APC 2013 Annual Report Download - page 241

CONSOLIDATED FINANCIALSTATEMENTS ATDECEMBER 31, 2013
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Commitments and contingent liabilities Note29
29.1 – Guarantees and similar undertakings
Dec.31, 2013 Dec.31, 2012
Market counter guarantees(1) 1,214 859
Pledges, mortgages and sureties(2) 47 9
Endorsements and guarantees -
Other commitments given(3) 164 267
GUARANTEES GIVEN 1,425 1,135
Endorsements and guarantees received 83 67
GUARANTEES RECEIVED 83 67
On certain contracts, customers require a guarantee from a bank that the contract will be fully executed by the Group. For these (1)
contracts the Group gives a counter guarantee to the bank. If a claim occurs, the risk linked to the commitment is assessed and a
provision for contingencies is recorded when the risk is considered probable and can be reasonably estimated.
Certain loans are secured by property, plant and equipment and securities lodged as collateral.(2)
Other guarantees given comprise guarantees given in rental payments.(3)
29.2 – Purchase commitments
For2013, the contractual facilities management costs amount to
approximately EUR100million including the volume and indexing
Shares in subsidiaries and affiliates
factors provided for by the contract (EUR100million for2012).
29.3 – Contingent liabilities
Commitments to purchase equity investments correspond to put
options given to minority shareholders in consolidated companies
or relate to earn-out payments. At December31, 2013, there is Senior Management believes that the provisions recognized in the
one material put related to the 26% interests in Luminous that balance sheet, in respect to the known claims and litigation to
was valued for an amount of EUR92million as other non-current which the Group is a party, should be adequate to ensure that
liabilities. such claims and litigation will not have any substantial impact on
Information technology services
the Group’s financial position or results. This is notably the case
for the potential consequences of a current dispute in Belgium
involving former senior executives and managers of the Group.
The Group has agreed with Capgemini to provide outsourcing of
certain of its information technology functions in Europe and The Group has entered into a company-wide agreement in
5
deployment of a system of shared SAP management applications. respect to individual training entitlement. It has applied the French
This global project has been deployed since2007 in several accounting treatment recommended by opinion 2004-F issued by
countries. At the end of2013, Schneider Electric had capitalized the CNC’s urgent issues committee. Expenditure on individual
total costs for a net amount of EUR81million. The costs are training is written off as an expense during the period and
progressively amortized with effect from2009, over a seven-year therefore no provision is made for it. As of December31, 2013,
rolling calendar and based on the number of users connected rights accrued but not used by employees of French entities of the
worldwide as the system is deployed. Group corresponded to around 1,583,931hours.
Subsequent events Note30
On January17, 2014, the Group completed its acquisition of not a core business to Schneider Electric. The Appliance division is
Invensys plc, a global automation player with a large installed base one of the world’s largest suppliers of components and systems
and a strong software presence. With this acquisition, Schneider that control the operation of appliances, including cooking,
Electric is significantly enhancing its position as a provider of refrigeration, laundry and dishwashing, in both residential and
efficiency solutions integrating power and automation. The commercial sectors. In the financial year ended March31, 2013,
transaction will allow the combined entity to have a unique position the division recorded revenues of £331million, net of intercompany
in industrial and infrastructure end-markets. Invensys reported transactions. The consideration for the transaction is £150million.
revenue for continuing operations of £1.8billion in its Fiscal Year This disposal will enable Schneider Electric to focus upon the
2013 and has approximately 16,000 employees across the globe. divisions of Industrial Automation, Software and Energy Controls of
The transaction is remunerated through the issuance of Invensys that generated revenues of £1,461million in the financial
17,207,427 new Schneider Electric shares on January20, 2014 year ended March31, 2013.The agreement is conditional upon the
and the payment of £2.5billion on January30, 2014. satisfaction of certain regulatory conditions and customary closing
conditions, and is expected to complete during the first semester
On February5, 2014, Schneider Electric signed an agreement for of 2014.
the sale of the Invensys Appliance division. The disposal follows a
strategic review of the Appliance division that concluded the unit is
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2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC