Annual Report 2012 - Knorr-Bremse AG.

10 Report
Report of the Supervisory Board
In the course of fiscal 2012, the Supervisory Board concerned itself in detail with the state
and development of Knorr-Bremse AG and all Group companies.
Along with important individual transactions and human
resources decisions, this also included consideration of
fundamental aspects of strategic direction and corporate
planning. In addition, the Supervisory Board received regular
reports from the Executive Board either in the course
of its meetings or in written or oral form. The Supervisory
Board examined important individual transactions as well
as deciding on items of business that required its approval
either by law or in line with company statutes. The information
and analyses upon which the decisions of the
Supervisory Board were based were discussed and assessed
in depth together with the Executive Board. In order
to comply with the requirements of the German Accounting
Law Modernization Act in terms of corporate
governance, a second meeting of the Financial Statements
Committee was held in mid-year. At its meetings,
the Financial Statements Committee dealt in particular
with the supervision of the accounting process, the efficacy
of the internal controlling system, the risk management
system and the internal audit system, as well as the
work of the auditors.
In fiscal 2012 the Knorr-Bremse Group was able to post a
modest increase in sales, which rose to EUR 4.30 billion
(2011: EUR 4.24 billion). The Rail Vehicle Systems division
compensated for downturns in sales in Europe, South
America and Asia/Australia by returning a strong performance
in North America. The Commercial Vehicle Systems
division benefited from the positive development of
the commercial vehicle markets in North America and
Japan in particular, which more than offset minor declines
in Europe and South America.
To safeguard the future development of the company, in
2012 Knorr-Bremse continued to invest in the strategic
development and expansion of its production plants. In
the year under review, a new Rail Vehicle Systems plant
was opened in Buccinasco (Italy). Also in 2012, construction
activities were begun or continued at five plants: in
Pune (India) for the Commercial Vehicle Systems division,
in Faridabad (India), Westminster (USA) and Granville
(Australia) for the Rail Vehicle Systems division, and in Itupeva
(Brazil) for both divisions.
In addition to organic growth, the year under review saw
corporate strategy continue to focus on targeted acquisitions
and joint ventures with the aim of optimizing the
product portfolio. In the rail vehicle sector the acquisition
of an additional 25% of the Icer Rail S.L. joint venture in
Pamplona (Spain) further strengthened the friction materials
product segment. As a result of this increase, Knorr-
Bremse subsidiary Sociedad Española de Frenos, Calefacción
y Señales S.A., Getafe (Spain) and the second
shareholder, Berkshire Rail S.L., Pamplona (Spain), now
hold equal 50% shares in the joint venture. Knorr-Bremse
subsidiary Microelettrica Scientifica S.p.A., Buccinasco (Italy)
reinforced its capabilities in the field of power systems
by acquiring the outstanding shares in Heine Resistors
GmbH, a manufacturer of special-purpose resistors
based in Dresden (Germany). In addition, Rheinmetall
Simulation Australia Pty. Ltd., Adelaide (Australia) concluded
an agreement with Knorr-Bremse subsidiary Sydac
Pty. Ltd., Adelaide (Australia) governing the acquisition
of the latter’s military driving simulators business
with effect from February 1, 2013. Through this sale,
Knorr-Bremse is moving out of an area that does not fall
within the Group’s strategic fields of activity. Moreover,
the two divisions of Knorr-Bremse founded the Knorr-
Bremse Technology Center India Private Ltd., Pune (India),
as a cooperative venture between Knorr-Bremse Systeme
für Nutzfahrzeuge GmbH, Munich (Germany) and Knorr-
Bremse Systeme für Schienenfahrzeuge GmbH, Munich
(Germany). The object of the joint venture company is to
perform development services for the parent companies.
Against the backdrop of rising sales, the company continued
to assign top priority to safeguarding the highest
quality standards in all of its products, processes and
structures. This was ensured not only through the quality
processes in place across the Group but also through targeted
employee development. Thus, in 2012, the new
Value Stream Academy – a training center serving both
divisions – was opened at the Commercial Vehicle Systems
site in Liberec (Czech Republic). The Academy drives
improvements along the entire value stream and provides
a firm theoretical grounding in the relevant principles
for Knorr-Bremse employees.
The 2012 Financial Statements and the Management Report
on Knorr-Bremse AG, the 2012 Consolidated Financial
Statements and the Management Report on the
Knorr-Bremse Group drawn up by the Executive Board,