Philips 2004 Annual Report Download - page 166
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Supervisory Board members’ and Board of Management members’
interests in Philips shares
Members of the Supervisory Board and of the Board of Management are not allowed to take
any interests in derivative Philips securities.
number of shares
as of as of
December 31, December 31,
2003 2004
L.C. van Wachem 17,848 17,848
W. de Kleuver 4,131 4,131
L. Schweitzer 1,070 1,070
J.M. Thompson 1,000 1,000
G.J. Kleisterlee 41,137 107,004
J.H.M. Hommen 317,295 402,184
G. Dutiné – 3,912
A. Huijser 25,288 30,508
O
34 Financial instruments, derivatives and risks
Philips is exposed to currency risk, interest rate risk, equity price risk, commodity price risk,
credit risk and country risk.
The Company does not purchase or hold financial derivative instruments for trading purposes.
Currency risk
Currency fluctuations may impact Philips’ financial results. The Company has a structural
currency mismatch between costs and revenues, as a substantial proportion of its production,
administration and research & development costs is denominated in euros, while a substantial
proportion of its revenues is denominated in US dollars. Consequently, fluctuations in the
exchange rate of the US dollar against the euro can have a material impact on Philips’ financial
results. In particular, a relatively weak US dollar during any reporting period will reduce Philips’
income from operations, while a stronger US dollar will improve it.
The Company is exposed to currency risk in the following areas:
Gtransaction exposures, such as forecasted sales and purchases and receivables/payables resulting
from such transactions;
Gtranslation exposure of net income in foreign entities;
Gtranslation exposure of investments in foreign entities;
Gexposure of non-functional-currency-denominated debt;
Gexposure of non-functional-currency-denominated equity investments.
It is Philips’ policy that significant transaction exposures are hedged by the businesses.
Accordingly, all businesses are required to identify and measure their exposures from material
transactions denominated in currencies other than their own functional currency. The Philips
policy generally requires committed foreign currency exposures to be hedged fully using
forwards. Anticipated transactions are hedged using forwards or options or a combination
thereof. The policy for the hedging of anticipated exposures specifying the use of
165Philips Annual Report 2004