Philips 2015 Annual Report Download - page 97

Corporate governance 11.2
Annual Report 2015 97
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 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
discharge of the members of the Board of Management
and the Supervisory Board from responsibility for the
performance of their respective duties in the preceding
financial year. However, this discharge only covers
matters that are known to the Company and the
General Meeting of Shareholders when the resolution
is adopted. The General Meeting of Shareholders is
held in Eindhoven, Amsterdam, Rotterdam, The Hague,
Utrecht or Haarlemmermeer (Schiphol Airport) no later
than six months after the end of the financial year.
Meetings are convened by public notice, via the
Company’s website or other electronic means of
communication and to registered shareholders by letter
or by the use of electronic means of communication, at
least 42 days prior to the (Extraordinary) General
Meeting of Shareholders. Extraordinary General
Meetings of Shareholders may be convened by the
Supervisory Board or the Board of Management if
deemed necessary and must be held if shareholders
jointly representing at least 10% of the outstanding
share capital make a written request to that eect to the
Supervisory Board and the Board of Management,
specifying in detail the business to be dealt with. The
agenda of a General Meeting of Shareholders shall
contain such business as may be placed thereon by the
Board of Management or the Supervisory Board, and
agenda items will be explained where necessary in
writing. The agenda shall list which items are for
discussion and which items are to be voted upon.
Material amendments to the Articles of Association and
resolutions for the appointment of members of the
Board of Management and Supervisory Board shall be
submitted separately to the General Meeting of
Shareholders, it being understood that amendments
and other proposals that are connected in the context
of a proposed (part of the) governance structure may
be submitted as one proposal. In accordance with the
Articles of Association and Dutch law, requests from
shareholders for items to be included on the agenda
will generally be honored, subject to the Company’s
rights to refuse to include the requested agenda item
under Dutch law, provided that such requests are made
in writing at least 60 days before a General Meeting of
Shareholders to the Board of Management and the
Supervisory Board by shareholders representing at
least 1% of the Company’s outstanding capital or,
according to the official price list of Euronext
Amsterdam, representing a value of at least EUR 50
million. Written requests may be submitted
electronically and shall comply with the procedure
stipulated by the Board of Management, which
procedure is posted on the Company’s website.
Pursuant to Dutch legislation, shareholders requesting
an item to be included on the agenda, have an
obligation to disclose their full economic interest (i.e.
long position and short position) to the Company. The
Company has the obligation to publish such disclosures
on its website.
Main powers of the General Meeting of
Shareholders
All outstanding shares carry voting rights. The main
powers of the General Meeting of Shareholders are to
appoint, suspend and dismiss members of the Board of
Management and of the Supervisory Board, to adopt
the annual accounts, declare dividends and to
discharge the Board of Management and the
Supervisory Board from responsibility for the
performance of their respective duties for the previous
financial year, to appoint the external auditor as
required by Dutch law, to adopt amendments to the
Articles of Association and proposals to dissolve or
liquidate the Company, to issue shares or rights to
shares, to restrict or exclude pre-emptive rights of
shareholders and to repurchase or cancel outstanding
shares. Following common corporate practice in the
Netherlands, the Company each year requests limited
authorization to issue (rights to) shares, to restrict or
exclude pre-emptive rights and to repurchase shares.
In compliance with Dutch law, decisions of the Board of
Management that are so far-reaching that they would
greatly change the identity or nature of the Company
or the business require the approval of the General