses jim harding was entitled to a pensionable bonus of up to 45 of salary whilst he was an executive director
accordingly any bonus paid to jim harding may affect his entitlement under the mouchel superannuation fund provision 7 
of schedule a to the combined code provisions on the design of performance related remuneration states that in general
neither annual bonus nor benefits in kind should be pensionable no current directors are entitled to pensionable bonuses
approved by the board of directors and signed on its behalf
amanda massie
secretary
18 october 2004 remuneration report
mouchel parkman report and accounts 2004 34
this report sets out the policy and disclosures on directors’ remuneration as required by united kingdom company law 
full consideration has also been given to the combined code of the united kingdom listing rules
unaudited information
the remuneration committee
at the start of the year the remuneration committee comprised its chairman ian knight and richard benton on 13 october
2003 ian knight resigned and rodney westhead and professor sir michael lyons were appointed the committee is chaired by
professor sir michael lyons
the committee meets at least twice a year and on behalf of the board sets the remuneration packages for executive directors
including basic salary bonuses and other compensation payments the committee also makes recommendations for the grant 
of share options to executive directors under the approved and unapproved executive share option schemes 
the committee was assisted by the company secretary richard cuthbert attended four of the six meetings of the remuneration
committee during the year in an advisory role
the remuneration committee does not retain remuneration consultants but seeks professional advice from external consultants
as it sees fit during the year advice was sought from the hay group management limited on executive remuneration packages
as part of an overall review of staff reward and grading
remuneration policy
the aims of the remuneration policy are
• to align individual rewards and incentives directly with the performance of the group and hence with the interests of the
company’s shareholders
• to provide remuneration packages that are sufficient to attract retain and motivate executive directors of the calibre required
having regard to the remuneration paid to senior executives performing similar roles in similar organisations and
• to encourage ownership and investment by executives
levels of remuneration are reviewed annually by the remuneration committee in light of expert advice which assesses levels of
remuneration of directors in similar companies in addition comparison is made with remuneration arrangements of other senior
employees in the group
in line with the group’s growth strategy a significant proportion of the director’s salary is linked to the performance of the group
to this end the remuneration committee has agreed to new executive bonus arrangements for directors and senior managers 
in the group linked to a coinvestment plan to take effect in the year 20045 these arrangements are designed to provide
consistent awards across the merged group those benefiting from the arrangement will be able to invest their bonuses in
company shares to be held in trust for three years if the company meets performance targets during the three year period 
the executive will be issued matching shares the coinvestment plan is to be presented for approval of the members at the
forthcoming annual general meeting
if the group’s performance meets 110 of agreed targets the variable elements in the executive directors’ salaries will account
for a maximum of 33 of the directors’ salary if the group’s performance meets 90 of agreed targets the variable elements 
in the directors’ salary will account for up to 26 of their salary and if the group’s performance fails to achieve 90 of targets 
no incentives will be paid
the remuneration committee keeps this remuneration policy under review in light of company and market developments 
other than outlined above there are no plans to materially alter the current remuneration arrangements in the current 
financial year
nonexecutive directors
remuneration of the nonexecutive directors is determined by the board nonexecutive directors are not entitled to share
incentives pensions annual bonus or any similar payments other than expenses incurred in connection with the performance 
of their duties remuneration report
mouchel parkman report and accounts 2004 35
executive directors
the remuneration package
the remuneration package consists of a basic salary allowances and benefits in kind and an annual performance bonus
executive directors also receive pension and life assurance benefits
basic salary
salaries are determined by reference to levels prevailing in the employment market generally for executive directors of a comparable
status salaries are reviewed annually at the beginning of each financial year and when an individual changes position or responsibility
bonus
bonus entitlement is related to performance of the group the terms of which are reviewed annually the annual bonus can range
from 0 to 50 of the basic salary for executive directors the annual bonus is paid with reference to clearly defined targets 
targets are based on levels of group profit achieved
it is the role of the remuneration committee at the end of each year to review the results against targets that have been set
during the 20034 year a mix of exparkman and exmouchel bonus scheme principles applied to the executive directors 
the committee took these into account in assessing bonus achievement for executive directors the committee took the view 
that the directors had achieved 82 of the targets that had been set for them details of payments made for 2004 are set out 
in the remuneration table on page 36
share options
the executive directors are eligible to participate in the inland revenue approved executive share aes option scheme and 
the unapproved executive share ues option scheme all executive share options are longterm incentives and are performance
related no options were granted in the year
details of share options outstanding are set out in the share options table on page 38
for approved options granted during the period from march 1997 to december 2001 the company’s adjusted earnings per share
as presented in these financial statements must increase by 6 or more than rpi over a three year period for unapproved
share options granted during the period from march 1997 to december 2001 the company’s adjusted earnings per share must
increase by 12 or more than the rpi over a three year period
other benefits
executive directors’ benefits include a car its running costs or an equivalent amount of car allowance and noncontributory
membership to a private healthcare scheme
performance graph
under the uk directors’ remuneration report regulations 2002 we are required to show mouchel parkman’s relative performance
against a holding of shares in a broadbased equity index over the past five years the comparison has been shown since june
2002 as this is when the company’s shares first became publicly traded the remuneration committee has decided to show
mouchel parkman’s performance against the ftse support services index as this is a comparison with companies that are most
similar to mouchel parkman in the prior year the ftse all small support services index was used to measure performance but this
index is no longer available
160
mouchel parkman ftse support services index
80
60
120
20
0
100
140
40
31 july ’02 31 july ’03 31 july ’04 remuneration report
mouchel parkman report and accounts 2004 36
executive directors’ service contracts
it is the company’s policy to fix notice periods for executive directors for a period of no more than 12 months the remuneration
committee is of the opinion that the entitlement of directors to the security of 12 months notice of termination of employment is 
in line with practice in many comparable companies
copies of each directors’ service agreement will be available for inspection at the annual general meeting
the remuneration committee aims to always deal fairly with cases of termination whilst attempting to limit compensation the
remuneration committee has given due consideration to the recommendations of the combined code regarding the inclusion 
of specific provisions in directors’ service contracts for compensation commitments in the event of early termination
the service agreements currently do not make allowance for specific amounts of compensation in the event of early termination 
of contracts in order to enable the remuneration committee to respond appropriately to particular circumstances the remuneration
committee will continue to review the appropriateness of this practice
details of service agreements and notice periods are as follows
effective expiry notice period notice period
date of retirement for company for director
name of director contract date months months
richard cuthbert 19092003 ongoing 12 12
kevin young 10062002 ongoing 6 6
nonexecutive directors’ service contracts
nonexecutive directors are appointed under letters of appointment for a period of three years at an annual fee for a certain
number of days’ service each year
effective expiry no of days’
date of retirement service
name of director contract date required
richard benton 07062002 06062005 50 min
ian knight 07062002 06062005 24
professor sir michael lyons 19092003 18092006 24
rodney westhead 19092003 18092006 24
audited information
directors’ remuneration
year ended 31 july 2004
accumulated gain on the
basic salary benefits total accrued exercise of
and fees bonus in kind total pension share options
£000 £000 £000 £000 £000 £000
executive directors
richard cuthbert appointed 19 sep 172 47 6 225 4
jim harding 1 aug to 19 sep 29   29 6
kevin young 143 87 1 231 10 1363
nonexecutive directors
richard benton 55   55 
ian knight 35   35 
jim harding 19 sep to 31 may 20   20 107 1449
rodney westhead appointed 19 sep 26   26 
richard archer 19 sep to 31 jan 11   11 
professor sir michael lyons appointed 19 sep 26   26 
517 134 7 658 121 2818
 includes £50000 exceptional bonus paid on the completion of the merger of mouchel plc and parkman group plc
 the figures are for the period from 19 september 2004 being the date of appointment until 31 july 2004 remuneration report
mouchel parkman report and accounts 2004 37
year ended 31 july 2003
accumulated gain on the
basic salary benefits total accrued exercise of
and fees bonus in kind total pension share options
£000 £000 £000 £000 £000 £000
executive directors
jim harding 169 57 1 227 79 54
kevin young 126 40 14 180 8
nonexecutive directors
richard benton 55   55 
ian knight 43   43 
393 97 15 505 87 54
directors’ pensions
executive directors are members of one of the company pension schemes which are administered by boards of trustees the
schemes are defined benefit schemes approved by the inland revenue and contractedout of the state earnings related pension
scheme the directors contribute to the schemes the normal retirement age for richard cuthbert is 65 and for kevin young is
60 members may accrue the maximum pension of twothirds of pensionable salary at normal retirement age dependant upon
service the pension costs of directors are charged to the profit and loss account over their estimated service lives based upon
actuarial advice the company also contributes to a funded unapproved retirement benefit scheme for richard cuthbert to the
extent of 15 of salary in excess of the inland revenue pensionable earnings cap
during the year three directors were members of a defined benefit pension scheme 2003 two
increase in
accrued
pension transfer transfer total
during value of value of change in transfer
accrued the year accrued accrued employee value during value of
pension at excluding pension pension contributions the year net increase less
age at the end of any increase at the start at the end during the of director’s director’s
31 july 2004 the year for inflation of the year of the year period contributions contributions
years months £000 £000 £000 £000 £000 £000 £000
richard cuthbert 51 6433 35 7 25 23
jim harding 60 10 107 25 1414 1745 1 330 430
kevin young 45 3 10 2 62 78 5 11 10
the transfer values in the table above have been calculated on the basis of actuarial advice in accordance with actuarial guidance
note gn11 less directors’ contributions members of the scheme have the option to pay additional voluntary contributions
neither the contributions nor the resulting benefits have been included in the above table
the transfer values disclosed above do not represent a sum paid to or payable to the individual director instead they represent 
a potential liability of the pension scheme remuneration report
share options
options as at
options as at number number 31 july
1 august of options of options 2004
2003 granted exercised or date of
or date of during during resignation option price
appointment the year the year or retirement pence exercisable between
jim harding ues 449140  449140  1925 022003022007
retired 31 may 2004 ess 4020  4020  1925 082003012004
aes 106180  53090 53090 2825 032004032011
ues 293820  293820  2825 032004032008
ues 300000   300000 3125 122004122008
ess 1548   1548 10000 082005012006
1154708  800070 354638
kevin young ues 753880  753880  1925 022003032007
ues 200000   200000 2825 032004032008
ues 300000   300000 3125 122004122008
1253880  753880 500000
richard cuthbert ues 539237   539237 11910 042005032009
appointed 19 sep 2003 aes 25196   25196 11910 042005032012
564433   564433
 options marked  are performance related
 the market price of these shares was 2000p on 21 october 2003 this being the date of exercise
 the market price of these shares was 2120p on 6 may 2004 this being the date of exercise
 the market price of these shares was 1695p on 1 august 2003 this being the date of exercise
the market price of the shares on 31 july 2004 was 2015p and the shares traded in the range 1695p to 2685p during the year
directors’ interests
the interests of the directors of the company at the beginning and end of the year to 31 july 2004 were as follows
beneficial holdings
ordinary shares
31 july 31 july
2004 2003
richard benton 700000 700000
richard cuthbert 14491 
ian knight 200000 200000
professor sir michael lyons 7628 
rodney westhead 9844 
kevin young 858480 584600
the remuneration report has been approved by the board of directors and signed on its behalf by the company secretary
amanda massie
secretary
18 october 2004
mouchel parkman report and accounts 2004 38 independent auditors’ report to the 
members of mouchel parkman plc
mouchel parkman report and accounts 2004 39
we have audited the financial statements of mouchel parkman plc for the year ended 31 july 2004 which comprise the group
profit and loss account the group balance sheet the company balance sheet the group cash flow statement the statement 
of total recognised gains and losses reconciliation of movement in shareholders’ funds and the related notes 1 to 40 these
financial statements have been prepared under the accounting policies set out therein we have also audited the information in the
remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state 
to them in an auditors’ report and for no other purpose to the fullest extent permitted by law we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body for our audit work for this report 
or for the opinions we have formed
respective responsibilities of directors and auditors
as described in the statement of directors’ responsibilities the company’s directors are responsible for the preparation of the
financial statements in accordance with applicable united kingdom law and accounting standards our responsibility is to audit
the financial statements in accordance with relevant united kingdom legal and regulatory requirements auditing standards and
the listing rules of the financial services authority
we report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements
and the part of the directors’ remuneration report described as having been audited are properly prepared in accordance with the
companies act 1985 we also report if in our opinion the directors’ report is not consistent with the financial statements if the
company has not kept proper accounting records if we have not received all the information and explanations we require for our
audit or if information specified by law or the listing rules regarding directors’ remuneration and transactions with the company
and other members of the group is not disclosed
we review whether the corporate governance statement and remuneration report reflect the company’s compliance with the
seven provisions of the combined code specified for our review by the listing rules and we report if it does not we are not
required to consider whether the board’s statements on internal control cover all risks and controls or form an opinion on the
effectiveness of the group’s corporate governance procedures or its risk and control procedures
we read the directors’ report and the other information contained in the annual report for the above year as described in the
contents section including the unaudited part of the directors’ remuneration report and consider the implications for our report 
if we become aware of any apparent misstatements or material inconsistencies with the financial statements
basis of audit opinion
we conducted our audit in accordance with united kingdom auditing standards issued by the auditing practices board an audit
includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements it also
includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial
statements and of whether the accounting policies are appropriate to the circumstances of the company and the group
consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in 
order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material
misstatement whether caused by fraud or other irregularity or error in forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements mouchel parkman report and accounts 2004 40
independent auditors’ report to the 
members of mouchel parkman plc
opinion
in our opinion
• the financial statements give a true and fair view of the state of affairs of the company and the group as at 31 july 2004 and 
of the profit of the group for the year then ended and
• the financial statements and part of the directors’ remuneration report described as having been audited have been properly
prepared in accordance with the companies act 1985
deloitte  touche llp
chartered accountants and registered auditors
london
18 october 2004 financial statements
contents
42 group profit and loss account
43 group balance sheet
44 parent company balance sheet
45 group cash flow statement
46 statement of total recognised gains and losses
reconciliation of movements in shareholders’ funds
47 notes to the financial statements
72 five year financial summary mouchel parkman report and accounts 2004 42
group profit and loss account
for the year ended 31 july 2004
before exceptional
exceptional items and
items and goodwill
goodwill amortisation
amortisation notes 4 5  6 total restated
2004 2004 2004 2003
notes £000 £000 £000 £000
turnover group and share of joint ventures 272900  272900 224858
less share of joint ventures’ turnover 17 1045  1045 1225
group turnover 23 271855  271855 223633
continuing operations 261721  261721 222730
acquisitions 3343  3343 903
discontinued operations 6791  6791 
cost of sales 4 218881  218881 181167
gross profit 52974  52974 42466
administrative expenses 33757 2481 36238 30299
administrative expenses excluding goodwill amortisation and 
exceptional goodwill impairment 33757  33757 29425
goodwill amortisation  1774 1774 874
exceptional goodwill impairment  707 707 
operating profit group 34 19217 2481 16736 12167
continuing operations 18625 2481 16144 12126
acquisitions 248  248 41
discontinued operations 344  344 
operating profit is analysed between
earnings before interest tax depreciation and amortisation 22784  22784 15421
depreciation 4 3567  3567 2380
goodwill amortisation 4  1774 1774 874
exceptional goodwill impairment 45  707 707 
operating profit group 19217 2481 16736 12167
nonoperating exceptional items 6  6784 6784 963
profit on ordinary activities before finance items 19217 9265 9952 11204
interest receivable and similar income 7 424  424 653
interest payable and similar charges 8 271  271 153
profit on ordinary activities before taxation 19370 9265 10105 11704
tax on profit on ordinary activities 10 4068 1067 3001 4056
profit on ordinary activities after taxation 15302 8198 7104 7648
dividends 12 2662  2662 1773
retained profit for the year transferred to reserves 29 12640 8198 4442 5875
basic earnings per share 13 154p  72p 80p
diluted earnings per share 13 148p  69p 75p
adjusted earnings per share 13 145p  67p 73p
 basic diluted and adjusted earnings per share before exceptional items and goodwill amortisation were 99p 93p and 90p
respectively for the year ended 31 july 2003
restated following application of merger accounting principles of frs 6 acquisitions and mergers and the adoption of 
urgent issues task force uitf 38 accounting for esop trusts notes 1b and 1n mouchel parkman report and accounts 2004 43
group balance sheet
as at 31 july 2004
restated
2004 2003
notes £000 £000
fixed assets
intangible assets 14 13725 13312
tangible assets 15 10461 11139
24186 24451
investments in joint ventures
share of gross assets 17 66 236
share of gross liabilities 17 66 236
 
investments – other 17 27 175
24213 24626
current assets
debtors 18 81093 62708
cash at bank and in hand 19416 21589
100509 84297
creditors
amounts falling due within one year 19 58986 48557
net current assets 41523 35740
total assets less current liabilities 65736 60366
creditors
amounts falling due after more than one year 23 1220 956
provisions for liabilities and charges
deferred taxation 10d 120 120
pension provision 37 3200 3200
other provisions  31
61196 56059
capital and reserves
called up share capital 24 265 264
share premium 25 21418 20779
shares to be issued 193 1094
revaluation reserve 26 3212 3212
merger reserve 9178 9099
other reserves 27 234 122
esop reserve 28 1738 2614
profit and loss account 29 28902 24347
equity shareholders’ funds 61196 56059
 restated following application of merger accounting principles of frs 6 acquisitions and mergers and the adoption of 
uitf 38 accounting for esop trusts notes 1b and 1n
the financial statements were approved by the board of directors on 18 october 2004 and are signed on its behalf by
richard cuthbert kevin young
director director mouchel parkman report and accounts 2004 44
parent company balance sheet
as at 31 july 2004
restated
2004 2003
notes £000 £000
fixed assets
tangible assets 15 4089 4089
investments 17 1542 1432
5631 5521
current assets
debtors 18 47691 29222
cash at bank and in hand 63 155
47754 29377
creditors
amounts falling due within one year 19 8830 7117
net current assets 38924 22260
total assets less current liabilities 44555 27781
provisions for liabilities and charges
deferred taxation 10d 120 120
44435 27661
capital and reserves
called up share capital 24 265 155
share premium 25 21418 20779
revaluation reserve 26 3212 3212
profit and loss account 29 21278 6129
esop reserve 28 1738 2614
equity shareholders’ funds 44435 27661
 restated following the adoption of uitf 38 accounting for esop trusts note 1n
the financial statements were approved by the board of directors on 18 october 2004 and are signed on its behalf by
richard cuthbert kevin young
director director mouchel parkman report and accounts 2004 45
group cash flow statement
for the year ended 31 july 2004
restated
2004 2003
notes £000 £000
net cash inflow from operating activities 30 19292 15718
returns on investments and servicing of finance
interest received 421 666
interest paid 118 77
interest element of finance lease rentals 70 77
net cash inflow from returns on investments and servicing of finance 233 512
taxation
overseas tax paid  10
uk corporation tax paid 5254 2918
tax paid 5254 2928
capital expenditure and financial investment
purchase of tangible fixed assets 15 3560 5107
disposal of tangible fixed assets 20 19
net cash outflow from capital expenditure and financial investment 3540 5088
acquisitions and disposals
purchase of subsidiary undertakings 3911 4937
net cash acquired with subsidiary 34 194 203
payment to acquire unincorporated business 48 16
sale of business 745 
net cash outflow from acquisitions and disposals 3020 5156
nonoperating exceptional cash flows transaction and restructuring costs 5574 
dividends paid 2276 889
net cash outflowinflow before financing 139 2169
financing
issue and expenses of issue of ordinary shares 90 429
reduction of bank loans  585
capital element of finance lease rentals 33 526 401
disposal of own shares 989 520
net cash inflowoutflow from financing 553 895
increase in cash 31 414 1274
 restated following application of merger accounting principles of frs 6 acquisitions and mergers and the adoption of uitf 38
accounting for esop trusts notes 1b and 1n statement of total recognised gains and losses
for the year ended 31 july 2004
restated
2004 2003
£000 £000
profit for the financial year 7104 7648
currency translation differences on net foreign currency investments 27 112 18
total recognised gains and losses for the year 6992 7630
reconciliation of movements in shareholders’ funds
for the year ended 31 july 2004
restated
2004 2003
£000 £000
profit for the financial year 7104 7648
dividends 2662 1773
4442 5875
other recognised losses for the year 27 112 48
shares issued and share premium arising 640 
movement on merger reserves 79 97
employee share ownership plan esop trusts 28 876 537
profit on sale of own shares held in esop trusts 113 
movement on deferred equity consideration 901 1094
opening shareholders’ funds 56059 48504
closing shareholders’ funds 61196 56059
 restated following application of merger accounting principles of frs 6 acquisitions and mergers and the adoption of 
uitf 38 accounting for esop trusts note 1b and 1n
mouchel parkman report and accounts 2004 46 notes to the financial statements
for the year ended 31 july 2004
1 accounting policies
a basis of accounting
the financial statements are prepared under the historical cost basis of accounting as adjusted for the revaluation of freehold
property and have been prepared in accordance with applicable accounting standards of the accounting standards board 
and the pronouncements of the urgent issues task force uitf
b basis of consolidation
the group financial statements consolidate the financial statements of the company and all subsidiary undertakings subsidiaries
acquired in the year are accounted for by the acquisition method of accounting associated undertakings and joint ventures are
accounted for in the group financial statements using the equity method of accounting a joint arrangement that is not an entity 
is accounted for in accordance with financial reporting standard frs 9 associates and joint ventures in that the group
accounts for its own assets and liabilities and cash flows measured according to the agreement governing the arrangement
the combination of mouchel plc and parkman group plc has been accounted for under the merger accounting principles contained
in frs 6 acquisitions and mergers the comparatives have been restated in line with these principles
c depreciation
no depreciation is provided on the freehold buildings as it is the group’s policy to maintain the buildings in a continual state 
of sound repair and to make improvements from time to time accordingly the directors consider that the residual value of 
the buildings is such that any depreciation would be immaterial other assets are writtenoff according to the forecast length 
of their useful life on a straightline basis the principal rates are
plant and office equipment 10 20 and 3333 per annum
vehicles 20 and 3333 per annum
leasehold improvement over the life of the lease up to the first available break
d repairs and renewals
these costs are charged against profits as and when they are incurred no provision for future repairs is made in the 
financial statements
e taxation
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the 
tax rates and laws that have been enacted or substantially enacted by the balance sheet date
deferred taxation is provided in full on material timing differences at the rate of taxation anticipated to apply when these differences
crystallise timing differences arise from the inclusion of items of income and expenditure in the taxation computations in periods
different from those in which they are included in the financial statements
a deferred tax asset is only recognised when it is more likely than not that it will be recoverable in the future deferred tax assets
and liabilities recognised have not been discounted
f foreign exchange
the financial statements of the foreign subsidiaries are translated into sterling at the closing rate of exchange on the balance 
sheet date and the differences arising from the translation of the opening net investment in the subsidiaries at the closing rate 
is taken directly to reserves other translation differences are dealt with in the profit and loss account
g longterm contracts
a longterm contract is defined as a contract entered into where the time taken to substantially complete the contract is such 
that the contract activity falls into more than one accounting period these contracts are included in trade debtors at cost plus
attributable profits estimated to be earned to date based on the stage of completion less provision for any known or anticipated
losses and payments on accounts received where payments on account are in excess of turnover these amounts are included
in trade creditors
h pension costs
the expected cost of providing defined benefit pensions is charged to the profit and loss account so as to spread the cost for
those employees in the defined benefits scheme over the anticipated service lives of those employees in such a way that pension
cost is a substantially level percentage of current and expected future pensionable payroll
mouchel parkman report and accounts 2004 47 mouchel parkman report and accounts 2004 48
notes to the financial statements
for the year ended 31 july 2004
1 accounting policies continued
i leases
tangible fixed assets held under finance leases and the related lease obligations are recorded in the balance sheet at the fair 
value of the leased assets at the inception of the lease the excesses of the lease payments over the recorded lease obligations
are treated as finance charges which are amortised over each lease term to give a constant rate of charge on the remaining
balance of the obligations rental costs under operating leases are charged to profit and loss account in equal annual amounts
over the periods of the leases
j investments
fixed asset investments are shown at cost less provisions for impairment a review for impairment is carried out if events or
changes in circumstances indicate that the carrying value of an investment may not be recoverable any loss that arises as a
result of such an impairment is recognised in the profit and loss account for the financial year in which it is incurred
k goodwill
for acquisitions of a business including an interest in an associated undertaking following the implementation of financial
reporting standard 10 goodwill and intangible assets purchased goodwill is capitalised in the year in which it arises and
amortised over its estimated useful life the estimated useful life is currently 10 years based on the directors’ best estimate
goodwill which arose on the acquisition of a business including an interest in associated undertakings prior to the adoption
of frs 10 was written off directly to reserves in the year of acquisition
l financial instruments
note 21 of the financial statements provides an explanation of the role that financial instruments have had during the period in
creating or changing the risks the group faces in its activities the explanation summarises the objectives and policies for holding
or issuing financial instruments
the numerical disclosures in note 21 deal with the financial assets and financial liabilities as defined in frs 13 derivatives and
other financial instruments shortterm debtors and creditors have been excluded from the disclosures
transactions denominated in foreign currencies are recorded at the rates ruling on the date of the transactions at the balance
sheet date monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at
that date
m share based payments
the difference between the exercise price and the market price on the date options are granted to employees is recorded in the
profit and loss account
n esop trusts
the financial statements and the comparatives have been prepared in accordance with uitf 38 esop trusts which was
adopted retrospectively in the current year the impact of this adoption was a reclassification of the investment in own shares 
from investments to esop reserve there was no impact to the profit and loss account the cash flows from the sale of own
shares have been reclassified to cash flows from financing previously cash flows from capital expenditure and financial investment
2 turnover
turnover represents the sales value excluding value added tax of services provided by the group during the year as adjusted 
for the opening and closing valuations of longterm contracts mouchel parkman report and accounts 2004 49
notes to the financial statements
for the year ended 31 july 2004
3 segmental analysis
a turnover
analysis of turnover by activity is as follows
restated
2004 2003
£000 £000
managed services 173006 143793
project services 84461 66720
management consultancy 14388 13120
271 855 223633
turnover from joint ventures project services 1045 1225
analysis of turnover by origin is as follows
restated
2004 2003
£000 £000
united kingdom 257123 211938
far east 7035 6862
rest of world 7697 4833
271855 223633
turnover from joint ventures united kingdom 1045 1225
the analysis of turnover by geographical destination is not materially different from that by geographical origin
b operating profit
analysis of operating profit by activity is as follows
restated
2004 2003
£000 £000
managed services 12439 8331
project services 4951 3303
management consultancy 1827 1407
total operating profit before goodwill amortisation and exceptional goodwill impairment 19217 13041
goodwill amortisation and exceptional goodwill impairment 2481 874
group operating profit 16736 12167
analysis of operating profit by origin is as follows
restated
2004 2003
£000 £000
united kingdom 18585 12463
far east 421 75
rest of world 211 503
total operating profit before goodwill amortisation and exceptional goodwill impairment 19217 13041
goodwill amortisation and exceptional goodwill impairment 2481 874
group operating profit 16736 12167
the analysis of operating profit by geographical destination is not materially different from that by geographical origin
it is not considered appropriate to allocate the goodwill amortisation or exceptional goodwill impairment either by operating activity
or origin mouchel parkman report and accounts 2004 50
3 segmental analysis continued
c net assets
analysis of net assets by geographical segment is as follows
restated
2004 2003
£000 £000
united kingdom 58587 52043
far east 110 2707
rest of world 2499 1309
61196 56059
analysis of net assets by activity has not been presented as no balance sheet items are analysed by class of business
4 operating profit
restated
2004 2003
£000 £000
group operating profit is stated after charging
cost of sales 218881 181167
continuing operations 210073 180376
acquisitions 2744 791
discontinued operations 6064 
administrative expenses
depreciation
owned assets 3305 1742
finance leases 262 638
goodwill amortisation 1774 874
rentals under operating leases in respect of
buildings 4973 4645
plant and computer equipment 3063 2287
audit fees
audit remuneration group 138 155
company 45 33
audit related services 20 20
other fees payable to auditors uk 114 85
overseas 9 15
other items
profitloss on disposal of fixed assets 9 18
pension costs in excess of regular pension contributions note 37  900
other administrative expenses 21837 18887
exceptional goodwill impairment note 5 707 
36238 30299
continuing operations 35504 30228
acquisitions 351 71
discontinued operations 383 
in addition to the audit fees disclosed above fees of £810000 were paid to the auditors in relation to the merger transaction and
£52000 was paid in respect of the acquisition of mouchel gel limited
5 exceptional goodwill impairment
the exceptional goodwill impairment is an operating exceptional item and relates to the impairment of the remaining goodwill
which arose on the acquisition of full circle educational services limited in may 2002
notes to the financial statements
for the year ended 31 july 2004 mouchel parkman report and accounts 2004 51
notes to the financial statements
for the year ended 31 july 2004
6 nonoperating exceptional items
restated
2004 2003
£000 £000
merger transaction costs 2576 963
restructuring and reorganisation costs 3381 
loss on disposal of subsidiary undertaking 827 
6784 963
merger transaction costs relate to the merger of mouchel plc and parkman group plc on 19 september 2003 and consist of
amounts paid to the company’s advisors in relation to the merger
restructuring and reorganisation costs are the costs of restructuring the group subsequent to the merger
the loss on disposal of subsidiary undertaking relates to the disposal of mouchel parkman asia limited which is detailed 
in note 35
7 interest receivable
restated
2004 2003
£000 £000
group 424 653
8 interest payable and similar charges
restated
2004 2003
£000 £000
bank overdrafts 191 67
finance leases 80 86
271 153
9 employee costs and numbers
restated
2004 2003
£000 £000
staff costs including directors of undertakings within the group
wages and salaries 133164 111808
social security costs 9990 8252
other pension costs note 37 7620 7138
150774 127198
the average number of employees of undertakings in the group during the year was as follows
restated
2004 2003
number number
professional staff 3719 3107
other staff 401 477
4120 3584 mouchel parkman report and accounts 2004 52
10 taxation
a analysis of tax charge for the year
before
exceptional exceptional
items and items and
goodwill goodwill
amortisation amortisation restated
2004 2004 2004 2003
£000 £000 £000 £000
current tax
corporation tax on profits of the year
united kingdom 4515 1067 3448 4192
total current tax note 10b 4515 1067 3448 4192
deferred tax
current year movement 447  447 136
tax on profit on ordinary activities 4068 1067 3001 4056
b factors affecting the tax charge for the year
the tax charge for each year is different to the standard rate of corporation tax in the uk 30 the differences are
explained below
restated
2004 2003
£000 £000
profit on ordinary activities before tax 10105 11704
profit on ordinary activities multiplied by the standard rate of
corporation tax in the uk of 30 3031 3511
effects of
tax relief on employee share incentives 1950 
expenses not deductible for tax purposes 207 137
depreciation for period in excess of capital allowances
and other timing differences 447 136
exceptional items not deductible for tax purposes 1181 146
goodwill amortisation 532 262
current tax charge for the year 3448 4192
c factors that may affect future tax charges
in the prior year the group had an unrecognised deferred tax asset in respect of losses as there was insufficient evidence that
there would be suitable taxable profits within the next 12 months from which the future reversal could be deducted in the year
the subsidiary was disposed of
no deferred tax asset has been recognised in respect of other items amounting to £48672 2003 £49250
tax relief on employee share incentives depends on the value of employee share options exercised in the relevant year and on 
the company’s share price at the time of exercise
notes to the financial statements
for the year ended 31 july 2004 mouchel parkman report and accounts 2004 53
notes to the financial statements
for the year ended 31 july 2004
10 taxation continued
d deferred tax asset
restated
2004 2003
£000 £000
depreciation in excess of capital allowances 522 75
pension accrual 960 960
deferred tax asset note 18 1482 1035
taxable future profits on sale of shares in the 
mouchel employees’ share ownership plan trust 120 120
net deferred tax asset at 31 july 1362 915
the movement during the year for deferred taxation was
at 1 august 915 779
deferred tax credit in profit and loss account for year 447 136
net deferred tax asset at 31 july 1362 915
11 profit of the parent company
the group profit and loss account consolidates the profit and loss accounts of the parent company and subsidiary undertakings
as permitted by section 230 of the companies act 1985 the profit and loss account of the parent company is not presented as
part of these accounts the parent company’s result for the financial year before dividends amounted to a profit of £17698000
2003 profit of £6203000
12 dividends
restated
2004 2003
£000 £000
dividends payable to mouchel parkman plc formerly mouchel plc shareholders
first interim dividend of 09p per share 2003 075p per share 952 465
second interim dividend nil 2003 145p per share  899
final dividend of 18p per share 2003 nil 1906 
less dividend on own shares 142 205
less dividends waived by esop trusts 54 44
ordinary dividend on equity shares 2662 1115
dividends payable to parkman group plc shareholders
dividends payable prior to merger  658
total dividends payable 2662 1773
the final dividend will be paid on 1 december 2004 to the ordinary shareholders on the register at close of business on 
29 october 2004 mouchel parkman report and accounts 2004 54
notes to the financial statements
for the year ended 31 july 2004
13 earnings per ordinary share
before
exceptional exceptional
items and items and
goodwill goodwill restated
amortisation amortisation total total
2004 2004 2004 2003
£000 £000 £000 £000
profit after tax 15302 8198 7104 7648
basic diluted and adjusted earnings attributable to shareholders 15302 8198 7104 7648
basic earnings per share 154p 72p 80p
diluted earnings per share 148p 69p 75p
adjusted earnings per share 145p 67p 73p
 basic diluted and adjusted earnings per share before exceptional items and goodwill amortisation were 99p 93p and 90p
respectively for the year ended 31 july 2003
restated
2004 2003
number number
weighted average number of ordinary shares 99215764 95732277
dilutive share options 1539357 3367299
contingent issuable shares 676688 840605
dilutive save as you earn schemes 2265152 2242058
diluted weighted average number of ordinary shares 103696961 102182239
weighted average number of ordinary shares 99215764 95732277
average number of shares held by the employee share ownership plan trusts 8094564 11708096
share options shares held in the employee share ownership plan trusts 
matured in respect of executive share option schemes 1639518 2043811
adjusted weighted average number of ordinary shares 105670810 105396562
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average
number of ordinary shares during the year
diluted earnings per share is calculated by adjusting earnings attributable to ordinary shareholders and the weighted average
number of ordinary shares in issue on the assumption of conversion of all dilutive share options in issue and shares under save 
as you earn schemes the share price used to calculate diluted earnings per share is based on a weighted average price of 
22318p 2003 12491p
adjusted earnings per share is calculated by adjusting the weighted average number of shares to include the shares held by 
the employee share ownership plan trusts the directors believe that this additional measure provides a better indicator of 
the underlying trends in the business mouchel parkman report and accounts 2004 55
notes to the financial statements
for the year ended 31 july 2004
14 intangible fixed assets
restated
goodwill
£000
cost at 1 august 2003 14785
additions in the year note 34 4981
adjustment to purchase consideration 2087
exceptional goodwill write down 923
at 31 july 2004 16756
accumulated amortisation at 1 august 2003 1473
charge for the year 1774
exceptional goodwill write down 216
at 31 july 2004 3031
net book value
at 31 july 2004 13725
at 31 july 2003 13312
goodwill additions arose during the year upon the acquisition of mouchel gel limited formerly gel group limited goodwill is
amortised in accordance with the accounting policy set out in note 1k
adjustment was made to the purchase consideration of atkins odlin consulting engineers limited mouchel parkman lda limited
full circle educational consultants limited and mouchel parkman metro limited following a review of the earn out positions
15 tangible fixed assets
a group
plant
leasehold freehold and office
improvements properties equipment vehicles total
£000 £000 £000 £000 £000
cost or valuation
at 1 august 2003 restated 1209 4089 23493 346 29137
foreign exchange translation difference   52 5 57
1209 4089 23441 341 29080
acquisitions 16  84  100
additions 98  3434 28 3560
disposals   1468 68 1536
at 31 july 2004 1323 4089 25491 301 31204
accumulated depreciation
at 1 august 2003 restated 616  17200 182 17998
foreign exchange translation difference   73 5 78
616  17127 177 17920
disposals   699 45 744
charge for the year 153  3346 68 3567
at 31 july 2004 769  19774 200 20743
net book value
at 31 july 2004 554 4089 5717 101 10461
at 31 july 2003 restated 593 4089 6293 164 11139
the net book value of the group’s tangible fixed assets includes £93451 of plant and office equipment and vehicles held under
finance leases at 31 july 2004 2003 £356058
included above was £792000 of assets written off as part of the reorganisation costs shown in note 6 mouchel parkman report and accounts 2004 56
notes to the financial statements
for the year ended 31 july 2004
15 tangible fixed assets continued
b company
freehold
properties
£000
cost or valuation
at 1 august 2003 4089
disposals 
at 31 july 2004 4089
accumulated depreciation
at 1 august 2003 
disposals 
at 31 july 2004 
net book value
at 31 july 2004 4089
at 31 july 2003 4089
the company’s freehold property was revalued by countrywide surveyors limited commercial and professional property
advisers in july 2000 at £4100000 the comparable amount under the historical cost convention is £877000
in july 2003 being the third year after the original valuation a valuer was asked to perform a valuation in accordance with
financial reporting standard 15 tangible fixed assets the valuer bbg commercial valued the property at £4100000
16 capital commitments
group and company
the group was not committed to any material capital expenditure as at 31 july 2004 or 31 july 2003
17 investments
restated
shares in restated
subsidiary other restated
undertakings investments total
£000 £000 £000
a group
at cost 1 august 2003  175 175
additions 1515
disposals  163 163
at 31 july 2004 2727
b company
at cost 1 august 2003 1432  1432
additions 110  110
disposals 
at 31 july 2004 1542  1542
acquisitions
on 1 august 2004 the group acquired at a cost of £5987028 including expenses 100 of the share capital of gel group
limited the company’s name was later changed to mouchel gel limited net assets on the date of sale were £1006488 as
detailed in note 34 mouchel parkman report and accounts 2004 57
notes to the financial statements
for the year ended 31 july 2004
17 investments continued
disposals
on 30 july 2004 the company disposed of its investment in mouchel parkman asia limited proceeds on the disposal were
£627000 and net group assets of £1454000 were disposed resulting in a loss on disposal of £827000 details of the 
disposal are contained in note 35
subsidiaries
the company’s wholly owned subsidiaries in which the company had an interest at 31 july 2004 their country of incorporation
and registration as well as ownership of their share capital are listed below
portion of country of
company shares held  incorporation
mouchel parkman services limited formerly mouchel parkman uk limited 100 great britain
mouchel parkman metro limited formerly mouchel metro limited 100 great britain
mkb resourcing limited 100 great britain
mouchel biuro doradztwa sp zoo dormant 100 poland
mouchel management limited dormant 100 great britain
mouchel services limited dormant 100 great britain
baker martin mouchel limited dormant 100 great britain
mouchel parkman international jersey limited
formerly mouchel consulting international limited 100 jersey
mouchel middle east limited 100 hong kong
mouchel parkman international limited formerly mouchel international limited 100 hong kong
mouchel gel limited 100 great britain
lg comparecom limited dormant 100 great britain
metro project services limited dormant 100 great britain
mouchel trustee limited 100 great britain
mouchel quest trustee limited 100 great britain
mouchel parkman lda limited formerly mouchel lda limited 100 great britain
mouchel parkman gb limited formerly parkman limited 100 great britain
parkman property management limited 100 great britain
mouchel parkman ireland limited formerly parkman teoranta limited 100 ireland
parkman group plc 100 great britain
2020 liverpool limited 100 great britain
atkins odlin consulting engineers limited 100 great britain
full circle educational services limited dormant 100 great britain
newbury king  co limited dormant 100 great britain
carey love associates limited dormant 100 great britain
land aspects limited dormant 100 great britain
land concepts limited dormant 100 great britain
parkman ni limited dormant 100 great britain
parkman consultants limited dormant 100 great britain
parkman consulting engineers dormant 100 great britain
parkman group professional services limited dormant 100 great britain
parkman holdings limited dormant 100 great britain
parkman international limited dormant 100 great britain
parkman m  e consultants limited dormant 100 great britain
parkman midlands limited dormant 100 great britain
parkman scotland limited dormant 100 great britain
parkman south east limited dormant 100 great britain
pce holdings limited dormant 100 great britain
pfi street lighting limited dormant 100 great britain
 on 1 september 2004 liverpool city council acquired a 199 interest in the ordinary share capital of 2020 liverpool limited mouchel parkman report and accounts 2004 58
notes to the financial statements
for the year ended 31 july 2004
17 investments continued
other investments
the group’s other investments include a 50 holding in mouchel ire limited registered in the ukraine and a 25 holding in
chotichinda mouchel consultants limited formerly known as mouchel thailand limited incorporated in thailand
joint arrangement not an entity
during the year mouchel parkman services limited entered into a 50 joint arrangement with m holleran limited and a 33
joint arrangement with faber mansell limited and bullen consultants limited
mouchel parkman services limited has a 50 interest in joint arrangements with amey construction limited lee mccullough
and partners limited wa fairhurst and partners and amey rail limited a 40 share in the arrangements with mott macdonald
limited and rail first limited and a 25 interest in joint arrangements with amey highways limited the arrangement with lee
mccullough and partners limited is through mouchel mccullough management limited registered in ireland all these arrangements
are accounted for in accordance with the policy detailed in note 1b
joint ventures
the group has two joint ventures with roberts  partners group plc being speed 8770 limited and mouchel roberts limited
mouchel parkman owns 50 of the ordinary share capital of mouchel roberts limited and speed 8770 limited and both companies
have the same address as mouchel parkman plc
speed 8770 limited was dormant in the year and mouchel roberts ceased trading in april 2004
the share of the net assets of both of these joint ventures are shown below
mouchel speed elimination of total
roberts 8770 intercompany joint
limited limited transactions ventures
2004 2004 2004 2004
£000 £000 £000 £000
profit and loss account
share of turnover 1045   1045
share of profit on ordinary activities before and after taxation 
balance sheet
share of current assets 66   66
share of gross assets 66   66
share of liabilities due within one year 66   66
share of gross liabilities 66   66
share of net assets  mouchel parkman report and accounts 2004 59
notes to the financial statements
for the year ended 31 july 2004
17 investments continued
mouchel speedelimination of total
roberts 8770 intercompany joint
limited limited transactions ventures
2003 2003 2003 2003
£000 £000 £000 £000
profit and loss account
share of turnover 1225 9 9 1225
share of profit on ordinary activities before and after taxation 
balance sheet
share of current assets 236   236
share of gross assets 236   236
share of liabilities due within one year 236   236
share of gross liabilities 236   236
share of net assets 
neither of the joint ventures had any fixed assets or liabilities due after more than one year at 31 july 2004 2003 £nil
transactions of joint ventures of the group during the year were as follows
2004 2003
£000 £000
sales to
mouchel roberts limited 75 287
purchases from
mouchel roberts limited  9
as at 31 july the group had the following balances due from joint ventures
mouchel roberts limited
trading 62 62
the amounts due from joint ventures are included within debtors note 18
18 debtors
restated
group group company company
2004 2003 2004 2003
£000 £000 £000 £000
trade debtors 76076 58990  
amounts owed by subsidiary undertakings   47678 29088
amounts owed by joint ventures note 17 62 62  
other debtors 888 920  
prepayments and accrued income 2585 1701  134
current corporate taxes   13 
deferred tax note 10d 1482 1035  
81093 62708 47691 29222 mouchel parkman report and accounts 2004 60
notes to the financial statements
for the year ended 31 july 2004
19 creditors amounts falling due within one year
restated
group group company company
2004 2003 2004 2003
£000 £000 £000 £000
bank overdrafts note 20 150 2538  
obligations under finance leases note 22 47 447  
trade creditors 34247 22174  
amounts owed to subsidiary undertakings   5534 4880
current corporate taxes 1828 3511  
other taxes and social security 8447 4705  134
other creditors 8076 9684 1469 1200
accruals 4406 3970 42 33
dividends 1785 1528 1785 870
58986 48557 8830 7117
20 borrowings
restated
2004 2003
£000 £000
bank overdraft 150 2538
21 financial instruments
the financial instruments of the group comprise internal cash resources borrowings and debtors and creditors arising from
normal trading activities
the group’s policy is to manage the financial instruments centrally to provide both the working capital and the investment funds
necessary for ongoing operations and future development the majority of borrowing for working capital and other requirements 
is sourced from the group’s principal uk bank
the majority of uk projects and contracts are in sterling and otherwise are in line with the currencies in which the majority of the
costs are denominated the group’s principal overseas subsidiaries have arranged working capital facilities in their local currency
and it is unusual for them to contract in currencies other than their own functional currency consideration is given to hedging
against possible currency movements where considered appropriate it is the group’s policy that no trading in derivatives shall 
be undertaken
interest rate risk arises under the group’s overdraft and loan facilities and liquidity risk arises from the group’s ongoing trading as
well as its obligations under its borrowings these exposures are regularly monitored and appropriate measures taken to mitigate
associated risks
shortterm debtors and creditors other than shortterm borrowings have been omitted from the following disclosures
a interest rate risk
financial assets
financial assets comprise cash at bank and in hand interest on floating rate financial assets is based on the overnight deposit
rate available in the money markets rates for fixed term deposits are fixed until the contracts close out contracts are typically
one year or less mouchel parkman report and accounts 2004 61
notes to the financial statements
for the year ended 31 july 2004
21 financial instruments continued
financial assets
noninterest
floating rate bearing
financial financial
total assets assets
31 july 2004 £000 £000 £000
sterling 18496 18496 
other currencies 920 355 565
19416 18851 565
restated
restated noninterest
floating rate bearing
restated financial financial
total assets assets
31 july 2003 £000 £000 £000
sterling 20275 20275 
hong kong dollars 1166 1166 
other currencies 148  148
21589 21441 148
financial liabilities
the group negotiates working capital facilities locally in the countries in which it operates these facilities are agreed annually and
are normally repayable on demand
31 july 2004
fixed rate financial liabilities
weighted
noninterest 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 5773 1202 54 4517 824 056
other 73 73   na na
5846 1275 54 4517
31 july 2003
fixed rate financial liabilities
restated
restated weighted
restated restated noninterest restated average
floating rate fixed rate bearing weighted period for
restated financial financial financial average which rate
total instruments liabilities liabilities interest rate is fixed
£000 £000 £000 £000  years
sterling 5345 1305 580 3460 834 124
other 37 37   na na
5382 1342 580 3460
b currency exposures
the main functional currency of the group is sterling working capital facilities for overseas operations are in local currency 
a number of transactions are conducted in other currencies which give rise to monetary assets and liabilities denominated 
in other currencies none of these currency amounts are considered material enough to disclose separately mouchel parkman report and accounts 2004 62
notes to the financial statements
for the year ended 31 july 2004
21 financial instruments continued
c liquidity
the maturity of financial liabilities is as follows
restated
2004 2003
total total
£000 £000
amounts falling due
in one year or less or on demand 4672 4472
in more than one year but not more than two years 1174 904
in more than two years but not more than five years  6
5846 5382
the group did not have any material undrawn committed borrowing facilities
d fair value of financial assets and liabilities
the fair value of the assets and liabilities of the group are considered to be materially equivalent to their book value
22 lease obligations
restated
2004 2003
£000 £000
obligations under finance leases fall due as follows
between one and two years 7 127
between two and five years  6
due after more than one year note 23 7 133
due within one year note 19 47 447
54 580
at 31 july 2004 the group was committed to making the following payments during the next year in respect of operating leases
group
land and group
buildings other
£000 £000
leases which expire
within one year 1764 664
between one and five years 4249 550
in more than five years 685 
6698 1214
23 creditors amounts falling due after more then one year
restated
group group
2004 2003
£000 £000
obligations under finance leases note 22
total amount payable 8 148
less future finance charges 1 15
7 133
deferred consideration 1167 777
other creditors 46 46
1220 956 mouchel parkman report and accounts 2004 63
notes to the financial statements
for the year ended 31 july 2004
24 called up share capital
restated
number 2004 number 2003
group of shares £000 of shares £000
authorised
ordinary shares of 025p 122063625 305 122063625 305
allotted and fully paid
ordinary shares of 025p 105881233 265 105396560 264
number 2004 number 2003
company of shares £000 of shares £000
authorised
ordinary shares of 025p 122063625 305 76000000 190
allotted and fully paid
ordinary shares of 025p 105881233 265 62000000 155
the difference between company share capital and group share capital arises in the year due to the fact that frs 6 acquisitions
and mergers has not been applied to the parent company balance sheet
under the uk and overseas mouchel sharesave schemes and the parkman sharesave schemes employees held options at 
31 july 2004 on 4095932 ordinary shares 2003 5087693 as follows
option
number of price
shares per share exercisable between
1356655 2825p aug ’04 jan ’05
739172 9915p oct ’04 mar ’05
423648 10000p aug ’05 jan ’06
286770 8289p apr ’06 sept ’06
702041 14200p aug ’06 jan ’07
587646 21417p aug ’07 jan ’08
under sharesave schemes during the year employees exercised options on 1276952 shares at a price of 1925p per share 557
shares at 8289p per share 738 shares at 14200p per share 5425 shares at 2825p per share and 9466 shares at 9915p per
share and 4197 shares at 100p per share 2003 1342060 shares at a price of 1625p per share 916648 at 1925p per share
2180 shares at 2825p per share 640 shares at 100p per share 2249 shares at 102p 30593 at 122p and 12900 at a price of 
115p per share the company issued 10761 new shares in the year to satisfy employee share ownership plan options
25 share premium
company company
and group and group
2004 2003
£000 £000
balance at 1 august 20779 20779
issue of new shares 639 
balance at 31 july 21418 20779
26 revaluation reserve
company company
and group and group
2004 2003
£000 £000
balance at 1 august and 31 july 3212 3212 mouchel parkman report and accounts 2004 64
notes to the financial statements
for the year ended 31 july 2004
27 other reserves
restated restated
group group
capital foreign
reserve exchange restated
arising on translation group
consolidation reserve total
£000 £000 £000
balance at 1 august 2003 67 189 122
foreign exchange translation differences  112 112
balance at 31 july 2004 67 301 234
28 esop reserves
the esop reserve arises because mouchel trustee limited holds shares in mouchel parkman plc as agent for the trustees of 
the mouchel employees’ share ownership plan trust mourant  co trustees limited holds shares in mouchel parkman plc 
as trustee for the mouchel no 2 employees’ share ownership plan trust and mouchel quest trustee limited holds shares in
mouchel parkman plc as trustee for the mouchel qualifying employee share ownership trust these shares are available for
distribution to the employees of the group at the discretion of the trustees in accordance with uitf 38 the investment in own
shares arising out of esop trusts has been shown as a reduction in the reserves of the group
all income finance charges and administrative expenses relating to the trusts are recognised within the profit and loss account 
of mouchel parkman plc as they accrue except for the surplus or losses arising on the disposal of shares to third parties which 
are taken directly to reserves
as at 31 july the shareholding in own shares was as follows
2004
cost nominal value market value
number £000 £000 £000
mouchel employees’ share ownership plan trust 4700937 1115 12 9472
mouchel no 2 employees’ share ownership plan trust 1509804 471 3 3042
mouchel qualifying employee share ownership trust 485359 152 1 978
2003
cost nominal value market value
number £000 £000 £000
mouchel employees’ share ownership plan trust 9273152 1990 23 15718
mouchel no 2 employees’ share ownership plan trust 1509804 471 3 2559
mouchel qualifying employee share ownership trust 489556 153 1 830
of the ordinary shares above 1780303 2003 3128588 are under option to employees and may be exercised according to
note 24 a further 3394710 2003 6697380 of the ordinary shares above are under option to directors and senior employees
under executive share option schemes
 based on a share price on 31 july 2004 of 2015p per ordinary share 2003 1695p
movement on esop reserve
group and
company
£000
balance at 1 august 2003 restated 2614
sale of shares 876
balance at 31 july 2004 1738 mouchel parkman report and accounts 2004 65
notes to the financial statements
for the year ended 31 july 2004
29 profit and loss account
group company
£000 £000
balance at 1 august 2003 restated 24347 6129
profit on sale of own shares held in esop trusts 113 113
profit for the year after dividend 4442 15036
balance at 31 july 2004 28902 21278
30 net cash inflow from operating activities
restated
2004 2003
£000 £000
operating profit 16736 12167
depreciation and amortisation including exceptional goodwill impairment 6048 3254
profitloss on sale of fixed assets note 4 9 18
increase in debtors 19267 9005
increase in creditors 15395 8304
increase in provisions  900
foreign exchange difference 389 80
net cash inflow from operating activities 19292 15718
31 reconciliation of net cash flow to movement in net funds
restated
2004 2003
£000 £000
increase in cash for the year 414 1274
cash outflow on net decrease in debt and lease financing 526 923
change in net funds resulting from cash flows 940 2197
translation difference 199 61
new finance leases note 33  17
loans and finance leases acquired with subsidiary note 33  29
movement in net funds in the year 741 2212
net funds at the beginning of the year note 32 18471 16259
net funds at the end of the year note 32 19212 18471
32 analysis of net funds
restated
brought carried
forward other forward
1 august noncash 31 july
2003 cash flow changes 2004
£000 £000 £000 £000
cash at bank 21589 1974 199 19416
overdraft 2538 2388  150
19051 414 199 19266
debt due within one year 447 526 126 47
debt due in more than one year 133  126 7
18471 940 199 19212 mouchel parkman report and accounts 2004 66
notes to the financial statements
for the year ended 31 july 2004
33 analysis of changes in financing in the year
restated
2004 2003
£000 £000
finance lease obligations
balance at 1 august 580 935
inception of finance lease contracts  17
acquisitions  29
cash outflow 526 401
balance at 31 july note 22 54 580
34 acquisitions
mouchel gel limited note 17
book value
and fair value
£000
net assets acquired
tangible fixed assets 84
debtors 1074
cash at bank and in hand 194
creditors 226
taxation 120
1006
goodwill 4981
5987
satisfied by
cash 3345
deferred consideration amounts falling due within one year 1475
amounts falling due after more than one year 1167
5987
the subsidiary undertaking acquired during the year utilised £130000 of the group’s net operating cash flows and paid
£128000 in respect of taxation
the consolidated profit after tax of mouchel gel limited for the financial period commencing 1 january 2003 and ending on 
the date of acquisition was £51715 and for the prior year ended 31 december 2002 was £264000
the directors have reviewed the amounts payable as deferred consideration and do not believe they will differ materially to
amounts provided
35 sale of subsidiary undertaking
on 30 july 2004 the group sold its 100 interest in the share capital of mouchel parkman asia limited the profit of mouchel
parkman asia limited up to the date of disposal and for its last financial year was £344000
net assets disposed of and the related sale proceeds were as follows
£000
fixed assets 84
current assets 1512
creditors 142
net assets disposed 1454
sale proceeds
cash 627
loss on disposal 827 36 merger accounting
a alignment of accounting policies
the only impact from the alignment of the accounting policies of mouchel plc and parkman group plc is in respect of costs
incurred in relation to third parties but which are recoverable on contracts these were previously excluded from the costs and
turnover of parkman group plc the effect of this was to increase turnover and costs in parkman group plc by £17413000 
in the year to july 2003 and by £2906000 in the 2 months to september 2003
b analysis of consolidated profit and loss account for the year ended 31 july 2004
10 months to
2 months to 2 months to july 2004 year to
sep 2003 sep 2003 mouchel july 2004
mouchel parkman parkman total
£000 £000 £000 £000
turnover 2761012992231253 271855
continuing operations 25921 12992 222808 261721
acquisitions 557  2786 3343
discontinued operations 1132  5659 6791
operating profit before exceptional items 295 996 15445 16736
continuing operations 209 996 14939 16144
acquisitions 41  207 248
discontinued operations 45  299 344
exceptional items all continuing   6784 6784
profit on ordinary activities before finance items 295 996 8661 9952
net interest 26  127 153
profit before tax 321 996 8788 10105
taxation 96 297 2608 3001
net profit after tax 225 699 6180 7104
c analysis of consolidated profit and loss account for the year ended 31 july 2003
year to year to year to
july 2003 july 2003 july 2003
mouchel parkman total
£000 £000 £000
turnover 147424 76209 223633
continuing operations 147109 75621 222730
acquisitions 315 588 903
operating profit before exceptional items 7768 4399 12167
continuing operations 7741 4385 12126
acquisitions 27 14 41
exceptional items all continuing 713 250 963
profit on ordinary activities before finance items 7055 4149 11204
net interest 496 4 500
profit before tax 7551 4153 11704
taxation 2661 1395 4056
net profit after tax 4890 2758 7648
mouchel parkman report and accounts 2004 67
notes to the financial statements
for the year ended 31 july 2004 notes to the financial statements
for the year ended 31 july 2004
mouchel parkman report and accounts 2004 68
36 merger accounting continued
d analysis of statement of total recognised gains and losses
2004 2003
£000 £000
profit for the period 7104 7648
mouchel 225 4890
parkman 699 2758
mouchel parkman 6180 
currency translation differences on net foreign currency investments 112 18
mouchel  50
parkman  32
mouchel parkman 112 
total gains and losses for the year 6992 7630
e net assets
on 19 september 2003 being the date of the merger mouchel plc had consolidated net assets of £46370000 and parkman
group plc had consolidated net assets of £11292000 net assets do not represent fair value on the date of the transaction 
the market capitalisation of mouchel plc and parkman group plc immediately prior to the merger were £135160000 and
£92930000 respectively
f consideration
mouchel plc issued 43396560 shares in exchange for the entire share capital of parkman group plc the shares had a fair 
value of £91567000 on the date of the merger
37 pensions
the group operates several occupational pension schemes for its employees the mouchel superannuation fund and the
parkman staff pension scheme are both funded defined benefit schemes the following defined contribution schemes were also
in place legal and general gpp scheme parkman dc scheme and the parkman ireland pension scheme dc section
defined contribution schemes
contributions to the defined contribution schemes are between 4 and 10 for the employer and between 2 and 10 for 
the employee contributions are dependent on age
the pension charge for contributions payable to the defined contribution schemes was £1961000 2003 £1470000
defined benefit schemes
the pension charge for the year was made up of contributions of £5659000 2003 £5668000 last year a provision for
pension costs in excess of regular employer contributions of £900000 was made
for the main defined benefit schemes the group continues to apply statement of standard accounting practice ssap 24
accounting for pension costs and makes disclosures under the transitional rules of frs 17 retirement benefits
mouchel superannuation fund
the contributions for the year ended 31 july 2004 and the year ended 31 july 2003 were determined by a qualified independent
actuary on the basis of triennial valuations using the projected unit method and a market based valuation approach the most
recent valuation was at 31 march 2001 and showed that the market value of the scheme’s assets was £70400000 and that the
actuarial value of those assets on the funding basis represented 106 of the benefits that had accrued to members after allowing
for expected future increases in earnings the assumptions which have the most significant effects are those relating to the rate 
of return on investments and the rates of increase in salaries and pensions it was assumed that the investment returns prior to
retirement would be 675 per annum investment returns after retirement would be 525 per annum that salary increases
would average 425 per annum and that present and future pensions in payment would increase at the rate of 225 per
annum the employer’s contribution rates for the main section were 146 and for the public service section were 165 notes to the financial statements
for the year ended 31 july 2004
mouchel parkman report and accounts 2004 69
37 pensions continued
parkman staff pension scheme
contributions for this scheme are determined by a qualified actuary on the basis of biennial valuations using the projected unit
method the last actuarial valuation was carried out as at 5 april 2002 it was assumed in that valuation that the long term rate 
of return on investments would be 70 the increase in pensionable salaries would be 50 and pension increases would be
27 per annum
at 5 april 2002 the market value of the scheme’s assets was £285 million which represented approximately 85 of the benefits
that had accrued to members at that date allowing for projected increases in earnings the funding level at that date on the
minimum funding requirement was 93
both the former mouchel and parkman schemes are currently undergoing actuarial valuations the valuation exercise is expected 
to be concluded in december 2004
both schemes are closed to new entrants except for employees transferring to the group under the transfer of undertakings
protection of employment regulations 1981 as amended where the group is required to provide benefits which are broadly
comparable to those provided under the local government pension scheme or another defined benefit scheme provided by 
the transferring employer
ssap 24 accounting for pension costs
in the prior year a pension provision in excess of the regular pension contributions of £900000 was made
ssap 24 requires that pension costs arising from differences between the actuary’s assumptions and actual experience are
spread over the expected remaining service lives of the current employees in the scheme variations from regular costs are
normally recognised on the basis of triennial funding valuations of the scheme the scheme actuary mercer human resource
consulting mercers has performed a roll forward valuation which supports the quantum of the provision but this does not
constitute a full valuation as at 31 july 2004 there was an accrual of £481000 2003 £512000 in respect of pension contributions
due on salaries
frs 17 retirement benefits
the two defined benefit schemes are presented in aggregate in accordance with frs 17 the full actuarial valuation was reviewed
and updated as at 31 july 2004 based upon the following assumptions
2004 2003 2002
 
rates of increase in salaries 39 37 34
rates of increase of pensions in payment 29 27 24
discount rate 59 57 61
inflation assumption 29 27 24
scheme assets and liabilities under frs 17 are disclosed below
2004 2003 2002
£000 £000 £000
equities 80687 84629 73149
bonds 27180 11512 13466
property 3976 2819 2282
total fair value of assets 111843 98960 88897
actuarial value of liability 154205 142488 111345
deficit 42362 43528 22448
related deferred tax asset 12709 13058 6734
net scheme deficit 29653 30470 15714 mouchel parkman report and accounts 2004 70
notes to the financial statements
for the year ended 31 july 2004
37 pensions continued
the expected return for the scheme assets in the forthcoming year is as follows
2004 2003 2002
 
equities 79 76 77
bonds and cash 52 50 55
property 75 73 74
had the scheme been accounted for under frs 17 the impact on equity shareholders’ funds the group’s operating profit and 
on the group’s statement of total recognised gains and losses would have been as follows
as at as at
31 july 31 july
2004 2003
£000 £000
equity shareholders’ funds
equity shareholders’ funds excluding net pension deficit 61196 56059
amounts already provided 3200 3200
pension deficit 29653 30470
total equity shareholders’ funds 34743 28789
as at as at
31 july 31 july
2004 2003
£000 £000
analysis of amount chargeable to operating profit
current service cost 6632 6128
analysis of credit due to other finance income
expected return on pension scheme assets 7594 6676
interest on pension scheme liabilities 8340 6952
net expense 746 276
analysis of amounts recognisable in the statement of total recognised gains and losses
actual return less expected return on pension scheme assets 505 1380
experience gains and losses arising on the scheme liabilities 1699 
changes in assumptions underlying the present value of the scheme liabilities 681 18964
2885 20344
movement in deficit during the year
deficit in scheme at 1 august 43528 22448
current service cost 6632 6128
contributions 5659 5668
interest costs on assets 746 276
actuarial gainloss 2885 20344
deficit in scheme at 31 july 42362 43528 notes to the financial statements
for the year ended 31 july 2004
mouchel parkman report and accounts 2004 71
37 pensions continued
2004 2003 2002
history of experience gains and losses
differences between the expected and actual return on scheme assets
amount £000 505 1380 22837
percentage of scheme assets 0 1 26
experience gains and losses on the scheme liabilities
amount £000 1699 
percentage of scheme liabilities 1 0 0
total amount recognisable in the statement of total recognised gains and losses
amount £000 2885 20344 21661
percentage of scheme liabilities 2 14 19
the actuarial assumptions used in the last valuations of the schemes were modified in accordance with the requirements of frs 17
in order to arrive at the disclosures detailed
the assets and liabilities as at 31 july 2004 have been determined using valuations and assumptions as at that date in accordance
with frs 17 the main assumptions are set out on page 69
due to the closure of the schemes to new entrants the frs 17 current service cost under the projected unit method will increase
as members approach retirement age
38 contingent liabilities
contingent liabilities at 31 july 2004 in respect of guarantees and indemnities in the normal course of business totalled £7030587
2003 £1133324
in addition bank overdrafts of subsidiaries were guaranteed at 31 july 2004 up to £332102 the amount overdrawn at that date
being £150000
39 related party transactions
transactions with joint ventures are disclosed in note 17
40 ultimate controlling party
there is no single controlling party ultimate control is exercised by the shareholders five year financial summary
mouchel parkman report and accounts 2004 72
summarised group profit and loss account for the year ended 31 july
restated
2000 2001 2002 2003 2004
£000 £000 £000 £000 £000
group turnover 94770 118570 162930 223633 271855
operating profit 4884 6468 9070 13041 19217
net interest 240 514 200 500 153
profit before tax 4644 5954 8870 13541 19370
operating margin 52 55 56 58 71
effective tax rate 266 301 287 311 210
adjusted earnings per share 52p 56p 67p 90p 145p
 before exceptional item of £352000 in 2001 exceptional administrative expenses of £1422000 and goodwill amortisation of
£479000 in 2002 nonoperating exceptional item of £963000 and goodwill amortisation of £874000 in 2003 and nonoperating
exceptional items of £6784000 goodwill amortisation of £1774000 and exceptional goodwill impairment of £707000 in 2004
summarised group balance sheet as at 31 july
restated restated
2000 2001 2002 2003 2004
£000 £000 £000 £000 £000
fixed assets 8968 13796 19364 24626 24213
current assets 33809 41814 71829 84297 100509
current liabilities 23406 26473 33661 48557 58986
long term liabilities 533 7521 4830 4307 4540
equity shareholders’ funds 18838 21616 52702 56059 61196
 restated following the adoption of frs 19 deferred tax
the balance sheets and profit and loss accounts for 2000 have not been restated for the impact of frs 19 deferred tax
the profit and loss accounts and balance sheets for 2003 and 2004 have been prepared using audited accounts for both periods
the balance sheets and profit and loss accounts for 2000 2001 and 2002 were prepared using the audited accounts of mouchel plc
and parkman group plc as at 31 july and 31 march respectively adjustments to align nonconcurrent periods have been made 
to the profit and loss accounts office and advisors
mouchel parkman registered office
mouchel parkman plc
west hall parvis road
west byfleet
surrey  kt14 6ez
registered number 95369
auditors
deloitte  touche llp
hill house
1 little new street
london  ec4a 3tr
registrars
lloyds tsb registrars
the causeway
worthing
west sussex  bn99 6da
financial advisors and joint brokers
cazenove  co ltd
20 moorgate
london  ec2r 6da
joint brokers
abn amro
250 bishopsgate
london  ec2m 4aa
financial pr
citigate dewe rogerson
3 london wall buildings
london wall
london  ec2m 5sy
designed by four iv design consultants  london  t 44 020 7837 8659 wwwmouchelparkmancom


Summary:
 mouchel and parkman announced an intention to join forces
on 21 august 2003 we have achieved pretty much everything
we set out to do in our first year we completed our integration
programme on time met our financial objectives and created
a new and dynamic force in the market
everyone here has played their part in getting us to where we
are i thank them on behalf of the board not just for their hard
work but also for their belief we have tried hard to create a
culture and working environment in which everyone can flourish
and realise their ambitions we think we are well on the way
so does the independent assessor from investors in people
iip who visited us in july – she interviewed people throughout
the organisation and found that the “level of excitement is
almost tangible”
the process of putting two fast growing and successful
businesses together has been exciting and rewarding our
integration programme project one comprised 16 separate
subprojects these included the ‘hard’ – new systems and
processes – and the ‘soft’ – issues that would influence the
way we do things in mouchel parkman we also identified
four critical areas of risk facing us in 20034 these and 
our responses to them are central to an understanding 
of our performance
1 we needed to keep the business moving forward in spite
of our internal challenges
the demands of the merger could have distracted us from
the fundamentals particularly developing client relationships
and winning new business we were aware of the need to
keep looking outward rather than focusing too much on
internal issues as a result we have kept the top line moving
we have grown the order book and we have increased what
was already a very healthy pipeline of new opportunities
we secured new commissions in the year in both our core
and incubator sectors these included
• two social housing management contracts each for seven
years for the london borough of hackney
• commissions for the dfes to project manage the feasibility
of three new city academies
• an eight year contract supporting alcatel in replacing the
signalling for the jubilee and northern lines for the tube
lines consortium
• four managed services contracts in the water industry some
for up to ten years to provide operational management
services to thames water southern water scottish water
and severn trent water
• the first contract let by the highways agency to recruit 
and train its traffic officers
• six longterm highways contracts in partnership with
cornwall county council the corporation of london the
london boroughs of bexley and richmonduponthames
leeds city council and the city of westminster the last of
these is a local authority managing agent contractorstyle
macstyle contract which we secured in joint venture with
balfour beatty – the first of what we believe will be a trend
in this type of procurement
our existing clients have also reaffirmed their satisfaction
enabling us to maintain a 100 record in securing managed
service contract extensions extensions in the year included
• ealing and wiltshire highways
• wiltshire and bedfordshire property
• north yorkshire ‘bundled’ services
2 we needed to keep staff on board
anxiety amongst staff is inevitable during major change 
we opted to address reorganisation and redundancy issues
quickly to minimise uncertainty we also communicated openly
about our plans in the end relatively few fulltime posts were
redundant as a result of the merger and of course we
continue to welcome new staff to the group through
recruitment and transfer
the vast majority of our people have shown great support for
the new company confirming our expectation that the cultures
of mouchel and parkman would combine well in a new group
chief executive’s statement
successfully integrate two companies deliver significant growth
and improve profitability that was the expectation in 20034
richard cuthbert chief executive outlines our progress in the
year and assesses our prospects
mouchel parkman report and accounts 2004 6 chief executive’s statement
3 we needed to establish an effective and coordinated
programme of integration for our support systems
some of the activities within project one were focused 
on the transformation of business critical processes and
infrastructure we completed all of these on time and to
budget so that by the end of our first year and in some
cases by april 2004 we had in place
• a single it platform and technical support team organisation
and management
• a companywide finance system
• a set of technical and project management procedures
across quality management environmental management
and health and safety
• new employment terms and conditions and a new
performance management and appraisal system for 
all employees
4 we needed to ensure a successful transition for recent
acquisitions and major contract wins
a number of important new contracts and several acquisitions
were secured in the run up to the merger these had to perform
in line with expectations in their first year in circumstances that
had not previously been anticipated as a result of the care
we devoted to this issue gel atkins odlin and lda all
performed well this year
our joint venture with liverpool city council 2020 liverpool
limited started on 1 october 2003 and has performed
exceptionally well we have already developed an identity in
the city enabling us to attract fresh talent to help us satisfy the
demand for infrastructure improvement works in liverpool in
the run up to its european capital of culture status in 2008
finally our most recent mac contract with the highways
agency in cumbria and north lancashire area 13 had 
a very good first year and is another success for the
ameymouchel joint venture
the next phase – core market sectors
highways
as ameymouchel we are arguably the highways agency’s
leading provider of maintenance management services on the
capital works side we are already involved in two of the new
early contractor involvement eci schemes and more may
follow there is also the prospect of major motorway widening
projects our leadership of the active traffic management project
on the m42 in the west midlands is giving us excellent
experience in the application of technology to increase
highway capacity
we confirmed our preeminent position with local authorities
during 20034 our strategic alliances with hertfordshire and
wiltshire county councils went from strength to strength our
track record and long list of reference sites puts us in a strong
position for future opportunities these include second and
even third generation outsourcing contracts in the shire counties
along with first generation contracts in london and the
metropolitan areas the signs are that at least some of these
contracts will offer highways as part of a large bundle of
outsourced services some could be macstyle contracts
property
we are now market leader in the local authority sector and
expect further growth our teams have brought a noticeable
improvement to customer service delivery in both surrey and
hertfordshire in the first 12 months of those contracts the
building schools for the future bsff initiative promises to
dramatically increase investment in secondary school
infrastructure and we are exploring opportunities to develop
local education partnerships with leas in joint venture with
other providers our continuing success in the academies
procurement and project management programme is adding
to our credibility for bsff
rail
we have a good balanced portfolio of work with longterm
structures inspection and assessment contracts with network
rail and longterm signalling work for london underground
we are well positioned for further expansion but in spite of
the massive spend in the sector this market remains uncertain
and we wait to see how network rail’s developing plans will
affect us longterm 
water
we had a tremendous year securing valuable longterm asset
management contracts with some of the major water companies
and increasing turnover by over 30 the outsourcing trend
looks set to continue and opportunities to undertake capital
scheme design work will increase as we formally enter the
new asset management cycle – asset management plan 4
amp4 we will increase our scale and market share through
acquisition should the right opportunity present itself
incubator market sectors
our incubator sectors currently represent about 10 of our
turnover our objective is for at least one incubator to become
a core market sector our approach is to establish a profitable
consultancy business as a forerunner to developing managed
services contracts we have achieved this in all four sectors now
mouchel parkman report and accounts 2004 7 chief executive’s statement
mouchel parkman report and accounts 2004 8
our team of management consultants provides advice on
infrastructure projects and services across all of our markets
together with thought leadership this helps us to set the
agenda for our clients and identify new opportunities for the
group the team has again been successful working primarily
in our incubator sectors
gas
national grid transco ngt is leading the further transformation
and restructuring of the uk gas industry through gel we
have been able to play a part in this process supporting
macquarie bank in its successful bid for the wales and west
regional gas distribution network we expect more opportunities
to flow from this process both before and after the formal
transfer of assets to the new private sector owners next april
alongside this ngt’s pipeline replacement programme will
continue to offer good prospects for us as one of very few
providers in this market in the year gel won contracts in
norfolk south wales and scotland
waste
the fundamental change that the eu landfill directive is bringing
to local authority practice means that consultancy opportunities
will remain in this sector we advised several local authorities
on waste strategy and continued our work for shanks on new
waste transfer sites in east london whilst 20034 was a
successful year for our consultancy team we have not yet been
able to enter the market for managed services in this sector
education
the recent green paper from the department for education
and skills – ‘every child matters’ – sets out a bold agenda 
for children’s services and recognises that poor educational
performance is often due to poor management and
communication not poor teaching we improve the
management of people projects and assets so this gives 
us a valuable role in helping to raise standards as our work
as advisors and interim managers demonstrated this year
this is an evolving market which together with the bsff
programme indicates that our investment in this sector over 
the last two to three years is likely to bear fruit as our success
in the academies programme has indicated improving the
management and capacity of leas and the promotion of joined
up services supporting urban regeneration are the most likely
routes for effective public private partnership in this sector
housing
interim manager roles are also a prospect in social housing
we were delighted with our wins in hackney and we’ve made
an encouraging start to the contracts we have excellent
people out there delivering frontline services to the community
and we are already making a difference together with our
successful contract with westminster we now have an
established business this market is still not developing at 
the pace we had anticipated however and we are working 
on alternative service models which might be attractive to
local authorities and residents
developing our people
at the end of july 2004 we employed 4250 people recent
joiners included a range of senior management – a new
company secretary hr director and a new business
development director in government services this autumn
we recruited nearly 100 graduates the training and continuing
professional development for all of our people is now channelled
through ‘mp learning’ staff communications are facilitated
by our intranet ‘mportal’ our quarterly magazine ‘mprint’ a
monthly newsletter ‘mp monthly’ and a regular series of
presentations by the executive team in all offices
as the group grows the sharing of best practice is ever more
important our ability to quickly and effectively integrate people
joining us through acquisition or under the transfer of
undertakings protection of employment regulations 1981
as amended tupe is also crucial to our continuing success
with this in mind we have appointed a business transformation
director whose role is also to champion continuous
improvement across the group we introduced the european
foundation for quality management efqm version of
business excellence during the year that has established a
structured approach to self assessment – an essential first step
along the road to service improvement
outlook
it has been a privilege to lead mouchel parkman in its first
year our market prospects and overall business outlook 
are good and we are confident that we can now achieve
more than either mouchel or parkman could have achieved
alone we have the right people the right approach and a
tremendous opportunity to fulfil our aspiration to become the
leading provider of consultancy and support services in our
chosen markets we have made an excellent start
richard cuthbert
chief executive