Siemens 2011 Annual Report Download - page 248

6 A. To our shareholders
23 B. Corporate Governance 51 C. Combined management’s discussion and analysis
52 C. Business and operating environment
80 C. Fiscal  – Financial summary
83 C. Results of operations
101 C. Financial position
114 C. Net assets position
117 C. Overall assessment of the economic position
118 C. Report on post-balance sheet date events
119 C. Report on expected developments and
associated material opportunities and risks
135 C. Information required pursuant to Section  ()
and Section  () of the German Commercial
Code (HGB) and explanatory report

million related to the purchase of Siemens Medical Solutions
Diagnostics Europe Limited, Ireland, from a Group holding; a
€ million capital increase to OSRAM AG; € million relat-
ed to converting a shareholder loan to NSN into preferred
shares; and € million related to new capital provided to
NSN in exchange for preferred shares.
Receivables and other assets increased % to €. bil-
lion due primarily to receivables from affiliated companies as
a result of intra-group financing activities.
Marketable securities increased from € million to €.
billion. This increase includes investments in commercial
papers of €. billion.
Cash and cash equivalents decreased % to €. billion
as a result mainly of the dividend of €. billion we paid to
shareholders for fiscal ; purchase of additional shares
from shareholders of Siemens Ltd, India, of € million; in-
vestments in commercial papers of €. billion (see market-
able securities) and redemption of a bond of €. billion.
These were partly offset by strong operating performances in
the Sectors and cash inflows in connection with the sale of
Areva NP S.A.S.
Equity increased from €. billion to €. billion. This
increase was caused by the profit for the year of €. billion
and the issuance of treasury stock in conjunction with our
share-based compensation program of € million, which
was partly offset by dividends paid for fiscal  amounting
to €. billion. The equity ratio at September ,  was
.% (: .%).
Provision for pension and other obligation increased from
€. billion to €. billion, principally because of addi-
tions relating to interest costs and past service costs.
Other provisions increased from €. billion to €. bil-
lion. The year-over-year increase resulted primarily from addi-
tions to tax provisions of € million and additional provi-
sions for operating expenses of € million. Furthermore, in
fiscal , Healthcare reevaluated the commercial feasibility
of its particle therapy venture and as a result, shifted the fo-
cus of certain particle therapy projects primarily to research.
This led to provisions of € million. These factors were part-
ly offset by the usage of the provision of € million men-
tioned above for the contingent losses on the sale of Siemens
IT Solutions and Services.
Trade payables, liabilities to affiliated companies and oth-
er liabilities increased % to €. billion due primarily to
liabilities to affiliated companies as a result of intra-group fi-
nancing activities.
C.. Dividend
Siemens AG as the parent company of the Siemens Group re-
corded unappropriated net income under the accounting prin-
ciples of the German Commercial Code of €. billion for fis-
cal  compared to €. billion for the previous year.
At the Annual Shareholders’ Meeting, scheduled for January
, , the Supervisory Board and the Managing Board will
submit the proposal to allocate the unappropriated net in-
come of Siemens AG for the fiscal year ended September ,
 to distribute a dividend of €. on each no-par value
share entitled to dividend for fiscal year , and the remain-
ing amount to be carried forward. The prior-year dividend was
€. per share.
C.. Use of financial instruments
Siemens AG carries out a central role within the Siemens
Group in the management of financial market risks. As part of
the Company ’s risk management program, a variety of deriva-
tive financial instruments is used to reduce risks resulting pri-
marily from fluctuations in foreign currency exchange rates,
interest rates and commodity prices.
The Company manages its risks associated with fluctuations
in foreign currency denominated assets, liabilities, firm com-
mitments and forecast transactions primarily through a Com-
pany-wide portfolio approach. The derivative financial instru-
ments used primarily are foreign currency exchange con-
tracts, combined interest / currency swaps and 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, combined interest / currency
swaps, interest rate options, interest rate futures as well as caps
and floors. The purpose of these instruments is predominantly
to hedge against the risk of interest rate changes affecting fi-
nancial liabilities of the Group issued via foreign subsidiaries of
Siemens AG, and to optimize net interest income /expense and
interest rate risk relative to a benchmark, respectively.