APC 2005 Annual Report Download - page 137

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Note 16 – Net income tax benefit
In 2005, this item included only the income tax bene-
fit for the tax group headed by Schneider Electric SA.
The income tax benefit totaled 68.1 million, up
sharply from 22.4 million the year before. In 2004,
this item was reduced by a net income tax charge of
2.0 million.
Schneider Electric SA is the parent company of the
tax group comprising all French subsidiaries that are
over 95%-owned. Tax loss carryforwards available to
the Company in this capacity totaled 948.4 million at
December 31, 2005.
Note 17 - Off-balance sheet
commitments
17a) Partnership obligations
Share of the liabilities of "SC" non-trading companies
attributable to Schneider Electric SA as partner of the
companies concerned: not material.
Share of the liabilities of "SNC" flow-through entities
attributable to Schneider Electric SA as partner of the
entities concerned: not material.
17b) Guarantees given and received
Commitments given:
Counterguarantees of bank guarantees: None
Other guarantees given: 7.6 million
Commitments received:
Bank counterguarantees: None
17c) Financial instruments
The Company does not purchase or sell any financial
instruments. Hedging transactions are carried out by
the manager of the Group cash pool, Boissière
Finance, a wholly-owned subsidiary of Schneider
Electric Industries SAS, which in turn is wholly-owned
by Schneider Electric SA.
17d) Exchange of Legrand shares
As part of its public exchange offer for Legrand SA,
Schneider Electric SA made a commitment to
exchange shares held upon exercise of options
granted by Legrand for Schneider Electric shares.
When Legrand SA was sold to KKR/Wendel
Investissement, Schneider Electric SA set up a call
and put system for the Legrand shares created
through the exercise of said options. These shares
are re-sold to Legrand SAS (formerly known as
FIMAF), an investment vehicle of the KKR/Wendel
Investissement consortium.
The stock option plans in question are fully covered.
Note 18 – Other information
18a) Number of employees
At December 31, 2005, the Company had three
employees.
18b - Consolidated financial statements
Schneider Electric SA is the parent company of the
Group and therefore publishes the consolidated finan-
cial statements of the Schneider Electric Group.
Note 19 – Subsequent events
On the Chairman’s suggestion, seconded by the
Remunerations and Appointments & Corporate Gov-
ernance Committee, the Board decided at its meeting
of January 6, 2006 to ask shareholders to approve a
change in the corporate governance system at the
Annual and Extraordinary Meeting of May 3, 2006.
The system would comprise a Supervisory Board and
a Management Board.
In 2005, capital gains stemmed primarily from the sale of Schneider Electric SA shares held under "Other invest-
ment securities" for allocation on exercise of stock options. Capital gains on the sale of Schneider Electric SA
shares held under "Marketable securities" accounted for substantially all of other non-recurring income – net.
Aggregate income from the sale of Schneider Electric SA shares amounted to 6.8 million.
Net allocations to provisions included 22.9 million for impairment of receivables related to the Pinglin contract
(see notes 3 and 8) and 3.8 million for contingencies related to stock option plan 24 (see note 8).
Note 15 - Net non-recurring expense
Dec. 31, 2005 Dec. 31, 2004
Net gains/(losses) on fixed and financial asset disposals 2,938 (6,741)
Provisions net of reversals (26,686) (4,750)
Other non-recurring income - net 4,642 6,545
Net non-recurring expense (19,106) (4,946)
Company Financial Statements