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2011The Annual Report

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1Deloitte 2011 Deloitte LLP Annual Report

Contents

3 Chairman’s statement

5 Report from John Connolly

8 David Sproul – the year ahead

10 Perspectives

11 Driving long-term growth

13 The future of financial services

15 ReImagining business

17 Embedding analytics

19 2012 legacy

21 Deloitte in 2011

22 People

28 Our responsibility

37 Leadership and governance

46 Abridged financial statements

56 Non-financial performance



Our vision is to be the Distinctive Firm, standing out in our markets through the impact we have on the reputation and success of our clients. In pursuing this purpose, Deloitte contributes to a sustainable and prosperous society.

We will achieve our vision through actions which:

• Build distinctive client relationships through a deep focus on industries and private markets;• Secure market leadership in more industries, regions, platforms and services; • Reinforce a global approach to building client relationships and service delivery; • Create a high performance environment in which the best people thrive;• Continue to embed quality and integrity across all dimensions of our firm;• Demonstrate leadership in all areas of responsible business.

Welcome to the Deloitte UK 2011 Annual Report. We are pleased to report on our business progress,our contribution more widely to the community, our environmental impact, to highlight the success of our people and to offer some insights on a range of vitally important areas which impact businessand the world at large.

Enjoy the read.

Welcome



2011 has been a significant year for the firm and our Board’s agenda has had a clear focus on leadershipsuccession planning and the subsequent election ofDavid Sproul as our new Senior Partner and ChiefExecutive, to succeed John Connolly.

John Connolly leaves the firm an outstanding legacy,having led us through a critical time of change. John was the force behind our decision to stay in consulting,our transaction with the Andersen partners, and a seriesof bold acquisitions and partnerships, including DriversJonas, dCarbon8, Exsigno, Ingeus, ReportSource, RMD,Bacon & Woodrow and Burlington. Throughout John’sleadership in the last 12 years, Deloitte in the UK hasbeen transformed, has performed outstandingly and had a forward-looking strategy during the downturn.

We have had a very smooth leadership transition processand David Sproul and his executive team have developedthe strategy to position Deloitte as the Distinctive Firm,which David outlines in his preview of the year ahead.

Externally, we face many changes in terms of how wework with our clients, the economy and the businessenvironment generally. This is particularly so withthe forces of globalisation and the regulatory landscapeand challenges around the roles (and the perceptions of those roles) that firms like ours play in a number ofour markets.

As Chairman of the Board, during a time whentransparency and accountability have never been moreimportant, my intention is to set a new benchmark ofexcellence in governance for professional services firms.This will be a priority for the Board of Deloitte.

We now have a Managing Partner, Public Policy, Quality& Risk, Margaret Ewing, who as well as being on theExecutive has joined the Board. Margaret, who alreadyheads Deloitte’s CFO programme, is helping to lead ourdiscussions with regulators and policy makers to ensureDeloitte makes a full contribution to all of the currentdebates as well as to wider discussions on fosteringeconomic growth in the UK, and its attractiveness as a place to do business.

Chairman’s statementDavid Cruickshank



Deloitte now complies with the 2010 Audit FirmGovernance Code, and I am delighted to announce thatwe have appointed two Independent Non-Executives.Uniquely, we are appointing these to our main Board sothat they can have proper and full involvement in ourfirm. The first is Gerry Grimstone, who has had a longand distinguished career in government and financialservices, and is currently Chairman of Standard Life. The second is Dr DeAnne Julius CBE, a distinguishedeconomist, who was a founder member of the MonetaryPolicy Committee and is currently Chairman of ChathamHouse. She has been a Non-Executive Director of severalmajor international companies and currently serves onthe boards of Roche in Switzerland and Jones LangLaSalle in the US.

This is an exciting development for our firm and over the next few years, I know we will benefit from theexperience and insights that our Non Executives bringand I am sure that, due to their exceptional personalqualities, they will contribute fully to public interestmatters as they affect our firm.

Chairman’s statement

“During a time whentransparency andaccountability have neverbeen more important, myintention is to set a newbenchmark of excellence ingovernance for professionalservices firms.”



I am pleased to present the Deloitte UK 2011 AnnualReport – my final report for the firm. We are presenting a combined report, embracing our business progress andachievements alongside our contribution to society andthe environment. This is a reflection of our belief thatbeing a responsible business in every aspect of the waywe conduct our work, including our reporting, is criticalto our long-term success.

Business performanceThe year to 31 May 2011 remained challenging butnevertheless we were able to take advantage of growthopportunities in a number of areas. Our revenues wereup by 7% to £2.1 billion. The year was one ofinvestment as we focused on preparing for growth as the economy improves in the period ahead. Weincreased our staff numbers by 8% and our overall staffcost by 15%. We increased our partner complement by4%. Impacted by these investments in our people, profit was down by 9%.

The profit for the financial year distributable to partnerswas £535 million. The average profit earned by eachpartner in the year, after providing for pensions andannuities payable to retired partners, was £758,000compared with £873,000 in the prior year.

Each of our business divisions performed strongly in their markets.

Revenue (£m)

Report from John Connolly Former Senior Partner and Chief Executive

2011 2,098

2010 1,953

2009 1,969

2008 2,010

2007 1,802



.AuditThe Audit practice performed well with revenues up 4% on the prior year. After a relatively flat first sixmonths the second half of the year showed increasinggrowth. This was despite challenging trading conditionsoutside of the financial services sector. We also added toour FTSE 100 client list during the year with InternationalPower and Glencore.

The Enterprise Risk Services practice consolidated itsposition as market leader and reported double digitgrowth. The Financial Services business and theSustainability practice also had another good year with strong growth in both areas.

A relatively strong finish to the year means that we enter FY12 with good momentum and the prospect of continued growth next year.

TaxThe Tax practice grew by 5%. This was driven byexcellent performances in a number of our corebusinesses, particularly in our R&D Services and DisputeResolution Practices, which provided consistent growthin a market otherwise characterised by variabletransaction and M&A volumes. Our continuedcommitment to the entrepreneurial market also delivered significant growth.

The UK and global tax compliance landscape forcorporates continues to experience considerableupheaval and we were successful in a number of globalcorporate compliance outsourcing opportunities. The investment we have made in our Compliance &Reporting Services business ensures we will be wellplaced in FY12 to significantly enhance the complianceexpertise we deliver to our clients, allowing us tobecome a clear market leader. We also anticipate growthopportunities from our leading private equity M&Aoffering and strong Financial Services Practice.

ConsultingThe Consulting practice achieved a very impressive 13% growth in the year, with 6% coming from the twoacquisitions (ReportSource and Exsigno) and 7% fromorganic growth. The latter was a strong achievementgiven the big shifts that occurred in the early part of theyear, primarily the significant reduction in demand forconsulting services in the public sector. Consequentlythere were two main themes for the year. Firstly, theintegration of the two acquired businesses, with a focuson retaining clients and talent. Secondly, the significantredeployment of people who had historically beenengaged in government work into financial services and the wider private sector, which saw strong revenuegrowth in the second half of the year.

We expect this momentum to be maintained into FY12as economic conditions continue to improve.

Corporate FinanceRevenue in Corporate Finance grew by 11%, largelyreflecting the full year impact of the acquisition of DriversJonas in the last quarter of FY10. Many of our marketsstarting to show sustained improvement. We are seeinggood growth in our M&A related businesses, notablyTransaction Services. The Reorganisation Servicesbusiness remained active and we continue to secure a range of market leading assignments in the Forensic and Dispute Services business, particularly in the financial services sector.

We are making excellent progress in developing ourbusinesses in Switzerland and the Middle East throughbroadening our capabilities and footprint. Drivers JonasDeloitte, the Real Estate Advisory business we createdlast year, had a good start despite difficult markets andwe have already shown the value we can deliver to ourclients through this broader capability. Our continuedemphasis on deeper industry capability in CorporateFinance has also proved highly effective in deliveringvalue to our clients.

During the year we continued to work with a broadrange of clients on significant engagements, includingworking with Glencore on its recent IPO, supportingEurostar’s recent financing for new high speed trains andadvising private equity house, Endless, on its successfuldisposal of Crown Paints to Hempel. Our high-profile rolearound the significant restructuring of Dubai Worldconcluded in Autumn 2010, while our role supportingthe Landsbanki Winding Up Board and ResolutionCommittee in Iceland continues.

Report from John Connolly

Service line revenue (£m)

Audit 652

Tax 534

Consulting 517

Corporate Finance 395

Total 2,098

31%

25%

25%

19%



People and recognitionWe continue to put talent at the heart of our agenda,focusing on recruitment, professional development andstrengthening our connection with our 13,000 people.

Our talent priority is to be the number one firm forcareer and personal development and to be a placewhere people can do their best work, progress quicklyand fulfil their potential. We continue to invest in ourpeople, focusing on ensuring we attract and retaindiverse talent.

Highlights include:• This year we recruited 3,300 individuals while using

personal and professional development to help our people build their careers

• Our people survey showed an increase of more than 4% in our overall Engagement Index on FY10

• We invested £25.4m in learning and development, and received an award from The Sunday Times Best Companies judges for the scope and range of our training.

Deloitte in the communityWe believe passionately in the need to invest in thecommunities in which we live and work, and to achievethe maximum impact by focusing on the delivery of ourcore skills and expertise.

2011 has been an outstanding year for our contribution:• Our total community contribution this year was

£11.163m, an increase of £14% on our FY10 contribution

• We provided more than 50,000 hours of volunteer and pro-bono support to the community

• To date more than 25,000 young people have completed Deloitte employability courses with nearly 90% going to education at a higher level than previously or straight into full-time employment

• We have supported more than 300 talented athletes through our Talented Athlete Sponsorship Scheme

• The Deloitte Ride Across Britain, now in its second year, has now raised more than £750,000 for ParalympicsGB

• We were also recognised this year as leading the sector in Business in the Community’s 2011 Corporate Responsibility Index, achieving Platinum status with a score of 98%.

With just one year until the Opening Ceremony, our involvement in delivering a successful LondonOlympic Games has moved up yet another gear. Through over 100 secondees and 150 advisory projects,

our people have provided more than 350,000 hours ofexpertise already – and we expect to almost treble thatby the end of the Games.

As well as helping the Organising Committee prepare forthe Games, we are also helping London, and businessesacross the UK, do the same.

Our Green JourneyWe recognise our responsibility as a major business toensure we employ resources as sustainably as possible.During the year our focus on improving the efficiency ofour estate drove a decrease in energy consumption of5%. Our overall carbon footprint increased by 3% peremployee, a result of an increase in business travelfollowing our success in winning international contracts.To drive our continual improvement and address this wehave developed Our Green Journey, a major long-termstrategy with wide-reaching environmental targets acrossthe business, projects that improve the sustainability ofour estate and operations, and increased engagementwith and involvement of our people.

Innovation at the heart of DeloitteInnovation continues to be integral to our work and a day-to-day part of our firm. As a consequence, thisyear we have had a dedicated programme gearedtowards fostering innovation, including specific eventsand initiative (such as iCafes and iWeeks), our onlineiSpace and the physical space of our iZone –encouraging our people and clients to think and actdifferently and step outside of their comfort zones.

And now my final comments. I am confident that no-onehas enjoyed his or her role in business more than I have,especially over the last 12 years as UK Senior Partner andlatterly Global Chairman. Deloitte is an exceptionalbusiness populated by outstanding people with skillshighly valued by our clients and importantly with thehighest integrity.

The leadership team now in place, led by David Sproul,will take Deloitte forward even further. I wish them luckin their new challenging roles.

Finally I want to thank all Deloitte people for theircontribution in creating the finest professional servicesfirm in the market.

I look forward to my continuing involvement in the firmin my role as Special Advisor.

Report from John Connolly

£11.163mTotal communitycontribution

350,000Hours of expertise provided to London Olympic Games



The Distinctive FirmI am delighted to be elected by my fellow partners to lead our firm. It is a privilege to become the SeniorPartner and Chief Executive of Deloitte and aresponsibility that I take on with enormous pride. Anexciting future lies ahead as we open the next chapter inshaping our business, taking a lead in responding to theGovernment’s growth and competitiveness agenda forthe UK, and to our clients’ demands in a rapidlychanging world.

With the UK at an economic crossroads, and the publicsector downsizing, the UK will rely increasingly on theprivate sector to create jobs and boost the economyrather than by government and consumers. Deloitte isplaying a key role in the UK’s recovery and contributingto further economic growth, working with our clients tohelp them grow their businesses.

We want to be at the heart of the next generation ofbusinesses. In May, we launched a ten-year partnershipwith the London Business School, to create the DeloitteInstitute of Innovation and Entrepreneurship. Deloitte’speople and our clients will be closely involved with LBSfaculty, both on campus and at Deloitte’s owninnovation centre. We will help equip business leadersand entrepreneurs with the information, leading-edgeresearch, insights and resources to create new growthand tackle social and economic challenges.

More than a decade of exceptional leadership from JohnConnolly has seen Deloitte transformed into a leadingprofessional services firm. I look forward to building onthis success. I have a very clear ambition to establishDeloitte as the Distinctive Firm, standing apart from the competition through the impact we have on thereputation and success of our clients, and contributing to a sustainable and prosperous society.

We will achieve this by focusing on our relationships withour clients. We will focus on achieving market leadershipin more of our key areas. We will take a global approachto building client relationships and service delivery. Wewill continue to create a high performance environmentwhere the best people thrive. We will continue to embedquality and integrity across all dimensions of our firm.

Client relationshipsMy vision for Deloitte is to create a truly differentiatedexperience for our clients. Our success as a firm has beendefined by the strength of the relationships we have withour clients. Our strategy for the future has theserelationships at its core. Clients expect the higheststandards of quality, delivery and technical expertise fromDeloitte. But in such a climate, clients are increasinglylooking for more from us. Our firm will stand outthrough the impact we are able to make to thereputation and success of their businesses.

David Sproul – the year ahead Senior Partner and Chief Executive



Market leadership Deloitte’s four-year strategy aims to build ourcompetitive edge through a combination of organic and inorganic growth, and to focus our investmentparticularly in those areas where we see the strongestopportunities for growth in client relationships anddistinctive positioning. This strategic choice will give usthe best opportunity to grow faster than the market.

We operate in an increasingly interconnected globalmarketplace and global engagement is vital, not only for the firm’s future success but also the UK economy.Effectively realising this international opportunity will be a key area of focus for me as CEO.

Our peopleThe foundation of our strategy is our commitment tohaving the best people. There is going to be a fiercetalent war in the market place, and we need to compete,not only to attract the best people, but to retain our toptalent. We will do this by creating a distinctive talentexperience, which demands, supports and rewards the highest performance.

Deloitte’s is a culture of shared values in which we are all accountable. We want all our people also to share in a sense of purpose and the firm’s successes. I am committed to making a career at Deloitte the mostfulfilling and exciting experience for our exceptionalpartners and people.

Quality, public policy and responsible business Deloitte remains committed to sustainability, and ethicaland responsible business practices, where not justbusiness but society prospers. Indeed it is our ambitionto be regarded as the responsible business. To achievethis it is imperative we continue to build trust withclients, the public and society at large. Our strategy isfocused on ensuring that we continue to place integrity,transparency, quality and value for all our stakeholders at the heart of all our activities. We will take a lead ininnovating and designing the future role of professionalservices firms with key stakeholders.

Connected leadershipThe firm’s culture is built on respect, diversity and shared values and I will continue to champion this. My leadership style will be inclusive, supportive androoted in quality. We have laid out an ambitious strategy.I am confident in our ability to execute this and I amcommitted to empowering all our partners and people to play their part.

The year ahead

“I have a very clear ambition to establishDeloitte as the DistinctiveFirm, standing apart from the competition through the impact we have on thereputation and success ofour clients, and contributingto a sustainable andprosperous society.”



Perspectives

Businesses and, indeed, wider society, face a range of issues which will shape the future success ofDeloitte, our clients and the economy at large. Some of these issues include the challenge of drivinglong-term growth, increased regulation, how we can all be responsible businesses, the potential ofanalytics and the legacy of big events, such as the 2012 Olympic Games. Deloitte gives its perspectiveon these issues, which will have a major impact on the UK, and considers the challenges,opportunities and tough choices we face.



With the UK at an economic crossroads, and the publicsector downsizing, the UK will increasingly rely on theprivate sector to create jobs and boost the economy.

High debt levels and weak balance sheets are likely to act as a drag on consumer and government spending for several years to come. Broadly speaking, the UKcorporate sector is making good profits and generatingstrong cash flow. It has the firepower to drive UK GDPgrowth over the next few years, whereas consumers and government do not.

The recovery will be driven by growing corporate activity– capital spending, industrial output, exports and hiring.Reassuringly, Deloitte CFO Survey findings indicate thatthe top priority for big businesses is launching newproducts or services and expanding into new markets.After two years of cost cutting and holding on to cash,appetite for both risk and expansion has risen sharply.

If larger enterprises are in the mood to expand, there isobviously more the UK can do to foster the conditionsneeded for them to thrive. With a huge budget deficitand the Bank of England Base Rate of 0.5%, fiscal andmonetary policies may be close to ‘running on empty’,but there is plenty the government can do to improvethe long-term productive potential of the economy.

A place to do businessOverall, the UK, and certainly London, is a good place todo business. We benefit from an open economy, a stablepolitical system, a helpful time zone between Asia andNorth America, and our native language. We needbusinesses to recognise the merit of setting up andstaying in the UK market, rather than taking their ideasand skills abroad. The UK must provide an environmentwhich is attractive to the wealth generators who willsupport employment here.

Although a necessity, five-year parliaments do not alwaysengender the sort of long-termism and stability in policythat businesses need. The tendency to reshuffledepartments or the people running them can be at oddswith the patient, long-term focus of creating the rightenvironment for business. Long-term goals really help to underscore the commitment to business, sendingimportant signals to domestic business and globallymobile capital.

Driving long-termgrowthSenior Partner and Chief Executive



Foundations for growthThree areas key to long term growth potential (andwhere government action is needed to strengthen the supply side of the UK economy) are infrastructure,education and tax.

The UK ranks 33rd in the quality of general infrastructurein the latest World Economic Forum competitivenessreport, below Estonia, Namibia and Slovenia. The UKneeds to lock in good quality infrastructure spendingover the political and economic cycle.

Too many people come out of school lacking basic skills in literacy and numeracy. According to CBI research, 69% of companies believe that school leavershave inadequate business awareness, and more than50% found shortcomings in their ability to managethemselves. The UK is home to four of the top 10universities in the world, yet more needs to be done to ensure that all school leavers possess a certain level of employability skills.

The latest World Economic Forum competitiveness report also ranks the UK 95th in terms of the incentives it creates to work or invest, below many westerneconomies including the US, Ireland, New Zealand, the Netherlands, Norway as well as many emergingeconomies. The UK tax system has become morecomplex. There had been a feeling that every Budgetover the past few years has increased the tax burden onbusinesses, leading to a perception that the UK is not agreat place to do business. We welcome the CoalitionGovernment’s approach to providing long term clarity in the tax system, while cutting down on unacceptableavoidance through a more structured approach to taxlaw. The Government has made positive progress with its corporate tax roadmap, and we would like to seesomething similar for personal taxes.

While it is important that the richest in society make a contribution, wealth creators need certainty andpredictability if they are to be encouraged to invest. One signal it would be good to get from theGovernment would be that the 50p tax rate isnot here to stay.

The UK has weathered a deep recession and theGovernment is now looking to the private sector to drivethe recovery. The UK has some formidable strengths, notleast of all a Government that recognises the vital rolethat business will have in its future growth. Businessesnow need to harness this opportunity for setting thedirection of growth, working alongside Government to ensure the environment for cultivating this is created.

Driving long-term growth

Our own economic impactDeloitte is playing a key role in the UK’s recovery and contributing to further economicgrowth, working with clients to help them growtheir businesses.

Deloitte analysis showed that in 2010 the six largestfirms in our sector (Deloitte, PwC, Ernst & Young,KPMG, BDO, Grant Thornton) directly contributedover £5.4 billion to UK GDP. Deloitte’s share of thiswas £1.34 billion – around a quarter of the totalamount. Including business-to-business andconsumer spending impacts, their economicfootprint was £11.8 billion and 180,000 jobs. The activities of the firms as a whole – includingenhancing skills and fostering innovation across all sectors and industries – stimulated benefits tobusiness and society worth over £300 million.Exchequer contribution was some £2.1 billion, ofwhich Deloitte contributed £530 million directly.



The tumultuous events of the past few years have led toa much greater focus on the financial sector and on howit needs to remodel itself to face the challenges of thenext decade.

First on the list for consideration are the lessons drawnby the organisations themselves from the financial crisis(in particular for risk management) and the need toaddress these through robust implementation ofremedial measures. But equally important are theregulatory and political responses to the crisis. Many of these reflect the view that never again shouldpolicymakers be faced with the unpalatable choice ofrisking either significant amounts of taxpayer support or widespread dislocation as firms and markets fail andcan no longer provide the services essential for thefunctioning of a modern economy.

As a result there have been a wide range of supervisoryinitiatives. Some endeavour to hard-code the lessonsdrawn into rules for the future; rules that will continue to apply once memories begin to fade. But in others theresponse has gone further, in part reflecting differentattitudes towards risk between the public and privatesectors. G20 governments have supported much highercapital and liquidity standards, together with additionalmeasures intended to make the financial infrastructuremore robust and to counter the credit cycle, as well assteps to simplify the task of closing troubled institutions.While many of these steps have been coordinated on aglobal basis, some individual countries or regions have

chosen to go further than others such as the ‘Swissfinish’ applied by the local regulators to the capitalrequirements of their largest firms.

This financial stability agenda has come on top of analready busy regulatory programme, focused on theneed to protect consumers and investors, to fightfinancial crime, and to reflect the increasinglyinternational nature of financial services. The regulatoryframework itself is being restructured, bothinternationally (for instance via the establishment of theEuropean Supervisory Agencies) and in the UK, wherethe Financial Services Authority will be replaced by thePrudential Regulation Authority (a new subsidiary of theBank of England) and the Financial Conduct Authority.

All of this means that the regulatory landscape forfinancial services firms is not only becoming increasinglycomplex but is resulting in a fundamental change in therules of the game for business. Indeed, supervisors havesaid they will become much more involved in thefundamental questioning of business models thanpreviously. No longer can senior management afford to treat regulation simply as a matter of compliance. For some business lines, capital requirements willincrease almost ten-fold, raising questions about the economics of the business that go to the heart of the strategy of the organisation.

The future of financial services



This is not confined to the banking sector. Insurancecompanies in the EU will be subject to Solvency II – a new regime for capital adequacy – while hedge fundswill be covered by the Alternative Investment FundManagers Directive. Other measures will addressconsumer and investor protection, short-selling, marketinfrastructure, market abuse and data protection. As aresult no financial services business can afford to beignorant of, or merely reactive to, changes in regulation.There seems little chance of this changing any time soon.

Financial services firms need to consider not just howbest to execute regulatory change programmes but how to factor in a more strategic perspective, whichtakes account of regulatory developments on a national,regional and global basis. To help do this, they arelooking at ways to develop relationships with regulators,finance ministries and other policymakers, to givethemselves a forward-looking perspective on regulationthat will help them engage more proactively with theproposed changes.

There is also a need to consider the long-term impact ofregulatory proposals, both individually and in aggregate.This will allow firms to analyse how they will be affectedby these changes and to consider the interactionsbetween the various initiatives and how business isdeveloping. This should not only assist them in adjustingtheir strategies, but also help to highlight any unintendedconsequences that might result from the changes, whichcould feed back into the policy development process. It is to address issues such as this that Deloitte hasestablished a European-wide Centre for RegulatoryStrategy to help provide clients with a strategicperspective and to input into the various regulatoryreform programmes.

The range of changes to financial services regulation inthe next few years is daunting. Those who are most likelyto succeed will think through the implications inadvance, and adjust their plans for the businessaccordingly. This requires the development of strategiesthat will prove profitable over the long-term, while beingrobust to developments in, and movements through, theeconomic and credit cycles.

The future of financial services

“The regulatorylandscape for financialservices firms is not onlybecoming increasinglycomplex but is resultingin a fundamental changein the rules of the gamefor business.”



When Mark Zuckerberg created Facebook, it is unlikelyhe could have foreseen that it would become a socialmedia phenomenon attracting 600 million usersworldwide, including 10% of the population of a countrysuch as Indonesia. This example of the far-reachingpotential of private sector innovation to stimulatemassive societal impact is why inspiring our innovatorsand ‘reimagining our businesses’ demands our sustainedattention.

Business plays a fundamental role in imagining, andindeed creating, the society of the future. The innovatorsof smartphones may not have imagined them from theoutlet as catalyst for freedom and change, but that’swhat this technology has the potential to achieve inAfrica. Unilever may not have set out to create acompany that would protect millions of low-incomeconsumers from life threatening diseases through asimple water purifier device. When William WelchDeloitte undertook the first ‘independent audit’ inhistory, of the Great Western Railway, could he haveimagined that his pioneering spirit was laying thefoundations of assurance and trust between privateenterprises, and between business and wider society?

Business has been, is now, and always should be playinga major role in inspiring and effecting the massivechanges taking place in our constantly evolving globalsociety, driving towards a better future for everyone. Thisis because business pioneers innovation, and innovationdrives the change that enables the realisation of society’sgoals. It is hard to imagine society without business,without the breakthroughs in technology, trade,information management and organisationaldevelopment that business has facilitated.

Private enterprise at its best builds a better society, andenhances the quality of human lives. Yet looking backover recent years of shocks to our UK and globaleconomy, any business concerned with actingresponsibly would note the impact on wider societywhen elements of our globalised business model unravel.Had there ever been any doubt, the co-dependency of aflourishing society and a flourishing marketplace is nowabundantly clear to all.

ReImagining business



ReImagining business

In an ever more borderless global marketplace, thegrowing interdependence of national economies andprivate enterprise is significant. It is the core business ofbusiness – far more then the philanthropic extras – thatimpacts society most, for better or for worse. Whatbusiness produces and makes available – frompharmaceuticals to fibre optics, nuclear power totelecoms, textiles to tarmac, financial instruments topersonal computing technology – is all about buildingsociety.

Generalised statements about the purpose of businessoutside of profit are no substitute for the rigour of anenterprise defining its particular contribution to societythrough its core activities. We must better understandthe contribution our businesses make to the economic,environmental and social progress of the UK andbeyond. We must make that contribution clearer to ourwider constituency. Considering the purpose of everybusiness in societal terms can help galvanise, inspire andcheck employees and investors, educate and inspirewider society, and support leaders in ensuring theirorganisations contribute to the common good. Alreadyaround 20% of Fortune global 500 firms are publicallypositioning their core business in terms of its positiveimpact on wider society.

Creating such an environment begins with fostering a culture of receptiveness to new ideas and freshapproaches to problems. Entrepreneurial spirit is asdecisive a part of success in large, established multi-national corporations as it is in energetic start ups.Freedom of speech and association is essential to aflourishing social and political culture. Likewise, toanticipate and even shape the marketplace – driven bythe needs and desires of a changing society – we needthe conditions that enable creativity in our organisations.We must explicitly create these conditions to invite theemergence of new ideas.

Business is about envisaging the change we want to seein the world and working towards implementing thatchange. We must open more eyes to opportunity and re-imagine business innovation as the ignition key for aflourishing future society. By re-examining the purpose ofour businesses, we can empower and enable our talent.Only through fostering entrepreneurial spirit can weenable investment in innovation to secure a robust andagile future for our own corporations and, ultimately, to inspire transformational global change.

Business has been, isnow, and always shouldbe playing a major role ininspiring and effectingthe massive changestaking place in ourconstantly changingglobal society, drivingtowards a better futurefor everyone.



Our interconnected economy generates an everincreasing richness and abundance of information.Organisations that harness the power of theirinformation to compete on analytic insight, rather thanintuition, will excel in their markets. However, thevolume, variety and velocity of data are growingexponentially and many organisations are struggling tokeep up. It is estimated that in 2011, 1.8 trilliongigabytes of data will be created and replicated . Thisequates to approximately 300 gigabytes for every personon the planet, or the equivalent of us each receivingalmost five million text messages a day. These extremevolumes of data are forecast to double every year and80% of this data flows through commercial or publicinstitutions.

The challenge is to cut through the noise in the data toidentify the insight that an organisation can reliably basekey decisions upon, and use that insight responsibly toprovide improved products and services. The key to thisis analytics.

Creating a competitive edgeAnalytics is not just the application of mathematical andstatistical tools to draw valuable insights from your data.Nor is it just about establishing and governing a reliabledata estate. Analytics is about embedding a fact-basedculture at the core of how an organisation makesdecisions regarding its customers, products and services,stakeholders and people.

Analytic techniques are a critical component tocompetitive successes. For instance, major food retailers have benefitted significantly from changing their approach to generating loyalty and improving thecustomer service by analysing shopping behaviours andseeking to offer a personalised experience.

Another example of a sector which is seeking to embedanalytics is motor insurance, an industry suffering fromchallenging market conditions and a lack of profits.Recent analysis by Deloitte found that underwritinglosses exceeded £2 billion in 2010, and that motorinsurers lost 20 pence for every pound of premiumearned. Smart insurers are turning to analytics to betterunderstand behaviours in areas such as customer andclaims management, fraud detection and underwriting. It will be game changing for those insurers that are ableto integrate the insights gained through key decisionmaking and business-as-usual activities.

Embedding analytics



Managing risk Analytics is also central to risk management. Forexample, mining companies are using analytics to predict which of their employees are most at risk fromworkplace accidents. Analysing health and safety logs,and the working patterns, professional and personalcharacteristics of those involved, identifies the mostimportant statistical indicators of risk.

These insights enable individually tailored, highlytargeted, preventative actions to be taken. When appliedto large workforces, the ability to use such indicators tomake even small percentage improvements has a verydramatic effect.

Optimising your operationsSuch benefits are not limited to commercialorganisations. Faced with budget constraints, publicbodies are making tough decisions in order to reduceoperational costs. There is a real risk that they couldoffload the wrong skills, divest the wrong assets, orcommission the wrong types of services. Majorgovernment departments are using analytics to directthese critical decisions, gathering evidence, modellingdifferent scenarios, and forecasting potential outcomes.

Embedding analyticsFrom just the few examples above, the immense powerand wide applicability of analytics is clear. However, withgreat power comes great responsibility.

Analytics thrives on information: the richer and morecomprehensive this data, the more powerful the insights.Businesses that invest in integrating a wide variety ofinternal and external data sources, and which championthe importance of maintaining the quality of this data,will have the greatest success.

This thirst for data must be weighed against concernssurrounding personal privacy. For example, customers oremployees may tolerate additional information beingcollected if they see it to their advantage, but not if they see it as an invasion of privacy.

Organisations, therefore, have a significant obligation toprotect the information they hold. One need only look tothe plethora of recent hacking scandals to understandthe risks and reputational damage that can emerge wheninformation has been compromised.

While analysis of this valuable information may beenabled by technology, analytics is fundamentally aboutemployees at all levels recognising how a greater insightinto the facts can empower the success of theirorganisation.

Many organisations start small, trialling the use ofanalytics to solve key business issues. The ultimate aim isto integrate analytics into every part of the organisation,transforming decision making and realising the full valueof the information available.

Looking forwardCommercial and government organisations are alreadyembracing analytics to understand how their businessesare performing, what underpins this performance, andwhat can be done to effect change. They are progressingfrom historical analyses towards generating a near real-time understanding of what is happening right nowacross their businesses.

The market leaders are going further still: moving fromlooking at what has happened, or what is happeningnow, to what may occur in the future. They are usinganalytics to become predictive, to identify trends, toforecast demand, to anticipate behaviours, and to modelthe impact of possible market changes to prepare fortomorrow.

The organisations that put analytics at the heart of theiroperations have the potential to create significant value.Those that master the use of analytics to become trulypredictive will stay one step ahead and become themarket leaders.

Embedding analytics



Perfect timing is the goal of any athlete and the London2012 Olympic and Paralympic Games have certainlytimed it well for British business.

In the challenging aftermath of the global financial crisis,businesses of all shapes and sizes have welcomed thesupply opportunities thrown up by an event oftencharacterised as the biggest logistical exercise a countrycan undertake in peace-time. London 2012-relatedcontracts worth more than £3.5 billion have alreadybeen awarded to 950 different businesses.

While the timing was perfect, these opportunities werenot served on a plate. The businesses that benefitedprepared well and acted quickly.

The race, however, is not yet fully run. The LondonOrganising Committee of the Olympic and ParalympicGames is still to procure more than £700 million worthof goods and services, ranging from 1,200 hockey ballsto the flags for the medal ceremonies. 600 or so pre-Games training camps are also still to be arranged andthese will be held across the country.

When show-time finally arrives, VisitBritain estimates thepotential additional spending by visitors resulting fromthe Games at over £2 billion, providing another welcomesource of extra demand for local businesses.

These visitors will not just be tourists and sports fans. As the world’s best athletes strive for gold in the OlympicPark, a diverse array of National Olympic Committees,sports federations, Heads of State, corporate sponsors,their guests and customers will descend on the UKcapital, along with other venues as far apart as Glasgowand Weymouth.

No wonder that research recently commissioned byDeloitte found that 41% of companies in the tourism,hospitality and leisure sector were expecting an increasein demand for their services.

Substantial as they are, the benefits for British businessesof staging the Games will not solely be short-term innature.

It has already provided a massive reputational boost forthe UK construction industry as a result of the skill andefficiency with which contractors have set about thegargantuan task of creating the Olympic Park. In Junethis year, Deputy Prime Minister Nick Clegg led a trademission to Brazil to promote the skills and track record ofcompanies helping to stage the Games, with a significantfocus on the construction and engineering contractors.

2012 legacy

Senior Partner and Chief Executive



The Games have also given a clear push forward to theUK’s already formidable events and marketing industry. It has opened doors in fast-developing economies suchas Russia and Brazil, which will stage, respectively, theSochi 2014 Winter Games and the Rio 2016 OlympicGames and Paralympic Games.

London 2012 is therefore making a significantcontribution to the growth of the UK economy. It is clear that there is still more to come.

While the Olympic and Paralympic closing ceremonieswill rightly celebrate the achievements of the athletes,they should also provide an opportunity to celebrate the growth that London 2012 has delivered.

After 2012

Deloitte 2012As the official professional services provider toLondon 2012, Deloitte is also using the Olympic and Paralympic Games to drive growth.

In particular, Deloitte is capitalising on its deliveryrole, the ability of the Games to forge newrelationships and the impact the Games has onrecruitment and retention.

One of the most powerful impacts of our Gamesdelivery role has been in our Capital Programmebusiness. Our track record in planning andimplementing very complex programmes has beenboosted by the power of the Games to evidenceand demonstrate the breadth and impact of ourcapability.

Another great example is the integration of our real estate advisory business Drivers JonasDeloitte into our overall services to clients. DriversJonas Deloitte is project-managing the constructionof both the beach volleyball facility at Horse GuardsParade and the equestrian venue at Greenwich Park.These are challenging assignments, since theyinvolve creating temporary Olympic-calibre venuesfrom scratch on sensitive heritage sites, and, in thecase of Horse Guards Parade, we cannot start untilTrooping the Colour has finished!

The Olympic project is also a catalyst for expandingnetworks and augmenting the experience ofDeloitte people. Relationships have been forged andstrengthened with other sponsors, in part throughthe collaborative efforts of the Chairman’s Club, anetwork of global, tier one and tier two sponsors.One Chairman’s Club initiative has seen directorsfrom Deloitte and other sponsors team up withPilotlight, to give the benefit of their expertise tocharities based in the Olympic boroughs, helpingthem to help more people more effectively.

Finally, the Games also offer an effective tool for inspiring existing Deloitte employees andattracting the highest-possible calibre of jobapplicants. The value of the Olympic Games hasalready been demonstrated through a major impacton recruitment and retention. Many of our peoplehave had the opportunity to work with LOCOG andother Olympic bodies, either through secondmentsor on advisory projects. These roles have beenhighly sought-after: around 10% of our people haveapplied for a LOCOG secondment role whilst oursponsorship is often cited as a reason to join thefirm in job interviews.



Deloitte in 2011

Our business performed strongly in 2011. In the following sections, we provide an overview of the key features of our people and responsibility agendas, leadership and governance in our firm.



Deloitte responded to the improving economy bypreparing the firm for future growth.

We focused on recruitment, professional developmentand strengthening our connection with our 13,000people and the way they participate in our business. This meant listening and responding to their views, andenjoying the buzz we are creating together in the buildup to the London 2012 Olympic and Paralympic Games.

This year we recruited 3,300 people and we havecontinued to develop everyone professionally andpersonally as they build their careers within the firm.

As a response to announced changes in full-timeeducation funding, we began formally recruiting after A-level for the first time, reaching out to those whomight have decided against university.

This year we have introduced exciting ways for ourpeople to shape and deliver innovative ideas for clientservice and growth. These include a bespoke onlineinnovation tool, and inviting hundreds of our people to attend events in our Innovation cafes and sharedspaces. Coming together to collaborate on new ideas to excite our clients, grow our business and enhance our working culture.

People

Innovation Week

The Deloitte London campus



During the year we estimate that around 30% of ourpeople participated in these new events, including ourfirst ever client innovation week in September 2010, forTransport for London. This attracted the biggestparticipation levels ever in our firm for such an event –and was followed by a similar response when we invitedour people to help refresh our strategic direction for thenext four years.

Pivotal to our fact-finding approach is Deloitte’s PeopleEngagement Survey, a massive listening exercise acrossthe firm.

This year 79% of UK employees completed the survey,up from 62% last year, and 72% of Swiss colleagueswho participated for the first time in 2011. Engagementlevels rose 4% on last year.

This reflected how we responded to what employeessaid in 2010 and took action on the areas theyhighlighted for change, including focus on transparencyaround reward and performance management. Each partof the business shared the survey results, met with theirpeople, developed action plans and appointed keyindividuals to oversee change.

Driven by the desire to build strong relationships with ourpeople, we also enhanced Deloitte’s alumni programme,participating in Deloitte’s first international alumnirelations meeting in Munich in November. As a diverseglobal community of over 21,500 highly talented people,leading in many areas of business, as entrepreneurs, and in public service, we value their contribution in themarketplace and in helping to shape our own directionand insights. Of course, we are also delighted when theyreturn to us, as many do.

We put this down to, in no small part, how we developpeople while they are here.

Last year we spent £25.4m overall on Learning &Development and received an award in March 2011from The Sunday Times Best Companies judges for the scope and range of our training.

But this investment goes beyond formal training.Mentoring is a huge part of who we are, a badge ofhonour for individuals and a key to our talent strategy.

To reach director level, for example, a Deloitte seniormanager is usually mentored and sponsored by aroundfive partners and must already be mentoring his or herown colleagues.

Thousands of formal and informal mentoringpartnerships take place each day, with anyone able to access mentoring, from schemes such as Women inLeadership, to our graduates who are assigned buddiesor mentors from their first day.

With a mobility scheme that allows people to move both within Deloitte UK and between other DTTLmember firms, our Hindu diversity network beganoffering a buddy this year to the many people who joinDeloitte UK from countries as far flung as India andSouth Africa, making sure they settle well.

Buddying, mentoring and networking define our diversitynetworks, which cover sexuality, faith, gender, ethnicity,parenting and disability. This focus on mentoringextended to accrediting 30 in-house coaches in 2010 to help our mums-to-be, guiding 82 women through the early days of motherhood and their return to work.Similar coaching rolls out to fathers in 2011, along withmore general Respect@Work training that people willundertake to understand the nature of unconscious biasin the workplace.

In the coming year, as we implement our new SeniorPartner and Chief Executive’s four year strategy and gearup for London 2012, Deloitte is a very exciting place towork, looking to its future with great momentum tobuild on.

Learn how having Deloitte on your CV takes you to new and exciting places from some of ourpeople, as they describe their year with the firm.

People



Komal Desai’s role as an Actuarial manager in Deloitte’sConsulting team took her out of her comfort zone in2010.

“I’ve done so much interesting client work this year,” says Komal who joined us from City University sevenyears ago with an actuarial science degree.

“In 2010/11, I have worked with one of our clients(developing a team of actuaries internally), while on a secondment at a large UK based insurer, and amcurrently working with a global insurance group.”

Komal became heavily involved in recruitment andarranging mentoring for our students, and was theanalyst lead for her department.

“Normally we have five graduates in our team, but thisyear we’ve recruited 15 and I’m currently reviewing theplans we have in place for them, to ensure they have a smooth transition into the department.

“We are a friendly team that uses the community hoursgiven to us by the firm to put something back into thewider society.

“This year I’m running the JPMorgan CorporateChallenge to raise money for charity and I’ve also been a reading partner with an 11 year old school girl.

“Over 2010/11, I’d certainly say I’ve grown as a person.The training, client facing work and talented people I work with, have helped me develop both personallyand professionally.”

People

Komal DesaiManager, Consulting

“We are a friendlyteam that uses thecommunity hours givento us by the firm to putsomething back intothe wider society.”



As a newly promoted director in our Audit practice, Dan Baker’s year at Deloitte has seen the auditor put his degree in biology to good use.

“In June I moved from our Reading office to St Albans totake on the role of Group Director, and help the partnerin charge run the practice, giving me new challenges andgreat opportunities to develop.

“Along with my regular audit work, I found myselffocusing on the nuts and bolts of what makes ourbusiness tick and the importance of teamwork.

“I also continued to concentrate on the life sciencessector, which has been an interest of mine sinceuniversity.

“I had the pleasure of working on an industry-led cross-business project, looking at R&D value measurement forthe top global pharmaceutical companies.

“This is informing strategy for the sector as it exploreshow best to identify, pursue and fund innovation andgrowth. Our report featured in the Financial Times.

“The project is an excellent example of how we broughttogether industry specialists from our Consulting, Auditand Corporate Finance teams, across several offices andgroups, working together to understand the forcesaffecting our clients.

“The support I have had from my mentors has beenfantastic, helping me to achieve promotion to director in July 2010.

“This has continued following my move to a new office,which at first was quite daunting.

“Living in Twickenham has meant I’ve done a little moretravelling than before, but the opportunity of accelerateddevelopment makes that more than worthwhile, andDeloitte’s flexibility in when and where I work hasallowed me to sustain a positive working culture and a life with a young family.

“That’s probably one of the many reasons why I’ve been with the firm for ten years and never been temptedto leave!”

People

Dan BakerDirector, Audit



Dreams literally came true this year for Carol Ghobry, an assistant manager in Deloitte’s Tax practice.

Having joined us in 2007, Carol was busy developing hercareer as a tax advisor to our private clients when herinvolvement in the church and a trip to Kenya in 2009led her to seek a sabbatical to spend some time workingwith people in some of the poorest areas of the world.

“I went to my managers and asked for an eight monthsabbatical,” says the Kings College London law graduate.“To my delight, Deloitte was receptive to the idea andoffered to hold my job open.”

Working with charities including Tearfund, Well SpringEgypt, and International Sports Coalition, the 26 year oldtravelled to South Africa, Kenya and Egypt, drivingthrough a riot at one point and witnessing events inTahrir Square as the revolution in Cairo unfolded.

Carol was involved in various projects with local churchesand orphanages, particularly focusing on leadershipdevelopment training with young people in poorcommunities.

She came back to Britain from Egypt and campaignedwith Tearfund, lobbying MPs to put the issue of globalpoverty higher up their agenda.

“I returned to Deloitte in June feeling fresh and ready toget stuck back into work. The experience has certainlygiven me a lot more perspective on life, and was a realeducation on global poverty and what we can do aboutit. I literally went from working with some of thewealthiest people in the world of business, to servingsome of the poorest.”

The sabbatical forms part of Carol’s Christian ethos. “Itreally is a great joy to be able to use my time, skills andenergy for the good of those less fortunate, and to seethe difference it makes is a real honour.”

At Deloitte Carol is the Tax Community InvestmentChampion, which gives her the opportunity to promotethis work within Tax.

“I’ve got so much drive and confidence now, and I’m notsure many employers would have given me such afantastic opportunity.”

People

Carol GhobryAssistant Manager, Tax



In January 2010, Dorian Reece wasn’t expecting his firmDrivers Jonas to merge with Deloitte. This is hisexperience.

“The combination of Drivers Jonas’s market leading trackrecord in airport real estate advice, together withDeloitte’s global relationships, created an opportunity forsuper growth – which is awesome,” says Dorian, acertified property valuer from Perth Australia.

“An Airport industry group was formed that broughttogether the wide expertise that I found in Deloitte.

“As a result, we are pursuing numerous opportunitiestogether, currently in Poland, Denmark, and Japan aswell has having already worked together on a number of projects throughout the UK and Western Europe.

“Lots of organisations preach cross-selling and acollaborative approach, but at Deloitte it really happens.

“Working across industries and disciplines generates real benefits for our clients and for us. I’m excited aboutour future.

“Deloitte is what you make of it and the training on offer provided real opportunities for my personaldevelopment.”

This year Dorian attended our Directors AssessmentCentre and was successful in becoming a director.

“The assessment was really challenging, but having beenthrough it I can see its purpose and value. It’s been agreat year and I’m looking forward to exploring thewider opportunities on offer.”

People

Dorian ReeceDirector, Corporate Finance

At a glance• More than 13,000 partners and employees

• 1,100 graduates and 1,500 experienced hires will join the firm this year

• Our people are able to work in our different businesses, industry groups, regions, internal client service teams and internationally

• Continued and substantial investment in learning and development, coaching and mentoring at all stages of a Deloitte career

• Wellbeing at work offering flexible working and London campus health suite and gym, health and fitness events around the UK

• Flexible benefits include additional holiday, a company car, the Bike To Work scheme, medical and dental insurance and discounted childcare

• Diversity networks, sports and social groups, from wine tasters to sailors, to connect and support people



Our business is built on the quality of our work, on strong ethical principles and integrity, on anunderstanding of our impact on wider society and thetrust placed in us by our clients. We understand that ourbusiness has wide and far-reaching impacts and thatbeing responsible in every aspect of the way we conductour work is critical to our own long-term success.

We are already renowned for the quality of our clients,for our own business performance, for the influence we have and how we set the agenda on matters thattranscend our business self-interest. We want tocontinue to build on our reputation and be regarded as the responsible business.

This ambition requires a focus on every aspect of ourbusiness operations: on our clients, our people, oursuppliers, our communities and the environment. We arecommitted to creating a truly integrated approach to allareas of business responsibility. We have made significantdevelopments already this year and are in the process ofdeveloping further, ambitious long-term goals andtargets across our responsible business agenda.

Defining what matters to usBeing a responsible business requires a clearunderstanding of the areas that matter most to our keystakeholders. This year we have continued to conductsignificant employee and wider stakeholder engagement,raising the profile and understanding of our approach to responsible business across our organisation and inparticular inviting our people and our clients to helpshape our agenda. For example, we held an InnovationWeek focused on our new four-year strategy, giving ourpeople the opportunity to participate in its development.An estimated 30% per cent of our people contributedwith their ideas and insight. We also ran a specificcampaign around responsible business. The refreshing of our firm-wide strategy was an ideal opportunity toengage our people in how we broaden our standing as aresponsible business and what we represent as a brand.

Our responsibility

Senior Partner and Chief Executive



As a result of this process we have identified six themesthat underpin responsible business at Deloitte and give a stronger focus to those areas that reflect the specificimpact and influence of our business: Serving Clients,Quality & Trust, Communicating, Our Green Journey,Ourselves and Our Society.

A summary of our non-financial performance is providedon page 56.

Serving clientsWe make a significant contribution to society throughthe impact we create with our clients. We supportbusinesses with technical expertise, market-leadinginsights and by providing accountability andtransparency, ensuring stakeholders can continue to havefaith in the organisations in which they invest and whichshape public services and the world around us. Webelieve that exceptional client service enhances the value that we and our clients provide to society.

During the year we:• created the Deloitte Institute of Innovation and

Entrepreneurship at the London Business School• opened our own Innovation Zone, an exciting,

market–leading facility that sets us apart in our emphasis on client collaboration. The focus is on accelerated problem solving using a range of facilitation techniques

Looking ahead we will be developing a framework to capture more fully the impact we achieve through our client service and measure how these add to asustainable and prosperous society, reporting on this annually through a Deloitte impact report.

We will continue to develop our own client servicecapabilities across our responsible business agenda, with a specific focus on sustainability services.

We will also help to lead and shape the debate amongstbusiness leaders on their central role in defining anddelivering the society we want for the future, creating an ongoing series of interactive debates and events.

Quality and trustOur commitment to quality and trust is at the heart ofour business and our brand. We earn our clients’ trust by delivering objective, insightful advice and assuranceunderpinned by our strong ethical principles. During theyear we:• are now compliant with the Audit Firm Governance

Code published by the Institute of Chartered Accountants in England and Wales in January 2010

• announced the appointment of Independent Non-Executives to the full UK Board of Partners and a new Managing Partner in place for Public Policy, Quality & Risk who sits on both the Executive and Board of Partners

• maintained ISO 27001 accreditation, the recognised international standard for information security management.

We will continue to embed quality and integrity ineverything we do and specifically focus on our role inleading the debate around public policy and regulatorychange in our sector.

For more information please see our Leadership and Governance section.

Our responsibility

Clients

Our people

Suppliers

Wider Community

Government & Regulators

Our society

Communicating

Serving clients

OurselvesQuality & trust

Green journey

DeloitteResponsible

Business



CommunicatingWe support our clients in achieving their own ambitionsin respect of openness, accountability and transparency,and we recognise that we need to demonstrate theseattributes ourselves. We want to ensure not only that ourkey stakeholders understand our business, our approachand our values, but that they are active participants inhelping shape our business agenda.

During 2011 we:• delivered our fourth Audit Transparency Report• combined our responsible business reporting with our

annual report for the first time• have invested in an internal Yammer microblogging

platform to enhance internal collaboration and communication and in addition we are actively implementing our external social media strategy through third party sites such as Twitter, Facebook and Youtube.

During the financial year ahead we will continue to work towards creating a fully integrated annual report that covers all our key financial,environmental and social performance, to sit alongside our Deloitte impact report and Audit Transparency Report.

OurselvesThe performance and behaviour of our people define the perceptions that clients and wider society have ofour firm. Our people are our main asset in ensuring weconsistently deliver outstanding service to our clients. We focus on a high-performance culture to fulfil theseexpectations, offering our people exceptionalopportunities for professional growth. We want to be the first choice for the best talent.

For more information on our approach to talent and asummary of key FY11 highlights see Our People section.

Our responsibility

We have been recognised this year as the highestranking entry in the‘Accountants and Consultants’ sector in Business in the Community’s2011 Corporate ResponsibilityIndex, achieving Platinumstatus with a score of 98%.



focus on employee participation, as well as increasedengagement with external stakeholders, stronggovernance structures and more transparent monitoringand reporting of our environmental impact. We will alsobe making significant investments in capital projects toimprove our utilities and resource efficiency and enableour people to take similar actions to minimise their own impact.

This means we need to encourage a cultural shift in the way we do business and carry out our internal and external activities. To drive this forward, we arerestructuring our environmental department andincreasing the number of environmental championsacross the firm. We will also be carrying out employeeworkshops and training on the key themes of Our Green Journey.

We have already made significant progress towardsmany of Our Green Journey objectives. This year weretained our ISO 14001 accreditation in the UK, whichdemonstrates that we operate a best-practiceenvironmental management system and are driven tocontinually improve our environmental performance. We are working towards ISO 14001 accreditation in ourSwiss practice and intend this to be operational by theend of FY12.

Our responsibility

“Getting our own house inorder is critical in enabling us to offer market leadingsustainability services and to meet clients’ evolvingdemands. The Green Journeyprovides the vision,commitment and resourcesto deliver a step change inour approach toenvironmental management.”Guy Battle, Partner Sustainability Services

Our Green JourneyWe recognise that it is our responsibility as a majorbusiness to ensure we employ resources as sustainably as possible and provide the best advice to our clients tohelp them manage their own impact. As part of ourcommitment to the environment, we are ensuring weuse our available resources, which include energy andwater, in the most economical and sustainable way. We also have a team dedicated to continually improvingthe environmental performance of the firm.

This year our total direct and energy-related emissions(Scopes 1 and 2) have decreased in both absolute termsand per FTE, and this further demonstrates ourcommitment to embedding operational sustainabilitythroughout our estate. Our overall carbon footprint hasincreased by 3% per FTE due to the increase in businesstravel following our success at winning internationalbusiness contracts. To both drive the continualimprovement of the performance of our estate andrespond to our expanding travel (Scope 3) emissions, we have launched Our Green Journey, a major long-termstrategy and investment with wide-reaching targets,including reducing our carbon emissions per employeefrom business travel by 35%, from energy consumptionby 30% and our waste production by 20% by 2020, allagainst a baseline of 2010/11.

Our Green Journey will involve a step-change inDeloitte’s environmental management and behaviours,help to place sustainability at the heart of our internal and client-facing activities and make us an innovative, market-leading business in sustainability services.

Our Green Journey is driven from the very top of the business, but will require the contribution of all Deloitte people to be truly successful. With this in mind, we have placed a strengthened



We continue to publically report on our carbon footprintand this year we obtained CEMARS accreditation, whichconfirmed we had monitored and reduced our direct andenergy-related emissions (Scope 1 and 2) by 6.8% over three years to 31 May 2010. This is an absolutereduction of 1,604 tonnes. We recognise our travelfootprint is increasing. At present internal travelconstitutes 29% of our travel footprint and we arecommitted to reducing this figure. To drive thisimprovement, we have undertaken a programme toexpand our video conferencing facilities and this yearincreased them from 25 to 60 units. We are alsodeveloping a new training package for our people to encourage their use.

We have installed 22 smart meters across our offices inthe UK as part of our energy management programmeand will be expanding the smart metering system to therest of our UK offices. To improve our energymanagement, we are rolling carbon managementsoftware out across our offices. Energy usage is one of our key environmental impacts and we intend todedicate considerable financial and specialist resourcestowards improving our energy efficiency in the coming year.

In our bid to reduce, reuse and recycle waste, all ouroffices now implement a bin-less office with segregatedrecycling points. Food composting has been introducedin our London office as part of our ‘zero waste to landfill’initiative and we achieved zero waste to landfill inLondon last year. A feasibility study will be carried out onour waste management over the summer to help moveus towards our long-term goal of sending zero waste tolandfill across all our offices.

We have also built a partnership with the TanzaniaRainforest Conservation Group, where we havecommitted our resources to develop environmentallysustainable skills with the local people, protectbiodiversity and set up and improve forest reserves,helping conserve 1.7 million tonnes of CO2 per year.

We are proud to announce that a new frog species wasdiscovered in the rainforest this year, and to honour oursupport has been named after Deloitte, Nectophrynoidesdeloittei. Funding for this project is partly obtainedthrough our corporate charge card.

The Deloitte corporate charge card has a credit systemwhereby a proportion of the annual fee is invested intoenvironmental projects. We are aiming to increase theusage of the card by our people in FY12.

Our responsibility

The Deloitte FrogOur leadership in supporting the African rainforesthas been recognised globally by having a newspecies named after Deloitte. The ‘Deloitte Frog’ –or more accurately Nectophrynoides deloittei – wasdiscovered in the Ruhebo forest in Tanzania – anecologically diverse area the size of Wales whichDeloitte is helping to preserve through ourRainforest Conservation Project.

The African Rainforest Conservancy honouredDeloitte at a formal celebration on 9 February 2011in New York, where Heather Hancock received theprestigious global award on behalf of the firm:

"This was a pioneering move by Deloitte. Wewanted to demonstrate our commitment to therainforest, to biodiversity and to the developmentneeds of local people. Thank you to everybody whohas given their time and commitment. This is a veryunusual first for Deloitte and let's hope the frogfeels as proud as we do about the bond we'veformed!"Heather HancockManaging Partner, Talent and Brand

The award represents great recognition for thepioneering approach we took with the United Bankof Carbon and the African Rainforest Trust and ourcommitment to ensuring sacred forests in Tanzaniaare standing for future generations.



Total community contribution

Our total community contribution was £11.163m, anincrease of 14% on last year. In total we provided morethan 50,000 hours of volunteer and pro-bono support tothe community of which 87% was skills-based support,an increase of 13%. This reflects our commitment tomaximising our impact through a focus on the delivery of our core skills and expertise. We are building on thisduring the current year as we develop our socialinnovation strategy, helping organisations that deliversignificant environmental and social impact through their core business go to scale.

Our responsibility

“Partnerships that bringexpertise, resources andinsight unique to thecapabilities of the businessand the strategic needs ofthe community organisationcan have a far more dramaticimpact than financial supportalone.”Heather Hancock, Managing Partner Talent & Brand

At work in the community

2010/11 £11,163m

2009/10 £9,791m

2008/9 £8,369m

2007/8 £7,414m

2006/7 £6,584m

Our Society We believe passionately in the need to invest in thecommunities in which we live and work. Our approach is to identify important areas of need where our skills,our expertise and the power of our brand can have thegreatest impact and through which we can effectivelyengage our people. We do this by creating sustainablepartnerships with community organisations that delivervalue over the long-term.

Our community programme is focused on three corethemes: education & skills, disability sport and charitablegiving – as well as our sponsorships in the arts and ourrole as official professional services provider to theLondon 2012 Olympic & Paralympic Games.

More than 40 partners provide leadership across our community programme and we have a network of over 350 community champions and project managers across all of our UK offices. They help to ensure that our approachto community investment is fully embedded in our everyday operations. In April this year we established a formal community programme in our Swiss practice.



Education & skillsEducation and skills continues to be a key focus of the firm with more than 26% of our total communitycontribution dedicated to this agenda. Deloitte21 is a Deloitte network-wide global initiative focused onproviding innovative solutions to address educationalneeds of disadvantaged young people and ensure theyhave the skills they need to thrive in the 21st centuryeconomy. Under Deloitte21, the UK firm operates a wide range of activity including sponsorship of TeachFirst, school and head teacher mentoring programmesand reading and numeracy partner schemes withDeloitte volunteers.

Our flagship programme, the Deloitte EmployabilityInitiative, continues to deliver exceptional training toteachers and provides thousands of young people eachyear with the skills they need to secure and sustainquality employment. To date more than 25,000 youngpeople have completed employability skills courses withnearly 90% going on to education at a higher level orstraight into full-time employment. We are in the processof agreeing a joint partnership with Pearson Group Plcwho will manage the core programme delivery andqualification process. This will ensure the sustainability of the initiative following a £2 million initial investmentby the firm, over a five-year period.

We have also continued our work with the MicroLoanFoundation to support its requirement for more loanofficers with specialised education and qualifications.MicroLoan Foundation makes loans to womenentrepreneurs in rural Malawi. We have jointly developeda comprehensive training program for the loan officers,offering courses including leadership, presentation skills,budgeting, pricing, and market research. Investing in the qualifications and skills of loan officers will empowerwomen and facilitate economic development in Malawi.

Disability Sport and London 2012 community legacyWe are committed to ensuring a positive legacy from the London 2012 Games. Deloitte Disability Sportremains the largest programme of its kind in the UK,driving participation at the grassroots, developing theperformance of talented athletes and supporting theParalympicsGB team in achieving more podium finishesat future Paralympic Games. Already, more than 1,700disability sport clubs are listed on Deloitte parasport(www.parasport.org.uk) and the firm has supportedmore than 300 talented athletes through the TalentedAthlete Sponsorship Scheme run by SportsAid. Our firstever corporate challenge, the Deloitte Ride Across Britainis now in its second year and has already raised morethan £750,000 for ParalympicsGB. Deloitte's involvementin Disability Sport knits together what we are best at,solving complex problems and a desire to supporttalented young people.

Through the Chairman’s Club, an exclusive network of senior executives of the International OlympicCommittee’s global sponsors and London 2012 tier oneand two domestic sponsors, we have established twonew initiatives focusing on utilising the skills of ourDirector group. Eight of our directors this year havejoined other senior leaders from the Chairman’s Clubmember organisations on the PilotLight scheme. Thisprovides non-executive support to small and highlyimpactful charities in the Olympic Boroughs over an 18-month period to help build their capacity and reach. The Chairman’s Club has also created a head teachermentoring programme and qualification, which enablessenior level people in business to establish mentoringrelationships at schools across the UK. Twelve Deloittedirectors have been identified and trained by theChartered Management Institute and will begin peer-to-peer mentoring relationships with head teachers duringthe next year, creating opportunities to share ideas andexperiences and generate closer collaborativepartnerships between business and the education sector.

Our responsibility

Deloitte Ride Across Britain



Our Responsibility

My Story – Sam ScowenSam Scowen has Proximal Femoral Deficiency –a short right femur. Her father wanted to help herbecome more active. He discovered DeloitteParasport and, after using the ‘find a club’ function,made contact with Dorney Boat Club, where Samtook up adaptive rowing. With coaching sheimproved quickly. Sam saw an advertisement for a ‘Paralympic Potential Day’ on Parasport and wasspotted by performance coach Tom Dyson. Tomworked closely with Sam’s club to develop aprogramme that, only nine months after taking upthe sport, led to Sam’s selection for the 2009 VareseInternational Regatta, where she won silver andbronze in mixed double sculls events. She raced inthe same class in the Munich World Cup, winninggold, and finished fifth in the World Championships.

Charitable GivingOur national charity partners for 2010 – 2012 are Helpfor Heroes, Cancer Research UK and Children withLeukaemia, as voted for by our people. We are proud to announce that since the start of these partnershipsour staff and partners have raised more than £2magainst an initial target of £1m, as well as providingmore than 50,000 hours in additional time and pro-bono support. In addition, we have made significantaid contributions through the Deloitte Foundation of£1million to Pakistan and £225,000 to Japan.

The ArtsWe continue to support the Arts through our long-term commitment to the Royal Opera House. The collaborative relationship we have with the RoyalOpera House provides opportunities for our people toget involved throughout the year, with the main focus ofactivity around Deloitte Ignite. This is an annual three daycontemporary Arts festival, designed to help the Royal

Opera House reach out to more diverse and broaderaudiences. Our people actively participate in DeloitteIgnite, through volunteering as ushers, coming to thepreview event, attending as day guests or guests atspecific Deloitte Ignite concerts and private backstagetours.

As part of our pro bono activities, Deloitte is also theofficial professional services provider to the SerpentineGallery. The Serpentine Gallery is one of London’s mostwell-known and respected art galleries, which offers freeaccess to all. The artists they exhibit are well-known andestablished and they have accreditation in theinternational art world. The role we are playing is inassisting the Serpentine Gallery to develop a more robuststrategy and implementation plan for their new gallery.

My Story – Sam ScowenSam Scowen has Proximal Femoral Deficiency –a short right femur. Her father wanted to help herbecome more active. He discovered DeloitteParasport and, after using the ‘find a club’ function,made contact with Dorney Boat Club, where Samtook up adaptive rowing. With coaching sheimproved quickly. Sam saw an advertisement for a‘Paralympic Potential Day’ on Parasport and wasspotted by performance coach Tom Dyson.

Tom worked closely with Sam’s club to develop aprogramme that, only nine months after taking upthe sport, led to Sam’s selection for the 2009 VareseInternational Regatta, where she won silver andbronze in mixed double sculls events. She raced inthe same class in the Munich World Cup, winninggold, and finished fifth in the World Championships.



Our Responsibility

Help for HeroesHelp for Heroes supports wounded servicepersonnel. It has grown from an initial fundraisingbike ride to a £100 million charity in just under fouryears and is now one of the UK’s most recognisedbrands. Such rapid growth has presentedoperational challenges, typically seen in fastgrowing entrepreneurial businesses.

Deloitte’s employees selected Help for Heroes as one of their three charity partners in January2010. Since then, Deloitte has been operating at the very heart of Help for Heroes, tackling urgentstrategic and organisational issues enabling Help forHeroes to grow, efficiently and sustainably. Servicesranged from enhancing management andleadership structures to real estate expertise and thedevelopment of IT systems.

The view from the business“The team stretches across all service lines andacross all grades, from partners to executiveassistants. The appetite to get involved has beenhuge. Using the skills which we normally use inclient engagements, we have been able to make areal impact on the way Help for Heroes is working.”Tony Schofield, Partner, Deloitte

“Working with charities has always been a passionof mine, and the ability to translate this passion into

impactful roles that leverage my professional skillsbecame a key reason for choosing an employer. I’ve since spoken about my role in the pro-bonoprogramme at recruitment events and have beenstaggered by the number of potential hires who are seeking to work for Deloitte because of ourcommunity investment programme. They arethrilled to hear we don’t just focus on the usualactivities for our charity partners – such asfundraising events and day-long team events –but take a holistic approach to giving back which is more sustainable.”Felicia Trewin, Senior Manager, TechnologyIntegration Practice, Deloitte

The view from the charity“When the relationship started we simply expectedthem to encourage people to do some things andmake us some money. What we hadn’t expectedwas their involvement. The experience has beencompletely different from our ‘Charity of the year’experience with anyone else. Deloitte has becomefar more integral. They are part of the team. We arelooking at the long-term strategy, what we aregoing to look like in the next few years. A lot ofthese questions I need sophisticated help with tosee how I would tackle these issues. Suddenly I can hand it over to someone who understands it.”Bryn Parry, CEO, Help for Heroes

Help for Heroes Concert at Twickenham



Deloitte’s leadership is taken from our partner group andour focus on quality encompasses the values of all ourpeople. We do not take for granted the trust placed inDeloitte by clients and the wider business community,and sustaining this trust rests with every individual, atevery level, within our firm. As such, Deloitte considersitself a Public Interest Entity – and with that comesregulation and intense scrutiny by a range ofstakeholders. This public interest status is vitallyimportant to safeguard and respect. For more detail on our approach to quality and leadership please also see our Transparency Report 2011.

Executive GroupDeloitte’s activities are managed by the Senior Partnerand Chief Executive, and the Executive Group, which is appointed by the Senior Partner and Chief Executive.Each partner on the Executive has specific responsibilitiesbut the emphasis is on the group working as a team tolead the firm. In keeping with our client service focus,every member of the Executive Group is also activelyengaged with our clients.

The members of the Executive Group as at the date of this report are:

David Sproul, Senior Partner and Chief Executive, SteveAlmond, International Markets, Margaret Ewing, PublicPolicy, Quality and Risk and London Practice SeniorPartner, Sharon Fraser, Regional Markets, StephenGriggs, Finance, Heather Hancock, Talent and Brand,Andy Hodge, Tax, Panos Kakoullis, Audit, TimothyMahapatra, Corporate Finance, Vince Niblett, SeniorMarkets Group, Paul Robinson, Consulting, NickSandall, Financial Services, Nick Shepherd, Drivers JonasDeloitte, Richard Punt, Growth and Markets.

In addition, four partners have been asked to take onExecutive-level responsibilities, although not sitting onthe Executive Group. These partners are:Sabri Challah, Corporate Development, Richard Buck,Deloitte Digital, David Gill, Internal Client Services, Gerry Paisley, Practice Protection Group.

Stuart Counsell, Finance & Legal, Cahal Dowds,Regions, Martin Eadon, Clients & Industries, John Kerr,Talent, Ian McNeil, Partner Edge, David Owen,Consulting also served on the Executive Group during the year.

Senior Partner and Chief ExecutiveDavid Sproul, the Senior Partner and Chief Executive, has full executive authority for the management ofDeloitte in the UK. The Senior Partner and ChiefExecutive is nominated by the Board of Partners andelected by the partners for four year terms of office.David Sproul began his first term as Senior Partner and Chief Executive on 1 June 2011.

The responsibilities of the Senior Partner and ChiefExecutive fall under five principal headings:• the business of Deloitte, including the development

and management of professional services at the highest level of quality and compliance with all regulations;

• the development and implementation of policies and strategic direction;

• financial performance;• partners and our staff, including our talent goals; and• international, representing the UK firm in its

association with DTTL.

The Senior Partner and Chief Executive communicatesregularly with the partner group and with all of ourpeople, in person and by a series of webcasts, voicemailsand email alerts. The partner group also meets at leastannually, with the most recent meeting having takenplace in June 2011 in London.

Board of PartnersThe Board of Partners is responsible for the promotionand protection of partner interests and for the oversightof management. It approves Deloitte’s long-termstrategies and has specific oversight of risk and quality.The Board is composed of the Chairman and the SeniorPartner and Chief Executive, both of whom are electedby the partners, a further ten elected partners, threeExecutive Group partners proposed by the Senior Partnerand Chief Executive and affirmed by the partners, and up to two co-opted members. In addition it now alsohas two Independent Non-Executives.

Like the Senior Partner and Chief Executive, theChairman is nominated by the Board and elected by thepartners and serves for a four year term of office. DavidCruickshank commenced his second term of office asChairman on 1 June 2011. The separation of the roles ofChairman and Chief Executive provides a strong measureof accountability for the Executive Group.

Leadership and governance



Deloitte’s Partnership Agreement stipulates that the tenelected Board members and the Chairman must not bemembers of the Executive Group. As a result, themajority of the Board membership is independent of the Executive Group. The Board meets monthly exceptfor August.

The Board as at the date of this report comprised: David Cruickshank, ChairmanDavid Sproul, Senior Partner and Chief Executive

Ten elected members:David Barnes, John Cullinane, John Fotheringham,Chris Loughran, Anna Marks, Ellie Patsalos, ChrisPowell, Ian Steele, Nick Edwards and Denis Woulfe.

Three Executive Group members:Margaret Ewing, Stephen Griggs and Vince Niblett.

Independent Non-Executives:Gerry Grimstone, Dr DeAnne Julius CBE

Board secretary:Caryl Longley

Steve Almond, Martin Eadon, Richard Edwards,Humphry Hatton, David Owen and Geoffrey Tayloralso served on the Board during the year.

Corporate GovernanceThe Board’s oversight of management and theestablishment and operation of audit, remuneration,compensation and nomination committees ensure thatDeloitte adheres to applicable corporate governance,quality and risk management requirements, and disclosesthese matters in full.

The membership of each of these committees is made up of elected members of the Board who areindependent from the Executive Group, or from within the partner group.

In January 2010, the Institute of Chartered Accountantsin England & Wales (ICAEW) published the Audit FirmGovernance Code. This Code applies to the eight largestaudit firms in respect of financial years commencing onor after 1 June 2010 and sets a benchmark for goodgovernance.

• Independent Non-Executives: Deloitte now complies with the 2010 Audit Firm Governance Code, with the appointment of two Independent Non-Executives. Uniquely, we are appointing these to our main Board so that they can have proper and full involvement in our firm. The first is Gerry Grimstone, who has had a long and distinguished career in government and financial services, and is currently Chairman of Standard Life. The second is Dr DeAnne Julius CBE, a distinguished economist, who was a founder member of the Monetary Policy Committee and is currently Chairman of Chatham House. She has been a Non-Executive Director of several major international companies and currently serves on the boards of Roche in Switzerland and Jones Lang LaSallein the US.

Our Independent Non-Executive Board members will oversee the public interest aspects of our business, and the intention is for them to form an active dialogue with Deloitte in helping to shape and influence our firm.

As well as sitting on the Board, our Independent Non-Executive Board members form the majority on a new sub committee of our Board, The Public Interest Oversight Committee.

A third Independent Non-Executive is expected to be appointed in FY12.

• Investor dialogue: We welcome the Code’s requirements for audit firms to engage with investors and have been actively engaged with this community. We consider open discussion and dialogue between auditors, investors and audit committees to be an important aspect of ensuring that the auditing profession understands the needs of its key stakeholders.

During the year, we have held discussions with a number of key investors and other market participants and commentators. We have found the emerging dialogue both informative and constructive, and have concentrated our efforts in recent months to conduct the dialogue in the context of our governance structures.

Our Chairman has therefore played a central role in these discussions, and as our Independent Non-Executives join us, they will join him in opening further, and regular, communication lines with the investor community and its representatives.




Women in LeadershipDavid Sproul and David Cruickshank have declared theircommitment to ensuring the firm fulfils the aspirationsset out in Lord Davies’ 2011 report Women on Boards.Currently 24% of Board members are women. Of ourExecutive Group, 21% are women.

We have a target of 25% of Board roles to be held by women by the end of 2013 and for 25% of theExecutive Group roles to be held by women by 2015.During FY12 we are developing plans for increasing the diversity of the Partnership generally, and at Board level.

Deloitte has acted to accelerate women into positionswhere they can make a contribution at the top of ourfirm. Our CEO and Executive Group regularly considerprogress and new steps to achieve this, and ourChairman and Board consider progress against plans in the Board’s regular review of our talent strategy and performance.

Audit CommitteeEach year the Board appoints an Audit Committee,which operates in accordance with such written terms of reference as the Board may determine. The AuditCommittee is made up of at least three partners(excluding any partners who are members of theExecutive Group and holders of such senior managementappointments as the Board may determine). The Boardappoints one of the members of the Audit Committee as the Chairman of the Committee.

Appointments to the Audit Committee are made everyyear and a partner appointed serves for the entire yearand, subject to not falling within the exclusion referredto above, may be reappointed for any subsequent year.

The Audit Committee plays a key role in our riskmanagement and quality process, taking responsibilityfor monitoring the reporting, accounting, financial andcontrol aspects of the Executive Group’s activities.

The Audit Committee’s activities and areas of focusduring the year are discussed below.


Our regulatory environmentThe financial crisis has set a new context not justfor banks, but for firms like ours.

As a consequence, there is a necessity for reaching a new and broader understanding of the value thatDeloitte offers, and the expectations of our servicesfrom a much wider community of stakeholders.

It is in this context that we now see more scrutinyof the audit market and the role of auditors thanthere has been before, with consultations, reportsand inquiries from the European Commission,House of Lords, Financial Reporting Council, Office of Fair Trading, and various governmentdepartments, as well as the Public CompanyAccounting Oversight Board in the US.

Deloitte supports such interest. Any considerationof the audit market, and the role of auditors, mustinclude greater public engagement and awarenessof the role of auditors in providing confidenceabout business transparency and the capitalmarkets.

We are actively leading and contributing todiscussions on the future role of auditors withgovernment bodies and ministers, regulators,investors, audit committees and clients.

We all have a common interest to power forwardthe UK economy, to improve the way that businessis done in the UK, to invest for growth and toaccelerate the performance of individual businesseswhilst invigorating the trust the public holds in thecapital markets, with greater transparency onperformance and risk and focus on quality audits.

Margaret EwingManaging Partner, Public Policy, Quality & Risk



Audit Committee (continued)External reportingThe Audit Committee reviewed, discussed and approvedthe external auditors’ audit strategy and plan at the startof the external reporting process in December 2010.This set out the nature and scope of work which would be undertaken and an initial indication of the key audit risks.

At the July 2011 meeting, at the conclusion of the auditof FY11 financial statements, the Audit Committeereviewed the findings of the audit with Grant ThorntonUK LLP. The following key audit risks were reported toand discussed with the Audit Committee:• policy on revenue recognition – including

engagements, the recoverability of client receivables and judgements related to the recognition of income in respect of engagements with specific characteristics,e.g. those with contingent fee arrangements

• recoverability of client receivables – including allowances and adjustments made against unbilled receivables and debtor balances

• accounting treatment of transactions – including the potential impairment of any related goodwill in respect of acquisitions undertaken in previous years

• provisions – including the underlying assumptions in respect of provisions for pensions and annuities, surplus property provisions (which were prepared by Drivers Jonas Deloitte and independently reviewed by external specialists) and professional liability claims provisions.

Narrative and other reportingThe Audit Committee provided independent oversight ofmanagement’s development of all our external reporting,including the implementation of disclosures requiredunder the Audit Firm Governance Code as set out below.During the year the Audit Committee reviewed theAnnual Report, the Transparency Report and the financialstatements and, in particular, disclosures in relation to:• the work of the Audit Committee• the adoption of the going concern basis of

preparation• internal control and risk management• our principal risks and uncertainties• our ‘responsible business’ reporting.

Looking forward, Deloitte supports the Government'sand the Financial Reporting Council's efforts to reduceand improve narrative reporting. One of our partners,

Isobel Sharp, has also played a key role in the jointScottish and New Zealand Institutes of CharteredAccountants project seeking to remove the ‘excessbaggage’ from financial reporting, the findings of which are currently being considered by the IASB.

External auditorsGrant Thornton UK LLP was appointed as our auditor in 2003, following a competitive tender process, whenDeloitte registered as a Limited Liability Partnership andbecame subject to audit requirements. Followingcompletion of the 2010 audit a client satisfaction reviewwas undertaken, with a senior partner of Grant ThorntonUK LLP who was not involved in the audit process,through a meeting with senior members of our financefunction. As in previous years, there were no mattersarising from the review of the 2010 audit and the AuditCommittee concluded that it was satisfied with theperformance of Grant Thornton UK LLP and proposed tothe Board that they be re-appointed. The review of the2011 audit will take place prior to the October 2011Audit Committee meeting.

In accordance with best practice, Steve Maslin, our Grant Thornton UK LLP engagement partner since 2003, has rotated off the audit and has been replaced by Simon Lowe for this current financial year. Simon was introduced to the Audit Committee Chairman, who confirmed that he was content for him to take on the role of engagement partner.

Later this year the Audit Committee and the new PublicInterest Oversight Committee (which includes our twoIndependent Non-Executives) will consider our policy fortendering the audit. At the present time, the Board hastaken the decision that, in order to avoid potential issuesof confidentiality and competition, it would not appointanother Big Four firm as external auditor.

The provision of non-audit services is monitored carefullyby the Audit Committee. In the current year the onlynon-audit services provided by Grant Thornton UK LLPwere in relation to the provision of assurance on thecarbon reporting presented in this annual report. The feefor this work was £20,000. The Audit Committee wasconsulted about this appointment and was satisfied thatGrant Thornton’s independence would not be impairedas a result of undertaking the assignment.

Leadership and governanceSenior Partner and Chief Executive



Audit Committee (continued)The Assurance GroupThe firm’s Assurance Group carries out internal audit and monitoring projects across all aspects of the firm’sbusiness to provide assurance over the design andoperation of key controls and the adequacy ofcompliance with firm’s policies and procedures.

The Audit Committee considered the adequacy of theAssurance Group’s resources, its authority, access toinformation and its standing within the firm. The AuditCommittee also reviewed and approved the AssuranceGroup plan, considered the results of the Group’s workand how management has addressed issues raised andthe co-ordination between the Assurance Group andexternal auditors. The Audit Committee also conductedan evaluation of the effectiveness of the AssuranceGroup.

Risk management and internal controlThe Audit Committee conducted a review of theeffectiveness of the firm’s system of internal controlusing the Financial Reporting Council’s Internal ControlRevised Guidance for Directors on the Combined Code(the Turnbull Guidance) as the framework for the review.In reaching its view, the Audit Committee received andconsidered reports from the Chief Risk Officer, serviceline managing directors, the firm’s Security Partner, theDirector of Assurance, the Ethics Partner and the externalauditors, Grant Thornton UK LLP. No significantweaknesses were identified during this process. TheAudit Committee is satisfied that there is an ongoingprocess for identifying, evaluating and managing thefirm's significant risks and the process has been in placefor the year ended 31 May 2011 and up to the date ofapproval of the annual report and accounts.

Whistle-blowing and fraudThe Audit Committee considered reports from the firm’sPractice Protection Group on fraud related matters andon arrangements in place for staff to raise concernsabout possible improprieties or unethical behaviour(including consideration of any instances of fraud,breaches of firm policy and regulatory and legalrequirements) and the investigation and follow-up on any issues raised. The Committee also approved a revision to the firm’s whistle blowing policy andprocedures.

In addition the Audit Committee oversaw the firm’spreparations for the implementation of the Bribery Actfrom 1 July 2011. The Audit Committee has reviewed the process under which our risk assessment has been

undertaken, revisions to our policies and procedures and mechanisms for training and raising awareness.

The Audit Firm Governance CodeThe Audit Committee has been involved at every stage of the implementation of the Audit Firm GovernanceCode and the development of our disclosure action planarising from the Code. All relevant disclosures for thisannual report, the accompanying Transparency Reportand on our website have been approved by the AuditCommittee.

The Audit Committee’s activities and findings arereported to the Board. The Audit Committee meets atleast three times a year. It met five times during the yearended 31 May 2011.

The members of the Audit Committee as at the date of this report are: David Barnes, Chairman, John Fotheringham, Chris Loughran, Chris Powell and Denis Woulfe.

Further details on the terms of reference and work of the Audit Committee can be found on our website.

Compensation CommitteeEach year the Board sets up a Compensation Committeeto make observations to it with regard to the proposedassignment of equity groups and the allocation of profitsharing units to Partners who are members of the Board.The Committee operates in accordance with the generalpolicy objectives and guidelines laid down by the Boardand is made up of the Chairman of the Board who chairsthe Committee, two Partners who are members of theBoard, elected by the Board, and two Partners (not beingmembers of the Board at the time of their election)elected by the Partners.

The Compensation Committee serves for the duration of a calendar year. Elections and appointments to theCompensation Committee are held or made every yearand a Partner elected or appointed to the CompensationCommittee serves for the entire year. The CompensationCommittee meets approximately once a year.

The Secretary to the Board acts as Secretary to theCompensation Committee.

The members of the Compensation Committee at the date of this report are:David Cruickshank, Chairman, Chris Powell, Ian Steele, Ken McFarlane and Pat Loftus.




The Secretary to the Board acts as Secretary to the Nomination Committee.

The members of the Nomination Committee as at the date of this report are:David Cruickshank, Chairman, John Cullinane,Humphry Hatton, Chris Loughran, Ralph Adams, Ken McFarlane, Gerry Loftus and Pat Loftus

Public Interest Oversight CommitteeA new sub committee of the Board has been establishedto oversee public interest matters as they affect our firm. The Committee is appointed by the Board and made upof a majority of Independent Non-Executives.

Appointments to the Public Interest Oversight Committeeare made every 3 years, and meetings take place 4 timesa year.

The Secretary to the Board acts as Secretary to the PublicInterest Oversight Committee.

The members of the Public Interest Oversight Committeeat the date of this report are:David Cruickshank, Chairman, Gerry Grimstone and Dr DeAnne Julius CBE, Independent Non-Executives.

Margaret Ewing, Public Policy, Quality and Risk andDavid Barnes, Chairman of the Audit Committee, willattend meetings to inform the Committee.

Advisory Panel on Corporate ResponsibilityThe Advisory Panel is a sub-committee of the Board. It has oversight of and reports to the Board on the firm'scorporate responsibility (CR) strategy and plans, monitorsperformance and guides the firm's charitablecontributions and philanthropic activities.

The Advisory Panel is focused on the firm's direction,performance and leadership position across the firm'sentire CR programme. The Panel also ensures that ourapproach to CR is aligned with the CR policies beingpursued by DTTL member firms globally. The AdvisoryPanel meets on a quarterly basis and includes membersfrom the Board, the Executive Group and includes an employee and CR representatives.

Remuneration Committee Each year, after the Board has appointed two partners to the Compensation Committee, the Board appoints aRemuneration Committee to make recommendations toit with regard to the proposed assignment of equitygroups and the allocation of profit sharing units to theChairman, the Senior Partner and such other holders of senior management appointments as the Board may have determined. The Board appoints one of the members of the Committee as its Chairman. The Committee is made up of three partners who are members of the Board and the two members of the Board who are members of the CompensationCommittee.

The Remuneration Committee serves for the duration of a calendar year, with appointments to the Committeemade every year. The Remuneration Committee meetsapproximately four times a year.

The Secretary to the Board acts as Secretary to the Remuneration Committee.

The members of the Remuneration Committee as at the date of this report are:Ian Steele, Chairman, David Barnes, John Cullinane,Ellie Patsalos and Chris Powell.

Nomination CommitteeEach year the Board sets up a Nomination Committee to oversee the selection of candidates to stand in Boardelections. The Nomination Committee operates inaccordance with the general policy objectives laid downby the Board from time to time and shall be made up ofthe Chairman of the Board who shall be the Chairman of the Committee, two partners who are members of the Board and four partners (not being members of the Board or the Executive Group at the time of theirelection) elected by the partners.

The Nomination Committee serves for the duration of a calendar year. Elections and appointments to theNomination Committee are held or made every year. The Nomination Committee meets approximately fourtimes a year.




Assurance GroupDeloitte’s Assurance Group is a key element of ourcontinuous review of the effectiveness of our systems of internal control. The Assurance Group carries outprojects across all aspects of the firm’s business based on a programme agreed with the Audit Committee.Projects are determined on a risk-based approach. The objective is to provide assurance over the design and operation of key controls associated with themanagement of risk and the adequacy of compliancewith firm’s policies and procedures in the areas in scope.

The Director of Assurance’s authority and responsibilitiesare enshrined in an Assurance Group Charter approvedby the Audit Committee. The Director reports to theManaging Partner, Public Policy, Quality and Risk and hasunrestricted access to the Chief Executive Officer,members of the Audit Committee and the Chairman ofthe Board in addition to reporting formally to the AuditCommittee. The Charter gives the Assurance Groupunrestricted rights of access to all records, personnel andassets that are required to discharge its responsibilities.The Group also works closely with our external auditorsand other assurance providers. It is staffed by adedicated in-house team, but making use of subjectmatter experts from within the firm where appropriate.

Global Organisation‘Deloitte’ is the brand under which tens of thousands ofdedicated professionals in independent firms throughoutthe world collaborate to provide audit, consulting,financial advisory, risk management, and tax services toselected clients. These firms are members of DeloitteTouche Tohmatsu Limited (‘DTTL’), a UK private companylimited by guarantee. Each member firm provides servicesin a particular geographic area and is subject to the lawsand professional regulations of the particular country orcountries in which it operates. DTTL does not itselfprovide services to clients. DTTL and each DTTL memberfirm are liable only for their own acts or omissions andnot those of each other. Each DTTL member firm isstructured differently in accordance with national laws,regulations, customary practice, and other factors, andmay secure the provision of professional services in itsterritory through the subsidiaries, affiliates, and/or other entities.

UK Presence on the Board of DTTLSteve Almond is the Chairman of the Board of Directorsof DTTL, the international organisation of which we are a member. He was elected on 1 June 2011 for a fouryear term of office. In that capacity, Steve works withinDTTL to help member firms to share their collectiveexpertise and experience of client service, talentdevelopment and quality and risk management processes which, inter alia, will allow them to enhancequality throughout the network. DTTL has a separateChief Executive Officer, Barry Salzberg, who was electedon 1 June 2011 for a four year term of office. SharonFraser and Sabri Challah served on the DTTL board duringthe year. In addition, David Sproul has served on theDTTL Global Board since 1 June 2011 and DavidCruickshank since 1 June 2007.




David Sproul Senior Partner and Chief Executive Steve Almond International MarketsMargaret Ewing Public Policy, Quality and Risk and London Practice Senior Partner

Sharon Fraser Regional Markets Stephen Griggs Finance Heather Hancock Talent and Brand

Andy Hodge Tax Panos Kakoullis Audit Timothy Mahapatra Corporate Finance

Vince Niblett Senior Markets Group Paul Robinson Consulting Nick Sandall Financial Services

Nick Shepherd Drivers Jonas Deloitte Richard Punt Growth and Markets Sabri Challah Corporate Development

Richard Buck Deloitte Digital David Gill Internal Client Services Gerry Paisley Practice Protection Group


Executive Group




Board of Partners

David Cruickshank Chairman David Sproul Senior Partner and Chief Executive David Barnes

John Cullinane John Fotheringham Chris Loughran

Anna Marks Ellie Patsalos Chris Powell

Ian Steele Denis Woulfe Nick Edwards

Margaret Ewing Stephen Griggs Vince Niblett

Caryl Longley Board Secretary Gerry Grimstone Independent Non-Executive Dr DeAnne Julius CBE Independent Non-Executive



The following are abridged financial statements takenfrom the full audited financial statements of Deloitte LLPfor the year ended 31 May 2011. To access the complete2011 financial statements for Deloitte LLP please visit ourwebsite, www.deloitte.co.uk.

Report of the independent auditor

To the members of Deloitte LLPWe have examined the abridged financial statements for the year ended 31 May 2011.

This report is made solely to Deloitte LLP’s members, as a body. Our audit work has been undertaken so thatwe might state to Deloitte LLP’s members those matterswe are required to state to them in an auditor’s reportand for no other purpose. To the fullest extent permittedby law, we do not accept or assume responsibility toanyone other than Deloitte LLP and its members as abody, for our work, for this report, or for the opinionswe have formed.

Respective responsibilities of the members and auditorThe members are responsible for preparing the abridgedfinancial statements in accordance with applicableUnited Kingdom law. Our responsibility is to report to you our opinion on the consistency of the abridgedfinancial statements with the full financial statementsand the report to members and its compliance with therelevant requirements of section 427 of the CompaniesAct 2006 and the regulations made thereunder. We alsoread the other information contained in the annualreport and consider the implications for our report if we become aware of any apparent mis-statements or material inconsistencies with the abridged financialstatements.

We conducted our work in accordance with Bulletin2008/3 issued by the Auditing Practices Board. Ourreport on the LLP’s full annual financial statementsdescribes the basis of our opinion on those financialstatements and the report to members.

OpinionIn our opinion, the abridged financial statements areconsistent with the full financial statements and thereport to members of Deloitte LLP for the year ended 31 May 2011 comply with the applicable requirementsof section 427 of the Companies Act 2006, and theregulations made thereunder.

Simon LoweSenior Statutory Auditor for and on behalf ofGrant Thornton UK LLPStatutory AuditorChartered Accountants

London8 August 2011

Abridged financialstatementsSenior Partner and Chief Executive



Consolidated income statementYear ended 31 May 2011

2011 2010 £m £m

Revenue 2,098 1,953

Operating expensesExpenses and disbursements on client assignments (322) (277)Staff costs (859) (750)Depreciation and amortisation (48) (41)Other operating expenses (326) (292)Share of results of joint venture (1) -

Profit from operations 542 593

Other income 2 23Finance income 38 30Finance cost (72) (103)

Profit before tax 510 543

Tax (1) 1

Profit for the year before provision for annuities and remuneration for current members 509 544

Provision for annuities and remuneration for current members (101) (128)

Profit for the financial year 408 416

Attributable to:Members as owners of parent entity 409 416Non-controlling interest (1) -

408 416

Reconciliation with profit distributable to members

Profit for the financial year based on the Firm’s equity accounts 557 615

Retired member annuities and other adjustments (22) (25)

Profit for the financial year distributable to members 535 590

Profit allocated during the year (40) (27)

Adjustments for IFRS not adopted in the Firm’s equity accounts (87) (147)


The profit distributable to members is determined in accordance with accounting policies which differ from IFRS. The principal differences relate to the accounting treatment of annuities and pension schemes.



Consolidated statement of comprehensive incomeYear ended 31 May 2011

2011 2010£m £m


Other comprehensive income and expenseActuarial gains/(losses) on defined benefit pension schemes 27 (14)

Other comprehensive income/(expense) for the year, net of tax 27 (14)

Total comprehensive income for the year, attributable to members as owners of the parent entity 435 402

Attributable to:Members as owners of parent entity 436 402Non-controlling interest (1) -

435 402



Consolidated balance sheet As at 31 May 2011

2011 2010£m £m

Assets

Non-current assetsProperty, plant and equipment 197 206Intangible assets 39 43Interest in joint venture 4 -Financial assets 2 2

242 251

Current assetsClient and other receivables 613 596Cash and cash equivalents 10 27

623 623

Total assets 865 874

Liabilities

Current liabilities Trade and other payables 274 225Borrowings 45 -Provisions 35 30Members’ capital 6 3

360 258

Non-current liabilitiesRetirement benefit obligation 218 249Deferred tax 1 1Provisions 770 697Members’ capital 122 124

1,111 1,071

EquityMembers’ other reserves (605) (455)Non-controlling interests (1) -

Total liabilities and equity 865 874



Consolidated balance sheet As at 31 May 2011

Consolidated statement of changes in equityYear ended 31 May 2011

Members’ interests 2011 2010

£m £mThe following balances relating to members are included in the consolidated balance sheet:Members’ capital 128 127Amounts due to/(from) members 34 (12)Members’ other reserves – current members (605) (455)

Members’ interests for current members (443) (340)

Provision for annuities dependent upon future generation of profits

Provision for current member annuities 350 320Provision for retired member annuities 426 373

Total members’ interests before annuities payable from future profits 333 353

The full audited financial statements of Deloitte LLP for the year ended 31 May 2011 were approved by the Board on 8 August 2011. The financial data on pages 47 to 55 are an extract from 2011 financial statements.Signed on behalf of the Board,

David Sproul Stephen Griggs

2011 2010£m £m

Members’ other reserves at the start of the year (455) (241)

Profit for the year 409 416Actuarial gains/(losses) on defined benefit pension schemes 27 (14)

Total comprehensive income 436 402

Profits allocated to members during the year (563) (601)Other transactions with members (23) (15)

Members’ other reserves at the end of the year (605) (455)



Consolidated cash flow statementYear ended 31 May 2011

2011 2010£m £m


Adjustments for:Tax on profits 1 (1)Depreciation and amortisation 48 41Release of provision against financial assets (1) (1)Profit on disposal of a business (2) (23)Loss on disposal of property, plant and equipment 1 2Finance income (38) (30)Finance expense 72 103Increase in provisions 72 95Decrease in retirement benefit obligations (5) (8)

Operating cash inflows before movements in working capital 556 594

(Increase)/decrease in receivables (29) 20Increase/(decrease) in payables 14 (11)

Cash generated by operations 541 603

Corporate taxes paid (19) (17)

Net cash flow from operating activities 522 586

Investing activitiesInterest received - 1Repayment of loans 1 3Proceeds on disposal of a business 2 26Proceeds on disposal of property, plant and equipment 5 6Acquisition of businesses (8) (14)Purchase of property, plant and equipment (41) (28)

Net cash used in investing activities (41) (6)

Financing activitiesPayments to and on behalf of members (517) (595)Retirement benefits paid to former members (26) (26)Repayment of capital to former members (6) (12)Members’ capital introduced 7 12Interest paid (1) (2)

Net cash used in financing activities (543) (623)

Net decrease in cash and cash equivalents (62) (43)

Cash and cash equivalents at beginning of year 27 72

Effect of foreign exchange rate changes - (2)

Cash and cash equivalents at end of year (35) 27

Cash and cash equivalents compriseCash at bank 10 27Bank overdraft (45) -

(35) 27



Notes to the financial statementsYear ended 31 May 2011

1. Operating SegmentsThe group has four reportable operating segments: Audit, Tax, Consulting and Corporate Finance. The Audit segmentprovides audit, internal audit, regulatory, risk and control, accounting and financial reporting services. The Tax segmentprovides business tax, employer and personal tax services. The Consulting segment provides strategy, operations,human capital, enterprise application and technology integration services as well as actuarial and insurance solutions.The Corporate Finance segment provides transaction support, reorganisation services, forensic and dispute services,real estate consultancy and advisory services.

The reportable segments reflect the group’s principal management and internal reporting structures and are strategicbusiness units that offer different services.

The group evaluates the performance of the segments on the basis of net revenue and profit or loss from operationsbefore unallocated costs, finance income, finance cost and tax expense. Net revenue is revenue less expenses anddisbursements incurred on client assignments.

Central adjustments largely represent time spent on internal projects by Deloitte members of staff. Unallocated itemsinclude any costs which cannot be allocated to an operating segment on a meaningful basis. Adjustments are made to net revenue and profit as reported internally, compared to as reported in the financial statements, such adjustmentsreflect the different accounting policies adopted.

Performance assessment of the segments includes a review of certain assets such as client receivables net of paymentson account and deferred income and amounts to be billed to clients and prepayments. All other assets, including non-current assets, balances with partners, cash, provisions and retirement benefit balances are controlled centrally and arenot allocated across service lines. There is no internal reporting of liabilities by operating segment; and thus nosegmental disclosures are provided.

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




1. Operating Segments (continued)

CorporateAudit Tax Consulting Finance Total2011 2011 2011 2011 2011

£m £m £m £m £m

Revenue 652 534 517 395 2,098

Net revenue (as reported internally) 570 460 428 343 1,801Central adjustments (25)

1,776Profit per operating segment (as reported internally) 198 181 109 106 594

Unallocated (51)Other income 2Share of results of joint venture (1)Finance income 38Finance cost (72)

Profit before tax 510

Tax (1)

Profit for the year 509

Operating segment assets(as reported internally) 139 173 107 126 545

Unallocated assets 320

Total assets 865




1. Operating Segments (continued)

CorporateAudit Tax Consulting Finance Total2010 2010 2010 2010 2010

£m £m £m £m £m

Revenue 628 511 459 355 1,953

Net revenue (as reported internally) 559 453 376 311 1,699Central adjustments (23)

1,676

Profit per operating segment (as reported internally) 206 183 109 130 628

Unallocated (35)Other income 23Finance income 30Finance cost (103)

Profit before tax 543

Tax 1

Profit for the year 544

Operating segment assets 124 176 96 102 498(as reported internally)Unallocated assets 376

Total assets 874

2011 2010£m £m

Revenue per income statement 2,098 1,953Expenses and disbursements on client assignments (322) (277)

Net revenue 1,776 1,676




1. Operating Segments (continued)The accounting policies of the reportable segments are the same as the group’s accounting policies as described in thefull financial statements. Segment net revenue and profit without the allocation of central costs, other income, financeincome and costs and tax expense are the measures that are reported to the Senior Partner and Chief Executive for thepurposes of assessment of segment performance and resource allocation.

Included in group revenue is net revenue of approximately £77m (2010: £46m) which arose from supplyingprofessional services, across all four service lines, to the group’s largest client, which is a non-audit client.

The group’s revenue and information about its segment assets (non-current assets excluding financial instruments andinterest in joint venture) by geographical location are detailed below. Both revenue and non-current assets are basedon those arising in legal entities situated in each country.

To manage and drive the business, the group is managed using a matrix structure which incorporates both service linesand the nature of the industry to which the services are supplied. Revenue by industry is:

Non-current Revenue Net revenue assets

2011 2010 2011 2010 2011 2010£m £m £m £m £m £m

UK 1,909 1,786 1,630 1,552 218 236Other Countries 189 167 171 147 18 13

2,098 1,953 1,801 1,699 236 249

Net NetRevenue Revenue revenue revenue

2011 2010 2011 2010£m £m £m £m

Financial Services 656 546 562 475Technology, Media & Telecommunications 205 206 176 179Real Estate, Hospitality & Leisure 200 169 172 147Consumer Business 179 217 154 189Energy, Infrastructure & Utilities 173 153 148 133Manufacturing 167 161 143 140Government & Public Sector 161 215 138 187Business & Professional Services 91 34 78 30Life Science 83 63 71 54Private Equity 66 65 57 57Other 117 124 102 108

2,098 1,953 1,801 1,699

2. Member RemunerationProfits are shared amongst the members after the end of the year in accordance with agreed profit sharingarrangements. The average profit per member is calculated by dividing the profit for the financial year distributable to members, by the average number of members.

2011 2010£’000 £’000

Average profit per member 758 873

The share of profit that has been allocated since the year end to the Senior Partner and Chief Executive John Connolly,who was the member with the largest entitlement to profits in 2011, was £4.4m (2010: £5.1m). Profit allocated toDavid Sproul, the new Senior Partner and Chief Executive, was £2.6m.



Environmental Performance

2010/11 Performance

The GHG Protocol categories direct and indirect emissions into three broad scopes which we report on here:

Scope 1: Direct GHG emissions.Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam.Scope 3: Other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehiclesnot owned or controlled by the reporting entity, outsourced activities, waste disposal, etc.

1. The carbon emissions in the above table have been restated since the 2009/10 CR Report was published. The revisions were driven byimprovements made to the reporting and validation processes, many of which stemmed from our CEMARS accreditation audits. We alsoreviewed our operational boundaries relating to gas consumption; and expanded our travel monitoring to retrospectively include distance and class data. The historic emissions were then recalculated using the latest DEFRA conversion factors, updated in line with 4th GHG Protocol.

2. We reduced our gas consumption by 7% over the past year however improved monitoring of the fugitive emissions from our air-conditioningunits led to an overall increase in Scope 1 emissions.

3. This increase was due to higher business travel following success in winning international business contracts.

4. We are continually improving our waste monitoring procedures. This increase is primarily due to the introduction of on-site weighing of ourpaper waste which has allowed us to obtain more accurate data.

5. Our 2010/11 targets were set at the end of 2009/10 and recorded within our externally accredited ISO 14001 environmental managementsystem. These have now been replaced by stretching long-term targets as part of our Green Journey vision and we will work towards achievingthese in the future.

The above data table was updated in September 2011 following the completion of our external audit. The Grant Thornton assurance statementis available on the internet pages.

Non-financialperformance

Indicator 2008/09 2009/10 2010/11 2010/11 Targets5 Achieved?

Scope 1 emissions (tonnes CO2e)1 2,807 2,449 2,628 2,400 No2

Scope 2 emissions (tonnes CO2e)1 18,050 17,966 17,239 17,607 Yes

Scope 3 emissions (tonnes CO2e)1 27,807 31,928 38,924 31,426 No3

Scopes 1 and 2 emissions (tonnes CO2e) per FTE 1.71 1.74 1.56 – –

Scopes 1, 2 and 3 emissions (tonnes CO2e) per FTE 3.98 4.47 4.61 – –

Video-Conferencing (No. of meetings) – 789 1,732 805 Yes

Waste Generated (tonnes) – 1,525 1,948 1,495 No4

Waste Recycled, UK (tonnes) – 55% 66% 56% Yes

Waste Diverted from Landfill, London (tonnes)* 100% 100% 100% 100% Yes

Waste Diverted from Landfill, UK (tonnes) 67% 82% 89% 84% Yes

Water Consumption, London (m3) – 99,470 73,756 97,481 Yes

Paper, Procured (kg) 522,041 555,382 540,141 544,274 Yes



Other non-financial performance

Our Green Journey Targets

2010/11 people performance

*The Deloitte Engagement Index is taken from our 2010 People Survey and measures satisfaction, willingness to recommend to others as a place to work, pride and commitment, creating an index that links to key business metrics.

**The percent agreeing in our 2010 People Survey for survey item “Deloitte provides me with the opportunity for learning and development”

***The percent agreeing in our 2010 People Survey for the survey item “At Deloitte, people are treated as individuals regardless of backgroundor beliefs”

We have robust procedures in place to ensure we do not have a gender bias in our pay and award structure.As a result of these procedures we are confident that no material gender pay gap is in place across the firm.

We have a target for 25% of our Board roles to be held by women by 2015. Currently 24% of Board members and 21% of our Executive Group are women.

We are developing further long-term targets in this area and will report on these during the year financial year ahead.

Non-financial performance

Indicator 2008/09 2009/10 2010/11

Deloitte employees (average no. FTE) 12,228 11,876 12,766

Employee Engagement Index* No comparator 63% 67%

Learning and Development** No comparator 81% 67%

Inclusion*** No comparator 84% 87%

Women employees 43% 42% 42%

Women partners 14% 14% 14%

Green Journey: 2020 Targets Target Baseline Target Date

GHG Emissions Reduce Scopes 1, 2 and 3 emissions 35% per FTE 2010/11 2020/21

Energy Emissions Reduce emissions intensity from energy consumption 30% per FTE 2010/11 2020/21

Energy Consumption Procure ‘green’ electricity* 100% – 2011/12

Energy Consumption Generate electricity from renewable sources 40% – 2020/21

Travel Reduce travel-related GHG emissions 25% per FTE 2010/11 2020/21

Video-Conferencing Increase the usage of video-conferencing facilities 50% 2010/11 2013/14

Waste Production Reduce quantities of waste production 20% per FTE 2010/11 2020/21

Waste Management Send zero waste to landfill across our estate* 0% – 2015/16

Water Consumption Reduce potable water consumption 20% per FTE 2010/11 2020/21

Paper Usage Reduce paper consumption 20% per FTE 2010/11 2020/21

Biodiversity Create and enhance habitats on our estates and ensure a net increase in the ecological value of our sites*

* where management is under our direct control.



Non-financial performance

2010/11 community performance and targets

Our community performance figures are calculated using the London Benchmarking Group (LBG) Model. Deloitte is an active member of LBG. The LBG model helps businesses to improve the management, measurement and reportingof their corporate community involvement programmes. It moves beyond charitable donations to include the fullrange of contributions (in time, in kind and in cash) made to community causes, and assesses the actual results for the community and for the business.

As managers of LBG, Corporate Citizenship have worked with Deloitte to ensure that it understands the LBG modeland has applied its principles to the measurement of community involvement programmes during the year ended 31May 2011. Having conducted an assessment, Corporate Citizenship is satisfied that this has been achieved. The workdid not extend to an independent audit of the data.

Indicator 2009/10 2010/11 2010/11 Target Achieved? Target 2011/12

Number of community volunteers 3,263 3,383 3,400 No 3,400

Community volunteering hours 44,932 50,625 48,000 Yes 50,000

Skills-based volunteering and pro-bono support to the community 74% 87% – – 88%Members of payroll giving schemeas %age of eligible employees 26% 24% 26% No 26%

Partner and employee charity contributions £1.435m £2.011m £1.550m Yes £1.750m

Total firm community contribution £9.791m £11.163m £10.00m Yes £12.00m


Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK privatecompany limited by guarantee, and its network of member firms, each of which is a legallyseparate and independent entity. Please see www.deloitte.co.uk/about for a detaileddescription of the legal structure of DTTL and its member firms.

Deloitte LLP is the United Kingdom member firm of DTTL.

© 2011 Deloitte LLP. All rights reserved.

Deloitte LLP is a limited liability partnership registered in England and Wales with registerednumber OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom. Tel: +44 (0) 20 7936 3000 Fax: +44 (0) 20 7583 1198.

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