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In India, in the Govindpuri community in South Delhi, our In-Diya
low-consumption lighting solution provides reliable, efficient, and
green lighting to schoolchildren. The symbol of our mission:
helping people make the most of their energy.
2010 Annual Report
Schneider Electric: The global specialist in energy management
Registration Document
Schneider Electric SA

Table of contents

  • Page 1
    2010 Annual Report Schneider Electric: The global specialist in energy management Registration Document Schneider Electric SA In India, in the Govindpuri community in South Delhi, our In-Diya low-consumption lighting solution provides reliable, efficient, and green lighting to schoolchildren. The ...

  • Page 2
    ... 45 46 48 54 62 72 80 88 97 7 General presentation 1. 2. 3. 4. 5. 6. of Schneider Electric SA General information Shareholders' rights and obligations Capital Ownership structure Employee profit-sharing, stock ownership Stock option and stock grant plans with performance criteria 7. Disclosure of...

  • Page 3
    Registration Document Annual Report All of Schneider Electric's regulated information is available on the corporate website at www.schneider-electric.com, Finance section. The Business and Sustainable Development Report is available at 2010 www.schneider-electric.com, Sustainable Development and ...

  • Page 4
    ... forma sales exceeded EUR20 billion for the first time. In two years, we succeeded in transforming the crisis into opportunity and acquired a new dimension. Schneider Electric has become the global specialist in energy management. Our businesses are facing a number of global challenges: in order to...

  • Page 5
    ... are increasing our investments in R&D and in innovation, which account for 4% to 5% of sales, and in developing new businesses, mainly in energy efficiency solutions, systems for renewable energies and services. On the environmental front, Schneider Electric wants to be exemplary in managing the...

  • Page 6
    ...REGISTRATION DOCUMENT Schneider Electric's 2010 economic and financial results reached a level that is unprecedented for your company. They are abundantly described and explained throughout this Annual Report. The Supervisory Board would like to thank and to congratulate all of the Group employees...

  • Page 7
    ... Emmanuel Babeau EXECUTIVE VICE PRESIDENT FINANCE, MEMBER OF THE MANAGEMENT BOARD 2010 marks the return of growth. How have sales evolved throughout the year? In 2010, Schneider Electric generated EUR19.6 billion in sales, up 9.3% on an organic basis, and 24% overall. Thanks to the acquisitions we...

  • Page 8
    ... & Alliances Laurent Vernerey (1) Executive Vice President, IT (1) * ** *** Member of the Executive Committee. Member of the Management Board. President and CEO, Custom Sensors & Technologies Inc. Europe, Middle East, Africa and South America. 6 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 9
    ...President, Finance Auditors Statutory Auditors Ernst & Young et Autres Mazars Substitute Auditors Société Auditex M. Thierry Blanchetier * Independent member according to the definition contained in the AFEP-MEDEF corporate governance guidelines. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 10
    KEY FIGURES 2010 > Key figures 2010 • Record high sales, EBITA and net profit • Steady growth and improved margin in 2011 SCHNEIDER ELECTRIC • Pro-forma sales (4) exceed EUR20 billion for the first time • Robust free cash flow at EUR1.7 billion, net debt down at EUR2.7 billion • Strong ...

  • Page 11
    ...to an increase in working capital consumption of EUR206 million but free cash ï¬,ow stayed strong and reached EUR1,734 million, or 8.9% of consolidated sales, reï¬,ecting a cash conversion rate of 101%. Net investment totaled EUR528 million. 06 07 08 09 10 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 12
    ... 2011. Ownership structure at December 31, 2010 4.2% CDC Group 4.1% Employees 8.2% Capital Research & Management Co. (1) 1.7% Treasury shares 81.8% Public (1) To the best knowledge of the Company. Change in the share price against the CAC 40 index over five years Schneider Electric 140 share...

  • Page 13
    ... 13, 2010 Schneider Electric announced the signature of an agreement to acquire SCADAgroup, an Australian based leading provider of telemetry products and solutions for the water and waste-water, oil & gas and electric power end-market segments. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 11

  • Page 14
    ... high-quality product at an affordable price. On May 14, 2010, on the occasion of an important visit to present their joint projects in solar energy, Schneider Electric and Solairedirect announced a plan to expand their activity in solar energy in Morocco. This visit represents a unique opportunity...

  • Page 15
    ... which challenges students from top universities from Europe, America and Asia to design, build and operate energy efficient, solar-powered houses. On July 1, 2010 Schneider Electric signed an agreement to support professional training in construction within the framework of the post-emergency...

  • Page 16
    ... EN 16001 certification thanks to the Group's energy efficiency solutions. The building is also certified to ISO 14001 and HQE Exploitation green building standards. On December 7, 2010 Schneider Electric became a supporting partner of the Social Business/Enterprise and Poverty Chair at HEC Paris...

  • Page 17
    ... of the Group, and its strategy, markets and businesses 1. Global specialist in energy management 2. Leader in an industry of the future 3. Innovation and R&D: serving growth 4. Organisational simplicity and efficiency 5. Risk factors 16 20 29 34 37 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 15

  • Page 18
    ...system, not just the individual components have to be taken into account. The era of intelligent energy management has dawned, and Schneider Electric has the vision, products and services and ambition necessary to play a major role in this energy revolution. 16 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 19
    ..., Schneider Electric became a major player in building automation. 2007: The Group became global leader in critical power and video security systems, with the acquisition of APC and Pelco respectively. 2009: The acquisitions of energy efficiency leader Conzerv in India and UPS manufacturer Microsol...

  • Page 20
    ...AND BUSINESSES GLOBAL SPECIALIST IN ENERGY MANAGEMENT Early 2009: A new company program called "One" introduced to support Schneider Electric's strategic goals. One, the successor to new2, retains the key strands of customer satisfaction (Customer 1) and staff development (1 Team). The program also...

  • Page 21
    ... new company program: • 1 Solution Provider: Schneider Electric is accelerating its drive to address end-user needs with customised solutions that meet energy management needs, thereby increasing their market presence. The Group is leveraging its integrated portfolio of businesses through the use...

  • Page 22
    ... energy management offering, and to help its business and residential customers make their energy: • green, by offering innovative solutions for renewable energies and eco-designed products and systems. The development of smart grids opens up new opportunities for the Group in terms of real-time...

  • Page 23
    ... installers, electrical equipment distributors and management companies, as well as end customers. The Group's solutions, products and services cover: process control and supervision; decentralised management of one or several sites; critical power; pre-payment systems facilitating the access...

  • Page 24
    .... Its solutions, products and services cover: Residential services: making technology available to all and facilitating access to all communication resources Schneider Electric's main customers on this market include architects, construction firms, home builders, electricians, electrical equipment...

  • Page 25
    ... energy management in 2011, Schneider Electric is leveraging its broad and consistent portfolio of business, which enables it to satisfy the requirements of its customers thanks to its innovative products, integrated and intelligent solutions and its growing range of services. Since 2011, the Group...

  • Page 26
    ... energy supply and impeccable quality at all times. By combining the products of American Power Conversion (APC), acquired in 2007, with those of MGE UPS Systems, which has been part of the Group since 2004, Schneider Electric has attained global leadership of this high-potential market. The Group...

  • Page 27
    ... to project completion. Schneider Electric has what it takes to provide safe, reliable and efficient services that help customers enhance performance throughout the life cycle of their installations. Energy efficiency solutions Energy efficiency means using less energy for the same level of...

  • Page 28
    ...a high performance network, the Group works hand in hand with distributors on supply chain issues, technical training and marketing. Internet tools now occupy a dominant position for sales, and above all, up-to-date information. Through the "eShop", distributors can link Schneider Electric's product...

  • Page 29
    ... the buildings, energy and electricity infrastructure markets. Their main customers are contractors. Panel builders mostly buy low and medium voltage devices, such as circuit breakers and contactors, and increasingly, prefabricated systems. Systems integrators design, develop and support automation...

  • Page 30
    ... of standards are evolving due to the proliferation of new technologies and the emergence of increasingly sophisticated integrated solutions: recharging equipment for electric vehicles, solar energy, home energy management, etc. Schneider Electric actively participates with working groups set up...

  • Page 31
    ... is a Group-wide R&D program. Launched in 2009, the program defines a common architecture enabling Schneider Electric's electrical distribution, critical power and cooling services, automation and industrial and building control systems 3. 2 Experts at the heart of their markets Schneider Electric...

  • Page 32
    .... 3. 3 Projects focused on energy efficiency and customer values To respond to the global and local challenges of energy management, Schneider Electric has set up a research, development and innovation program centered on (i) designing energy efficiency solutions tailored to each market (buildings...

  • Page 33
    ... and management of a building (CSTB); • the ZigBee and carrier current equipment, to make available to the living environment an integrated group of products to manage electrical charges and measure consumption (Schneider Electric and Watteco). 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 31

  • Page 34
    .... Environmental issues play a key role in much of the members' resulting work. Examples include projects to design new materials or systems to reduce electrical consumption, projects to replace toxic components and a project to develop hypersensitive gas sensors. In this context, Schneider Electric...

  • Page 35
    ...-ups based in Europe, North America and Asia, developing new technologies that could lead to major breakthroughs in the fields of energy and the environment. The fund made its first investment in 2010, while two investments were sold by Schneider Electric Ventures, generating a significant return...

  • Page 36
    ...of "Global Functions" that increase experience and generate economies of scale. • Energy combines the activities of Areva's Distribution business and the medium voltage activities of Schneider Electric (previously part of the Power business) with two end-customer segments (Utilities and Oil & Gas...

  • Page 37
    ..., the country President serves as Schneider Electric's main representative in the country, notably in dealings with employees and local officials. 1 Finance; Marketing; Supply chain; Human resources; Strategy & Innovation; Information systems. • Globalisation: major support functions that...

  • Page 38
    ... protection and energy efficiency. In order to limit risks related to the environment generally, the Group has implemented an ISO 14001-compliant process to continuously improve the environmental performance of its plants and supply chain centres. 36 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 39
    ... are generally beyond its control, and to manage them as effectively as possible. These procedures include quarterly business reviews in which performance and projections are monitored, in terms of activity, action plans, results to date and forecasts, at all organisational levels of the Group (see...

  • Page 40
    ... of customers. Improvement targets are set for each country as part of the One company program, backed by specific action plans and progress monitoring procedures. scenario for each acquisition varies depending on whether the business was acquired to strengthen or extend the Group's existing line...

  • Page 41
    ...To limit risks involved in a performance published a related to the environment in general, the Group is process to continuously improve the environmental of its plants and products. In 1992, the Group formal environmental policy designed to improve 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 39

  • Page 42
    ...ows, which are generally hedged by means of forward purchases and sales. Equity risk Exposure to equity risk primarily relates to treasury stock and shares in AXA. These positions are not hedged. At December 31, 2010, the AXA shares' market value exceeded their acquisition cost. An increase in raw...

  • Page 43
    ...any of these regulations or standards or their applicability to the Group's business could lead to lower sales or increased operating costs, which would result in lower profitability and earnings. The Group's products are also subject to multiple quality and safety controls and regulations, and are...

  • Page 44
    ... that they will not, by their nature, have significant effects on the Group's business, assets, financial position or profitability. Moreover, Schneider Electric knows of no other disputes that could have a significant impact on its business. 42 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 45
    DESCRIPTION OF THE GROUP, AND ITS STRATEGY, MARKETS AND BUSINESSES RISK FACTORS Insurance Schneider Electric's strategy for managing insurable risks is designed to defend the interests of employees and customers and to protect the Company's assets, the environment, employees, customers and its ...

  • Page 46
    1 DESCRIPTION OF THE GROUP, AND ITS STRATEGY, MARKETS AND BUSINESSES RISK FACTORS 44 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 47
    ... 4. Schneider Electric's Commitment to Environmental Performance 5. Committed to and on behalf of employees 6. Schneider Electric, a responsible corporate citizen 7. Methodology and audit of indicators 8. Indicators 46 48 54 62 72 80 88 97 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 45

  • Page 48
    ... well-being; a policy that supports and develops the communities where it works. • bring products and solutions to the market that waste less energy and promote environmentally sound production and consumption; 2 A commitment to action Schneider Electric has set out four principles to put its...

  • Page 49
    ... improvement plans. Schneider Electric Foundation In 2010, the Foundation was very busy with emergency assistance and reconstruction programmes, primarily in Pakistan, Chile and Haiti. It set up programs to help build energy trade training centers, with support from employees on-site and...

  • Page 50
    ... Group so that all team members can embrace Schneider Electric's responsibility approach and apply it in line with local culture and legislation. Governance is a set of processes, rules and laws that inï¬,uence the way a business is directed, managed, and controlled. 1 External and internal bases...

  • Page 51
    ..., environmental management, sustainable line-up, RoHS and Reach programs, purchasing, supply chain, ethics, access to energy program, communication and stakeholders relations. • defining Schneider Electric's sustainable development strategy and rolling out action plans at Group level with...

  • Page 52
    ... available to all Group employees. • implementation of the recommendations given during the internal audit in late 2010, primarily continuing communication actions and training for employees in countries most susceptible to breaches of ethics; 50 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 53
    ... Resources, Environment, Access to Energy, etc.), implement measures to achieve the plans' goals. Each department is represented by a project leader, who works directly with local managers in their respective areas. With the introduction of the new One company program in 2009, Schneider Electric...

  • Page 54
    ... signed the Global Compact, the frequency of accidents at work and the number of Base of the Pyramid youths trained to energy management profession, all improved in 2010; • on the Internet at www.barometer.schneider-electric.com. The site was expanded in early 2009 to explain the new indicators...

  • Page 55
    ..., President and CEO, and Philippe Delorme, Executive VP for Strategy and Innovation, participated in the G20 economic summit in Seoul, South Korea, where 120 corporate executives came together to represent emerging and developed economies. 2 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 53

  • Page 56
    ... of partners, therefore without any control over their final destination and end-of-life processing. The Group works in more than 100 countries, with uniform practices, standards and values. Schneider Electric strives to provide a relevant response to all these issues. reduce energy bills by...

  • Page 57
    ...we are developing a new range of custom systems and services that are more complex and more sophisticated to meet their needs for optimised energy management. Offers Schneider Electric offers products and solutions in all the main fields relating to the smart grid: • buildings, industrial sites...

  • Page 58
    ...and energy management. We use and connect to power plants' and large buildings' electrical network, provide equipment to turbine manufacturers, and supply the residential market through our network of partners and distributors. Schneider Electric has actively reinforced its solutions in recent years...

  • Page 59
    ... studies Design and optimisation of electrical distribution architectures Equipment supply and installation Installation life cycle maintenance and operation contracts Conversion and protection products sold through our network of general and specialised distribution partners Components and systems...

  • Page 60
    ... and services making energy safe, reliable, efficient, productive, and green. In large buildings and industrial sites, this approach requires the integrated management of security, heating, and electricity systems, control of equipment and manufacturing processes, and the monitoring of data centers...

  • Page 61
    ... human rights) and Principle 2 (Businesses should make sure that they are not complicit in human rights abuses). 2. Integration of the sustainable purchases approach into the selection of new suppliers Schneider Electric uses a certification process called Schneider Supplier Quality Management...

  • Page 62
    ..., Our Principles of Responsibility are mentioned in corporate documents (annual report and business and sustainable development reports), which are available on the Schneider Electric website. Examples in 2010 Suppliers A specific document is distributed to all the Group's suppliers, the Schneider...

  • Page 63
    ...ethical investment indexes. We have one year to ensure that we are re-listed on the DJSI World index before the end of the current company program (2009-2011). An action plan is being studied to ensure that this is achieved. 2 Dow Jones Sustainability Indexes Schneider Electric is part of the 2010...

  • Page 64
    ... products represent 26.1% of revenue. • 69.0% of Schneider Electric employees work in ISO 14001 certified sites. An analysis of these results is presented in the sub-chapter "Reduction of CO 2 emissions", "Eco-design", and "Ecoproduction" below. 62 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 65
    ... in large countries with significant business volume, and environmental managers in each plant or supply chain centre. In 2010, the organisation within Global Supply Chain Management changed from a corporate only leadership to a regional organisation (North America, Asia-Pacific, EuropeMiddle East...

  • Page 66
    ... per year over three years. In 2011, Schneider Electric is working on defining its next objective for the reduction of carbon emissions for the Planet & Society Barometer in the Company's next program. The Group's approach is based on measuring, controlling and reducing CO2 emissions, starting with...

  • Page 67
    ...) has been deployed for manufacturing processes that involve SF6 gas; • the Energy Action program, which included the deployment of the EEM system (Energy Efficiency Monitoring) in more energy intensive sites, was implemented in 2010 (see pages 66-67). • Schneider Electric's score on the CDLI...

  • Page 68
    ... Board of the Industrial Operations Management since 2010. Global Supply Chain Management is responsible for all of the Group's sites. Schneider Electric continued the deployment of the Energy Efficiency Monitoring (EEM) program in its main energy consuming sites to ensure accurate measurement...

  • Page 69
    ... investment will see a return in two to three years. • accurately manage energy costs; • compare site performance to identify inefficiency; • help fulfill the Group's environmental objectives. At the end of 2010, close to 60 of the most energy intensive factories in North America and Europe...

  • Page 70
    ... directive in the process of developing new products; Schneider Electric's Approach In order to meet these expectations, Schneider Electric has set out to • provide its customers with environmental information; • control the use of dangerous substances; • bring a high level of innovation to...

  • Page 71
    ...December 15, 2010. This need for communication is taken into account before marketing offers: all new products are now designed to comply with RoHS's technical constraints and provide the necessary information required by REACH. At the end of 2009, only part of the local product offers specific to...

  • Page 72
    ...products, going beyond the simple calculation of potential recovery rates provided by Environmental Impact and Management Explorer (EIME) software. The Group has developed a guide of good design practices to optimise end-of-life costs and the potential recyclability rate. In 2010, Schneider Electric...

  • Page 73
    ... are designed to compensate in the event of malfunctions or emergencies, such as fires. In 2010 Schneider Electric conducted its annual review of pollution risks at all manufacturing sites as part of ISO 14001 tracking. No major incident was reported in 2010. 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 74
    ...Talent development and training", below. • Schneider Electric reduces by 44% the rate of work accidents, compared with end-2009; • the recommendation score given to the Company by employees rises by 16 points, compared with the starting score; 72 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 75
    ...of job vacancies, facilitate individual meetings with real professionals and enable greater equality of opportunity. In France in 2010, there were over 500 successful cases of internal mobility. Through the "TGV employment operation", Schneider Electric was able to present the Group's businesses and...

  • Page 76
    ... ï¬,u. Main Plans of Action 2010 Safety As part of the Planet & Society Barometer, Schneider Electric set a goal for 2009-2011 to reduce the annual rate of accidents in the work place by 10%. End-2010, the accident rate had fallen by 44% in relation to the average rate in 2009. It currently stands...

  • Page 77
    ... to processes and projects, whose proper execution is crucial to both successfully implementing the Group's strategy and satisfying its customers. 2 Main Plans of Action 2010 As part of the Planet & Society Barometer, Schneider Electric set a goal in 2009-2011 to increase the employee company...

  • Page 78
    ... positions of key responsibility; • creating favorable working conditions for both men and women by adopting measures designed to enhance work-life balance. • strengthen the role of managers in rolling out the Group's gender diversity strategy; 76 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 79
    ...2011 will see this process extended to all Schneider Electric entities, including its latest acquisitions, enabling the Company to use a single process to develop talent and promote mobility and career development throughout the Group. Particular attention is paid to the number of talented employees...

  • Page 80
    ... most jobs for disabled employees". Disability (France) Schneider Electric signed its eighth Group Agreement in January 2010. The three-year Agreement (2010, 2011 and 2012) is managed and promoted globally and throughout the country by a core network with members from inside and outside the Company...

  • Page 81
    ... dialogue and relations Schneider Electric management and employee representatives agree on the place and importance of labor-management relations in Europe. Main action plans for 2010 European Committee In 2010, the European Committee met five times: four restricted Committee meetings and one...

  • Page 82
    ...- help provide electrical training for young people looking to enter the workforce. The Schneider Electric Foundation and Schneider Electric's team members support this focus through their collective and individual commitment. Launched in 2009, the BipBop (Business, Innovation, People at the Base of...

  • Page 83
    ... promote the development of businesses that provide access to energy in rural or suburban areas in developing countries; • support the deployment of innovative energy access solutions that use renewable energies for people at the Base of the Pyramid. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 84
    ... Investment type Main action plans in 2010 Investments in France La Foncière Chenelêt is a Chenelêt Group employment opportunity company formed to counter energy precariousness by creating energy-efficient social housing. Moreover, construction sites bring together employment...

  • Page 85
    ... Reference Center to provide training for jobs in the electricity, wood, construction and public works sectors. The program will train more than 2,000 young people in two years, as well as Haitian teachers. For its contribution to energy management training, Schneider Electric undertakes to supply...

  • Page 86
    ... Board of Directors meets two times per year. It defines and encourages significant strategic directions for the Foundation. It is composed of Schneider Electric managers, employee representatives, and important people from outside of the company. 84 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 87
    ... projects in the BipBop Energy Access program, Ensemble, they are monitored and measured on a quarterly basis in the framework of the Planet and Society barometer. One indicator is devoted to education. The objective of this progress plan is to train 10,000 young people in electrical professions...

  • Page 88
    ... year, APC by Schneider Electric implements a program called Community Impact which gathers employees from the head office and others to support local associations with community service (donating or recycling computer equipment, assisting handicapped people, etc.). 86 2010 REGISTRATION DOCUMENT...

  • Page 89
    ... head of the job creation network of French businesses "DIESE" (the association for the development of initiative and entrepreneurship among company employees). The Group is also an active member of the APCE (Agence pour la création d'entreprises). 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 87

  • Page 90
    ..., function and type of contract), sites declaring employee representation, the number of collective agreements and training programs cover 80% of the total workforce. Indicators from the Planet & Society barometer The following Human Resources, safety and environment data is used by indicators from...

  • Page 91
    ... (electricity, urban heating). • the number of sites reporting their energy use increased from 244 sites in 2009 to 251 in 2010; Exceeding the Group's growth by 7 points per year with our energy efficiency activities The energy efficiency activities are products, services and solutions sold by...

  • Page 92
    ...base of the pyramid taken into account by this indicator are those that have incomes under USD3,000 per annum in purchasing power parity. The indicator measures the sales of prepayment meters sold by Conlog, a subsidiary of Schneider Electric, to electrical distribution companies in Africa, enabling...

  • Page 93
    ... information Total staff, fixed-term/open-ended contracts, recruitment, layoffs and grounds, overtime, labor from outside the Company Cutting staff and job saving, regarding reorientation efforts, re-employment and supporting measures Work schedule, total hours for full-time and part-time employees...

  • Page 94
    ... In order to strengthen the quality of its extra-financial reporting, Schneider Electric uses the Global Reporting Initiative, a recognised international reference to help organisations and their stakeholders to evaluate their business' performance in terms of economic, social, environmental and...

  • Page 95
    ... trained in anti-corruption policies and procedures SO4 Actions taken to contend with corruption cases SO7 Legal actions for anti-competitive behavior SO8 Monetary of value of significant fines Product responsibility PR1 Life cycle stages in which health and safety impacts of products are assessed...

  • Page 96
    2 SUSTAINABLE DEVELOPMENT METHODOLOGY AND AUDIT OF INDICATORS 94 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 97
    ... and SF6 leaks data are reported monthly instead of bi-annually. Other environmental data are gathered in June and December based on estimates (at least for the last month of each semester) and is not systematically readjusted at year's end. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 95

  • Page 98
    ..., in all material respects, in accordance with the Guidelines. Neuilly-sur-Seine, March 15, 2011 French original signed by The Statutory Auditors Ernst & Young et Autres Ernst & Young Environment and Sustainable Yvon SALAÜN Éric DUVAUD 96 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 99
    ... tertiary sites. They have a Group scope. All of the Group's entities are included, except the businesses from the Areva Distribution acquisition, a company acquired in 2010. Schneider Electric provides readers two pieces of information so that environmental performance can be compared from one year...

  • Page 100
    ...886 â-² 2010 Audited Indicators NP = Not Published * The CO2 emissions linked to energy consumption are considered estimates, because the indirect emissions are calculated on the conversion factors per country. ** 9 sites used SF6 in 2009 and 2010. 98 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 101
    ... Russia United Kingdom Brazil LA1 Annual breakdown of workforce by country (the most significant countries) (5) France United States of America China Mexico India Germany +9% -1% +24% +14% +38% +57% -6% -10% -9% -16% +2% -8% UA UA UA UA UA UA 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 99

  • Page 102
    ... LA1 Direct variable costs (cost of employees under production or business costs) Workforce (France) LA1 LA1 LA1 LA1 Spot workforce Number of hirings Number of departures Breakdown by type of contract Open-ended contract Fixed-term contract 100 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 103
    ... and executives Work experience Breakdown by gender (7) Men Women 2010 30.2% 1.3% 31.9% 32.7% 3.9% 66.8% 33.2% 2009 31.1% 1.3% 32.0% 32.7% 2.9% 66.2% 33.8% 2008 32.4% 1.0% 30.9% 31.9% 3.8% 64.5% 35.5% 2 Hiring LA2 (6) Breakdown by type of contract Open-ended contract Fixed-term contract 58...

  • Page 104
    ...Health and safety of employees Health and safety of employees LA7 Number of accidents (1) of which Schneider Electric employees of which temporary workforce LA7 Number of fatal accidents of which Schneider Electric employees of which temporary workforce LA7 Frequency rate of which Schneider Electric...

  • Page 105
    ... Services in 2010, 7.1% in 2009 and 5.2% in 2008. UA = Unavailable. UP = Unpublished. Blue collars are Schneider Electric partners whose costs impact directly on the completion of business. The VDC are variable direct costs. â-² Audited 2010 indicators. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 106
    ... to the local communities as possible. Breakdown of The Schneider Electric Foundation's 2010 Financial Commitments 2010 Breakdown per Operational Unit Professional Training Emergency Raising Awareness about Sustainable Development Other (mainly involving employee/sponsorship expertise) Breakdown...

  • Page 107
    ... Board and Management Board 8. Management interests and compensation 9. Regulated Agreements 10. Internal control and risk management** 11. Application of the AFEP-MEDEF corporate governance guidelines** 106 113 115 116 119 120 120 121 129 130 138 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 108
    ..., Gérard de La Martinière, Noël Forgeard, Jérôme Gallot, Willy R. Kissling, Cathy Kopp, Anand Mahindra and G. Richard Thoman. Each year, the Supervisory Board reviews its members' status, based on a report from the Remunerations, Appointments 106 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 109
    ... Schneider Electric SA shares First appointed: 1996 / Term ends: 2012 Vice Chairman of the Supervisory Board Mr Léo Apotheker * Age: 57 Business address: Hewlett-Packard Company, 3000 Hanover Street, Palo Alto, CA 94304-1112 (USA) 250 Schneider Electric SA shares First appointed: 2007 / Term ends...

  • Page 110
    ... companies • Currently: Member of the Supervisory Board of Schneider Electric SA; Director of Air Liquide; member of the Supervisory Board of European Financial Reporting Advisory Group (EFRAG - a Belgian association); Director of Poor's Credit Market Services France SAS; Director of Allo Finance...

  • Page 111
    CORPORATE GOVERNANCE SUPERVISORY BOARD Mr Jérôme Gallot * Age: 51 Business address: CDC Group Entreprises 137, rue de l'Université - 75007 Paris, France 250 Schneider Electric SA shares First appointed: 2005 / Term ends: 2012 Mr Willy R. Kissling * Age: 67 Professional address: Poststrasse n° ...

  • Page 112
    ...Business Address: Mahindra Towers, 6th ï¬,oor, Dr 6M b Hosle Road, Mumbai 400 018, India 250 Schneider Electric SA shares First appointed: 2010 / Term ends: 2012 Other directorships and functions in french or foreign companies • Currently: Member of the Supervisory Board of Schneider Electric SA...

  • Page 113
    ... shares First appointed: 2005 / Term ends: 2014 Other directorships and functions in french or foreign companies Other directorships and functions in french or foreign companies • Currently: Member of the Supervisory Board of Schneider Electric SA; Chairman of Weinberg Capital Partners, Financi...

  • Page 114
    ... appointed: 2010 / Term ends: 2011 Other directorships and functions in french or foreign companies • Currently: Other directorships and functions in french or foreign companies Non-voting Director of Schneider Electric SA Director of AXA Investment Managers Private Equity SA, of AXA Investment...

  • Page 115
    ...MEDEF corporate governance guidelines. It states that Supervisory Board members must: • represent all shareholders and act in the corporate interest; • resign from the Board when they have not participated in more than half the Board meetings; 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 113

  • Page 116
    ... opportunity to meet informally with key members of Senior Management prior to Board meetings. New members attend training and information sessions dealing with the Company's strategy and businesses. Schneider Electric has adopted a code of ethics for Supervisory Board members and employees designed...

  • Page 117
    ... - TM Samara. At each meeting, the Board was informed about the status of acquisition projects and notably of the Areva T&D Distribution business and its integration. The Supervisory Board also reviewed the Company's financial strategy. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 115

  • Page 118
    ... (MEMBERS, OPERATING PROCEDURES AND MEETINGS) Agenda The Supervisory Board was given the Management Board's quarterly reports. At each meeting, the Board also tracked business performance. It also tracked the Company's financial performance. The Supervisory Board was informed of the Group's 2010...

  • Page 119
    ... authorisations presented to the 2010 Annual Shareholders' Meeting, - recommended dividend for 2010. The Audit Committee reported to the Supervisory Board on its work in 2010 at the February 17, July 29, October 19 and December 15, 2010 meetings. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 117

  • Page 120
    ... of the Executive Committee; the review of the succession plan; the review of the remuneration of Executive Committee members; the development of employee share ownership; its review of the draft report of the Chairman on corporate governance. 118 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 121
    ...Member of the Management Board Mr Emmanuel Babeau Age: 44 Business address: Schneider Electric 35, rue Joseph Monier - 92500 Rueil-Malmaison, France 713(1) Schneider Electric SA shares First appointed: 2009 / Term ends: 2012 Other directorships and functions in French or foreign companies President...

  • Page 122
    ... service contract with Schneider Electric Industries SAS. The members of the Supervisory Board and Management Board together hold 0.03% of the Company's capital and 0.03% of the voting rights. Emmanuel Babeau has a service contract with Schneider Electric Industries SAS and is Chairman of the Board...

  • Page 123
    ...and Appointments and Human Resources Committee. The variable bonuses of the Management Board members are determined as follows: • 60% of the bonus is determined by reference to the Group's overall performance, as measured in terms of operating margin, 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 124
    ... paid: Mr Lachmann has a Company car and may also use the chauffeurdriven Company cars made available to Group Senior Management. This benefit in kind can be estimated for the 2010 financial year at EUR5,090. Supervisory Board members The Annual Shareholders' Meeting set total attendance fees at...

  • Page 125
    ... year. (2) Non-voting member. (3) Claude Briquet, who has a service contract with Schneider Electric Industries SAS, waived payment of his attendance fees. Schneider Electric will donate the amount waived for 2009 to the Schneider Electric Foundation. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 126
    ... Babeau was appointed to the Management Board on May 3, 2009 and joined the Group as Executive VP Finance under a service contract for executives with Schneider Electric Industries SAS. At its meeting of December 17, 2009, the Supervisory Board decided: President and CEO - Jean-Pascal Tricoire...

  • Page 127
    ... during the financial year to each Management Board corporate officer by the issuer and by any company in the Group. No options to subscribe new shares or purchase existing shares were granted to members of the Management Board in 2010. For a complete understanding of the information reported in the...

  • Page 128
    ...available to the Group's senior French executives, - the Top-hat Pension Plan for the Group's Senior Management described in the Supervisory Board Chairman's report in accordance with article L. 225-68 of the French Commercial Code (see page 122); 126 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 129
    ... also use the chauffeur-driven company cars made available to Group Senior Management. This benefit in kind can be estimated at EUR5,146. Emmanuel Babeau Under his service contract with Schneider Electric Industries SAS, Emmanuel Babeau is covered by the top-hat pension plan for senior executives...

  • Page 130
    ...: Information Systems, Marketing, Strategy & Innovation, Global Human Resources and Industrial Operations; • the Executive Vice-Presidents of the businesses: Power Global & EMEAS*, Power North America & Buildings, Power Asia Pacific, Industry, Energy, IT and Custom Sensors & Technologies...

  • Page 131
    ...' Meeting of April 26, 2007. • benefits from the Top-hat Pension Plan for Schneider Electric senior executives, the Schneider Electric SA employee benefit plan and the supplementary health, disability and death coverage available to the Group's senior executives; 2010 REGISTRATION DOCUMENT...

  • Page 132
    ... in internal control. It was reviewed by the Audit Committee. 1.2. Scope of this report The system is designed to cover the Group, defined as the Schneider Electric SA parent company and the subsidiaries over which it exercises exclusive control. 130 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 133
    ...: • the proper application of Group accounting principles and policies; • the integrity of the consolidation system database; • the quality of accounting processes and data; • training for finance staff in the form of specific seminars; 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 131

  • Page 134
    ... the Group's companies on an annual basis during formal financial review meetings. Procedures for managing financial risk are described in "Risk Factors." 2.6. Global Functions (Human Resources, Purchasing, Manufacturing, Supply Chain, Information Systems, etc.) Schneider Electric centralises...

  • Page 135
    ... sets permanent restrictions on purchases and sales of Schneider Electric SA shares by persons who have access to price-sensitive information in the course of their work (see "Organisational and operating procedures of the Supervisory Board", Chapter 3 § 2). 3.6. Statutory and management reporting...

  • Page 136
    ...Audit plan for the coming year, team members look closely at the risk matrix and the analysis of changes from one year to the next. More than half of the major and general risks identified at end-2009 were addressed in audits carried out between 2008 and 2010 to assess action plans for managing and...

  • Page 137
    ...CONTROL AND RISK MANAGEMENT 5. Control procedures This section describes specific measures taken in 2010 to improve the Group's control system. 5.3. Global Functions In 2010, the Global Functions continued to set guidelines, issue instructions and provide support. During the year: 5.1. Operating...

  • Page 138
    ... "in-house" application used to date; • local internal audit teams in the Operating Divisions will be reinforced. 6. Internal control procedures governing the production and processing of accounting and financial information In addition to: The Management Control and Accounting unit ensures that...

  • Page 139
    ...on the internal control and risk management procedures relating to the preparation and processing of accounting and financial information The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman's report in respect...

  • Page 140
    .... However, the plan complies with the recommendation's intention, given that: • the rights are capped at 25% of average compensation; • the current members still have many years of service to perform before they can benefit from the plan. 138 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 141
    4 Business review 1. Trends in Schneider Electric's core markets 140 2. Review of the consolidated financial statements 3. Review of the parent company financial statements 4. Review of subsidiaries 5. Outlook 142 146 147 147 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 139

  • Page 142
    .... In the Asia-Pacific region the market, which only slowed during the global recession, managed two-digit growth in 2010. As for the new EMEAS economies, they remained in recession in Europe, stabilised in Russia and rose sharply in South America. 140 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 143
    ... in 2011 and beyond, particularly if the oil price remains high, thereby covering the high marginal cost of development of new oilfields linked to the extreme complexity of the exploration and production environments. Data centres and Networks 2010 was a year of rebound for IT business with...

  • Page 144
    ... of an agreement to acquire SCADAgroup, an Australian based leading provider of telemetry products and solutions for the water and wastewater, oil & gas and electric power end-market segments. Telemetry is a key technology that allows the remote measurement, monitoring, control and data transfer of...

  • Page 145
    ... service markets. Buildings revenue (7% of Group revenue), totaled EUR1,402 million on December 31, 2010, an increase of 10.6% on an actual basis and 3.3% at constant scope and exchange rates. The solutions businesses are seeing growth thanks to services tied to energy efficiency in North America...

  • Page 146
    ... of purchase accounting intangibles and Restructuring costs) corresponds to operating profit before amortisation and impairment of purchase accounting intangible assets from acquisitions, and before goodwill impairment and restructuring expenses. 144 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 147
    ... 2010 net of cash acquired; the main acquisition of the period was Areva Distribution for EUR1,138 million. The sale of treasury stock generated a net cash inï¬,ow of EUR249 million (EUR22 million in 2009), mainly relating to the sale of the Schneider Electric SA shares previously held by the Group...

  • Page 148
    4 BUSINESS REVIEW REVIEW OF THE PARENT COMPANY FINANCIAL STATEMENTS Net debt at December 31, 2010 totaled EUR2,736 million or 18.2% of equity attributable to equity holders of the parent. This represents a small decrease of EUR76 million from the year before. The Group ended the year with cash and...

  • Page 149
    ...while energy efficiency and better trends in mature markets should be a support to the Buildings business. The Group will continue to drive strong industrial productivity which is expected to deliver about EUR400 million of savings. It will also invest 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 150
    4 BUSINESS REVIEW 148 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 151
    ... statement of cash flows 3. Consolidated balance sheet 150 152 154 4. Consolidated statement of changes in equity 156 5. Notes to the consolidated financial statements 6. Statutory Auditors' report on the consolidated financial statements 157 222 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 152
    ... intangibles) EBITA corresponds to operating profit before amortisation and impairment of purchase accounting intangible assets and before goodwill impairment. The accompanying notes are an integral part of the consolidated financial statements. 150 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 153
    ... to non-controlling interests * The 2009 figures are restated for the items mentioned in note 1.2 (acquisition costs and CVAE). The accompanying notes are an integral part of the consolidated financial statements. 21.7 3 940 2,736 2,649 87 5 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 151

  • Page 154
    ... receivable Decrease/(increase) in inventories and work in process (Decrease)/increase in accounts payable Change in other current assets and liabilities Change in working capital requirement Total I II - Cash ï¬,ows from investing activities: Purchases of property, plant and equipment Proceeds from...

  • Page 155
    ...nancing activities: Issuance of long-term debt Repayment of long-term debt Sale/(purchase) of own shares Increase/(reduction) in other financial debt Issuance of shares Dividends paid: Schneider Electric SA** Non-controlling interests Total III IV - Net effect of exchange rate: Increase/(decrease...

  • Page 156
    ... current assets TOTAL ASSETS * The 2009 figures are restated for the items mentioned in note 1.2 The accompanying notes are an integral part of the consolidated financial statements. 17 18 19 15.3 20 3,139 4,441 1,212 38 3,389 12,219 31,051 154 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 157
    ... for the items mentioned in note 1.2 The accompanying notes are an integral part of the consolidated financial statements. 22 23 1,504 588 2,092 24 24 16 25 3,845 1,165 5,010 957 128 8,187 3,432 1,760 23 24 876 692 1,115 7,875 31,051 5 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 155

  • Page 158
    ... shares. (3) Of which of the Group's share, EUR3 million tied to employee shareholder plans and 14 million euros of capital gains from the South Africa disposal. The accompanying notes are an integral part of the consolidated financial statements. 156 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 159
    ...nancial year ended December 31, 2010 were drawn up by the Management Board on February 14, 2011 and reviewed by the Supervisory Board on February 16, 2011. They will be submitted to shareholders for approval at the Annual General Meeting of April 21, 2011. The Group's main business activities are...

  • Page 160
    ...2009. The financial statements for the year ended December 31, 2008, presented in the Registration Document registered with Autorité des Marchés Financiers (AMF) under number D 09-0124 on March 17, 2009, are incorporated by reference. • the treatment of the sale of shares in Schneider Electric...

  • Page 161
    ...; Presentation of the CVAE As of the reporting date (see note 30.3 to the 2009 consolidated financial statements), the Schneider Electric Group still hadn't taken a position regarding the press release by the CNC (France's national accounting board) on January 14, 2010 concerning the accounting...

  • Page 162
    ... (note 1.14); the valuation of share-based payments (note 1.20); the calculation of provisions for contingencies, in particular for warranties (note 1.21); obligations (note 22). • the measurement of pension and other post-employment benefit 160 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 163
    ... when more than 20% of voting rights are held by the Group. Companies acquired or sold during the year are included in or removed from the consolidated financial statements as of the date when effective control is acquired or relinquished. Intra-group balances and transactions are eliminated. The...

  • Page 164
    ... costs in 2004. As a result, only development costs for new products launched since 2004 are capitalised in the IFRS accounts. Development costs for new projects are capitalised if, and only if: The useful life of property, plant and equipment used in operating activities, such as production lines...

  • Page 165
    ... information. If such an indication exists, the Group tests the asset for impairment by comparing its carrying amount to the higher of fair value minus costs to sell and value in use; 1.12 - Non-current financial assets Investments in non-consolidated companies are classified as available-for-sale...

  • Page 166
    ... or loss. 1.18 - Schneider Electric SA shares Schneider Electric SA shares held by the parent company or by fully consolidated companies are measured at acquisition cost and deducted from equity. They are held at their acquisition cost until sold. 164 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 167
    ... In the case of stock appreciation rights, a liability is recorded corresponding to the amount of the benefit granted, remeasured at each balance sheet date. As part of its commitment to employee share ownership, Schneider Electric gave its employees the opportunity to purchase shares at a discount...

  • Page 168
    ... outstanding at the balance sheet date. 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 proceeds from the exercise...

  • Page 169
    ... standard IFRS 3 R, Schneider Electric valued the assets acquired and liabilities assumed at their fair value on the date of acquisition. This resulted in preliminary goodwill, which may be adjusted over a maximum period of 12 months starting from the acquisition date, according to new information...

  • Page 170
    ... acquired businesses in order to form a new operating segment known as Energy. Data concerning General Management that cannot be allocated to a particular segment are presented under "Holding". • Power, which includes Medium and Low Voltage, Installation Systems and Control, Renewable Energies...

  • Page 171
    ... assessments used by the Management Board are notably based on Earnings Before Interest, Taxes, amortisation of purchase accounting intangibles and Restructuring costs (EBITAR). Share-based payment is presented under "Holding". The Management Board does not review assets and liabilities by Business...

  • Page 172
    5 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2010 Western of which Europe France Revenue by country market Non-current assets 6,568 6,022 1,777 1,869 North of which America USA 4,704 6,391 3,952 6,141 Asia- of which Rest of Pacific China the world ...

  • Page 173
    ... in paid vacation modalities in the US and an insurance claim for EUR17 million. • an SAP application module currently being replaced for EUR15 million; • a property for EUR12 million; • research and development projects for EUR5 million. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 171

  • Page 174
    ... in the case of a 0.5 point increase in the discount rate. Note 9 Other financial income and expense 2010 2009 (1) (56) 7 (3) (34) (87) Exchange gains and losses, net Financial component of defined benefit plan costs Dividends Net gains/(losses) on disposal of long-term investments Other...

  • Page 175
    ... Impact of tax losses Other permanent differences Income tax (expense)/benefit EFFECTIVE TAX RATE 196 62 1 (14) (566) 24.0% 122 89 (21) (78) (295) 25.0% 1,720 (566) (76) 6 2,356 34.43% (811) 2009 824 (295) (42) (21) 1,182 34.43% (407) 5 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 173

  • Page 176
    ... proportion to operating income: Power Business Square D Company The Group's goodwill is presented below. 82% Industry Business 18% Year of acquisition APC Square D Company Groupe Lexel Areva Distribution Telemecanique TAC/Andover/Abacus/Applied Control Technology/ Yamas/HGA Pelco Clipsal MGE UPS...

  • Page 177
    ... two small businesses in Europe that are currently being sold. Impairment tests performed on all the Group's CGUs have not led to impairment losses being recognised. Other changes Translation adjustments concern principally goodwill on US dollars. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 175

  • Page 178
    ..., backlog and inventories, customer relationship). In addition, client portfolios relating to Cimac and Scada acquired at the beginning of 2010 were recognised for EUR30 million. All these items are recognised in "Other intangible assets". 176 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 179
    ...the Group's brands towards the Schneider Electric brand (One Brand project) has led to the amortisation from January 1, 2010 of the Xantrex, TAC and MGE brands over a six-year period. The corresponding amortisation expense totaled EUR56 million over the year. 5 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 180
    ... 344 (268) 12 12 10 5,333 371 (258) 263 7 505 6,221 (3,253) (343) 233 (12) 7 (3,368) (361) 218 (145) (1) (227) (3,884) 1,970 1,965 2,337 178 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 181
    ...Dec. 31, 2009 104 1 (4) 101 5 Minimum payments Less than one year Between one and five years Five years and more TOTAL COMMITMENTS Discounting effect Discounted minimum payments 92 204 104 400 (49) 351 Discounted minimum payments 88 183 80 351 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 179

  • Page 182
    ... unlisted AFS TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS (1) (2) (3) (4) Companies purchased in 2010, consolidated in 2011. Removed from the scope of consolidation - in liquidation. Liquidated in 2010. Gross unit value of less than EUR5 million. 180 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 183
    ... acquisition contract stipulates retaining part of the acquisition price as a liability guarantee. This amount of EUR9 million 15.3 - Current financial assets Current financial assets total EUR38 million at December 31, 2010 and comprise short-term investments. Note 16 Deferred taxes by type...

  • Page 184
    ...Consequently, the Group believes that there is no significant concentration of credit risk. In addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade accounts receivable. 182 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 185
    ...,175,672,728, represented by 271,959,091 shares with a par value of EUR8, all fully paid up. At December 31, 2010, a total of 287,955,220 voting rights were attached to the 271,959,091 shares outstanding. Schneider Electric's capital management strategy is designed to: • ensure Group liquidity...

  • Page 186
    ...TO THE CONSOLIDATED FINANCIAL STATEMENTS Changes in share capital Changes in share capital since December 31, 2009 were as follows: Cumulative number of shares Capital at Dec. 31, 2009 Exercise of stock options Payment of dividend in shares Employee share issue CAPITAL AT DEC. 31, 2010 262,752,025...

  • Page 187
    ... for the year. 21.5 - Share-based payments Current stock option and stock grant plans The Board of Directors of Schneider Electric SA and later the Management Board have set up stock option and stock grant plans for senior executives and certain employees of the Group. The main features of these...

  • Page 188
    ...some options is generally conditional on the achievement of annual objectives based on financial indicators. In respect of subscription vesting conditions for current stock option plans, Schneider Electric SA has created 2,709,882 shares in 2010. 186 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 189
    ... estimated life of between four and five years using the following assumptions: • a payout rate of between 3.0% and 4.5%; • a discount rate of between 2.4% and 4.5%, corresponding to a risk-free rate over the life of the plans (source: Bloomberg). 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 190
    ... nonleveraged plan, employees may purchase Schneider Electric shares at a 15% to 17% discount (depending on the country) to the price quoted for the shares on the stock market. Employees must then hold their shares for five years except in certain cases provided for by law. The share-based payment...

  • Page 191
    ... STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The tables below summarise the main characteristics of the plans, the amounts subscribed, the valuation assumptions and the cost of the plans for 2010 and 2009. 2010 Nonleveraged plans Plan characteristics Maturity (years) Reference price...

  • Page 192
    ... bank subscribes at a discount to provide the leverage. 21.6 - Schneider Electric SA shares At December 31, 2010, the Group held 4,583,005 Schneider Electric shares in treasury stock, which have been recorded as a deduction from retained earnings. 190 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 193
    ... other post-employment benefit obligations The Group has set up various post-employment benefit plans for employees covering pensions, termination benefits, healthcare, life insurance and other benefits, as well as long-term benefit plans for active employees, primarily long service awards and...

  • Page 194
    ... costs and provide life insurance benefits to retired employees who fulfill certain criteria in terms of age and years of service. These post-employment benefit obligations are unfunded. Healthcare coverage for North American employees represents 90% of this obligation. The assumptions used...

  • Page 195
    ...) Expected return on plan assets Past service cost Curtailments and settlements NET COST RECOGNISED IN THE STATEMENT OF INCOME 43 109 (82) 0 (7) 63 2 56 (56) 55 109 (74) (92) (2) Dec. 31, 2009 Of which SE USA 5 18 57 (50) (91) 2 (66) 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 193

  • Page 196
    5 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2010 Dec. 31, 2009 Of which SE USA 3. Change in projected benefit obligation Projected benefit obligation at beginning of year Service cost Interest cost (effect of discounting) Plan participants' ...

  • Page 197
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2010 Dec. 31, 2009 Of which SE USA 5. Funded status Projected benefit obligation Fair value on plan assets Surplus/ (Deficit) Effect of the asset ceiling Deferred items: Unrecognised past service cost (LIABILITIES)/NET ASSET RECOGNISED IN THE...

  • Page 198
    5 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2010 2. Change in projected benefit obligation Projected benefit obligation at beginning of year Service cost Interest cost (effect of discounting) Plan participants' contribution Benefits paid Actuarial...

  • Page 199
    ... and product liability. Provisions for customer risks also integrate the provisions for losses at completion for a number of long term contracts, for EUR17 million. (d) Environmental risks These provisions are primarily funded to cover cleanup costs. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 200
    ...of long-term debt NON-CURRENT FINANCIAL LIABILITIES Current financial liabilities break down as follows: 4,348 1,379 15 10 (503) (239) 5,010 Dec. 31, 2009 4,508 1,386 16 7 (900) (104) 4,913 Dec. 31, 2010 Commercial paper Accrued interest Other short-term borrowings Drawdown of funds from lines of...

  • Page 201
    ... July 2006, comprising a EUR500 million 5-year variable rate tranche indexed to the 3 month Euribor and a EUR500 million 7 1/2-year tranche at 4.5%. • EUR600 million worth of bonds issued in August 2005, at a rate of 4%, due on August 2017. 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 199

  • Page 202
    ... Cimac, ITG, D5X, Vizelia and H'Dev. Dec. 31, 2009 8 9 17 9 53 50 16 128 The Clipsal acquisition contract stipulates retaining part of the acquisition price as a liability guarantee. This amount has been placed in an escrow account (note 15.2). 200 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 203
    ... granted to US employees. The market value of financial instruments, which their carrying amount reï¬,ects, is estimated either internally by discounting future differential cash ï¬,ows at current market interest rates or by third party banks. 5 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 201

  • Page 204
    ... FINANCIAL STATEMENTS 26.2 - Carrying amount and market value of financial instruments other than derivatives Dec. 31, 2010 Notional amount Available-for-sale financial assets Other non-current financial assets Marketable securities Bonds Other short and long-term debt FINANCIAL INSTRUMENTS...

  • Page 205
    CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26.4 - Impact of financial instruments Impact on equity Fair value (32) 31 (1) Dec. 31, 2010 Available-for-sale financial assets Loans and accounts receivable Financial liabilities measured at amortised cost ...

  • Page 206
    ...Non-current assets : Available-for-sale financial assets Other non-current financial assets TOTAL NON-CURRENT ASSETS Current assets: Trade accounts receivable Other receivables Current financial assets Marketable securities TOTAL CURRENT ASSETS LIABILITIES Non-current liabilities: Other long-term...

  • Page 207
    ...: EMEAS* North America Asia-Pacific * Europe, Middle-East, Africa, South America. 5 The change in the average number of employees is primarily linked to the acquisition of the Areva Distribution businesses. 27.2 - Employee benefits expense 2010 Payroll costs (1) Profit-sharing and incentive...

  • Page 208
    ... 2010 versus EUR68 million at December 31, 2009. Please refer to Chapter 3 section 8 of the Registration Document for more information regarding the members of Senior Management. Note 28 Related party transactions 28.1 - Associates Companies over which the Group has significant influence, accounted...

  • Page 209
    ...Subsequent events Acquisition of APW in India On January 7, 2011 the Group announced the signature of an agreement for the acquisition of the majority of the share capital of APW President Systems Limited, a company specialising in the design and manufacture of standard or custom-built electric bays...

  • Page 210
    ... auditing o/w Schneider Electric SA o/w subsidiaries Related services o/w Schneider Electric SA o/w subsidiaries Audit sub-total Other services Legal, tax TOTAL FEES 7% 129 129 3% 799 97% 3% 100% 5,109 34 5,143 99% 1% 100% 13,987 333 14,320 208 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 211
    ... FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 32 Consolidated companies The main companies included in the Schneider Electric Group scope of consolidation are listed below. % interest Dec. 31, 2010 Europe Fully consolidated Areva T&D Austria AG (Distribution business...

  • Page 212
    ... Loire SAS MGE Finances SAS MGE UPS Systems SAS Muller & Cie SA Newlog SAS Normabarre SAS Prodipact SAS Rectiphase SAS Sarel - Appareillage Électrique SAS SCI Auxibati SCI Usibati Scanelec SAS Schneider Automation SAS Schneider Electric Consulting SAS Schneider Electric Energy France SAS Schneider...

  • Page 213
    ... SAS Transfo Services SAS APC Deutschland GmbH Berger Lahr Positec GmbH Crouzet GmbH Elau GmbH Elso GmbH Kavlico GmbH Kavlico GmbH (formerly Kavlico Technology GmbH) Merten GmbH Merten Holding GmbH MGE USV-Systeme GmbH Ritto GmbH Schneider Electric Automation Deutschland GmbH Schneider Electric...

  • Page 214
    ... APC Benelux B.V. APC Europe B.V. APC Holdings B.V. APC International Corporation B.V. APC International Holdings B.V. Citect B.V. Control Microsystems B.V. Crouzet B.V. Elau B.V. Pelco Europe B.V. Pro-Face HMI B.V. (sub-group) Sandas Montage B.V. Schneider Electric B.V. Schneider Electric Energy...

  • Page 215
    ... Spol s.r.ø. Schneider Electric d.o.o. APC Spain SL EFI Electronics Europe SL Hispano Mecano-Electrica SA Manufacturas Electricas SA Schneider Electric IT, Spain SL Schneider Electric Energy Spain, SL Schneider Electric España SA Telemantenimiento de Alta Tension, SL Xantrex Technology SL AB...

  • Page 216
    ... FINANCIAL STATEMENTS % interest Dec. 31, 2010 Schneider Electric Finances SA Schneider Electric Motion AG Schneider Electric (Schweitz) AG Schneider Electric Ukraine Smart Electric Advance Cayson Ltd Advance Dormant No. 1 Ltd Ajax Electrical Ltd APC DC Network Solutions UK Limited APC Holdings...

  • Page 217
    ...Instruments Corp. American Power Conversion Federal Systems, Inc. APC America Inc. APC Corp. APC Holdings Inc. APC Sales & Service Corp. BEI Precisions Systems & Space Co. Inc. BEI Sensors & Systems Company, Inc. Control Microsystems U.S. Inc. Crydom, Inc. Custom Sensors & Technologies, Inc. Delsena...

  • Page 218
    ... FINANCIAL STATEMENTS % interest Dec. 31, 2010 Netbotz Inc. Newall Electronics Inc. Nu Lec LLC P.H.L. Four, Inc. P.H.L. One, Inc. P.H.L. Three, Inc. Pacsena LP Palatine Hills Leasing Inc. Pelco, Inc. Power Measurement Inc. Pro-face America, LLC Schneider Electric Buildings Americas, Inc. Schneider...

  • Page 219
    ... Room Equipment & Engineering Co. Ltd Citect Controls Systems (Shanghaï) Ltd Clipsal China Company Limited Clipsal Manufacturing (Huizhou) Ltd Custom Sensors & Technologies Asia (Shanghaï) Ltd Foshan Gaoming TAC Electronic & Electrical Products Company Ltd Foshan Wilco Electrical Trading Co...

  • Page 220
    ... Santai Limited Invensys Building Systems (Hong Kong) Limited Schneider Electric IT Hong Kong Limited Schneider Electric (Hong Kong) Limited Schneider Electric Asia Pacific Limited SWC Technology Limited APC India Private Ltd Areva T&D India Ltd (Distribution business only) Cimac Automation Private...

  • Page 221
    ...FINANCIAL STATEMENTS % interest Dec. 31, 2010 Schneider Electric Industries (M) Sdn Bhd Schneider Electric IT Malaysia Sdn Bhd Schneider Electric Manufacturing (M) Sdn Bhd Citect NZ 2005 Ltd Schneider Electric (NZ) Ltd American Power Conversion Land Holdings Inc. Clipsal Philippines MGE UPS Systems...

  • Page 222
    ... Electric Algérie MGE UPS Systems Argentina SA Schneider Electric Argentina SA Clipsal Middle East Xantrex International SRL Palatine Ridge Insurance Company Ltd Standard Holdings Ltd APC Brasil Ltda Areva Transmissao & Distribuiçao de Energia Ltda (Distribution business only) CST Latino America...

  • Page 223
    ... FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2010 Alight Investment Holdings (Pty) Ltd Citect (Pty) Ltd Clipsal Industries (Pty) Ltd Clipsal Manufacturing (Pty) Ltd Clipsal South Africa (Pty) Ltd Clipsal Electronic Systems (Pty) Ltd Delixi Electric...

  • Page 224
    ...capitalised. We reviewed the data and assumptions used to identify projects that qualify for capitalisation, as well as the group's calculations, and verified that adequate disclosure is made in the notes to the consolidated financial statements. 222 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 225
    ...the financial statements 4. Statutory Auditors' report on the financial statements 224 226 227 238 5. List of securities held at December 31, 2010 239 6. Subsidiaries and affiliates 7. The Company's financial results over the last five years 240 242 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 226
    6 COMPANY FINANCIAL STATEMENTS BALANCE SHEET > 1. Assets (in thousands of euros) Balance sheet Notes 1.1 Gross A. & D. or Prov. Dec. 31, 2010 Net Dec. 31, 2009 Net Dec. 31, 2008 Net Non-current assets: Intangible assets Intangible rights Property, plant and equipment Land Buildings Other ...

  • Page 227
    ... income Translation gains TOTAL EQUITY AND LIABILITIES The notes form an integral part of these company financial statements. 7.3 256,681 702,982 2 9,738,439 8 45 31,704 31,749 9 10 11 4,544,565 510,369 13 3 5,054,951 5,070,081 14,840,268 6 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 225

  • Page 228
    ... amount of fixed asset disposals Provisions, depreciation and amortisation Other Non-recurring expenses Net non-recurring income/(expense) Net income tax benefit NET INCOME The notes form an integral part of these company financial statements. 226 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 229
    ... expenses. Lastly, the Company redeemed the outstanding EUR46 million in commercial paper. • the payment of the 2009 dividend in stock, for EUR330 million; • the employee share issue carried out on July 8, 2010 as part of the worldwide Employee Stock Purchase Plan, for EUR144 million; • the...

  • Page 230
    6 COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 1 Non-current assets 1.1 - Intangible assets This item primarily consists of share issue and merger expenses, which are fully amortised. 1.2 - Tangible assets Tangible assets Cost Depreciation NET Dec. 31, 2009 4,481 (290) ...

  • Page 231
    ...,586 3,585,399 Plan 26 Plan 27 Plan 28 Plan 29 Plan 30 Cost Provisions TOTAL NET 761,313 948,241 1,000,000 31,333 877,586 3,618,473 Marketable securities primarily represent own shares held by the Company for allocation to stock option plans. 6 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 229

  • Page 232
    6 COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 5 Advances to the Group cash pool This item consists of interest-bearing advances by Schneider Electric SA to the Group cash pool (Boissière Finance) that are recoverable on demand. Note 6 Accruals and other assets 6.1 - ...

  • Page 233
    ...nancial year, 2,709,882 new shares were issued on the exercise of 9,207,066 stock options, increasing the share capital by EUR74 million. Shareholders who chose the 2009 stock dividend option subscribed for 4,345,794 shares representing EUR35 million. A 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 234
    ...the 2009 stock dividend, EUR127 million from the employee share issue and EUR139 million from the exercise of stock options. Own shares In 2010, Schneider Electric SA transferred to employees 33,074 own shares, acquired at a cost of EUR2 million. The total number of own shares held at the reporting...

  • Page 235
    ... are traded on the Luxembourg stock market. The issue premiums and issue costs are amortised in line with the effective interest method. Lastly, the Group redeemed EUR900 million worth of August 2005 bonds at maturity on August 11, 2010. • EUR250 million worth of bonds issued in March 2009 to...

  • Page 236
    ... 46,679 Increase Decrease (46,000) (650) Dec. 31, 2010 1 2 3 20 20 (45) (46,695) Note 12 Maturities of receivables and payables Total Non-current assets Advances to subsidiaries and affiliates Other investment Current assets Accounts receivable - trade Other receivables Marketable securities...

  • Page 237
    ... million), Muller (EUR5 million) as well as by AXA (EUR6 million). 691,233 (177,272) (4,484) 509,477 Dec. 31, 2009 540,925 (138,454) (1,822) 400,649 The Schneider Electric Industries SAS subsidiary paid a dividend of EUR527 million in 2009. 6 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 235

  • Page 238
    ...generated as part of the sale of own shares to employees under stock grant plans. In February 2010, the Company reversed a EUR1 million contingency provision funded in 2002 with respect to a non-trading real-estate (2,081) 1,499 1,173 592 Dec. 31, 2009 (2,668) 32,433 8,451 38,216 company. The EUR0...

  • Page 239
    ... 31, 2010, the Company had two employees. 18.2 - Consolidated financial statements Schneider Electric SA is the parent company of the Group and accordingly publishes the consolidated financial statements of the Schneider Electric Group. 6 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 237

  • Page 240
    ...statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at December 31, 2010 and of the results of its operations for the year then ended in accordance with French generally accepted accounting principles. II - Justification of assessments...

  • Page 241
    ...,399 Schneider Electric SA own shares (stock option plans 26, 27, 28, 29 and 30) TOTAL 217,284 217,284 Schneider Electric Industries SAS AXA SELF Vigéo SAS Schneider Electric SA own shares 4,344,481 111,172 2,683 53 48,778 4,507,167 1,038 242,005 4,750,210 6 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 242
    ...I: (+50%) a) French subsidiaries (aggregate) b) Foreign subsidiaries (aggregate) B. Affiliates not included in Section I: (0-50%) a) French companies (aggregate) b) Foreign companies (aggregate) * Including income or loss in prior financial year. 240 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 243
    ... 136,943 82,614 3,139,967 - - 3,417,756 Holding company Holding company 1,502,317 154,023 34,425 672,235 6,536 1,421 21,249 21,249 - - - (180) 18,934 - 1,038 - - - - - 5,073 - 113,985 1,200 113,909 1,200 - - - - 5,968 - 6 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 241

  • Page 244
    ... 3,936 2,004 1,374 2,606 1,194 (1) Dividends on shares held in treasury on the dividend payment date and the associated withholding are credited to retained earnings. (2) Pending approval by the Annual Shareholders' Meeting of April 21, 2011. 242 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 245
    7 General presentation of Schneider Electric SA 1. General information 2. Shareholders' rights and obligations 3. Capital 4. Ownership structure 5. Employee profit-sharing, stock ownership 6. Stock option and stock grant plans with performance criteria 7. Disclosure of information required in ...

  • Page 246
    ...acquiring or otherwise, of all activities related to: • electrical equipment manufacturing, electrical distribution and secure power supply; • building control, automation and safety; • industrial control and automation, including software; 244 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 247
    ...of shareholders benefiting from double voting rights. The minimum holding period to qualify for double voting rights was reduced from four to two years by decision of the combined Annual and Extraordinary Shareholders' Meeting of June 27, 1995. 7 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 245

  • Page 248
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA SHAREHOLDERS' RIGHTS AND OBLIGATIONS 2 - Ceiling on voting rights (Article 24 of the articles of association) At the Annual Meeting, no shareholder may exercise more than 10% of the total voting rights attached to the Company's shares. The 10% ...

  • Page 249
    ... shares. The type of options (options to subscribe new shares or purchase existing shares) will be determined at a later date by the Management Board; • in addition, as part of employee share issues, the Company has issued 59,043 share subscription warrants; Together, these plans represent...

  • Page 250
    ... programs to promote stock ownership among employees in non-French subsidiaries, within a limit of 1% of the Company's share capital as of April 22, 2010. At its meeting on December 15, 2010 the Supervisory Board authorised the Management Board to issue new shares of the Employee Stock Purchase...

  • Page 251
    ... new shares to employees during 2011, within a limit of 1.1% of the Company's issued capital. The Management Board intends to use this authorisation in June 2011 to issue new shares to employees under a nonleveraged and leveraged stock ownership plan. (3) Issues of shares to entities set up to hold...

  • Page 252
    ...31, 2010: - finance a future acquisition (rather than issue new shares at the time of the acquisition); • transactions carried out by the Company: - number of shares acquired: 0 - number of shares transferred since the beginning of the program: 30,860. 250 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 253
    ... & Management Co Capital (%) 4.33 5.50 8.02 Voting rights (%) 4.06 5.16 7.55 Pledges on Schneider Electric shares 4,543 shares are pledged. Pledges on subsidiaries' shares Schneider Electric SA has not pledged any shares in significant subsidiaries. 7 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 254
    ... members of Senior Management, top managers in all countries, high-potential managers and employees who performed exceptionally during the year. • stock grant plan 10, covering 658 grantees (residents of France) and representing 332,762 shares; 252 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 255
    ... and 2009 were not met. • a number of shares equivalent to three years of base salary for Jean-Pascal Tricoire and two years of base salary for Emmanuel Babeau. The total holding is calculated on the basis of the number of Schneider Electric shares owned plus the share-equivalent of the corporate...

  • Page 256
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA STOCK OPTION AND STOCK GRANT PLANS WITH PERFORMANCE CRITERIA Past option plans Number of beneficiaries Plan date at inception Feb. 5, 2003 433 Plan 21 Number of o/w options at corporate inception officers 2,000,000 150,000 Exercise price (in ...

  • Page 257
    GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA STOCK OPTION AND STOCK GRANT PLANS WITH PERFORMANCE CRITERIA Details on outstanding options (2010) Total number of shares Exercise that could be price subscribed or Expiry date (in euros) (2) purchased (3) Feb 4, 2011 Feb 4, 2011 May 5, 2012 May 5, 2012...

  • Page 258
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA STOCK OPTION AND STOCK GRANT PLANS WITH PERFORMANCE CRITERIA Past share plans (at December 31, 2010) Plan Plan date Number of Number of Acquisition Holding beneficiaries shares at period period at inception inception 13 2,214 Performance criteria ...

  • Page 259
    ... page 246) relating to the non-application of the ceiling on voting rights when a public tender offer is in process. • agreements entered into by the Company with change of control clauses: see page 253 for information on the exercise of stock 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 257

  • Page 260
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA STOCK MARKET DATA > 8. • millions of euros Stock market data In France, Schneider Electric is listed on the Eurolist of the Euronext Paris market (compartment A), where it is traded in lots of one under ISIN code FR0000121972. It is part of the ...

  • Page 261
    ... Electric share CAC 40 index (Source: Reuters) Monep Options on Schneider Electric SA shares have been traded on the MONEP market since December 20, 1996. Ordinary bonds The information is disclosed in note 9 of the Company Financial Statements (page 233) 7 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 262
    ...'s participation in the Q&A session with the Chairman at the Annual Shareholders' Meeting. In this capacity, Committee members present certain questions phoned in to the toll-free number. • a corporate website http://www.schneider-electric.com. 260 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 263
    ... Annual and Extraordinary Shareholders' Meeting 2. Supervisory Board's comments on the Management Board's report, made in accordance with article L. 225-68 of the French Commercial Code 3. Auditors' special reports 4. Resolutions 262 269 270 276 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 261

  • Page 264
    ...described in the report on corporate governance on pages 126 and 127), Mr Jean-Pascal Tricoire: - benefits from the top-hat pension plan for the Group senior executives, the Schneider Electric SA employee benefit plan and the supplementary health, disability and death coverage available to the...

  • Page 265
    ... the top-hat pension plan for French senior executives provided for in his service contract with Schneider Electric Industries SAS. The plan is presented on page 127. Appointment of members to the Supervisory Board - fifth to eighth resolutions The Supervisory Board, following a proposal to that...

  • Page 266
    ... The Schneider Electric SA share price is currently one of the highest of the CAC 40 index, thereby potentially dissuading individual or employee shareholders from investing in the Company's share. We therefore propose that you divide the share's par value by two as a means of increasing the share...

  • Page 267
    ... In April 2009, the Shareholders' Meeting authorised the Management Board to grant to selected employees and officers of the Company and its subsidiaries and affiliates, as defined in article L. 225-180 of the French Commercial Code, options exercisable for new Schneider Electric SA shares or...

  • Page 268
    ... prices quoted for the Company's shares over the twenty trading days preceding the decision of the Management Board to grant the options; a) For the 2010 annual plan implemented in December 2009 • for 80% of the options allotted under condition of performance, an average level for 2010 and 2011...

  • Page 269
    ... • the annual number of shares granted, pursuant to this authorisation, to members of the Management Board may not represent more than 0.03% of the Company's issued capital; on employees' behalf. The 2010 worldwide employee stock purchase program offered a choice between a non-leveraged plan and...

  • Page 270
    ... of stock options or employee share issues. We have not used the authorisation given by the Shareholders' Meeting of April 23, 2009, which expires on April 22, 2011. Lastly, the twenty-fifth resolution concerns powers to carry out formalities. 268 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 271
    ... fruit of the Group's strategy focused on energy efficiency, developing solutions, strong presence in the new economies, a new customer-driven organisation and committed and capable teams. The Supervisory Board salutes the hard work and commitment of the entire corporate community in achieving this...

  • Page 272
    ...were or were not entered into during the past year: • Measures defining Jean-Pascal Tricoire's new status (authorised by the Supervisory Board on February 18, 2009 and approved by the shareholders at the Shareholders' Meeting of April 23, 2009) 270 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 273
    ... Babeau. The Supervisory Board, at its meetings held on April 23, 2009 and December 17, 2009, has authorised Mr. Emmanuel Babeau to benefit from the top-hat pension plan for Schneider Electric senior executives, as he is entitled under his service contract with Schneider Electric SA. In the event...

  • Page 274
    ...information provided in the Board's report on the proposed transaction to grant free shares. Neuilly-sur-Seine and Courbevoie, March 18, 2011 The statutory Auditors French original signed by Ernst & Young et Autres Yvon SALAÃœN MAZARS David CHAUDAT 272 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 275
    ...present our report on the proposal to authorise the Management Board to issue shares or share equivalents, on one or several occasions, to employees who are members of an Employee Stock Purchase Plan set up by French or foreign related companies, without shareholders' pre-emptive subscription rights...

  • Page 276
    ... rights, for a period of 18 months. If the resolution is adopted, the Management Board will set the terms and conditions of these transactions. This authorisation may only be used as and from August 1 2011. The Management Board is responsible for reporting to shareholders on the proposed share issue...

  • Page 277
    ...-116 of the French commercial code, we will submit an additional report if necessary at such time your Management Board uses these authorisations in the event it issues common stock with preemptive rights canceled and it issues marketable securities giving access to the share capital and/or giving...

  • Page 278
    ..., expiring at the close of the Shareholders' Meeting to be called in 2012 to approve the 2011 financial statements. The dividend will amount to EUR3.20 for each of the EUR8 par value shares carrying dividend rights from January 1, 2010. 276 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 279
    ... the transaction. • The Management Board shall have full powers to implement this resolution, directly or through a representative. • This authorisation will expire at the end of a period of eighteen months from the date of this Meeting. 8 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 277

  • Page 280
    ... Board in office, the above requirement shall be waived in the event that, within three months, the departed members are replaced in such a manner as to enable the number of Supervisory Board members in office aged 70 or more to be maintained." 278 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 281
    ... the Management Board shall have full powers to implement this authorisation; • decides that this authorisation shall cancel and replace the unused portion of the authorisation given in the tenth resolution of the Shareholders' Meeting of April 23, 2009. 8 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 282
    ... as of the date of each issue, whether or not the said shares are treated as fungible with the Company's existing shares; • decides to authorise the Management Board, directly or through a representative and by means of public offering, to (i) increase the Company's issued share capital on one...

  • Page 283
    ...Monetary and Financial Code to (i) increase the share capital within a limit of 108 million of par value (5% of capital, by way of indication) by issuing shares or any securities granting access to Company capital or any of its subsidiaries, whose issue price will be fixed by the Management Board in...

  • Page 284
    ... Company and the companies or groups linked to it, under the conditions referred to Article L. 225-180 of the French Commercial Code, options granting access to the subscription of new Schneider Electric SA shares or to the purchase of existing shares of the Company acquired by Schneider Electric SA...

  • Page 285
    ... criteria to which shall be subject, where appropriate, all or part of the shares allocated as part of the annual longterm incentive plans, with the understanding that 100% of the shares allocated to members of the Management Board as part 8 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 283

  • Page 286
    ... the Company during the trading session the day of the decision of the Management Board fixing the issue price or (ii ) the average opening or closing prices of the shares of the Company during the 20 trading days preceding the date of the decision of the 284 2010 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 287
    ... shares of the Company within 10% of capital over a period of 24 months after this meeting and to conduct proportional reductions of share capital; - define the characteristics of the securities to be issued, setting the issue price, dates, times, terms and conditions of subscription, payment...

  • Page 288
    8 ANNUAL AND EXTRAORDINARY SHAREHOLDERS' MEETING RESOLUTIONS 286 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 289
    ... annual company financial statements and corresponding Auditors' Reports provided in Chapter 6 of the registration document for the ended Thursday, December 31, 2009, registered with Autorité des Marchés Financiers (AMF) under number D10-0125 on March 19, 2010, • the business review provided...

  • Page 290
    ... Courbevoie Represented by David Chaudat Alternate Auditors Auditex Thierry Blanchetier Ernst & Young et Autres and Mazars are members of the Auditor's Regional Company of Versailles. Appointment expires 1992 2016 2004 2010 2010 2016 2016 2016 288 2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 291
    ..., 2011 2010 Annual Results Q1 2011 Sales Half Year Results Q3 2011 Sales Investors Relations: Carina Ho Tél. +33 (0)1 41 39 60 84 Fax +33 (0)1 41 29 71 42 Press Contact: Véronique Roquet Montegon Tél: +33 (0)1 41 29 70 76 Fax: +33 (0)1 41 29 88 14 www.schneider-electric.com This document was...

  • Page 292
    ...France) Tel: +33 (0)1 41 29 70 00 Fax: +33 (0)1 41 29 71 00 www.schneider-electric.com Incorporated in France, governed by a Management Board and Supervisory Board, with issued capital of EUR2,175,672,728 Registered in Nanterre, R.C.S. 542 048 574 Siret n°: 542 048 574 01 091 March 2011 / 998-4117