To: the General Meeting of Shareholders and the Supervisory Board of ASM International N.V.
In our opinion:
We have audited the financial statements 2017 of ASM International N.V. (“ASMI” or the “Company”) based in Almere. The financial statements include the consolidated financial statements and the ASM International N.V. company financial statements.
The consolidated financial statements comprise:
The company financial statements comprise:
We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.
We are independent of ASM International N.V. in accordance with the EU Regulation on specific requirements regarding statutory audits of public-interest entities, the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Based on our professional judgement we determined the materiality for the financial statements as a whole at EUR 5.5 million (2016: EUR 5.0 million). The materiality is determined with reference to result before income taxes adjusted for non-recurring gain on partial disposal of an associate and fluctuating impact of foreign exchange results, of which it represents 3% (2016: 5%). We consider result before income taxes adjusted for non-recurring gain on partial disposal of an associate and fluctuating impact of foreign exchange results as the most appropriate benchmark because the Company is a profit oriented company and the key users of the financial statements are focused on profit. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.
We agreed with the Supervisory Board that misstatements in excess of EUR 250,000 which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.
ASM International N.V. is at the head of a group of components. The financial information of this group is included in the consolidated financial statements of ASM International N.V.
Our group audit mainly focused on significant group entities where account balances are of significant size, have significant risks of material misstatement to the Group associated with them or are considered significant for other reasons.
Considering our ultimate responsibility for the opinion, we are also responsible for directing, supervising and performing the group audit. In this context, we have determined the nature and extent of the audit procedures to be carried out by component auditors. Decisive factors were the significance and / or the risk profile of the group entities or operations (components). On this basis, we selected components for which an audit of account balance had to be performed. Furthermore, we have determined the nature and extent of the audit procedures that we perform at group level and at the Shared Services Center (“SSC”).
Our procedures cover the significant operations in Japan, Korea, the Netherlands, Singapore and the United States of America, all mainly through our audit procedures at the SSC, supplemented with local audits of account balances. Furthermore, our procedures cover the (results from) investments in associates, including the work performed by the non-KPMG member firm auditors on ASM Pacific Technology Ltd (“ASMPT”). The remaining balances are covered by additional procedures at group level.
We have sent detailed instructions to all component auditors, covering the significant areas that should be covered (which included the relevant risks of material misstatement detailed below) and set out the information required to be reported to the group auditor. We visited America, Singapore and ASMPT in Hong Kong for site visits and file reviews and held various telephone calls with the auditors of the components, to discuss the group audit, significant risks, audit approach and instructions, as well as the audit findings and observations reported to the group auditor.
By performing the procedures mentioned above at group components, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the consolidated financial statements.
Our procedures as described above can be summarized as follows:
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.
These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of:
Based on the following procedures performed, we conclude that the other information:
We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.
By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.
Management Board of ASM International N.V. is responsible for the preparation of the other information, including the information as required by Part 9 of Book 2 of the Dutch Civil Code.
We were engaged by the Annual General Meeting of Shareholders as auditor of ASM International N.V. on May 21, 2014, as of the audit for the year 2015 and have operated as statutory auditor ever since that financial year.
We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audits of public-interest entities.
Management Board of ASM International N.V. is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, Management Board of ASM International N.V. is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
As part of the preparation of the financial statements, Management Board of ASM International N.V. is responsible for assessing ASM International N.V.’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, Management Board of ASM International N.V. should prepare the financial statements using the going concern basis of accounting unless Management Board of ASM International N.V. either intends to liquidate the ASM International N.V. or to cease operations, or has no realistic alternative but to do so. Management Board of ASM International N.V. should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements.
The Supervisory Board is responsible for overseeing the ASM International N.V.’s financial reporting process.
Our objective is to plan and perform the audit engagement 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 not detect all material errors and fraud during our audit.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.
A further description of our responsibilities for the audit of the financial statements is included in appendix 1 of this auditor's report. This description forms part of our auditor’s report.
Amstelveen, March 16, 2017
KPMG Accountants NV
R.P. Kreukniet RA
We have exercised professional judgement and have maintained professional scepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:
Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group components. Decisive were the size and/or the risk profile of the group components or operations. On this basis, we selected group components for which an audit or review had to be carried out on the complete set of financial information or specific items.
We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit committee in accordance with Article 11 of the EU Regulation on specific requirements regarding statutory audits of public-interest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report.
We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were of most significance in the audit of the financial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.