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Leading the fieldDeloitte & Touche LLP Annual Report 2008

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Our highlights of the year• Revenues increased by 11.5% to £2,010 million• Profit available for distribution to partners and retired partners

increased by 19.4%• Profit per partner reached £970,000 • 60 new partners appointed• Listed in the Sunday Times Best Big Companies to Work For 2008,

for the third consecutive year• Named as the No.1 graduate employer in finance and professional

services in the National Graduate Recruitment Awards• Partner and staff numbers grew 6% to 12,562• 1,400 graduates will join the firm in the next few months• Listed in the 2008 Sunday Times 50 Best Green Companies• Received a Gold rating in the Business in the Community 2007

Corporate Responsibility Index, up from Silver last year • One of only 21 UK-based companies to be awarded the CommunityMark by

Business in the Community, recognising excellence in community investment• Over 2,900 people participated in Community Days • Appointed as the professional services supporter for London 2012 by the

London Organising Committee for the Olympic Games and Paralympic Games (LOCOG)

• Named Accountancy Firm of the Year in the 2008 Citywealth Private Clients Awards

• Recognised as the world’s top firm for securitisation accounting in the International Securitisation Report (ISR) 2007 Awards, for the 10thconsecutive year

• Voted best professional firm in the British Venture Capital Association and Real Deals Private Equity Awards 2008

• Winners of the Professional Development IT Consultancy of the Year awards at the British Computer Society Annual Awards

• Announced as Oracle Corporation’s Consulting Partner of the Year for the third consecutive year

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Deloitte & Touche LLP Annual Report 2008 1

2 A conversation with John Connolly

5 Business performance

6 Marketplace perspectiveShifting economicsInnovationPartnering to win

14 Developing our high-performance culture

20 Corporate Responsibility

24 Delivering quality

28 Leadership and governance

31 Global organisation

32 Report to partners

35 Independent auditor’s report

36 Financial statements

69 List of partners

Contents

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2

A conversation with John Connolly

Can you provide an overview of the year’s performance?Against a background of turbulent and complexmarkets, we reported strong performance for the year.Gross revenues grew by 11.5% to reach £2,010m,just exceeding the vitally important £2 billion targetset two years earlier. Net revenue (revenues net ofclient disbursements) grew by 11.8% with goodgrowth in each division. Profits available fordistribution to partners and retired partners increasedby 19.4% to £683m, with average profit per partnerincreasing to £970,000 (£877,000).

How did the credit crunch impact your business?Following a continuous period of high growth, the environment for advisory services was adverselyimpacted for much of this year as the US sub-primecrisis and its wider consequences reduced the level of business opportunity across the firm. The significantreduction in the number and value of M&Atransactions and the marked reduction in the level of real estate activity had an adverse impact on ourrevenues across the firm, but especially in CorporateFinance and Tax, where we have a leading position inprivate equity.

Given that, what has driven these high levels of growth?You’re right, I do believe our growth was excellentgiven the markets. Our performance reflects acontinuous and relentless twin focus on our clientsand our people.

We have combined an obsessive commitment toquality with a sharpened focus on clients’ needs inthese changing and challenging markets. We have re-emphasised our actions to retain our people, seeingthe value of being fully and appropriately resourced,especially as the economic and credit environmentimproves in due course. Innovation, agility and speedto market have been even more important.

Achieving double digit growth in the firm and eachdivision reflects the talent we have, the strength of the Deloitte brand, the scale and value of our clientrelationships in all segments, the resilience of ourbroad-based capabilities and particularly our efforts toidentify and capture high growth opportunities whichemerge in this environment.

John Connolly, DeloitteSenior Partner and ChiefExecutive, gives his view onDeloitte’s performance andthe market outlook.


3Deloitte & Touche LLP Annual Report 2008

How is the UK firm responding to thedevelopment and growth of economieselsewhere in the world, especially thedeveloping territories?Deloitte in the UK has very deep expertise in many ofour advisory businesses. We have an opportunity andindeed a responsibility to deploy these skills, whereappropriate, in some of those territories where thereare special needs. This includes Russia, the MiddleEast, India and China.

In the Middle East, the large capital inflows and the growth in the sovereign wealth funds increase the significance of our Corporate Finance activities.We have recently established a joint venture withDeloitte in the Middle East to respond to thisincreasing demand.

Elsewhere, many more large Russian companies,particularly in the minerals and oil sector, are comingto London to tap into the financial markets here, so itmakes sense for us to put resource into the Russianmarkets to help our colleagues in Russia. We areseeing many private equity businesses turn toAsia, and establish offices in Hong Kong, Beijing andShanghai. These are large clients of Deloitte globallyand again a recent development has been to secondpartners and managers to the Deloitte member firm in China.

What are the key priorities on the Talent agenda?Ensuring we are appropriately resourced and that weprovide the best environment for exceptional peopleto develop are priorities. In the past year, we haveappointed 60 new partners and 1,400 new graduateswill join the firm in the next few months. I amdelighted to say we continue to attract very smartpeople at all levels in the firm. One of the reasonspeople are attracted to Deloitte is the platform wegive them on which to build their skills andexperience. The diversity of our business presents our people with a huge amount of choice about how and where to develop their careers.

Clearly, financial reward is important. We believe our people should be appropriately rewarded for thecontributions they make, so this is a priority for us. I was delighted to announce recently that as a thankyou for helping us achieve our “2 in 2” targets,everyone in the firm received an extra £1,000celebratory award, and this was outside of the normal bonus system.

We have a large number of the brightest people,making huge contributions to our clients and to thefirm, and one of the things they are looking for isopportunity. What we as a firm need to do is providethem with a continuous flow of terrific opportunities.Indeed one of the reasons for us having a continuedfocus on the growth and development of our businessis so that we can create opportunity for more andmore of our people to participate at higher and higherlevels in the organisation.

How is Deloitte making progress with CorporateResponsibility and making a contribution to thewider community?Whilst clearly I have a bias, I really do believe our firm is taking a leading position in contributing to the wider community and running our businessresponsibly. This year we set a new benchmark incommitment, showing leadership in the businesscommunity.

In December 2007, we announced the ground-breaking sponsorship of the London 2012 OlympicGames and Paralympic Games alongside ourappointment as the official provider of professionalservices to the London Organising Committee for the Olympic Games and Paralympic Games. Ourappointment is a source of great pride to our peopleand reflects our longstanding commitment to theideals of the London Games and our market-leadingposition in the business of sport. Our work in supportof LOCOG will bring to life the depth and breadth ofDeloitte’s capabilities and our exceptional track recordin delivering the most complex and challengingprojects. We are already seeing the difference ourassociation with the London 2012 Games is having on our graduate recruitment, and in motivating andretaining our people.

We have a relentless andobsessive focus with themarketplace and our clients.


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We are also proud to have an equally excitingpartnership with the British Paralympic Associationand SportsAid, where our support for disability sportat the grassroots has been hailed as transformationalby the Olympic Minister, the Rt Hon Tessa Jowell MP,and where our financial backing for talented youngathletes means that 23 Deloitte-supported athleteswill be joining the ParalympicsGB team at the Beijing Paralympics.

Alongside the London 2012 development, we alsoannounced a five year partnership with the RoyalOpera House to stage a new annual cultural festival,Deloitte Ignite, which is targeted at youngprofessionals. The first festival will be in Septemberthis year.

Our new Green Agenda programme, now in itssecond year, addresses what Deloitte needs to do todevelop a sustainable and environmentally-friendlybusiness, and supports our increasingly broad portfolio of client services in the environmental andsustainability areas. Our environmental impact comesmainly from the way we serve our clients, includingbusiness travel and premises, and our focus has beenon long-term investment and innovation: for example,50% of the carbon emissions from our business travel are now offset through our Barclays corporatecharge card programme, and the architectural andengineering solutions we employed in our Londoncampus refurbishment were both practical and far-reaching, with a green wall and roofs incorporatedinto designs, 87% of surplus furniture recycled, and80% of waste recycled across our London offices.These and other achievements set us well on our waytowards achieving ISO14001 accreditation in 2009.

We are proud of our reputation as leaders amongstbusiness in our commitment to CorporateResponsibility. Highlights include our selection as one of The Sunday Times 50 Best Green Companiesand securing a Gold rating in the Business in theCommunity Corporate Responsibility Index.

As well as being the Chairman of the Global Board ofDeloitte Touche Tohmatsu, I now have responsibilityfor leading the Global Corporate ResponsibilityCouncil which comprises senior partners from manymember firms. At the global level we have raised thebar; Corporate Responsibility has been positioned as a strategic priority. The role of the Global CorporateResponsibility Council is primarily to set our policy andstrategy and to encourage and support member firms’actions nationally and globally.

Looking ahead, how do you see the market’s and Deloitte’s position?I can add little to the long trail of negative economicand market assessments. We are unlikely to see muchgrowth in most business segments of the UK economyin the next year but a pick-up is likely in the latter partof 2009 or first half of 2010. Economic activity hasheld up in many parts of the world. I believe the USeconomy has the capacity to rebound more quicklythan generally expected and to be a positive influenceon the global recovery. For the UK the key driver ofthe recovery will be an improved supply of credit andlower market interest rates.

Over the last few years Deloitte has achieved marketleadership largely for two reasons. First, we have abroader range of skills than any other professionalservices firm. We seek to anticipate the changingneeds of our clients in deploying these skills and inhelping our clients develop and implement pragmaticbusiness solutions. Secondly, we are relentless in ourpursuit of quality and innovation. The market and ourclients increasingly recognise this.

Even in low growth markets there will be winners inevery business segment. We have exceptional peopleand we nourish and develop their talent. I remain veryoptimistic that the winning business in ourprofessional services market will be Deloitte.

A conversation with John Connolly



Business performance

Deloitte’s performance this year has remained strong, a remarkable achievement given the market turbulence.

12%Gross revenues grew by 11.5% to reach £2,010m, just exceeding the £2 billion

target set two years earlier. Net revenue (revenues net of client disbursements) grew by 11.8% withgood growth in each division. Profits available fordistribution to partners and retired partners increasedby 19.4% to £683m. Profit before tax grew by 16.0%to £654m and average profit per partner increased to £970,000 (£877,000).

Audit

11%Our Audit practice built furtherupon the winning position it has attained in the last few

years, achieving net revenue growth of 11.1% withparticularly strong performances from our security, risk and regulatory teams, combined with a continuingflow of new clients in our core audit division. Newclients this year included Barratt Developments, Corus,Gallaher and Taylor Wimpey. Deloitte is now the co-leader in share of FTSE 250 audits.

Tax

11%Tax had a very good year,notwithstanding the significantimpact of the downturn in M&A

activity. Net revenue growth was 10.6%, fuelled by our leading position in many service lines and theopportunities offered by a tax environment thatremains uncertain, with continuing legislative changeleading to a demand for our compliance, reportingand accounting services. The accelerated interest inthe UK from emerging markets has led to a healthydemand for the services of our international tax team.

Consulting

13%Consulting net revenue grew by an exceptional 13.2%, withparticularly strong performance

in enterprise applications, the business systemsplanning and implementation unit. From an industryperspective, the highest growth was achieved in thefinancial services and the technology, media andtelecommunications practices. A particular success in the year was securing a number of major contractswhich were supported by our key propositions,including finance transformation, enterprise costreduction and business-critical programmes.

Corporate Finance

13%Our Corporate Finance practiceachieved extremely robust netrevenue growth of 13.1%

notwithstanding a significantly reduced rate of growthin the last quarter. Whilst boom time M&A work hastailed off, growth was buoyed by debt, forensic andrestructuring work and our agility in responding tochanging client needs. Of the five significantStructured Investment Vehicles (SIVs) restructuringsthat occurred in 2008, Deloitte led the four largestprojects, including the headline-grabbing $9bnreceivership of Cheyne Finance. Our forensic anddispute services group has seen tremendous growthover the past year, with revenues up 50% and ourcorporate finance advisory team had a successful yearassisting with multinational deals, particularly thoseinvolving Infrastructure or Sovereign Wealth Funds.

2008

2007

2006

2005

2004

2010

1802

1559

1355

1246

Revenue (£m)

2008

2007

2006

2005

2004

970

877

765

711

621

Profit per partner (£000)

31%

28%

23%

18% Audit

Tax

Consulting

Corporate Finance

Service line revenue


6

Marketplace perspectiveShifting economics



For some companies, however, the dark economicclouds may hold a silver lining. For companies withhealthy capital reserves, the combination of lowervaluations and less competition from private equityhouses will make transactions more accessible thanthey were a year ago. The financial services industry is one sector that looks ripe for a spate of M&Aactivity, with some companies keen to shed non-coreportfolio companies while others look to make themost of cheaper pricing.

Sterling’s decline has also made UK assets moreattractive to international investors. Chinese andIndian investors are increasingly looking to the UK for business opportunities. While the pound has madepricing more favourable for international investors,there are strong underlying factors which make theUK an exciting business destination.

In spite of the downturn, London is still the leadingglobal financial centre and businesses from around the world are keen to benefit from this. Branding,technological innovation and business services, such as marketing, are also of great interest tointernational trade.

“Deloitte is snapping up most of the receivershipmandates for StructuredInvestment Vehicles (SIVs),sidelining competitors.”Reuters, 15 April 2008.

Sustainable working capital improvement

A combination of an increase in the cost ofcapital and a heightened competitive landscape led a leading global healthcare company toengage our working capital team. Our clientfaced the dual challenges of operating in over 50countries with management objectives historicallyfocused on revenue and margin growth. As istypical in these cases, any working capitalimprovement needed to be sustainable, achievedwithout adversely impacting the underlyingbusiness and in an environment where clientresource was limited and with multiple otherinitiatives under way. Our experts, working insmall, senior teams alongside client personnel,are driving a programme to convert 20% of ourclient’s working capital into cash required to fundthe future of the business.

In the past 12 months, we have seen a marked shift in fortunes in the UK economy. An era of cheap debtand strong growth has come to an end. Credit hasbecome scarce, house prices are falling and theconsumer sector is under real pressure. The pace of growth is likely to slow markedly in the comingquarters. Against a backdrop of weakening growth,demand has increased for our specialist debt andrestructuring advice. The high-profile collapse of a number of Structured Investment Vehicles (SIVs) is one such example. Structured investments hadbecome increasingly aggressive in the high growthenvironment, with growing concern over off-balancesheet liabilities. Following the collapse of the US sub-prime market and the resulting impact on SIVs, a real need for experts who could unpick thecomplexity and work out the best approach for the restructuring process grew.

Our quarterly CFO Survey has shown that, despitereductions in Bank of England base rates, even ourlargest corporates are finding credit pricier and harder to obtain. CFOs say they are likely to respondby squeezing discretionary spending, jobs and capital expenditure. Our experts are working with a whole range of businesses to find the best way of managing both cost and cash in a less benignmarket. A particularly important area for corporates is working capital. Our specialist team is working with businesses to ensure they work their capital aseffectively as possible in these difficult times. There are a variety of techniques that can counter theimpact of slower growth.


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Shifting economics

Economic power is moving eastward, as economies in Asia and the Middle East continue to grow. Manyorganisations, including Deloitte, are looking at how to respond to the opportunity this presents. At the start of this year, John Connolly was part of a trade delegation led by the Prime Minister to China and India.

AsiaThe past 12 months have seen record levels of trade between China and the UK. We have seenphenomenal growth in Deloitte China, which has a current workforce of 7,500 compared to 4,000 two-and-a-half years ago. The UK firm has beensupporting this growth, with one example being therelocation of a team of private equity experts from theUK to the Chinese firm to work alongside the existingM&A group. This team is working with Europeanprivate equity clients looking to source dealopportunities in China as well as serving the growingnumber of Chinese investors who want to accessdeals in the UK. Earlier this year, for example, weacted as reporting accountants on the initial publicoffering (IPO) of China Central Properties Limited, a China-based property developer which raised£150m on AIM. We also helped Chinesepharmaceutical company China Medical SystemHoldings (CMS) with a successful AIM listing. CMSwas valued at £65.2m on its IPO and raised £10m to fund further expansion.

Middle EastIn a survey of the region’s private equity market,Deloitte found that confidence levels are high for long-term growth prospects, largely due to theplentiful availability of capital for investment and a buoyant economic climate. In response, we arecreating a corporate finance joint venture with theMiddle East firm and relocating a team of partnersand managers to the region.

Islamic finance currently accounts for around 1–2% of the global financial services industry. Yet withMuslims accounting for approximately 20% of theworld’s population and growing, the market is likely to see continuing double digit growth. London’sexisting eminence as a world financial centre and theaffinity the UK has with the Middle East as a place to do business, makes the Government’s vision ofLondon becoming a key global centre for the Islamicfinance industry very achievable.

In anticipation of this, Deloitte has launched an IslamicFinance proposition which offers clients our coreexpertise in Audit, Tax, Consulting and CorporateFinance within a Shariah (Islamic law) compliantframework.

IndiaWith an economy growing consistently at over 8% per annum, India has emerged as an increasinglysignificant player in the global economy. For Britishcompanies, India represents an opportunity to tapnew markets and access world class talent. As aconsequence of this, developing an India strategy isbecoming an important element in the thinking ofmany of our existing and potential clients. DeloitteIndia has bolstered the talent in each of its service lines to meet the growing interest from internationalcompanies in India, with the recruitment of newpartners and transferring teams from the UK firm.

In May Vodafone announced the acquisition ofHutchison Essar, the India-based mobile operator.Deloitte UK advised on the accounting for theacquisition and was subsequently appointed asauditors.

India-based Tata Steel demonstrated its globalambitions by its acquisition of Corus plc in April 2007,thereby becoming the sixth largest steel manufacturerin the world. Through the close cooperation ofpartners from Deloitte India and Deloitte UK, we were appointed auditors for the worldwide operations of Corus for the year ending 31 March 2009.


Russia and the Commonwealth of Independent States (CIS)The rapid growth of the CIS is making it an attractiveplace for foreign investors. For both British andmultinational companies, developing a strong ‘CISstrategy’ is seen as key to ensuring future growth.

Deloitte has hosted a series of Russian ExecutiveMaster Classes for companies considering an IPOwhich cover all aspects of listing on the London Stock Exchange, including corporate governanceissues, the differences in listing requirements on the main market and AIM, the search for alternativesources of financing, and the role of NOMADs andbrokers.

AfricaIn recent years, there has been a strong appetite for companies across Africa to grow their globalfootprints. For many that has meant moving theirprimary listings to London and raising capital in theLondon markets through AIM and the full board.

One example is Naspers, South Africa’s leading Pay TV and ISP provider, which acquired the majorEuropean online auction site, QXL Ricardo, earlier this year. Deloitte UK, working with Deloitte SouthAfrica, provided financial due diligence, tax andemployee benefits services work, which involved coordinating Deloitte teams in multiple territoriesacross the UK, Poland, Switzerland, Denmark andSouth Africa.

In June, Deloitte UK was offered the opportunity to become a training office for the South AfricanInstitute of Chartered Accountants. Once completed,this admission will make Deloitte UK the first firmoutside of Africa allowed to train charteredaccountants for the Institute. This initiative supportsthe UK’s International Markets programme as well as our firm’s commitment to innovation, talent andglobal deployment.


“The Deloitte Master Classeshave provided the LondonStock Exchange with a muchneeded forum for in-depthdiscussions with pre-IPOcompanies looking at bothour Main Market and AIM.By including the broadestpossible group of IPOadvisers the Master Classeshave given CIS companies acomprehensive view of thechallenges ahead of them.” Jon Edwards, senior manager (CIS), London Stock Exchange.

“The information given in the classes was directlyrelevant to our bank’s IPO plans – the speakershad direct experience in the areas covered andthey seemed professional in their work. It’s rare to meet so many high-quality speakers in one place.”

Yuriy Mitrofanov, Deputy Head of Legal,Gazprombank.


10

Marketplace perspectiveInnovation

A defining feature of Deloitte is our appetite for big,bold moves in the market place. We bring anticipationto our client relationships by taking ideas andopportunities to our clients and sharing their appetiteand energy for growth.

Anticipation is shaping our own ambitions for growth,where we have been focusing on a number of specificmarket situations – areas such as pensions advisory,M&A, the growing market for Islamic finance, the‘green’ services that help our clients respond to theimpact of climate change on their business, and thethreat from the scale and frequency of identity theft –where we saw exceptional opportunities forinnovation in our offerings to clients.

Emerging trends are also at the forefront of our thinking and we are already mobilising andconcentrating talented people across the firm to capture the market for the future.

Emerging trends at theforefront of our thinking.



Complex markets create great opportunities forinnovation and creativity, and for a pioneeringapproach from Deloitte. There are boundless examples across our business:

• Capturing the market for Structured InvestmentVehicles (SIVs), bringing our restructuring expertiseto bear

• Responding to the growing pensions buy-outmarket by developing an independent methodologyto help companies determine their optimal pensionsstrategy

• Making the headlines with the innovation of valuingairline landing slots, being first to see the impact ofthe ‘open skies’ deal on transatlantic aviation

• Being ‘first’ with our appointment of a Shariah(Islamic law) scholar to provide our clients with a real depth of experience

• Developing an education and insight programmefor the next generation of FTSE 100 CFOs, to buildthe skills and capabilities required to satisfy thisdemanding and complex role

• Launching the Deloitte Digital Index – the first of its kind to measure, track and anticipate changes in the consumer take-up of digital products andservices to help clients understand how and whytheir addressable market is growing

• Being named by our peers in the industry as thebest professional services firm in the Private EquityAwards 2008.

Innovation is integral to the way we work. It is intimately connected to the way we recruit,develop and challenge our people, to the workingenvironment we offer and the use of technology for the most up-to-date ways of collaborating with clients.


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Marketplace perspectivePartnering to win

In December, the London Organising Committee ofthe Olympic Games and Paralympic Games (LOCOG)appointed Deloitte as the official professional servicesprovider to London 2012. We are the exclusiveprovider of professional advisory services to LOCOG,including tax, human capital, management consulting,and financial support through secondments andadvisory work.

Deloitte’s selection by LOCOG reflects the exceptionalbreadth and scale of our services, the quality of ourpeople, and our enthusiastic support for the London2012 Games. This is a fabulous opportunity foreveryone in our firm, and a great platform for theDeloitte brand. It reflects our long-standingcommitment to leadership in the market and in thecommunity, building on our support for grassrootssport and our exceptional track record in voluntaryand community support. During the next four years,many of our people will have a once in a lifetimeopportunity to help transform London and the UKthrough the impact of the London 2012 Games.We are proud to be playing our part.

We are leaders in sport. Sport is not suddenly in fashion at Deloitte. It has been core to ourorganisation for many years and is displayed in manyways – the services we offer, the sporting participationof our people and our investment in grassrootsdisability sport.

Deloitte is the only Big 4 adviser with a dedicatedSports Business Group, the market leader for over 10 years. We advise on business and commercialissues, working for sports clubs, leagues andcompetitions, major events, governing bodies,government, financiers and investors.

In 2007, working with the British ParalympicAssociation, we launched Deloitte Parasport, a ground-breaking online resource that helps disabledpeople discover the sporting options open to themand encourages them to compete in sport. WithSportsAid, we doubled the investment in the TalentedAthlete Scholarship Scheme to provide bursaries forsports people with a disability. We’re delighted ourcommitment to disability sport is already having animpact at grassroots level, and to have 23 Deloitte-funded athletes in the ParalympicsGB squad forBeijing this summer.

“Deloitte stands forexcellence. The Deloitte team shares the values andvision of what we presented in Singapore and will bringsome very talented peoplewith many years ofexperience. Those skills will be an inseparable part of how we deliver London’sOlympic and ParalympicGames in 2012.”Sebastian Coe KBE, Chair of LOCOG.



Alongside our passion for sport sits our passion forthe arts. In March this year, we announced the start of a five-year partnership with the Royal Opera House(ROH). The sponsorship will enable the ROH to stageDeloitte Ignite, an annual three day cultural festivaltargeted at young professionals. This five-yearrelationship will allow the ROH to stage a range ofnew and innovative performances and to reach amore diverse audience. It will also give Deloitte’sclients, staff and partners some unique entertainmentopportunities and experiences at what is undoubtedlyone of the UK’s leading arts and culture venues.

The partnership with ROH brings together ourappetite for innovation and focus on young peoplewith a commitment to widening access to the arts.

The inaugural Deloitte Ignite Festival will be held on 12 to 14 September, under the creative guidanceof Wayne McGregor, Resident Choreographer to TheRoyal Ballet and founder of Random Dance. This year’sfestival is inspired by the human senses and includeswork by Blast Theory, Julian Opie, famous for hispaintings of Blur, and a club night by DJ Scanner. The festival will run alongside the launch of the ROH’s2008/09 season.

“I welcome Deloitte as a new partner of theRoyal Opera House for their sponsorship of thenew Deloitte Ignite festival. This five-yearrelationship makes them one of our mostimportant supporters and enables us to present a three-day festival of contemporary and cuttingedge work at the beginning of our new season,designed specifically to attract new audiences.”

Tony Hall, Chief Executive of the Royal Opera House.


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Developing our high-performance culture

Achieving supreme market leadership depends on ourability to deliver exceptional service to the market.

Managing Partner for Talent John Kerr explains: “We do this by building long-term relationships withour clients and by focusing passionately on quality and innovation in everything we do.

“All of this, however, would be impossible without thebest people – and without our ability to provide themwith opportunities to develop and progress quickly.This means building a mentoring culture, giving ourpeople opportunities to work with the best – andusing our unrivalled depth and breadth to provide our people with a wide range of career options.

“It means also that we won’t compromise on ourstandards of quality – only the best is acceptable for our clients. This cycle of development, coupledwith the highest standards, creates the partners of tomorrow.”

Talent drives our business.

Internal move proves just the job

Last year, Simon Davis – then a London-basedmanager in our Audit service line – found himself at a career crossroads.

“My Audit job had taught me a huge amount.However, having predominantly worked for thesame client for several years, I needed a change –to accelerate my rate of development again.”

Simon decided to look for his next opportunitywithin another service line – and eventuallytransferred into our Corporate Finance Insurancepractice.

This new role has seen Simon working onfinancial due diligence projects for insurancebrokers and companies, commercial due diligenceand strategic advisory work in the corporate andLloyd’s markets – and on secondment for sixweeks with a City client.

“The variety of work and people I’ve beenexposed to since starting the new job fullyvindicates my decision to pursue an internalopportunity,” he says.

“My learning curve has steepened again, I’vegained new skills, improved my market andcommercial knowledge hugely – and broadenedmy internal and external network.”



Drive for development works both ways Our drive to develop our people paid off once again inJune – when we promoted 42 new partners, 20 newassociate partners and 128 directors. Here, some ofour new partners and associate partners talk abouthow our organisation has helped them develop – and how they, in turn, have helped bring our Talentagenda to life for people working in their part of the business.

Birmingham-based David George is a new associatepartner in our Audit service line. “I’m part of afast-growing team and one of the key reasons forour success has been the opportunity to encourageand push our people into new or different roles insupport of our growth – be it managing a clientrelationship, developing a new service offering orundertaking a key operational role.

“My approach has always been to be part of a genuine meritocracy, a firm in which peopleprogress solely because of their performance andcontribution. The firm’s Talent agenda and thedetailed implementation of this in the individualservice lines has greatly facilitated this objective – with the opportunity to promote based on abilityrather than simply time in grade.

“Meanwhile, I myself have participated in a widerange of different developmental activities sincejoining Deloitte. Most recently, the training I received as part of the firm’s DirectorDevelopment Programme was particularly helpfuland relevant. Also, the associate partnerassessment process had a real focus on preparingcandidates for what the firm will expect of thempost-promotion. I really appreciated theopportunity to build relationships with fellowcandidates and to share experiences with them. And now that I’ve been promoted, I’m lookingforward to playing an even bigger part in thefirm’s efforts around mentoring, too.”

Leeds-based Simon Prinn is a new partner in our Tax service line. “A lot of different partners havebeen prepared to invest their time in me since I joined the firm. They’ve made the effort andhave taken the time to consider how they canhelp me to develop. Sometimes this has beennothing more than a little recognition andpositive feedback for a job well done. At othertimes, however, the gloves have come off andthey’ve pushed me out of my comfort zone – and haven’t been afraid to have the hardconversations with me.

“In turn, I’ve reciprocated by always doing mybest to develop talent within my team. It takes a lot of time and energy – and you really have todiscipline yourself to prioritise it, especially whenthere are a huge number of screamingly urgentclient demands to deal with. Nevertheless, Ialways carve out time in order to focus on whatsomeone needs to do in order to get to the nextlevel. Developing your people pays massivedividends in the long term – for me, for the restof the team and for the entire firm, too.”


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We’re making it easier for everyone at Deloitte to work flexiblyOur organisation offers a competitive reward strategythat provides our people with the freedom to maketheir remuneration package as unique as they are.Specifically, this year we’ve extended fully paidpaternity leave to two weeks, and increased ourcareer break option from one to two years. And tocelebrate our achievement of £2bn revenue in thepast financial year, the firm recently rewarded eachemployee with a special performance award of£1,000, as recognition of the role each of themplayed in the realisation of this key strategic goal.

We go to great lengths to take a big picture view ofour peoples’ needs and to help them balance their lifeat Deloitte with their commitments outside the office.

We do this by offering our working parents 20 days of emergency back-up child care at minimal cost –plus priority access to a full-time and permanent placewithin a nationwide network of high-quality nurseries.

Bright Horizons “delivers tangible work-life balance”.

Bright Horizons – Deloitte’s back-up child care service – is helping to deliver a tangible work-lifebalance to Sophia Steiger, a director in ourConsulting service line.

Explains Sophia: “Using Bright Horizons meansthat, once in a while, I’m able to drop my two-and-a-half-year-old daughter Octavia at nurseryand then collect her at the end of the day –rather than the onus being on my husband takingher to his workplace nursery five days a week.

“The service, therefore, gives us real – andaffordable – flexibility. To me, it’s a truedemonstration of what it means to work with Deloitte.”

Sophia used the service for the first time whenher husband was away. “I phoned BrightHorizon’s central help desk and quickly located anursery only 15 minutes from my home in northwest London. I rang them on the Wednesday andbooked a place for the following Friday. All-in-all,it took about fifteen minutes to book her in.

“Then, on the day, I simply turned up with theregistration forms, Octavia and her favourite bear. I met the nursery manager and Octavia’s keyworker for the day, we had a look around,Octavia settled in with the water play – and was off.”



At the same time, our innovative wellbeingprogramme has this year seen us offer everyone at Deloitte access to a generously subsidised and fully equipped state of the art gym and ongoingsupport and guidance on how to live a happier and healthier life.

The past year has also seen us launch Flexibility andChoice, a firm-wide programme that helps clarify ourflexible working benefits and principles, making iteasier for our people to apply to work flexibly. John Connolly explains: “If we look at our seniorgrades, we can see that while we’ve been makingsteady progress toward increasing the proportion offemale directors and partners, the levels don’t reflectthe number of women who join us as graduates.

“Research tells us that some women leave becausethey don’t think the opportunities are there for them –at least not in a way that’s acceptable to them. Forexample, some women leave because they don’t feelthe firm can offer the degree of work-life balance theyneed. They’re happy to be dedicated to the business –but not so dedicated that it absorbs so much of theirtime and energy that they’re unable to enjoy ameaningful family life.

“We’ve responded to this by clarifying the firm’sapproach to flexible working and by making it easierfor everyone at Deloitte to apply to work flexibly. As a result, quite a high proportion of our femaleemployees and partners now work flexibly, includingpart-time.“

“I’m better motivated at work all round, because I feel there is a balance in my life.”

Guernsey-based Jo Huxtable – a director in our Tax service line – works three long daysWednesday to Friday and from 8.30am to2.30pm on Monday, making up the hours onother days – including during the evening.

“Being able to work flexibly means a lot to me, asit allows me to spend time with my children afterschool during the week and, therefore, havemore of a work-life balance.

“While at work, I’m focused and organisedenough to ensure I can complete work within the reduced hours. And when I’m at home, I’mhappier – as I have time with my family, which is very important to me.

“The business doesn’t suffer because of thesearrangements, as I ensure I’m available at alltimes. And, in any case, my clients are aware ofmy hours and we work around them without anyunmanageable problems.

“Meanwhile, I’m better motivated at work allround, because I feel there is a balance in my life,which makes me more productive. And with thebusiness helping me to balance life inside andoutside work, I feel like putting more back inwhen I am at work.”


18


Attracting and retaining a diverse workforce.

Diversity programme delivering firm benefitsOur Respect, Inclusion and Diversity agenda is animportant part of our drive to develop and deliver a high-performance culture.

Our commitment to this agenda, and to the diverseinsights and advantages it delivers to Deloitte, remainsabsolute – and enjoys sponsorship at the highestlevels of the firm.

John Connolly comments: “Our Respect, Inclusion and Diversity agenda is a key determinant of ourorganisation’s ability to become supreme marketleaders.

“Supreme market leadership isn’t just about being thebiggest or most profitable firm. It means also leadingin a broad and big picture way – including becomingthe business that the best people want to join andwant to remain with.

“That’s why, as well as leading our competitors incriteria such as revenue, profit and clientele, we needalso to lead the market in areas such as sustainabilityand diversity.

“We can’t afford to be the best in only a few areas –especially when it comes to fulfilling the needs of themost talented people.”

Our Deloitte NetworksDeloitte’s internal diversity networks connect partnersand employees who share affinity indicators such asgender, race, religion and sexual orientation.

With more than 2,500 members, these groupsprovide our people with a shared sense of belonging;help them balance their working and non-workinglives; and build bridges between our talent and theworld outside the firm.

Our Women’s Network provides a good example of the benefits these groups are delivering to ourpeople.

Launched on International Women’s Day last year, the network provides our female partners andemployees with a forum to develop relationships with existing and potential clients – and to build aninternal network within which our people can accessrole models and raise issues relevant to women in the workplace.



Network sponsor and Forensic & Dispute Servicespartner Emma Codd explains: “Deloitte is addressingthe challenge of making sure a greater proportion ofour women make it into senior roles within the firm.The network’s primary objective is to support womencoming up through the firm’s ranks.”

A place where women want to workThe past year also saw Deloitte win externalrecognition as a place where UK women most want to work.

The Times Top 50 Where Women Want to Work list allows potential recruits to research and compare employers.

This year’s list attracted hundreds of entries from awide range of the country’s leading organisations.Specific awards were presented to organisationsfielding the best entries in five categories.

Deloitte won the award for connectivity, a categorythat assessed entrants’ ability to keep their peoplelinked into – and engaged with – their organisation. In particular, the judges were impressed by the firm’sappropriate use of social networking tools, by itsdeployment of internal and external blogs and remoteworking technology, by our role modelling throughemployee profiles and by our use of internal seminarsto spread knowledge and understanding. Deloitte was the only Big 4 firm to win a category award,sharing the limelight with Google, Cisco, Citibank and McDonalds.

Our Women in Leadership group Our Women in Leadership group is another strongchange catalyst in the drive for equality within ourorganisation.

Margaret Ewing, the group’s Chair explains: “OurWomen in Leadership group, established a year ago,is made up of senior management – both male andfemale – from all of Deloitte’s business units, togetherwith the firm’s Managing Partner for Talent.

“The group is charged with improving the firm’sgender diversity – particularly with regard to theretention and development of our female talent.

“For example, the past year has seen the grouprecommend and establish informal female partnernetwork and mentoring groups. Among many otheradvantages, these groups have provided a forumthrough which our female partners can develop theirown support network and access female role modelsand mentors. This initiative has proved so successfulthat the firm is now planning to cascade it to ourdirectors and senior managers.”

Positive actionAdds Margaret: “In general, we recognise the need to take certain positive actions to allow us to realiseour gender ambitions. For example, our Board, ourExecutive and our partner group simply don’t reflectthe gender split of the graduates who join us each year.

“So, for the past several years, the firm has takensteps to ensure our Board includes at least two female partners.

“This kind of positive action at the highest level sendsthe right messages – and is helping Deloitte redressour current gender imbalance.”

Margaret Ewing, Deloitte ViceChairman and Chair of theWomen in Leadership group.

Beth Green, an assistant director in our CorporateFinance service line, is living proof of thedevelopment dividends the network is delivering.

Explains Beth: “Since signing up, I’ve been able to network with women in the firm whom Iwouldn’t otherwise have met. In particular, theevents have given me access to a number ofsenior female partners who’ve built successfulcareers here at Deloitte, partners who can adviseme how to follow in their footsteps – whileproviding me also with insights into other areasof our organisation.

“It’s also been very reassuring to realise that otherwomen in the firm are facing many of the sameissues I am – and to learn how they’re dealingwith them.”


20

Corporate ResponsibilityGaining momentum

We know that our everyday business activities affectnot only our own organisation but society morewidely – both through our own actions and throughthe actions of those we do business with.

Historically, corporate responsibility involved little more than the handing over of a cheque for a goodcause. Deloitte believes it can do more by workingtowards developing a far more collaborativerelationship with community groups, charities andnon-governmental organisations. We believe in atripartite relationship between the firm, our peopleand our corporate responsibility partner organisations,where the talents and the resources of our firmdemonstrate our pursuit of a responsible businessstrategy and our goal of being leaders in society.

The best way for us to effect change is through our intellectual capital – the power of our people toapply their business skills to pressing global and localchallenges. We make a difference in large and smallways every day. The scope ranges from high-levelcollaborations, to local contributions of skills-basedvolunteering. Taken together, we are proud thatDeloitte is regarded as one of the leading companiesfor corporate responsibility in the UK, and by the value our corporate responsibility partners get fromour long-term support.

The following summarises some of the highlights fromthe year. Full details can be found in our dedicatedCorporate Responsibility 2008 Report.

Highlights and awards• This year, Deloitte received a Gold rating (93.5%)

in the Business in the Community 2007 CorporateResponsibility Index, up from Silver (85%) last year

• We were listed in the 2008 Sunday Times 50 Best Green Companies

• One of only 21 UK-based companies to be awardedthe CommunityMark by Business in the Community,recognising excellence in community investment

• Gold Quality Mark for Payroll Giving from HMTreasury for the third consecutive year

• BHF Heart of Business Awards: ‘GreatestAchievement in Building a Long Term Partnership’and Deloitte Community Programme Manager Jo Westhead recognised for ‘OutstandingAchievements as Corporate Charity Champion’

Our Community Agenda

Disability SportThe Deloitte Foundation has invested £1.7 million over five years to develop disability sport at a grassroots level. With matching commitments fromthe UK government bringing the total investment to £3.4 million, this is the largest programme of its kind in the UK.

Our website www.parasport.co.uk is a key resource to help disabled people get involved in sport. We alsooffer bursaries through our Talented AthleteScholarship Scheme. Twenty-three disabled athleteswho are supported by Deloitte through the schemehave been selected to represent Great Britain at theBeijing 2008 Paralympic Games.

“We are proud of the fact that we are helping theseyoung people combine their sporting and academiccareer,” says Heather Hancock, Managing Partner,Brand and Innovation. “Being an elite athlete is costly.But for a disabled athlete there are additional costhurdles to overcome. For instance, it costs thesestudents more to travel anywhere, find the rightcoaching, and get specialised equipment. So, it is atremendous achievement for these athletes to do thiswhile gaining their academic qualifications.”

Phil Lane, Chief Executive of the BritishParalympic Association said: “At grassroots levelthere is a need to create opportunities for thoseembarking on their first steps to sportingachievement. We also need to help those withtalent who want to progress to a higher level ofperformance. Deloitte’s investment will enable us to do just that.”



Employability SkillsDeloitte’s award-winning Employability Skills initiativerepresents a £2m investment to date. Since 2001, we have been working with employers, trainingconsultants, further education colleges and the UKGovernment to design and deliver a qualification thatwill provide young people with the skills, attitudes and behaviours they need to secure and sustainemployment. More than 2,000 people have alreadycompleted the course at colleges across the country,with thousands more enrolling each year thanks to a major expansion of the programme made possibleby the Deloitte Foundation.

The scheme will benefit up to 40,000 young peopleacross the UK. Deloitte partners and employees aresupporting students on employability skills courses by delivering workshops on business topics such asinterview skills, CV writing and presentation skills.


22

Gaining momentum

Fundraising and payroll givingDuring 2005-2007, the firm appointed the BritishHeart Foundation (BHF) and Leukaemia Research asour national charities, as voted for by employees andpartners across the UK. Our people raised more than£1m for each charity through fundraising events,payroll giving and matched funding from the firm.

For 2008 and 2009 the firm’s national charities are Cancer Research UK (CRUK) and the NSPCC. Our aim is to raise at least £1m to fund the purchase and running of a desperately needed mobile cancerawareness unit for CRUK, and for the NSPCC to fund an online counselling service providing internetand SMS access for vulnerable children.

Almost 25% of Deloitte’s employees donate regularlyto the firm’s national charities and/or charities of theirown choice, through the firm’s payroll giving scheme.

In 2008, Deloitte is also a platinum benefactor of thisyear’s Lord Mayor’s Appeal, benefiting Wellbeing ofWomen, a charity whose purpose is to fund researchinto obstetric and gynaecological health matters herein the UK and ORBIS, set up to eradicate preventableblindness, primarily in the developing world.

Volunteering and Community DaysHundreds of our people take part in long-termmentoring programmes operated across the UK,including our popular secondary school mentoringand number and reading partner schemes. We offer anumber of ways for our people to volunteer, with ourfocus on enabling our people to use their skills andexpertise to help disadvantaged communities.We also support our people to make a visiblecontribution to their local community on a single daythrough our Community Day Programme. CommunityDays give groups of up to 200 people the chance tomake a difference on a variety of community andenvironmental projects. Community Days are verypopular with our people, as they give them anopportunity to give back to their local communitieswith an increasing focus on sustainability andregeneration.

Our Green AgendaLaunched in 2007, our Green Agenda addresses what Deloitte needs to do to develop a sustainable,profitable and environmentally friendly business.

Raising awareness of environmental issues and howthe firm can reduce our impact is one of the keycomponents of our Green Agenda. We have set up a UK-wide Green Champions network to help supportthe agenda at a local level, and to provide feedbackon our initiatives and areas for improvement. Weregularly undertake campaigns to raise awareness and change the behaviours of individuals working at Deloitte. Together these small changes add up to a big difference.

The journey from silver to goldDeloitte has been awarded an overall Gold rating in the Business and the Community 2007 CorporateResponsibility Index. The results were published in theSunday Times in May, in the ‘Companies that Count’supplement.

Our performance in the overall index increased 8.5percentage points to 93.5% from 85% and a ‘Silver’rating last year. In the individual Workplace, Communityand Environment indices, Deloitte received Platinum(95%), Platinum (99%) and Gold (91%) respectively.

Douglas Campbell Rouse, Head of CorporatePartnerships, BHF said: “We have been extremelyimpressed and humbled with the level ofexpertise and enthusiasm with which Deloittepeople have engaged in their Charity of the Year programme. The impact of the £1.016m has made a massive difference to our charity inhelping to keep more hearts beating throughpioneering research, education and careinitiatives.”

Kate White, Director of Fundraising forLeukaemia Research said: “The money Deloittehas raised is helping thousands of children andadults with leukaemia and related blood cancers.Every year 25,000 people are diagnosed; wewant to give every one of them the best chanceof survival. Thanks for your support.”



Deloitte joins the Prince’s May Day NetworkThis year, Deloitte submitted a May Day case study on climate change to Business in the Community,reporting on our climate change actions and activities.

Our contribution was recognised by HRH The Prince of Wales and we were invited to join the Prince’s MayDay Network, run by Business in the Community. The network is the UK’s largest group of companies(approximately 200) committed to collaborativelytackling climate change by mobilising their companies,employees, suppliers and customers. By sharing bestpractice, these companies promise to play a powerfulrole in reducing the UK’s carbon emissions.

As a member of the network, Deloitte has pledged to take action on:

• Integrating a low carbon strategy into our business model

• Committing adequate budget and resources to tackling climate change

• Encouraging our suppliers to measure and minimise their carbon footprint.

Deloitte completes London campus In 2004, following unprecedented growth, Deloittetook the decision to design and build a new Londonurban campus, which is centred around the leafy cityoasis of New Street Square. The project has involvedmoving 7,500 of our people and giving them accessto state of the art communication systems, a gym and health facilities. Environmental considerationswere encapsulated in our design, tender processesand ways of working.

The majority of the project was completed in 2008 and the firm is realising a wide range ofenvironmental benefits from the move, including:

• More than 400 new cycle bays and showeringfacilities for cyclists

• 50% reduction in stationery consumption,following the introduction of centralised floormanagement

• 25% (5m kWh) reduction in energy consumption in the new London campus

• 80% (from 10%) of waste now recycled in Londonand an ongoing national roll out programme

• 100% of directly purchased electricity fromrenewable sources

• 87% of surplus furniture recycled• Working with our landlord, we have incorporated

green walls and green roof space into the design.

Deloitte has completed year two of our three yearCarbon Management Programme with the CarbonTrust. The firm aims to achieve ISO14001 accreditation in 2009.

United Bank of CarbonDeloitte is assisting with the development of theUnited Bank of Carbon (UBoC). The UBoC is acommunity interest company which allows businessesto fund rainforest sustainability on a global basis.Deloitte is providing invaluable skills and expertise to this globally prominent project which looks toprovide support to a broad base of environmental and under-funded global causes.

UBoC will broker partnerships between individualbusinesses and specific rainforest protection projectsrun by established non-government organisations.UBoC Trading (a PLC) will invest in the validation ofUBoC rainforest projects for trading in the emergingglobal voluntary and compliance carbon markets.


24

Delivering quality The responsible firm



As a firm, we have a responsibility to our clients, our people, our regulators and to the communities in which we live and work. This is reflected in ourapproach to quality.

For our clients, the need for high-quality services andsolutions is paramount. Added to this, we recognisethat robust corporate governance is vital for effectivecapital flows and for building confidence and trust inthe markets from companies, Government, investorsand consumers. The need for the highest levels ofquality assurance has never been greater.

All of our services are built on our reputation forquality and our ability to deliver high-quality solutionsto complex clients and markets. Our robust policies,procedures and methodologies are thencomplemented by strong quality controls, a challenging programme of review and riskmonitoring, as well as our primary asset: the quality of our people, and the reputation built on that. Theseare underpinned by a strongly consultative culture.

Leadership commitmentOur focus on quality is reflected in the level ofattention and commitment given by our most seniorpartners. Our Senior Partner and Chief Executive, John Connolly, recognises the critical importance ofquality to our clients, our regulators and our peopleand sees this as a personal priority. In addition, he has appointed senior members of our Executive totake responsibility for our quality and riskmanagement agendas.

Vassi Naidoo is our Managing Partner, Quality and hasresponsibility for our overall Quality Agenda. This hasthree strands: clients, infrastructure and people. Vassilooks at all elements of our practice to ensure we areupholding and delivering the very highest qualitystandards across these three strands, all of whichultimately have to be delivered through the attitudesand behaviours of our people.

Embedding quality in our peopleWe use a variety of processes, tools and approaches to ensure our people have the skills and attitudes to uphold our quality standards. The Deloitte Codeprovides guidance for our people about the specificstandards of behaviour we expect throughout theorganisation.

Deloitte CodeHonesty and integrity – we act with honesty and integrityProfessional behaviour – we operate within the letter and the spirit of applicable lawsCompetence – we bring appropriate skills andcapabilities to every client assignmentObjectivity – we are objective in forming ourprofessional opinions and the advice we giveConfidentiality – we respect the confidentiality of informationFair business practices – we are committed to fair business practicesResponsibility to society – we recognise and respect the impact we have on the world around usRespect and fair treatment – we treat all ourcolleagues with respect, courtesy and fairnessAccountability and decision making – we lead byexample, using our shared values as our foundation.

In addition, our people undertake a set of compulsorytraining courses to ensure they have the knowledgeand skills required within the framework of ourcompetency and performance management model. All of our partners and people are supported in theirquality, compliance, risk management and anti-moneylaundering obligations by appropriate technical andother training programmes. Our online independenceand ethics learning programme is undertaken byeveryone in the firm, using real-life examples totranslate independence and ethical questions intopractical actions. Additionally, our telephone helplinesallow our people to request information, ask questionsor report issues confidentially to senior members ofthe Practice Protection Group.

We also provide people with a set of internalprocesses and tools that help ensure they meet our independence and compliance responsibilities. Our engagement compliance and client databasesystems are all internally developed and comprisecutting edge solutions to the complexity of regulatoryrequirements; the tools are designed to be intuitive to use while facilitating compliance, reporting andmonitoring. We assess whether potential newengagements are consistent with maintainingindependence and managing any potential conflicts of interest. We also monitor partner and staffinvestments to ensure we safeguard the independenceand objectivity of Deloitte, our people and ourengagement teams.


26

The responsible firm

Vassi Naidoo summarises: “Over the past year, wehave continued to improve a number of our processesand working practices that are integral to our businessstrategy. By gaining feedback from our clients throughindependent client service assessments and from ourpeople through our annual commitment survey, wehave taken actions to enhance the value of theservices we deliver and address any concerns raised.We remain committed to ensuring the highest qualityin our professional work and in all we do.”

Risk Management and Practice ProtectionGerry Paisley, Managing Partner Practice Protection, is responsible for the oversight of the firm’s ethics,compliance and risk management processes.Alongside the Senior Partner and the Board he workswith our National Compliance, Independence andEthics partner to set the strategy and priorities for our ethics and compliance programme.

We have well-established systems and procedures tohelp safeguard the objectivity of our people and thefirm, to avoid conflicts of interest and to comply withethical and other applicable standards. The release ofrevised ethical standards this year has added to thecomplexity of these considerations, requiring aconstant balance between the straightforwardapproach outlined in the Deloitte Code and theincreasing levels of regulation and professionalrequirements in this area.

Gerry Paisley comments: “We take our regulatoryobligations extremely seriously, and adopt anapproach that whole-heartedly embraces the spirit aswell as the letter of regulation. We are confident thatthey are demonstrated through the tone set by theleaders of our practice and the behaviour and actionsof our people.”

Our Practice Protection Group comprises regulatorycompliance, risk management, anti-money laundering,information security, and internal audit specialists,providing an all-round function to support themanagement of quality and risk. The team providespractical support and advice to our client-servingprofessionals. In addition, it establishes andpromulgates firmwide quality, risk management andcompliance strategy and policy; manages claims andinsurance; and drives compliance with regulatoryrequirements in relation to all of the firm’s businessactivities, including interaction with regulators. The Audit Inspection Unit of the Financial ReportingCouncil’s Professional Oversight Board conducts anannual review of our firm-wide procedures and ouraudits of public interest entities. The most recentlycompleted review covered the year from April 2007 to March 2008.

The group also leads our approach to information and security, a topical issue and one that we havebeen alert to for many years. The importance ofmaintaining confidentiality around client and otherinformation is continually emphasised – and ourapproach to encryption, ethical walls, clear desk policy and secure storage devices all underpin thiscommitment. Our policies require all confidentialinformation held on firm laptops to be encrypted,while our people are expected to take the utmost care with such information, whether in hard copy or electronic form. We have supported this through significant investment in a new documentmanagement system to refine our working practices.



Quality and risk management frameworkOur quality and risk framework is embedded in allparts of our business. The framework brings arigorous approach across all of our service offerings in areas such as client and engagement acceptance,partner portfolios, engagement risk, and assessmentof existing and new service offerings. Its primarypurpose is to underpin our commitment to quality,integrity and ethical behaviour throughout ourbusiness, whilst establishing that the responsibility for quality sits with those who deliver service to ourclients. Engagement partners remain fully responsiblefor the quality of the services they provide. Wherethose services are regulated, they are conducted bypersons who are individually authorised by theappropriate regulatory body. They, in turn, aresupported by a partner in each of the service lineswho assumes responsibility for the reporting andoversight of quality and risk management issues andwho are senior members of each service line’smanagement team.

Audit qualityAs a leading auditor of UK public interest entities, we have also published our annual TransparencyReport. This report, which is available from ourwebsite, gives more information on our firm and ourapproach to delivering audit quality, including ourstructure and governance, independence proceduresand practices and our systems of quality control.

Business risk appraisalThe business environment remains complex andregular evaluation of emerging and changing risk isessential. We have a process in place to identify andmanage issues through our business risk framework.This focuses on the key risks that could have amaterial impact on the realisation of our strategy andare evaluated in the light of their potential impact onour people, our infrastructure and our markets. Eachidentified risk is owned by a senior partner responsiblefor coordinating mitigating activities and monitoringwarning indicators.


28

Leadership and governance

Executive GroupDeloitte’s activities are managed by the Senior Partnerand Chief Executive and the Executive Group, which isappointed by the Senior Partner and Chief Executive.In keeping with our client service focus, members ofthe Executive Group are also actively engaged withour clients.

The members of the Executive Group are:John Connolly, Senior Partner and Chief Executive,Steve Almond, Managing Director, Global, AidanBirkett, Managing Director, Corporate Finance, SabriChallah, Managing Partner, Corporate Development,Stuart Counsell, Deputy to the Chief Executive,Cahal Dowds, Managing Partner, Regions, MartinEadon, Managing Director, Clients & Industries,Margaret Ewing, Vice Chairman, Heather Hancock,Managing Partner, Brand & Innovation, John Kerr,Managing Partner, Talent, Vassi Naidoo, ManagingPartner, Quality, Vince Niblett, Managing Director,Audit, David Owen, Managing Director, Consulting, Gerry Paisley, Managing Partner, Practice Protection,Graham Richardson, London Senior Partner, DavidSproul, Managing Director, Tax, Bob Warburton,Managing Partner, Finance & Legal.

Senior Partner and Chief Executive John Connolly, the Senior Partner and Chief Executiveof the UK firm of Deloitte has full executive authorityfor the management of the firm. The Senior Partnerand Chief Executive is nominated by the Board ofPartners and elected by the partners for a four-yearterm of office. John Connolly began his third term asSenior Partner and Chief Executive on 1 June 2007.

Deloitte’s leadership is taken from our partner group. Their commitment to qualityand integrity allows us to deliver excellence to our clients.



The responsibilities of the Senior Partner and ChiefExecutive fall under five principal headings:

• The business of Deloitte, including the developmentand management of services at the highest level ofquality, and compliance with all regulations

• The development of policies and strategic direction• Financial performance • Partners, including the development and

management of our talent goals • International, representing the UK firm’s association

with Deloitte Touche Tohmatsu.

The Senior Partner and Chief Executive communicatesregularly with the partner group and with all of ourpeople, in person and by a series of webcasts,voicemails and regular email alerts. The partner groupalso meet at least annually, most recently in July 2008in London.

John Connolly is also the Chairman of the Board ofDirectors of Deloitte Touche Tohmatsu (DTT), theinternational organisation of which we are a member.In this separate role, John is able to help enhancequality throughout the network of member firms, andto share within the network the collective expertiseand experience of client service, talent developmentand quality and risk management. The internationalnetwork has a separate Chief Executive Officer, Jim Quigley.

Board of PartnersThe Board of Partners is responsible for the promotionand protection of partner interests and for theoversight of management. It approves Deloitte’s longterm strategies and has specific oversight of risk.

The Board is composed of the Chairman, the SeniorPartner and Chief Executive, both of whom areelected by the partners, a further ten elected partners,five Executive Group partners proposed by the SeniorPartner and Chief Executive and affirmed by thepartners and up to two co-opted members.

Like the Senior Partner and Chief Executive, theChairman is nominated by the Board and elected bythe partners and serves for a four-year term of office.David Cruickshank commenced his first term of officeas Chairman on 1 June 2007. The separation of theroles of the Chairman and the Senior Partner andChief Executive provides a strong measure ofaccountability for the executive team.

The current Board comprises:David Cruickshank ChairmanJohn Connolly Senior Partner

and Chief Executive

The current elected members are: John Cullinane, Sharon Fraser, Stephen Griggs,Richard Norton, Ian Steele, Denis Woulfe, Lionel Young, Geoff Taylor and Ellie Patsalos

Executive Group members: Steve Almond, Martin Eadon, Vince Niblett, David Owen and David Sproul

Deloitte’s partnership agreement stipulates that therewill be ten elected board members, in addition to theChairman, who must not be members of theExecutive Group. As a result, two thirds of the Boardmembership is independent of the Executive Group.The Board meets monthly except for July.

From left to right: JohnCullinane, Sabri Challah,Penny Avis, Ian Steele, AidanBirkett, Lionel Young, RichardNorton, David Cruickshank,Sharon Fraser, Denis Woulfe,Stephen Griggs, Vassi Naidoo,Bob Warburton, MartinEadon, Stuart Counsell, VinceNiblett, Margaret Ewing, GerryPaisley, David Sproul, CahalDowds, John Connolly,Heather Hancock, RichardBuck, David Owen, SteveAlmond, John Kerr.


30

Corporate governance The Board’s oversight of management and theoperation of the audit, remuneration and nominationcommittees ensures Deloitte adheres to the highestlevels of internal corporate governance and riskmanagement oversight.

The membership of each of these committees is made up of elected members of the Board who are independent from the Executive Group.

Audit CommitteeThe Audit Committee takes responsibility formonitoring all reporting, accounting, financial andcontrol aspects of the executive management’sactivities. It receives reports from our internal auditteam and our external auditors, reports on eachmeeting to the Board and is a fundamental part ofour risk management process.

The Audit Committee liaises closely with the externalauditors regarding the results of the audit and isactively involved in the selection of external auditors.It receives regular assurance reports frommanagement and others on the operationaleffectiveness of matters related to risk and control and monitors the timeliness and effectiveness ofcorrective action taken by management.

Remuneration CommitteeThe Remuneration Committee monitors the objectivesand reviews the performance of the Chairman and ofthe Senior Partner and Chief Executive and makesrecommendations to the Board on profit sharing.

Nomination CommitteeThe Nomination Committee produces a candidate list for elections to the Board to achieve therepresentation and diversity required.

Internal auditDeloitte’s internal audit team is a key element of ourcontinuous review of the effectiveness of our systemsof internal control. Reporting to the Managing Partner,Practice Protection, the internal audit team is acombination of permanent staff and client-servingsecondees from our internal audit service line. The team reviews both financial and non-financialprocesses and works closely with our externalauditors, reporting on a formal basis to the Audit Committee.

Leadership and governance



Deloitte & Touche LLP is a limited liability partnership,incorporated under the Limited Liability PartnershipsAct 2000 and is wholly-owned by its members(normally referred to as partners).

Deloitte & Touche LLP is the UK member firm ofDeloitte Touche Tohmatsu (‘DTT’), a Swiss Vereinwhose member firms are a network of legally separateand independent entities. Each member firm providesservices in a particular geographic area and is subjectto the laws and professional regulations of theparticular country or countries in which it operates.DTT does not provide services to clients, or direct,manage or control its member firms. Neither DTT nor any of its member firms are liable for each other’s acts or omissions.

With member firms in 140 countries, the internationalnetwork of DTT brings world-class capabilities anddeep local expertise to help clients succeed whereverthey operate. The 165,000 professionals in DTTmember firms are committed to becoming thestandard of excellence.

DTT member firms are owned locally and managed bytheir respective national management. This structureallows the DTT organisation to establish policies;member firms apply these policies in quality assuranceprocesses that comply with local regulatory, legislativeand professional requirements.

Global organisation


32

Report to partners

The Board presents its report to the members and the audited financial statements of Deloitte & ToucheLLP for the year ended 31 May 2008. The financialstatements incorporate the financial statements ofDeloitte & Touche LLP and entities controlled byDeloitte & Touche LLP. The financial statements thatwill be filed at Companies House will comprise thegroup financial statements together with the separatefinancial statements of Deloitte & Touche LLP.

The members of Deloitte & Touche LLP are known and referred to by both clients and staff as partners.Throughout the financial statements references topartners should be taken as referring to members, as defined by the Limited Liability PartnershipsRegulations.

Principal activityThe principal activities of Deloitte are the provision of Audit, Tax, Consulting and Corporate Financeservices in the United Kingdom. In addition,professional services are provided in Switzerland by a subsidiary entity.

StrategyOur strategy remains to be the pre-eminentprofessional services firm for clients and talent,reflected in superior growth and performancecompared to market. The elements of our strategy are:

• A broader range of capability than our competitorsdelivered to clients through integrated andinnovative solutions

• A focus on exceptional quality• An environment where our people can develop

and excel• A culture that emphasises teaming and

high performance.

StructureDeloitte & Touche LLP is incorporated as a LimitedLiability Partnership under the Limited LiabilityPartnership Act 2000 and is wholly owned by itspartners. The principal subsidiary and associatedundertakings of Deloitte & Touche LLP are set out in Note 22.

These financial statements are the accounts ofDeloitte & Touche LLP and reflect the results for the year to 31 May 2008. The financial statementsconsolidate the accounts of Deloitte & Touche LLP and all its subsidiary undertakings (the ‘group’), drawn up to 31 May each year.

Designated membersThe designated members (as defined in the LimitedLiability Partnerships Act 2000) during the year were:John Connolly, Steve Almond, Martin Eadon, GerryPaisley, David Sproul and Bob Warburton. All thedesignated members served as members of theDeloitte & Touche LLP Executive Group, the mostsenior management committee, throughout the year.

Business performancePerformance this year has been strong in a businessenvironment which has been more challenging as theyear has progressed.

Revenue grew by 11.5% in the year to £2,010mresulting in a 16.0% growth in profit before tax to £654m.

Profit before allocations to partners and retiredpartners grew by 19.4% to £683m. The average profit per partner was £970,000, an increase of10.6% over the previous year.

Our performance this year has reflected the strengthand resilience of our broad-based capabilities across all our client segments.

PeopleStaff costs at £729m were 10.0% higher, reflectingour continued investment in our people. The averageheadcount during the year was 6.2% higher than theprevious year and we now have over 12,000 partnersand staff working across the group.

Assets and liabilitiesTotal assets increased by 15.3% to £996m and totalpartners’ interests increased from £309m to £382m.

Provisions include the net present value for annuitiespayable to both retired and current partners of£502m. Payment of these annuities is conditional on the future generation of profits within the group.

Cash flowProfit after interest, tax and working capitalmovements generated a positive operating cash flow for the year of £640m.

The main treasury risks relate to interest, liquidity andcurrency. The primary currency is sterling but certainexpenses and charges from overseas offices aredenominated in other currencies, some fees arerendered in other currencies and the foreign subsidiaryundertakings have functional currencies different fromthat of the group. The volume and timing of currency



inflows and outflows provide a natural hedge andDeloitte & Touche LLP does not undertake formalhedging transactions. Complex financial instrumentsare not used and speculative activity is notundertaken.

Finance and capital structureAt the balance sheet date partners’ interests at £382m amounted to £568,000 per partner comparedto £482,000 per partner for the previous year. Fixedcapital amounted to £130m or £193,000 per partner.The balance of undistributed profit will, in accordancewith the current distribution policy, be released topartners in the 12 month period following the year end.

The balance of Deloitte’s funding is provided by bankfacilities. We continue to maintain a significant level ofcommitted undrawn facilities to enable us to respondrapidly to opportunities and to fund initiatives withoutthe need for specific financing.

Partners’ drawings and capitalAll partners are equity partners and share in the profitsand subscribe the entire capital of Deloitte & ToucheLLP. Each partner’s capital subscription is linked to hisor her share of profit and is repaid in full on ceasing to be a partner. The rate of capital subscription isdetermined from time to time depending upon thefinancing requirements of the business.

Partners draw a proportion of their profit share in 12 monthly on account instalments during the year in which the profit is made, with the balance of their profits, net of a tax retention, paid ininstalments in the subsequent year. All payments are made subject to the cash requirements of thebusiness. Tax retentions are paid to HM Revenue andCustoms on behalf of partners with any excess beingreleased to partners as appropriate.

Partners’ profit sharingPartners share profits based upon a comprehensiveevaluation of their individual contribution to theachievement of the group’s strategic objectives.

Partners are assigned to an equity group, which isreviewed annually and which describes the attributes,skills and broad performance expected of them. Each equity group carries a wide band of profitsharing units so that relative contributions can be recognised.

Seven key criteria are used for assessing theperformance and contribution of each partner to the success of Deloitte. These are:

• QualityEach partner must be a role model for quality in their professional work

• TalentContribution to mentoring, leading, recruitment,engagement, development and training our people

• ClientsClient portfolio managed and roles carried out

• Brand and EminenceMarket related activity including regulatoryrelations, thought leadership, innovation and brand protection roles

• Revenue Generation, Growth, Business BuildingContribution to business development building and relationship building

• Financial SuccessOverall contribution to the financial success of Deloitte

• Leadership and ManagementContribution to the group’s broad success throughleadership and management roles.

Partners within all equity groups are expected to be ambassadors for Deloitte & Touche LLP externally and leaders by example to all of our employees in everything they do. Certain attributes transcend all equity groups. These are:

• Unassailable integrity• Quality service to our clients• The highest levels of technical excellence• Development of people• Compliance with the group’s policies and standards

and external regulatory requirements; and• High quality management of risk.

Partners who provide audit services are expected to beresponsive to their clients’ service needs, but they arenot evaluated or remunerated on the selling of otherservices to their audit clients.

Partner performance is evaluated in all designatedcompetencies, beginning with the Board’s approval of the profit sharing strategy proposed by the SeniorPartner and concluding with the Board’s review of therecommended profit allocation and equity groupgoing forward for each individual partner, theconclusions of which are disclosed in full to allpartners. A committee of partners is tasked withoverseeing the management process to ensureconsistent and equitable treatment.


34

Creditor payment policyDeloitte & Touche LLP’s policy is to settle terms ofpayment with suppliers when agreeing the terms of each transaction, ensure suppliers are made awareof the terms of payment and abide by the terms of payment.

Trade creditors of the group at 31 May 2008 wereequivalent to 12 days’ (2007: 15 days’) purchases,based on the average daily amount invoiced bysuppliers during the year.

Political donationsIt is Deloitte’s policy not to give cash contributions toany political party or other groups with a politicalagenda. However, we do seek to develop andmaintain constructive and balanced relationships withthe main representative political parties and may makeavailable Partner, advisor and staff resources andtechnical and factual information on occasion.Disclosures on such matters for companies are coveredby the Political Parties, Elections and Referendums Act.Although the scope of this Act does not cover LimitedLiability Partnerships, we regard it as appropriate todisclose equivalent details.

Going concernThe Board considers that the financial resourcesavailable to Deloitte & Touche LLP are adequate tomeet its operational needs for the foreseeable future.Consequently, the going concern basis has beenadopted in preparing these financial statements.

Statement of partners’ responsibilities in respect of the financial statementsThe Limited Liability Partnerships (LLP) Regulations2001, as amended by The Limited LiabilityPartnerships (Amendment) Regulations 2005, madeunder the Limited Liability Partnerships Act 2000require the partners to prepare financial statementsfor each financial year which give a true and fair viewof the state of affairs of Deloitte & Touche LLP and ofthe group and of the profit or loss of the group for the year. In preparing these financial statements, the partners are required to:

• Select suitable accounting policies and then apply them consistently

• Make judgements and estimates that are reasonable and prudent

• State whether applicable accounting standards have been followed, subject to any materialdepartures disclosed and explained in the financialstatements; and

• Prepare the financial statements on the goingconcern basis unless it is inappropriate to presumethat the group will continue in business.

Under the LLP Regulations, the partners areresponsible for ensuring that proper accountingrecords are kept which disclose with reasonableaccuracy the financial position of the group and whichenable them to ensure that the financial statementscomply with those regulations. The partners have ageneral responsibility for safeguarding the assets ofthe group and for taking reasonable steps for theprevention and detection of fraud and otherirregularities.

The responsibilities are exercised by the Board on behalf of the partners.

AuditorsGrant Thornton UK LLP will be proposed for reappointment.

Approved by the Board and signed on behalf of the Board

John ConnollySenior Partner and Chief Executive21 July 2008

Report to partners



Independent auditors’ reportto the partners of Deloitte &Touche LLPWe have audited the group financial statements ofDeloitte & Touche LLP for the year ended 31 May2008 which comprise the principal accountingpolicies, the group income statement, the groupbalance sheet, the group cash flow statement, thegroup statement of recognised income and expenseand Notes 1 to 22. These group financial statementshave been prepared under the accounting policies setout therein.

We have reported separately on the parentpartnership financial statements of Deloitte & ToucheLLP for the year ended 31 May 2008.

This report is made solely to the partners, as a body, in accordance with Section 235 of the Companies Act 1985 as applied by the Limited LiabilityPartnerships Regulations 2001. Our audit work hasbeen undertaken so that we might state to thepartners those matters we are required to state tothem in an auditor’s report and for no other purpose.To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other thanthe partnership and the partners as a body, for ouraudit work, for this report, or for the opinions wehave formed.

Respective responsibilities of partners and auditorsThe partners’ responsibilities for preparing the Annual Report and the group financial statements in accordance with United Kingdom law andInternational Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of Partners’ Responsibilities. Ourresponsibility is to audit the group financial statementsin accordance with relevant legal and regulatoryrequirements and International Standards on Auditing(UK and Ireland).

We report to you our opinion as to whether the groupfinancial statements give a true and fair view andwhether the group financial statements have beenproperly prepared in accordance with the CompaniesAct 1985 as applied by the Limited LiabilityPartnerships Regulations 2001.

In addition we report to you if, in our opinion, wehave not received all the information and explanationswe require for our audit, or if information specified bylaw regarding partners’ remuneration and othertransactions is not disclosed.

We read other information contained in the AnnualReport and consider whether it is consistent with the audited group financial statements. The otherinformation comprises only pages 1 to 31. Weconsider the implications for our report if we becomeaware of any apparent misstatements or materialinconsistencies with the group financial statements.Our responsibilities do not extend to any otherinformation.

Basis of audit opinionWe conducted our audit in accordance withInternational Standards on Auditing (UK and Ireland)issued by the Auditing Practices Board. An auditincludes examination, on a test basis, of evidencerelevant to the amounts and disclosures in the groupfinancial statements. It also includes an assessment of the significant estimates and judgments made bythe partners in the preparation of the group financialstatements, and of whether the accounting policiesare appropriate to the group’s circumstances,consistently applied and adequately disclosed.

We planned and performed our audit so as to obtainall the information and explanations which weconsidered necessary in order to provide us withsufficient evidence to give reasonable assurance thatthe group financial statements are free from materialmisstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we alsoevaluated the overall adequacy of the presentation of information in the group financial statements.

OpinionIn our opinion:

the group financial statements give a true and fairview, in accordance with IFRSs as adopted by theEuropean Union, of the state of the group’s affairs as at 31 May 2008 and of its profit for the year thenended; and the group financial statements have been properlyprepared in accordance with the Companies Act 1985as applied by the Limited Liability PartnershipsRegulations 2001.

Grant Thornton UK LLPRegistered AuditorChartered Accountants

London21 July 2008


36

Consolidated income statementYear ended 31 May 2008

2008 2007Note £m £m

Revenue 3 2,010 1,802

Operating expensesExpenses and disbursements on client assignments (285) (259)Staff costs 4 (729) (663)Depreciation and amortisation (45) (38)Other operating expenses (330) (285)

Profit from operations 5 621 557

Finance income 6 68 39Finance cost 6 (35) (32)

Profit before tax 654 564

Tax 7 (2) (2)

Profit for the year before partners’ profit shares 652 562

Provision for partner pensions for current partners (12) (3)

Profit available for discretionary division amongst partners 16 640 559

Analysis of profit available for distribution to partners and retired partners

Profit available for discretionary division amongst partners 640 559

Provision for partner pensions for current partners 12 3

Retired partner annuity cost 31 10

Total profit before partner and retired partner allocation 683 572



Consolidated statement ofrecognised income and expenseYear ended 31 May 2008

2008 2007£m £m

Actuarial (losses)/gains on defined benefit pension schemes (11) 80Exchange differences on translation of foreign operations (2) -

Net (expense)/income recognised directly in equity (13) 80

Profit for the financial year 640 559

Total recognised income for the period attributable to partners 627 639


38

Consolidated balance sheet As at 31 May 2008

2008 2007Note £m £m

Assets

Non-current assetsProperty, plant and equipment 9 200 147Intangible assets 10 11 13Financial assets 11 33 71

244 231

Current assetsClient and other receivables 12 661 582Cash and cash equivalents 91 51

752 633

Total assets 996 864

Liabilities

Current liabilities Trade and other payables 13 199 183Provisions 14 28 30Partner capital 16 130 123

357 336

Non-current liabilitiesRetirement benefit obligation 19 67 74Deferred tax 15 1 1Provisions 14 511 490

579 565

EquityPartners’ other reserves 16 60 (37)

Total liabilities and equity 996 864



Consolidated balance sheetcontinued As at 31 May 2008

Partners’ interests

2008 2007Note £m £m

The following balances relating to partners are included in the group balance sheet:

Partners’ capital 16 130 123Amounts due from partners (included in current assets) 16 (46) (26)Provision for current partner annuities

(included in non-current liabilities) 16 238 249Partners’ other reserves 16 60 (37)

Total partners’ interests 382 309

The financial statements on pages 36 to 68 were approved by the Board on 21 July 2008.Signed on behalf of the Board,

John Connolly Bob WarburtonSenior Partner and Chief Executive Managing Partner, Finance & Legal


40

Consolidated cash flowstatementYear ended 31 May 2008

2008 2007£m £m

Profit from operations 621 557

Adjustments for:Depreciation, amortisation & impairment 45 38Impairment of financial assets 1 (1)Loss on disposal of property, plant and equipment 1 -Increase in provisions 50 8Decrease in retirement benefit obligations (18) (13)

Operating cash inflows before movements in working capital 700 589

(Increase)/decrease in receivables (74) 44Increase/(decrease) in payables 17 (36)

Cash generated by operations 643 597

Corporate taxes paid (3) (3)

Net cash flow from operating activities 640 594

Investing activitiesInterest received 28 9Proceeds on disposal of financial assets 43 3Purchase of subsidiary - 4Proceeds on disposal of property, plant and equipment 6 7Purchase of property, plant and equipment (103) (59)Purchase of investments (1) -

Net cash used in investing activities (27) (36)

Financing activitiesNew loans (5) (2)Payments to and on behalf of partners (550) (476)Retirement benefits paid to former partners (21) (21)Repayment of capital to former partners (9) (6)Partners’ capital introduced 16 15Interest paid (4) (5)Decrease in bank overdrafts - (22)

Net cash used in financing activities (573) (517)

Net increase in cash and cash equivalents 40 41

Cash and cash equivalents at beginning of year 51 10

Cash and cash equivalents at end of year 91 51

Cash and cash equivalents compriseCash at bank 91 51



Notes to the financialstatementsYear ended 31 May 2008

1. Accounting policies

The principal accounting policies adopted in thepreparation of these financial statements are set outbelow. These policies have been consistently appliedthroughout the year and the preceding year.

Basis of accountingThe financial statements have been prepared inaccordance with International Financial ReportingStandards (IFRSs) as adopted by the EU.

In the current year, the group has adopted IFRS 7 FinancialInstruments: Disclosures which is effective for annualreporting periods beginning on or after 1 January 2007.The impact of the adoption of IFRS 7 has been to expandthe disclosures provided in these financial statementsregarding the group’s financial instruments.

At the date of authorisation of these financial statements,the following Standards and Interpretations which havenot been applied in these financial statements were inissue but not yet effective:

IFRS 8 ‘Operating Segments’ revises disclosure in relationto an entity’s operating segments and is effective foraccounting periods beginning on or after 1 January 2009.

IAS 23 ‘Borrowing Costs’ is effective for accountingperiods beginning on or after 1 January 2009.

IFRIC 14 ‘The Limit on Defined Benefit Asset’ is effective foraccounting periods beginning on or after 1 January 2008.

IFRS 3 ‘Business Combinations (2008)’ is effective forbusiness combinations on or after 1 July 2009.

The adoption of these Standards and Interpretations infuture periods is not expected to have a material impacton the financial statements of the group.

IAS 32 ‘Financial Instruments: Presentation’ was amendedto require certain “Puttable Financial Instruments andObligations Arising on Liquidation” to be reclassified fromfinancial liabilities to equity and is effective for annualperiods beginning on or after 1 January 2009. IAS 1‘Presentation of Financial Statements’ was amendedconcurrently to require additional disclosure for puttablefinancial instruments that are classified as equity followingthe IAS 32 amendment. The amendment to IAS 1 is alsoeffective for annual periods beginning on or after 1January 2009.

The amendment to IAS 32, should it be endorsed for use inEurope, may result in the reclassification of partner capital

from current liabilities to equity. The impact of areclassification will not be material to the income statement.

The financial statements have been prepared on thehistorical cost basis, except for the revaluation of certainfinancial assets.

ConsolidationThe consolidated financial statements incorporate thefinancial statements of Deloitte & Touche LLP and entitiescontrolled by Deloitte & Touche LLP (its subsidiaries) madeup to 31 May each year.

Control is achieved where Deloitte & Touche LLP has thepower to govern the financial and operating policies of aninvestee entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated incomestatement from the effective date of acquisition or up tothe effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financialstatements of subsidiaries to bring the accounting policiesused into line with those used by the group.

All intra-group transactions, balances, income andexpenses are eliminated on consolidation.

The acquisition of subsidiaries is accounted for using thepurchase method. The cost of the acquisition is measuredas the aggregate of the fair values, at the date ofexchange, of assets given and liabilities incurred orassumed by the group in exchange for control of theacquiree, plus any costs directly attributable to thebusiness combination. The acquiree’s identifiable assets,liabilities and contingent liabilities that meet theconditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.

RevenueRevenue represents amounts chargeable to clients forprofessional services provided during the year includingrecoverable expenses on client assignments but excludingValue Added Tax.

Services provided to clients, which at the balance sheetdate have not been billed to clients, are recognised asrevenue.

Revenue recognised in this manner is based on anassessment of the fair value of the services provided at thebalance sheet date as a proportion of the total value of theengagement. Revenue is only recognised where the group


42


1. Accounting policies (continued)

has a contractual right to receive consideration for workundertaken and no revenue is recognised on contingentengagements until the contingent event crystallises.

Provision is also made against unbilled amounts on thoseengagements where the right to receive payment iscontingent on factors outside the control of the group.Unbilled revenue is included in trade and otherreceivables.

LeasesLeases are classified as finance leases whenever the termsof the lease transfer substantially all the risks and rewardsof ownership to the lessee. All other leases are classifiedas operating leases. Rentals payable under operatingleases are charged to income on a straight-line basis overthe term of the relevant lease.

Benefits received and receivable as an incentive to enterinto an operating lease are also spread on a straight-linebasis over the lease term or to the first break clausewhere applicable.

Foreign currenciesTransactions denominated in foreign currencies arerecorded at the rate of exchange ruling at the date of thetransaction. Monetary assets and liabilities denominatedin foreign currencies at the balance sheet date areretranslated to the relevant functional currency at therates ruling at that date. These translation differences aredealt with in the income statement.

The individual financial statements of each groupcompany are presented in the currency of the primaryeconomic environment in which it operates (its functionalcurrency). For the purpose of the consolidated financialstatements, the results and financial position of eachgroup company are expressed in pounds sterling, which isthe functional currency of Deloitte & Touche LLP, and thepresentation currency for the consolidated financialstatements.

The assets and liabilities of the group’s foreign operationsare translated at exchange rates prevailing on the balancesheet date. Income and expense items are translated atthe average exchange rates for the period, unlessexchange rates fluctuate significantly during that period,in which case the exchange rates at the date oftransactions are used. Exchange differences arising on the retranslation of the foreign operations, if any, areclassified as equity and transferred to the group’s other reserves.

TaxationThe taxation payable on profits of the Limited LiabilityPartnership is the personal liability of the partners and isnot dealt with in these financial statements. A retentionfrom profit distributions is made to fund the taxationpayments on behalf of partners.

The tax expense represents the sum of the current anddeferred tax relating to the corporate subsidiaries. Thecurrent tax expense is based on taxable profits of thesecompanies. Taxable profit excludes items of income orexpense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax iscalculated using tax rates that have been enacted orsubstantively enacted by the balance sheet date.

Deferred tax in the subsidiaries is generally recognised,using the liability method, in respect of temporarydifferences at the balance sheet date between thecarrying amounts of assets and liabilities for financialreporting purposes and the corresponding tax bases.Deferred tax is measured at the tax rates enacted orsubstantively enacted at the balance sheet date andwhich are expected to apply in the periods in which thetemporary differences reverse. Deferred tax assets arerecognised to the extent that it is probable that taxableprofits will be available against which deductibletemporary differences can be utilised.

Property, plant and equipmentProperty, plant and equipment is stated at cost lessaccumulated depreciation and any impairment loss. The gain or loss arising on the disposal of an asset isdetermined as the difference between the sale proceedsand the carrying amount of the asset and is recognised in income.

Depreciation is provided to write off the cost less theestimated residual value of property, plant and equipmentby equal instalments over the estimated useful economiclives as follows:

Leasehold improvements: Period of lease

Fixtures and fittings: 5-10 years

Computer equipment: 3-5 years

Motor vehicles: 4 years





Intangible assetsIntangible assets are recognised only if all of the followingconditions are met:

• an asset is created that can be identified;

• it is probable that the asset created will generate futureeconomic benefits; and

• the development cost of the asset can be measuredreliably.

The direct cost of staff in the development of computersystems for the group has been capitalised as anintangible asset and is being amortised on a straight-linebasis over a period of ten years. Where no internallygenerated intangible asset can be recognised,development expenditure is recognised as an expense in the period in which it is incurred.

Goodwill arising on acquisitions is recognised as an assetand initially measured at cost, being the excess of the costof acquisition over the group’s interest in the fair value ofidentifiable assets and liabilities recognised.

Impairment of tangible and intangible assetsAt each balance sheet date, the group reviews thecarrying amounts of its tangible and intangible assets to determine whether there is any indication that thoseassets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any).

If the recoverable amount of an asset is estimated to beless than its carrying amount, the carrying amount of theasset is reduced to its recoverable amount.

An impairment loss is recognised as an expenseimmediately.

Any impairment loss in respect of goodwill is notreversed. In the case of other assets an impairment loss is reversed where there are changes in the estimatedrecoverable amount.

Financial assetsFinancial assets are classified as available for sale or asloans and receivables as appropriate. Financial assetsinclude cash and cash equivalents, investments, clientreceivables, amounts due from other member firms of theDeloitte Touche Tohmatsu (DTT) organisation, including

long-term loans and amounts due from partners. Thegroup determines the classification of its financial assetsat initial recognition and they are initially recorded at fairvalue. The subsequent measurement of financial assetsdepends on their classification, as follows:

Available for sale financial assetsListed redeemable notes held by the group that aretraded in an active market are classified as being availablefor sale and are stated at fair value. Interest is determinedby applying the effective interest rate method and isrecognised in income along with any foreign currencygains/losses. Other gains and losses arising from changesin fair value are recognised directly in equity. Where theinvestment is disposed of or is determined to be impaired,the cumulative gain or loss previously recognised in equityis included in the profit or loss for the year.

Loans and receivablesClient receivables, loans and other receivables that havefixed or determinable payments that are not quoted in anactive market are classified as loans and receivables. Loansand receivables are measured at amortised cost using theeffective interest rate method, less any impairment.Interest income is recognised by applying the effectiveinterest rate, except for short-term receivables when therecognition of interest would be immaterial.

Financial liabilitiesFinancial liabilities, including borrowings, are initiallymeasured at fair value, net of transaction costs and aresubsequently measured at amortised cost using theeffective interest rate method. The group determines theclassification of its financial liabilities at initial recognition. Financial liabilities include trade payables, amounts due toother member firms of the DTT organisation and partnercapital.

Financial guaranteesFinancial guarantees are recorded as liabilities if it isanticipated that they will crystallise as liabilities. In thesecircumstances financial guarantees are measured initiallyat their fair values and are subsequently measured at thehigher of:

• the amount of the obligation under the contract, asdetermined in accordance with IAS 37 Provisions,Contingent Liabilities and Contingent Assets; and

• the amount initially recognised less, where appropriate,cumulative amortisation


44



Client receivablesClient receivables are initially recognised at fair value, and are subsequently measured at amortised cost lessappropriate allowances for estimated irrecoverableamounts.

Cash and cash equivalentsCash and cash equivalents comprise cash in hand, ondemand deposits and other short-term highly liquidinvestments.

Bank borrowingsInterest-bearing bank loans and overdrafts are recognisedat fair value on initial recognition. Interest is included infinance cost and is determined using the effective interestrate method.

Trade payablesTrade payables are initially measured at fair value, and are subsequently measured at amortised cost. Interestincome is recognised by applying the effective interestrate, except for short-term payables when the recognition of interest would be immaterial.

ProvisionsProvisions are recognised when the group has a presentlegal or constructive obligation as a result of a past event,and it is probable that the group will be required to settlethat obligation. Provisions are measured as the bestestimate of the expenditure required to settle theobligation at the balance sheet date, and are discountedto present value where the effect is material. The increaseduring the period in the discounted amount arising fromthe passage of time and the effect of any change in thediscount rate is charged to the income statement as afinance cost.

Retirement benefit obligationsThe group operates both defined benefit and definedcontribution schemes. The net deficit or surplus for thedefined benefit schemes is calculated in accordance withIAS 19 ‘Employee Benefits’, based on the present value ofthe defined benefit obligations at the balance sheet dateless the fair value of the schemes’ assets. The cost ofproviding benefits is determined using the projected unitcredit method, with actuarial valuations being carried outat each balance sheet date. Actuarial gains and losses arerecognised in full in the period in which they occur. Theyare recognised outside the income statement andpresented in the statement of recognised income and expense.

Where the actuarial valuation of the schemedemonstrates that the scheme is in surplus, therecognisable asset is limited to that which the group can benefit from in the future.

Past service cost is recognised immediately in the incomestatement to the extent that the benefits are alreadyvested. Otherwise, the past service cost is amortised on a straight-line basis over the average period until thebenefits become vested.

The group’s payments to the defined contributionretirement benefit schemes are charged to the incomestatement as they fall due.

Partners’ interestsPartners subscribe capital in proportion to their equityinterest in Deloitte & Touche LLP. Partners’ capital mayonly be withdrawn when a partner retires from the LLP.Because partners may retire from the partnership with lessthan one years’ notice, partner capital has been classifiedas a current liability.

Partners’ non-current liabilities represent provisions for thepension annuities of current partners. The provisionrelates to annuities payable, under the Partner PensionPlan, which commence when the partner reaches the ageof 60. The annuities are unfunded and are dependentupon the future generation of profits.

Drawings by partners on account of profits have beenclassified as amounts due from partners within currentassets.




2. Critical accounting judgements and key sources of estimation

The preparation of financial statements requiresmanagement to make estimates and assumptions thataffect the reported amount of revenue, expenses, assetsand liabilities and the disclosure of contingent assets andliabilities. Estimates and judgements are continuallyevaluated and are based on historical experience andexpectations of future events that are consideredreasonable in the circumstances. Actual results may differ from those estimated.

Management consider that the following estimates andjudgements are likely to have the most significant effectson the amounts recognised in the financial statements:

Retirement benefit obligationThe pension liability in respect of the defined benefitscheme has been independently valued based oninformation provided by the group in terms of thepensionable pay and contributions to the scheme. Theassumptions set out in Note 19 are based on the bestestimates available. The group will continue to reviewthese assumptions against the group’s experience andmarket data, and adjustments will be made in futureperiods where appropriate.

Provision for partner annuitiesThe provision for annuities for both retired and currentpartners has been independently valued based oninformation provided by the group in terms of futurelevels of pension annuity, current partner retirement ratesand mortality. This data is based on the experience withinthe group over the last four years. In addition, theassumptions set out in Note 14 are based on the bestestimates available. The group will continue to reviewthese assumptions against the group’s experience andmarket data, and adjustments will be made in futureperiods where appropriate.


46


3. Operating Segments

The group has four reportable operating segments: Audit, Tax, Consulting and Corporate Finance. The audit segmentprovides audit, internal audit, regulatory, risk & control and accounting & financial reporting services. The tax segmentprovides business tax, employer and personal tax services. The consulting segment provides strategy, operations, humancapital, enterprise application and technology integration services as well as actuarial & insurance solutions. Thecorporate finance segment provides transaction support, reorganisation services, forensics & dispute services andadvisory services.

The reportable segments reflect the group’s principal management and internal reporting structures and are strategicbusiness units that offer different services. They are managed separately because each business requires different skillsand methodology.

The accounting policies of the operating segments are the same as those described in the summary of accountingpolicies. The group evaluates the performance of the segments on the basis of net revenue and profit or loss fromoperations before finance income, finance cost and tax expense.

Performance assessment of the segments includes a review of certain assets such as client receivables, amounts to bebilled to clients and prepayments, segment liabilities reviewed include accruals and specific staff liabilities. All otherassets and liabilities, including non-current assets, balances with partners, cash, provisions and retirement benefitbalances are controlled centrally and are not allocated across service lines.

Inter-segment revenue is not material as revenue is shared proportionately by those service lines delivering services to clients.

CorporateAudit Tax Consulting Finance Unallocated Total2008 2008 2008 2008 2008 2008

£m £m £m £m £m £m

Revenue 619 567 469 355 - 2,010

Expenses anddisbursements (89) (76) (75) (45) - (285)

Net revenue 530 491 394 310 - 1,725

Profit from operations 177 185 123 136 - 621

Finance income 68 68Finance cost (35) (35)

Profit before tax 654

Tax (2) (2)

Profit for the year 652

Total assets 139 200 86 102 469 996

Total liabilities & equity 6 3 3 3 981 996




3. Operating Segments (continued)

CorporateAudit Tax Consulting Finance Unallocated Total2007 2007 2007 2007 2007 2007

£m £m £m £m £m £m

Revenue 557 508 430 307 - 1,802

Expenses anddisbursements (80) (64) (82) (33) - (259)

Net revenue 477 444 348 274 - 1,543

Profit from operations 146 165 115 131 - 557

Finance income 39 39Finance cost (32) (32)

Profit before tax 564

Tax (2) (2)

Profit for the year 562

Total assets 112 168 86 102 396 864

Total liabilities & equity 2 2 5 1 854 864

Included in group revenue is revenue of approximately £52m (2007: £31m) which arose from supplying professionalservices to the group’s largest client.

In order to best manage and drive the business, the group is managed using a matrix structure which incorporates bothservice lines and the nature of the market to which the services are supplied. Revenue by market is:

2008 2007£m £m

Financial Services 504 424Telecoms, Media & Technology 286 242Consumer Business 202 173Government & Public Sector 198 192Manufacturing 162 164Energy, Infrastructure & Utilities 157 146Other 112 115Real Estate 107 90Private Equity 92 83Tourism, Hospitality & Leisure 85 83Life Science 68 57Professional Partnerships 37 33

2,010 1,802


4. Staff costs

Employees

The average number of people employed by the group during the year (excluding partners) was:

2008 2007No. No.

Client-serving:Audit 3,886 3,769Tax 2,371 2,249Consulting 2,114 1,835Corporate Finance 1,054 900

9,425 8,753

Support 1,932 1,939

11,357 10,692

Staff costs incurred during the year in respect of these employees were:2008 2007

£m £m

Salaries 624 568Social security costs 66 59Pension costs (Note 19):

Defined contribution 28 23Defined benefit 11 13

729 663

48





5. Profit from operations

Profit from operations has been arrived at after charging/(crediting):

2008 2007£m £m

Operating lease rentals - land and buildings 51 49- other 2 1

Depreciation of property, plant and equipment 43 36Amortisation of intangible assets 2 2Net foreign exchange (gain)/loss (2) 2

Audit fees and expenses for the year ended 31 May 2008 were £0.2m (2007: £0.2m) and fees for other services were£0.1m (2007: £0.1m) which related to the audit of subsidiary financial statements.

In addition, the auditors received £21,000 (2007: £19,000) for the audit of the group pension schemes. The auditorsand their associates did not provide any non-audit services during either year.

6. Finance income and cost

2008 2007£m £m

Finance incomeInterest receivable 28 9Expected return on pension scheme assets (Note 19) 40 30

68 39

Finance costInterest payable on bank loans and overdrafts 4 5Other interest payable and unwinding of discount on provisions 1 1Interest on pension scheme obligations (Note 19) 30 26

35 32


50


7. Tax

The taxation charge, which arises in the corporate entities included within these financial statements, comprises:

2008 2007£m £m

Current tax 7 6Compensating payments due from partners (4) (4)Adjustment in respect of prior periods (1) -

Tax expense in corporate subsidiaries 2 2

The tax expense at the standard rate can be reconciled to the actual tax expense as follows:2008 2007

£m £m

Profit on ordinary activities of corporate entities before tax 10 8

UK Corporation tax 3 2Effects of:

- adjustments to tax charge in respect of previous periods (1) -

Tax expense in corporate subsidiaries 2 2

UK Corporation tax is calculated at 29.67% (2007: 30%) of the estimated assessable profit for the year.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.

The UK tax charge in respect of the corporate entities includes an additional amount as a result of UK transfer pricinglegislation. The cost of this is offset by compensating payments made by the partners of Deloitte & Touche LLP to thesubsidiaries, which are dealt with through partners’ interests.

8. Partners’ share of profits

Profits are shared amongst the partners after the end of the year in accordance with agreed profit sharingarrangements.

The average profit per partner is calculated by dividing the profit for the year before partners’ profit shares by theaverage number of partners.

2008 2007No. No.

Average number of partners 672 641

£’000 £’000

Average profit per partner 970 877

The share of profit that has been allocated since the year end to the Senior Partner, who was the partner with thelargest entitlement to profits in 2008, was £5,696,000 (2007: £4,656,000).




9. Property, plant and equipment

Leasehold Computer Fixtures Motorimprovements equipment and fittings vehicles Total

£m £m £m £m £m

Cost At 1 June 2006 109 57 39 40 245Additions 21 21 6 11 59Acquisitions 1 - 1 - 2Disposals (2) (12) (2) (12) (28)

At 1 June 2007 129 66 44 39 278Additions 65 22 6 10 103Disposals (31) (14) (12) (12) (69)

At 31 May 2008 163 74 38 37 312

DepreciationAt 1 June 2006 44 36 22 14 116Charge for the year 13 12 5 6 36Disposals (1) (12) (2) (6) (21)

At 1 June 2007 56 36 25 14 131Charge for the year 14 15 9 5 43Disposals (29) (14) (12) (7) (62)

At 31 May 2008 41 37 22 12 112

Net book amountAt 31 May 2008 122 37 16 25 200

At 31 May 2007 73 30 19 25 147

Capital commitments contracted but not provided for as at 31 May 2008 amounted to £21m (2007: £38m).


52


10. Intangible assets

IT Software Total£m

Cost At 31 May 2008, 1 June 2007 and at 1 June 2006 17

AmortisationAt 1 June 2006 2Charge for the year 2

At 1 June 2007 4Charge for the year 2

At 31 May 2008 6

Net book amountAt 31 May 2008 11

At 31 May 2007 13




11. Financial assets

Investments Loans Total£m £m £m

Valuation/costAt 1 June 2006 46 30 76Additions - 2 2Revaluation of investments 3 - 3Disposals (3) - (3)

At 1 June 2007 46 32 78Additions 1 5 6Disposals (42) (4) (46)

At 31 May 2008 5 33 38

ProvisionAt 1 June 2006 3 3 6Provided in the year - 1 1

At 1 June 2007 3 4 7Provided in the year - 1 1Disposals - (3) (3)

At 31 May 2008 3 2 5

Carrying amountAt 31 May 2008 2 31 33

At 31 May 2007 43 28 71

At 31 May 2007 investments included £42m of quoted fixed interest corporate bonds and government stock whichwere stated at fair value. These were disposed of during the year. Investments also include £2m (2007: £1m) ofunquoted debt investments which are stated at cost less provision for impairment.

Loans represent long-term loans to Deloitte Touche Tohmatsu (DTT) which are repayable within 3 years. Interest ischarged at commercial rates which are between 3.5% and 6.2%. A total of £24m of loans was repaid in full on 10 July 2008.


54


12. Client and other receivables

2008 2007£m £m

Client receivables 344 315Amounts to be billed to clients 209 196Amounts due from other member firms of the DTT organisation 31 16Amounts due from partners 46 26Other receivables 12 16Prepayments and accrued income 19 13

661 582

Client receivables are shown after impairment provisions for bad and doubtful debts of £12m (2007: £15m),movements on which are as follows:

2008 2007£m £m

As at the start of the year 15 15New and additional provisions 11 11Recoveries (10) (7)Write-offs (4) (4)

As at the end of the year 12 15

Client receivables are presumed to be impaired at any point where full recoverability of the debt is considered doubtful.Reasons for impairment could include the client being unable to pay or a dispute over either the services provided or thefees incurred. Full provision is made for all debts which are considered to be impaired. A provision of £12m has beenmade against client receivables of £13m. The £12m provision relates to UK based clients. A total of £11m relates toindividually impaired receivables of which £10m is for receivables which are over nine months past due.

The group has a policy of providing for all debts to the extent that they are not considered recoverable. The provision isalso determined by reference to past default experience. In determining the recoverability of the client receivable thegroup considers any change in the credit quality of the client receivable.

A detailed review of the credit worthiness of each and every client is completed before an engagement commences and the concentration of credit risk is limited due to the client base being large and unrelated. Accordingly, the groupbelieves that there is no further credit provision required in excess of the provision for doubtful debts.

Clients are required to settle invoices on invoice presentation or on such other date as is agreed in the engagementterms for that client. Although terms do vary, invoices are considered past due after 14 days have elapsed following theinvoice date; for 2008 the non-impaired current client receivables amount to £112m (2007: £109m). No collateral isheld for client receivables; amounts due from other member firms of DTT are generally payable on presentation.




12. Client and other receivables (continued)

An analysis of the age of client receivables and amounts due from member firms of DTT that are not impaired but arepast due at the year end is presented below:

2008 2007£m £m

Less than 1 month 131 1191 – 3 months 99 763 – 6 months 27 236 – 9 months 6 4

At 31 May 263 222

13. Trade and other payables

2008 2007£m £m

Progress billings for client work 27 20Trade payables 14 17Amounts due to other member firms of the DTT organisation 11 12Corporation tax 2 3Social security and other taxes 56 49Other payables 12 10Accruals and deferred income 77 72

199 183


56


14. Provisions

Retired CurrentSurplus partner partner Professional

property annuities annuities liability claims Total£m £m £m £m £m

At 1 June 2007 29 231 249 11 520

Additional provision in the year 5 50 56 6 117

Transfer - 23 (23) - -

Utilisation of provision (8) (21) - (4) (33)

Released unused - - - (3) (3)

Unwinding of discount 1 13 15 - 29

Adjustment for change in discount rate - (32) (59) - (91)

Net movement in provision (2) 33 (11) (1) 19

At 31 May 2008 27 264 238 10 539

2008 2007£m £m

Included in current liabilities 28 30Included in non-current liabilities 511 490

539 520

Surplus propertyThe surplus property provision is provided to cover the expected losses on sublet and vacant properties where expectedrevenues are less than cost. The provision has been estimated using current costs and has been discounted to presentvalue at a rate of 6% (2007: 6%).




14. Provisions (continued)

Retired and current partner annuitiesThe annuities payable to retired and current partners are unfunded, are conditional upon the future generation of profits and are capped in each year at 8% of the applicable group profit.

The provision for retired and current partners’ annuities is the present value of the future obligation of the group to provide retirement annuities to partners.

The principal actuarial assumptions which have been used in calculating the liabilities, after the application of mortalityrates, are as follows:

2008 2007% p.a. % p.a.

Discount rate 6.7 5.7Price inflation 3.5 3.2

The discount rate of 6.7% (2007: 5.7%) is based on the yield on the over 15 years AA rated Corporate Bond Index.

The assumed discount rate, inflation rate and partner profit share increases all have a significant effect on theprovisions. The following table shows the sensitivity of the value of the partner annuities to changes in theseassumptions.

Assumption Change in assumption Impact on annuity provision(Decrease)/Increase£m %

Discount rate Increase by 0.25% (20) 4Inflation rate Increase by 0.25% 13 3Partner profit share increase Increase by 0.25% 3 1

Professional liability claimsThe provision for professional liability claims represents the group’s estimate of the potential liability arising from claimsthat have been notified to the group. No separate disclosure is made of the cost of claims covered by insurance, as todo so could seriously prejudice the position of the group.

15. Deferred taxation

Deferred taxation provided for in the financial statements is set out below:Accelerated

capitalallowances

£m

At 1 June 2006 and at 1 June 2007 1Charge to income -

At 31 May 2008 1

Deferred taxation is generally recognised on a full provision basis, without discounting, on all temporary differences fortaxation purposes in the corporate entities included within these financial statements.


58


16. Partners’ interests

Provision Partners’Amounts for current equity –

Partners’ due from partner othercapital partners annuities reserves Total

£m £m £m £m £m

Partners’ interests at 1 June 2006 114 (14) 258 (212) 146Profit for the financial year available for

division among partners - - - 559 559Allocated profits - 460 - (460) -Pension scheme actuarial gain - - - 80 80Movement in provision - - (9) - (9)Drawings and distributions - (472) - - (472)Compensating payment due to

subsidiary undertakings - - - (4) (4)Capital:

Introduced 15 - - - 15Repaid (6) - - - (6)

Partners’ interests at 1 June 2007 123 (26) 249 (37) 309Profit for the financial year available for

division among partners - - - - 640 640Allocated profits - 526 - (526) -Pension scheme actuarial loss - - - (11) (11)Translation reserve - - - (2) (2)Movement in provision - - (11) - (11)Drawings and distributions - (546) - - (546)Compensating payment due to

subsidiary undertakings - - - (4) (4)Capital:

Introduced 16 - - - 16Repaid (9) - - - (9)

Partners’ interests at 31 May 2008 130 (46) 238 60 382

Deloitte & Touche LLP’s profits are divided based on units allocated to partners. The unit allocation is completed afterthe year end and accordingly there was no automatic division of profits among the partners and only certain fixedshares of profit had been allocated as at 31 May 2008. As a result, the balance of profit available for division among the partners as at 31 May 2008 is included in other reserves.

Partners’ other reserves rank after unsecured creditors and loans and other debts due to partners rank pari passu withunsecured creditors in the event of a winding up.




17. Operating lease commitments

At 31 May 2008, the group had outstanding commitments for future minimum lease payments under non-cancellableoperating leases, which fall due as follows:

Land and Land andbuildings Other buildings Other

2008 2008 2007 2007£m £m £m £m

Operating lease payments which fall due:Within one year 60 1 59 1Within two to five years 217 4 217 1In more than five years 537 - 424 -

814 5 700 2

18. Contingent liabilities

The group has:• guaranteed the performance of Liberata plc, a former subsidiary of Deloitte & Touche general partnership, under

certain of its contracts. The maximum amount payable under the guarantee is approximately £30m (2007: £30m)and the contract expires on 4 January 2009. The group has the benefit of a counter indemnity for the full amount of these liabilities from certain former shareholders in Liberata plc; and

• entered into a several guarantee to guarantee a proportion of certain liabilities of Deloitte Touche Tohmatsu. At 31 May 2008 the contingent liability under this guarantee amounted to £26m (2007: £38m).

19. Retirement benefit schemes

Defined contribution schemesThe group operates occupational defined contribution schemes and stakeholder arrangements for employees, as well as a number of closed schemes.

In all cases the schemes’ assets are held separately from those of the group in trustee administered or, in the case ofstakeholder, contract based arrangements.

The total cost charged to the income statement of £28m (2007: £23m) represents contributions payable to theseschemes by the group.

Defined benefit schemesThe group provides retirement benefit through defined benefit schemes. The defined benefit sections of the schemesare closed to new members. Under the schemes, employees are entitled to retirement benefits of up to two-thirds oftheir final salary, subject to HMRC limits, on attainment of retirement ages between 60 and 65. No other postretirement benefits are provided. The schemes are funded schemes.

The pension scheme assets are held in a separate Corporate Trustee administered fund to meet the long-term pensionliabilities for past and present employees.

The schemes’ assets are stated at their bid value as at 31 May 2008. The schemes’ liabilities have been updated fromthe most recent actuarial valuation, as at 30 September 2005, by an independent qualified actuary to assess theliabilities as at 31 May 2008.

The liabilities of the defined benefit schemes are measured by discounting the best estimate of future cash flows to be paidout by the schemes using the projected unit credit method. This amount is reflected in the deficit in the balance sheet.


60


19. Retirement benefit schemes (continued)

2008 2007% %

The principal actuarial assumptions at the balance sheet date:Discount rate 6.7 5.7Expected return on scheme assets 8.9 8.9Inflation 3.5 3.2Future salary increases 5.0 4.7Future pension increases 3.4 3.1

Benefits are valued at the date from which they can be taken without actuarial reduction for early payment.

The actuarial valuation assumes that mortality will be in line with nationally published PA92 mortality tables as adjustedto allow for future improvements in life expectancy including the published medium cohort improvement factors. The assumed life expectations on retirement at age 65 are:

2008 2007Retiring today:Males 22 22Females 25 24

Retiring in 20 years:Males 22 22Females 25 25

The amount recognised in the group balance sheet arising from the obligations in respect of the defined benefitschemes is as follows:

2008 2007£m £m

Fair value of scheme assets 417 445Present value of scheme obligations (484) (519)

Deficit in the scheme and liability recognised in the group balance sheet (67) (74)

The amounts recognised in the group income statement in respect of the defined benefit schemes are as follows:

2008 2007£m £m

Operating expenses:Current service cost 11 13

Finance cost:Interest cost 30 26Expected return on scheme assets (40) (30)

1 9





Actuarial gains and losses have been reported in the statement of recognised income and expense.

The movements in the defined benefit schemes’ assets were as follows:

2008 2007£m £m

Fair value of scheme assets at 1 June 445 352Expected return on scheme assets 40 30Actuarial (losses)/gains (75) 54Contributions from the sponsoring employers 19 22Benefits paid (12) (13)

Fair value of scheme assets at 31 May 417 445

The actual return on scheme assets was as follows:2008 2007

£m £m

Expected return on scheme assets 40 30Actuarial (losses)/gains on scheme assets (75) 54

(35) 84

The expected return on assets is determined using current and projected economic and market factors and after takingactuarial advice. The calculation incorporates the expected return on risk-free investments and the historical riskpremium associated with other invested assets.

The analysis of the scheme assets and the expected rate of return at the balance sheet date was as follows:

Expected return Fair value of assets

2008 2007 2008 2007% % £m £m

Equity instruments 8.9 8.9 411 444Other 8.9 8.9 6 1

8.9 8.9 417 445


62



The overall expected rate of return on scheme assets is a weighted average of the individual expected rates of return oneach asset class.

The changes in defined benefit obligations were as follows:2008 2007

£m £m

Present value of defined benefit obligation at 1 June 519 519Current service cost 11 13Interest cost 30 26Actuarial gains on scheme liabilities (64) (26)Benefits paid (12) (13)

Present value of defined benefit obligation at 31 May 484 519

The analysis of the actuarial gains and losses recognised in the statement of recognisedincome and expense is as follows:

2008 2007£m £m

Actuarial (losses)/gains on scheme assets (75) 54Actuarial gains on scheme liabilities 64 26

Total actuarial (losses)/gains (11) 80

Cumulative amount of actuarial gains recognised in the statement of recognised income and expense 33 44

The four year history of experience adjustments is as follows:

2008 2007 2006 2005£m £m £m £m

Fair value of scheme assets 417 445 352 288Present value of scheme obligations (484) (519) (519) (470)

Deficit in the schemes (67) (74) (167) (182)

Experience adjustments to scheme assets (75) 54 32 14

Experience adjustments to scheme liabilities - (7) 8 (3)





The estimated amount of contributions expected to be paid to the schemes during the current financial year is £18 million. This includes contributions for future accrual and contributions towards eliminating the deficit.

The assumed discount rate, inflation rate, salary increases and mortality all have a significant effect on the valuation.The following table shows the sensitivity of the value of the defined benefit obligations to changes in theseassumptions.

Assumption Change in assumption Impact on scheme liabilities(Decrease)/Increase£m %

Discount rate Increase by 0.25% (21) 4Inflation rate Increase by 0.25% 21 4Salary increases Increase by 0.25% 2 -Mortality Increase by 1 year 13 3

20. Financial instruments

Capital structureThe group is financed by partner capital. In addition the short-term working capital requirements of the group will bemet by drawing down on the overdraft facilities. The group’s structure is regularly reviewed to ensure that it remainsrelevant to the business and its plans for growth. There are established treasury policies that are reviewed regularly toensure they remain relevant to our business. The group aims to minimise the level of short-term borrowing and this isachieved through the active management and targeting of receivables; client receivables and amounts due to be billedto clients. A number of entities within the group are regulated by the Financial Services Authority and as such aresubject to certain regulatory capital requirements. These requirements were met throughout the financial year.


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20. Financial instruments (continued)

Financial instruments comprise debt investments, loans, short-term borrowings, cash, client receivables and tradepayables, amounts due to and from other member firms of the DTT organisation, partners capital and amounts duefrom partners. Financial instruments give rise to liquidity, credit, interest rate and foreign currency risks, informationabout these risks and how they are managed is set out below.

The carrying amounts of financial instruments are as follows:

2008 2007£m £m

Financial AssetsQuoted debt investments - 42

Available for sale - 42

Unquoted debt investments 2 1Loans to DTT 31 28Client receivables 344 315Amounts due from other member firms of the DTT organisation 31 16Amounts due from partners 46 26Other receivables 12 16Cash and deposits 91 51

Loans and receivables 557 453

Financial LiabilitiesAmounts due to other member firms of the DTT organisation (11) (12)Partner capital (130) (123)Trade payables (14) (17)

Liabilities at amortised cost (155) (152)

Total net financial instruments 402 343





Liquidity riskThe ultimate responsibility for liquidity risk management lies with the Executive Group, which has developed anappropriate liquidity risk management framework for the management of the group’s short, medium and long-termfunding and liquidity management requirements. The group manages liquidity risk by maintaining adequate bankingfacilities and borrowing facilities and by continually monitoring forecast and actual cash flows.

Liquidity risk arises from the group’s ongoing financial obligations, including settlement of financial liabilities such astrade and other payables. The group’s financing requirements vary during the year, partly as a result of payments to and on behalf of partners and partly as a result of other major payments such as for leasehold improvements.

During the year, borrowing facilities of £410m were negotiated with two leading international banks. These facilities aredue to expire between 30 June 2009 and 7 August 2010 and renewal of the facilities, based on forecast requirements,will be negotiated with expected renewal at satisfactory levels. At 31 May 2008 the group had available £410m (2007:£370m) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met. Thesefacilities are considered more than adequate to finance variations in working capital.

Cleared funds held at banks are monitored on a daily basis and surplus amounts are placed on short-term deposits or invested on the money market. It is the group’s policy to invest surplus amounts for periods of up to three months. At the year end all surplus funds were held in either on-demand accounts or on the money market. Funds in the group’scaptive insurance company are placed on deposit for periods of up to three months.

Trade payables of £14m (2007: £17m) mature within one year. Partner capital of £130m (2007: £123m) is repayablewhen the partner retires. As less than one year’s notice is required partner capital is considered to mature within oneyear. The amount of undiscounted cash outflows for financial liabilities are equal to their carrying amount as both tradepayables and partner capital are non-interest bearing. The timing of these undiscounted cash outflows is potentially duefor repayment immediately, subject to partner retirement, or within a three month timeframe. In practice the majority ofthe partner capital balance is viewed as being of a long term nature and in most cases capital introduced by newpartners is expected to replace that of retiring members.

Credit riskCredit risk primarily refers to the risk that a client will default on its contractual obligations resulting in financial loss tothe group and the group has adopted a policy of only dealing with creditworthy clients. Credit risk also arises fromamounts to be billed to clients, amounts due from other member firms of the DTT organisation, loans, cash and cashequivalents and guarantees.

Client receivables consist of a large number of clients, spread across diverse industries and geographical areas andcovering a wide range in terms of credit quality. Ongoing credit evaluation is performed on the financial condition ofclient receivables and the group does not have any significant credit risk exposure to any single client or any group ofclients having similar characteristics. Unbilled receivables are typically billed to clients within a month of arising andinvoices are generally payable within 14 days or as agreed per the engagement terms.

All work carried out on behalf of other member firms of the DTT organisation is subject to a DTT member firmagreement which specifies the exact terms and conditions of each engagement. Invoices are generally payable uponpresentation. The credit risk arising from amounts owed by DTT member firms is deemed to be low and is thereforeaccepted by the group. None of the amount receivable from DTT is considered to be impaired.

The credit risk on liquid funds is limited because the leading banks used are those with high credit ratings (long termAA- as a minimum) assigned by international credit rating agencies and cash deposits are placed only with the group’srelationship banks.


66



Except for the several guarantees (Note 18) provided to Liberata and Deloitte Touche Tohmatsu the carrying amount offinancial assets recorded in the financial statements, net of any allowances for losses, represents the group’s maximumexposure to credit risk. This amount is:

2008 2007£m £m

Financial assets 557 495Amounts to be billed to clients 209 196Guarantees 56 68

Total credit risk 822 759

Interest rate riskInterest rate risk arises from cash and cash equivalents and interest bearing investments and loans. Interest on cash andcash deposits of £91m (2007: £51m) is earned at a variable rate linked to LIBOR. Interest on short-term borrowings ispaid at a variable rate linked to LIBOR. Investments include unquoted investments which are non-interest bearing. Thelong-term loans to DTT earn interest at a variable rate of interest linked to either US or UK LIBOR. It is recognised thatinterest rates are liable to fluctuate and the group accepts this risk and does not consider it to be material to the group.

Foreign currency riskThe group undertakes certain transactions denominated in foreign currencies, hence its exposure to exchange ratefluctuations arises. The group’s income and expenditure is primarily in sterling. However, some fees and costs aredenominated in foreign currencies, as are the transactions of the European and Swiss subsidiaries and transactions with DTT member firms.

The group does not hedge or enter into forward or derivative transactions and is mainly exposed to US Dollar foreigncurrency risk. Balances in foreign currency bank accounts are held to facilitate cash management and, on occasion, toprovide an economic hedge of future foreign currency expenditure. Other than foreign currency bank accounts and theUS Dollar denominated loans to DTT, the group has no significant assets or liabilities denominated in currencies otherthan sterling. It is recognised that exchange rates are liable to fluctuate and the group accepts this risk and does notconsider it to be material to the group.

The following table is a summary of the group’s net foreign currency denominated monetary assets/(liabilities):

2008 2007£m £m

Euro 55 29US Dollar 36 40Swiss Franc (7) 5

84 74





Foreign currency sensitivity analysisThe following tables detail the group’s sensitivity to a 10% increase and decrease in the Sterling amount against the relevantcurrencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts theirtranslation at the year end for a 10% change in exchange rates. A positive number below indicates an increase in profitwhere the Sterling strengthens 10% against the relevant currency. For a 10% weakening of the Sterling against the relevantcurrency, there would be an equal and opposite impact on the profit and the balances would be negative.

Euro US Dollar Swiss Franc currency impact currency impact currency impact

2008 2007 2008 2007 2008 2007£m £m £m £m £m £m

Profit or loss 1 - 2 3 1 -

The group’s sensitivity to foreign currency has decreased since 10 July 2008 due to the repayment of $47m US Dollardenominated loans.

Interest rate sensitivity analysisThe sensitivity analyses below have been determined based on the exposure to interest rates for non-derivativeinstruments at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of theliability outstanding at the balance sheet date was outstanding for the whole year. A 0.5% increase or decrease is usedwhen reporting interest rate risk internally to key management and represents management’s assessment of thereasonably possible changes in interest rates.

If interest rates had been 0.5% higher/lower and all other variables were held constant, the group’s profit for the yearended 31 May 2008 would increase/decrease by £515,000 (2007: £200,000).

Fair valueFair values for loans denominated in US Dollars have been calculated using year end exchange rates. The estimated fairvalues of all other financial instruments of the group are approximate to their book values as at 31 May 2008 and 31May 2007 largely owing to their short maturity.

All financial assets and liabilities are receivable and repayable on demand or within one year except the following loanswhich are included within financial assets:

2008 2007Fair value Fair value

£m £m

Within one year 27 3In the second year 2 9In the third year 2 10In the fourth year - 2In the fifth year - 1After five years - 3

21. Related party transactions

Transactions between Deloitte & Touche LLP and its subsidiaries, which are related parties, have been eliminated on consolidation.

Members of the Executive Group are recognised as the group’s key management personnel and their remuneration is regarded as a related party transaction. The share of profit allocated to the partners who were members of theExecutive Group during the year amounted to £44m (2007: £34m). This includes the profit share of the Senior Partner.


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22. Subsidiary undertakings

The financial statements consolidate the results and financial position of the group, including principal subsidiaryundertakings listed below:

Proportion ofvoting rightsand shares Country of

Principal subsidiary undertakings Holding held incorporation Nature of business

Deloitte MCS Limited Ordinary 100% England & Wales Consulting services

Deloitte & Touche Management AG Ordinary 100% Switzerland Management company

Deloitte AG Ordinary 100% Switzerland Professional services

Deloitte Financial Advisory Services AG Ordinary 100% Switzerland Financial advisory services

Deloitte Consulting GmbH Ordinary 100% Switzerland Consulting services

Deloitte PCS Limited Ordinary 100% England & Wales Personal financial services

Deloitte Total Reward and Benefits Limited Ordinary 100% England & Wales Investment advisory services

Deloitte & Touche Public Sector Ordinary 100% England & Wales Internal audit services Internal Audit Limited

B&W Deloitte GmbH Ordinary 100% Germany Actuarial services

B&W Deloitte GmbH Ordinary 100% Switzerland Actuarial services

Peterborough Insurance PCC Limited Ordinary 100% Guernsey Captive insurance company

Other

beprofessional.com Limited Ordinary 50% England & Wales Professional services

Nautilus Indemnity Holdings Limited Ordinary 18.1% Bermuda Captive Insurance company

On 4 July 2008 an agreement was signed for the sale of B&W Deloitte GmbH (Germany) to Deloitte & Touche GmbHWirtschaftsprüfungsgesellschaft, a German limited liability company, for a consideration of £1.2m. The sale is due to becompleted later in the year.



Partners

Tamsin AbbeyAmit AbhyankarJohn AdamMark AdamsMark AdamsRalph AdamsKevin AhernJames AlexanderNeil AllcockPeter AllredSteve AlmondIraj AmiriDebbie AnthonyJohn AntoniazziCarmen AquerretaTim ArcherDean ArnoldCarol ArrowsmithAlex ArtertonKeith AshworthCarol AthaMark AtkinsonShaun AustinPenny AvisTerry Awan

Richard BaddonPeter BadenhuizenMark BainesJames BairdMichael BairdEmma BairstowSam BakerAdrian BalcombeRick BallardMike BarberJolyon BarkerNigel BarkerDaniel BarlowDavid BarnesSteve BarnettStuart BarnettSue BarrattCatherine BartonIan BartonRichard BartonMatt BathamStephan BaumannRichard BaxterDan BeanlandAllan BeardsworthNeil BeatonMark BeddySean BeechRichard BellDavid BellMike BellJohn BelseyDavid BelwardJoanne BentleyDavid BettesworthPauline BiddleJohn BinnsJohn BirdAidan BirkettJodi BirkettRichard Blackwell

Lucy BloemZahir BokhariAlison BondDarren BoocockClive BouchTony BowersJim BoyleMarcus BoyleCharles BradbrookRob BradburyNeville BramwellGreg BranchKen BransomLouise BrettSimon BrewCaroline BrittonChris BroughIan BrownIan BrownKatelyn BrownRichard BrownRobert BryantRichard BuckAndrew BuckleAlexandre BugaGavin BullockGlyn BuntingFenton BurginStuart BurnhopeElizabeth BurnieDan ButtersAlex ButterworthHeather Bygrave

Cindy CahillConor CahillDonald CampbellGeorge CampionNic CarringtonJeremy CassonRoss CattellDavid CaukillJason CaulfieldAnna CelnerMakhan ChahalSabri ChallahCindy ChanAlison ChapmanStephen ChargeJohn CharltonAlan ChaudhuriWarren ChesterRajeev ChopraJohn ClacyTony ClareAndrew ClarkIan ClarkJane ClarkJeff ClarkePaul ClarkeJason ClatworthyDavid ClaxtonJohn ClennettSimon ClevelandDavid ClissittDavid CobbEmma Codd

Tony CohenRobin CohenBill CohenJames ColemanNeil ColesKathy ColganRussell CollinsVince ColvinGreg ComninosSue ConderJoe ConneelyJohn ConnollyDean CookTony CooperBill CooperMichele Costafrolaz-TissotStuart CotteePaul CoulthardStuart CounsellEmma CoxJohn CoxRichard CraneOwen CrasswellerSimon Creedy-SmithKevin CresswellDavid CruickshankNeil CruickshanksSimon CuerdenMichael CullenJohn CullinaneGreg CulshawJane CurranAndrew Curwen

Howard Da SilvaAndrew DaleyNick DarganNicholas DaviesHoward DaviesJason DaviesMark DaviesTim DavisTim DavyBill DawsonKalvinder DhillonChris DigbySimon DixonMike DobbyBill DodwellPatrick DohertyMark DolemanMatthew DonaldsonGordon DootsonJames DouglasCahal DowdsAndrew DownesTom DowningBob DoyeEliza Dungworth

Martin EadonTim EdgeNick EdwardsRichard EdwardsMaghsoud EinollahiMatt EllisRoger Esler

David EvansHugh EvansNick EvansPhill EversonMargaret Ewing

Douglas FarishTony FarnworthClaire FaulknerPaul FeechanAlan FendallJames FergusonLeonardo FerreiraSally FisherMark FitzPatrickAlbert FlemingKatie Folwell-DaviesLinda FosterJohn Foster ThomasJohn FotheringhamPesh FramjeePaul FranekSharon Fraser

Andrew GallacherPeter GallimoreRick GarrardKirsty GarrisonAllan GassonPatrick Gay-CrosierIan GeddesPaul GeesonRebecca GeorgeCJ GetzColin GibsonLis GibsonDavid GillRichard GilroyPhilip GoethMark GoodeyAndrew GordonAndrew GouldenDom GrahamPeter GrattonAndrew GreenMartyn GregoryVimi Grewal-CarrByron GriffinDebbie GriffithsGwyn GriffithsStephen GriggsAndrew GrimstoneOliver GrundyElizabeth GutteridgeAndrew Gwyther

Garth HackshallJayson HadleyKari HaleDavid HallStephen HallDavid HalsteadGavin Hamilton-DeeleyRichard HammellSimon HammettJohn HammondHeather Hancock


70

Kendra HannEdward HansonCharles HardyDeepak HariaDavid HarkerAndy HarrisNeil HarrisMike HartleyChris HarveyWayne HarveyHumphry HattonJohn HaugheyRichard HawesJulian HawkinsAlison HaynesLaurence HedditchDerek HendersonStuart HendersonJohn HenshallMary HensherWarwick HensleyJackie HessWilliam HigginsPaula HiggletonMark HillCarol HindleDavid HindleyJonathan HintonPeter HippersonAndy HodgeRobert HodkinsonOliver HolderGraham HollisPeter HolmesGavin HoodIan HookJames HoriguchiBarney HornKatie HouldsworthRichard HoustonNeville HowardRoss HowardMatthew HowellAndrea HowlColin HudsonNeil HudsonCarl HughesDavid HughesDavid HumeCiaran HunterRich HurleyLawrence HutterChris Hyams

Frank IlettWill InglisJoe Ippolito

Ross JamesNick JealMartin JenkinsGurpreet JohalDave JohnsonNick JohnsonNigel JohnsonDuncan JohnstonAndrew Jones

Dan JonesDavid JonesDavid JonesMartyn JonesMichael JonesNeil JonesLouis Jordan

Neville KahnPanos KakoullisAndrew KayePhilip KayeStephen KeaneDan KeebleJack KellyBernard KennyJohn KerrNicola KerrSimon Kerton-JohnsonMartin KilburnJohn KilbyCarl KingDoug KingJacques KistlerStephen KnightRichard KnightsDennis KnowlesAngus Knowles-CutlerYuki KoniiIan KriegerKlaus KummermehrAlex Kyriakidis

Jean-Francois LagasseAnthony LandesSarah LavanMark LawrieMartin LawsJulia Le BlanJulian LeakeChris LeckMark Lee-AmiesJames LeighKeith LeslieRick LesterSimon LettsTom LewthwaiteStephen LeyMike LloydRichard Lloyd-OwenPhil LobbJane LodgeGerry LoftusPat LoftusDarren LongleyChris LoughranNikki LovejoyHoward LovellPaul LuptonCathy LynchDaniel Lyons

Tom MacdonaldJohn MacintoshCarol MacKinnonIain MacmillanAlan MacPherson

Mike MaddisonTim MahapatraPatrick MaherPeter MaherAnne-Marie MalleyLee ManningSimon ManningMohan ManuelAnna MarksJason MarshStephen MarshallAngus MartinChris MatonRob MatthewsTony MauriceJohn MaxeyDougie McAndrewStuart McCabeTony McClenaghanDanny McConnellNigel McCreaSimon McCreadyKen McFarlaneCarole McGregorStuart McLarenHoward McMinnIan McNeilKaren McNichollsLisa McNultyMark McQueenPaul MegsonCarl MellorNigel MercerStephen MercerGus MiahRoger MilesPhilip MillsKerr MitchellNikki MitchellFeargus MitchellPeter MollerJason MoorePaul MordueAndy MorrisTony MorrisCraig MuirPeter MuirMark MullinsGerry MurphyDavid MurrayRichard MuschampDavid Myers

Vassi NaidooKirsty NewmanPeter NewmanAndy NewsomeVince NiblettHenry NicholsonPhil NicklinDavid NoonDavid NortonRichard Norton

Peter O’DonoghueDavid O’LearyRoy O’Neil

Kevin O’ReillyJames O’RiordanAndrew OgramJonnie OldhamRoberto OrsiCampbell OswaldDavid OwenGeorge OwenNick OwenSimon Owen

Mark PacittiGerry PaisleyTim ParrDavid ParryPeter ParsonsShirish PatelZubin PatelDavid PatersonEllie PatsalosChris PearsonMatt PerkinsCosti PerricosAndy PetersNick PflaegerJeremy PhippsNigel PickardGraham PickettAngus PollockVeronica PooleRichard PorterKaren PottsChris PowellMinnow PowellAndrew PowerRobin PriestSimon PrinnNick PriorSven ProbstRichard Punt

David QuantrillPeter QuigleyMichael QuinlanDavid Quinlin

David RaistrickWilliam RamsayCliff RanaColin RawlingsClive ReayJohn ReeveBen ReganJohn ReidMary ReillyLynne RennieMark RhysBelinda RichardsJason RichardsPhilip RichardsGraham RichardsonJames RiddellGeorgina RobbDavid RobbinsGlenn RobertsChris RobertsonAndrew Robinson



Paul RobinsonStephen RossAndy RotheryPaul RoweDavid RushGillian RussellMarvin Rust

Jas SahotaMartin SaluveerIrene SalviFiona SalzenNick SandallDamian SandersPhilip SandfordIan SargeantMaxine SaundersPeter SaundersReto SavoiaTom ScampionRolf SchoenauerPaul SchofieldDavid ScottAlastair ScrimgeourKirsty SearlesRoyston SeawardRobert SeldonAnup ShahManish ShahIsobel SharpMark ShawEd SheddGraeme SheilsHadleigh ShekleSarah ShillingfordNigel ShiltonCarlton SiddleKaren SilcockRoger SimlerAndy SimmondsIan SimpsonNigel SlaterJim SloaneJulian SmallAdam SmithAndrew SmithIan SmithMark SmithIan SparshottAndrew SpoonerDavid SproulTim SteelIan SteeleDarren StephensMark StephensonMatthew StephensonPaul StephensonIan StoneKeith StoneLisa StottSarah SturtMartyn SullivanAndy SwarbrickRichard Syratt

Dave TansleyMark Tantam

Kirsten TassellGeoff TaylorTarlok TejiDebbie ThomasGuy ThomasJulian ThomasNigel ThomasWayne ThomasPaul ThompsonCalum ThomsonPaul ThomsonAndy ToddMatt TombsNeil TomlinsonRob TopleyWilliam ToucheChris TragheimNicola TratalosPaul TrickettMike Turley

Nick van MarkenHoward VearyVishal VediHelena Vega-LozanoRichard Vitou

Simon WakefieldPatrick WaldronTim WalkerAdam WallerIan WallerBrett WalshKevin WalshAlan WaltonBob WarburtonChris WardDonna WardMark WardStephen WardGiles WarnerChris WarrenDouglas WatkinsonChris WattsWayne WeaverRoman WebberClaire WebsterJeff WehnerChristoph WellingerClaire WesleyAndrew WestbrookStephen WestonBrian WhiteBrian WhiteBrian WhitefootBevan WhiteheadJohn WhiteheadJustin WhitehouseJane WhitlockAndy WhittonRichard WiddasRoger WightmanKen WildAndy WildeDavid WilkinsonMalcolm WilkinsonChris Williams

David WilliamsIain WilliamsJames WilliamsMark WilliamsMike WilliamsRichard WilliamsRic WilliamsStephen WilliamsPaul WilliamsonJamie WillisRobert WilsonAndrew WintersGlen WitneyNigel WixceyDominic WongNeil WoodStephen WoodhouseJohn WoodsMichael WoodwardStuart WoodwardDenis WoulfeDerek WrightJames WrightPeter WrightToby WrightDaryl Wyer

Jun YamaguchiJames YearsleyBrian YeomansNeil YeomansDebbie YoungConrad YoungLionel Young

Morris ZelkhaPaul Zimmerman


72

With thanks to:Adidas, British Heart Foundation, Business in the Community, British Paralympic Association, Cancer Research UK, China Central Properties Limited,Continental Sports, Corus, Gazprombank, GeorgeSims Racing Boats, Leukaemia Research, The LondonOrganising Committee of the Olympic and ParalympicGames, London Stock Exchange, Naspers, NSPCC,RDK Mobility, Royal Opera House, Thomson Reuters,SportsAid, United Bank of Carbon, Vodafone.

Photography: David Yeo, Jason Keffert.


This annual report is printed on NAPM-accredited Revive Matt,manufactured entirely from waste paper containing at least 75%de-inked post-consumer waste. Strict environmental controls areadhered to during production and no chlorine bleaching is used.

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Deloitte refers to one or more of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please seewww.deloitte.co.uk/about for a detailed description of the legal structure of DTT and its member firms.

Deloitte & Touche LLP is the United Kingdom member firm of DTT.

© 2008 Deloitte & Touche LLP. All rights reserved.

Deloitte & Touche LLP is a limited liability partnership registered in England and Wales with registered number OC303675. A list of members’ names is available for inspection at StonecutterCourt, 1 Stonecutter Street, London EC4A 4TR, United Kingdom, the firm’s principal place of businessand registered office. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198.

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