Siemens 2011 Annual Report Download - page 152

6 A. To our shareholders
23 B. Corporate Governance 51 C. Combined management’s discussion and analysis
52 C. Business and operating environment
80 C.2 Fiscal  – Financial summary
83 C. Results of operations
101 C. Financial position
114 C. Net assets position
117 C. Overall assessment of the economic position
118 C. Report on post-balance sheet date events
119 C. Report on expected developments and
associated material opportunities and risks
135 C. Information required pursuant to Section  ()
and Section  () of the German Commercial
Code (HGB) and explanatory report

C.. The Siemens Group –
Organization and basis of presentation
We are a globally operating, integrated technology company
with core activities in the fields of industry, infrastructure, en-
ergy and healthcare, and we occupy leading market positions
worldwide in the majority of our businesses. We can look back
on a successful history spanning more than 160 years, with
groundbreaking and revolutionary innovations such as the in-
vention of the dynamo, the first commercial light bulb, the
first electric streetcar, the construction of the first public pow-
er plant, and the first images of the inside of the human body.
On a continuing basis, we have , employees as of Sep-
tember ,  and business activities in around  coun-
tries and reported consolidated revenue of €. billion in
fiscal . We operate in excess of  major production and
manufacturing plants worldwide. In addition, we have office
buildings, warehouses, research and development facilities or
sales offices in almost every country in the world.
Siemens comprises Siemens AG, a stock corporation under
the Federal laws of Germany, as the parent company and a to-
tal of about , legal entities, including minority invest-
ments. Our Company is incorporated in Germany, with our
corporate headquarters situated in Munich. Siemens operates
under the leadership of its Managing Board, which comprises
the Chief Executive Officer (CEO) and Chief Financial Officer
(CFO) of Siemens as well as the heads of selected corporate
functions and the CEOs of the Sectors.
Our fundamental organizational principles are:
> the CEO principle,
> end-to-end business responsibility of the Sectors, Divisions
and Business Units, and
> the unrestricted right of selected corporate functions to is-
sue instructions in relation to a function to the extent legal-
ly permissible.
The Siemens Managing Board is the sole management body
and has overall business responsibility in accordance with the
German Stock Corporation Act (Aktiengesetz, AktG). At all
other organizational levels within our Company, management
responsibility is assigned to individuals who make decisions
and assume personal responsibility (CEO principle). This prin-
ciple establishes clear and direct responsibilities and fosters
efficient decision-making.
Our Sectors, Divisions, Business Units and Financial Services
(SFS) are “global entrepreneurs“ and have end-to-end busi-
ness responsibility worldwide, including with regard to their
operating results. They therefore have “right of way” over the
Clusters and Countries in business matters. The regional units
(Clusters and Countries) are responsible for the local custom-
er relationship management and for implementing the busi-
ness strategies of the Sectors and SFS as well as the require-
ments set by the corporate functions.
In addition to their particular authority to issue binding com-
pany-wide guidelines and to their monitoring and coordinat-
ing responsibilities, the heads of selected corporate functions
(Finance and Controlling, Legal and Compliance, Human Re-
sources and Supply Chain Management, for example) have an
unrestricted right to issue instructions in relation to a func-
tion across all parts of the Company to the extent legally per-
missible.
Below the Managing Board, Siemens is structured organiza-
tionally into Sectors, SFS which acts as business partner for
the Sectors and also conducts its own business with external
customers, Cross-Sector Services that support other Siemens
units, Corporate Units with specific corporate functions, and
regional Clusters. The Sectors are principally broken down in-
to Divisions and these in turn into Business Units.
In fiscal , our business activities focused on three Sectors,
Industry, Energy and Healthcare, which formed three of our
reportable segments. In addition to these three Sectors, we
had two additional reportable segments: Equity Investments
and SFS.
During fiscal , we initiated a change in the organizational
structure of our Sectors which became effective October ,
. Beginning with fiscal , we formed a fourth Sector, In-
frastructure & Cities, in order to benefit from the growth of ur-
ban centers and the demand for infrastructure solutions. The
new Sector comprises the activities of the Industry Sector’s Di-
visions Building Technologies and Mobility and the Energy
Sector’s activities of the Power Distribution Division, including
Smart Grid applications. The new Sector also holds the Atos
S.A. (AtoS) shares and the convertible bond which Siemens re-
ceived following the sale of Siemens IT Solutions and Services
to AtoS. Furthermore the new Sector will include Siemens’ in-
terest in OSRAM AG (formerly OSRAM GmbH), following
its planned public offering. Until completion of the public
offering, OSRAM AG remains a separate business directly re-
porting to the Managing Board of Siemens AG. The timing of
C. Business and operating environment