The Siemens Compliance System Only clean business is Siemens business Belgrade, May 29, 2014 The Siemens Compliance System Only clean business is Siemens business

The Siemens Compliance System The Company

Siemens has been in business for 165 years I won't sell the future for short-term profit. Werner von Siemens Innovative Excellent Responsible

Key figures Revenue by Sector Revenue by Region Revenue and employees Healthcare and Cities Asia, Australia Germany 20% 14% 18% 23% Europe, C.I.S., Africa, Middle East (excl. Germany) 35% 24% 28% 38% Americas Energy Industry Based on customer location Revenue and employees Continuing operations – comparison with previous year Revenue in millions of € Employees in thousands 100,000 500 In millions of € FY 2012 FY 2013 New orders 75,939 82,351 Revenue 77,395 75,882 Income 4,642 4,212 Free cash flow 4,727 5,257 Employees 366,000 362,000 80,000 400 60,000 300 40,000 200 20,000 100 FY 1986 1990 1995 2000 2005 2013 As reported in annual reports

A strong local partner for customers In more than 200 countries Germany 118,000 70 10.8 14% 24% Americas 20.9 Europe, C.I.S., Africa, Middle East (excl. Germany) 78,000 77 Asia, Australia 74 28% 27% 29.1 64,000 15.1 102,000 68 17% 20% 20% 25% 26% 28% 37% 38% 24% 24% Employees Revenue (billions of €) Major production facilities As of September 30, 2013; All numbers refer to continuing operations 5 5

The Siemens Compliance System The Past

The disaster struck – November 2006 headlines Possible scenarios Debarment from public tenders Penalties up to €10 billion Long-term damage to reputation and business Break-up of the company

Rapid reaction and implementation of our Compliance System, plus further development Immediate actions Implementation Support sustainable business 2006 2007 2008 2009 Exchange of Leadership Team Tone from the top Independent investigation Centralization of bank accounts Settlement with authorities in Germany and in the U.S. Compliance program Compliance organization Compliance training Compliance tools Settlement with World Bank Continuous improvement Values & integrity Collective Action Active development of Compliance System/ external recognition 2010 2011 2012 2013 First funding round Integrity Initiative End of monitorship (Dec. 15, 2012) Dow Jones Sustainability Index: highest rating in the category Compliance for third time in a row Second funding round Integrity Initiative

The Siemens Compliance System: Prevent – Detect – Respond Management responsibility Compliance risk management Policies and procedures Training and communication Advice and support Integration in personnel processes Collective Action Whistle blowing channels “Tell us” and Ombudsman Compliance controls Monitoring and Compliance reviews Compliance audits Compliance investigations Consequences for misconduct Remediation Global case tracking

The Siemens Compliance System Siemens Today

“Tone from the top” as important internal and external message “The culture of a company and its values make the difference. People rightly associate Siemens with reliability, fairness and integrity.” Joe Kaeser, President and CEO of Siemens AG

Our Compliance System – Management responsibility is the focus We continuously develop the Compliance System further in order to adapt it to changing requirements according to our global business. Effective preventive measures such as risk management, policies & procedures, training & communication enable systematic misconduct to be avoided Prevent Management responsibility Respond Detect Explicit consequences and clear reactions support the prevention of misconduct, for example to punish wrongdoing and to eliminate deficiencies Effective Compliance work requires complete clarification: whistle-blowing channels “Tell us” and Ombudsman, as well as professional and fair investigations

Compliance is one of the four main categories of the Internal Control System Risk and Internal Control Risk identification highlights gaps in internal controls and influences the identification of necessary control requirements as well as their monitoring. Enterprise Risk Management (ERM) Internal Control System (ICS) Monitoring of control requirements may result in the identification of unmitigated risks. The Policy & Control Masterbook (PCMB) comprises in total ~750 Siemens global control requirements and forms the basis for the Siemens “In Control” Statement. Quarterly C orporate Circulars Categories Strategic CL CO* is governance owner of 44 control requirements thereof - 25 CCF** - 19 other sources, e.g. CL CO circulars SOA 404 Annex 4 Operations Sources ICS Self Assessment Catalogue Financial ICS Task Force Output Compliance Others Update

We need to continue fostering an integrity culture 9% We need to continue fostering an integrity culture Questions to guide Siemens employees towards compliant and responsible behavior 1 Is it the right thing for Siemens? Is it consistent with Siemens core values and mine? 2 3 Is it legal? Is it something I am willing to be held accountable for? 4 If the answer is YES to all of those questions, DON'T WORRY, BE CONFIDENT

“The tone from the top" has to be lived Middle Management needs to Anchor compliance in the entire value chain Promote Siemens' compliance tools Full commitment towards Compliance and Clean Business Explain and demonstrate compliance-related issues Motivate and encourage employees Engage in regular communication with employees Show priority of compliance at all times "walk the talk"

Compliance Helpdesk consists of five parts "Ask Us" Partly available "Tell Us" “Find It" Do you have any questions about compliance? You can ask them at any time via the Compliance HelpDesk “Ask Us.” Use “Find It” to search for compliance related information, such as FAQs, policies & guidelines or training material. HelpDesk “Tell Us” function provides global, round-the-clock facilities for making statements on compliance-related breaches. Compliance Helpdesk & Monitoring “Approve It" “Improve It" “Approve It” is the platform for approval requests regarding gifts and hospitality With “Improve It” you can help to improve the Compliance program by adding your ideas and suggestions.

Siemens provides employees with training in line with their roles and responsibility Type of Training Target Group Training in Global Bribery and Global Competition awareness Anti-Corruption Basic & Refresher Training Antitrust Risk Assessment & Measures Training on Compliance Tools 1) Compliance Officer Trainings Senior Management 2) “Sensitive Functions” 3) Business/regional specific groups (e.g. sales, project management, procurement, etc.) All entities based on their risk class Compliance Organization In-person trainings Anti-Corruption Global Competition (Antitrust) Business Conduct Guidelines Your Signature – Your Responsibility Employees with signing authority Web-based trainings

The Siemens Compliance Organization – clear roles & responsibilities Direkte Anbindung an den CEO Direct connection to the CEO Roles of Compliance Officers Rollen des Compliance Officers President and CEO Joe Kaeser General Counsel Situation * Andreas C. Hoffmann Chief Compliance Officer Klaus Moosmayer Tasks Continuous communication about the importance of Compliance for Siemens Bundling of company-wide expertise for avoidance of corruption and other violations of fair competition, and regarding data privacy Governance for investigations and disciplinary response Company-wide Compliance organization in Headquarters, Sectors and Regions * Direct reporting line to Board of Management and Supervisory Board re compliance risks and measures.

Compliance in global business – tasks and challenges Employees Business Partners Environment Dissemination of knowledge about regulations and processes Attitude and values lived out in practice Role and role-model function of executives are decisive factors Integrity dialog Business partners as intermediaries to customers Examples: sales agents, system integrators, custom agents Risk-based Compliance due diligence of all business partners High risk of corruption in many countries where Siemens does business Countries with high annual growth also affected Collective Action

Our employees – in dialog on Compliance with their line manager Integrity dialog in team meetings Objectives to maintain awareness of Compliance to provide a practical demonstration of management responsibility Managers discuss Compliance-related topics with their teams Contents: Risk-based selection of topics with central and local relevance Supported by Compliance Officer Global rollout during Fiscal Year 2013 Repeated on annual basis

Business partner-related Compliance risks – uniform risk-assessment of all relationships The Compliance Due Diligence process for Business Partners All business partners with an intermediary function between Siemens and the customer must undergo a risk assessment (uniform across the company and supported by a tool). Based on certain risk indicators – such as, for example, the risk of corruption in the country of deployment – a risk class (higher, medium or lower risk) is defined for the business relationship, which subsequently determines further procedure (Due Diligence, requirement for approval and mandatory contract clauses). Around 13,000 business partners are classified by using this process.

1% Collective Action calls for high Compliance standards which benefit all market participants Fight corruption in concert with competitors and other players Create high compliance standards via a concept of prevention Integrate an independent institution for promotion and monitoring Define sanctions in case of violations Customers Governments Collective Action NGOs 1) Society Competitors 1) Non-Governmental Organizations such as Transparency International

We must remain vigilant… L‘Etat de São Paulo poursuit Siemens en justice Bloomberg.com Siemens Agrees to Pay $10 Million to Settle New York Fraud Case Spiegel Online Versuchte Bestechung in Kuwait: Siemens deckt neue Korruption auf As at: January 2014

…and determinedly pursue any cases that arise… Stipulated standards The presumption of innocence applies, employee rights are safeguarded Works Council co-determination rights are protected Data protection is observed

… and continue with the constant development of the Compliance System Compliance has top priority Compliance System to support sustainable growth and create a competitive advantage Risk-based further development of the Compliance System, in order to maintain high standards High rating and recognition of our Compliance System in the annual assessments for the Dow Jones Sustainability Index: top rating in the Compliance category for the 3rd time in succession Compliance priorities for Fiscal 2014 Stand for Integrity Committed to Business Managing Risk & Assurance Responsibility for Data Privacy

Metrics and further Information The Siemens Compliance System Metrics and further Information

Compliance metrics* * Source: Siemens Annual Report 2013

Further information Business Conduct Guidelines Compliance Homepage Compliance System Brochure Siemens Integrity Initiative Annual Report 2013

Siemens doo Beograd Marko Petrovic (LCO) Siemens d.o.o. Beograd   Siemens d.o.o. Beograd Compliance (LC) Omladinskih brigada 21 11070 Beograd, Srbija Tel: +381 11 20 96 321 Mob: +381 60 81 70 321 marko.v.petrovic@siemens.com www.siemens.rs