Philips 2005 Annual Report Download - page 175

Philips Annual Report 2005 175
Auditors’ report
Reportofindependentregisteredpublicaccountingrm
We have audited the consolidated balance sheets of Koninklijke Philips Electronics N.V. and
subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of
income,changesinstockholders’equity,andcashowsforeachoftheyearsinthethree-year
period ended December 31, 2005, appearing on page 124 to 174. Theseconsolidatednancial
statements are the responsibility of the Company’s management. Our responsibility is to
expressanopinionontheseconsolidatednancialstatementsbasedonouraudits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States of America) and auditing standards generally accepted in the
Netherlands. Those standards require that we plan and perform the audit to obtain reasonable
assuranceaboutwhethertheconsolidatednancialstatementsarefreeofmaterialmisstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
inthenancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedand
signicantestimatesmadebymanagement,aswellasevaluatingtheoverallnancialstatement
presentation. We believe that our audits provide a reasonable basis for our opinion.
Inouropinion,theconsolidatednancialstatementsreferredtoabovepresentfairly,inall
materialrespects,thenancialpositionofKoninklijkePhilipsElectronicsN.V.andsubsidiariesas
ofDecember31,2005and2004,andtheresultsoftheiroperationsandtheircashowsfor
each of the years in the three-year period ended December 31, 2005, in accordance with
accounting principles generally accepted in the United States of America.
Amstelveen, February 13, 2006
KPMG Accountants N.V.
nancialassets
valueofnancialinstruments:
Othernancialassets
Forothernancialassets,fairvalueisbasedupontheestimated
Thefairvalueisestimatedonthebasisofdiscountedcashowanalyses.
certainissues,oronthebasisofdiscountedcashowanalysesbased
Other nancial instruments, derivatives and currency risk
TheCompanydoesnotpurchaseorholdnancialderivative
CurrencyuctuationsmayimpactPhilips’nancialresults.TheCompany
ItisPhilips’policythatsignicanttransactionexposuresarehedged.The
toforecastcashowsandthewayinwhichthebusinessescanadaptto
equityinvestedinconsolidatedforeignentitiesnancedbyequityis
therequirednancingofsubsidiarieseitherdirectlybyexternalforeign
derivatives.Apartfromthat,theCompanyhassignicantderivatives
hedgesrelatedtoforecastedtransactionsarerecordedascashow
investmentsinforeignentitiesnancedbydebtarerecognizedinthe
OnJanuary19,2006,Philipsannouncedthatithadsignedadenitive
haveledforbankruptcy,whilepartoftheLPDbusinessintheNetherlands
Republic,MexicoandtheUSarealsoreviewingtheirnancialposition.
38383838
39