REPORT OF THE SUPERVISORY BOARD TO THE SHAREHOLDERS
During the year under review, the Supervisory Board performed its duties in accordance with applicable legislation and the Articles of Association of ASM International NV and supervised and advised the Management Board on an ongoing basis.
We present the ASMI 2014 Statutory annual report in accordance with IFRS, as prepared by the Management Board and reviewed by the Supervisory Board. Our independent auditors, Deloitte Accountants BV have audited these Annual accounts and issued an unqualified opinion. Their report is available in the Independent auditor’s report on financial statements.
All of the members of the Supervisory Board have signed the Financial statements in respect of the financial year 2014.
Supervision of the Management Board, its policy decisions and actions are entrusted to the Supervisory Board. In accordance with Dutch law, the Supervisory Board is a separate body, independent of the Management Board. The Supervisory Board supervises and advises the Management Board in executing its responsibilities. The profile of the Supervisory Board describes the range of expertise that should be represented within the Board. The procedures of the Supervisory Board and the division of its duties are laid down in the Supervisory Board Rules. Both documents are available on our website (www.asm.com).
Meetings of the Supervisory Board
During 2014, the Supervisory Board met with the Management Board on eight occasions. Furthermore, the Supervisory Board held one conference calls without the Management Board participating. Jan Lobbezoo and Heinrich Kreutzer attended all Supervisory Board meetings with the Management Board, Johan Danneels and Martin van Pernis attended all meetings except one, while Ulrich Schumacher attended all meetings except two. In these meetings, the Boards discussed strategy, operations, business risks, product and market developments, the Company’s organization, management and financial structure and performance, including further profitability improvements. In 2014, the Company announced a share buyback program of €100 million with the announcement of the third quarter results, in line with the earlier communicated message that the Company uses excess cash for the benefit of its shareholders.
In addition, the Supervisory Board discussed the functioning of the Supervisory Board and its individual members, the relationship between the Supervisory Board and the Management Board, the composition of the Management Board, its performance, and the performance of its individual members without the members of the Management Board attending.
Included in the responsibilities of the Supervisory Board is to oversee the Company’s compliance with corporate governance standards and best practices in the Netherlands and the United States. The changes to the amended Dutch Corporate Governance Code relate, amongst others, to risk management of the Company, remuneration of Management Board members and corporate social responsibility issues. These matters were broadly discussed within the Supervisory Board. The Supervisory Board is of the opinion that the Company complies with the Sarbanes-Oxley Act and applicable corporate governance requirements and best practices set out by Nasdaq, the US Securities and Exchange Commission ('SEC'), and the Dutch Corporate Governance Code, except for those discussed in the Corporate Governance section, which follows this report.
Supervisory Board Composition
The Supervisory Board is composed of five members. In 2014 Heinrich Kreutzer and Martin van Pernis were reappointed to the Supervisory Board for a four-year term.
Management Board Composition
The Management Board is composed of two members. During the Annual General Meeting ('AGM') in May 2014, Chuck del Prado and Peter van Bommel were reappointed for a four-year term as members of the Management Board.
Supervisory Board Committees
The role of the Audit Committee is described in its charter, which is available on the Company’s website (www.asm.com). The Audit Committee consists of Messrs Heinrich Kreutzer (Chairman), Jan Lobbezoo and Ulrich Schumacher.
During the year, the Audit Committee met with the Management Board and Deloitte Accountants, the Company’s independent auditors, on four occasions, and in one conference call. Audit Committee discussions included: the Company’s financial reporting including the application of accounting principles; the Company’s financial position and financing programs; the Company’s internal risk management systems; effectiveness of internal controls including the testing required by Section 404 of the Sarbanes-Oxley Act; the establishment of an internal audit function; the appointment of Deloitte Accountants; the selection process of a new auditor as from 2016 onwards; the audit performed, and its findings, the Annual report and Annual accounts; and the budget and the quarterly progress reports prepared by the Management Board. The internal auditor participated in all four Audit Committee meetings presenting his own actions and findings.
On several occasions, the Audit Committee met with Deloitte Accountants, without the members of the Management Board present, to discuss the risk of fraud. Furthermore, the Audit Committee discussed the auditor’s performance with the Management Board without Deloitte Accountants present.
To comply with new established governance regulations regarding rotation of external auditors the Audit Committee together with management started a selection process to appoint a new external auditor. After careful consideration KPMG was selected to become our new selected auditor as from the accounting year 2015, which was approved in May 2014.
Nomination, Selection and Remuneration Committee
The role of the Nomination, Selection and Remuneration Committee is described in its charter, which is available on the Company’s website (www.asm.com). In general, the Committee advises the Supervisory Board on matters relating to the selection and nomination of new Management Board members, as well as the remuneration of the members of the Management Board. This Committee consists of Messrs Martin van Pernis (Chairman), Jan Lobbezoo and Johan Danneels.
In 2014, the Nomination, Selection and Remuneration Committee held one meeting and one conference call. The topics discussed included the remuneration of the individual members of the Management Board. During the meetings of the Committee, the Chief Executive Officer was present, except on the occasion when his own remuneration was discussed. During the AGM of May 2014 the revised Remuneration Policy was adopted by the shareholders.
The remuneration of the members of the Management Board is Note 27 to the Financial statements of the Statutory annual report. The remuneration of the members of the Management Board during 2014 is fully in accordance with the Remuneration Policy.
Word of Thanks
We extend gratitude and appreciation to ASMI employees worldwide for their many contributions and enduring commitment to the Company. It is their commitment and determination that enabled us to make substantial progress in 2014. We recognize that the cumulative efforts of our workforce are truly creating real value for all of our stakeholders.
J.C. Lobbezoo, Chairman
M.C.J. van Pernis
Almere, the Netherlands
April 9, 2015