Siemens 2014 Annual Report Download - page 242

108 A. To our Shareholders 131 B. Corporate Governance 171 C. Combined Management Report
172 C. Business and economic environment
187 C. Financial performance system
193 C. Results of operations
205 C. Financial position
210 C. Net assets position

The Compensation Report outlines the principles underlying
the determination of the total compensation of the members of
the Managing Board of Siemens AG, and sets out the structure
and level of the remuneration of the Managing Board mem-
bers. It also describes the policies governing and levels of com-
pensation paid to Supervisory Board members. The Compensa-
tion Report is an integral part of the Combined Management
Report and is presented in B. COMPENSATION REPORT.
The Corporate Governance statement pursuant to Section a
of the German Commercial Code is an integral part of the Com-
bined Management Report and is presented in B. CORPORATE
GOVERNANCE STATEMENT PURSUANT TO SECTION A OF THE GERMAN
COMMERCIAL CODE.
The Takeover-relevant information (pursuant to Sections 
para.  and  para.  of the German Commercial Code) and
explanatory report are an integral part of the Combined Man-
agement Report and are presented in B. TAKEOVER-RELEVANT
INFORMATION (PURSUANT TO SECTIONS  PARA.  AND  PARA.  OF
THE GERMAN COMMERCIAL CODE) AND EXPLANATORY REPORT.
The Compliance Report outlines the principles of our Compli-
ance System which aims to ensure that all our worldwide busi-
ness practices are in line with our Business Conduct Guidelines
and in compliance with all applicable laws. In addition, it de-
scribes our approach on compliance risk management, busi-
ness partner compliance due diligence, cooperation with third
parties and the Siemens Integrity Initiative. The Compliance
Report is an integral part of the Combined Management Report
and is presented in B. COMPLIANCE REPORT.
C. Compensation Report and legal disclosures
C. Siemens AG (Discussion on basis of German Commercial Code)
Unlike our Consolidated Financial Statements, which are
prepared in accordance with the International Financial Report-
ing Standards (IFRS), the Annual Financial Statements of
Siemens AG have been prepared in accordance with the rules
set out in the German Commercial Code (Handelsgesetzbuch).
C.. Business and economic environment
Siemens AG is the parent company of the Siemens Group.
Siemens AG is a technology company with core activities in the
fields of electrification, automation and digitalization. Siemens AG
includes one additional operating business, Siemens Real Estate.
Furthermore Siemens AG is significantly influenced by directly
or indirectly owned subsidiaries and investments. Siemens AG
holds directly and indirectly  legal entities including
non-controlling interests. Siemens AG also includes the Group’s
corporate headquarters functions.
The economic environment for Siemens AG is largely the same
as for the Siemens Group and is described in detail in C..
ECONOMIC ENVIRONMENT.
C.. Results of operations
Statement of Income of Siemens AG in accordance
with German Commercial Code (condensed)
(in millions of €)
September , % Change
 
Revenue 30,934 30,305 2%
Cost of sales (22,109) (22,016) 0%
Gross profit 8,824 8,289 6%
as percentage of revenue 29% 27%
Research and development
expenses (2,781) (2,878) 3%
Selling and general
administrative expenses (4,036) (4,173) 3%
Other operating income
(expenses), net (20) (178) 89%
Financial income, net
thereof income from
investments 2,870
(prior year 3,893) 2,243 3,631 (38)%
Result from
ordinary activities 4,230 4,692 (10)%
Income taxes (444) (840) 47%
Net income 3,786 3,852 (2)%
Profit carried forward 110 115 (4)%
Assets reduction due
to spin-off –(1,800) 100%
Allocation to other
retained earnings (988) 476 n / a
Unappropriated net income 2,907 2,643 10%