Philips 2009 Annual Report Download - page 214

Limitations in the distribution of stockholders’ equity.
Pursuant to Dutch law, limitations exist relating to the distribution of
stockholders’ equity of EUR 1,255 million (2008: EUR 1,296 million). As
at December 31, 2009, such limitations relate to common stock of
EUR 194 million (2008: EUR 194 million) as well as to legal reserves
included under ‘revaluation’ of EUR 102 million (2008: EUR 117
million), available-for-sale financial assets of EUR 120 million (2008: nil,
as the amount was a loss), cash flow hedges of EUR 10 million (2008: nil,
as the amount was a loss) and ‘affiliated companies’ of EUR 829 million
(2008: EUR 985 million).
In general, gains related to available-for-sale financial assets, cash flow
hedges and currency translation differences cannot be distributed as
part of stockholders’ equity as they form part of the legal reserves
protected under Dutch law. By their nature, losses relating to available-
for-sale financial assets, cash flow hedges and currency translation
differences, reduce stockholders’ equity, and thereby distributable
amounts.
HNet income
Net income in 2009 amounted to a gain of EUR 410 million (2008: a loss
of EUR 91 million).
IEmployees
The number of persons employed by the Company at year-end 2009
was 12 (2008: 11) and included the members of the Board of
Management and the members of the Group Management Committee.
For the remuneration of past and present members of both the Board
of Management and the Supervisory Board, please refer to note 31,
which is deemed incorporated and repeated herein by reference.
JObligations not appearing in the balance sheet
General guarantees as referred to in Section 403, Book 2, of the Dutch
Civil Code, have been given by the Company on behalf of several group
companies in the Netherlands. The liabilities of these companies to
third parties and equity-accounted investees totaled EUR 1,038 million
as of year-end 2009 (2008: EUR 1,249 million). Guarantees totaling
EUR 294 million (2008: EUR 266 million) have also been given on behalf
of other group companies and credit guarantees totaling EUR 33 million
(2008: EUR 42 million) on behalf of unconsolidated companies and third
parties. The Company is the head of a fiscal unity that contains the most
significant Dutch wholly-owned group companies. The Company is
therefore jointly and severally liable for the tax liabilities of the tax entity
as a whole. For additional information, please refer to note 24.
KAudit fees
For a summary of the audit fees, please refer to the Supervisory Board
report, table ‘Fees KPMG’ section 9.4, Report of the Audit Committee,
of this Annual Report.
LSubsequent events
Sale of shares in TPV Technology Ltd.
On January 29, 2010, Philips announced that it sold most of its stake in
Hong Kong based technology provider TPV Technology Ltd to CEIEC
(H.K.) Ltd, a subsidiary of CEC/Great Wall, in an off-market transaction.
This transaction, which is subject to the buyers obtaining applicable
consents, authorizations and approvals from the relevant government
authorities of the People’s Republic of China, represented 9% of TPV’s
issued share capital and reduced Philips’ shareholding to 3%.
This transaction, which has an approximate break-even impact on the
results, provides Philips with net proceeds of EUR 95 million to be
recognized in the first quarter of 2010.
Renewal of credit facility
On February 18, 2010, Philips signed a new five-year EUR 1.8 billion
committed standby revolving credit facility to replace the existing USD
2.5 billion facility. In line with the previous facility, it does not have a
material adverse change clause, has no financial covenants and does not
have credit-rating-related acceleration possibilities.
February 22, 2010
The Supervisory Board
The Board of Management
12.6 Auditor’s report - Company
Auditor’s report
To the Supervisory Board and Shareholders of Koninklijke Philips
Electronics N.V.:
Report on the Company financial statements
We have audited the accompanying Company financial statements 2009
which are part of the Financial Statements 2009 of Koninklijke Philips
Electronics N.V., Eindhoven, the Netherlands, which comprise the
balance sheet as at December 31, 2009, statements of income and
changes in equity for the year then ended, and the notes as included in
section 12.1 to 12.5.
Management’s responsibility
The Board of Management is responsible for the preparation and fair
presentation of the Company financial statements and for the
preparation of the Management report, both in accordance with Part 9
of Book 2 of the Dutch Civil Code. This responsibility includes:
designing, implementing and maintaining internal control relevant to the
preparation and fair presentation of the Company financial statements
that are free from material misstatement, whether due to fraud or
error; selecting and applying appropriate accounting policies; and
making accounting estimates that are reasonable in the circumstances.
Auditor’s responsibility
Our responsibility is to express an opinion on the Company financial
statements based on our audit. We conducted our audit in accordance
with Dutch law. This law requires that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the Company financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the Company financial
statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material
misstatement of the Company financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity’s preparation and fair
presentation of the Company financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall
presentation of the Company financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Company financial statements give a true and fair
view of the financial position of Koninklijke Philips Electronics N.V. as at
December 31, 2009, and of its result for the year then ended in
accordance with Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirement under 2:393 sub 5 part f of the Dutch
Civil Code, we report, to the extent of our competence, that the
Management report as defined in section 11.1 Introduction is consistent
with the Company financial statements as required by 2:391 sub 4 of the
Dutch Civil Code.
Amsterdam, February 22, 2010
KPMG Accountants N.V.
M.A. Soeting RA
H I J K L 12 Company financial statements 12.6 - 12.6
214 Philips Annual Report 2009