APC 2006 Annual Report Download - page 110

Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2004
Number of companies France Abroad France Abroad France Abroad
Parent company and fully consolidated subsidiaries 67 458 69 366 65 328
Proportionally consolidated companies - - - - - -
Companies accounted for by the equity method 1 2 1 3 2 5
Sub-total by region 68 460 70 369 67 333
Total 528 439 400
Consolidated financial statements at December 31, 2006
2.5 - Perpetual bonds
In the French GAAP accounts, the 1991 perpetual
bonds are recorded in debt at their nominal value,
while the related interest rate swaps are carried off-
balance sheet.
In accordance with interpretation SIC 12 and IAS 39,
the Group consolidated the special purpose entity that
holds the perpetual bonds. The swaps taken out by the
special purpose entity in connection with the perpetu-
al bonds have been measured at fair value.
Interest rate swaps on the perpetual bonds taken out
directly by the Group, which do not qualify for hedge
accounting, are recognized in the balance sheet at fair
value, with gains and losses arising from remeasure-
ment at fair value recognized in other financial income
and expense.
At January 1, 2005, the value of the perpetual bonds
and the fair value of the swaps the special purpose
entity was 21 million, and the fair value of the swaps
entered into directly by the Group was 56.4 million.
2.6 - Put options granted
to minority shareholders
The Group has given commitments to buy out the
minority shareholders of consolidated subsidiaries (put
options). These commitments were reported off-bal-
ance sheet in the French GAAP accounts at Decem-
ber 31, 2004.
IAS 32 requires their recognition in debt, at fair value,
which corresponds to the option strike price. As
explained in note 1.21, in the absence of established
accounting practice, the difference between the fair
value of the put options and the underlying minority
interests has been posted to goodwill.
Note 3 - Changes in the scope of consolidation
3.1 - Additions and removals
The consolidated financial statements for the year ended December 31, 2006 include the accounts of the compa-
nies listed in note 30. The scope of consolidation at December 31, 2006, 2005 and 2004 is summarized as follows:
The principal changes at December 31, 2006 were as
follows:
Acquisitions
On January 1, 2006, the Group bought out CIH Ltd’s
interest in the Clipsal Asia joint venture, in accordance
with the terms of the agreement between the two part-
ners. Clipsal Asia was previously accounted for by the
equity method.
On February 15, 2006, the Group acquired the assets
of US-based Silicon Power Corporation’s Crydom brand
Custom Sensors business.
On February 28, 2006, the Group acquired AEM SA, a
Spanish company that designs, manufactures and
markets low voltage electrical products and installation
systems and control.
On March 27, 2006, the Group acquired the entire cap-
ital of Citect, an Australian manufacturer of Supervi-
sion Control and Data Acquisition (SCADA) solutions
and Manufacturing Execution Systems (MES).
On April 30, 2006 Schneider Electric acquired OVA G.
Bargellini SpA, Italy’s leading emergency lighting com-
pany with operations in the Installation Systems and
Control segment.
On May 31, 2006 the Group acquired Merten GmbH &
Co Kg, a German firm that offers intelligent low voltage
solutions and Installation Systems and Control for the
residential and buildings markets.
On July 27, 2006, the Group acquired the Invensys
Building Systems (IBS) business in North America and
Asia. Following on the acquisition of Invensys'
Advanced Building Systems business (ABS EMEA) in
July 2005, this transaction extends Schneider Elec-
tric’s current positions in Building Automation.
On September 26, 2006, Schneider Electric finalized
the acquisition of Austria-based VA Tech Elin EBG
Elektronik, a company that develops and manufac-
tures high-power speed drive products and solutions.
Lastly, on November 23, 2006, the Group acquired
UK-based GET Group PLC. This acquisition will
expand Schneider Electric’s Installation Systems and
Control lineup with wiring devices for the UK and
British Standard export markets.
These companies have been fully consolidated from
their respective acquisition dates.
Details of the calculation of goodwill on these acquisi-
tions are provided in note 4.
Newly consolidated companies
Several joint ventures were formed during the year
with Chinese partners to further develop business.
These included:
SSBEA (Schneider Shaanxi Baoguang Electrical
Apparatus Co.ltd) in February 2006, in the area of
medium voltage vacuum circuit breakers.
East in September 2006, in the area of Critical Power.
108