Philips 2008 Annual Report Download - page 125

Report of independent registered public
accounting firm
To the Supervisory Board and Shareholders of Koninklijke Philips
Electronics N.V.:
We have audited the accompanying consolidated balance sheets of
Koninklijke Philips Electronics N.V. and subsidiaries as of December 31,
2008 and 2007, and the related consolidated statements of income,
changes in stockholders’ equity and
cash flows for each of the years in
the three-year period ended December 31, 2008 appearing on page
126 to 178. We also have audited Koninklijke Philips Electronics N.V.
and subsidiaries’ internal control over financial reporting as of
December 31, 2008, based on criteria established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Koninklijke
Philips Electronics N.V. and subsidiaries’ management is responsible
for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the
effectiveness of internal control over financial reporting, included in
the accompanying Management’s report on internal control over
financial reporting appearing on page 124. Our responsibility is to
express an opinion on these consolidated financial statements and an
opinion on the company’s internal control over financial reporting
based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free
of material misstatement and whether effective internal control over
financial reporting was maintained in all material respects. Our audits
of the consolidated financial statements included examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial
statement presentation. Our audit of internal control over financial
reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis
for our opinions.
A company’s internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3)
provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets
that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Koninklijke Philips Electronics N.V. and subsidiaries acquired VISICU
Inc., Philips Healthcare Informatics Limited (formally known as TOMCAT
Ltd.), Shenzhen Goldway Industrial Inc., Dixtal Biomédica Indústria e
Comércio Ltda., Dixtal Tecnologia Indústria e Comércio Ltda.,
Alpha X-Ray Technologies, and Melhk Ltd. (together “the Acquired
Companies”) during 2008. Management excluded from its assessment of
the effectiveness of Koninklijke Philips Electronics N.V. and subsidiaries’
internal control over financial reporting as of December 31, 2008, the
Acquired Companies’ internal control over financial reporting of which
total assets represented 1.0% of consolidated total assets and net
sales represented less than 0.5% of consolidated net sales included in
the consolidated financial statements of Koninklijke Philips Electronics
N.V. and subsidiaries as of and for the year ended December 31, 2008.
Our audit of internal control over financial reporting of Koninklijke
Philips Electronics N.V. and subsidiaries also excluded an evaluation of
the internal control over financial reporting of the Acquired Companies.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Koninklijke Philips Electronics N.V. and subsidiaries as of December 31,
2008 and 2007, and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31,
2008, in conformity with accounting principles generally accepted in
the United States of America. Also in our opinion, Koninklijke Philips
Electronics N.V. and subsidiaries maintained, in all material respects,
effective internal control over financial reporting as of December 31,
2008, based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
As discussed in note 20 to the consolidated financial statements,
effective December 31, 2006, Koninklijke Philips Electronics N.V.
and subsidiaries adopted the provisions of SFAS No. 158, ‘Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans’.
KPMG Accountants N.V.
Amsterdam, February 23, 2009
Philips Annual Report 2008 125
254
Corporate governance
250
Reconciliation of
non-US GAAP information
262
Ten-year overview
266
Investor information