Siemens 2010 Annual Report Download - page 208

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

Current assets increased by € million year-over-year. The
breakdown of the increase in trade and other receivables,
other assets was as follows: trade receivables, € million;
receivables from subsidiaries, € million; other receivables
and other assets, € million. Treasury stock reported in fiscal
 under marketable securities are separately presented as
an offset to equity following BilMoG requirements. As a conse-
quence, the carrying amount of securities was reduced by
€, million. Cash and cash equivalents increased by €,
million as a result of both strong operating performance and
an increase in billings in excess of costs.
Deferred tax assets were reclassified from current assets to a
separate balance sheet item and the prior-year figure is re-
ported on a comparable basis. The increase in deferred tax as-
sets resulted from temporary differences between the carrying
amounts in the HGB financial statements and those serving as
the tax base as well as recoverable loss carryforwards.
Shareholder’s equity increased slightly, to €, million. The
increase is due to higher Net income, largely offset by a nega-
tive net effect on retained earnings due to first-time adoption
of the BilMoG regulations. Accordingly, retained earnings de-
creased by €, million following the requirement to offset
treasury stock within equity. This decrease was only partly
compensated by a positive effect on retained earnings of €,
million, primarily related to the adoption of the requirement to
consider deferred taxes on temporary differences as well as tax
loss carry forwards as permitted under BilMoG.
For further information on the effects of first-time adoption of
BilMoG on our balance sheet, refer to the annual financial
statements for Siemens AG.
The equity ratio declined to .% from .% as of September
, .
Siemens AG has made use of the option available under BilMoG
and elected to maintain the special reserve with an equity por-
tion. In fiscal , the special reserve with an equity portion
was € million, a decrease of € million from the prior-year
level. Provisions for pension plans and similar commitments
declined by € million and other accruals and provisions in-
creased by €, million. The increase in other accruals and
provisions was due mainly to an expected loss in connection
with the strategic reorientation and carve-out of Siemens IT
Solutions and Services as well as to an increase in provisions
for decommissioning of certain facilities, both as described
above. Liabilities rose by €, million, attributable largely to
an increase in billings in excess of costs, intragroup financing
activities, and an increase in other liabilities. Other liabilities
include a liability of € million in connection with the above-
mentioned staff reduction measures at Siemens IT Solutions
and Services.
DIVIDEND
As the parent company of the Siemens group, Siemens AG re-
corded unappropriated Net income under German accounting
principles (HGB) of €, million for fiscal  compared to
€, million for the previous year.
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.
USE OF FINANCIAL INSTRUMENTS
Siemens AG carries out a central role within the Siemens group
in the management of financial market risks. This role involves
the use of a wide range of derivative financial instruments to
limit or eliminate the risks that arise mainly as a consequence
of fluctuations in exchange rates, interest rates and commod-
ity prices.
Siemens AG pursues primarily a portfolio approach across the
group to hedge the risks resulting from fluctuations in assets
and liabilities denominated in foreign currency, pending trans-
actions or forecasted transactions. The financial instruments
used in this approach are, for the most part, forward exchange
contracts together with combined cross-currency interest rate
swaps and currency options.
In the context of the group-wide management of interest rate
risk, Siemens AG uses various interest rate hedging instru-
ments such as interest rate swaps, caps, floors, and interest
rate futures. The purpose of these instruments is predomi-
nantly to hedge against the risk of interest rate changes affect-