Deloitte Touche Tohmatsu Worldwide Member Firms 2004 Review

Sustainable leadership.

Organizations that engage in open, transparentdialogue with stakeholders will sustain leadership.

Organizations that embrace higher ethical standards will preserve the public trustand will sustain leadership.

Organizations that provide solutions tocomplex problemswill sustain leadership.

Organizations that see regulatory complianceas a means to preserve investor confidencewill sustain leadership.

Organizations that think and act both globallyand locallywill sustain leadership.

Organizations that develop people devoted to integrity and quality, and that promote diversity,will sustain leadership.

Organizations that fulfill their responsibilities as good corporate citizenswill sustain leadership.

Organizations that demonstrate financial stabilitywill sustain leadership.

Organizations that engage in open, transparent dialogue withstakeholders will sustain leadership.

The power of Deloitte Touche Tohmatsu worldwide lies in the cultural and intellectual diversity of its independently owned and controlled member firms operating in almost 150 countries throughout the world, as well as in their shared values and commitment toprofessional excellence. DTT and its member firms owe much to the vision of their formerleaders and partners, the dedication of their people, and their valued clients. Collectively, the Deloitte member firms have emerged as a leading multiservice organization. Across ourfirms, broad new leadership is defining new and higher standards for our profession.

Now more than ever, openness, transparency, and continual improvement are the keys tosuccessful business leadership. Our stakeholders have a right to know how we work and how we live up to our values. In that spirit, we are proud to share information about our governance,core values, commitment to integrity, financial results, and the steps we are taking to sustainpublic trust.

William G. ParrettChief Executive Officer

Today, boards are taking a proactive role in helping companies succeed. They are scrutinizingfinancial reports, strengthening governance systems, and intensifying their overview of strategy andethics—all in an effort to build public trust.

Boards know that success requires more than checking the profit-and-loss statements. Successmeans performing well on a variety of fronts: enhancing employee commitment, protecting theenvironment, building the brand, and verifying the quality of governance and managementprocesses.

As we continue to address the changing needs of companies worldwide and explore new ways tohelp our clients raise their standards and succeed, we, too, adhere to the highest standards and arecommitted to continual improvement in our organization.

Piet HoogendoornChairman of the Board

Deloitte Touche Tohmatsu1633 BroadwayNew York, NY 10019-6754USA

Deloitte refers to one or more of Deloitte Touche Tohmatsu (DTT), a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. As a Swiss Verein (association), neitherDeloitte Touche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions. Each of the member firms is a separate and independent legal entity operatingunder the names “Deloitte,” “Deloitte & Touche,” “Deloitte Touche Tohmatsu,” or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein.

Dear Valued Stakeholders,

In a world that is undergoing rapid change, it is crucial to understand the organizations thatshape our business environment—how organizations provide value to clients, what they do tostrengthen the capital markets and sustain the public trust, and how they are meeting thechallenges they face today.

The member firms of Deloitte Touche Tohmatsu continue to focus on client service excellenceand delivering value. Our audits are important in helping clients maintain their credibility in thecapital markets. Our tax services assist clients in meeting their tax obligations. The financialadvisory services professionals of our member firms are providing advice and support in areasranging from mergers and acquisitions to litigation and arbitration, while our consultingprofessionals are helping clients run more efficient, effective businesses.

Undeniably, professional services firms have experienced the turmoil and change of the pastfew years. Our historically self-regulated practices have been influenced by new, and oftencomplex, standards, regulations, and oversight frameworks. Like other organizations, we alsoface an increasingly litigious environment.

Members of The Executive include: (left to right) Colin Taylor, Jean-Paul Picard, Willy A. Biewinga (seated),Hirotake Abe, John P. Connolly, Dr. Wolfgang Grewe (seated), Jerry P. Leamon, and William G. Parrett

In response to these challenges, we have taken steps to maintain the confidence of our clients.We have redoubled our efforts to build and sustain the public’s trust in the capital markets. Wehave focused on recruiting, training, and retaining the highest-quality professionals from ashrinking talent pool. Our tax practices have distinguished themselves by focusing on high-quality services without controversy. Our consulting practices have adapted well to the shiftingmarket by focusing on their strengths. Through these difficult times, we have become strongerat the global, national, and local levels.

It shows. Financially, our member firms have excelled. Aggregate global revenues increased20.8 percent for the year ended May 31, 2003, and 8.6 percent for the year ended May 31,2004. We continue to pursue a global growth strategy that enables us to focus on areas andregions where we can strengthen our position as a leading professional services organization.

Today, our people are working harder than ever to be leaders in setting the standard forintegrity and quality. They are also the foundation of our social responsibility, donatingthousands of hours of their time to help the people in their local communities.

In this report, we tell the entire story; however, we understand that some readers may needmore information than others. Accordingly, we have divided the report into two sections. “Insummary” captures many of the important initiatives, achievements, and challenges of therecent past, and outlines our plans for the future. For a closer look at DTT and our memberfirms, we also invite you to read the second section, “In detail.”

This report is about not only our achievements, but our aspirations. As firms that do business innearly 150 countries and operate in some areas where standards and regulations are stillmaturing, it is difficult to operate flawlessly. We still strive for consistency everywhere and toserve our clients worldwide to the best of our ability. We have learned from our experience andwe continue to improve.

During the past 10 years, it has become clear that the real story behind Deloitte is one oftremendous success. We have achieved a leadership position, and we know that sustaining thatposition means making more tough decisions, acting on those decisions, and sharing our goalsand challenges with you, our valued stakeholders.

The Executive

William G. Parrett

Hirotake Abe

Willy A. Biewinga

John P. Connolly

Dr. Wolfgang Grewe

Jerry P. Leamon

Jean-Paul Picard

Colin Taylor

6

In summary

1

Deloitte refers to one or more of Deloitte ToucheTohmatsu, a Swiss Verein, its member firms, andtheir respective subsidiaries and affiliates.

In summary

Preserving the trust and confidence of our clients and the public is one of our highest priorities at the Deloitte Touche Tohmatsu member firms.Ultimately, this responsibility affects every aspect of our daily business. We know the impact our decisions and actions can have on clients, becausethey play a significant role in the capital markets.

For these reasons, we devote the resources ittakes to preserve the trust of our clients andthe public.

DTT’s member firms are continuouslyevaluating and making improvements in allour service lines, focusing rigorously on bothour audit and advisory services. We arecodifying and clearly communicating ourshared values and ethical principles andushering in a new era of transparency andaccountability to help the public and ourclients know exactly where we stand andwhat we are doing.

The Most Fundamental Assurance of Quality—Our People Our people are at the front line of our qualityassurance measures. Starting with a strong“tone at the top” is essential to integrity andquality and extends to the professionals whoperform at the local level. The people of DTT’smember firms are dedicated to doing theright thing.

Our Global Shared Values

• Integrity

• Outstanding value to markets and clients

• Commitment to each other

• Strength from cultural diversity

Our work often involves complex issues thatencompass evolving global, national, and localregulations, procedures, and policies. In additionto comprehensive cross-functional policies andstandards, we have created extensiveconsultation networks. As a result, ourprofessionals, wherever they may be, have accessto the people who have the knowledge, skill,and expertise to assist in making the bestdecisions. Our people recognize the importanceof consultation and they understand that theanswer resulting from this process is important.

Organizations that embrace higher ethicalstandards will preserve the public trustand will sustain leadership.

2

In summary

Our Stakeholders’ Right to Know Sustaining trust is impossible without candiddialogue with our stakeholders. Ourstakeholders have a right to understand howwe work, how we deliver and monitor quality,and how we live up to our values.Accomplishing this means communicating inan open and honest manner—even if thatmeans adopting new areas of disclosure andreporting for our professions.

Today, we are engaging in directcommunication through publications such as“Integrity & Quality: The Foundation of OurCulture” and reports like this one. We areasking the leaders of our member firms toengage in a dialogue with their clients andtheir communities. Our senior leaders areactively engaged in meeting with governmentand community representatives to emphasizethat Deloitte is taking an active stance withrespect to communication and accountability.

Uniting through Shared ValuesThe shared values of the people of Deloittebind us together and promote trust among thepartners and professionals of our memberfirms, allowing us to enhance the confidence ofthe capital markets. These values join ustogether across different cultures, customs, andlanguages and are the foundation for collectivesuccesses.

Carefully identified through a globalconsultation process, these values are all-encompassing and embrace the cultures inwhich our member firms operate. Thisthorough process resulted in universal sharedvalues that form a basis for a consistentapproach to service delivery worldwide.

Ethical Principles: Guiding Our PeopleThese principles are a result of closecollaboration between DTT’s global ethics andcompliance officer, DTT’s global independenceleader, and senior partners from memberfirms around the world. They offer guidanceto our professionals on the global and locallevels and address matters of professionalconduct, including confidentiality,competence, and leadership.

Ethical Principles

Honesty and IntegrityWe act with honesty and integrity.

Professional BehaviorWe operate within the letter and the spiritof applicable laws.

CompetenceWe bring appropriate skills and capabilitiesto every client assignment.

ObjectivityWe are objective in forming our professionalopinions and the advice we give.

ConfidentialityWe respect the confidentiality ofinformation.

Fair Business PracticesWe are committed to fair business practices.

Responsibility to SocietyWe recognize and respect the impact wehave on the world around us.

Respect and Fair TreatmentWe treat all our colleagues with respect,courtesy, and fairness.

Accountability and Decision-MakingWe lead by example, using our sharedvalues as our foundation.

3

In summary

Sustaining Trust through a Shared Audit Approach

The clients of DTT’s member firms have long benefited from a consistent shared auditapproach. Regardless of where an audit is performed, DTT’s member firms use a commonframework and software, which can be tailored to address varying regulatoryrequirements and industry circumstances.

Additionally, our member firms continue their long-standing commitment to conductingquality assurance reviews of audit engagements. These reviews are performed by apartner or senior manager who is not part of the engagement team. The InternationalFederation of Accountants (IFAC) has adopted this practice, making it a requirement forall auditing firms in 2005 with respect to financial statement audits for listed entities, butit has been an integral part of our quality control procedures for well over 10 years.

Quality assurance reviews are not limited to the engagement level. Internal practicereviews of the member firms’ accounting and auditing practices are performed every yearfor large member firms and at least every three years for smaller member firms. These aredesigned to verify that the member firm has complied with quality assurance procedures,DTT and member-firm policies, and applicable laws and regulations.

As a provider of public accounting and auditing services around the world, DTT’s memberfirms not only comply with applicable international professional standards andrequirements, but also contribute to standard-setting efforts and endeavors aimed atadvancing the profession. The accounting and auditing services provided by our memberfirms are performed in accordance with International Standards on Auditing. Memberfirms also meet or exceed the International Auditing and Assurance Standards Board’sInternational Standards on Quality Control, as well as the requirements of the IFAC codeof ethics. Deloitte voluntarily complies with the requirements of the IFAC Forum of Firms,comprising international public accounting and audit organizations, of which DTT is afounding member.

We take pride in the strength of our global audit approach and quality assurancemeasures, yet we recognize that maintaining superior client service and the public trustdemands continuous improvement and self-scrutiny at the member firms. We havefocused intensely on doing our part to rebuild confidence in financial reporting. These area few examples of enhancements that member firms have made to ensure clientscontinue to receive the highest quality in audit practices:

• All partners and managerial professionals are required to enter and update theirpersonal investment portfolio in our online Global Independence Monitoring System.This information is automatically cross-referenced against the list of entities requiringindependence, facilitating timely identification and resolution of potential issues.

• Member firms have always been required to establish plans to addressrecommendations arising from practice reviews, and implementation was monitored. Toreinforce the importance of continuous improvement, our senior leaders are now evenmore proactively involved in this oversight.

• A senior partner oversees global quality standards. This partner is also responsible forcodifying and strengthening the network of quality assurance specialists in the memberfirms.

• We enhance our global audit software to incorporate new standards, regulatoryrequirements, and other developments around the world. We have also provided ourprofessionals with expanded means of assessing financial statement risk.

4

In summary

With our commitment to providing a broad array of services, the DTTmember firms can solve complex problems by offering the mostcomprehensive breadth of professional services available in the globalmarketplace. Advisory clients of our member firms can leverage the power of our entire range of professional capabilities.

In part, this decision was made because theconsulting practices strengthen our firms’ability to serve their clients, which, in turn,strengthens the firms.

To maintain the benefits of their consultingpractices to their clients, our member firmssegment the market rather than segmentingtheir capabilities. This enables them toprovide the entire spectrum of theircapabilities to advisory clients. It also allowsmember firms to enhance the quality of theiraudits by bringing clients the subject-matterknowledge they need while remaining trueto the independence safeguards ofapplicable regulations.

Organizations that provide solutions tocomplex problems will sustain leadership.

In addition to traditional consulting services—strategy and operations, human capital,enterprise applications, and technologyintegration—our member firms bring a fullrange of accounting and financial advisory,tax, and enterprise risk capabilities to bear oncomplex problems.

Our multidisciplinary approach reflects ourability to provide unique skills across functionsto serve clients in multiple jurisdictions. Closecooperation enables professionals in DTT’smember firms to consider client problems notin isolation, but across the context of theentire global enterprise. Every day, this uniquestrategy is helping our clients achievedramatic results—in risk management andmergers and acquisitions, in complying withregulatory changes, and in working withenterprise portals, enterprise cost reduction,radio frequency identification, revenueenhancement, and many other areas.

Offering Services across Multiple DisciplinesDTT’s member firms offer a broad array ofresources, skills, and tools to best serve theirclients and deliver comprehensivemultidisciplinary capabilities. Our memberfirms considered separating their largestconsulting operations from the rest of theirorganizations while retaining certain otherconsulting competencies. After review of allthe factors, however, DTT and its memberfirms made a strategic choice not to do so.

5

In summary

Organizations that see regulatorycompliance as a means to preserveinvestor confidencewill sustain leadership.The operating environment of the public accounting profession has undergonetremendous change during the past two years. The shift from a self-regulatedenvironment to one of significant new government regulation and third-partyoversight has encompassed every major national market and region of the world.

Across our organization, our firms arecommitted to complying with new regulations.During the past year, DTT and its member firmshave devoted significant resources andmanagement time to compliance and toworking with regulators to support thesuccessful implementation of newrequirements.

We have also devoted significant resources tohelp our member firms meet these challenges,with important new investments in qualityassurance, independence monitoring, riskmanagement, and regulatory informationsystems. One of our most important objectivesis to strengthen the trust our clients and thepublic have placed in us and to restoreconfidence in auditors and their firms.

To aid our people in understanding andimplementing the new regulatory requirements,we continue to expand our extensive globalnetworks of subject-matter knowledge. Theseconsultation networks help our professionalsmake the appropriate decisions based on thelatest information and specialized advice andcounsel. This process allows the professionals ofour member firms to arrive at the best answersto complex questions—answers that willwithstand scrutiny.

Maintaining Independence from Our Audit ClientsMaintaining independence from audit clientsdepends on people who act with soundjudgment, objectivity, professional skepticism,and integrity. All Deloitte people know it iscritical to abide by the applicableindependence rules and to sustain a positiveperception of independence in the investingcommunity.

Our firms have always taken a comprehensiveapproach to independence, and in responseto new regulations and public perception, wehave implemented even strongerindependence policies, procedures, andsystems. Our multifaceted approach includesan expansive consultation network; rigorouspolicies, including those on partner rotation;an electronic system for tracking financialinterests; monitoring procedures, such as anannual confirmation of compliance by eachprofessional and each member firm; anddisciplinary actions for noncompliance.

A New Regulatory Environment

In response to corporate scandals in theUnited States, Congress enacted theSarbanes-Oxley Act of 2002, setting apattern for action in many otherjurisdictions. France has adopted a newfinancial security act; Germany isdeveloping legislation to implement its10-point plan on financial reporting andaudit; Japan has amended its law oncertified public accountants; and theEuropean Union (EU) is working on anew 8th Company Law Directive, whichwill establish a framework for audits andauditing in the 25 EU member states.

6

In summary

Organizations that think and act bothglobally and locally will sustain leadership.Deloitte is an organization of member firms that provide professionalservices and advice with an emphasis on performance, integrity, andquality. Key among our strengths is the global reach of our firms. Today,we are focused on client service through a global strategy that is carried outlocally in nearly 150 countries.

With almost 120,000 people worldwide, ourmember firms deliver services that can becategorized in four broad functional areas:audit, tax, financial advisory/corporate finance,and consulting services. The people of DTT’smember firms serve more than half of theworld’s largest companies, as well as largenational enterprises, public institutions,privately owned companies, and successful,fast-growing global companies.

As a Swiss Verein, Deloitte’s member firms areowned and managed locally by their respectivenational management and governance bodies,but retain membership in a global family. Thisgives us extraordinary insight and perspectiveon local matters, from regulation and specificmarket needs to maximization of our globaltalent pool and expertise. The structure alsoenables our global organization to establishpolicies and the member firms to tailor thosepolicies into quality assurance procedures thatcomply with local regulatory, legislative, andprofessional requirements.

A Strategy for GrowthThe strategy for member-firm growth is firmlygrounded in the marketplace. In short, prioritymarket sectors, geographical areas, andindustries are identified, and then energy isfocused on expanding our member firms’presence in those segments.

Expansion and growth efforts are directed atstrengthening the presence of our memberfirms in areas where they have the potential tobecome leading service providers; however,they will not sacrifice the ability to serve existingclients at the highest levels of integrity andquality simply to expand the business.

7

In summary

People and Locations

The accompanying charts illustrate the distribution of the personnel of the Deloitte member firms by geography andfunctional area. The term “function” is used internally by Deloitte and designates the organization of our people in theirrespective disciplines. Each functional area comprises various capabilities.

Asia-Pacific/JapanEurope/Middle East/AfricaAmericas

September 2004May 2004May 2003May 2002

42,200

17,000

100,400

47,850

21,200

120,000

48,200

41,200

50,950 47,000

19,800

115,000

50,500

46,500

20,000

117,000

Partners and employees by geographic region

AdministrationTaxConsulting

Financial Advisory ServicesAudit

September 2004May 2004May 2003May 2002

45,1004,000

4,950 4,900 4,800

16,400

13,100

100,400

54,200

20,600

16,200

120,000

55,400

20,000

21,800

24,050

56,000

20,000

15,200

117,000

21,00019,500

15,200

115,000

Partners and employees by functional area

Presence of DTT’s Member Firms

FY 2002 FY 2003 FY 2004

Number of member firms 77 77 71

Number of countries 141 145 148

Number of cities 686 655 670

The decrease in the number of firms primarily reflects theconsolidation of member firms in certain geographic areas.

In 2004, in several countries, new regulations governing auditor independence led our member firms to divest certainbusinesses to comply with applicable rules and regulations. The decision to retain consulting also produced someefficiencies and cost savings that led to a reduction in employee levels, but not in service quality. As a result of theconsolidation in our professions, our member firms welcomed a number of new professionals throughout 2003.

8

In summary

Organizations that develop people devoted tointegrity and quality, and that promotediversity, will sustain leadership.Simply stated, the success of our member firms as leaders among professionalservices firms depends on the integrity and quality of their people. What setsthem apart is their ability to provide high-quality services, to make judgmentsbased on sound knowledge and experience, to act with objectivity, and to upholdhigh ethical standards.

Deloitte’s working environment is open andhonest. We put a high value on collaborationand consultation. The DTT member firms areconstantly working to provide the rightbalance of professional challenges,competitive remuneration and benefits, andtraining and development opportunities tohelp our people meet their personal andprofessional ambitions.

Our Global People Commitment Survey,which is used by a number of member firms,allows us to monitor performance with

Working Together

Deloitte is committed to multiculturalismand inclusion wherever we operate. Tous, working together across cultural andgeographic borders is a competitiveadvantage that allows us to capitalize onour differences and use them to addvalue for our organization and ourclients. It is our strength that we are anorganization that understands,appreciates, values, respects, and workswith each other’s differences.

respect to human resource practices. Basedon the survey, we believe that the vastmajority of our people are satisfied workingfor Deloitte; however, we recognize that thereis always room for improvement. Ourmember firms are taking steps to better retaintop talent, help employees create a strongerwork-life balance, and make the link betweenperformance management and recognitionmore concrete and transparent.

Recruiting Superior TalentWe have created the Global Excellence Modelas the basis for DTT’s member firms’ humanresource and personnel policies. This model isused to profile the competencies, intellect,academic training, and diversity ofbackground required by our professionals.

9

In summary

Our member firms use many proven measuresand techniques to identify and attractsuperior talent, including:

Strategic education programs andinstitutions. Our member firms concentratetheir recruiting efforts on the best educationalinstitutions in their geographies.

Behavioral interviewing. Looking beyondcurriculum vitae, we ask how candidates havemanaged previous situations, particularly thosein which there were competing pressures andethical issues.

Internships. Through our internship program,we offer short-term employment to the bestand brightest future professionals while theyare completing their education.

Global recruitment technology. Memberfirms have access to technology that uses job-specific questions to identify candidates whopossess optimal characteristics foremployment.

Talent development. Talent developmentefforts identify member-firm partners whoexhibit strong leadership and practicemanagement qualities in order to maintain astrong pipeline of partners with potential forglobal leadership roles in client service andpractice management.

Deloitte voices“Mobility seems to be the name of

the game—by the time I have

wrapped up an engagement in

Abu Dhabi, I may have started

another project in Dubai or

Al Ain. Working with colleagues

from different cultures in an

open-minded and flexible

atmosphere has fostered my

team-working abilities.”

Senior, Dubai

“Being a father of two young

children and having a wife who is

employed full-time, flexible work

arrangements are a plus here.”

Senior Manager, Belgium

“Deloitte is very focused on

retaining its people so they will

do their best to ensure that

everyone receives challenging

and interesting work. The main

reason I am here is because I’m

always learning.”

Senior, Australia

“I am impressed with the

knowledge and experience

Deloitte provides its employees

through personal mentoring

and training opportunities.”

Assistant, Guam

In summary

10

Organizations that fulfill their responsibilities as good corporate citizenswill sustain leadership.With a strong local presence in many countries, Deloitte member firms areuniquely positioned to have a positive impact on the people and communitiesin which they operate. Our commitment to corporate social responsibility isclosely linked to our shared values and our belief in responsible businesspractices.

The services provided by our member firmsare valuable to the capital markets and thebusiness environment in helping themoperate efficiently and effectively.

Just as the economic and social well-being ofdiverse communities has a direct impact onour success, we can have a positive influenceon our communities by conducting our corebusiness activities in an ethical manner and byengaging in projects and alliances with localand regional organizations to the benefit ofsociety and our stakeholders.

Around the world, our member firms continueto demonstrate corporate citizenship throughactive involvement in international and local

policy and economic development, skill trainingand educational programs, and philanthropicand community relations activities. We believethese are inherent responsibilities of allmultinational organizations.

Responsibility on a Global ScaleDTT’s member firms and their professionalscontribute to and participate in international,national, and local organizations that supportthe development of professional standardsand the advancement of our professions.

For years, many of our professionals, includingour leaders, also have been deeply involved inprojects, working groups, initiatives, andorganizations created to serve the public.

Today, Deloitte is actively engaged with anumber of organizations that seek to advancethe corporate social responsibility agenda.These organizations are valuable platforms forus to communicate with peers and the publicabout how to live out our commitment tocorporate social responsibility.

Exceeding Our Professional ResponsibilitiesThe people of Deloitte’s member firms share along tradition of supporting the communities inwhich we live and work. In addition to financialcontributions made by our member firms, tensof thousands of our people volunteer time anddonate money to a variety of causes thatencourage economic development and raisepublic awareness of the positive impactbusiness can have on the community.

Recognition from the Community

The spirit of corporate socialresponsibility permeates all levels of ourorganization. This year, we are proud thatour China firm has received the CaringCompany Award from the Hong KongCouncil of Social Service in recognition ofour efforts in caring for the communityand our commitment to corporatecitizenship.

11

In summary

Organizations that demonstrate financial stability will sustain leadership.Although the professional services sector has seen unprecedented turmoiland transition during the past few years, there has been tremendous demandfor the services of DTT’s member firms. Results in this period reflectconsistent revenue growth.

This steady growth has taken Deloitte memberfirms from being the smallest of the globalprofessional services organizations, and oneprimarily focused on audit and tax, to beingone of the leading organizations today. Weattribute the success of our member firms tothe value of our services, to our people, andto strategic initiatives that have been carriedout steadfastly around the world.

In the past two years, all functional areascontributed to our revenue growth exceptconsulting, which, as a result of certaindivestitures, experienced a slight decline. Taxachieved the most significant increase inrevenue, at almost 60 percent, while auditrevenue rose by more than 50 percent.

Although the implementation of newregulations has required a substantialinvestment of our time and financialresources, it has also driven the demand forour services. Our member firms are expandingtheir businesses by broadening relationshipswith current clients and attracting new clientswith our commitment to client serviceexcellence, coupled with the depth andbreadth of our capabilities.

Global GrowthDuring the past two years, our member firmshave strengthened their collective globalposition. The revenues of our member firmsin the Europe/Middle East/Africa regionincreased by more than 60 percent, nowaccounting for more than 40 percent of totalglobal revenue. We have seen average annualgrowth of approximately 8 percent in ourfirms in the Americas and the Asia-Pacific/Japan regions.

Revenue growth is only one measure offinancial strength and stability. Global,national, and local market share are equallyimportant. DTT and our member firmsmonitor market share to determine howsuccessful we are in achieving our strategies.

Looking Ahead The economic indicators are in place for animproving global economy. We have engagedin constructive dialogue concerning properreforms and anticipated the regulations thathave had such a profound impact on ourprofessions. And we are setting the standardsfor integrity and quality to meet clientdemands. For these reasons, we predict anapproximate 7 percent gain over the comingyear, and we expect growth in all majorregions of the world and in each function.

Expanding into Emerging Markets

There are various emerging markets where our member firms are expanding their presence.The development of our firm in China is the most significant of these. We see China as anarea of virtually unlimited potential, and our member firms have major audit and advisoryclients operating there. They are working diligently to expand relationships with the Chinesegovernment and Chinese enterprises. To position itself as the one organization that can helpboth foreign and Chinese companies in that country, our member firm in China is planningto expand rapidly. These efforts are expected to cost approximately US$150 million.

Although expanding into an emerging market certainly has potential, it also brings challenges.There are costs and strategic considerations associated with doing business in markets withshifting ownership structures and evolving regulations and standards. Professional servicesorganizations have an obligation to provide assistance in the constructive development of suchmarkets.

200420022000199819961994

$5.2$6.6

$12.5$11.2

$9.0

$16.4

DTT member firms—A history of strong growth (in billions of US$)

Fiscal years ended 31-May

12

Client Service Approach 13

Our People 20

Building a Sustainable Future 23

Leadership and Governance 26

Financial Performance 29

In detail

13

For many years, clients have depended onDTT’s member firms to help them meet theirmost demanding business challenges. Wehave built our functional areas, developed ourprofessional talent, expanded our memberfirms, and worked to anticipate change withthe goal of sustaining the trust of clients andthe public.

Today, after careful consideration of anevolving regulatory environment and the bestinterests of clients, our member firms remaincommitted to a multidisciplinary approach.This approach considers challenges not inisolation, but across the context of a client’sentire organization. It also encourages greatersharing of resources, information, andcompetencies, helping to achieve anenterprisewide advantage.

Benefits of a Multifunctional Business ModelDeloitte member firms offer advisory clientsthe value resulting from a true multifunctionalapproach, which includes a full complementof consulting capabilities. Advisory clients ofour member firms also benefit from ourprofessional objectivity. In the context ofvarious national regulations, we determinedthat our firms can still providemultidisciplinary services to audit clients whilecarefully adhering to all independencerequirements and steadfastly applyingrigorous internal assurance policies andprocedures.

Advisory clients of DTT’s member firms canleverage the power and depth of our entirerange of professional capabilities and services.In addition to consulting services in areas suchas strategy and operations, human capital,enterprise applications, and technologyintegration, DTT’s member firms bring a fullrange of accounting and financial advisory,tax, and enterprise risk capabilities andexperience to bear on complex problems.

It is not only advisory clients that benefit fromour broad range of capabilities and in-depthknowledge. In today’s environment ofincreasingly complex technology, transactions,and global business structures, the knowledgeand experience of specialists are a requisite forperforming a high-quality audit. Our auditteams have access to specialists in areas such astechnology, security, internal controls, capitalmarkets, taxation, and actuarial services.

Client Service ApproachFocused on Global Client Service Standards and Excellence

Deloitte and its member firms have always worked to balance respect for the diversity oflocal cultures, customs, business ownership structures, and the shared values that bind ourmember firms together. Our global client service standards have fostered the confidence inDTT and its member firms that has allowed us to attain our leadership position. Recently,we conducted a thorough reexamination of these standards to ensure that they reflect thechanges in the environment in which we operate, our clients’ needs, and our organization.

Global Client Service Standards

1. Determine, on each engagement, who our clients are and directly ascertain theirexpectations for our performance. Depending on the location and nature of theservices, clients may include the board of directors, the audit or supervisory committee,and management (all of whom are representatives of shareholder interests); financinginstitutions; governmental entities; trusts; partnerships; and parties to a mergertransaction.

2. Analyze our clients’ needs and professional service requirements.

3. Develop client service objectives that will enable us to fulfill our professionalresponsibilities, satisfy our clients’ needs, and aim to exceed their expectations. Preparean appropriate client service plan to achieve these client service objectives.

4. Execute the client service plan in a manner that has earned us our reputation for qualityand endeavors to ensure that commitments are met, potential problems areanticipated, and surprises are avoided.

5. Establish effective communications, both internal and external, to enhance our clients’recognition of the value and quality of our service.

6. Provide our clients with insights on the condition of their businesses and withmeaningful suggestions for their improvement.

7. Continually broaden and strengthen our relationships with our clients to facilitateeffective communication and enhance client confidence, while maintaining professionalobjectivity.

8. Ensure that any professional, technical, or client service problem is resolved promptly,with timely consultation in an environment of mutual respect.

9. Obtain from our clients, either formally or informally, a regular assessment of ourperformance.

10. Receive fees that reflect the value of services provided and responsibilities assumed,and that are considered fair and reasonable.

Our member firms constantly refine anddevelop our functional areas and help buildthe skills of their professionals to addresschanging global, local, and regulatoryconditions, as well as stakeholderexpectations. In this way, we position ourentire organization for growth.

“...the company has settled as Deloitte. It is the only full-service professional services firm left with integratedglobal capabilities across consulting, systems integration,audit, tax, and financial advisory. The company istherefore placing itself in a category of one. In the future,the firm expects to differentiate itself even further, as itbelieves enterprises will seek to resolve business,technology, financial, and regulatory compliance issueswithin a single, integrated view.”

IDC Worldwide Services 2004 Vendor Analysis:

Winning in the Global Services Marketplace, Lessons Learned from the Top 20 PlayersIDC #31614, August 2004

14

In detail: Client service approach

Audit ServicesDeloitte is a recognized leader not onlybecause of its size, but also by virtue of auditquality and the credibility of the work of ourmember firms with audit and supervisorycommittees, regulators, and the investmentcommunity.

A Consistent Global Audit Approach Deloitte addressed the globalization of businessby establishing a proprietary international auditapproach that is used by all DTT member firms.This global audit approach, known asAuditSystem/2 (AS/2), was the first to include afully integrated audit methodology, commondocumentation, and enabling software. AS/2’sfeatures are highly flexible, with the capabilityof addressing clients’ circumstances andfinancial reporting and professionalrequirements that vary from country to country.

This consistent international audit approachpromotes audit quality and efficiency andfacilitates the ongoing development of auditprofessionals, regardless of where they maywork or where their careers with Deloitte maytake them. The approach also reduces the riskthat important audit findings may bemisunderstood when a participating memberfirm communicates with the primary clientservice team.

Our risk-based audit approach is designed toobtain a thorough understanding of the client’sglobal business, assess financial statement risks,and consider the reliability of internal controls

over financial reporting. Our member firms’audit teams then tailor the audit plan toaddress the risks, objectives, and controlreliance strategy they have identified.Throughout the audit, our teams continuallyassess risk and how audit findings bear on theirtesting procedures, allowing them to addressissues appropriately as they arise.

DTT and its member firms are investingsignificant time and resources to furtherenhance our audit methodology and software.The next generation of our audit approach will:

• Effectively address new regulatoryrequirements and developments in auditingstandards around the world

• Provide member firms’ audit teams with a“dashboard” view of the progress of theaudit, the audit findings, and open issues thatneed to be addressed

• Improve teamwork and collaboration amongour participating member firms throughelectronic means.

Providing a Global AdvantageIn addition to core audit services, DTT’smember firms offer a variety of specializedservices closely related to the audit. Forinstance, Global Offering Services is aninternational team of professionals withbroad knowledge of U.S. accountingprinciples, disclosure requirements, and SECrules and regulations. They are committed toworking closely with local client service teamsto assist global companies in accessing theU.S. securities markets.

To meet the 2005 requirement for EuropeanUnion companies to adopt InternationalFinancial Reporting Standards (IFRS), DTT’smember firms have developed a network ofprofessionals who devote substantial time toIFRS conversion projects. The experience andknowledge we gain during these projects willgive our audit teams an advantage in auditingIFRS financial statements.

Enterprise Risk ServicesOur member firms’ enterprise risk services(ERS) professionals help clients identify andassess risk and uncertainty and enhance thereliability of systems and processesthroughout the enterprise.

Core competencies encompass capitalmarkets, control assurance, internal audit,regulatory consulting, and security services.ERS professionals play a vital role in providingrisk assessment and technology support foraudit engagements. This has becomeincreasingly important in light of new internalcontrol reporting and attestationrequirements in various markets.

Technological innovation, globalization,regulation, and the increased accountabilityof senior management and boards havecombined to significantly change thelandscape of risk management. Throughindustry-based risk control specialists, DTT’smember firms deliver market-drivenintegrated solutions to advisory clients. Ourbest practices and global framework forservices enhance cross-border synergies andcollaboration. We have e-enabled knowledgetransfer and client service delivery and wefocus on value-creating services that improvethe effectiveness of risk management.

The internal audit services offered by DTT’smember firms range from helping to design astrategic plan for internal audit toreengineering existing departments orproviding specialized resources foroutsourcing the entire internal audit function.

In detail: Client service approach

15

Tax and Legal ServicesWith more than 20,000 professionalsworldwide and a presence in every majortrading nation, the tax and legal practices ofDTT’s member firms serve companies in everybusiness sector and industry. From individualsto start-up companies and mid-sized familybusinesses to large domestic companies andglobal enterprises, our tax professionals havethe skills and tools they need to help clientscomply with complex, evolving regulations.

Regulatory and market changes around theworld have had an enormous impact on theprofession and the clients of DTT’s memberfirms. The convergence of two issues—anti-avoidance legislation and scope ofservice/auditor independence regulations—has created uncertainty. Our member firmshave responded proactively, helping clientsaddress the regulatory environment, assesstax risks, and respond appropriately to taxauthorities.

Meeting the Demands of a Global EconomyIn this volatile atmosphere, clients requireprofessional services providers with deeptechnical competence and a global networkof specialists in international tax and transferpricing, indirect tax, international assignmentand personal tax services, mergers andacquisitions, and corporate tax.

Through our global service-line approach, wecan develop and test innovative solutions inareas such as research-and-developmentcredits and tax risk management. The deliveryof these services through our global networkof member firms is further enhanced bystrong relationships and the industry-specificexperience of the lead tax partners whoserole is to align Deloitte’s tax services withclients’ business needs.

Service Delivery Innovation The provision of tax advice is complex,because taxing authorities’ requirements mayconflict or require sophisticated interpretationto assess the relevant facts and circumstances.In specialized areas of taxation, companiesmust comply with detailed rules that demandfocused technical knowledge; however, thesecomplexities and contradictions also canprovide planning opportunities. To assist ourclients with these complexities, DTT and its

member firms have developed state-of-the-arttools and technologies such as Transfer PricingArchitect and CORPTAX ETS (Enterprise TaxSystem).

Earning high praise from clients, DeloitteOnLine is an innovative, flexible, Web-basedcollaborative tool that allows better controland communication on complexengagements. Marketing innovations such asDbriefs, an informative, timely, interactiveonline series, bring Deloitte’s insights on thelatest tax developments directly to our clients’desktops.

Technology innovation, our client-centric,global network of deeply skilled specialists,and a sustained commitment to quality makethe Deloitte member firms the preeminentglobal providers of tax services.

Financial Advisory ServicesOur member firms’ Financial Advisory Services(FAS)/Corporate Finance professionals providecomprehensive services, including merger andacquisition structuring, support andintegration, due diligence, corporate financeadvice and execution, valuation services,reorganization services, forensic investigationsand technology, and litigation and arbitrationsupport. Primary clients include companiesand private equity firms engaged intransactions, disputes, restructuring, andrelated challenges. Deloitte member firmsalso provide services to major law firms,governments, and international lendingagencies.

In addition to their basic qualifications,principally as accountants, many of the FASpractitioners in our member firms holdaccreditations or certifications in specialtyfields, such as corporate finance, valuation,turnaround advisory services, or fraudexamination. In countries and localities whereit is required, portions of the FAS practices ofmember firms are licensed and regulated.

Taking a Proactive Stand on New Regulations

The Sarbanes-Oxley Act of 2002 requiresinspection of public accounting firmsregistered with the U.S. Public CompanyAccounting Oversight Board (PCAOB).The inspections began in 2004 after theregistration process was complete, butDeloitte and the other Big Four firmsagreed to submit to a voluntary limitedinspection in 2003, prior to registrationand the more rigorous 2004 inspection.

When the 2003 limited inspection reportwas issued in August 2004, ChairmanWilliam J. McDonough of the PCAOBstated, “None of our findings has shakenour belief that these firms are capable ofthe highest-quality auditing.” Althoughthe report did include some constructiveobservations and suggested areas ofimprovement—which we take seriously—we are proud that the inspection resultsconfirm that the audit work of our U.S.member firm on the selectedengagements did not lead to Deloitteperforming any significant additionalprocedures on any of the auditengagements reviewed.

Tax Takes Top Honors

Euromoney’s 2004 edition of the ExpertGuide to the World’s Leading TransferPricing Advisers ranked our transferpricing network as first in the world.Corporate tax advisors and peers fromleading companies and firms around theworld named a number of professionalsin Deloitte’s member firms as leaders inthe field. We far surpassed ourcompetitors in this respect. Deloitte alsocame out on top in many of the world’smajor financial jurisdictions, includingBelgium, Brazil, Canada, Germany, Japan,Italy, the United Kingdom, and theUnited States.

In detail: Client service approach

16

Future Opportunities We expect the markets for corporate financeand transaction services to strengthen in thenear to medium term. Currently, Deloitte’sTransaction Services practices hold a leadingposition in several major markets and aregrowing in a number of others. In addition, ourmember firms are building resources in keymarkets such as China, France, Germany, and Japan.

Driven by market forces such as corporatefailures, forensic investigations, regulatorydevelopments, and money laundering, theForensic & Dispute Services and ReorganizationServices practices of our member firms continueto find opportunities for expansion. Arbitration-related support and testimony is expected tofoster growth in the areas of domestic disputesin noncommon-law countries and ininternational arbitration cases. The EconomicAnalysis practices of our member firms alsohave significant growth potential related tointernational merger and competition cases.

ConsultingThe consulting functions of Deloitte’smember firms are now, in aggregate, one ofthe three largest consultancies in the world.As an integrated part of our organizationwith approximately 20,000 professionals,DTT’s member firms are the onlyconsultancies in the world that can offerclients such a comprehensive scope ofmultidisciplinary services, ranging fromstrategy formulation to implementation.

This broad capability and the unique marketposition is an advantage for Deloitte and forclients. Unlike most consultancies, DTT’smember firms have a powerful process andtechnology implementation capability thatenables them to take strategic plans anddesigns and help their clients turn them into reality.

Advisory and Implementation Practices Our advisory consulting practices encompasscorporate strategy, financial management,operations, human capital, and business ITstrategy. Member firms are working hard tomake their implementation practices even morecompetitive and are actively seeking meaningfulalliances with large technology services firms tobroaden our large-scale businesstransformation capabilities.

Although recent regulations have limited theopportunity to work for some clients, otherregulations have led to rapid growth in thedemand for our services. Currently, memberfirms are working to help clients understandthe implications of Basel II in the financialservices sector, food safety regulations inconsumer business, and the Sarbanes-OxleyAct and similar regulations around the world.

New Developments and Initiatives DTT’s member firms are identifying new areasof demand and accelerating development oftheir service offerings in key areas, includingrevenue enhancement, mergers andacquisitions, cost reduction, supply-chainoptimization, and human capital. We recentlyannounced a number of new initiatives tosustain the collective leadership position ofour member firms and support their clients.

The Value Initiative offers a suite of diagnostictools to map and assess all key aspects of anorganization’s business operations. Key to theValue Initiative is our proprietary EnterpriseValue Map (EVM), a one-page summary thatidentifies how value is created and whatclients can do to improve performance.

Our new knowledge management systempools many of our insights and experiencesfrom around the world and makes themavailable to all practitioners in all DTTmember firms.

Member firms continue to publish thought-provoking research in response to currentchallenges. For example, we co-authored thebestseller The Innovator’s Solution, a survey ofthe impact of offshoring in the financialservices industry, and a periodic survey onproductivity and jobs produced by our HumanCapital practices.

Superior Client Service through Risk ManagementGlobal risk management processes, applicableto all our functional areas, are essential indelivering excellent client service andmaintaining the reputation for quality ofDeloitte member firms. And they are vital toensuring our member firms do the rightthing, even if it means turning down anengagement.

A number of activities are fundamental tothese processes: carefully identifyingcompanies where our relationship is mutuallybeneficial, identifying and addressingpotential conflicts of interest, determining theservices each member firm can offer in itsmarketplace, defining the engagement termsthat are appropriate for the specified services,and addressing engagement risks.

Member firms perform a formal riskassessment when an engagement is beingconsidered. Guidelines are in place to identifyand resolve professional, legal, and regulatoryconflicts that may arise from a prospectiveengagement. Approval protocols requireconsultation with designated individuals inspecified circumstances.

Client relationships are evaluated periodicallyand engagement risks are reassessed beforeour member firms decide to continue arelationship. For high-risk engagements,additional consultation with designatedindividuals is required. If they believe it isinappropriate to continue serving a client, ourmember firms will terminate the relationship.

For multinational companies, engagementacceptance and continuance procedures areperformed by each participating member firmfor the work it will carry out in its localebefore a decision is reached.

“Deloitte (rebranded in early 2004) has not only weatheredthe storm of non-separation but turned its uniqueintegrated service offering into a proven ace in the hole.”

META Group ResearchDeloitte Detour Deemed a “W”

July 13, 2004

In detail: Client service approach

17

DTT, its member firms, and their people know that maintainingindependence from audit clients entails more than compliance withrules and regulations. In serving audit clients, our member firmsand their professionals must consider how their independence isperceived. Legislation, regulations, and professional guidance canmandate the fact and appearance of independence. However,ensuring our independence depends on people acting with soundjudgment, objectivity, professional skepticism, and integrity—all ofwhich are characteristic of the people of our member firms.

Our multifaceted approach to independence from audit clientsincludes the following elements:

• Global independence network. This network covers all memberfirms and service areas. The global managing partner ofindependence is supported by a staff of specialists and a networkof partners who are responsible for independence assurancemeasures in their respective member firms.

• Independence policies, procedures, and training. DTT and eachmember firm maintain written independence policies.Coordination among members of the independence networkallows the development of policies that are compliant with allapplicable rules and regulations. DTT also provides materials onindependence for our member firms to use in training theirpartners and employees.

• Tracking and identification of entities that requireindependence. To help ensure the continued independence ofDTT, the member firms, and their respective people, we use aproprietary electronic financial interest tracking system known asthe Global Independence Monitoring System (GIMS). Partners andmanagerial professionals must enter their investments into GIMSand keep the information current. To facilitate timelyidentification and resolution of conflicts, each person’s portfolio ischecked against our electronic list of audit clients and otherentities that require independence.

• Global client engagement and acceptance. Our global client andengagement acceptance policy requires the partner for eachpotential engagement to complete a process to determinewhether the client is one from which DTT member firms mustmaintain independence. If the entity requires independence, thepartner must verify that the proposed services are permissibleunder applicable independence policies and consult with the leadclient service partner.

• Monitoring and enforcement. Through our practice reviewprocess, member firms’ quality control processes overindependence are reviewed for compliance with policies. Inaddition, each member firm certifies its compliance with DTT’sindependence policies each year. Just as DTT can exercisedisciplinary action against member firms that do not comply withthe policies of our global organization, member firms mayexercise disciplinary action ranging from reprimand to terminationof professionals who do not comply with independence policies.

• Partner rotation. Each member firm’s partner rotation policy mustcomply with local regulations and professional standards.Furthermore, DTT has a global partner rotation policy that isapplicable to all public-interest audit clients. At a minimum, thelead client service partner and the partner who performs the qualityassurance review cannot function in those roles for more thanseven consecutive years. The policy also prohibits returning to anengagement for a minimum of two years.

• Partner compensation. The partner compensation structures ofmember firms vary according to local requirements, marketplaceconditions, their respective partnership agreements, andprofessional guidance. In addition to embracing the importanceof quality, integrity, and technical excellence, the compensationpractices in each member firm must comply with applicableindependence requirements.

To further ensure that audit partners focus on their primaryresponsibility to provide high-quality audit services, DTT has aglobal policy that forbids them from receiving direct financialincentives for selling products or services to their audit clients,other than those products and services related to the audit,review, or attestation. Regulatory requirements in certaincountries require this policy for audit partners serving public-interest companies, but DTT and its member firms have chosen toextend the policy to all member firms’ audit partners. Generally,no independence perception issue is associated with offeringpartners incentives to sell services to clients when they do notparticipate in the audit of those clients.

A Multifaceted Approach to Independence from Audit Clients

In detail: Client service approach

18

Global Industry GroupsAs a vital component of our quality and clientservice strategy, DTT member firms continue tobuild on our deep industry knowledge.Knowing our clients’ industries as well as weknow our own is critical to meeting their needsacross all functional areas.

DTT’s member firms supplement the knowledgeacquired through serving clients by participatingin global, national, and local industry groups,conferences, and seminars. Our global, cross-functional industry programs are led by seniorpartners and provide our client service teamswith extensive knowledge and consultativeresources on technical industry issues.

Our dedication to attracting and developingprofessionals who can solve industry-specificchallenges has made DTT’s member firms aleading service provider to Fortune’s Global500. The industry groups listed below have theknowledge and experience to deliver servicesthat are tailored to the specific needs of clients:

• Aviation and transport services

• Consumer business

• Energy and resources

• Financial services

• Life sciences and health care

• Manufacturing

• Public sector

• Technology, media, and telecommunications

• Real estate.

Responding to New Market Developments At Deloitte, we have developed innovativeresponses that cut across traditional industry ortechnical boundaries to meet changing marketdemands. The following are only someexamples of how our member firms aremeeting their clients’ needs by pioneeringinnovative solutions.

Security. In a time of economic uncertainty andincreased regulation in response to terrorism,security has become a top priority. Deloittemember firms are helping clients respond tothese new challenges by offering end-to-endsolutions with new business strategies,improved supply-chain management,information assurance, and international taxexperience.

Addressing emerging reform. Throughmember firms’ audit, tax, financial advisory,and consulting capabilities, we bring all thetools and perspectives our clients need notonly to comply with national regulations andreforms, but to improve corporategovernance, strengthen controls, and increaseinvestor confidence by moving beyondcompliance.

Delocalization/offshoring. Major institutionshave increased their move to delocalizefunctions and global businesses have focusedeven more on India and China. Our industrygroups responded with thought leadershipmaterial and conferences, and by strengtheningour member firms’ presence in those markets.

Japanese Services Group. For the past threedecades, the Japanese Services Group (JSG)has been meeting the needs of Japaneseclients operating throughout the world.Historically, this has been one of our mostsuccessful global services groups. The JSG isthe largest and most established network ofJapanese professionals associated with anyBig Four professional services firm. The JSGoffers consistent worldwide service toJapanese businesses, helping them meet thegeographical, technological, and culturalchallenges of global competition.

Chinese Services Group. Deloitte China, incooperation with member firms operating instrategic markets, established the ChineseServices Group (CSG) to complement andsupport the growth in services to Chinesecompanies. Initially, inbound investments intoChina will be the primary market focus of theCSG. At the same time, however, the CSGwill build the foundation that will allowmember firms in China and abroad tobecome the professional service provider ofchoice for globalizing Chinese companies,especially with regard to their investmentsoverseas.

Radio frequency identification. Alreadymandated by some large retail companies andthe U.S. government, radio frequencyidentification (RFID) technology enablescompanies to track goods in real timethroughout the entire supply chain. Our newservice offering, Mobile ID Services, helpsusers navigate the entire RFID deploymentprocess, from compliance and technology

integration to optimizing their RFIDinvestment and enhancing enterprise value.

Money-laundering prevention. Practitionersfrom financial advisory services, assurance,regulatory services, and consulting serviceshave formed a working group to coordinatethe services provided by our member firms inthe area of money-laundering prevention.They have been engaged by prominentfinancial institutions throughout the world.

Sustainability reporting. In an increasingnumber of countries, teams are helpingclients develop public reports that provideinternal and external stakeholders with thecompany’s visions, values, principles, andgovernance practices. These “sustainabilityreports” focus on economic, social, andenvironmental performance. We are alsodeveloping assurance approaches to suchreporting.

Leveraging Technology to Add Valueacross National Borders

In various markets, Deloitte firms haveestablished a number of tools andresources to assist clients and, in manycases, the general public, in betterunderstanding the dynamics of financialreporting requirements, corporategovernance, and the capital markets.One example is our IAS Plus Web site,which provides comprehensiveinformation about international financialreporting. Available free of charge atwww.iasplus.com, the site has a broadarray of information and resourcesrelated to the International AccountingStandards Board and InternationalFinancial Reporting Standards (IFRS),including:

• Online educational modules, whichhave been accessed and downloadedfor use more than 100,000 times sincebecoming available

• Detailed summaries of the standardsand related interpretations

• Comparisons of IFRS to generallyaccepted accounting principles invarious nations

• Model IFRS financial statements anddisclosure checklists.

In detail: Client service approach

19

Aviation & Transport Services

Technology, Media, & Telecommunications

Manufacturing

Life Sciences &Health Care

FinancialServices

Energy & Resources

Consumer Business 77%

58%

73%

90%

69%

78%

74%

Percentage of Fortune’s Global 500 served by our member firms

The Deloitte Approach to the Market

Although the underlying foundations of our shared service approach—shared values, ethicalprinciples, client service standards, and a commitment to excellence—are common across theentire client base of our member firms, we recognize that to maintain superior client service,our firms must tailor their approach to the factors and issues that prevail in a particularsegment. For this reason, DTT’s member firms segment the market in a manner that enablesthem to provide the right mix of experience and expertise for each client situation. Generally,the market is segmented by geography, industry, the size of the client, and the nature of theservices provided.

Serving more than half of the world’s largest companies, as well as large national and middle-market enterprises, public institutions, privately owned companies, and successful, fast-growing companies, our member firms worldwide serve clients through the broad functionalareas of audit, tax, financial advisory/corporate finance, and consulting services.

DTT’s member firms audit their fair share of Fortune’s Global 500. In addition, due to theirbroad range of services, they serve more than 70 percent of the Global 500. This marketshare further demonstrates global strength.

Our global industry groups bring deep industry knowledge to our client engagements. Weenjoy significant market share in many segments, including:

• Consumer Business. Our member firms serve 98 percent of the world’s top 30 consumerproducts companies, 75 percent of the top 100 retailers, and 80 percent of the top 30tourism, hospitality, and leisure companies.

• Energy and Resources. Deloitte member firms audit 50 percent and serve 87 percent of theelectrical power companies in the Global 500.

• Financial Services. Our member firms provide services to more than one-half of the world’stop 50 banking institutions, 33 of the top 50 insurance companies, 20 of the top 25securities firms, and 15 of the top 20 asset managers.

• Manufacturing. In the Global 500, our member firms serve more than three-quarters of theautomotive companies, 58 percent of the process companies, and 79 percent of theaerospace and defense companies. In addition, DTT’s member firms audit 35 percent of thetop 20 manufacturing companies in the Global 500.

Our Marketplace

Deloitte member firms have a wide array ofcompetitors. Other companies serving in ourmajor functional areas are listed below. As aresult of the different services provided byeach organization and the potential fordiffering presentation of results, amounts arenot necessarily comparable.

Total Revenue for the Big Four(most recent period available)1 US$millions

Deloitte $16,421Ernst & Young 14,547KPMG International 12,160PricewaterhouseCoopers 14,683

FY03 Total Consulting Revenue2, 3

Deloitte4 $5,920.0

Elite Strategy Firms and/or HR Consulting FirmsA.T. Kearney $ 846.0Bain & Company 890.8Booz Allen Hamilton 2,017.0Boston Consulting Group 1,009.8Hewitt Associates 734.0McKinsey & Company 3,000.0Mercer 2,719.0Towers Perrin 1,031.3Watson Wyatt Worldwide 1,067.0

IT Consulting FirmsAccenture $8,272.0BearingPoint 3,141.0Capgemini 5,073.8EDS5 1,195.9IBM 12,955.0

1 Information obtained from public Web sites.PricewaterhouseCoopers also discloses aggregatedgross revenues, with reimbursed expenses, of US$16billion. Deloitte and Ernst & Young are fiscal 2004amounts and KPMG International andPricewaterhouseCoopers are fiscal 2003 amounts.

2 © 2004 Kennedy Information, Inc.; from ConsultantsNews, June 2004, “CN 75 Firms”; reprinted withPermission of the Publisher.

3 Kennedy Information uses four broad segments tocategorize consulting services: informationtechnology, strategy, human resources, andoperations management. Services related tooutsourcing are excluded from this definition.

4 Deloitte member-firm revenues reflect fiscal 2004,which is the year ended May 31, 2004. Revenues areinclusive of all consulting and advisory competencies,including strategy, operations, finance, riskmanagement, human capital, technology, andenterprise applications.

5 Amount excludes revenues from A.T. Kearney, anindependent subsidiary of EDS.

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Deloitte and its member firms aim to helptheir people reach a meaningful balancebetween their professional and personalpriorities through a variety of arrangements. Examples include:

Flexible work arrangements. In somecountries, some employees enjoy reducedhours, reduced workload, job-sharingarrangements, or telecommutingopportunities.

Career breaks. Employees in some countriescan be considered for career breaks.Consideration is given to requests forpurposes such as a course of further study,the birth or adoption of a child, care for a sickor elderly relative, bereavement, or thetemporary transfer of a spouse or partner.

Child care. In some locations, member firmsoffer child care resource and referralprograms that can assist with day care, homecare, and programs for school-age children.

Adoption and elder care assistance. Anotherservice helps employees who wish to adopt achild by providing access to adoptionspecialists and information about licensedadoption agencies, private adoptions, andstate regulations. Employees can also obtainassistance with elder care.

Learning and Development OpportunitiesEnhancing current competencies anddeveloping new ones are part of a continuouslearning process that DTT and our memberfirms encourage to enhance client service andincrease personal satisfaction. Examplesinclude:

International assignment programs. Eachyear, Deloitte’s international assignmentprograms offer more than 1,000 people fromapproximately 60 countries the opportunity toexpand their skills and experience by workingabroad. Deloitte’s award-winning GlobalDevelopment Program gives talented youngprofessionals the opportunity to spend up tothree years in another country early in theircareers. Our member firms continually workto develop new leadership opportunities foryoung partners and senior professionals.

Our PeopleThe people of DTT’s member firms are guidedin their actions by the organization’s sharedvalues and ethical principles. They arededicated to providing superior client servicewith professional objectivity and to workingdiligently to preserve the trust of their clients,the capital markets, and the public.

Because we set high expectations for ourpeople, they have a right to expect as muchfrom our organization. DTT’s member firmsoffer a challenging and rewarding workenvironment, pay competitive salaries in themarkets where they operate, provideopportunities for education and careeradvancement, and are dedicated to fosteringan atmosphere of inclusion.

Instilling Integrity and Quality in Our ProfessionalsThe business of Deloitte member firms is toprovide the expertise, character, judgment,experience, and objectivity of their people tohelp clients address the challenges they facein managing their businesses. For that reason,it is crucial that our member firms hire,develop, and retain people of the highestquality who are committed to our professionsand to serving clients with skill and integrity.

DTT’s member firms’ recruitment andselection methodology requires jobcandidates to participate in behavior-basedinterviews and thorough assessments of theirkey competencies. This enables them toidentify professionals who have the skills andqualities for which we are known. To retainthe high-quality professionals hired by ourmember firms, we strive to offer our people aframework in which they can thrive anddevelop as professionals and as individuals.Throughout Deloitte member firms, ourEmployer of Choice program concentrates onmeasures that help meet these needs:

• Appropriate learning and careerdevelopment opportunities

• A program to manage and identifyindividuals with a strong potential tobecome leaders

• Recognition and reward packages thatencourage high performance

• Work-life balance and other benefitprograms that help our professionalsmanage their personal and professionalcommitments

• An environment of inclusion andunderstanding across cultures.

Investing in Our People Deloitte and its member firms haveimplemented the following “global peoplecommitments” that describe how we worktogether across borders and cultures toensure that professionals thrive inside andoutside the workplace:

• Attract and retain the best

• Communicate openly and effectively

• Empower and trust

• Recognize success

• Respect and support work-life balance

• Develop people.

Working Environment Deloitte’s member firms strive to maintain aworking environment that is open and honest,and are committed to collaboration at alllevels of the organization. They emphasizeconsultation and teamwork and encourageflexibility on the part of all people.

Our member firms seek to live up to theircommitments to their people. This requiresthem to provide their people with the rightbalance of professional challenges,competitive remuneration and benefits,learning and development, and an excitingand inclusive working environment thatenables the individual to meet both personaland professional ambitions.

Every one or two years, our member firmsactively solicit the feedback of our peoplethrough the Global People CommitmentSurvey. As a result of this survey, DTT’smember firms are striving to improveperformance in the following areas:

• Retaining top talent

• Encouraging work-life balance

• Linking performance management andrecognition in a more concrete andtransparent manner.

Competitive Remuneration and Benefits DTT’s member firms pride themselves on payingcompetitive salaries in the markets where theyoperate and tailoring a wide range of benefitsto the needs of their people. Although they donot have a single global benefits policy, most ofour member firms offer benefits packages thatexceed the required minimum.

In detail: Our people

21

Deloitte Learning. Among the many optionsfor learning, DTT offers e-learning programs.The global Deloitte Learning portal offers asingle means of access to informationregarding local and global learning programs.Courses, which may take place in a classroomor online, cover technical, strategic, andoperational issues; language training; projectmanagement; leadership; and humanresources training. These resources are inwide use by professionals throughout theworld. In fiscal 2004, some 75,000 peopletook advantage of the e-learning curriculum.

Global Excellence Model. Our GlobalExcellence Model (gEm) performance andcareer development system providesguidelines and templates to assistprofessionals in managing their careers andmonitoring their performance. The systemalso facilitates the delivery of client service bycreating an understanding of thecompetencies required in each service areaand at each level, regardless of geographiclocation. The model is invaluable in matchingthe competencies of our professionals andthe unique needs of our clients withmaximum effectiveness.

Strategic Talent Development of Future Leaders Strategic talent management efforts focus onidentifying and developing those partners inDeloitte member firms who exhibit thepotential for global leadership in clientservice and practice management roles. Ourgoals are to foster stability during leadershiptransitions and to maintain continuity in ourclient relationships through carefulmanagement. To maintain a strong pipelineof capable individuals who are prepared toassume global leadership roles, we identifyand develop partners who exhibit strongleadership and practice managementqualities.

The Young Partners Advisory Group consists ofyoung partners who have been identified fortheir outstanding leadership potential. Thegroup’s task is to address a topic of particularimportance to the global organization. Ourmost recent group includes young men andwomen from almost 20 countries, withexperience across multiple industries andfunctional areas.

Professional Challenges and Advancement OpportunitiesDTT’s gEm-based performance managementsystem helps Deloitte member firms setexpectations for individual and teamperformance and ties the results toappropriate levels of compensation andreward. The culture of our organizationrecognizes and rewards talented people andprovides exemplary performers withopportunities for advancement.

Development opportunities—from coachingand mentoring to international experience—are provided to help the people in Deloittemember firms develop the knowledge, skills,and experience needed for outstandingperformance. The reward system is guided bya competency-based structure that definesroles, sets performance expectations, andevaluates people and teams based on theirperformance.

Special advancement opportunities areavailable to those qualified to becomepartners of our member firms. Becoming apartner in any member firm requires manyyears of training, as well as talent, skill, andproven performance.

The partner admissions frameworkrecommended for use by member firmsstrives to ensure that the process is fair,objective, and transparent, and that it isbased on accomplishment and anunderstanding of the economic and businessenvironment in which the candidate operates.

The framework provides six criteria toevaluate candidates:

• Service excellence

• Technical competency

• People development

• Demonstrated commitment to our shared values

• Leadership effectiveness

• Marketing and business generation.

Succession Planningand Job Placement

Monitoring and Review

Talent Identification

Assessment ofCapability and

Readiness

LeadershipDevelopment and

Deployment

Establishment ofLeadership Criteria

Our Strategic Talent Development Models

DevelopmentModels

In detail: Our people

22

Our commitment to and vision for inclusionrequire us to create opportunities for all ourpeople to participate in the various aspects ofour organization. Although our member firmsare united by this vision, our Multiculturalismand Inclusion Initiative recognizes that theimplementation of programs will be shaped,above all, by local and national cultures.

Our global strategy for multiculturalism andinclusion builds on several frameworks. Oneof our most immediate goals is to establish abaseline measurement, beginning this year,from which to determine accountability andadjust requirements. Another is to organizenetworks of member firms with similarprofiles to share plans and programs, such asincreasing the participation of minoritygroups and furthering opportunities forwomen in the workforce.

Finally, we are committed to providing globallearning programs to develop the skillsneeded to work cross-culturally. Currentprograms include our Women in Leadershipinitiatives in the United States and the UnitedKingdom, the Destination Transformationprogram in South Africa, the EqualOpportunity initiative in Sweden, and Womenin the Workforce networks in Europe, theMiddle East, and Africa.

Women in the Workforce

As part of our commitment tomulticulturalism and inclusion, wedeveloped a process this year thatrequires member firms to measure andreport gender statistics.

Currently, women in DTT and ourmember firms represent:

• 45 percent of all personnel

• 13 percent of all partners/directors

• 13 percent of the partners admitted in 2004

• 26 percent of managers.

Commitment to Multiculturalism and Inclusion We emphasize cultural diversity through ourMulticulturalism and Inclusion Initiative. Ourvision for this initiative is to demonstrate by ouractions that our member firms understand,value, and benefit from the differentbackgrounds of our people. Given our 71member firms covering nearly 150 countries,DTT and its member firms are naturally diverseand multicultural; however, our vision is notlimited to this broad view. Rather, DTT and itsmember firms strive to be multicultural andinclusive at all levels—within member firms,within local offices, and within client serviceteams.

Employer of Choice

During the past five years, DTT’s member firms have been recognized as employers of choice on more than 30 occasions. Various Deloitte member firms have received the following awards and recognitions:

• Named one of the best places to work in Denmark, Finland, France, Ireland, Italy, theNetherlands, Portugal, the United States, and Uruguay by the Great Places to WorkInstitute

• Ranked one of the best companies to work for in Spain by Actualidad Económica

• Recognized as one of the top 100 employers of choice in Sweden by Universum

• Designated one of the most desired companies in Hungary by Budapest University ofEconomics

• Named an employer of choice for women in Australia for the third year in a row by theEqual Opportunity for Women in the Workplace Agency

• Honored as one of the Pan European Society’s 100 best Czech companies

• Ranked one of the best companies to work for in Argentina by Mercado magazine

• Cited as one of the best companies to work for in South Africa by the CorporateResearch Foundation

• Voted one of the best places to work in Germany by WirtschaftsWoche

• Included among the top 50 employers in Canada by The Globe and Mail

• Ranked eighth among the top 10 Icelandic employers in the annual company of the yearsurvey conducted by the Commercial Workers Union

• Awarded a Work & Life Award by New Zealand’s Equal Employment Opportunity Trustfor helping our people integrate their activities and interests at work and outside work,thereby creating a culture that values its people and enables them to reach theirpotential.

23

Building a Sustainable FuturePrincipled Economic Conduct Our member firms have a responsibility toimprove economic and social conditionswhere they operate. We help sustain local,regional, and national economies by payingtaxes and compensating our employees fairly.

Our activities in the area of corporate socialresponsibility go beyond our daily businessfunctions. We support leading organizationsthat promote corporate social responsibility.As an organization of people dedicated toshared values and ethical principles, wedonate our time and resources to buildstronger communities.

A Positive Financial Impact through OwnershipAlthough we are a global organization, thepartners of our member firms own theirrespective practices. As a result, Deloitte has adistinctive beneficial impact in each countrywhere our member firms have a presence.

Typically, multinational companies repatriate asignificant portion of the revenues generatedby foreign subsidiaries back to the headquarterscountry. By contrast, virtually all the social andeconomic benefits of the revenues and profitsgenerated by DTT’s member firms remain in thecommunities where the work is performed,helping to build stronger local economies andfoster job growth.

Our Perspective on Corporate Social ResponsibilityOur shared values, ethics, integrity, andindependence are fundamental. These valueshelp build public trust and form the basis ofour approach to corporate socialresponsibility. To be socially responsible, we:

• Collaborate with organizations dedicated tofostering sustainable economic growth andsocial equity

• Work within the public and private sectorsto support economic development andeducation

• Encourage the member firms to rewardtheir people for contributing to theircommunities.

Making a Global Difference To advance responsible globalization, member firms have entered into strategiccommitments with several organizations.These organizations promote responsibleglobal citizenship and sustainabledevelopment by encouraging businesses torecognize and commit to economic growth,environmental protection, and social equity allover the world. These organizations provide avaluable forum for discussion of corporatesocial responsibility and best practices foracting on our commitment.

World Economic ForumDTT was one of the founding signatories ofthe World Economic Forum’s GlobalCorporate Citizenship Initiative (GCCI) in2002. The GCCI conducts annual surveys ofsignatories to gain insight into corporatesocial responsibility and produces thoughtleadership on specific issues related toresponsible business practices.

World Business Council for Sustainable DevelopmentA member of the World Business Council forSustainable Development since 1991, DTT hasbeen actively involved in many workinggroups and projects through the years. Thisorganization is a coalition of 170international companies united by a sharedcommitment to sustainable development viathe three pillars of economic growth,ecological balance, and social progress. Mostrecently, we worked with Rabobank andSTMicroelectronic on a three-year project todevelop Striking the Balance, a reportaddressing the value of sustainabilityreporting and best practices for achieving it.

United Nations Global CompactDeloitte has been involved with the UnitedNations Global Compact, an initiative seekingto promote responsible global citizenship byadvancing universal values in businessoperations, since its inception. DTT is the onlyprofessional services organization to be afounding member of the initiative. The GlobalCompact brings companies together withU.N. agencies, labor, and civil society tosupport 10 principles in the areas of anti-corruption, human rights, labor, and theenvironment. We strongly support the 10Global Compact principles and we participatein global meetings and a number of regionalGlobal Compact networks.

Most recently, Deloitte was commissioned bythe United Nations Development Programmeand the United Nations IndustrialDevelopment Organization under theauspices of the Global Compact to provide aresource document for its workshop onpartnerships for small enterprisedevelopment. We have also fulfilled ourobligation to publicly communicate ourprogress in relation to the Global Compactprinciples.

“It is no longer sufficient for multinational corporations todo merely what is legal. In every instance, multinationalcorporations must do what is right—through theirconduct, not just their words.”

William G. ParrettInternational Center for Corporate Accountability Conference

at the United NationsMay 2004

In detail: Building a sustainable future

24

Improving Our CommunitiesThe community involvement of our people isintegral to our approach to corporate socialresponsibility and an effective way for us tocontribute to sustainable communities. Ourpeople devote their time and energy toprojects such as school mentoring, healthassistance, and e-learning for unemployedyoung people. These efforts create greatersocial awareness of the value of corporatecitizenship and have far-reaching benefits forour professionals and the communities wherethey live. Here are a few examples of whatsome of our member firms and their peoplehave done:

Junior Achievement, Argentina. In additionto providing pro bono auditing, Deloitte’sArgentine firm collaborated on the JuniorAchievement TITAN program, which usescomputer simulations to help students gainexperience running a company and to applythe theory they learn during JuniorAchievement classes.

Fim de Semana com Música, Brazil. DeloitteBrazil sponsored music classes for 30teenagers from Favela Paraisópolis as part of acommunity cultural project known as Fim deSemana com Música (Weekend with Music).

School Mentoring Program, China. Incollaboration with local secondary schools,Deloitte China worked with the Education &Manpower Bureau of the Hong Kong SARgovernment to facilitate a school mentoringprogram for underprivileged students. Wehope to make a contribution to thedevelopment of the local workforce throughmentoring relationships with Deloitteprofessionals.

The Civilia Foundation, Czech Republic.Since December 2003, Deloitte’s firm in theCzech Republic has conducted variousfundraising events for Civilia Foundation, anorganization that provides shelter for olderabandoned children.

E-Learning Class, France. In partnership withSolidarités Nouvelles face au Chômage (SNC),Deloitte’s French firm hosts an e-learning classfor unemployed people. Our professionalslead seminars, mentor SNC members, andassist in resume preparation.

Project Siyakhula, South Africa. The idea forProject Siyakhula was born in 1998, whenaccounting trainees from Deloitte in Pretoriarecognized that by sharing their knowledge,they could make a difference in the educationof disadvantaged pupils from townshipschools. These trainees began visitingdisadvantaged schools on Saturday morningsto provide accounting lessons; six years later,the project continues to make a tangibledifference in the lives of students nationally.

La Fundación Tomillo, Spain. Deloitte Spainjoined with la Fundación Tomillo to designand present a four-hour course for youngpeople who are unemployed or at risk ofscholastic failure. The course, Learning toWork with Equipment, placed specialemphasis on communication skills and hands-on activities.

The Mustard Children’s Home, Taiwan. Thisyear, Deloitte Taiwan donated buildingmaintenance materials for the MustardChildren’s Home, and volunteers repaintedthe walls and cleaned the surroundings. Inaddition, Deloitte Taiwan will grantscholarships to five children each year andprovide them with living allowances until theyturn 20.

skills4industry, United Kingdom. Thisbusiness employment program,skills4industry, is led by Deloitte’s UnitedKingdom firm and backed by some of theUnited Kingdom’s largest companies. Itprovides 16- to 18-year-old students fromdisadvantaged communities with thequalifications, skills, and experience they needto secure employment.

In detail: Building a sustainable future

25

United Way, United States. With moremembers than any other company, our U.S.member firm is the clear leader amongcorporations in United Way’s prestigiousAlexis de Tocqueville Society—a group ofindividuals who contribute $10,000 or moreto United Way with the goal of improvingpeople’s lives. Deloitte’s participation in theprogram increased by 30 percent last year,creating an even greater impact incommunities around the country.

IMPACT Day 2004. More than 20,000 Deloittepeople from some 100 locations in Finland,India, Mexico, and the United States steppedout into their communities on 8 October2004 for IMPACT Day. Local office teamsspent months organizing this event. Ourvolunteers supported a number of causes bymentoring children, delivering meals to theelderly, beautifying facilities, painting murals,planting trees, and pulling weeds. Practiceleaders and clients of member firms in Eastand West Africa convened in Mombasa,Kenya, to discuss ways that business canaddress development concerns in the region.Three offices in China will hold their ownIMPACT Day later in the year.

Community Service RecognitionAround the world, DTT professionals andmember firms are recognized for theiroutstanding community involvement. Theseawards underscore what is possible throughthe dedication of time, resources, and skills.

Citizenship in Action Award, United States.In December 2003, the U.S. Chamber ofCommerce’s Center for Corporate Citizenshipawarded DTT’s U.S. member firm its inauguralCitizenship in Action award, honoring thefirm for its decision to champion early ethicseducation. Deloitte took the honors for itswork with Junior Achievement to create theExcellence through Ethics curriculum.

Socially Responsible Enterprise 2004,Mexico. In 2004, for the fourth consecutiveyear, the Centro Mexicano para la Filantropianamed Deloitte Mexico a socially responsibleenterprise. The award recognizes companiesthat promote social responsibility and aremost committed to the development ofMexico and its communities.

Concern for the EnvironmentAs a network of professional services firms,we do not have the far-reachingenvironmental impact of an industry such asmanufacturing. Our main effect on theenvironment is in the areas of transportation,energy consumption, and waste. Many of ourmember firms have already taken theinitiative to monitor, manage, and report ontheir environmental impact and activities. Wewill work with our member firms toencourage the development of systems tomeasure, monitor, and report environmentalimpact and to make efforts to reducenegative effects wherever possible.

Looking ForwardDTT’s member firms have a long history ofworking directly with local communities tohelp improve social and economic conditions.We will continue to encourage our people tohelp improve their communities and toreward them for their efforts.

We are moving toward a model in whichmost of our community involvement, socialinvestment, and philanthropic activity will beconducted through long-term partnershipswith business, civil society, and the publicsector. Because we believe our mostsignificant contributions to the globalcommunity are made through the time andexperience of our people, we are workingwith member firms to establish measures tobest capture our contributions to societythrough volunteerism and pro bono servicehours. These ongoing efforts are expected tobe effective in helping us sustain our leadingposition with respect to corporate socialresponsibility.

26

Leadership and GovernanceIt is through strong, well-conceived governanceand leadership structures that DTT’s memberfirms maintain the highest levels of quality andintegrity and sustain the trust of their clients,the capital markets, our people, and the public.

As a global organization comprising memberfirms and their affiliates in nearly 150 countries,we have governance and managementstructures at both the global and member-firmlevels. Our global policies form the basis formember firms to tailor their policies to complywith local rules and regulations. Although ourpolicies have withstood increased scrutiny andrecent regulation, we constantly work toidentify areas for improvement and new waysto anticipate regulations, allowing us tomaintain the highest level of confidence amongour stakeholders.

A Unifying StructureDeloitte is structured as a Swiss Verein, anassociation of member firms that are legallyindependent of one another but operate underrelated names. These names include “Deloitte,”“Deloitte & Touche,” “Deloitte ToucheTohmatsu,” “Tohmatsu,” and others.

The Verein is led by The Executive, which isheaded by the global chief executive officer;day-to-day management is executed throughthe Management Committee. Together, theyare responsible for determining and managingthe strategic direction of the organization. TheDTT Board of Directors is our highest governingbody. These management and governancebodies, along with other internal administrativeservices, such as human resources andtechnology, comprise what is referred to as DTT,or the global organization. The globalorganization and the member firms form theVerein.

The Verein sets out specific guidance to themember firms, including those regardingindependence and integrity. The Verein alsoprovides each member firm with exclusiveprivileges in its specific jurisdiction; all memberfirms must comply with the laws, regulations,professional rules of conduct, and codes ofethics of both the Verein and their respectivelocalities.

As a Verein, or association of member firms,DTT does not provide any services to clients.

It is funded by annual subscriptions paid byeach member firm, and does not haveindividual partners, principals, or shareholders.DTT personnel consist of staff of a subsidiary ofDTT or of partners, principals, or employees ofmember firms on assignment to DTT. The costof these assignments is borne by DTT.

Member-Firm StructureThe partners of DTT’s member firms are the soleowners of their practices. Their member firmsare organized on an individual-country orregional basis, and each operates within thelegal and regulatory framework of its particularjurisdiction. They are separate and independentfirms that are owned and managed locally.These firms have come together to practiceunder a common brand, methodologies, clientservice standards, and other professionalstandards and guidelines.

Our structure seeks compliance with rules oflocal ownership and management governingthe accountancy profession in most countries. Italso reflects the fact that our member firms arenot subsidiaries or branch offices of a globalparent. Rather, they are locally formed entitiesthat have voluntarily come together into aglobal association to coordinate their approachto client service. This structure also conferssignificant strengths: a deep understanding oflocal markets and a sense of responsibility andinitiative among our professionals, who have adirect stake in the integrity and growth of theirpractices.

Flexibility within a Strong NetworkThe Verein structure allows Deloitte to be aleader at all levels—locally, nationally, andglobally—because its governance policies aresensitive to the professional environment andculture of individual countries. At the sametime, individual practices, as members of theDTT global organization, have access to thecross-functional skills, knowledge, andconsultation networks of Deloitte, as well as itsmarket recognition and reputation.

DTT has adopted standards regarding specificleadership and governance structures. Each DTTmember firm has a managing partner, seniorpartner, or equivalent. In addition to theresponsibility for the executive management oftheir respective national practices, thesepartners are responsible for localimplementation of global policies and strategiesand for aligning national policies and strategieswith those of the global organization.

Each member firm is required to have agoverning body, such as a board of directors orboard of partners, to facilitate the soundgovernance of the individual practice, theimplementation of local rules and regulations,and the implementation of DTT global policiesand procedures.

Each member firm also appoints arepresentative to serve as a liaison to the globalorganization and to represent the member firmat the DTT World Meeting. This meeting is heldannually to update member firms on strategy

The Global Organization

The member firms support and adhere to the purposes and policies of the Verein by:

• Conducting themselves in a manner that advances the reputation of the organization

• Aligning national plans, strategies, and operations with those of the global organization,as appropriate, in consultation with global executive management

• Adhering to all requirements regarding professional standards, shared values,methodologies, governance of the Verein, and systems of quality control and riskmanagement

• Advising DTT’s executive management of the details of all joint ventures, joint practices,proposed mergers, and practice activity in jurisdictions other than those assigned to themember firm.

In detail: Leadership and governance

27

and initiatives proposed by globalmanagement and to vote on specific matterspertaining to the Verein, such as approval ofboard members or changes in the governingdocuments, financial statements, and votingentitlements of the member firms.

DTT Membership Quality ControlThe partners of Deloitte’s member firms areaccountable for their actions. To monitorcompliance with global policies andprocedures, member firms must undergoperiodic practice reviews conducted by theglobal organization.

When appropriate, DTT considers the additionof member firms in emerging jurisdictions tohelp serve our clients more effectively. Ourrigorous admission process ensures that DTT’sgovernance remains strong locally, as well asglobally.

Before any admission is proposed to theboard, a practice review is conducted onbehalf of DTT, covering the following matters:

• Professional reputation and integrity of thefirm and its partners

• Quality of the firm’s leadership andmanagement

• Profitability and financial position of thefirm

• Litigation

• Current market position and rate of growth

• Quality control procedures and a limitedreview of engagements in all practice areas.

The review team will make its recommendationfor or against admission of the applicant basedon the results of the practice review.

Once admitted, each member firm is subjectto applicable practice review processes todetermine its compliance with global policiesand procedures, as well as with local rulesand regulations.

These reviews provide reasonable assurancethat the policies and procedures relating tothe member firm’s system of quality controlare relevant, adequate, operating effectively,and complied with in practice. Practicereviews are conducted regularly across allfunctional areas and in each member firm,

DTT’s Leadership Bodies

In addition to the national management and governance bodies that have direct authorityover their respective member firms, globally, DTT is governed by its Board of Directors, ledby The Executive, and managed by the Global Management Committee. The Board ofDirectors works with its Governance Committee, which helps direct issues to be addressedby the board. Made up of representatives from throughout DTT, these leadership bodiesare designed to be inclusive and to allow a diversity of opinions.

The Executive and the Global Management Committee

Our global chief executive officer is elected by the partners of DTT’s member firms andserves a term of four years. The Executive comprises DTT’s most senior leaders. It isresponsible for establishing the vision and strategy that optimizes DTT’s success and forprotecting the long-term interest of all stakeholders. With eight members from variousregions around the world, the group works in a collegial style and attempts to reachdecisions through consensus.

The Executive is led by the global chief executive officer, currently William G. Parrett, whochooses the members subject to approval by the board and the provisions of the Verein.The Executive carries out its responsibilities through the Global Management Committee,a group of 17 partners with geographical and functional representation. This groupfocuses on business performance and execution of global strategy.

Board of Directors and Governance Committee

The Board of Directors, with 33 members, is our highest global governing body. The boardhas responsibility for addressing governance issues in our global organization. Currentlyled by Piet Hoogendoorn, the board oversees DTT management processes and monitorsethical conduct.

Members of the board are appointed by individual member firms that are themselvesselected based on size, revenues, and number of multinational clients. The board alsoincludes five regional seats, ensuring that smaller member firms are represented. Onceelected, a member can serve up to a four-year term.

The board is served by the Governance Committee, which has oversight responsibility forthe organization’s management. This multicultural group of senior partners engages inefficient, open discussion of issues before they proceed to the board. The GovernanceCommittee has equal representation of DTT’s 13 largest member firms. Each committeemember has one vote on matters considered by the committee. To avoid conflicts ofinterest, no member of the Governance Committee may also serve on The Executive. Theboard also has a number of subcommittees that coordinate and recommend action on awide scope of financial and administrative issues within the context of the globalorganization.

In detail: Leadership and governance

28

with the oversight of functional and riskmanagement leaders. These often involvedetailed engagement examinations by service-line specialists from outside the practice.

Member firms must establish detailed plans toaddress recommendations arising frompractice reviews, and DTT leaders activelymonitor adherence to these plans. Failure tocomply with current policies and procedurescould result in disciplinary action andexpulsion for member firms whose conduct isfound by the Board of Directors to beunprofessional or improper according to theconditions of the Verein.

Other global compliance processes have beenundertaken or are planned, including thefollowing:

• Risk management program design reviewshave been conducted by the Global RiskGroup

• Technology and security standards reviewsare planned by the Global InformationSecurity Office

• Internal audits have been conducted toensure that firms maintain their books andrecords in accordance with the DTTstandards for member firms

• Monitoring of compliance with ethicsstandards is planned by the Global Ethicsand Compliance Office

• A quality report card for each member firmis being considered.

member firms are generally expressed interms of unit value. Partners of member firmsare compensated in accordance with theirnumber of units at the applicable unit valuefor their firm. This compensation generallyprovides for the equivalent of salary, short-and long-term benefits, return on capital, andprofessional indemnity insurance.

According to recommended guidelines, theobjectives of the partner compensationsystem are to develop and reward partners ina way that:

• Promotes the delivery of client services thatset the standard for integrity and quality

• Encourages professional excellence andgrowth

• Rewards partners based on their relativevalue and the extent of their sustainedperformance

• Supports the global organization’sprofessional and business strategy

• Supports business-building and increasingprofitability.

As previously noted, to ensure our memberfirms’ audit partners focus on their primeresponsibility—to provide audit services of thehighest quality—our global policy forbidsthem from receiving compensation, bonuses,or other direct financial incentives for sellingproducts or services, other than audit, review,or assurance-related services, to their auditclients.

Ongoing Oversight and Continuous ImprovementAs part of our ongoing effort to strengthenoversight and enforcement of our governanceand membership policy, we review our globalpolicies to identify ways to achieveimprovement. As a result of our most recentreview, DTT is considering the followingrecommendations:

• The establishment of a “national office”structure for each member firm, modeledafter those already in existence for some ofour large member firms

• The involvement of a senior leadership teamin further assessing member-firmcompliance with certain membershipstandards

• The extension of the scope-of-practicereviews to other aspects of member firms’management practices and processescovered by global policies.

Partner CompensationAlthough the compensation practices ofindividual member firms vary, generally, thepartner compensation system is an earnings-allocation process.

Typically, each partner in a member firm isallocated partnership interests, known asunits, in his or her respective member firm.Under recommended guidelines, the numberof units allocated to a partner is determinedby several factors, with performance andclient service quality being the mostsignificant. The operating earnings of

29

Member-Firm Financial Performance and GrowthDeloitte is a stronger organization today thanever before. Through the hard work anddedication of people in the member firms andthe global alignment of our strategic initiatives,we have achieved unprecedented growth inmarkets around the world. DTT’s strategy toserve clients through a multidisciplinaryapproach has resulted in the enhancement ofour member firms’ client bases and hasopened new areas of opportunity.

Regulators, the investing public, and othershave an interest in obtaining more informationregarding professional services organizationssuch as Deloitte and its member firms, and wehave a desire to be more transparent. Ourcommitment to communicating more openlywith our stakeholders extends to the area offinancial results. Although financial results donot tell the whole story, they do providevaluable insight into our achievements and thetrust clients place in DTT’s member firms. Webelieve communicating key financialinformation of the member firms is a valuablestep in building and sustaining confidenceinternally and externally, with clients and thepublic.

The strong financial performance of themember firms is necessary for their continuedability to deliver outstanding quality. To assessfinancial performance and track the progressof their strategy, we monitor key financialmeasures such as revenue growth, operatingactivity results, market share, and changes inaverage partner earnings.

Strong Performance in Challenging TimesAlthough our professions have undergoneunprecedented turmoil and transition duringthe past three years, Deloitte’s member firmshave seen consistent growth in the demandfor their services. Results for the past threefiscal years ended May 31, and the plan fornext year, reflect continued revenue growth.Both in the United States and globally,revenue growth in fiscal 2002 was affected bythe events of September 11, 2001. The high

growth rate of 20.8 percent in fiscal 2003reflects the recent consolidation in ourprofessions, as well as our success in winningnew business.

Economic indicators signal an improvingglobal economy, which we expect tocontribute to the continued growth of ourmember firms. We are projecting an increasein total member-firm revenues ofapproximately 7 percent for fiscal 2005 andwe anticipate growth in each of our functionsand in each major region of the world.

In addition to revenue, market share is a keyindicator of our global strength. DTT’smember firms audit their fair share ofFortune’s Global 500 and, as a result of theirbroad array of services, they maintainsignificant service relationships with amajority of the Global 500.

Financial Performance

The information reported reflects the sum of selected operating and financial performancedata of the member firms and their subsidiaries and affiliates in the Verein. Each member firmis a separate and independent legal entity. As such, DTT member firms maintain their financialrecords in accordance with local accounting standards and regulatory or statutoryrequirements, as appropriate, for their respective legal forms as partnerships, limited liabilitycompanies, corporations, or other structures. Accordingly, although the member firms use asimilar structure of financial accounts, certain items may be accounted for differently indifferent member firms as a result of varying accounting practices across international bordersand the various legal structures.

Member firms include the results of all entities that are majority-owned by their partners. Inaddition, DTT member firms have minority interests in other legal entities, certain joint ventureswith strategic alliances, and other business relationships, for which the results are not includedin the information presented here. Revenues include reimbursed expenses.

The sum of these selected operational and financial statistics does not constitute a financialconsolidation of the DTT member firms on an actual or pro forma basis; such a consolidationwould generally not be appropriate or permissible under international or local generallyaccepted accounting principles. Further, the composite amounts do not attempt to reconcile orrestate items that are treated differently among the member firms.

FY 2005 (projected)

FY 2004**FY 2003FY 2002

+0.8% +20.8% +8.6% +6.7%

$12.5

$15.1$16.4

$17.5

Revenue growth* (in billions of US$)

*

**

DTT member firms

As described earlier, member firms divested certain practices during fiscal year 2004. Afterexcluding the divested practices from each year, revenue growth for the continuing businesseswas 11.1%.

In detail: Financial performance

30

Asia-Pacific/Japan**

Europe/Middle East/AfricaAmericas

FY 2004FY 2003FY 2002

7.07.6 8.2

1.4

$12.51.6

$15.1 1.6

4.1

5.96.6

$16.4

Revenue by geographic region* (in billions of US$)

DTT member firms

Asia-Pacific/Japan revenue contributed approximately 10 or 11 percent of total revenue for each of the three fiscal years. However, as a result of lower rates per hour in the region, professional service hours for the Asia-Pacific/Japan region represented 18, 16, and 15 percent of the total in fiscal years 2002, 2003, and 2004, respectively.

*

**

Each World-Class Function Contributes to PerformanceFrom a functional perspective, our member-firm tax practices contributed the largestrevenue increase, with almost 60 percentgrowth over the past two years. This reflectsthe addition of a significant number of newclients resulting from the consolidation in ourprofessions. As a result of transitioning clients,as well as the impact of new regulations thatincreased our member firms’ clients’ need foraudit and advisory services, audit revenuesrose by more than 50 percent over the two-year period. Although consulting revenuesdecreased slightly in 2003, as they did for ourmajor competitors, they rose 4 percent in2004 after adjusting for divested practices incertain markets.

TaxConsulting

Financial Advisory ServicesAudit

FY 2004FY 2003FY 2002

4.90.8

1.11.2

2.4

$12.5

6.3

3.6

$15.1

7.4

3.8

4.44.1

4.0

$16.4

Revenue by functional area* (in billions of US$)

*DTT member firms

Strategic Investments Contribute to Strong Operating Activity ResultsAs noted on page 29, financial results arecompiled based on the respective accountingtreatment for each member firm. In addition,based on the appropriate accounting for thevarious legal structures, certain items may beaccounted for differently in the memberfirms. These differences in accountingtreatment among member firms include suchitems as whether partners’ compensation ischarged against earnings or paid as adistribution from earnings, whether incometaxes are the responsibility of the firm or ofthe individual partners, the accounting forpension and retirement costs and otherpartner benefits, the estimated useful lives ofdepreciable assets, and other factors affectingcapitalization standards and deductibility forincome taxes.

Operating activity results before such itemswould be 23.0 percent, 22.2 percent, and23.8 percent for fiscal years 2002, 2003, and2004, respectively. Operating activity resultsafter deduction of the items discussed abovewould be considerably lower, given theirsignificance in many member firms.The lower operating activity results in fiscal2003 were attributable to the costs andchallenges associated with the consolidation inour professions and the retention of ourconsulting capabilities in many member firms.

It is important for the financial stability and thesustained quality of the services offered byDTT’s member firms that the partners of thosefirms benefit from the greater profitability,which improves their ability to make ongoinginvestments. During the past several years,average partner compensation in manymember firms increased in conjunction withimproved business performance.

Executing Our Strategy to Increase Scale around the WorldRevenues in the Europe/Middle East/Africa(EMEA) region increased by more than 60percent in the past two years, and now accountfor more than 40 percent of total globalrevenue. Deloitte member firms have seenaverage annual growth of approximately 8percent in the Americas and the Asia-Pacific/Japan regions. Japan had a challengingyear in 2003, but recovered well in 2004.Revenues in Japan increased by 13 percentafter adjustment for the divestment of part ofits consulting practice.

In detail: Financial performance

31

Based on analysis, the compensation of thepartners of our member firms is comparable tothat of executives in the geographies in whichthey work. However, given the wide ranges ofpartner compensation throughout the world,which reflect the differing tax and legalstructures, treatment of profit sharing,marketplace circumstances in the variousgeographies, and other items, worldwideaverage earnings per partner are notmeaningful.

We expect member firms’ costs to increase in2005 as we continue to invest in training andquality control measures for service delivery.These investments are vital as member firmsposition themselves to manage growth.

Strong Financial Condition Is Key to Sustainable LeadershipThe partners are the member firms’ soleowners. Most partners have investedsignificant capital and hold an equity interestin their national practices. This substantialinvestment provides the working capital thatenables the member firms to maintain trainingprograms, build state-of-the-art technology,develop new services, and meet professional,governmental, and industry regulations andstandards. Deloitte member firms have a ratioof current assets to current liabilities thataverages greater than 2:1.

For most of our member firms’ partners, thisequity interest in his or her member firmrepresents a substantial portion of his or hernet worth. As partners, they assume a certaindegree of liability for adverse events affectingtheir practices. Given their personalinvestment, we believe this ownershipstructure provides a practical incentive forpartners to act as professional leaders who arecommitted to sustaining excellence in everyaspect of their work.

Like all companies, the member firms haveother commitments, such as guarantees, leases,and pensions, some of which are funded andsome of which are unfunded; however, as inthe case of all liabilities, the obligations arespecific to individual member firms.

As previously discussed, the presented amounts represent composite, not consolidated,financial information. In addition, specific capital requirements vary in different markets andbetween member firms. For example, debt is considered to be held by the member firm insome jurisdictions, as reflected in the table above, and by the partners as individuals in others.

Select composite DTT and member-firm financial position information (in billions of US$)

31-May-03 31-May-04

Client receivables $3.5 $4.1

Total current assets 4.5 5.7

Total assets 7.3 8.9

Current liabilities 2.7 3.0

Third-party debt and partners’ capital 4.6 5.9

Litigation and InsuranceGiven the litigious environment in certain partsof the world, legal and professional insurancecosts are becoming more significant. AlthoughDTT member firms maintain insurance coverage,the proliferation of litigation is causing thiscoverage to become increasingly difficult toobtain, and it is virtually nonexistent in someplaces. The exposure assumed by organizationssuch as our member firms is not proportional toour responsibilities under professionalrequirements. This discrepancy and relatedlitigation continue to be among the mostsignificant challenges to our member firms—and therefore, to DTT—influencing theretention of people, the cost of services, and theviability of professional services organizations.

DTT’s member firms, like all other majorprofessional services organizations and DTTitself, have been named as a defendant in anumber of civil lawsuits. Most of these suits arepremised on allegations that financialstatements issued by clients and reported on byour member firms were incorrect. Although thisis one of our most significant challenges, ourmember firms have been able to address thesecases in an appropriate manner withoutaffecting their overall ability to serve clients.

DTT’s member firms maintain professionalindemnity insurance coverage at levels currentlyavailable in the marketplace. To respect theconfidentiality of the carrier’s interest, we treatdata about insurance coverage as proprietaryand confidential.

Each DTT member firm is required to purchaseprofessional liability insurance customary to thelaws under which it operates and at a levelappropriate for the risks associated with theservices it provides.

Ensuring Financial StabilityMeeting the responsibilities of DTT’s memberfirms to their clients and people requires afinancially stable and sustainable organization.DTT’s member firms energetically pursue allappropriate opportunities for practice growthwhile maintaining prudent control overspending. They manage their core financialactivities, such as tax payments, billing, andpartner compensation, with integrity andhonesty.

Each member firm has internal accountingcontrols for executing transactions inaccordance with its management’sauthorization, maintaining accountability forassets, and permitting preparation ofcombined financial information. This helpsensure that each member firm’s assets aresafeguarded and that the financialinformation is reliable.

32

PietHoogendoornNetherlands –Chairman

Sharon L. Allen United States

Igal Brightman Europe/MiddleEast/Africa

Sanford A.Cockrell III United States

John P. ConnollyUnited Kingdom

Brian L. DerksenUnited States

HendrikDescheemaekerBelgium

Martin J. A.EadonUnitedKingdom

Richard J.FinebergUnited States

Carlos GonzálezSpain

ErnestoGonzálezMexico

AlcidesHellmeister FilhoLatin Americaand Caribbean

Erik HolstJoergensenDenmark

David H. LaidleyCanada

Jerry P. LeamonUnited States

Carol J.LindstromUnited States

Alan N.MacGibbonCanada

Chaly MahAsia-Pacific

Thomas M.Maloney, Jr.United States

Harley B.McHutchisonAustralia

Kenneth E.McKelvieChina

Andrew G.McMasterUnited States

Libero MiloneItaly

Vassi NaidooSouthern Africa

William G.ParrettChief ExecutiveOfficer

Alain PonsFrance

James H.QuigleyUnited States

Amadou RaimiFrance

Achim SchmidtGermany

Martin A.SciclunaUnitedKingdom

ShuichiroSekineJapan

Bob van NesEurope/MiddleEast/Africa

Keiji WatanabeJapan

Edward WayAsia-Pacific

Board of Directors

See the description of the Board of Directors on page 27.

33

Global Management Committee

Vassi Naidoo (1)JohannesburgDeputy Regional Managing Partner, Europe/Middle East/Africa (EMEA)

Ralph G. Adams (2)EdinburghGlobal Managing Partner, Financial Advisory Services

Shuichiro Sekine (3) TokyoRegional Managing Partner, Japan

Manoj P. Singh (4) Hong KongRegional Managing Partner, Asia-Pacific

Jerry P. Leamon (5) New YorkGlobal Managing Partner, Clients and Markets

John P. Connolly (6) LondonGlobal Managing Director

Colin Taylor (7) TorontoRegional Managing Partner, North America and Global Managing Partner, Brand and Eminence

Alan S. Schneier (8) New YorkGlobal Managing Partner, Tax & Legal

Dr. Wolfgang Grewe (9)MunichRegional Managing Partner, EMEA and Global Managing Partner, Innovation and Investment

James H. Wall (10) New YorkGlobal Managing Director, Human Resources andManaging Director, Global Office

Jeffrey P. Rohr (11) New YorkChief Financial Officer

Joseph J. Lambert (12) New YorkGeneral Counsel

Wolfgang Richter (13) New YorkChief Information Officer

Jeffrey K. Willemain (14) DetroitGlobal Managing Partner, Regulation and Risk

Not pictured above:

Stephen AlmondLondonGlobal Managing Partner, Audit

William G. ParrettNew YorkChief Executive Officer

Paul D. Robinson Toronto Global Managing Partner, Consulting

Alberto Terol MadridRegional Managing Partner, Latin America and Caribbean

1 2 34 5

6 7 89 10 11 12

13 14

See the description of the Global Management Committee and The Executive (pictured in the introductory letter) on page 27.

Porus Pardiwalla (1)India, Audit

Louise Rainville (2)Canada, Audit

Michael Shaw (3)New Zealand, Tax

Kohei Kan (4)Japan, Audit

Kathleen Farlow (5)United States, Tax

Marion Farnschlaeder (6)Germany, Tax

Francisco Perez Cisneros (7)Mexico, Audit

Paul Meulenberg (8)Netherlands, Consulting

Antoine de Riedmatten (9)France, Audit

Domenico Arcuri (10)Italy, Consulting

Vassi Naidoo (11)South AfricaYoung Partners Advisory Group Advisor

Kevin Black (12)South Africa, Audit

Geoff Andrews (13) Bahamas, Audit

Padraig Cronin (14)Ireland, Tax

Victor Ng (15)China, Audit

Janet Foutty (16)United States, Consulting

Philip Yuen (17)Singapore, Audit

Hans Waren (18)Sweden, Audit

Jaime Vargas Cifuentes (19)Colombia, Tax

Anthoula Madden (20)United Kingdom, Consulting

The Young Partners Advisory Group of 2004

1 2 3 4 56

7

89 10

11 12 13

20

14 1516 17

1819

See the description of the Young Partners Advisory Group on page 21.

34

Our Expanded Global Reach

This document printed on 30% recycled, chlorine-free paper. ISO 14001 certified.

AustraliaHarley B. McHutchison,Chairman

Giam J. Swiegers, CEO

Keith W. Skinner,Managing Partner

BelgiumHendrikDescheemaeker,Chairman

Jos Beddegenoodts,CEO

Ludo de Keulenaer, Managing Partner

CanadaDavid H. Laidley,Chairman

Alan N. MacGibbon,CEO

Central EuropeOtto Jelinek, Chairman

Bob van Nes, CEO

ChinaKenneth E. McKelvie,Chairman

Peter G. Bowie, CEO

DenmarkGeert Bjoern Hansen,Chairman

Erik Holst Joergensen,CEO

FranceAmadou Raimi,Chairman

Jean-Paul Picard, CEO

Alain Pons, DeputyManaging Director

GermanyFrank Tischer, Chairman

Dr. Wolfgang Grewe,Senior Partner

IndiaDileep Choksi, SeniorLeader

Udayan Sen, SeniorLeader

Mukund Dharmadhikari,Senior Leader

ItalyLibero Milone,Chairman and CEO

Enrico Ciai, ManagingPartner

JapanKeisuke Ueda,Chairman

Hirotake Abe, CEO

MexicoJuan Carlos Izaza,Chairman

Ernesto González, CEOand Managing Partner

NetherlandsErik Beelaerts vanBlokland, Chairman

Willy A. Biewinga, CEOand Managing Partner

South AfricaFuthi Mtoba, Chairman

Vassi Naidoo, CEO

Richard M.W. Dunne,Managing Partner

SpainRafael Farrán, Chairman

Carlos González, CEO

Miguel Zorita,Managing Partner

United KingdomMartin A. Scicluna,Chairman

John P. Connolly, CEO

Martin J. A. Eadon,Managing Partner

United StatesSharon L. Allen,Chairman

William G. Parrett,Senior Partner

James H. Quigley, CEO

Barry Salzberg,Managing Partner

Leaders of Our Largest Member Firms

Americas

Argentina

Aruba

Bahamas

Barbados

Belize

Bermuda

Bolivia

Brazil

British VirginIslands

Canada

Cayman Islands

Chile

Colombia

Costa Rica

DominicanRepublic

Ecuador

El Salvador

Guatemala

Guyana

Honduras

Jamaica

Mexico

NetherlandsAntilles

Nicaragua

Panama

Paraguay

Peru

United States

Uruguay

Venezuela

Europe/MiddleEast/Africa

Albania

Angola

Austria

Azerbaijan

Bahrain

Belarus (Republic of)

Belgium

Bosnia andHerzegovina

Botswana

Bulgaria

Burkina Faso

Cameroon

Channel Islands

Congo(DemocraticRepublic of)

Croatia (Republic of)

Cyprus

Czech Republic

Denmark

Egypt

Estonia (Republic of)

Finland

France

Gabon

The Gambia

Gaza Strip/WestBank

Georgia

Germany

Ghana

Gibraltar

Greece

Greenland

Hungary

Iceland

Ireland

Isle of Man

Israel

Italy

Ivory Coast

Jordan

Kazakhstan(Republic of)

Kenya

Kosovo

Kuwait

Kyrgyzstan

Latvia (Republic of)

Lebanon

Libya

Lithuania(Republic of)

Luxembourg

Macedonia(Former YugoslavRepublic)

Madagascar

Malawi

Malta

Mauritania

Mauritius

Moldova(Republic of)

Monaco

Morocco

Mozambique

Namibia

Netherlands

Nigeria

Norway

Oman

Poland

Portugal

Qatar

Romania

Russia

Rwanda

San Marino(Republic of)

Saudi Arabia

Serbia andMontenegro

Slovak Republic

Slovenia

South Africa

Spain

Swaziland

Sweden

Switzerland

Syria

Tanzania

Tunisia

Turkey

Uganda

Ukraine

United ArabEmirates

United Kingdom

Uzbekistan(Republic of)

Yemen (Republic of)

Zambia

Zimbabwe

Asia-Pacific

Australia

Bangladesh

BruneiDarussalam

China (People’sRepublic of)

Fiji

Guam

India

Indonesia

Japan

Korea (Republic of)

Malaysia

Marshall Islands(Republic of)

Micronesia(Federated States of)

Nepal

New Caledonia

New Zealand

NorthernMariana Islands

Pakistan

Palau (Republic of)

Papua NewGuinea

Philippines

Singapore

Sri Lanka

Taiwan

Thailand

Vietnam

Copyright © 2004 Deloitte Touche Tohmatsu. All rights reserved.

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, andtheir respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of memberfirms around the world devoted to excellence in providing professional services and advice, focusedon client service through a global strategy executed locally in nearly 150 countries. With access tothe deep intellectual capital of 120,000 people worldwide, Deloitte delivers services in four profes-sional areas—audit, tax, consulting, and financial advisory services—and serves more than one-halfof the world’s largest companies, as well as large national enterprises, public institutions, locallyimportant clients, and successful, fast-growing global companies. Services are not provided by theDeloitte Touche Tohmatsu Verein and, for regulatory and other reasons, certain member firms donot provide services in all four professional areas. As a Swiss Verein (association), neither DeloitteTouche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions.Each of the member firms is a separate and independent legal entity operating under the names“Deloitte,” “Deloitte & Touche,” “Deloitte Touche Tohmatsu,” or other, related names.

Contact InformationGregorio PanaderoGlobal Communications and Public RelationsSpain+34 91 514 50 00gpanadero@deloitte.es

Madonna JarrettOffice of the Chief Executive – CommunicationsHong Kong+852 2852 1683majarrett@deloitte.com.hk

www.deloitte.com