Audit Report

1 – About Klynveld, Peat Marwick and Goerdeler -- (KPMG)

a - History:

The firm was established in 1870 when William Barclay Peat formed an accounting firm in London. In 1877 accountancy firm Thomson McLintock opened an office in Glasgow and in 1911 William Barclay Peat & Co. and Marwick Mitchell & Co. merged to form Peat Marwick Mitchell & Co, laterk nown as Peat Marwick.

Meanwhile in 1917 Piet Klijnveld opened his accounting-firm in Amsterdam. Later he merged with Kraayenhof to form Klynveld Kraayenhof & Co.

In 1979 Klynveld Kraayenhof & Co. (Netherlands), Thomson McLintock (United States) and Deutsche Treuhandgesellschaft (Germany) formed KMG (Klynveld Main Goerdeler) as a grouping of independent national practices to create a strong European-based international firm. Then in 1987 KMG and Peat Marwick joined forces in the first mega-merger of large accounting firms and formed a firm called KPMG in the US, and most of the rest of the world, and Peat Marwick McLintock in the UK.

In 1990 the two firms settled on the common name of KPMG Peat Marwick McLintock but in 1991 the firm was renamed KPMG Peat Marwick and in 1999 the name was reduced again to KPMG.

In 1997 KPMG and Ernst & Young announced that they were to merge, in a manoeuvre largely seen as a spoiling tactic over the merger of Price Waterhouse and Coopers & Lybrand. However that merger, to form PricewaterhouseCoopers, was granted regulatory approval while the KPMG/Ernst & Young tie-up was later abandoned.

In 2001 KPMG divested its U.S. consulting firm through an initial public offering of KPMG Consulting Inc, which is now called BearingPoint, Inc. In early 2009, BearingPoint filed for Chapter 11 bankruptcy protection and proceeded to sell portions of the firm to Deloitte, PricewaterhouseCoopers, and other parties.

The UK and Dutch consulting arms were sold to Atos Origin in 2002.

In 2003 KPMG divested itself of its legal arm, Klegal and KPMG LLP sold its Dispute Advisory Services to FTI...