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Page 1: Ernst & Young Global Review 2010

Ernst & Young

Global review

2010

Global review 2010

Page 2: Ernst & Young Global Review 2010
Page 3: Ernst & Young Global Review 2010

Chairman’s letter 2Chairman’s Q&A 4

01 Globalization 7

02 People 19

03 Entrepreneurship 29

Facts and figures 41

Ernst & YoungGlobal review 2010

Page 4: Ernst & Young Global Review 2010

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Global review 2010

“ Our increasingly complex and interconnected world requires businesses to be more global, more accepting and understanding of diverse points of view, and more focused on what really matters in the post-crisis world.”

Chairman’s letter

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Global review 2010 Chairman’s letter

The past year has been one of recovery and readjustment for the global economy — recovery from the worst recession in decades, and readjustment of the relationships between developed and emerging economies, between the public and private sectors, and between global institutions and nation states.

The strong recovery we’ve seen in the emerging markets has contrasted with a weaker one across the developed world, accelerating a long-term shift in economic power from west to east and from north to south. Governments, central banks and regulators looked for ways to stimulate and support their domestic economies. And the unprecedented cooperation between countries in the depth of the crisis has come under strain from national pressures.

Our increasingly complex and interconnected world requires businesses to be more global, more accepting and understanding of diverse points of view, and more focused on what really matters in the post-crisis world. This is occurring at the same time as sweeping demographic changes continue to impact the world. The teams we will each be part of in years to come will be much more diverse than those same teams may have been a short time ago — diverse in terms of gender, ethnicity, nationality, religion, generation and many other characteristics.

Positioned against these trends are some important advantages that Ernst & Young has as an organization. We are recognized as the most globally integrated professional services organization — in our mindset, actions and structure. We are building and fostering the leading people culture in our profession. And we have the leading brand and reputation with entrepreneurs all over the world. These are strengths that we have cultivated for years, and that will serve us extremely well in the decades to come.

Our long-term focus on the trends that will be shaping the world means that, as the recovery takes hold, we are uniquely positioned to provide quality services for our clients. Two years on from the worst global downturn in decades, Ernst & Young’s financial performance held steady and, encouragingly, was much stronger in the second half of the financial year. This performance is testament to the efforts of our 141,000 people, and I want to thank them for working tirelessly for our clients and colleagues while always demonstrating their unwavering commitment to quality.

James S. Turley

Chairman and Chief Executive Officer Ernst & Young

Page 6: Ernst & Young Global Review 2010

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Global review 2010

Jim, you spend a lot of your time speaking with business leaders around the world. Are they confident about global economic recovery?As the recovery takes hold, people I speak to say they’d have hoped that recovery would be more definite everywhere around the world, but there are some bright spots. Different parts of the world are recovering at different speeds — the confidence in the emerging markets is strong and justified by both their recovery and their growth prospects. And there’s a slowly growing sense of optimism in the developed economies, too.

However, business leaders think that some major risks remain. The first of these risks is that the international cooperation that we saw during the crisis fractures and countries become protectionist. We are seeing evidence of this in the global dispute over currency intervention. A second risk is that entrepreneurs stay on the sidelines, when they are vital to creating the jobs that are badly needed in many developed economies. And a third risk is that the global economy is knocked backward by a sovereign debt crisis.

Apart from focusing on the economy, what are business leaders focused on now?The thing that I’m hearing a lot of discussion and debate around is how companies should prepare for, mitigate or otherwise manage low-probability but high-impact risks. Events this year such as the oil spill in the Gulf of Mexico showed just how significant these risks can be. Traditionally management and boards have probably spent more time focusing on their higher-probability risks. That’s important, but I think the focus is shifting now to encompass a broader view of all risks, even those thought to be very unlikely to occur.

One of the results of the downturn is that the G-20 seems to have emerged as an important body for global economic and regulatory coordination. What is your view on that?I think this is one of the most important changes, or at least it reflects one of the most important changes, that has occurred in the past several years. The downturn has really accelerated the shifts in economic power to the emerging markets. This year the emerging markets will account for nearly half of world

economic output, more than half of global economic growth, and they are bouncing back from the downturn much more quickly than the developed world. Continued changes in demographics mean this trend will continue for decades. The G-20 is much more representative of this changed world than the G-7 or G-8, and so it’s right that it has become such an important forum for cooperation.

The G-20 leaders have called for a single set of high-quality accounting standards around the world. Are we any closer to achieving it? Yes and no, but I remain optimistic.

Convergence of IFRS and US GAAP is an important objective on the path to realizing the goal of a single set of high-quality accounting standards used around the globe — an effort we continue to endorse without reservation.

Under the leadership of Sir David Tweedie and Bob Herz, the IASB and FASB have made great strides towards realizing the goal. And, we welcome the appointment of Hans Hoogervorst and Ian Mackintosh as IASB Chairman and Vice Chairman respectively, and of Leslie Seidman as Acting Chairman of the FASB. But much work — and much uncertainty — remains.

The Boards have an ambitious timetable and, perhaps more importantly, they have not been able to agree on some important areas like financial instruments. Both the IASB and the FASB feel pressure from the G-20 to complete their joint projects expeditiously. And the IASB feels the added pressure of certain countries that are set to adopt IFRS in the near future. But these pressures cannot lead to a sacrifice in the delivery of improved, high-quality and operational accounting standards.

Progress on the joint projects also is an important consideration for the US Securities and Exchange Commission (SEC) as it decides whether to commit to a date — or dates — certain to require US companies to adopt IFRS.We hope that taking the time that is necessary to develop improved, high-quality standards in so many important areas will not significantly affect the SEC in continued progress toward making an adoption decision. However, we are at a critical juncture for all parties.

Chairman’s Q&A

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Global review 2010 Chairman’s Q&A

Here is the thing, though. When I talk to people in the US, I make it really clear to them that I can’t see any advantage for the US to operate by a different set of rules than those that are followed in most of the rest of the world. I don’t believe that benefits the US economy, the US capital markets or US investors. So that is why I remain optimistic about IFRS becoming the single set of high-quality, global accounting and financial reporting standards.

Because of rising budget deficits, governments around the world are searching for revenue while, at the same time, they are competing for scarce jobs and capital. In this complex tax environment, how are clients responding?Clients are definitely getting the message that tax is more important from both a strategic and a risk management perspective. In response, C-suite executives, audit committees and company boards are increasingly including tax risk management as part of overall corporate governance.

Last year, the US Commissioner of Internal Revenue, echoing a sentiment increasingly shared by tax administrators around the globe, said that companies need to view tax as an issue that gets appropriate vetting at board level, because complicated business transactions raise complex tax issues and because tax is one of the biggest expenses on the income statement. Transparency is the new watchword of corporate governance. All of this is occurring in a time of substantial revenue needs for most governments in the world and, therefore, increased enforcement activity.

Audit committees are also responding by expanding their focus from tax compliance issues to tax risk management. One consequence of the new enforcement era is that tax administrators expect corporate boards to understand the outcomes of their business tax strategies in their role as corporate stewards. This underscores the importance for clients to have open and regular communications, especially between the tax function and the C-suite. We are seeing leading companies implementing more effective communications frameworks to ensure tax issues are brought to the attention of the audit committee and full board.

As a result of the financial crisis, some people have asked, “Where were the auditors?” How do you respond to that? The first thing I’d say is that it’s important to contrast the last two crises we’ve been through. The crisis at the beginning of this decade had a large number of financial restatements, so you could rightly call it an accounting and auditing crisis. The crisis that we’re emerging from now was really an economic crisis. It was about credit bubbles, property bubbles, and asset values changing

a lot. If the “Enron-era” crisis was characterized by countless restatements of accounts, then this crisis has certainly not been. In fact, the profession feels pretty good about the role it played in helping ensure the fair presentation of accounts.

That said, I think there are some very legitimate questions the world is wrestling with now. If you have few if any financial restatements, yet you still have the crisis we just experienced, then people rightly ask how relevant historical financial information really is. So the issue becomes a discussion around what information investors need to make the right decisions. Do they need more forward-looking information, more on key performance indicators? Do they need more information about judgments, estimates and accounting policies?

This is clearly not just an issue for the profession. It’s something that our regulators and investors around the world are starting to discuss as we all try to prevent a replay of this crisis in the future.

So what do you think the auditor’s responsibility should be?We have a proactive responsibility to make sure that we comply with auditing standards and that the clients we serve are complying with the requisite accounting standards. So the first and most important responsibility is to act diligently and professionally in compliance with standards, and have clients do the same. Where the application of those standards would result in something that is not “true and fair”, then we should figure out how to discuss this with regulators, discuss this in a more open way with audit committees, and figure out the next steps to take.

Regulators also want to figure out whether and how auditors should work more closely with prudential supervisors. The UK Financial Reporting Council and Financial Services Authority issued a white paper talking specifically about that and this type of discussion is also included in the recently issued EU green paper on the auditing profession. What role should auditors who serve financial institutions have in talking to different regulators? That’s a discussion that’s going to take place over the next year.

How do you feel about how Ernst & Young is doing right now?One of the things that I’m always interested in is how others see Ernst & Young. I travel all over the world, and what I hear about our organization is remarkably consistent around the globe. There are three things, really.

First, when others look at the profession, what they say is that Ernst & Young is by far the most global — the most global in mindset, governance, structure and actions. And I hear this consistently whether I’m talking with clients, regulators, students or whomever.

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Global review 2010 Chairman’s Q&A

Second, I hear that Ernst & Young has a leading people culture — a culture that’s built on our values that permeate the organization around the world. When people look at us globally, this is the place they want to be.

Third, I hear we have the best brand in working with entrepreneurs — working with business people who are really driving things in the marketplace. Part of that comes from our Entrepreneur Of The Year program, but the biggest part of it comes from our decades-long commitment to having a great client portfolio in strategic growth markets and emerging economies.

When people talk about us this way I feel like we’re getting it right — that these advantages we have, and that people see us as having, position us perfectly for continued success, the way the world is today and the way it will be in the future.

We’ve won some well-known audit clients over the past couple of years, many of whom have cited our globalized structure and focus on traditional services as a key factor in their decision to appoint us. We’ve gained global household names such as Siemens, Eni, Danone, Enel — subject to shareholder approval, Fiat Industrial and United Airlines. And we’ve won a lot of great projects with non-audit clients, too, ranging from Barclays to Vale. I think these new clients and engagements prove that our global structure is a point of difference that resonates strongly in the market.

So I feel great about how we’re doing, although every day we have to commit ourselves to be better. I’m not satisfied — nor are any of our people — when regulators find things around the world in our engagements that they wish we had done differently. Quality in Everything We Do is what we are all about.

How have you managed to achieve as much as you have done in terms of global integration when it seems as if other similar organizations have struggled?There are probably lots of reasons, but what stands out in my mind is the trust we have built over the years. This is trust among partners of our practices, trust across borders, respect for different opinions and perspectives and a teaming culture that pervades the entire organization.

Why do you think Ernst & Young’s people culture is so special?Every culture is unique — it can’t be replicated. At Ernst & Young we aspire to have a leading people culture everywhere in the world. To achieve this, we invest in being the most

inclusive organization; having the most robust learning and development framework; and offering the most engaging environment in which to build a career.

If we attract and retain the best people — and invest in them — then we will deliver the best results for our clients. Our aim is to be an organization comprised of highly skilled, highly motivated and highly engaged people who believe Ernst & Young is the best organization for them and feel excited and proud to work here.

Advisory was one of your growth areas this year. Why are you building your Advisory services again? The downturn created greater demands among our client base for risk management, operational efficiency and sustainable performance-improvement services. Such demands provide an opportunity for our profession and our organization to be at the forefront in stabilizing and revitalizing the world’s leading organizations through these difficult times.

We have a very focused Advisory strategy. It’s around transactions, risk and performance improvement closely related to our traditional services. We have chosen to focus our investments in our traditional and related services and not pursue investment and growth in the large information technology systems integration and outsourcing space.

Finally, what do you feel your most important role at Ernst & Young is?For me, the answer to this question doesn’t change. In my eyes, the most important thing I can do is to ensure the people of Ernst & Young have a personal sense of what is right and what is wrong, and of what is expected of them. And, most importantly, that all our people have a deep belief that nothing is more important than their own personal integrity and commitment to quality. If anyone or anything makes them uncomfortable, at a client or within Ernst & Young, I want them to know that it is not just okay for them to object, or raise their hand, or ask for assistance: it is their personal and professional obligation to do so.

That is why, just as in previous years, I spend most of my time traveling to our offices, visiting our people — speaking with them and our clients. Because getting our people to truly understand our expectations of them, and truly believe in our commitment to them, doesn’t happen just by email or voicemail. Meeting our people where they live, and seeing each other face to face, is the only way.

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Globalization

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Global review 2010

“ Globalization is one of the defining issues of our time. Our response has been to transform our organization so that we keep in step with the changing needs of our clients and our people.”

Globalization

Globalization is shaping our world: it’s expanding horizons as trade, technology and investment increasingly connect countries and companies around the globe; and it’s compressing time and distance as people and products move — and ideas spread — faster than ever before.

Globalization magnifies opportunity and risk. It opens up new markets and creates opportunities for innovation. And it provides access to new sources of capital and wider pools of skilled employees. But at the same time, globalization has increased complexity. As organizations navigate new markets or encounter new competitors, the demands on them multiply.

The recent financial crisis brought home just how interconnected and interdependent the world has become. It also emphasized two forces of globalization: the shifts in demographics and capital that are shaping the global economy and society as a whole. These trends will increasingly impact markets, competition and recruitment for us and our clients.

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Our Americas Area was formed in 2006. It comprises 29 countries and nearly 41,000 people. The workplace culture of the Americas Area is regularly recognized by organizations such as the Great Place to Work Institute and Universum, which frequently place Ernst & Young near the top of their lists for countries across the region.

Our newest-formed Area, which brings together 26,000 people across 20 countries, was created in 2010 through the integration of our former Oceania and Far East Areas. The Asia-Pacific region is the world’s most dynamic economy. We believe that much of our clients’ and our own future growth will come from the region and our Asia-Pacific Area will enable us to better serve clients looking to invest in or grow across the region.

Our Japan Area employs more than 7,000 professionals and works with many of Japan’s best-known companies across the financial, manufacturing and electronics sectors. It also acts as the hub for our Japan Business Services network — nearly 350 Japanese-speaking professionals based in 60 cities around the globe who serve Japanese clients operating overseas.

We created our EMEIA Area in 2008, bringing together 67,000 people from 90 countries across Europe, the Middle East, India and Africa. It was a groundbreaking move, as many assumed that it was impossible for an organization such as ours to take such a big step. Creating EMEIA cemented our reputation as the most globally integrated organization in our field.

Americas EMEIA Asia-Pacific Japan

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Global review 2010 Globalization

At Ernst & Young, we have long thought that globalization is one of the defining issues of our time. Our response has been to transform our organization so that we keep in step with the changing needs of our clients and our people. Our clients need integrated, cross-border service and the same high quality wherever they do business around the world. Our people want to build careers in an organization that’s global in its outlook and inclusive in its approach.

We’re not merely a loose collection of national practices. We are the most globally integrated professional services organization in our mindset, actions and structure. And at the heart of our highly integrated organization are the 141,000 people who comprise Ernst & Young.

Our global mindsetAs our world has become more interconnected, the people we work with, and for, come from a diverse range of backgrounds and cultures. We want to recruit and develop a workforce that mirrors the world we live in and has the skills and mindset to work effectively across any borders.

To support them and help foster the global mindset needed to work in cross-border and cross-cultural teams, we encourage international assignments among our member firms and promote an inclusive work culture that respects diversity. The success of our integration efforts as we’ve moved from a country-focused organization to a more integrated, global one is a testament to the global actions of our people.

Our global actionsGlobal integration means we can respond faster than our competitors. We can access the right people and assemble broader, more experienced teams, wherever the client is based, to deliver seamless service worldwide. We can consistently negotiate everywhere, execute everywhere and mobilize resources everywhere.

We can invest on a global basis, also. This was the fourth year of our US$1 billion investment initiative. Underlining the shift in global economic power, much of that investment has been earmarked for emerging markets and the program exceeded expectations, with more than US$1.2 billion ultimately invested.

By acting globally we deliver better, more consistent quality. The UK Audit Firm Governance Code, which came into effect in 2010 and applies to our UK business, stipulated bringing in Independent Non Executives (INEs). We decided to also implement this requirement at a global level as well as naming the INEs to our Global Advisory Council, our main global oversight body. This was part of our commitment to achieving the highest quality standards, worldwide.

Globalization indexWe engaged the Economist Intelligence Unit to create an annual globalization index and released Redrawing the map: globalization and the changing world of business at the World Economic Forum, 2010. We asked 520 senior business executives for their views on the impact of globalization. The key findings were:

• The rise of the emerging markets has changed the game and outlook for businesses

• Companies are still planning international expansion despite the downturn

• Successful companies require culturally diverse management teams

• Innovations developed in one country are not always commercially viable in others

• Businesses must engage with governments and other policy makers on issues such as trade, protectionism and regulation

www.ey.com/globalization

Page 13: Ernst & Young Global Review 2010

At Xerox Corporation, executives are frequently called on to take new leadership roles that require them to relocate internationally. So, they expect to work with a professional services organization that has as global an outlook as they do.

“This means our international client service team has to be constantly in touch with one another to share insights and ideas,” says Dan Kaplan, Ernst & Young Global Client Service Partner for Xerox. “We’ve built trusted relationships throughout Xerox’s global organization by understanding their business imperatives and issues, and demonstrating how we can best help Xerox management overcome the challenges they face.”

Ernst & Young has provided global internal audit outsourcing services to Xerox since 2001. Our relationship has expanded in recent years,

however, as the team introduced new subject matter specialists to enhance the service we provide Xerox. As a result of this commitment, Xerox engaged us on a variety of information technology, process improvement, tax and transaction advisory services projects throughout EMEIA and North America.

A recent Xerox acquisition provided us with a great opportunity to demonstrate our due diligence services and our ability to assist during post-acquisition integration.

“Xerox assembled an internal transition team that planned and executed a smooth integration of two complementary but different businesses,” says Dan. “We provided insights around transactions, tax, valuation, human capital and information technology. Our ability to listen and work with their team was just as important as what we had to say.”

“ They expect to work with a professional services organization that has as global an outlook as they do.”

Cross-border connections

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Page 14: Ernst & Young Global Review 2010

Reaching new heights

“When Boeing’s new 787 Dreamliner made its international debut at the Farnborough International Airshow 2010, we worked with Boeing to ensure their key people were in the UK to leverage the opportunity,” says James Egan, Leader, Ernst & Young’s Global Immigration practice. “It was a high-profile event and the right people needed to be there.”

Boeing is the world’s largest aerospace company with operations in 70 countries. We support them with strategic advice on immigration issues, as well as processing and tracking visas and work permits for international assignees in nearly 60 countries. Our global business immigration network is the largest of its kind, with offices in 90 countries offering a wide range of immigration services.

“The increased globalization we’ve seen in recent years means more workers are moving around than ever before. It’s vital that international assignments are managed carefully. If there are issues with work permits or visas, then it can lead to losing a contract, losing money or a damaged reputation. Companies like Boeing understand these risks and clearly wish to make sure they avoid them,” explains James.

“When looking for a global immigration provider, Boeing selected us. Our focus has been to provide consistent quality, responsiveness and thoroughness. What makes us different from many providers is that we are not reliant on third-party vendors. Our global structure means we have broad geographic reach, central accountability and a shared commitment to quality.”

“ Our global structure m

eans we have broad

geographic reach, central accountability and a shared com

mitm

ent to quality.”

12

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Global review 2010 Globalization

Our global approach strengthens our ability to establish and execute on global policies and practices that raise the bar for service quality. Our range of global tools and processes supports our people in evaluating, accepting and serving the right clients with the right services. These tools include GTAC, our Global Tool for client Acceptance and Continuance, and SORT, our Service Offering Reference Tool, which allows people to assess quickly which services can be delivered to our audit and non-audit clients.

Across the world, our member firms are complying with the requirement of the EU 8th Directive that statutory auditors of EU public interest entities publish an annual transparency report. As strong advocates of transparency, we have extended this by publishing a global report that provides an overview of our global governance and quality standards. You can read this report at www.ey.com/transparencyreport.

Our global structureAt Ernst & Young we have a global structure that is unique in our profession and can best meet the demands of today’s and tomorrow’s business. We have one strong global leadership team that sets one single global strategy and agenda. To ensure we are efficient and effective, we have organized our legal entities into similarly sized business units in terms of both people and revenue. These business units, almost all of which are purposely not single countries, are grouped into geographic Areas across the Americas; Europe, Middle East, India and Africa; Asia-Pacific; and Japan. Each business unit’s leadership team works directly with their Area and global leaders to ensure flawless execution. This structure is streamlined — it allows us to make decisions quickly, and ensures that we execute our strategy and provide high-quality service wherever in the world our clients do business.

Over the past year, we’ve been working hard to globalize the support functions shared by our four geographic Areas and our global center. We are creating cost savings by reducing duplication and creating efficiencies of scale and, at the same time, are increasing effectiveness by improving service consistency. In our financial year 2010, globalizing IT services and procurement has resulted in savings of hundreds of millions of dollars. Generating these cost savings creates more opportunity to invest in market-facing activities and broaden our service offerings. The ultimate aim of creating shared global services, however, is to support our client teams and global integration efforts. Globalized support functions help build a global mindset and underpin our global structure. They also develop a consistent, customer-centric approach to internal service, which mirrors the way we serve our clients.

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“Collaboration between teams from member firms of Ernst & Young’s Asia-Pacific and Europe, Middle East, India and Africa (EMEIA) Areas was crucial to help us succeed with this engagement. And the diversity of our team — in terms of culture, skills and location — and our global approach were really recognized by Lenovo,” says Alice Chan-Loeb, Ernst & Young’s Global Client Service Partner for the computer giant.

Since its acquisition of IBM’s PC business in 2005, Lenovo had engaged a number of corporate income tax compliance service providers. Following a two-day workshop in Beijing, Ernst & Young developed a fully automated system that will make Lenovo’s corporate income tax compliance and reporting more efficient.

“Colleagues from many countries came together with professionals from our EMEIA Tax Center to look closely at how Lenovo’s tax, accounting and IT functions interacted with each other and their service providers. This new automated system will improve processes as well as the quality of the data Lenovo uses for tax compliance and reporting. Most importantly, it will also help Lenovo’s tax team free up time for other critical tasks such as planning,” says Alice.

“ The diversity of our team — in term

s of culture, skills and location — and our global approach w

ere really recognized.”

Making tax less taxing

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Global trading, global teaming

“Japanese trading companies — or ‘sogo shosha’ as they are known in Japan — are complex but nimble organizations,” explains Shinichi Saito, Ernst & Young’s Global Client Service Partner for one of the best known of these companies. “They are highly diversified and highly globalized — often earning most of their revenue overseas — although their structure is uniquely Japanese. Their outstanding feature is that they can quickly adapt their business models to match the changing global business environment,” he continues.

Many of these trading companies span a wide range of industries — from fashion to infrastructure to mineral resources to energy — and create economies of scale by linking together functions such as logistics, financing and equity investment, and marketing across businesses and borders. So serving such clients effectively requires the right team and mindset.

“These companies need us to match their global footprint and global outlook as well as deep industry experience across their diverse range of interests. In the case of one client, we support its global operations in more than 50 countries, through dedicated teams all around the world. It works across many different sectors, so our Global Industry Centers in Oil & Gas, Mining & Metals, Power & Utilities and others are vital to the services we provide,” says Saito. “Drawing on them, on our Japan Business Services network and on our other service-line professionals, within a day we can put together the right team for any project, anywhere in the world, which will provide the client with the same high level of service they would receive in Tokyo.”

“ These companies need us to match their global footprint and global outlook.”

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Thinking beyond borders

“Thinking beyond borders and service silos is vital to working with the European Commission,” says Inge Boets, Ernst & Young’s Global Client Service Partner for the EU. “While commissioners for the 27 EU member states are based in Brussels, the EC’s 25,000 civil servants work in multiple countries. The unique structure of Ernst & Young’s Europe, Middle East, India and Africa (EMEIA) Area makes it possible to draw on several hundred government and public sector professionals from countries around the world, providing high-quality service to the EC.”

Since 2007, Ernst & Young has been servicing Audit Framework Contracts for the EC. An Audit Framework Contract is an agreement with an audit firm that sets out terms and conditions under which specific audits can be launched. It’s a way for the EC to rationalize and harmonize relationships with professional services firms. Ernst & Young currently manages five Audit Framework Contracts and has been working closely with the EC to improve the quality of audits, guidance and training — the three pillars of Audit Framework Contracts.

“In 2008, we created a special pool of audit team leaders from across multiple countries. It’s always a challenge when you bring together people from different countries, but the mindset and motivation of our people across EMEIA has made it a success. Our team is highly integrated and that is what makes a difference for the EC,” says Inge.

“ Our team

is highly integrated and that is w

hat makes a difference.”

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Global review 2010 Globalization

Our service linesGlobally, we provide services and resources across four service lines — Assurance, Advisory, Tax and Transaction Advisory — in 16 principal industry sectors. These sectors are aligned with our key target markets and represent our strongest opportunity for growth in our chosen markets. Our focus on industry enables us to build deep connections with our clients through a real understanding of their issues, allowing us to build our knowledge in the areas that matter most to them. Our service lines provide the same services using the same methodologies worldwide.

AssuranceThe global business landscape is being transformed by the impact of the recent financial crisis and by globalization. This transformation is resulting in a number of significant challenges for management, boards, audit committees and external auditors. In this environment, we are more focused than ever on ensuring the relevance of our work to all stakeholders in the capital markets.

Our relationships with audit clients mean that we are uniquely placed to examine the challenges they face in today’s changing environment. We’ve identified five key areas of attention that have emerged for them to consider in the financial and accounting environment: enhancing corporate governance; evaluating overall risk management beyond financial statement risk; evaluating funding and liquidity strategy; assessing the impact of regulatory and accounting rules; and protecting financial reputation.

While we seek to help our clients as they work through these issues, we never lose sight of our commitment to continue to deliver audits of the highest quality. Ernst & Young’s global integration enhances audit quality by enabling greater scale and mobility of resources, more effective use of people and greater consistency in the application of our audit methodology.

TaxIn today’s changing global environment, many companies are re-framing their decision-making processes and adjusting the way they operate to remain competitive. Tax is playing a more visible role in this process from both a strategic and a risk management perspective. As an example, senior-level executives, audit committees and company boards are increasingly including tax risk management as part of overall corporate governance.

For each change that businesses have had to make, governments have had to consider how to react. They have adapted their tax policies and adjusted their administrative approaches to compete more effectively for international business and investment, while collecting the revenue they need to address growing deficits and increased spending needs.

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Companies are looking to our Tax practice for help with tax advisory and reporting, as well as tax risk management. The combination of our strong network of tax professionals, market-leading insights and global focus and integration enables us to address the interconnected needs of our clients’ global operations. In addition, our deep industry and geographic experience positions us well to better understand their businesses, focus on their needs and provide exceptional client service to help them achieve their goals.

Transaction Advisory ServicesWe help clients make better decisions about how to strategically manage capital and transactions. In today’s globalized world, effectively managing capital is challenging. We are seeing more complex transaction structures involving a broader range of buyers, demanding financing arrangements and a greater need to maximize cash release than in the recent past. As a result, more rigorous capital management is more important than ever.

That is why in 2009, we repositioned our Transaction Advisory Services practice around our clients’ most pressing issue — capital. We have aligned ourselves to our clients’ capital agenda — helping them raise, invest, optimize and preserve their capital. This broader positioning enables us to articulate the value we can add beyond our historic focus on transactions and complements the services we offer in Assurance, Tax and Advisory.

AdvisoryOver the past few years we have invested in building our Advisory capabilities and attracting talented Advisory professionals to join Ernst & Young around the world. Today, Advisory is one of our fastest-growing service lines and, with nearly 20,000 advisory professionals in over 140 countries, it is one of the broadest global advisory networks of any professional services organization.

The changing economic environment has created greater demands for risk management, operational efficiency and sustainable performance-improvement services. In response to client demand and the changing economic environment, we have repositioned our capabilities in the area where we believe we can make the most impact and where organizations need the most help.

We have focused our Advisory strategy around transactions, risk and performance improvement — areas closely related to our traditional services. Through our skills and objectivity, we help our clients stabilize and revitalize their organizations and bring stability and confidence to their many stakeholders.

Global review 2010 Globalization

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People

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Global review 2010

“ We aspire to have a leading people culture everywhere in the world.”

People

Globalization and underlying demographic trends mean that competition to employ outstanding people is evolving rapidly. Successful companies are adapting to this by building internationally experienced leadership and equipping their people with the skills to lead in the diverse 21st–century workforce.

We are already proud of our people culture, and we are committed to doing even more. Our people tell us that our inclusive work culture, our global mindset and our focus on quality make Ernst & Young a great place to work and build their careers. Our clients tell us that in recent years we have improved the effectiveness of our teams, our relationship building and our provision of high-caliber people.

We aspire to have a leading people culture everywhere in the world. Creating a culture that attracts and retains outstanding people and helps them thrive leads to better service for our clients. We are investing in three key elements of our culture that enhance what is important to our clients and our people.

Inclusiveness — Recruiting outstanding people is just the start. Inclusiveness means making sure all our people’s voices are heard and valued. This not only helps attract and retain the best people, but also it helps get better answers for our clients and our organization.

Development — Our approach to development involves offering the learning, experiences and coaching all our people need to enrich their careers and deliver the best results for clients, as well as offering additional programs for current and future leaders of our organization.

Engagement — We want all our people to feel enthused by their work and their colleagues and to be comfortable in an organization that gives them the flexibility to achieve their professional and personal aspirations. We engage our people in countless ways, from selecting the right people to lead major change to taking an interest in our people as individuals, to being sure to say thank you for a job well done.

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Distance learning

“Throughout my career I’ve been open to new challenges, wherever they might take me,” says US partner Lee Henderson. Lee started his Ernst & Young career in our San Jose, California, office in 1995, but a thirst for learning and new experiences led him to pursue an international career.

Lee was promoted to partner in 2006 and that year moved to New York to work with the Americas Client Service and Accounts Leader. Just months later, Lee was asked to take on a new role, but this time in London.

“I had boxes that I still hadn’t unpacked from our move to New York, yet here I was, getting ready to move my young family across the Atlantic,” Lee recalls. “But sometimes career paths aren’t linear, and being flexible can open up new worlds of opportunity.”

While in London, Lee played an important role in the formation of our EMEIA Area in 2008, and was later appointed Chief Operating Officer for our UK and Ireland Sub-Area Assurance practice. Along the way, he continued working with technology sector clients. In 2010, Lee returned to the US to serve as audit engagement partner for a Chicago-based insurance broker.

“I can’t say I’ve been following a master plan,” Lee says. “But I’ve been guided by great mentors as well as a passion for the business. Moving around has shown me the importance of getting outside my comfort zone and has certainly built my skills and confidence.”

“ Being flexible can open up new w

orlds of opportunity.”

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Global review 2010 People

InclusivenessAs our clients become more global and expand into new markets, they expect us to be equally diverse. We have a strong commitment to bringing together the right teams for our clients from across our global organization. These teams match our clients’ needs in terms of knowledge, skills and cultural background.

Diverse teams are also proven to stimulate innovation and new ways of problem solving. But they need an inclusive culture to help them function at their best. Inclusiveness is all about making the diverse mix work. It’s about equity and opportunity — making sure that differences are celebrated so that talented people from any background can rise to the top, and ensuring that opportunities to develop and advance are available for all from day one.

Making sure that all our people’s voices are heard and valued not only helps attract and retain the best people, but also it helps get better answers for our clients and our organization.

As the most globally integrated organization in our field, we encourage a global mindset in all of our people. We have made good progress on diversity and inclusiveness in recent years and we want to accelerate that progress. Our leaders are accountable for delivery — for setting goals, developing actions and monitoring results, and for engaging clients around diversity and inclusiveness issues.

A selection of our awards Around the world, our people culture is recognized by external organizations with prestigious awards and accolades. These include:

CAREERS & the disABLED magazine Top 50 Employers, 2010 Readers’ Choice, USA

DiversityIncTop 50 Companies for Diversity, USA, 2010

Employer Branding AwardsExcellence in Training Award, India, 2009

Equal Opportunity for Women in the Workplace Agency (EOWA) EOWA Employer of Choice for Women list, Australia, 2010

Fortune100 Best Companies to Work For, 2010

Great Place to Work InstituteBest Workplaces in Canada, 2010

Great Place to Work Institute MexicoBest Companies to Work for Women in Mexico, 2009

HR Alliance AwardsBest University Recruitment Program in Germany, 2009

Progressive Employers of Canada List, 2010

Stonewall Top 100 Employers The Workplace Equality Index, UK, 2010

Universum GroupThird in World’s Most Attractive Employers — Global Top 50 Rankings, 2010

Working Mother100 Best Companies, USA, 2010

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“ Getting people with different perspectives

together can deliver great results for clients. People tend to spark off each other and perform

their best.”

Team bonding

“Our clients are working across borders more and more. It’s natural as the world becomes more global. So diverse teams with international experience achieve the best results for them,” says Mick Bardella, an Ernst & Young Client Service Partner, whose UK-based team represents six nationalities.

“Several members of the team recently supported a client on a major bond issue,” continues Mick. “The team needed to have a wide range of geographic and industry knowledge. Because of the team’s diverse background, we could cover it exactly.”

Senior Manager Sonia Barnoff, a Canadian on secondment to the UK from our San Francisco office, is part of the team. She finds that working in a diverse team creates special synergies. “On the bond issue, I worked with British, American and Russian colleagues and I found that although we each had our own style of working, it created an excellent dynamic.”

Mick agrees, “Getting people with different perspectives together can deliver great results for clients. People tend to spark off each other and perform their best. It’s a really positive experience for everyone involved.”

Sonia is certain that working in diverse teams has had a profound impact on her career and outlook. “It’s taught me so much,” she says. “When I go back to the US, I can feel the difference that being in London has made. It’s such a multicultural city that you learn to be flexible and adapt really quickly to other cultures. That’s a really important skill in today’s world.”

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“ As a m

entor, it’s important not only

to show understanding, but also to

share your own experiences — both

the ups and the downs.”

Rewarding relationships

“I hope this award inspires others by showing you can strike a balance between career, family and other commitments,” says Transaction Advisory Services partner and working mother Eva Ip, who has been named Young Achiever of the Year by the American Chamber of Commerce, Hong Kong, at its Women of Influence Awards.

The award recognizes Eva’s quick career progression since she joined Ernst & Young in 2002. During that time she has led the establishment of our Shanghai transaction support practice and helped build our Hong Kong Private Equity practice for the Transaction Advisory Services team.

While juggling work and family life, Eva finds time to mentor colleagues and sees her career achievements as a way of encouraging others. “I think, as a mentor, it’s important not only to show understanding, but also to share your own experiences — both the ups and the downs,” Eva says.

“When I became a partner five years ago, my mentor was hugely supportive. Knowing I could draw on that support really helped the transition from senior manager. It was that experience which inspired me to mentor others. Everybody needs that kind of support.”

Eva says that mentoring is not all give, however. “As a mentor you should be taking from the relationship, too. Mentoring has helped me be more understanding of others and strengthened my leadership and management skills. The fact it’s a two-way street makes it even more rewarding. It’s a relationship that should be treasured.”

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Global review 2010 People

DevelopmentA work culture that focuses on people has to have personal development at its heart. Our commitment to developing people helps build an engaging and positive workplace that’s stimulating and rewarding. This way, we can build the skills and knowledge we need to develop and retain the talented people who will drive our future success and deliver a differentiated relationship and service for our clients.

Our global learning and development framework is called EYU. It was launched globally several years ago, and we continue to integrate it throughout our business. EYU gives our people broader experiences and empowers them to take ownership of their careers. It is designed for all of our people and can be tailored to both individual and business needs through learning, experience and coaching.

Learning — A global curriculum has been developed and implemented to deliver consistent learning across our four Areas and service lines. We are investing in improving the system to better balance virtual and classroom learning.

We have re-engineered our milestone programs to combine networking and career development opportunities from joining to retirement. We mark the critical junctures in our people’s careers with events and special coaching programs held around the world for interns, new employees, new managers and new partners. We are currently making our induction program more consistent around the world. In financial year 2010 more than 10,000 people attended “Welcome to EY” and in 2011 around 30,000 new joiners are expected to attend.

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Our global learning curriculum has two primary objectives: first, to build general business skills and acumen, and second, to constantly refresh and enhance technical skills across our service lines to drive excellent client relationships and service.

There are currently more than 16,000 courses on our learning and performance management system, EY Leads. Over the 2010 financial year, our people undertook more than six million hours of learning and completed over 700,000 courses. EY Leads not only delivers learning, but also is used to validate that people have had the technical training they require from a regulatory perspective across our global organization.

Experience — We know that the most enriching and career-enhancing experiences are gained on the job, and we recognize this as a formal part of our career development framework. We are committed to helping our people get the experiences they need, and our service lines plan assignments in ways that not only give our clients high-quality service, but also provide our people with the best experiences for their career development.

Career mobility is an important part of this commitment. We encourage and support cross-border and cross-service-line placements through our Global Exchange Program and Area-wide initiatives, such as our EMEIA Area’s New Horizons program. Mobility helps people develop an inclusive mindset and thrive in an increasingly global market, while matching our clients’ needs.

We also encourage our people to use their professional skills to give back to their communities. Their communities not only benefit from their insights and talents, but also our people benefit in their careers and their lives — often enhancing their leadership, communication or project-management skills.

Coaching — Coaching is about authentic conversations between people at all levels throughout our organization — stretching from daily informal on-the-job coaching to project feedback to periodic formal performance reviews. We are improving our global tools and processes to provide robust and focused feedback and mentoring. We have also increased our investment in formal coaching. For example, we have launched new partner-transition coaching programs and have communities of coaching champions who facilitate programs and give feedback to leadership on coaching.

Global review 2010 People

Our values

Who we are:

People who demonstrate integrity, respect and teaming

People with energy, enthusiasm and the courage to lead

People who build relationships based on doing the right thing

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“ Use your experience and influence to m

ake a difference. You’ll get to m

eet extraordinary people doing extraordinary things.”

Leading with our values

“Use your experience and influence to make a difference. You’ll get to meet extraordinary people doing extraordinary things. That’s my advice to people starting their careers,” says Kelly Grier, Chicago Office Managing Partner.

It’s advice that Kelly has followed herself. In 2010, Kelly was chosen by the World Economic Forum as one of its Young Global Leaders — an exclusive group of high-achievers under 40 whose purpose is to drive positive social change. She joins Alexander Ivlev, Russian Country Managing Partner, who was named a Young Global Leader in 2007.

Kelly was nominated for her efforts in promoting inclusiveness at Ernst & Young, including developing a mentoring program which was used as the blueprint for an inclusiveness initiative across other Americas Sub-Areas, and for the strategic direction she has given to Ernst & Young’s work with Perspectives Charter School. The Mayor of Chicago commended Ernst & Young for its achievements at the school, including activities led by Kelly, such as securing funding for classroom libraries and establishing a mentoring program pairing students to Ernst & Young people.

“I think what the Young Global Leaders program represents — teaming, respect and leadership — aligns directly with Ernst & Young’s values. Ultimately it’s about using these values to have a positive influence on others — at work and beyond,” says Kelly. “I often say you are a role model for the people around you and coming after you. You can’t choose whether or not to be one. You can only choose what kind of role model you want to be.”

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Global review 2010 People

EngagementWorkplace engagement — how people think, act and feel about their work — has long been recognized as a powerful indicator and driver of productivity, commercial success and employee retention. Its importance has been amplified by the downturn and its impact on motivation.

We want our people to feel enthused by their work, their colleagues and our organization, and to be comfortable in an organization that gives them the flexibility they need to achieve their professional and personal aspirations.

We focus our efforts around engagement on three core elements: conversation, choices and celebration.

Conversation — This is about listening to our people and engaging in open and authentic dialogue at all levels of our organization. Our Global People Survey is one of the ways in which we listen to our people. It helps us to identify those areas where we are getting it right, and those areas where we need to try harder — across all aspects of our business. The survey is conducted every other year and tens of thousands of our people worldwide take part.

Choices — The need for flexibility in the modern workplace is becoming more pronounced as a result of business cycles or the multiple demands of work, family and community that 21st-century workers face. We have always supported flexible working arrangements, and our long-term aim is to support and develop a flexible workforce that is responsive to the needs of our clients and the needs of our organization while, at the same time, motivating our people by offering choices in how, when and where they work.

Celebration — Celebration is about reward and recognition. Our Chairman’s Values Award program is a very important example of one way we recognize people who bring their energy and dedication to work to make a difference to their clients and the wider community. This year our annual Chairman’s Values Award attracted more than 2,600 nominations from across Ernst & Young. The awards celebrate those people who live our values to the full.

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Entrepreneurship

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Global review 2010

Entrepreneurship

“ Our commitment to entrepreneurial companies, in both emerging and developed economies around the world, helps ensure that we’re working with more of tomorrow’s global leaders, today.”

Entrepreneurs make a difference. They not only have great ideas, but also the drive to make them a reality. They use their fresh thinking and hard work to create positive social change — bringing new concepts and products to market, and creating jobs and wealth.

Globalization has empowered entrepreneurs. They thrive in high-risk and high-reward environments — where creativity, innovation and flexibility can bring real advantage and disrupt established players. Today, entrepreneurs start out global because the internet and the opening up of international markets has eroded the importance of a single home market. As a group, entrepreneurs represent the best hope of creating sustained economic growth around the world.

In developed economies where growth is still fragile, entrepreneurs have a vital role to play in helping to turn the corner. Entrepreneurship will, over the long run, do far more to create sustainable job growth and fuel economic recovery than government stimulus. By constantly challenging the status quo, entrepreneurs will create new jobs and even new markets.

In the emerging markets, entrepreneurship has an equally important role in propelling future growth. As these economies modernize and become more efficient and their state-owned enterprises privatize, entrepreneurship and foreign direct investment play vital roles in creating employment.

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“People don’t realize how big this transformation is going to be,” says Gil Forer, Ernst & Young’s Global Cleantech Leader. “Moving to a more resource-efficient and low-carbon economy — enabled by cleantech — represents a new industrial revolution, one that governments, multinationals and start-ups will all play big roles in advancing.” To help understand the direction the cleantech revolution is heading, the Global Cleantech Center hosts regular “Cleantech Ignition” sessions that convene leading players in the evolving ecosystem for in-depth discussions.

One of the pioneers of cleantech is Israeli-American entrepreneur Shai Agassi, whose bold vision of zero-emission transportation led him to found electric vehicle (EV) company Better Place in 2007. Agassi’s vision encompasses not only EVs, but also, critically, the network of charge spots, battery-switch stations, software and services that support them. The switch stations, which exchange

charged batteries for depleted ones in less time than it takes to fill a car with gasoline, allow EVs to match the extended range of internal combustion cars. Better Place has created a new business model as well. It separates ownership of the battery from the EV and uses a service-based model to make EVs affordable. By combining this technology and business model, Better Place has created a scalable, low-cost solution that could reduce the dependency on oil and drastically cut the world’s CO² emissions, while reducing the cost of driving to just pennies per mile.

“Better Place is an early-stage company that has the potential to change the world,” explains Gil. “Companies such as Better Place choose to work with us because they recognize our long experience with emerging high-growth businesses, and understand the role we’re playing in fostering cleantech insight-based discussion and debate.”

“ Moving to a more resource-efficient and low-carbon economy — enabled by cleantech — represents a new industrial revolution.”

Creating a Better Place

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“ Today, Google is one of our biggest global clients, but we were just as interested in working with them when they were five guys we were eating some papadums with.”

From garages to greatness

“Our first meeting with Google was over lunch at an Indian restaurant in Silicon Valley, back in 1999, just before they received their first venture-capital backing,” explains Dave Cabral, Ernst & Young’s Global Client Service Partner for Google. “Five people were there from Google and, at the time, those were the only five people who worked there. By the following year they’d grown to 20 employees and we did their first audit.”

Through the years Ernst & Young has helped Google pass many of its milestones, including strategic investments, its initial public offering and acquisitions.

Many of our largest clients have been served by us from their earliest stages. We’ve been working with many of our technology clients since long before they became household names. We have worked with some of the

world’s best-known IT firms for more than 20 years and with well-known internet giants for more than 10, and today we’re working with the next generation of technology leaders. We recognize the potential in these high-growth companies and provide the help they need to achieve it.

“Today, Google is one of our biggest global clients — but we were just as interested in working with them when they were five guys we were eating some papadums with,” says Dave. “Because whether a client is big or small we only know one way to serve them — the very best we can.”

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Global review 2010 Entrepreneurship

We have long recognized the potential of entrepreneurs. Over the past three decades, we have been working with entrepreneurs, adapting our experience, industry capabilities and resources to work for entrepreneurial, fast-growth companies. We work with a range of businesses, from those receiving their first venture funding through to large mid-cap companies, whose value may be measured in billions of dollars.

Our work with entrepreneurs is an important part of our strategy for future growth. In 1960 it took 20 years for the Fortune 500 to turn over by a third. Today, it takes just four years. Our commitment to entrepreneurial companies, in both emerging and developed economies around the world, helps ensure that we’re working with more of tomorrow’s global leaders, today.

Entrepreneur Of The Year — celebrating entrepreneursWe started the Entrepreneur Of The Year Awards program to celebrate successful entrepreneurs, so they could share their stories, inspire others and receive the recognition they deserve. Our first program took place in 1986 in Milwaukee, Wisconsin, in the United States. By 1987 it was held across 11 US cities. And in 1993 the program started to expand internationally. Today the program spans more than 140 cities in 50 countries, which together represent more than 90% of the global economy.

Over the past five years, more than 6,500 entrepreneurs joined the Entrepreneur Of The Year alumni. A “who’s who” of both developed and emerging markets, these alumni include many household names. Over half of today’s top 100 NASDAQ companies have won Entrepreneur Of The Year, and most received the award before they achieved top 100 status.

Ten years ago we decided to go global and started World Entrepreneur Of The Year. Held annually in Monaco, Entrepreneur Of The Year country winners compete for the World Entrepreneur Of The Year title. Past winners include Michael Spencer of ICAP plc, Guy Laliberté of Cirque du Soleil and Narayana Murthy of Infosys Technologies.

As an extension of the Entrepreneur Of The Year program, forums to share knowledge and generate networking opportunities for the Entrepreneur Of The Year alumni were held in 36 countries during 2010.

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Working with emerging market entrepreneursRecognizing the potential of emerging market entrepreneurs, we are planning to extend the Entrepreneur Of The Year program to 14 new countries over the next 24 months. The most recent emerging markets to join the program are Argentina and Vietnam.

We also support Endeavor, a not-for-profit organization that helps high-impact entrepreneurs in emerging markets improve and grow their businesses. We participate in Endeavor’s network, which covers more than 10 emerging markets and helps entrepreneurs by connecting them with a network of seasoned business leaders, who provide mentoring, strategic advice and inspiration. Endeavor’s goal is to transform emerging countries by establishing high-impact entrepreneurship as the leading force for sustainable economic development.

Endeavor builds five types of capital. Financial: creating jobs and wealth by unleashing new talent. Human: developing leaders through hands-on training and advising. Social: mobilizing networks to attract investors and business mentors. Cultural: showcasing role models to inspire the next generation. Intellectual: leading cutting-edge research to harness innovation.

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“Pharmaceuticals is probably not the first sector that comes to mind when people think about business in the Middle East, but it has a strong and growing presence,” says Waddah Barkawi, Ernst & Young’s Global Client Service Partner for Amman-based Hikma Pharmaceuticals. Hikma, which was named Ernst & Young Middle East Entrepreneur Of The Year in 2007, was founded by entrepreneur Samih Darwazah in 1978. Since then, it has grown from just two products and sales of US$150,000 to 4,000 products and sales of more than US$600 million across 49 countries last year.

Ernst & Young has worked with Hikma on a variety of projects over the years. In 2004, we reviewed internal controls in the run up to the company’s 2005 listing on the London Stock Exchange, where it is a member of the

FTSE 250 Index. Since 2006, we have provided Hikma’s group internal audit function across its 12 worldwide locations. And we have performed due diligence and valuations work on Hikma’s acquisitions and advised on the company’s supply chains and strategy.

“With its operations across the Middle East, North Africa, the United States and Europe, Hikma has true global impact,” explains Waddah. “Our global reach, our strong relationship and our understanding of entrepreneurial companies allow us to provide the kind of service that Hikma deserves and demands.”

“ Our global reach, our strong relationship and our understanding of entrepreneurial companies allow us to provide the kind of service that Hikma deserves and demands.”

Delivering healthy returns

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Initial public offeringsWe are a market leader in guiding companies through successful initial public offerings (IPOs). We are the number-one brand in IPO market share, and, over the past five years, we have helped over 1,200 companies go public around the world. Many of the emerging entrepreneurial companies we have worked with have gone on to become major global organizations.

An IPO can be one of the best routes to funding growth for fast-growing companies seeking to raise capital. But it’s not a decision that can be taken lightly, and the most successful companies approach an IPO as a transformational process rather than a pure financing event or an endgame. Our “IPO Readiness” methodology and diagnostic, as well as our IPO Retreats, help business leaders at an early stage of the planning process.

Our IPO Retreats are designed to help business leaders decide whether an IPO is the right step for them and give advice on how best to approach and prepare. The retreats provide attendees with a confidential environment where they can hear other people’s experiences of IPOs and meet other leaders in a similar position. By analyzing why companies go public — their objectives and the results — and exploring alternative routes to finance, the retreats offer a complete run-through of what is involved, allowing leaders to test the waters without risking their businesses.

Venture capitalOur Venture Capital Advisory Group works with leading venture capital firms and their portfolio companies in innovation hotbeds around the world. Our aim is to give venture-backed emerging companies the best possible start on their journey to market leadership.

Acting as a single point of contact for venture capital funds, our Venture Capital Advisory Group adapts our global resources to the needs and issues facing fast-growth companies and their investors. In addition to providing quarterly insights, we hold regular workshops and coaching sessions, such as IPO Readiness, to enable entrepreneurs to connect with the venture capital community and with each other, and share and learn from leading practices.

Our Venture Capital Advisory Group approach has enabled us to deepen our relationships with leading venture capital firms from Silicon Valley and Tel Aviv to Beijing and Bangalore. It has also enabled us to focus on high-growth companies in future growth industries, such as cleantech.

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Global review 2010 Entrepreneurship

Cleantech The world’s resources and natural environment are under unprecedented pressure from population growth and increased consumption by an emergent middle class. Resulting higher energy and commodity prices, and concerns around climate change and energy security, are pressuring companies and governments to transform to a more resource-efficient, lower-carbon economy.

This transformation is being enabled by clean technology innovation. Much progress has been made in cleantech in recent years, as evidenced by increased private and public sector investment, the creation of new market leaders, supportive new policies and regulations and a robust pipeline of innovation in both technology and business models. In 2010, total worldwide investments in clean energy are estimated at more than US$175 billion. And its impact will only continue to grow. Many governments view cleantech as an important source of job creation and have deployed cleantech strategies to drive growth and competitive advantage by stimulating an innovation-based economy.

Our Global Cleantech Center, one of our 16 global industry centers, helps cleantech companies, corporations and governments to make the most of opportunities and realize the benefits of cleantech in this transforming world. As part of our commitment to this sector, each year we host a global series of cleantech roundtables called ignition sessions. These bring together key stakeholders including innovators, corporations, investors, utilities, government and non-governmental organizations to discuss cleantech issues. This year’s sessions, held in Munich, Shanghai and Silicon Valley, focused on the consumer, supply chain and infrastructure issues that need to be addressed to move electric vehicles from vision to reality.

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Global review 2010 Entrepreneurship

Strategic Growth ForumListed by Forbes.com as one of its seven “get-ahead executive retreats”, our Strategic Growth Forum, held in Palm Springs, California is one of the United States’ most prestigious gatherings of high-growth, market-leading companies. The annual event brings together top entrepreneurs and world-leading CEOs, investors, industry experts and government officials. It regularly attracts more than 1,500 attendees who come to network, learn and hear inspiring stories from some of the world’s most successful business people.

In 2010, the Strategic Growth Forum program covered topics such as strategies for growth, the latest thinking on the transaction market and available capital, and the critical success factors of mergers, acquisitions and IPOs. Speakers included Bill Ford, Executive Chairman, Ford Motor Company; A.G. Lafley, former Chairman, President and CEO, Procter & Gamble; and Arthur Levitt, former Chairman, United States Securities and Exchange Commission.

The Strategic Growth Forum has recently expanded outside of the US and the first event to be held in Brazil took place in October 2010.

Exceptional enterprise diagnosticIn the 30 years that we have been dedicated to the entrepreneurial market and the 24 years that we’ve been running Entrepreneur Of The Year, we have worked with tens of thousands of entrepreneurial businesses. We have used the knowledge that we built up over the years to analyze why some companies rise to the top. The outcome was the Exceptional Enterprise diagnostic. We use this diagnostic to work with companies and take them through the three growth stages that companies have to go through to achieve market leadership — from emerging to rapid-growth to next-generation leader — the challenges they must address along the way, and the attributes they need to succeed.

Three growth stages

EmergingCompanies concentrate on identifying the market opportunity, available sources of funding and the right people to help kick-start the business.

Rapid-growthCompanies focus their energies on becoming a supplier of choice for their most valuable customers, on managing expansion and securing additional capital to accelerate growth.

Next-generation market leaderThe best businesses turn their attention to working effectively across global markets, try to balance the entrepreneurial spirit with corporate culture and ensure they optimize their capital structure to help meet shareholder expectations.

Achieving market leadership means successfully addressing challenges in six areas:

1. Customer recruitment and management

2. Finance

3. Managing risk

4. Operational effectiveness

5. People recruitment and retention

6. Transactions and alliances

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“ They’ve got passion, vision, resilience and single-minded determination. These timeless traits are what make these entrepreneurs and their companies exceptional.”

“Entrepreneurs drive economic growth and social change,” says Greg Ericksen, Ernst & Young’s Global Vice Chair — Strategic Growth Markets. “They create jobs and markets and their innovations enrich lives. But they often don’t get the recognition they deserve. We started Entrepreneur Of The Year and World Entrepreneur Of The Year to celebrate their positive contribution and inspire others.”

Greg has been involved with our Entrepreneur Of The Year program from its beginnings in the United States in 1986. He led its international expansion and founded World Entrepreneur Of The Year — the only global award for entrepreneurs. World Entrepreneur Of The Year celebrated its 10th anniversary this year. In that time, Greg has met over 300 World Entrepreneur Of The Year finalists — all of whom have won Entrepreneur Of The Year in their home countries.

“Thinking about the entrepreneurs that I’ve met over the years and what’s changed and what’s stayed the same, I think what’s changed is that entrepreneurs today have more global opportunities than they did just 10 years ago,” Greg adds. “Information technology, globalization and the rise of the emerging markets have been good for all businesses, but have been especially good for entrepreneurs. They have the speed and agility to take advantage of the opportunities that these changes have presented.

“What’s stayed the same is the entrepreneurs themselves. Entrepreneurs are still carving out their own success. They’ve got passion, vision, resilience and single-minded determination. These timeless traits are what make these entrepreneurs and their companies exceptional.”

World of opportunity

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Global review 2010 Entrepreneurship

Corporate responsibility focusOne of the ways that we demonstrate our corporate responsibility is through encouraging entrepreneurship as a tool to empower people, generate jobs and strengthen communities around the world. We support and serve entrepreneurship through the following international programs: Endeavor, Corporate Responsibility Fellows Program, Entrepreneurial Winning Women, Kiva and E-Mentor Corps.

Our Corporate Responsibility Fellows program sends high-performing Ernst & Young people to high-impact entrepreneurs in Central and South America for three-month assignments. These projects are designed to use our people’s skills to improve the effectiveness of the entrepreneurs’ key business processes.

Our Entrepreneurial Winning Women program offers high-potential female entrepreneurs personalized one-on-one business insights and access to networks of established entrepreneurs, executives, advisors and investors with the aim of helping them to take their businesses to the next level. In addition to the US program established three years ago, Entrepreneurial Winning Women was successfully launched in Indonesia in 2010, with several other countries anticipated to launch in 2011 and 2012.

We also work with Kiva, the world’s first not-for-profit website that provides person-to-person micro-lending. We have made an in-kind donation of US$1 million of professional services and assist Kiva in increasing the transparency of its micro-finance process.

In 2010, we joined the US State Department’s E-Mentor Corps, a new program designed to match mentors in the US business community with aspiring entrepreneurs from developing countries around the world. Through E-Mentor Corps, an entrepreneur seeking mentorship can go online and find a person with the expertise they need on everything from securing financing to writing a business plan.

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Facts and figures

Ernst & Young’s combined global revenues for the financial year ended 30 June 2010 were US$21.3 billion, compared with US$21.4 billion in 2009.

Ernst & Young’s 2010 financial year saw a mixed performance, with decreases in revenue in the first half, offset by a strong rebound in the third and fourth quarters. Revenues in the second half of the financial year increased by 5.3% in US dollar terms.

The return to revenue growth in the second half of our 2010 financial year was particularly strong in our Transaction Advisory Services and Advisory service lines, which posted growth rates of 9.4% and 13.3% respectively, benefiting from improved business confidence and an increase in corporate activity. Our Assurance and Tax service lines saw more modest growth in the same period, reflecting continued pricing pressure that was more than offset by an increase in audit market share and an increase in work from existing clients.

Across Ernst & Young’s four geographic Areas, our newly formed Asia- Pacific Area recorded a 9.0% growth in revenues; the Americas, EMEIA and Japan Areas showed 3.2%, 0.9% and 0.3% declines, respectively. All Areas showed improvement in performance in the second half of 2010.

Over the past four years, we have invested more than US$1.2 billion, mainly in the emerging markets. This commitment to the emerging markets resulted in high single-digit to modest double-digit growth in many markets, including Africa, China, India and Brazil. Based on the success of our first global investment program, as well as the opportunities we continue to see in the emerging markets, we will continue to invest at comparable levels for the foreseeable future.

The momentum for growth is continuing into the 2011 financial year. Corporate activity and demand for our services is picking up in many markets, with the emerging economies leading the world out of the downturn. We are well-positioned to benefit from that recovery as we continue to invest in the future of our organization, whether it is new geographic markets or the development of our people.

“ Corporate activity and demand for our services is picking up in many markets, with the emerging economies leading the world out of the downturn.”

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Page 44: Ernst & Young Global Review 2010

Global review 2010 Facts and figures

% change

Revenue by Area US$ millions FY10 FY09 US$ local currency

Americas 8,373 8,647 —3.2 —4.6

EMEIA 9,551 9,636 —0.9 —2.9

Asia-Pacific 2,138 1,961 9.0 1.5

Japan 1,193 1,196 —0.3 —6.7

TOTAL 21,255 21,440 —0.9 —3.5

% change

Revenue by service line US$ millions FY10 FY09 US$ local currency

Assurance 10,061 10,141 —0.8 —3.9

Tax 5,671 5,822 —2.6 —4.1

Advisory 3,662 3,589 2.0 —1.2

TAS 1,861 1,888 —1.4 —3.2

TOTAL 21,255 21,440 —0.9 —3.5

42

Performance and people

Ernst & Young is not a global corporate structure where ownership, legal control, or profits are consolidated at a central parent entity. The financial information presented here represents combined, not consolidated, revenues, eliminates inter-firm billings and includes expenses billed to clients.

Revenue by client type

US$ millions

FY09

12,385Audit clients

9,055Non-auditclients

TOTAL

21,440

FY10

12,354Audit clients

8,901Non-auditclients

TOTAL

21,255

Page 45: Ernst & Young Global Review 2010

Global review 2010 Facts and figures

People by Area FY10 FY09 % change

Americas 40,318 41,487 —2.8

EMEIA 67,771 68,732 —1.4

Asia-Pacific 25,628 26,851 —4.6

Japan 7,247 7,371 —1.7

TOTAL 140,964 144,441 —2.4

People by service line FY10 FY09 % change

Assurance 58,438 60,938 —4.1

Tax 26,747 27,446 —2.5

Advisory 19,479 18,276 6.6

TAS 7,332 7,876 —6.9

Practice support 28,968 29,905 —3.1

TOTAL 140,964 144,441 —2.4

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FY10 headcount numbers reflect personnel as of 30 June 2010.

Fortune 2010 Global 500

% of companies served by Ernst & Young

Forbes 2010 Global 2000

% of companies served by Ernst & Young

1 Companies where Ernst & Young revenues exceeded US$500k in FY10.

57%

Non-audit clients1 26%

Audit clients

All other companies in the index

17% All other companies in the index

40%

26%

Audit clients34%

Non-audit clients1

Page 46: Ernst & Young Global Review 2010

Global review 2010 Facts and figures

Americas

Revenue US$ millions

8,373People

40,318

EMEIA

Revenue US$ millions

9,551People

67,771

Offices worldwide

44

Number of people

1—100

101—500

501—1,500

1,501—3,000

3,000+

Page 47: Ernst & Young Global Review 2010

Asia-Pacific

Revenue US$ millions

2,138People

25,628

Japan

Revenue US$ millions

1,193People

7,247

Total

Revenue US$ millions

21,255People

140,96445

Global review 2010 Facts and figures

Page 48: Ernst & Young Global Review 2010

Norman Lonergan Global Vice Chair Advisory

Albert Ng Representative of Emerging Market Practices

Steve Howe Area Managing Partner Americas

Global review 2010 Facts and figures

Global Executive

The Global Executive, our highest management body, brings together the three dimensions of Ernst & Young — functions, services and geographies.

46

Mark Otty Area Managing Partner EMEIA

Mark Weinberger Global Vice Chair Tax

Lou Pagnutti Area Managing Partner Asia-Pacific

Yoshitaka Kato Area Managing Partner Japan

John Murphy Global Managing Partner Markets

Christian Mouillon Global Vice Chair Assurance

Pip McCrostie Global Vice Chair Transaction Advisory Services

Peter Griffith Global Managing Partner Operations & Finance

Sam Fouad Global Managing Partner People

Victoria Cochrane Global Managing Partner Quality & Risk Management

John F. Ferraro Chief Operating Officer

James S. Turley Chairman & Chief Executive Officer

Page 49: Ernst & Young Global Review 2010

Global review 2010 Facts and figures

Global Advisory Council

Leadership team

James S. Turley Chairman and Chief Executive Officer New York and London John F. Ferraro Chief Operating Officer London Victoria Cochrane Global Managing Partner — Quality & Risk Management London Peter Griffith Global Managing Partner — Operations & Finance London Sam Fouad Global Managing Partner — People London John Murphy Global Managing Partner — Markets London Norman Lonergan Global Vice Chair — Advisory London Pip McCrostie Global Vice Chair — Transaction Advisory Services London Christian Mouillon Global Vice Chair — Assurance Paris Mark Weinberger Global Vice Chair — Tax Washington, D.C.

Steve Howe Area Managing Partner — Americas New York Trent Henry Canada Toronto Deborah Kissire East Central (US) McLean Carmine DiSibio Financial Services Organization New YorkRonen Barel Israel Tel AvivAlberto Tiburcio Mexico and Central America Mexico City Anthony Anderson Midwest (US) Chicago Mark J. Manoff Northeast (US) New York Jorge Menegassi South America São PauloKarole Lloyd Southeast (US) AtlantaDavid Alexander Southwest (US) DallasKay Matthews West (US) San Jose

Mark Otty Area Managing Partner — EMEIA London Ajen Sita Africa JohannesburgPieter Jongstra BeNe Rotterdam Karl Johansson CIS MoscowPhilip Hourquebie Central and Southeast Europe IstanbulJean-Pierre Letartre FraLux Paris Andy Baldwin Financial Services Organization LondonGeorg Graf Waldersee GSA BerlinRajiv Memani India GurgaonDonato Iacovone Mediterranean MilanAbdulaziz Al-Sowailim MENA RiyadhTorstein Hokholt Nordics OsloScott Halliday UK&I London

Lou Pagnutti Area Managing Partner — Asia-Pacific Hong KongSteven Phan Asean SingaporeKeith Pogson Financial Services Organization Hong KongAlbert Ng Greater China ShanghaiSeungWha Gweon Korea SeoulRob McLeod Oceania Sydney

Yoshitaka Kato Area Managing Partner — Japan Tokyo

Steve Almassy Global Vice Chair — Office of the Chairman Accounts/Industry London

Ratan Engineer Asset Management London Mike Hanley Automotive Detroit Bill Schlich Banking & Capital Markets New York Gil Forer Cleantech New York Howard Martin Consumer Products LondonPhilippe Peuch-Lestrade Government & Public Sector ParisPete Porrino Insurance New YorkCarolyn Buck Luce Life Sciences New YorkGlen Giovannetti Life Sciences BostonJohn Nendick Media & Entertainment Los AngelesMike Elliott Mining & Metals SydneyDale Nijoka Oil & Gas HoustonBen van Gils Power & Utilities DusseldorfJohn Harley Private Equity LondonHoward Roth Real Estate New YorkPatrick Hyek Technology San JoseVincent de La Bachelerie Telecommunications Paris

Beth Brooke Global Vice Chair — Public Policy, Sustainability and Stakeholder Engagement Washington, D.C.

Oscar Aguirre Mexico CityLaurence Avram Diday ParisCharles Barone ChicagoJohn Belli IrvineCoen Boogaart AmsterdamJohan van den Bos AmsterdamOwen Chan Hong KongJohn Cole LondonLoutfi Echhade RiyadhChristoph Ehrhardt StuttgartEric Golenvaux BrusselsFrancisco González Carrera MadridKelly Grier ChicagoKatsuhiko Hara TokyoAlexei Ivanov MoscowCraig Johnson ChicagoSofia Kalomenides AthensLynn Kraus SydneyMylene Levac-Wolf MontrealMarc Levy New YorkPekka Luoma HelsinkiMichael Lynch-Bell LondonKreesen Naidu DurbanWinston Ngan SingaporeVic Noel ManilaDanita Ostling New YorkTony Pampena TorontoLuiz Carlos Passetti São PauloGunther Ruppel FrankfurtSung Ho Shin SeoulAmitabh Singh GurgaonDaniel Smith SeattleThomas Stenz ZurichPenny Stocks LondonJohn Thomopoulos New YorkAkira Toda TokyoLars Träff StockholmMichael Wachtel MelbourneC.Y. Wang Los AngelesSteve Wills LondonDonald Zimmerman Atlanta

The Global Advisory Council includes approximately 40 senior client-serving partners drawn from member firms across the four Ernst & Young Areas.

These partners, who otherwise do not hold senior management roles, are elected by their peers.

They advise Ernst & Young on policies and strategies. The approval of the Global Advisory Council is required for a number of significant matters that could affect the organization.

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Global review 2010 Facts and figures

48

Americas

Canada

East Central (US)

Financial Services Organization Bahamas, Bermuda, Cayman Islands, US

Israel

Mexico and Central America (MECASA) Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama

Midwest (US)

Northeast (US)

South America (SASA)Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Venezuela

Southeast (US) Aruba, Barbados, Jamaica, Netherlands Antilles, Puerto Rico, Trinidad and Tobago

Southwest (US)

West (US)

EMEIA

Africa Angola, Botswana, Congo, Democratic Republic of the Congo, Equatorial Guinea, Ethiopia, Gabon, Ghana, Guinea, Ivory Coast, Kenya, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Tanzania, Uganda, Zambia, Zimbabwe

BeNeBelgium, Netherlands

CIS Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Russia, Ukraine, Uzbekistan

CSE Albania, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Greece, Hungary, Latvia, Lithuania, FYR of Macedonia, Malta, Moldova, Montenegro, Poland, Romania, Serbia, Slovakia, Slovenia, Turkey

FraLux Algeria, France, Luxembourg

Financial Services Organization

GSA Austria, Germany, Liechtenstein, Switzerland

India

Mediterranean Italy, Portugal, Spain

Middle East and North Africa (MENA) Afghanistan, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Pakistan, Palestinian Authority, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates

Nordics Denmark, Finland, Iceland, Norway, Sweden

UK&I United Kingdom, Republic of Ireland

Asia-Pacific

Asean Brunei, Cambodia, Guam, Indonesia, Laos, Malaysia, Maldives, Mongolia, N. Mariana Islands, Philippines, Singapore, Sri Lanka, Thailand, Vietnam

Financial Services Organization

Greater ChinaChina, Taiwan

Korea

OceaniaAustralia, Fiji, New Zealand

Japan

Areas and Sub-Areas

Page 51: Ernst & Young Global Review 2010

Design Studio 2br

Photography Jonathan Gayman Ken Lennox Bill Robinson John Wildgoose

Print St Ives Westerham Press ISO14001, FSC certified and CarbonNeutral®

Our Global review 2010 is printed on Munken Polar and Hello Matt papers. These papers comprise virgin wood fiber from well-managed forests independently certified according to the rules of the Forest Stewardship Council (FSC). It is manufactured at a mill that has been awarded the ISO14001 certificate for environmental management. The mill uses pulps that are elemental chlorine free (ECF) process and the inks used are all vegetable oil based.

Page 52: Ernst & Young Global Review 2010

Ernst & Young

Assurance | Tax | Transactions | Advisory

About Ernst & YoungErnst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 141,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

For more information, please visit www.ey.com

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

© 2010 EYGM Limited. All Rights Reserved.

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