Siemens 2010 Annual Report Download - page 164

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis
50 Business and operating environment
78 Fiscal  – Financial summary
81 Results of operations
98 Financial position
110 Net assets position
113 Overall assessment of the economic position

DIVIDEND
At the Annual Shareholders’ Meeting scheduled for January ,
, the Managing Board, in agreement with the Supervisory
Board, will submit the following proposal to allocate the unap-
propriated Net income of Siemens AG for the fiscal year ended
September , : to distribute a dividend of €. on each
no-par value share entitled to the dividend for fiscal year 
existing at the date of the Annual Shareholders’ Meeting, and
the remaining amount to be carried forward. The prior-year
dividend was €. per share.
CRITICAL ACCOUNTING ESTIMATES
Siemens’ Consolidated Financial Statements are prepared in
accordance with International Financial Reporting Standards
(IFRS), as adopted by the European Union (EU). The financial
statements are also in accordance with IFRS as issued by the
IASB. Our significant accounting policies, as described in
“Notes to Consolidated Financial Statements,” are essential to
understand our results of operations, financial positions and
cash flows. Certain of these accounting policies require critical
accounting estimates that involve complex and subjective
judgments and the use of assumptions, some of which may be
for matters that are inherently uncertain and susceptible to
change. Such critical accounting estimates could change from
period to period and have a material impact on our financial
position, results of operations and cash flows. Critical account-
ing estimates could also involve estimates where management
reasonably could have used a different estimate in the current
accounting period. Management cautions that future events
often vary from forecasts and that estimates routinely require
adjustment.
For information on Critical accounting estimates, see “Notes to
Consolidated Financial Statements.” For a sensitivity analysis
of the impairment of Healthcare Sector’s Diagnostics Division
see “Net assets position – Goodwill impairment at Healthcare
Sector’s Diagnostics Division.”
Financial position
PRINCIPLES AND OBJECTIVES
OF FINANCIAL MANAGEMENT
Siemens is committed to a strong financial profile, which pro-
vides the financial flexibility to achieve growth and portfolio
optimization goals largely independent of market conditions.
Financial management at Siemens is executed under a frame-
work of applicable laws and internal guidelines and regula-
tions. It includes the following activities:
Liquidity management
Our principal source of financing is cash inflows from operat-
ing activities. Corporate Treasury generally manages cash and
cash equivalents for the Siemens Group and has primary re-
sponsibility for raising funds in the capital markets for the
Siemens Group through various debt products, with the excep-
tion of countries with conflicting capital market controls. The
relevant consolidated subsidiaries in these countries obtain
financing primarily from local banks. Siemens follows a pru-
dent borrowing policy which is aimed towards a balanced fi-
nancing portfolio, a diversified maturity profile and a comfort-
able liquidity cushion. On September , , Siemens held
€. billion in cash and cash equivalents, mainly in euros,
of which % were managed by Corporate Treasury. Especially
in light of the global financial markets crisis, Siemens monitors
funding options available in the capital markets, trends in the
availability of funds and the cost of such funding to evaluate
possible strategies regarding its financial and risk profile.
Corporate Treasury enters into reverse repurchase agreements
with financial institutions with investment grade credit rat-
ings. Siemens holds securities as collateral under these agree-
ments via a third party (Euroclear) and is permitted to sell or
re-pledge the securities. The extent to which Siemens engages
in transactions involving reverse repurchase agreements de-
pends on its liquidity management needs and the availability
of cash and cash equivalents which varies from time to time.
For further information on reverse purchase agreements refer
to “Notes to Consolidated Financial Statements.”
Cash management
Cash management comprises the management of bank part-
ner relationships and bank accounts as well as the execution
of payments, including the administration of cash pools, on a