Philips 2009 Annual Report Download - page 154

11.3 Reports of the independent auditor
Reports of Independent Registered Public Accounting Firm
The report set out below is provided in compliance with auditing
standards of the Public Company Accounting Oversight Board in the US
and includes an opinion on the effectiveness of internal control over
financial reporting as at December 31, 2009. Management’s report on
internal control over financial reporting is set out in section 11.2,
Management’s report on internal control, of this Annual Report. KPMG
Accountants N.V. has also issued reports on the consolidated financial
statements in accordance with Dutch auditing standards, which is set
out in section 11.13, Auditor’s report - Group, of this Annual Report,
and in accordance with auditing standards of the Public Company
Accounting Oversight Board in the US, which is included in the Annual
Report on Form 20-F filed with the US Securities and Exchange
Commission. KPMG Accountants N.V. has also reported separately on
the Company Financial Statements of Koninklijke Philips Electronics
N.V. This audit report is set out in section 12.6, Auditor’s report -
Company, of this Annual Report.
11.4 Auditors’ report on internal control
Report of Independent Registered Public Accounting Firm on
internal control over financial reporting pursuant to section
404 of the US Sarbanes-Oxley Act
To the Supervisory Board and Shareholders of Koninklijke Philips
Electronics N.V.:
We have audited Koninklijke Philips Electronics N.V. and subsidiaries’
internal control over financial reporting as of December 31, 2009,
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 maintaining effective
internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the
accompanying section 11.2, Management’s report on internal control,
of this Annual Report. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit
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 audit also included performing such
other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
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,
Meditronics Healthcare Pvt. Ltd., Ilti Luce S.r.l., Dynalite Intelligent Light
Pty. Limited, Traxtal Inc., Teletrol Systems Inc., and Saeco International
Group S.p.A. (together the “Acquired Companies”) during 2009.
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, 2009, the Acquired
Companies’ internal control over financial reporting associated with
total assets representing 1.7% of consolidated total assets and net sales
representing 0.7% 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, 2009. 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, Koninklijke Philips Electronics N.V. and subsidiaries
maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2009, based on criteria
established in Internal Control - Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the
consolidated balance sheets of Koninklijke Philips Electronics N.V. and
subsidiaries as of December 31, 2009 and 2008, and the related
consolidated statements of income, comprehensive income, changes in
equity, and cash flows for each of the years in the three-year period
ended December 31, 2009, and the related financial statement schedule
I-Transition from US GAAP to IFRS, included as Exhibit 15(b) and
Exhibit 15(c) to the Annual Report on Form 20-F, respectively. Our
report dated February 22, 2010 expressed an unqualified opinion on
those consolidated financial statements and the financial statement
schedule I-Transition from US GAAP to IFRS as included in the Annual
Report on Form 20-F.
KPMG Accountants N.V.
Amsterdam, February 22, 2010
11 Group financial statements 11.2 - 11.4
154 Philips Annual Report 2009