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Schneider Electric SA 2012
Registration Document
Schneider Electric SA
Financial and Sustainable Development
Annual Report
The ‘Refuge du Goûter’, the historical last shelter before the
summit of Mont Blanc, has been completely refurbished to become
a net-zero building equipped with the most innovative energy
management solutions from Schneider Electricâ„¢. It is a dramatic
example of how Schneider Electric collaborates with external
partners to take sustainable development to new heights.
Registration
2012
Document
Headquarters:
35, rue Joseph Monier - CS 30323
F-92506 Rueil-Malmaison Cedex (France)
Tél. : +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 EUR 2,221 ,668 ,05 6
Registered in Nanterre, R.C.S. 542 048 574
Siret n°: 542 048 574 01 091
Schneider Electric SA

Table of contents

  • Page 1
    ...Document 2012 Financial and Sustainable Development Annual Report Registration Document Schneider Electric SA The 'Refuge du Goûter', the historical last shelter before the summit of Mont Blanc, has been completely refurbished to become a net-zero building equipped with the most innovative energy...

  • Page 2
    ... Code 2 89 4. Auditors' special reports 290 5. Resolutions 2 98 Trends in Schneider Electric's core markets Review of the consolidated financial statements Review of the parent company financial statements Review of subsidiaries Outlook 9 Persons responsible for the Registration Document Persons...

  • Page 3
    Registration Document All of Schneider Electric's regulated information is available on the corporate website at Financial and Sustainable Developement Annual Report 2012 www.schneider-electric.com, Finance section. The Business and Sustainable Development Report is available at www.schneider-...

  • Page 4
    ...the Connect company program and the disciplined integration of our acquisitions. We have positioned Schneider Electric on a solid and growing business: our technologies make industry, IT, energy and cities more efficient. We have diversified and balanced our exposure to geographies and end markets...

  • Page 5
    ... new teams would find their place at Schneider Electric, and build all the necessary bridges to develop a growth and cost advantage for our customers. We stepped up our engagement in social responsibility and sustainable development, in five key directions: environment, social, society, ethics...

  • Page 6
    ...; • that the Board and the directors take on a real responsibility; • and furthermore, that the Board fully carries out its controlling responsibility over the Chairman & CEO and the management team, and over the strategy and its execution. 4 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 7
    ... solid balance sheet structure with a strong investment grade rating. Regarding external growth, we will consider opportunities when they make sense from a strategic and valuation point of view. 2012 was the first year for the Connect program, which set a number of ambitions for 2014. Is the Group...

  • Page 8
    ... Vice-President Strategy Businesses 11 Philippe Delorme Executive Vice-President, Partner 6 Aaron Davis Executive Vice-President, Marketing 7 Karen Ferguson Executive Vice-President, Global Human Resources 12 Laurent Vernerey Executive Vice-President, End User Business Group 13 Clemens...

  • Page 9
    ...Auditors Principal auditors Ernst & Young et Autres Mazars * Alternate auditors Société Auditex M. Thierry Blanchetier Independent member of the Supervisory Board as defined in the AFEP/MEDEF Corporate Governance Guidelines for listed companies. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 7

  • Page 10
    ... 2012 > Key figures 2012 EPS grew 11%, at EUR3.73 on adjusted basis SCHNEIDER ELECTRIC Record high earnings and cash generation in mixed markets Adjusted EBITA up 10% at EUR3.5 billion, or 14.7% of revenues Record free cash flow of EUR2.1 billion and dividend of EUR1.87 Connect company program...

  • Page 11
    ... by strict working capital control and better inventory management through the deployment of Tailored Supply Chain, a key initiative of the Connect program. Indeed, stock reduction represented a contribution of EUR210 million. 08 09 10 11 12 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 9

  • Page 12
    ...financial statements. Ownership structure on December 31, 2012 3.7% CDC Group 4.4% Employees 7.5% Capital Research & Management Company (1) 1.5% Treasury shares 82.9% Public (1) To the best knowledge of the Company. Share price against CAC 40 index over five years Schneider Electric share 70...

  • Page 13
    ...be working to create an advanced energy distribution management system for electricity networks, develop standalone generator control systems and other innovative solutions. Around 90% of the company's staff at the R&D center will be research personnel. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 14
    ...the Group's policy to develop employee shareholding, is proposed to Group employees in twenty-six countries, including France. This plan covers around 80% of the employees of the Group. Corporate Social Responsibility On January 17, 2012, Schneider Electric was recognised at the Zayed Future Energy...

  • Page 15
    ...strategy, markets and businesses 1. Our strategy and market opportunities 2. Businesses, end-markets and customer channels 3. Company history and development 4. Research & development 5. Organisational simplicity and efficiency 6. Risk Factors 14 18 22 2 7 30 33 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 16
    ... and market opportunities Schneider Electric, the global specialist in energy management with operations in over 100 countries, leverages its portfolio to make energy safe, reliable, efficient, productive and green. While global energy demand is set to rise to support growing industrialization and...

  • Page 17
    ... have developed reference architectures for solutions in targeted end-markets in order to facilitate smooth integration of our products and speed up project design. We are also deploying a unified software suite to support the deployment of solutions. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 18
    ... our industry. Multiple channels of access to a broad and diffuse user base We work with many types of partners, such as distributors, system integrators, contractors, panel builders, electricians, machine manufacturers and others, as well as with our end customers. Schneider Electric has developed...

  • Page 19
    ... OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES OUR STRATEGY AND MARKET OPPORTUNITIES user base. Our diverse market access channels, which require only minor capital investment, help to ensure that we are not dependent on a limited number of large customers. Success in our industry requires strong...

  • Page 20
    ... 2000. Schneider Electric manages multiple channels to markets built on strong partnerships. 2.1 Leadership positions in our businesses End User business group The Industry business: Number 2 Worldwide in Industrial Automation and Control Industry provides comprehensive products and solutions for...

  • Page 21
    ... sector include end-users, property developers, design firms, systems integrators, panel builders and installers, electrical equipment distributors and building management companies. Within this market, targeted sub-segments include: Hotels/ Retail, Healthcare, Government/Educational, Life Sciences...

  • Page 22
    ... Gobain Distribution in France. In addition, the Group uses specialist distribution channels for highly technical products such as automation solutions and industrial software, as well as for Pelco's access control and security products. Schneider Electric assists its distributors in advising their...

  • Page 23
    ... countries throughout the world. • a dedicated program for multi-site and/or global OEMs that enhances their ability to offer superior solutions on an international level. Other large end-users and global strategic accounts Schneider Electric also addresses customers directly in a number of end...

  • Page 24
    ... companies offering complementary products and solutions. 1981-2001: The Schneider Group refocuses on the Electricity Sector 1981-1997: Schneider Group refocuses on the electrical industry by divesting its non-strategic assets, such as its public works 22 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 25
    ...acquired Lee Technologies, a leading service provider for data centers in North America. • In August 2011, we acquired Telvent, a leading provider of software and IT solutions with high added value for the real-time management of critical infrastructures in the electrical, oil and gas, and water...

  • Page 26
    1 OVERVIEW OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES COMPANY HISTORY AND DEVELOPMENT Recent acquisitions in new economies • In January 2011, we acquired the majority of the share capital of APW President Systems Limited, a company specializing in the design and manufacture of standard or ...

  • Page 27
    ... key investment areas in new economies and create new opportunities in mature countries to be a leader in both types of geographic areas. - Planet & Society Barometer: maintain best-in-class standard in environmental sustainability and social responsibility. Management compensation is partly...

  • Page 28
    ... GROUP'S STRATEGY, MARKETS AND BUSINESSES COMPANY HISTORY AND DEVELOPMENT Connect: Key financial targets for 2012-2014 With Connect, Schneider Electric expects Group performance to reach a new level of excellence by 2014. Key targets Services growth Solutions profitability Industrial productivity...

  • Page 29
    ...> 4. Research & development The R&D strategy of Schneider Electric is designed to consolidate our global leadership in critical technologies of its businesses while supporting the specific needs of each market by the Group and the strategic development of solutions. To support innovation, the Group...

  • Page 30
    ... led by Schneider Electric, with 15 partners over a period of four years. This project proposes a solution to define optimal energy management strategies in eco-districts. The project will be based on three test sites: Chambery, Athens and London. 28 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 31
    ... high-tech startups whose innovations fit with the Group's future development. In 2010, Schneider Electric Ventures became Aster Capital with the launch of a new capital investment fund to finance innovative startups operating within the areas of energy, new materials and the environment. This new...

  • Page 32
    ...teams and is responsible for its global results. A number of back-office functions such as finance, human resources, IT systems and global marketing are handled by the Global Functions, which have a governance role and provide services internally. 30 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 33
    ... cost and service. Manufacturing and supply chain operations, areas of shared services or expertise (such as finance or human resources), information systems, strategy & innovation as well as certain marketing functions (e.g. web services) are now included within the Group's Global Functions...

  • Page 34
    ...manufacturing operations. A number of the production facilities and distribution centers are dedicated to the global market. The other units are located as close as possible to their end markets. Although design and/or aesthetic features may be adapted to meet local requirements, Schneider Electric...

  • Page 35
    ... markets for the Group's products are competitive in terms of pricing, quality of products, systems and services, development and introduction time for new offers. Schneider Electric faces strong competitors, some of whom are larger than we are or are developing in certain lower cost countries...

  • Page 36
    ... industry. R&D and forward-looking engineering involves some 11,000 employees around the world, a number of them in development centers located in over 26 countries. This ongoing commitment has allowed Schneider Electric to accelerate time to market and leverage the technology of strategic partners...

  • Page 37
    ...The Group's human resources strategy is designed to create a motivating working environment. A "Cool Site" program was launched globally to promote engaging workplaces which support the work environment at the Group. Specific policies have also been developed covering international mobility, career...

  • Page 38
    ... interest rates. Interest rate risk on borrowings is managed at the Group level, based on consolidated debt and taking into consideration market conditions in order to optimize overall borrowing costs. Most bond debt is fixed rate. At December 31, 2012, 86% of the Group's gross debt was fixed rate...

  • Page 39
    ...diverse investor base. The Group currently has an A- credit rating from Standard & Poor's and an A3 credit rating from Moody's. The Group's liabilities and their terms and conditions are described in note 24 of Chapter 5. In line with the Group's overall policy of conservatively managing liquidity...

  • Page 40
    ... risks, based on management's best estimate of their expected financial impact. Nevertheless, certain new files implicating the Group for Spie Batignolles' past activities could still arise and result in costs. Schneider Electric, in addition to other companies operating in the same industry, has...

  • Page 41
    ... to asbestos in certain products and work contracts. Although it is impossible to forecast the results and/or costs of these proceedings with certainty, Schneider Electric considers that they will not, by their nature, have significant effects on the Group's business, assets, financial position or...

  • Page 42
    ... in North America, a insurance captive company based in the US (Vermont) is used to standardize deductibles for civil liability, workers compensation and automobile liability policies. These retentions range from USD1 million to USD5 million per 40 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 43
    ... performance 3. Schneider Electric's Commitment to Environmental Performance 4. Committed to and on behalf of employees 5. Schneider Electric, a responsible corporate citizen 6. Methodology and audit of indicators 7. Indicators 42 52 60 70 83 92 99 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 41

  • Page 44
    ... and environmental responsibility, based on the Group's employees: responsible, ethical governance; sites and products that respect the environment; employee development; policies that support and develop the communities in which Schneider Electric operates. (1) Source: International Energy...

  • Page 45
    ...the company program and during the establishment of the Planet & Society Barometer every three years. Please see also the list of the Group's primary external sustainable development commitments on page 50. (1) Source: CSR Sector Reporting Guide, 2013. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 46
    ... NGOs • Quarterly Planet & Society Barometer newsletter Department Quality, Customer Satisfaction and Eco-design Investor Relations and sustainable development Partners Purchasing, Energy Efficiency & Solutions and sustainable development Social Technical Human resources R&D and Activities...

  • Page 47
    ... footprint, particularly CO2 equivalent emissions caused by the Group's industrial and human activity. • mobilize the corporate development objectives; community around sustainable • share the Group's improvement plans with stakeholders. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 45

  • Page 48
    ...certification, energy efficiency, access to energy, accident rate, Company's employee recommendation score and energy management training). For each company program, the Group defines a new Planet & Society Barometer. The improvement plans are elaborated following an internal exercise to identify...

  • Page 49
    ... publication reports on the Group's action plans and monitoring indicators for the 10 principles of the Global Compact. Schneider Electric meets the requirements of the Advanced Level of the Global Compact with this report for COP. 2 Our internal basis of preparation: the Responsibility & Ethics...

  • Page 50
    ... development policies and programs in 2011, interviewing various managers. The results were presented to the Supervisory Board in 2012. In the new governance proposed for the Group in 2013, the Remuneration Committee's powers were formally extended to issues of corporate social responsibility...

  • Page 51
    ... To achieve this, Schneider Electric works with a network of 15,000 employees, comprised of certified solution sales and marketing teams and supported by technical experts and over 60 Solution Centers aligned to supporting customers in local geographies and key global end user segments, where our...

  • Page 52
    ... helps companies implement their corporate social responsibility policies. Lastly, the Group participates in work conducted by CSR Europe, notably in the area of occupational health. Miscellaneous Highlights of 2012 Livelihoods: Carbon offset fund for biodiversity and rural communities Livelihoods...

  • Page 53
    ... development programs. 2 Ethical stock market indices A key performance indicator was set in the Planet & Society Barometer for the duration of the 2012-2014 Connect program: to ensure Schneider Electric's presence in the three major SRI (Socially Responsible Investing) indices - the DJSI World...

  • Page 54
    ... Connect program (2012-2014): Objectives for year end 2014 1. +7 points growth revenue with EcoXperts above total growth revenue 2. 90% of our recommended suppliers embrace ISO 26000 guidelines 3. 3 major ethical stock market indices choose Schneider Electric 2012 7.6 pts â-² 7.8% â-² 3â-² 2011...

  • Page 55
    ... treasury stock and loans ** Including 90% of acquisition and 10% placed for retirement pensions Cash ï¬,ow after operating expenses ans dividends Cash ï¬,ow from external sources (1) The Global Compact will continue to be promoted with suppliers. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 53

  • Page 56
    ..., buildings, sites and equipment. Schneider Electric therefore provides an innovative and competitive portfolio of products, systems, services and software to help its customers further optimize their energy management. • products: dimmer switches, timers, heating and air-conditioning control...

  • Page 57
    ... very high demand for all other uses. This is why Schneider Electric is developing energy management solutions adapted to grid cycles. Finally, the variety of charging environments, whether public or private, single or collective, requires information and invoicing systems to be put in place for...

  • Page 58
    ... forecasting, energy and environment management information system. Recovery service for equipment containing SF6 In the framework of its Planet & Society Barometer for the 20092011 period, Schneider Electric looked to create SF6 gas recovery processes, for end-of-life products in 10 countries...

  • Page 59
    ... by Group values, the Responsibility & Ethics Dynamics program forms the basis of common references. Schneider Electric's mission therefore takes its meaning from engaging with individuals and organizations in order to help them get the most from their energy. 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 60
    ...Our Principles of Responsibility were presented to their teams. Measuring rollout and effectiveness The Responsibility & Ethics Dynamics program is primarily the subject of regular internal communication. The objective is to inform all the employees and remind the management teams of the priority...

  • Page 61
    ... the result is weakest. Outlook for 2013 Program rollout will continue in 2013 along various axes: Personal data protection Building a global organization requires the pooling of our information systems (human resources, customer relationship management, suppliers, etc.) and globally sharing our...

  • Page 62
    ... the environment and health through the following objectives contained in the Connect company program: Context and aims Schneider Electric does not produce nor distribute energy. It conceives and builds electrical products and proposes integral solutions for a number of market segments. The...

  • Page 63
    ... existing technical training. In addition, an Intranet environment is accessible by all employees and expanded continuously to inform everyone about the levels of our programs and the contribution of each one. • for product management: environmental managers in each business who are responsible...

  • Page 64
    ... by the Company. Scope 3 corresponds to all other indirect emissions of the Company from sources that it does not hold or control (transport, use of products and services, etc.). (3) Long-distance freight includes air freight and maritime freight. 62 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 65
    ... employees' awareness about new energy efficiency solutions and their own contribution to product development. Around 9% of total Group emissions come from energy consumption at its sites (according to the carbon footprint of 2012). Since 2005, Schneider Electric has fixed annual objectives...

  • Page 66
    ... program resulted in the following achievements in 2012: • to optimize the number of data centers and their energy management using Schneider Electric products and solutions; • to ensure the continuous training of our IT teams, implementation of continuous improvement plans and best practices...

  • Page 67
    ...environmental information that they need, Schneider Electric developed Green Premium - a unique eco-brand based on criteria clearly defined either by law or by international standards. These criteria include easily and globally accessible ad hoc environmental information on its products. A solution...

  • Page 68
    ..., called the End-of-Life Instruction (EoLI). As part of its new Connect business program, Schneider Electric is strengthening its eco-brand Green Premium and renewing its communication through the Planet & Society Barometer. Green Premium is the foundation of Schneider Electric's Eco-design approach...

  • Page 69
    ...resource scarcity while addressing environmental issues with its suppliers and its manufacturing processes and logistics, in 2012 Schneider Electric consolidated its Eco-design strategy in line with its Environment policy, its commitment to sustainable development and the evolution of international...

  • Page 70
    ...'s energy consumption action plans on pages 63-64. Raw material consumption Schneider Electric focuses on making its devices more compact to conserve natural resources so that customers have more environmentally friendly products to choose from. The Group has developed design tools for managing...

  • Page 71
    ... sites worldwide are required to follow. The target of the One program 2009-2011 was to recover 85% of hazardous and non-hazardous waste. In 2012, Schneider Electric confirmed this objective. Because classification systems vary widely from country to country, the Group does not consolidate global...

  • Page 72
    ... key areas, such as compensation, benefits, human capital development, training and performance management. Regional teams are leveraged to effectively shadow the Group's globalised operations; • HR Business Partner assists managers on a day-to-day basis in setting out their business strategies...

  • Page 73
    ... of social policies by Human Resources; extension in 2012 to the Country Presidents of the five major countries. • Launch of a new Planet & Society Barometer over the period 2012-2014: the Frequency Rate of accidents, which had exceeded its target in 2011, is still tracked internally and...

  • Page 74
    ... Training and communication continue to be key components of the Health & Safety program at Schneider Electric. We are committed to providing awareness level and task specific training for our employees and contractors to ensure a strong knowledge base to work safely. In 2012, additional global...

  • Page 75
    ...the best employers in key regions of the world. In 2012, the Employee Engagement Index at Group level is 55%, above the industry average (53%). The Employee Engagement Index has been included in the Planet & Society Barometer 2012-2014. The One voice survey is now part of the culture of the Company...

  • Page 76
    ... of Schneider Electric's Human Resources policy. Approach Schneider Electric global Talent Acceleration program is designed to increase the Group's talent pool and develop diversity, in accordance with the Connect company program. In 2012, this program continued to focus primarily on new economies...

  • Page 77
    ... partnered with the Solutions & Strategic Customers Department and the business leaders to develop the Energy & Solutions University, in order to accelerate the development of strategic skills in solutions and services. Certifying career paths are offered to employees (account managers, sales...

  • Page 78
    ... teams to address business challenges faced by Schneider Electric as part of the Connect transformation. • research & development: The Offer Creation Academy addresses the competency needs of the Offer Creation Process (OCP) to ensure the right competency levels of R&D employees globally...

  • Page 79
    ... (see page 91). • consolidate the place of equal employment opportunity in HR management practices. Action plans Several global processes have been developed to support Schneider Electric's diversity policy: Agreements in France In 2004, Schneider Electric France formalized its commitments to...

  • Page 80
    ... • on-line training program dedicated to the promotion of diversity, launched globally in 2009. Gender balance In its diversity policy, Schneider Electric lays particular emphasis on equal career management for men and women as the best means to develop the values and skills required to meet the...

  • Page 81
    ... members (Purchasing Department, Employment Management Department, Occupational Health Department, Communication Department, corporate partners and specialist agencies) with local rollout by "Disability Officers". In France, Schneider Electric recruits through work-study programs for positions...

  • Page 82
    ... projects in France and abroad developed as part of the BipBop program. Action plans Employee share ownership plan 2012 Schneider Electric has ramped up its in-house communication to employees to ensure that they have a clear understanding of the challenges facing the Company, its policy and its...

  • Page 83
    ... of all managers at industrial sites and logistics centers who receive a bonus. In December 2011, the annual long term incentive plan for 2012 was put in place granting 2,637 people performance shares on the condition that they belong to the Group on the day at the end of the acquisition period...

  • Page 84
    ... year. In 2012, Schneider Electric Mexico received for first time the award: "ESR" as a socially responsible Company. This award is delivered to companies that have outstanding practices in Quality of life, with environment, community and ethics considered. Schneider Electric Mexico also received...

  • Page 85
    ...the Base of the Pyramid) internal energy access program illustrates Schneider Electric's desire to create a virtuous circle combining business, innovation and social responsibility. The "BipBop"program Business Innovation Create an investment fund for business development in the electricity sector...

  • Page 86
    ... solutions Business Development Director; • an Offer Creation Director based in Bangalore (India); • a Welfare Investment Director, who manages the Schneider Electric Energy Access social welfare fund; • a Training Programs Director; • BipBop correspondents in key countries (India, Senegal...

  • Page 87
    ...in electricity; • promote the development of businesses that provide access to energy in rural or suburban areas in developing countries; responsible development, constitutes a response to the new French legislation on employee savings plans. On December 31, 2012, 2,666 Group employees in France...

  • Page 88
    ... windmills; • Nice International. A company that manages networks of Internet cafes using solar power systems. These Internet access points allow users to access training, communication and information means. The SEEA investment alongside FMO (Dutch development aid funds) and Rabobank investments...

  • Page 89
    ...low-cost and eco-design criteria into consideration. The project extends over 42 months and coordinates the expertise of 12 industrial and research partners. It is supported by the French Environment and Energy Management Agency (ADEME). These actions are funded by the Schneider Electric Foundation...

  • Page 90
    ... life of the Foundation and the Company with local partnerships taking center stage at an international level. In 2012, 25,000 employees in 50 countries took part in this campaign and have rolled out 150 initiatives. Governance The Schneider Electric Foundation Board of Directors meets two times...

  • Page 91
    ... Grenoble); - who have supported the Energy Access social welfare investment fund, - or who began work after training; • management control, finance, communication, fundraising, management, human resources, technical, etc. For more information visit: www.fondation.schneider-electric.com and www...

  • Page 92
    ... employee donations to the organizations of their choice. In 2012, the Company matched 2,532 donations in North America (compared with 2,791 in 2011 and 2,578 in 2010); • Pelco by Schneider Electric, the Group entity specialized in building security and video surveillance, is developing a program...

  • Page 93
    ... These actions result in support for employment, implementation of the Group's involvement policy, SME development aid, support for the energy sector, assistance for learning and other actions desired by the local economic and political authorities. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 91

  • Page 94
    ...departments directly concerned by the indicators (Human Resources, environment, the Foundation, etc.) and each represented by a driver. The global performance of the Planet & Society Barometer is calculated by the Group's Sustainable Development Department. The indicators from the Planet & Society...

  • Page 95
    ... (2012-2013-2014) by 3.3%, using Schneider Electric solutions. The program is available for all Schneider Electric sites. The internal customer is Global Supply Chain Management. The Energy Management Services teams are the internal provider. In 2012, the program addresses Schneider Electric's 100...

  • Page 96
    ...: Products, Management, Languages, Office, Security, Legal and Regulatory training, etc.; excluded from the count are: training that does not have a formal trainer, with no written learning objectives or notices and time spent on social media. 94 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 97
    ... page numbers of the report in which the various indicators are mentioned. 1° Social information a) Employment Total workforce and breakdown of employees by gender, age and region Hiring and layoffs Remuneration and its development b) Organization of work Organization of working time Absenteeism...

  • Page 98
    ..., consumer associations and bordering populations Conditions of dialogue with these persons or organizations Partnership or sponsorship actions c) Subcontracting and suppliers Consideration within the Company's purchasing policy of social and environmental issues The importance of subcontracting and...

  • Page 99
    ... Code (Code de commerce), and on the Planet & Society Barometer's indicators(1) as of December 31st 2012. Management's Responsibility The Board of Directors is responsible for the preparation of the Management Report including the consolidated social, environmental and societal information...

  • Page 100
    ...for Environmental and Social information (excluding Safety) are precise and communicated throughout the Group; the collection of information is largely based on an information system and the controls in place at the different levels are effective, • the reporting Guidelines for Safety information...

  • Page 101
    ...nancial consolidation. ISO 14001 sites cover about 70% of the Group. • one part publishing constant scope indicators; • and another part publishing indicators per employee to correct the changes in the Company's activities. The sites' workforce includes Schneider Electric employees (fixed-term...

  • Page 102
    ... end 2014 1. 10% CO2 savings on transportation 2. 75% of our product revenues achieved with Green Premium 3. 10% energy consumption savings 2012 14.8% â-² 65.5% â-² 6.1% â-² 2011 63% - The 2011 performance serves as a starting value for the Planet & Society Barometer Connect program between 2012...

  • Page 103
    ...300 sites recognized "Great place to work - Cool site" 2012 -23% â-² 55% â-² 27% â-² -* -* 2011 23% - The 2011 performance serves as a starting value for the Planet & Society Barometer Connect program between 2012 and 2014. â-² 2012 audited indicators * These indicators will be reported from 2013...

  • Page 104
    ... Asia-Pacific Europe North America Rest of the world LA1 Breakdown of workforce by country (the most significant countries) (5) France United States of America China India Mexico Spain Brazil Germany Australia Indonesia United Kingdom Russia LA1 Annual change in workforce by country (the most...

  • Page 105
    ... 15/24 years 25/34 years > 34 years 2 LA1 Breakdown of workforce by function Marketing Sales Services and projects** Support Technical Industrial LA1 Direct variable costs* (cost of employees under production or business costs) Hires (6) Breakdown by type of contract Permanent contract Fixed...

  • Page 106
    ... Breakdown by Region Asia-Pacific Europe North America Rest of the world Dialogue and social relations Dialogue and social relations LA4-6 Sites stating they benefit from employee representation (2) Unions Works Council Health and Safety Committee LA7 Number of collective agreements (2) 47.6% 50...

  • Page 107
    ... Medical Incident Rate (8) of which Schneider Electric employees of which subcontractors Talent development and training GRI LA10 LA10 2 Indicators Talent development and training Number of training hours (2) Average hours of training per person (2) White collar Blue collar 2011 2010 2009...

  • Page 108
    ... Blue collar Disability (France) Employees with disabilities Direct employment Indirect employment Talent development and training (France) LA10 Breakdown of costs by training type Health, safety and environment Technical Languages and IT Languages IT Solutions Management and Leadership Others 19...

  • Page 109
    ... Europe DONATIONS IN PRODUCTS OR SERVICES FOR A PARTNER/PROJECT OF THE FOUNDATION (in euros) Number of employees involved in the Foundation's actions * Of which Square D/Schneider Electric North America 960,712 3,946,161 440,625 5,347,498 1% 72%* 23% 4% 1,198,916 35,741 2012 REGISTRATION DOCUMENT...

  • Page 110
    ....schneider-electric.com www.teachers.schneider-electric.org To contact us: Email: [email protected] Mail: Schneider Electric Sustainable Development Department address - 35, rue Joseph Monier, CS 30323 - 92506 Rueil-Malmaison Cedex, France 108 2012 REGISTRATION DOCUMENT...

  • Page 111
    SUSTAINABLE DEVELOPMENT INDICATORS 2 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 109

  • Page 112
    2 110 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 113
    ...the Supervisory 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** 128 129 129 130 138 139 148 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 111

  • Page 114
    ... internal control and risk management procedures implemented by the Company. The sections Management Board and Supervisory Board system, 1, 2, 3, 4, 8 (Remuneration Policy for corporate officers and members of the Management Board and Pension Plans), 10 and 11, and Section 2 (Shareholder's Meeting...

  • Page 115
    ... then subject to ratification by the next General Shareholders' Assembly. Throughout their term, Supervisory Board members must hold at least 1,000 Schneider Electric SA shares. Consequently, as a result of its assessment in 2011, the Supervisory Board has requested that its members hold at least...

  • Page 116
    ... the names of companies whose securities are listed on a regulated market. (1) Directly or through the FCPE. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 114 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 117
    ...beginning of 2012. Note: bold indicates the names of companies whose securities are listed on a regulated market. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 115

  • Page 118
    ... since May 2010. Note: bold indicates the names of companies whose securities are listed on a regulated market. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 116 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 119
    ... resigned on February 16, 2013 following his nomination as Minister of Future Creation and Science of South Korea. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 117

  • Page 120
    ... • Currently: Member of the Supervisory Board of Schneider Electric SA. - Other directorships at a listed company: Director of Air Liquide. - Other directorships or functions: Director of Standard & Poor's Credit Market Services France SAS; Director of Allo Finance; Chairman of the Managing...

  • Page 121
    CORPORATE GOVERNANCE SUPERVISORY BOARD Ms. Dominique Sénéquier* Age: 59 Business address: AXA Private Equity 20, place Vendôme 75001 Paris - France 1,000 Schneider Electric SA shares First appointed: 2010/Term ends: 2015 Directors and of the Audit Committee of Hewlett-Packard Company; Chairman,...

  • Page 122
    ... Business address: GIE AXA 25, avenue Matignon 75008 Paris - France 528 Schneider Electric SA shares First appointed: 2004/Term ends: 2014 Directorships and other functions • Currently: Member of the Supervisory Board of Schneider Electric SA. - Other directorships at a listed company: Chairman...

  • Page 123
    ... hold at least 1,000 shares of Company stock; • abide by strict rules regarding transactions involving Schneider Electric SA stock (no trading allowed in the 31 days preceding the day following the publication of the annual or interim financial 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 121

  • Page 124
    ... press review, all of the Company's press releases, financial analysts' reports and other documents. Members also have the opportunity to meet informally with key senior executives prior to Supervisory Board meetings. New members of the Supervisory Board attend training and information sessions...

  • Page 125
    ... Board meetings** devoted to discussing the Company's corporate governance and strategy, reviewing operations and the annual and interim financial statements and preparing the Annual Shareholders' Meeting. The Supervisory Board held six meetings in 2012. The meetings lasted around five hours...

  • Page 126
    ...-day meeting devoted entirely to this topic, as it does each year. The Board examined the new company program "Connect" covering the period 2012-2014. The Board reviewed the policy of sustainable development of Schneider Electric, the Group's results and the policy of male/female equal opportunities...

  • Page 127
    ... preparing the work of the Supervisory Board, making recommendations to the Board and issuing opinions - reviews risk mitigation, - reviews the rollout of the Group's internal audit system and acknowledges the outcome of entities' self assessment 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 125

  • Page 128
    ... the IT systems strategy, review of action plans regarding the security of IT systems, review of the possible impacts of the financial crisis on management of debt and the Group's conditions for obtaining finance, review of the development of the Solutions business, review of tax risks, review of...

  • Page 129
    ... of stock option, bonus shares and employee stock ownership plans. It is also responsible for examining succession plan solutions for members of the Management Board and Executive Committee. It examines Human Resource policies and in particular: Meetings in 2012 In 2012, the Supervisory Board...

  • Page 130
    ... her term several times provided that the total extension does not exceed three years. Chairman of the Management Board Mr. Jean-Pascal Tricoire Age: 49 years old Business address: Schneider Electric 35, rue Joseph Monier 92500 Rueil-Malmaison - France 125,064 (1) Schneider Electric SA shares First...

  • Page 131
    ... statements and related management reports; • calls Shareholders' Meetings; 3 > 7. Declarations concerning the situation of the members of the Supervisory Board and Management Board Emmanuel Babeau has a service contract with Schneider Electric Industries SAS and is Chairman of the Board...

  • Page 132
    ... and Human Resources Committee. The variable remuneration of the Management Board members is determined as follows: • 70% is determined by the Group's overall performance, as measured in terms of operating margin, organic growth, cash 130 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 133
    ... COMPENSATION generation ratio, solutions development, customer satisfaction rates, corporate social responsibility and people development; • 30% is based on the attainment of measurable individual performance targets. Senior Executives benefit from Performance Shares under the annual long term...

  • Page 134
    ... CORPORATE GOVERNANCE MANAGEMENT INTERESTS AND COMPENSATION Members of the Supervisory Board The Annual Shareholders' Meeting set total attendance fees at EUR1 million. The Supervisory Board has decided to allocate these fees as follows: • Board members and non-voting members resident in France...

  • Page 135
    ...: control profitability and cash conversion, implementation of the Connect Company program, imptementation of the new organization, integration of acquisitions, develop and grow profitability of Solutions. Based on these elements, at its meeting of February 20, 2013, the Supervisory Board set...

  • Page 136
    ... of options to purchase or subscribe shares during the financial year to each corporate officer by the issuer and by any company in the Group No option to subscribe new shares or purchase existing shares was granted during the 2012 financial year. 134 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 137
    ... of the information reported in the summary of the compensation, performance shares received by each corporate officer (see page 134), the allocations made in 2011 (for 2012) are disclosed hereinafter. Plan no. Jean-Pascal TRICOIRE Emmanuel BABEAU 13 13 Number of Plan date shares granted 12/16...

  • Page 138
    ... and promoted by him until that time, whether or not in connection with a change in Schneider Electric's shareholder structure as described above, - the Schneider Electric SA and Schneider Electric Industries SAS employee benefit plan, which offers health, incapacity, disability and death cover...

  • Page 139
    ... of the Global Functions: Information System, Marketing, Strategy & Innovation, Global Human Resources - Global Supply Chain; • the Executive Vice-Presidents of the businesses: Global Operations - North America Operations & Buildings, China Operations - Industry - Infrastructure - IT...

  • Page 140
    ... GOVERNANCE REGULATED AGREEMENTS Transactions in Schneider Electric SA shares by Senior Management and corporate officers during the 2012 financial year Transactions disclosed in application of article 621-18-2 of the French Monetary and Financial Code Total transaction amount EUR7,210,043 EUR6...

  • Page 141
    CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT As Jean-Pascal Tricoire agreed to resign from his employment contract with the Schneider Electric Group (where he had 22 years' seniority) when his term as Chairman of the Board was renewed in May 2009, the Supervisory Board defined his new...

  • Page 142
    ...Operating Divisions and Global Functions. These reviews cover business trends, action plans, current results and forecasts for the quarters ahead. Similar reviews are carried out at different levels of the Group prior to Senior Management's quarterly review. Internal Control Department The Internal...

  • Page 143
    ...' primary operations and performance. Global Functions (Human Resources, Purchasing, Manufacturing, Supply Chain, Information Systems, etc.) Schneider Electric centralizes decision-making and risk management at the corporate level through specific bodies such as the Group Acquisitions Committee...

  • Page 144
    ... meets eight times per year to ensure cross-functional coordination among the Global Function for innovation and new products. The Human Resources Department is responsible for deploying and ensuring the application of procedures concerning employee development, occupational health and work safety...

  • Page 145
    ...fied as being recurrent in the units or as having a material impact at the Group level. The internal control system is adjusted to account for these risks as needed. The Group's insurance programs cover the remaining portion of transferable risks. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 143

  • Page 146
    ...January 2011). It brings its methodology to develop emergency plans (evacuation plans, crisis management plans, business continuity plans, etc.) and ensures coordination of the corporate crisis team (SEECC Schneider Electric Emergency Coordination Center) each time that it is activated. The Security...

  • Page 147
    ... the Key Internal Controls - training and requests for self-assessments - throughout the Operating Divisions, with the scope extended to cover new units: 40% of the deficiencies identified during the 2011 campaign were deemed settled in 2012. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 145

  • Page 148
    ... of this governance; • internal control self-assessment questionnaires were sent out to cover 90% of the Group's consolidated revenues (training managers in internal control practices, defining and implementing remedial action plans if needed). 146 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 149
    ... providing an adequate level of internal control; • defining levels of responsibility for authorizing and checking transactions; • given that the Group consolidated financial statements are finalized a few weeks after the annual and half-year balance sheet date, subsidiaries perform a hard...

  • Page 150
    ...two days before they are reviewed by the Board. Schneider Electric practice At Schneider Electric, in order not to extend delays between the closing of financial statements by the Management Board and the review by Supervisory Board, the Audit Committee which reviews the Financial Statements meets...

  • Page 151
    4 Business review 1. Trends in Schneider Electric's core markets 150 2. Review of the consolidated financial statements 3. Review of the parent company financial statements 4. Review of subsidiaries 5. Outlook 152 157 157 157 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 149

  • Page 152
    ...China, dragged by past tight credit conditions over past quarters and less favorable inland and foreign environment. Residential In Western Europe, 2011 trend showing improvement in housing construction was not confirmed in 2012. Recovery was delayed because of ongoing economic and sovereign debt...

  • Page 153
    ... segment, benefiting from continued access to capital markets or from the backing of large Private Equity groups, have accelerated their development. These companies accelerated their international expansion as well to meet growing global demand. 4 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 154
    ... to the dates on which the Group gained control of the acquired companies. (1) Adjusted EBITA is EBITA before restructuring costs and before other operating income and expenses, which includes acquisition, integration and separation costs. 152 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 155
    ... or South East Asia, and by the success of the Luminous offer in India. The Buildings business generated revenues of EUR1,682 million, or 7% of the consolidated total. This represents an increase of +8.4% on a reported basis and -3.1% like-for-like. Products were impacted by tough market conditions...

  • Page 156
    ...EUR42 million for the Group out of which EUR35 million for Power and EUR7 million for Industry as a reduction of revenues, EBITA and Adjusted EBITA. ** Adjusted EBITA: EBITA before restructuring costs and before other operating income and expenses. 154 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 157
    ... million after tax effect in 2012 (and 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC EUR15 million of goodwill impairment in 2011), the profit for the period attributable to the equity holders of our parent company amounted to EUR2,023 million for the year ended December 31, 2012, an increase of...

  • Page 158
    4 BUSINESS REVIEW REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS Earnings per share Earnings per share increased to EUR3.39 for the year ended December 31, 2012 from EUR3.34 for the year ended December 31, 2011 (taking into account the division of the nominal value of the shares by two, effective...

  • Page 159
    ... for acceleration in the new economies and a slow recovery in North America. Based on current market conditions, the Group targets a low-single digit organic growth in revenues and a stable to slightly up adjusted EBITA margin for the year 2013. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 157

  • Page 160
    4 BUSINESS REVIEW OUTLOOK 158 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 161
    ... 2. Consolidated statement of cash flows 3. Consolidated balance sheet 4. Consolidated statement of changes in equity 5. Notes to the consolidated financial statements 6. Statutory Auditors' report on the consolidated financial statements 160 162 164 166 167 229 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 162
    ... intangibles) EBITA corresponds to operating profit before amortization and impairment of purchase accounting intangible assets and before goodwill impairment. The accompanying notes are an integral part of the consolidated financial statements. 160 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 163
    ... of the parent • to non-controlling interests * The 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements The accompanying notes are an integral part of the consolidated financial statements. 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 161

  • Page 164
    ...-term pension assets Sub-total Total II - Cash ï¬,ows from/(used in) investing activities Issuance of bonds Repayment of bonds Sale/(purchase) of own shares Increase/(reduction) in other financial debt Proceeds from issuance of shares Dividends paid: Schneider Electric SA Non-controlling interests...

  • Page 165
    ...AND CASH EQUIVALENTS AT DECEMBER 31 20 3,617 * The 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 163

  • Page 166
    ... figures were restated for the item disclosed in note 1.2 of the consolidated financial statements The accompanying notes are an integral part of the consolidated financial statements. 17 18 19 15.3 20 3,090 5,289 1,291 127 3,737 13,534 36,156 164 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 167
    ...190 1,827 23 24 930 291 1,726 8,964 36,156 5 * The 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 165

  • Page 168
    ... 1,667 204 84 (8) 76 Total 14,971 1,877 (134) 1,743 January 1, 2011* Profit for the year* Other comprehensive income Comprehensive income for the year Division of the nominal value by two Capital increase Exercise of stock options Dividends Share-based compensation expense Other (1) 271,959 271...

  • Page 169
    ... Annual General Meeting of April 25, 2013. The Group's main businesses are described in chapter 1 of the Registration Document. TABLE OF CONTENTS Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Accounting Policies Changes in the scope of consolidation Segment information Research...

  • Page 170
    ... 2011 comparative information in the consolidated financial statements at December 31, 2012. An action plan has been implemented in order to reinforce preventive and detective controls. - IFRIC 20 - Stripping Costs in the Production Phase of a 168 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 171
    ...FY 2011 restated 1,877 (134) Profit for the year Other comprehensive income for the year, net of tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR Attributable: • to owners of the parent • to non-controlling interests (27) (27) 1,743 1,667 76 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 169

  • Page 172
    ... Trade and other operating receivables Other receivables and prepaid expenses Current financial assets Cash and cash equivalents Total current assets TOTAL ASSETS 3,349 (82) 5,402 1,638 104 2,771 (82) (58) 13,264 35,828 24 24 1,468 22,564 170 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 173
    ... to owners of the parent Non-controlling interests Total equity Total non-current liabilities Current liabilities Trade and other operating payables Accrued taxes and payroll costs Current provisions Other current liabilities Current debt Total current liabilities TOTAL EQUITY AND LIABILITIES 4,094...

  • Page 174
    ... 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 list of consolidated subsidiaries and associates can be found in note 32. The reporting date for all companies included in...

  • Page 175
    ... impairment are identified on the basis of external or internal 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; 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 173

  • Page 176
    ...financial assets Investments in non-consolidated companies are classified as available-for-sale financial assets. They are initially recorded at their cost of acquisition and subsequently measured at fair value, when fair value can be reliably determined. 174 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 177
    ..., compensation levels and payments into mandatory retirement programs. 1.20 - Share-based payments The Group grants different types of share-based payments to senior executives and certain employees. These include: • Schneider Electric SA stock options; • stock grants; • stock appreciation...

  • Page 178
    ... 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 (note 21.5). • restructuring costs, when the Group has prepared a detailed plan for the...

  • Page 179
    ...of the exercise of stock options 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...

  • Page 180
    ...The Group's consolidated financial statements for the year ended December 31, 2012 can be summarized as follows: Number of active companies Parent company and fully consolidated subsidiaries Proportionally consolidated companies Companies accounted for by the equity method TOTAL Dec. 31, 2012 582...

  • Page 181
    .... Share-based payment is presented under "Corporate costs". The Management Board does not review assets and liabilities by Business. The same accounting principles governing the consolidated financial statements apply to segment data. Details are provided in Chapter 4 of the Registration Document...

  • Page 182
    ... Europe Revenue by country market Non-current assets 7,142 7,361 of which France 1,916 1,710 North America 5,208 7,466 of which USA 4,360 7,310 AsiaPacific 5,933 4,413 of which Rest of the China world 2,798 1,095 4,062 811 Total 22,345 20,051 Moreover, the Group follows the share of new...

  • Page 183
    ... year 2012 Impairment losses on assets Gains on asset disposals Losses on asset disposals Costs of acquisitions Pension plan curtailments Others OTHER OPERATING INCOME AND EXPENSES (16) 8 (10) (52) 21 39 (10) Full year 2011 8 (9) (99) 42 50 (8) 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 181

  • Page 184
    ... growth rate; • a 0.5 point decrease of margin rate. Impairment losses totaling EUR15 million were recognized on goodwill relating to two small businesses in Europe sold in 2011. • 7% of assets for a 0.5 point increase of the discount rate; 182 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 185
    ..., Group entities file consolidated tax returns. Schneider Electric SA has chosen this option for the French subsidiaries it controls directly or indirectly through Schneider Electric Industries SAS. 10.1 - Analysis of income tax expense Full year 2012 Current taxes France International Total...

  • Page 186
    ... ITB Infrastructure TOTAL 3,943 2,244 1,469 3,015 2,233 12,904 Dec. 31, 2011, net 3,906 2,176 1,642 3,061 1,987 12,773 Square D goodwill was allocated to each business in proportion to operating income: Power Square D Company 82% Industry 18% 184 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 187
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS 11.2 - Movements during the year The main movements during the year are summarized as follows: Full year 2012 Net goodwill at opening Acquisitions* Disposals Impairment Translation adjustment Reclassifications Net goodwill at year end Included cumulative...

  • Page 188
    ...on intangible assets other than goodwill and others TOTAL* * Includes amortization & depreciation of intangibles assets from purchase price allocation for EUR225 million for the year 2012 and EUR208 million for the year 2011 (disclosed in note 8). 186 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 189
    ... 2012 231 11 (1) 2 3 (24) 222 (7) (4) (1) 210 Buildings 1,480 104 (18) 11 33 122 1,732 78 (32) (13) 31 (14) 1,782 Other 832 233 (46) 1 (141) 33 912 262 (111) (4) (127) 10 942 Total 6,221 516 (170) 35 (63) 149 6,688 488 (287) (41) 9 (10) 6,846 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 187

  • Page 190
    ...The depreciation and impairment of tangible assets retreated at statutory cash ï¬,ow were as follows: Cash impact Depreciation of property, plant and equipment Impairment on tangible assets TOTAL Dec. 31, 2012 394 8 402 Dec. 31, 2011 386 (1) 385 188 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 191
    ...TO THE CONSOLIDATED FINANCIAL STATEMENTS 13.2 - Finance leases Tangible assets primarily comprise the following finance leases: Dec. 31, 2012 Land Buildings Machinery and equipment Other tangible assets Accumulated depreciation ASSETS UNDER FINANCE LEASE, NET 1 45 31 2 (68) 11 Dec. 31, 2011 1 44...

  • Page 192
    ...Elements Inc. (1) SE Buildings Energy Efficiency (1) Inversion FCPR SESS Simak (2) SE Venture Others (3) Total unlisted AFS TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS (1) Companies purchased in 2012. (2) Removed from the scope of consolidation - in liquidation. (3) Gross unit value of less than EUR5...

  • Page 193
    ... price on the balance sheet date. The revaluation of listed investments over the year has had a negative impact on other equity reserves of EUR60 million before tax. NVC Lighting investment was acquired in July 2011 in the framework of a partnership that gives Schneider Electric an exclusive access...

  • Page 194
    ... 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements. Dec. 31, 2011* 5,360 185 116 5,744 (259) 5,402 4,364 400 168 112 93 265 5,402 5,310 193 92 5,595 (306) 5,289 4,291 395 187 88 76 252 5,289 192 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 195
    ...a total amount of EUR112 million, compared with EUR135 million during the second semester of 2011. Moreover, the Group had factored without recourse to a bank during the second semester of 2012 an income tax carry-back receivable of EUR93 million. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 193

  • Page 196
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 21 Equity 21.1 - Capital Share capital At the Annual General Meeting held on April 21, 2011 Schneider Electric shareholders approved the division of the nominal value of the shares by two. The operation took effect on September 2, 2011 and resulted in...

  • Page 197
    ...the Group paid out the 2010 dividend of EUR1.60 per share (with a nominal value of EUR4), for a total of EUR856 million. At the Shareholders' Meeting of April 25, 2013, shareholders will be asked to approve a dividend of EUR1.87 per share for 2012. At December 31, 2012 Schneider Electric SA had...

  • Page 198
    ...TO THE CONSOLIDATED FINANCIAL STATEMENTS 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...

  • Page 199
    ... THE CONSOLIDATED FINANCIAL STATEMENTS Stock grants Date of Board meeting 12/21/2006 04/23/2007 12/19/2007 12/19/2007 01/05/2009 01/05/2009 08/21/2009 12/21/2009 12/21/2009 12/17/2010 12/17/2010 07/26/2011 07/26/2011 07/26/2011 12/16/2011 12/16/2011 07/27/2012 07/27/2012 Plan no...

  • Page 200
    ..., 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS To exercise the options granted under plans 26 to 33, and the SARs, the grantee must be an employee or corporate officer of the Group. In addition, exercise of some options is generally conditional on the achievement of annual objectives based...

  • Page 201
    ... 11 bis Plan 12 Plan 13 Plan 14 TOTAL 1 5 14 12 11 10 53 Full year 2011 2 2 5 6 16 13 44 21.5.2 Worldwide Employee Stock Purchase Plan Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues. Employees in countries that meet legal and...

  • Page 202
    ...an ordinary, non-revolving personal loan, with a five-year maturity to an individual with an average credit rating. (2) A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer. 200 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 203
    ... rate for market participants reduces the lock-up cost and increases the expense booked by the issuer. (4) In some countries, due to local law, employees subscribe for undiscounted sums while the bank subscribes at a discount to provide the leverage. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 204
    ... 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 21.6 - Schneider Electric SA shares At December 31, 2012, the Group held 8,580,080 Schneider Electric shares in treasury stock, which have been recorded as a deduction from retained earnings. 21.7 - Tax on equity Total income tax recorded in...

  • Page 205
    ... Group's liability. Defined contribution plan payments totaled EUR70 million in 2012 and EUR61 million in 2011. Other post-employment and long-term benefits: including healthcare, life insurance and long service awards The North American subsidiaries pay certain healthcare costs and provide life...

  • Page 206
    ... service cost Curtailments and settlements Interest cost (effect of discounting) Expected return on plan assets NET COST RECOGNIZED IN THE STATEMENT OF INCOME 48 1 116 (91) 74 3 55 (60) (2) Full year 2011 Of which SE USA 41 1 4 110 (86) 70 2 4 53 (56) 3 204 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 207
    ... 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Full year 2012 Of which SE USA 3. Change in projected benefit obligation Projected benefit obligation at beginning of year Service cost Past service cost Curtailments and settlements Interest cost (effect of discounting) Plan participants...

  • Page 208
    ...THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2012 Of which SE USA 5. Funded status Projected benefit obligation Fair value on plan assets Surplus/(Deficit) Effect of the asset ceiling Deferred items: Unrecognized past service cost (LIABILITIES)/NET ASSET RECOGNIZED IN THE BALANCE SHEET 1 (1,488...

  • Page 209
    ...(primarily discount rates). At December 31, 2012, actuarial losses relative to the effects of experience on healthcare costs, life insurance and other postemployment benefits totaled EUR11 million for the Group. Actuarial losses totaled EUR21 million at December 31, 2011. Dec. 31, 2012 3. Funded...

  • Page 210
    ..., for EUR36 million. • provisions for disputes over defective products; • provisions to cover disputes related to recalls of clearly identified products. (d) Environmental risks These provisions are primarily funded to cover cleanup costs. 208 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 211
    ... Short-term portion of convertible and non-convertible bonds Short-term portion of long-term debt Short-term debt TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES 147 368 120 587 504 1,726 8,132 Dec. 31, 2011 190 132 475 217 96 1,110 8,037 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 209

  • Page 212
    5 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24.1 - Breakdown by maturity Dec. 31, 2012 Nominal 2012 2013 2014 2015 2016 2017 2018 and beyond TOTAL 1,726 1,083 1,061 761 1,148 2,353 8,132 Dec. 31, 2011 Swaps 3 5 2 10 Interests 274 202 ...

  • Page 213
    ... Samara acquisition debt Debt on Luminous valuation Other OTHER NON-CURRENT LIABILITIES * Acquisition of D5X, Vizelia and Energy Pool. The debt on Luminous valuation corresponds to the Group commitments on the minority interest (26%) in Luminous. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 211

  • Page 214
    ... and natural hedge. Fluctuations in interests rates impact the Group interest expenses and income and the value of the Group's financial liabilities and assets. Interest rate risk on borrowings is managed at the Group level, based on consolidated debt and taking into consideration market conditions...

  • Page 215
    ... and accounts receivable Financial liabilities measured at amortized cost Derivative instruments TOTAL Impact on income and expense 6 30 (331) (38) (333) Impact on Equity Fair value Translation adjustment (60) (73) (133) 9 78 (158) (2) (73) Other - 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 216
    ... long-term debt TOTAL NON-CURRENT LIABILITIES Current liabilities Trade accounts payable Other Short-term debt TOTAL CURRENT LIABILITIES 4,190 112 1,726 6,028 4,190 112 1,742 6,044 4,190 36 1,742 5,968 76 76 6,406 6,406 6,934 6,934 6,934 6,934 - 214 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 217
    ... ASSETS AT FAIR VALUE 60 1,720 1,780 Dec. 31, 2011 Level 1 Available-for-sale financial assets Net derivative instruments Marketable securities NET ASSETS AT FAIR VALUE 191 634 825 Level 2 (185) (185) Level 3 105 105 Total 296 (185) 634 745 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 215

  • Page 218
    ...* North America Asia-Pacific * Europe, Middle-East, Africa, South America. The increase in the average number of employees is primarily linked to the 2012 acquisitions. 27.2 - Employee benefits expense Full year 2012 Payroll costs Profit-sharing and incentive bonuses Stock options WESOP EMPLOYEE...

  • Page 219
    ... outsourcing of certain of its information technology functions in Europe and deployment of a system of shared SAP management applications. This global project has been deployed since 2007 in several countries. At the end of 2012, Schneider Electric had capitalized total costs for a net amount of...

  • Page 220
    5 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 30 Subsequent events On February 2013, the Group received notice that a litigation in the U.S. was settled in favor of Schneider Electric that will benefit from a tax repayment for an ...

  • Page 221
    ... FINANCIAL STATEMENTS AT DECEMBER 31, 2012 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, 2012 Europe Fully consolidated Schneider Electric Energy...

  • Page 222
    ...SAS - S.E.L.F. Schneider Electric France SAS Schneider Electric Holding Amérique du Nord SAS Schneider Electric Holding Europe SAS Schneider Electric Industries SAS Schneider Electric International SAS Schneider Electric Manufacturing Bourguebus SAS Schneider Electric SA (Holding company) Schneider...

  • Page 223
    ... Corporation B.V. APC International Holdings B.V. Pelco Europe B.V. Pro-Face HMI B.V. (sub-group) Schneider Electric B.V. Schneider Electric Energy Netherlands B.V. Schneider Electric Logistic Centre B.V. Schneider Electric Manufacturing The Netherlands B.V. Telvent Netherlands B.V. U.P.S. Systems...

  • Page 224
    ... Schneider Electric d.o.o. EFI Electronics Europe SL Manufacturas Electricas SA Schneider Electric IT, Spain SL Schneider Electric Energy Spain SL Schneider Electric Espana SA Telvent Arce Sistemas, SA Telvent Energia SA Telvent Environment SA Telvent Export SL Telvent GIT SA Telvent Global Services...

  • Page 225
    ...THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 C-Matic Systems Ltd CBS Group Ltd Crouzet Ltd Crydom SSR Ltd Newall Measurement Systems Ltd Schneider Electric (UK) Ltd Schneider Electric Buildings UK Ltd Schneider Electric Energy UK Ltd Schneider Electric IT UK Ltd Schneider Electric...

  • Page 226
    ... FINANCIAL STATEMENTS AT DECEMBER 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 APC America Inc. Schneider Electric IT Corporation APC Holdings Inc. APC Sales & Service Corp. BEI Precisions Systems & Space Co. Inc. BEI Sensors & Systems Company, Inc. Control...

  • Page 227
    ... 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 Pelco Australia Pty Limited Scadagroup Pty Ltd Schneider Electric (Australia) Pty Limited Schneider Electric Australia Holdings Pty Limited Schneider Electric Buildings Australia Pty Limited Serck Controls Pty Ltd...

  • Page 228
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 Schneider Electric IT Hong Kong Limited Schneider Electric (Hong Kong) Limited Schneider Electric Asia Pacific Limited APC India Private Ltd APW President Systems Ltd Cimac Automation Private Ltd Cimac Software Systems Private Ltd...

  • Page 229
    ... CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 Schneider Electric Taiwan Co Ltd MGE UPS Systems S.A. (Thailand) Co. Ltd Pro Face South East Asia Pacific Co. Ltd Schneider (Thailand) Ltd Schneider Electric CPCS (Thailand) Co. Ltd Clipsal Vietnam Co. Ltd MGE UPS Systems Viet Nam Limited...

  • Page 230
    ... THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 Schneider Electric Maroc Schneider Electric Nigeria Ltd Schneider Electric Oman LLC Schneider Electric Pakistan (Private) Limited Schneider Electric Peru SA Cimac Electrical and Automation W.L.L EPS Electrical Power Distribution Board...

  • Page 231
    ... 31, 2012 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union. • note 1.9 to the consolidated financial statements outlines the method for recognizing research and development costs and...

  • Page 232
    ...the Group to make these estimates. These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report. 230 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 233
    ...the financial statements 232 234 235 4. Statutory Auditors' report on the financial statements 2 46 5. List of securities held at December 31, 2012 6. Subsidiaries and affiliates 247 248 7. The Company's financial results over the last five years 2 50 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 234
    ..., plant and equipment Land Buildings Other Investments Shares in subsidiaries and affiliates Other investment securities Advances to subsidiaries and affiliates Other 2.1 2.2 2.3 4,605,759 48,909 4,178,758 8,833,426 Total non-current assets Current assets: Accounts receivable Accounts receivable...

  • Page 235
    ... liabilities Current liabilities: Accounts payable - trade Accrued taxes and payroll costs Other 135 42,320 8,689 51,145 Total non-current and current liabilities Deferred income Translation gains TOTAL EQUITY AND LIABILITIES The notes form an integral part of these Company financial statements...

  • Page 236
    ... amount of fixed asset disposals Provisions, depreciation and amortization 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. 234 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 237
    ... by EUR8 million and in Schneider Electric Japon by EUR18 million. A provision was booked for the tax audit on 2009 tax group filing that was paid in January 2013. • the employee share issue carried out on July 19, 2012 as part of the worldwide Employee Stock Purchase Plan, for EUR123 million...

  • Page 238
    ...2012 were as follows: Shares in subsidiaries and affiliates Schneider Electric Industries SAS Cofibel Cofimines Schneider Electric Japan Holding Other (less than EUR20 million) TOTAL Carrying value 4,344,481 74,647 74,256 3,149 3,721 4,500,254 236 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 239
    COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 2.2 - Other investment securities Other investment securities Schneider Electric SA shares Other Provisions for other shares NET Dec. 31, 2011 48,778 111,303 (77) 160,004 Increases - Decreases (111,172) (111,172) Dec. 31, 2012 48,...

  • Page 240
    6 COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 4 Marketable securities Dec. 31, 2011 Number of shares Stock options plan 26 Stock options plan 27 Stock options plan 28 Stock options plan 29 Stock options plan 30 Stock grants plan 5 Stock grants plan 7 Stock grants plan 8 ...

  • Page 241
    ... 3,658 Increases 1,654 1,654 Decreases (398) (510) (71) (755) (1,763) (3,632) 721 (53) (328) 618 (348) (140) (693) (830) (36) (8,218) Dec. 31, 2012 2,061 502 142 4,116 9,615 19,975 (1,631) 25 1,247 (2,340) 3,571 169 3,827 2,828 1,618 45,723 6 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 239

  • Page 242
    ...2,952,178 new shares were issued on the exercise of stock options, increasing the share capital by EUR12 million. Own shares The total number of own shares held at the reporting date stood at 8,580,080, representing a net amount of EUR249 million. 240 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 243
    ... current and retired senior executives and managers. During 2012, the Company closed the previous plan to new comers and implemented a new plan with progressing vesting rights based on seniority in the Group and in Executive Committee. The financing of this new plan was externalized to AXA France...

  • Page 244
    6 COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 9 Bonds Share capital Dec. 31, 2012 Schneider Electric SA 2017 Schneider Electric SA 2014 Schneider Electric SA 2015 Schneider Electric SA 2017 Schneider Electric SA 2017 Schneider Electric SA 2016 Schneider Electric SA 2013 ...

  • Page 245
    ..., 2011 190,000 62 2 190,064 Increase 3,163,500 6 3,163,506 Decrease (3,353,500) (2) (3,353,502) Dec. 31, 2012 68 68 Note 12 Maturities of receivables and payables Total Non-current assets Advances to subsidiaries and affiliates Other investment Current assets Accounts receivable - trade Other...

  • Page 246
    ...THE FINANCIAL STATEMENTS Note 13 Related-party transactions (minimum 10% interest) Gross Shares in subsidiaries and affiliates Advances to subsidiaries and affiliates Accounts receivable Cash and cash equivalents Interest-bearing liabilities Accounts payable Revenues: • dividends • interests...

  • Page 247
    ... December 31, 2012, 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. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 245

  • Page 248
    ...us by your Annual Shareholders' Meeting, we hereby report to you, for the year ended December 31, 2012 on: • the justification of our assessments; • the specific verifications and information required by law. These financial statements have been approved by the Management Board. Our role is...

  • Page 249
    ... companies TOTAL Marketable securities 6,585,926 Schneider Electric SA own shares (stock option plans 26, 27, 28, 29 and 30) TOTAL 199,949 199,949 3,774 152,053 4,549,086 Schneider Electric Industries SAS Schneider Electric SA own shares 4,344,481 48,778 4,393,259 6 2012 REGISTRATION DOCUMENT...

  • Page 250
    ... earnings* Share interest held (%) I. Detailed information on subsidiaries and affiliates with a carrying amount of over 1% of the share capital of Schneider Electric SA A. Subsidiaries (at least 50% owned) Schneider Electric Industries SAS 35, rue Joseph Monier 92500 Rueil-Malmaison, France Co...

  • Page 251
    ... FINANCIAL STATEMENTS SUBSIDIARIES AND AFFILIATES Book value of securities held Gross Net Loans and advances provided by the Company and still outstanding Amount of guarantees given by the Company 2012 Revenues (ex. VAT) 2012 Profit or loss (-) Dividends received by the Company during 2012...

  • Page 252
    ... 1,963 1,170 3,936 2,004 1,374 (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 25, 2013. 250 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 253
    ... presentation of Schneider Electric SA 1. General information on the Company 2. Shareholders' rights and obligations 3. Capital 4. Ownership structure 252 253 2 55 259 5. Employee profit-sharing - stock ownership 260 6. Performance shares and stock option plans 261 7. Disclosure of information...

  • Page 254
    ... 92500 Rueil-Malmaison, France. The articles of association, regulated information, registration documents, sustainable development reports, notice of the General Assembly and other documents are also available on the corporate website (http:// www.schneider-electric.com). Schneider Electric SA is...

  • Page 255
    ...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 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 253

  • Page 256
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA SHAREHOLDERS' RIGHTS AND OBLIGATIONS 2 -Ceiling on voting rights (ar ticle 24 of the articles of association) At the Annual Shareholders' Meeting, no shareholder may exercise more than 10% of the total voting rights attached to the Company's shares. ...

  • Page 257
    ... date by the Management Board; • 4,872,550 shares under the performance shares or stock grant plans (plans 6 and 9 to 14 ter) relating to shares to be issued and to existing shares or shares to be issued whose type will be determined later; 7 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 255

  • Page 258
    ... on the date of the implementation of the authorization. The Combined Annual and Extraordinary Shareholders' Meeting of May 3, 2012 authorized the Management Board to issue new shares under programs to promote stock ownership among employees in non-French companies of the Group, within a limit of...

  • Page 259
    ... 20, 2013 authorized the Management Board to grant bonus shares within the limit of 0.47% of the capital as part of the long-term incentive plan for 2013. (6) On the date of the 2011 Annual Shareholder's Meeting the capital is EUR2,177 million. 7 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 257

  • Page 260
    ... issued share capital as of the date of the Annual Shareholders' Meeting, representing, on the basis of the issued share capital at February 28, 2013, a total of 55,612,519 Schneider Electric SA shares with a par value of EUR4, • number of shares and percentage of share capital held directly and...

  • Page 261
    ...PRESENTATION OF SCHNEIDER ELECTRIC SA OWNERSHIP STRUCTURE • transactions carried out pursuant to the program authorized by the Annual Shareholders' Meeting of 2011 and renewed by the Annual Shareholders' Meeting of 2012 between January 1, 2012 and February 28, 2013: - number of shares acquired...

  • Page 262
    ...to its employees. The Group's last share capital increase reserved to its employees took place in July 2012. This resulted in a subscription of 3,5 million shares. At December 31, 2012, employees held a total of 24,652,612 Schneider Electric SA shares through the corporate mutual funds or directly...

  • Page 263
    GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARES AND STOCK OPTION PLANS > 6. Grant policy Performance shares and stock option plans Description of the shares allocated The vesting and lock-up periods for performance shares allocations to residents of France under plans 5 and 7 are ...

  • Page 264
    ...proceeds in cash. • mandatory investment in Schneider Electric SA shares of 10% of the selling price (net of taxes and contributions) of performance shares grants acquired through plans set up since 2009. These obligations are suspended once the shareholding targets described above are met. Lock...

  • Page 265
    GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARES AND STOCK OPTION PLANS Past stock option plans The data below are adjusted for the two-for-one share split, effective September 2, 2011. Plan 23 24 Number of beneficiaries at Plan date inception 05/06/2004 05/06/2004 107 402 ...

  • Page 266
    ...-Pascal Tricoire Emmanuel Babeau 68,482 302,942 161,574 63,000 72,000 10,000 (2) 100,000 30,000 (1) In his role as corporate officer at the date of attribution. (2) Options attributed at the time of his recruitment as Chief Financial Officer. 264 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 267
    GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARES AND STOCK OPTION PLANS Past share plans (at December 31, 2012) The data below are adjusted for the two-for-one share split, effective September 2, 2011. Plan 6 Number of beneficiaries at Plan date inception 01/05/2009 721 Number ...

  • Page 268
    ...in 2012 of which the number of shares bought or subscribed is the highest 365,260 Plans 24-26-27-28-30 Shares awarded to the ten most highly paid non-corporate officer employees Number Exceptional Grant of July 2012 2,125 Plans 13 ter and 14 ter 266 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 269
    ...ceiling on voting rights when a public tender offer is in process. > 8. Year 2011 Stock market data In France, Schneider Electric is listed on Euronext Paris (sub-fund A), where it is traded on a per-share basis under ISIN code FR0000121972. Schneider Electric SA shares are included on the CAC 40...

  • Page 270
    ...PRESENTATION OF SCHNEIDER ELECTRIC SA STOCK MARKET DATA Five-year trading summary 2012 Average daily trading volume on the Paris stock exchange (NYSE Euronext): • number of shares (in thousands) • in millions of euros High and low share prices (in euros): • high • low Year-end closing price...

  • Page 271
    ... annual report and a short form; a shareholder's guide; a letter to shareholders; general, economic and financial information about the Group (in the form of press releases and presentations); • a corporate website - http://www.schneider-electric.com/finance/fr. 7 2012 REGISTRATION DOCUMENT...

  • Page 272
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA INVESTOR RELATIONS 270 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 273
    ...-Chairman Independant Director 2 2 8 3. Supervisory Board comments on the report of the Management Board and Financial Statements pursuant to article L.225-68 of the French Commercial Code 2 89 4. Auditors' special reports 5. Resolutions 290 2 98 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 271

  • Page 274
    ... shareholders who pay income tax in France, a social security tax of 15.5% will be charged on the gross dividend. Article 9-I-B of the 2013 Finance Act eliminated the option of a ï¬,atrate withholding tax. Consequently, dividends are now required to be subject to the progressive income tax rate...

  • Page 275
    ... benefit company pensions (article L. 137-1 of the Social Security code) was signed on February 23, 2012 by Schneider Electric SA and Schneider Electric Industries SAS with AXA France Vie. This contract was approved at the Annual Shareholders' Meeting of May 3, 2012. The Management Board decided to...

  • Page 276
    ... Commercial Code. The Company buyback programs may have various objectives: reducing the capital stock, covering stock option plans, allocating shares to employees or corporate officers, fulfilling obligations related to convertible bonds, making acquisitions, and for market making as part of...

  • Page 277
    ...Tricoire, who joined the Group 26 years ago, was made part of Senior Management by Henri Lachmann at the end of 2003 before being appointed Chairman of the Management Board in 2006. Over these 9 years, the revenue of Schneider Electric has increased by a factor of 2.7, net income by 4.2, and market...

  • Page 278
    ... must be elected by the General Shareholder's Meeting from among the candidates designated by the FCPEs (collective employee shareholding plans) Supervisory Boards investing in the company shares or designated by the employee shareholders when their shares are held directly and not via the FCPEs...

  • Page 279
    ...has managed the Electrical Wiring activity in the Business Unit LifeSpace for the EMEAS region. This responsibility was extended to the global level in 2013 in the Partner Activity. Ms. Herbaut has been a member of the Supervisory Board of Schneider Electric SA representing the employee shareholders...

  • Page 280
    ... least equal to the weighted average price for the Company's shares over the three trading days preceding the date on which the share or share equivalent issues were decided by the Management Board. They may be issued with a maximum discount of 5%. 278 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 281
    ... GDP plus three points throughout the cycle, as follows: • 100% of the shares granted to the Company's senior corporate officers and to members of the Executive Committee, in the framework of the Group's annual long-term incentive plans, 8 279 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 282
    ... the Company and its subsidiaries and affiliates, with waiver by shareholders of their pre-emptive subscription rights - seventeenth resolution In April 2011, the Shareholders' Meeting authorized the Management Board to grant options to corporate officers and employees of Schneider Electric SA and...

  • Page 283
    ...the new economy countries, a leveraged plan (x10), with a discount of 15% (in France) or 20% (in other countries), will be offered in 33 countries representing 90% of all employees. The capital increase resolutions expire in 2013. To allow Schneider Electric to pursue its policy of developing global...

  • Page 284
    ... of Schneider Electric SA Schneider Electric refers to the AFEP/MEDEF corporate governance code (April 2010). The present internal regulations have been drawn up in application of Article 13.3 of the Company's articles of association. They were adopted by the Board of Directors on April ...2013...

  • Page 285
    ... and its committees shall be included in the annual report. - Decide on the use of the delegations of authority granted at annual general Shareholders meetings, more particularly for increasing Company capital, redeeming the Company's own 8 283 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 286
    ... Board of Directors shall represent all the Shareholders and shall act in the interests of the Company in all circumstances. 2. Members of the Board of Directors shall attend Board meetings and meetings of the committees of which they are members. 284 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 287
    ... governing stock-market ethics Group's code of ethics, of which they have received a copy, with respect to their personal financial transactions. In consequence, members of the Board of Directors may not acquire or dispose of options or any other derivative relating to Schneider Electric SA shares...

  • Page 288
    ... Market authority (AMF) concerning these reports, as well as the other key financial information documents. • It handles follow-up on legal control of annual and consolidated accounts made by statutory auditors, notably by examining the 286 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 289
    ... plans for key Group executives. The Committee shall prepare the Board of Directors' deliberations on (i) employee shareholder development, (ii) reviews made by the Board on social and financial impacts of major re-organization projects and major human resource policies, (iii) monitoring management...

  • Page 290
    ... on the agenda for every Board meeting. It is the vice-Chairman's responsibility to decide whether it should be held or not. It is therefore held as decided by the Vice-Chairman, either directly before or after each Board meeting. In addition, the 288 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 291
    ... area of social and environmental responsibility. In one year, the Planet & Society Barometer, which measures the Group's commitments in this area based on 14 criteria, rose from 3 at 6.43, while the objective of the "Connect" program is to raise it to 8/10 by the end of 2014. The Supervisory Board...

  • Page 292
    ...Mr. Emmanuel Babeau (Member of the Management Board) Your Supervisory Board, in its meeting of February 21, 2012, authorized the amendment of the supplementary defined benefits pension plan for Group senior executives subject to French social 290 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 293
    ... was agreed with normal insurance contract conditions, under which implementation depends on duration of human life. Its purpose is to guarantee the payment of the annuity installments due as payments under the new plan by contracting companies. 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 291

  • Page 294
    ... average of the rate of achievement of Group performance objectives used to determine the variable portion of Mr. Tricoire's compensation for the three financial years preceding the date of the Board Meeting at which the decision is made. 292 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 295
    ... Company at the date of this Shareholders' Meeting. On the basis of its report, your Management Board proposes to authorize the Board of Directors, for a period of 38 months from the date of this Shareholders' Meeting, to allocate bonus shares, existing or to be issued. 8 2012 REGISTRATION DOCUMENT...

  • Page 296
    ... basis of its report, your Management Board proposes to authorize the Board of Directors, for a period of 38 months from the date of this Shareholders' Meeting, to allocate options to subscribe for or purchase shares. The authorization that would thus be granted to the Board of Directors shall inure...

  • Page 297
    ... of acquired shares, we have prepared this report in order to inform you of our opinion on the causes for and the terms and conditions of the proposed capital reduction. Your Management Board proposes to delegate to the Board of Directors, for a period of 24 months from the date of this Shareholders...

  • Page 298
    ... half the capital, or giving the right to allocate debt securities, with cancellation of preferential subscription rights by way of tenders referred to in Section II of Article L. 411-2 of the French Monetary and Financial Code (15th resolution); 296 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 299
    ANNUAL AND EXTRAORDINARY SHAREHOLDERS' MEETING AUDITORS' SPECIAL REPORTS Furthermore, since this report does not specify the method of determining the issue price of the equity securities to be issued as part of the implementation of the 10th and 14th resolutions, we are not able to give our ...

  • Page 300
    ... and commitments undertaken during previous financial years and approved by the Shareholders at a General Meeting thereof relating to such Plans. Share dividend Retained earnings TOTAL EUR1,039,298,191.58 EUR962,808,515.26 EUR2 ,002,106,706.84 298 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 301
    ... ordinary shareholder meetings, having heard the Report of the Management Board, hereby resolve to grant authority to the Management Board, in accordance with Article L.225-209 of the Code of Commerce and of European Regulation n° 2273/2003, dated December 22, 2003, to acquire shares of the Company...

  • Page 302
    ...'s shares, each of these supervisory boards shall designate a maximum of two candidates, selected at their discretion. The supervisory boards shall be consulted by the Company's Chief Executive Officer, however, who may decide to consolidate one 300 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 303
    ANNUAL AND EXTRAORDINARY SHAREHOLDERS' MEETING RESOLUTIONS or more supervisory boards into a group responsible for designating, at its discretion, no more than a maximum of two candidates; b) When the voting rights attaching to shares held directly by employees or indirectly by employees or former ...

  • Page 304
    ... hereby resolve that, the Board of Directors in office at the time of the General Shareholders' Meeting held to consider and act on the financial statements for the financial year ending on December 31, 2013, shall present and adopt the financial statements and annual report in respect of such...

  • Page 305
    ... as previously-issued shares, subject to the effective date thereof; NINTH RESOLUTION (Further to the (i) 22nd Resolution approved at the Extraordinary General Shareholders' Meeting held on April 21, 2011 (Capital Increase Reserved to Employees Participating in a Company Investment Plan without the...

  • Page 306
    ... to the Board of Directors (i) to increase the share capital up to a limit of EUR220 million in nominal, or paid-in capital, amount by issuing ordinary shares of any and all securities carrying the right to acquire shares of the Company or any of the subsidiaries thereof, without the shareholders...

  • Page 307
    ... to grant to the Board of Directors the authority necessary to undertake one or more capital increases, on the report of the Statutory Auditors, within a limit of 9.9% of the share capital for the purpose of paying for contributions in kind made 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 8 305

  • Page 308
    ... to acquire shares of the Company or any of its subsidiaries the issue price of which shall be decided by the Board of Directors in accordance with terms and conditions determined at a General Shareholders' Meeting, or (ii) issuing securities providing for the attribution of debt securities) The...

  • Page 309
    ...of the Code of Commerce. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC • hereby resolve that the Board of Directors shall determine who is to benefit from the grants as well as the terms and conditions thereof and the performance criteria, if any, to which all or part of the shares granted under...

  • Page 310
    ... new shares of Schneider Electric SA or to purchase existing shares of the Company acquired by Schneider Electric SA on the terms and conditions provided by law; - provided, however, that the subscription or purchase price on the date the option is granted may not be less than the average trading...

  • Page 311
    ..., 2013; • hereby resolve to set a maximum discount to be offered in connection with the Company Investment Plan at 20% of an average of the trading price of the Company's shares on NYSE Euronext in Paris during the twenty trading sessions preceding the date of the action of the Board of Directors...

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    ... Management Board and the Special Report of the Statutory Auditors hereby resolve to authorize the Board of Directors, as provided in Article L.225-209 of the Code of Commerce, to cancel the Company's own shares acquired under and pursuant to authorizations granted at General Shareholders' Meetings...

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    ...applicable to ordinary shareholder meetings, subject to approval of the Eighth Resolution submitted to this General Shareholders' Meeting, hereby resolve to elect Mr. Antoine GossetGrainville as a Director for a term of 3 years, equal to the time 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 311

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    ... as a Director representing employee shareholders, for a term of 4 years, i.e., until the close of the General Shareholders' Meeting held in 2017 to consider and act on the financial statements for the financial year ending December 31, 2016. 312 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

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    ... Tricoire Chairman of the Management Board Schneider Electric SA Pursuant to Article 28 of Commission regulation 809/2004/EC, the following information is incorporated by reference in the present registration document: • the consolidated financial statements and corresponding Auditors' Reports...

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    PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT PERSONS RESPONSIBLE FOR THE AUDIT OF THE FINANCIAL STATEMENTS responsible for the audit > Persons of the financial statements Date appointed Statutory Auditors Ernst & Young et Autres Tour First-1, place des Saisons - 92037 Paris-la-Défense-Cedex ...

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    ...' Annual Meeting (Paris) Dividend payment Financial releases February 21, 2013 2012 Annual Results April 23, 2013 July 31, 2013 Q1 2013 Sales Half Year Results October 25, 2013 Q3 2013 Sales Investors Relations: Anthony Song Tél. +33 (0)1 41 39 60 84 Fax +33 (0)1 41 29 71 42 Press Contact...

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    Schneider Electric SA Headquarters: 35, rue Joseph Monier - CS 30323 F-92506 Rueil-Malmaison Cedex (France) Tél. : +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 EUR 2,...