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Make the most
of your energy™
2008 annual report
Registration document
Schneider Electric SA

Table of contents

  • Page 1
    2008 annual report Registration document Schneider Electric SA Make the most of your energy â„¢

  • Page 2

  • Page 3
    ... SA 1. General information 2. Capital 3. Ownership structure 4. Employee profit-sharing, stock ownership, stock option and stock grant plans 5. Stock market data 6. Investor relations 64 64 66 67 70 72 8 Annual and Extraordinary Shareholders' Meeting of April 23, 2009 1. Management Board's report...

  • Page 4
    ... limit global warming; meanwhile, the demand for electricity will double by 2030. There are many powerful drivers behind this inï¬,ationary consumption. @ A massive middle class is emerging from the development of new economies. They want to take their place in the world and get their rightful share...

  • Page 5
    ... from new types of companies. Schneider Electric is in the unique position to bring customers innovative solutions to help them make the most of their energy. What are the main growth drivers of Schneider Electric's positioning in energy management? We don't generate energy. We don't make products...

  • Page 6
    ..."One Schneider Electric". What do you expect from it? Our new company programme is designed to drive progress and transformation in the company. We invest in two fundamentals: customer satisfaction as the number one priority; and building one unified team. We also focus on three key transformations...

  • Page 7
    ...2005-2008, and for launching the new company program One in January 2009. Both shareholders and financial market observers have saluted the quality of this new company program, and Schneider Electric's team members have made it their own. The Supervisory Board would like to take this opportunity to...

  • Page 8
    ... North America Julio Rodriguez, Executive Vice President Europe Aaron Davis, Chief Marketing Officer Karen Ferguson, Executive Vice President Global Human Resources Russell Stocker, Executive Vice President Asia-Pacific Christian Wiest, Executive Vice President International Businesses...

  • Page 9
    ...the Supervisory Board of the "Schneider Actionnariat" corporate mutual fund Gérard de La Martinière* Corporate Director Noël Forgeard* Corporate Director Jérôme Gallot* Chairman of CDC Entreprises SAS Willy R. Kissling* Corporate Director Cathy Kopp* Human Resources General Manager, Accor James...

  • Page 10
    ... New activities proved to be strong growth drivers, with revenue from services up 20%, critical power and cooling services up 8% and building automation up 12%. Revenue from emerging economies rose 14%, while acquisitions added 3.1%, thanks in particular to Pelco, the world leader in video security...

  • Page 11
    ... for 2005-2008 have been met. Now, Schneider Electric will take its strategic transformation to the next level with a new company program for 2009-2011 entitled "One". The Group is committed to achieving its efficiency objectives despite reduced short-term visibility for the global outlook. Backed...

  • Page 12
    ... Annual Meeting of April 23, 2009. The dividend will be paid on May 29, 2009. Ownership structure at December 31, 2008 78.28% Public 10.67% Capital Research & Management 4.41% Caisse des dépôts et consignations 3.60% Employees 3.03% Treasury stock - Own shares The Schneider Electric SA share...

  • Page 13
    ... industrial control operations in Japan and â,¬60 million in cash. Services On March 27, 2008, Schneider Electric acquired ECP Tech Services (ECP), a US-based company that is a provider of power system testing, maintenance and commissioning services to industrial, utility and commercial customers...

  • Page 14
    ... Electric's Human Resources. It's up to the Group's managers to embody these values and to leverage them so they can lead their teams constructively and courageously. For external audiences, a communication campaign has been implemented to express these values, as well as Schneider Electric's new...

  • Page 15
    ... of the Group, its markets and its businesses 1 - From steel to energy management ...p. 14 2 - A strategic focus on energy management ...p. 15 3 - Company program ...p. 17 4 - Achieving more with less to preserve the planet ...p. 18 5 - Uncontested global leadership in five main markets ...p. 21...

  • Page 16
    ...acquired Data Center & Networks customer base generated 17% of sales. Schneider Electric now has an unrivaled lineup in terms of breadth, synergy and related services. The Group has promoted and enhanced its leadership in its historical businesses and gained a forefront position in energy management...

  • Page 17
    ... (Advanced Buildings Systems) EMEA, which operates in Europe and the Middle East, came on board in 2005, followed by IBS (US and Asia) in 2006. In 2007, Schneider Electric enhanced the security side of the business by acquiring Pelco Inc. the world leader in video security systems. Critical Power...

  • Page 18
    ...the way they trade, think of economic development and collaborate with stakeholders. A global company like Schneider Electric can leverage decisive strengths to meet these new challenges. @ Focus on simple solutions. No matter how technical products or solutions may be, users want them to be easy to...

  • Page 19
    ... the Group's human resources management. Targets To achieve these goals, Schneider Electric set ambitious targets for 2005-2008. @ Customers - Improve the very satisfied customer rate by 30%. @ Employees - Reduce the number of days lost due to work accidents by 20% per employee per year. - Develop...

  • Page 20
    ..., Critical Power and Cooling Services and Automation & Control. In 2008, Schneider Electric broadened its area of expertise to include access to and optimized management of renewable energies. Energy production Energy usage buildings and large commercial installations or transformed into low voltage...

  • Page 21
    ... configuration, programming, operating assistance and supervision software. Its vast industrial control lineup ranges from contactors, overload relays and motor circuit breakers to speed drives, motion controllers, sensors, control units and operator terminals. Schneider Electric offers the market...

  • Page 22
    ... Japan Industrial Standard (JIS). Forefront positions worldwide Low and medium voltage Installation systems and control Legrand ABB Siemens Panasonic Emerson Eaton Mitsubishi Critical power & cooling services Industrial automation & control Siemens Rockwell Building automation & security Honeywell...

  • Page 23
    ... management of one or several sites. @ Critical power and cooling services. @ Prepayment systems that bring electricity to disadvantaged customers. Main customers in this market include: @ Energy companies. @ Water treatment plant operators. @ Oil and gas infrastructure. @ Marine sector. @ Public...

  • Page 24
    ...Data exchange (Voice-Data-Image, radio technologies). @ Energy management, metering and quality. @ Decentralized management of one or several sites. @ Critical power and cooling services. @ Surveillance and security Main customers in this market include: @ Developers. @ Engineering and design firms...

  • Page 25
    ...distribution channels for highly technical products such as automation solutions and industrial software, as well as for Pelco-brand access control and security products. To maintain a high performance network, the Group works hand in hand with distributors on supply chain issues, technical training...

  • Page 26
    ... application libraries. @ Exclusive access to project opportunities, resources and knowledge. Global strategic accounts: A dedicated organization Schneider Electric has a dedicated organization for global companies interested in developing special relationships with their key suppliers. The Group...

  • Page 27
    ...among more than 70 sites in 25 countries. 7,300 team members directly involved in R&D or technical engineering. 82% of these team members work in Schneider Electric's Business Units, with the mission of creating new generations of products and services. 15% work for the Operating Divisions, with the...

  • Page 28
    ... the career growth of high level experts in technologies, products and services, raise their profiles and ensure that the Group knows where they are and uses their knowledge in defining its strategy. Led by Human Resources, the Innovation Department and the Group's main R&D executives, the program...

  • Page 29
    ... Electric Ventures, the Group's venture capital fund for start-ups in areas related to energy management, is another source of highly productive partnerships. Since 2003, the fund has forged contacts with more than a thousand small and mid-sized businesses around the world. It invests in high-tech...

  • Page 30
    ... America - Asia-Pacific - Europe - International. @ 8 Business Units - Automation & Control - Building Automation & Security - Customized Sensors - Power - Renewable Energies - Critical Power & Cooling - Services and Projects - Installation Systems and Control. @ 6 Corporate Functions - Finance...

  • Page 31
    ... and develop talent, anticipate changes in the Group's businesses and create an attractive and stimulating working environment. Human Resources pursued its strategy of global management in 2008, with the goal of helping employees from recent acquisitions become full-ï¬,edged Schneider Electric team...

  • Page 32
    ... hiring program. Each year, this program gives high potential graduates interested in international mobility the opportunity to kick off their Schneider Electric careers with a job in a foreign country. Fostering all types of diversity Part of adapting human resources to the Group's new...

  • Page 33
    ... Risk factors related to the Company's business The Group operates worldwide, in competitive and cyclical markets The worldwide markets for the Group's products are competitive in terms of pricing, product and service quality, development and introduction time and customer service. The Group faces...

  • Page 34
    ... conducted by the CGUs, which at Schneider Electric correspond to the Operating Divisions (Europe, North America, International and Asia-Pacific) and Business Units (Critical Power & Cooling Services (CPCS), Building Automation (BA) and Customized Sensors & Technologies (CST)). If the recoverable...

  • Page 35
    ... operating cash ï¬,ows, which are generally hedged by means of forward purchases and sales. Liquidity risk Liquidity is provided by the Group's cash and cash equivalents and commercial paper programs. These programs are backed by undrawn confirmed lines of credit. At December 31, 2008, the Group...

  • Page 36
    ... 3, 2008. Following public offers launched in 1993 by SPEP (the Group holding company at the time) for its Belgian subsidiaries Cofibel and Cofimines, Belgium initiated proceedings against former Schneider Electric executives in connection with the former Empain-Schneider Group's management of...

  • Page 37
    ... Group's main insurance programs has declined since 1996. In 2008, it was equivalent to 2.95‰ of consolidated revenues. Insurance Schneider Electric's strategy for managing insurable risks is designed to defend the interests of employees and customers and to protect the environment, the Company...

  • Page 38
    36

  • Page 39
    ... Board and Management Board ...p. 48 8 - Internal control ...p. 48 9 - Management interests and compensation ...p. 54 10 - Regulated agreements ...p. 60 11 - Auditors ...p. 60 12 - Shareholders' rights and obligations ...p. 60 13 - Application of the AFEP-MEDEF corporate governance guidelines...

  • Page 40
    ...Business address: Weinberg Capital Partners 40 rue de la Boëtie - 75008 Paris, France 500 Schneider Electric SA shares First elected: 2005 / Term ends: 2010 Other directorships and functions in French or foreign companies @ Currently: Vice Chairman of the Supervisory Board of Schneider Electric SA...

  • Page 41
    ...: 2008 / Term ends: 2012 Other directorships and functions in French or foreign companies @ Currently: Member of the Supervisory Boards of Schneider Electric SA and the "Schneider Actionnariat" corporate mutual fund; responsible for trading in Europe within the Industry department of Schneider...

  • Page 42
    ...the Management Board of Caisse des Dépôts in September 2006. Noël Forgeard* Age: 62 Business address: 85 Avenue Wagram, 75017 Paris, France 250 Schneider Electric SA shares First elected: 2005 / Term ends: 2010 Other directorships and functions in French or foreign companies @ Currently: Member...

  • Page 43
    ... Business address: Corporate Perspectives, LLC 126 East 56th Street, 9th Floor - New York NY 10022, USA 250 Schneider Electric SA shares First elected: 2007 / Term ends: 2012 @ Currently: Member of the Supervisory Board of Schneider Electric SA; Director of Dexia (as from February 2008); Executive...

  • Page 44
    ... Business address: AXA, 25 Avenue Matignon, 75008 Paris, France 264 Schneider Electric SA shares First elected: 2004 / Term ends: 2010 Other directorships and functions in French or foreign companies @ Currently: Non-voting member of the Supervisory Board of Note: Boldface type indicates companies...

  • Page 45
    ... 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 to prevent insider trading. Under the terms of this code...

  • Page 46
    ... Board was given the Management Board's quarterly reports. At each meeting, the Board also devoted time to monitoring business performance and the Company's financial performance. It reviewed the Group's investor relations strategy and the communication campaign to support the "One" company program...

  • Page 47
    ...changes in the Group's balance sheet structure and cash position. It also focused on the status of the contract with Capgemini to build and deploy a core system and outsource a portion of facilities management in Europe. As concerns environmental risks, the Committee reviewed the Group's application...

  • Page 48
    ... October 6, 2008. @ The launch of an employee share issue in 2009. The Committee also reported to the Supervisory Board on: @ Its review of the Management Board's operations and its assessment of the Management Board members' performance. @ Its review of changes in compensation policy (long-term pro...

  • Page 49
    ... of Schneider Electric's International Division. Note: Boldface type indicates companies whose shares trade on a regulated market. (1): Held directly or through a corporate mutual fund. 6. Organizational and operating procedures of the Management Board The Management Board has the broadest powers...

  • Page 50
    ... of the Supervisory Board or Management Board and their private interests. 8. Internal Control** In its operations, Schneider Electric faces a number of external and internal risks presented in the description of the Company and its businesses (see pages 31 to 35). The Group has set up procedures...

  • Page 51
    ... Operating Divisions (Europe, North America, Asia-Pacific and International). @ The Executive Vice Presidents of the Business Units (Power, Automation & Control, Building Automation & Security, Renewable Energies and Critical Power & Cooling Services). @ The Executive Vice President, Globalization...

  • Page 52
    ..., Finance & Control - Legal Affairs and the Executive Vice President, Human Resources) performs a comprehensive review of the activities and results of the Operating Divisions and corporate functions four times a year. The review covers the status of the main action plans in the areas of business...

  • Page 53
    ... and new products. @ The efficiency of such critical processes as customer satisfaction, supply chain, IT and purchasing and production localization. @ Employee development (training, occupational health and safety, etc.). new2's priorities corresponded to major processes in terms of management and...

  • Page 54
    ... on retirement, pensions and healthcare costs paid on behalf of retired employees in all countries where the Group has an obligation under the related plans. Long- and short-term debt Net debt is managed at Group level by the Finance & Control - Legal Affairs Department. Where appropriate, cash...

  • Page 55
    ... Control and Accounting Department The Corporate Management Control and Accounting unit includes a reporting team that is responsible for producing and distributing reporting packages throughout the Group and a performance analysis team that tracks the operating units' performance in relation...

  • Page 56
    ... principles consist of competitively positioning Schneider Electric in relation to market compensation rates for senior executives of comparable industrial groups in each country concerned, as follows: •฀Cash฀compensation,฀comprising฀a฀fixed฀salary฀and฀a฀ variable bonus, is set...

  • Page 57
    ...was paid attendance fees for 2008 of â,¬60,000 by Schneider Electric SA. Lastly, Mr. Lachmann received total payments of â,¬543,468 under the Company's pension plan for senior executives. Mr. Lachmann has a Company car and may also use the chauffeur-driven Company cars made available to Group senior...

  • Page 58
    ... is based on Group performance targets in terms of organic revenue growth, operating profit and return on capital employed, and on personal targets, including the development of solutions, the achievement of APC's and Pelco's business plans, deployment of the plan to simplify the Company and the...

  • Page 59
    ...,901 2008 Amount paid 765,000 1,260,000 0 0 4,945 2,029,945 Options to subscribe new shares or purchase existing shares granted to members of the Management Board during the year by the issuer and by any other Group affiliate Plan no. (1) Jean Pascal Tricoire Pierre Bouchut 28 30 28 30 Plan date...

  • Page 60
    ... Company cars made available to Group senior management. This benefit in kind can be estimated â,¬4,945. Member of the Management Board - Pierre Bouchut Under his service contract with Schneider Electric Industries SAS, Pierre Bouchut is covered by the top hat pension plan for senior executives...

  • Page 61
    ..., Critical Power & Cooling Services and Building Automation Business Units. @ The Executive Vice President, Global Human Resources. Transactions in Schneider Electric shares in 2008 by senior management and members of the Supervisory Board and Management Board Transactions disclosed in application...

  • Page 62
    ... by shareholders at the Annual Meeting of April 26, 2007. At its meeting on May 3, 2006, the Supervisory Board decided that Jean-Pascal Tricoire should continue to be entitled to all the pension and other benefits provided for in his service contract with Schneider Electric Industries SAS, which...

  • Page 63
    ... earnings. @ To the payment of a dividend. The Annual Meeting may decide to offer shareholders the opportunity to receive the dividend in cash or in the form of new shares of common stock. Dividends not claimed within five years from the date of payment become time-barred and are paid over to the...

  • Page 64
    ...xed salaries of the Management Board members on Mr. Tricoire's recommendation for 2009. @ Top hat pension plan The increase in potential rights should correspond to a limited percentage of the beneficiary's compensation. Under the top hat pension plan for Schneider Electric senior executives (see...

  • Page 65
    ... presentation of Schneider Electric SA 1 - General information ...p. 64 2 - Capital ...p. 64 3 - Ownership structure ...p. 66 4 - Employee profit-sharing, stock ownership, stock option and stock grant plans ...p. 67 5 - Stock market data ...p. 70 6 - Investor relations ...p. 72 1 2 3 4 5 6 7 8 63

  • Page 66
    ...-Malmaison, France. The bylaws, regulated information, registration document, sustainable development reports, calls to meeting and other documents are also available on the corporate website (www.schneider-electric.com). 2. Capital Share capital and voting rights The Company's share capital at...

  • Page 67
    ... Stock Purchase Plan within a limit of 1% of the Company's issued capital. This limit may be raised to 1.2%. The Management Board intends to use this authorization in June 2009 to issue new shares to employees under a non-leveraged and leveraged stock ownership plan. At the Annual Shareholders...

  • Page 68
    ..., the Company purchased 877,586 Schneider Electric shares at an average unit price of â,¬69.18 between January 1, 2008 and December 31, 2008. Trading fees paid in 2008 totaled â,¬ 91,127.08. 3. Ownership structure Three-year summary of changes in capital Dec. 31, 2008 Capital % Capital Research...

  • Page 69
    ... to developing worldwide employee stock ownership. Employees who are members of the Employee Stock Purchase Plan have an opportunity to purchase new or existing Schneider Electric SA shares through corporate mutual funds or directly. The last employee share issue took place in July 2008. A total of...

  • Page 70
    ...two years of base salary for Pierre Bouchut. The total holding is calculated on the basis of the number of Schneider Electric shares owned plus the share-equivalent of the corporate mutual fund units invested in Schneider Electric shares. To facilitate compliance, the Supervisory Board approved the...

  • Page 71
    ... new shares. P = Options to purchase existing shares. (2) Equal to the average share price of the twenty trading days prior to the date of grant. No discount or premium is applied. (3) As of January 1, 2008. (4) Assuming vesting conditions are met. Options held by corporate officers, by plan...

  • Page 72
    ... in the case of corporate officers) is subject to performance targets for 2009-2011. 5. 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 market...

  • Page 73
    ...31, 2005 Dec. 31, 2006 Dec. 31, 2007 Dec. 31, 2008 Feb. 10, 2009 � Share price in euros Schneider Electric share CAC 40 index (base: Schneider Electric on December 31, 2003) Monep Options on Schneider Electric SA shares have been traded on the MONEP market since December 20, 1996. 71 General...

  • Page 74
    ... annual report, the business review and the sustainable development report, the Company also publishes: @ A Letter to Shareholders. @ General, business and financial information (presentations, press releases). @ A corporate website (www.schneider-electric.com). Shareholders' Relations Committee...

  • Page 75
    Business review 1 2 1 - 2008 highlights ...p. 74 2 - Operating performance ...p. 75 3 - Change in financial situation ...p. 77 4 - Outlook ...p. 79 5 - Sustainable development ...p. 79 3 4 5 6 7 8 73

  • Page 76
    ... high-growth emerging economies. Automation & Control On January 11, 2008, the Group acquired US-based IMS, a company that designs and manufactures integrated motor and drive products. In 2007, IMS generated revenue of around $20 million. This move has given Schneider Electric an innovative opening...

  • Page 77
    ...the Group acquired Arrow in Japan, a world leading manufacturer of signaling products (indicating banks, sirens and rotating lights) with 2007 revenue of around â,¬15 million. On April 13, 2008 Schneider Electric acquired ECP Tech Services (ECP), a US-based company that is a provider of power system...

  • Page 78
    ... power business prior to the acquisition. These companies have been fully consolidated from their respective acquisition dates. On September 30, 2008, Schneider Electric contributed its electrical distribution and industrial control operations in Japan and â,¬60 million in cash to its new...

  • Page 79
    ... â,¬15 million on the assets transferred to the new Fuji Electric FA Components & Systems joint venture in Japan and â,¬11 million received in settlement of a dispute with Panasonic during the year. In 2008, capitalization of development costs had a positive net impact on operating profit of â,¬134...

  • Page 80
    ...million in 2007. Acquisitions used a total of â,¬598 million, net of the cash acquired. The sale of treasury stock on exercise of stock options represented a net outï¬,ow of â,¬70 million compared with a net inï¬,ow of â,¬15 million in 2007 related to disposals. Dividends paid totaled â,¬832 million...

  • Page 81
    Parent company financial statements Schneider Electric SA posted total portfolio revenues of â,¬952 million in 2008 compared with â,¬21 million the previous year. Schneider Electric Industries SAS, the main subsidiary, paid dividends of â,¬902 million in 2008 compared with zero in 2007. Interest ...

  • Page 82
    80

  • Page 83
    ...on regional development and community relations ...p. 96 9 - Environmental performance ...p. 97 10 - Rating ...p. 103 11 - Methodology underlying human resources, safety and environmental indicators ...p. 104 12 - Statutory auditor's report on a selection of environmental, safety and human resources...

  • Page 84
    ... Strategy Direction. Such a change means that sustainable development is an approach that both conditions the Group's internal policy and sets a direction in its external strategy. Missions: @ Further improve the overall level of responsibility in Schneider Electric @ Implement new social, community...

  • Page 85
    ... to develop new skills and team spirit. At the same time, they are recognized for their initiatives and risk taking in contributing to the Company's growth." Across the Group, human resources policies are deployed governing diversity, hiring, international mobility, training, leadership competencies...

  • Page 86
    ...an Environmental Director within the Globalization & Industry department. The Strategy, Customers, Innovation & Technology department coordinates the deployment of eco-design policy among product environment managers. @ In the area of social policy, each Operating Division or Business Unit Executive...

  • Page 87
    ... by industrial and human activity. 5. Social performance Schneider Electric's people are critical to its success. The Group motivates its employees and promotes involvement by making the most of diversity, supporting professional development, and ensuring safe, healthy working conditions. Progress...

  • Page 88
    ... short-interval management system implemented in all production sites, which helps improve adherence to health and safety-related situations in the field. Each employee can submit a subject or raise a problem and provide his or her solution. - o/w Schneider Electric employees N/A Frequency rate...

  • Page 89
    ... 8%* 2.7%* Countries with the most employees 2008 (percentage) France USA China Mexico India Spain Australia Germany Russia United Kingdom Italy Indonesia 17% 17% 10% 6% 4% 3% 3% 3% 3% 3% 2% 2% < 5 years Headcount% change / 2007* - 2% - 7% + 8% - 2% - 5% - 1% 0% 0% + 153% - 1% 0% + 7% 5 / 14 years...

  • Page 90
    ...certain cases, these plans led to headcount reductions. The Group took assertive steps going beyond its legal obligations to assist employees in re-directing their careers at all concerned sites. 2006 48% 52% 2007 52% 48% 2008 47% 53% Examples in 2008 Europe : in 2007, Schneider Electric and the...

  • Page 91
    .... At the end of 2008, employee share ownership in Schneider Electric accounted for 3.60% of the capital, with one quarter of the Group's employees owning stock in the company. Breakdown by region (based on year-end spot count) (percentage) 2006 Asia-Pacific Europe North America Rest of the World...

  • Page 92
    ... five-day training on the company's global vision and its economic environment at the start of the member's term of office. In 2008, the Council met three times and attended a study trip to China. Representatives from the Group Works Council, France, visited the main facilities in China and talked...

  • Page 93
    ... seven executives, the group's main objectives are to define a specific development model for Schneider Electric and its strategy directions, identify the risks and opportunities in gender equality, share best practice and develop action plans. Other initiatives @ France/China: Schneider Electric...

  • Page 94
    ...not complicit in human rights abuses). In 2008, Schneider Electric made 80% of its purchases from 2,300 suppliers and subcontractors. Purchasing volumes for the Group were approximately â,¬10 billion in 2008. Location of main new suppliers in 2008 China South America India 2008 88 31 13 Monitoring...

  • Page 95
    ... becoming one of Schneider Electric's main suppliers. A panel of 350 key partners incorporating new acquisitions in 2007 and 2008 has been set up for the entire Group. Since joining the Global Compact is one form of leverage on suppliers, communication on the importance of this public commitment vis...

  • Page 96
    ... with investment funds to create companies dedicated to the electrical business for the Bottom of the Pyramid Support from Schneider Electric Foundation People Train young people from the Bottom of the Pyramid in electrical skills, sponsor them NB: the initials Bop are currently used to designate...

  • Page 97
    ... areas: human rights, labour rights and the environment. In joining the Global Compact in December 2002, Schneider Electric publicly expressed its support for universal values. Other non-profit organisations The Group is a member of the Board of Directors of the French study centre for corporate...

  • Page 98
    ... Foundation (cf. page 93 Community). Example from 2008 Business creation Over the past ten years, Schneider Electric France has supported employee projects to create businesses or buy going concerns through Schneider Initiatives Emploi (SIE) - a dedicated structure that allows the Group to address...

  • Page 99
    ..., customer involvement, suppliers, etc.) and the global skills strategy pursued by Schneider Electric. The Group directs a large part of its research projects into energy efficiency. In medium tension, work focuses on new sensors and software intended to enhance products and advanced diagnostic...

  • Page 100
    ... of a plan to reduce air traffic and focus on maritime traffic by a more effective arbitration between stock ownership costs and transportation costs @ Overhaul of international traffic to and from Latin America and India @ Switch of E 65 million in transport costs under the control of a service...

  • Page 101
    ... in the electricity industry with customers and stakeholders. The RoHS directive and REACH regulations are taken into account in in-house actions programs in Schneider Electric and are applied in Europe and other countries as well. Two programs were implemented in the Group to ensure regulatory...

  • Page 102
    ... been signed as part of the Alliance. Finally, many items of information concerning the environment are also available, for example on the APC site where a training guide on energy savings can be downloaded, along with a manual on eco-design for data centres. Schneider Electric products Most of the...

  • Page 103
    ...was developed in 2008 in Spain where Schneider Electric took part in a reforesting program. Managing emissions, pollution and waste Land use conditions Virtually all Schneider Electric sites are located in urban or industrial areas and do not affect any notable biotopes. No Group operations involve...

  • Page 104
    ... EIME recovery rate (EIME is a software application that assesses environmental risks and management opportunities). The Group has developed a best practice guide for design to optimise end-of-life costs and the potential recyclability rate of its products. In addition, Schneider Electric decided to...

  • Page 105
    ...Stoxx benchmark financial universe. Schneider Electric has been included since 2001. Vigeo ratings are used to select listed stock in accordance with ASPI Eurozone guidelines. www.vigeo.com Dow Jones Sustainability indices First included in 2002, Schneider Electric was listed in the 2008 Dow Jones...

  • Page 106
    ...www.foundation.schneider-electric.com > Contact us By e-mail: [email protected] By land mail: Schneider Electric Industries SAS Sustainable Development Department - 35 rue Joseph Monier- 92500 Rueil-Malmaison - France 11. Methodology underlying human resources, safety...

  • Page 107
    ...high-potential talent within Schneider Electric. Diversity is one of the Planet & Society barometer's performance indicators. Global Compact: this indicator, which tracks the percentage of unit purchases made from Global Compact signatories, covers the 2,000 largest referenced suppliers in the Group...

  • Page 108
    ... that the Indicators were not established, in all material respects, in accordance with the Protocol. Conclusion During our review, we detected that the reporting of worked hours data, which is required to compute "Lost-Time Injury Frequency Rate (LTIFR)" and "Lost-Time Injury Severity Rate (LTISR...

  • Page 109
    Consolidated financial statements at December 31, 2008 1 - Consolidated statement of income ...p. 108 2 - Consolidated statement of cash ï¬,ows ...p. 109 3 - Consolidated balance sheet ...p. 110 4 - Consolidated statement of changes in equity and minority interests ...p. 112 5 - Notes to the ...

  • Page 110
    ...) (142) 2,562 Revenue Cost of sales Gross profit Research and development expenses Selling, general and administrative expenses Other operating income and expenses EBITA (*) Amortization and impairment of purchase accounting intangibles Operating profit Finance costs, net Other financial income...

  • Page 111
    ...Sale/(purchase) of treasury shares Increase/(reduction) in other financial debt Issuance of shares Dividends paid: Schneider Electric SA Minority interests Total III IV - Net effect of exchange rate : Net increase/(decrease) in cash and cash equivalents : I + II + III + IV Cash and cash equivalents...

  • Page 112
    ..., plant and equipment, net Total tangible and intangible assets Investments in associates Available-for-sale financial assets Other financial assets Total non current financial assets Deferred taxes Total non-current assets Current assets Inventories and work in process Trade accounts receivable...

  • Page 113
    ...Share capital Share premium account Retained earnings Translation reserve Dec. 31, 2008 (in millions of euros) (note 13) Dec. 31, 2007 1,979 5,378 4,503 (954) 10,906 145 11,051 1,962 5,254 3,931 (962) 10,185 129 10,314 Equity attributable to equity holders of the parent Minority interests Total...

  • Page 114
    ... for number of shares) Number of shares (thousands) Share capital Share premium account Retained earnings Treasury Other Translation Equity Minority stock reserves reserve attributable interests to equity holders of the parent (265) (9) (152) 8,717 1,583 12 (810) 12 (810) (1) 121 38 Total...

  • Page 115
    ... the Management Board of Schneider Electric on February 13, 2009 and by the Supervisory Board on February 18, 2009. They will be submitted to shareholders for approval at the Annual General Meeting of April 23, 2009. The Group's main businesses are described in Chapter 1 of the Registration Document...

  • Page 116
    ... other shareholders. Investments in operating entities controlled jointly with a limited number of partners, such as joint ventures and alliances, are accounted for by the equity method in accordance with the alternative treatment allowed under IAS 31 - Interests in Joint Ventures. Companies over...

  • Page 117
    ... of those cash ï¬,ows from other assets or groups of assets. CGUs generally correspond to the Operating Divisions (Europe, North America, International and Asia-Pacific) and Business Units Critical Power & Cooling Services (CPCS), Building Automation (BA), and Customized Sensors & Technologies (CST...

  • Page 118
    ... rates and the portion of research and development costs related to the production process (corresponding to the amortization of capitalized projects in production and product and range maintenance costs). 1.17 - Schneider Electric SA shares Schneider Electric shares held by the parent company...

  • Page 119
    ... certain retired employees in Europe and the United States. The accounting policies applied to these plans are similar to those used to account for defined benefit pension plans. The Group also records for all its subsidiaries an obligation for seniority-related benefits (primarily long service...

  • Page 120
    ...investment is sold. 1.23 - Revenue recognition The Group's revenues primarily include sales of products and revenues from service and project contracts. Sales of products Revenue from sales is recognized when the product is shipped and title transferred (standard shipping terms are FOB). Discounts...

  • Page 121
    .... Acquisitions during the period totalled â,¬598 million, net of the cash acquired. Other changes On September 30, 2008, Schneider Electric contributed its electrical distribution and industrial control operations in Japan and â,¬60 million in cash to its new Fuji Electric FA Components & Systems...

  • Page 122
    ... 14.0% 1,682 Impact on cash Changes in the scope of consolidation reduced the Group's cash position by a net â,¬598 million, as described below: 2008 Acquisitions Cash and cash equivalents paid Cash and cash equivalents acquired Disposals Other operations Net financial investments (610) (559) (51...

  • Page 123
    ... Operating Division ; APOD: Asia-Pacific Operating Division ; IOD: International Operating Division ; RE : Renewable Energy ; CST: Customized Sensors & Technologies ; BA: Building Automation ; CPCS: Critical Power & Cooling System. 121 Consolidated financial statements at December 31, 2008...

  • Page 124
    ... basis of operating profit by region as of the acquisition date. Europe Square D Telemecanique Merlin Gerin 9% 71% 62% North America 80% 10% Asia-Pacific 10% 20% 20% International 1% 9% 8% 3.2 - Changes in goodwill The main movements between December 31, 2007 and December 31, 2008 are summarized...

  • Page 125
    ... in intangible assets Trademarks Software Development projects (R&D) Other Total Gross value Dec. 31, 2006 Acquisitions/Capitalization Disposals Translation adjustment Reclassification Changes in the scope of consolidation and other Dec. 31, 2007 Acquisitions/Capitalization Disposals Translation...

  • Page 126
    ... Main trademarks recognized as of December 31, 2008 include: APC Pelco MGE Clipsal TAC/Andover Juno Digital Xantrex BEI Merten Kavlico Other Total Dec. 31, 2008 net 1,321 369 200 126 104 82 43 26 19 18 11 12 2,331 Dec. 31, 2007 net 1,249 344 200 152 114 78 33 28 18 11 20 2,247 Trademarks...

  • Page 127
    ...On September 30, 2008, Schneider Electric and Fuji Electric contributed their respective electrical distribution and industrial control operations in Japan to their new joint venture, Fuji Electric FA Components & Systems (note 2.1). Schneider Electric's share of the joint venture's results for the...

  • Page 128
    ... - in liquidation. (3) Dormant companies. (4) Investments with a unit value of less than â,¬5 million. (5) The Group had a debt towards Polam equal to the value of the shares held. Fair value corresponds to the quoted price on the last trading day of the period for investments listed on an active...

  • Page 129
    ... are generated from sales to customers operating in a wide range of businesses and geographic regions. 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...

  • Page 130
    ... 11 - Income tax Whenever possible, Group entities file consolidated tax returns. Schneider Electric SA files a consolidated tax return with its French subsidiaries held directly or indirectly through Schneider Electric Industries SAS. 11.2 - Tax proof 2008 Profit attributable to equity holders...

  • Page 131
    ...425,629 shares outstanding. Schneider Electric's capital management strategy is designed to ensure liquidity, optimize the balance sheet and the weighted average cost of capital, and ensure access to capital markets under the best possible conditions. Decisions may be based on EPS, rating or balance...

  • Page 132
    ...,032 The share premium account increased by â,¬123,906,581, following the exercise of options and increases in capital. 13.2 - Ownership structure Dec. 31, 2008 Capital % Capital Research and Management Company CDC Employees Own shares (1) Treasury stock Public Total Number of shares Voting rights...

  • Page 133
    .... In 2007, the Group paid out the 2006 dividend of â,¬3.00 per share, for a total of â,¬670 million. At the Annual Meeting of April 23, 2009, shareholders will be asked to approve a dividend of â,¬3.45 per share for 2008. At December 31, 2008, Schneider Electric SA had distributable reserves in an...

  • Page 134
    ... grantee must be an employee or corporate officer of the Group. In addition, exercise of half the options is conditional on the achievement of annual objectives based on revenue and on operating profit and EBITA margins. In 2008, 284,694 new Schneider Electric SA shares were issued on the exercise...

  • Page 135
    ...paid by the employee. The total is invested in Schneider Electric shares at a preferential price. The bank converts the discount transferred by the employee into funds with a view to securing the yield for the employee and increasing the indexation on a leveraged number of directly subscribed shares...

  • Page 136
    ...issuer. (4) An increase in the retail/institutional volatility spread increases the opportunity gain for the employee and increases the expense booked by the issuer. 13.6 - Treasury stock A share buyback program was authorized by shareholders at the Annual Meeting on May 6, 1999, and renewed at the...

  • Page 137
    ... The Company set up a liquidity contract under which the financial intermediary bought 4,317,497 shares at an average price of â,¬66.40 and sold 3,873,024 shares at an average price of â,¬68.04. At December 31, 2008, the Group held 7,508,889 Schneider Electric shares in treasury stock, acquired at...

  • Page 138
    ... obligations primarily concern the Group's North American and European subsidiaries. These plans feature either a lump-sum payment on the employee's retirement or regular pension payments after retirement. The amount is based on years of service, grade and end-of-career salary. They also include top...

  • Page 139
    ..., 2008 o/w US plans (Square D) 3. Change in projected benefit obligation Projected benefit obligation at beginning of year Service cost Interest cost (impact of discounting) Plan participants' contributions Benefits paid Actuarial (gains)/losses recognized in equity Modification of pension plan...

  • Page 140
    ...employment benefits Changes in provisions for other post-employment and long-term benefits were as follows: Dec. 31, 2008 1. Components of net cost recognized in the statement of income Service cost Interest cost (impact of discounting) Expected return on plan assets Past service cost Curtailments...

  • Page 141
    ... concerns long-term benefits for active employees (notably long service awards in France), for which part of the actuarial gain or loss is recognized in the income statement. Actuarial gains and losses stem from changes in actuarial assumptions (primarily discount rates). Actuarial gains related to...

  • Page 142
    ... Dec. 31, 2008 Commercial paper Accrued interest Drawdown of funds from lines of credit Bank overdrafts Other short-term borrowings Short-term portion of convertible and non-convertible bonds Short-term portion of long-term debt Current financial liabilities Total current and non current financial...

  • Page 143
    ...Aug 2017 Schneider Electric SA has made several bond issues as part of its Euro Medium Term notes (EMTN) program over the past few years. Issues that were not yet due as of December 31, 2008 were as follows: @ â,¬100 million worth of bonds indexed to the Constant Maturity Swap (CMS) rate, issued in...

  • Page 144
    ...2007. Schneider Electric capitalized development costs relating to the SAP contract in a net amount of â,¬155 million at end-2008. Information technology services In 2004, the Group signed an agreement with Capgemini to outsource its European IT functions and to develop and deploy shared management...

  • Page 145
    ... hedges of intragroup loans and borrowings (net purchases) and â,¬160 million in hedges of operating cash ï¬,ows (net sales). USD SEK DKK RUB HUF AUD CZK JPY AED GBP HKD Other Total Sales 500 82 194 24 77 17 25 6 37 27 71 1,060 Dec. 31, 2008 Purchases (730) (57) (91) (1) (5) (29) (9) (43) (14) (46...

  • Page 146
    ...-for-sale financial assets Other non-current financial assets Total non-current assets Current assets Trade accounts receivable Other receivables Current financial assets Cash and cash equivalents Total current assets LIABILITIES Non-current liabilities Other long-term debt Total non-current...

  • Page 147
    ...a !118 million of asset and a !54 million of investment in the SAP core model. The second level of segment information is broken down according to the Group's three main businesses. Revenue Electrical Distribution Automation & Control Critical Power Holding 2008 10,343 5,313 2,655 18,311 2007 9,869...

  • Page 148
    ... Europe, for â,¬102 million, North America, for â,¬14 million, and Asia-Pacific, for â,¬14 million, as well as the integration of Pelco, for â,¬13 million. Gains on asset disposals mainly reï¬,ect assets transferred to the new Fuji Electric FA Components & Systems joint venture in Japan. The Group...

  • Page 149
    ... and cash equivalents) and debt. 2008 Interest income Interest expense Net gains/(losses) on the sale of marketable securities Finance costs, net Dividend income Exchange gains and losses, net Impairment losses on financial assets Net gains/(losses) on disposal of long-term investments Discounting...

  • Page 150
    ...date as the options in plan 31. Note 29 - Auditors' Fees Fees paid to the Auditors and members of their networks in 2008 and 2007 were as follows: (! thousand) 2008 Ernst & Young % Mazars % Total Audit Statutory auditing o/w Schneider Electric SA o/w subsidiaries Related engagements o/w Schneider...

  • Page 151
    ... GmbH & Co KG Schneider Electric Motion GmbH Schneider Electric Motion Real Estate GmbH Schneider Electric Motion Services GmbH & Co KG Schneider Electric Power Drives Gmbh Stago Deutschland GmbH Svea Building Control System GmbH & Co. KG Tac GmbH Verwaltung SVEA Building Control Systems GmbH Vitrum...

  • Page 152
    ...Dec. 31, 2008 Schneider Electric Bulgaria Schneider Electric d.o.o American Power Conversion Denmark ApS Elmat ApS JO-EL Electric A/S Schneider Electric Denmark A/S Schneider Nordic Baltic A/S Tac A/S AEM SA APC Spain S.L. EFI Electronics Europe SL Hispano Mecano-Electrica SA Manufacturas Electricas...

  • Page 153
    ... Schneider Automation Schneider Electric Consulting Schneider Electric Foncière Schneider Electric France Schneider Electric Holding Amérique du Nord Schneider Electric Holding Asie Pacifique Schneider Electric Holding Europe Schneider Electric Industries SAS Schneider Electric International...

  • Page 154
    ... AS MGE UPS Systemer AS Schneider Electric Norge A/S TAC AS American Power Conversion Corp (A.P.C.) B.V. APC Benelux B.V. APC Europe BV APC Holdings B.V. APC International Corporation B.V. APC International Holdings BV Citect BV Crouzet BV ELAU BV Pelco Europe B.V Pro Face HMI (sous-groupe) Sandas...

  • Page 155
    ... Motion Systems UK Ltd JO EL Electric Ltd JO JO (UK) Ltd Lexel Holdings (UK) Limited MGE UPS Systems Ltd MITA (NW) Ltd MITA (UK) Ltd Nestfarm Limited Newall Measurement Systems Ltd Pelco UK Limited Sarel Ltd Satchwell Controls Systems Ltd Schneider Electric (UK) Ltd Schneider Electric Ltd Tac...

  • Page 156
    ... AB T.A.C. Holding AB TAC Svenska AB Thorsman & Co AB Crouzet AG Elau AG Feller AG Gutor Electronic GmbH MGE UPS Systems AG Sarel AG Schneider Electric Finances Schneider Electric Motion AG Schneider Electric Suisse AG Selectron Systems AG Schneider Electric Ukraine Smart Electric Accounted for by...

  • Page 157
    ... LLC Schneider Electric Vermont Ltd SNA Holdings Inc. Square D Company Square D Holdings One, Inc. Square D Investment Company ST Inverter Americas Inc TAC Americas Inc. TAC-Critical Systems, Inc. TAC LLC Veris Industries LLC Xantrex Technology Inc. Xycom Automation, LLC USA USA USA USA USA USA USA...

  • Page 158
    ...PDL Holdings Australia Pty Ltd PDL Industries Australia Pty Ltd Pelco Australia Pty. Limited Power Measurement Ltd Proface Australia Pty Ltd Schneider Electric (Australia) Pty Ltd Schneider Electric Australia Holdings Pty Ltd TAC (IBS) Asutralia Pty TAC Control Systems International Pty Ltd TAC Paci...

  • Page 159
    ... Sdn Bhd Citect NZ 2005 Ltd Clipsal Industries (NZ) Ltd Schneider Electric (NZ) Limited American Power Conversion Land Holdings Inc. South Korea South Korea South Korea South Korea Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong...

  • Page 160
    ... Invensys Building Systems Pte Ltd KSLA Energy & Power Solution Pte Ltd Merten Asia Pte Ltd MGE Asia Pte Ltd MGE Logistics South East Asia pacific Pte Ltd PDL Electric (S) Pte Ltd Pelco Asia Pacific PTE Ltd Schneider Electric Export Services Schneider Electric Industrial Development Singapore Pte...

  • Page 161
    ...31, 2008 Schneider Electric South Africa Pty Ltd Valortrade 27 (Pty) Ltd Schneider Electric Algeria EPS Ltd MGE UPS Systems Argentina S.A Schneider Electric Argentina Clipsal Middle East Xantrex Holding Ltd. Xantrex International Partnership Xantrex International SRL Palatine Ridge Insurance Company...

  • Page 162
    ... standards applicable in France. To the Shareholders, In compliance with the assignment entrusted to us by your annual shareholders' meeting, we hereby report to you, for the year ended December 31, 2008, on: @ the audit of the accompanying consolidated financial statements of Schneider Electric...

  • Page 163
    Company financial statements at December 31, 2008 1 - Balance sheet ...p. 162 2 - Statement of income ...p. 164 3 - Notes to the financial statements of Schneider Electric SA ...p. 165 4 - Auditors' report on the financial statements ...p. 172 5 - List of securities at December 31, 2008 ...p. 173...

  • Page 164
    ... and cash equivalents Marketable securities Advances to the Group cash pool Other (note 4) (note 5) 222,202 4,859,208 49 5,081,459 192,779 4,859,208 49 5,052,036 5,096,022 Total current assets Accruals and other assets Prepaid expenses Deferred charges Bond call premiums Translation losses Total...

  • Page 165
    Liabilities and shareholders' equity Shareholders' equity Share capital Additional paid-in capital Reserves and retained earnings Legal reserve Retained earnings Net income for the year Untaxed provisions Total shareholders' equity (â,¬ thousands) Dec. 31, 2008 Dec. 31, 2007 Dec. 31, 2006 (note...

  • Page 166
    ...) Sales of services and other Reversals of provisions, depreciation and amortization and expense transfers Operating revenues Purchases and external charges Taxes other than on income Payroll costs Depreciation, amortization and provision expense Other operating expenses and joint-venture losses...

  • Page 167
    ... is amortized over 10 years. Significant events of the year On July 17, 2008, Schneider Electric SA carried out a â,¬134 million employee share issue as part of the worldwide Employee Stock Purchase Plan. The Company carried out several bond issues during the year, in an aggregate amount of â,¬457...

  • Page 168
    ...securities". On December 31, 2008, the Company set aside a â,¬2 million provision for impairment of Schneider Electric SA shares acquired for allocation on the exercise of stock options. Pursuant to the authorization granted by shareholders at the Annual Meeting of May 3, 2006, Schneider Electric SA...

  • Page 169
    ...,232 - Marketable securities primarily include Schneider Electric SA shares held in treasury for allocation on the exercise of stock options. At December 31, 2008, the Company set aside a â,¬29.4 million provision for impairment of these shares. Note 5 : Advances to the Group cash pool This item...

  • Page 170
    ... Company's share capital at December 31, 2008 amounted to â,¬1,979,405,032, represented by 247,425,629 shares with a par value of â,¬8.00, all fully paid up. Another 1,999,846 shares were issued as part of the employee share issue. Schneider Electric SA shares In 2008, Schneider Electric SA paid...

  • Page 171
    ...profit available for distribution was allocated to the legal reserve. The remainder plus retained earnings and funds from the share premium account were allocated to the payment of a dividend, in a total amount of â,¬795.8 million. 7b - Additional paid-in capital Additional paid-in capital rose by...

  • Page 172
    ... and a â,¬600 million 12-year 4.0% tranche. These bonds are traded on the Luxembourg stock exchange. The issue premium and issue costs are amortized according to the effective interest method. In addition, on July 25, 2008, Schneider Electric SA issued â,¬177 million worth of bonds at the 3-month...

  • Page 173
    ...,754 20,930 133,010 (1,769) 152,171 The main 2008 dividends received by Schneider Electric SA were paid by subsidiaries Schneider Electric Industries SAS, in an amount of â,¬901.9 million, Cofibel, in an amount of â,¬34.7 million, Digital Holdings Japan, in an amount of â,¬2.2 million, as well as...

  • Page 174
    ...7, 2009, Schneider Electric SA issued â,¬750 million worth of 6.75% bonds due July 2013 as part of its EMTN program. @ At its meeting of January 5, 2009, the Management Board set up a stock option plan and a stock grant plan for corporate officers and Group employees. @ In January 2009, the Company...

  • Page 175
    ... real estate companies D. Investments in foreign companies Total Marketable securities 3,670,232 Schneider Electric SA shares (stock option plans no. 26, 27, 28, 29 and 30) 1,038 241,187 4,765,774 192,779 Total 192,779 173 Company financial statements at December 31, 2008 A. Investments with...

  • Page 176
    ... (â,¬ thousands) Company Capital Reserves and retained earnings before appropriation of income for the year* % interest I. Subsidiaries and affiliates whose carrying value exceeds 1% of Schneider Electric SA's capital A. Subsidiaries (at least 50%-owned) Schneider Electric Industries SAS 35 rue...

  • Page 177
    Book value of shares Cost Net Outstanding loans and advances Guarantees Net sales for the year Income or loss for the year Dividends received 4,344,481 4,344,481 3,167,791 - 3,518,019 Holding company Holding company 550,383 901,916 136,898 136,898 - - 1,571 7,246 82,609 82,609 -...

  • Page 178
    ... 31 Capital stock (in thousands of euros) Shares in issue Convertible bonds in issue (in thousands) Maximum number of shares to be created (in thousands): - Through conversion of bonds - Through exercise of rights Results of operations (in thousands of euros) Sales net of VAT Investment revenue...

  • Page 179
    ... Meeting of April 23, 2009 1 - Management Board's report to the Annual and Extraordinary Shareholders' Meeting ...p. 178 2 - Management report on share buybacks ...p. 182 3 - Supervisory Board's comments ...p. 183 4 - Auditors' special reports ...p. 183 5 - Resolutions ...p. 195 1 2 3 4 5 6 7 8 177

  • Page 180
    ... their dividend in Schneider Electric shares, on the basis of â,¬3.45-worth of new shares for each share owned, by requesting reinvestment from their stockbroker or bank at any time between May 4, 2009 (the ex-dividend date) and the close of business on May 19, 2009. Shareholders who elect...

  • Page 181
    ... 31, 2008). The maximum purchase price is set at â,¬90 per share. Transfer of the registered office - seventh resolution Annual and Extraordinary Shareholders' Meeting of April 23, 2009 As part of a program to optimize the Group's sites, the Supervisory Board decided, at the Management Board...

  • Page 182
    ... a public exchange offer initiated by Schneider Electric. In accordance with the provisions of the French Commercial Code, the Management Board may also issue shares or share equivalents representing, in the aggregate, a maximum of 10% of the Company's issued capital, in payment for shares or share...

  • Page 183
    ... 2008, the Supervisory Board authorized the Management Board to issue new shares to members of the Employee Stock Purchase Plan during 2009, within a limit of 2.4 million shares (1% of the Company's issued capital). This ceiling may be raised to 2.9 million shares (1.2% of the capital). This program...

  • Page 184
    ... 2.5% of the capital set for the issuance of shares to employees who are members of the Employee Stock Purchase Plan. At the discretion of the Management Board, the issue price will be equal to either (i) the opening or closing price of the Company's shares quoted on the trading day the decision of...

  • Page 185
    ...company program in early 2009. The program is designed to expand the Group's market share in energy management by making Schneider Electric's organization simpler and more efficient. The Supervisory Board noted the broad strategic thinking that went into creating this program, which pursues two key...

  • Page 186
    ... Shareholders, In our capacity as Statutory Auditors of Schneider Electric SA and pursuant to articles L.225-135, L.225-136 and L.228-92 of the French Commercial Code, we present below our report on the authorizations sought by the Management Board to increase the Company's capital by issuing shares...

  • Page 187
    ... Shareholders, In our capacity as Statutory Auditors of Schneider Electric SA and pursuant to article L.225-177 and R.225-144 of the French Commercial Code, we present below our report on the proposal to grant stock options to the employees and corporate officers of the Company and related entities...

  • Page 188
    ... and employees of the company and its subsidiaries and affiliates To the Shareholders, In our capacity as Statutory Auditors of Schneider Electric SA and pursuant to article 225-197-1 of the French Commercial Code, we present below our report on the proposal to grant existing or new shares without...

  • Page 189
    ... Board is asking you to grant it full discretionary authority over a period of 24 months to cancel shares purchased under the shareholder approved buyback program within a limit of 10% of the Company's capital. We have no matters to report concerning the reasons for and the terms and conditions...

  • Page 190
    ... the Management Board. Shareholders shall be given the option of reinvesting their dividend in Schneider Electric shares, on the basis of â,¬3.45-worth of new shares for each share owned, by requesting reinvestment from their stockbroker or bank at any time between May 4, 2009 (the ex-dividend date...

  • Page 191
    ...French Commercial Code, the selling price of the shares in question will be determined in accordance with the provisions of the law governing stock options. @ The total amount invested in share buybacks shall not exceed â,¬2,226,830,580. @ The shares may be acquired, sold or otherwise transferred by...

  • Page 192
    ... manufacturing, electrical distribution and secured power supply. @ Building control, automation and safety. @ Industrial control and automation, including software. @ Management of all types of data centers, networks, equipment and other infrastructure. (ii) The acquisition, purchase, sale and use...

  • Page 193
    ... under current legislation; however, the Management Board may grant shareholders a non-transferable priority subscription right in accordance with article L.225-135 of the Commercial Code. @ That the amount received by the Company for each share issued - including, where applicable, the issue price...

  • Page 194
    ... by shareholders of their pre-emptive right to subscribe the shares issued upon exercise of the stock options. @ The General Meeting gives full powers to the Management Board to use this authorization within the above limits and to: - Set all the terms and conditions of the plans, the conditions...

  • Page 195
    ... employees and officers of Schneider Electric Group companies that qualify as related companies under article L.225-180 of the French Commercial Code and article L.3444-1 of the French Labor Code that have their headquarters outside France; and/or (ii) corporate mutual funds or other employee stock...

  • Page 196
    ... having heard the report of the Management Board and the Auditors' special report, resolves, in accordance with article L.225-209 of the French Commercial Code, to authorize the Management Board to cancel the shares of the Company acquired under the shareholder-approved buyback program, as provided...

  • Page 197
    ... 17, 2008. @ The annual company financial statements and corresponding Auditors' Reports provided in Chapter 6 of the registration document for the year ended December 31, 2006, registered with Autorité des Marchés Financiers (AMF) under number D07-223 on March 26, 2007. @ The business review...

  • Page 198
    196

  • Page 199

  • Page 200
    Schneider Electric SA Headquarters: 35 rue Joseph Monier - CS 30323 F-92506 Rueil-Malmaison Cedex (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 e 1,979,...