Siemens 2014 Annual Report Download - page 175

247 D. Consolidated Financial Statements
337 E. Additional Information
213 C. Overall assessment of the economic position
214 C. Subsequent events
215 C. Sustainability and citizenship
225 C. Report on expected developments and
associated material opportunities and risks
242 C. Compensation Report and legal disclosures
242 C. Siemens AG (Discussion on basis
of German Commercial Code)

Our Divisions are responsible for developing and implementing
their strategy; for developing and producing their portfolio of
products and services; and for managing their sales channels.
As “global entrepreneurs” they have end-to-end business re-
sponsibility worldwide, including with regard to their operating
results. They therefore have “right of way” over the regional
units in business matters.
As of October , , Healthcare became a separately managed
unit, which includes among others, the set-up of customized
structures (e.g. sales structures, R & D), systems (especially IT)
and functions (e.g. human resources, procurement).
Beginning with fiscal , our businesses are supported by our
Corporate Core, which comprises the units Corporate Develop-
ment; Governance & Markets; Communications and Govern-
ment Affairs; Legal and Compliance, Human Resources; Corpo-
rate Technology; and Controlling and Finance and by our
Corporate Services, which consist of the units Information
Technology; Supply Chain Management; Export Control and
Customs; Business Process Services; and Siemens Real Estate.
The Corporate Core issues binding company-wide guidelines in
coordination with the Managing Board and oversee their imple-
mentation. In addition, the Heads of selected corporate func-
tions (Governance & Markets, Communications and Govern-
ment Affairs, Legal and Compliance, Human Resources,
Controlling and Finance) have an unrestricted right to issue
instructions in relation to their function across all parts of the
company in accordance with the Bylaws for the Managing
Board of Siemens AG and to the extent legally permissible.
During the first quarter of fiscal , we disbanded our
Regional Cluster organization. Following this organizational
change, we have designated  Lead Countries which are indi-
vidually responsible for managing a number of other Coun-
tries regarding market penetration. The Lead Countries and
their assigned Countries are responsible for the local customer
relationship management and for implementing the business
strategies of the Divisions. Each Lead Country reports directly
to the Managing Board.
Except otherwise stated, financial measures presented in this
Combined Management Report are based on our organizational
structure as of September , . Based on this organiza-
tional structure, we provide financial measures for our four
Sectors and for two Businesses, each combining two Divisions
within a Sector as well as for eight Divisions of our Sectors.
These financial measures include: orders, revenue, profit and
profit margin. Divisions within a Sector may do business with
each other, leading to corresponding orders and revenue. Such
orders and revenues are eliminated on a Sector level. Further-
more, our reportable segments may do business with each
other, leading to corresponding orders and revenue. Such
orders and revenue are eliminated on the Siemens level within
Eliminations, Corporate Treasury and other reconciling items
and are not included in orders and revenue with external cus-
tomers (external orders and external revenue, respectively)
reported in this document. For Equity Investments we report
profit, and for SFS we report profit and total assets. Free cash
flow and further financial measures are reported for each
reportable segment in the Notes to Consolidated Financial
Statements. For information related to the definition of these
financial measures and to the reconciliation of segment finan-
cial measures to the Consolidated Financial Statements, see
NOTE  in D. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.