Siemens 2010 Annual Report Download - page 191

113 Report on post-balance sheet date events
114 Report on expected developments and associated
material opportunities and risks
128 Information required pursuant to § () and
§ () HGB and explanatory report
133 Information required pursuant to § () and
§ () no.  HGB and explanatory report
135 Compensation and declaration pursuant to §a HGB
135 Additional information for supplemental
financial measures
138 Siemens AG (Discussion on basis of HGB)
147 Consolidated Financial Statements
261 Additional information

We expect that sales to emerging markets will continue to ac-
count for an increasing portion of our total revenue, as our
business naturally evolves and as developing nations and re-
gions around the world increase their demand for our offering.
Emerging market operations present several risks, including
civil disturbances, health concerns, cultural differences such
as employment and business practices, volatility in gross do-
mestic product, economic and governmental instability, the
potential for nationalization of private assets and the imposi-
tion of exchange controls. In particular, the Asian markets are
important for our long-term growth strategy, and our sizeable
operations in China are influenced by a legal system that is still
developing and is subject to change. Our growth strategy
could be limited by governments supporting local industries.
Our Sectors and Cross-Sector Businesses, particularly those
that derive their revenue from large projects, could be ad-
versely affected if future demand, prices and gross domestic
product in the markets in which those Sectors and Cross-Sector
Businesses operate do not develop as favorably as expected. If
any of these risks or similar risks associated with our interna-
tional operations were to materialize, our financial condition
and results of operations could be materially adversely affected.
Public prosecutors and other government authorities in ju-
risdictions around the world are conducting investigations
of our Company and certain of our current and former em-
ployees regarding allegations of public corruption and
other illegal acts. The results of these and any future inves-
tigations may have a material adverse effect on the devel-
opment of future business opportunities, our financial
condition and results of operations, the price of our shares
and American depository shares (ADS) and our reputation:
Public prosecutors and other government authorities in juris-
dictions around the world are investigating allegations of cor-
ruption at a number of our former business groups and re-
gional companies. In addition to ongoing investigations, there
could be additional investigations launched in the future by
governmental authorities in these or other jurisdictions and
existing investigations may be expanded. As a result, govern-
mental authorities may take action against us or some of our
employees. These actions could include further criminal and
civil fines as well as penalties, sanctions, injunctions against
future conduct, profit disgorgements, disqualifications from
directly and indirectly engaging in certain types of business,
the loss of business licenses or permits or other restrictions. In
addition to monetary and other penalties, further monitors
could be appointed to review future business practices with
the goal of ensuring compliance with applicable laws and we
may otherwise be required to further modify our business
practices and our Compliance Program. Tax authorities may
also impose certain remedies, including potential tax penal-
ties. Depending on the development of the investigations, we
may be required to accrue material amounts for such penalties,
damages, profit disgorgement or other possible actions that
may be taken by various governmental authorities. Any of the
foregoing could have a material adverse effect on our business,
financial condition and results of operations, the price of our
shares and ADS and our reputation.
Additionally, we engage in a substantial amount of business
with governments and government-owned enterprises around
the world. We also participate in a number of projects funded
by government agencies and intergovernmental organizations
such as multilateral development banks. If we or our subsidiar-
ies are found to have engaged in certain illegal acts or are
found not to have taken effective steps to address the allega-
tions or findings of corruption in our business, this may impair
our ability to participate in business with governments or in-
tergovernmental organizations and may result in formal exclu-
sions from such business, which may have a material adverse
effect on our business. For example, legislation of member
states of the European Union could in certain cases result in
mandatory or discretionary exclusion from public contracts in
case of a conviction for bribery and certain other offences or
for other reasons. As described in more detail in “Notes to Con-
solidated Financial Statements,” we or our subsidiaries have in
the past been excluded from government contracting as a re-
sult of findings of corruption or other misconduct. Conviction
for illegal behavior or exclusion from participating in contract-
ing with governments or intergovernmental organizations in
one jurisdiction may lead to exclusion in other jurisdictions or
by other intergovernmental organizations. Even if we are not
formally excluded from participating in government business,
government agencies or intergovernmental organizations may
informally exclude us from tendering for or participating in
certain contracts. From time to time, we have received re-
quests for information from government customers and inter-
governmental organizations regarding the investigations de-
scribed above and our response to those investigations. We
expect to continue to receive such requests in the future.
In addition, our involvement in existing and potential corrup-
tion proceedings could damage our reputation and have an
adverse impact on our ability to compete for business from
both public and private sector customers. The investigations
could also impair our relationship with business partners on
whom we depend and our ability to obtain new business part-
ners. They may also adversely affect our ability to pursue stra-