Understanding the complexities of corporate family tree research

Understanding the complexities of corporate family tree research: What do Ben & Jerry's and Axe Body Spray have in common? Risk management and independence team Grant Thornton International Ltd © 2013 Grant Thornton International Ltd. All rights reserved.

Global presence: Grant Thornton International Ltd. and its member firms • 42, 204 Grant Thornton people worldwide • 729 offices • 140+ member firms • 130+ countries © 2015 Grant Thornton International Ltd. All rights reserved.

Defining Grant Thornton International Limited (GTIL) • GTIL and the member firms are not a worldwide partnership. • GTIL and each member firm is a separate legal entity. • Services are delivered by the member firms. • GTIL does not provide services to clients. • GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another's acts or omissions. © 2015 Grant Thornton International Ltd. All rights reserved.

Grant Thornton International Ltd. member firms are considered one firm • Certain regulators, such as IFAC and the SEC, treat GTIL and its member firms as “one firm” for independence purposes. • Such treatment is mainly based on the use of a common name throughout the network and shared tools and methodologies. © 2015 Grant Thornton International Ltd. All rights reserved.

What are our biggest challenges in proposing for global business? • avoiding conflicts of interest, and • maintaining independence © 2015 Grant Thornton International Ltd. All rights reserved.

Maintaining independence and avoiding conflicts of interests • Member firms and their affiliates must: • Maintain independence when providing non-audit services to either an audit client, its related entities, or an attest client • consider if a potential assignment could cause a conflict of interest • conduct international relationship checks before proposing a new service to an existing client, or services to a new client • Certain business relationships between member firms and audit clients, or with related entities of the audit client, can create threats to independence and objectivity © 2015 Grant Thornton International Ltd. All rights reserved.

Inherent risk of a conflict Providing service to an existing or prospective client where a relationship already exists with another member firm Member Firm A: Grant Thornton US Audit services Subsidiary © 2015 Grant Thornton International Ltd. All rights reserved. Non-audit services Member Firm B: Grant Thornton Brazil

Risks of not performing a relationship check resignation from engagements as a result of prohibited services being performed damage to the Grant Thornton brand © 2015 Grant Thornton International Ltd. All rights reserved. regulatory disciplinary action, including prohibition from performing audits of public interest entities monetary remuneration to audit clients for damages incurred

What Is A Potential Conflict? Proposed services and potential conflicting services Audit Conflicts Examples All reported non audit services • • Non-Audit All reported audit services Tax • Assurance review Advisory • Audit Transfer pricing • Global Restricted Payroll services List Consulting services Bookkeeping Outsourcing © 2015 Grant Thornton International Ltd. All rights reserved. All services • • Any litigation/legal work Forensic services Vendor relationships Business relationships Personal investments Liquidation services Master service agreements

Escalating steps in resolving conflicting assignments Step 5: Resolution at the GTIL CEO level Step 4: Attempt resolution between global service line leaders Step 3: Attempt resolution between the firms' national CEOs Step 2: Attempt resolution between the firms' national service line leaders Step 1: Attempt resolution between the firms' engagement partners © 2015 Grant Thornton International Ltd. All rights reserved.

Issues to consider in resolving conflicting assignments • impact on the client • impact on the member firms • impact on Grant Thornton’s reputation in the marketplace © 2015 Grant Thornton International Ltd. All rights reserved.

The three roles within the International Relationship Checking process Initiating member firm Responding member firm © 2015 Grant Thornton International Ltd. All rights reserved. GTIL Risk and Independence

The GTIL Risk management and independence team role • GTIL Risk management and independence team • ensures the entire family tree is captured • validates that the IRC form is filled out properly • checks the client and the line of ownership up to global ultimate parent against internal restricted lists © 2015 Grant Thornton International Ltd. All rights reserved.

Grant Thornton International – Risk management and independence team © 2015 Grant Thornton International Ltd. All rights reserved.

What do Ben & Jerry's and Axe Body Spray have in common? © 2015 Grant Thornton International Ltd. All rights reserved.

Family tree research GUO 55% Significant Shareholder 25% Brother- sister 50% Parent Client Subsidiary 50% Subsidiary © 2015 Grant Thornton International Ltd. All rights reserved. Brother-sister Subsidiary Significant Investee 25% Brother-sister

Information resources for family tree research • Bureau Van Dijk Hyper Ownership Viewer (BVD) database • Internet resources – SEC filings – Annual Reports – Bloomberg – Crunch. Base – Open Corporates © 2015 Grant Thornton International Ltd. All rights reserved.

Challenges and Opportunities © 2015 Grant Thornton International Ltd. All rights reserved.

Contact information Christina John Rachael Altman Malcolm Sturdevant Team Lead, Senior Associate - Corporate research analyst, Risk management and independence T (direct) +1 312 602 8993 E christina. john@gti. gt. com Senior Associate Corporate research analyst, Risk management and independence T (direct) +1 312 602 8192 E rachael. altman@gti. gt. com Associate - © 2015 Grant Thornton International Ltd. All rights reserved. Corporate research analyst, Risk management and independence T (direct) +1 312 602 8274 E malcolm. sturdevant@gti. gt. com

Questions & feedback © 2015 Grant Thornton International Ltd. All rights reserved.