APC 2009 Annual Report Download - page 189

2009 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 187
COMPANY FINANCIAL STATEMENTS
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NOTES TO THE FINANCIAL STATEMENTS
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3. Notes to the f inancial s tatements
(All amounts in thousands of euros unless otherwise specifi ed)
Significant events of the year
During the year, Schneider Electric SA carried out the following
transactions that increased the share capital and additional paid-in
capital by EUR678 million:
•the 2008 dividend reinvestment programme , for EUR519million;
•the employee share issue carried out on July 10, 2009 as part of
the worldwide Employee Stock Purchase Plan, for EUR112million;
•the exercise of stock options, for EUR47million.
The Company carried out several bond issues during the year,
in an aggregate amount of EUR1,150 million, and redeemed
EUR110million worth of bonds issued in 2007 at maturity on January
26, 2009.
The Company also repaid:
•a EUR 75 million bank loan originally due on October 11, 2011;
•dollar drawdowns on the BNP Facilities line of credit in an amount
of EUR752million on January 15, 2009;
•commercial paper in an amount of EUR143million, with the
remaining balance standing at EUR46million at year end.
In September2009, the Company set up a EUR 1.8billion line of
credit to secure liquidity and recorded a fi nancial expense for bank
charges of EUR 23million. This line replaced the EUR 1.6billion line
of credit expiring in October2010.
In December2009, the Company terminated its liquidity contract
with Crédit Agricole Chevreux and received EUR 47million in cash.
Accounting principles
The fi nancial statements for the year ended December31, 2009
have been prepared in accordance with French generally accepted
accounting principles, as in 2008.
Non-current assets
Non-current assets are stated at cost.
Intangible assets
Intangible rights are amortised over a maximum of fi ve years.
Property, plant and equipment
Property, plant and equipment are depreciated by the straight-line
method over their estimated useful lives, ranging from 3 to 10years.
Equity investments
Shares in subsidiaries and affi liates are stated at cost.
Allowances for impairment in value are recorded if the carrying value
is higher than the estimated value in use at the end of the fi nancial
year. Value in use is estimated primarily on the basis of underlying
net assets, earnings outlook and economic forecasts. For recently-
acquired investments, account is also taken of the acquired business
goodwill.
For listed investments, value in use is also based on the average
stock price over the last month. unrealised gains on investments
are not recognised .
Schneider Electric SA shares
Treasury stock is stated at weighted average cost.
In the case of treasury stock held for allocation on the exercise of
stock options, a provision is recorded if the exercise price is lower
than the carrying value of the related treasury shares or if the average
stock price for the month of December is lower than the weighted
average cost.
Pension obligations
The present value of pension obligations is determined using the
projected unit credit method.
Supplementary pension benefits are accrued for based on the
contractual terms of top-hat agreements.
The Company applies the corridor method to actuarial gains and
losses arising from changes in estimates. Under this method, the
portion of net cumulative actuarial gains and losses that exceeds
10% of the projected benefi t obligation is amortised over 10years.
Currency risk
Unrealised exchange losses are reserved for when necessary. Where
unrealised exchange gains and losses exist on investments and the
related fi nancing is in the same currency and with the same maturity,
the amount of the reserve is limited to the net loss.
Bonds
Call premiums and issue costs are amortised over the life of the
bonds.