2009		2010
	8,325.00
	5,060.00
3,252.00		3,265.00
7,362.00		8,035.00
	7,197.00
	2,999.00
4,161.00		4,198.00
85.00		88.00
281.00		181.00
691.00		479.00
1,243.00		1,351.00
1,543.00		75.00
18,618.00		17,672.00
2,913.00		3,865.00
191.00		5.00
334.00		348.00
102.00		112.00
81.00		79.00
	4,104.00
	20.00
	231.00
3,902.00		4,355.00
4,386.00		5,833.00
11,909.00		14,597.00
30,527.00		32,269.00

Liabilities and equity			2009			2010
Equity
Shareholders' equity:
Preference shares, par value EUR 0.20 per share:
	- Authorized: 2,000,000,000 shares (2008: 2,000,000,000 shares), issued none
Common shares, par value EUR 0.20 per shares:
	-Authorized: 2,000,000,000 shares (2008: 2,000,000,000 shares), issued none
	- Issued and fully paid: 972,411,769 shares (2008: 972,411,769 shares)	194.00			197.00
Capital in excess of par value					354.00
Retained earnings		15,947.00			15,416.00
Revaluation reserve		102.00			86.00
Other reserves		(461.00)			69.00
Treasury shares, at cost 44,954,677 shares (2008: 49,429,913 shares)		(1,187.00)			(1,076.00)
Subtotal			14,595.00			15,046.00
Non-controlling interests			49.00			46.00
Total equity			14,644.00			15,092.00
Non-current liabilities
Long-term debt			3,640.00			2,818.00
Long-term provisions			1,734.00			1,716.00
Deferred tax liabilities			530.00			171.00
Other non-current liabilities			1,929.00			1,714.00
Total non-current liabilities			7,833.00			6,419.00
Current liabilities
Short-term debt			627.00			1,840.00
Derivative financial liabilities			276.00			564.00
Income tax payable			118.00			291.00
Accounts and notes payable:
	- Trade creditors	2,775.00			3,686.00
	- Accounts payable to related parties	95.00			5.00
Subtotal			2,870.00			3,691.00
Accrued liabilities			2,740.00			2,995.00
Short-term provisions			716.00			623.00
Other current liabilities			703.00			754.00
Total current liabilities			8,050.00			10,758.00
Contractual obligations and contingent liabilities
Totals:			30,527.00			32,269.00
		2008	2009	2010
Sales		26,385.00	23,189.00	25,419.00
Cost of sales		(17,938.00)	(15,110.00)	(15,873.00)
Gross margin		8,447.00	8,079.00	9,546.00
Selling expenses		(5,518.00)	(5,159.00)	(5,246.00)
General and administrative expenses		(972.00)	(734.00)	(735.00)
Research and development expenses		(1,777.00)	(1,631.00)	(1,576.00)
Impairment of goodwill		(301.00)
Other business income		261.00	97.00	100.00
Other business expenses		(86.00)	(38.00)	(24.00)
Income from operations		54.00	614.00	2,065.00
Financial income		1,594.00	225.00	214.00
Financial expenses		(1,506.00)	(391.00)	336.00
Income before taxes		142.00	448.00	1,943.00
Income tax expense		(256.00)	(100.00)	(509.00)
Income (loss) after taxes		(144.00)	348.00	1,434.00
Results relating to investments in associates:
- Company's participation in income		81.00	23.00	14.00
- Other results		(62.00)	53.00	4.00
Income (loss) from continuing operations		(95.00)	424.00	1,452.00
Discontinued operations - net of income tax		3.00
Net income (loss)		(92.00)	424.00	1,452.00
Attribution of net income (loss)
Net income (loss) attributable to stockholders		(91.00)	410.00	1,446.00
Net income (loss) attributable to minority interests		(1.00)	14.00	6.00

1. What does the term integrated reporting mean? What differences are there from the

standard financial-based annual reports companies have issued in the past? What are the

similarities?

2. Are public accounting firms the appropriate choice to do sustainability assurance audits? Why

or why not? Who else (profession, industry, etc.) might be equipped to assess some of the non-

financial aspects of integrated reporting?

3. There is a concern that Integrated Reports are simply another form of advertising, as firms will

only report on POSITIVE social, economic, and financial results. What could be done to the

process to assure the public that all results, both good and bad, will be reported on?

4. Would you use sustainability reports, in addition to financial reports, to make investment

choices? Why or why not?

5. Should KPMG pursue providing integrated assurance to Philips, vs. the limited assurance

they are currently providing? Explain your answer.