Philips 2014 Annual Report Download - page 186

Company nancial statements 13.5
186 Annual Report 2014
The accounting for (contingent) liabilities from claims,
proceedings and investigations is complex and
judgemental, and the amounts involved are, or can be
material to the nancial statements as a whole. At
December 31, 2014, the provisions from legal
proceedings amount to EUR 653 million, in case the
company has a present legal or constructive obligation
that cannot be estimated reliably, no provisions have
been recognized.
In response to these risks, our audit procedures
included, amongst others, testing the eectiveness of
the Company’s controls around the identication and
evaluation of claims, proceedings and investigations at
dierent levels in the organization, and the recording
and continuous re-assessment of the related
(contingent) liabilities and provisions and disclosures,
in accordance with EU-IFRS. We also inquired with both
legal and nancial sta in respect of ongoing
investigations or claims, proceedings and
investigations, inspected relevant correspondence,
inspected the minutes of the meetings of the Audit
Committee, Supervisory Board and Executive
Committee, requested external legal conrmation
letters from a selection of external legal counsel and
obtained a legal representation letter from the
Company.
We evaluated and tested the Company’s policies,
procedures and controls surrounding the application of
the General Business Principles (GBP), the
identication and reporting of violations and assessed
management’s response to any GBP violations. We also
assessed the disclosure regarding (contingent)
liabilities from legal proceedings and investigations as
contained in Section 12.9, Note 19 Provisions, Note 22
Other Liabilities and Note 26 Contingent assets and
liabilities.
Responsibilities of the Board of Management and
the Supervisory Board for the nancial statements
The Board of Management is responsible for the
preparation and fair presentation of the nancial
statements in accordance with EU-IFRS and Part 9 of
Book 2 of the Dutch Civil Code, and for the preparation
of the Management report in accordance with Part 9 of
Book 2 of the Dutch Civil Code. Furthermore, the Board
of Management is responsible for such internal control
as the Board of Management determines is necessary
to enable the preparation of the nancial statements
that are free from material misstatement, whether due
to fraud or error.
In preparing the nancial statements, the Board of
Management is responsible for assessing the
Company’s ability to continue as a going concern.
Based on the nancial reporting frameworks
mentioned, the Board of Management should prepare
the nancial statements using the going concern basis
of accounting unless the Board of Management either
intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Management should disclose events and
circumstances that may cast signicant doubt on the
Company’s ability to continue as a going concern in the
nancial statements.
The Supervisory Board is responsible for overseeing the
Company’s nancial reporting process.
Our responsibilities for the audit of the nancial
statements
Our objective is to plan and perform the audit assignment in
a manner that allows us to obtain sufficient and appropriate
audit evidence for our opinion.
Our audit has been performed with a high, but not
absolute, level of assurance, which means we may have
not detected all errors and fraud.
For a further description of our responsibilities in
respect of an audit of nancial statements in general,
we refer to the website of the professional body for
accountants in the Netherlands (NBA).
www.nba.nl/standardtexts-auditorsreport.
Report on other legal and regulatory requirements
Report on the Management report and the other
information
Pursuant to legal requirements under Part 9 of Book 2
of the Dutch Civil Code (concerning our obligation to
report about the Management report and other
information):
•
We have no deficiencies to report as a result of our
examination whether the Management report, to the
extent we can assess, has been prepared in accordance
with Part 9 of Book 2 of the Dutch Civil Code, and whether
the information as required by Part 9 of Book 2 of the
Dutch Civil Code has been annexed.
• We report that the Management report, to the extent we
can assess, is consistent with the financial statements.
Appointment
We were appointed before 2008 for the rst time as
auditor of Koninklijke Philips N.V. and operated as
auditor since then. We were re-appointed by the
Annual General Meeting of Shareholders as auditor of
Koninklijke Philips N.V. on March 31, 2011, for the three
year period 2012 – 2014. On May 1, 2014, we were
appointed by the Annual General Meeting of
Shareholders as auditor of Koninklijke Philips N.V. for
the year 2015, after which we will mandatorily rotate o
from the Philips audit pursuant to Dutch law.
Amsterdam, The Netherlands
February 24, 2015
KPMG Accountants N.V.
E.H.W. Weusten RA