Philips 2014 Annual Report Download - page 97

Corporate governance 11.2
Annual Report 2014 97
In performing its duties and responsibilities the
Remuneration Committee is assisted by an in-house
remuneration expert acting on the basis of a protocol
ensuring that the expert acts on the instructions of the
Remuneration Committee and on an independent basis
in which conflicts of interests are avoided.
The Audit Committee
The Audit Committee meets at least four times a year,
before the publication of the annual, semi-annual and
quarterly results. All of the members of the Audit
Committee are considered to be independent under
the applicable US Securities and Exchange Commission
rules and at least one of the members of the Audit
Committee, which currently consists of ve members of
the Supervisory Board, is a nancial expert as set out in
the Dutch Corporate Governance Code and each
member is nancially literate. In accordance with this
code, a nancial expert has relevant knowledge and
experience of nancial administration and accounting
at the company in question. None of the members of
the Audit Committee is designated as an Audit
Committee nancial expert as dened under the
regulations of the US Securities and Exchange
Commission. The Supervisory Board considers the fact
of being compliant with the Dutch Corporate
Governance Code, in combination with the expertise
and experience available in the Audit Committee as
well as the possibility to take advice from internal and
external experts and advisors, to be sucient for the
fulllment of the tasks and responsibilities of the Audit
Committee. The Audit Committee may not be chaired
by the Chairman of the Supervisory Board or by a
(former) member of the Board of Management.
The tasks and functions of the Audit Committee, as
described in its charter, which is published on the
Company’s website as part of the Rules of Procedure of
the Supervisory Board, include the duties
recommended in the Dutch Corporate Governance
Code. More specifically, the Audit Committee assists the
Supervisory Board in fulfilling its oversight
responsibilities for the integrity of the Company’s
financial statements, the financial reporting process,
the system of internal business controls and risk
management, the internal and external audit process,
the internal and external auditor’s qualifications, its
independence and its performance, as well as the
Company’s process for monitoring compliance with
laws and regulations and the General Business
Principles (GBP). It reviews the Company’s annual and
interim financial statements, including non-financial
information, prior to publication and advises the
Supervisory Board on the adequacy and
appropriateness of internal control policies and internal
audit programs and their findings.
In reviewing the Company’s annual and interim
statements, including non-financial information, and
advising the Supervisory Board on internal control
policies and internal audit programs, the Audit
Committee reviews matters relating to accounting
policies and compliance with accounting standards,
compliance with statutory and legal requirements and
regulations, particularly in the financial domain.
Important findings and identified risks are examined
thoroughly by the Audit Committee in order to allow
appropriate measures to be taken. With regard to the
internal audit, the Audit Committee, in cooperation with
the external auditor, reviews the internal audit charter,
audit plan, audit scope and its coverage in relation to
the scope of the external audit, staffing, independence
and organizational structure of the internal audit
function.
With regard to the external audit, the Audit Committee
reviews the proposed audit scope, approach and fees,
the independence of the external auditor, its
performance and its (re-)appointment, audit and
permitted non-audit services provided by the external
auditor in conformity with the Philips Policy on Auditor
Independence, as well as any changes to this policy.
The Audit Committee also considers the report of the
external auditor and its report with respect to the
annual financial statements. According to the
procedures, the Audit Committee acts as the principal
contact for the external auditor if the auditor discovers
irregularities in the content of the financial reports. It
also advises on the Supervisory Board’s statement to
shareholders in the annual accounts. The Audit
Committee periodically discusses the Company’s
policy on business controls, the GBP including the
deployment thereof, overviews on tax, IT, litigation and
legal proceedings, environmental exposures, financial
exposures in the area of treasury, real estate, pensions,
and the Group’s major areas of risk. The Company’s
external auditor, in general, attends all Audit Committee
meetings and the Audit Committee meets separately at
least on a quarterly basis with each of the President/
CEO, the CFO, the internal auditor and the external
auditor.
11.3 General Meeting of Shareholders
Introduction
A General Meeting of Shareholders is held at least once
a year to discuss the Annual Report, including the report
of the Board of Management, the annual financial
statements with explanatory notes thereto and
additional information required by law, and the
Supervisory Board report, any proposal concerning
dividends or other distributions, the appointment of
members of the Board of Management and Supervisory
Board (if any), important management decisions as
required by Dutch law, and any other matters proposed
by the Supervisory Board, the Board of Management or
shareholders in accordance with the provisions of the
Company’s Articles of Association. The Annual Report,
the financial statements and other regulated
information such as defined in the Dutch Act on
Financial Supervision (Wet op het Financieel Toezicht),
will solely be published in English. As a separate
agenda item and in application of Dutch law, the
General Meeting of Shareholders discusses the