Philips 2010 Annual Report Download - page 79

5 Group performance 5.4.5 - 5.5
Annual Report 2010 79
Roll-out in the supply chain
The EICC code requests suppliers to roll-out the code in
the supply chain to their next-tier suppliers. During the
audits at risk suppliers, it is checked whether the facility
implemented an effective process to ensure that their
next-tier suppliers implemented the Code and are aware
of their ethical and legal requirements. A limited number
of second-tier suppliers were identified as high risk
suppliers and audited in the 2010 program.
‘Conflict’ minerals: issues further down the
chain
Philips acknowledges the issues concerning working
conditions at the base of the supply chain, specifically in
the extractives sector for metals such as tin, tantalum and
tungsten. In particular, we are concerned about the
situation in the east of the Democratic Republic of Congo
(DRC) where proceeds from the extractives sector are
sometimes used to finance rebel conflicts in the region.
Although Philips does not directly source minerals from
the DRC and the mines are typically seven or more tiers
removed from our direct suppliers, we address the issue
through the means and influencing mechanisms available
to us. For more details, please refer to section 15.6,
Supplier indicators, of this Annual Report.
5.5 Proposed
distribution to
shareholders
Pursuant to article 34 of the articles of association of
Royal Philips Electronics, a dividend will first be declared
on preference shares out of net income. The remainder of
the net income, after reservations made with the approval
of the Supervisory Board, shall be available for distribution
to holders of common shares subject to shareholder
approval after year-end. As of December 31, 2010, the
issued share capital consists only of common shares; no
preference shares have been issued. Article 33 of the
articles of association of Royal Philips Electronics gives the
Board of Management the power to determine what
portion of the net income shall be retained by way of
reserve, subject to the approval of the Supervisory Board.
A proposal will be submitted to the 2011 Annual General
Meeting of Shareholders to declare a dividend of EUR 0.75
per common share (up to EUR 710 million), in cash or in
shares at the option of the shareholder, against the net
income for 2010.
Shareholders will be given the opportunity to make their
choice between cash and shares between April 7, 2011
and April 29, 2011. If no choice is made during this
election period the dividend will be paid in shares. On
April 29, 2011 after close of trading, the number of share
dividend rights entitled to one new common share will be
determined based on the volume weighted average price
of all traded common shares Koninklijke Philips
Electronics N.V. at Euronext Amsterdam on 27, 28 and 29
April 2011. The Company will calculate the number of
share dividend rights entitled to one new common share,
such that the gross dividend in shares will be
approximately 3% higher than the gross dividend in cash.
Payment of the dividend and delivery of new common
shares, with settlement of fractions in cash, if required,
will take place from May 4, 2011. The distribution of
dividend in cash to holders of New York registry shares
will be made in USD at the USD/EUR rate fixed by the
European Central Bank on May 2, 2011.
Dividend in cash is in principle subject to 15% Dutch
dividend withholding tax, which will be deducted from the
dividend in cash paid to the shareholders. Dividend in
shares paid out of earnings and retained earnings is subject