Siemens 2013 Annual Report Download - page 111

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The Compensation Committee was established by a Supervisory Board decision of July 31,
2013. The Committee prepares proposals regarding the compensation system and the deter-
mination of Managing Board compensation, including the targets for variable Managing
Board compensation. It also prepares the full Supervisory Board’s regular review of the
compensation system and the appropriateness of Managing Board compensation as well
as the approval of the Compensation Report. In fiscal 2013, the Compensation Committee
met once in a constitutive meeting. Mr. Wenning expressed his willingness to serve as chair-
man. The Committee also made one decision outside meetings. An independent external
compensation specialist was commissioned to provide expert support relating to Manag-
ing Board compensation.
The Finance and Investment Committee met three times. The focuses of its meetings
included the preparation of the decision regarding the budget for fiscal 2013 and the
preparation and/or approval of the Company’s investment and divestment projects such
as the spinoff of OSRAM. Since the scope of its work will be expanded to include innovation-
related issues, the Committee will be renamed the Innovation and Finance Committee.
The Audit Committee met six times. In the presence of the independent auditors, the
President and Chief Executive Officer, the Chief Financial Officer and the General Counsel,
the Committee discussed the financial statements and the Combined Management Report
for Siemens AG and the Siemens Group, the proposal for the appropriation of net income
and the Annual Report on Form 20-F for the U.S. Securities and Exchange Commission (SEC).
In addition, the Audit Committee made a recommendation to the Supervisory Board
regarding the Supervisory Board’s proposal to the Annual Shareholders’ Meeting concern-
ing the election of the independent auditors. The Audit Committee gave in-depth con-
sideration to the appointment of the independent auditors for fiscal 2013, including the
definition of the audit focal points, to the monitoring of the auditors’ independence and
qualifications as well as the additional services they perform, to the determination of their
fee and to the discussion of the results of their audit reviews of the Company’s quarterly
financial reports and half-year financial report. In addition, the Audit Committee dealt
with the Company’s financial reporting process and risk management system and with
the effectiveness, resources and findings of the internal audit as well as with reports
concerning potential and pending legal disputes. The Audit Committee also focused on
Company compliance with the provisions of Section 404 of the Sarbanes-Oxley Act and on
the results of the internal audit’s examination of the effectiveness of Siemens’ internal
controls, regulatory compliance and the integrity of its financial reporting. In November
2013, it was decided to expand the Committee to include one additional shareholder rep-
resentative from the Supervisory Board and one additional employee representative from
the Supervisory Board.
Detailed discussion of the financial statements
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft audited the stand-alone Financial
Statements of Siemens AG, the Consolidated Financial Statements of the Siemens Group
and the Combined Management Report for Siemens AG and the Siemens Group for fiscal
2013 and issued an unqualified opinion. The stand-alone Financial Statements of Siemens AG
and the Combined Management Report for Siemens AG and the Siemens Group were
prepared in accordance with the requirements of German law. The Consolidated Financial
Statements of the Siemens Group were prepared in accordance with the International
Financial Reporting Standards (IFRS), as adopted by the European Union (EU), and with