Siemens 2011 Annual Report Download - page 321

153 D. Consolidated Financial Statements 273 E. Additional information
158 D. Consolidated Statements of Changes in Equity
160 D. Notes to Consolidated Financial Statements
266 D. Supervisory Board and Managing Board
154 D. Consolidated Statements of Income
155 D.2 Consolidated Statements of Comprehensive Income
156 D. Consolidated Statements of Financial Position
157 D. Consolidated Statements of Cash Flow
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or other illegal acts. The Company ’s operating activities, fi-
nancial results and reputation may also be negatively affect-
ed, particularly as a result of penalties, fines, disgorgements,
compensatory damages, third-party litigation, including with
competitors, the formal or informal exclusion from public in-
vitations to tender, or the loss of business licenses or permits.
Additional expenses and provisions, which could be material,
may need to be recorded in the future for penalties, fines,
damages or other charges in connection with the investiga-
tions.
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 recog-
nized an amount of € million in Other operating income
from the agreed recovery of funds from one of these accounts.
Civil litigation
As previously reported, Siemens AG reached a settlement with
nine out of eleven former members of the Managing and Su-
pervisory Board on December , . The settlement relates
to claims of 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. The Annual Shareholders’ Meeting approved all
nine settlements between the Company and the former mem-
bers of the Managing and Supervisory Board on January ,
. The shareholders also approved a settlement agreement
between the Company and its directors and officers insurers
regarding claims in connection with the D&O insurance of up
to € million. Siemens recorded € million gains, net of
costs, from the D&O insurance and the nine settlements. 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, which is currently pending.
As previously reported, 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 was approached by a com-
petitor to discuss claims it believed it had against the Compa-
ny. The alleged claims related to allegedly improper payments
by the Company in connection with the procurement of pub-
lic and private contracts. Siemens and the competitor were
able to resolve the matter on mutually agreeable terms.
As previously reported, a securities class action was filed in
December  against Siemens AG with the United States
District Court for the Eastern District of New York seeking
damages for alleged violations of U.S. securities laws. In
March , the Court granted the Company ’s motion to dis-
miss the action. The plaintiffs’ motion to reconsider was de-
nied by the court. Plaintiffs did not appeal the court’s deci-
sion. Accordingly, the dismissal is final.
ANTITRUST PROCEEDINGS
As previously reported, in February , the European Com-
mission launched an investigation into possible antitrust vio-
lations involving European producers of power transformers,
including Siemens AG and VA Technologie AG (VA Tech),
which Siemens acquired in July . The German Antitrust
Authority (Bundeskartellamt) has become involved in the pro-
ceeding and is responsible for investigating those allegations
that relate to the German market. Power transformers are
electrical equipment used as major components in electric
transmission systems in order to adapt voltages. On Octo-
ber , , the European Commission imposed fines totaling
€. million on seven companies with regard to a territori-
al market sharing agreement related to Japan and Europe.
Siemens was not fined because it had voluntarily disclosed
this aspect of the case to the authorities. The German Anti-
trust Authority continues its investigation with regard to the
German market. Siemens is cooperating with the German An-
titrust Authority in the ongoing investigation.
As previously reported, in April , Siemens AG and former
VA Tech companies filed actions before the European Court of
First Instance in Luxemburg against the decisions of the Euro-
pean Commission dated January , , to fine Siemens
and former VA Tech companies for alleged antitrust violations
in the European Market of high-voltage gas-insulated switch-
gear between  and . Gas-insulated switchgear is
electrical equipment used as a major component for power
substations. The fine imposed on Siemens AG amounted to
€. million and was paid by the Company in . The fine
imposed on former VA Tech companies, which Siemens AG ac-
quired in July , amounted to €. million. In addition,