Auditors’ Report on the Financial Statements Hilti Corporation Auditors’ Report on the Financial Statements Hilti Corporation REPORT OF THE STATUTORY AUDITOR TO THE GENERAL MEETING OF Key audit matters HILTI AKTIENGESELLSCHAFT, SCHAAN We have determined that there are no key audit matters to communicate in our report. Responsibilities of the Board of Directors for the financial statements Report on the audit of the financial statements The Board of Directors is responsible for the preparation of the financial statements that give a true and fair view in accordance with the Opinion provisions of Liechtenstein law and the entity’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. We have audited the financial statements of Hilti Aktiengesellschaft (the entity), which comprise the balance sheet as at 31 December 2020, the income statement and notes for the year then ended, including a summary of significant accounting policies. In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board In our opinion, the financial statements (pages 75 to 85) give a true and fair view of the financial position of the entity as at 31 December of Directors either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so. 2020, and its results of operations for the year then ended in accordance with Liechtenstein law and the entity’s articles of incorporation. Auditor’s responsibilities for the audit of the consolidated financial statements Basis for opinion Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material We conducted our audit in accordance with Liechtenstein law and International Standards on Auditing (ISAs). Our responsibilities under misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high those provisions and standards are further described in the “Auditor’s responsibilities for the audit of the consolidated financial level of assurance, but is not a guarantee that an audit conducted in accordance with Liechtenstein law and ISAs will always detect a statements” section of our report. material misstatement when it exists. 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 We are independent of the entity in accordance with the provisions of Liechtenstein law and the requirements of the Liechtenstein audit profession, as well as the International Code of Ethics for Professional Accountants (including International Independence Standards) of statements. the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in As part of an audit in accordance with Liechtenstein law and ISAs, we exercise professional judgment and maintain professional accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a scepticism throughout the audit. We also: basis for our opinion. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and Materiality perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. financial statements. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine • Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the individually and in aggregate, on the financial statements as a whole. entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our Overall materiality CHF 19.5 million opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events How we determined it 5% of profit before tax or conditions may cause the entity to cease to continue as a going concern. Rationale for the materiality We chose profit before tax as the benchmark because, in our view, this is the most commonly • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the benchmark applied used performance measure for the entity and it is a generally accepted benchmark. financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing Audit scope of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical particular, we considered where subjective judgements were made; for example, in respect of significant accounting estimates that requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the to bear on our independence, and where applicable, related safeguards. risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare a whole, taking into account the structure of the entity, the accounting processes and controls, and the industry in which the entity circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so operates. would reasonably be expected to outweigh the public interest benefits of such communication. 2020 Financial Report | 86 2020 Financial Report | 87