Philips 2012 Annual Report Download - page 107

10 Supervisory Board report 10.3 - 10.3
Annual Report 2012 107
audit function. With regard to the external audit, the
Audit Committee reviewed the proposed audit scope,
approach and fees, the independence of the external
auditors, non-audit services provided by the external
auditors in conformity with the Philips Policy on Auditor
Independence, as well as any changes to this policy. The
Audit Committee has assessed the performance of the
external auditor. For information on the fees of KPMG
Accountants N.V., please refer to the table ‘Fees KPMG’
in note 1, Income from operations.
In 2012, the Audit Committee periodically discussed the
company’s policy on business controls, the GBP including
the deployment thereof and amendments thereto, and
Philips’ major areas of risk, including the internal auditor’s
reporting thereon. The Audit Committee was informed
on, discussed and monitored closely the company’s
internal control certification processes, in particular
compliance with section 404 of the US Sarbanes-Oxley
Act and its requirements regarding assessment, review
and monitoring of internal controls. It also discussed risk
management, tax issues, the annual goodwill impairment
test performed in the second quarter, the IT strategy and
transformation, the Company’s finance transformation,
developments in regulatory investigations as well as legal
proceedings including antitrust investigations and related
provisions, environmental exposures and financing and
liquidity of the company, dividend, pensions, valuation and
performance of financial holdings and recent acquisitions
and new Dutch legislation on mandatory auditor rotation
and prohibition on non-audit services. The legislation on
mandatory auditor rotation will become effective January
1, 2016, meaning the Company must engage a new audit
firm for its statutory audit starting per January 1, 2016.
The new legislation also provides for the separation of
audit and non-audit services, meaning the Company’s
external auditor is no longer allowed to provide non-
audit services, with an exception for non-audit service
arrangements already in place on December 31, 2012,
which will be grandfathered for a maximum term of two
years (until December 31, 2014). In light of this new Dutch
legislation, the auditor policy is in the process of being
updated. During each Audit Committee meeting, the
Audit Committee discussed the report from the External
Auditor in which the External Auditor set forth its findings
and attention points during the relevant period.
Financial statements 2012
The financial statements of Koninklijke Philips Electronics
N.V. for 2012, as presented by the Board of Management,
have been audited by KPMG Accountants N.V.,
independent auditors. Their reports have been included
in the section Group financial statements; section 12.12,
Independent auditor’s report - Group, of this Annual
Report and the section Company financial statement;
section 13.5, Independent auditor’s report - Company, of
this Annual Report. We have approved these financial
statements, and all individual members of the Supervisory
Board (together with the members of the Board of
Management) have signed these documents.
We recommend to shareholders that they adopt the 2012
financial statements. We likewise recommend to
shareholders that they adopt the proposal of the Board
of Management to make a distribution of EUR 0.75 per
common share (up to EUR 685 million), in cash or in
shares at the option of the shareholder, against the net
income for 2012 and the reserve retained earnings of the
Company.
Finally, we would like to express our thanks to the
members of the Executive Committee and all other
employees for their continued contribution during the
year.
February 25, 2013
The Supervisory Board