Philips 2007 Annual Report Download - page 122

Philips Annual Report 2007128
Management’s report on internal control over
nancial reporting pursuant to section 404
of the US Sarbanes-Oxley Act
The Board of Management of Koninklijke Philips Electronics N.V.
(‘the Company’) is responsible for establishing and maintaining an
adequate system of internal control over nancial reporting (as such
term is dened in Rule 13a-15(f) under the US Securities Exchange
Act). Internal control over nancial reporting is a process to provide
reasonable assurance regarding the reliability of our nancial reporting
for external purposes in accordance with accounting principles
generally accepted in the United States of America (US GAAP).
Internal control over nancial reporting includes maintaining records
that in reasonable detail accurately and fairly reect our transactions;
providing reasonable assurance that transactions are recorded as
necessary for preparation of our nancial statements; providing
reasonable assurance that receipts and expenditures of company
assets are made in accordance with management authorization; and
providing reasonable assurance that unauthorized acquisition, use
or disposition of company assets that could have a material effect
on our nancial statements would be prevented or detected on a
timely basis. Because of its inherent limitations, internal control over
nancial reporting is not intended to provide absolute assurance that
a misstatement of our nancial statements would be prevented
or detected.
The Board of Management conducted an assessment of the Company’s
internal control over nancial reporting based on the Internal Control-
Integrated Framework established by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on that
assessment, the Board of Management concluded that, as of December
31, 2007, the Company’s internal control over US GAAP nancial
reporting is considered effective.
The Board of Management’s assessment of the effectiveness of the
Company’s internal control over nancial reporting as of December
31, 2007, excluded the following companies acquired by the Company
after January 1, 2007: Health Watch, Raytel Cardiac Services, VMI
Sistemas Medicos, XIMIS, Emergin, Color Kinetics, TIR Systems,
Partners in Lighting International, Lighting Technologies International
and Digital Lifestyle Outtters. These acquisitions are wholly-owned
subsidiaries of the Company of which total assets represented 4.3%
of consolidated total assets and net sales represented less than 2%
of consolidated net sales of the Company as of and for the year ended
December 31, 2007. If adequately disclosed, companies are allowed
to exclude acquisitions from their assessment of internal control
over nancial reporting during the rst year of an acquisition while
integrating the acquired company under guidelines established by
the US Securities and Exchange Commission.
The effectiveness of the Company’s internal control over US GAAP
nancial reporting as of December 31, 2007, as included in this
chapter Group nancial statements, has been audited by KPMG
Accountants N.V., an independent registered public accounting rm,
as stated in their report which follows hereafter.
Board of Management
February 18, 2008
Group nancial statements
128 Group nancial statements
- Management’s report
- Auditors’ report
188 IFRS information 240 Company nancial statements