Siemens 2010 Annual Report Download - page 275

147 Consolidated Financial Statements
148 Consolidated Statements of Income
149 Consolidated Statements of Comprehensive Income
150 Consolidated Statements of Financial Position
151 Consolidated Statements of Cash Flow
152 Consolidated Statements of Changes in Equity
154 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
261 Additional information

As previously reported, the Company is following up on evi-
dence of bank accounts and the amounts of the funds depos-
ited therein in various locations. Certain funds have been fro-
zen by authorities. During fiscal , the Company recognized
an amount of € in Other operating income from the agreed
recovery of funds from one of these accounts.
Civil litigation
As already disclosed by the Company in press releases, Siemens
AG asserted claims for damages against former members of
the Managing and Supervisory Board. The Company based its
claims on breaches of organizational and supervisory duties in
view of the accusations of illegal business practices that oc-
curred in the course of international business transactions in
the years  to  and the resulting financial burdens for
the Company. On December ,  Siemens reached a settle-
ment with nine out of eleven former members of the Manag-
ing and Supervisory Board. As required by law, the settlements
between the Company and individual board members were
subject to approval by the Annual Shareholders’ Meeting. The
Company reached a settlement agreement with its directors
and officers (D&O) insurers regarding claims in connection
with the D&O insurance of up to €. The Annual Sharehold-
ers’ Meeting approved all nine settlements between the Com-
pany and the former members of the Managing and Supervi-
sory Board on January , . The shareholders also agreed
to the settlement with respect to claims under the D&O insur-
ance. During the second quarter of fiscal , Siemens AG
received certain benefits as required under the aforementioned
settlement agreements with the result that an amount of €
net of related cost was recognized primarily in Other operating
income. Thereof € resulted from the settlement agreement
with the D&O insurers and € resulted from settlement agree-
ments with former board members. The former board mem-
bers used claims they had against the Company to offset a
portion of their obligations under the aforementioned settle-
ment agreements. The remaining amount was or will be settled
by the former board members in cash. On January , ,
Siemens AG filed a lawsuit with the Munich District Court I
against the two former board members who were not willing
to settle, Thomas Ganswindt and Heinz-Joachim Neubürger.
The complaint was served upon the defendants. The defen-
dants asked Siemens AG to produce certain documents.
As previously reported, an alleged holder of Siemens American
Depositary Shares filed a derivative lawsuit in February 
with the Supreme Court of the State of New York against cer-
tain current and former members of Siemens’ Managing and
Supervisory Boards as well as against Siemens as a nominal
defendant, seeking various forms of relief relating to the alle-
gations of corruption and related violations at Siemens. The
alleged holder of Siemens American Depository Shares volun-
tarily withdrew the derivative action in September .
As previously disclosed, in June , the Republic of Iraq filed
an action requesting unspecified damages against  named
defendants with the United States District Court for the South-
ern District of New York on the basis of findings made in the
“Report of the Independent Inquiry Committee into the United
Nations Oil-for-Food Programme.” Siemens S.A.S. France,
Siemens A. Ş. Turkey and OSRAM Middle East FZE, Dubai, are
among the  named defendants. Process was served upon all
three Siemens subsidiaries. The three Siemens subsidiaries
will defend themselves against the action.
As previously reported, Siemens AG had filed a request for ar-
bitration against the Republic of Argentina (Argentina) with
the International Center for Settlement of Investment Disputes
(ICSID) of the World Bank. Siemens AG claimed that Argentina
had unlawfully terminated its contract with Siemens for the
development and operation of a system for the production of
identity cards, border control, collection of data and voters’
registers (DNI project) and thereby violated the Bilateral Invest-
ment Protection Treaty between Argentina and Germany (BIT).
Siemens AG sought damages for expropriation and violation of
the BIT of approximately U.S. $ million. A unanimous deci-
sion on the merits was rendered by the ICSID arbitration tribu-
nal on February , , awarding Siemens AG compensation
in the amount of U.S. $. million, plus compound interest
thereon at a rate of . percent since May , . The tribu-
nal also ruled that Argentina is obligated to indemnify Siemens
AG against any claims of subcontractors in relation to the proj-
ect (amounting to approximately U.S. $ million) and, fur-
thermore, that Argentina would be obligated to pay Siemens
AG the full amount of the contract performance bond (U.S.
$ million) in the event this bond was not returned. The time
period set by the tribunal for returning the contract perfor-
mance bond subsequently elapsed without delivery. As previ-
ously reported, Argentina subsequently filed applications with
the ICSID aiming at the annulment and reversal of the decision
and a stay of enforcement of the arbitral award. On August ,
, Argentina and Siemens AG reached an agreement to
mutually settle the case and discontinue any and all civil pro-
ceedings in connection with the case without acknowledging
any legal obligations or claims. No payment was made by ei-
ther party.
As previously reported, Siemens has been approached by a
competitor to discuss claims it believes it has against the Com-