Role of the auditors

External auditor

The external auditor is appointed by the General Meeting of Shareholders based on a motion drawn up by the Supervisory Board following advice received from the Audit Committee and the Management Board.

The Management Board and the Audit Committee report to the Supervisory Board annually on the developments in the relationship with the external auditor, in particular with regard to the independence of the external auditor. Based on this and other factors, the Supervisory Board prepares its motion to the General Meeting of Shareholders on the appointment of an external auditor.

At least once every four years, the external auditor’s performance is thoroughly evaluated and reviewed by the Management Board and the Audit Committee. The principal conclusions of this review are communicated to the General Meeting of Shareholders in order to assist in its review of the motion to appoint the external auditor. This evaluation took place early in 2006.

On 24 April 2006, the General Meeting of Shareholders reappointed PricewaterhouseCoopers Accountants N.V. as external auditor for of the company to audit the financial statements for the financial years 2006 through 2009.

The external auditor usually attends the meetings of the Audit Committee. In compliance with current legislation, the external auditor reports on his audit activities to the Management Board and the Supervisory Board and sets out the matters he wishes to bring to the attention of these boards. In pursuance of the Charter of the Audit Committee, these matters could include issues concerning the audit, the financial figures and the operation of the internal risk management and control systems (including the reliability and continuity of the electronic data processing) and the quality of internal information systems. The external auditor also attends the meeting of the Supervisory Board that is devoted to the discussion of the financial statements to be submitted for adoption to the General Meeting of Shareholders. In addition, the external auditor attends Nuon’s General Meeting of Shareholders and may, on that occasion be asked to elaborate on his audit activities and his auditor’s report on the reliability of the financial statements.

Internal auditor

The task of Nuon’s Internal Audit Department is to provide the Management Board with additional opinion on its ‘being in control’ of the business, its parts and processes, decentralised and otherwise. To this end, the department carries out financial, operational and IT audits. These are a product of the internal audit year plan as adopted by the Management Board and focus on the effectiveness and efficiency of business processes, taking into account the procedures as laid down in the Internal Audit Charter. Internal Audit is a corporate staff department that is hierarchically controlled by the Chairman of the Board of Management. The director of Internal Audit is accountable to the Management Board and the Audit Committee. Twice a year, Internal Audit reports to the Management Board on the ‘in control’ status via a monitoring report. The Management Board also submits this report to, and discusses it with, the Audit Committee and the Supervisory Board. In this context, and for the purpose of planning and implementing the audit of the financial statements, the Internal Audit Department works in close collaboration with the external auditor.