APC 2004 Annual Report Download - page 71

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1.22 - Earnings per share
Primary earnings per share is calculated by dividing
the net income of the year by the weighted average
number of shares outstanding during that year.
Diluted earnings per share is calculated by adjusting
net income and the number of shares outstanding for
the dilutive effect of conversion of convertible bonds
and exercise of stock options outstanding at the year
end. The dilutive effect of convertible bonds is deter-
mined using the "if converted" method, which consists
of taking into account the number of potential shares
to be issued in the case of conversion of instruments
convertible into shares. The dilutive effect of stock
options is determined by applying the "treasury stock"
method, which consists of taking into account the
number of shares that could be purchased, based on
the average share price for the year, using the pro-
ceeds from the exercise of the rights attached to the
options.
1.23 - Statement of cash flows
The consolidated statement of cash flows has been
prepared using the "indirect method", showing the
reconciliation of net income to net cash provided by
operations. Net cash and cash equivalents represent
cash and cash equivalents as presented in the bal-
ance sheets net of bank overdrafts.
Note 2 - Changes
in Scope of Consolidation
2.1 - Additions and removals
The consolidated financial statements at December
31, 2004 include the financial statements of the com-
panies listed in Note 27. The scope of consolidation at
December 31, 2004, 2003 and 2002 is summarized
as follows:
2004 highlights included:
New companies
Clipsal Asia Holding Limited, a joint venture formed in
December 2003 with Singapore-based CIH Ltd., was
accounted for by the equity method as of January 1,
2004 due to CIH's dominating role in managing the
company in its first year.
Clipsal's Ultra Terminal subsidiaries, acquired from
Gerard Industries in December 2003 and located in
Australia, New Zealand, India and South Africa, were
fully consolidated as of January 1, 2004. These sub-
sidiaries are wholly owned by Schneider Electric.
Acquisitions
On February 6, 2004, the Group acquired 48.1 % of
the outstanding shares in MGE UPS Systems. The
Group acquired a further 0.6 % on November 15,
2004, bringing its total interest to 84.8 %.
Up until December 31, 2003, MGE UPS Systems was
accounted for by the equity method with a three-
month difference in year-end in relation to the Group.
As from January 1, 2004, the company was fully con-
solidated and its year-end was moved to December
31. As a result, MGE UPS Systems' results for the
fourth quarter of 2003 are accounted for by the equi-
ty method in the Group's accounts for the period
ended December 31, 2004 and its 2004 results are
fully consolidated.
On May 27, 2004, Schneider Electric acquired all out-
standing shares in California-based Kavlico Corpora-
tion. This major player in sensing technologies report-
ed sales of $156 million and operating margin of
10.6 % for the fiscal year ended August 31, 2003.
Kavlico was fully consolidated as of July 1, 2004.
On July 13, 2004, Schneider Electric completed its
full acquisition of Andover Controls from Balfour
Beatty. Based primarily in the United States, Andover
Controls is a front-ranked designer, manufacturer and
supplier of building automation and security devices,
with 2003 sales of $ 169 million.
Andover Controls was fully consolidated as of July 1,
2004.
(Number of companies) At December 31
2004 2003 2002
France Abroad France Abroad France Abroad
Parent company and
fully consolidated subsidiaries 65 328 52 266 55 251
Proportionally consolidated
companies 1 1 1 1 1 1
Companies accounted for
by the equity method 1 4 2 7 2 9
Sub-total by region 67 333 55 274 58 261
Total 400 329 319
Consolidated financial statements