Philips 2004 Annual Report Download - page 208

Shareholders. Questions may be put to him at the meeting about
his report.
The Board of Management and the Audit Committee of the
Supervisory Board shall report on their dealings with the external
auditor to the Supervisory Board on an annual basis, particularly
with regard to the auditor’s independence. The Supervisory Board
shall take this into account when deciding upon its nomination for
the appointment of an external auditor.
The external auditor attends, in principle, all meetings of the Audit
Committee. The findings of the external auditor, the audit
approach and the risk analysis are also discussed at these meetings.
The external auditor attends the meeting of the Supervisory Board
at which the report of the external auditor with respect to the
audit of the annual accounts is discussed, and at which the annual
accounts are approved. In its audit report on the annual accounts
to the Board of Management and the Supervisory Board, the
external auditor refers to the financial reporting risks and issues
that were identified during the audit, internal control matters, and
any other matters, as appropriate, requiring communication under
the auditing standards generally accepted in the Netherlands and
the USA.
Auditor policy
The Company maintains a policy of auditor independence, and this
policy restricts the use of its auditing firm for non-audit services, in
line with US Securities and Exchange Commission rules under
which the appointed external auditor must be independent of the
Company both in fact and appearance. The policy is laid down in
the comprehensive policy on auditor independence published on
the Company’s website.
Investor Relations
General
The Company is continuously striving to improve relations with its
shareholders. In addition to communication with its shareholders
at the Annual General Meeting of Shareholders, Philips elaborates
its financial results during (public) conference calls, which are
broadly accessible. It publishes informative annual and quarterly
reports and press releases, and informs investors via its extensive
website. The Company is strict in its compliance with applicable
rules and regulations on fair and non-selective disclosure and equal
treatment of shareholders. Each year the Company organizes
major Philips Product Divisional analysts days and participates in
several broker conferences, announced in advance on the
Company’s website and by means of press releases. Shareholders
can follow in real time the meetings and presentations, organized
by the Company, by means of webcasting or telephone lines. It is
Philips’ policy to post presentations to analysts and shareholders
on the Company’s website. These meetings and presentations will
not take place shortly before the publication of annual and
quarterly financial information. While strictly complying with the
rules and regulations of fair and non-selective disclosure and equal
treatment of shareholders, in view of the number of meetings with
analysts and presentations to analysts or investors, not all of these
meetings and presentations are announced in advance by means of
a press release and on the Company’s website and can be followed
in real time. For this reason the Company cannot fully apply the
literal text of recommendation IV.3.I. of the Dutch Corporate
Governance Code.
The Company shall not, in advance, assess, comment upon or
correct, other than factually, any analyst’s reports and valuations.
No fee(s) will be paid by the Company to parties for the
carrying-out of research for analysts’ reports or for the
production or publication of analysts’ reports, with the exception
of credit-rating agencies.
Major shareholders and other information for
shareholders
As per December 31, 2004, no person is known to the Company
to be the owner of more than 5% of its common shares. The
common shares are held by shareholders worldwide in bearer and
registered form. Outside the United States, common shares are
held primarily in bearer form. As per December 31, 2004,
approximately 89% of the common shares were held in bearer
form. In the United States shares are held primarily in the form of
registered shares of New York Registry (Shares of New York
Registry) for which Citibank, N.A., 111 Wall Street, New York,
New York 10043 is the transfer agent and registrar. As per
December 31, 2004, approximately 11% of the total number of
outstanding common shares were represented by shares of New
York Registry issued in the name of approximately 1,700 holders
of record, including Cede & Co, acting as nominee for the
Depository Trust Company holding the shares (indirectly) for
individual investors as beneficiaries.
Only bearer shares are traded on the stock market of Euronext
Amsterdam. Only shares of New York Registry are traded on the
New York Stock Exchange. Bearer shares and registered shares
may be exchanged for each other. Since certain shares are held by
brokers and other nominees, these numbers may not be
representative of the actual number of United States beneficial
holders or the number of Shares of New York Registry beneficially
held by US residents.
207Philips Annual Report 2004