APC 2007 Annual Report Download - page 165

6
Company financial statements at December 31, 2007
8a - Contingencies
A provision was set aside in 2006 for stock option plan 24
because the exercise price was lower than the carrying
value of the underlying treasury shares. Following the Man-
agement Board’s decision that the options in plan 24 would
be options to subscribe new shares, the underlying treas-
ury shares were reallocated to plans 27, 28 and 29.
Management is confident that balance sheet provisions for
known disputes in which the Company is involved are suf-
ficient to ensure that these disputes do not have a material
impact on assets or income. In particular, sufficient provi-
sions have been set aside to cover the potential conse-
quences of a current dispute in Belgium involving former
senior executives and managers of the Company.
Schneider Electric SA carried out two new bond issues in
2007. The first, on January 26, 2007, consisted of 110
million worth of bonds at 3.375% due January 26, 2009, is-
sued at a price corresponding to 98.186% of par and
hedged at the Euribor 3-month rate +0.16%. The second,
on October 8, 2007, consisted of 600 million worth of
bonds at 5.375% due January 8, 2015, issued at a price
corresponding to 99.915% of par. These bonds are traded
on the Luxembourg stock exchange. The issue premium
and issue costs are amortized according to the effective
interest method.
Previous bond issues are as follows:
In 2006, Schneider Electric SA issued 1.0 billion worth
of bonds. The issue comprised a 500 million tranche at
the Euribor 3-month rate + 0.20% due July 18, 2011, and
a 500 million tranche at 4.5%, due January 17, 2014.
Note 8: Provisions for contingencies and pension accruals
Note 9: Bonds
Dec. 31, 2006 Increases Decreases Dec. 31, 2007
Provisions for contingencies
Stock option plan no. 24 3,760 - (3,760) -
Other 970 27 - 997
4,730 27 (3,760) 997
Provisions for pension accruals
Pension accruals 31,226 2,500 (2,027) 31,699
35,956 2,527 (5,787) 32,696
Amount Interest rate Maturity
Dec. 31, 2006 Dec. 31, 2007
Schneider Electric SA 2007 450,000 -6.125% fixed Oct. 19, 2007
Schneider Electric SA 2008 750,000 750,000 3.875% fixed Oct. 31, 2008
Schneider Electric SA 2010 900,000 900,000 3.125% fixed Aug. 11, 2010
Schneider Electric SA 2017 600,000 600,000 4.000% fixed Aug. 11, 2017
Schneider Electric SA 2011 500,000 500,000 Euribor +0.2% variable July 18, 2011
Schneider Electric SA 2014 500,000 500,000 4.500% fixed Jan. 17, 2014
Schneider Electric SA 2009 - 110,000 3.375% fixed Jan. 26, 2009
Schneider Electric SA 2015 - 600,000 5.375% fixed Jan. 8, 2015
3,700,000 3,960,000
7c - Retained earnings
Pursuant to the third resolution approved by shareholders
at the Annual Meeting of April 26, 2007, the portion of 2006
profit that was not distributed in 2007 was allocated to re-
tained earnings, in an amount of 204.7 million.
In addition, unpaid dividends on shares held in treasury as
of the dividend payment date were allocated to retained
earnings.
As a result of these movements, retained earnings totaled
483,791,000 at December 31, 2007.
8b - Pension accruals
The Company has various obligations towards its current
and retired senior executives and managers. Following an
actuarial valuation performed in 2007, the provision for
these obligations was increased to 31.7 million.
The Company applied the corridor method to actuarial
gains and losses arising from this valuation (see Account-
ing Principles). At December 31, 2007, the amount to be
recognized in the income statement over 10 years came to
0.8 million.
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