annual report and accounts 2006 - halcrow pensioners

Halcrow Holdings LimitedAnnual reportand accounts 2006

Contents

Highlights 2

Chairman’sstatement 4

Chiefexecutive’sreport 6

Directors’report 14

Statementofdirectors’responsibilities 19

Independentauditors’reporttothemembersofHalcrowHoldingsLimited 20

Consolidatedprofitandlossaccount 21

Consolidatedbalancesheet 22

Companybalancesheet 23

Consolidatedcashflowstatement 24

Consolidatedstatementoftotalrecognisedgainsandlosses 25

Notestothefinancialstatements 26

Officesandcontacts 53

Picture captionspage8:GrandMosque,AbuDhabi,UAEpage10:LiverpoolSouthParkway,UKPage12:ClydeArcbridge,Glasgow,UK

Halcrow Holdings LimitedAnnual report and accounts 2006

� | Halcrow Holdings Limited | Annualreportandaccounts2006

Strongperformancesacrossallofourbusinessgroupsmeanthatbothturnoverandprofitbeforetaxfor2006areup,deliveringimprovementsforthefifthyearinsuccession.Ourcontinuingprogresshassecuredusatop50placeintheUK’sSunday TimesProfitTrack100,whichidentifiesthetop100privateBritishfirmswiththefastestgrowingprofit.

Importantly,wehaveseenanotableperformanceinNorthAmerica.Employeenumbersareuptonearly450;wenowhave13permanentoffices–withtwomoreontheway;andweachievednetearningsof£24.3million–21percentaheadofbudget.

Lookingtothefuture,wehavestrengthenedourgroupboardwiththreenewappointments.TonyPryorjoinedusasnon-executivechairmandesignate,andwillbetakingoverfromTonyAllumattheendofJune2007;AlanSafferjoinedasgroupfinancedirector;andJohnTheakstonjoinedusasanon-executivedirector.

Businesshighlights

Tony Allum–chairmanFREngEurIngFICEFCIWEM

Tony Pryor–non-executivechairmandesignateBAPEng

Peter Gammie–chiefexecutiveBAFCA

Les Buck–groupboarddirectorBScCEngFICEFIHTPE

Chris Fleming–groupboarddirectorFREngFICEEurIngPhDBSc

Neil Holt–groupboarddirectorFCIB

Alan Saffer–groupfinancedirectorBAFCACPA

David Kerr–groupboarddirectorBScCEngFICEMIHT

John Theakston–non-executivedirectorBScCEngFICEMIHT

Ken Mair–companysecretaryFCISACII

Group board

Halcrow Holdings Limited | Annualreportandaccounts2006 | �

Groupturnover £330.4m

Grossprofitpercentage 39%

Operatingprofit £11.3m

Pre-taxprofit £12.0m

Financialhighlights


Wesawanotherstrongperformancein2006whichresultedinthebusinessexceedingbothturnoverandprofitexpectationsfortheyear.Throughout2006Ihaveseendeepeningcommitmenttothewiderissuessurroundingefficiencyandeffectivenessinallareasofthebusiness.Wehavemadeanexcellentstartto2007:wehaveastrongforwardorderbookandwesignificantlyimprovedonbudgetaryexpectationsforthefirstquarteroftheyear.IfeelconfidentthatHalcrowwillgofromstrengthtostrength.

Weplantostreamlineourinternalbusinessimprovementprojectssowecanmeasurethebenefitstheyproduceagainstfixedtargets.Wewillusevaluestreamanalysisandtheprinciplesof‘lean’todeliverservicesandproductsthatcreatevalueforclientswiththeminimumamountofwasteandthemaximumdegreeofquality.

Act now!–ourculturechangeprogramme–wasdevelopedfurtherandhastakenonthethemeofoperationalexcellencewithapilotprojectthatwillseetheExeter,CrawleyandBristolofficeseachsecuresignificantsavingsfor2007.

WewillalsofocusonmaximisingtaxcreditsforourUKresearchanddevelopment(R&D)activities.ThankstocreditsalreadyreceivedfromtheUKgovernment,Halcrowlaunchedaninnovationfundearlyin2007tosupportR&Dprojects,addingtoourcurrentinvestmentprogramme.In2006wespent£1.3millionontheseprojects,forgingnewwaysandmethodsofdoingwhatwedobest.

Ourstatedgoal–‘tobecomerecognisedastheconsultantthatclientsandpartnersnaturallyseekoutwhenfacedwiththeirgreatestchallenges’–isalreadyreapingdividendsasourlatestclientsurveystestify.Feedbackrevealsthatweareperceivedbyclientstobesignificantlybetterthantherestofthemarketinunderstandingtheirneedsanddeliveringtodeadlineandtobudget.

Ourbidimprovementandprojectexcellenceprogrammeshelpedustofurtherunderstandandserviceourclients’needs,creatingadifferentiatorbetweenusandourcompetitors.Bystrivingfor–andachieving–excellence,wehavebeenrecognisedbyKPMG,theglobalauditingfirm,whichselectedHalcrowasoneoftheworld’s15mostadmiredcompaniesin2006.It’savaluableendorsementofthefocusandenergyofthecompanyanditspeople.

OurpushintotheUKnuclearsectorcontinuestothrivewiththelaunchofourrefreshednuclearbusiness‘NuclearFocus’.Themultidisciplinaryteamhasalonghistoryofprovidingservicesandskillstothenuclearindustry.Aswellasundertakingdecommissioningwork,theteamisalsostrategicallypositionedtoplayakeyroleinanynewbuildnucleardevelopmentsintheUK.Mysuccessor,TonyPryor,willalsobringtobearhisconsiderableexperienceandknowledgewithinthiscoresector.

Importantly,wehaveseenfurtherchangestothemainboardinadditiontothearrivalofTonyPryorasnon-executivechairman.Aswellassayinggoodbyetoourtwonon-executivedirectors,SirMichaelAngusandRogerFlanagan,wemadetwonewappointments.AlanSafferjoinedusinJanuary2007asgroupfinancedirectorandbringsextensiveandwide-rangingexpertisetotheboard,amovewhichrecognisesthecriticalrolethatfinancenowplayswithinthebusiness.JohnTheakston,whojoinedusasanon-executivedirectorinAugust2006,alsobringsnewexperienceandexpertisetoourboard.Together,thesethreenewappointmentsstandusingoodsteadforthefuture.

Halcrowcontinuestoofferemployeesthechancetotakeatangiblestakeintheircompanyandmateriallybenefitfromitsongoingsuccess.Bytheendof2006,24.1percentofshareswereownedbyemployees,boostedbytheintroductionofadividendreinvestmentplanin2006.

Thisismylastchairman’sstatementasIwillbesteppingdownattheendofJune2007.Farfromdepartingwithsadness,though,Ileaveknowingthatmysuccessor,TonyPryor,inheritsasoundandhealthycompany.

Chairman’sstatement

Chairman’s statement

Thenumberofemployeeshareholdersissettogrowevenfurtherin2007withthelaunchofthecompany’sshareincentiveplan,offeringataxefficientwaytoinvestinthecompany.Ourgoalistoensurethatby2010,35percentofemployeesareshareholdersinourfuture.

TheHalcrowFoundation–setupasadirectresponsetotheIndianOceantsunamiofDecember2004–sawgrowthanddevelopmentin2006,mostnotably,gainingcharitablestatusintheUK.Atthesametime,itexpandeditsportfolioofprojectstoAfricaandtheUK.AswellassupportinggrassrootssocialcareinitiativesintheUKforfamiliesinSwindon,itisfundingmedicalequipmentforachildren’shospiceinYork.AndinAfrica,thefoundationisbuildinganablutionblockintheKiberasluminNairobi,Kenya,andbringingcleanwaterto6,000Malawianvillagers.

Insummary2006wasanotherchallenging,yethighlyrewarding,year.Anditisdowntoourmostvaluableasset–ourpeople–thatwecontinuetobuildonsuchsolidfoundationsandlookforwardtotheopportunitiesthatlieaheadin2007.

Iwouldliketothankeveryonefortheirsupportoverthefiveyearsofmychairmanship.IhavenotonlyenjoyedthetimeIhaveservedbutfeelveryprivilegedtohavedoneso.IlookforwardtohearingaboutthegreatersuccessIknowwillcomeinfutureyears.Thankyou.

Tony Allum CBEChairman

Tony Allum leaves the business after nine years on group board, nearly five of which were as chairman. During this time, and in his earlier career with Halcrow in the mid 1990s, he has contributed extensively to the group’s focus on developing markets outside the UK, including North America, India and the Middle East.

Over many years Tony has worked closely with various industry bodies on behalf of the group. He was chairman of the UK’s Iraq Industry Working Group. He is chairman of UK Trade and Industry’s Water Sector Advisory Group and he sits on the boards of British Expertise and the University of Bath in Swindon. Internationally, he has represented Halcrow at the World Economic Forum. In the recent past he has also headed up government sponsored trade delegations to India and China. In 2005 he was awarded a CBE for services to the industry and became a Fellow of the Royal Academy of Engineering.

Chairman’sstatement

Chairman’s statement



Chiefexecutive’sreport

Turnoverroseby17percentandgrossmarginsimprovedby1.5percent,significantlycontributingtotheincreaseinunderlyingprofitability.Improvementstoourprocessescontinuedtobeakeyfocusintheyearandoperationalefficiencywillbeakeythemefor2007.

WecontinuedtomakeprogresstowardsourstrategicgoalofhavingmorethanhalfofourbusinessoutsidetheUK.In200644percentofturnoverwasoutsidetheUKcomparedto40percentin2005.Workwonintheyearwas47percent,indicatingfurtherprogresstowardsthegoal.Wealsosignificantlyincreasedourworldwidebacklogofwork,up64percentcomparedtothebeginningoftheyear.

Globalisationcontinuedin2006withseveralstrategicacquisitions,includingthatofVancouver-basedtransportationplanningconsultancy,TransysInternationalConsultants.HalcrowalsotookfullownershipofHalcrowWaterServices,thejointventurecompanywithMidKentWater.

Overall,2006demonstratedasolidperformanceinwhatwasachallenging,butultimatelyrewarding,year.

Our business groups

ConsultingConsultingbusinessgroupmaintainedastronggrowthtrendthroughouttheyear,withprofit*andtotalearningsincreasingby12percenton2005.Itdelivereda£2.22millionprofit*–some£0.14millionaheadofbudget.

ItsinternationalbusinessgrewsignificantlythanksinparttosomemajorUSpublicprivatepartnership(PPP)contractsandanumberofimportantenvironmentalprojectsinRomania.ItsMiddleEastoperationalsogrewonthebackofanumberofmajorplanningcommissions.

IntheUKtheOxfordshireCountyCounciltransportplanningframeworkwassecuredforasecondfive-yeartermandnewtechnicalservicesframeworkswerewonwithMoray,NorthSomerset,andPerthandKinrosslocalauthorities,aswellasHighlandRegionalCouncil.

TheenvironmentteamcontinuedtoplayacrucialroleinresearchandplanningcommissionsfortheUK’sHighwaysAgencyandEnvironmentAgency.

RelationshipswithEnglishPartnershipsstrengthenedwithanumberofadditionalengineering,environmentalandlanddevelopmentframeworks.

TheinternationalmasterplanningandurbandesignbusinesssecuredseveralvaluablecommissionsinShanghaithroughajointventurewithShanghaiInternationalConsultingCompany,aswellaswinningprojectsinthePhilippines,IndiaandtheCaribbean.

MaritimeMaritimebusinessgroupputinasterlingperformancebyturninga£1millionloss*in2005intoaprofitof£0.89millionin2006.Nowinitssecondyearthebusinessgrouphasstreamlineditsoperationstoimproveefficiency,reducingthenumberofsectorsitworksin.Itsthreecoreareas–containers,coastalandenergy–accountfortwothirdsofitsfeeincome.

Amongthebiggerprojectssecuredin2006werealiquidnaturalgasterminalatRasLaffanPortinQatarandconsultancyworkattheKhalifaPortinAbuDhabi,UAE.

AsignificantinvestmentinflooddefenceworkinNorthAmericaafterhurricaneKatrinasecuredacommissionworkingfortheLouisianaDepartmentofNaturalResources.InNorthAfrica,a£260milliondeep-waterport–Tangier-

Chief executive’s report

Iampleasedtoreportprofitbeforetaxof£12.0millionfortheyear,comparedto£10.4millionin2005.Operatingprofitasreportedfellfrom£12.8millionto£11.3million.However,iftheimpactofforeigncurrencymovementsistakenintoaccount,underlyingoperatingprofitrosefrom£10.0millionto£15.7million,anincreaseof58percent.



Mediterranean–iswellunderway,asisanewportdevelopment–SungaiLiang–inBrunei.AndinBelizethemaritimesecurityteamishelpingtobeefupsecurityandprotectthecountry’ssixportfacilities,crucialtoitsexpandingtourismsector.

Property 2006heraldedthefifthanniversaryofHalcrow’spropertybusiness.NowbrandedHalcrowYolles,itrecordedaprofit*of£2.53millionin2006–some£1millionabovebudget.ItisnowontracktoexceedHalcrow’s2010targetof6percentreturnongrosssales,withseveralstellarperformancesfromindividualteamsalreadyexceedingthatfigure.ToallowittoproperlybuildonthisithasadoptedastrategyfocusingonprojectsintheUK,NorthAmericaandtheMiddleEast.

IntheUKthegroupwonanumberofsignificantprojectssuchasthelandmark36-storeyLondontower,20FenchurchStreet,andBeethamGroup’sprestigiousHiltonprojectinLiverpool.TheHalcrowYollesteaminScotlandiscontributingtoGlasgow’sheritage,bothpastandfuture,withitsworkonthemuch-lovedKelvingroveArtGalleryandMuseum.Itisalsosupportingthecity’sbidtohostthe2014CommonwealthGamesthroughtheprovisionofcivilandstructuralengineeringservicestotheshowcaseNationalIndoorSportsArenaandtheNationalVelodromeandCyclingComplex.

IntheMiddleEastHalcrowYollescontinueditsworkontheiconicAbuDhabiGrandMosqueandbeganworkonseveralkeycommissionssuchastheNewDohaInternationalAirportoperationsbuildingandthe30-storeyOberoiHotel,apartmentsandcommercialtowerinDubai.

InNorthAmericaseverallandmarkprojectswerecompleted,includingtheLeslieL.DanPharmacyBuildingattheUniversityofTorontowithitsinnovative‘floatingpod’




lecturehalls,theworldclassFourSeasonsCentreforthePerformingArtswithitsfeatureglassstaircase–celebratedasthelargestunsupportedglassstaircaseeverbuilt–andtheManitobaHydrocommercialtower–oneoftheworld’smostsustainablecommercialbuildings.WorkcontinuesonanumberofsignificantprojectssuchastheMGMProjectCityCenter,BlockC,LasVegas,Nevada,currentlythelargestprivately-fundeddevelopmentintheUS.Workalsocontinuesonthe£2billionredevelopmentschemeatTorontoPearsonInternationalAirport,Canada’sbusiestairport.Thegroup’srelationshipswithworldclassarchitectscontinueswithnewcommissionssuchasTheBow,EnCana’scorporateheadquartersinCalgarydesignedbyFosterandPartners.

In2007HalcrowYolleswillcontinuetomakeprogresstowarditsobjectivetobeatrulyglobalbusinessasitopensofficesinCalgaryandtheCaymanIslands.

Transportation Thetransportationbusinessgrouprecordedaprofit*of£7.77millionin2006,some£1.14millionaheadofbudget.

IntheUKtheteamsecuredanewfour-yearnationalframeworkcontracttodeliverabroadspectrumofservicestotheHighwaysAgency.TheDocklandsLightRailwayLondonCityAirportExtension,whichwasdesignedbyHalcrow,wasnotonlysuccessfullydeliveredin2006,butopenedwellaheadofschedule.

Aswellaswinninganever-expandingclutchofawards,theHalcrow-designedM60Manchesterwideningprojectwasdeliveredsixmonthsearlyand,thankstotheteam’singenuity,savedaround£2millionfortheHighwaysAgency.AnotherkeywinwastheBarnstaplebypassinDevon.Whencompletedin2007,the2.7kmroadwillremove70percentoftrafficfromthepicturesqueEnglishtown,providingmuchneededcongestionrelief.

ThelifeofLiverpool’stravellingpublicwasalsotransformedwiththecompletionoftheaward-winning,£32millionLiverpoolSouthParkwayInterchange.Notonlydoesitinterconnectwithbus,railandairservices,butitprovidesacentralfocusfortheregenerationofthatpartoftheportcity.

LastyearHalcrowwasappointedbytheHighwaysAgencyinasix-yearconsultancysupportrolecoveringthe£5billionprojecttowiden100kmofoneoftheworld’sbusiestroads

–theM25orbitalmotorway–Europe’slargestprivatelyfinancedhighwaysproject.

OutsidetheUKtheRewabridge–thelongestsuchstructureinFiji–wassuccessfullycompletedandopenedtohugepublicacclaimbythePacificisland’spresidentinAugust.Theuseoftheincrementalcastandpush-launchmethodtobuildthebridgewasthefirsttimethetechniquehadbeenusedintheSouthPacific.

HalcrowalsocontinuestohelpChinarealiseitsunprecedentedtransportinfrastructureambitions,suchasthe188kmGuangxihighwayproject,whichincludes81bridges,dueforcompletionin2008.

WiththePPPmarketintheUSstillinitsinfancy,manypotentialclientsarelookingtoharnesstheexperienceofcompanieslikeHalcrowtobenefitfromthisEuropeanfinancingphenomenon.Onthebackofthis,theteamwonaten-yearprocurementengineeringcontractwiththeTexasDepartmentofTransportationforthesecondTrans-TexasCorridorproject.

Water and power In2006waterandpowerbusinessgrouprecordedabove-targetprofit*of£2.06million.

Asglobalenergydemandsincreaseandpoliticiansembracetheneedtoreduceourcarbonfootprint,Halcrowispositioningitselftomeetthesechallengesheadon.Aspartofthis,thecompanyre-brandeditswaterandutilitiesbusinessgroupaswaterandpoweron1January2007.




Halcrow’sfuturestrategyforthepowersideofthebusinessisbasedonhelpingclientsreducecarbonemissions.Thisincludesplayingamajorroleinnucleardecommissioningandpotentialnew-buildnuclearfacilities,aswellasinvestingevenmoreinitsrenewableenergybusinesses.

Alongsideitsaimtoincreaseitsshareofthepowermarketto£30millionby2010,Halcrowplanstomaintainitsmarket-leadingpositioninUKflooddefenceengineering.

Regionally,2006sawheavyinvestmentinUSbusinessdevelopment,whileinChinaandRomaniaitislookingtoexpanditsportfoliooffloodmanagementandfloodmodellingwork.InIndiathebusinessaimstomaintainitsmomentuminthebuoyanthydropowermarket.IntheUKthebusinessgroupisalsomaintainingitspositionasoneoftheEnvironmentAgency’skeysuppliers.KeywinsintheyearincludedbeingappointedasLaingO’Rourke’sdesigneronthe£35millionupgradeofKnostropwastewatertreatmentworksservingLeeds.InRomaniaHalcrow,togetherwithpartners,SwecoandSogreah,isprovidingprojectmanagementtechnicalassistanceservicesforGlinawastewatertreatmentworks–theprimaryfacilityforBucharest,treatingwastewaterfor2.5millionresidents.AndinSharjah,UAE,theteamcompletedthedesignoftheseventhandlatestphaseoftheemirate’ssewagetreatmentworks,increasingcapacityby50percent.

*Profit/lossbeingunderlyingoperatingprofit/losswhichexcludestheimpactofforeignexchangemovements.

Our regions

Americas Halcrow’sacquisitionsofUSmaritimeconsultancyHan-PadronAssociatesandCanadianstructuralengineerYollesformedpartofapolicytotakethecompanyintothenotoriouslydifficultNorthAmericanmarket.Theplanwastobuildastronglocalbasethroughstrategicacquisitionsandusethemasaspringboardfortherestofthebusiness.

Today,Halcrowhas13permanentofficesacrossNorthAmericaandisnowopeninganotherbaseinVirginiatohelpsecurefutureworkwiththeUSNavy.Bytheendof2006,employeenumbershit445,whilenetearnings(turnovernetofdirectexpenses)rocketedby21percentaheadofbudgetto£24.3million.


Consultingmaintainedastronggrowthtrend–12percentupon2005–deliveringa£2.22millionprofit–£0.14millionaheadofbudget

Maritimeturneda2005lossof£1millionintoaprofitof£0.89millionin2006

Propertyrecordedaprofitof£2.53million,some£1millionabovebudget

Transportationpulledaheadofits2006targetandrecordedaprofitof£7.77million,some£1.14millionaheadofbudget

Waterandpowerrecordedabove-targetprofitof£2.06million

10 | Halcrow Holdings Limited | Annualreportandaccounts2006

Themaritimebusinessisnowthriving.Keyprojectwinsin2006includedconsultancyworkfortheDamesPointMarineTerminalinFlorida,thedevelopmentofadrydockattheNorfolkNavalBaseinVirginiaandtheGoldenPassliquidnaturalgasterminalinTexas.

TheNewYorkofficeisthemaincentreformaritimeworkintheregion,co-ordinatingtechnicalcontributionstoprojectsacrosstheworld.TheHoustonoffice–establishedin2006–ismakingsolidinroadsintotheTexanoilandgassector.

HalcrowYollescontinuedtomakeastrongcontributiontothecompany’sprofilelastyearthroughitsinvolvementinanumberoficonicstructuresandawardwinningprojects.Oneexample,thenewNationalBalletSchoolinToronto,forwhichtheteamprovidedfullstructuralengineeringservices,hasscoopedaclutchoftop-levelarchitecturalanddesignawards.The£44millionProjectGrandJetéhasnowwonfiveawards,includingtheprestigious2007InstituteHonorAwardforArchitecturefromtheAmericanInstituteofArchitecture.

InLatinAmericaweincreasedourvolumeofworkby20percent,inlinewiththerobustgrowthofmostoftheeconomiesintheregion.WeconsolidatedourpresenceinChilebyexpandingourclientbasetomanyoftheprivatewatercompanies.AndinMexico,PanamaandArgentinawemadeconsiderableprogressintheincreasinglydemandingenergymarket,winningcommissionsforstudiesfornewrefineries,liquefiednaturalgasprojectsandhydroelectricpowerschemes.Newmaritime-relatedworkwasalsopickedupinmanycountriesintheregion.

NotablecommissionssecuredincludetheIntegratedBaselineStudyofthePilcomayoRiverbasin,aprojectwhichconfirmsourleadingworldwidepositioninlargecatchmentstudies.Thestudylooksatoneofthemostcomplexcatchmentareasonthecontinentandinvolvesinstitutionalfundingarrangementsfromthreecountries.WearealsoworkingwithdifferentinternationalpartnersonfiveprojectsforWaterandSanitationfortheUrbanPoor(www.wsup.com).

Asia and Australia Ourbusinessinthisregionperformedwellin2006,hittingitstarget,withHongKonginparticularexceedingexpectationsinadifficultmarket.

TheAustralianmarketenjoyedsignificantgrowthinallareasthroughouttheyearandboosteditsworkforceby38percentto80employeestomeetitsorderbookcommitments.Establishedsectors,suchasrailandtunnels,continuedtoflourish,whilethenewerbusinessesofwaterandtransportationplanningstrengthenedtheirmarketpositions.

Australia’sboomingeconomybringsopportunitiesaswellaschallengesforthelocalteam.Amongtheplethoraofprospectsfor2007isaPPProllingstockprocurementproject,theNorthWestRailLinkinSydneyandBrisbane’sairportlinktunnel.

TheChinaoperationsmadegoodprogressin2006.Witha60-strongworkforce,itmovedtonewheadofficesinShanghai’scentralbusinessdistrict.Importantly,wealsoestablishedawholly-ownedforeignenterpriseinthecountry.TheShenzhenofficecontinuestosupportHongKongasacosteffectivedesigncentre,whiletheBeijingofficemaintainsitsfunctionasashopwindowandprojectofficeinthecapital.



Halcrow Holdings Limited | Annualreportandaccounts2006 | 11

Keyprojectsin2006includedtheEasternOceanCrossingandtheYangshanDeepwaterHarbour,aswellasanumberofhighwayandurbanplanningprojectsforinternationalfinancialinstitutions.Tohelpwithfuturedevelopment,theregionalsoidentifiednewstrategiclocalpartners–essentialforthedeliveryofthewiderChinastrategy–andwilltargetothernewjointventurepartnersin2007.

Intheothereconomicpowerhouseoftheregion,India,weareseeingconsiderableactivity.Thecountry’seconomygrewby8.5percentin2005/2006andisexpectedtobecomethethirdlargesteconomyintheworldby2050.Wehavebeencarefullypositioningourselvestotakeadvantageofthesemarketdynamics.Halcrowemployed25peopletherethreeyearsago,butaneardoublinginsizeeveryyearsincethen,meanswenowemploy170people.Weplantodoublethisnumberagaininlessthanthreeyears.

Todatewehaveconcentratedontransportplanninganddesigningroads,bridges,portsandhydropowersystems.Wesuccessfullyaddedproperty-relatedworktothisafterwinningtwocontractswithoneofthelargesthotelchains,TajHotels.IntransportationourprojectsincludetheKunleMunesarPalwal,a130kmsix-laneringroadaroundthewesternsideofDelhi.AndinmaritimethecompanyisdrawingupafeasibilitystudyforaportinPondicherryonthesoutheastcoastofIndia.

Europe (outside UK) Inkeepingwithotherregions,Europehasexperiencedstronggrowth.OurRomanianbusinessisdevelopingtoplanandachievedaturnoverof£3million.Withthecountry’saccessiontotheEuropeanUnionon1January2007,theofficeissetforanevenmoreimpressiveperformanceinthefuture.

Theenvironmentalteammadeanoutstandingcontributionandisnowrecognisedastheconsultantofchoicefordealingwithpollutionwithinthecountry’soilindustry.Petrom,thelargestoilandgasproviderinthecountry,commissionedHalcrowtoprovideequipmentassettaggingservices,valuedat£2million,aswellasseveralenvironmentalimpactassessmentlandfillandbio-remediationprojects.

TheyeardrewtoaclosewithtwonotablesuccessesinLatviaandPoland.InLatviatheteamwonaroaddesigncommissioninJurmala,thefirstdesignprojectforits



WecontinuedtomakeprogresstowardsourgoalofhavingmorethanhalfourbusinessoutsidetheUK–thefigureswereup4percentin2006,takingusto44percent

InNorthAmericaweachievednetearningsof£24.31million,21percentaheadofbudget

InLatinAmericawegrewby20percent,inlinewithmostoftheeconomiesintheregion

TheMiddleEastsawturnoverincreasebynearly34percentto£59.79million

1� | Halcrow Holdings Limited | Annualreportandaccounts2006

expandinghighwaysteam.AndinPolandHalcrowsecuredanimportanturbanwatercommissioninLodz.

InIrelandtheteamexceededitsprofittargetby40percentthankstoarobustperformanceinthehighwaysectorandincreasingdiversificationintoothermarkets,includingfloodstudiesandmarineworks.

HalcrowBarry,jointlyownedbyHalcrowandJohnBBarryandPartnersofDublin,isalreadyoneofIreland’sleadinghighwaydesignconsultantsandisnowactivelybiddingforlargerailwayinfrastructureprojects.

With80percentofthecompany’slocalworkcarriedoutundertheHalcrowBarryumbrella,theofficehaswonseveralnewcommissionsincludingmajordesignandbuildprojectsalongthebusyN9andN4roads.

In2006theteamcompletedtheN7Naasroad-wideningscheme,an£85milliondesignandbuildprojecttowidenanexistingdualcarriagewayfromtwotothreelanesovera14kmstretch.TheprojectdovetailedseamlesslywithHalcrow’sroleinsuccessfullystagingSeptember’sRyderCupinIreland.

OtherdesignandbuildprojectslastyearincludedtheN2FinglastoAshbourneRoadscheme,openedfourmonthsaheadofscheduleandwithinbudget.

Middle East FortheMiddleEastregion2006provedtobeanothersolidyearofgrowthwithallkeyfinancialtargetsbeingmet.

However,theyearwasnotwithoutitschallenges,oneoftheprincipalonesbeingtheintensecompetitionforresourcesinthefaceofanacceleratingrateofdevelopment.Despitethis,employeenumbersroseto1,283peoplebytheendof2006.

AlongsidebuoyantgrowthinSharjah’shighwayandurbanwatersectors,thewaterandpowerbusinessgrouprecordedsignificantwinsinSaudiArabia.ThetransportationbusinessgrouphasalsotakentheleadonanumberofmajorprimaryinfrastructureprojectsinRasAlKhaima.

Themaritimebusinessgroupremainedstoicallybusy,particularlyinitsinfrastructuredevelopmentworkfortheRasLaffanIndustrialCity.OthermajorwinsincludeLusailin

Qatar,YasIslandinAbuDhabiandcommissionsforEmaarinPakistanandSaudiArabia.

Keyprojectsin2006includetheworld’slargestman-madeisland–PalmJumeirahinDubai–thenewAlGarhoudbridge,whichwillhelpalleviatetrafficcongestionbetweenSharjahandDubai,andPakistan’stallestbuilding–theimposing190m-highITtowerinKarachi.

UKTheUKcontinuestobethelargestmarket,althoughitsshareofthegroup’srevenuehasdeclinedfrom60percentin2005to56percentin2006,inlinewithourstrategicplan.

Anumberofprestigiousprojectshavewonaplethoraofindustryplaudits,raisingthecompany’sprofilestillfurtherandcementingitsreputationasasignificantforceacrossallourmarkets.

InthenorthofthecountryHalcrow’stenofficeshaveseenemployeenumbersgrowto1,100.TheyearbeganwithInvernessstaffmovingtonew,largerpremisesanditendedwiththeGlasgowofficerelocatingfromTheOctagontotheflagshipCityParkpremises.2007willalsoseeamuch-neededexpansionoftheHandforthoffice.

Wesawanumberofflagshipprojectscometofruition.AdesignandbuildprojectforcontractorNuttallproducedtheClydeArcbridgeinGlasgow,whereHalcrowYollesalso



Halcrow Holdings Limited | Annualreportandaccounts2006 | 1�

celebratedcompletingtherefurbishmentofKelvingroveMuseumandArtGallery.

GoodwinsintheyearincludedKnostropwastewatertreatmentworksforLaingO’RourkeinLeeds,EdinburghAirportRailLink,EnglishPartnershipframeworks,ScottishWaterSolutionsframework,andatwo-yearextensiontotheA-onemaintenancecontractinnorth-eastEnglandfortheHighwaysAgency.

ThePerformanceAuditGroupteam,basedinEdinburgh,successfullycompletedthedeliveryof£0.5billionworthofcontractsforTransportScotland.Thetwo-yearprojectinvolvedprocurementoffourterm-maintenancecontractscoveringthe4,400kmScottishtrunkroadnetwork.

ThesuccessofA-one–Halcrow’sjointarrangementwithColastooperate,maintainandimprovemotorwaysandtrunkroadsinthenortheastofEnglandfortheHighwaysAgency–wasrecognisedin2006whenitwasawardedathree-yearcontractextension.WiththeadditionofCostain,theteamhasalsobeenshort-listedtomanagetheroadnetworkinthenorth-westofEngland.

Drivenbybuoyantmarkets,Halcrow’soperationinthesouthofthecountrycontinuedtoseesustainedgrowthinemployeenumbersandworkwonacrossmostsectors.Theregionaccountsfor66percentofHalcrow’sUKturnover.

In2006Halcrowmobilisedamulti-disciplinarydesignteamfortheCrossrailproject–oneofLondon’skeyinfrastructureprojects–whichwillboostLondon’seconomicgrowth,helpingsecureitsfutureasaworldcity.TheworkstartedtocometofruitionasourinvolvementontheChannelTunnelRailLink(CTRL)approachedcompletion.

Duetostartoperationsin2007,CTRLhasbeenoneofEurope’smostoutstandinginfrastructureprojects.Overthepastdecade,HalcrowhasplayedamajorroleindeliveringthissuccessaspartoftheRailLinkEngineeringconsortium.

TheregionalsowelcomedcolleaguesfromtheSnodlandofficewhenHalcrowacquiredMidKentWater’sshareoftheHalcrowWaterServicesjointventure.TheirskillsformakeypartofHalcrow’sstrategicregionalfocusintheThamesGatewayandsoutheastofEngland.

Into 2007

Halcrowbegan2007withimpressiveresults.Inthefirstquarterofoperationitdeliveredearningsandprofitsinexcessofbudgetandsignificantlyaheadofthesameperiodin2006.

Thecompanywilllooktobuildon–andexceed–itsbudgeted2007profit.Notonlyaremostofitsmarketsrobust,ithasastrongorderbookanditisonthevergeofclinchingseveralimportantcontracts.

Itsbusinessimprovementprogrammesaresettodeliverevenbetterresultsin2007astargetsareestablishedtoimproveefficiencyandeffectiveness.

Earlybusinesswinsin2007looksettoensurethatthiswillbeanotherexcitingyearasthecompanybuildsonrecentprogress.Theboardishopefulofdeliveringanotherrecord-breakingyear.

Peter GammieChiefexecutive



Halcrowbegan2007withimpressiveresults...mostofitsmarketsarerobust,ithasastrongorderbookanditisonthevergeofclinchingseveralimportantcontracts.


Directors’reportThedirectorspresenttheirreportandtheauditedfinancialstatementsfortheyearended31December2006.

1 Principal activity

HalcrowHoldingsLimitedistheholdingcompanyfortheHalcrowgroupofcompanies.Theprincipalactivityofthegroupistheprovisionofservicesasinternationalconsultingengineers.

2 Group results and transfer to reserves

Thegroupmadeaprofitonordinaryactivitiesaftertaxationof£7,922,000(2005(restated):£6,398,000).

3 Dividend

Thedirectorsrecommendafinaldividendpaymentof10.0p(2005:11.3p)perordinarysharepayabletothosemembersontheregisteratthecloseofbusinesson28June2007.This,togetherwiththeinterimdividendpaidinJanuary2007of12.25p(2005:11.0p)perordinaryshare,givesatotaldividendfortheyearof22.25pcomparedwith22.3pfortheyearended31December2005.

Approvalofthepaymentofthedividendwillbeputtotheshareholdersattheannualgeneralmeetingofthecompanytobeheldon28June2007.TheHalcrowTrusthaswaiveditsentitlementtoboththisdividendandtothedividendonitsholdingofpreferencesharesin2006and2005.

UnderFRS21“Eventsafterthebalancesheetdate”thefinancialstatementsdonotreflectthisdividendpayable,whichwillbeaccountedforinshareholders’equityasanappropriationofretainedearningsintheyearended31December2007.

4 Business review, future developments and principal risks and uncertainties

ThereviewofthebusinessisincludedintheChairman’sStatementonpagesfourandfiveandintheChiefExecutive’sReportonpagessixto13.

Theprincipalrisksanduncertaintiesfacingthebusinessincludeforeignexchangeriskandriskresultingfromthediversegeographicalspreadofthebusiness.

5 Share capital

Theordinarysharecapitalofthecompanyat31December2006washeldbeneficiallyasfollows:

TheHalcrowTrust: 14,321,688ordinaryshares(75.9%) Directorsandstaff: 4,550,325ordinaryshares(24.1%)

Theordinarysharecapitalat30April2007washeldbeneficiallyasfollows:

TheHalcrowTrust: 14,408,087ordinaryshares(75.5%)Directorsandstaff: 4,683,169ordinaryshares(24.5%)

The10,000preferencesharesof£1eachwereheldbeneficiallybyTheHalcrowTrustateachof31December2005,31December2006and30April2007.

Directors’ report | fortheyearended31December2006


6 Directors

Thefollowingservedontheboardofdirectorsduringtheperiodunderreviewandtothecurrentdate(exceptasnotedbelow):

AKAllum,ChairmanPGGammie,ChiefExecutive LGBuck CAFlemingNHoltDJKerrProfessorRFlanagan,non-executivedirector(retired31December2006) JATheakston,non-executivedirector(appointed1August2006)ASaffer(appointed15January2007)AFPryor(appointed19March2007)

7 Directors’ interests in shares of the company

Theinterestsofpersonswhoweredirectorsat31December2006inthesharesofthecompanywereasfollows:

Ordinary shares of £1

30April2007

Number

31 December 2006

Number

31December2005

Number

A K Allum 60,224 60,224 51,466

P G Gammie 97,632 97,047 84,704

L G Buck 37,608 37,023 27,343

C A Fleming 79,133 78,548 69,511

N Holt 61,408 58,061 51,870

D J Kerr 27,871 27,342 21,660

R Flanagan - 4,564 4,564

J A Theakston - - -



7 Directors’ interests in shares of the company (continued)

Share options Ordinary shares of £1

30April2007

Number

31 December 2006

Number

31December2005

Number

A K Allum 15,873 15,873 20,006

P G Gammie 18,220 6,502 23,764

L G Buck 23,035 23,035 23,712

C A Fleming 942 942 3,496

N Holt 16,434 4,716 8,207

D J Kerr 15,844 4,655 19,999

Shareoptionsmaybeexercisedasfollows:

Number Optionprice Exercisable

A K Allum 15,873 189p 10Sept2005to10Sept2012

P G Gammie 6,502 195p 1Dec2008to31May2009

L G Buck

5,523

15,873

1,639

189p

189p

220p

1Oct2007to31Mar2008

10Sept2005to10Sept2012

1Dec2010to31May2011

C A Fleming 942 205p 1Dec2007to31May2008

N Holt

4,063

653

189p

195p

1Oct2007to31Mar2008

1Dec2010to31May2011

D J Kerr

4,126

529

189p

189p

1Oct2007to31Mar2008

10Sept2005to10Sept2012

LGBuckandCAFlemingastrusteesandPGGammiebyvirtueofhisdirectorshipofHalcrowStaffandServices,whichistrusteetotheTheHalcrowTrust,havenon-beneficialinterestsinthesharecapitalofthecompanyasfollows:

30April2007

31 December 2006

31December2005

Ordinarysharesof£1 14,408,087 14,321,688 15,291,481

Preferencesharesof£1 10,000 10,000 10,000

EachofthedirectorsalsohasaninterestasapotentialbeneficiaryofTheHalcrowTrust.TheTrust’sobjectivesincludetheprovisionofbenefitstodirectorsandstaffofthecompanyanditssubsidiaryundertakings.



8 Close company status

ThecompanyisaclosecompanywithintheprovisionsoftheIncomeandCorporationTaxesAct1988.

9 Annual general meeting

Thenoticeconveningtheannualgeneralmeeting,tobeheldatVineyardHouse,44BrookGreen,London,W67BYon28June2007,iscontainedinacircularsenttotheshareholderswiththisreport.

10 Charitable contributions

Contributionsmadebythegroupduringtheyearforcharitablepurposeswere£66,000(2005:£43,000).

11 Employee involvement

Thepolicyofthegroupisoneofcontinuingtodevelopeffectivemeansofconsultationandcommunicationwithinandbetweenitsoperatingconstituents.

Consultationisachievedthroughmulti-levelledcommunicationchannelsincludingastaffcouncil,whichiselectedbyemployeesandmeetsonaregularbasis.Communicationisachievedthroughtheavailabilitytoemployeesofregularfinancialinformationandin-housemagazinesandthedistributionofinformationrelatingtotheresources,technicaldevelopmentsandachievementsofthegroup.

Thegroupbelievesthatemployeeshareownershipisanimportantfactorinemployeeinvolvementanditoperatesaninternalmarketthroughwhichemployeesmaybuyandsellshares.Italsooperatesasavings-relatedshareoptionschemeandashareincentiveplan(underwhichemployeesmaysaveandacquiresharesinthecompany),aswellasadividendreinvestmentplan.

12 Disabled persons

Thegroup’spolicyistogivefullandfairconsiderationtoapplicationsfromdisabledpersonsforpositionsinwhichtheycaneffectivelyperformthetasksrequired.Thesameopportunitiesfortraining,careeradvancementandpromotionaregiventodisabledpersonsemployedbythegroupastoallotherstaff,wherethisispracticable.Theemploymentofthosewhobecomedisabledwhilstintheemploymentofthegroupiscontinuedwhereverpossible.

13 Employee equity incentive scheme

ThegroupoperatesanemployeeequityincentiveschemeunderwhichdirectorsandcertainsenioremployeesareencouragedtoconvertanybonusintosharesofHalcrowHoldingsLimited.Underthescheme,therecipientofabonusmayelecttosubscribeforsharesatthepriceofferedbytheinternalmarketwithpartorallofthenetbonusaftertax.Sharespurchasedundertheschemeareheldintrustforathree-yearperiodand,whentheyarereleasedattheendoftheretentionperiod,theyarematchedbyanequalnumberofsharesprovidedbythegroup.

Noshareswereissuedundertheemployeeequityincentiveschemeintheyearended31December2006(2005:Nil).



14 Disclosure of information to auditors

Eachofthepersonswhoisadirectoratthedateofapprovalofthisreportconfirmsthat:

• sofarasthedirectorisaware,thereisnorelevantauditinformationofwhichthecompany’sauditorsare unaware;and• thedirectorhastakenallthestepsthatheoughttohavetakenasadirectorinordertomakehimselfawareofany relevantauditinformationandtoestablishthatthecompany’sauditorsareawareofthatinformation.

Thisconfirmationisgivenandshouldbeinterpretedinaccordancewiththeprovisionsofs234ZAoftheCompaniesAct1985.

15 Auditors

Deloitte&ToucheLLPhaveexpressedtheirwillingnesstocontinueinofficeandaresolutiontore-appointthemwillbeproposedattheforthcomingannualgeneralmeeting.

Registeredoffice: ByorderoftheboardVineyardHouse 44BrookGreen K MairLondonW67BY Secretary 23May2007

Registerednumber: 1674044



Statementofdirectors’responsibilities ThedirectorsareresponsibleforpreparingtheAnnualReportincludingthefinancialstatements.Thedirectors

havechosentopreparethefinancialstatementsforthecompanyandthegroupinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPractice(UKGAAP).

Companylawrequiresthedirectorstopreparesuchfinancialstatementsforeachfinancialyearwhichgiveatrueandfairview,inaccordancewithUKGAAP,ofthestateofaffairsofthecompanyandofthegroupandoftheprofitorlossofthegroupforthatperiodandcomplywithUKGAAPandtheCompaniesAct1985.Inpreparingthosefinancialstatements,thedirectorsarerequiredto:

• selectsuitableaccountingpoliciesandthenapplythemconsistently;• makejudgementsandestimatesthatarereasonableandprudent;• statewhetherapplicableaccountingstandardshavebeenfollowed;and • preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethatthe companywillcontinueinbusiness.

ThedirectorsareresponsibleforkeepingproperaccountingrecordswhichdisclosewithreasonableaccuracyatanytimethefinancialpositionofthecompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct1985.Theyarealsoresponsibleforsafeguardingtheassetsofthecompanyandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

Statement of directors’ responsibilities | fortheyearended31December2006

�0 | Halcrow Holdings Limited | Annualreportandaccounts2006

Wehaveauditedthegroupandparentcompanyfinancialstatements(the‘’financialstatements’’)ofHalcrowHoldingsLimitedfortheyearended31December2006whichcomprisetheconsolidatedprofitandlossaccount,theconsolidatedandcompanybalancesheets,theconsolidatedcashflowstatement,theconsolidatedstatementoftotalrecognisedgainsandlossesandtherelatednotes1to36.Thesefinancialstatementshavebeenpreparedundertheaccountingpoliciessetouttherein.Thisreportismadesolelytothecompany’smembers,asabody,inaccordancewithsection235oftheCompaniesAct1985.Ourauditworkhasbeenundertakensothatwemightstatetothecompany’smembersthosematterswearerequiredtostatetotheminanauditors’reportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthanthecompanyandthecompany’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

Respective responsibilities of directors and auditors

Thedirectors’responsibilitiesforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandUnitedKingdomAccountingStandards(UnitedKingdomGenerallyAcceptedAccountingPractice)aresetoutintheStatementofDirectors’Responsibilities.OurresponsibilityistoauditthefinancialstatementsinaccordancewithrelevantlegalandregulatoryrequirementsandInternationalStandardsonAuditing(UKandIreland).WereporttoyououropinionastowhetherthefinancialstatementsgiveatrueandfairviewandareproperlypreparedinaccordancewiththeCompaniesAct1985.WealsoreporttoyouwhetherinouropiniontheinformationgivenintheDirectors’Reportisconsistentwiththefinancialstatements.TheinformationgivenintheDirectors’ReportincludesthatspecificinformationpresentedintheChairman’sstatementandChiefExecutive’sstatementthatiscrossreferredfromtheBusinessReviewsectionoftheDirectors’Report.Inadditionwereporttoyouif,inouropinion,thecompanyhasnotkeptproperaccountingrecords,ifwehavenotreceivedalltheinformationandexplanationswerequireforouraudit,orifinformationspecifiedbylawregardingdirectors’remunerationandothertransactionsisnotdisclosed.WereadtheotherinformationcontainedintheAnnualReportasdescribedinthecontentssection,andconsider

whetheritisconsistentwiththeauditedfinancialstatements.Weconsidertheimplicationsforourreportifwebecomeawareofanyapparentmisstatementsormaterialinconsistencieswiththefinancialstatements.OurresponsibilitiesdonotextendtoanyfurtherinformationoutsidetheAnnualReport.

Basis of audit opinion

WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UKandIreland)issuedbytheAuditingPracticesBoard.Anauditincludesexamination,onatestbasis,ofevidencerelevanttotheamountsanddisclosuresinthefinancialstatements.Italsoincludesanassessmentofthesignificantestimatesandjudgmentsmadebythedirectorsinthepreparationofthefinancialstatements,andofwhethertheaccountingpoliciesareappropriatetothegroup’sandcompany’scircumstances,consistentlyappliedandadequatelydisclosed.Weplannedandperformedourauditsoastoobtainalltheinformationandexplanationswhichweconsiderednecessaryinordertoprovideuswithsufficientevidencetogivereasonableassurancethatthefinancialstatementsarefreefrommaterialmisstatement,whethercausedbyfraudorotherirregularityorerror.Informingouropinionwealsoevaluatedtheoveralladequacyofthepresentationofinformationinthefinancialstatements.

Opinion

Inouropinion: • thefinancialstatementsgiveatrueandfairview,in

accordancewithUnitedKingdomGenerallyAcceptedAccountingPractice,ofthestateofthegroup’sandtheparentcompany’saffairsasat31December2006andofthegroup’sprofitfortheyearthenended;

• thefinancialstatementshavebeenproperlypreparedinaccordancewiththeCompaniesAct1985;and

• theinformationgivenintheDirectors’Reportisconsistentwiththefinancialstatements.

Deloitte & Touche LLPCharteredaccountantsandregisteredauditors

Reading23May2007

Independent auditors’ report to the members of Halcrow Holdings Ltd | fortheyearended31December2006

Independentauditors’reporttothemembersofHalcrowHoldingsLimited

Halcrow Holdings Limited | Annualreportandaccounts2006 | �1

Consolidatedprofitandlossaccount

Notes2006 £000

Restated*2005£000

Turnover:groupandshareofjointventuresLessshareofjointventures’turnover

331,416 (1,040)

282,450(1,902)

Group turnover Continuing operations Acquisitions Cost of sales

3

17

330,376 329,175

1,201 (201,497)

280,548280,548

-(175,083)

GrossprofitAdministrativeexpenses

128,879 (117,562)

105,465(92,713)

Operatingprofitbeforeexchange(loss)/gainExchange(loss)/gain

15,694 (4,377)

9,9502,802

Operating profit/(loss) Continuing operations Acquisitions

4

17

11,317 11,450

(133)

12,75212,752

-

Shareofprofit/(loss)ofjointventuresInterestreceivableandsimilarincome Interestpayableandsimilarcharges

56

6 2,071

(1,407)

(8)170

(2,503)

Profit on ordinary activities before taxation Tax on profit on ordinary activities

9

11,987 (4,065)

10,411(4,013)

Profitfortheyearaftertaxation 7,922 6,398

*RestatedfollowingapplicationofFRS20Share-basedpayment(seenote11).

Consolidated profit and loss account | fortheyearended31December2006

�� | Halcrow Holdings Limited | Annualreportandaccounts2006

ConsolidatedbalancesheetNotes

2006 £000

2005£000

Fixed assets Intangibleassets Goodwill Negativegoodwill Tangibleassets Investmentsinjointventures Shareofgrossassets Shareofgrossliabilities Investmentsinassociatedundertakings Tradeinvestments

12

13

141415

16,550 (7)

16,543 20,461

595

(109) 486 241 166

37,897

19,121-

19,12119,648

1,618(672)

946237166

40,118

Current assets Debtors Cashatbankandinhand

18

132,651 2,691

135,342

109,264

5,870

115,134

Creditors – amounts falling due within one year (includingconvertibledebentures)

19 (109,635) (89,964)

Net current assets 25,707 25,170

Total assets less current liabilities 63,604 65,288

Creditors – amounts falling due after more than one year

20 (11,871) (16,993)

Provisions for liabilities and charges 21 (2,458) (2,143)

Net assets(excludingpensionliability) 49,275 46,152

Net pension liability 33 (65,171) (73,970)

Net liabilities (includingpensionliability) (15,896) (27,818)

Capital and reserves CalledupsharecapitalSharepremiumaccount Profitandlossaccount

222325

18,882

1,788 (36,566)

18,882

1,788(48,488)

Total shareholders’ deficit 26 (15,896) (27,818)

Thefinancialstatementswereapprovedbytheboardofdirectorson23May2007andsignedonitsbehalfby:

P G Gammie A SafferDirector Director

Consolidated balance sheet | asat31December2006

Halcrow Holdings Limited | Annualreportandaccounts2006 | ��

CompanybalancesheetNotes

2006 £000

2005£000

Fixed assets Investmentsinsubsidiaryundertakings

16

10,208

10,208

Current assets Debtors

18

18,899

19,761

Creditors – amounts falling due within one year (includingconvertibledebentures) 19 (63) (78)

Net current assets 18,836 19,683

Net assets 29,044 29,891

Capital and reserves Called up share capital Sharepremiumaccount Profitandlossaccount

222325

18,882 1,788 8,374

18,8821,7889,221

Total shareholders’ funds 26 29,044 29,891

Thefinancialstatementswereapprovedbytheboardofdirectorson23May2007andsignedonitsbehalfby:

P G Gammie A SafferDirector Director

Company balance sheet | asat31December2006


ConsolidatedcashflowstatementNotes

2006 £000

2005£000

Net cash inflow from operating activities 27 6,856 7,666

Returns on investment and servicing of finance Interestreceived Interestpaid Interestelementoffinanceleasepayments

Netcashoutflowfromreturnsoninvestmentandservicingoffinance

113

(1,395) (12)

(1,294)

170(1,449)

(2)

(1,281)

Taxation UnitedKingdomcorporationtaxpaid Overseastaxpaid Totaltaxation

(2,091) (1,236)

(3,327)

(2,069)

-

(2,069)

Capital expenditure and financial investment Purchaseoftangiblefixedassets Disposaloftangiblefixedassets Purchaseoffixedassetinvestments

Netcashoutflowforcapitalexpenditureandfinancialinvestment

(5,399)

71 (23)

(5,351)

(6,956)

146(79)

(6,889)

Acquisitions and disposals Subsidiaryundertakingacquired-TransysInternationalConsultants Cashconsiderationincludingexpenses Cashacquired Subsidiaryundertakingacquired-HalcrowWaterServicesLimited Cashconsiderationincludingexpenses Overdraftacquired Subsidiaryundertakingacquired-Yolles Cashconsiderationincludingexpenses Cashacquired Subsidiaryundertakingacquired-PyramidDevelopmentCorporation Cashconsiderationincludingexpenses Cashacquired Subsidiaryundertakingacquired-HanPadronAssociatesLLC Cashconsiderationincludingexpenses CashacquiredDeferredconsiderationpaid-YollesandHanPadron

Netcashoutflowforacquisitionsanddisposals

(331) 7

(100) (8)

- - - - - -

(4,085)

(4,517)

----

(65)-

(81)17

(5,382)

199(1,914)

(7,226)

Dividends paid (832) (618)

Cash outflow before financing (8,465) (10,417)

Financing Newfinanceleases CapitalelementoffinanceleasepaymentsExpensesofloantofinanceacquisitionofHanPadronAssociatesLLCIssueofordinarysharecapital Repaymentofdebentures

Netcash(outflow)/inflowfromfinancing

- (5)

- -

(14)

(19)

22(18)(25)294(14)

259

Decrease in cash in the year 28,29 (8,484) (10,158)

Consolidated cash flow statement | fortheyearended31December2006


Consolidatedstatementoftotalrecognisedgainsandlosses

Notes2006 £000

2005£000

Profitaftertaxation 7,922 6,398

Actuarialgain/(loss)relatingtothepensionscheme 33 6,806 (28,605)

Movementonrelateddeferredtax (2,042) 8,581

Totalrecognisedgainsandlossesrelatingtotheyear 12,686 (13,626)

Prioryearadjustments 11 -

Totalgainsandlossesrecognisedsincelastannualreportandfinancialstatements

12,686

Consolidated statement of total recognised gains and losses | fortheyearended31December2006


Notestothefinancialstatements1 Principal accounting policies

(a) Accounting convention ThefinancialstatementsarepreparedinaccordancewithapplicableUnitedKingdomaccountingstandards.Theparticularaccountingpoliciesadoptedaredescribedbelow.ExceptfortheimplementationofFRS20“Share-basedpayment”(seenote11),theyhaveallbeenappliedconsistentlythroughoutthecurrentandprecedingyear.

(b) Consolidation Theconsolidatedfinancialstatementscomprisethefinancialstatementsofthecompanyandallitssubsidiaryundertakings,jointventuresandassociatedundertakings.Anysubsidiaryundertakingsandjointventuresandassociatessoldoracquiredduringtheyearareincludedupto,orfrom,thedateofsaleoracquisition.

Intra-groupsalesandprofitsareeliminatedfullyonconsolidation.Onacquisitionofabusiness,alloftheassetsandliabilitiesthatexistatthedateofacquisitionarerecordedattheirprovisionalfairvalues,reflectingtheirconditionatthatdate.Allchangestothoseassetsandliabilities,andtheresultinggainsandlosses,thatariseafterthegrouphasgainedcontrolofthebusinessarechargedtothepost-acquisitionprofitandlossaccount.

ThegrouphastakenadvantageoftheexemptionunderFRS8“RelatedPartyDisclosures”nottodisclosetransactionsandbalancesbetweengroupcompanieswhichareeliminatedonconsolidation.

Jointventuresareentitiesinwhichthegroupholdslong-terminterestsandwhicharejointlycontrolledbythegroupandoneormoreotherventuresunderacontractualarrangement.Theresultsofjointventuresareaccountedforusingthegrossequitymethodofaccounting.

Associatedundertakingsareentitiesinwhichthegrouphasaparticipatinginterestandoverwhoseoperatingandfinancialpoliciesitexercisesasignificantinfluence.Theresultsofassociatedundertakingsareaccountedforusingthenetequitymethod.

(c) Turnover Turnoverrepresentsamountsearnedforprofessionalservicesanditemsprocuredforclients,adjusted,wherenecessary,forthestageofcompletiononindividualcontracts.Itexcludesvalueaddedandsimilartaxes.

(d) Recognition of profits Profitoncontractsforthesupplyofprofessionalservicesatpre-determinedratesistakenasandwhentheworkiscarriedout,irrespectiveofthedurationofthecontract.

Profitistakenonfixed-pricecontractswhilethecontractisinprogress,havingregardtotheproportionofthetotalcontractwhichhasbeencompletedatthebalancesheetdate.Provisionismadeforallforeseeablefuturelosses.

(e) Amounts recoverable on contracts Amountsrecoverableoncontractsrepresentturnoverandsupplyofserviceswhichhasnotyetbeeninvoicedtoclients.Suchamountsareseparatelydisclosedwithindebtors.

Thevaluationofamountsrecoverableonfixed-pricecontractsisadjustedtotakeupprofittodateorforeseeablelossesinaccordancewiththeaccountingpolicyforrecognitionofprofits. Costcomprises: • amountsrecoverablevaluedatthecostofsalariesandassociatedpayrollexpensesofemployees engagedonprojects.

Notes to the financial statements | fortheyearended31December2006


1 Principal accounting policies (continued)

(e) Amounts recoverable on contracts (continued)• unbilledexpensesincurredandequipmentpurchasedforclientsinconnectionwithspecificcontracts.

Whereamountsinvoicedtoclientsexceedthebookvalueofworkdone,theexcessisincludedincreditorsaspaymentsonaccount.

(f) Goodwill Goodwillrepresentsthedifferencebetweenthecostofacquisitionandthefairvalueofidentifiablenetassetsacquired.GoodwillarisingonacquisitionsiscapitalisedinaccordancewithFRS10“GoodwillandIntangibleAssets”.Wheretheseassetsareregardedashavinglimitedusefullives,theyareamortisedonastraightlinebasisovertheselives,whichrangefromfiveto20years.Nogoodwillbalancehaspreviouslybeeneliminatedagainstreservesintheyearofacquisition.

Goodwillwhichisheldinforeigncurrenciesisretranslatedtotheclosingexchangerate.

Negativegoodwillissimilarlyincludedinthebalancesheetandiscreditedtotheprofitandlossaccountintheperiodsinwhichtheacquirednon-monetaryassetsarerecoveredthroughdepreciationorsale.Negativegoodwillinexcessofthefairvaluesofthenon-monetaryassetsacquirediscreditedtotheprofitandlossaccountintheperiodsexpectedtobenefit.

Impairmentprovisionsaredeterminedbycomparingthecarryingvalueoftheassetwithitsrecoverableamount.

(g) Fixed assets Fixedassetsarestatedatcostlessdepreciationandimpairmentprovisions.Impairmentprovisionsaredeterminedbycomparingthecarryingvalueoftheassetwithitsrecoverableamount.Therecoverableamountisthehigheroftheamountthatcanbeobtainedfromsellingtheassetorthevalueofexpecteddiscountedcashflowsarisingfromowningtheasset.

(h) Depreciation of tangible fixed assets Depreciationoftangiblefixedassetsisbyequalannualinstalmentscalculatedtowriteoffthecostlessanyresidualvalueofeachassetoveritsanticipatedusefullife.

Theannualrateofdepreciationappliedtoeachclassoftangiblefixedassetisasfollows: Shortleaseholdproperty PeriodofleaseFreeholdland Nil Freeholdproperty 1% Motorvehicles 25%Furnitureandequipment: Computers 33% Others 20%

(i) Finance costs Interestiswrittenofftotheprofitandlossaccountasincurredbyallsubsidiariesinthegroup.

(j) Investments Fixedassetinvestmentsarestatedatcostlessprovisionforimpairment.Impairmentprovisionsaredeterminedbycomparingthecarryingvalueoftheinvestmentwithitsrecoverableamount.Therecoverableamountisthehigheroftheamountthatcanbeobtainedfromsellingtheinvestmentorthevalueofexpecteddiscountedcashflowsarisingfromowningtheinvestment.

(k) Foreign exchangeTransactionsinforeigncurrenciesareconvertedintosterlingusingtheexchangerateapplicableatthedate




(k) Foreign exchange (continued) ofthetransactionor,ifhedgedforward,attherateofexchangeundertherelatedforwardcurrencycontract.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedintosterlingatyear-endexchangeratesor,ifappropriate,ataforwardcontractrate.Allexchangedifferencesaredealtwiththroughtheprofitandlossaccount.

Allotherexchangeadjustmentsareincludedintheprofitandlossaccount.Theseincludethosearisingfromthetranslationoftheopeningnetinvestmentinthegroup’sforeignsubsidiaries,asareexchangeadjustmentsarisingonthetranslationofforeigncurrencyborrowingsusedtofundtheacquisitionofforeignsubsidiaries,totheextentthattheycanbematchedwithexchangeadjustmentsintherelevantnetequityinvestment.

(l) Taxation UKcorporationtaxisprovidedatamountsexpectedtobepaid(orrecovered)usingthetaxratesandlawsthathavebeenenactedorsubstantiallyenactedbythebalancesheetdate.

Deferredtaxisprovidedinfullontimingdifferenceswhichresultinanobligationatthebalancesheetdatetopaymoretax,orarighttopaylesstax,atafuturedate,atratesexpectedtoapplywhentheycrystallise,basedoncurrenttaxratesandlaw.Deferredtaxismeasuredonanon-discountedbasis.Timingdifferencesarisefromtheinclusionofitemsinincomeandexpenditureintaxationcomputationsinperiodsdifferentfromthoseinwhichtheyareincludedinfinancialstatements.Deferredtaxassetsarerecognisedtotheextentthatitisregardedasmorelikelythannotthattheywillberecovered.

(m) Pensions Benefitsarefundedbypaymentstoadministeredfunds.

ThemainschemeistheHalcrowPensionScheme,whichprovidesbenefitscalculatedinrelationtofinalsalary.

Fordefinedbenefitschemestheamountschargedtooperatingprofitarethecurrentservicecostsandgainsandlossesonsettlementsandcurtailments.Theyareincludedaspartofstaffcosts.Pastservicecostsarerecognisedimmediatelyintheprofitandlossaccountifthebenefitshavevested.Ifthebenefitshavenotvestedimmediately,thecostsarerecognisedovertheperioduntilvestingoccurs.Theinterestcostandtheexpectedreturnonassetsareshownasanetamountofotherfinancecostsorcreditsadjacenttointerest.Actuarialgainsandlossesarerecognisedimmediatelyinthestatementoftotalrecognisedgainsandlosses.

Definedbenefitschemesarefunded,withtheassetsoftheschemeheldseparatelyfromthoseofthegroup,inseparatetrusteeadministeredfunds.Pensionschemeassetsaremeasuredatfairvalueandliabilitiesaremeasuredonanactuarialbasisusingtheprojectedunitmethodanddiscountedatarateequivalenttothecurrentrateofreturnonahighqualitycorporatebondofequivalentcurrencyandtermtotheschemeliabilities.Theactuarialvaluationsareobtainedatleasttrienniallyandareupdatedateachbalancesheetdate.Theresultingdefinedbenefitassetorliability,netoftherelateddeferredtax,ispresentedseparatelyafterothernetassetsonthefaceofthebalancesheet.

Fordefinedcontributionschemestheamountchargedtotheprofitandlossaccountinrespectofpensioncostsandotherpost-retirementbenefitsisthecontributionspayableintheyear.Differencesbetweencontributionspayableintheyearandcontributionsactuallypaidareshownaseitheraccrualsorprepaymentsinthebalancesheet.

(n) Leases Paymentsunderoperatingleasesarechargedtotheprofitandlossaccountonanaccrualsbasis.Assetsfundedbyfinanceleasesareincludedintangiblefixedassetsattheirprovisionalfairvalue.Theexcessofleasepaymentsovertherecordedleaseobligationsistreatedasafinancechargewhichisamortisedoverthetermofeachleasetogiveaconstantrateofchargeonthebalanceofcapitalrepaymentsoutstandingintheprofitandlossaccountovertheremainingperiodoftheobligations.




(o) Accounting for derivative financial instruments and hedging activities Derivativesareinitiallyaccountedandmeasuredatprovisionalfairvalueonthedateaderivativecontractisenteredintoandsubsequentlymeasuredatprovisionalfairvalue.Thegainorlossonre-measurementistakentotheprofitandlossaccountexceptwherethederivativeisadesignatedcashflowhedginginstrument.

(p) Changes in accounting policies DuringtheyearthegrouphasimplementedFRS20“Share-basedPayment”andthe2005accountshavebeenrestatedaccordingly.Detailsoftheprioryearadjustmentsareshowninnote11.

2 Profit of parent company

InaccordancewiththeexemptionallowedbyS230oftheCompaniesAct1985,theprofitandlossoftheparenthasnotbeenpresented.Oftheprofitfortheperiodattributabletotheshareholders,alossof£15,000(2005:loss£16,000)hasbeendealtwithintheaccountsoftheparent.Thislossisbeforedividendspaidof£832,000(2005:£616,000).

3 Segmental information

Thedirectorsconsidertheretobeoneclassofbusinessbeingtheprovisionofservicesasinternationalconsultingengineers.Geographicalanalysesofturnover,profitonordinaryactivitiesbeforetaxationandnetassetsaresetoutbelow:

Turnover2006 £000

2005£000

UnitedKingdomEastAsia NorthAmerica CentralandSouthAmerica MiddleEast Europe(excludingUnitedKingdom) SouthAsia Africa Australia

184,398 14,032 32,711 12,417 59,796 14,045

4,776 2,381 5,820

330,376

167,61914,10425,927

9,38339,56913,2013,0242,8064,915

280,548

Geographicalsegmentationofturnoverbydestinationisnotmateriallydifferentfromturnoverbyorigin.



3 Segmental information (continued)

Profit/(loss) on ordinary activities before taxation 2006 £000

Restated2005£000

UnitedKingdomEastAsia NorthAmericaCentralandSouthAmerica MiddleEast Europe(excludingUnitedKingdom) SouthAsia Africa Australia

Netinterestexcludingexchangegain/(loss)onforeigncurrencyborrowings

9,820 (522)

2,454 (224)

(1,426) 206

(134) 604 545

11,323 664

11,987

9,179(306)

94(410)2,193

75117160591

11,693(1,282)

10,411

Net assets/(liabilities) 2006 £000

2005£000

UnitedKingdomEastAsia NorthAmericaCentralandSouthAmerica MiddleEast Europe(excludingUnitedKingdom) SouthAsia Africa Australia

(721) (1,467) (5,726)

178 (6,487)

(402) (632)

(48) (591)

(15,896)

(4,583)(3,221)

(10,069)2,347

(9,329)(644)

(1,094)(471)(754)

(27,818)

4 Operating profit

Operating profit is stated after charging/(crediting): 2006 £000

2005£000

Auditors’remunerationforaudit -group Auditors’remunerationforotherservices -groupDepreciationoftangiblefixedassets -owned -leased

AmortisationofgoodwillBaddebtexpense Profitonsaleoftangiblefixedassets Exchangelosses/(gains) Operatingleases: Plantandmachinery Other

169 338

5,163 36

789 1,940

(6) 4,378

889

4,889

159176

5,17913

1,2351,626

(36)(2,802)

879

4,862

Thegroupauditfeeincludes£10,000(2005:£10,000)inrespectofthecompany.



4 Operating profit (continued)

Thegroup’sgainsincludedintheprofitandlossaccountinrelationtofinancialinstrumentsheldatfairvalueanalysedbyfinancialinstrumentcategoryareasfollows:

2006 £000

2005£000

ForeignexchangederivativesInterestratederivatives

- 101

101

-97

97

5 Interest receivable and similar income

Interest receivable on: 2006 £000

2005£000

ShorttermbankdepositsNetinterestcreditonpensionschemesExchangegainonforeigncurrencyborrowings

113 859

1,099

2,071

170--

170

6 Interest payable and similar charges

Interest payable on : 2006 £000

2005£000

BankloansandoverdraftspayablewithinfiveyearsBankloansandoverdraftspayablegreaterthanfiveyearsFinanceleases Debentures Netinterestchargeonpensionschemes AllotherloansExchangelossonforeigncurrencyborrowings

796 595

12 4 - - -

1,407

342543

26

52534

1,051

2,503



7 Employee information

(a) The average number of persons, including directors, employed by the group during the year was:

2006 Number

2005Number

Professionalandtechnical Administrative

4,020 793

4,813

3,575716

4,291

(b) Staff costs during the year including directors were:2006 £000

2005£000

Wagesandsalaries Socialsecuritycosts Otherpensioncosts

166,867 10,039

9,137

186,043

144,8219,0417,100

160,962

8 Directors’ emoluments

Staff costs include the following emoluments of directors of Halcrow Holdings Limited:

2006 £000

2005£000

Aggregateemoluments Contributionstomoney-purchasepensionarrangement

1,159 16

1,175

1,03616

1,052

RetirementbenefitswereaccruingtoallsixexecutivedirectorsattheyearendundertheHalcrowPensionScheme,adefinedbenefitscheme,inrespectofqualifyingservices.

Aggregate emoluments include amounts paid to: 2006 £000

2005£000

Thehighest-paiddirectorEmoluments

255

225

Thehighest-paiddirectorhadbenefitsundertheHalcrowPensionSchemeasfollows:

2006 £000

2005£000

Accruedannualpensionatendofyear

48 45

Fivedirectorsexercisedshareoptionsduringtheyear(2005:three)



9 Tax on profit on ordinary activities

2006 £000

2005£000

UnitedKingdomcorporationtaxat30%Currentyear Adjustmenttoprior-yearprovision

1,509 (201)

2,391(473)

Lessdoubletaxationrelief

1,308 (15)

1,293

1,918(55)

1,863

Overseastaxation Shareofjointventures’taxcredit

Total current tax

974 (5)

2,262

729(5)

2,587Deferredtaxation,originationandreversaloftimingdifferencesDeferredtaxation,pensionliability

74 1,729

(55)1,481

Tax on profit on ordinary activities 4,065 4,013

Thestandardrateoftaxfortheyear,basedontheUKstandardrateofcorporationtax,is30%.Theactualtaxchargeforthecurrentandthepreviousyearvariesfromthestandardrateforthereasonssetoutinthefollowingreconciliation.

2006 £000

Restated2005£000

Profit on ordinary activities before tax

Taxonprofitonordinaryactivitiesatstandardrate Factorsaffectingchargefortheperiod: Expensesnotdeductiblefortaxpurposes PensionprovisionCapitalallowances(greater)/lessthandepreciation Othertimingdifferences Goodwillamortisation ForeigntaxchargedathigherratesthanUKstandardrate Adjustmentstotaxchargeinrespectofpriorperiods

11,987

3,596

262 (1,729)

(72) 116 77

213 (201)

10,411

3,123

3133540

(688)75

162(473)

Total current tax 2,262 2,587

10 Ordinary dividends

2006 £000

2005£000

Interimpaid:11.0p(2005:10.0p)perordinaryshare Finalpaid:11.3p(2005:10.0p)perordinaryshare

393 439

832

284332

616

TheHalcrowTrustwaiveditsrightstodividendspayableonitsholdingsofbothordinaryandpreferencesharesinrespectofboththeyearended31December2006andtheyearended31December2005.

Thedirectorsrecommendafinaldividendpaymentof10.0p(2005:11.3p)perordinarysharepayabletothosemembersontheregisteratthecloseofbusinesson28June2007.This,togetherwiththeinterimdividendpaidinJanuary2007of12.25p(2005:11.0p)perordinaryshare,givesatotaldividendfortheyearof22.25pcomparedwith22.3pfortheyearended31December2005.



11 Changes to accounting policies

FRS20“Share-basedPayment”hasbeenadoptedinthecurrentyear.The2005comparativeshavebeenrestatedandtheeffectonthe2005resultswastoincreaseadministrativeexpensesby£51,000.Thecumulativeadjustmenttotheprofitandlossreservewasachargeof£83,000withacorrespondingcreditentrydirecttoreservesandaccordinglytherewasthereforenooveralleffectonshareholders’funds.

In2006theadoptionofFRS20hasresultedinanincreaseinadministrativeexpensesof£68,000.

12 Intangible assets – goodwill

Group Goodwill

£000Negativegoodwill

£000

Cost At1January2006 Exchangemovements Acquisitions(seenote17)

24,779(2,104)

587

--

(375)

At31December2006 23,262 (375)

Amortisation At1January2006 Exchangemovements Charge/(credit)fortheyear

5,658(103)1,157

--

(368)

At31December2006 6,712 (368)

Net book value At31December2006 16,550 (7)

At31December2005 19,121 -

The goodwill arises on the purchase of: TransysInternationalConsultantsLimited Han-PadronAssociatesLLC PyramidDevelopmentInternationalCorpLimited YollesPartnershipIncorporated YollesPartnershipLimited HalcrowFoxandAssociatesLimited TransportationSystemsandMarketResearchLimited CrouchHoggWatermanLimited HalcrowPacificPtyLimited MechanicalandElectricalDesignAssociates ThewaterengineeringdesignandsurveybusinessofSouthernWaterplc CertainassetsofTMETorpyLimited,TMENorthernLimitedandTMEEngineersLimited

Goodwillisbeingamortisedonastraight-linebasisoverperiodsofbetweenfiveand20years.Thesearetheperiodsoverwhichthedirectorsestimatethatthevaluesoftheunderlyingbusinessesacquiredareexpectedtoexceedthevalueoftheunderlyingassets.

Thenegativegoodwillarisesonthepurchaseof:HalcrowWaterServicesLimited

Theremainingnegativegoodwillisbeingamortisedoverthreeyears.

Company Thecompanyhasnointangibleassets.



13 Tangible fixed assets

Group

Land

Freehold£000

andbuildings

Shortlease£000

Motor

vehicles£000

Furnitureand

equipment£000

Total £000

Cost At1January2006 Additions Acquisitionofsubsidiaryundertaking Disposals

8,208---

3,759

670-

(93)

611139

10(93)

31,4105,123

867(3,457)

43,988

5,932 877

(3,643)

At 31 December 2006 8,208 4,336 667 33,943 47,154

Depreciation At1January2006 Acquisitionofsubsidiaryundertaking Chargefortheyear Disposals

1,044

-163

-

2,126

-439(74)

490

335

(65)

20,680

7294,562

(3,439)

24,340

732 5,199

(3,578)

At 31 December 2006 1,207 2,491 463 22,532 26,693

Net book value At 31 December 2006

7,001

1,845

204

11,411

20,461

At 31 December 2005 7,164 1,633 121 10,730 19,648

Tangiblefixedassetsshownaboveincludefixedassetsheldunderfinanceleasesasfollows:

Net book value at end of year 2006 £000

2005£000

Furnitureandequipment 599 -

Depreciation charge for the year 2006 £000

2005£000

Furnitureandequipment 36 13

Freehold property Thegroup’sfreeholdpropertyatBurderopPark,Swindon,Wiltshire,isincludedinthebalancesheetatitspurchasepriceplusthecostofadditions.ItspurchasepricewasequaltoavaluationbyKemp&Hawley,charteredsurveyors,onanopen-marketbasisasat30April1990.ThelatestvaluationcarriedoutbyStrutt&Parkerasat31December2004gaveavalueof£6,250,000.

Company Thecompanyhasnotangiblefixedassets.



14 Investments in joint ventures and associated undertakings

Group £000

Joint ventures Cost plus share of retained profit At1January2006 Additions Disposal Shareofretainedprofitsintheyear

946 23

(487) 4

At �1 December �00� 486

On31July2006thegrouppurchasedtheremaining51percentoftheissuedsharecapitalofHalcrowWaterServicesLimitedforaconsiderationof£100,000andtheentitybecameasubsidiarycompany.Theentitywastransferredfromjointventurestosubsidiaryundertakings(seenote17).

Associated undertakings £000

Cost plus share of retained profit At1January2006 Shareofretainedprofitsintheyear

237

4

At �1 December �00� 241

15 Trade investments

Group £000

Cost At1Januaryand31December2006

166

Noneoftheinvestmentsincludedintheaboveamountsislistedonarecognisedinvestmentexchange.Thedirectorsconsiderthemarketvalueofthetradeinvestmentsat31December2006tobenotlessthantheircarryingvalue.

16 Investments in subsidiary undertakings

Company Shares in subsidiary undertakings £000

Cost At1Januaryand31December2006

11,327

Provisions At1Januaryand31December2006

1,119

Net book value At31December2006

10,208

At31December2005 10,208

Noneoftheinvestmentsincludedintheaboveamountsislistedonarecognisedinvestmentexchange.Theprincipalsubsidiaryundertakingsarelistedinnote36ofthefinancialstatements.



17 Acquisition of business

On31January2006thegrouppurchased100%ofthesharecapitalofTransysInternationalConsultantsLimited,aconsultancybasedinCanada,foraconsiderationofCA$1,210,637,includingadeferredpaymentofCA$497,250andacquisitioncostsofCA$65,857.

Theprovisionalfairvalueofthenetassetsacquiredwasasfollows:

£000

TangiblefixedassetsCurrentassets Cash Currentliabilities

Net assets acquired

24 104

7 (17)

118

Consideration Cashpaid Deferredpayment Interestondeferredpayment Acquisitioncosts

299 244

20 32

595

Goodwill capitalised (note12) 477

Theprovisionalassessmentofgoodwillarisingontheacquisitionisbeingamortisedover20years,asthisistheperiodoverwhichthedirectorsestimatethattheunderlyingbusinessacquiredisexpectedtoexceedthevalueoftheunderlyingassets.Achargehasbeenmadetotheprofitandlossaccountof£20,000for2006.

Therewasnodifferencebetweentheprovisionalfairvalueandnetbookvaluesoftheassetsandliabilitiesacquired.

AsummarisedprofitandlossaccountofTransysInternationalConsultantsLimitedfortheyearended31January2006isshownbelow:

£000

Turnover Expenses

Otherincome

Profitbeforetaxation Taxation

453 (377)

76 4

80 (14)

Retained profit for the period 66

Profitaftertaxfortheyearended31January2005was£60,000



17 Acquisition of business (continued)

On31July2006thegrouppurchasedtheremaining51%oftheissuedsharecapitalofHalcrowWaterServicesLimitedforaconsiderationof£100,000.

Theprovsionalfairvalueofthenetassetsacquiredwasasfollows:

£000

TangiblefixedassetsCurrentassets BankOverdraft Currentliabilities

Net assets acquired

Consideration:Cashpaid

NetassetsacquiredlessconsiderationTransferfromjointventures(note14)

Negative goodwill capitalised(note12)

121 1,575

(8) (726)

962

100

(862) 487

(375)

Negativegoodwillfornon-monetaryassetswillbecreditedtotheprofitandlossaccountovertheperiodinwhichthoseassetswillbedepreciated.Thisperiodisthreeyears.Negativegoodwillformonetaryassetshasbeencreditedtotheprofitandlossaccountin2006.

Therewasnodifferencebetweentheprovisionalfairvalueandnetbookvaluesoftheassetsandliabilitiesacquired.

Asummarisedprofitandlossaccountforthe4monthsto31July2006isshownbelow:

£000

Turnover Costofsales

Grossprofit AdministrativeexpensesNetinterestreceivable

Retained loss for the period

1,217 (836)

381 (445)

1

(63)

ThegoodwillrelatingtotheacquisitionoftheYollesgroupwasadjustedin2006asfollows:

£000

Goodwill capitalised as at 1 January 2006 Additional interest on deferred consideration accrued in 2006

Goodwill capitalised as at �1 December �00�

9,830 67

9,897

ThegoodwillrelatingtotheacquisitionofHan-PadronAssociatesLLPwasadjustedin2006asfollows:

£000

Goodwill capitalised as at 1 January 2006 Adjustment to work in progress acquired

Goodwill capitalised as at �1 December �00�

6,455 43

6,498



18 Debtors

Group Company

Amounts falling due within one year 2006 £000

2005£000

2006 £000

2005£000

Tradedebtors Amountsrecoverableoncontracts AmountsowedbysubsidiaryundertakingsOtherdebtors Prepaymentsandaccruedincome

75,769 45,497

- 6,127 4,811

132,204

60,43041,104

-3,4833,726

108,743

- -

18,891 8 -

18,899

--

19,7538-

19,761

Amounts falling due in more than one year

Deferredtaxation: Depreciationinexcessofcapitalallowances 447 521 - -

132,651 109,264 18,899 19,761

Deferred taxation Themovementinthetotaldeferredtaxassetduringtheyearreconcilesasfollows:

£000

Balanceat1January2006Chargetoprofitandlossaccount

Balance at �1 December �00�

521 (74)

447

Adeferredtaxassethasnotbeenrecognisedinrespectoftimingdifferencesrelatingtotaxlossesasthereisinsufficientevidencethatthelosseswillbeutilisedintheforeseeablefuture.Theamountoftheassetnotrecognisedis£1,600,000(2005:£1,200,000).Theassetwouldberecoveredifsufficientfuturetaxableprofitsaremadeintheappropriatejuristications.

19 Creditors – amounts falling due within one year

Group Company

2006 £000

2005£000

2006 £000

2005£000

Bankloansandoverdrafts–securedPaymentsonaccount Tradecreditors Obligationsunderfinanceleases AmountsowedtoassociatedundertakingsUnitedKingdomcorporationtax Othertaxationandsocialsecurity Debentures–unsecured Deferredconsideration Othercreditors Accrualsanddeferredincome

11,331 50,159 11,127

145 184 971

8,076 62

2,778 13,530 11,272

109,635

6,02640,108

9,12522

192805

6,94976

3,24013,910

9,511

89,964

- - - - - - -

62 - 1 -

63

-------

76-2-

78

Bankloansandoverdraftsaresecuredbyfixedandfloatingchargesoverthegroup’sassets.



19 Creditors – amounts falling due within one year (continued)

Debentures ThedebentureswereissuedtothevendorsofCrouchHoggWatermanLimitedaspartofthepurchaseconsideration.Theybearinterestat7%perannumandarerepayableinhalf-yearlyinstalmentstoeachholderafterheceasestobeemployedbythegroup.

£16,506ofthedebenturesmaybeconvertedtoordinarysharesattheoptionoftheholdersatanytime.Thepriceofanordinarysharetobeusedasthebasisforcalculatingthenumberofordinarysharestobeallottedwillbeequaltonetassetspersharecalculatedfromthefigureforshareholders’fundsdisclosedinthecompany’sfinancialstatementsatthedateofconversion.

Groupandcompany

The movements on debentures were as follows2006 £000

2005 £000

BalanceatbeginningoftheyearRedemptions

Balance at end of the year

76 (14)

62

90 (14)

76

20 Creditors – amounts falling due after more than one year

Group Company

2006 £000

2005£000

2006 £000

2005£000

Bank loans Repayablebetweentwoandfiveyears RepayableaftermorethanfiveyearsObligationsunderfinanceleases DeferredconsiderationAccrualsanddeferredincome

9,789 -

405 1,611

66

11,871

6,5004,388

-6,057

48

16,993

- - - - -

-

-----

-

Bank loansThebankloansarerepayableunderfixedinstalments.Interestischargedat1.25%abovebaserateandtheloansaresecuredbyfixedandfloatingchargesoverthegroup’sassets.

Obligations under finance leasesAmountsshownaboveasobligationsunderfinanceleasesfallingdueaftermorethanoneyearareduebetweenthesecondandfifthyearsinclusiveandaresecuredontherelatedleasedassets.

Maturity of financial liabilities

Group Company

2006 £000

2005£000

2006 £000

2005£000

Lessthanoneyear Betweentwoandfiveyears Morethanfiveyears

11,476 10,194

-

21,670

6,0486,5004,388

16,936

- - -

-

---

-



21 Provisions for liabilities and charges

Group At 1 January 2006

£000

Charged/(credited)toprofitandloss

£000Paid in year

£000

At31December2006£000

PropertydilapidationExcessesoninsuredclaims Contractlosses

1,350 765 28

449(122)

25

(37) - -

1,762643

53

2,143 352 (37) 2,458

Details of group provisions are as follows:

Property dilapidation Provisionismadefortheexpectedamountofpaymentstobemadetolandlordsofpropertiesleasedbythegroupattheirtermination.Therelevantleasesexpirebetween2007and2015.

Excesses on insured claims Whenclaimshavebeenmadeagainstthegroup,provisionismadefortheamountthatfallswithintheexcessofthegroup’sprofessionalindemnityinsurancepolicy.Theprovisionwillbeutilisedovertheperiodoftherelatedclaim.

Contract losses ProvisionismadeinaccordancewithSSAP9forcontractswhoseexpectedcontributiondoesnotincludeareasonableallocationofoverheads.Theprovisionwillbeutilisedovertheperiodoftherelatedcontracts.

Company Thecompanyhasnoprovisions.

22 Share capital

Group and company 2006 £000

2005£000

Authorised 25,000,000ordinarysharesof£1each 10,000non-redeemablepreferencesharesof£1each

25,000 10

25,010

25,00010

25,010

Allotted and fully paid2006 £000

2005£000

18,872,013(2005:18,872,013)ordinarysharesof£1each 10,000non-redeemablepreferencesharesof£1each

18,872 10

18,882

18,87210

18,882



22 Share capital (continued)

Thepreferencesharesof£1eacharenon-redeemable.Theholdershavenovotingrightsbuthavetheright,asaclass,toappointtwodirectors.Theyhaveanon-cumulativerighttoreceiveadividendof1ppersharepriortoanydistributiontoholdersoftheordinaryshares.Intheeventofawindingup,theyhavetherighttoareturnofassetstothevalueof£1persharebeforeanypaymenttotheholdersofordinaryshares.

23 Share premium account

Group and company 2006 £000

2005£000

AtthebeginningoftheyearOnsharesissuedduringtheyear

Attheendoftheyear

1,788 -

1,788

1,69791

1,788

24 Options

Optionsinrespectof2,030,551ordinarysharesof£1eachwereoutstandingat31December2006(2005:2,435,462)underthegroup’ssavings-relatedshareoptionscheme.Thesemaybeexercisedasfollows:

Optionprice Exercisable2006

Number2005

Number

177p189p189p195p195p195p205p205p205p220p220p220p

200620052007200620082010

200720092011200820102012

20,966 -

457,817 29,399

386,165 190,228 146,290 253,413 115,170 142,188 193,705

95,210

2,030,551

146,36117,385

486,578153,141425,951196,765159,998270,014117,960157,131208,19195,987

2,435,462

Insomecircumstances,includingtheredundancyordeathoftheholder,optionsmaybeexercisedatearlierdatesthanthoseshownabove.

Theweightedaveragesharepriceduringtheyearwas238.6p.



24 Options (continued)

Theweightedaveragelifeoftheoptionsoutstandingat31December2006was887days.

Nooptionsweregrantedduring2006andthegroup’sshare-basedpaymentschargefor2006is£68,000.InadoptingFRS20“Share-basedpayment”,aprioryearadjustmentof£83,000hasbeenmaderepresentingthefairvalueofoptionsawardedintheperiod7November2002to31December2005(seenote11).Thefairvaluesweredeterminedusingavaluationmodelwhichincludedthefollowingsignificantinputs:

Risk-freeinterestrate 5% Dividendyield 10%Expectedsharepricevolatility 26%

ThesharepricevolatilityisbasedonsimilarUKbusinessesoperatinginsimilarsectors.

25 Profit and loss account

Group Company

2006£000

2006£000

Atthebeginningoftheyear Retainedprofit/(loss)fortheyear Ordinarydividends Actuarialgainonpensionscheme(netofdeferredtaxation)Sharebasedpayments

(48,488)7,922(832)4,764

68

9,221(15)

(832)--

At the end of the year (36,566) 8,374

26 Total shareholders’ funds

Group Company

2006£000

Restated2005£000

2006£000

2005£000

Atthebeginningoftheyear Profit/(loss)fortheyearaftertaxationOrdinarydividends AllotmentofordinarysharesActuarialgain/(loss)onpensionschemenetofdeferredtaxationSharebasedpayments

(27,818)7,922(832)

-

4,76468

(13,921)6,398(616)294

(20,024)

51

29,891(15)

(832)---

30,229(16)

(616)294

--

At the end of the year (15,896) (27,818) 29,044 29,891



27 Net cash inflow from operating activities

2006 £000

Restated2005£000

Operatingprofit Depreciationoftangiblefixedassets Amortisationofgoodwill Profitonsaleoftangiblefixedassets Increaseindebtors Increaseincreditors Increaseinprovisions Adjustmentforpensionfunding AdjustmentforforeignexchangedifferencesAdjustmentforsharebasedpayments

11,317 5,199

789 (6)

(21,825) 15,057

315 (4,905)

847 68

6,856

12,7525,1921,235

(36)(15,719)

9,952223

(4,933)(1,051)

51

7,666

28 Reconciliation of cashflow to movement in net debt

2006 £000

2005£000

Decreaseincashintheyear ExpensesofloantofinanceacquisitionofHanPadronAssociatesLLCCapitalelementoffinanceleasepayments Repaymentofdebentureloans

Movementinnetdebtresultingfromcashflows NewfinanceleasesExchangemovementonlong-termloans

Net(debt)/fundsatthebeginningoftheyear

Netdebtattheendoftheyear

(8,484) - 5

14

(8,465) (533) 1,099

(7,899) (11,142)

(19,041)

(10,158)251814

(10,101)(22)

(1,051)

(11,174)32

(11,142)

29 Analysis of net debt

2005£000 Cashflow

Othernon-cashchanges

2006 £000

Cash at bank and in hand Bank loans and overdrafts Amountsfallingduewithinoneyear

Bank loans and overdrafts Amountsfallingdueafteroneyear

5,870

(6,026)

(156)

(10,888)

(3,179)

(5,305)

(8,484)-

--

-

1,099

2,691

(11,331)

(8,640)

(9,789)

Obligations under finance leases Amountsfallingduewithinoneyear Amountsfallingdueaftermorethanoneyear

(22)-

5-

(128)(405)

(145) (405)

Debentures Amountsfallingduewithinoneyear (76) 14 - (62)

(11,142) (8,465) 566 (19,041)

Thenon-cashmovementresultsfromtheretranslationofloansdenominatedinforeigncurrenciesatclosingexchangerateandnewfinanceleasesintheyear.



30 Capital commitments

Group Company

2006 £000

2005£000

2006 £000

2005£000

Contractedbutnotprovidedforinthefinancialstatements

124

178

-

-

31 Contingent liabilities

Group Company

2006 £000

2005£000

2006 £000

2005£000

Performanceandadvancepaymentbondsprovidedbybanks

Borrowingsofsubsidiaryundertakingsforwhichguaranteeshavebeengiven

9,852

-

9,852

12,932

-

12,932

-

4,396

4,396

-

4,396

4,396

Wherecontractvaluesaredenominatedinforeigncurrencies,thegroupinsomecasesentersintoforwardexchangecontractstoprotectthesterlingvalueofitsfutureearnings.

Thecompanyhasalsoprovidedguaranteesonbehalfofsubsidiaryundertakingsinrespectofpropertyleasesenteredintointheordinarycourseofbusinessandhasagreedtocontinuetosupportcertainofitssubsidiaryundertakings.

32 Lease commitments

At31December2006thegroupwascommittedtomakingthefollowingpaymentsduringthenextyearinrespectofoperatingleases:

Group

Land and buildings 2006 £000

2005£000

Leases which expire Withinoneyear Insecondtofifthyears Aftermorethanfiveyears

278

1,864 2,827

4,969

171 740

3,689

4,600

Other

Leases which expire Withinoneyear Insecondtofifthyears Aftermorethanfiveyears

83 962

-

1,045

82

627 1

710

Thecompanyhadnooperatingleasecommitments.



33 Pension commitments

Thegroupoperatesvariouspensionschemesforeligibleemployees.Theassetsofallschemesareheldseparatelyfromthoseofthegroupandareinvestedbyindependentinvestmentmanagers.

ThemainschemeistheHalcrowPensionSchemewhichprovidesbenefitscalculatedinrelationtofinalpensionablesalary.ThegroupalsosponsorsthePension&LifeAssurancePlanofHalcrowFox&AssociatesLimitedandcontributestotheHalcrowRailsectionoftheRailwaysPensionsScheme,bothofwhicharealsodefinedbenefitarrangements.Contributionsarepaidtotheschemesasagreedwiththetrusteesofthoseschemes.Alldefinedbenefitschemesareclosedtonewmembers.

Overtheyearto31December2006,contributionsbythegroupof£9,705,000weremadetothemainscheme(2005:£9,133,000).Thegroupiscurrentlypayingcontributionstothemainschemesothattotalcontributionspayablebyboththemembersandtheemployerare36.5percentofpensionablesalaries.Aformalactuarialvaluationiscurrentlyinprogress,andthegrouphasbeendiscussingfuturecontributionswiththescheme’strustees.Atthisstagediscussionsremainongoing.Contributionsof£641,000(2005:£581,000)weremadetotheHalcrowFoxscheme.Contributionsof£480,000(2005:£500,000)weremadetotheRailwayScheme.Furthercontributionsweremadetoothersmallerarrangements.

Thegroupcontributed£2,463,000(2005:£1,970,000)totheHalcrowMoneyPurchasePlan,whichisadefinedcontributionarrangement.

ThefollowingtablesetsoutthekeyFRS17assumptionsusedfortheschemes.Thetablesbelowalsosetout,asat31December2004,31December2005and31December2006,thefairvalueofassets,abreakdownoftheassetsintothemainassetclasses,thepresentvalueofFRS17liabilitiesandthedeficit/surplusofassetsbelow/abovetheFRS17liabilites.

Assumptions

2006 2005 2004

PriceinflationDiscountrate Pensionincreases(fixed) Pensionincreases(5%limitedpriceindexation)Salarygrowth(onaverage)

3.00%pa5.15%pa5.00%pa3.00%pa4.00%pa

2.70%pa4.85%pa5.00%pa2.70%pa3.70%pa

2.60%pa5.50%pa5.00%pa2.50%pa3.60%pa

Onthebasisoftheassumptionsusedforlifeexpectancy,amalepensionercurrentlyaged60wouldbeexpectedtoliveforafurther23.5years(2005:23.4years).Allowanceismadeforfutureimprovementsinlifeexpectancy,soapensionerreachingtheageof60in2026wouldbeexpectedtoliveforafurther24.8years.



33 Pension commitments (continued)

Asset distribution and expected return

�1 December �00�

Expectedreturn

Fairvalue(schemesindeficit)

£000

Fairvalue(scheme

insurplus)£000

Total£000

ComponentsEquities Bonds Property Other

8.0%pa5.1%pa6.3%pa5.2%pa

210,71170,97818,400

2,401

29,5005,8003,900

-

240,21176,77822,300

2,401

Balance sheetTotalfairvalueofassets Presentvalueofliabilities

302,490(396,391)

39,200(38,400)

341,690(434,791)

(Deficit)/surplusintheschemesRelateddeferredtax

(93,901)28,170

800(240)

(93,101)27,930

Net pension (liabilities)/assets (65,731) 560 (65,171)


Expectedreturn


£000


7.8%p.a.4.2%p.a.6.0%p.a.4.2%p.a.

218,01469,97319,4001,582


308,969(414,640)

Deficitintheschemes Relateddeferredtax

(105,671)31,701

Net pension liabilities (73,970)





Expectedreturn


£000


8.0%p.a.4.7%p.a.6.3%p.a.4.7%p.a.

171,55752,55416,90014,300


255,311(337,310)

Deficitintheschemes Relateddeferredtax

(81,999)24,600

Net pension liabilities (57,399)

UnderFRS17,theschemesarerepresentedonthebalancesheetasnetpensionliabilitiesof£65,171,000(2005:£73,690,000).

Thepost-retirementdeficitunderFRS17movedovertheperiodasfollows:

2006 £000

2005£000

Post-retirementdeficitatthebeginningoftheyear Currentservicecost

(105,671) (8,543)

(81,999)(7,368)

ContributionsincludingthoseofemployeesOthernetfinancecosts Actuarialgain/(loss)

13,448 859

6,806

12,826(525)

(28,605)

Post-retirement deficit at the end of the year (93,101) (105,671)

ThefollowingamountshavebeenincludedwithinoperatingprofitunderFRS17:

2006 £000

2005£000

Currentservicecost Employeecontributions

Total operating charge

8,543 (2,400)

6,143

7,368(2,545)

4,823




Thefollowingamountshavebeenincludedasnetfinanceincome/(costs)underFRS17:

2006 £000

2005£000

ExpectedreturnonpensionschemeassetsInterestonpost-retirementliabilities

Net return to credit/(charge)to finance income/(costs)

20,317 (19,458)

859

17,198(17,723)

(525)

Thefollowingamountshavebeenrecognisedwithinthestatementoftotalrecognisedgainsandlosses(STRGL)underFRS17:

2006 £000

2005£000

DifferencebetweentheexpectedandactualreturnonschemeassetsExperiencegainsandlossesarisingonschemeliabilitiesLossduetochangesinassumptionsunderlyingthevalueofschemeliabilities

Actuarial gain/(loss) recognised in the STRGL

8,668 (1,090)

(772)

6,806

32,793(1,432)

(59,966)

(28,605)

Thehistoryofexperiencegainsandlossesis:

2006 £000

2005£000

2004£000

2003£000

2002£000

Actualreturnlessexpectedreturnonschemeassets

Percentageofschemeassets

Experiencegains(andlosses)arisingonschemes’liabilities

Percentageofthevalueoftheschemes’liabilities

TotalamountrecognisedintheSTRGL

Percentageofthevalueoftheschemes’liabilities

8,668

2.54%

(1,090)

(0.25%)

6,806

10.44%

32,793

10.61%

(1,432)

(0.35%)

(28,605)

(6.90%)

7,110

2.78%

200

0.06%

(13,553)

(4.02%)

15,467

6.82%

4,810

1.60%

421

0.14%

(44,323)

(22.65%)

(5,984)

(2.22%)

(50,307)

(18.64%)

TheabovepercentagesshowtheSTRGLcomponentsasapercentageoftheend-of-yearschemes’assetorliabilityvalue,asappropriate.

Alldefinedbenefitschemesareclosedtonewentrantsand,underthemethodusedtocalculatepensioncostsinaccordancewithFRS17,thecostasapercentageofcoveredpensionablepayroll,beforedeductionofemployeecontributions,willtendtoincreaseastheaverageageofthemembershipincreases.




TheeffectofretirementbenefitsonoperatingprofitcalculatedinaccordancewithFRS17isincludedinthefinancialstatementsasfollows:

2006 £000

2005£000

Fundeddefined-benefitschemes

Definedcontributionschemes

Chargepernote7b

6,107

3,030

9,137

5,130

1,970

7,100

34 Assets pledged

Thegrouphasgrantedfixedandfloatingchargesoverallitsassetsassecurityforbankingfacilities.

35 Related party transactions

Joint venturesInthecourseofitsnormaloperations,thegrouphascontractedonanarm’s-lengthbasiswithHalcrowWaterServicesLimited,whichwasajointventureuntil31July2006,whentheremaining51%oftheshareswerepurchasedandthecompanybecameasubsidiaryundertaking.Thetransactionswhichhavenotbeendisclosedelsewhereinthefinancialstatementsareshownbelow:

2006 £000

2005£000

SalesPurchases

121 1,026

2221,661

Therewerenotransactionswith,oramountsduetoorby,VitukiConsultRtorHalcrow(Shanghai)EngineeringConsultingCorporationLimitedat31December2006(2005:nil).

Associated undertakings TherewerenosignificanttransactionswithDavyBritishRailInternationalLimitedduringtheyear.Therewasaninterest-freeloanof£184,000owedtoDavyBritishRailInternationalLimitedat31December2006(2005:£184,000).

The Halcrow Trust Anamountof£3,195,000wasowedbythegrouptotheHalcrowTrustat31December2006(2005:£1,075,000).



36 Principal subsidiary and associated undertakings and joint ventures

Subsidiary undertakings Percentage owned

HalcrowGroupLimited*HalcrowCanadaInc* HalcrowConsultingLimited HalcrowAsiaPartnershipLimited* HalcrowAsiaLimited* HalcrowChinaLimited* HalcrowInternationalLimited* HalcrowInternationalPartnership* HalcrowGroupIrelandLimited* HalcrowManagementSciencesLimited* HalcrowPacificPtyLimited* HalcrowRuralManagementLimited* HPAInc* SirWilliamHalcrow&PartnersInc* SirWilliamHalcrow&Partners(Malaysia)Limited* YollesPartnershipInc* YollesPartnershipLimited* BurderopInvestmentsLimitedHalcrowWaterServicesLimited*

Joint ventures

VitukiConsultRt* Halcrow(Shanghai)EngineeringConsultingCorporationLimited* HalcrowBarryLimited*

Associated undertakings DavyBritishRailInternationalLimited* HalcrowULGLimited* Allholdingsareofordinaryshares.*Indicatesthatthesharesareheldbyanintermediateholdingcompany.

100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%

Percentage owned

33%50%50%

40%50%

All these undertakings are registered in England except:

HalcrowPacificPtyLimited HalcrowChinaLimited SirWilliamHalcrow&PartnersInc HalcrowCanadaInc HPAInc YollesPartnershipInc VitukiConsultRt PyramidDevelopmentInternationalCorporationLimited Halcrow(Shanghai)EngineeringConsultingCorporationLimitedHalcrowGroupIrelandLimitedHalcrowBarryLimited

Country of registration

AustraliaHongKong

USACanada

USACanada

HungaryThailand

ChinaRepublicofIrelandRepublicofIreland



36 Principal subsidiary and associated undertakings and joint ventures (continued)

TheprincipalcountryofoperationofalltheseundertakingsisGreatBritainexceptthefollowingundertakingswhichoperateintheareasindicated:

HalcrowAsiaPartnershipLimitedHalcrowAsiaLimitedHalcrowInternationalPartnershipHalcrowGroupIrelandLimitedHalcrowBarryLimitedHalcrowPacificPtyLimitedHalcrowRuralManagementLimited SirWilliamHalcrow&PartnersIncHPAIncSirWilliamHalcrow&Partners(Malaysia)LimitedHalcrowChinaLimitedVitukiConsultRtHalcrowULGLimitedPyramidDevelopmentInternationalCorporationLimitedHalcrow(Shanghai)EngineeringConsultingCorporationLimited

EastAsiaEastAsia

MiddleEastRepublicofIrelendRepublicofIrelend

AustraliaWorldwide

USAUSA

EastAsiaEastAsia

EasternEuropeEastAsiaEastAsiaEastAsia

Theprincipalactivityofalltheaboveundertakingsisthesupplyofservicesasconsultingengineers,exceptforBurderopInvestmentsLimitedwhoseprincipalactivityispropertyinvestment.

Registered office VineyardHouse44BrookGreenHammersmithLondonW67BYtel+44(0)2076027282fax+44(0)[email protected]

Share registrar CapitaRegistrarsNorthernHouseWoodsomeParkFenayBridgeHuddersfieldHD80LAtel08701623131www.capitaregistrars.com

Worldwide

Argentina Buenos AiresSergioSourtel+541143114911fax+541143125819emailhalcrowba@halcrow.com

AustraliaMelbourneBillAustintel+61398999777fax+61398991214emailaustinmw@[email protected]

SydneyChrisAdamstel+61292509900fax+61292412228emailadamscg@halcrow.com.au

BahrainDavidAldistel+97317877829fax+97317877849emailaldisdg@[email protected]

BangladeshDhakaGhulamMustafatel+88028821877or9882625fax+88028823663emailhalcrow@halcrowbd.com

BelizeBelmopan CityIanCoopertel+5018221362fax+5018222001emailcooperi@halcrow.com

BrazilRio de JaneiroAugustoGuimaraestel+552122402700fax+552122402700ext201emailhalcrowbrasil@halcrow.com

CanadaTorontoCathySparktel+14163638123fax+14163630341emailcathy.spark@halcrowyolles.com

VancouverJimChimtel+16042932882ext111fax+16042932892emailjim.chim@halcrow.com

ChileSantiagoAlejandroLabbetel+5626585094fax+5626585095emaillabbeaa@halcrow.com

ChinaBeijingCathyHutel+861082888540fax+861082888541emailhucq@halcrow.com

Hong Kong [email protected]

Shanghai Dr.VictorCheungtel+862163190808fax+862163190809emailcheungvw@halcrow.com

ShenzhenDr.VictorCheungtel+8675582979070fax+8675583382696emailcheungvw@halcrow.com

HungaryBudapestJánosFehé[email protected]

IndiaNew DelhiPradeepJaintel+911146501500fax+911146501599emailhcil@halcrow.com

IrelandDublinSamMcCurdytel+35314033600fax+35314594357emailmccurdys@halcrow.com

LatviaRigaValdisVitolinstel+3717320234fax+3717320235emailhb@halcrow.com

LibyaTripoliGiumaBenMahmoudtel+218214441322fax+218213332172emailhalcrow@lttnet.net

MalaysiaKuala LumpurNorzalinaSulaimantel+60362015402fax+60362014406emailhalcrowkl@halcrow.com

NepalKathmanduMadanShresthatel+97714350509fax+97714350509emailnepal@halcrow.wlink.com.np

PakistanIslamabadAbbasHassantel+92512203451fax+92512203462emailisb@halcrowpk.com.pk

PhilippinesMakati CityMichaelYaxleytel+6328195231fax+6327500468emailhalcrow@halcrow.com.ph

PolandWarsawJarekKarpiejuktel+48226308379fax+48226254211emailwarsaw.office@halcrow.com

QatarDohaStewartHaytel+9744420507fax+9744421898emailhays@[email protected]

RomaniaBucharestGeorgePanatel+40212111871fax+40212103013emailpanag@halcrow.com

RussiaSt PetersburgDavidEdwardstel+78123321378fax+78123321377emailedwardsd@halcrow.com

South KoreaSeoulAndreaChoitel+8227795437fax+8227795439emailchoia@halcrow.com

Saint LuciaCastriesMandishSinghtel+17584521112fax+17584531454emailhalcrows@candw.lc

Syria [email protected]

ThailandBangkokAliAdamtel+66(0)26763830fax+66(0)[email protected]

Officesandcontacts



United Arab EmiratesSami Al-QazzazIanMcLennantel+97126790804fax+97126785422emailhme-abudhabi@halcrow.com

DubaiDavidYawtel+97143370380fax+97143379239emailhme-dubai@halcrow.com

SharjahJohnFarrertel+97165734333fax+97165732999emailfarrerj@[email protected]

United KingdomBirminghamPeterRoberytel+44(0)1214562345fax+44(0)[email protected]

BristolChrisKearnstel+44(0)1179389300fax+44(0)[email protected]

CardiffBarrieJonestel+44(0)2920720920fax+44(0)[email protected]

ChichesterRachelFowlertel+44(0)1243649900fax+44(0)[email protected]

CrawleyCatherineMerlanetel+44(0)1293434500fax+44(0)[email protected]

DerbyLesleyDhindsatel+44(0)1332222620fax+44(0)[email protected]

EdinburghRonBeardtel+44(0)1312723300fax+44(0)[email protected]

ExeterSarahDawetel+44(0)1392444252fax+44(0)[email protected]

GlasgowDonaldBelltel+44(0)1415522000fax+44(0)[email protected]

HandforthJohnDalytel+44(0)1625540456fax+44(0)[email protected]

InvernessJohnWalkertel+44(0)1463231707fax+44(0)[email protected]

LeedsSharonWatttel+44(0)1132208220fax+44(0)[email protected]

London MatthewWernhamVineyardHousetel+44(0)2076027282fax+44(0)[email protected]

VanessaConstableShortlandstel+44(0)2082333800fax+44(0)[email protected]

Newcastle and GatesheadTomBrowntel+44(0)1914873555fax+44(0)1914875818emailtyne&[email protected]

Norwich KevinMarshtel+44(0)1603226161fax+44(0)[email protected]

PeterboroughGarethHeatleytel+44(0)173356003fax+44(0)[email protected]

Plymouth SteveBurgetel+44(0)1752502980fax+44(0)[email protected]

ReadingPaulGranttel+44(0)1189650100fax+44(0)[email protected]

Snodland CatherineMerlanetel+44(0)1634244114fax+44(0)[email protected]

Stockton-on-Tees JohnNicholastel+44(0)1642632800fax+44(0)[email protected]@teesside.com

Swindon GarryWhitakertel+44(0)1793812479fax+44(0)[email protected]

Waltham Cross RolandGrzybektel+44(0)1992707100fax+44(0)[email protected]

WorcesterChrisKearnstel+44(0)1905361361fax+44(0)[email protected]

YorkCarolSnowdenLendaltel+44(0)1904559900fax+44(0)[email protected]

CarolSnowdenMuseumStreettel+44(0)1904559900fax+44(0)[email protected]

United States of America Houston MichaelPraughttel+18322423816fax+18322423818emailmpraught@han-padron.com

Jacksonville [email protected]

Las Vegas StephanKordttel+17022536617fax+17022530031emailstephan.kordt@halcrowyolles.com

Long BeachKenForssentel+15624938300fax+15624938308emailkenforssen@han-padron.com

New York HelgaJunoldtel+12126084963fax+12125665059emailjunoldh@halcrow.com

JonathanGoldsticktel+12126083990fax+12125665059emailjgoldstick@hpa.com

OaklandGayleJohnsontel+15104520040fax+15104520041emailgjohnson@han-padron.com

TampaTodStockbergertel+18138766800fax+18138766700emailtstockberger@hpa.com

WashingtonBobUlrichtel+17033515025fax+17033127068emailulrichr@halcrow.com

VenezuelaCaracas PaulNixontel+582122665322fax+582122675827emailvenezuela@halcrow.com

VietnamHanoi City [email protected]


Notes


DesignedandeditedbyHalcrow’scorporatecommunicationsteam.

PrintedbyRumboldHollandLithoPrinters.

Cover270gsmColorplandarkgreymadefromElementalChlorine-Freefibre,withsilverblocktextonouter.Textprintedon170gsmNovatechSilk,a100%recyclablepapermanufacturedaccordingtoISO9002andISO14001standardsusingchlorinefreepulpsfromsustainableforests.NovatechisproducedatEuropeanUnion’sEcoManagementandAuditSchemecertifiedmills.Theoriginatingforestsareauthenticallymanagedandsustainable:atleasttwotreesareplantedforeveryonefelled.

Notes

Halcrow Holdings LimitedAnnual reportand accounts 2006

annual report and accounts 2006 - halcrow pensioners

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